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
Tuesday, November 10, 2009
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
Monday, May 18, 2009
UK Property Sales Hit 18 Month High
UK Property sales hit 18-month high
Estate agents sold more houses in April than in any month since October 2007, according to new figures.
Saying the recession had changed the British people's attitude to owning property was 'nonsense', the NAEA's boss said Photo:
The average estate agent sold 10 properties in April, up from eight in March and a low point of five in August 2008, the National Association of Estate Agents (NAEA) said.
The findings come as a series of surveys indicate that the housing market is starting to recover. Rightmove, the property website, has just announced that the average asking price of a property in England and Wales increased by 2.4pc, or £5,000, during the four weeks to May 9, to stand at £227,441.
Last week the Royal Institution of Chartered Surveyors said house prices in Britain were on the rise again for the first time in 18 months.
Peter Bolton King, the chief executive of the NAEA, said: "What we are beginning to see now are consistent positive indicators that have held firm or improved since the beginning of the year.
"Six months ago people were talking about how the British people's attitude to owning property had changed in the recession. The NAEA always said that this was nonsense, and that demand for property remained strong, but confidence in the market had gone.
"These figures show that this confidence is returning."
Estate agents sold more houses in April than in any month since October 2007, according to new figures.
Saying the recession had changed the British people's attitude to owning property was 'nonsense', the NAEA's boss said Photo:
The average estate agent sold 10 properties in April, up from eight in March and a low point of five in August 2008, the National Association of Estate Agents (NAEA) said.
The findings come as a series of surveys indicate that the housing market is starting to recover. Rightmove, the property website, has just announced that the average asking price of a property in England and Wales increased by 2.4pc, or £5,000, during the four weeks to May 9, to stand at £227,441.
Last week the Royal Institution of Chartered Surveyors said house prices in Britain were on the rise again for the first time in 18 months.
Peter Bolton King, the chief executive of the NAEA, said: "What we are beginning to see now are consistent positive indicators that have held firm or improved since the beginning of the year.
"Six months ago people were talking about how the British people's attitude to owning property had changed in the recession. The NAEA always said that this was nonsense, and that demand for property remained strong, but confidence in the market had gone.
"These figures show that this confidence is returning."
Thursday, May 14, 2009
Elliot Morley MP V Agansing Rai VC
One is a Labour MP and former minister who claimed £16,000 in expenses from the taxpayer (you and me) for a mortgage that didn't exist, the other was a Gurkha who gave all for this country, but whose comrades are presently denied the right to stay here by Mr Morley's government.
This is Agansing Rai's obituary from the Telegraph 30th April 2009.
Which one would you prefer to live in the UK?
Agansing Rai, who has died in Kathmandu aged 80, was awarded the VC when serving with the 5th Royal Gurkha Rifles (Frontier Force) in Burma in 1944.
In June 1944 the 5th Gurkhas were under great pressure to stem the fanatical Japanese assault on Imphal, where success would have enabled them to break through into India. The Gurkhas were holding the Bishenpur-Silchar track, which had already been the scene of much hard fighting.
On 26 June, C Company of the 2nd Battalion of the 5th Gurkhas was ordered to capture an enemy position which dominated the track and had already changed hands several times. It consisted of two strong points, 200 yards apart and mutually self-supporting. Whereas there was dense jungle on the west of the enemy position, the hillside on the other sides was completely bare. Any assault would have to be launched in full view of the enemy for a least 80 yards up a slippery, precipitous ridge rising to a crest.
When the Gurkha company reached the crest they were immediately pinned down by fire from machine-guns and a 37 mm gun, suffering many casualties. Agansing Rai (at that time a Naik or Corporal) realised that delay would only lead to more casualties. So he led his section immediately at the machine-gun, firing as he charged. He killed three of the enemy machine-gun's crew of four. Inspired by this example the Gurkha company swept forward and drove the remaining Japanese off the strong point which they then occupied.
However the Gurkhas now came under heavy fire from the other strong point, as well as from the 37 mm gun concealed in the jungle. Once again Agansing Rai led his section towards the gun. Half the men were killed on the way, but Rai reached the gun and personally killed three of the five-man crew; his section killed the other two.
Rai then returned to his former position, took over the rest of the platoon, and in spite of heavy machine-gun fire and a shower of grenades, rushed forward with a grenade in one hand and a Thompson sub-machine gun in the other. Having reached the position, he killed all the occupants of a bunker with his grenade and bursts of Tommy-gun fire. The remaining Japanese, thoroughly demoralised, fled into the jungle, leaving these two vital positions in the hands of the Gurkhas.
Apart from Rai, another member of the 2/5th Royal Gurkha Rifles, Subedar Netrabahadur Thapa, also won a VC for his part in the action, which proved to be a turning point in the struggle for Imphal.
Agansing Rai was born in the village of Amsara, in the Okhaldhunga district of Nepal on 24 April 1920. He enlisted in the 5th Gurkhas in 1941 and was posted to the second Battalion. In 1943 he was promoted to section commander with the rank of Naik and saw action in early 1944 in the Chin Hills, where he was awarded a Military Medal.
He was presented with the VC by the Viceroy, Field Marshal Lord Wavell, in 1945. Besieged by reporters, who asked him how he felt and what he thought during the battle, he smiled disarmingly and said: "I forget." After the war he became an Instructor at the Regimental Centre and took part in the Victory Parade in London in 1946. He then served with the 2nd/5th Gurkhas in the army of occupation in Japan and was promoted to Subedar (company commander).
After Independence in 1947, Agansing Rai remained with the regiment in India, and in 1962-63 served in the Congo as part of the UN peacekeeping force. On retirement from the Army he was granted the honorary rank of Lieutenant. He was presented to the Queen during her visit to Nepal in 1986.
He attended many reunions of holders of the Victoria Cross and George Cross in London, where he was much admired as a man of stature and presence. He is remembered as a wise and quiet man, but one with a sense of humour and an ability to enjoy life.
Agansing Rai leaves three daughters and two sons.
This is Agansing Rai's obituary from the Telegraph 30th April 2009.
Which one would you prefer to live in the UK?
Agansing Rai, who has died in Kathmandu aged 80, was awarded the VC when serving with the 5th Royal Gurkha Rifles (Frontier Force) in Burma in 1944.
In June 1944 the 5th Gurkhas were under great pressure to stem the fanatical Japanese assault on Imphal, where success would have enabled them to break through into India. The Gurkhas were holding the Bishenpur-Silchar track, which had already been the scene of much hard fighting.
On 26 June, C Company of the 2nd Battalion of the 5th Gurkhas was ordered to capture an enemy position which dominated the track and had already changed hands several times. It consisted of two strong points, 200 yards apart and mutually self-supporting. Whereas there was dense jungle on the west of the enemy position, the hillside on the other sides was completely bare. Any assault would have to be launched in full view of the enemy for a least 80 yards up a slippery, precipitous ridge rising to a crest.
When the Gurkha company reached the crest they were immediately pinned down by fire from machine-guns and a 37 mm gun, suffering many casualties. Agansing Rai (at that time a Naik or Corporal) realised that delay would only lead to more casualties. So he led his section immediately at the machine-gun, firing as he charged. He killed three of the enemy machine-gun's crew of four. Inspired by this example the Gurkha company swept forward and drove the remaining Japanese off the strong point which they then occupied.
However the Gurkhas now came under heavy fire from the other strong point, as well as from the 37 mm gun concealed in the jungle. Once again Agansing Rai led his section towards the gun. Half the men were killed on the way, but Rai reached the gun and personally killed three of the five-man crew; his section killed the other two.
Rai then returned to his former position, took over the rest of the platoon, and in spite of heavy machine-gun fire and a shower of grenades, rushed forward with a grenade in one hand and a Thompson sub-machine gun in the other. Having reached the position, he killed all the occupants of a bunker with his grenade and bursts of Tommy-gun fire. The remaining Japanese, thoroughly demoralised, fled into the jungle, leaving these two vital positions in the hands of the Gurkhas.
Apart from Rai, another member of the 2/5th Royal Gurkha Rifles, Subedar Netrabahadur Thapa, also won a VC for his part in the action, which proved to be a turning point in the struggle for Imphal.
Agansing Rai was born in the village of Amsara, in the Okhaldhunga district of Nepal on 24 April 1920. He enlisted in the 5th Gurkhas in 1941 and was posted to the second Battalion. In 1943 he was promoted to section commander with the rank of Naik and saw action in early 1944 in the Chin Hills, where he was awarded a Military Medal.
He was presented with the VC by the Viceroy, Field Marshal Lord Wavell, in 1945. Besieged by reporters, who asked him how he felt and what he thought during the battle, he smiled disarmingly and said: "I forget." After the war he became an Instructor at the Regimental Centre and took part in the Victory Parade in London in 1946. He then served with the 2nd/5th Gurkhas in the army of occupation in Japan and was promoted to Subedar (company commander).
After Independence in 1947, Agansing Rai remained with the regiment in India, and in 1962-63 served in the Congo as part of the UN peacekeeping force. On retirement from the Army he was granted the honorary rank of Lieutenant. He was presented to the Queen during her visit to Nepal in 1986.
He attended many reunions of holders of the Victoria Cross and George Cross in London, where he was much admired as a man of stature and presence. He is remembered as a wise and quiet man, but one with a sense of humour and an ability to enjoy life.
Agansing Rai leaves three daughters and two sons.
Tuesday, May 12, 2009
Dominic Farrell's Investors' Newsletter 12th May 2009
Dear Investor
It has been 4 weeks since my last newsletter. Personally, I have been very busy refinancing some of my UK assets in order to invest in more, and also conducting personal due diligence and negotiations on a large UK commercial property which has been repossessed by a finance company.
Distressed Assets also had a full seminar at the Institute of Directors in London a couple of weeks ago and the team has also looked at a repossessed portfolio of properties in London, which we received direct from the administrators. Today, we are having a meeting with the representative of a bank which has recently foreclosed a developer. Watch this space!
I have said for some time, that I do not think the exceptional UK property deals we are seeing right now will be around for a long time. Mortgage products are getting more competitive on a daily basis. Demand is growing at its fastest pace since 1999 and banks are recapitalising. I would agree with the Royal Institution of Chartered Surveyors that we will some return to stability by the end of the year.
So what?
Well if you are serious about investing in UK property for your long-term wealth at these sorts of prices, now is the time to strike.
Repossession Seminar Tuesday 26th May 2009 - Liverpool
Distressed Assets is holding a seminar in Liverpool Tuesday 26th May 2009 in the evening. The team will outline the case for investing now in bank repossessed property and will detail the opportunities we presently have on the table. Further information can be obtained by looking at the website and there is also an application form for places – http://www.distressed-assets.co.uk/
Important Information For Overseas Holiday Let Owners
The Chancellor has given a windfall to owners of jet-to-let properties which are rented in the holiday sector in the EU – yes Cyprus counts.
Information can be found on my blog at http://www.dominicfarrell.com/. If you have any questions you will need to speak to your accountant. The huge benefit of this tax break is that you can back date it.
The Grove Spa Resort, Cyprus
There is a large site meeting today which is being attended by Stephanie and Jonathan. Construction has moved on at an incredible pace and we should have the latest pictures on the Construction Blog in the next couple of days.
It is worth looking at the blog as often as you can as we frequently update information or why not include it as an RSS feed on Google for instance so you receive updates immediately?
Hope to see you on the 26th.
Best wishes
Dominic Farrell
It has been 4 weeks since my last newsletter. Personally, I have been very busy refinancing some of my UK assets in order to invest in more, and also conducting personal due diligence and negotiations on a large UK commercial property which has been repossessed by a finance company.
Distressed Assets also had a full seminar at the Institute of Directors in London a couple of weeks ago and the team has also looked at a repossessed portfolio of properties in London, which we received direct from the administrators. Today, we are having a meeting with the representative of a bank which has recently foreclosed a developer. Watch this space!
I have said for some time, that I do not think the exceptional UK property deals we are seeing right now will be around for a long time. Mortgage products are getting more competitive on a daily basis. Demand is growing at its fastest pace since 1999 and banks are recapitalising. I would agree with the Royal Institution of Chartered Surveyors that we will some return to stability by the end of the year.
So what?
Well if you are serious about investing in UK property for your long-term wealth at these sorts of prices, now is the time to strike.
Repossession Seminar Tuesday 26th May 2009 - Liverpool
Distressed Assets is holding a seminar in Liverpool Tuesday 26th May 2009 in the evening. The team will outline the case for investing now in bank repossessed property and will detail the opportunities we presently have on the table. Further information can be obtained by looking at the website and there is also an application form for places – http://www.distressed-assets.co.uk/
Important Information For Overseas Holiday Let Owners
The Chancellor has given a windfall to owners of jet-to-let properties which are rented in the holiday sector in the EU – yes Cyprus counts.
Information can be found on my blog at http://www.dominicfarrell.com/. If you have any questions you will need to speak to your accountant. The huge benefit of this tax break is that you can back date it.
The Grove Spa Resort, Cyprus
There is a large site meeting today which is being attended by Stephanie and Jonathan. Construction has moved on at an incredible pace and we should have the latest pictures on the Construction Blog in the next couple of days.
It is worth looking at the blog as often as you can as we frequently update information or why not include it as an RSS feed on Google for instance so you receive updates immediately?
Hope to see you on the 26th.
Best wishes
Dominic Farrell
25% Discount At UK Property Auctions
The prices paid for property at auction still have a long way to fall, but the outlook for the housing market is not quite as dire as a few months ago.
New research suggests that in recent weeks prices of residential properties sold at auction were 25 per cent lower than the same home could have achieved had it been sold through an estate agent.
New research suggests that in recent weeks prices of residential properties sold at auction were 25 per cent lower than the same home could have achieved had it been sold through an estate agent.
The 25 per cent discount at property auctions is historically large, but better than at the turn of the year. Then a home that would normally sell for £100,000 would have fetched only £60,000 at auction, according to the research by Fathom Financial Consulting and Zoopla, the property website.
Along with Tuesday’s survey from the Royal Institution of Chartered Surveyors, which shows a large majority of estate agents reporting falling house prices in April, the results suggest there will be a further decline in property prices, although the bottom is easier to envisage than it was at the turn of the year.
The Rics survey shows estate agents managed to shift only 15 per cent of their stock of properties in April, indicating that it takes six-and-a-half months on average to sell a property conventionally.
“House prices have fallen rapidly already, but the exceptionally low level of transactions suggest that they have much further to go,” said Danny
Gabbay, director of Fathom Consulting.
Jeremy Leaf, a Rics spokesman, said: “There are tentative signs that the market is starting to pick up, but transactions remain at very low levels and we are unlikely to see significant improvement while money remains in short supply and the employment picture is uncertain.”
The main problem in judging what houses are worth arises because the vast majority of properties are not sold, while conventional measures of house prices estimate their values on the basis of a sample of current sales.
Most people wanting to know the value of their home would like to know how much they could get today – the equivalent of a “mark to market” price – and not the notional price they might get in December if they listed the property with an estate agent in a very fragile housing market.
This lack of pricing transparency has therefore contributed to a slump in homes up for sale.
In property auctions in March, however, 72 per cent of properties were sold in a day, giving a clear indication of the mark-to-market price.
Fathom used this data collated from auctions across Britain and collaborated with Zoopla, which used Land Registry data, to match up properties that had previously been sold through estate agents. Where there was a match, they compared the price at auction with a price that could have been expected on the conventional market.
In boom times, properties at auctions tend to sell at a premium, partly because buyers factor into their bids some of their expected profits from buying quickly.
But in property busts, such as Britain is experiencing, prices at auction will show a big discount over the conventional market because buyers expect prices to fall further and so bid low.
In the conventional market, sellers prefer to wait for a higher offer. The result is that few homes sell and prices fall gradually as everyone slowly learns that the old prices were too high.
The 25 per cent auction discount and the sluggish market give a strong signal that prices have further to fall. But the recent uptick in the auction market also shows the gap is narrowing.
The Rics reports further evidence of this cautious optimism, with a finding that new buyer enquiries have risen to the highest level since 1999 and there is a tentative pick-up in sales. Rics took these signs as a signal that “prices could stabilise later in the year”.
In London, there has been a marked increase in optimism among estate agents. Last July, 82 per cent of London agents said prices were falling, compared with only 26 per cent last month.
Source: FT
UK Property Price Falls Ease
House prices in England and Wales fell at their slowest pace in 15 months in the three months to April while new buyer enquiries rose at their fastest pace in a decade, a survey showed on Tuesday.
The Royal Institution of Chartered Surveyors' monthly house price balance picked up to -59.9 last month, its best showing since January last year, from -72.1 in March.
Analysts had forecast a reading of -70.
New buyer enquiries rose for a sixth consecutive month and at their fastest pace since August 1999, RICS said.
The findings tally with recent surveys from mortgage lenders suggesting that housing market activity has picked up from last year's record low and prices are falling more slowly.
However, RICS cautioned that this was an improvement, not a turnaround.
"There are tentative signs that the market is starting to pick up but transactions remain at very low levels and we are unlikely to see significant improvement while money remains in short supply and the employment picture is uncertain," said RICS spokesperson Jeremy Leaf.
The survey noted that record low interest rates meant few households were being forced to sell their properties despite rising unemployment.
The sales to stock ratio -- a key gauge of market slack -- rose for a fourth consecutive month, to 15.3 percent from 14.5 percent, but remained low by historical standards.
Source: Reuters
The Royal Institution of Chartered Surveyors' monthly house price balance picked up to -59.9 last month, its best showing since January last year, from -72.1 in March.
Analysts had forecast a reading of -70.
New buyer enquiries rose for a sixth consecutive month and at their fastest pace since August 1999, RICS said.
The findings tally with recent surveys from mortgage lenders suggesting that housing market activity has picked up from last year's record low and prices are falling more slowly.
However, RICS cautioned that this was an improvement, not a turnaround.
"There are tentative signs that the market is starting to pick up but transactions remain at very low levels and we are unlikely to see significant improvement while money remains in short supply and the employment picture is uncertain," said RICS spokesperson Jeremy Leaf.
The survey noted that record low interest rates meant few households were being forced to sell their properties despite rising unemployment.
The sales to stock ratio -- a key gauge of market slack -- rose for a fourth consecutive month, to 15.3 percent from 14.5 percent, but remained low by historical standards.
Source: Reuters
Monday, May 11, 2009
FOREX: Sterling Hurt By Gilt Buy-Backs
Monetary policy continues to relax. UK purchasing managers are more upbeat than most. US banks are not going bust just yet. Euro rates are lower and the ECB is buying Covered Bonds.
A game of two halves saw sterling climb to €1.14 on Wednesday before slumping to €1.12 the following day. Consolidation on Thursday was not solid enough to prevent a further fall to €1.1150 at the end of the week and that was where the pound was changing hands when London opened this morning.
For financial markets in general the week was typified by a further relaxation of monetary policy and an improvement in investor sentiment.
Although it was not a matter of cause and effect the two did go hand in hand. Central banks in Norway, Iceland, the Czech republic, Britain and Euroland were among those who either lowered policy interest rates or extended the scope of their quantitative easing. Equity markets were mostly upbeat, a mood underwritten by the results of the "stress tests" that the US Treasury had insisted be undertaken by America's biggest banks.
Hard economic data were relatively few and far between, even from those economies that usually churn them out by the dozen. In Britain's case the two that mattered came from the Nationwide building society and the Chartered Institute of Purchasing and Supply.
Nationwide reported a rise in its index of consumer confidence. The April reading went up from 42 to 50, the largest monthly rise in nearly two years. It did not exactly represent an outburst of exuberance among consumers: The index would have to almost double from its present level before the nation could be labelled "optimistic" but it was a worthwhile improvement nevertheless.
The CIPS's services sector Purchasing Managers' Index, similarly, was not good enough to be described as positive but it was better than most of the opposition. The headline figure went up three points to 48.7, eclipsing comparable measures from the United States (43.7), Germany (43.8), France (46.5), Italy (42.0) and the Euro zone as a whole (43.8).
One should not get carried away with a figure that is still negative - below the 50.0 breakeven level - but it is clear that things are getting worse much more slowly.
The Bank of England's decision to dip into its kitty to buy more gilts was not helpful to the pound. The government initially approved a pot of £150 billion for the Bank to spend on supporting the gilt market. The first £75 billion will be exhausted next month. When the Bank let it be known that it would spend a further £50 billion on buying gilts the market did not like the idea. The background suspicion is that the gilts bought by the Old Lady will never again see the light of day; in other words, that the government is printing money to lend to itself.
As suggested above, the Euro zone services sector PMI was slightly less soggy than the month before but not up to speed with Britain. Similarly with retail sales, Euroland's decline in March fell short of the UK experience.
Thursday's monthly council meeting at the European Central Bank produced a 25 basis point interest rate cut that lowered the refinancing rate to 1.0%. It also brought an asset purchase plan - quantitative easing - not entirely dissimilar to the one that the Bank of England is running. The difference is that the ECB will not be purchasing its own debt. It will be buying €60 billion of "covered bonds" to replenish the supply of credit to end users, the corporates themselves. Investors preferred the ECB scheme - and the euro - for two reasons. First, the ECB committed itself to the sort of decisive stimulus that was previously lacking. Second, there is no direct implication that it is printing money.
At first sight "covered bonds" might appear to have many of the characteristics of the disgraced mortgage bonds that brought financial markets to their knees in the United States: they are secured by a pool of mortgages and typically carry a AAA credit rating. However, the paper that the ECB intends to buy is not junk cobbled together by cunning financial engineers; it is proper stuff, regulated to within an inch of its life by the supranational European Covered Bond Council in Brussels. There is also a liquid market. With more than €2 trillion (billion) in circulation the ECB's €60 billion (milliard) should not have a measurable effect on the market other than to raise the general price level and, presumably, to encourage new issuance; exactly what the ECB is trying to achieve.
Sterling is still in the €1.05-€1.15 groove. Never mind if you missed last week's shot at €1.14, it will come again. Buyers of the euro should hedge 50% of their exposure and await another spike to increase their cover.
Source: Moneycorp
A game of two halves saw sterling climb to €1.14 on Wednesday before slumping to €1.12 the following day. Consolidation on Thursday was not solid enough to prevent a further fall to €1.1150 at the end of the week and that was where the pound was changing hands when London opened this morning.
For financial markets in general the week was typified by a further relaxation of monetary policy and an improvement in investor sentiment.
Although it was not a matter of cause and effect the two did go hand in hand. Central banks in Norway, Iceland, the Czech republic, Britain and Euroland were among those who either lowered policy interest rates or extended the scope of their quantitative easing. Equity markets were mostly upbeat, a mood underwritten by the results of the "stress tests" that the US Treasury had insisted be undertaken by America's biggest banks.
Hard economic data were relatively few and far between, even from those economies that usually churn them out by the dozen. In Britain's case the two that mattered came from the Nationwide building society and the Chartered Institute of Purchasing and Supply.
Nationwide reported a rise in its index of consumer confidence. The April reading went up from 42 to 50, the largest monthly rise in nearly two years. It did not exactly represent an outburst of exuberance among consumers: The index would have to almost double from its present level before the nation could be labelled "optimistic" but it was a worthwhile improvement nevertheless.
The CIPS's services sector Purchasing Managers' Index, similarly, was not good enough to be described as positive but it was better than most of the opposition. The headline figure went up three points to 48.7, eclipsing comparable measures from the United States (43.7), Germany (43.8), France (46.5), Italy (42.0) and the Euro zone as a whole (43.8).
One should not get carried away with a figure that is still negative - below the 50.0 breakeven level - but it is clear that things are getting worse much more slowly.
The Bank of England's decision to dip into its kitty to buy more gilts was not helpful to the pound. The government initially approved a pot of £150 billion for the Bank to spend on supporting the gilt market. The first £75 billion will be exhausted next month. When the Bank let it be known that it would spend a further £50 billion on buying gilts the market did not like the idea. The background suspicion is that the gilts bought by the Old Lady will never again see the light of day; in other words, that the government is printing money to lend to itself.
As suggested above, the Euro zone services sector PMI was slightly less soggy than the month before but not up to speed with Britain. Similarly with retail sales, Euroland's decline in March fell short of the UK experience.
Thursday's monthly council meeting at the European Central Bank produced a 25 basis point interest rate cut that lowered the refinancing rate to 1.0%. It also brought an asset purchase plan - quantitative easing - not entirely dissimilar to the one that the Bank of England is running. The difference is that the ECB will not be purchasing its own debt. It will be buying €60 billion of "covered bonds" to replenish the supply of credit to end users, the corporates themselves. Investors preferred the ECB scheme - and the euro - for two reasons. First, the ECB committed itself to the sort of decisive stimulus that was previously lacking. Second, there is no direct implication that it is printing money.
At first sight "covered bonds" might appear to have many of the characteristics of the disgraced mortgage bonds that brought financial markets to their knees in the United States: they are secured by a pool of mortgages and typically carry a AAA credit rating. However, the paper that the ECB intends to buy is not junk cobbled together by cunning financial engineers; it is proper stuff, regulated to within an inch of its life by the supranational European Covered Bond Council in Brussels. There is also a liquid market. With more than €2 trillion (billion) in circulation the ECB's €60 billion (milliard) should not have a measurable effect on the market other than to raise the general price level and, presumably, to encourage new issuance; exactly what the ECB is trying to achieve.
Sterling is still in the €1.05-€1.15 groove. Never mind if you missed last week's shot at €1.14, it will come again. Buyers of the euro should hedge 50% of their exposure and await another spike to increase their cover.
Source: Moneycorp
The Worst Of UK Recession May Be Over - OECD
The worst of the British recession may be over, the Organisation for Economic Co-operation and Development predicted for the first time on Monday.
Its latest "leading indicators", which are considered to be a bellwether for the global economic outlook, showed that Britain progressed from being in a "strong slowdown" to "possible trough" in March.
Based on up to 10 economic indicators per country, the OECD gauge for the UK economy rose by 0.3 points to 96.6, where any increasing number below 100 represents recovery. It was 5.4 points lower than the same time last year.
Of the G7 countries, France and Italy have also reached a "possible trough" according to the OECD, whereas Canada, Japan, Germany and the US, are still in the midst of a "strong slowdown".
"OECD composite leading indicators for March 2009 continue to point to a strong slowdown in the OECD. However France, Italy and the United Kingdom are showing tentative signs of, at least, a pause in the economic slowdown," said the OECD. It added that the signs of improvement were "weak".
The US fell 0.6 points to 89.9 on the OECD scale and was 11.8 points lower than a year ago, despite upbeat comments from Ben Bernanke, chairman of the Federal Reserve, who said last week the recession could be over by the end of the year.
Among the BRIC countries - Brazil, Russia, India and China - only China made it into "possible trough" territory, rising 0.9 points to 93. The other countries all declined in March and remained in a "strong slowdown." Brazil fell the most by 1.9 points to 92.7, although on an annual basis Russia was down the most by 21.8 points.
Source: The Telegraph
Its latest "leading indicators", which are considered to be a bellwether for the global economic outlook, showed that Britain progressed from being in a "strong slowdown" to "possible trough" in March.
Based on up to 10 economic indicators per country, the OECD gauge for the UK economy rose by 0.3 points to 96.6, where any increasing number below 100 represents recovery. It was 5.4 points lower than the same time last year.
Of the G7 countries, France and Italy have also reached a "possible trough" according to the OECD, whereas Canada, Japan, Germany and the US, are still in the midst of a "strong slowdown".
"OECD composite leading indicators for March 2009 continue to point to a strong slowdown in the OECD. However France, Italy and the United Kingdom are showing tentative signs of, at least, a pause in the economic slowdown," said the OECD. It added that the signs of improvement were "weak".
The US fell 0.6 points to 89.9 on the OECD scale and was 11.8 points lower than a year ago, despite upbeat comments from Ben Bernanke, chairman of the Federal Reserve, who said last week the recession could be over by the end of the year.
Among the BRIC countries - Brazil, Russia, India and China - only China made it into "possible trough" territory, rising 0.9 points to 93. The other countries all declined in March and remained in a "strong slowdown." Brazil fell the most by 1.9 points to 92.7, although on an annual basis Russia was down the most by 21.8 points.
Source: The Telegraph
Tax Rebate For Second Homes Overseas
People who own and let out holiday homes in Europe have been handed a 12-month window to reclaim tax potentially worth tens of thousands of pounds.
Anyone who has paid capital gains tax on a sale of a European property, or who has failed to cover their costs when letting out the property to holidaymakers, could now receive a rebate on tax paid in the past five years.
The tax break is an attempt by the government to bring the rules for European holiday homes into line with those for second homes in the UK.
Owners of holiday lets in the UK can offset losses incurred on letting the property against their other income to reduce their tax bill. They are also able to take advantage of additional reliefs to minimise capital gains tax on any profit from a sale. These benefits had not been available on second homes outside the UK but the discrepancy has been viewed as a contravention to European law.
The government is planning to remove the tax benefits on all holiday homes – including those in the UK – next year. Until then, however, it has extended the benefits to owners of properties abroad and allowed them to claim retrospectively.
“This is good news for people with overseas property, who will be able to take advantage of the relief for a short time,” said Leonie Kerswill, partner at PricewaterhouseCoopers. “But it is bad news for people who have UK property as they have only got the relief for another year.”
