Renthusiast

Winter of economic discontent

2010-09-06T11:28:00.003+01:00

Winter is fast approaching, and last season's winter was long, cold and dreary.
Wonder what's in store for this season?

World’s housing markets improve strongly

2010-06-07T13:49:00.003+01:00

The global housing bust is effectively over. According to the Global Property Guide’s latest survey of official house price statistics, 19 out of 36 countries experienced house price increases during the year to end-Q1 2010. Furthermore, out of 15 countries with house price falls, eight saw slower rates of decline in the year to end-Q1 2010 compared to the previous year. Countries in severe crisis that show no sign of recovery now include only Ireland, Bulgaria and, for political reasons, Thailand. The Global Property Guide’s statistical presentation uses price-changes after inflation, giving a more realistic picture than the more upbeat nominal figures usually preferred by real estate agents.

Robust recoveries in Europe

Many European countries have continued to recover strongly. Leading the pack is Finland, where house prices rose 11.03% during the year to end-Q1 2010. Being an export-oriented country, Finland was badly hit by the global financial crisis in 2008. This March, central bank governor Erkki Liikanen announced that the economy had stopped contracting. House prices are expected to rally further during the rest of 2010. Norway’s housing market has rebounded since Q3 2009. House prices went up by 7.65% year-on-year to end-Q1 2010, thanks to a massive stimulus package and low interest rates. However, on May 6, the Norges Bank raised its key policy rate by 0.25 percentage points to 2%. Luxembourg has recovered ahead of other European countries, with house prices picking up as early as Q2 2009. In Q1 2010, house prices were up by 6.63% (after inflation) compared to the same period last year. Low interest rates fuelled the recovery. In the United Kingdom, Nationwide’s data shows house prices up by 5.43% compared to the same period last year. London’s increase of 15.7% was the most outstanding. France and Germany had modest increases of less than 0.5% year-on-year to Q1 2010. This is the second year-on-year increase in house prices in France and the first in Germany. (All figures are after inflation.)

Signs of bottoming out in Europe’s weakest markets

House prices have fallen strongly in hard-hit Spain, Iceland and Lithuania, though the rates of decline have been slower during the year to end-Q1 2010 than during the previous year. During this period, Spanish house prices declined by 5.73%, less than last year’s decline of 7.24%. In Iceland, house prices were down by 13.98% during the year to end-Q1 2010, an improvement from the drop of 20.47% during the same period last year. Iceland has experienced high inflation, explaining the considerable discrepancy between nominal and real house price rise figures. In Lithuania, house prices fell by 22.22% during the year to end-Q1 2010, a modest improvement from the drop of 26.92% experienced during the same period last year. Latvia saw the steepest drop among all countries in the survey. However, there is renewed optimism in the market. The year-on-year price falls of 31.72%, though dramatic, are an improvement on last year’s price drop of 43.07%. Equally important, during the latest quarter house prices were up 10.70%, signaling that the bottom has been reached - and that recovery is on the way.

North America remains weak

House prices in the US were still declining in Q1 2010. The Case-Shiller index showed a modest drop of 0.23% over the year to end-Q1 2010 (inflation-adjusted), a significant improvement from the fall of 18.68% during the same period last year. House prices were down by 1.68% in Q1 2010 compared to Q4 2009. The FHFA’s purchase-only index (seasonally adjusted and inflation-adjusted) showed a steeper fall of 5.30% year-on-year to end-Q1 2010. House prices declined by 2.29% in Q1 2010 according to FHFA, compared to the previous quarter. Canadian house prices stopped falling in July 2009, though there was a modest house price fall of 0.71% during the year to end-Q1 2010.

The UAE recovers

House prices in Dubai were up 1.29% (in nominal terms) over the year to end-Q1 2010, after falling by 34% (also in nominal terms) over the year to end-Q1 2009. House prices were higher by 3.48% in nominal terms and 4% in real terms in Q1 2010 compared to prices in Q4 2009.

A possible housing bubble in Asia

A bubble is feared to be forming in Asia, after massive recoveries in Hong Kong, Singapore and Taiwan. Hong Kong recorded the highest house price increase among all countries surveyed at 27.15% (after inflation) during the year to end-Q1 2010. This is a remarkable performance, considering that during the same period a year ago Hong Kong suffered a painful year-on-year drop of 15%. Fuelled by the government’s stimulus measures and interest rate cuts, prices started to pick up in Q3 2009, with a moderate year-on-year increase of 4%. In Q4 2009, everybody was caught by surprise when house prices skyrocketed by 22% y-o-y. Analysts have expressed concern, and there is a lot of very un-Hong Kong-like outrage at ‘speculators’. The same concerns affect Singapore. After being badly hit by the financial crisis, Singapore’s house prices increased by 23.88% year-on-year to end-Q1 2010, in substantial contrast to the 22.70% price falls during the same period last year. Taiwan’s house prices rose 18.46% year-on-year to Q1 2010, the highest increase ever recorded in the country. The upsurge was caused by an influx of buyers from mainland China, after financial cooperation agreements were signed between China and Taiwan. Indonesia and Thailand have been performing poorly. House prices in 14 largest Indonesian cities dropped 1.08% over the year to end-Q1 2010. Political instability was responsible for Thailand’s downturn. House prices fell 19.96% over the year to end-Q1 2010, the sharpest drop since the Thai time-series began in 1992 (all figures are after inflation).

