Distressed Assets, a Liverpool based property investment and acquisition company forecasts that the UK property market will rise on average by up to 5% in 2010.
The main event in the UK this year will be the General Election which must be called before June. After the election the main effort of government will be implementing policies to reduce the deficit, balancing reductions in public expenditure with recovery in the economy. In the meantime, interest rates will remain low, wage demands likewise and unemployment will continue to rise, although at a lower rate than in 2009.
Dominic Farrell, a director of Distressed Assets comments that “The UK property market will not collapse in 2010. The same pundits who predicted a collapse in 2009 are predicting a collapse of 20% this year. They got it wrong last year and they will be wrong again this year. Given low interest rates, a shortage of supply, economic recovery (albeit weak) and growing confidence amongst business owners, industrialists and bankers, I personally predict a rise in property prices in the UK of up to 5%.”
This is further supported by a recent report by property website Zoopla: “Around 81% of people expect house prices to rise during the coming six months, predicting average increases of 5.4%. The figure is a significant turnaround from a year ago, when only one in five people expected property values to increase during the first half of 2009.”
Farrell continues, “The two key factors supporting property markets are the availability and cost of finance as well as general consumer confidence. In both cases there have been substantial improvements since this time last year.”
Notes for Editors:
Distressed Assets is a Liverpool-based company which sources undervalued property investment opportunities for clients from banks, financial institutions and via auction. Its sister companies include property development and acquisition companies and an investment magazine publisher.
The company website is at http://www.distressed-assets.co.uk
Distressed Assets will be holding a Repossessed Property Conference in London on Saturday 30th January 2010. Details can be found on the website.
For further information or interviews, please contact Henry Powell-Jones on +44 151 243 5430
Tuesday, January 12, 2010
Tuesday, December 15, 2009
Bank Repossessed Property Conference Sat 30 Jan 2010 London
Dear Investor,
Towards the end of the week I will look forward to 2010 and beyond, but today I would like to announce the Distressed Assets Repossessed Property Conference 2010.
Why You Should Attend?
Expert speakers in the fields of property investment, law, tax and lettings who will explain in detail how you can substantially increase your wealth in 2010. Property remains one of the best long-term investments and now is a rare chance to invest at or near to the bottom of the market.
Aim
The aim of the conference is to inform delegates of the outstanding opportunities that are presently available in the UK bank repossessed property market and how to secure a great investment for your future prosperity. One of our clients recently wrote,
“Distressed Assets found me a property which I purchased at 40% below market value, with a gross yield of 9%. Although it took some time to find me an investment property that matched my requirements it has proved well worth the wait. If I remortgaged the property today I could release £50,000 of equity, nearly three times my initial investment - an excellent return by anyone’s measure. The service throughout has been extremely professional and thorough. Thank you” Jon Cowan, London
And another:
“I’d like to thank Distressed Assets for sourcing me an apartment in Central London. The location is perfect with excellent rental demand and very close to all local amenities. It has a gross yield of 10% giving strong cash flow of £350pcm after all costs. I have recently remortgaged the property, and even with surveyors being particularly cautious in the current market, it was valued at £230,000. That’s £65,000 of equity in just six months, a very good return on investment of over 150%. I am now hoping to reinvest the £45,000 of equity which I have just released from the property.” Richard Smith, Essex
The topics to be covered are:
The Economic Outlook For 2010
Why Now Is The Perfect Opportunity To Make Substantial Returns From UK Bank Repossessed Property
What To Look For And How To Buy Repossessed Property Substantially Below Market Value
Avoiding The Legal Pitfalls And Managing Risk
How To Pay Less Property Tax
A Property Investment Strategy For A New Era
How To Raise Finance in 2010
Renting Your Property: Getting The Best From Your Lettings Agent
Ask the Panel Session Q&A
Throughout the day there will also be the opportunity to have a private consultation with a property advisor and mortgage advisor.
This is a great opportunity to learn from experts in their field. Distressed Assets has a proven track record in sourcing repossessed properties at a large discount to market value with strong cash flow.
The window for these investments is closing and, as the economy stabilises next year, you will need to act quickly in order to secure deals like the ones illustrated above.
The conference will be held in the London Hilton Metropole, Edgware Road on Saturday 30th January from 10.30am to 5.30pm and there will be the opportunity afterwards for networking with speakers and fellow delegates.
The cost of the 1 day Conference is £97 plus VAT per person. Tickets purchased before 1200 noon this Friday (18th December 2009) will cost £47 plus VAT for the first 30 places only.
Ring now on 0151 243 5432 or 0151 243 5431 to secure your place or fill in the form at:
http://www.distressed-assets.co.uk/
See you there
Best wishes
Dominic Farrell
Friday, December 11, 2009
Dominic Farrell's Investors' Newsletter 11th December 2009
Dear Investor,
The “highlight” of the week was the Pre-Budget Report on Wednesday and by now you will be familiar with many of the key points. If you are a banker, then Christmas will not be as much fun as it has been in the past. But it appears for now that the tax on bonuses above the £25k threshold is a one off measure (we’ll see?).
The Report had all the hallmarks of Gordon Brown and did not tackle the main issue of the budget deficit. The figures for the borrowing requirement - £178 billion this year, dipping to £176 billion next year are mind blowing and I believe we are running the largest deficit this country has known in “peacetime” (although soldiers in Afghanistan would dispute we are in a period of peace).
There will be much pain after the next General Election which may be as early as March, but likely to be May or June. Either way, whichever party wins, difficult choices will have to be made according to the classic economic concept of the “allocation of scarce resources.”
I will hold off with my predictions for 2010 until the final newsletter of this year which will be before 18th December as the company will close completely for a well earned break from then until 4th January 2009.
If you have any outstanding business which needs a response before the first week in January, then please contact your account manager before next Friday.
We are now established in our new offices. The address for the group of companies is:
Bold Spirit House
10-12 Pall Mall
Liverpool
L3 6AL
Key departmental telephone numbers are:
InvestinCyprus.com Developers – 0151 243 5432
Distressed Assets – 0151 243 5431
Jet-to-Let - 0151 243 5430
We now have two Twitter accounts for the company. The first one is a news reporting service for Distressed Assets and has a remarkable following of over 4000 people in a matter of a few weeks. The address should you wish to follow is:
http://twitter.com/Repossessions
My own personal Twitter is a mixture of economics, politics and everyday life. In the past couple of weeks I have gained over 1000 followers and if you wish to follow, the address is:
http://twitter.com/DominicFarrell
Have a great weekend
The “highlight” of the week was the Pre-Budget Report on Wednesday and by now you will be familiar with many of the key points. If you are a banker, then Christmas will not be as much fun as it has been in the past. But it appears for now that the tax on bonuses above the £25k threshold is a one off measure (we’ll see?).
The Report had all the hallmarks of Gordon Brown and did not tackle the main issue of the budget deficit. The figures for the borrowing requirement - £178 billion this year, dipping to £176 billion next year are mind blowing and I believe we are running the largest deficit this country has known in “peacetime” (although soldiers in Afghanistan would dispute we are in a period of peace).
There will be much pain after the next General Election which may be as early as March, but likely to be May or June. Either way, whichever party wins, difficult choices will have to be made according to the classic economic concept of the “allocation of scarce resources.”
I will hold off with my predictions for 2010 until the final newsletter of this year which will be before 18th December as the company will close completely for a well earned break from then until 4th January 2009.
If you have any outstanding business which needs a response before the first week in January, then please contact your account manager before next Friday.
We are now established in our new offices. The address for the group of companies is:
Bold Spirit House
10-12 Pall Mall
Liverpool
L3 6AL
Key departmental telephone numbers are:
InvestinCyprus.com Developers – 0151 243 5432
Distressed Assets – 0151 243 5431
Jet-to-Let - 0151 243 5430
We now have two Twitter accounts for the company. The first one is a news reporting service for Distressed Assets and has a remarkable following of over 4000 people in a matter of a few weeks. The address should you wish to follow is:
http://twitter.com/Repossessions
My own personal Twitter is a mixture of economics, politics and everyday life. In the past couple of weeks I have gained over 1000 followers and if you wish to follow, the address is:
http://twitter.com/DominicFarrell
Have a great weekend
Monday, November 23, 2009
Dominic Farrell's Investors' Newsletter 20th November 2009
Dear Investor,
The refurbishment of our office block in Liverpool is moving at a pace and we should all be moved in and settled by the end of the month. In the meantime we have received some very exciting news from Cyprus which will please many buyers at the Grove Spa Resort. We will publish the details via this newsletter in due course when an official announcement is made.
Distressed Assets has delivered a number of successes recently, one of which I wish to highlight here:
• 2 Bed Apartment with parking purchased at auction for £70,000
• Previously sold for £160,000 in Aug 2007
• £6,600 income p.a. with a gross yield 9.4%
• Previously sold for £160,000 in Aug 2007
• £6,600 income p.a. with a gross yield 9.4%
Waterloo is one of the best areas of Liverpool and a directly comparable property is currently on the market at £117,500 so our investor has made instant equity of nearly £50,000, not bad for a relatively small outlay.
Further there are some positive news stories hitting the press about buy-to-let in the UK and when investors compare the returns from property with the returns from pension funds and cash, then there’s no surprise that they are choosing property.
Repossessed Property Seminar – Wednesday 25th November 2009 in London at 6.30pm
We have a few places remaining on our FREE repossessed property seminar next week. Myself, Henry and Angela (our lawyer) will show how you can make substantial sums of money in this market whist avoiding the legal pitfalls. One of our clients has made £80,000 on one property purchase he made just 6 months ago.
If you want to learn how to achieve these levels of return, then fill in the form at:
My blog has a very good article about buy-to-let which you can read by clicking here:
Twitter
I now have my own Twitter account which I will update each day from either my laptop or Blackberry. It will literally be a collection of random thoughts from investing to sport to politics and life in general. If you wish to subscribe, then please follow the link below:
We also have a Twitter account which deals entirely with Repossessed Property and this can be accessed at:
Linkedin
Yes, we have been busy on the IT side of things recently. Yesterday, I opened a Linkedin account which is essentially a personal business network. If you wish to join my personal business network, then sign-up here:
Have a great weekend
Thursday, November 19, 2009
The Future's Bright For Buy-To-Let
It's about time landlords got a bit of good news and the last few weeks have been full of bullish buy-to-let announcements.
Not only are landlords taking out more mortgages, but more deals are being launched to serve them. Landlords are also feeling upbeat about the year ahead -- and for good reason. Their returns have just turned positive for the first time in over two years.
Could it be that happy days are here again for the buy-to-let market?
Lending up
Lending in the buy-to-let sector grew in the third quarter of this year for the first time in two years, according to data published last week by the Council of Mortgage Lenders.
It totalled £2.1bn over the quarter, 10% higher than in the previous three months. The third quarter also saw the first increase in two years in the number of buy-to-let loans advanced, from 21,600 to 23,700.
Good news indeed, although let's not forget that the increases were from a very low base compared to 2007 lending levels. Still it's encouraging to see the market is actually growing.
Lending within the sector was up for both purchase and remortgage business, with house purchase lending 'appreciably stronger' according to the CML -- that's not surprising when many borrowers are reverting to low standard variable rates (SVRs) and deciding to sit tight until rates rise.
Plus with no buy-to-let mortgages available over 80% of a property's value, anybody with less than 20% equity would be unable to remortgage, whether they wanted to or not. Lucky for them that many SVRs are low!
There has also been a continued improvement in the number of arrears in the buy-to-let sector -- helped by low rates. According to the CML the number of mortgages with arrears of more than 1.5% of the balance dropped for the third quarter in a row, falling in from 22,900 to 20,500 (which represents 1.7% of outstanding buy-to-let mortgages).
The CML points out that while the recovery in the sector is only modest is does show that buy-to-let is "here to stay".
Landlords feeling bullish
The positive stats are supported by happy landlords, with many feeling much more optimistic about the sector in the third quarter of this year.
According to buy-to-let lender Paragon Mortgages, landlords expect the net value of their portfolios to increase over the next 12 months and have been taking advantage of lower house prices since the first quarter of 2007.
On average they owned 11 properties at the beginning of 2007, which increased to an average of 12 properties by the third quarter of 2009.
Plus they are feeling good about the future with a third of landlords now saying that tenant demand will grow over the next 12 months, and 57% predicting it will remain stable.
Paragon added that it is unlikely that the mainstream mortgage market will recover for a number of years and that this means that large number of people will continue to be excluded from buying, and will need to rent property.