There are two main instances in which property owners can qualify for a rebate.
The first is if the income they have received from letting the property has not covered related costs, such as mortgage payments, bills, insurance and fees, in one or all of the past five years.
If this is the case, the owner may now be able to offset their losses against income tax they have already paid and receive a rebate. For example, someone who has had to pay out £5,000 more than the rental income they received in each of the past five years could offset £25,000 against income tax. A higher rate taxpayer could expect a rebate of £10,000 – 40 per cent of £25,000.
The second is if owners have paid capital gains tax on a European property in the past five years. They could be entitled to additional “taper” relief, which could substantially reduce the amount of tax they should have paid.
Conti Financial Services, which provides overseas mortgages, said someone who made a £100,000 profit on a £200,000 property might have paid capital gains tax of around £30,000. This person may now be able to include further tax reliefs, which could reduce the CGT liability to as little as £2,000 – and mean a rebate of £28,000.
“Anyone who thinks they could be eligible for these tax breaks should act quickly,” said Michael Axelrod, commercial director at Conti. “This is an opportunity limited to the current tax year and it would be a great shame to miss out on a valuable windfall.”
Source: FT
Anyone who has paid capital gains tax on a sale of a European property, or who has failed to cover their costs when letting out the property to holidaymakers, could now receive a rebate on tax paid in the past five years.
The tax break is an attempt by the government to bring the rules for European holiday homes into line with those for second homes in the UK.
Owners of holiday lets in the UK can offset losses incurred on letting the property against their other income to reduce their tax bill. They are also able to take advantage of additional reliefs to minimise capital gains tax on any profit from a sale. These benefits had not been available on second homes outside the UK but the discrepancy has been viewed as a contravention to European law.
The government is planning to remove the tax benefits on all holiday homes – including those in the UK – next year. Until then, however, it has extended the benefits to owners of properties abroad and allowed them to claim retrospectively.
“This is good news for people with overseas property, who will be able to take advantage of the relief for a short time,” said Leonie Kerswill, partner at PricewaterhouseCoopers. “But it is bad news for people who have UK property as they have only got the relief for another year.”
There are two main instances in which property owners can qualify for a rebate.
The first is if the income they have received from letting the property has not covered related costs, such as mortgage payments, bills, insurance and fees, in one or all of the past five years.
If this is the case, the owner may now be able to offset their losses against income tax they have already paid and receive a rebate. For example, someone who has had to pay out £5,000 more than the rental income they received in each of the past five years could offset £25,000 against income tax. A higher rate taxpayer could expect a rebate of £10,000 – 40 per cent of £25,000.
The second is if owners have paid capital gains tax on a European property in the past five years. They could be entitled to additional “taper” relief, which could substantially reduce the amount of tax they should have paid.
Conti Financial Services, which provides overseas mortgages, said someone who made a £100,000 profit on a £200,000 property might have paid capital gains tax of around £30,000. This person may now be able to include further tax reliefs, which could reduce the CGT liability to as little as £2,000 – and mean a rebate of £28,000.
“Anyone who thinks they could be eligible for these tax breaks should act quickly,” said Michael Axelrod, commercial director at Conti. “This is an opportunity limited to the current tax year and it would be a great shame to miss out on a valuable windfall.”
Source: FT
Sunday, May 10, 2009
Sandwich Lease Options Are A Disaster In Waiting
As ‘No Money Down’ financing for buy-to-let investors has virtually been stamped out by lenders, sandwich lease options are now being offered as the saviour for property investors wanting to make money out of property with little or no financial commitment. So called ‘Consultants’ are charging thousands to teach people how to use these schemes which should, in the opinion of Mark Alexander, Managing Director of The Money Centre, be rated as extremely high risk.
The scheme involves an investor entering into an option agreement with a person who is struggling to sell their home. A value is agreed and the investor secures an option to purchase at a fixed price for a fixed term in return for what can only be described as a promise to pay the mortgage which remains in the vendors name.
The investor then finds a tenant who pays a premium to the investor for an option to purchase the property on similar terms (increased values) to that which the current owner has agreed with the investor. Theoretically the investor makes money in two ways. When the person with the option to purchase exercises the option to buy the investor simultaneously exercises his option and the investor profits on the difference between the values of the option contracts he has negotiated. Second, the investor charges rent over and above the cost of the mortgage. The investor also benefits from any up front premium taken out of the deal without ever taking ownership of the property.
The potential risks are:
For the person who wanted to sell, if the investor fails to pay the mortgage it will not be the investor who gets repossessed, it will be the owner. This could result in dire financial problems which could lead to bankruptcy.
Second, the person who paid the premium to the investor for his lease option only has the financial covenant of the investor to rely upon as security for the money he has paid.
The following points need to be seriously considered:
How many investors using this scheme have an undoubted credit rating? Who is checking this?
If the tenant doesn't pay the rent, will the investor have sufficient funds to pay the mortgage that he has promised to pay?
What happens when interest rates go up?
Who is responsible for the upkeep of the property and what happens if they can't afford to maintain it properly?
Is any third party with an undoubted credit rating going to underwrite these risks?If a broker recommends this scheme and the investor and/or the tenant and/or the vendor lose out financially, who will they turn to for compensation? Might it be the FSA regulated broker who recommended the scheme and his PI insurance?
Source: The Money Centre
Thursday, May 7, 2009
ECB Cut Rates To 1%
FRANKFURT (Reuters) - The European Central Bank cut its benchmark interest rate by 25 basis points to a new record low of 1.0 percent on Thursday, as expected.
But the ECB kept its overnight deposit rate, which is acting as a floor for money markets, at 0.25 percent, narrowing the gap between its policy rates instead of cutting the lowest of these to zero.
The ECB also cut its marginal lending rate by 50 basis points to 1.75 percent, from 2.25 percent -- keeping the rate corridor symmetrical. The new rates will take effect on May 13.
All 79 economists polled by Reuters had expected the ECB to cut the main refinancing rate to a new record low of 1.0 percent this month. Euro zone inflation is low and the economy is shrinking fast, although some data have shown signs of improvement.
Analysts and markets are now awaiting President Jean-Claude Trichet's news conference at 1:30 p.m. British time, when he is due to announce whether the ECB will use more alternative policy measures to support the economy.
The ECB is tipped to extend the maximum terms for its liquidity operations but could also follow other central banks into direct asset purchases.
Markets are also keen to see whether Trichet will say that 1 percent is the bottom of the current rate cycle and if he signals that the ECB plans to keep rates low for some time.
(Reporting by Krista Hughes; editing by David Stamp)
But the ECB kept its overnight deposit rate, which is acting as a floor for money markets, at 0.25 percent, narrowing the gap between its policy rates instead of cutting the lowest of these to zero.
The ECB also cut its marginal lending rate by 50 basis points to 1.75 percent, from 2.25 percent -- keeping the rate corridor symmetrical. The new rates will take effect on May 13.
All 79 economists polled by Reuters had expected the ECB to cut the main refinancing rate to a new record low of 1.0 percent this month. Euro zone inflation is low and the economy is shrinking fast, although some data have shown signs of improvement.
Analysts and markets are now awaiting President Jean-Claude Trichet's news conference at 1:30 p.m. British time, when he is due to announce whether the ECB will use more alternative policy measures to support the economy.
The ECB is tipped to extend the maximum terms for its liquidity operations but could also follow other central banks into direct asset purchases.
Markets are also keen to see whether Trichet will say that 1 percent is the bottom of the current rate cycle and if he signals that the ECB plans to keep rates low for some time.
(Reporting by Krista Hughes; editing by David Stamp)
Mortgage Lenders Relax Criteria
Mortgage lenders have started to relax slightly the requirements they need for granting a home loan, figures indicate.
Two-thirds of mortgage deals still require borrowers to put down a deposit of at least 25%.
But figures from the financial information service Moneyfacts show a recent rise in the number of deals demanding smaller down-payments.
The total number of mortgage deals has risen by 7% in the past month, with more needing only a 15% or 20% deposit.
"We are seeing a number of mortgage providers slowing reducing their strict criteria and are increasing the number of products available to those that can raise a 15% deposit, be it at a higher initial interest rate," said
Darren Cook of Moneyfacts.
Ray Boulger of mortgage brokers John Charcol said lenders were responding to competitive pressures.
"As lenders find the pool of customers who can put down a 40% deposit is shrinking, they are being forced to ask for smaller deposits," he said.
Changing times
A year ago, with the contraction of the property market gathering pace, more than half the available mortgages still needed a deposit of only 10%, or even less.
But last autumn, mortgage rationing by the UK's banks and building societies became much more aggressive.
By the end of the year the once-traditional 10% deals were rare and there are now just 96 of them.
And by last December more than half of all home loans needed at least a 25% deposit.
However, this year has seen some relaxation by the lenders.
"What we have seen over the past few months is a change in lenders offering their best interest rates at 70-75% loan-to-value rather than 60%," said Mr Boulger.
The number of deals needing a 15% deposit has risen, from 209 at the start of last December to 272 now.
And the number of 20% deposit loans which are available has gone up from 105 to 143 in the past month.
"Banks consider a 75% loan to value as a conservative benchmark and it is generally where they see themselves getting their money back if a property is repossessed," said Mr Cook.
"With more mortgages becoming available at higher loan to values, it can be seen that a number of banks are regaining some confidence within the housing market," he said.
Source: BBC
Two-thirds of mortgage deals still require borrowers to put down a deposit of at least 25%.
But figures from the financial information service Moneyfacts show a recent rise in the number of deals demanding smaller down-payments.
The total number of mortgage deals has risen by 7% in the past month, with more needing only a 15% or 20% deposit.
"We are seeing a number of mortgage providers slowing reducing their strict criteria and are increasing the number of products available to those that can raise a 15% deposit, be it at a higher initial interest rate," said
Darren Cook of Moneyfacts.
Ray Boulger of mortgage brokers John Charcol said lenders were responding to competitive pressures.
"As lenders find the pool of customers who can put down a 40% deposit is shrinking, they are being forced to ask for smaller deposits," he said.
Changing times
A year ago, with the contraction of the property market gathering pace, more than half the available mortgages still needed a deposit of only 10%, or even less.
But last autumn, mortgage rationing by the UK's banks and building societies became much more aggressive.
By the end of the year the once-traditional 10% deals were rare and there are now just 96 of them.
And by last December more than half of all home loans needed at least a 25% deposit.
However, this year has seen some relaxation by the lenders.
"What we have seen over the past few months is a change in lenders offering their best interest rates at 70-75% loan-to-value rather than 60%," said Mr Boulger.
The number of deals needing a 15% deposit has risen, from 209 at the start of last December to 272 now.
And the number of 20% deposit loans which are available has gone up from 105 to 143 in the past month.
"Banks consider a 75% loan to value as a conservative benchmark and it is generally where they see themselves getting their money back if a property is repossessed," said Mr Cook.
"With more mortgages becoming available at higher loan to values, it can be seen that a number of banks are regaining some confidence within the housing market," he said.
Source: BBC
Friday, May 1, 2009
Mortgage Competition Hots Up - 4.99% For 10 Years
I am presently refinancing and in some cases financing properties which were bought for cash in order to release equity to invest straight back into UK distressed properties.
In one case, I was offered a 4.99% 10 year fixed deal at 75% LTV with free legals and valuation. The product is completely portable. Since then others have come to the market with 4.89%!
I have also been made aware that mortgage providers which left the market place last year are now returning with very competitive rates.
Banks make their money by lending. It appears that the competition for clients is starting to hot up.
For many homeowners and investors, fixing rates at these levels makes complete sense and will bear fruit in 2-3 years time when interest rates will be a lot higher than today. Holding off for the lowest possible fix, is like trying to predict the bottom of the present property price slide.
For me, borrowing cash at 4.99% over 10 years is a no-brainer. If I've missed a few basis points, so be it, but in the meantime I have the cash now to invest, not at some stage in the future when the property deals will not be as good.
It's "opportunity cost" again.
Have a great bank holiday weekend. I am off to Twickenham for the Army V Navy which tends to get a little messy!
Cheers
Dominic Farrell
In one case, I was offered a 4.99% 10 year fixed deal at 75% LTV with free legals and valuation. The product is completely portable. Since then others have come to the market with 4.89%!
I have also been made aware that mortgage providers which left the market place last year are now returning with very competitive rates.
Banks make their money by lending. It appears that the competition for clients is starting to hot up.
For many homeowners and investors, fixing rates at these levels makes complete sense and will bear fruit in 2-3 years time when interest rates will be a lot higher than today. Holding off for the lowest possible fix, is like trying to predict the bottom of the present property price slide.
For me, borrowing cash at 4.99% over 10 years is a no-brainer. If I've missed a few basis points, so be it, but in the meantime I have the cash now to invest, not at some stage in the future when the property deals will not be as good.
It's "opportunity cost" again.
Have a great bank holiday weekend. I am off to Twickenham for the Army V Navy which tends to get a little messy!
Cheers
Dominic Farrell
Thursday, April 30, 2009
UK Property Prices Falling More Slowly
The annual rate at which house prices are falling is showing signs of moderating as buyers return to the market, figures have revealed.
The Land Registry said house prices dropped by only 0.4% during March, the lowest monthly fall for 11 months, while the annual rate of declined eased from a record 16.6% to 16.2%.
Nationwide also reported a slight decrease in year-on-year price falls, with these running at 15% in April, down from 15.7% in March.
But the Nationwide index, which covers the whole of the UK, reported a price fall of 0.4% for April itself, wiping out some of the 0.9% gain seen in March.
Figures from the Land Registry, which only include England and Wales, also showed sales volumes continued to decline during January, the latest month for which figures are available.
The number of homes changing hands dropped to 24,770 during the month, down from 36,341 in December, although some of the fall is likely to represent the seasonal slowdown around Christmas. Sales levels are now 57% lower than they were in January last year.
The Land Registry data showed a mixed pattern across the regions, with the North East seeing prices rise by 1.8% in March, while in the South West they rose by 1.1%.
Wales and London also saw monthly price rises of 1% and 0.6% respectively.
But at the other end of the scale, property lost a further 2% of its value in the West Midlands, with prices dropping by 1.6% in the East and falling by 1.4% in both Yorkshire and the Humber and the South East.
Nationwide surprised economists by reporting the first house price rise for 16 months in March, marking the start of a run of positive data on the market. Last week the Council of Mortgage Lenders said lending rose by 16% during the month, and HM Revenue and Customs publishing figures showing the number of homes changing hands soared by 40% in March.
Source: The Press Association
The Land Registry said house prices dropped by only 0.4% during March, the lowest monthly fall for 11 months, while the annual rate of declined eased from a record 16.6% to 16.2%.
Nationwide also reported a slight decrease in year-on-year price falls, with these running at 15% in April, down from 15.7% in March.
But the Nationwide index, which covers the whole of the UK, reported a price fall of 0.4% for April itself, wiping out some of the 0.9% gain seen in March.
Figures from the Land Registry, which only include England and Wales, also showed sales volumes continued to decline during January, the latest month for which figures are available.
The number of homes changing hands dropped to 24,770 during the month, down from 36,341 in December, although some of the fall is likely to represent the seasonal slowdown around Christmas. Sales levels are now 57% lower than they were in January last year.
The Land Registry data showed a mixed pattern across the regions, with the North East seeing prices rise by 1.8% in March, while in the South West they rose by 1.1%.
Wales and London also saw monthly price rises of 1% and 0.6% respectively.
But at the other end of the scale, property lost a further 2% of its value in the West Midlands, with prices dropping by 1.6% in the East and falling by 1.4% in both Yorkshire and the Humber and the South East.
Nationwide surprised economists by reporting the first house price rise for 16 months in March, marking the start of a run of positive data on the market. Last week the Council of Mortgage Lenders said lending rose by 16% during the month, and HM Revenue and Customs publishing figures showing the number of homes changing hands soared by 40% in March.
Source: The Press Association
Wednesday, April 29, 2009
Labour MPs Who Supported The Gurkhas
The Liberal Democrats say 28 Labour MPs rebelled against the Government's shameful policy over the number of Gurkhas allowed to live in the UK. This is their list and I thank the Rebels for their moral courage and sense of natural justice:
Dianne Abbott
Ian Cawsey
Harry Cohen
Jeremy Corbyn
Paul Farrelly
Mark Fisher
Neil Gerrard
Kate Hoey
Kelvin Hopkins
Joan Humble
Glenda Jackson
John McDonnell
Shona McIsaac
Andrew MacKinlay
Gordon Marsden
Bob Marshall Andrews
Julie Morgan
Nick Palmer
Stephen Pound
Nick Raynsford
Andy Reed
Linda Riordan
Alan Simpson
Andrew Smith
Paul Truswell
Keith Vaz
Robert Wareing
Mike Wood
Dianne Abbott
Ian Cawsey
Harry Cohen
Jeremy Corbyn
Paul Farrelly
Mark Fisher
Neil Gerrard
Kate Hoey
Kelvin Hopkins
Joan Humble
Glenda Jackson
John McDonnell
Shona McIsaac
Andrew MacKinlay
Gordon Marsden
Bob Marshall Andrews
Julie Morgan
Nick Palmer
Stephen Pound
Nick Raynsford
Andy Reed
Linda Riordan
Alan Simpson
Andrew Smith
Paul Truswell
Keith Vaz
Robert Wareing
Mike Wood
Gordon Brown Defeated Over Gurkha Betrayal
Gordon Brown's government has suffered a shock defeat in the Commons on its policy of restricting the right of many former Gurkhas to settle in the UK.
MPs voted by 267 to 246 for a Lib Dem motion offering all Gurkhas equal right of residence, with the Tories and 27 Labour rebels backing it.
Lib Dem leader Nick Clegg called the government's position "shameful".
Immigration minister Phil Woolas told MPs new proposals would be published before Parliament's summer recess.
In a statement, he said: "This government respects the will of the House of Commons."
He added that all outstanding applications for UK residence by Gurkhas would be dealt with by the end of May.
Mr Brown's first significant defeat as prime minister came despite last-minute concessions being offered to rebel Labour MPs.
'Immense victory'
The Commons vote is not binding, but it represents an embarrassment for the government.
It comes at a time when Mr Brown is facing criticism over other issues, including his reform plans for MPs' expenses, which will also go to a vote on Thursday.
It is the biggest Commons victory achieved by the Liberal Democrats since their formation two decades ago, and is the first time a government has lost an opposition day debate since James Callaghan in January 1978.
There were shouts of "resign" as the numbers were announced. The Lib Dems said 28 Labour MPs had voted for their motion - although that is thought to include one Labour MP who voted both for and against the motion.
After the vote Mr Clegg and Mr Cameron joined actress Joanna Lumley, who has been campaigning on the issue, and Gurkhas outside Parliament.
Mr Clegg said: "This is an immense victory on a series of fronts: for the rights of Gurkhas who have been waiting so long for justice, a victory for Parliament, a victory for decency."
He added that it was "the kind of thing people want this country to do".
Uncomfortable episode
Mr Cameron said it was "embarrassing" for the prime minister because his efforts to strike a "shoddy deal" with Labour rebels had failed.
He added: "Today is a historic day where Parliament took the right decision. The government have got to come back with immediate proposals so that the Gurkhas can have an answer."
Among Labour MPs voting for the Liberal Democrat motion were home affairs committee chairman Keith Vaz, ministerial aide Stephen Pound and former cabinet minister Andrew Smith.
Mr Pound said he had resigned as a parliamentary private secretary to vote against the government.
Labour MP Martin Salter, chairman of the Parliamentary group on
Gurkhas' rights, abstained.
He told the BBC he refused to support the government but wanted to acknowledge the concessions made.
'Major changes'
He added: "It is the amount of abstainers that did it. Comparatively few Labour MPs actually voted for the Lib Dem motion but an awful lot of people sat on their hands as a way of showing their determination to finish this issue."
Some 36,000 former Gurkhas have been denied UK residency because they served in the British army before 1997.
Ministers had introduced new rules allowing more soldiers to settle here based on long service, medals received, and those injured in battle.
The Home Office said that new rules would allow about 4,300 more to settle, but the Gurkha Justice Campaign said it would be just 100.
Defending the policy at prime minister's questions earlier, Gordon Brown said: "Since 1997 we have taken the first action to give justice to the Gurkhas.
"During that period of time the first ever Gurkhas to have rights of settlement in Britain has been agreed and 6,000 have now applied successfully and come into the country."
He said they had created equal pay and pensions for the Gurkhas and doubled the pensions of people staying in Nepal.
But he said: "We have got to balance our responsibilities to those who have served our country with the finance that we need to be able to meet these obligations - and not base our offer on money we cannot afford."
Ms Lumley said the campaigners were "elated" as they had expected to lose the vote.
"When it came through we saw it on the screen and I can't tell you the sense of elation," she said.
Source: BBC
MPs voted by 267 to 246 for a Lib Dem motion offering all Gurkhas equal right of residence, with the Tories and 27 Labour rebels backing it.
Lib Dem leader Nick Clegg called the government's position "shameful".
Immigration minister Phil Woolas told MPs new proposals would be published before Parliament's summer recess.
In a statement, he said: "This government respects the will of the House of Commons."
He added that all outstanding applications for UK residence by Gurkhas would be dealt with by the end of May.
Mr Brown's first significant defeat as prime minister came despite last-minute concessions being offered to rebel Labour MPs.
'Immense victory'
The Commons vote is not binding, but it represents an embarrassment for the government.
It comes at a time when Mr Brown is facing criticism over other issues, including his reform plans for MPs' expenses, which will also go to a vote on Thursday.
It is the biggest Commons victory achieved by the Liberal Democrats since their formation two decades ago, and is the first time a government has lost an opposition day debate since James Callaghan in January 1978.
There were shouts of "resign" as the numbers were announced. The Lib Dems said 28 Labour MPs had voted for their motion - although that is thought to include one Labour MP who voted both for and against the motion.
After the vote Mr Clegg and Mr Cameron joined actress Joanna Lumley, who has been campaigning on the issue, and Gurkhas outside Parliament.
Mr Clegg said: "This is an immense victory on a series of fronts: for the rights of Gurkhas who have been waiting so long for justice, a victory for Parliament, a victory for decency."
He added that it was "the kind of thing people want this country to do".
Uncomfortable episode
Mr Cameron said it was "embarrassing" for the prime minister because his efforts to strike a "shoddy deal" with Labour rebels had failed.
He added: "Today is a historic day where Parliament took the right decision. The government have got to come back with immediate proposals so that the Gurkhas can have an answer."
Among Labour MPs voting for the Liberal Democrat motion were home affairs committee chairman Keith Vaz, ministerial aide Stephen Pound and former cabinet minister Andrew Smith.
Mr Pound said he had resigned as a parliamentary private secretary to vote against the government.
Labour MP Martin Salter, chairman of the Parliamentary group on
Gurkhas' rights, abstained.
He told the BBC he refused to support the government but wanted to acknowledge the concessions made.
'Major changes'
He added: "It is the amount of abstainers that did it. Comparatively few Labour MPs actually voted for the Lib Dem motion but an awful lot of people sat on their hands as a way of showing their determination to finish this issue."
Some 36,000 former Gurkhas have been denied UK residency because they served in the British army before 1997.
Ministers had introduced new rules allowing more soldiers to settle here based on long service, medals received, and those injured in battle.
The Home Office said that new rules would allow about 4,300 more to settle, but the Gurkha Justice Campaign said it would be just 100.
Defending the policy at prime minister's questions earlier, Gordon Brown said: "Since 1997 we have taken the first action to give justice to the Gurkhas.
"During that period of time the first ever Gurkhas to have rights of settlement in Britain has been agreed and 6,000 have now applied successfully and come into the country."
He said they had created equal pay and pensions for the Gurkhas and doubled the pensions of people staying in Nepal.
But he said: "We have got to balance our responsibilities to those who have served our country with the finance that we need to be able to meet these obligations - and not base our offer on money we cannot afford."
Ms Lumley said the campaigners were "elated" as they had expected to lose the vote.
"When it came through we saw it on the screen and I can't tell you the sense of elation," she said.
Source: BBC
Forget The Mediterranean, Cruise To Liverpool
Liverpool is rated one of Europe’s best cruise destinations. Boost for city terminal just a year after it opened. 15 vessels carrying 23,000 passengers expected in 2009.
LIVERPOOL’S reputation as a quality cruise destination has been given a huge boost after being rated one of the best in Europe - just a year after its terminal opened.
Passengers on the prestigious cruise liner company Grand Princess marked Liverpool as the 6th most enjoyable port of call, from 38 destinations, with a score of 87.5 out of 100 - with top port St Petersburg just a few points ahead on 91 percent.
And in the passenger satisfaction survey Liverpool scored the highest out of all UK ports for the question: “Which port most influenced you to book this cruise.” The ratings come on the eve of Liverpool's 2009 cruise season and seals an historic return to the seas for the city after a 40-year absence as a port of call.
Councillor Warren Bradley, Leader of Liverpool City Council, said: ‘’2008 was a fantastic year to launch the terminal, and these approval ratings from the passengers are a huge boost to everyone who has worked so hard both in the cruise operation and the wider tourism industry to make it a success.”
Keith Blundell, Head of Tourism at Liverpool City Council, added: ‘’The bookings for ‘09 proves Liverpool’s world class cultural offer has huge international appeal and this terminal is only adding to the city’s status as a must see destination. “The feedback from the passengers has been phenomenal with many praising the friendliness of the people and the beauty of the city.''
After welcoming 13 vessels in 2008, carrying over 16,000 passengers, the council-run owned and operated City of Liverpool Cruise Terminal is looking to bigger horizons. This year 15 cruise liners will bring in over 23,000 passengers, which is expected to generate over £1.6m to the city’s economy.
On Monday, June 29 the city welcomes the arrival of Crown Princess which at 116,000 tons is the largest ever cruise ship to enter the River Mersey – only for that record to be beaten in October with the arrival of Queen Mary 2.
Cunard's flagship cruise liner is a 148,000 ton vessel, with capacity for 3,056 passengers and a crew of 1,253. And at 1,132 ft. the £400m ships is 147 feet longer than the Eiffel Tower is tall (984 ft.) And as well as being a huge crowd puller – more than 15,000 people came to see the QE2 - the future for the terminal looks very bright with predicted tourism spend by 2012 at £2.94m.
Councillor Gary Millar, executive member for enterprise and tourism, said: “Liverpool has certainly made an impact both on the cruise industry and visitors alike, and as we know, word of mouth is the best possible recommendation. “The fact the city is so highly regarded in terms of its offer and welcome augers extremely well for the future.”
Cruise liners port of call in Liverpool 2009
26 May Rotterdam
29 May Astor
2 June Seven Seas Voyager
29 June Crown Princess
1 July Trinity House Patricia
23 July Crown Princess
7 August Black Watch
14 August Maasdam
16 August Crown Princess
28 August Crown Princess
29 August Crystal Symphony
31 August Prinsendam
18 September Deutschland
29 September Seabourn Pride
20 October Queen Mary 2
Source: Liverpool Vision
LIVERPOOL’S reputation as a quality cruise destination has been given a huge boost after being rated one of the best in Europe - just a year after its terminal opened.
Passengers on the prestigious cruise liner company Grand Princess marked Liverpool as the 6th most enjoyable port of call, from 38 destinations, with a score of 87.5 out of 100 - with top port St Petersburg just a few points ahead on 91 percent.
And in the passenger satisfaction survey Liverpool scored the highest out of all UK ports for the question: “Which port most influenced you to book this cruise.” The ratings come on the eve of Liverpool's 2009 cruise season and seals an historic return to the seas for the city after a 40-year absence as a port of call.
Councillor Warren Bradley, Leader of Liverpool City Council, said: ‘’2008 was a fantastic year to launch the terminal, and these approval ratings from the passengers are a huge boost to everyone who has worked so hard both in the cruise operation and the wider tourism industry to make it a success.”
Keith Blundell, Head of Tourism at Liverpool City Council, added: ‘’The bookings for ‘09 proves Liverpool’s world class cultural offer has huge international appeal and this terminal is only adding to the city’s status as a must see destination. “The feedback from the passengers has been phenomenal with many praising the friendliness of the people and the beauty of the city.''
After welcoming 13 vessels in 2008, carrying over 16,000 passengers, the council-run owned and operated City of Liverpool Cruise Terminal is looking to bigger horizons. This year 15 cruise liners will bring in over 23,000 passengers, which is expected to generate over £1.6m to the city’s economy.
On Monday, June 29 the city welcomes the arrival of Crown Princess which at 116,000 tons is the largest ever cruise ship to enter the River Mersey – only for that record to be beaten in October with the arrival of Queen Mary 2.
Cunard's flagship cruise liner is a 148,000 ton vessel, with capacity for 3,056 passengers and a crew of 1,253. And at 1,132 ft. the £400m ships is 147 feet longer than the Eiffel Tower is tall (984 ft.) And as well as being a huge crowd puller – more than 15,000 people came to see the QE2 - the future for the terminal looks very bright with predicted tourism spend by 2012 at £2.94m.
Councillor Gary Millar, executive member for enterprise and tourism, said: “Liverpool has certainly made an impact both on the cruise industry and visitors alike, and as we know, word of mouth is the best possible recommendation. “The fact the city is so highly regarded in terms of its offer and welcome augers extremely well for the future.”