The Global Property Guide is an on-line property research house. Requests for comments are best made by telephone to +(63) 917 321 7073. Our local time is Hong Kong time, i.e., standard time + 8.00

Lower global prices lead to strong investment overseas

2010-01-22T18:17:00.003Z

The weaker pound is off-set by lower global real estate prices meaning for cash-rich buyers a purchase overseas is a strong investment

by Hamptons International

Renewed interest from overseas buyers for UK property is predicted for 2010. In particular, investors from the Far East will take advantage of the agreeable exchange rates and weaker pound. These investors will be discount driven and for high net worth individuals, the weaker pound is balanced by reduced global real estate prices. For this international part of the market, a purchase in an emerging market, such as India can be a strong investment.

For UK based buyers, the weaker pound certainly had an impact in 2009 and there was a decrease in transactions of properties for sale. However this is predicted to ease with the stock markets improved performance and the continued consumer confidence in the market. However one such trend which is emerging for top-tier tax payers is a demand for properties in tax havens such as Switzerland and Monaco. This is due to the stricter guidelines now in place in the UK and is predicted to rise further.

Following trends in the UK and established economic hubs, we have seen increased buyer confidence across several price bands and we predict this will continue into 2010. Although the economic climate is improving, the affect of the recession on employment is still a concern. If unemployment continues to rise upwards, the property market will be affected; meaning that people will be unwilling to buy and instead opting for properties for rent until the economy stabilises. Sellers will need to take this on board and be realistic on value. Furthermore it will be important to carefully assess the needs and financial abilities of the target market for their property.

For UK based developers who have access to funds or equity, there are opportunities to take advantage of not only land prices, but also construction costs. In 2009, there was a deficit of new construction owed to the global recession and therefore stock levels will be low. However this lack of supply should drive increased demand for new-build property during 2010, especially from cash-rich buyers looking to invest in new builds rather than second-hand markets

These new-build prices are predicted to rise in line with the second-hand market, however it will be dependant on the exact location and type of product. This is mainly due to strengthening consumer confidence as people begin to see a light at the end of the tunnel. However we do anticipate a low transactional level in the market around the time of the UK election and FIFA World Cup in South Africa.

The deepest impact for the 2010 market and therefore challenging off-plan developments is the availability of liquidity in the banking sector and the ability to provide low cost finance to investors, either home or overseas based.

Lennox does Miami

2007-02-26T20:25:00.001Z

This weekend, boxing legend Lennox Lewis turned down a reported £15 million to come out of retirement and fight Ukrainian slugger Vitali Klitschko, stating he was "flattered" the boxing community wanted him back in the ring, but being a "man of his word," LL unequivocally has "no plans to return" to the ring.
And why should he?
Haute Living's latest edition gives a glimpse of LL's current lifestyle, chillin on the beach in Miami; and when not hanging out in Coconut Grove or Pinecrest, LL heads for the hills in Jamaica. The article also revealed that LL recently sold his pad in London (smart move) and is currently shuttling residencies between Canada, Miami and Jamrock (aka Jamaica)

What's ahead for London property?

2009-12-29T12:16:00.007Z

by William Harries of Lowndes Partnership

2009 has been a far better year than 2008 and I am optimistic about the prospects for 2010. At the start of 2009 the property market was still very cautious rebounding from the unravelling banking crisis. However, in the New Year especially in prime locations buyers returned to the market. Property prices were falling and the Euro / Sterling exchange rate was making prime property an attractive investment for international buyers. As the year moved into spring and summer there were plenty of buyers for property in sought-after locations most notably central London and the Home Counties. A significant lack of stock helped hold prices at a higher level than perhaps they should have been and stock levels continued to remain an issue throughout the second half of 2009. Euro buyers were enjoying an affordable UK market and prime property continued to be in demand. In particular I saw strong bidding in Mayfair, Belgravia, Knightsbridge and favoured parts of Chelsea and Kensington. Residential areas not so popular with international buyers faired less well, however, even in this difficult period there were some fantastic deals albeit not at 2007 levels.
2010 may be a different story. Whilst we have seen prime areas become a safe haven for international buyers other factors must begin to play their part affecting the UK property market. In my opinion property prices in prime locations will remain firm, prices will hold and in some cases may even rise. However key ratios to watch in 2010 are:

1. Rising inflation verses interest rates.
2. Taxation increases on personal income.

Whilst in prime locations stock levels remain low, other regions need more confidence and affordable property prices. Yes, banks and mortgage lenders are extremely cautious lending to the property sector and rightly so – part of this recession was fuelled by money being too easy to borrow during the last decade. I think the real issues in 2010 surround consumer confidence. In the future, if lending becomes more restricted, the annual total of properties sold will reduce and perhaps the property market will become more stable. At the height of the market there were over 1,000,000 transactions per year. The RICS quoted that recently this number fell to 55,000 – 60,000 per month and they are suggesting for 2010 this will rise to 70,000 per month.
I am sure interest rates will go up to combat rising inflation. The government needs more revenue to balance the books and income tax raises must be round the corner – surely the question is when will this or the next government make these tax increases? Perhaps as early as this coming summer / autumn.
Neither of the above helps to develop confidence with property buyers. Whilst a lack of stock in sought after locations will almost certainly help to hold prices firm in 2010. A good number of housing schemes are on hold; property developers are keen to find buyers off plan offering tempting deals to first time buyers. For existing property owner’s interest rates remain low and many households are enjoying heavily discounted mortgages payments. Short-term interest only loans taken out in the last 4-5 years may have now ended making monthly premiums based on current variable rates extremely low. 2010 will remain a difficult year for first time buyers. Lenders will be looking for higher deposits and property at entry level is still expensive. The market needs first time buyers to make the cycle work and both buyers and lenders need confidence that prices are not going to immediately work against them.
In my view the property market will remain static during 2010. Prices are unlikely to rise. If interest rates begin to climb perhaps more owners will become nervous and start to sell. This will increase stock levels and that is good for the market, it may push prices down in regional areas making property more affordable.