Positive return
Landlords have even more reason to feel cheery following the latest rental index from property company LSL property services. It says that annual property investment returns turned positive in October for the first time since the UK fell into recession.
After taking rental income and the fall in house prices into account, a landlord investing in property in October 2008 would have made an average annual return of 2.4% -- the last annual positive return was in July 2007.
The rental index also showed that tenant arrears have improved -- an issue that has been a huge problem for landlords during the recession. By the end of October, arrears had shrunk to 495,000 or 14.6% of UK tenancies, the lowest level since LSL began calculating these figures one year ago.
What about mortgages?
Even more good news, the mortgage market is also improving with lenders offering more buy-to-let deals. There were just 179 buy-to-let mortgages in September and now there are 239 available, according to financial information provider Moneyfacts.
But that's still a drop of 93% from the peak of the market two years ago, when there were over 3,600 buy-to-let deals on offer.
Maximum loan-to-value ratios are still tight but there are a couple of deals available up to 80% LTV from sister lenders Yorkshire Bank and Clydesdale Bank. For any real choice though landlords still need to find 25% upfront.
This is a world away from the market two years ago where 85% and 90% mortgages accounted for 65% of the buy-to-let market. Plus lenders are still tightening some criteria, such as restricting the size of portfolios that landlords can have.
But if you want a buy-to-let deal, there are some options around -- provided you have that all-important equity of course!
Source: Lovemoney.com
Not only are landlords taking out more mortgages, but more deals are being launched to serve them. Landlords are also feeling upbeat about the year ahead -- and for good reason. Their returns have just turned positive for the first time in over two years.
Could it be that happy days are here again for the buy-to-let market?
Lending up
Lending in the buy-to-let sector grew in the third quarter of this year for the first time in two years, according to data published last week by the Council of Mortgage Lenders.
It totalled £2.1bn over the quarter, 10% higher than in the previous three months. The third quarter also saw the first increase in two years in the number of buy-to-let loans advanced, from 21,600 to 23,700.
Good news indeed, although let's not forget that the increases were from a very low base compared to 2007 lending levels. Still it's encouraging to see the market is actually growing.
Lending within the sector was up for both purchase and remortgage business, with house purchase lending 'appreciably stronger' according to the CML -- that's not surprising when many borrowers are reverting to low standard variable rates (SVRs) and deciding to sit tight until rates rise.
Plus with no buy-to-let mortgages available over 80% of a property's value, anybody with less than 20% equity would be unable to remortgage, whether they wanted to or not. Lucky for them that many SVRs are low!
There has also been a continued improvement in the number of arrears in the buy-to-let sector -- helped by low rates. According to the CML the number of mortgages with arrears of more than 1.5% of the balance dropped for the third quarter in a row, falling in from 22,900 to 20,500 (which represents 1.7% of outstanding buy-to-let mortgages).
The CML points out that while the recovery in the sector is only modest is does show that buy-to-let is "here to stay".
Landlords feeling bullish
The positive stats are supported by happy landlords, with many feeling much more optimistic about the sector in the third quarter of this year.
According to buy-to-let lender Paragon Mortgages, landlords expect the net value of their portfolios to increase over the next 12 months and have been taking advantage of lower house prices since the first quarter of 2007.
On average they owned 11 properties at the beginning of 2007, which increased to an average of 12 properties by the third quarter of 2009.
Plus they are feeling good about the future with a third of landlords now saying that tenant demand will grow over the next 12 months, and 57% predicting it will remain stable.
Paragon added that it is unlikely that the mainstream mortgage market will recover for a number of years and that this means that large number of people will continue to be excluded from buying, and will need to rent property.
Positive return
Landlords have even more reason to feel cheery following the latest rental index from property company LSL property services. It says that annual property investment returns turned positive in October for the first time since the UK fell into recession.
After taking rental income and the fall in house prices into account, a landlord investing in property in October 2008 would have made an average annual return of 2.4% -- the last annual positive return was in July 2007.
The rental index also showed that tenant arrears have improved -- an issue that has been a huge problem for landlords during the recession. By the end of October, arrears had shrunk to 495,000 or 14.6% of UK tenancies, the lowest level since LSL began calculating these figures one year ago.
What about mortgages?
Even more good news, the mortgage market is also improving with lenders offering more buy-to-let deals. There were just 179 buy-to-let mortgages in September and now there are 239 available, according to financial information provider Moneyfacts.
But that's still a drop of 93% from the peak of the market two years ago, when there were over 3,600 buy-to-let deals on offer.
Maximum loan-to-value ratios are still tight but there are a couple of deals available up to 80% LTV from sister lenders Yorkshire Bank and Clydesdale Bank. For any real choice though landlords still need to find 25% upfront.
This is a world away from the market two years ago where 85% and 90% mortgages accounted for 65% of the buy-to-let market. Plus lenders are still tightening some criteria, such as restricting the size of portfolios that landlords can have.
But if you want a buy-to-let deal, there are some options around -- provided you have that all-important equity of course!
Source: Lovemoney.com
Tuesday, November 10, 2009
UK Property Prices To "Keep On Rising"
House prices are likely to keep on rising for the time being, says the Royal Institution of Chartered Surveyors (Rics).
Its latest monthly survey shows that sellers are now beginning to return to the property market.
But they are still being outweighed by the number of potential buyers registered with estate agents.
A separate government property survey said house prices had risen by 6% between May and September.
The Department for Communities and Local Government (DCLG) also said UK house prices rose by 1.2% in September.
Although prices are still 4.1% lower than a year ago, this was the fourth monthly increase in a row and put the average house price at £199,303 across the country.
Property shortage
The Rics survey found that in October, the balance of surveyors reporting price rises rather than falls rose to 34%, up from 20% in September.
The comparative shortage of supply is continuing to promote buyer competition
Keith Barnfield, Barnfields estate agency
Rics said this was the strongest survey result in favour of rising prices since December 2006.
"Although the supply of property is beginning to pick-up, it is still insufficient to keep pace with the increase in demand which points to further prices gains in the near term," said Jeremy Leaf of Rics.
"Cheap money remains a critical prop for the market and this is being reflected in the continuing appetite for finance from first-time buyers despite the large deposits still being demanded by lenders," he added.
Commentators have explained this by pointing to a dearth of people putting their homes up for sale, even though the number of potential buyers has been restricted since 2007 by the continuing rationing of available mortgages because of the continuing effects of the international credit crunch.
"Transaction numbers are back up to 2006 levels - the comparative shortage of supply is continuing to promote buyer competition," said Keith Barnfield of Barnfields in Enfield.
Richard Evans of Colleys surveyors in Exeter said: "Competition amongst buyers for a small supply of properties for sale is continuing to drive asking prices and values up."
More sales
The Rics survey said London was leading the way in terms of price rises, with a balance of 95% of estate agents in the capital reporting that prices were going up rather than down.
That was the strongest survey result for London since December 1996.
The balance of those surveyors across the UK reporting an increase in instructions from would-be sellers has risen from just 5% in September to 15% in October.
Rics said this upward trend in sales instructions had occurred in all regions, particularly in the north of England, the South West and in London.
Completed sales have continued to rise slowly to an average of 19 per surveyor over the past three months - although that still amounts to just under three sales every two weeks.
"The most recent survey provided further evidence that activity levels also continue to improve, albeit at a slightly slower pace than in previous months [but] a shortage of supply still seems to be limiting activity in the housing market," said Rics.
Catherine Penman, of property consultancy Carter Jonas, said: "The September DCLG figures are further proof of the ongoing recovery in the residential property market, which is virtually unrecognisable from a year ago."
"Low interest rates, attractive prices and more encouraging news from the economy are driving transactions," she added.
Source: BBC
Its latest monthly survey shows that sellers are now beginning to return to the property market.
But they are still being outweighed by the number of potential buyers registered with estate agents.
A separate government property survey said house prices had risen by 6% between May and September.
The Department for Communities and Local Government (DCLG) also said UK house prices rose by 1.2% in September.
Although prices are still 4.1% lower than a year ago, this was the fourth monthly increase in a row and put the average house price at £199,303 across the country.
Property shortage
The Rics survey found that in October, the balance of surveyors reporting price rises rather than falls rose to 34%, up from 20% in September.
The comparative shortage of supply is continuing to promote buyer competition
Keith Barnfield, Barnfields estate agency
Rics said this was the strongest survey result in favour of rising prices since December 2006.
"Although the supply of property is beginning to pick-up, it is still insufficient to keep pace with the increase in demand which points to further prices gains in the near term," said Jeremy Leaf of Rics.
"Cheap money remains a critical prop for the market and this is being reflected in the continuing appetite for finance from first-time buyers despite the large deposits still being demanded by lenders," he added.
Commentators have explained this by pointing to a dearth of people putting their homes up for sale, even though the number of potential buyers has been restricted since 2007 by the continuing rationing of available mortgages because of the continuing effects of the international credit crunch.
"Transaction numbers are back up to 2006 levels - the comparative shortage of supply is continuing to promote buyer competition," said Keith Barnfield of Barnfields in Enfield.
Richard Evans of Colleys surveyors in Exeter said: "Competition amongst buyers for a small supply of properties for sale is continuing to drive asking prices and values up."
More sales
The Rics survey said London was leading the way in terms of price rises, with a balance of 95% of estate agents in the capital reporting that prices were going up rather than down.
That was the strongest survey result for London since December 1996.
The balance of those surveyors across the UK reporting an increase in instructions from would-be sellers has risen from just 5% in September to 15% in October.
Rics said this upward trend in sales instructions had occurred in all regions, particularly in the north of England, the South West and in London.
Completed sales have continued to rise slowly to an average of 19 per surveyor over the past three months - although that still amounts to just under three sales every two weeks.
"The most recent survey provided further evidence that activity levels also continue to improve, albeit at a slightly slower pace than in previous months [but] a shortage of supply still seems to be limiting activity in the housing market," said Rics.
Catherine Penman, of property consultancy Carter Jonas, said: "The September DCLG figures are further proof of the ongoing recovery in the residential property market, which is virtually unrecognisable from a year ago."
"Low interest rates, attractive prices and more encouraging news from the economy are driving transactions," she added.
Source: BBC
Monday, November 9, 2009
Economic Recovery or Illusion? What 2010 holds for the UK Investor
Christmas is fast approaching and the UK property market is moving again so I thought that I would update you on what’s been happening both within the UK property market and with Distressed Assets.
As we all know the UK economy is still in recession. There was a widely anticipated belief that October’s figures would indicate that the UK economy had begun recovery but instead the economy shrank a further 0.4% between July and September which makes the current recession the longest since records began.
Meanwhile the Bank of England has kept the base rate unchanged at 0.5% and has decided to pump a further £25 billion into the economy on top of the £50 billion already committed by the Bank over the last 3 months.
Last Tuesday it was announced that RBS and Lloyds Banking Group are to sell off more than 900 branches over the next five years as well as some famous banking brand names. The idea is to encourage competition and the flow of credit around the economy which can only be a good thing for the consumer.
So where does all of this leave the UK housing market? With no sign of inflationary pressure in the wider economy at the moment and interest rates thus likely to remain low for some time to come the UK housing market is likely to enter a period of stability while the limited supply in London will continue to drive up prices into the New Year.
Official figures appear to support this: according to the latest Nationwide index annual house price inflation has turned positive for the first time since March 2008 while Halifax recorded a 2.8% rise in the third quarter of this year.On a more anecdotal level several of my London-based friends have recently sold their properties for prices in excess of asking and are finding it increasingly difficult to find a suitable property to buy.
There should be some caution however as next year’s general election will be the crucial event that will set the conditions for the property market in the years to come. If the Tories do gain power they will be forced to take tough decisions on taxation and public spending which may negatively impact the property market. I suspect, however, that they realise the delicate balancing act that is required to restore confidence and that a further dip in the property market would be disastrous for the wider economy as it is, in many ways, the barometer of Britain’s economic confidence.
While many continue to sit on the fence the window for UK distressed property is closing, particularly in London. The market has followed a very clear pattern this year of increasing enquiries, increasing mortgage applications and increasing transactions while competition is also on the increase.
As a company we have enjoyed several recent successes both in London and the North of England which have come about through relationship building and persistence. We have built excellent relationships with several administrators through whom we are sourcing fantastic value property. Several of our investors have now refinanced properties purchased through us earlier in the year and some have made as much as £80,000 on a single transaction.
