Streetwise Property Alert 18th November 2013

Welcome to today’s email of UK property news and views…

Property Market Outlook

Savills Q4 Residential Focus makes interesting reading. The headline has to be that the South East of England is expected to do the best over the next five years, rising a total in value of 31.9 per cent which compares with 24.4 per cent in London.

Their Lucian Cook explains, ‘Though we expect London to continue to outperform in the short term, it is unlikely to continue to do so indefinitely. The capital has already been the strongest performing region of the UK since the middle of 2005 during which period prices have risen by 37 per cent compared to just 8 per cent across the country as a whole. As a consequence, the gap between London prices and the rest of the UK, including the South East, is as wide as it has ever been. As confidence improves, buyers are likely to look to markets beyond London that offer better relative value, though it will be later in the cycle before the North feels this benefit.’

‘We see no evidence of an imminent housing bubble and think it an unlikely prospect. For a bubble to occur we would need to see five year price rises of 35 to 40 per cent and/or mortgage interest rates of around 7 per cent, which seems improbable. On balance, an earnings-led price recovery remains the most likely outcome, with a continued squeeze on mortgaged owner occupation continuing to limit the recovery in market turnover and house price growth potential.’

A Quick Aside

If you want to know why London is a sure-fire investment success – generally – you just need to look at the supply side. At present, some 24,000 units a year are being built- it needs to be at least 50,000.

Our Christmas Appeal

We are raising money this Christmas for Martin House – the hospice for young children – and I thank those of you who have donated. So far we have raised £385 which, excluding the £100 I put in, means that the average member has contributed two pence. The average member has been with us for about four years, subscribes to three services and has received something like 1500 emails and 40 odd newsletters over that time. Is that worth more than two pence? I hope so! Please make a donation today: www.justgiving.com/iain-c-maitland

Salford Apartments – Be Quick

We have been offered modern flats in Salford, Manchester. They are modern, high-spec units and only six years old with 244 year leases. They are being sold complete with furniture and are already tenanted so there are no voids and no initial letting fees. These are from £89,995, with 7+ per cent yields and a 2 per cent finder’s fee. Email for details.

admin@streetwisenews.com

Look North?

Assetz’ Stuart Law is in the news this week, saying, ‘Property investment has become mainstream again in the last year and, with interest rates so low, people cannot see a downside to buy-to-let. However, we are now at a critical point where property prices will start to rise faster than rents; this will happen first in Greater London, which has seen tremendous price increases in recent months.’

‘Investors who are keen to not miss out on property price growth and stunning yields, currently achievable in the rest of the country, ought to invest there now. In the current climate, by investing in the North, it is difficult to lose out. Property prices are yet to experience the headline-inducing giddy heights of London and the South East, but it is important to focus investment on the in-demand city centre and suburbs clustered around cities like Manchester, Leeds, Birmingham and Liverpool where employment is high. The potentially lucrative yields of the North are now starting to enter many landlords’ consciousness. The savviest investors will start to look away from London and head north to really make their money work.’ We have a ‘where to invest’ report coming soon.

All for now but, if you are buying into the UK from overseas please note we have the monthly currencies review coming in at any moment. Email for that.

admin@streetwisenews.com

Streetwise Property Alert 15th November 2013

Have you signed up to all of the free OVERSEAS services we offer that are of interest to you? Here’s a taster from France, America and Spain Property Alerts…

Focus On…

From 2014, as part of our ever-rolling services, we are looking to do four-page monthly reports, subject to demand, on various locations, some in France, others a little further out. There is some interest in ski properties. We note this week, for example, that Mark Warner Property is offering ski apartments out in Kaprun from £97,980. It’s certainly an interesting price.

We are told, ‘In both summer and winter, Kaprun is a popular tourist town. For skiers it has 85 miles of pistes, while for summer visitors there are golf courses, national parks and thermal spas. The 1,000ft Kitzsteinhorn glacier makes Kaprun one of only a handful of places in Europe where in summer you can ski in the morning, play golf in the afternoon and take a boat out on the lake at Zell am See for a lazy sun-downer.’ More to come? You tell us!

Belize – Latest News

Canadian Real Estate Wealth Magazine draws investors’ attentions towards Belize this month. Here’s some of what they have to say, ‘Buried treasure can be found in the Caribbean, and you don’t need a pirate ship to find it. The treasure comes in the form of affordable real estate in five sub-tropical markets primed for growth. These areas are all poised to experience an economic boom in 2013 and beyond, and that has put wind in the sails of North American baby boomers. Each market has an inventory of move-in-ready properties that are suitable for retirement and investment purposes. They are also relatively inexpensive.’