William Harries founded Lowndes Partnership having worked in the residential property market for 13 years. He gained experience in Central London with a leading rental agency and 9 years with an international firm of residential and commercial estate agents. William has advised clients on renting, selling and buying properties in London and Central England and helped set up Knight Frank's in-house buying department, The Buying Solution. During this time he ran their Cotswold region and later created the Home Counties Region. Further information email info@lowndespartnership.co.uk or call 44 207 887 6311

Westfield extends hours, West 3 brings luxury

2009-12-14T14:02:00.009Z

As the remaining shopping days before Christmas fly by, this year, the Westfield London shopping centre in White City is emerging as a true rival to the West End and is the perfect place to get all of the Christmas shopping done under one roof.
Having celebrated its first birthday at the end of October, Europe’s largest urban shopping centre, is already in full festive mode. During its extended Christmas shopping hours, the centre will be open until 11pm on Monday to Friday and 10pm on Saturday (from 14th to 23rd December). It offers a comfortable place to shop, less hectic than the West End and all under cover, to escape the rain and cold weather.

Oxford Street Shopping

vs Westfield

And when the hard work of ticking off the gifts to buy is done, what better than to make the short journey home to West 3 London, the stylish conversion apartments with contemporary interiors. West 3 London are conversion of the former Ministry of Pensions Building on Acton Vale, one of West London’s most illustrious heritage buildings.

images from West 3

Transport links in the area were further improved with investment that came as part of the development of the Westfield shopping centre. Westfield Group contributed £170m to improving transport infrastructure, including a new Hammersmith and City line station at Wood Lane, a new overground station, upgrading of the Central Line tube stations at Shepherd’s Bush and White City, and a new bus station. Prices at West 3 London start from £262,500 for a one bedroom apartment. Further information, call 020 8811 2336, or visit the website.

Hamptons reports 63% increase in property buyers

2009-12-14T12:58:00.009Z

Guest post: Hamptons International

Compared to 2008, Hamptons International has reported an increase of 63% in the number of property buyers, while actual sales remain twice as high.

Even though the economic downturn still pervades the economy, corroborated by the last figures on GDP describing the surprising doggedness of the recession for another quarter, optimism is yet within reach, as the housing sector had another positive quarter.

With the last periodical research, Hamptons International Property Price Tracker has ascertained a 5.3% rise in sale prices, which occurred across the second and third quarter of 2009. London’s market performed comparatively higher than the wider market, with a rise of 6%. The price rise is being driven by a lack of supply – the gulf flanked by who is buying and who is selling has proven to be broader this year than in previous ones. Analysis of this competitive environment in property developments has established that the average ratio of buyers per seller went up at 8.8 in Q3-2009, a 52% growth on the 5.8 figure for applicants per vendor last year. The volume of transactions remains higher in 2009, with the current exchange figures being 76% higher than in 2008.

The property demand has steered capital values up for two quarters in a row this year, with an 8.6% boost in average prices. In contrast to 2008, prices are at present in good territory (up 2.1%). Shortage values resulted in larger properties (on top of those in prime locations) going up by more than average for the wider market – considerably more in some cases. These figures are reiterated by Rightmove’s latest house price survey, corroborating the dearth of fresh properties as a factor in putting asking prices up by 0.2% this year – the first rise in annual prices since June last year.

Because transaction levels are up, Royal Institution of Chartered Surveyors reports that sales per surveyor has seen a rise to 18 in the last three months. The closely watched ratio of sales-to-stock also leapt up in September, a significant gauge of the take-up in market slack, which is often considered to be a leading indicator of the future direction of prices.

Around £38.9bn of gross mortgage lending was circulated during Q3-2009, confirmed by the Council of Mortgage Lenders. It signifies an increase of 18% since Q2, but also a 36% fall compared to the same period last year. This verifies current reports that the retail mortgage market is enjoying increasing activity but maintaining this growth will depend on the wholesale money markets. It is positive to notice a number of institutions in the UK undergoing restructured finance issuances that are backed by mortgage securities – another hopeful step towards more liquidity across the sector.

The gap between achieved exchange prices and asking prices has fallen during the year so far. The competitive bidding for many properties is being steered by a distinct cessation of this discrepancy. The average London property deal recently exchanged within 6% of asking prices and the gap seems to be narrowing. The prospect for a positive switch for the UK economy is flimsy but even so the UK’s economic position seems to be somewhat softening.

Hamptons International offers an extensive portfolio of UK and international property.
Services include sales, lettings, residential developments, property management and mortgages.

Sarah Beeny speaks on Tepilo.com

2009-11-24T17:44:00.009Z

As of late yesterday afternoon, Sarah Beeny's Tepilo.com invited users to begin uploading letting listings to the site, alongside sales listings which went live when the site launched a few months ago. Both Sarah and Tepilo's MD Will Miller answered a few questions I put to them yesterday afternoon about the launch of the new service and the reaction so far to Tepilo.com from the mainstream property industry.

1) Can you outline the current services available on tepilo.com?