Cruise liners port of call in Liverpool 2009
26 May Rotterdam
29 May Astor
2 June Seven Seas Voyager
29 June Crown Princess
1 July Trinity House Patricia
23 July Crown Princess
7 August Black Watch
14 August Maasdam
16 August Crown Princess
28 August Crown Princess
29 August Crystal Symphony
31 August Prinsendam
18 September Deutschland
29 September Seabourn Pride
20 October Queen Mary 2
Source: Liverpool Vision
This Government Is Bonkers And Should Be Ashamed!
Some people come to our country, incite racial hatred and violence, are sexist and homophobic and advocate the complete destruction of the freedoms and democratic system which our ancestors fought to preserve (and receive benefits, housing and handouts for their troubles!)
Others can go on terrorist training camps overseas with the sole intention of killing me and you and remain here.
Others come here to manipulate our over-generous welfare system, milk the NHS and suck the benefits system dry.
Others can come here by pretending to get married and remain.
Others claim dubious "political asylum" and also "qualify" for benefits.
In pure economic terms terms there is a lot of outflow and not a lot of inflow from these claimants.
Others fight for our democratic system and the freedoms we cherish. They have sacrificed all, over generations, in the jungles of Burma, Borneo and Malayia. They fought in the Falklands and now give their all in Afghanistan. They are members of the British Army - they do not have the same rights as the others I mentioned above. By the by, they pay taxes!
This Labour Government should hold its head in shame - or at least some of them as a rebellion on this issue is likely as evidenced by the article below from the Telegraph.
Please give these brave men from Nepal the same support they have given us for generations. 52,000 have given their lives for our freedom. They have earned 26 Victoria Crosses. They are more British than many of us!
When we needed them they were there for us, now we need to be there for them
"Kaphar hunnu bhanda marnu ramro"
(Better to die than live a coward)
"Dozens of Labour backbenchers are expected to vote against the Government's treatment of the Gurkhas.
The revolt comes after the Labour-dominated Home Affairs Committee told the Government to do more for the Gurkhas and summoned Phil Woolas, the immigration minister, to explain its stance.
The Government has been accused of betraying thousands of Nepalese men who fought for Britain in conflicts including the Falklands after setting new immigration rules that stop short of allowing all former Gurkhas to come to Britain.
Under the new rules, only Gurkhas with at least 10 years' service are eligible to come to Britain. Other foreign nationals serving with the British Armed Forces can apply after only four years.
The High Court last year declared that preventing Gurkhas who had served in the British Army before 1997 from living in this country was unlawful.
In response, the Home Office last week issued fresh criteria for allowing Gurhkas into the UK, but set the bar for entry so high that campaigners say that only a few hundred veterans will ever qualify.
Nick Clegg, the Liberal Democrat leader, has called for all former Gurkhas to be admitted to Britain and will today trigger a Commons vote on the issue.
Forty-five Labour backbenchers have signed a Commons motion calling for Gurkhas who retired before 1997 to have the same immigration status as those who retired after that time. In all, 109 MPs have backed the motion.
Martin Salter, a Labour backbencher, said: "This completely disgraceful decision does a great disservice to the brave Gurkha soldiers who have willingly risked their lives for this country."
Mr Clegg appealed to Labour MPs to vote against the Government's "insulting decision to turn its back on these brave soldiers."
He said: "People who are prepared to fight and die for our country should be entitled to live here. Yet even this basic principle is broken by this out of touch and morally bankrupt Government."
The Lib Dem motion in the Commons will also be publicly supported at Westminster rally by the actress Joanna Lumley, whose father served in a Gurkha regiment.
Mr Woolas has claimed that giving free access to all former Gurkhas and their families could mean as many as 100,000 people moving to Britain.
Advocates of the Gurkha cause say that is an overestimate, and the Home Affairs Committee has summoned Mr Woolas to explain the Government's treatment of the Gurkhas.
Keith Vaz, the Labour chairman of the committee said ministers should "do the honourable thing" and admit the Gurkhas.
He said: "The Committee was tremendously impressed by the merits of the Gurkha argument and the dignity with which they have attempted to redress a great injustice.
"It is indisputable that the UK owes an historic debt of gratitude to the Gurkhas for their brave, loyal and distinguished service in the defence of this country. Natural justice as well as moral rectitude dictate that we should treat them equally as any other individual prepared to fight and die for this country.""
Others can go on terrorist training camps overseas with the sole intention of killing me and you and remain here.
Others come here to manipulate our over-generous welfare system, milk the NHS and suck the benefits system dry.
Others can come here by pretending to get married and remain.
Others claim dubious "political asylum" and also "qualify" for benefits.
In pure economic terms terms there is a lot of outflow and not a lot of inflow from these claimants.
Others fight for our democratic system and the freedoms we cherish. They have sacrificed all, over generations, in the jungles of Burma, Borneo and Malayia. They fought in the Falklands and now give their all in Afghanistan. They are members of the British Army - they do not have the same rights as the others I mentioned above. By the by, they pay taxes!
This Labour Government should hold its head in shame - or at least some of them as a rebellion on this issue is likely as evidenced by the article below from the Telegraph.
Please give these brave men from Nepal the same support they have given us for generations. 52,000 have given their lives for our freedom. They have earned 26 Victoria Crosses. They are more British than many of us!
When we needed them they were there for us, now we need to be there for them
"Kaphar hunnu bhanda marnu ramro"
(Better to die than live a coward)
"Dozens of Labour backbenchers are expected to vote against the Government's treatment of the Gurkhas.
The revolt comes after the Labour-dominated Home Affairs Committee told the Government to do more for the Gurkhas and summoned Phil Woolas, the immigration minister, to explain its stance.
The Government has been accused of betraying thousands of Nepalese men who fought for Britain in conflicts including the Falklands after setting new immigration rules that stop short of allowing all former Gurkhas to come to Britain.
Under the new rules, only Gurkhas with at least 10 years' service are eligible to come to Britain. Other foreign nationals serving with the British Armed Forces can apply after only four years.
The High Court last year declared that preventing Gurkhas who had served in the British Army before 1997 from living in this country was unlawful.
In response, the Home Office last week issued fresh criteria for allowing Gurhkas into the UK, but set the bar for entry so high that campaigners say that only a few hundred veterans will ever qualify.
Nick Clegg, the Liberal Democrat leader, has called for all former Gurkhas to be admitted to Britain and will today trigger a Commons vote on the issue.
Forty-five Labour backbenchers have signed a Commons motion calling for Gurkhas who retired before 1997 to have the same immigration status as those who retired after that time. In all, 109 MPs have backed the motion.
Martin Salter, a Labour backbencher, said: "This completely disgraceful decision does a great disservice to the brave Gurkha soldiers who have willingly risked their lives for this country."
Mr Clegg appealed to Labour MPs to vote against the Government's "insulting decision to turn its back on these brave soldiers."
He said: "People who are prepared to fight and die for our country should be entitled to live here. Yet even this basic principle is broken by this out of touch and morally bankrupt Government."
The Lib Dem motion in the Commons will also be publicly supported at Westminster rally by the actress Joanna Lumley, whose father served in a Gurkha regiment.
Mr Woolas has claimed that giving free access to all former Gurkhas and their families could mean as many as 100,000 people moving to Britain.
Advocates of the Gurkha cause say that is an overestimate, and the Home Affairs Committee has summoned Mr Woolas to explain the Government's treatment of the Gurkhas.
Keith Vaz, the Labour chairman of the committee said ministers should "do the honourable thing" and admit the Gurkhas.
He said: "The Committee was tremendously impressed by the merits of the Gurkha argument and the dignity with which they have attempted to redress a great injustice.
"It is indisputable that the UK owes an historic debt of gratitude to the Gurkhas for their brave, loyal and distinguished service in the defence of this country. Natural justice as well as moral rectitude dictate that we should treat them equally as any other individual prepared to fight and die for this country.""
Monday, April 27, 2009
Fantasyland Economics - The Labour Government and Gordon Brown
Like many others in the UK, I was extremely disappointed, both personally and professionally, with the weak and strategically inept budget statement last week from Alistair Darling.
The fantasyland economic forecasts were blown out of the water even before the ink had dried and follow the fortunes of other overly optimistic projections from this government of spin.
Old Labour is back with a vengeance with the 50% (in reality 61% with the removal of personal allowances) marginal tax rate for higher earners, many of whom will now reduce economic activity to stay below the threshold, or move overseas. The revenue arising from this hike will be negligible, but the "unintended consequences" will be large.
If you add in the dividend tax hike then many business owners in the present climate may well call it a day and take their entire retained profits now at the old rate.
Result: A large spike in unemployment, lower corporation and personal tax revenues for the government and an increase in benefits!!
The 50% tax issue is a red herring and was deliberately announced in order to deflect from the core problem - UK PLC is broke, unless you work in the bulging public sector where you are protected from the downturn as the private sector takes the burden.
The level of borrowing over the next few years is off the scale, even by the excesses of this tax and spend government.
What is for certain, Gordon Brown, who was never elected into the post of prime minister through a General Election, will go down in history as having sent this country's finances and prospects back to the dark ages.
If many of his MPs had spent more time scrutinising the public finances and not with their snouts in the trough of their expenses claims, then maybe we wouldn't be in such a mess?
Dominic Farrell
The fantasyland economic forecasts were blown out of the water even before the ink had dried and follow the fortunes of other overly optimistic projections from this government of spin.
Old Labour is back with a vengeance with the 50% (in reality 61% with the removal of personal allowances) marginal tax rate for higher earners, many of whom will now reduce economic activity to stay below the threshold, or move overseas. The revenue arising from this hike will be negligible, but the "unintended consequences" will be large.
If you add in the dividend tax hike then many business owners in the present climate may well call it a day and take their entire retained profits now at the old rate.
Result: A large spike in unemployment, lower corporation and personal tax revenues for the government and an increase in benefits!!
The 50% tax issue is a red herring and was deliberately announced in order to deflect from the core problem - UK PLC is broke, unless you work in the bulging public sector where you are protected from the downturn as the private sector takes the burden.
The level of borrowing over the next few years is off the scale, even by the excesses of this tax and spend government.
What is for certain, Gordon Brown, who was never elected into the post of prime minister through a General Election, will go down in history as having sent this country's finances and prospects back to the dark ages.
If many of his MPs had spent more time scrutinising the public finances and not with their snouts in the trough of their expenses claims, then maybe we wouldn't be in such a mess?
Dominic Farrell
Thursday, April 23, 2009
Wednesday, April 22, 2009
At A Glance 2009 Budget Summary
Alistair Darling, the chancellor, stood up to deliver his second Budget at 12.31.
The Chancellor pledges to protect investment in schools and hospitals.
Chancellor expects economic growth to return ”towards the end of this year”.
Global economy to double in next 20 years.
Average monthly saving since October for people with tracker mortgages has been £230 per month.
Chancellor says measures taken to support economy will protect 500,000 jobs.
Darling says he wants European finance ministers to focus on rebuilding the European economy next week.
”Unexpected severity” of global downturn has seen IMF growth forecasts downgraded three times since October.
Darling says economic contraction in first quarter will be similar to 1.6 per cent in fourth quarter of 2008.
Chancellor forecasts economy to contract by 3.5 per cent this year
Chancellor says expect economy to return to growth by the end of the year.
Chancellor forecasts growth of 1.25 per cent in 2010.
Chancellor predicts growth of 3.5 per cent in 2011.
Inflation expected to reach 1 per cent by the end of this year.
Inflation target, of 2 per cent, remains unchanged.
Retail price inflation to fall to minus 3 per cent by September before returning to zero next year.
Current deficit expected to halve within four years.
Addtional £1.7bn in funding for the Job Centre Plus network.
Additional support for people out of work for 12 months will be provided through a Flexible New Deal.
From January everyone who has been out of work for 12 months and is under 25 will receive a job offer or training place.
Working with employers to create 250,000 new jobs.
£260m in funds for new youth training programme.
A further £250m this year and £400m in 2010-11 will be given for sixth form colleges to extend training young people.
The existing level of support for out-of-work home owners extended for six months to help them keep up with mortgage payments.
Introduction of scheme from today to guarantee mortgage backed securities following European approval.
Stamp duty holiday for properties worth less that £175,000 extended to the end of the calendar year.
Extension of £80m for for home buy direct - the social housing initiative.
Extending loss relief for companies to two years.
Chancellor to implement scrappage scheme from next week to offer £2,000 to consumers who exchange old cars for new until March 2010.
Fiscal measures taken by chancellor represent 0.5 per cent easing of GDP this year before tightening next year.
Borrowing to total £175bn this year, equal to 12 per cent of GDP.
Public borrowing as total of GDP to fall to 9.1 per cent in 2011-12, then to 7.2 per cent in 2012-13, then 5.5 per cent in 2013-14.
Public borrowing as total of GDP to fall to 9.1 per cent in 2010/11.
2011/12 Public borrowing as total of GDP to fall to 7.2 per cent, and will fall further to 5.1 per cent in 2012/13.
Tax avoidance to result in extra £1bn over the next three years.
Income tax will not be increased this year.
From April 2011 higher rate income tax relief restricted to basic rate for incomes over £150,000.
From April next year, income tax will rise for those earning over £150,000 per year to 50 per cent from 40 per cent, in a mesure brought forward by one year.
Fuel duty up 2p per litre from September.
Alcohol and Tobacco duty to rise by 2 per cent from 6pm.
Public sector efficiency saving to rise to £9bn by 2013-14.
Capital investment to be 1.25 per cent of GDP after 2013.
Corporate governance and executive pay in banks to be reformed.
New £500m for housing industry, including £100m for local authorities to build energy efficient houses.
£50m to modernise housing accommodation used by the armed forces.
Businesses’ capital allowance will be doubled to 40 per cent for one year.
Extra funding to expand broadband network across the UK.
Chancellor to set up new £750m investment fund to focus on emerging technologies and biotechnology to promote research and development.
”Carbon Budget” commits the UK to reducing its carbon output by 34 per cent by 2020 and announces £435m of extra support for promoting carbon reduction.
New power stations to be exempt from climate change levy from 2013.
£405m in new funding to encourage low-carbon manufacturing.
Child element of child tax credit up by £20 from April.
Pensioner fuel allowance maintained at current levels in spite of fall in prices.
ISA allowance extended to £10,200 from £7,200
The chancellor sat down at 13.21.
Source: FT
The Chancellor pledges to protect investment in schools and hospitals.
Chancellor expects economic growth to return ”towards the end of this year”.
Global economy to double in next 20 years.
Average monthly saving since October for people with tracker mortgages has been £230 per month.
Chancellor says measures taken to support economy will protect 500,000 jobs.
Darling says he wants European finance ministers to focus on rebuilding the European economy next week.
”Unexpected severity” of global downturn has seen IMF growth forecasts downgraded three times since October.
Darling says economic contraction in first quarter will be similar to 1.6 per cent in fourth quarter of 2008.
Chancellor forecasts economy to contract by 3.5 per cent this year
Chancellor says expect economy to return to growth by the end of the year.
Chancellor forecasts growth of 1.25 per cent in 2010.
Chancellor predicts growth of 3.5 per cent in 2011.
Inflation expected to reach 1 per cent by the end of this year.
Inflation target, of 2 per cent, remains unchanged.
Retail price inflation to fall to minus 3 per cent by September before returning to zero next year.
Current deficit expected to halve within four years.
Addtional £1.7bn in funding for the Job Centre Plus network.
Additional support for people out of work for 12 months will be provided through a Flexible New Deal.
From January everyone who has been out of work for 12 months and is under 25 will receive a job offer or training place.
Working with employers to create 250,000 new jobs.
£260m in funds for new youth training programme.
A further £250m this year and £400m in 2010-11 will be given for sixth form colleges to extend training young people.
The existing level of support for out-of-work home owners extended for six months to help them keep up with mortgage payments.
Introduction of scheme from today to guarantee mortgage backed securities following European approval.
Stamp duty holiday for properties worth less that £175,000 extended to the end of the calendar year.
Extension of £80m for for home buy direct - the social housing initiative.
Extending loss relief for companies to two years.
Chancellor to implement scrappage scheme from next week to offer £2,000 to consumers who exchange old cars for new until March 2010.
Fiscal measures taken by chancellor represent 0.5 per cent easing of GDP this year before tightening next year.
Borrowing to total £175bn this year, equal to 12 per cent of GDP.
Public borrowing as total of GDP to fall to 9.1 per cent in 2011-12, then to 7.2 per cent in 2012-13, then 5.5 per cent in 2013-14.
Public borrowing as total of GDP to fall to 9.1 per cent in 2010/11.
2011/12 Public borrowing as total of GDP to fall to 7.2 per cent, and will fall further to 5.1 per cent in 2012/13.
Tax avoidance to result in extra £1bn over the next three years.
Income tax will not be increased this year.
From April 2011 higher rate income tax relief restricted to basic rate for incomes over £150,000.
From April next year, income tax will rise for those earning over £150,000 per year to 50 per cent from 40 per cent, in a mesure brought forward by one year.
Fuel duty up 2p per litre from September.
Alcohol and Tobacco duty to rise by 2 per cent from 6pm.
Public sector efficiency saving to rise to £9bn by 2013-14.
Capital investment to be 1.25 per cent of GDP after 2013.
Corporate governance and executive pay in banks to be reformed.
New £500m for housing industry, including £100m for local authorities to build energy efficient houses.
£50m to modernise housing accommodation used by the armed forces.
Businesses’ capital allowance will be doubled to 40 per cent for one year.
Extra funding to expand broadband network across the UK.
Chancellor to set up new £750m investment fund to focus on emerging technologies and biotechnology to promote research and development.
”Carbon Budget” commits the UK to reducing its carbon output by 34 per cent by 2020 and announces £435m of extra support for promoting carbon reduction.
New power stations to be exempt from climate change levy from 2013.
£405m in new funding to encourage low-carbon manufacturing.
Child element of child tax credit up by £20 from April.
Pensioner fuel allowance maintained at current levels in spite of fall in prices.
ISA allowance extended to £10,200 from £7,200
The chancellor sat down at 13.21.
Source: FT
UK Distressed Assets Seminar - Institute of Directors, London
We had a full house at the Institute of Directors in Pall Mall London last night for the first Distressed Assets seminar.
I kicked off with the macro-economic overview and why I believe now is an opportunity of a lifetime in which to "value invest" in UK property repossessed by banks or administrators.
Henry continued by detailing to the audience the methodolgy of our approach and some of the successes we have had to date.
Martin, our lawyer, explained the complexities and potential pitfalls of investing in repossessed property, and how we ensure that thorough legal and financial due diligence is conducted prior to offer.
A great night, lots of new and not so new faces and new members for Distressed Assets.
I kicked off with the macro-economic overview and why I believe now is an opportunity of a lifetime in which to "value invest" in UK property repossessed by banks or administrators.
Henry continued by detailing to the audience the methodolgy of our approach and some of the successes we have had to date.
Martin, our lawyer, explained the complexities and potential pitfalls of investing in repossessed property, and how we ensure that thorough legal and financial due diligence is conducted prior to offer.
A great night, lots of new and not so new faces and new members for Distressed Assets.
Tuesday, April 21, 2009
Things Are Getting Worse, But More Slowly
Politicians and commentators find reasons to be less gloomy. Even so, this week could be tricky for sterling.
Sterling extended its uptrend for a third week, adding two more cents before topping out a little above €1.1350. After the failure of five attempts to break higher the pound retreated on Friday. When London opened this morning it was trading at €1.13 and looking nervous.
On both sides of the Atlantic there have been murmurs that the end of the economic downturn may be nigh. Politicians have studiously avoided any mention of the "green shoots" that inspire such derision among cynics, and the word "tentative" is ubiquitous, but there seems to be a spreading belief that the bottom of the recession will come this year, followed by a return to slow but positive growth in 2010. President Obama spoke of "signs of economic progress". Federal Reserve Chairman Ben Bernanke saw "tentative signs that the sharp decline in economic activity may be slowing."
The Royal Bank of Scotland's survey of purchasing managers showed "further evidence that the worst of the downturn... may now be behind us." Morgan Stanley economist David Miles, the chap who will replace David Blanchflower on the Monetary Policy Committee, was "guardedly optimistic" about the economy when he wrote about it in the Western Mail.
The Confederation of British Industry says "there are a few tentative signs that the steepest phase of the recession is now behind us."Although they have been in short supply during the last couple of weeks the UK economic data can be used to support this understated optimism, as long as only the better ones are selected.
In Britain the RICS house price balance improved for the first time in months. Rightmove's house price index went up by 1.8% in April (admittedly it does not tell the whole story because it relates only to asking prices).
Euroland's data profile was not quite as low as the UK but there too the numbers were scarce. Inflation was confirmed at +0.6% in the year to March, the headline number having been dragged down by lower food and energy prices. Core prices rose by 1.5% in the year, not enough to dampen the European Central Bank's appetite for another rate cut next month.
Industrial production fell by 2.3% in February, down 18.4% on the year. The figures compared unfavourably with equivalent falls of 1% and 12.5% for the UK but investors decided against making a big deal of it.
The media pounced on the possibility of boardroom tiff at the European Central Bank. On Wednesday Bundesbank President Axel Weber told journalists that euro interest rates should not be taken below 1%. ECB President Jean-Claude Trichet dismissed that view in Tokyo 36 hours later, saying "central banks must do all they can to restore, preserve and foster confidence among households and corporations in order to pave the way for sustainable prosperity."
Analysts inferred that he was open to the idea of euro rates falling beyond the 1% they are expected to hit next month and the euro briefly came under pressure.
The week ahead could be a tricky one for the pound. On the agenda, among other things, are inflation, unemployment, first quarter GDP and the Chancellor's austerity budget. None of them is loaded with promise. Nor is the technical picture looking terribly clever for sterling/euro. The three-week uptrend is vulnerable and a correction looks possible. At this stage it does not look terribly dangerous but we could well see the pound lower at this time next week. Buyers of the euro with a short time horizon should increase their hedge beyond the usual 50% or be prepared to live with a pound two or three cents lower in the next few days.
Source: Moneycorp
Sterling extended its uptrend for a third week, adding two more cents before topping out a little above €1.1350. After the failure of five attempts to break higher the pound retreated on Friday. When London opened this morning it was trading at €1.13 and looking nervous.
On both sides of the Atlantic there have been murmurs that the end of the economic downturn may be nigh. Politicians have studiously avoided any mention of the "green shoots" that inspire such derision among cynics, and the word "tentative" is ubiquitous, but there seems to be a spreading belief that the bottom of the recession will come this year, followed by a return to slow but positive growth in 2010. President Obama spoke of "signs of economic progress". Federal Reserve Chairman Ben Bernanke saw "tentative signs that the sharp decline in economic activity may be slowing."
The Royal Bank of Scotland's survey of purchasing managers showed "further evidence that the worst of the downturn... may now be behind us." Morgan Stanley economist David Miles, the chap who will replace David Blanchflower on the Monetary Policy Committee, was "guardedly optimistic" about the economy when he wrote about it in the Western Mail.
The Confederation of British Industry says "there are a few tentative signs that the steepest phase of the recession is now behind us."Although they have been in short supply during the last couple of weeks the UK economic data can be used to support this understated optimism, as long as only the better ones are selected.
In Britain the RICS house price balance improved for the first time in months. Rightmove's house price index went up by 1.8% in April (admittedly it does not tell the whole story because it relates only to asking prices).
Euroland's data profile was not quite as low as the UK but there too the numbers were scarce. Inflation was confirmed at +0.6% in the year to March, the headline number having been dragged down by lower food and energy prices. Core prices rose by 1.5% in the year, not enough to dampen the European Central Bank's appetite for another rate cut next month.
Industrial production fell by 2.3% in February, down 18.4% on the year. The figures compared unfavourably with equivalent falls of 1% and 12.5% for the UK but investors decided against making a big deal of it.
The media pounced on the possibility of boardroom tiff at the European Central Bank. On Wednesday Bundesbank President Axel Weber told journalists that euro interest rates should not be taken below 1%. ECB President Jean-Claude Trichet dismissed that view in Tokyo 36 hours later, saying "central banks must do all they can to restore, preserve and foster confidence among households and corporations in order to pave the way for sustainable prosperity."
Analysts inferred that he was open to the idea of euro rates falling beyond the 1% they are expected to hit next month and the euro briefly came under pressure.
The week ahead could be a tricky one for the pound. On the agenda, among other things, are inflation, unemployment, first quarter GDP and the Chancellor's austerity budget. None of them is loaded with promise. Nor is the technical picture looking terribly clever for sterling/euro. The three-week uptrend is vulnerable and a correction looks possible. At this stage it does not look terribly dangerous but we could well see the pound lower at this time next week. Buyers of the euro with a short time horizon should increase their hedge beyond the usual 50% or be prepared to live with a pound two or three cents lower in the next few days.
Source: Moneycorp
Friday, April 17, 2009
Economic Downturn ‘may be starting to abate’, Says IMF Chief
The economic downturn ‘may be starting to abate’ with a recovery emerging in 2010, the managing director of the International Monetary Fund has said.
Joining the growing number of policymakers and politicians talking of an end to the worst of the downturn, Dominique Strauss-Kahn said this recovery would depend on three points.
The first was continued fiscal stimulus from countries around the world. ‘Fiscal stimulus efforts need to be sustained in 2010, because we are not out of the woods just yet,’ he said.
The second was a renewed call for policymakers to cleanse banks’ balance sheets of toxic assets. ‘The new U.S. plan is a major step forward, but its success hinges on the willingness of banks to sell their toxic assets,’ he said.
The third point outlined by the IMF chief was the need for urgent action on the financing front, especially to alleviate pressures on emerging markets. He said the IMF now has the resources ‘to make a difference’ after plans were announced at the London meeting of the G20 to triple the organisation’s lending capacity to $750 billion.
Source: Citywire
Joining the growing number of policymakers and politicians talking of an end to the worst of the downturn, Dominique Strauss-Kahn said this recovery would depend on three points.
The first was continued fiscal stimulus from countries around the world. ‘Fiscal stimulus efforts need to be sustained in 2010, because we are not out of the woods just yet,’ he said.
The second was a renewed call for policymakers to cleanse banks’ balance sheets of toxic assets. ‘The new U.S. plan is a major step forward, but its success hinges on the willingness of banks to sell their toxic assets,’ he said.
The third point outlined by the IMF chief was the need for urgent action on the financing front, especially to alleviate pressures on emerging markets. He said the IMF now has the resources ‘to make a difference’ after plans were announced at the London meeting of the G20 to triple the organisation’s lending capacity to $750 billion.
Source: Citywire
Thursday, April 16, 2009
FOREX: Sterling Still In Its Uptrend
Industrial production in Britain falls by less than others. Four-day week and lack of data dampens activity. More of the same likely this week.
Sterling hesitated around Monday's €1.10 opening level before moving up to €1.1150 on Tuesday. More hesitation took it back down to €1.10 on Thursday. Then it was up to €1.1150 again, where it opened in London this morning.
The pound's daily movement last week seemed to owe more to chance than to any fundamental economic factors. Its net performance against the majors was almost random; virtually steady against the dollar, down by two yen and a cent and a half better against the euro.
The shortened week meant fewer economic data than usual. Britain's balance of trade and the producer price index brought marginal improvements: the trade deficit narrowed slightly, as did the gap between manufacturers' costs and factory gate prices. Nationwide's index of consumer confidence hit a record (five-year) low at 41 in March, two points down from he previous month.
The figures that everyone chose to ignore were those for industrial production in February. In no way could the 1% monthly fall have been considered good, let alone the 12.5% annual decline. However, judged against the opposition, the numbers were less than embarrassing. Britain's 1% monthly fall does not look so shoddy when compared to The United States' -1.4%, Germany's 2.9% and Japan's 9.4% for the same 28 days.
Thursday's interest rate decision was always going to be a non-event and that was how it turned out. A brief press release from the Bank of England noted that its 0.5% Bank rate would continue until (at least) May and that it would buy another $49 billion of gilts over the next two months.
After all the crowing (and crow pie, for that matter) it was instructive to see the final figures for fourth quarter GDP slippage in the Euro zone. It was not just educational, it was spooky. We had already seen the final revision to Britain's Q4 GDP, which showed a contraction of 1.6% over the three months. In the States an annualised 6.3% contraction translated into a quarterly shrinkage of 1.6%. And what was the figure for Euroland? -1.6%.
The global economy: It does what it says on the tin. Critics still allege that Britain's recession will be deeper and longer than elsewhere. They could well turn out to be correct but, nine months into the slump, the evidence is still wanting.
This will be another slow week for UK and Euroland statistics. House prices and retail sales are the only offerings from Britain. The Euro zone highlight will be the data for industrial production in February. In the context of sterling/euro the figures to beat will clearly be -1% on the month and -12.5% for the year: It isn't going to happen. Whether the Euro zone's weaker performance will weigh directly on the euro to any appreciable extent is a different matter.
Sterling/euro is looking good, having cleared the traffic jam at €1.11, but its recent history is littered with false dawns. We must therefore stick to the tried-and-tested neutral approach: Buyers of the euro should continue to hedge their exposure, fixing a price for half of whatever they need and using a stop order to protect the balance against unexpected nightmares.