If you would like to find out more we are holding our latest Distressed Assets Seminar in central London on Wednesday the 25th November from 6.30 to 8.30pm. Please telephone Greg for more details on 0151 244 5450 or email him at greg@distressed-assets.co.uk
Written by Henry Powell-Jones
As we all know the UK economy is still in recession. There was a widely anticipated belief that October’s figures would indicate that the UK economy had begun recovery but instead the economy shrank a further 0.4% between July and September which makes the current recession the longest since records began.
Meanwhile the Bank of England has kept the base rate unchanged at 0.5% and has decided to pump a further £25 billion into the economy on top of the £50 billion already committed by the Bank over the last 3 months.
Last Tuesday it was announced that RBS and Lloyds Banking Group are to sell off more than 900 branches over the next five years as well as some famous banking brand names. The idea is to encourage competition and the flow of credit around the economy which can only be a good thing for the consumer.
So where does all of this leave the UK housing market? With no sign of inflationary pressure in the wider economy at the moment and interest rates thus likely to remain low for some time to come the UK housing market is likely to enter a period of stability while the limited supply in London will continue to drive up prices into the New Year.
Official figures appear to support this: according to the latest Nationwide index annual house price inflation has turned positive for the first time since March 2008 while Halifax recorded a 2.8% rise in the third quarter of this year.On a more anecdotal level several of my London-based friends have recently sold their properties for prices in excess of asking and are finding it increasingly difficult to find a suitable property to buy.
There should be some caution however as next year’s general election will be the crucial event that will set the conditions for the property market in the years to come. If the Tories do gain power they will be forced to take tough decisions on taxation and public spending which may negatively impact the property market. I suspect, however, that they realise the delicate balancing act that is required to restore confidence and that a further dip in the property market would be disastrous for the wider economy as it is, in many ways, the barometer of Britain’s economic confidence.
While many continue to sit on the fence the window for UK distressed property is closing, particularly in London. The market has followed a very clear pattern this year of increasing enquiries, increasing mortgage applications and increasing transactions while competition is also on the increase.
As a company we have enjoyed several recent successes both in London and the North of England which have come about through relationship building and persistence. We have built excellent relationships with several administrators through whom we are sourcing fantastic value property. Several of our investors have now refinanced properties purchased through us earlier in the year and some have made as much as £80,000 on a single transaction.
If you would like to find out more we are holding our latest Distressed Assets Seminar in central London on Wednesday the 25th November from 6.30 to 8.30pm. Please telephone Greg for more details on 0151 244 5450 or email him at greg@distressed-assets.co.uk
Written by Henry Powell-Jones
Friday, October 30, 2009
The Credit Crunch Is Easing And How To Make A Killing In Repossessed Property
Dear Investor,
It has been a few weeks since my last newsletter with the majority of my time spent overseas and in London.
The “credit crunch” appears to be easing, but recession not recovery continues to be the catchword in the UK, although some of our European partners began the recovery phase of the cycle in the last quarter and the US will soon follow. I am confident we will see growth early next year, but the key question is “How sustainable will that growth be?” In the meantime, take this blip in the long-term economic cycle as a buying opportunity.
Without doubt we are witnessing some excellent investment deals in the UK, particularly in London. Yesterday we finalised a deal with an administrator for a number of apartments in North London. Henry has been working on behalf of clients for some months on this and that hard work has paid off. These excellent properties are at least £50,000 below current realistic values and yield 6-7% which in this part of London is very good. Investors will see a strong return on these well located units as the market recovers, which in London is already underway with values up around 6% this year.
Why do we get offered these units at such good rates?
Simply, administrators, LPA receivers and banks are not estate agents and as such do not want to deal with lots of individuals. They prefer to deal with one person/company and secure bulk deals. It is not easy dealing with administrators, but the discounts to the market justifies the work and patience.
Office Move
We are about to move office and have just finalised a refurbishment contract with a local design agency. You may remember that at the height of the credit crunch we purchased an office block in Liverpool city centre. We will be moving in before Christmas, rebranding the block and will be set for a running start to 2010 with a new business launch. We have been working hard on the new business idea for some time and for now I will keep it under wraps, but it will make a huge difference to the way in which we do business in the UK.
I am presently in Cyprus enjoying a few days with my family and will accompany Stephanie at the Grove Spa Resort monthly site meeting next week. Progress is excellent and I know a lot of you have been following the construction blog – Click here to view the blog
Invitation – FREE seminar in London Wednesday 25th November 2009
“How to increase your wealth substantially in 2010 by investing in UK bank repossessed property”
Myself and Henry will be giving a talk starting at 6.30pm for a couple of hours on how to successfully invest in repossessed property, the potential pitfalls, how to raise finance and how to secure incredible deals. Anyone investing in the current market will reap the benefits in years to come.
Places are limited, so if you wish to attend this free event then please fill in the form at: http://www.uk-property-repossessions.com/property_repossession_seminars.aspx
Best wishes
Dominic
Tuesday, September 8, 2009
Huge Returns As Distressed Assets’ Clients Refinance For The Next Investment
Dear Investor,
I hope you are now back into the swing of things after the summer break. I would like to introduce two new members of staff who have recently joined the group.
Brice Robinson is a qualified stockbroker and financial advisor and has joined the company to work on a new concept we are developing. He has worked in the past for well known banks and financial services companies.
Greg Johnson has many years experience at senior levels in the property industry and joins the team to coordinate and develop sales.
InvestinCyprus.com Developers
We have been extremely busy over the past few weeks. Stephanie and Jonathan are in Cyprus working hard with the architect and contractors on The Grove Spa Resort. I was there in August and was very impressed with the sheer scale of the project and the commitment and drive of everyone involved in the scheme. Well done Stephanie et al!
Distressed Assets
Back in the UK, the Distressed Assets team have been working very long hours and are having some great successes.
Case Study
An investor purchased a property in London through Distressed Assets 6 months ago for £155,000 and has now refinanced it at £235,000 giving a capital gain of £80,000 on an investment of £38,750 which on an annualised basis equates to a return on investment of 412% (206% over 6 months). The property cashflows very well and he is now in the process of buying a second investment property through Distressed Assets.
Yesterday we made an offer to administrators for 9 apartments in London and are preparing to make an offer on a further 54 apartments in another part of London. We believe that the apartments in the latter case are worth about £315,000 each in today’s market but we are able to make a bulk offer at about £215,000 each. All of the apartments are fully tenanted with strong cash flow.
In my view there has never been a better time to invest in UK property. Even in the very height of the previous market cycle, we did not experience the huge capital gains illustrated in the example above.
Distressed Assets Seminars
If you wish to take advantage of the present investors' market in the UK and also the expertise, contacts and buying power of Distressed Assets then please join us on one of our forthcoming FREE investment seminars in London and Liverpool.
Tuesday 22nd September 2009 - London 6.30pm to 8.30pm
Thursday 24th September 2009 - Liverpool 6.30pm to 8.30pm
Places are strictly limited and are allocated on a first come first served basis. I understand that we are close to capacity in London already, so you will have to be quick to get a place.
Jet-to-Let Magazine
Jet-to-Let Magazine has moved to an online format with multi-media enhancements including podcasts and video. You should receive the latest issue by e-mail later today. As ever, your feedback is most welcome as are suggestions for content for future editions.
Best wishes
Dominic
Friday, August 7, 2009
UK Property Market Stabilises And Securing A Repossession In London
Dear Investor,
I am presently flying back from Cyprus having spent the past 2 weeks observing the progress of the Grove Spa Resort and having a series of business meetings. I also had time to meet up with some friends and also “test drive” a new villa I recently completed on, so it wasn’t all hard work.
Back in the UK Henry and the team have been finalising an offer we are to make to administrators on Friday for a number of repossessed properties in London. They represent excellent value, particularly at a time when prices are now rising. In The Times today there is an article on page 46 titled “Off-plan buyers return as London property perks up”
We have recently had reports from both Nationwide and Halifax of rising prices. Savills have reported a rise in prices of London prime property of 4.3% between March and June due to “pent-up demand and improved buyer sentiment.”
Another key indicator of the strengthening market is the closing of the gap between asking prices and prices paid. Research by Marsh and Parsons has shown the gap has narrowed from 8.7% in January 2009 to 3.9% in July. Also, the key measure of affordability in the property market, the house prices to earnings ratio, is reported by Halifax to have declined from a peak of 5.84 in July 2007 to an estimated 4.36 in July 2009. The long-term average is 4.0.
So what does this add up to? Well, predictions from analysts such as Capital Economics of a further fall of 20% in UK property prices appear to be quite wide of the mark. Even with tight lending and fewer mortgages, prices in the main are stabilising. The “freefall” in my view is over. What we will see is a series of monthly rises and falls, but it will be the overall trend which we need to follow, not the monthly data. Three months data (Nationwide reporting the prices have risen in the UK for the past 3 months) in my view does not make a trend, but the stabilising effect it has on sentiment is the key.
I am in London tomorrow for a series of meetings about a new business idea I have which will enable us to purchase large quantities of bank repossessed stock. Crucially, we want to do this before the banks decide to hold out for better prices, which will be inevitable as the market returns to growth, albeit subdued in the short term. These are very exciting times and the opportunities are stunning, but the window of opportunity is getting narrower.
Invest Now In London
We are in the process of acquiring a further tranche of properties in Zones 1 and 2 in London. The properties have been repossessed and the value in terms of price is excellent with prices between £200,000 and £350,000 with yields varying from 6% to 8%. If you are interested in investing in this prime London stock please fill in the form at:
We close both the Liverpool and Cyprus offices for two weeks beginning Friday 7th August. However, given the pace at the moment the Distressed Assets desk will be manned as sensitive negotiations with banks and LPA receivers are ongoing.
If you are going away for a holiday, enjoy your time off.
Regards
Dominic
Monday, July 27, 2009
PRESS RELEASE: Repossessed London Property Attracts Overseas Investors At 60% Discount
Overseas investors armed with strong currencies relative to sterling are eager to snap up repossessed properties in London, with savvy buyers seeing long-term value in the UK’s capital city.
Distressed Assets, a Liverpool based company which specialises in sourcing bank repossessed property, has received a high volume of enquiries from abroad.
“We have recently received enquiries from Ireland, UAE, France, Spain, Pakistan, Australia, USA, India, Latvia, Norway and Cyprus. Many of the investors are seasoned business people who view the present economic climate as a buying opportunity and understand the significant value in UK bank repossessed property” says Director Dominic Farrell
Farrell continues, “Falling property prices, a weak pound and the added value of investing in repossessions gives the overseas investor up to a 60% discount on 2007 London property prices. With strong yields and the outlook for medium to long-term capital growth positive, London property has all the attributes of a blue chip investment for UK and foreign investors alike.”
Notes for Editors: Distressed Assets is a Liverpool-based company which sources undervalued property investment opportunities for clients from banks, financial institutions and via auction. Its sister companies include property development and acquisition companies and an investment magazine publisher.
The company website is at http://www.distressed-assets.co.uk
Distressed Assets will shortly be holding investor meetings in London, Dublin, Nicosia, Bahrain and Dubai.
For further information or interviews, please contact Henry Powell-Jones on +44 151 244 5657
Distressed Assets, a Liverpool based company which specialises in sourcing bank repossessed property, has received a high volume of enquiries from abroad.
“We have recently received enquiries from Ireland, UAE, France, Spain, Pakistan, Australia, USA, India, Latvia, Norway and Cyprus. Many of the investors are seasoned business people who view the present economic climate as a buying opportunity and understand the significant value in UK bank repossessed property” says Director Dominic Farrell
Farrell continues, “Falling property prices, a weak pound and the added value of investing in repossessions gives the overseas investor up to a 60% discount on 2007 London property prices. With strong yields and the outlook for medium to long-term capital growth positive, London property has all the attributes of a blue chip investment for UK and foreign investors alike.”
Notes for Editors: Distressed Assets is a Liverpool-based company which sources undervalued property investment opportunities for clients from banks, financial institutions and via auction. Its sister companies include property development and acquisition companies and an investment magazine publisher.
The company website is at http://www.distressed-assets.co.uk
Distressed Assets will shortly be holding investor meetings in London, Dublin, Nicosia, Bahrain and Dubai.
For further information or interviews, please contact Henry Powell-Jones on +44 151 244 5657
Tuesday, July 21, 2009
Wealthy Investors Remain Hungry For Risk
More than a third of wealthy investors earning over £50,000 a year have not reduced their attitude to risk because of the recession, according to a recent study by HSBC Wealth Management.
The research revealed that almost 25 per cent of those who consider themselves well informed about investment options said their appetite for risk actually increased during the economic downturn.