As from 6pm [yesterday] – you can:

a) Buy or Sell your home online for free – with no charges or commission. You can add your home, browse property for sale, set up alerts and make contact directly with owners through the site. Using owner descriptions and a magazine style layout, we aim to give buyers and tenants much more of an insight into what's great about each property.

b) Let your property for free – we’re starting with a week where users can upload a property to let. They will also be able to move their property between areas of the site, enabling you to let while you sell and sell while you let. If you keep your property on the site this saves you having to upload it repeatedly. After a week we will enable the full search functionality to let users view the uploaded letting opportunities.

c) Get advice – there’s a recently expanded advice section on the site, with information and tips on improving your home, buying and selling property, becoming a landlord or tenant, expanding your home, designing your home, finance and legalities. You can even ask Sarah any questions if you get stuck.

d) Useful tools – we’ve partnered with some great companies such as MyDeco, Lovemoney, Spareroom.co.uk, Mybuilder and more to bring you a number of property related tools in one place. We’re slowly integrating these more and more with the site.

e) Moving forward we also have a properties wanted and tease me area coming to the site in the next few weeks. Properties wanted will enable buyers or tenants to profile their ideal property, and will give owners/landlords the chance to search through potential matches. Tease me, is really to let users upload their property and scope the market for what offers they might get. If the offers are good enough then who knows!

2) What made you decide to start listing lettings?

We decided to move into lettings due to popular demand and through the success of the sales side of the site. I recently read that around 50% of the market let privately now without using a lettings agent, so it was logical that we moved forward to offer this. There aren’t too many good sites where you can currently do this and the better looking ones seem to charge a fee. We hope it’s met with the same enthusiasm as the sales side of the site.

3) You've recently announced partnering with a few new websites, where your listings can now be found. Can you tell us which sites we can find listings for tepilo.com?

You can now find Tepilo listings on a huge amount of great websites, including: Channel4.com, The Telegraph, The Independent, The Sun, The Star, AOL, Trovit homes, Oodle and many more.

4) It's free for users to upload properties and you also charge no commission. What's your strategy for making money on tepilo.com?

It’s always been our aim never to take any money from the end user of the site. There’s currently no place on the site where we do this. The business model is slightly unique, and we are finalising talks with a significant sponsor which should drive the site moving forward. There’s no advertising on the site and we won’t ever try and push any services on our users. Hopefully this makes Tepilo a better place to be.

5) What's your take on the controversy with Rightmove, Globrix and The Little House Company with regards to FSBO listings on the major portals.

This is one of the reasons we set up Tepilo – it seemed mad that the biggest property sites would only allow listings from Estate agents. We hope in time we can sit amongst them and there won’t be a need to try and get on their sites when selling privately – as Tepilo becomes better known, we hope people will know to check the site in conjunction with others such as Rightmove.

6) Are you currently partnered with any major portals?

Yes, well, we’ve been speaking with a few – and have some plans which will hopefully come to fruition very soon – I can’t say too much at this stage.

7) What has the response been from the portals to tepilo.com

We heard from a few of them very soon after we launched – and they were actually very helpful. It was great to talk through their experiences and what worked and what didn’t for them when they were getting started. Because they don’t accept private listings we’re not really competing with them – and some of them now direct private seller to us.

8) What about the agents in general, how have they responded to you?

Again we heard from a few when we were getting going, but on the whole none of them have been too hostile. We’ve actually had a few make enquiries about listing their properties on the site now we’re getting a great amount of enquiries. Being free it actually makes sense for them as an option too!

9) What general advice do you give to house sellers in today's challenging market ?

I think we’re currently bouncing along the bottom of the market – some say there may be a double dip and house prices will go down further – but I can’t really see that happening. I think the market is starting to stabilize, so whilst prices won’t fall much further, they may well take some time to rise considerably. If you need to sell then it’s probably not worth waiting around, and if you’re looking to buy, take advantage of the current state of the market – but don’t be too fussy – if you really like a property then don’t be put off by a high asking price, especially if you won’t look to sell for a few years.

Thanks to both Sarah and Will for answering these questions. For more on Sarah Beeny check out her main website; her Channel 4 property show, her twitter feed and don't forget to visit Tepilo.com and add your listings; who knows you may even be lucky enough to win a visit from the lovely lady herself !

Google is 'key partner' for Zoopla

2009-12-07T07:34:00.008Z

Alex Chesterman, CEO of the award winning Zoopla.co.uk released this statement concerning Google's entry into the UK property search market:

"Google is a key partner in our business today with its free search results and paid search ads, and far from seeing their entry into the property space as a threat, we believe it provides an opportunity to generate even greater levels of traffic to our content and more exposure and leads for our member agents.
Google is [also] an extremely important start point in the consumer web journey and therefore we watch with great interest anything they do. Google helps online users find relevant content and Zoopla.co.uk is the UK's leading property market resource combining property listings together with current home values, sold house prices, local information and a variety of tools to help consumers make better property decisions.”

click here for Rightmove response to Google property and here for my extensive interview with Alex Chesterman

Rightmove "asserts" market position over Google

2009-12-03T15:40:00.003Z

Following reports that Google are about to enter the UK property search market, Rightmove have just issued the following extensive statement this afternoon:

Rightmove, the UK’s number one property website, has responded to recent reports regarding a new property market entrant to reaffirm its service offering to customers. News reports have suggested that the search engine Google will soon enter the UK property market, although no launch date or announcements have been made.
As a full-service property portal Rightmove is the established market leader in delivering leads to agents via its popular Rightmove website, i-Phone app and a forthcoming desktop search tool. Rightmove agents are also able to build profile within their local area, advertise to potential vendors and fully monitor their branch performance using a range of add-on features including the recently upgraded Rightmoveplus homepage.

