Welcome to today’s email…
If you are looking at London, pay a visit to the Savills.co.uk site; as well as lots of useful news and commentary, it offers an interactive map of London where you can compare performances in prices and rents over the last 12 months and five years. It also reveals the proportion of international buyers and tenants in each area and the reasons why people are buying there. In brief, Battersea and Clapham have seen the highest price rises over the past year, 7.9 per cent. Rent-wise, Battersea has seen the biggest rise over twelve months at 8.3 per cent. Check out the site.
A new range of specialist buy-to-let mortgages has been released by Shawbrook Bank, available via mortgage brokers TBMC. These include three-, five- and ten-year tracker rates up to 75 per cent LTV and are available for Houses in Multiple Occupation (HMOs), student lets, limited companies and portfolios.
Andy Young at TBMC comments, ‘We are delighted to offer this new product range from Shawbrook Bank which provides new options for landlords, especially professionals. As a predominantly commercial lender, Shawbrook takes a flexible approach to lending, looking at the overall proposition of the case rather than ticking rigid criteria boxes.’ As always, talk to a broker.
Writing for The Scotsman, Andrew Hagger of Moneycomms.co.uk suggests it may be time to look again at offsetting your savings against your mortgage. ‘Here’s an idea of the savings you can achieve with an offset, proving that it is a viable option for those with fairly modest savings or those who intend to save on a regular basis. Say you have savings of £5,000. Offsetting this balance against a £100,000 mortgage at 4 per cent would save interest charges of £8,016 and take one year and three months off the term of a 25 year mortgage.’
‘If you are able to put aside £150 into your savings account each month, then you’ll save £20,518 in mortgage interest charges, cut three years and two months off the length of your 25 year mortgage plus you’ll end up with a savings balance of £39,300 when the mortgage is repaid.’ As ever, it’s a matter of taking every ‘either-or’ option and crunching all the numbers.
All for now. Do have a look at the June PDF newsletters, UK and International Property Alerts, and feel free to send them on to anyone interested in UK or overseas property.
The latest Knight Frank Global House Price Index makes interesting reading. Over the past year, to end of Q1 2013, worldwide residential property prices are up 6.6 per cent. The headline is that this is the biggest rise in some three years. As you’d expect, there are variations. The highest risers are Hong Kong at 28 per cent, Beijing and Shanghai at 23.8 per cent and Dubai at 21.1 per cent.
‘Property prices in all world regions, except Europe, increased in the year to March, with the Middle East performing best, rising by 10.6 per cent on average.’ Biggest falls? As you’d expect, Greece led the way down at 11.8 per cent. Hungary, down 9 per cent and the Netherlands, down 8.3 per cent were other poor performers. More to come.
Savills new Spotlight report suggests that UK investors need to act fast if they are to buy into Brazil as South American investors are buying into property developments before they are even released into Europe. Yolande Barnes of Savills Research says, ‘Brazilians, alongside other South American nationals, are poised to become more significant players in international real estate markets. As the domestic market grows and as investors have prospered, they will become more inclined to invest.’
‘South America, in general, and Brazil, in particular, have enjoyed the benefits of fast economic growth, but apparently without the attendant excess house price inflation that has become associated with so many of the ‘new world’ real estate markets of the East. Although house price growth over the last five years has averaged 23 per cent per annum in Rio and 17 per cent per annum in S?o Paulo, residential rental yields are on a par with many of the troubled ‘old world’ economies and house price to income ratios are much lower than many of the Asian ‘tiger’ economies.’
Those of you who bought into Brazil via our introduction last year are now sitting on 20 per cent returns and some of you are now entering new 20 per cent return deals before the drop to 15 per cent. We are now only taking replies from known-to-be-serious investors.
According to new research from the National Association of Realtors (NAR), US sales are slowing because of shorter supply whilst sales are still rising. Lawrence Yun, NAR’s Chief Economist, says, ‘The robust housing market recovery is occurring in spite of tight access to credit and limited inventory. Without these frictions, existing home sales easily would be well above the five million unit pace.’
‘Buyer traffic is up 31 per cent on a year ago whilst sales are around ten per cent above what they were over the same period. To prevent high demand and low supply impacting the market and to tame price growth to a manageable, healthy pace, the number of new homes available need to be increased by ramping up construction.’ More to follow.
Finally, we have a monthly currencies review just come in from Peter at Pure FX