The majority of the 500 investors questioned for the survey said they would consider investing their money outside the UK with almost half saying that they had already done so and the majority of those people saying they would do so again.
“It wasn’t that long ago that some investors were shunning international stocks due to a fear of the unknown. Now it’s really encouraging to see that a high percentage of UK investors are keen to invest beyond their borders,” said David Wells, head of investments at HSBC Wealth Management.
In terms of which assets investors considered to be risky, 68 per cent of people said investing in small companies is the most risky way of managing their money in the current economic climate. Property came fourth on the list of risky investments after alternative investments such as commodities and private equity.
“Despite the recent volatile stock market conditions, investors recognise the importance and benefits of a globally diversified portfolio that stretches across a range of asset classes,” Wells said. “In uncertain times, the best way to invest is to enable experts to diversify your investments, spreading your money across geographies and types of assets.”
Despite concerns about the risks, 54 per cent on investors now think the stock market has bottomed. Among those who think the worst is over, on average, they predict a 5 per cent rise in the value of the stock market in the next month.
Source: The Financial Times
The research revealed that almost 25 per cent of those who consider themselves well informed about investment options said their appetite for risk actually increased during the economic downturn.
The majority of the 500 investors questioned for the survey said they would consider investing their money outside the UK with almost half saying that they had already done so and the majority of those people saying they would do so again.
“It wasn’t that long ago that some investors were shunning international stocks due to a fear of the unknown. Now it’s really encouraging to see that a high percentage of UK investors are keen to invest beyond their borders,” said David Wells, head of investments at HSBC Wealth Management.
In terms of which assets investors considered to be risky, 68 per cent of people said investing in small companies is the most risky way of managing their money in the current economic climate. Property came fourth on the list of risky investments after alternative investments such as commodities and private equity.
“Despite the recent volatile stock market conditions, investors recognise the importance and benefits of a globally diversified portfolio that stretches across a range of asset classes,” Wells said. “In uncertain times, the best way to invest is to enable experts to diversify your investments, spreading your money across geographies and types of assets.”
Despite concerns about the risks, 54 per cent on investors now think the stock market has bottomed. Among those who think the worst is over, on average, they predict a 5 per cent rise in the value of the stock market in the next month.
Source: The Financial Times
Monday, July 20, 2009
Property "Bargain Buy" Window Closing
Property website Rightmove says asking prices rose for the fifth time this year in July.
Miles Shipside, commercial director at Rightmove, said: 'There is now clear evidence that there were some fire-sale prices last winter, when a few brave buyers correctly called the bottom of the market.
'In most parts of the country, prices have consistently improved during spring. With growing confidence that we’ve passed the bottom, buyers are more active, although they may discover that many of the best buys have gone,' he goes on.
The comments come as the property website's survey showed a return to rising average asking prices after last month's 0.4% decrease, with a 0.6% increase.
The group said the average property asking price was £227,864 in July, down 3.1% since this time last year.
Initial asking prices have risen by 6.7% since the beginning of 2009, the group says, adding that there has been a 20% increase in sellers coming to market compared to the previous year-to-date average.
Shipside says this suggests 'we will see the housing market remain in a "steady state" during the second half of 2009'.
The benefit of hindsight shows that the lowest ebb of prices, and thus the best time to pick up a bargain, was last winter, he added.
'Prices were in freefall in the second half of 2008, as desperate sellers reduced prices by some 2% a month, yet most buyers still held back, leading to a 50-year low in transactions.
'The window of opportunity to pick up the best buys in popular areas in this phase of the market is therefore closing,' he concludes.
He said buyer activity remains strong, with traffic on Rightmove’s website remaining 'much higher than we would expect during the months of June and July which are typically quieter'.
The increased confidence and activity is tempting more sellers to test the market, as they seek to take advantage of the smaller price difference to trade up to a better home,' he said.
Source: Citywire
Miles Shipside, commercial director at Rightmove, said: 'There is now clear evidence that there were some fire-sale prices last winter, when a few brave buyers correctly called the bottom of the market.
'In most parts of the country, prices have consistently improved during spring. With growing confidence that we’ve passed the bottom, buyers are more active, although they may discover that many of the best buys have gone,' he goes on.
The comments come as the property website's survey showed a return to rising average asking prices after last month's 0.4% decrease, with a 0.6% increase.
The group said the average property asking price was £227,864 in July, down 3.1% since this time last year.
Initial asking prices have risen by 6.7% since the beginning of 2009, the group says, adding that there has been a 20% increase in sellers coming to market compared to the previous year-to-date average.
Shipside says this suggests 'we will see the housing market remain in a "steady state" during the second half of 2009'.
The benefit of hindsight shows that the lowest ebb of prices, and thus the best time to pick up a bargain, was last winter, he added.
'Prices were in freefall in the second half of 2008, as desperate sellers reduced prices by some 2% a month, yet most buyers still held back, leading to a 50-year low in transactions.
'The window of opportunity to pick up the best buys in popular areas in this phase of the market is therefore closing,' he concludes.
He said buyer activity remains strong, with traffic on Rightmove’s website remaining 'much higher than we would expect during the months of June and July which are typically quieter'.
The increased confidence and activity is tempting more sellers to test the market, as they seek to take advantage of the smaller price difference to trade up to a better home,' he said.
Source: Citywire
Thursday, July 16, 2009
Dominic Farrell's Investors' Newsletter 14th July 2009
Dear Investor
It’s been a while since the last newsletter as we’ve been busy with seminars in Dublin and London and meetings with clients around the country. The pace at the moment is very quick.
In London we met with a client from overseas who wishes to invest £50 million in UK distressed assets. He is one of a number of overseas clients who has identified the weakness of sterling and the present prices through banks, administrators and LPA receivers as an opportunity not to be missed.
It is always interesting to sit down with someone from another country and hear their reasons for investing in the UK right now – it is interesting how many people living here do not see the huge opportunities in the present market.
We have put forward a number of offers recently and have had some success. Investing “off market” as such is not conveyer belt investing and takes patience, time and lots of due diligence. We have the services of a solicitor who investigates and legally approves all of our purchases.
Shortly we will be selling properties in London, on behalf of an administrator, with substantial discounts and yields between 6% and 9%.
Some properties have secured leases for a number of years with a third party which guarantees cash flow. These properties are excellent value for money and will be sold very quickly.
If you are not a member of Distressed Assets and wish to receive details of the repossessed properties we have access to, then phone Alun on 0151 244 5656 from the UK or +44 151 244 5656.
Personally, I have been busy working with a professional property management company to take over responsibility for our newly acquired office block. We are literally starting from first principles and I am now fully briefed on things like lift insurance and the nuances of commercial property management. The best bit of advice I received from a friend was to outsource completely the management of this property, including lease negotiations, rent reviews etc, and I have now done this.
Economically, I think the worst of the “credit crunch” is now behind us and we will see some form of weak recovery 4th quarter 2009. It is difficult and somewhat foolish to try and look into a crystal ball, but I think the base rate factor combined with an improvement in sentiment will eventually kick in.
In terms of property, we have seen prices rising in the “off market” sector which should be a precursor to stability in the main market. Only time will tell, but if you are putting off an investment decision, I wouldn’t wait too long!
Regards
Dominic Farrell
It’s been a while since the last newsletter as we’ve been busy with seminars in Dublin and London and meetings with clients around the country. The pace at the moment is very quick.
In London we met with a client from overseas who wishes to invest £50 million in UK distressed assets. He is one of a number of overseas clients who has identified the weakness of sterling and the present prices through banks, administrators and LPA receivers as an opportunity not to be missed.
It is always interesting to sit down with someone from another country and hear their reasons for investing in the UK right now – it is interesting how many people living here do not see the huge opportunities in the present market.
We have put forward a number of offers recently and have had some success. Investing “off market” as such is not conveyer belt investing and takes patience, time and lots of due diligence. We have the services of a solicitor who investigates and legally approves all of our purchases.
Shortly we will be selling properties in London, on behalf of an administrator, with substantial discounts and yields between 6% and 9%.
Some properties have secured leases for a number of years with a third party which guarantees cash flow. These properties are excellent value for money and will be sold very quickly.
If you are not a member of Distressed Assets and wish to receive details of the repossessed properties we have access to, then phone Alun on 0151 244 5656 from the UK or +44 151 244 5656.
Personally, I have been busy working with a professional property management company to take over responsibility for our newly acquired office block. We are literally starting from first principles and I am now fully briefed on things like lift insurance and the nuances of commercial property management. The best bit of advice I received from a friend was to outsource completely the management of this property, including lease negotiations, rent reviews etc, and I have now done this.
Economically, I think the worst of the “credit crunch” is now behind us and we will see some form of weak recovery 4th quarter 2009. It is difficult and somewhat foolish to try and look into a crystal ball, but I think the base rate factor combined with an improvement in sentiment will eventually kick in.
In terms of property, we have seen prices rising in the “off market” sector which should be a precursor to stability in the main market. Only time will tell, but if you are putting off an investment decision, I wouldn’t wait too long!
Regards
Dominic Farrell
Thursday, July 9, 2009
IMF Says World Is Pulling Out Of Recession
The world economy is starting to pull out of recession, the International Monetary Fund said on Wednesday, marking up its growth forecasts for next year and hinting that it might reduce its estimates for bank losses.
“The recovery is coming,” said Olivier Blanchard, IMF chief economist. But he cautioned “it is likely to be a weak recovery” and said policy-makers needed to guard against ongoing economic and financial risks. However, investors signalled their doubts about the strength of any economic recovery by selling off commodities, notably oil and gold, and stocks.
The yen, a barometer of risk aversion, also shot up 3 per cent against the euro and the dollar.
Since the release of a much weaker-than-expected US jobs report for June last week, investors’ appetite for risky assets has soured.
“When we do get a recovery, it will be pretty anaemic,” said Jay Mueller, portfolio manager at Wells Capital. “The third quarter will be tough and the fourth does not look much better. People who had been optimistic that the economy has bottomed are rethinking . . . since last week’s jobs report.”
The IMF now forecasts global growth of 2.5 per cent next year, up from 1.9 per cent in April, led by strong growth in China and India, a rebound in Japan and positive but sub-trend growth in the US. It upgraded its forecasts for Europe too, but still expects the eurozone to contract 0.3 per cent next year, with Germany declining 0.6 per cent.
The Fund inched down its forecast for global growth this year to minus 1.4 per cent.
The IMF did not update its estimates for losses facing banks. However, José Viñals, IMF financial counsellor, said it would be reasonable to guess that the figures would end up being lowered. He said markdowns on securities “would be likely to be somewhat better now” following the improvements in financial markets.
However, the IMF warned against complacency, saying it was too soon to implement “exit strategies” and highlighting several risks to recovery. It urged further efforts to clean up the banking system, noting that “bank capitalisation remains a concern, notably in Europe”.
The Fund also signalled concern that governments on both sides of the Atlantic had only “limited” success in dealing with problem assets.
Mr Blanchard said governments should prepare for the possibility that further stimulus could be needed. “It may be that private demand is going to be very weak for longer than we anticipated. In that case the fiscal stimulus in some form will have to be continued.”
Source: The Financial Times
“The recovery is coming,” said Olivier Blanchard, IMF chief economist. But he cautioned “it is likely to be a weak recovery” and said policy-makers needed to guard against ongoing economic and financial risks. However, investors signalled their doubts about the strength of any economic recovery by selling off commodities, notably oil and gold, and stocks.
The yen, a barometer of risk aversion, also shot up 3 per cent against the euro and the dollar.
Since the release of a much weaker-than-expected US jobs report for June last week, investors’ appetite for risky assets has soured.
“When we do get a recovery, it will be pretty anaemic,” said Jay Mueller, portfolio manager at Wells Capital. “The third quarter will be tough and the fourth does not look much better. People who had been optimistic that the economy has bottomed are rethinking . . . since last week’s jobs report.”
The IMF now forecasts global growth of 2.5 per cent next year, up from 1.9 per cent in April, led by strong growth in China and India, a rebound in Japan and positive but sub-trend growth in the US. It upgraded its forecasts for Europe too, but still expects the eurozone to contract 0.3 per cent next year, with Germany declining 0.6 per cent.
The Fund inched down its forecast for global growth this year to minus 1.4 per cent.
The IMF did not update its estimates for losses facing banks. However, José Viñals, IMF financial counsellor, said it would be reasonable to guess that the figures would end up being lowered. He said markdowns on securities “would be likely to be somewhat better now” following the improvements in financial markets.