Miles Shipside, commercial director of Rightmove, comments:

“As a pure search engine, Google’s offering would appear to differ to the full service we have established for home-hunters, potential vendors and agents in the UK market. This can be seen in the property site that Google have already launched in Australia.
Google is pre-eminent as a way of searching for information. But when people know what they want, and want to source quality information that is clearly presented, they turn to websites such as Amazon for books and CD’s, Ebay for auctioned collectibles, Autotrader for cars and Rightmove for property. There is no conflict between what these sites do and what Google does.
Large organisations have attempted to enter the online property market in the past. Earlier this week News International sold up their shares in a property website they bought into in 2004.
Should any announcement be made by Google, we are confident that home-hunters and agents alike will continue to see the value in Rightmove’s usability and quality services.”

So far today, Rightmove shares have nosedived nearly 13%, with suggestions that even Rightmove directors are busy offloading stock.

Sarah Beeny: We "shouldn't worry" about Lib Dem mansion tax

2009-11-30T17:08:00.002Z

"It doesn't seem to be a very fair or realistic tax and I think it seems unlikely it would ever actually be brought in, so perhaps we shouldn't worry."
Sarah Beeny, President Tepilo.com and presenter of Chanel 4's Property Ladder

Globrix and Newscorp part company

2009-11-30T16:16:00.003Z

A few weeks less than 2 years after making a "multi-million pound investment", Newscorp has decided to part company with Globrix, with the Globrix founders reacquiring Newscorp's equity stake for "an undisclosed sum".

According to Globrix blog, the "move" helps Globrix focus on "core activities" as a technology business and a "growing UK property portal."

[Hat tip Zoopla, which is ironic, a few months ago I predicted Globrix and Newscorp would soon part company since Murdoch seemed to have lost interest in the freemium business model promoted by Globrix, and jokingly suggested that they may be next on the Zoop acquisition list. Couldn't see it happening back then, but now ... ??? ]

Primelocation comments on Lib Dem ‘Mansion Tax" proposal

2009-11-30T15:32:00.002Z

“The levy has not been properly thought through and could prove damaging to the recovery of the housing market if introduced in the current climate. Creating another artificial threshold will hinder some of the natural movement within the property market, possibly stunting the ripple effect of a revival, which our data indicates will be led by Prime London properties.”
Andrew Smith, Head of Research, Primelocation.com

Primelocation.com is the UK's principal portal for leading estate agency firms, including major national agencies such as Savills, Knight Frank and Hamptons International, listing over 680,000 prime properties to rent or buy in the UK and overseas. The monthly Primelocation Price Index monitors price changes and stock levels in the UK prime market.

Mouseprice analyzes Lib Dem mansion tax rethink

2009-11-30T09:52:00.009Z

guestpost via: mouseprice.com

The Lib Dems this morning revised their "mansion tax" policy, by both raising the property price threshold from £1m to £2m and increasing the tax rate from 0.5% to 1%.
However, what has not been revealed until now is the substantial impact these changes would have on estimated tax revenue. Far from being revenue neutral, the policy revision will result in £288m less tax revenue than the original proposal. With the new proposals there is a dramatic fall in the number of houses affected, from 105,600 to 19,600. Cynical observers may conclude the revision was due to the critical response to the original proposals.

Original proposal:
No. of properties affected: 105,600
Total value of properties affected: £168,735 million.
Tax rate: 0.5%
Estimated tax revenue: ~~£844 million~~ £316 million

New proposal:
No. of properties affected: 19,600
Total value of properties affected: £55,610 million.
Tax rate: 1%
Estimated tax revenue: ~~£556 million~~ £165 million

The data above is supplied by Mouseprice.com - the UK's leading property information website.
Mouseprice.com maintains a database containing property valuation estimates on every property in the country. Estimates are based on information derived from Land Registry and estate agent data sets using automated valuation model (AVM) technology.

Dubai "could be the new Lehman"

2009-11-26T13:48:00.007Z

Other than a spectacular and unprecedented level of debt on a real estate project, what's also interesting about Dubai World is the level of exposure the UK's biggest banks ~~had~~ have to Dubai's debt burden:

"Nakheel is now standing on the brink of failure given the astonishing amount of cash Dubai would have to inject on it in order to see the enterprise survive ... Dubai World’s more than 70 creditors face the prospect of writedowns on as much as $60 billion of debt if they haven’t unloaded their holdings and the state-owned company fails to win additional support from Abu Dhabi.
The biggest creditors are Abu Dhabi Commercial Bank and Emirate NBD PJSC. Other lenders include Credit Suisse Group AG, HSBC Holdings Plc, Barclays, Lloyds Banking Group Plc and Royal Bank of Scotland Group Plc, according to a person familiar with the situation.
“Our exposure is immaterial,” said Credit Suisse spokesman Marc Dosch. HSBC and Lloyds declined to comment when contacted by Bloomberg. Spokesmen at RBS and Barclays were not immediately available to comment.
[via Bloomberg emphasis added]

It will be interesting to see how UK banks (and by extension the UK government) officially respond to this unprecedented situation; actually not so unprecedented, as there is now talk comparing Dubai to Argentina in 2001:

European stocks plummeted the most in three weeks amid concern Dubai’s proposal to delay debt payments may trigger the biggest sovereign default since Argentina in 2001. Asian shares fell. Unlike Argentina, which stopped payments on $95 billion of debt eight years ago ... Dubai’s announcement yesterday “was a surprise,” said Alia Moubayed, a London-based economist at Barclays Plc.
...

