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The Brief.Property Investment News that matters

EDITION EIGHT

Sarah Manning-Benson Membership Support Advisor

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A lot has happened already in 2013. High demand for all 3 product launches has kept us on our toes and is a pleasing testament to the appeal of the Secure Exit Strategy™, and we’re finalising some great projects to bring you over the remainder of the year. Not surprisingly, our London projects always attract the most attention, but bearing in mind the structure and characteristics of the SES it’s worth remembering that it consistently performs regardless of location.

We’re currently very interested in the Serviced Apartments market. Yet to mature in the UK, this sector has very strong credentials and a bright future ahead of it, and presents some very appealing prospects for future SES applications. Read all about it in the Members area of the site!

Contents02 welcome

From Sarah Manning-Benson Membership Support Advisor

03 Take The high Road Plan to transform Aberdeen’s Union Street

04 UniTed They sTand…divided They fall North-south divide continues to grow

05 hiT The high noTes Sharp rise in the number of private renters

06 a new lease on life Tenants request longer tenancy agreements

07 woolmanhill abeRdeen Hotel development Investment

08 land of hope and gloRy Greater UK housing market confidence

09 oppoRTUniTy knocks Another huge success at the Property Investor Show

10 beT yoUR boTTom dollaR U.S. home prices increase 6.8% in 2012

11 The lasT woRd New Secure Exit Strategy™ Application

The Brief.

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IPIN Global’sWoolmanhillproject lies at the

heart of Aberdeen’s regeneration

zone.Click for details!

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Plan to transform Aberdeen’s Union Street Academics at Robert Gordon University have drawn up a 10-point plan to help regain the fortunes of Aberdeen’s Union Street.

The report recommends that old rundown shops and offices be demolished and replaced with more fashionable high-street brands, designer boutiques, Grade A offices and a mixture of contemporary new homes.

The area has become increasingly shabby over the past 30 years as retailers moved away to large shopping centres.

But now it is hoped that the new plan, drawn up by a team led by Robert Gordon principal Professor Ferdinand von Prondzynski, will transform Union Street into a chic place to live and work.

The report suggests that the existing zoning of Union Street be reviewed in order to include the prospect of returning parts to residential use, and redeveloping it to give prominence to pedestrian use, cyclists and public transport.

The report also advocates creating a new world class public facility that “celebrates our energy industries and their technological innovation, reinforces the international reputation and identity of the city, and serves as a powerful ‘magnet’ for Aberdeen”.

Its authors add: “We are now at a critical moment in the city’s history. Aberdeen has prospered as a result of its status as Europe’s oil and gas capital, but it is clear that its economy needs to develop and evolve”.

“A major requirement for the city will be to ensure that it attracts diverse, high value, knowledge intensive investment, and that it can successfully nurture economic and cultural creativity. The city’s regeneration is more than a programme to make it nicer: it is a programme to make it successful”.

Take the high road

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With almost half of all postcodes in London having registered a property price increase last month, the north-south divide widened further, according to Hometrack.

The property price data from the firm shows that the average property price appreciated by 0.1% in February, led by gains in the south of the country, particularly in London, while there were losses across the north – reinforcing the north-south property divide.

Of markets registering an increase in prices, 74% were in London and the south-east, with 48% of London postcodes seeing property values rise in February.

Prices in the north-east have fallen 0.2%, and 0.1% in both the north-west and Yorkshire and Humberside.

Richard Donnell, director of research at Hometrack, said: ‘The impetus for improved market conditions and higher prices has been driven by London and the Home Counties of southern England where there is the greatest mismatch between supply and demand.

‘Prices remain under downward pressure in Northern regions where the trend is tipped towards price falls.”

Hometrack expects supply and demand to rise over the next few months.

“Looking ahead to spring we expect both demand and supply to grow. However, higher stamp duty costs in southern England will remain a disincentive to sell, creating scarcity and a support to headline prices,” added Donnell.

United they stand… divided they fallNorth-south divide continues to grow

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The Brief.The Brief.

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Although UK property prices remain rather flat, rental values, unlike low saving rates in the banks, have been rising across many parts of the country, fuelled by greater rental demand.

The rise in rents means that more landlords are benefitting from higher rental returns and there is unlikely to be any diminishment in them any time soon; an attractive proposition for buy-to-let investors.

The Census 2011 showed that the proportion of people renting from a private landlord in England and Wales almost doubled from 9% in 2001 to 15% in 2011 in the past decade. Yet the indications are that percentage will increase further, pushing rents higher in the process.

Consequently, in a bid to avoid huge rent hikes, many tenants are now looking to lock-in to longer tenancy agreements, in order to minimise annual rises. This is helping to reduce rental void periods for landlords.

