Building Solutions (Midlands) Blog

Is the party or holiday over for house prices?

Richard — Fri, 12 Mar 2010 22:25:22 +0000

The holiday has finished, that’s the Christmas Holiday and the stamp duty Holiday and it looks like every body has the post holiday blues. Well at least first time buyers, it is the first time buyers and mortgagees that are the key to stimulating the UK housing market but it seems now the holiday is over they have other things on their minds.
The Council of mortgage lenders figures are showing an incredible fall in the number of new mortgages their figures find that new mortgage lending has fallen by 49%. This figure brings back memories of the end of the mortgage tax relief of the late 90’s when the UK housing market ramped up before it was removed and came down once it had been revoked. With slightly improving loan to value ratios there will come a time when the mortgage market balances with the property market. The cash rich property investors and developers who have been quietly buying up land, property, land options and deals will be in a very envious position.

Downward pressure on house prices as supply exceeds demand

Amanda — Wed, 10 Mar 2010 21:45:00 +0000

There has been a recent rise in the number of agents reporting an increase in available properties, to 15 per cent from -20 per cent, described as “the first sustained shift towards supply for two years”.

While market indicators are consistent with further house price increases, recent gains have been attributed to the lack of property available. Lower interest rates, better mortgage deals and patience from lenders has meant that more homeowners have been able to stay put during the recession, rather than being forced to sell. As prices have increased, homeowners have put their properties on the market, which may have contributed to February’s price fall, along with the end of the stamp duty holiday and bad weather at the start of the year.

Price falls have been reported in Yorkshire and Humber, the West Midlands, Wales and the North.

Investors look to land deals for higher investment returns

Richard — Tue, 09 Mar 2010 20:46:52 +0000

Some of the big names in house building and property development are thought to be assembling land banks using a mixture of private and bank financing. Many insiders in the property sector believe that although house prices may be fairly volatile throughout 2010 with prices bouncing along the bottom they will remain relatively constant on a year on year basis. So when the market turns those brave souls in the industry who have had the for thought to buy while the heard are selling, will be very well placed to ramp up the build phase and get the maximum profits when the upturns comes.

High yielding investment funds?

Richard — Mon, 08 Mar 2010 21:01:38 +0000

Has the commercial property boom of recent years been fueled by fund managers? This is the question being asked, has the demand for higher yielding investment funds driven property fund investment managers to pay too much for secondary locations and shorter leases? Now that the bubble has burst and the heard have turned, are there opportunities for investors to make the higher returns that inflated this asset bubble?
Questions like these are causing investors to question the motives of some I.F.A’s and fund managers who profit from the cash going into a fund more than the performance of the funds they recommend or manage.

Is now the time to make money from property?

Richard — Sun, 07 Mar 2010 12:24:37 +0000

With many in the industry now predicting a double dip, and the latest figures showing a 1% fall in property prices last month, you would need to be brave to purchase a new property development or renovation project. The price of auction property and those in need of modernisation is directly related to the property market sentiment. When there is talk of us being “out of the worst of it” and the “green shoots of recovery”, you can almost see the auction guide prices rising with every positive comment. Considering that most large property developments, conversions, and renovations will take up to a year to be back on the market, you must consider where prices will have settled in a year’s time. If your project requires planning applications, conservation works or grant funding the project period could be nearer to 2 years. So is now the best time to profit from the populations concerns of further pressures on property prices. With Land prices facing a recent revival it look like some of the larger house builders are confident that the future is brighter than many believe.

Buying my first home

Richard — Sat, 06 Mar 2010 19:15:12 +0000

The most coveted of prizes for all estate agents, property developers, and house builders is the “first time buyer”. It looks like this increasing rare breed has been almost hunted to extinction, the use of a devastating weapon is the main reason for the high numbers culled in their infancy. This most effective weapon is of course “tighter lending criteria”, when in the hands of a well trained banker this weapon can devastate a huge number of first time buyers before they even make it to the estate agents window.
This is probably why we now have the lowest level of home ownership in the UK since 1991, so where have all the houses gone? Don’t worry they are still there but many have changed hands, the fall in the owner occupier market has been compensated by an increase in the private rented sector. Private landlords are now providing accommodation for those first time buyers who have been unable to obtain the mortgage funding they desperately need to obtain their first home.

Renovating ex-local authority houses

Richard — Sat, 06 Mar 2010 08:02:04 +0000

What can be done by way of improvements / modernisation / upgrading to the latest property regulations, and decor, progressed by private investors to ex-local authority properties was outlined in an article in a national newspaper last weekend (Sunday 28th February). The national Sunday newspaper article concerned highlighted what had been achieved in the Midlands.

Ex-local authority houses usually have a lot going for them in that more often than not they are located in an area which has easy access to local amenities :- shops, doctors, dentists, buses, and schools.