Argentina 2001

London Stock Exchange Group Plc, whose largest shareholder is Borse Dubai Ltd., dropped the most in three months. European Aeronautic, Defence & Space Co., which is part-owned by Dubai, fell 2.8 percent. Cie. de Saint-Gobain SA, Europe’s biggest supplier of building materials, slipped 4.6 percent after Goldman Sachs Group Inc. recommended selling the shares.
Europe’s Dow Jones Stoxx 600 Index retreated 2 percent to 243.01 at 12:46 p.m. in London, the steepest intraday drop since Nov. 3. The measure plunged 44 percent in the six months after Lehman Brothers Holdings Inc.’s bankruptcy in September 2008 froze credit markets and worsened the first global recession since World War II.
“The specter of financing difficulties is resurging ... The news from Dubai “is resurfacing worries that we had put aside. This could be the new Lehman.”

European stocks as of this morning

Will Google kill vertical property search?

2009-11-24T18:56:00.003Z

Very in-depth post from Notorious R.O.B on the Google real estate issue.
People seem to be forgetting that both Yahoo and Microsoft also have dedicated real estate services, so why not Google?

Talks of copyright infringement seem a little farfetched, but the Notorious one does raise an interesting issue on the potential of Google Real Estate to kill vertical property search and the success that industry has enjoyed over the past few years.
Ironically it really was probably the launch of Google maps back in '06 that spawned the growth and revolution of vertical property search engines, making names like Zoopla and Zillow everyday household words.
Notorious R.O.B reminds us that pretty much all search begins at Google, we can safely assume the same holds true for real estate and property. Most Consumers, according to ROB do not start their property search by "going to Realtor.com and typing in 'homes for sale in New Jersey'. They DO go to Google and do just that, and then find a list of websites (including Realtor.com) and go there."
ROB feels that consumers will soon realize that they can find listings for homes in Google and start to "migrate over" from the vertical search engines. ROB feels that this will "kill existing real estate vertical search engines", and will certainly have an impact on the wider real estate world, including agents and how they market their property.
Incidentally, this may be one reason why the property industry is now recognizing innovation at sites such as estatecreate.com, which permits users to format single property sites that may easily be indexed in Google; potentially eliminating, or at least reducing the need to list in portals and vertical search indexes.

Forecast not looking good for 2010

2009-11-20T14:12:00.004Z

Most leading economists and agents predict more gloom for UK property next year with Seema Shah, of Capital Economics suggesting prices not returning to '07 levels until at least 2019: “the market is still overvalued, whichever measure you use, prices need to fall a further 20 percent to 25 percent to get back their long-term trend.”

[via Bloomberg]

Climate change and property prices

2009-11-16T10:10:00.012Z

The UN climate change conference in Copenhagen is generating a lot of enthusiasm. One aspect that seems to be currently missing from the debates is the impact of climate change on property valuations. This is something all too familiar in London, with the recent controversy surrounding the proposed third runway at Heathrow.
Environmentalist David Pearce authored "Blueprint for a green economy" on behalf of the UK government in 1989. In the report, Mr Pearce argued that it is well known that differences in property values arise from many sources, including "the amount and quality of accommodation available , the accessibility of the central business district, the level and quality of local public facilities, the level of taxes that have to be paid on the property and the environmental characteristics of the neighborhood, as measured by the levels of air pollution, traffic and aircraft noise, and access to parks and water facilities."
Perace believes that these "variables on interest" on property values are indeed "very closely correlated, for example, accessibility to the town centre is often closely related to some measures of air pollution , and one measure of air pollution, such as total suspended particulate matter, is very closely correlated to other measures such as sulfur dioxide. To overcome this, many studies use only one 'representative ' measure of pollution."

Perace's research appears to confirm some of the legitimate concerns of lobby group "Notrag" (No Third Runway Action Group), who write that BAA has sent letters to all residents in the village of Sipson to say that they are willing to buy all affected properties in an attempt to support their planning application to build the runway. Naturally, this will be contested by some residents and environmental activists, however the news that BAA is willing to buy the properties offered "relief to some residents who have tried unsuccessfully to move" and addresses the "problem of residents who are unable to sell their homes due to the third runway threat" according to Notrag.

London mayor Boris Johnson, has also been vehemently opposed to the third runway, clashing with some members within his own political party over the issue. Johnson vents opposition to the runway by stating that the loss of hundreds of houses in "the ancient village of Sipson," and the increase in road traffic and number of flights from 470,000 to 700,000 a year will make London a much less desirable place to live:

I am writing this at 11.20pm on Sunday night in Highbury, north London, which is not normally thought of as being under the flightpath, and I promise I have just heard a flight go over. It was audible, though the windows vibrated only mildly. What will it be like when that plane starts to descend over west London and the wind starts howling through the wheels? And what will north London be like if they are ever so mad as to build a third runway? The map indicates that Harrow, Camden, Islington, Enfield will all be on the itinerary for planes using the new runway – in other words, that hundreds of thousands, if not millions, of Londoners stand to be affected in a way that the builders of Heathrow never imagined, while the auditory sufferings of west London will be intensified. I am a capitalist, a free-marketer, a believer in air travel, but I simply cannot believe that the endless expansion of Heathrow is the right thing for London or for Britain. Why are we the only major country to direct aviation traffic straight over our principal conurbation?