Optimists - and there will be many - should under-hedge. On the other hand, if price certainty is essential there is no alternative but to cover the whole amount.
Source: Moneycorp
Sterling hesitated around Monday's €1.10 opening level before moving up to €1.1150 on Tuesday. More hesitation took it back down to €1.10 on Thursday. Then it was up to €1.1150 again, where it opened in London this morning.
The pound's daily movement last week seemed to owe more to chance than to any fundamental economic factors. Its net performance against the majors was almost random; virtually steady against the dollar, down by two yen and a cent and a half better against the euro.
The shortened week meant fewer economic data than usual. Britain's balance of trade and the producer price index brought marginal improvements: the trade deficit narrowed slightly, as did the gap between manufacturers' costs and factory gate prices. Nationwide's index of consumer confidence hit a record (five-year) low at 41 in March, two points down from he previous month.
The figures that everyone chose to ignore were those for industrial production in February. In no way could the 1% monthly fall have been considered good, let alone the 12.5% annual decline. However, judged against the opposition, the numbers were less than embarrassing. Britain's 1% monthly fall does not look so shoddy when compared to The United States' -1.4%, Germany's 2.9% and Japan's 9.4% for the same 28 days.
Thursday's interest rate decision was always going to be a non-event and that was how it turned out. A brief press release from the Bank of England noted that its 0.5% Bank rate would continue until (at least) May and that it would buy another $49 billion of gilts over the next two months.
After all the crowing (and crow pie, for that matter) it was instructive to see the final figures for fourth quarter GDP slippage in the Euro zone. It was not just educational, it was spooky. We had already seen the final revision to Britain's Q4 GDP, which showed a contraction of 1.6% over the three months. In the States an annualised 6.3% contraction translated into a quarterly shrinkage of 1.6%. And what was the figure for Euroland? -1.6%.
The global economy: It does what it says on the tin. Critics still allege that Britain's recession will be deeper and longer than elsewhere. They could well turn out to be correct but, nine months into the slump, the evidence is still wanting.
This will be another slow week for UK and Euroland statistics. House prices and retail sales are the only offerings from Britain. The Euro zone highlight will be the data for industrial production in February. In the context of sterling/euro the figures to beat will clearly be -1% on the month and -12.5% for the year: It isn't going to happen. Whether the Euro zone's weaker performance will weigh directly on the euro to any appreciable extent is a different matter.
Sterling/euro is looking good, having cleared the traffic jam at €1.11, but its recent history is littered with false dawns. We must therefore stick to the tried-and-tested neutral approach: Buyers of the euro should continue to hedge their exposure, fixing a price for half of whatever they need and using a stop order to protect the balance against unexpected nightmares.
Optimists - and there will be many - should under-hedge. On the other hand, if price certainty is essential there is no alternative but to cover the whole amount.
Source: Moneycorp
Wednesday, April 15, 2009
Dominic Farrell's Investors' Newsletter 15th April 2009
Dear Investor,
There has been some encouraging news recently concerning the UK property market. The news can be summarised as follows:
There has been some encouraging news recently concerning the UK property market. The news can be summarised as follows:
- An easing of credit markets (possibly the bottom of the “Credit Crunch”
An increase in mortgage lending, albeit from a smaller base - More competitive mortgage products
- A substantial fall in LIBOR
- Estate agents reporting that enquiries are now turning into sales
- The rate of decline in property prices in England in Wales is at its slowest since February last year
It’s early days, but combined with the positive news from the US, then we may not be too far away from a bottom. I think that the US recession will probably bottom in Q3 or Q4 2009 and in the UK a return to growth up to 6 months after the US.
Forecasting is like trying to predict the weather in the UK. However, whether I am out by a quarter here or there does not matter. You have to look at the overall picture, based on the latest data.
Barring a confrontation with North Korea, Iran or some other significant geo-political event, the effects of global interest rate cuts and the coordinated fiscal positions of the major trading blocs will continue to have an impact.
I think the window for significantly undervalued deals in the UK is narrowing and will continue to do so as the news becomes more positive and those who have been sitting on the sidelines re-enter the market, particularly as mortgage products continue to improve.
We will also see investors who are receiving a negative return on cash deposits and losses from the stock market enter the fray.
Whether we will see a classic V shaped recovery or a more flattened U shaped one is irrelevant, as those who invest now in distressed assets will see substantial returns going forward whatever the timeframe.
If you wish to find out more on how you can invest in UK bank repossessed properties with strong cash flow and substantial reductions on open market value, then fill in the form at www.distressed-assets.co.uk and we will call you back. It is the distressed assets route which will provide the substantial returns, not the estate agent route.
Alternatively, we have a seminar in London next week at 6.30pm Tuesday 21st April 2009 where I will give the macro-economic picture and Henry will detail the type of property we target and the criteria we use to determine value. We will have the opportunity after the seminar for a more informal chat over a drink. An exciting year ahead for investors – don’t miss out.
Best wishes
Dominic Farrell
Signs Of A Pick-Up In UK Property?
The sharp fall in English and Welsh house prices continued in March, though the pace of decline was the slowest since February last year after fast-rising new buyer interest translated into a modest increase in sales, a survey showed on Wednesday.
The Royal Institution of Chartered Surveyors' monthly property survey reported that its seasonally adjusted house price balance rose to -73.1 in March from -78.1 in February.
The house price balance represents the difference between the percentage of surveyors reporting rising and falling house prices, and is consistent with data from mortgage lender Halifax which showed house prices fell 1.9 percent in March after a 2.3 percent drop in February.
While prices fell, RICS said there were now signs of greater housing market activity after a shortage of mortgage finance caused sales to almost grind to a halt at the end of last year.
"The tentative signs of a pick-up in activity have become more broadly based over the past month," RICS said.
"The higher level of buyer interest is feeding through into actual sales. Newly agreed sales, measured on a net balance basis, rose over the month as did the average sales per surveyor series, for the first time since the tail end of 2007."
New buyer inquiries have risen for five consecutive months, and are now growing at their fastest pace since September 2003, while the number of homes being offered to the market is falling, making surveyors' less gloomy about the next three months' price outlook
"The net balance still remains comfortably in negative territory but the reading of -55 is the least worst in more than a year and considerably better than the -88 net balance registered in January," RICS said.
Source: Reuters
The Royal Institution of Chartered Surveyors' monthly property survey reported that its seasonally adjusted house price balance rose to -73.1 in March from -78.1 in February.
The house price balance represents the difference between the percentage of surveyors reporting rising and falling house prices, and is consistent with data from mortgage lender Halifax which showed house prices fell 1.9 percent in March after a 2.3 percent drop in February.
While prices fell, RICS said there were now signs of greater housing market activity after a shortage of mortgage finance caused sales to almost grind to a halt at the end of last year.
"The tentative signs of a pick-up in activity have become more broadly based over the past month," RICS said.
"The higher level of buyer interest is feeding through into actual sales. Newly agreed sales, measured on a net balance basis, rose over the month as did the average sales per surveyor series, for the first time since the tail end of 2007."
New buyer inquiries have risen for five consecutive months, and are now growing at their fastest pace since September 2003, while the number of homes being offered to the market is falling, making surveyors' less gloomy about the next three months' price outlook
"The net balance still remains comfortably in negative territory but the reading of -55 is the least worst in more than a year and considerably better than the -88 net balance registered in January," RICS said.
Source: Reuters
Tuesday, April 14, 2009
LIBOR Falling At Fastest Rate Since January As Confidence Grows
I have said for some time that the US would lead the rest of the world out of recession with the UK following 6-12 months later. The latest data suggests that the rate of decline in both countries is slowing, although unemployment will continue to grow substantially. We are close to the bottom of the "credit crunch" but have further to go with the recession and property. My view over the horizon is one of inflation as inventories are reduced, confidence returns and the "money tsunami" hits the shoreline. Base rates will rise very quickly. Think about fixing your mortgages during the next few months. I have copied an interesting article from Bloomberg below.
April 14 (Bloomberg) -- The London interbank offered rate for three-month dollar loans is dropping at the fastest pace since January as bankers gain confidence that the worst of the financial crisis is over.
Debt strategists at Credit Suisse Group AG, Societe Generale SA and Royal Bank of Canada, three of the 16 banks that provide the data that sets Libor each day, say the declines will continue. Momentum may be building as signs of economic stability emerge, according to Federal Reserve Chairman Ben S. Bernanke.
“Not so long ago the main worry was whether the bank you’re dealing with was going to be around in three months time,” said Ira Jersey, head of U.S. interest-rate strategy at RBC Capital Markets in New York. “Now that concern is on the back burner. We’re going to see Libor coming down steadily.”
Libor, the British Bankers’ Association interest rate that determines borrowing costs on about $360 trillion of financial agreements ranging from home mortgages to corporate bonds, fell to 1.13 percent last week from 1.33 percent a month earlier. The fastest drop since the start of the year, when the rate tumbled to 1.08 percent on Jan. 14 from 1.42 percent nine days earlier, coincides with President Barack Obama’s efforts to restore the economy and the banking system to health.
The combination of plans to help banks get rid of devalued assets such as mortgage and leverage loans, the first back-to- back monthly increases in consumer spending since the first half of 2008 and an unexpected rise in home sales for February stoked optimism that the worst of the recession is over.
‘Intended Effect’
Bernanke told CBS Corp.’s “60 Minutes” on March 15 he saw “green shoots” in some financial markets. Fed programs to relieve disruptions in credit markets and restore the flow of credit “are having the intended effect,” Bernanke said April 3 during a speech in Charlotte, North Carolina.
Libor will decline to 1.04 percent by June, according to the average forecast of 12 banks on the BBA’s Libor panel surveyed by Bloomberg News April 6 through April 9, compared with 1.21 percent in a survey last month. Societe Generale, which bet on Libor rising as recently as February, says the rate will fall to 0.98 percent by the end of the quarter.
“There is a cautious optimism evolving that things are beginning to get better,” said Dominic Konstam, head of interest-rate strategy at Credit Suisse in New York. He predicts Libor may drop to about 0.75 percent this year. “There’s a sense that things are going to go relatively smoothly through April with Libor continuing to fall.”
Failed Institutions
Lending between banks started to freeze in August 2007, when losses from subprime mortgages left financial institutions with billions of dollars in securities and financial contracts they couldn’t value. Credit markets contracted more in September 2008, when Lehman Brothers Holdings Inc. filed for the biggest bankruptcy in history.
More than 60 U.S. financial institutions have failed over the past two years. Global losses and writedowns have swelled to $1.29 trillion, helping to sink the global economy into its first recession since World War II.
As credit evaporated and stock markets tumbled, investors fled to the relative safety of gold and government bonds. In the five months following New York-based Lehman’s collapse, the MSCI World Index of stocks tumbled as much as 36 percent, gold soared 31 percent to $1,007.70 an ounce and the rate on U.S. Treasury bills fell to less than zero percent.
Government bonds returned 53 percentage points more than the Standard & Poor’s 500 index, according to Merrill Lynch & Co. data, the widest margin since the bank started calculating fixed-income returns in 1978.
London Fix
The gap between the Fed’s target rate for overnight loans between banks and Libor widened to 3.32 percentage points on Oct. 10 from 0.82 percentage point just before Lehman failed and an average of 0.22 percentage point in the five years before credit markets froze. The cost banks said they’d pay to borrow from each other soared even as central banks lowered benchmark interest rates and provided unlimited dollar funding.
Every morning, the London-based BBA surveys member of the trade group on how much it would cost them to borrow from each other for 15 different periods, from overnight to one year, in currencies including dollars, euros and yen.
Now, strategists say, credit is starting to move again. The U.S. government and the Fed spent, lent or committed $12.8 trillion, the equivalent of 90 percent of last year’s gross domestic product, to stem the longest recession since the 1930s. Obama met with more than a dozen chief executive officers from banks including JPMorgan Chase & Co., Morgan Stanley and Goldman Sachs Group Inc. on March 27, imploring them to get credit flowing through the markets again.
‘Aggressive Fiscal Expansion’
Governments’ stimulus measures worldwide will boost GDP by 1 percent to 1.5 percent this year, Deutsche Bank AG economists led by Peter Hooper in New York said in an April 8 report.
“Aggressive fiscal expansion will, in our view, play an important role in ameliorating the economic downturn and helping to lift the global economy out of its current severe recession,” the economists wrote.
In the past month, the MSCI World rose 15 percent and gold closed at $895 an ounce, down 13 percent from its record high. Treasuries posted their worst first quarter since 1999, losing 1.4 percent, including reinvested interest, according to Merrill Lynch’s U.S. Treasury Master Index. The index is down 0.7 percent so far in April.
Credit Costs
Consumer credit costs are still high by historical standards compared with what banks pay to borrow, an obstacle that Bernanke says must be removed to fix the economy. “Restoring the flow of credit to households and businesses is essential if we are to see, as I expect, the gradual resumption of sustainable economic growth,” Bernanke said April 3.
The difference in yield, or spread, between the average 30- year U.S. mortgage and 10-year Treasuries narrowed to 2.14 percent on April 9, down from 3.07 percent on Dec. 19, which was the highest level since 1986, according to Bloomberg data. Still, the gap averaged 1.75 percentage points in the decade before the credit crisis began.
Credit-card borrowing rates are 10.23 percentage points above Libor, compared with an average of 9.91 percentage points in the past five years, according to Bloomberg data.
More losses by banks could trigger an increase in Libor, said Kurush Mistry, an interest-rate strategist at Barclays Plc in New York. “There’s still a lot of uncertainty regarding bank earnings and stress tests, and Libor could easily be shocked higher.”
Libor-OIS Spread
The International Monetary Fund is expected to raise its estimate of bad assets held by financial institutions worldwide to $4 trillion, the London-based Times newspaper reported April 7, without citing anyone. The IMF’s forecast for bad assets originating in the U.S. will increase to $3.1 trillion from a January estimate of $2.2 trillion, according to the newspaper.
The Libor-OIS spread, an indicator for banks’ willingness to lend, also remains elevated, while down from its highest levels. The measure narrowed to 0.94 percentage point from 1.08 percentage points a month ago. It’s above the 0.25 percentage- point level that former Fed Chairman Alan Greenspan said would indicate markets were back to “normal.”
Contracts in the forward market show traders are betting the spread will fall to 0.82 percentage point by December, according to data compiled by Tullett Prebon Plc, the second- biggest broker of interbank transactions after ICAP Plc. It averaged 11 basis points between December 2001 and July 2007.
Economic Recovery
Bulls say Libor will decline because the U.S. economy is showing signs the recession will end later this year. The U.S. will expand at a 1.6 percent annual pace in the fourth quarter, according to the median estimate in a
Bloomberg News survey of 74 forecasters.
Consumer spending, which accounts for more than 70 percent of the U.S. economy, rose 0.2 percent in February after climbing 1 percent in January, breaking a six-month string of declines. Orders placed with factories increased 1.8 percent in February, the first gain since July, the Commerce Department said. Purchases of existing homes jumped 5.1 percent to an annual rate of 4.72 million in February as lower prices attracted buyers, the National Association of Realtors said March 23.
Treasury Secretary Timothy Geithner’s plan to rid banks and markets of distressed assets heightened optimism the worst of the slump was past. The S&P 500 rallied 12 percent since March 20, the Friday before Geithner announced the program.
‘Less Stressed’
Pacific Investment Management Co., the Newport Beach, California-based manager of the world’s biggest bond fund, and New York-based BlackRock Inc., the largest publicly traded U.S. asset manager, said they may be interested in participating in Geithner’s Public-Private Investment Program.
The government programs have served to unclog rates beyond dollar Libor, the BBA said.
“Over recent months Libor rates have fallen in all currencies,” said John Ewan, a London-based director at the BBA. “We have also seen the spreads between individual contributor rates narrow. An interpretation of this could be that the markets are less stressed.”
Source: Bloomberg
April 14 (Bloomberg) -- The London interbank offered rate for three-month dollar loans is dropping at the fastest pace since January as bankers gain confidence that the worst of the financial crisis is over.
Debt strategists at Credit Suisse Group AG, Societe Generale SA and Royal Bank of Canada, three of the 16 banks that provide the data that sets Libor each day, say the declines will continue. Momentum may be building as signs of economic stability emerge, according to Federal Reserve Chairman Ben S. Bernanke.
“Not so long ago the main worry was whether the bank you’re dealing with was going to be around in three months time,” said Ira Jersey, head of U.S. interest-rate strategy at RBC Capital Markets in New York. “Now that concern is on the back burner. We’re going to see Libor coming down steadily.”
Libor, the British Bankers’ Association interest rate that determines borrowing costs on about $360 trillion of financial agreements ranging from home mortgages to corporate bonds, fell to 1.13 percent last week from 1.33 percent a month earlier. The fastest drop since the start of the year, when the rate tumbled to 1.08 percent on Jan. 14 from 1.42 percent nine days earlier, coincides with President Barack Obama’s efforts to restore the economy and the banking system to health.
The combination of plans to help banks get rid of devalued assets such as mortgage and leverage loans, the first back-to- back monthly increases in consumer spending since the first half of 2008 and an unexpected rise in home sales for February stoked optimism that the worst of the recession is over.
‘Intended Effect’
Bernanke told CBS Corp.’s “60 Minutes” on March 15 he saw “green shoots” in some financial markets. Fed programs to relieve disruptions in credit markets and restore the flow of credit “are having the intended effect,” Bernanke said April 3 during a speech in Charlotte, North Carolina.
Libor will decline to 1.04 percent by June, according to the average forecast of 12 banks on the BBA’s Libor panel surveyed by Bloomberg News April 6 through April 9, compared with 1.21 percent in a survey last month. Societe Generale, which bet on Libor rising as recently as February, says the rate will fall to 0.98 percent by the end of the quarter.
“There is a cautious optimism evolving that things are beginning to get better,” said Dominic Konstam, head of interest-rate strategy at Credit Suisse in New York. He predicts Libor may drop to about 0.75 percent this year. “There’s a sense that things are going to go relatively smoothly through April with Libor continuing to fall.”
Failed Institutions
Lending between banks started to freeze in August 2007, when losses from subprime mortgages left financial institutions with billions of dollars in securities and financial contracts they couldn’t value. Credit markets contracted more in September 2008, when Lehman Brothers Holdings Inc. filed for the biggest bankruptcy in history.
More than 60 U.S. financial institutions have failed over the past two years. Global losses and writedowns have swelled to $1.29 trillion, helping to sink the global economy into its first recession since World War II.
As credit evaporated and stock markets tumbled, investors fled to the relative safety of gold and government bonds. In the five months following New York-based Lehman’s collapse, the MSCI World Index of stocks tumbled as much as 36 percent, gold soared 31 percent to $1,007.70 an ounce and the rate on U.S. Treasury bills fell to less than zero percent.
Government bonds returned 53 percentage points more than the Standard & Poor’s 500 index, according to Merrill Lynch & Co. data, the widest margin since the bank started calculating fixed-income returns in 1978.
London Fix
The gap between the Fed’s target rate for overnight loans between banks and Libor widened to 3.32 percentage points on Oct. 10 from 0.82 percentage point just before Lehman failed and an average of 0.22 percentage point in the five years before credit markets froze. The cost banks said they’d pay to borrow from each other soared even as central banks lowered benchmark interest rates and provided unlimited dollar funding.
Every morning, the London-based BBA surveys member of the trade group on how much it would cost them to borrow from each other for 15 different periods, from overnight to one year, in currencies including dollars, euros and yen.
Now, strategists say, credit is starting to move again. The U.S. government and the Fed spent, lent or committed $12.8 trillion, the equivalent of 90 percent of last year’s gross domestic product, to stem the longest recession since the 1930s. Obama met with more than a dozen chief executive officers from banks including JPMorgan Chase & Co., Morgan Stanley and Goldman Sachs Group Inc. on March 27, imploring them to get credit flowing through the markets again.
‘Aggressive Fiscal Expansion’
Governments’ stimulus measures worldwide will boost GDP by 1 percent to 1.5 percent this year, Deutsche Bank AG economists led by Peter Hooper in New York said in an April 8 report.
“Aggressive fiscal expansion will, in our view, play an important role in ameliorating the economic downturn and helping to lift the global economy out of its current severe recession,” the economists wrote.
In the past month, the MSCI World rose 15 percent and gold closed at $895 an ounce, down 13 percent from its record high. Treasuries posted their worst first quarter since 1999, losing 1.4 percent, including reinvested interest, according to Merrill Lynch’s U.S. Treasury Master Index. The index is down 0.7 percent so far in April.
Credit Costs
Consumer credit costs are still high by historical standards compared with what banks pay to borrow, an obstacle that Bernanke says must be removed to fix the economy. “Restoring the flow of credit to households and businesses is essential if we are to see, as I expect, the gradual resumption of sustainable economic growth,” Bernanke said April 3.
The difference in yield, or spread, between the average 30- year U.S. mortgage and 10-year Treasuries narrowed to 2.14 percent on April 9, down from 3.07 percent on Dec. 19, which was the highest level since 1986, according to Bloomberg data. Still, the gap averaged 1.75 percentage points in the decade before the credit crisis began.
Credit-card borrowing rates are 10.23 percentage points above Libor, compared with an average of 9.91 percentage points in the past five years, according to Bloomberg data.
More losses by banks could trigger an increase in Libor, said Kurush Mistry, an interest-rate strategist at Barclays Plc in New York. “There’s still a lot of uncertainty regarding bank earnings and stress tests, and Libor could easily be shocked higher.”
Libor-OIS Spread
The International Monetary Fund is expected to raise its estimate of bad assets held by financial institutions worldwide to $4 trillion, the London-based Times newspaper reported April 7, without citing anyone. The IMF’s forecast for bad assets originating in the U.S. will increase to $3.1 trillion from a January estimate of $2.2 trillion, according to the newspaper.
The Libor-OIS spread, an indicator for banks’ willingness to lend, also remains elevated, while down from its highest levels. The measure narrowed to 0.94 percentage point from 1.08 percentage points a month ago. It’s above the 0.25 percentage- point level that former Fed Chairman Alan Greenspan said would indicate markets were back to “normal.”
Contracts in the forward market show traders are betting the spread will fall to 0.82 percentage point by December, according to data compiled by Tullett Prebon Plc, the second- biggest broker of interbank transactions after ICAP Plc. It averaged 11 basis points between December 2001 and July 2007.
Economic Recovery
Bulls say Libor will decline because the U.S. economy is showing signs the recession will end later this year. The U.S. will expand at a 1.6 percent annual pace in the fourth quarter, according to the median estimate in a
Bloomberg News survey of 74 forecasters.
Consumer spending, which accounts for more than 70 percent of the U.S. economy, rose 0.2 percent in February after climbing 1 percent in January, breaking a six-month string of declines. Orders placed with factories increased 1.8 percent in February, the first gain since July, the Commerce Department said. Purchases of existing homes jumped 5.1 percent to an annual rate of 4.72 million in February as lower prices attracted buyers, the National Association of Realtors said March 23.
Treasury Secretary Timothy Geithner’s plan to rid banks and markets of distressed assets heightened optimism the worst of the slump was past. The S&P 500 rallied 12 percent since March 20, the Friday before Geithner announced the program.
‘Less Stressed’
Pacific Investment Management Co., the Newport Beach, California-based manager of the world’s biggest bond fund, and New York-based BlackRock Inc., the largest publicly traded U.S. asset manager, said they may be interested in participating in Geithner’s Public-Private Investment Program.
The government programs have served to unclog rates beyond dollar Libor, the BBA said.
“Over recent months Libor rates have fallen in all currencies,” said John Ewan, a London-based director at the BBA. “We have also seen the spreads between individual contributor rates narrow. An interpretation of this could be that the markets are less stressed.”
Source: Bloomberg
Thursday, April 9, 2009
Dominic Farrell's Investors' Newsletter 8 April 2009
Dear Investor,
It’s been a few weeks since my last e-newsletter and from both a business and personal perspective it has been extremely busy. I had lunch at Anfield (thanks Colin, Peter and John), lost some money at Aintree Races (great to see the Patel and Smith families), and went up and down the M6 a couple of times to my home in the Lake District where I had some friends staying.
In terms of business.................
The Grove Spa Resort, Cyprus
Construction at The Grove Spa Resort in Cyprus is moving at a pace although the unseasonal weather continues to hamper progress. For those following the construction of this development the Construction Blog has the latest pictures. A link can be found at the bottom of this newsletter.
UK Distressed Assets
Distressed Assets recorded another notable success this week. We purchased a new-build 2 bedroom apartment in the Streatham Hill area of London which is 5 minutes walk from Streatham Hill railway station for £155,000 with a 8.5% yield and 35%+ below current market value. Only 3 days earlier the bank was asking for a higher price, but we managed to secure an even better deal by moving very quickly and decisively.
Henry and his team have built up some strong key relationships over the past 7 months which are bearing fruit. You will see the quality of the deals we are securing by visiting the website at www.distressed-assets.co.uk creating long-term value and wealth.
Yesterday, we received a complete UK portfolio from administrators to research and cherry-pick before it is placed with estate agents prior auction. Relationship building, research and analysis is the key to success in this market and time and effort now will bear substantial low risk returns in the future.
UK Distressed Assets Seminar Tuesday 21st April 2009 at 6.30pm in London
Distressed Assets will be holding a seminar in London on Tuesday 21st April 2009 at 6.30pm in which we will explain how you can create low risk long-term wealth through investing in UK property now. Not when the market turns, not when the newspapers talk it up, but now when it’s an investors' market and banks are offloading repossessed properties quickly in order to repair their balance sheets.
If you wish to attend, we have a few places remaining. Fill in the form now at www.distressed-assets.co.uk to apply for a ticket. The seminar is free and I hope to have the opportunity to meet you on the night.
Economic Data
We have seen some interesting data over the past week from the US and also in the UK. Have a look at my blog for details. Although a “recovery” is not around the corner, the “rate of decline” is slowing. In an economic climate of doom and gloom, this fact has gone unnoticed in the mainstream press.
The “Money Tsunami” I keep speaking and writing about is still offshore, but is heading towards land. UK individuals have recently paid down £8 billion in debts, the savings ratio has increased and we are seeing some companies such as Marks and Spencer and JD Sports (only this morning) doing better than analysts expected. I am personally better off by over 60% on my UK mortgages and the additional revenue is being re-invested into refurbishments and other opportunities which has a positive “economic effect” in terms of multipliers and accelerators. How many other people are sitting on higher cash balances as a result of historical base rate reductions?
As an economist and investor, I find present day events fascinating and I am excited about the opportunities we are finding. The times are unprecedented and in my view so are the investment prospects for those with the foresight and courage to act.
Happy Easter
Whatever this weekend means for you, I hope you have a good one!
I am having a few days off and staying in Liverpool. The weekend inevitably revolves around family and friends and Anfield on Saturday for the Blackburn game. In the meantime, we have Chelsea to contend with tonight!
Best wishes
Dominic Farrell
It’s been a few weeks since my last e-newsletter and from both a business and personal perspective it has been extremely busy. I had lunch at Anfield (thanks Colin, Peter and John), lost some money at Aintree Races (great to see the Patel and Smith families), and went up and down the M6 a couple of times to my home in the Lake District where I had some friends staying.
In terms of business.................
The Grove Spa Resort, Cyprus
Construction at The Grove Spa Resort in Cyprus is moving at a pace although the unseasonal weather continues to hamper progress. For those following the construction of this development the Construction Blog has the latest pictures. A link can be found at the bottom of this newsletter.
UK Distressed Assets
Distressed Assets recorded another notable success this week. We purchased a new-build 2 bedroom apartment in the Streatham Hill area of London which is 5 minutes walk from Streatham Hill railway station for £155,000 with a 8.5% yield and 35%+ below current market value. Only 3 days earlier the bank was asking for a higher price, but we managed to secure an even better deal by moving very quickly and decisively.
Henry and his team have built up some strong key relationships over the past 7 months which are bearing fruit. You will see the quality of the deals we are securing by visiting the website at www.distressed-assets.co.uk creating long-term value and wealth.
Yesterday, we received a complete UK portfolio from administrators to research and cherry-pick before it is placed with estate agents prior auction. Relationship building, research and analysis is the key to success in this market and time and effort now will bear substantial low risk returns in the future.
UK Distressed Assets Seminar Tuesday 21st April 2009 at 6.30pm in London
Distressed Assets will be holding a seminar in London on Tuesday 21st April 2009 at 6.30pm in which we will explain how you can create low risk long-term wealth through investing in UK property now. Not when the market turns, not when the newspapers talk it up, but now when it’s an investors' market and banks are offloading repossessed properties quickly in order to repair their balance sheets.
If you wish to attend, we have a few places remaining. Fill in the form now at www.distressed-assets.co.uk to apply for a ticket. The seminar is free and I hope to have the opportunity to meet you on the night.
Economic Data
We have seen some interesting data over the past week from the US and also in the UK. Have a look at my blog for details. Although a “recovery” is not around the corner, the “rate of decline” is slowing. In an economic climate of doom and gloom, this fact has gone unnoticed in the mainstream press.
