Reports from a local mortgage broker that the local auctions are not packed with buyers came as a surprise to many, as the mini property revival takes hold. Further questioning revealed that although the auction room was not packed with willing buy-to-let investors the properties were still fetching good prices. Most reaching or exceeding their reserve and guide prices.
We can of course only speculate on the reasons for this, but it does fit into the view of many that canny cash rich investors are hovering up bargains while many who believe the recovery is upon us simple can?t fund deals.
We have also had interesting discussions with various start up businesses who believe now is the time to grab a free hold or leasehold bargain. They may have already missed the boat as many Landlords and property developers become increasingly bullish about market conditions.
Commercial agents operating in the heart of the city are becoming increasingly concerned with a steady erosion I the quantity of quality prime office space within the square mile. This news comes as a shock to many of the pessimists who were busy looking at the last quarter?s data. The speed of the recovery in this sector has taken many by surprise. The first quarter?s data showed some dramatic declines and the worst trading conditions for two decades. The sudden take up of prominent commercial leases by some large blue chips have had a sudden and impressive positive effect on this market. The lease with potential to purchase of some prime office space by the bank of China seems to have started a great period of recovery. There have also been several rumors that the Royal bank of Canada could also have a potential interest in some prime London office space.
Data released from the Nationwide also point to an annual gain, with property prices staging an almost unbelievable come back from their lows in February of 17.6% on the same survey.
One of the largest and often most under estimated drivers of the UK house price is consumer confidence, the reason that this mystical force is often under estimated is that bankers and economists find it difficult to gauge.
So will the UK public be responsible for the ever popular comeback of house price inflation? The simple economics of supply and demand will always affect the UK house price, and there are figures to suggest that the number of homes coming back on the market is increasing. The underlying fact that simply not enough new homes are being built to keep up with demand, will also play a significant part in the continuing story of the average UK house price.
With property developers and house builders increasingly looking to help the owners or occupiers of new homes lower their carbon foot print, and keep in tune with part ?L? of the building regulations electric heating is fast becoming a sensible alternative.
There are several systems now available on the market and the property developer or house builder has the ability to use a combination of electric heaters, electric water heaters, and solar panels to give effective heating, hot water, and help keep carbon emissions to a minimum.
The other benefit is that there is no need for a gas safety check if the property is designed to run with out and gas supply, and the property developer makes a large saving on the cost of getting a new gas supply to each property in the new development. This also has great advantages for social housing or the private rental sector where landlords benefit greatly from a reduced maintenance program.
The introduction of H.M.O?s regulation was the first real regulation of the U.K. private residential landlords. Many people conclude that the fee?s raised by landlords can only be a good thing and perhaps the scheme should be extended, well now local government have got a taste for the fee?s it seems that they are looking to expand the scheme to cover many other properties within the private rented sector. The only issue with the scheme fee?s is that ultimately the fee?s will be passed onto the tenants, and will hit those that are often on low incomes like students and immigrant workers.
There are also rumors that the powers that be may consider further alterations to the present UK planning system, to force student lets or H.M.O?s to require strict planning approvals. These proposals have been met with robust responses from both the student union and the small landlords association.
City centre apartments and buy-to-let were once so closely linked that many developers openly marketed directly to investors. The city centre apartment holds a lot of advantages for the property investors, they have no exterior maintenance to organise. The properties are modern and popular with tenants.
So why have these lost favour, the main reason is simple cold hard cash, the rental yields that could be achieved have never been great but property investors weighed this against the many other advantages. Rental yield have not really improved as there has been downward pressure on rents, but even more concerning is that the capital values have dropped since the UK housing market peak. Most property has suffered capital losses but new build city centre apartments have been the some of the worst affected. However there are now signs of larger cash rich investors making bulk buys of these properties as they look to the midterm and some potentially large gains
A recent survey by a mortgage lending company specialising in buy-to-let lending to UK landlords has give a positive forecast of both house prices and rents. Landlords expect the value of their property portfolios to continue to enjoy moderate rises over the next twelve months. This is the first quarter survey that has showed landlords are positive about their future since the first quarter of 2007.
Landlords in many areas are also reporting positive prospects for the rents achieved with the west midlands being identified as an area enjoying increased rents. It is thought by many that the recent rise in house prices has reduced the number of ?landlords by default?, property owner who unable to sell their property decide to rent it out instead. These accidental landlords produce an increased supply in rental property which in turn leads to downward pressures on rents.
The number of complaints from vendors, tenants and landlords has risen dramatically over the last year, the majority of complaints relate to the usual tenant and landlord issues. As with many service industries letting agents, estate agents and landlords must be careful to explain the processes and practices of deposits, property care and the sales process.
The complaints from landlords are of poor reference checks, inefficient property inspections and a lack of procedures to protect against damage to the property. The tenants find biggest issues with the holding and retaining of property deposits.
There has been issues with fees for home information packs falling due if vendors have switched agents and estate agents need to be mindful of such issues when market conditioners are more challenging. Estate Agents have also found issue with the methods employed by some other agents when aggressively marketing to poach their clients.
The latest figures out for house price growth are giving increasing credibility to those who feel we have hit the bottom of the market.
With increasing interest from both private buyers who can meet the stricter lending criteria and property investors calling the bottom of the market it is simply back to supply and demand. There are simple just not enough quality properties available for the increasing demand. The London market often thought to act as an indicator of national trends has been the best market for property sellers. Some data suggests that the property market is currently as vibrant as the heady days of 2007.
This news becomes even less surprising when many surveyors report completed sales are up but the number of properties on their books is remaining at a constant. Reports out this week say that national house price levels are now back up to October 2003 levels and climbing.
Rumours from the capital suggest that a large international bank will take over 200,000 square foot of prime office space in Canary Wharf. There are further rumours that one of the city?s well know law firms may also have more than a passing interest in acquiring a substantial volume of prime office space, within the same development.
It seems that better news from the commercial property sector continues to give the braver investors who launched into this market recently a warm feeling. The commercial property market has gradually and quietly gathering strength in recent months. Many commentators now believe that the sector has recently been undervalued. There are those who draw attention to a potential lack of quality tenants in the short term, but as the medium term look increasingly positive many are now deciding to dip their toes back into this most traditional of investment vehicles.