However, the IMF warned against complacency, saying it was too soon to implement “exit strategies” and highlighting several risks to recovery. It urged further efforts to clean up the banking system, noting that “bank capitalisation remains a concern, notably in Europe”.
The Fund also signalled concern that governments on both sides of the Atlantic had only “limited” success in dealing with problem assets.
Mr Blanchard said governments should prepare for the possibility that further stimulus could be needed. “It may be that private demand is going to be very weak for longer than we anticipated. In that case the fiscal stimulus in some form will have to be continued.”
Source: The Financial Times
Wednesday, July 8, 2009
UK Property Market Stabilises And Securing A Repossession In London
Dear Investor,
I am presently flying back from Cyprus having spent the past 2 weeks observing the progress of the Grove Spa Resort and having a series of business meetings. I also had time to meet up with some friends and also “test drive” a new villa I recently completed on, so it wasn’t all hard work.
Back in the UK Henry and the team have been finalising an offer we are to make to administrators on Friday for a number of repossessed properties in London. They represent excellent value, particularly at a time when prices are now rising. In The Times today there is an article on page 46 titled “Off-plan buyers return as London property perks up”
We have recently had reports from both Nationwide and Halifax of rising prices. Savills have reported a rise in prices of London prime property of 4.3% between March and June due to “pent-up demand and improved buyer sentiment.”
Another key indicator of the strengthening market is the closing of the gap between asking prices and prices paid. Research by Marsh and Parsons has shown the gap has narrowed from 8.7% in January 2009 to 3.9% in July. Also, the key measure of affordability in the property market, the house prices to earnings ratio, is reported by Halifax to have declined from a peak of 5.84 in July 2007 to an estimated 4.36 in July 2009. The long-term average is 4.0.
So what does this add up to? Well, predictions from analysts such as Capital Economics of a further fall of 20% in UK property prices appear to be quite wide of the mark. Even with tight lending and fewer mortgages, prices in the main are stabilising. The “freefall” in my view is over. What we will see is a series of monthly rises and falls, but it will be the overall trend which we need to follow, not the monthly data. Three months data (Nationwide reporting the prices have risen in the UK for the past 3 months) in my view does not make a trend, but the stabilising effect it has on sentiment is the key.
I am in London tomorrow for a series of meetings about a new business idea I have which will enable us to purchase large quantities of bank repossessed stock. Crucially, we want to do this before the banks decide to hold out for better prices, which will be inevitable as the market returns to growth, albeit subdued in the short term. These are very exciting times and the opportunities are stunning, but the window of opportunity is getting narrower.
Invest Now In London
We are in the process of acquiring a further tranche of properties in Zones 1 and 2 in London. The properties have been repossessed and the value in terms of price is excellent with prices between £200,000 and £350,000 with yields varying from 6% to 8%. If you are interested in investing in this prime London stock please fill in the form at:
We close both the Liverpool and Cyprus offices for two weeks beginning Friday 7th August. However, given the pace at the moment the Distressed Assets desk will be manned as sensitive negotiations with banks and LPA receivers are ongoing.
If you are going away for a holiday, enjoy your time off.
Best wishes
Regards
Dominic
Tuesday, June 30, 2009
UK House Prices Rise For Second Month
LONDON (Reuters) - House prices rose for the second month running in June, leaving them less than 10 percent down on a year ago, the Nationwide building society said on Tuesday, in another sign the market may be stabilising.
The figures followed a survey by GfK/NOP which showed consumer confidence hitting its highest level in 14 months in June as Britons became more optimistic about their finances.
The data added to the view Britain may be one of the first major economies to pull out of recession and helped lift sterling to its highest level of the year on a trade-weighted index.
"An upbeat UK house price report gave sterling a lift this morning," said Nick Kounis, an economist at Fortis. "This adds to evidence suggesting the housing market is turning."
The Nationwide building society said house prices rose 0.9 percent this month, taking the annual rate of decline to 9.3 percent -- the smallest fall since July 2008 -- from 11.3 percent in May.
And prices in the three months to June were 0.9 percent higher on the previous three months, the first positive reading since December 2007, with the average house price now standing at 156,442 pounds.
"House prices have risen in three of the last four months, suggesting that the improvement that began to show up in March represents more than just statistical noise," said Martin Gahbauer, Nationwide's chief economist.
Nevertheless, policymakers are still being circumspect and not declaring victory yet over Britain's first recession since the early 1990s -- figures due at 0830 GMT are expected to show the economy shrank 2.1 percent in the first three months of 2009.
Nationwide also remained cautious, pointing out the stabilisation in prices had come despite very low house purchase activity as there had been a corresponding drop in the stock of property for sale.
The latter is probably a result of potential sellers and builders holding on to their properties waiting for an upturn but Nationwide said that would have to change.
"Abnormally low supply levels are unlikely to last forever, as the recent price increases should make previously hesitant sellers feel more confident about marketing their properties," Gahbauer said.
"Additional supply is also likely to come from homeowners who see their financial position impacted by higher unemployment and lower incomes."
Credit constraints also remain a problem curbing buying. Mortgage lending in May rose by its lowest amount on record, just 324 million pounds, a tenth of the increase a year ago, according to Bank of England data.
And while mortgage approvals have ticked higher, they remain well below the level consistent with a sustainable recovery.
"The stabilisation of house prices is a welcome surprise that did not seem likely at the beginning of the year," said Gahbauer.
"However, there are still considerable headwinds facing the demand side and until we see a more robust recovery in house purchase activity, it is too early to be confident about a full-scale recovery of prices."
Source: Reuters
The figures followed a survey by GfK/NOP which showed consumer confidence hitting its highest level in 14 months in June as Britons became more optimistic about their finances.
The data added to the view Britain may be one of the first major economies to pull out of recession and helped lift sterling to its highest level of the year on a trade-weighted index.
"An upbeat UK house price report gave sterling a lift this morning," said Nick Kounis, an economist at Fortis. "This adds to evidence suggesting the housing market is turning."
The Nationwide building society said house prices rose 0.9 percent this month, taking the annual rate of decline to 9.3 percent -- the smallest fall since July 2008 -- from 11.3 percent in May.
And prices in the three months to June were 0.9 percent higher on the previous three months, the first positive reading since December 2007, with the average house price now standing at 156,442 pounds.
"House prices have risen in three of the last four months, suggesting that the improvement that began to show up in March represents more than just statistical noise," said Martin Gahbauer, Nationwide's chief economist.
Nevertheless, policymakers are still being circumspect and not declaring victory yet over Britain's first recession since the early 1990s -- figures due at 0830 GMT are expected to show the economy shrank 2.1 percent in the first three months of 2009.
Nationwide also remained cautious, pointing out the stabilisation in prices had come despite very low house purchase activity as there had been a corresponding drop in the stock of property for sale.
The latter is probably a result of potential sellers and builders holding on to their properties waiting for an upturn but Nationwide said that would have to change.
"Abnormally low supply levels are unlikely to last forever, as the recent price increases should make previously hesitant sellers feel more confident about marketing their properties," Gahbauer said.
"Additional supply is also likely to come from homeowners who see their financial position impacted by higher unemployment and lower incomes."
Credit constraints also remain a problem curbing buying. Mortgage lending in May rose by its lowest amount on record, just 324 million pounds, a tenth of the increase a year ago, according to Bank of England data.
And while mortgage approvals have ticked higher, they remain well below the level consistent with a sustainable recovery.
"The stabilisation of house prices is a welcome surprise that did not seem likely at the beginning of the year," said Gahbauer.
"However, there are still considerable headwinds facing the demand side and until we see a more robust recovery in house purchase activity, it is too early to be confident about a full-scale recovery of prices."
Source: Reuters
Monday, June 15, 2009
Dominic Farrell's Investors' Newsletter 15th June 2009
Dear Investor
I was in Cyprus last week for the monthly construction meeting at The Grove Spa Resort, Mazotos and also enjoyed the 35C temperatures, sunshine, food (I like it too much!) and the more relaxed business pace.
I also spent some time at a new villa I purchased off plan a couple of years ago designing the garden and generally ensuring everything with the contractor was going to plan.
The demand for these properties is strong and we have already taken about 7 weeks of bookings without even having the marketing pictures and materials in place. At almost £900 per week in the main season, ever increasing demand particularly from Cypriots and a limited supply of these type of properties being built, these units represent a good medium to long-term investment.
Unlike some countries in Eastern Europe, notably Romania and Bulgaria, which have been in economic and financial meltdown this year as a result of unsustainable weaknesses in their economies, the Cyprus economy remains resilient and is still forecast to grow, albeit at a much reduced rate. The economy has performed well compared with other EU member states and is well placed when the recovery phase of the economic cycle begins.
UK Economy and Property
The weekend press was full of “Green Shoots” theories about the UK economy and I don’t intend to go into any detail here as much has been written elsewhere. What I will say is that a lot of the leading economic indicators are looking better than expected, but given that only a few months ago we were expecting Armageddon, then we should not be surprised.
I have remained very positive throughout the financial crisis and became even more upbeat once decisive action was taken to secure the banking system, reduce base rates and introduce quantitative easing in order to increase liquidity and the money supply.
Economic policies are paying off. It’s early days, but the basis for a recovery is being built. Many investors, whether in oil, bank shares or sterling have made good money in the past few weeks.
Property prices are rising in London and where London leads other cities eventually follow. As banks return to lending and consumers become more confident, then we will have the key factors in place for a sustainable recovery in the UK property market.
Distressed Assets
Spotting the financial crisis as an opportunity, I formed Distressed Assets in October 2008 at the height of the malaise in order to seek repossessed properties at bargain basement prices which had strong cash flow. All of our purchases have been stunning and will make substantial returns for clients over the medium term.
I personally completed on a repossessed 5 storey office block with underground parking in a prime city centre location last Wednesday. I dealt directly with the bank and purchased the property at a price which covered their liability.
The numbers look like this:
· Purchase price 65% below a valuation from 18 months ago
· Gross yield 15% per annum
· Net yield 10% per annum
· Gross return on cash invested = 49% per annum
· Net return on cash invested = 36% per annum
· Payback on cash invested = 2.7 years
· Payback period = 9.3 years
I am very pleased with this investment and given the price I paid have managed to invest in a substantial commercial property “below” the bottom of the present cycle in this type of asset class.
This morning I have been viewing residential properties which have yields ranging from 8% to 19%. Yes that’s nineteen! Now is the time to strike and invest in repossessed property for your long-term wealth.
If you are keen to understand how you can benefit from these incredible deals, then join us on one of our free seminars:
Distressed Assets Seminars – Dublin and London
Distressed Assets will be hosting seminars in:
· Dublin 22nd June 2009
· London 25th June 2009
Starting at 6.30pm
“Make Substantial Profits From UK Bank Repossessed Property”
I will join Henry, our financial consultant and our lawyer to present the case for investing now in UK property and highlight the potential returns and pitfalls. Places are allocated on a first come first served basis.
To secure you FREE ticket, fill in the form here:
http://www.uk-property-repossessions.com/property_repossession_seminars.aspx
Best wishes
Dominic Farrell
I was in Cyprus last week for the monthly construction meeting at The Grove Spa Resort, Mazotos and also enjoyed the 35C temperatures, sunshine, food (I like it too much!) and the more relaxed business pace.
I also spent some time at a new villa I purchased off plan a couple of years ago designing the garden and generally ensuring everything with the contractor was going to plan.
The demand for these properties is strong and we have already taken about 7 weeks of bookings without even having the marketing pictures and materials in place. At almost £900 per week in the main season, ever increasing demand particularly from Cypriots and a limited supply of these type of properties being built, these units represent a good medium to long-term investment.
Unlike some countries in Eastern Europe, notably Romania and Bulgaria, which have been in economic and financial meltdown this year as a result of unsustainable weaknesses in their economies, the Cyprus economy remains resilient and is still forecast to grow, albeit at a much reduced rate. The economy has performed well compared with other EU member states and is well placed when the recovery phase of the economic cycle begins.
UK Economy and Property
The weekend press was full of “Green Shoots” theories about the UK economy and I don’t intend to go into any detail here as much has been written elsewhere. What I will say is that a lot of the leading economic indicators are looking better than expected, but given that only a few months ago we were expecting Armageddon, then we should not be surprised.
I have remained very positive throughout the financial crisis and became even more upbeat once decisive action was taken to secure the banking system, reduce base rates and introduce quantitative easing in order to increase liquidity and the money supply.
Economic policies are paying off. It’s early days, but the basis for a recovery is being built. Many investors, whether in oil, bank shares or sterling have made good money in the past few weeks.