Boris called in the architect of the Hong Kong airport to draw up a feasibility assessment for "Boris Island", an island airport concept in the Thames estuary, which is also receiving opposition from environmentalists, although at present, not nearly as intense as that which is coming from Heathrow.

proposed Boris Island

London's current airports

Hong Kong airport

protests at Heathrow

Cayman Island fraud investigation

2009-11-12T10:47:00.003Z

Following complaints received about the investment activities of Dynamic Decisions Capital Management Ltd, the Serious Fraud Office has opened an investigation and wants to hear from anyone with information that might help with enquiries. The SFO opened the criminal investigation following a formal referral of the matter by the Financial Services Authority.
Complaints had been received by the SFO and the Financial Services Authority about Dynamic
Decisions Capital Management Ltd, in connection with a hedge fund operated in the Cayman Islands known as Dynamic Decisions Growth Premium Master Fund Ltd. The SFO would like to hear from persons who believe they have any information that might help the SFO with its enquiries.
The number to call is 0207 239 7388.

New report into online advertising

2009-11-11T17:15:00.002Z

Guest post: Jonathan Bowers
Communications Director
UKFast.net Ltd

New figures from the Internet Advertising Bureau show that online ad spend has overtaken TV in the UK. Britain is the first mature market in which this significant change has happened and it shows that companies here appreciate that web advertising is now the best route to market.
In the, first six months of 2009, 23.5% of all ad spend in the UK was taken by online forms compared with just 21.9% for TV.
In this the UK is ahead of the curve. To date, the world's other major markets have not matched the UK's milestone. In the US, online ads make up 15.4% of the total market and still trail TV. Asia-Pacific has even more ground to make up with a percentage only just in double digits while TV commands over 30%. Globally, the web advertising figure stands at 13.2%.

Redrawing the balance

In difficult economic times, online advertising forms are the only growth sectors. The graph below shows that all offline forms of advertising are decreasing while 'Internet' and 'Internet Search (PPC)' are the two areas witnessing an increase.

source: IPA Bellwether

Marketing departments have come to appreciate that online advertising is more engaging and versatile, which translates to a better return on investment.
It is more attractive than traditional advertising channels because it is more accessible. TV remains the domain of firms with large budgets and the small players simply cannot afford to compete in this advertising arena.
Online is a different proposition, however. Basic costs are lower and with sophisticated targeting, budgets can be focused. Furthermore, pay per click, an 'Internet only' advertising form, offers advertisers the benefit of only incurring cost when people click on their ads.
"Crucially, this allows small and medium size businesses to compete with their bigger rivals," states Lawrence Jones, MD of UKFast. "This is exactly the experience of UKFast. We have enjoyed tremendous growth at the expense of larger competitors, despite having a much more modest advertising budget."

Getting the balance right

So the statistics show that advertisers are increasingly looking to the Internet, but that means competition is growing when overall budgets are actually shrinking.
Research from the Advertising Association reveals that online ad spend increased by a huge 19.1 per cent in 2008, maintaining a dramatic increase since 2003.
However the data depicted below from Zenith Optimedia shows that even online spend is predicted to dip over the next couple of years as the effects of the recession continue to play a part.

All businesses wish they could spend less on PPC and still maintain their rankings. UKFast believes that speed is the key to reducing PPC costs.
To retain user numbers, search engines want to deliver an excellent service. Users say they want speed, so the search engines give fast loading websites preferential rankings.
This therefore means that high rankings can be achieved through a modest investment in speed instead of a heavy investment in PPC.
Online travel business Let's Stay UK is a good example of the effect speed has. The business does not engage in 'pay per click' campaigns and yet it regularly features in the top three of search returns on its key terms. This includes consistently beating much bigger rivals such as Haven and Butlins.
However, according to Google research into user habits, traditional organic results only capture 40% of users. 20% are taken by organic forms that use other Google media, such as shopping and news links, while the remaining 40% are focused on the Pay Per Click (PPC) results. So to get a rounded search engine campaign involves ranking highly in multiple organic and PPC sections.
Consider the diagram below. The red section is the traditional organic returns and it commands 40% of users' attention. The yellow section contains, in this example, Google shopping links and draws 20%. The orange section is the top paid results and it gains 26% of users, while the green section is the remainder of the paid links and that only draws 14%.

The importance of the yellow section is worth noting. While it is made up of free organic links like the red section, it is a separate section in terms of the algorithm that generates it. What this means for companies trying to achieve high organic rankings is that they must meet the requirements of both algorithms.
Meanwhile, to rank highly in the paid areas it is clearly vital to get into the orange section. Here three links share 26% of the clicks, as opposed to the right column sponsored links, which share 14% between 7 results.
Speed also helps to deliver higher PPC rankings because of Google's desire to provide an excellent user experience across the board. The time it takes for the user to load your webpage is assessed and added to the 'Quality Score' that determines the cost of the PPC. This allows Google to reward websites that look to deliver a better service.
This means that speed can reduce your PPC costs in relation to your competitors. You can rank more highly than they do and pay less for the privilege!
"The most effective advertising today is online," adds Jones. "But with budgets limited and competition tough online businesses need other cost-effective ways to achieve prominence in the search rankings. Speed is one answer. Fast hosting delivers higher rankings in both organic and paid search. It can be the factor that makes an online business take-off."