‘Marie-France Dayan, founder of The Zen Investor in Montreal, explains there are five main reasons why Canadian investors are warming up to Belize. It’s very easy to access, as it’s only one hour and 45 minutes from Miami. The legal structure is similar to Canada’s. The country is also considered a “tax heaven” in the sense that there is no capital gain in Belize.Belize has yet to be discovered. There is so much potential for growth, new businesses and ventures, and the prices are relatively low compared to other Caribbean regions.’

‘I would say that the Cayo district would be the number one place to go. The return on investment in this area is very good because people are just beginning to discover it, and it’s a great place to attract eco-tourists.’ Interested in this market? We have a small number of investors – 10 to 12 –who have bought here in 2013 and we can put together an article on request.

Brazil Investors – London, 21 November

The Brazil deal we’ve been introducing for not far off two years now has delivered exactly as promised for everyone and there is growing interest amongst members.

We can now offer a few more invitations to join me in London on 21 November to find out all you need to know about this investment opportunity.

I am happy to meet before or after as well for a chat and, for those flying in or coming by train into London we can arrange pick-ups and returns.

Please do get back to me asap if you wish to come along; places are going fast. We can send you masses of material to bring you up-to-speed before the event.

What’s Happening – The FT Speaks

Good article recently on Spain in the Financial Times. One or two quotes. ‘Since the start of the year, foreign investors have begun to return to the Spanish property market for the first time since the crisis hit in 2008. The question is whether this increased interest from supposedly smart money is an indication a floor has been placed under the property market or whether such deals are simply speculative bets on heavily distressed assets.’

‘There are quite a lot of family offices and investment funds with very long investment horizons that are looking closely at Spanish real estate says José de Ochoa, a managing director at Alvarez & Marsal in Spain. The size of the deals are small so far, but I expect this to pick up significantly in the next year.’

‘The banks need to sell their stock, and the bad bank is being very active in selling portfolios, which means there are several large players who are in a selling position says Víctor Casarrubios, partner at Jones Day in Madrid. On the other side, there are buyers expecting to find low prices and high rental yields, but this gap may become smaller as time goes on.’ We are, quietly and behind the scenes, starting to introduce deals to known-to-be-serious investors. Drop us a line if you’d like to discuss this.

Focus On…

Returning to our possible series of Focus On… reports, we note that developer Karl O’Hanlon is to ‘create 36 flats and houses, from £168,850 for a studio and £306,500 for a two-bedroom flat of 880sq ft with terrace, in Languedoc…reach the region via five high-speed rail stations, five airports and a good road network.’

‘These should generate good rental returns. The previous Languedoc project, Château Les Carrasses, allows owners to stay as often as they like in their own property but otherwise make them available to rent, earning up to 4.7 per cent rental yields for owners in the first full year with no tax on rental returns for seven years.’ Interested? More to come – if you wish.

All for now, see you again soon.

Sneaky Social Networking

Many of us have a profile on multiple social networking sites, including Facebook, LinkedIn and Twitter, on top of our email accounts. This can make it difficult to keep track all of the activity. Relately is a service that helps users to remember to contact their important acquaintances and reminds them what they’ve talked about in the past.

Users subscribing to the service can import all of their contacts across the web and see at a glance the last time they were in touch. Contacts can be sorted into groups depending on their importance and reminders can be set for each group. Non-vital contacts are assigned a more relaxed schedule than those of greater importance. A subscription to Relately costs $27 a month.

I’m not sure if this is good value of not. On a personal level, I’d suggest not, but business-wise, it could be money well spent. Regular contact is an important part of maintaining both business connections, and Relate.ly offers an efficient way to keep on top of good communication. I don’t see too much evidence of business people using social networking in a structured and professional manner, so this could be what’s needed.

Website: www.relate.ly

Streetwise Property Alert 14th November 2013

Are you signed up to all the FREE Property Alerts services that might be of use to you. Here, for example, are some recent stories from London, Hotel and Investment Property Alerts…

London Asking Prices – The Reality

Naomi Heaton, chief executive at London Central Portfolio Limited, makes some interesting comments on London asking prices this week. Let’s quote, ‘Alarmist reports from property portal Rightmove that the average price in London inflated by 10.2 per cent in one month are called into question with the release of the Land Registry All Transaction Data (ATD) from the third quarter of the year. Unlike the Rightmove statistics, which are based purely on asking prices, the ATD data tracks the actual price achieved for every sale recorded in the government’s registry.’