“As rents continue upwards it is no surprise to see tenants requesting long and longer tenancies, as they attempt to ‘lock in’ to their properties for the maximum time on offer,” said James Thornett, regional lettings director at Kinleigh Folkard & Hayward. “While this trend is an advantage to tenants, it is also gaining popularity among landlords who are keen to avoid costly vacant periods where their property could remain un-let.”

Tenants request longer tenancy agreements

A new lease on life

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Sharp rise in the number of private renters

There has been a significant increase in the volume of private renters in England since 2008 according to new analysis from housing investment and shared equity mortgage provider, Castle Trust.

Analysis of the latest ONS English Housing Survey by Castle Trust reveals that the number of private renters in England rose to 3.8 million last year, an increase of 23% from the 2008 figure of 3.1 million. Indeed the average annual amount paid on private rent increased by £572 or 7% from £7,956 in 2008 to £8,528 in 2012.

The dramatic hike in the volume of people living in rental accommodation in England has helped to push the total amount of money paid in rent up by £7.7 billion.

Many would-be homebuyers are being forced to rent property because stringent mortgage lending conditions are preventing many people from being about to buy property.

“Despite mortgage rates being well below their historic average, renting is booming as homeownership becomes more and more of a distant dream. Mortgage payments represent a significant proportion of a household’s monthly spending and many people do not see the viability of owning a home,” said Sean Oldfield, chief executive officer, Castle Trust.

Hit the high notes

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Greater UK housing market

confidence

The number of people actively looking to buy property in January increased to its highest level in five years, the latest data from the National Association of Estate Agents (NAEA) shows.

The January residential property market report reveals that the average number of house hunters registering with an estate agent increased from 281 in December 2012 to 314 in January 2013. This is the highest figure since September 2007, when an average of 326 property hunters was recorded.

The strong start to this year is thanks in part to a rise in the percentage of sales made to first-time buyers; an important part of the market that hit its highest point in almost two years at 25% of overall sales compared with 21% in December.

The data supplied by the NAEA also shows that the increase in demand had a positive impact on the volume of sales agreed, which rose from an average of five per branch to seven.

Mark Hayward, President of the NAEA, said: “These latest results reflect a wider upturn in the market at the start of what we hope will be a better year for UK property. The strong number of enquiries during January suggests the financial barriers that have plagued the market for so many years may be beginning to ease as banks increasingly look at new ways to assist buyers.

“Strong financial results from some of the country’s leading house builders this week suggest a growing confidence that some form of a recovery is beginning to take shape.”

Land of hope & glory

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Another huge success at The Property Investor Show

Opportunity knocksFor IPIN the show couldn’t have gone better. A packed stand from start to finish, 2 sell-out seminars and a further chance to meet Members in person.

Thanks to all of you who travelled especially to see us - you helped make it a great success.

We look forward to seeing you again shortly - keep your eyes open for alerts about more events across the UK.

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U.S. home prices increase 6.8% in 2012

Bet your bottom dollar A declining supply of homes for sale in the USA helped to push property prices up by 6.8% in 2012, according to Standard & Poor’s/Case-Shiller.

The Standard & Poor’s/Case-Shiller home price index for December shows residential property prices posted the biggest year-on-year increase last year in six years.

Boosted by decreasing inventory and increasing demand, the 20-city index shows prices rose by an average of 6.8% in 2012 compared to the previous with price rises in 19 of 20 major cities tracked, according to the recently released report. Only New York fell, down 0.5%.

On a monthly basis, the 20-city index gained 0.2%in December. Nine cities posted positive monthly gains in the last month of last year.

The Case-Shiller national composite index, which covers all nine U.S. census divisions, posted a 7.3% gain in the fourth quarter compared to the same time the previous year.

The strong final few months of the year helped to “cement the housing recovery,” says Stan Humphries, Zillow’s chief economist.

With demand for properties in the U.S. continuing to grow, many experts expect to prices fall further, owed mainly to declining housing inventory.

In January, the supply of homes for sale fell to 4.2 months, almost an eight-year low, the National Association of Realtors said. That means if no more homes came on the market, they would all be sold within 4.2 months.

The tight inventories are spurring bidding wars and multiple offers in many parts of the USA, which means

that much of the country is now a seller’s market, according to NAR.

With the USA property market entering its busiest season, demand from buyers is being boosted by greater market confidence and low interest rates. Consequently, vendors are enjoying great success, with many securing a sale within a short space of time.

Almost a third of listings in areas from Washington, DC to Denver and Seattle are reportedly under contract in two weeks or less, reflecting the fact that it is now a tseller’s market.

“Nobody wants to sell at the bottom and everybody wants to buy at the bottom,” said Paul Diggle, property economist for Capital Economics, during an interview with Bloomberg. “That might create some kind of standoff until home prices rise sufficiently so that sellers come back to the market at a larger scale.”

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