The “Money Tsunami” I keep speaking and writing about is still offshore, but is heading towards land. UK individuals have recently paid down £8 billion in debts, the savings ratio has increased and we are seeing some companies such as Marks and Spencer and JD Sports (only this morning) doing better than analysts expected. I am personally better off by over 60% on my UK mortgages and the additional revenue is being re-invested into refurbishments and other opportunities which has a positive “economic effect” in terms of multipliers and accelerators. How many other people are sitting on higher cash balances as a result of historical base rate reductions?
As an economist and investor, I find present day events fascinating and I am excited about the opportunities we are finding. The times are unprecedented and in my view so are the investment prospects for those with the foresight and courage to act.
Happy Easter
Whatever this weekend means for you, I hope you have a good one!
I am having a few days off and staying in Liverpool. The weekend inevitably revolves around family and friends and Anfield on Saturday for the Blackburn game. In the meantime, we have Chelsea to contend with tonight!
Best wishes
Dominic Farrell
Tuesday, April 7, 2009
Purchasing Managers' Indices Boost For Sterling
UK PMIs lead the way in manufacturing and services sectors. Non-controversial G20 communique welcomed by markets. ECB rate cut to 1.25% leaves room for more next month.
The pound climbed steadily throughout the week. Starting from €1.07 last Monday it added three cents to open in London this morning at €1.10.
Little as the market cares for economic statistics at the moment it could not ignore two minor triumphs for the UK economy last week. Purchasing Managers' Indices are compiled by national professional associations in several countries. Precise methodologies differ from place to place but there is a common theme. Firms are canvassed about their perceptions of current trading activity and their plans for the future. Those who think things are going well or who expect improvement in the months ahead register a plus. The pessimists go in as a minus. When all the results are in they are consolidated into a PMI that covers a range of 0-100. An index of 50 is neutral; as many firms are doing well as are doing badly, implying zero growth. Publication of the figures for Britain, the Euro zone and the United States is coordinated to happen on the same day. First come the manufacturing sector PMIs, followed a couple of days later by the services sector numbers.
For a year or more the indices in every country have been significantly below that breakeven point for obvious reasons. Last week however, the UK economy delivered better results in both categories than either the Euro zone or the United States. Britain's manufacturing PMI came in at 39.1, four points better than the previous month and three points ahead of the nearest opposition. The services PMI did even better, less than five points short of breakeven at 45.5 and comfortably ahead of the US at 40.8 and Euroland at 40.9.
Adding to the positive tone for sterling, mortgage approvals rose in February to their highest level since May last year and consumer confidence improved from -35 to -30, still negative but heading in the right direction. Nationwide and the Halifax told contradictory tales about the direction of house prices in March, effectively cancelling each other out.
The G20 meeting managed to meet investors' modest expectations so was considered a result. President Sarkozy did not walk out and the free-marketeers compromised on the matter of heavier regulation for the financial sector. A G20 agreement was never going to revitalise the global economy at a stroke. On the other hand, public disharmony could have postponed recovery by denting confidence. It did not happen, for which we must be grateful.
The G20 effect, both before and after the event, was to raise confidence levels among investors. That worked against the euro and to the benefit of riskier currencies, including the pound. The euro also had other pitfalls to negotiate. Spanish bank Caja Castilla la Mancha had to be nationalised, needing €9 billion of guarantees to keep it afloat. The long-awaited downgrade of Irish sovereign debt came when Standard & Poor's replaced its triple-A status with an AA+ rating.
The European Central Bank's interest rate decision on Thursday was a two-edged sword for the euro. On the positive side the 25 basis point cut, which took the refinancing rate down to 1.25%, was smaller than anticipated.
Balancing that on the debit side was the hint of a further cut next month. There is also the possibility of "further non-standard measures" which analysts take to mean the buying of either government or corporate bonds.
This week's meeting of the Bank of England's Monetary Policy Committee should be less of a challenge than usual for the pound. With the Bank rate already down to 0.5% the MPC has little scope - and probably even less inclination - to take it lower. The general paucity of economic data ought to allow the pound to build on last week's foundations but experience shows that recovery for sterling is almost never a one-way street. Buyers of the euro should continue to hedge their exposure, fixing a price for half of whatever they need and using a stop order to protect the balance against unexpected nightmares. If price certainty is essential there is no alternative but to cover the whole amount.
Source: Moneycorp
The pound climbed steadily throughout the week. Starting from €1.07 last Monday it added three cents to open in London this morning at €1.10.
Little as the market cares for economic statistics at the moment it could not ignore two minor triumphs for the UK economy last week. Purchasing Managers' Indices are compiled by national professional associations in several countries. Precise methodologies differ from place to place but there is a common theme. Firms are canvassed about their perceptions of current trading activity and their plans for the future. Those who think things are going well or who expect improvement in the months ahead register a plus. The pessimists go in as a minus. When all the results are in they are consolidated into a PMI that covers a range of 0-100. An index of 50 is neutral; as many firms are doing well as are doing badly, implying zero growth. Publication of the figures for Britain, the Euro zone and the United States is coordinated to happen on the same day. First come the manufacturing sector PMIs, followed a couple of days later by the services sector numbers.
For a year or more the indices in every country have been significantly below that breakeven point for obvious reasons. Last week however, the UK economy delivered better results in both categories than either the Euro zone or the United States. Britain's manufacturing PMI came in at 39.1, four points better than the previous month and three points ahead of the nearest opposition. The services PMI did even better, less than five points short of breakeven at 45.5 and comfortably ahead of the US at 40.8 and Euroland at 40.9.
Adding to the positive tone for sterling, mortgage approvals rose in February to their highest level since May last year and consumer confidence improved from -35 to -30, still negative but heading in the right direction. Nationwide and the Halifax told contradictory tales about the direction of house prices in March, effectively cancelling each other out.
The G20 meeting managed to meet investors' modest expectations so was considered a result. President Sarkozy did not walk out and the free-marketeers compromised on the matter of heavier regulation for the financial sector. A G20 agreement was never going to revitalise the global economy at a stroke. On the other hand, public disharmony could have postponed recovery by denting confidence. It did not happen, for which we must be grateful.
The G20 effect, both before and after the event, was to raise confidence levels among investors. That worked against the euro and to the benefit of riskier currencies, including the pound. The euro also had other pitfalls to negotiate. Spanish bank Caja Castilla la Mancha had to be nationalised, needing €9 billion of guarantees to keep it afloat. The long-awaited downgrade of Irish sovereign debt came when Standard & Poor's replaced its triple-A status with an AA+ rating.
The European Central Bank's interest rate decision on Thursday was a two-edged sword for the euro. On the positive side the 25 basis point cut, which took the refinancing rate down to 1.25%, was smaller than anticipated.
Balancing that on the debit side was the hint of a further cut next month. There is also the possibility of "further non-standard measures" which analysts take to mean the buying of either government or corporate bonds.
This week's meeting of the Bank of England's Monetary Policy Committee should be less of a challenge than usual for the pound. With the Bank rate already down to 0.5% the MPC has little scope - and probably even less inclination - to take it lower. The general paucity of economic data ought to allow the pound to build on last week's foundations but experience shows that recovery for sterling is almost never a one-way street. Buyers of the euro should continue to hedge their exposure, fixing a price for half of whatever they need and using a stop order to protect the balance against unexpected nightmares. If price certainty is essential there is no alternative but to cover the whole amount.
Source: Moneycorp
Focus On UK Property Last Week
I had a busy week focusing on some of my UK properties as well as viewing distressed assets, including a 28 bedroom hotel, which has potential for development.
I had a pleasant interlude with a day at Aintree Races and returned back to Liverpool last night after a pleasant weekend with friends in the Lake District.
Great result for Liverpool FC last Saturday and a disappointing day for us Scousers on Sunday with a last minute win for Man Utd.
There has been some interesting data over the past week which may, and I mean may, point to light at the end of the tunnel for the economy and the property market. It is only early days, as the data shows a "deceleration in the rate of decline" which is very different from a sustained recovery, but nevertheless is most welcome.
I had a pleasant interlude with a day at Aintree Races and returned back to Liverpool last night after a pleasant weekend with friends in the Lake District.
Great result for Liverpool FC last Saturday and a disappointing day for us Scousers on Sunday with a last minute win for Man Utd.
There has been some interesting data over the past week which may, and I mean may, point to light at the end of the tunnel for the economy and the property market. It is only early days, as the data shows a "deceleration in the rate of decline" which is very different from a sustained recovery, but nevertheless is most welcome.
Friday, March 27, 2009
Some Interesting Data From The US
There has been some interesting and "positive" data coming out of the US over the past couple of days.
- The number of new homes sold last month rose 4.7%, the first monthly increase since July 2007. Economists had expected sales to fall by 2.9%.
- US mortgage applications rose by 32.2%.
- Durable goods orders were up 3.4%, the largest increase since December 2007.
Don't hold your breath at this stage, but any positive news right now is most welcome.
Also the S&P 500 has seen the largest 1 month gain in March since 1974!
As I have stated previously, the recovery will begin in the US and we will follow sometime later. So keeping an eye out on US data will allow some form of forecasting and planning to take place for investors and business owners.
I am off to Anfield for lunch today, so my weekend starts early. I hope you have a relaxing and enjoyable couple of days.
Cheers
Dominic Farrell
Wednesday, March 25, 2009
Gordon Brown: The Devalued Prime Minister Of A Devalued Government
An interesting speech by Daniel Hannan MEP
Euro Gains From Reserve Currency Status
Sterling unnerved by unemployment data. IMF predicts longer recession for Britain. Investors twitchy about latest US bailout. Euro the safe-haven currency of choice.
Last Monday's €1.09 was the best sterling could achieve during the week. By the end of Wednesday it had slipped to €1.0550. Only very painfully and slowly did it inch back up to the €1.0650 where it opened in London this morning.
Although there was no particular shortage of data from the UK economy investors paid only selective attention to the numbers. They were far more interested in the anecdotal evidence, both from Britain and abroad. Perhaps the most irrelevant statistic of the week was Rightmove's house price index. While the Nationwide and the Halifax report annual price falls of 18% or more Rightmove sees just a 9% decline. Unlike the first two indices, which are based on actual transactions, Rightmove measures the prices at which vendors would like to sell their properties. If they could.
The one set of figures that did hurt sterling was the unemployment numbers on Wednesday. Another 138,000 ex-taxpayers signed on the dole in February, taking the rate of unemployment past the two million mark.
Having been primed by analysts and the media to expect it, investors could probably have lived with the 2 million unemployed. What they could not handle was the sharpest monthly leap in claimants since 1971.
Investors were more relaxed about the latest predictions from the International Monetary Fund. The IMF believes Britain's will be the only western economy still in recession by the end of next year. News like that has brought the pound to its knees in the past. This time, everyone was far more concerned about the unemployment situation and about how the number could have risen from two to three million by the end of the year.
As was the case with sterling, euro zone ecostats had only a peripheral influence on the single currency. To be fair, there was no data overload from Euroland. Consumer price inflation was in line with forecasts at 1.2%. Industrial production fell by 3.5% in January, down by 17.3% on the year (in Britain the figures were -2.6% and -11.4%) but the dismal news was overpowered by the smell of bigger fish frying elsewhere.
The euro's gain was the US dollar's loss. In Washington the Federal Reserve surprised markets by taking another step down the path to printing money. For the first time the Fed announced that it would be buying US government bonds, "Treasuries". It omitted to say where the money would be coming from, although the guess is that the Treasury itself will lend the money to the Fed.
Investors are nervous about this "quantitative easing", whatever its precise form, as earlier demonstrated when the Bank of England embarked on a similar strategy. They abandoned the dollar in a hurry and fled to the relative safety of the euro.
Little more than a month ago there were three "safe-haven" currencies; the yen, the Swiss franc and the dollar. The euro did not even figure. Since then the list has been whittled down. The Japanese economy's appalling performance has excluded the yen. Intervention by the Swiss National Bank has effectively erected a "Keep Out" notice over its franc. Now investors have got cold feet about the dollar. By default it leaves the euro as the safe-haven currency-of-choice, at least for the moment. The situation does nothing to lessen the pound's uneasiness against the euro.
Buyers of the euro should hedge their exposure, fixing a price for half of whatever they need and leaving the remainder uncovered in anticipation of better levels in the future.
Those of an optimistic bent may consider under-hedging, always bearing in mind the pound's propensity to head south at the drop of a hat. Use a stop order to protect the downside in case of unexpected alarms.
Source: Moneycorp
Last Monday's €1.09 was the best sterling could achieve during the week. By the end of Wednesday it had slipped to €1.0550. Only very painfully and slowly did it inch back up to the €1.0650 where it opened in London this morning.
Although there was no particular shortage of data from the UK economy investors paid only selective attention to the numbers. They were far more interested in the anecdotal evidence, both from Britain and abroad. Perhaps the most irrelevant statistic of the week was Rightmove's house price index. While the Nationwide and the Halifax report annual price falls of 18% or more Rightmove sees just a 9% decline. Unlike the first two indices, which are based on actual transactions, Rightmove measures the prices at which vendors would like to sell their properties. If they could.
The one set of figures that did hurt sterling was the unemployment numbers on Wednesday. Another 138,000 ex-taxpayers signed on the dole in February, taking the rate of unemployment past the two million mark.
Having been primed by analysts and the media to expect it, investors could probably have lived with the 2 million unemployed. What they could not handle was the sharpest monthly leap in claimants since 1971.
Investors were more relaxed about the latest predictions from the International Monetary Fund. The IMF believes Britain's will be the only western economy still in recession by the end of next year. News like that has brought the pound to its knees in the past. This time, everyone was far more concerned about the unemployment situation and about how the number could have risen from two to three million by the end of the year.
As was the case with sterling, euro zone ecostats had only a peripheral influence on the single currency. To be fair, there was no data overload from Euroland. Consumer price inflation was in line with forecasts at 1.2%. Industrial production fell by 3.5% in January, down by 17.3% on the year (in Britain the figures were -2.6% and -11.4%) but the dismal news was overpowered by the smell of bigger fish frying elsewhere.
The euro's gain was the US dollar's loss. In Washington the Federal Reserve surprised markets by taking another step down the path to printing money. For the first time the Fed announced that it would be buying US government bonds, "Treasuries". It omitted to say where the money would be coming from, although the guess is that the Treasury itself will lend the money to the Fed.
Investors are nervous about this "quantitative easing", whatever its precise form, as earlier demonstrated when the Bank of England embarked on a similar strategy. They abandoned the dollar in a hurry and fled to the relative safety of the euro.
Little more than a month ago there were three "safe-haven" currencies; the yen, the Swiss franc and the dollar. The euro did not even figure. Since then the list has been whittled down. The Japanese economy's appalling performance has excluded the yen. Intervention by the Swiss National Bank has effectively erected a "Keep Out" notice over its franc. Now investors have got cold feet about the dollar. By default it leaves the euro as the safe-haven currency-of-choice, at least for the moment. The situation does nothing to lessen the pound's uneasiness against the euro.
Buyers of the euro should hedge their exposure, fixing a price for half of whatever they need and leaving the remainder uncovered in anticipation of better levels in the future.
Those of an optimistic bent may consider under-hedging, always bearing in mind the pound's propensity to head south at the drop of a hat. Use a stop order to protect the downside in case of unexpected alarms.
Source: Moneycorp
Friday, March 20, 2009
Dominic Farrell's Investors' Newsletter 20 March 2009
Dear Investor
I am now back in Liverpool having been around the country at various events, including my annual university football club reunion, lunches in London with various professional advisors and a catch-up with a couple of military friends. Notable successes last week were the cracking results for Liverpool against Real Madrid and Manchester United and I am now looking forward to the Champions League games against Chelsea.
Yesterday, Henry, Russell and I had a meeting with a company about some very exciting changes we are planning for Jet-to-Let Magazine. Further details will follow shortly.
In Cyprus, construction is well underway on The Grove Spa Resort in Mazotos and pictures and commentary can be found at the Construction Blog if you are interested.
Global Economic Events
Recent data and the various policies of governments and central banks point to the US coming out of recession first, followed by the UK and then the Eurozone. Over what timescale is open to debate. I know this is against the current thinking and wisdom, but if you look at the data, Germany is having a harder time than us! Add in Spain, Italy and Ireland and the lack of urgency thus far at the European Central Bank and I may be right.
Most major central banks around the world are adopting some form of quantitative easing similar to that in Japan between 2001 and 2006. Bernanke at the Federal Reserve is using policy initiatives, such as the purchase of $300bn of treasury bills, to reduce the cost of borrowing and prevent deflation. In the UK, Brown is doing something similar by purchasing gilts, raising their price and hence reducing the yield. All these counter-deflationary measures are aimed at reducing the cost of borrowing.
In view of this, I personally cannot see the Euro maintaining its present strength in the months to come. So what?
GBP/EURO
We cover exchange rates and what determines them on the Understanding Economics 3 day course. Of all the indices, commodities and stocks to trade, FOREX is probably the easiest to understand as the fundamental economic factors which drive rates are clear. I follow GBP/EURO as I have a good handle on the economic drivers in the two “zones” for want of a more politically correct term.
It is beyond the scope of this newsletter to explain the features of the chart such as moving averages and Bollinger bands, but what is clear is that the Euro may test the previous high (or low from Sterlings perspective) achieved at the start of the year. Its worth watching for those who do trade currencies as a move to back to the previous short-term lows (highs for Sterling) of 1.15 is a reasonable assumption, giving a potential trading profit.
NOTE: Trading FOREX is highly speculative and you could lose a lot of money. I am NOT recommending that you do it. My piece above is for information purposes only and does not constitute financial advice.
UK Distressed Assets
The Distressed Assets team is very busy with over 30 viewings around the country this week from an initial short list of over 1000 (one thousand!) properties at the beginning of the research phase last week. The team is working very hard and we have been inundated with investors wishing to join the group.
Free Investment Seminar in London
Distressed Assets is holding a free seminar in central London on Tuesday 21st April 2009 between 6.30 and 9.00pm. The seminar will look at how investors are making money today in the present market through buying distressed assets from banks and other sources and why we believe there has not been a better time to invest in specifically targeted UK property for many years. We will also explain the Distressed Assets process, how we differ in approach from other companies and how you can benefit from our bespoke service.
If you wish to attend the seminar please fill in the form on the website at: www.distressed-assets.co.uk
Places will be allocated on a first come first served basis and seating is limited.
Understanding Economics in London
After the success of the course in Liverpool, we have decided to run a 3 day event in London on the 29th to the 31st of May 2009. If you are serious about seizing the opportunities that the present recession offers and wish to understand the impact of government economic decisions on your business, investment and personal life, then this course is a must:
A detailed syllabus is available at: http://www.understanding-economics.com/
Further details can be obtained by filling in the form online. We presently have a special offer price for the next 7 days.
Have a great weekend
Cheers
Dominic Farrell
I am now back in Liverpool having been around the country at various events, including my annual university football club reunion, lunches in London with various professional advisors and a catch-up with a couple of military friends. Notable successes last week were the cracking results for Liverpool against Real Madrid and Manchester United and I am now looking forward to the Champions League games against Chelsea.
Yesterday, Henry, Russell and I had a meeting with a company about some very exciting changes we are planning for Jet-to-Let Magazine. Further details will follow shortly.
In Cyprus, construction is well underway on The Grove Spa Resort in Mazotos and pictures and commentary can be found at the Construction Blog if you are interested.
Global Economic Events
Recent data and the various policies of governments and central banks point to the US coming out of recession first, followed by the UK and then the Eurozone. Over what timescale is open to debate. I know this is against the current thinking and wisdom, but if you look at the data, Germany is having a harder time than us! Add in Spain, Italy and Ireland and the lack of urgency thus far at the European Central Bank and I may be right.
Most major central banks around the world are adopting some form of quantitative easing similar to that in Japan between 2001 and 2006. Bernanke at the Federal Reserve is using policy initiatives, such as the purchase of $300bn of treasury bills, to reduce the cost of borrowing and prevent deflation. In the UK, Brown is doing something similar by purchasing gilts, raising their price and hence reducing the yield. All these counter-deflationary measures are aimed at reducing the cost of borrowing.
In view of this, I personally cannot see the Euro maintaining its present strength in the months to come. So what?
GBP/EURO
We cover exchange rates and what determines them on the Understanding Economics 3 day course. Of all the indices, commodities and stocks to trade, FOREX is probably the easiest to understand as the fundamental economic factors which drive rates are clear. I follow GBP/EURO as I have a good handle on the economic drivers in the two “zones” for want of a more politically correct term.
It is beyond the scope of this newsletter to explain the features of the chart such as moving averages and Bollinger bands, but what is clear is that the Euro may test the previous high (or low from Sterlings perspective) achieved at the start of the year. Its worth watching for those who do trade currencies as a move to back to the previous short-term lows (highs for Sterling) of 1.15 is a reasonable assumption, giving a potential trading profit.
NOTE: Trading FOREX is highly speculative and you could lose a lot of money. I am NOT recommending that you do it. My piece above is for information purposes only and does not constitute financial advice.
UK Distressed Assets
The Distressed Assets team is very busy with over 30 viewings around the country this week from an initial short list of over 1000 (one thousand!) properties at the beginning of the research phase last week. The team is working very hard and we have been inundated with investors wishing to join the group.
Free Investment Seminar in London
Distressed Assets is holding a free seminar in central London on Tuesday 21st April 2009 between 6.30 and 9.00pm. The seminar will look at how investors are making money today in the present market through buying distressed assets from banks and other sources and why we believe there has not been a better time to invest in specifically targeted UK property for many years. We will also explain the Distressed Assets process, how we differ in approach from other companies and how you can benefit from our bespoke service.
If you wish to attend the seminar please fill in the form on the website at: www.distressed-assets.co.uk
Places will be allocated on a first come first served basis and seating is limited.
Understanding Economics in London
After the success of the course in Liverpool, we have decided to run a 3 day event in London on the 29th to the 31st of May 2009. If you are serious about seizing the opportunities that the present recession offers and wish to understand the impact of government economic decisions on your business, investment and personal life, then this course is a must:
A detailed syllabus is available at: http://www.understanding-economics.com/
Further details can be obtained by filling in the form online. We presently have a special offer price for the next 7 days.
Have a great weekend
Cheers
Dominic Farrell
Wednesday, March 18, 2009
Bernanke Sees "Green Shoots" Of Recovery
Quantitative easing is underway in Britain. Rising equity markets are weighing on the dollar. G20 gives the impression of useful agreement. British industrial production is falling more slowly than in France and Germany.
For the first four days of the week sterling continued to head south. On Thursday it approached €1.07 before putting together a modest rally. It opened in London this morning at €1.09, still apparently in awe of overhead resistance at €1.0950.
Sterling was handicapped for most of the week by investors' nervousness about the much-trumpeted "quantitative easing" that is supposed to restore liquidity to the retail end of the financial system. The Bank of England intends to buy £75 billion of gilts in the next three months with the first £2 billion tranche going out last Wednesday.
That first "Asset Purchase Facility gilt purchase operation" received guarded approval from the media but investors were twitchy about how well the reverse auction would go and were still twitchy afterwards because only banks were seen to have taken part. Pension funds and other institutions either decided not to take the risk or simply did not want the money.
As to the effectiveness of the programme, the jury is still out and will not be coming in anytime soon. Sceptics believe falling deposit rates and rising loan rates prove that commercial banks are following an agenda different from that of the government and the Bank. An attendant fear is that the government could be tempted to monetise its debt, leaving the purchased gilts on the central bank's books until maturity and thus, in all but the literal sense, printing money.
Economic data from the UK did not particularly help matters for sterling. The two key figures released last week showed an acceleration in the slowdown of industrial production and a widening of the trade deficit.
Industrial production fell by 2.6% in January and it was 11.4% down over the 12 month period.We have yet to see the figures for Euro zone industrial production in January but we did see the national figures for France and Germany last week.
In France the monthly and annual declines were -3.1% and -13.8%, in Germany the numbers were -7.5% and -19.3%. On the face of it that comparison ought to have helped the pound but it did not. The old fears linger about Britain's recession being deeper and longer than those elsewhere.
The G20 finance ministers' meeting in Horsham was a qualified success. With that many participants it was never likely to deliver a huge breakthrough but it could have created mischief for the global economy if participants had been seen to squabble. Some cynics have dismissed the communique as a list of platitudes, including as it did a bit of self-congratulation, a bit of commitment and a bit of coordination.
But perhaps the most heartening part was the frequent use of the word "we" and the absence of any allusion to disagreement among the 20. It does not guarantee the emergence of global financial harmony when the leaders meet next month in Beckton but it does at least provide a stable platform upon which they might be able to build.
The most hopeful message came - surprisingly - from US Federal Reserve Chairman Ben Bernanke. He told a CBS interviewer that "I do, I do see green shoots [of economic recovery]". Those who remember Tory chancellor Norman Lamont using similar words prematurely in 1992 may raise an eyebrow but Mr Bernanke's sentiment seemed honest. Let's hope his optimism is not misplaced.
Equity investors certainly seem to have regained some of their optimism. Last week's stock market rally was one of the main reasons for the euro's advance. The security of the US dollar and the Swiss franc is less of an attraction when folk are less nervous. As investors unloaded their holdings of "safe-haven" currencies their first port of call was the euro. Sterling followed in its wake but at a slower pace. Its potential obstacle this week will be Wednesday's employment data but it will also continue to respond to general nervousness about the economy and the banks.
Sterling appears to have turned another corner against the dollar but still looks uneasy against the euro. Buyers of the euro should hedge their exposure, fixing a price for half of whatever they need and leaving the remainder uncovered in anticipation of better levels in the future.
Those of an optimistic bent may consider under-hedging, always bearing in mind the pound's propensity to head south at the drop of a hat. Use a stop order to protect the downside in case of unexpected alarms.
Source: Moneycorp
For the first four days of the week sterling continued to head south. On Thursday it approached €1.07 before putting together a modest rally. It opened in London this morning at €1.09, still apparently in awe of overhead resistance at €1.0950.
Sterling was handicapped for most of the week by investors' nervousness about the much-trumpeted "quantitative easing" that is supposed to restore liquidity to the retail end of the financial system. The Bank of England intends to buy £75 billion of gilts in the next three months with the first £2 billion tranche going out last Wednesday.
That first "Asset Purchase Facility gilt purchase operation" received guarded approval from the media but investors were twitchy about how well the reverse auction would go and were still twitchy afterwards because only banks were seen to have taken part. Pension funds and other institutions either decided not to take the risk or simply did not want the money.
As to the effectiveness of the programme, the jury is still out and will not be coming in anytime soon. Sceptics believe falling deposit rates and rising loan rates prove that commercial banks are following an agenda different from that of the government and the Bank. An attendant fear is that the government could be tempted to monetise its debt, leaving the purchased gilts on the central bank's books until maturity and thus, in all but the literal sense, printing money.
Economic data from the UK did not particularly help matters for sterling. The two key figures released last week showed an acceleration in the slowdown of industrial production and a widening of the trade deficit.
Industrial production fell by 2.6% in January and it was 11.4% down over the 12 month period.We have yet to see the figures for Euro zone industrial production in January but we did see the national figures for France and Germany last week.
In France the monthly and annual declines were -3.1% and -13.8%, in Germany the numbers were -7.5% and -19.3%. On the face of it that comparison ought to have helped the pound but it did not. The old fears linger about Britain's recession being deeper and longer than those elsewhere.
The G20 finance ministers' meeting in Horsham was a qualified success. With that many participants it was never likely to deliver a huge breakthrough but it could have created mischief for the global economy if participants had been seen to squabble. Some cynics have dismissed the communique as a list of platitudes, including as it did a bit of self-congratulation, a bit of commitment and a bit of coordination.
But perhaps the most heartening part was the frequent use of the word "we" and the absence of any allusion to disagreement among the 20. It does not guarantee the emergence of global financial harmony when the leaders meet next month in Beckton but it does at least provide a stable platform upon which they might be able to build.
The most hopeful message came - surprisingly - from US Federal Reserve Chairman Ben Bernanke. He told a CBS interviewer that "I do, I do see green shoots [of economic recovery]". Those who remember Tory chancellor Norman Lamont using similar words prematurely in 1992 may raise an eyebrow but Mr Bernanke's sentiment seemed honest. Let's hope his optimism is not misplaced.
Equity investors certainly seem to have regained some of their optimism. Last week's stock market rally was one of the main reasons for the euro's advance. The security of the US dollar and the Swiss franc is less of an attraction when folk are less nervous. As investors unloaded their holdings of "safe-haven" currencies their first port of call was the euro. Sterling followed in its wake but at a slower pace. Its potential obstacle this week will be Wednesday's employment data but it will also continue to respond to general nervousness about the economy and the banks.
Sterling appears to have turned another corner against the dollar but still looks uneasy against the euro. Buyers of the euro should hedge their exposure, fixing a price for half of whatever they need and leaving the remainder uncovered in anticipation of better levels in the future.
Those of an optimistic bent may consider under-hedging, always bearing in mind the pound's propensity to head south at the drop of a hat. Use a stop order to protect the downside in case of unexpected alarms.
Source: Moneycorp
Manchester Utd V Liverpool - What A Game!
What can I say?
Should have been 1-6?
My Man U friends were certainly down in the dumps last Saturday and no doubt are still feeling it today, but the reality of the situation is that they will still win the league!