Mouseprice iphone app now live

2009-11-06T12:50:00.010Z

Apple has now approved The mouseprice app we spoke about a few weeks ago; the app is now live and has been officially released this morning.
Designed to make searching for valuation comparables and property price data on the go, the mouseprice app is very different to the Rightmove app, or Propertynearme which is used mainly to check property sale and rental prices; however to date, there is no UK or European service to offer mobile valuation estimates, similar to the much praised Zillow app in the US.
However the Mouseprice app does come at a price, and as applications go, it's not exactly cheap. Comparables data will coast you a one off £2.99, as mouseprice is wisely aiming this tool at the people who will probably use it most; i.e. estate agents, surveyors and investors, who can "use the app to check comparables and valuation estimates on the way to a viewing" according to the press release.
Once paid for all searches are free with no limits to the amount of searches that can be performed, and the app is relatively simple and straighforward to use as this short video demonstrates:

Below are exclusive screenshots:

Aonther new iphone application

2009-10-30T14:22:00.004Z

But this one is different in that it's web based, meaning you don't have to download an app for your phone, simply point your iphone browser to this URL. It's a throw back for old school iphone users who can remember the days before Apple launched the app store (just over a year ago, yet seems like a lifetime). PropertyNearMe uses the 'geo location' functionality of the iPhone to download properties for sale or rent in the immediate vicinity and features aggregated property data supplied by Nestoria. Countries covered include the UK, Germany, Italy and Spain. The developers promise a version for Android phones soon as well as a downloadable app version with more features to follow.

The economics of George Osborne

2009-10-28T13:19:00.002Z

Guest Post
Douglas McWilliams chief executive
centre for economics and business research

With Conservative policy becoming clearer and the state of the UK economy gradually becoming less uncertain, it is now possible to make an assessment of their economic consequences. Our latest UK forecasts, to be released later this week, are based on our normal convention that we take the spread betters’ conclusions for the results of uncertain political developments. In this case we therefore assume a Conservative victory in a May election with a working majority. In effect, we see monetary policy being moved into ‘fast forward’while the fiscal policy levers are put into ‘fast reverse’.
We assume £80 billion of public spending cuts, £20 billion of indirect tax increases and a ‘get back to work package with a gross cost of £3 billion. The good news for the Tories is that it looks as though the policies should work; the Budget deficit is reduced to 2.5% of GDP before the end of the parliamentary term, the economy does not go back into recession, while unemployment stays high and rises slightly –but starts to fall back in 2013.
The policies depend for their success on keeping monetary policy very loose –a combination of quantitative easing and base rates at 0.5% until mid 2011 at least and a fall in the 10 year bond yield to 2.5% in two years. This leads to a continued weak exchange rate –the pound falls to $1.40 and could temporarily reach parity with the euro unless the markets become aware at anearly stage of the euro’s structural weaknesses.
Low interest rates and a competitive pound eventually revive net exports –particularly constraining imports of manufactured goods –and business investment, especially in commercial property. GDP growth from 2010‐2014 averages just short of 1.5% ‐not high but not obviously much lower than under any other strategy. Following emergence from the recession in the second half of 2009, growth comes back in 2010 but falls back again in 2011‐12 as fiscal retrenchment takes its course. Through 2013‐14 growth reaches and surpasses the 2.0% mark for the first timesince 2007.
Of course there are risks. The biggest risk is that external factors and a weak pound may mean that underlying inflation is too high for interest rates to be kept low. This is why the Tories’ labour market strategy is so important –the ‘back to work’ policy may cost money (we suspect rather more than the £600 million quoted in the press) but is essential to limit the rise in unemployment and to keep downward pressure on pay inflation, business costs and hence the Consumer Price Index.
But the Conservatives could justifiably argue that the risks of the alternative strategy are much greater –a risk of financial markets being unwilling to finance a debt burden and a major economic crisis. We think George Osborne’s sums add up –but he is reliant on the problems of the world economy easing, on growth outside the UK and on maintaining market confidence.
and are only made available to bone fide employees of organisations with a current and fully paid‐up membership of the prospects.

Media reports boosting property market

2009-10-26T15:13:00.002Z

Investor confidence in the UK and overseas property market appears to be rising according to statistical research from the Property Investor Show, with 43% of investors reporting a increase in confidence in the last three months and 32 per cent attributing this change to positive media reports about the property market. Financing purchases remains an ongoing issue with 80 percent of investors still unable to secure bank loans to fund investment. However 32 percent of respondents claim to have enough cash or equity to cover the current LTV ratio requirements.
Property Investor managing director Nick Clark claims there is a "strong shift" in the UK with investors now re-exploring opportunities overseas with potential greater returns than the other "poor performing investment vehicles such as bank savings and the stock market."
The Property Investor Show took place this past weekend at London's Excel center attracting over 10,000 visitors and 160 exhibitors.

Lettingsearch jumps on Tory bandwagon

2009-10-22T13:34:00.006+01:00

Alongside The Honourable Miss Allsopp, and Ahipp, Lettingsearch.co.uk also seems to be jumping on the Tory political march to number 10 with great enthusiasm.
The proposed scheme to allow Housing Allowance tenants to choose to have their allowance paid direct to landlords instead of to themselves would give landlords greater confidence that rents would be paid as well as giving a "huge boost to the private sector lettings market as we seek to come out of the downturn," according to Lettingsearch director Phil Calderbank. However Calderbank is tempering his enthusiasm by warning the Tories not just to "pay lip service to what they know will be a popular vote winner come election day."