Such ex-local authority properties are also usually well built, have reasonably large sized rooms, have been maintained well by the local authority concerned. They also often have a good sized garden with space to have a shed or other outbuildings. Some of these properties can be adapted so that off road parking can be provided, if not already provided.

After the builder has done the necessary work it can be hard to imagine what the house looked like originally, but builders can make such properties into lovely modern homes.

Ten things you need to know before you start a property renovation

Richard — Fri, 05 Mar 2010 19:41:42 +0000

1. Before you buy get a member of the Royal Institute of chartered surveyors to give you a full written report. They are the most experienced and best placed individuals to give you all the facts in an unbiased report. They have the skills and experience to then produce a schedule of works, once you have a schedule of works you can look for experienced contractors to undertake the renovation.
2. Choosing the right contractor : You should choose a contractor that has experience with the type of renovation that you are undertaking. They will be able to provide you with a fixed price quotation for all the items on your schedule of works. Your surveyor will be able to look at your contractor’s quotation and advise you on savings and specifications.
3. Start with the end in mind: Get a firm idea on paper of exactly what you want form your renovation project, take the time to think about finishes, floor heights, security systems, phone points, TV and audio points, the position of sockets, furniture, and how you will use the space.
4. Lead times: Certain items and renovation processes have lead times, drying times, importing times, and installation times, if your require new services you may not need them until the end of the project but they are some of the first things that need to be taken care of.
5. Budgets, funding and contingency: Winging it is NOT an option! One of the worst things that can happen during any renovation or conversion is running out of money. Money is the oxygen that a project needs to run efficiently, if funding gets too tight it often forces very poor decisions that can affect the end result and value of a renovation project.
6. Project phasing and works schedules: If you have your dream property but you do not quite have enough funds to safely carry out the renovation or development, it is a good idea to produce a schedule of works or phase the works. If you do this do not be tempted to do the nice bits first, do not fit the new kitchen and bathroom until the leaky roof has been repaired.
7. Set a sensible period of works: Good quality renovations of small commercial or large residential properties can take years, a complex renovation or conversion of listed buildings or buildings in a conservation area need to be agreed with the local authority conservation department. Liaising with a conservation officer can slow down vital stages in the project so make sure you allow enough time.
8. Follow your plans but follow your guide: Choose a surveyor and main contractor who will follow your plans and choices but be guided by their advice. It is truly the mark of a good contractor if they can lead and advise their client but remain mindful of following their wishes. Choose a contractor who will lead the project and manage the many components of a successful renovation or conversion. They are your one of your biggest assets so listen carefully to their advice and then make an informed decision once you have all the facts.
9. Passion and a commercial rational: Make sure you get what you want, but when spending tens of thousands of pounds always imagine yourself as an investor in the project. Peoples circumstances change, and if you chose to sell or change the use of your property would you realise the investment you have made?
10. Plan and enjoy: plan your project out as much as possible, make well thought out decisions early on and before a contractor is waiting on the phone for a decision. If you really want to enjoy your project and relax. The more you plan and research the more relaxed you will be during the renovation or conversion. Celebrate the milestones, spending that sort of cash always carries some level of stress, don’t wait until the end to celebrate enjoy the milestones along the way. Remember once you have finished a well planned project you will have something unique, something to be proud of, and some good memories!

Institutional investors look to fund residential investment developments

Richard — Thu, 04 Mar 2010 20:48:58 +0000

Some of the UK’s biggest property companies and investment funds are lobbying the treasury for alterations to the stamp duty regulations. It makes investors purchasing multiple residential property investments and residential investment property portfolios suffer a disadvantage in comparison with property investors who purchase single investment properties.
They are lobbying for a “residential property Reit”, as a special purpose investment vehicle in which to buy and hold residential investment properties. These “residential property Reit’s”, will be far more tax efficient than traditional investment property companies. The government is keen to encourage private investment funding for residential investment property developments. So should it make the efforts to adjust the tax system in favor of instructional property investors which will in turn increase the availability of social housing?

New build development for profit

Richard — Tue, 02 Mar 2010 20:12:44 +0000

House builders are starting to see the first signs of a recovery in the UK housing market, with the values of land gradually improving and their off plan sales improving they can see the first green shoots of recovery in the house building sector.
One of the remaining challenges for the sector is down valuing, when property surveyors are recommending lower property values than that estimate by the developers. The values of the finished homes on new build developments is the most critical number in a development appraisal these figures make up the GDV, gross development value. Once the land costs, build costs, and overheads are removed the remaining balance is the developer’s profit. If the property developer over estimates the final sales prices the results can be financially devastating for the development project and the property developer. With more land owners looking to complete joint venture as a result of a less fluid market for residential development sites, more and more investment consortiums are pawing through the figures and estate agents comparables to make sure the sums add up.