Home draws, against the Fulhams, Hulls and Stokes of this world have cost us dearly.
The strength in depth at Utd and the Alex Ferguson factor will see them home and dry. However, the Champions league draw on Friday will be interesting. Who wants Liverpool?
Cheers
Dominic Farrell
Should have been 1-6?
My Man U friends were certainly down in the dumps last Saturday and no doubt are still feeling it today, but the reality of the situation is that they will still win the league!
Home draws, against the Fulhams, Hulls and Stokes of this world have cost us dearly.
The strength in depth at Utd and the Alex Ferguson factor will see them home and dry. However, the Champions league draw on Friday will be interesting. Who wants Liverpool?
Cheers
Dominic Farrell
Thursday, March 12, 2009
PRESS RELEASE: Astute Investors Buck The Trend And Snap Up UK Distressed Property Assets
Distressed Assets, a Liverpool based property research and acquisition company has seen a sharp increase in the number of enquiries from investors for its bespoke property purchase service.
As UK property prices tumble and recessionary woes continue, astute investors are seeing the opportunities that the present economic situation presents. Most commentators seem to be advising not to touch property right now but others see the situation differently.
Dominic Farrell, founder of Distressed Assets, believes now is the best time to invest in UK property,
“The best time to buy anything is when demand is weak and finance is difficult to obtain. Add in negative overall sentiment and you have a recipe for success. Investors can secure excellent value in today’s market and will reap the benefits over the medium to long-term. However, as with any business, there are a lot of potential pitfalls and research, relationship building and comprehensive due diligence are the fundamental requirements for a sound investment.”
David Ogden from Manchester, a client of Distressed Assets, testifies to the potential for investment success in the present market:
“Within 3 weeks of joining they had secured me a great property which will generate a significant return on my investment, is cash positive and has great potential for capital growth. They secured it for 60% below its previous selling price. I have found the Distressed Assets team to be unbelievably focused and passionate about what they are doing and have absolute confidence and trust in them." - David Ogden, Manchester
Given the present negative media coverage of property as an investment it could be easy to believe that prices will never rise again and the recession will last for the next decade. Farrell disagrees:
“With stock markets at 12 year lows, interest rates on cash almost negative in real terms and the bond market showing signs of a bubble, property purchased at significant prices below current value with strong cash flow is a solid investment over the medium to long-term. ”
Notes for Editors:
Distressed Assets is a Liverpool-based company founded specifically to seek investment opportunities in the present economic situation. Its sister companies include well established 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 an investment seminar in Central London on Tuesday 21st April 2009. If you wish to attend this seminar, please fill in the form at:
For further information or interviews, please contact Henry Powell-Jones on +44 151 244 5657
Wednesday, March 11, 2009
Liverpool V Real Madrid
Everywhere I went in Liverpool over the past 2 days was full of very well behaved Spanish football fans. My local bar/restaurant in Liverpool city centre could have been in Madrid given the number of people speaking Spanish.
The game last night was awesome. Liverpool played with a vigour and energy I have not seen for some time. With more Spanish players on the pitch than Real Madrid, Liverpool proved yet again what a force they can be with the right mental attitude, team selection and tactics.
Tonight, we are all Internazionale fans!
Dominic Farrell
The game last night was awesome. Liverpool played with a vigour and energy I have not seen for some time. With more Spanish players on the pitch than Real Madrid, Liverpool proved yet again what a force they can be with the right mental attitude, team selection and tactics.
Tonight, we are all Internazionale fans!
Dominic Farrell
Monday, March 9, 2009
FOREX: Sterling Softer On Banking Worries
The record low for base rates was widely anticipated. The plan for quantitative easing received qualified approval. Similar measures are being considered by the ECB. Sterling remains weighed down by nervousness about banks.
It was a messy and eventually expensive week for sterling. Starting from €1.13 it headed straight for €1.11. Three and a half days of laboured recovery took it back up to €1.13, whereupon it again dived to €1.11. It opened in London this morning at that level looking nervous.
A grab-bag of second division economic data had little visible effect on the pound. Money supply, consumer confidence, manufacturers' costs and factory gate prices are all interesting in their way but do not make compelling reading when everyone is obsessing about base rates.
Even when the Purchasing Managers' Index for Britain's services sector outstripped Euroland and the United States the impact was muted.
It was the Bank of England's interest rate announcement on Thursday that held the market's attention even after it had come and gone. The Bank's decision to halve the Bank rate to 0.50% was no surprise, nor was the heavy hint that this could be the bottom. Attention centred on the other part of the package, "quantitative easing", the £75 billion that the Bank intends to spend buying gilts in the next three months. After due consideration investors decided it was not such a bad idea.
Sterling's stumbling block throughout the week was - and still is - investor nervousness about equities in general and financial shares in particular. Last month they were fretting about HSBC's deeply discounted rights issue.
On Friday they fretted about a report by Morgan Stanley that that corporate profits in Britain will fall by more than during the 1930s depression. The report highlighted banking losses and weak oil prices as major factors. This morning they were worried about the all-but-nationalisation of Lloyds Bank Group and the £260 billion of its assets that the government will guarantee.
There were two main items on the Euro zone's calendar; the revision to fourth quarter GDP and the interest rate decision by the European Central Bank. To some extent both were non-events but that did not prevent either being analysed to death. The Q4 GDP figure was least controversial. The first revision left it unchanged at -1.5%, exactly in line with the performance of the United States and Britain.
The ECB announcement was similarly unsurprising with a 50 basis point rate cut to 1.5%. More interesting - as usual - was ECB President Trichet's press conference afterwards. M Trichet allowed that euro rates could fall further but dismissed the prospect of zero rates, calling them "inappropriate".
He also floated the possibility of "credit easing" using "additional non-standard measures". Everyone took this to mean some quirky Gallic form of quantitative easing. Behind the curve or not, the ECB was talking the same language (albeit quietly) as the Bank of England and the Fed. With few heavyweight economic data from either side of the Channel this week it looks as though it will again be corporate news and official views that drive currencies.
For sterling the risk is that nervousness about UK banks' solvency and independence will weigh it down. Last week's technical support has already given way and we could see another expedition to January's lows.
Investors should be ready for sterling to drop another three cents in fairly short order. As long as that is the full extent of the damage it should not alter the risk management strategy. Buyers of the euro should hedge their exposure, fixing a price for half of whatever they need and leaving the remainder uncovered in anticipation of better levels in the future.
Use a stop order to protect the downside in case of unexpected alarms.
Source: Moneycorp
It was a messy and eventually expensive week for sterling. Starting from €1.13 it headed straight for €1.11. Three and a half days of laboured recovery took it back up to €1.13, whereupon it again dived to €1.11. It opened in London this morning at that level looking nervous.
A grab-bag of second division economic data had little visible effect on the pound. Money supply, consumer confidence, manufacturers' costs and factory gate prices are all interesting in their way but do not make compelling reading when everyone is obsessing about base rates.
Even when the Purchasing Managers' Index for Britain's services sector outstripped Euroland and the United States the impact was muted.
It was the Bank of England's interest rate announcement on Thursday that held the market's attention even after it had come and gone. The Bank's decision to halve the Bank rate to 0.50% was no surprise, nor was the heavy hint that this could be the bottom. Attention centred on the other part of the package, "quantitative easing", the £75 billion that the Bank intends to spend buying gilts in the next three months. After due consideration investors decided it was not such a bad idea.
Sterling's stumbling block throughout the week was - and still is - investor nervousness about equities in general and financial shares in particular. Last month they were fretting about HSBC's deeply discounted rights issue.
On Friday they fretted about a report by Morgan Stanley that that corporate profits in Britain will fall by more than during the 1930s depression. The report highlighted banking losses and weak oil prices as major factors. This morning they were worried about the all-but-nationalisation of Lloyds Bank Group and the £260 billion of its assets that the government will guarantee.
There were two main items on the Euro zone's calendar; the revision to fourth quarter GDP and the interest rate decision by the European Central Bank. To some extent both were non-events but that did not prevent either being analysed to death. The Q4 GDP figure was least controversial. The first revision left it unchanged at -1.5%, exactly in line with the performance of the United States and Britain.
The ECB announcement was similarly unsurprising with a 50 basis point rate cut to 1.5%. More interesting - as usual - was ECB President Trichet's press conference afterwards. M Trichet allowed that euro rates could fall further but dismissed the prospect of zero rates, calling them "inappropriate".
He also floated the possibility of "credit easing" using "additional non-standard measures". Everyone took this to mean some quirky Gallic form of quantitative easing. Behind the curve or not, the ECB was talking the same language (albeit quietly) as the Bank of England and the Fed. With few heavyweight economic data from either side of the Channel this week it looks as though it will again be corporate news and official views that drive currencies.
For sterling the risk is that nervousness about UK banks' solvency and independence will weigh it down. Last week's technical support has already given way and we could see another expedition to January's lows.
Investors should be ready for sterling to drop another three cents in fairly short order. As long as that is the full extent of the damage it should not alter the risk management strategy. Buyers of the euro should hedge their exposure, fixing a price for half of whatever they need and leaving the remainder uncovered in anticipation of better levels in the future.
Use a stop order to protect the downside in case of unexpected alarms.
Source: Moneycorp
UK Banking Shares - What A Disaster!
I remember about a year ago someone saying that now was a great time to invest in UK banking shares!
In the Sunday Times over the weekend, there was a story of a 62 year old man who had £500,000 invested in Lloyd's Group and had received a £25,000 a year dividend.
Yesterday, his shares were worth £25,000 with no prospect of a dividend in the near future. Today, the shares have fallen further.
Some commentators who are relishing the present fall in UK property prices may wish to offer alternatives for investors?
In the Sunday Times over the weekend, there was a story of a 62 year old man who had £500,000 invested in Lloyd's Group and had received a £25,000 a year dividend.
Yesterday, his shares were worth £25,000 with no prospect of a dividend in the near future. Today, the shares have fallen further.
Some commentators who are relishing the present fall in UK property prices may wish to offer alternatives for investors?
- Savings accounts paying nothing?
- Stock markets at 12 year lows and falling?
- Bonds (the next bubble to pop, particularly with quantitative easing)?
- "Under the Mattress?" I hear that one company has now designed a bed which has a safe under the mattress. I am not kidding.
For all the short-term falls in prices, property remains the most solid form of investment over the medium to long-term. With prices falling as they are, investors should view this as a buying opportunity.
Dominic Farrell
Thursday, March 5, 2009
Warren Buffett: Distressed Assets Are A Great Opportunity
Warren Buffett knows a thing or two about investing and is following the view that now is a great opportunity to invest in distressed assets. Worth watching.
Eurozone Slashes Rates By 50bps To 1.5%
Eurozone interest rates have been slashed by a half percentage point to the lowest level ever as the European Central Bank responds to continental Europe’s worst recession since the second world war.
The ECB said its main interest rate would fall from 2 per cent to 1.5 per cent, bringing the total cut since early October to 275 basis points, and taking the eurozone’s monetary guardian into territory not charted since the euro’s launch in 1999.
But official borrowing costs are still higher in the eurozone than in the US and the UK - highlighting the central bank’s wariness about taking more aggressive action.
The latest cut came after ECB governing council members received updated forecasts thought have shown a dramatically worse contraction this year in eurozone economic activity than in previous projections, released in December. Eurozone industry has been badly hit by a collapse in global demand since the fall of Lehman Brothers investment bank.
The forecasts are also likely to have shown eurozone inflation undershooting significantly the ECB’s target of an annual rate “below but close” to 2 per cent.
Attention will now focus on whether Jean-Claude Trichet, ECB president, hints at further interest rate cuts in coming months, and whether the ECB will follow the Bank of England and US Federal Reserve in adopting additional “non-standard” measures to combat the economic crisis.
The council is likely to have discussed possible plans for buying corporate debt to address specific market liquidity problems and reduce interest rate spreads. But the ECB is thought unlikely to embark on a large-scale “quantitative easing” programme any time soon.
Eurozone gross domestic product contracted by 1.5 per cent in the final quarter of 2008, Eurostat, the European Union’s statistical office confirmed ahead of the ECB announcement. That was the largest quarterly contraction on record. Exports slumped by 7.3 per cent and investment by 2.7 per cent.
EU policymakers could take a little comfort from the fact that recent revisions mean the eurozone fared less badly than the US economy – which contracted by 1.6 per cent in the same period.
But the start of 2009 appears to have brought little relief. Spain reported industrial production in January was 20.2 per cent lower than a year before, the same rate of contraction in December. Earlier this week, German engineering companies reported January’s foreign orders were almost 50 per cent lower than a year before.
Source: The Financial Times
The ECB said its main interest rate would fall from 2 per cent to 1.5 per cent, bringing the total cut since early October to 275 basis points, and taking the eurozone’s monetary guardian into territory not charted since the euro’s launch in 1999.
But official borrowing costs are still higher in the eurozone than in the US and the UK - highlighting the central bank’s wariness about taking more aggressive action.
The latest cut came after ECB governing council members received updated forecasts thought have shown a dramatically worse contraction this year in eurozone economic activity than in previous projections, released in December. Eurozone industry has been badly hit by a collapse in global demand since the fall of Lehman Brothers investment bank.
The forecasts are also likely to have shown eurozone inflation undershooting significantly the ECB’s target of an annual rate “below but close” to 2 per cent.
Attention will now focus on whether Jean-Claude Trichet, ECB president, hints at further interest rate cuts in coming months, and whether the ECB will follow the Bank of England and US Federal Reserve in adopting additional “non-standard” measures to combat the economic crisis.
The council is likely to have discussed possible plans for buying corporate debt to address specific market liquidity problems and reduce interest rate spreads. But the ECB is thought unlikely to embark on a large-scale “quantitative easing” programme any time soon.
Eurozone gross domestic product contracted by 1.5 per cent in the final quarter of 2008, Eurostat, the European Union’s statistical office confirmed ahead of the ECB announcement. That was the largest quarterly contraction on record. Exports slumped by 7.3 per cent and investment by 2.7 per cent.
EU policymakers could take a little comfort from the fact that recent revisions mean the eurozone fared less badly than the US economy – which contracted by 1.6 per cent in the same period.
But the start of 2009 appears to have brought little relief. Spain reported industrial production in January was 20.2 per cent lower than a year before, the same rate of contraction in December. Earlier this week, German engineering companies reported January’s foreign orders were almost 50 per cent lower than a year before.
Source: The Financial Times
Bank of England Cuts Rates by 50bps To 0.5%
The Bank of England’s monetary policy committee cut its key rate by half a percentage point to 0.5 per cent on Thursday and unveiled a programme under which it will buy up to £150bn in government gilts and corporate bonds.
It is the first European central bank to begin this process – known as quantitative easing – in an effort to kick-start demand.
The MPC has authorised the programme to begin with an initial £75bn of asset purchases, to be composed mostly of government gilts.
The quantitative easing was widely expected and underscores the authorities’ determination to counteract the broad based slump in demand across the UK economy. The Bank said the programme would be financed by the creation of central bank reserves and could take as long as three months to carry out, the Bank said in a statement.
It said the sum of £75bn had been agreed “in the first instance”, a hint that ultimate purchases could be a larger sum.
Mervyn King, Bank of England governor, said in a letter to Alistair Darling, chancellor of the exchequer, that the size of the full programme should be “up to a maximum of £150bn”, but that £50bn of that should be used to support the purchase of private sector assets – corporate bonds and commercial paper.
In a letter from the chancellor to the governor dated March 3, it was made clear that central bank money – money which does not require the government to borrow from elsewhere in the economy – can be used to finance a previously agreed asset purchase facility .
That facility, which was intended to be paid for with cash raised from sales of gilts, had a more narrow purpose than the scheme unveiled on Thursday.
The APF, totalling £50bn, was aimed at unblocking the market for corporate borrowing, and the chancellor’s letter implies that the APF has been absorbed into a large pump-priming exercise.
In a statement concerning its decision to cut rates, the MPC said it agreed that part of the £75bn sum would be used to finance purchases through the previously announced APF. “But in order to meet the committee’s objective of total purchases of £75bn, the Bank would also buy medium and long-maturity conventional gilts in the secondary markets,” the Bank said. “It is likely that the majoriity of the overall purchases by value over the next three months will be of gilts.”
The MPC agreed that in future meetings it would monitor the effectiveness of the programme in boosting money supply “and in due course, raising the rate of growth of nominal spending, adjusting the speed and scale of purchases as appropriate.”
Ian McCafftery, chief economic adviser at the CBI, the employers’ body, welcomed the move. “Quantitative easing may move the MPC into relatively uncharted territory, but it is the right move,” he said.
“With interest rates already at very low levels and their impact on economic activity muted by the credit crunch, the Bank needs to use other tools to support economic activity and mitigate the risk of the start of a deflationary spiral.
“Business will particularly welcome the fact that the Bank will purchase not only gilts but also other private-sector assets. This will help companies obtain the finance they need in these difficult times.”
In deciding on the 50-point rate cut, the MPC considered the forecast in its March inflation report, which implied a substantial risk of inflation undershooting its 2 per cent target in the medium term. It also discussed the fact that data released since that report had done nothing to suggest an improving economic outlook.
However, it also considered the fact that very low official rates “could have counter-productive effects on the operation of some financial markets and on the lending capacity of the banking system.”
Source: The Financial Times
It is the first European central bank to begin this process – known as quantitative easing – in an effort to kick-start demand.
The MPC has authorised the programme to begin with an initial £75bn of asset purchases, to be composed mostly of government gilts.
The quantitative easing was widely expected and underscores the authorities’ determination to counteract the broad based slump in demand across the UK economy. The Bank said the programme would be financed by the creation of central bank reserves and could take as long as three months to carry out, the Bank said in a statement.
It said the sum of £75bn had been agreed “in the first instance”, a hint that ultimate purchases could be a larger sum.
Mervyn King, Bank of England governor, said in a letter to Alistair Darling, chancellor of the exchequer, that the size of the full programme should be “up to a maximum of £150bn”, but that £50bn of that should be used to support the purchase of private sector assets – corporate bonds and commercial paper.
In a letter from the chancellor to the governor dated March 3, it was made clear that central bank money – money which does not require the government to borrow from elsewhere in the economy – can be used to finance a previously agreed asset purchase facility .
That facility, which was intended to be paid for with cash raised from sales of gilts, had a more narrow purpose than the scheme unveiled on Thursday.
The APF, totalling £50bn, was aimed at unblocking the market for corporate borrowing, and the chancellor’s letter implies that the APF has been absorbed into a large pump-priming exercise.
In a statement concerning its decision to cut rates, the MPC said it agreed that part of the £75bn sum would be used to finance purchases through the previously announced APF. “But in order to meet the committee’s objective of total purchases of £75bn, the Bank would also buy medium and long-maturity conventional gilts in the secondary markets,” the Bank said. “It is likely that the majoriity of the overall purchases by value over the next three months will be of gilts.”
The MPC agreed that in future meetings it would monitor the effectiveness of the programme in boosting money supply “and in due course, raising the rate of growth of nominal spending, adjusting the speed and scale of purchases as appropriate.”
Ian McCafftery, chief economic adviser at the CBI, the employers’ body, welcomed the move. “Quantitative easing may move the MPC into relatively uncharted territory, but it is the right move,” he said.
“With interest rates already at very low levels and their impact on economic activity muted by the credit crunch, the Bank needs to use other tools to support economic activity and mitigate the risk of the start of a deflationary spiral.
“Business will particularly welcome the fact that the Bank will purchase not only gilts but also other private-sector assets. This will help companies obtain the finance they need in these difficult times.”
In deciding on the 50-point rate cut, the MPC considered the forecast in its March inflation report, which implied a substantial risk of inflation undershooting its 2 per cent target in the medium term. It also discussed the fact that data released since that report had done nothing to suggest an improving economic outlook.
However, it also considered the fact that very low official rates “could have counter-productive effects on the operation of some financial markets and on the lending capacity of the banking system.”
Source: The Financial Times
Sunday, March 1, 2009
A Beautiful Day Here In Cyprus
How different life is when you can walk along the beach in shorts and t-shirt with the sun shining and waves splashing against the rocks.
We've had torrential rain for the past week, which is great for the dams and gardens, but no so great for construction.
However, the weather today is fantastic (as you can see from the photo) and the bank holiday weekend in Cyprus is well under way.
I went to look at a couple of off-plan villas we have completing in April and work appears to be progressing well. I am particularly pleased with the larger of the two properties which is set in a big plot and is 200m from a cracking beach and also some great restaurants.
These type of properties rent well, particularly to Cypriots from Nicosia, although the British and Europeans are the main market. I have a similar property which I placed on the rental market prior to Christmas and already have 25 weeks booked for this year which makes it significantly cashflow positive.
Having seen the new properties yesterday and also inspected one of my friends villas I remarked to him on the phone that it was a shame we were renting these houses out.
And that is the key point. Sentimentality should not come into investing. I left a villa "empty" for well over a year, because it had been my home and I didn't want other people staying there. How daft is that?
As the financial crisis continues around the globe and interest rates for savers become negative (in real terms) and stockmarket losses over the past 12 years continue unabated, one asset class can be relied upon to produce the goods over the medium to long term - property.
Further, investing on a portfolio basis is the key to success which I know many readers of this blog recognise. We have been inundated with enquiries from around the world for our bespoke "Distressed Assets" service from Jet-to-Let Investments
The deals Henry Powell-Jones and his team have successfully purchased are astonishing. Investing in the UK now (buying from banks, not estate agents) and for the foreseable future will produce strong returns over the medium term and will reward the savvy investor who has the courage to be contrarian to the prevailing opinion.
For the journalists who continue to talk down property, please continue - don't stop!
Because once the tide turns, whenever that may be, these same journalists will flip, and when they do, it will be too late to grab the real bargains.
Have a great day. I am now off to catch a few more rays and then for lunch.
Cheers
Dominic Farrell
We've had torrential rain for the past week, which is great for the dams and gardens, but no so great for construction.
However, the weather today is fantastic (as you can see from the photo) and the bank holiday weekend in Cyprus is well under way.
I went to look at a couple of off-plan villas we have completing in April and work appears to be progressing well. I am particularly pleased with the larger of the two properties which is set in a big plot and is 200m from a cracking beach and also some great restaurants.
These type of properties rent well, particularly to Cypriots from Nicosia, although the British and Europeans are the main market. I have a similar property which I placed on the rental market prior to Christmas and already have 25 weeks booked for this year which makes it significantly cashflow positive.
Having seen the new properties yesterday and also inspected one of my friends villas I remarked to him on the phone that it was a shame we were renting these houses out.
And that is the key point. Sentimentality should not come into investing. I left a villa "empty" for well over a year, because it had been my home and I didn't want other people staying there. How daft is that?
As the financial crisis continues around the globe and interest rates for savers become negative (in real terms) and stockmarket losses over the past 12 years continue unabated, one asset class can be relied upon to produce the goods over the medium to long term - property.
Further, investing on a portfolio basis is the key to success which I know many readers of this blog recognise. We have been inundated with enquiries from around the world for our bespoke "Distressed Assets" service from Jet-to-Let Investments
The deals Henry Powell-Jones and his team have successfully purchased are astonishing. Investing in the UK now (buying from banks, not estate agents) and for the foreseable future will produce strong returns over the medium term and will reward the savvy investor who has the courage to be contrarian to the prevailing opinion.
For the journalists who continue to talk down property, please continue - don't stop!
Because once the tide turns, whenever that may be, these same journalists will flip, and when they do, it will be too late to grab the real bargains.
Have a great day. I am now off to catch a few more rays and then for lunch.
Cheers
Dominic Farrell
Dominic Farrell's Investors' Newsletter, Understanding Economics and UK Distressed Assets
Dear Investor
The “Understanding Economics” course in Liverpool last weekend was a great success. This was the first time we have organised a course of this type and I was initially unsure how it would be received by the attendees and whether the content was pitched at the right level – after all, economics is a huge subject.
One of the attendees wrote:
“I would just like to say a big thank you to yourself and John for the Understanding Economics course. We got massive value and confidence from it.
John has a great talent for getting across a subject that all investors should understand in a very accessible way. Now I can listen to the news and understand what the implications are and not have to rely on a journalist’s opinion. If only we were taught this at school.”
I sat and listened to every word, even though I have a degree in the subject. John certainly knows his stuff and his exploration of some of the more peripheral consequences of the credit crunch, as well as the exchange rate multiplier effect and the Wall St Crash of 1929 were both particularly interesting and highly relevant in today’s economic environment.
Our next course will take place in London 29th – 31st May 2009.
For further details visit the website at:
http://www.understanding-economics.com/
We are also very active with our personal portfolio. We have two refurbishment projects underway in Liverpool and one in Cumbria. Fitting out the latter property with a new kitchen, bathroom, carpets and decoration should mean we can ask £500 plus a week in rental. The mortgage has more than halved recently, so this will be an excellent cash contributor.
I spent Monday viewing four repossessed properties which I am personally targeting, although there may be one or two legal hurdles we need to cross before taking a view on making offers.
In Cyprus, we have bought a re-sale villa which we are preparing for rental as well as a further two off-plan villas that will be completing in April. The rentals are going very well and we are seeing strong demand from Europeans who appreciate the extra value offered by paying for a holiday in sterling. The weakness of the pound against the euro is working to push up our occupancy, as we price our holiday rentals in sterling.
UK Distressed Assets – 60% below 2007 Selling Price
The Distressed Assets division of Jet-to-Let Investments secured another superb bank repossession property last Thursday.
The property is in West Yorkshire and sold in July 2007 for £188,000. We bought it for a client at £74,000 with a strong net yield and positive cashflow. At 60% below the selling price of 18 months ago, we think this is represents outstanding value and a very strong investment over the medium term.
The team has been busy this week with research, intelligence gathering and site visits in Liverpool, London, Nottingham and Manchester. For every property we make offer on, we will have rejected more than 100. By being ruthless with our selection criteria, we ensure that only the very best opportunities are presented to our clients.
The amount of work involved is substantial, but as each week goes by, the team becomes more efficient. The great economist Adam Smith, in his book “The Wealth of Nations” explains why this is the case. Nothing changes in economics. The principles from 1776 are equally relevant today.
If you would like to benefit from the opportunities available through Distressed Assets, please fill in the form at:
http://www.jet-to-let-investments.com/UK/index.html
If you filled in the form last week, please do not send it again. We have been overwhelmed with the response and will be contacting you very shortly – thanks for your patience.
Finally, the latest International Wealth Network event took place in central London on Monday evening. Nick Burrage and Oli Sutton, two of our Property Entrepreneurs, did a great job of organising the evening and there was an excellent turnout. Thanks also to Jess, Nick’s wife who also did a sterling job helping to organise the event. There was a really eclectic mix of people there and I know that Alun and Henry enjoyed meeting so many interesting people.
Please email Henry Powell-Jones to find out when the next International Wealth Event will be: henry@jet-to-let-investments.com
Cheers
Dominic Farrell
The “Understanding Economics” course in Liverpool last weekend was a great success. This was the first time we have organised a course of this type and I was initially unsure how it would be received by the attendees and whether the content was pitched at the right level – after all, economics is a huge subject.
One of the attendees wrote:
“I would just like to say a big thank you to yourself and John for the Understanding Economics course. We got massive value and confidence from it.
John has a great talent for getting across a subject that all investors should understand in a very accessible way. Now I can listen to the news and understand what the implications are and not have to rely on a journalist’s opinion. If only we were taught this at school.”
I sat and listened to every word, even though I have a degree in the subject. John certainly knows his stuff and his exploration of some of the more peripheral consequences of the credit crunch, as well as the exchange rate multiplier effect and the Wall St Crash of 1929 were both particularly interesting and highly relevant in today’s economic environment.
Our next course will take place in London 29th – 31st May 2009.
For further details visit the website at:
http://www.understanding-economics.com/
We are also very active with our personal portfolio. We have two refurbishment projects underway in Liverpool and one in Cumbria. Fitting out the latter property with a new kitchen, bathroom, carpets and decoration should mean we can ask £500 plus a week in rental. The mortgage has more than halved recently, so this will be an excellent cash contributor.
I spent Monday viewing four repossessed properties which I am personally targeting, although there may be one or two legal hurdles we need to cross before taking a view on making offers.
In Cyprus, we have bought a re-sale villa which we are preparing for rental as well as a further two off-plan villas that will be completing in April. The rentals are going very well and we are seeing strong demand from Europeans who appreciate the extra value offered by paying for a holiday in sterling. The weakness of the pound against the euro is working to push up our occupancy, as we price our holiday rentals in sterling.
UK Distressed Assets – 60% below 2007 Selling Price
The Distressed Assets division of Jet-to-Let Investments secured another superb bank repossession property last Thursday.
The property is in West Yorkshire and sold in July 2007 for £188,000. We bought it for a client at £74,000 with a strong net yield and positive cashflow. At 60% below the selling price of 18 months ago, we think this is represents outstanding value and a very strong investment over the medium term.
The team has been busy this week with research, intelligence gathering and site visits in Liverpool, London, Nottingham and Manchester. For every property we make offer on, we will have rejected more than 100. By being ruthless with our selection criteria, we ensure that only the very best opportunities are presented to our clients.