Property prices are rising in London and where London leads other cities eventually follow. As banks return to lending and consumers become more confident, then we will have the key factors in place for a sustainable recovery in the UK property market.
Distressed Assets
Spotting the financial crisis as an opportunity, I formed Distressed Assets in October 2008 at the height of the malaise in order to seek repossessed properties at bargain basement prices which had strong cash flow. All of our purchases have been stunning and will make substantial returns for clients over the medium term.
I personally completed on a repossessed 5 storey office block with underground parking in a prime city centre location last Wednesday. I dealt directly with the bank and purchased the property at a price which covered their liability.
The numbers look like this:
· Purchase price 65% below a valuation from 18 months ago
· Gross yield 15% per annum
· Net yield 10% per annum
· Gross return on cash invested = 49% per annum
· Net return on cash invested = 36% per annum
· Payback on cash invested = 2.7 years
· Payback period = 9.3 years
I am very pleased with this investment and given the price I paid have managed to invest in a substantial commercial property “below” the bottom of the present cycle in this type of asset class.
This morning I have been viewing residential properties which have yields ranging from 8% to 19%. Yes that’s nineteen! Now is the time to strike and invest in repossessed property for your long-term wealth.
If you are keen to understand how you can benefit from these incredible deals, then join us on one of our free seminars:
Distressed Assets Seminars – Dublin and London
Distressed Assets will be hosting seminars in:
· Dublin 22nd June 2009
· London 25th June 2009
Starting at 6.30pm
“Make Substantial Profits From UK Bank Repossessed Property”
I will join Henry, our financial consultant and our lawyer to present the case for investing now in UK property and highlight the potential returns and pitfalls. Places are allocated on a first come first served basis.
To secure you FREE ticket, fill in the form here:
http://www.uk-property-repossessions.com/property_repossession_seminars.aspx
Best wishes
Dominic Farrell
Wednesday, June 3, 2009
We Must All Vote On Thursday
It's poignant that the Local and European Elections take place 2 days before the 65th anniversary of the D Day landings, when young men like my father landed on the French coast and fought the Nazis for the freedom and democracy that we enjoy in the UK today.
We are all angry with some MPs for their "flipping, " capital gains tax avoidance, fraud and more, but not all MPs are corrupt, just some.
Please vote. It is important and is a right that many men and women have died for, particularly in the 2 world wars of the 20th Century.
I am voting tomorrow. Admittedly I am not voting for a mainstream party (because of the expenses scandal) and not the BNP which stands for everything that my father fought against!
But I will vote.
We are all angry with some MPs for their "flipping, " capital gains tax avoidance, fraud and more, but not all MPs are corrupt, just some.
Please vote. It is important and is a right that many men and women have died for, particularly in the 2 world wars of the 20th Century.
I am voting tomorrow. Admittedly I am not voting for a mainstream party (because of the expenses scandal) and not the BNP which stands for everything that my father fought against!
But I will vote.
Recovery Hopes Mount As UK's Biggest Industry Grows Unexpectedly
There were expectations that the UK was recovering from the economic downturn faster than other countries today, after data showed a surprise expansion in the services sector.
According to data from the Chartered Institute of Purchasing and Supply (CIPS)/Markit, the UK services sector expanded last month, with the widely followed Purchasing Managers Index (PMI) showing a reading of 51.7 in May.
The jump from 48.7 in April takes the reading above the all important 50 mark, with anything above 50 representing growth and anything below representing contraction.
It was the sixth successive rise, leaving the index sharply higher than its record low of 41.1 in November, and was well above estimates which expected the reading to remain below 50.
Roy Ayliffe, director of professional practice at CIPS, said: 'The UK services sector has bounced back much quicker than expected demonstrating that it really is the engine of the modern economy.
'Against most economic predictions, May's PMI data suggests the UK economy may come out of the recession much sooner than was originally thought, with construction, manufacturing and service sectors all showing significant improvement.'
Ayliffe advised caution going forward however, warning that the recovery may not be sustainable.
The services sector is one of the most important indicators of the state of the UK economy, accounting for around 75% of UK Gross Domestic Product (GDP).
Paul Smith, senior economist at Markit Economics, said that given the size of the sector, the growth within services in the UK could cut falls in GDP.
Smith said: 'May's survey data signalled a welcome return to growth of a sector that accounts for a substantial proportion of UK economic output, which raises the chances that overall GDP in Q2 will fall at a slower rate than currently expected.'
Source: Citywire
According to data from the Chartered Institute of Purchasing and Supply (CIPS)/Markit, the UK services sector expanded last month, with the widely followed Purchasing Managers Index (PMI) showing a reading of 51.7 in May.
The jump from 48.7 in April takes the reading above the all important 50 mark, with anything above 50 representing growth and anything below representing contraction.
It was the sixth successive rise, leaving the index sharply higher than its record low of 41.1 in November, and was well above estimates which expected the reading to remain below 50.
Roy Ayliffe, director of professional practice at CIPS, said: 'The UK services sector has bounced back much quicker than expected demonstrating that it really is the engine of the modern economy.
'Against most economic predictions, May's PMI data suggests the UK economy may come out of the recession much sooner than was originally thought, with construction, manufacturing and service sectors all showing significant improvement.'
Ayliffe advised caution going forward however, warning that the recovery may not be sustainable.
The services sector is one of the most important indicators of the state of the UK economy, accounting for around 75% of UK Gross Domestic Product (GDP).
Paul Smith, senior economist at Markit Economics, said that given the size of the sector, the growth within services in the UK could cut falls in GDP.
Smith said: 'May's survey data signalled a welcome return to growth of a sector that accounts for a substantial proportion of UK economic output, which raises the chances that overall GDP in Q2 will fall at a slower rate than currently expected.'
Source: Citywire
Monday, June 1, 2009
Gazumping Returns To London
Gazumping has returned to the top end of London’s property market, estate agents say, as the number of buyers starts to outstrip houses in some of the capital’s most sought-after areas.
Sealed bids, which estate agents use in periods of high demand to extract the best price from competing buyers, have also been seen for the first time in 18 months.
Furthermore, the number of cash buyers has risen to unusually high levels, agents have reported.
One branch of Chesterton Humberts in central London said 17 out of 18 sales this year had been made in cash. Knight Frank said 45 per cent of sales over £5m in London were made in cash in April, compared with a third typically.
Savills, meanwhile, said the average number of cash buyers climbed to 42 per cent in March, compared with 24 per cent in 2006 and 2007.
Liam Bailey, head of residential research at Knight Frank, said: “There is no question that purely in terms of sales activity, the central London market is unrecognisable from where it was six months ago.”
He said that “after a noticeable absence” there was evidence of gazumping again and the need for sealed bids.
According to the Nationwide house price index for May, prices rose 1.2 per cent rise from April, sending a signal that appears consistent with other surveys showing improving sentiment.
However, Martin Gabhauer, chief economist at Nationwide, warned that the data did not mean prices had bottomed out.
Source: FT
Sealed bids, which estate agents use in periods of high demand to extract the best price from competing buyers, have also been seen for the first time in 18 months.
Furthermore, the number of cash buyers has risen to unusually high levels, agents have reported.
One branch of Chesterton Humberts in central London said 17 out of 18 sales this year had been made in cash. Knight Frank said 45 per cent of sales over £5m in London were made in cash in April, compared with a third typically.
Savills, meanwhile, said the average number of cash buyers climbed to 42 per cent in March, compared with 24 per cent in 2006 and 2007.
Liam Bailey, head of residential research at Knight Frank, said: “There is no question that purely in terms of sales activity, the central London market is unrecognisable from where it was six months ago.”
He said that “after a noticeable absence” there was evidence of gazumping again and the need for sealed bids.
According to the Nationwide house price index for May, prices rose 1.2 per cent rise from April, sending a signal that appears consistent with other surveys showing improving sentiment.
However, Martin Gabhauer, chief economist at Nationwide, warned that the data did not mean prices had bottomed out.
Source: FT
UK Economy Could Be Growing By The Autumn
Upbeat manufacturing data has helped push UK equities higher again as commentators increasingly suggest the economy may be growing by the autumn and even the long-term bears are running out of reasons to be miserable.
Coming in at 45.4 in May, the seasonally adjusted CIPS/Markit Purchasing Managers’ Index remained below the no-change mark of 50.0 for the thirteenth successive month.
But it also posted it third consecutively monthly rise - from an upwardly revised figure of 43.1 in April - and is now at its highest level for 12 months.
'At this rate we would hit the no-change 50.0 PMI benchmark by autumn – significantly earlier than economists initially predicted,' said Roy Ayliffe, director at the Chartered Institute of Purchasing & Supply.
Production and new orders continued to decline in May, but at the slowest rates for twelve and fourteen months respectively and the orders-to-inventory ratio rose to a thirty-two month high - which is why Ayliffe and others are suggesting their could be economic growth within three months..
The news comes on the back of an upbeat report from the Engineering Employers Federation.
James Knightly, economist at ING, a long time bear on the UK economy, says even he might have to review his forecasts.
'Despite our worries concerning the impact of the bursting of the house price bubble and the implosion of the banks on a household sector that is the most indebted in the world, it appears that the slashing of interest rates and support from quantitative easing is generating a tangible improvement in the economy,' he says.
He still sees a number of reasons to be cautious and thinks the leap in PMI may in part be down to re-stocking that could soon run out of steam.
Nonetheless, he thinks today's data is another strong argument to start being less pessimistic about the UK.
Howard Archer, UK economist at IHG Global Insight agrees today's data is clearly good news and boosts hopes that the economy could start growing before the end of the year.
Earlier, better than expected Chinese PMI data helped lift the mood on global markets. All eyes are now on the US ISM figures.
If - as expected - they come in with a positive number, an increasing number of market watchers might be arguing the recession is over in the US and that will boost hopes we'll be back in groth miode by the end of the summer.
Source: Citywire
Coming in at 45.4 in May, the seasonally adjusted CIPS/Markit Purchasing Managers’ Index remained below the no-change mark of 50.0 for the thirteenth successive month.
But it also posted it third consecutively monthly rise - from an upwardly revised figure of 43.1 in April - and is now at its highest level for 12 months.
'At this rate we would hit the no-change 50.0 PMI benchmark by autumn – significantly earlier than economists initially predicted,' said Roy Ayliffe, director at the Chartered Institute of Purchasing & Supply.
Production and new orders continued to decline in May, but at the slowest rates for twelve and fourteen months respectively and the orders-to-inventory ratio rose to a thirty-two month high - which is why Ayliffe and others are suggesting their could be economic growth within three months..
The news comes on the back of an upbeat report from the Engineering Employers Federation.
James Knightly, economist at ING, a long time bear on the UK economy, says even he might have to review his forecasts.
'Despite our worries concerning the impact of the bursting of the house price bubble and the implosion of the banks on a household sector that is the most indebted in the world, it appears that the slashing of interest rates and support from quantitative easing is generating a tangible improvement in the economy,' he says.
He still sees a number of reasons to be cautious and thinks the leap in PMI may in part be down to re-stocking that could soon run out of steam.
Nonetheless, he thinks today's data is another strong argument to start being less pessimistic about the UK.
Howard Archer, UK economist at IHG Global Insight agrees today's data is clearly good news and boosts hopes that the economy could start growing before the end of the year.
Earlier, better than expected Chinese PMI data helped lift the mood on global markets. All eyes are now on the US ISM figures.
If - as expected - they come in with a positive number, an increasing number of market watchers might be arguing the recession is over in the US and that will boost hopes we'll be back in groth miode by the end of the summer.
Source: Citywire
UK Property Prices Stabilise After 2 Years Of Falls
The average cost of a home in England and Wales did not change during the month, with only 13 per cent of postcode districts reporting price falls, compared with 58 per cent in January and over 70 per cent last autumn, according to housing intelligence group Hometrack.
It was the first time in 20 months that the survey had not registered a month-on-month decline in prices.
A combination of stronger sales volumes, continued buyer interest and a dwindling supply of property for sale was cited as the cause of the boost to market confidence.
The survey showed a 9 per cent rise in the number of sales agreed, while the number of potential buyers registering with estate agents increased by 6 per cent during the month and by 21 per cent in the last quarter.
But the group cautioned that it was too soon to predict a recovery in the housing market.
Richard Donnell, Hometrack's director of research said: "While house prices remain unchanged over May the outlook for the housing market remains fragile with a number of factors that could well de-rail the recent pick up in market activity.