‘According to these statistics, just released, property prices in prime central London (PCL) continue to grow around long term trend having risen by 1.64 per cent since the previous quarter and 7.52 per cent over this time last year (Q3 2012). Average property prices in PCL now stand at £1,484,597. Whilst PCL has seen robust growth over the last few years – far more than most other asset classes – short termism and sensationalist reports from commentators such as Rightmove should be treated with care. Asking price data is, in itself, misleading as it is based on hope value not actual value. A few multi-million pound properties coming to market can distort the average price.’

Share Tips

We are tempted, given our history and links with share-tipsters, to run occasional share tips. Interested? Let us know. We note, for example, that Investors Chronicle is tipping Whitbread (WTB). Let’s quote, ‘A forward price-earnings ratio of 20 is pricey and the yield is nothing special. But Whitbread is performing strongly and, as consumer sentiment continues to recover, it’s hard to see near-term catalysts that could seriously threaten that toppy share rating.’

‘Strong consumer appetite for coffee and budget hotels meant an impressive first-half performance for Whitbread. The group saw like-for-like sales jump 2.8 per cent year-on-year, with much of that growth generated at the group’s Premier Inn hotels and at its Costa Coffee chain.’

‘Costa’s UK business enjoyed an especially robust first half after having brewed up a 5.5 per cent increase in like-for-like sales – that helped the division to boost underlying profits by 20.5 per cent in the period to £43.5m. The performance was complemented by the Premier Inn business, where total occupancy grew 1.3 percentage points to 80.3 per cent and like-for-like sales rose 3.3 per cent.’ More to come? You tell us.

Free Seminar With Me

The 16 November seminar on Investing In Property 2014 – easier said than done if you are not a high net worth or a sophisticated investor – is full. We’ve decided to test this with just eight of our regulars so that we can fine-tune it for a wider audience in early January. We have now set a date for 11 January – a Saturday afternoon in London. Pre-register interest. We have just 50 places.

Student Housing News

According to a new report by Knight Frank, student rents should rise by 3 per cent over the next year. ‘Purpose-built student accommodation – private halls of residence let at premium rents, often to international students – should be underpinned by the rising global popularity of Britain as a place to study and by market share gains.’

Knight Frank suggests supply and demand are the keys to success and names London, Edinburgh, Newcastle and Bristol as being undersupplied at present. Note too that ‘councils are increasingly hostile to student developments, which are assumed to yield noise rather than council tax, voters and affordable housing subsidies.’ We are now supplying known-to-be-serious investors with a stream of steady deals. You have already taken your share of Newcastle and Bristol units; London and Edinburgh soon!

London ‘Whisper Sales’ Revealed

Fact is, many – if not most – upmarket property deals in London these days are what are being called ‘whisper sales’; i.e. they are done by word-of-mouth, off-market. According to Ben Morris at Savills, about 25 per cent of apartments are now sold this way.

‘It’s becoming increasingly popular, starting in west London. Many buyers and sellers don’t want to have to splash their details all over the place. We achieve better prices for off-market flats because people are willing to pay a premium. This is partly because of the anonymity, partly because they feel like they are getting something exclusive.’

‘If someone is considering selling their house in December, we might suggest that they go down the quiet-marketing route first. If they find a buyer, great, but if not, then they can launch when the market picks up again in the spring without too much over exposure. It’s about hitting the market as fresh as possible.’ Food for thought.

Email back for details of all the Property Alerts services. All for now, see you again soon. admin@streetwisenews.com

Student Subscriptions

I read a report recently that said the average UK  student gains about a stone and a half in the first two years at University. Bad diet is chiefly to blame. Perhaps, then, there’s a need for a  new US based subscription service that enables parents to send a regular supply of essentials to their offspring while they’re away studying.

The service comes from a company called Pijon in two versions – one for boys and one for girls – and each box contains a selection of different products that will help students in their studies and new lifestyle. The  first box  contained healthy fruit and nut bars, Dorset Cereals muesli, Dove soap, a Muji notepad and a roll-up chalkboard. The company aims to include the kind of items that are traditionally sent by parents to help their kids away from home, while also selecting high quality brands that are out of the reach of the typical student budget. Boxes can be ordered from $25 a month.

