Monthly Archives: May 2011

Larger new build developments focus on cash rich buyers

Many new build developments are focusing on larger properties four or five bedroom executive homes are becoming the build specification of choice for many house builders and property developers. The reason is they are reacting to the current tough mortgage market conditions. They are building what they know they can sell, easily to older buyers with a good credit history and cash on the hip. Why would property developers and house builders focus their attentions on first time buyers? First time buyers struggle to get mortgages as many have a limited credit history and smaller deposits. So builders are focusing on those who are forced to trade up to a larger property, as the size of their family increases. The property industry is market driven and the hard fact of life is that the market is extensively driven by bank funding. Developers will continue to build for those who they know can obtain the funds to cover the developer’s gross development values.

Commercial property heavyweight flex their muscles as market bounces?

The recent activity in the commercial property market has baffled many market analysts, investors are increasingly looking to move their funds into property. With JJL and King Struge joining forces they will be excellently placed to take advantage of an increase in available investor funding and their combined experience. King Sturge is well known for its domination of the industrial property sector and this will give JJL a fantastic commercial advantage. This consolidation in the market is a positive sign as many have long believed that the property advisory sector has been over supplied. So with fewer companies chasing more deals the property recovery looks to be entrenched.

Investors return to property as commodity markets gain uncertainty

Many investors are returning to investment property as there are increasing concerns that the commodity markets are becoming overvalued. This view has been strengthened further by research from the Worldwide Property Group their research showed that many investors look to property in uncertain markets. This coupled with fabulous results from the Paragon group which specialises in buy to let finance shows that property investment is fast becoming the home of the clever money.

Funding gap narrows but challenges remain for commercial property funding

21 billion pounds of UK commercial property debts have been paid back to lenders during 2010, this has been assisted by some loans being diverted into the Irish’s National Asset Management Agency. The agency has taken on about 10million of this debt. The main issue facing many landlords is that they will be looking to refinance debts over the next five years. As they look to renegotiate there loan notes the banks are looking to do the exact opposite and repair their balance sheets. UK lenders and building societies held almost two thirds of the commercial property debt. With the other third being held by other lenders and foreign lenders.

Lenders return to the self build mortgage market

Self build along with buy to let is seeing the first signs of a revival in their mortgage sectors. This is good news for the self builders and the government. The government is committed to increasing the number of self build properties to match the levels seen in the rest of the European property market. Data shows that the number of approvals for self build mortgages have increased by a third in the past year.

Clever management decisions at Land Securities

Have lead to some very positive results from the UK?s largest real estate investment trust. It is outperforming the London market which has seen another year of recovery in the commercial property sector. Their involvement in property development projects and some impressive acquisitions and disposals have assisted the positive results. With a stronger balance sheet and a reduction in loan to values they are excellently placed to spear head a revival in the commercial property development market. With the merchant banks looking for both better returns and to off load liquidated assets. Those like Land Securities that have an impressive and proven track record in property development and investment are well placed to take advantage of very positive market conditions.

Retailers look to commercial property for medium term returns

Many retailers are looking to sign up leases and buy up their business premises as they look to the capital growth of commercial properties over the next five years. Commercial properties are valued on their rental income or the yield, that?s rent in comparison or percentage of the properties capital value. If you believe that both rents and capital values will rise over the next five years now is the time to secure a deal to beat rent and property price inflation.

20 percent of all homes in the UK could be rented in the next five years

There is also strong evidence to suggest that rents will also increase as tenant demand increases. This will undoubtedly increase yields and attract investors. Many investors are looking at buying on a fixed rate loan and as rents and capital values rise they will have an inflation busting asset. With the continued lack of high loan to values loans for first time buyers many are simply frozen out of the market. This of course leads to a high demand for quality investment property and the perfect situation for the return of buy to let.

Less commercial property deals stack up as lenders go for capital and repayment deals

Although there are still interest only deals in the commercial property mortgage market, it is becoming increasingly challenging to close the deals. Banks and lenders are increasingly focused on repayment vehicles and are asking for increasingly more information and supporting evidence. Investors who bought with less than 25 percent equity stakes are often in negative equity. With capital values in many locations dropping from their 2007 peak, it effectively means that many commercial property investors simple cannot re-finance. With all this said many believe that as investors lose faith in paper backed investments, property will see at least some of these diverted funds.

Looking for a proactive property development partner?

We have recently been working with a development company based in the midlands that has impressed on various levels and aspects of a number of development projects we have been involved with.

Rufford Developments Ltd is a professional forward thinking development company with a vastly experienced team at their disposal. Rufford Developments provides a unique one stop facility for developers, land owners and contractors. They offer a service for site finding and disposal, professional services and development funding along with Quantity Surveying and Project Management services throughout the construction process. Rufford Developments can take a development from concept to completion in house, avoiding numerous points of contact that is usually the case on developments projects.

We have first hand experience in working along side Rufford Developments on a number of projects from putting the right team in place to securing development funding. All of which resulted in a successful project being carried out to the clients satisfaction. www.rufforddevelopments.com