"Given the weak outlook for the economy, house prices are expected to remain under downward pressure for the foreseeable future."
He said sellers' had re-aligned their prices with what purchasers are prepared to pay.
"Yet as we have highlighted previously, overall levels of market activity are well down on what would constitute normal market conditions," he added.
Mr Donnell said credit was still an issue and those buyers returning to the market tended to be people able to pay in cash or requiring a low loan to value mortgage.
May's increase in the number of sales being agreed is in sharp contrast to the same period in 2008, when there was just a 4% rise in sales and confidence amongst buyers was melting away.
There has been a raft of positive data on the housing market in recent weeks, with both transaction levels and mortgage approvals for house purchase increasing.
Figures from Nationwide Building Society have suggested house prices rose by 1.2 per cent during May, the second increase in three months for the lender's survey.
But the Council of Mortgage Lenders reported a 9 per cent fall in mortgage advances during April, prompting economists to warn that any recovery was likely to be gradual.
Mr Donnell said any talk of green shoots could attract more people into the market, increasing the supply of properties and undermining the support to prices currently provided by scant availability.
"Beyond this year there is also a risk of higher interest rates should inflationary forces build and higher mortgage costs would place an additional squeeze on household finances," he said.
"Quite simply it is too early to rule out future price falls and the sensible money would be on further falls in the next 12 months."
The Hometrack survey showed that the number of homes listed on agents' books fell slightly in the month, by 0.2 per cent, and has increased by just 2.5 per cent in the last quarter.
Just over 90 per cent of asking prices were achieved in the month and the average time taken to sell a property dropped below 10 weeks for the first time in a year.
No region reported a price increase and values were down by 0.1 per cent in the East Midlands, North West, West Midlands and Yorkshire and Humberside. They were static in the remaining regions.
Source: The Telegraph
It was the first time in 20 months that the survey had not registered a month-on-month decline in prices.
A combination of stronger sales volumes, continued buyer interest and a dwindling supply of property for sale was cited as the cause of the boost to market confidence.
The survey showed a 9 per cent rise in the number of sales agreed, while the number of potential buyers registering with estate agents increased by 6 per cent during the month and by 21 per cent in the last quarter.
But the group cautioned that it was too soon to predict a recovery in the housing market.
Richard Donnell, Hometrack's director of research said: "While house prices remain unchanged over May the outlook for the housing market remains fragile with a number of factors that could well de-rail the recent pick up in market activity.
"Given the weak outlook for the economy, house prices are expected to remain under downward pressure for the foreseeable future."
He said sellers' had re-aligned their prices with what purchasers are prepared to pay.
"Yet as we have highlighted previously, overall levels of market activity are well down on what would constitute normal market conditions," he added.
Mr Donnell said credit was still an issue and those buyers returning to the market tended to be people able to pay in cash or requiring a low loan to value mortgage.
May's increase in the number of sales being agreed is in sharp contrast to the same period in 2008, when there was just a 4% rise in sales and confidence amongst buyers was melting away.
There has been a raft of positive data on the housing market in recent weeks, with both transaction levels and mortgage approvals for house purchase increasing.
Figures from Nationwide Building Society have suggested house prices rose by 1.2 per cent during May, the second increase in three months for the lender's survey.
But the Council of Mortgage Lenders reported a 9 per cent fall in mortgage advances during April, prompting economists to warn that any recovery was likely to be gradual.
Mr Donnell said any talk of green shoots could attract more people into the market, increasing the supply of properties and undermining the support to prices currently provided by scant availability.
"Beyond this year there is also a risk of higher interest rates should inflationary forces build and higher mortgage costs would place an additional squeeze on household finances," he said.
"Quite simply it is too early to rule out future price falls and the sensible money would be on further falls in the next 12 months."
The Hometrack survey showed that the number of homes listed on agents' books fell slightly in the month, by 0.2 per cent, and has increased by just 2.5 per cent in the last quarter.
Just over 90 per cent of asking prices were achieved in the month and the average time taken to sell a property dropped below 10 weeks for the first time in a year.
No region reported a price increase and values were down by 0.1 per cent in the East Midlands, North West, West Midlands and Yorkshire and Humberside. They were static in the remaining regions.
Source: The Telegraph
Wednesday, May 27, 2009
Sterling Set For More Gains As It Breaks Through The $1.60
Currency experts have indicated that the mid-term outlook for sterling against the dollar looks positive despite the warning by Standard and Poor's last week that it may strip the UK of its top tier credit rating.
The pound broke through the $1.60 mark for the first time in almost seven months on Wednesday on renewed hopes that the British economy may be over the worst of the recession, and analysts said it was set to strengthen further.
"The worst of the financial crisis appears to have passed, so any renewed assault on sterling from a fresh plunge in banking shares looks unlikely," said John Higgins at Capital Economics. "On the contrary, we expect to see further gains."
Sterling reached its highest level against the dollar since early November as the British Bankers' Association reported that mortgage approvals rose to 27,685 in April from 26,671 in March, and a CBI survey indicated slowing decline in the UK services sector.
It has fallen by about 20pc against the dollar over the past year but some currency experts believe a lot of the bad news has already been priced in and it is now undervalued.
The pound has been hit particularly hard by the global downturn as investors feared that the UK, with a heavy reliance on the financial services sector and high levels of household debt, would be among the worst hit economies.
However, it has become increasingly clear that other economies have been hit just as hard, and signs that the worst is over could herald an increase in risk appetite among investors.
Steve Barrow, currency strategist at Standard Bank, predicts the pound will rise above $1.80 over the coming year. "We do not think S&P's actions should dent the bullish view that we have had for the pound for some time," he said.
Last week S&P said it had put the UK's AAA rating on review because of the deteriorating state of the public finances.
However, Mr Barrow, said the review was "not a total shock" and a decision to downgrade would not be made until the very end of 2010 or early 2011 in any event as S&P digested the implications of next year's general election and pre-Budget report.
"If time is a greatest healer we may find that the currency market forgets about this sword of Damocles that hangs over the UK's cherished AAA rating," he said.
Most experts agree that the biggest threat to sterling over the medium term is the Debt Management Office's ability to sell a growing mountain of Government bonds, including a record £220bn this year.
Source: The Telegraph
The pound broke through the $1.60 mark for the first time in almost seven months on Wednesday on renewed hopes that the British economy may be over the worst of the recession, and analysts said it was set to strengthen further.
"The worst of the financial crisis appears to have passed, so any renewed assault on sterling from a fresh plunge in banking shares looks unlikely," said John Higgins at Capital Economics. "On the contrary, we expect to see further gains."
Sterling reached its highest level against the dollar since early November as the British Bankers' Association reported that mortgage approvals rose to 27,685 in April from 26,671 in March, and a CBI survey indicated slowing decline in the UK services sector.
It has fallen by about 20pc against the dollar over the past year but some currency experts believe a lot of the bad news has already been priced in and it is now undervalued.
The pound has been hit particularly hard by the global downturn as investors feared that the UK, with a heavy reliance on the financial services sector and high levels of household debt, would be among the worst hit economies.
However, it has become increasingly clear that other economies have been hit just as hard, and signs that the worst is over could herald an increase in risk appetite among investors.
Steve Barrow, currency strategist at Standard Bank, predicts the pound will rise above $1.80 over the coming year. "We do not think S&P's actions should dent the bullish view that we have had for the pound for some time," he said.
Last week S&P said it had put the UK's AAA rating on review because of the deteriorating state of the public finances.
However, Mr Barrow, said the review was "not a total shock" and a decision to downgrade would not be made until the very end of 2010 or early 2011 in any event as S&P digested the implications of next year's general election and pre-Budget report.
"If time is a greatest healer we may find that the currency market forgets about this sword of Damocles that hangs over the UK's cherished AAA rating," he said.
Most experts agree that the biggest threat to sterling over the medium term is the Debt Management Office's ability to sell a growing mountain of Government bonds, including a record £220bn this year.
Source: The Telegraph
PRESS RELEASE: Repossessed Property Is The New Buy-To-Let
Repossessed Property Is The New Buy-To-Let
A significant by-product of the credit crunch and subsequent recession in the UK is the number of properties repossessed by banks and financial institutions as a consequence of borrowers defaulting on their repayments.
The Council of Mortgage Lenders has reported that the number of properties repossessed in the UK rose to 12,800 in the first three months of 2009. This was up 23% from the previous three months and up 50% on the same period last year.
For those directly affected, repossession is both devastating and a personal tragedy. But for an investor it presents an opportunity to invest near the bottom of the property market cycle at prices substantially below market value with strong yields and positive cash flow.
Not so long ago the topic of conversation around many dinner tables was “Buy-to-Let” and the next property hotspot. Now it is firmly about distressed assets, particularly UK bank repossessed property. Everyone loves a bargain and those property investors with a contrarian view to the prevailing opinion are spotting significant long-term value and snapping up great deals.
One such route for these value investors is via auction. Many auction houses up and down the country are booming but buyers should be aware that not all repossessed properties are suitable investments and many come with a lot of legal and financial baggage.
Distressed Assets, a Liverpool-based company, makes offers on only a tiny proportion of the auction properties researched by its team of analysts, brokers and solicitors.
“From each catalogue of around 400 lots we offer only 2% of the auction properties to clients after the initial sift, desk research, financial analysis, viewings and legal due diligence. Our strict investment criteria rule out the remaining lots” stated Dominic Farrell, director of Distressed Assets, at an investors’ seminar in Liverpool last night.
“Many novice investors compete to “win” at auction with their eyes wide shut, naively hoping for the best, having completed little if any legal and financial due diligence. Some may not even understand that exchange of contracts takes place as the hammer hits the gavel and completion on the deal can be as short as 14 days.” Farrell continued.
Although property auctions are normally the preserve of professional investors, Farrell believes that companies like his can assist homebuyers and investors alike to compete on equal terms with the experts and benefit from significant discounts to open market value.
“Distressed Assets, with its team of analysts, solicitors and financial advisors, provides a bespoke service for investors making use of many years of collective experience in property investment and development, property law and financial services. For time poor investors, this is the low risk route to secure a distressed asset for future wealth generation. This is the best time in decades to invest in property for the long-term.”
Notes for Editors:
Distressed Assets is a Liverpool-based company which sources undervalued property investment opportunities for clients from banks, financial institutions and via auction.
Its sister companies include property development and acquisition companies and an investment magazine publisher. The company website is at http://www.distressed-assets.co.uk/
Distressed Assets is holding free investment seminars in Dublin on Monday 22nd June 2009 and in London Thursday 25th June 2009. If you wish to attend a seminar, please fill in the form on the website at
http://www.uk-property-repossessions.com/property_repossession_seminars.aspx
For further information or interviews, please contact Henry Powell-Jones on +44 151 244 5657
A significant by-product of the credit crunch and subsequent recession in the UK is the number of properties repossessed by banks and financial institutions as a consequence of borrowers defaulting on their repayments.
The Council of Mortgage Lenders has reported that the number of properties repossessed in the UK rose to 12,800 in the first three months of 2009. This was up 23% from the previous three months and up 50% on the same period last year.
For those directly affected, repossession is both devastating and a personal tragedy. But for an investor it presents an opportunity to invest near the bottom of the property market cycle at prices substantially below market value with strong yields and positive cash flow.
Not so long ago the topic of conversation around many dinner tables was “Buy-to-Let” and the next property hotspot. Now it is firmly about distressed assets, particularly UK bank repossessed property. Everyone loves a bargain and those property investors with a contrarian view to the prevailing opinion are spotting significant long-term value and snapping up great deals.
One such route for these value investors is via auction. Many auction houses up and down the country are booming but buyers should be aware that not all repossessed properties are suitable investments and many come with a lot of legal and financial baggage.
Distressed Assets, a Liverpool-based company, makes offers on only a tiny proportion of the auction properties researched by its team of analysts, brokers and solicitors.
“From each catalogue of around 400 lots we offer only 2% of the auction properties to clients after the initial sift, desk research, financial analysis, viewings and legal due diligence. Our strict investment criteria rule out the remaining lots” stated Dominic Farrell, director of Distressed Assets, at an investors’ seminar in Liverpool last night.
“Many novice investors compete to “win” at auction with their eyes wide shut, naively hoping for the best, having completed little if any legal and financial due diligence. Some may not even understand that exchange of contracts takes place as the hammer hits the gavel and completion on the deal can be as short as 14 days.” Farrell continued.
Although property auctions are normally the preserve of professional investors, Farrell believes that companies like his can assist homebuyers and investors alike to compete on equal terms with the experts and benefit from significant discounts to open market value.