The amount of work involved is substantial, but as each week goes by, the team becomes more efficient. The great economist Adam Smith, in his book “The Wealth of Nations” explains why this is the case. Nothing changes in economics. The principles from 1776 are equally relevant today.
If you would like to benefit from the opportunities available through Distressed Assets, please fill in the form at:
http://www.jet-to-let-investments.com/UK/index.html
If you filled in the form last week, please do not send it again. We have been overwhelmed with the response and will be contacting you very shortly – thanks for your patience.
Finally, the latest International Wealth Network event took place in central London on Monday evening. Nick Burrage and Oli Sutton, two of our Property Entrepreneurs, did a great job of organising the evening and there was an excellent turnout. Thanks also to Jess, Nick’s wife who also did a sterling job helping to organise the event. There was a really eclectic mix of people there and I know that Alun and Henry enjoyed meeting so many interesting people.
Please email Henry Powell-Jones to find out when the next International Wealth Event will be: henry@jet-to-let-investments.com
Cheers
Dominic Farrell
Friday, February 27, 2009
How Far Will Stockmarkets Fall?
An interesting article by Dominic Frisby:
The stock market crash of 2008 played out like 1929 almost to the day. In fact the pattern was so uncannily close, that I became convinced the post-crash rebound would do the same and we would see a similar spring bounce.
That hasn’t happened. After a brief rally into 2009, the markets have ground lower. But now they are at key levels. A breakdown from here and things are going to get even nastier – if such a thing were possible...
The uncanny parallels between 2008 and 1929
Let’s take a look first at the repeating pattern of stock market crashes. My thanks to Bob Hoye of Institutional Advisers for the table. You can see the similarities are amazing:
Moreover, the percentage declines were virtually identical. An initial decline from the high to a late October low of about 40%, then a rebound of about 15%, followed by a final low in late November – down about another 22%. The parallels are uncanny.
The worrying thing for today’s investors is that the final low after 1929 did not come until three years later; after 1873 it did not arrive until four years later. Given that modern markets made their peak in mid-2007 it is not unreasonable to expect the eventual low to come no earlier than 2010-11.
What is a double top and why is it so important?
Stockcharts.com, the website of lauded technical analyst John Murphy, defines a ‘Double Top’ as follows: ‘a major reversal pattern that forms after an extended uptrend. As its name implies, the pattern is made up of two consecutive peaks that are roughly equal, with a moderate trough in-between’.
The thinking behind the double top (and indeed its opposite, the double bottom) is that the market reaches a point where there are no more buyers, only sellers. It falls, then retests that point, and when there are still no more buyers, it reverses.
The FTSE 100 – and every other major index – put in a clear double top in 2007 (just as they did in 2000) and it signalled a significant change in trend (see chart below):
That is just a weekly chart for the last five years. What is worrying, however, is if you look at the bigger picture. The major indices have put in a mammoth, long-term double top. Here is a chart of the S&P since 1970. You can see it very clearly in the chart below – in 2007, at the 2000 highs, the markets ran out of buyers:
But you can also see, the market is now retesting those 2002-3 lows. They were first tested in November 2008 and we got a rally. Now they’re being retested again (see below):
This really is a key juncture for the stock markets. If these lows hold, we could be marking an important bottom (although I have no doubt this will be retested).
But if we break down below these lows, we’re going back to test 1996 prices (600 on the S&P) and possibly even 1994 prices (S&P around 450). These current lows will then mark an important point of resistance that will slow any future bull markets (in other words, when markets rise again, the current lows will be where they start to falter).
On the positive side, Bloomberg reported this week that Elliot Wave
International’s Robert Prechter, a notorious bear and practitioner of ‘Wave theory’, has advised his clients to cover their shorts (bets that the market will fall).
He first recommended that his clients short US stocks in 2007, saying that “aggressive speculators should return to a fully leveraged short position.” But Prechter wrote to his clients this week, saying that “the market is compressed. When it finds a bottom and rallies, it will be sharp and scary for anyone who is short. I would rather be early than late.”
My own thinking is that we will see some kind of support and possibly even a rally from the mid-700s. But, longer-term, this bear market is far from over.
And what about gold?
Prechter has been right about a lot of things – deflation being one of them – but he has not been right on gold. A strong deflationist, he has been bearish on the metal. But we are rapidly learning that gold is first and foremost a monetary metal – and as money is the best asset to own during deflation, it’s actually doing rather well.
Now, I hope that Prechter remains wrong. But the worrying thing for gold investors now is that gold, too, is putting in a double top.
$1,000 an ounce was such an obvious place for gold to hit resistance. As I wrote in last week’s Money Morning, it made sense to take some money off the table. I remain convinced of gold’s long-term future, but it looks like we are in the early stages of an intermediate correction.
I suppose a 50% retracement of the gains since October is not an unreasonable target. That would take us back to the $850 area. (It would also give us a superbly bullish, inverted head-and-shoulders pattern – more on that another day).
I said in my new year predictions in MoneyWeek that a retest of $1,000 was likely in the first part of the year, but that gold would not break through $1,000 until next autumn or winter. We still seem to be on course for that. For now though, the late February to March seasonal correction for gold (see chart below) is playing out to the script:
I couldn’t bring myself to sell any gold or any of my preferred gold stocks, so instead the way I played this was to buy some puts (options that bet the price will go down) on SLV (the silver ETF), and GDX (the gold stocks ETF). It’s been a good trade so far.
Source: Moneyweek
The stock market crash of 2008 played out like 1929 almost to the day. In fact the pattern was so uncannily close, that I became convinced the post-crash rebound would do the same and we would see a similar spring bounce.
That hasn’t happened. After a brief rally into 2009, the markets have ground lower. But now they are at key levels. A breakdown from here and things are going to get even nastier – if such a thing were possible...
The uncanny parallels between 2008 and 1929
Let’s take a look first at the repeating pattern of stock market crashes. My thanks to Bob Hoye of Institutional Advisers for the table. You can see the similarities are amazing:
Moreover, the percentage declines were virtually identical. An initial decline from the high to a late October low of about 40%, then a rebound of about 15%, followed by a final low in late November – down about another 22%. The parallels are uncanny.
The worrying thing for today’s investors is that the final low after 1929 did not come until three years later; after 1873 it did not arrive until four years later. Given that modern markets made their peak in mid-2007 it is not unreasonable to expect the eventual low to come no earlier than 2010-11.
What is a double top and why is it so important?
Stockcharts.com, the website of lauded technical analyst John Murphy, defines a ‘Double Top’ as follows: ‘a major reversal pattern that forms after an extended uptrend. As its name implies, the pattern is made up of two consecutive peaks that are roughly equal, with a moderate trough in-between’.
The thinking behind the double top (and indeed its opposite, the double bottom) is that the market reaches a point where there are no more buyers, only sellers. It falls, then retests that point, and when there are still no more buyers, it reverses.
The FTSE 100 – and every other major index – put in a clear double top in 2007 (just as they did in 2000) and it signalled a significant change in trend (see chart below):
That is just a weekly chart for the last five years. What is worrying, however, is if you look at the bigger picture. The major indices have put in a mammoth, long-term double top. Here is a chart of the S&P since 1970. You can see it very clearly in the chart below – in 2007, at the 2000 highs, the markets ran out of buyers:
But you can also see, the market is now retesting those 2002-3 lows. They were first tested in November 2008 and we got a rally. Now they’re being retested again (see below):
This really is a key juncture for the stock markets. If these lows hold, we could be marking an important bottom (although I have no doubt this will be retested).
But if we break down below these lows, we’re going back to test 1996 prices (600 on the S&P) and possibly even 1994 prices (S&P around 450). These current lows will then mark an important point of resistance that will slow any future bull markets (in other words, when markets rise again, the current lows will be where they start to falter).
On the positive side, Bloomberg reported this week that Elliot Wave
International’s Robert Prechter, a notorious bear and practitioner of ‘Wave theory’, has advised his clients to cover their shorts (bets that the market will fall).
He first recommended that his clients short US stocks in 2007, saying that “aggressive speculators should return to a fully leveraged short position.” But Prechter wrote to his clients this week, saying that “the market is compressed. When it finds a bottom and rallies, it will be sharp and scary for anyone who is short. I would rather be early than late.”
My own thinking is that we will see some kind of support and possibly even a rally from the mid-700s. But, longer-term, this bear market is far from over.
And what about gold?
Prechter has been right about a lot of things – deflation being one of them – but he has not been right on gold. A strong deflationist, he has been bearish on the metal. But we are rapidly learning that gold is first and foremost a monetary metal – and as money is the best asset to own during deflation, it’s actually doing rather well.
Now, I hope that Prechter remains wrong. But the worrying thing for gold investors now is that gold, too, is putting in a double top.
$1,000 an ounce was such an obvious place for gold to hit resistance. As I wrote in last week’s Money Morning, it made sense to take some money off the table. I remain convinced of gold’s long-term future, but it looks like we are in the early stages of an intermediate correction.
I suppose a 50% retracement of the gains since October is not an unreasonable target. That would take us back to the $850 area. (It would also give us a superbly bullish, inverted head-and-shoulders pattern – more on that another day).
I said in my new year predictions in MoneyWeek that a retest of $1,000 was likely in the first part of the year, but that gold would not break through $1,000 until next autumn or winter. We still seem to be on course for that. For now though, the late February to March seasonal correction for gold (see chart below) is playing out to the script:
I couldn’t bring myself to sell any gold or any of my preferred gold stocks, so instead the way I played this was to buy some puts (options that bet the price will go down) on SLV (the silver ETF), and GDX (the gold stocks ETF). It’s been a good trade so far.
Source: Moneyweek
Thursday, February 26, 2009
Sterling Stages A Recovery
STERLING STAGES A RECOVERY
Inflation and retail sales numbers improved the appeal of sterling. There is still no coherent European financial rescue plan.
Sterling started last Monday close to the week's low at €1.1150. It got as far as €1.14 in midweek before subsiding to €1.13. When London opened this morning it was a cent ahead on the week at €1.1250.
Sterling has done well against most currencies. Less than helpful news stories were offset by economic data which, though far from marvellous, were sometimes better than investors had hoped. Two statistics deserve particular credit. Consumer prices fell by a less than expected 0.7% in January, taking CPI inflation down from 3.1% to 3.0%. The modest decline made investors less sure of further aggressive rate cuts by the Bank of England.
Friday's retail sales figures had a similar implication. Up by 0.7% in January sales receipts were a surprising 3.6% higher on the year. These "official" retail sales data have developed a reputation for being erratic.
Even the Monetary Policy Committee is wary of attaching too much importance to what it sees as potentially misleading figures. Yet the market could not ignore what looked like a decent performance by shoppers.
On Wednesday morning a rumour did the rounds alleging that Britain would lose its triple-A credit rating. That may or may not be the case but the UK is a long way back in the queue behind Italy, Ireland, Austria and goodness knows who else.
The Confederation of British Industry moaned that sterling weakness has done little to improve the export performance of British companies. How ironic that it made the complaint on the very day the minutes of February's Monetary Policy Committee meeting came out.
According to the minutes; "it appeared that UK exporters had, on average, responded to the lower level of sterling by boosting margins, rather than by cutting foreign currency prices and gaining market share."
As the financial woes of the Euro zone deepen, member governments seem no closer to a coherent response. National packages of assistance remain uncoordinated. At their weekend summit meeting in Berlin leaders agreed that something should be done but nobody appeared to be putting a hand in their pocket. The only two solid proposals were to clamp down on tax havens (including Luxembourg perhaps?) and regulate hedge funds more rigorously.
With very few economic statistics to go on, the euro's performance depended on changing perceptions of Euroland's financial standing. One of the latest developments has been the possibility of a credit rating downgrade for banks with a big exposure to Eastern Europe. Austrian and Swedish banks are reckoned to be at greatest risk.
Sterling/dollar continues to behave erratically. Although it has gone nowhere in the last couple of months its frequent five-cent excursions make people nervous. Buyers of the euro should hedge half of their requirement, leaving the remainder uncovered in anticipation of better levels in the future. Use a stop order to protect the downside in case of unexpected alarms.
Source: Moneycorp
Inflation and retail sales numbers improved the appeal of sterling. There is still no coherent European financial rescue plan.
Sterling started last Monday close to the week's low at €1.1150. It got as far as €1.14 in midweek before subsiding to €1.13. When London opened this morning it was a cent ahead on the week at €1.1250.
Sterling has done well against most currencies. Less than helpful news stories were offset by economic data which, though far from marvellous, were sometimes better than investors had hoped. Two statistics deserve particular credit. Consumer prices fell by a less than expected 0.7% in January, taking CPI inflation down from 3.1% to 3.0%. The modest decline made investors less sure of further aggressive rate cuts by the Bank of England.
Friday's retail sales figures had a similar implication. Up by 0.7% in January sales receipts were a surprising 3.6% higher on the year. These "official" retail sales data have developed a reputation for being erratic.
Even the Monetary Policy Committee is wary of attaching too much importance to what it sees as potentially misleading figures. Yet the market could not ignore what looked like a decent performance by shoppers.
On Wednesday morning a rumour did the rounds alleging that Britain would lose its triple-A credit rating. That may or may not be the case but the UK is a long way back in the queue behind Italy, Ireland, Austria and goodness knows who else.
The Confederation of British Industry moaned that sterling weakness has done little to improve the export performance of British companies. How ironic that it made the complaint on the very day the minutes of February's Monetary Policy Committee meeting came out.
According to the minutes; "it appeared that UK exporters had, on average, responded to the lower level of sterling by boosting margins, rather than by cutting foreign currency prices and gaining market share."
As the financial woes of the Euro zone deepen, member governments seem no closer to a coherent response. National packages of assistance remain uncoordinated. At their weekend summit meeting in Berlin leaders agreed that something should be done but nobody appeared to be putting a hand in their pocket. The only two solid proposals were to clamp down on tax havens (including Luxembourg perhaps?) and regulate hedge funds more rigorously.
With very few economic statistics to go on, the euro's performance depended on changing perceptions of Euroland's financial standing. One of the latest developments has been the possibility of a credit rating downgrade for banks with a big exposure to Eastern Europe. Austrian and Swedish banks are reckoned to be at greatest risk.
Sterling/dollar continues to behave erratically. Although it has gone nowhere in the last couple of months its frequent five-cent excursions make people nervous. Buyers of the euro should hedge half of their requirement, leaving the remainder uncovered in anticipation of better levels in the future. Use a stop order to protect the downside in case of unexpected alarms.
Source: Moneycorp
Not Much Blogging Going On
I can't believe how quickly the past 7 days have gone.
We had the "Understanding Economics" course in Liverpool last weekend which was a huge success. I will write more about this later.
I spent the whole of Monday viewing bank repossessed properties for my personal portfolio, and dealing with 2 refurbishment projects I have ongoing in Liverpool and 1 in Cumbria.
I am very pleased that after 5 years we have finally got around to sorting the Cumbrian property out!
Real Madrid V Liverpool was a great result last night for us scousers and I am looking forward to the return leg at Anfield in just under 2 weeks from today.
Have a great day
Cheers
Dominic Farrell
We had the "Understanding Economics" course in Liverpool last weekend which was a huge success. I will write more about this later.
I spent the whole of Monday viewing bank repossessed properties for my personal portfolio, and dealing with 2 refurbishment projects I have ongoing in Liverpool and 1 in Cumbria.
I am very pleased that after 5 years we have finally got around to sorting the Cumbrian property out!
Real Madrid V Liverpool was a great result last night for us scousers and I am looking forward to the return leg at Anfield in just under 2 weeks from today.
Have a great day
Cheers
Dominic Farrell
Thursday, February 19, 2009
Acquisition: 60% Below Price Sold For In July 2007
I said I would get back to you with how we got on today with the two offers we were making for bank repossessed properties.
The first property in West Yorkshire sold for substantially above what we were willing to pay and was therefore a non-starter.
However, we secured the second property we had researched for 60% below what it sold for in July 2007. Staggering!!
Yielding 7.3% with strong positive cashflow, it brings to an end a very successful week for the Distressed Assets division of Jet-to-Let Investments.
Well done team.
Dominic Farrell
The first property in West Yorkshire sold for substantially above what we were willing to pay and was therefore a non-starter.
However, we secured the second property we had researched for 60% below what it sold for in July 2007. Staggering!!
Yielding 7.3% with strong positive cashflow, it brings to an end a very successful week for the Distressed Assets division of Jet-to-Let Investments.
Well done team.
Dominic Farrell
Dominic Farrell's Investors' Newsletter, UK Distressed Assets Success
Dear Investor
We are busy preparing for the 3 day “Understanding Economics To Beat The Recession” course in Liverpool starting tomorrow.
I have a very small role in the proceedings looking at the “Applied” side of the theory. I have revisited the "Product Life Cycle," "Boston Consulting Matrix" and "Porter's Five Forces Analysis" in order to provide a framework for analysing business opportunities in the present climate.
I am looking forward to the course and more importantly interacting with the people on it, all of whom I know well. Friday evening in Liverpool will be interesting, as will Saturday morning, but for a different reason!
There is a lot of information on the internet and many spam e-mails about UK distressed property. On the surface it looks easy to pick-up these bargain properties, but the reality is very different. Yes there are a lot of opportunities around, but it takes painstaking research and analysis to dig them out. You will not be presented truly great opportunities via a “list” of properties.
My team at Jet-to-Let Investments generally start by looking at 500 properties – yes 500! By the time they have been put through our “sieve process” a “Distressed Assets Checklist” which includes desk research, site visits, rental analysis and legal checks which takes considerable time, energy and resources, we offer on about 5 properties or only 1%.
Recent successes have been:
My view is that the best possible deals in the UK right now are obtained from bank repossessions. We only look at bank repossessed properties as they are desperate to sell in order to raise cash. We are making offers on two more properties today, but only if the price is right.
Value in today’s market is determined by one thing only – RENT. The X% below market estimate is a great safety net and locks in value, but the real value lies in the yield and net cashflow.
If investing in UK Distressed Assets at this very bespoke and highly researched level is something you may be interested in, then please fill in the form at:
http://www.jet-to-let-investments.com/UK/index.html
Best wishes
Dominic Farrell
We are busy preparing for the 3 day “Understanding Economics To Beat The Recession” course in Liverpool starting tomorrow.
I have a very small role in the proceedings looking at the “Applied” side of the theory. I have revisited the "Product Life Cycle," "Boston Consulting Matrix" and "Porter's Five Forces Analysis" in order to provide a framework for analysing business opportunities in the present climate.
I am looking forward to the course and more importantly interacting with the people on it, all of whom I know well. Friday evening in Liverpool will be interesting, as will Saturday morning, but for a different reason!
There is a lot of information on the internet and many spam e-mails about UK distressed property. On the surface it looks easy to pick-up these bargain properties, but the reality is very different. Yes there are a lot of opportunities around, but it takes painstaking research and analysis to dig them out. You will not be presented truly great opportunities via a “list” of properties.
My team at Jet-to-Let Investments generally start by looking at 500 properties – yes 500! By the time they have been put through our “sieve process” a “Distressed Assets Checklist” which includes desk research, site visits, rental analysis and legal checks which takes considerable time, energy and resources, we offer on about 5 properties or only 1%.
Recent successes have been:
- London – property approximately 30% below present estimated value with strong positive cashflow yielding 8%.
- Cheshire – property approximately 38% below present market value with strong positive cashflow yielding 9.8%
My view is that the best possible deals in the UK right now are obtained from bank repossessions. We only look at bank repossessed properties as they are desperate to sell in order to raise cash. We are making offers on two more properties today, but only if the price is right.
Value in today’s market is determined by one thing only – RENT. The X% below market estimate is a great safety net and locks in value, but the real value lies in the yield and net cashflow.
If investing in UK Distressed Assets at this very bespoke and highly researched level is something you may be interested in, then please fill in the form at:
http://www.jet-to-let-investments.com/UK/index.html
Best wishes
Dominic Farrell
Wednesday, February 18, 2009
Economics, UK Property and the Media
The title of the blog more or less sums up my day. We have the Economics Course starting in Liverpool on Friday and I have been preparing my short role in the proceedings which is the "Applied" elements on Sunday afternoon.
I have revisited the "Product Life Cycle," "Boston Consulting Matrix" and "Porter's Five Forces Analysis" in order to provide a framework for analysing business opportunities in the present climate. I am looking forward to the course and more importantly interacting with the people on it, all of whom I know well. Friday evening in Liverpool will be interesting, as will Saturday morning, but for a different reason!
Tomorrow we are hoping to secure a couple of UK properties, although it all depends on price. I'll let you know how we get on.
I am also quite excited about a few UK bank properties which crossed my desk today and will travel to see them next week. Again, I'll let you know the outcome.
Finally, the Jet-to-Let Magazine Top 10 investment countries as voted for by a sample of 500 of the latest subscribers is now in its third year and interest from the media is as keen as ever - I have been on the phone a few times today!
Let's hope Manchester United lose tonight!
Cheers
Dominic Farrell
I have revisited the "Product Life Cycle," "Boston Consulting Matrix" and "Porter's Five Forces Analysis" in order to provide a framework for analysing business opportunities in the present climate. I am looking forward to the course and more importantly interacting with the people on it, all of whom I know well. Friday evening in Liverpool will be interesting, as will Saturday morning, but for a different reason!
Tomorrow we are hoping to secure a couple of UK properties, although it all depends on price. I'll let you know how we get on.
I am also quite excited about a few UK bank properties which crossed my desk today and will travel to see them next week. Again, I'll let you know the outcome.
Finally, the Jet-to-Let Magazine Top 10 investment countries as voted for by a sample of 500 of the latest subscribers is now in its third year and interest from the media is as keen as ever - I have been on the phone a few times today!
Let's hope Manchester United lose tonight!
Cheers
Dominic Farrell
Tuesday, February 17, 2009
"Distressed Assets" Scores Another Success
The "Distressed Assets" division of Jet-to-Let Investments has scored another notable success.
Today, we have acquired a bank repossessed property in London for about 30% below a realistic present market value. The property has a conservative yield of 8% and has strong monthly positive cashflow.
As reflected in the Jet-to-Let Magazine 2009 investor survey, professional investors are now looking to the UK for bargains.
Estate agents are reporting increasing activity with base rates at historical lows. In my view, if the banks were still lending money, then property prices would stabilise and possibly rise given the recent increase in enquiries?
In the meantime, whilst the market is suppressed, take this opportunity to invest in properties at significant discounts to present market value. These opportunities do not grow on trees and require painstaking and time consuming research, including visits and legal enquiries.
But when you are successful, it is worth all the effort.
If you wish to know more on how you can benefit from these opportunities, including our finance packages, then e-mail Henry at henry@jet-to-let-investments.com and leave your telephone number and he will call you back.
Dominic Farrell
Today, we have acquired a bank repossessed property in London for about 30% below a realistic present market value. The property has a conservative yield of 8% and has strong monthly positive cashflow.
As reflected in the Jet-to-Let Magazine 2009 investor survey, professional investors are now looking to the UK for bargains.
Estate agents are reporting increasing activity with base rates at historical lows. In my view, if the banks were still lending money, then property prices would stabilise and possibly rise given the recent increase in enquiries?
In the meantime, whilst the market is suppressed, take this opportunity to invest in properties at significant discounts to present market value. These opportunities do not grow on trees and require painstaking and time consuming research, including visits and legal enquiries.
But when you are successful, it is worth all the effort.
If you wish to know more on how you can benefit from these opportunities, including our finance packages, then e-mail Henry at henry@jet-to-let-investments.com and leave your telephone number and he will call you back.
Dominic Farrell
Monday, February 16, 2009
FOREX: Global Nervousness Weights On Sterling
GLOBAL NERVOUSNESS WEIGHS ON STERLING
The prospect of "quantitative easing" by the Bank of England turns off investors. House prices lose their impact. President Obama's stimulus package leaves all markets unconvinced. Economic data from the Euro zone were no better than those from Britain.
Sterling gave back four of the previous fortnight's hard-won cents, falling from €1.1450 to this morning's €1.1150 opening in London. The high came last Monday at €1.1550. The low was on Thursday at €1.10.
Bizarrely, for the third week running, it was Barclays that opened the batting for sterling. Investors were enthusiastic about its announcement of better than expected profits, setting a positive tone for the pound. More good news came with the British Retail Consortium's report that sales in January showed the biggest monthly improvement since May.
It was the first increase of any sort since September. House prices have taken a back seat in recent weeks. Investors are more concerned about the recession and the health - or otherwise - of the financial infrastructure than they are about further confirmation that the property market remains soggy.
Neither the lowest turnover for 31 years, as revealed by the RICS, nor the 1.2% monthly rise in asking prices reported by Rightmove had any appreciable impact. Even Rightmove admitted the improvement was a function of "false optimism" among would-be sellers.
Most distressing for the pound was Bank of England Governor Mervyn King's press conference after publication of the Bank's Quarterly Inflation Report. Among other things he said we were in the midst of a "deep recession" that could see the economy shrinking at a 4% annual rate this summer. (The CBI sees the economy shrinking by 3.3% this year.)
Investors were less concerned about the Bank's recognition of the blindingly obvious state of the economy than they were about the proposed remedy: Quantitative easing or, as the media see it, "printing money".
The Monetary Policy Committee has not yet agreed on this course of action but the Governor gave every impression that it would do so before long.
The main driver for currency movements during the week was the progress of President Obama's stimulus bill through Congress. The American Recovery and Reinvestment Act will spend $787,000,000,000 on everything from tax breaks to "weatherizing" (insulating) homes.
Unfortunately, markets are not convinced that it will do anything other than blow more money away in return for unpredictable economic benefits. This uncertainty encouraged the hoarding of safe-haven currencies and a drift away from the riskier ones, including sterling.
The euro had its own share of negative economic news. Investor confidence fell two points to another record low of -36. The only crumb of comfort was an improvement in investors' outlook; the expectations measure went up from -31.5 to -18.25.
The euro's biggest hurdle was Germany's performance in the fourth quarter of last year. Where Britain's GDP shrank by 1.5% in Q4 the contraction in Germany was 2.1%. It did not look good. The figure for the Euro zone as a whole was better but not stellar; like the UK, the Euro zone economy shrank by 1.5%.
Nor was the Euroland industrial production figure any more impressive: The 2.6% monthly fall in December was slightly bigger than forecast and the 12% annual decline was considerably more than the -9.5% that investors had been expecting.
In Rome at the weekend the G7 finance ministers' meeting had little to say about exchange rates. Because it came up with no panacea for the world's economic ills investors took it as carte blanche to fill their boots with yen and Swiss Francs and to sell the riskier currencies, including the pound.
As if to prove its independence the pound refused to hold above the three month moving average that we discussed last week. It is still there or thereabouts but its performance is not as positive as it could be and the correction could go further this week if CPI inflation in Britain falls to even lower levels than the 3.1% we saw last month.
Unless and until the pound can break above the €1.1550 November low, buyers of the euro should hedge half of their requirement, leaving the remainder uncovered in anticipation of better levels in the future. Use a stop order to protect the downside in case of unexpected alarms.
Source: Moneycorp
The prospect of "quantitative easing" by the Bank of England turns off investors. House prices lose their impact. President Obama's stimulus package leaves all markets unconvinced. Economic data from the Euro zone were no better than those from Britain.
Sterling gave back four of the previous fortnight's hard-won cents, falling from €1.1450 to this morning's €1.1150 opening in London. The high came last Monday at €1.1550. The low was on Thursday at €1.10.
Bizarrely, for the third week running, it was Barclays that opened the batting for sterling. Investors were enthusiastic about its announcement of better than expected profits, setting a positive tone for the pound. More good news came with the British Retail Consortium's report that sales in January showed the biggest monthly improvement since May.
It was the first increase of any sort since September. House prices have taken a back seat in recent weeks. Investors are more concerned about the recession and the health - or otherwise - of the financial infrastructure than they are about further confirmation that the property market remains soggy.
Neither the lowest turnover for 31 years, as revealed by the RICS, nor the 1.2% monthly rise in asking prices reported by Rightmove had any appreciable impact. Even Rightmove admitted the improvement was a function of "false optimism" among would-be sellers.
Most distressing for the pound was Bank of England Governor Mervyn King's press conference after publication of the Bank's Quarterly Inflation Report. Among other things he said we were in the midst of a "deep recession" that could see the economy shrinking at a 4% annual rate this summer. (The CBI sees the economy shrinking by 3.3% this year.)
Investors were less concerned about the Bank's recognition of the blindingly obvious state of the economy than they were about the proposed remedy: Quantitative easing or, as the media see it, "printing money".
The Monetary Policy Committee has not yet agreed on this course of action but the Governor gave every impression that it would do so before long.
The main driver for currency movements during the week was the progress of President Obama's stimulus bill through Congress. The American Recovery and Reinvestment Act will spend $787,000,000,000 on everything from tax breaks to "weatherizing" (insulating) homes.
Unfortunately, markets are not convinced that it will do anything other than blow more money away in return for unpredictable economic benefits. This uncertainty encouraged the hoarding of safe-haven currencies and a drift away from the riskier ones, including sterling.
The euro had its own share of negative economic news. Investor confidence fell two points to another record low of -36. The only crumb of comfort was an improvement in investors' outlook; the expectations measure went up from -31.5 to -18.25.