This seems like an interesting subscription based business. Pijon is US based, but I can see it working well here too, and finding a ready market amongst parents concerned about their children’s well-being when they leave home for the first time for university.

Spice Up Your Flight

We’ve all been there. You board a flight and realise pretty quickly that it’s not going to be full.. You take your seat and hope against hope that the seat next to you will remain free. And then just as the doors are about to close, the biggest, fattest, sweatiest slob on Gods earth wobbles up the aisle and prises himself in beside you. Well on Indian airline, Spicejet, that could soon be a thing of the past.

The airline has set up a system to enable passengers to book the seat next to them for a nominal fee when the flight hasn’t reached full capacity. It’s possible to book in advance, and then if there’s no spare seat available, a refund is issued. The system gives the airline an additional source of revenue (these spare seats otherwise provide no revenue) and the passengers the opportunity to upgrade their experience at low cost.

I wonder if this is an idea with wider applications? Is there spare capacity in other fields which could be sold off for mutual benefit? I’d be happy to pay a bit extra for ‘space’ in a number of situations, and I suspect others would too.

Streetwise Property Alert 13th November 2013

Welcome to today’s email of news and views.

Toronto Is Hot

According to OPP Connect, always a good read, Chinese investors are increasingly looking at Toronto in Canada. Apparently, interest has increased by ten times in less than a year. Why? It’s because the city is viewed, much like London, as a safe investment.

Juwai.com’s Andrew Taylor says to OPP Connect, ‘This (ten-fold increase) doesn’t mean you will see 1,000 per cent more homes selling to Chinese investors. But it does mean a lot more investors are looking at a lot more properties, a lot more often. And that is the first step on a process that often ends up with one or more purchases.’

‘Most news reports peg London in the UK as the top destination for investors seeking a safe place to invest. Many Chinese investors tell us they also consider Toronto to be the safest of safe. When investors decide to move to a new location, they want as few risks as possible. Toronto has low corruption, stable politics and a strong, diverse economy with plenty of opportunities for growth. It’s a safe bet.’ Interested in Toronto? We can put together a preliminary article if there is a fair demand. Let us know.

Dubai Update

New lending rules have been issued in Dubai. ‘Expats living in the UAE and buying a first property may borrow up to 75 per cent of the value of the property if it costs up to DH5 million; it’s 65 per cent above that. For a second property the limit is 60 per cent. Off-plan buyers will be limited to a maximum of 50 per cent.’

The Dubai Land Department’s Sultan Butti Bin Mejren says, ‘Dubai will strictly enforce existing rules and, if necessary, set new ones to prevent another bubble from forming in its property market, while cracking down on abuses by real estate brokers. What we’re trying to maintain is a sustainable growth in the real estate sector over the coming five years.’

Turkey – A Quiet Word, Please

Spot Blue’s Julian Walker offers some words of advice when it comes to buying in Turkey. Unlike many brokers who talk up their market, regardless of reality, the advice is sound. ‘Actually, it is not as easy as you might think (to buy successfully in Turkey). The buying market is not highly regulated. There are amazing bargains to be had, but investors must be careful about with whom they do business.’

‘If we look at Istanbul, you will find the affordability is superb, especially in comparison with other vibrant cities, such as London, Paris, or Dubai. Prices start at about $80,000, which will get you a very modern, well-built one bedroom apartment on the European side of the city. These are very popular.’

‘Outside Istanbul, you will get more for your money. For around $75,000, for example, you can get a two-bedroom apartment overlooking the coastal resort of Alanya, built to very high specifications. You can either rent it out or have it as a lock-up-and-leave.’

‘The Turkish market is not very regulated, but we do everything by British best-practice standards. We won’t work with developers that won’t supply us with their financial details, for example, on the basis that no-one is too big to fail these days.’ Interested in Turkey? More to come.

We are raising money this Christmas for Martin House – the hospice for young children – and I thank those of you who have donated. Can we get this figure higher? Your donations are very much appreciated. It would be nice to get this money in and through before Christmas. See: www.justgiving.com/iain-c-maitland

Streetwise Property Alert 12th November 2013

Welcome to today’s email of news and views. We have had a strong response to the affordable, off-plan, finder’s-fee-free deals in London but are still taking replies…for now anyway. Be quick.