“Distressed Assets, with its team of analysts, solicitors and financial advisors, provides a bespoke service for investors making use of many years of collective experience in property investment and development, property law and financial services. For time poor investors, this is the low risk route to secure a distressed asset for future wealth generation. This is the best time in decades to invest in property for the long-term.”
Notes for Editors:
Distressed Assets is a Liverpool-based company which sources undervalued property investment opportunities for clients from banks, financial institutions and via auction.
Its sister companies include property development and acquisition companies and an investment magazine publisher. The company website is at http://www.distressed-assets.co.uk/
Distressed Assets is holding free investment seminars in Dublin on Monday 22nd June 2009 and in London Thursday 25th June 2009. If you wish to attend a seminar, please fill in the form on the website at
http://www.uk-property-repossessions.com/property_repossession_seminars.aspx
For further information or interviews, please contact Henry Powell-Jones on +44 151 244 5657
European Property Tax Rebate
Britons who own holiday homes on the Continent, which they let out, could be eligible for tens of thousands of pounds in tax rebates. While tax breaks on so-called “furnished holiday lettings” are set to be scrapped from next April, before that date the relief has been extended from properties in the UK to those in other European countries.
How it works.
Furnished holiday lettings relief offers two main benefits. First, owners can offset their trading losses from renting out properties against other income, such as salary from their job. These “losses” take into account expenses including repairs, cleaning the property, utility bills, and mortgage interest.
A 40 per cent taxpayer incurring £10,000 of trading losses could claim a £4,000 tax rebate, for example.
Second, owners may be able to reduce capital gains tax (CGT) bills to a rate of only 10 per cent as a result of properties being deemed business assets.
To qualify for the relief, properties must be let at a commercial rent for 70 days or more a year, with these lets no more than 31 days each. Properties must also be available for rent 140 days a year.
How to claim.
Holiday home-owners who think they may be eligible for a rebate should contact the Revenue or their tax adviser.
Source: Homes and Property
How it works.
Furnished holiday lettings relief offers two main benefits. First, owners can offset their trading losses from renting out properties against other income, such as salary from their job. These “losses” take into account expenses including repairs, cleaning the property, utility bills, and mortgage interest.
A 40 per cent taxpayer incurring £10,000 of trading losses could claim a £4,000 tax rebate, for example.
Second, owners may be able to reduce capital gains tax (CGT) bills to a rate of only 10 per cent as a result of properties being deemed business assets.
To qualify for the relief, properties must be let at a commercial rent for 70 days or more a year, with these lets no more than 31 days each. Properties must also be available for rent 140 days a year.
How to claim.
Holiday home-owners who think they may be eligible for a rebate should contact the Revenue or their tax adviser.
Source: Homes and Property
Tuesday, May 26, 2009
Back From A Successful Trip To Cyprus
I attended the monthly site meeting at the Grove Spa Resort in Mazotos, Cyprus last week and had a number of meetings with the banks, contractors, consultants and of course our superb architect Constantinos.
The progress of the site is impressive and also the quality of the work by our prime contractor GCC.
The Larnaca and Famagusta Districts of Cyprus have held their own during the credit crunch and indeed we are still seeing good demand.
Last week, we signed contracts for a cash sale for 2 apartments at The Grove Spa Resort to a local businessman who recognises the value of quality real estate investing as opposed to the vagaries and volatility of stock markets.
I was impressed with the professionalism and focus of all the contractors we are working with and must admit to a feeling of excitement and anticipation about the finished product.
Banks
The Bank of Cyprus reduced rates by 100bps last week which will lead other banks to follow suit. Athanasios Orphanides, the US trained president of the Central Bank is pushing for rates and margins to fall in an effort to increase the money supply.
We are already seeing a slight improvement in lending and can confirm that our development company, InvestinCyprus.com Developers has now negotiated a leading mortgage product for our clients at around 4%.
There will be a further easing in rates this year.
Cheers
Dominic Farrell
Tuesday, May 19, 2009
Credit Crunch Has Ended According To TED and LIBOR
Economists called the end of the credit crunch yesterday as the short-term interest rate that banks charge to borrow from each other fell to a record low on dollar, euro and pound-denominated loans.
The continuing decline in the London interbank offered rate (Libor) signalled a return to normality for the credit markets for the first time since May 2007, according to Peter Chatwell, an interest rate strategist at Calyon, the investment banking unit of Crédit Agricole.
“This marks a return to normal territory and gives us hope that we can cope with anything that comes now. It indicates that the banks are well capitalised, with no more surprises. It gives us hope that we have a functioning banking system and that we can now go about the job of running the broader economy,” Mr Chatwell said.
David Buick, of BGC Partners, said: “The trust is returning. This is very encouraging.”
Mr Chatwell takes his comfort from the Ted spread, a key measure of banking confidence defined as the difference between the interest rate charged on US treasuries and the dollar Libor rate. It fell to 62.47 basis points yesterday, its lowest since August 2007, when the credit crunch kicked in and the Ted spread soared.
“A spread of 62 points equates with the upper boundary of normality,” Mr Chatwell said. The spread ranged from 20 basis points to 62 basis points between December 2005 and May 2007 - the period of stability before the credit markets lurched.
In a further sign that the economy could be returning to normality, the Vix index — a key measure of share-price volatility in America — fell by 6.85 per cent to 30.83 in early afternoon trading. It stood at 55 in March.
The improvements in the American, European and British credit markets came as the pound rose to €1.1335, up 0.93 cents. Sterling also rose just over half a cent to $1.5306. Libor fell by four points to 78.5 basis points for three-month dollar loans, by 1.8 points to 1.33 per cent for sterling loans and from 1.247 to 1.242 for euro borrowings. These are all record lows.
Source: The Times
The continuing decline in the London interbank offered rate (Libor) signalled a return to normality for the credit markets for the first time since May 2007, according to Peter Chatwell, an interest rate strategist at Calyon, the investment banking unit of Crédit Agricole.
“This marks a return to normal territory and gives us hope that we can cope with anything that comes now. It indicates that the banks are well capitalised, with no more surprises. It gives us hope that we have a functioning banking system and that we can now go about the job of running the broader economy,” Mr Chatwell said.
David Buick, of BGC Partners, said: “The trust is returning. This is very encouraging.”
Mr Chatwell takes his comfort from the Ted spread, a key measure of banking confidence defined as the difference between the interest rate charged on US treasuries and the dollar Libor rate. It fell to 62.47 basis points yesterday, its lowest since August 2007, when the credit crunch kicked in and the Ted spread soared.
“A spread of 62 points equates with the upper boundary of normality,” Mr Chatwell said. The spread ranged from 20 basis points to 62 basis points between December 2005 and May 2007 - the period of stability before the credit markets lurched.
In a further sign that the economy could be returning to normality, the Vix index — a key measure of share-price volatility in America — fell by 6.85 per cent to 30.83 in early afternoon trading. It stood at 55 in March.
The improvements in the American, European and British credit markets came as the pound rose to €1.1335, up 0.93 cents. Sterling also rose just over half a cent to $1.5306. Libor fell by four points to 78.5 basis points for three-month dollar loans, by 1.8 points to 1.33 per cent for sterling loans and from 1.247 to 1.242 for euro borrowings. These are all record lows.
Source: The Times
A Messy Week For Sterling
UK data give no cause for new concern. Bank of England cautious about recovery. Euro torpedoed, eventually, by weak first quarter GDP data.
It took a while to gain traction but the pound got its act together in the second half of the week. It came near to €1.1250 late on Friday and was pushing higher through that level when London opened this morning. A potentially upbeat start to Sterling's week came with a report from the Organisation for Economic Co-operation and Development. This members-only club announced that Britain was one of only a handful of countries that would soon see a turnaround - or at least a bottom - in their economic performance. France, Italy and China were also on the list while the US, Japan and Germany faced further "sharp falls" in output.
Britain's residential housing sector delivered unusually good news on three sides. The Royal Institute of Chartered Surveyors' House Price Balance improved by a dozen points to -60%; nowhere near good but a lot better than in previous months. The Council of Mortgage Lenders said mortgage approvals had risen by 29% in March. Although the number was still a third less than a year earlier it was a welcome increase. This morning the Rightmove property website reported a 2.4% rise in sellers' asking prices.
Asking prices are very different from selling prices but the upswing in sellers' optimism was seen as a plus for the UK economy.
Negatives for sterling came with another rise in unemployment, this time to 7.1%, and a realistic assessment of the economy from Bank of England Governor Mervyn King. He said the economy would rebound and that it might take a while to get back to trend growth. Nothing obviously wrong with that. He said that it was impossible to predict how long it would take for the banks to resume full-scale lending activities.
Also true. However, the market chose to focus on Dr King's refusal to commit to untrammelled expansion from here on in. That sentiment weighed on sterling for the rest of the week.
The euro's week was equally as nervous as that for sterling. National industrial production figures from Italy, France and Germany were all negative and the Euroland numbers on Wednesday showed a 2% monthly decline in March with output more than 20% down on a year ago. It made Britain look good.
Friday's data for first quarter GDP extended that perception. Euroland's economy shrank by 2.5% in Q1 and by 4.5% in the 12-month period. The equivalent UK figures were -1.9% and -4.1%.No longer are the commentators banging on about Britain's economic underperformance. The evidence just isn't there. Buyers of the euro should place a stop order, somewhere above their threshold of pain, and bide their time.
Source: Moneycorp
It took a while to gain traction but the pound got its act together in the second half of the week. It came near to €1.1250 late on Friday and was pushing higher through that level when London opened this morning. A potentially upbeat start to Sterling's week came with a report from the Organisation for Economic Co-operation and Development. This members-only club announced that Britain was one of only a handful of countries that would soon see a turnaround - or at least a bottom - in their economic performance. France, Italy and China were also on the list while the US, Japan and Germany faced further "sharp falls" in output.
Britain's residential housing sector delivered unusually good news on three sides. The Royal Institute of Chartered Surveyors' House Price Balance improved by a dozen points to -60%; nowhere near good but a lot better than in previous months. The Council of Mortgage Lenders said mortgage approvals had risen by 29% in March. Although the number was still a third less than a year earlier it was a welcome increase. This morning the Rightmove property website reported a 2.4% rise in sellers' asking prices.
Asking prices are very different from selling prices but the upswing in sellers' optimism was seen as a plus for the UK economy.
Negatives for sterling came with another rise in unemployment, this time to 7.1%, and a realistic assessment of the economy from Bank of England Governor Mervyn King. He said the economy would rebound and that it might take a while to get back to trend growth. Nothing obviously wrong with that. He said that it was impossible to predict how long it would take for the banks to resume full-scale lending activities.
Also true. However, the market chose to focus on Dr King's refusal to commit to untrammelled expansion from here on in. That sentiment weighed on sterling for the rest of the week.
The euro's week was equally as nervous as that for sterling. National industrial production figures from Italy, France and Germany were all negative and the Euroland numbers on Wednesday showed a 2% monthly decline in March with output more than 20% down on a year ago. It made Britain look good.
Friday's data for first quarter GDP extended that perception. Euroland's economy shrank by 2.5% in Q1 and by 4.5% in the 12-month period. The equivalent UK figures were -1.9% and -4.1%.No longer are the commentators banging on about Britain's economic underperformance. The evidence just isn't there. Buyers of the euro should place a stop order, somewhere above their threshold of pain, and bide their time.
Source: Moneycorp
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2009
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May
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- Sterling Set For More Gains As It Breaks Through T...
- PRESS RELEASE: Repossessed Property Is The New Bu...
- European Property Tax Rebate
- Back From A Successful Trip To Cyprus
- Credit Crunch Has Ended According To TED and LIBOR...
- A Messy Week For Sterling
- UK Property Sales Hit 18 Month High
- Elliot Morley MP V Agansing Rai VC
- Dominic Farrell's Investors' Newsletter 12th May 2...
- 25% Discount At UK Property Auctions
- UK Property Price Falls Ease
- FOREX: Sterling Hurt By Gilt Buy-Backs
- The Worst Of UK Recession May Be Over - OECD
- Tax Rebate For Second Homes Overseas
- Sandwich Lease Options Are A Disaster In Waiting
- ECB Cut Rates To 1%
- Mortgage Lenders Relax Criteria
- Mortgage Competition Hots Up - 4.99% For 10 Years
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- Heroes
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- Gordon Brown Defeated Over Gurkha Betrayal
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- This Government Is Bonkers And Should Be Ashamed!
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- At A Glance 2009 Budget Summary
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