Buyers will as always be searching for bargain properties but many will still want to balance risk with savings. So where should they look to make the most money from property?
Many argue that the Euro zone is a good starting place if you select your venue carefully, there have been some fantastic bargain properties in Spain. Many Brits have sort to be more fugal so splashing out on that second home has been pretty low on their list of priorities. This has lead to a glut of many properties that would have traditionally been soaked up buy British property buyers. This has meant many sellers have become more motivated and lowered their asking price in an attempt to sell to the lower number of British property buyers.
Some European property developers are selling houses at discounts of up to 40% but many inside the property development sector expect that many of the property bargains will have disappeared by mid 2010. As more and more confidence returns to both the UK and European property markets.
Some well respected property development pundits are betting on 3-5% increases in UK and European property prices by May of this year. This is a far cry from some of the negative projections seen in recent years. So advice to buy-to-let landlords and property investors is buy in May then go away! Many believe that most of the bargains have been had but if investors and landlords act quickly they will still find a bargain property in 2010.
A retail development site in Wakefield has been restarted by a construction firm based in York after the development stalled owing to the credit crunch thus providing many jobs for the construction industry, and on completion providing much needed employment in the retail sector and on- going cleaning, supply, financial, accounting, maintenance and general management of the retail site.
More encouraging news comes from Rotherham where Rotherham Football Club have a former industrial site near to the town centre, not too far from their existing ground, which will again provide welcome jobs for construction workers in the building of new facilities for the Football Club.
In York, York City Football Club, although not apparently as advanced as Rotherham mentioned above, are also in discussion with the local authority etc concerning moving to a new site for their stadium / ground which would mean vacating their existing ground / stadium at Bootham Crescent.
Also in York, Planning Permission discussions have taken place for the former Terry?s Chocolate Factory site, thus the building and construction sector in Yorkshire has welcome news for the immediate and short-term, and longer term future.
There are some alarming figures for the US commercial property sector being bandied around, some say that US commercial property values are at a seven year low. There has also been talk of office rentals having hit average occupancy levels of as low as 80%.
So when there are such strong signs of recovery in the UK commercial property market, and signs of property investors bullish about the returns from the UK commercial property market. How long will it be before the UK banks start to look more favorable at lending on property development ventures and speculative property development funding?
The Royal Town Planning Institute (RTPI) expresses positivity at the news of the governments concerns over the increases in the number of Houses in Multiple Occupation in some residential areas.
Houses in Multiple Occupation or HMO?s as they are known in the property sector have been the subject of licensing in recent years after the HMO license scheme was piloted in areas including Derby.
There is particular concerns for areas prone to high demand form Students in university towns with some quarters voicing concerns that HMO?s can lead to the lowering of community spirit in some residential areas. The nature of HMO?s does favor students and more transient short term residents which is sure to affect the feeling of community in areas of high HMO?s. It will be interesting to see what is included in any planning policy guidelines and how this may affect values and the availability of share households.
We have never had it so good! Well almost, recent data on the total performance of returns from property has shown that in the last quarter of 2009 total returns from property leapt to 10%. Just let me repeat that property returns 10%, considering where interest rates are there are not many investors who will complain about returns of 10%. The data showed that it was in fact the second highest rise since 1978. Yes that?s right property is performing at its near best since 1978!
Well that is the positive news, of course the usual caveats apply, it only reflexes one quarter?s results so over the more medium term the figures could show a very different picture. With rumours of no double dip being whispered in the city many will start to look for new doom and interest rates are a fare bet.
The increase in the Bank of England?s base rate will of course have a pretty devastating affect on the fragile UK property market. So this time next year what will we are saying about the decisions on interest rates that are the discussion of many back offices in the city?
So today?s the day many have longed for and many have look forward to for as long as they can remember, well at least since 2007. Will we see more estate agents windows appearing in the gaping holes left from the many retailers that have gone into administration? Will your old high street Woolworths be the next Estate Solutions?
Well one thing?s for sure the UK housing market is driven by sentiment and there will be a new sense of positive sentiment now the recession is now in retreat.
Property investment companies are quietly raising funds from investors to allow them to invest in depressed property values in some areas of the midlands. The key strategies for many companies is to focus on high yielding property investments typically with low capital values per unit. The key to turn a profit from these types of properties is to negotiate preferable rates with main contractors and go for high volume purchases.
This give you more leverage with negotiating purchase prices and all the suppliers that assist in the future refurbishment programs which are key to increasing capital values of property investments.
The other plus to a refurbishment of existing property portfolios, is the opportunity for increases in rental yields again this has the knock on effect of increasing capital values of investment property.
Recent figures show that house prices can never be relied upon as a safe bet, and when people say you never meet a poor landlord, I can point to several particularly after the recent fall in capital values. With all that said, house prices on average have outperformed inflation by an average of over 2.5%. One reason for this out performance is the simple economics of supply and demand, with the constraints of the UK planning system growing ever tighter and the recent lending drought, could these figures show even higher growth?
Or will the property developers and house builders choose to price realistically as the economy has shrunk? One thing that can be relied upon is the UK?s public?s love affair with property and particularly new build houses. It seems for many the dream of buying a wreak and painstakingly restoring it to its former glory has turn into a nightmare as negative equity and the time required for project management snaps at their heels.
The recent return to form of the UK housing market will lead to many property developers starting to flick through the auction catalogues and the local land agents listings for suitable building plots and potential re-development sites.
To go with their newly acquired building plot they will probably be looking to find suitable property development funding. With many of the UK?s main high street banks still cautious to provide lending for speculative property development. Many property developers will be looking at more creative funding options, with the use of mezzanine funding, profit share and joint ventures to assist with build costs and risk mitigation. This delicate recovery will see more use of special purpose vehicles to hold property developments as property developers look to merge their financial and skill bases to give them the flexibility to take on larger property developments. The other advantage of these commercial partnerships and alliances is raising the percentage of security required for the primary funding agents to make their primary charge a sensible level of security, this is essential so the primary lender can move on or re-finance against its loan books.