Property Market Overview

According to new research from the Halifax, property prices have risen for the ninth consecutive month in October. Prices are up 1.6 per cent in the past quarter and up 6.9 per cent over the past year. The average property in the UK is now valued at £171,991.

Why? ‘Low interest rates and higher consumer confidence, supported by the increasing evidence that a sustainable economic recovery may now be underway, are helping to increase housing demand.’ Prices are expected to continue rising.

Even so, we would urge a little caution and issue a ‘due diligence’ reminder. We note the words of Joseph Murrock at Wesold.co.uk who says this week, ‘In many areas of the UK, as the Halifax reminds us, house prices remain significantly below their 2007 peak. In some areas, they’re still falling. For anyone inside the M25, this is easily forgotten. What is happening in the capital is hugely distorting the image of the broader UK market.’

Help To Buy

Most headlines these days seem to be about the Help To Buy scheme. Talking to people, some do not seem to actually understand it. Gary Ennis at Barratt Developments agrees, ‘We decided to promote the hugely popular Help to Buy scheme available at our developments in the London commuter belt. It was very apparent that many first-time buyers didn’t fully understand how the scheme works!’

‘The main point of confusion was the understanding of the equity loan that is provided under the first part of the Help to Buy scheme. The 20 per cent loan is added to the 5 per cent deposit from the buyer so that they can get an affordable 75 per cent mortgage from a lender. The buyer owns 100 per cent of the property from day one of the purchase. Many house-hunters are under the impression that the housebuilder or government owns a 20 per cent share of the property under the scheme which is not true.’ More to come – if you want it, we can do an article or a report.

London – 2014 Forecast & Beyond

Cluttons has given us its 2014 forecast. In brief? London price growth will slow. There will be average annualised growth approaching four per cent across London over the next five years although some locations that have seen lower than average price rises this year may outperform. Central London rents will rise by three to four per cent in 2014 with an annualised average rent increase of just over four per cent to the end of 2017.

‘While overseas investors dominate the headlines, it is Londoners living and working in the capital who are the mainstay of the market. It’s encouraging to be approaching the end of the year with greater buoyancy in the market but the pace of price growth in the residential market is pushing home ownership further out of reach for large numbers of those living and working in London. The pace of growth will inevitably slow, but with the spectre of rising interest rates over the medium term, life in the capital will remain a challenge.’

All for now. See you again soon.

Financing Art

Artists tend to be pretty hard up, unless (or until) they have some commercial success. CSA+D Studio in Brooklyn New York have come up with a scheme to finance artists working from their studio which may have wider implications.

The studio has 12 house artists it’s supporting, and members of the local community can purchase ’shares’ in the work they’re about to produce. In return, they receive 3 to 6 pieces of artwork from across the range of artists at the end of the season. The advantage to the artists is that it allows them to achieve a positive cash flow. Normally they don’t earn until they sell something. Investors get to help out local people, and also have the excitement of receiving some original art which may (or may not!) be worth more than their investment.

This could certainly work anywhere where there are a group of artists who are prepared to give up some of their work in return for positive cash flow. I also wonder whether this is a model that might be applied in other sectors or industries?

Streetwise Property Alert 11th November 2013

An exciting day today – I wanted to share the news with you asap. Our London property sourcing agent, Adam, writes, ‘We have been appointed by leading developer Barratt Homes to offer a selection of off-plan investments in their brand new scheme at New South Quarter in Croydon.

With prices from just £189,000, and completion due in March 2014, these units will sell very quickly as Croydon is one of the real buzz areas inside the M25.

London Victoria and London Bridge Stations can be reached in just 25 minutes from West Croydon station which makes Croydon a major commuter destination and business hub.

International shopping mall developer Westfield (think Olympic village) is also in the early stages of constructing its new super mall in Croydon which tells you more than any research document ever will on which way Croydon is going!

Barratt’s tell me that since the help-to-buy was introduced their sales have gone off the chart to owner-occupiers, which is good news for investors as long as they reserve first!’
I was born and raised in Croydon, know the area very well, go back regularly as I have family in the area, and am happy to chat to would-be investors and meet them there.

And, as a special, introductory offer for those investors who reply to this email TODAY, we will not be charging a sourcing and acquisition fee on these units. That will save you £3,500 in the first instance! Email back for more…but do it quickly. admin@streetwisenews.com