The euro's biggest hurdle was Germany's performance in the fourth quarter of last year. Where Britain's GDP shrank by 1.5% in Q4 the contraction in Germany was 2.1%. It did not look good. The figure for the Euro zone as a whole was better but not stellar; like the UK, the Euro zone economy shrank by 1.5%.
Nor was the Euroland industrial production figure any more impressive: The 2.6% monthly fall in December was slightly bigger than forecast and the 12% annual decline was considerably more than the -9.5% that investors had been expecting.
In Rome at the weekend the G7 finance ministers' meeting had little to say about exchange rates. Because it came up with no panacea for the world's economic ills investors took it as carte blanche to fill their boots with yen and Swiss Francs and to sell the riskier currencies, including the pound.
As if to prove its independence the pound refused to hold above the three month moving average that we discussed last week. It is still there or thereabouts but its performance is not as positive as it could be and the correction could go further this week if CPI inflation in Britain falls to even lower levels than the 3.1% we saw last month.
Unless and until the pound can break above the €1.1550 November low, buyers of the euro should hedge half of their requirement, leaving the remainder uncovered in anticipation of better levels in the future. Use a stop order to protect the downside in case of unexpected alarms.
Source: Moneycorp
PRESS RELEASE: Top 10 Property Investment Countries for 2009 Revealed in Jet-to-Let Survey
The top 10 countries of most interest to jet-to-let property investors in 2009 have been revealed in a survey conducted by property investment magazine, Jet-to-Let.
In order to provide an up-to-date snapshot of investor intentions in 2009, Jet-to-Let magazine surveyed 500 new readers who recently subscribed to its free investment magazine. The results, which provide an interesting comparison with a similar survey produced last year, show that investors continue to be interested in investing in property. Interest remains firm in some countries, has declined in others and there is a shift towards bargain properties in the United Kingdom and the United States.
Over 36% of investors said they wish to invest in foreign property in the next 12 months, with 27% keen to invest in the next 6 months. The number one preferred country for investors was Cyprus, which is unchanged from 2008, with France and the United States ranked second and third. There were three new entrants this year – India ranked at five, the United Kingdom ranked at eight and Greece in joint tenth place with Turkey.
Dominic Farrell, editor of Jet-to-Let magazine and author of the bestselling property investment book, The Jet to Let Bible, says he’s not surprised that the United Kingdom had entered the top 10. “There are presently fantastic bargains in the UK for investors with the foresight and courage to see beyond the current economic climate. This is particularly so if buyers are holding strong currencies such as the US dollar or Euro which can add an extra 20% in terms of value” he says.
“France and Spain will always be in the top ten for UK and Irish buyers, but the relegation of Spain to number six reflects the change in market conditions and an erosion of confidence in the Spanish market,” Dominic explains.
Brazil and Germany dropped out of the 2009 top 10 league, after being featured last year.
Summing up the current choices of property investors, Dominic says, “Given the current economic climate and the negative media coverage of property investment, this survey shows that investors can see beyond today and realise that property has few rivals in terms of medium to long-term prosperity and risk. Given a choice between equities or other financial instruments and property, I know where I’ll continue to put my money. This is a moment of opportunity for investors and those who take action will reap the benefits in years to come. We will not always be in a recession and the economic policies being adopted now, will eventually bear fruit. The catalyst for a recovery will be a return to lending by banks around the world.”
Notes for Editors
Jet-to-Let magazine is a free quarterly subscription publication aimed at investors and homebuyers seeking superior returns in domestic and overseas property markets. It is currently delivered to subscribers in 74 countries worldwide.
Jet-to-Let magazine is edited by Dominic Farrell, author of the bestselling property investment book, The Jet to Let Bible. The magazine brings together the views of respected professional investors, developers, financiers and journalists and is a must-have source of quality investment advice for both novice and experienced investors alike. For more details, or to subscribe for free, see www.jet-to-let-magazine.com
The Jet-to-Let 2009 top 10 results are:
Cyprus
France
USA
United Arab Emirates
India
Spain
Italy
United Kingdom
Morocco
Greece and Turkey (joint 10th)
The Jet-to-Let 2008 top 10 survey results were:
Cyprus
France
Spain
Germany
USA
Morocco
Italy
United Arab Emirates
Turkey
Brazil
For more details or interview requests with Dominic Farrell, contact: +44 (0) 151 244 5432
In order to provide an up-to-date snapshot of investor intentions in 2009, Jet-to-Let magazine surveyed 500 new readers who recently subscribed to its free investment magazine. The results, which provide an interesting comparison with a similar survey produced last year, show that investors continue to be interested in investing in property. Interest remains firm in some countries, has declined in others and there is a shift towards bargain properties in the United Kingdom and the United States.
Over 36% of investors said they wish to invest in foreign property in the next 12 months, with 27% keen to invest in the next 6 months. The number one preferred country for investors was Cyprus, which is unchanged from 2008, with France and the United States ranked second and third. There were three new entrants this year – India ranked at five, the United Kingdom ranked at eight and Greece in joint tenth place with Turkey.
Dominic Farrell, editor of Jet-to-Let magazine and author of the bestselling property investment book, The Jet to Let Bible, says he’s not surprised that the United Kingdom had entered the top 10. “There are presently fantastic bargains in the UK for investors with the foresight and courage to see beyond the current economic climate. This is particularly so if buyers are holding strong currencies such as the US dollar or Euro which can add an extra 20% in terms of value” he says.
“France and Spain will always be in the top ten for UK and Irish buyers, but the relegation of Spain to number six reflects the change in market conditions and an erosion of confidence in the Spanish market,” Dominic explains.
Brazil and Germany dropped out of the 2009 top 10 league, after being featured last year.
Summing up the current choices of property investors, Dominic says, “Given the current economic climate and the negative media coverage of property investment, this survey shows that investors can see beyond today and realise that property has few rivals in terms of medium to long-term prosperity and risk. Given a choice between equities or other financial instruments and property, I know where I’ll continue to put my money. This is a moment of opportunity for investors and those who take action will reap the benefits in years to come. We will not always be in a recession and the economic policies being adopted now, will eventually bear fruit. The catalyst for a recovery will be a return to lending by banks around the world.”
Notes for Editors
Jet-to-Let magazine is a free quarterly subscription publication aimed at investors and homebuyers seeking superior returns in domestic and overseas property markets. It is currently delivered to subscribers in 74 countries worldwide.
Jet-to-Let magazine is edited by Dominic Farrell, author of the bestselling property investment book, The Jet to Let Bible. The magazine brings together the views of respected professional investors, developers, financiers and journalists and is a must-have source of quality investment advice for both novice and experienced investors alike. For more details, or to subscribe for free, see www.jet-to-let-magazine.com
The Jet-to-Let 2009 top 10 results are:
Cyprus
France
USA
United Arab Emirates
India
Spain
Italy
United Kingdom
Morocco
Greece and Turkey (joint 10th)
The Jet-to-Let 2008 top 10 survey results were:
Cyprus
France
Spain
Germany
USA
Morocco
Italy
United Arab Emirates
Turkey
Brazil
For more details or interview requests with Dominic Farrell, contact: +44 (0) 151 244 5432
Sunday, February 15, 2009
Ross Kemp - Return To Afghanistan - Sky One
I first met Ross Kemp about 14 years ago at a boxing event in Knightsbridge, London. We had a chat in the bar after the bouts.
He is obviously a well known actor, and at the time I think he was still with Eastenders.
I must say, I have been massively impressed with the personal courage, fortitude and journalism he has shown in his current documentary, Return to Afghanistan, on Sky One which I watched tonight.
I commend it to you.
Cheers
Dominic Farrell
He is obviously a well known actor, and at the time I think he was still with Eastenders.
I must say, I have been massively impressed with the personal courage, fortitude and journalism he has shown in his current documentary, Return to Afghanistan, on Sky One which I watched tonight.
I commend it to you.
Cheers
Dominic Farrell
The Royal Military Academy, Sandhurst - Nicky Campbell's Breakfast Show
It's a Sunday and I'm posting a blog!
The Reason:
I know many readers are interested in military matters and tomorrow, Monday 16th February 2009, Nicky Campbell's Radio 5 Live Breakfast Show will come from The Royal Military Academy, Sandhurst.
You may find it interesting.
I'll have to set the alarm?
Cheers
Dominic Farrell
The Reason:
I know many readers are interested in military matters and tomorrow, Monday 16th February 2009, Nicky Campbell's Radio 5 Live Breakfast Show will come from The Royal Military Academy, Sandhurst.
You may find it interesting.
I'll have to set the alarm?
Cheers
Dominic Farrell
Friday, February 13, 2009
Dominic Farrell's Investors' Newsletter, The Recession, Construction Blog And Nanook Of The North
Dear Investor
‘With capacity being stripped out of the system - inventory, costs, people, production - those that survive should enjoy some strong pricing power. Stand by for buoyant recovery in earnings - and inflation.’
This is an extract from Citywire which is an excellent on-line resource for investors which I try to read most days. The full article can be accessed here
The passage summarises my position on the present economic situation in the UK. The money tsunami which I have written about on my blog and in these newsletters is gathering offshore and will one day arrive as the capacity of the system i.e. “supply” is squeezed.
The result will be rising prices – inflation. The only question is when, but the catalyst will be the resumption of lending by banks.
Amongst all the doom and gloom in the media and in wider society it is important to put the present situation into some form of wider perspective.
I am not underestimating the personal tragedy of losing your job, or the stress of the threat of losing your job, but as investors we have to see through the fog and take bold decisions.
Many investors are seizing the moment and acquiring other companies for bargain basement prices. Likewise, bank repossessed property in the UK, is an opportunity that many of us will not see again on this scale and at these prices. I have been amazed at some of the prices we have been negotiating recently.
I would like to emphasise that we do not negotiate with private individuals, but we have access to these deals after the properties have been taken back by the bank.
This window is short and now is the time for action.
If you wish to speak to Henry Powell-Jones about this, then give him a call on +44 (0) 151 244 5657
If you wish to have a greater understanding of economic events, their impact and how to look beyond the present gloom, then join us in Liverpool next weekend for our 3 day “Understanding Economics To Beat The Recession” course. We have only two places remaining.
Further details and syllabus can be found here
The Grove Spa Resort, Mazotos, Cyprus
The General Constructions Company (GCC) has been appointed as the prime contractor for The Grove Spa Resort. GCC is undoubtedly one of the best construction companies in the region and has been established for 62 years and we are proud to be working with them on this landmark project.
Yesterday, they appointed their sub-contractors and the topographical survey for Phase 2 of the construction was completed this week.
The additional plot of land we purchased before Christmas has also now been prepared having been given the go-ahead by the planning authorities.
Having been given the green light by the planners, we’re ready to go!
This e-mail goes to about 14,000 investors around the world, but this project only concerns a small fraction of that number.
Additionally, I have purchased many off-plan properties in the past and understand the frustrations of not being kept up-to-date with the projects I have invested in.
So, we have created a Construction Blog for buyers and investors where you can follow progress on a daily basis. My IT department are looking at a number of options, but in the meantime we will use good old fashioned words and pictures.
I know that account managers have been in regular touch with buyers outlining the changes to the project and I appreciate your enthusiasm and approval for the enhancements we have made.
For the rest of the readership, you will be spared the detail, but I will comment on the broader issues from time to time, which I hope you will find interesting.
Our press release about the appointment of GCC has been picked up by the media and one particularly influential magazine which will carry a feature. If you wish to read it click here
Henry Powell-Jones
As many of you are aware, we have a strong military bias in the company with 5 of us having military experience.
Henry Powell Jones, of Jet-to-Let Investments, is running the London Marathon in April for the Army Benevolent Fund (ABF)
“For over sixty years the Army Benevolent Fund (ABF) has worked tirelessly to provide support to serving soldiers, former soldiers and their families in times of need.
The people we support include those with disabilities or mental illness, people experiencing homelessness or unemployment, and older people.”
If you feel you can help, please donate here:
http://www.justgiving.com/henrypowelljones
Thanks
International Wealth Meeting – London
Nick will be hosting the International Wealth Network meeting in London Monday 23rd February 2009. This is the re-arranged date due to the bad weather on the 2nd February.
Further details can be found at here
Jon, our operations manager, found a novel way to get to work that day!
Nanook of the North!
Have a great weekend!
Dominic Farrell
‘With capacity being stripped out of the system - inventory, costs, people, production - those that survive should enjoy some strong pricing power. Stand by for buoyant recovery in earnings - and inflation.’
This is an extract from Citywire which is an excellent on-line resource for investors which I try to read most days. The full article can be accessed here
The passage summarises my position on the present economic situation in the UK. The money tsunami which I have written about on my blog and in these newsletters is gathering offshore and will one day arrive as the capacity of the system i.e. “supply” is squeezed.
The result will be rising prices – inflation. The only question is when, but the catalyst will be the resumption of lending by banks.
Amongst all the doom and gloom in the media and in wider society it is important to put the present situation into some form of wider perspective.
I am not underestimating the personal tragedy of losing your job, or the stress of the threat of losing your job, but as investors we have to see through the fog and take bold decisions.
Many investors are seizing the moment and acquiring other companies for bargain basement prices. Likewise, bank repossessed property in the UK, is an opportunity that many of us will not see again on this scale and at these prices. I have been amazed at some of the prices we have been negotiating recently.
I would like to emphasise that we do not negotiate with private individuals, but we have access to these deals after the properties have been taken back by the bank.
This window is short and now is the time for action.
If you wish to speak to Henry Powell-Jones about this, then give him a call on +44 (0) 151 244 5657
If you wish to have a greater understanding of economic events, their impact and how to look beyond the present gloom, then join us in Liverpool next weekend for our 3 day “Understanding Economics To Beat The Recession” course. We have only two places remaining.
Further details and syllabus can be found here
The Grove Spa Resort, Mazotos, Cyprus
The General Constructions Company (GCC) has been appointed as the prime contractor for The Grove Spa Resort. GCC is undoubtedly one of the best construction companies in the region and has been established for 62 years and we are proud to be working with them on this landmark project.
Yesterday, they appointed their sub-contractors and the topographical survey for Phase 2 of the construction was completed this week.
The additional plot of land we purchased before Christmas has also now been prepared having been given the go-ahead by the planning authorities.
Having been given the green light by the planners, we’re ready to go!
This e-mail goes to about 14,000 investors around the world, but this project only concerns a small fraction of that number.
Additionally, I have purchased many off-plan properties in the past and understand the frustrations of not being kept up-to-date with the projects I have invested in.
So, we have created a Construction Blog for buyers and investors where you can follow progress on a daily basis. My IT department are looking at a number of options, but in the meantime we will use good old fashioned words and pictures.
I know that account managers have been in regular touch with buyers outlining the changes to the project and I appreciate your enthusiasm and approval for the enhancements we have made.
For the rest of the readership, you will be spared the detail, but I will comment on the broader issues from time to time, which I hope you will find interesting.
Our press release about the appointment of GCC has been picked up by the media and one particularly influential magazine which will carry a feature. If you wish to read it click here
Henry Powell-Jones
As many of you are aware, we have a strong military bias in the company with 5 of us having military experience.
Henry Powell Jones, of Jet-to-Let Investments, is running the London Marathon in April for the Army Benevolent Fund (ABF)
“For over sixty years the Army Benevolent Fund (ABF) has worked tirelessly to provide support to serving soldiers, former soldiers and their families in times of need.
The people we support include those with disabilities or mental illness, people experiencing homelessness or unemployment, and older people.”
If you feel you can help, please donate here:
http://www.justgiving.com/henrypowelljones
Thanks
International Wealth Meeting – London
Nick will be hosting the International Wealth Network meeting in London Monday 23rd February 2009. This is the re-arranged date due to the bad weather on the 2nd February.
Further details can be found at here
Jon, our operations manager, found a novel way to get to work that day!
Nanook of the North!
Have a great weekend!
Dominic Farrell
Thursday, February 12, 2009
UK Distressed Assets - Busy Day
The team has had a very busy day now that we have shortlisted the UK bank repossessed properties we wish to target next week.
They have been researching, travelling, viewing and number crunching for the past two weeks on our next batch of properties. The intensity and sheer volume of work they get through is impressive.
Some of the deals are outstanding and the excitement in the main office is contagious. I have just heard Henry comment on the level of postive cashflow a target property will produce.
I spent the morning doing some "Fiz" (fitness) and came into Liverpool for a pre-arranged meeting this afternoon which was quite enjoyable given the nature of the subject matter.
Now for an early dinner. Good day in the office.
Dominic Farrell
They have been researching, travelling, viewing and number crunching for the past two weeks on our next batch of properties. The intensity and sheer volume of work they get through is impressive.
Some of the deals are outstanding and the excitement in the main office is contagious. I have just heard Henry comment on the level of postive cashflow a target property will produce.
I spent the morning doing some "Fiz" (fitness) and came into Liverpool for a pre-arranged meeting this afternoon which was quite enjoyable given the nature of the subject matter.
Now for an early dinner. Good day in the office.
Dominic Farrell
The Grove Spa Resort, Mazotos - Sub-Contractor Appointments
It's a busy day in Cyprus with GCC, the prime contractor for The Grove Spa Resort, Mazotos appointing the sub-contractors. That was quick! We only appointed them a couple of days ago.
Further details can be found on the construction blog at:
www.thegrovesparesort.blogspot.com
Dominic Farrell
Further details can be found on the construction blog at:
www.thegrovesparesort.blogspot.com
Dominic Farrell
Spain V England
You could only marvel at the confidence, skill and technique of the Spanish players last night who gave our lads a lesson in football.
I think Spain are rated number 1 in the FIFA rankings with England down at eight. It showed last night.
However, Capello is doing a great job and as a friendly, if there is such a thing these days, he has much to ponder after the trip to Seville.
Good luck
Dominic Farrell
I think Spain are rated number 1 in the FIFA rankings with England down at eight. It showed last night.
However, Capello is doing a great job and as a friendly, if there is such a thing these days, he has much to ponder after the trip to Seville.
Good luck
Dominic Farrell
Wednesday, February 11, 2009
Property Entrepreneur Day In Liverpool And A Surprise Encounter
We had a briefing day for Group 2 of the Property Entrepreneur Programme in Liverpool yesterday. These entrepreneurs have successfully completed our training and were here to back-brief on their progress and receive updates from Henry and Alun.
What a great bunch of people - lots of positive energy, determination and the right mental attitude to succeed - very impressive.
Interestingly, in the pub after the training day, there was a group of men having something to eat and drink or two: Kenny Dalglish, Alan Hansen, Alan Kennedy and Gary Gillespie!
Come on the Reds!
Dominic Farrell
What a great bunch of people - lots of positive energy, determination and the right mental attitude to succeed - very impressive.
Interestingly, in the pub after the training day, there was a group of men having something to eat and drink or two: Kenny Dalglish, Alan Hansen, Alan Kennedy and Gary Gillespie!
Come on the Reds!
Dominic Farrell
Tuesday, February 10, 2009
PRESS RELEASE The Grove Spa Resort Cyprus Appoints High Profile Prime Contractor
PRESS RELEASE The Grove Spa Resort, Cyprus – Appointment of General Constructions Company Ltd (GCC) as Prime Contractor.
InvestinCyprus.com Developers has appointed the General Constructions Company (GCC) as the prime contractor for its landmark 5 Star mixed-use scheme, The Grove Spa Resort in Mazotos, Cyprus.
GCC was founded in 1947 and is one of the leading construction companies in Cyprus with its head office in Nicosia.
GCC has constructed many prestigious projects in Cyprus, including: The Annabelle 5 Star Hotel in Paphos, Ayia Napa Water Park, IKEA, and The Embassy of The People’s Republic of China to name a few.
The company has also undertaken large projects for the Cyprus government and UK Ministry of Defence. Further, the company has successfully operated in Saudi Arabia for over 30 years and is now establishing a strong presence in Bahrain.
The motto of GCC is “Quality First” and the company this week celebrates its 62nd year of delivering quality construction projects.
Commenting on the appointment of GCC, Stephanie Fairhurst, Managing Director of InvestinCyprus.com Developers said,
“ The appointment of GCC as our main contractor shows our commitment to delivering a top quality resort by employing only the very best professionals for this outstanding project. GCC has a strong reputation for excellence and professionalism and we are delighted to be working together.”
Phase 1 of the build of The Grove Spa Resort was completed at Christmas before the purchase of an additional plot of land to add further facilities to the scheme.
The revised plans have now been approved by the authorities and Phase 2 of the construction begins this week.
InvestinCyprus.com Developers Director Dominic Farrell says:
“We couldn’t refuse the opportunity to purchase an additional plot of land adjacent to the scheme and buyers have been extremely pleased with the extra value the enhanced facilities have provided.”
Mr Farrell continues, “Testament to the appeal of The Grove Spa Resort is that, even in the present climate, we still have strong interest from buyers and continue to make sales, despite having sold 80% of the scheme before we started construction.”
Notes for Editors:
The Grove Spa Resort in Mazotos, Cyprus is a 5 star mixed-use scheme due for completion in 2010.
In addition to 128 residential units, there is a restaurant, supermarket, on-site rental and resale office, concierge service, health spa, gymnasium, dance studio, hydrotherapy pool, 3 outdoor pools, tennis court, sports TV room, children’s play area and secure underground parking and storage units.
There has been worldwide interest in this project with buyers from UK, Ireland, Cyprus, Hong Kong, Poland, Malaysia, Dubai, Bahrain, Sweden, Italy, India, South Africa, Singapore and Azerbaijan.
For further information and interviews please contact Dominic Farrell on +44 (0) 151 244 5432
InvestinCyprus.com Developers has appointed the General Constructions Company (GCC) as the prime contractor for its landmark 5 Star mixed-use scheme, The Grove Spa Resort in Mazotos, Cyprus.
GCC was founded in 1947 and is one of the leading construction companies in Cyprus with its head office in Nicosia.
GCC has constructed many prestigious projects in Cyprus, including: The Annabelle 5 Star Hotel in Paphos, Ayia Napa Water Park, IKEA, and The Embassy of The People’s Republic of China to name a few.
The company has also undertaken large projects for the Cyprus government and UK Ministry of Defence. Further, the company has successfully operated in Saudi Arabia for over 30 years and is now establishing a strong presence in Bahrain.
The motto of GCC is “Quality First” and the company this week celebrates its 62nd year of delivering quality construction projects.
Commenting on the appointment of GCC, Stephanie Fairhurst, Managing Director of InvestinCyprus.com Developers said,
“ The appointment of GCC as our main contractor shows our commitment to delivering a top quality resort by employing only the very best professionals for this outstanding project. GCC has a strong reputation for excellence and professionalism and we are delighted to be working together.”
Phase 1 of the build of The Grove Spa Resort was completed at Christmas before the purchase of an additional plot of land to add further facilities to the scheme.
The revised plans have now been approved by the authorities and Phase 2 of the construction begins this week.
InvestinCyprus.com Developers Director Dominic Farrell says:
“We couldn’t refuse the opportunity to purchase an additional plot of land adjacent to the scheme and buyers have been extremely pleased with the extra value the enhanced facilities have provided.”
Mr Farrell continues, “Testament to the appeal of The Grove Spa Resort is that, even in the present climate, we still have strong interest from buyers and continue to make sales, despite having sold 80% of the scheme before we started construction.”
Notes for Editors:
The Grove Spa Resort in Mazotos, Cyprus is a 5 star mixed-use scheme due for completion in 2010.
In addition to 128 residential units, there is a restaurant, supermarket, on-site rental and resale office, concierge service, health spa, gymnasium, dance studio, hydrotherapy pool, 3 outdoor pools, tennis court, sports TV room, children’s play area and secure underground parking and storage units.
There has been worldwide interest in this project with buyers from UK, Ireland, Cyprus, Hong Kong, Poland, Malaysia, Dubai, Bahrain, Sweden, Italy, India, South Africa, Singapore and Azerbaijan.
For further information and interviews please contact Dominic Farrell on +44 (0) 151 244 5432
Monday, February 9, 2009
UK Recession - Conflicting Signals From Liverpool
I was out in Liverpool city centre over the weekend with some friends for a bite to eat and a couple of beers. The topic of conversion was initially about The Grove Spa Resort in Cyprus as they are all buyers and wanted to know more about the extra facilities we are building.
More importantly, they wanted to know,
"What will the underground sports TV room be like?
That was too much like work for me so we moved the conversation on. The reality is that Stephanie and the staff know the detail, not me!
After a quick chat about the goings on at Liverpool Football Club, we had a long debate about the "real" state of the UK economy.
My cousin is a doorman at a well known night venue in Liverpool and I always go along to say hello whenever I am out in Town. What he doesn't know about what's going on in Liverpool is not worth knowing.
Interestingly, he said that his venue has never been busier, which I must admit to being surprised given the current economic climate.
But then earlier that night, we found it difficult to get into a couple of smart restaurants without reservations. We ended up going to one where I knew the owner - this is February and not so long after Christmas!
Where am I going with this?
Well, in terms of restaurants and bars in Liverpool, the venues which have "appeal" are doing well and those which don't are struggling. Likewise the best restaurants are thriving whilst the lesser ones are closing.
The recession is certainly hitting some businesses hard, but certainly not all. Presently it is very patchy and those with good strong flexible business models are coping well.
I also think that there is a psychological factor at play. In Economics, it is called Behavioural Economics or Behavioural Finance.
In a recession, people are content to give up the new car and persevere with the old one for a lot longer. People are also content to keep wearing the same old coat and jump a bus and not a taxi.
Increasingly these days, however, people will not compromise on social and leisure activities or holidays.
My UK holiday lettings business has never been so busy whilst in Cyprus we are seeing unprecedented demand.
I placed a villa up for rent in November 2008 (3 months ago) and already have 25 weeks booked. Others have similar experiences.
My view is that competitively priced, quality products in the social/leisure sector will continue to do well throughout the recession.
Does your product fit the bill?
Dominic Farrell
More importantly, they wanted to know,
"What will the underground sports TV room be like?
That was too much like work for me so we moved the conversation on. The reality is that Stephanie and the staff know the detail, not me!
After a quick chat about the goings on at Liverpool Football Club, we had a long debate about the "real" state of the UK economy.
My cousin is a doorman at a well known night venue in Liverpool and I always go along to say hello whenever I am out in Town. What he doesn't know about what's going on in Liverpool is not worth knowing.
Interestingly, he said that his venue has never been busier, which I must admit to being surprised given the current economic climate.
But then earlier that night, we found it difficult to get into a couple of smart restaurants without reservations. We ended up going to one where I knew the owner - this is February and not so long after Christmas!
Where am I going with this?
Well, in terms of restaurants and bars in Liverpool, the venues which have "appeal" are doing well and those which don't are struggling. Likewise the best restaurants are thriving whilst the lesser ones are closing.
The recession is certainly hitting some businesses hard, but certainly not all. Presently it is very patchy and those with good strong flexible business models are coping well.
I also think that there is a psychological factor at play. In Economics, it is called Behavioural Economics or Behavioural Finance.
In a recession, people are content to give up the new car and persevere with the old one for a lot longer. People are also content to keep wearing the same old coat and jump a bus and not a taxi.
Increasingly these days, however, people will not compromise on social and leisure activities or holidays.
My UK holiday lettings business has never been so busy whilst in Cyprus we are seeing unprecedented demand.
I placed a villa up for rent in November 2008 (3 months ago) and already have 25 weeks booked. Others have similar experiences.
My view is that competitively priced, quality products in the social/leisure sector will continue to do well throughout the recession.
Does your product fit the bill?
Dominic Farrell
Jet-to-Let Magazine 2009 Subscriber Survey
My IT Department has been busy today putting together the final figures for Jet-to-Let Magazine's 2009 Subscriber Survey - Top 10
This will be the third year in which we have published the Top 10 list and is seen by the industry as a good yardstick for buyers/investors intentions.
Each year there are surprises and this year is no exception.
Please keep an eye out for the press release.
Dominic Farrell
This will be the third year in which we have published the Top 10 list and is seen by the industry as a good yardstick for buyers/investors intentions.
Each year there are surprises and this year is no exception.
Please keep an eye out for the press release.
Dominic Farrell
Great News For Property Buyers In Cyprus: 14 New Golf Courses Approved
The Cyprus government has finally approved the creation of 14 new golf courses, which will bring the total number on the island to 17. The decision was finalised at a cabinet meeting last Thursday (5th February 2009).
Government Spokesman Stefanos Stefanou said the actual decision had been taken by the previous government.
“It was taken for the purpose of strengthening the tourism product in Cyprus and boosting economic activity,” he said.
Dominic Farrell, director of InvestinCyprus.com Developers, the company behind the much acclaimed Grove Spa Resort in Mazotos says:
“This is excellent news for homebuyers and investors alike and will provide a substantial boost to rental demand, re-sales and economic activity in general.
Additionally, seasonality will be reduced in areas surrounding courses as the winter months in Cyprus are ideal for playing golf. Combined with the increase in low cost flights from airlines such as easyJet, we will see a sharp increase in visitors to the island.
Owners of high quality properties with all-year-round facilities will benefit most.”
For an article by Jet-to-Let Magazine on the benefits of investing near golf courses click here
Government Spokesman Stefanos Stefanou said the actual decision had been taken by the previous government.
“It was taken for the purpose of strengthening the tourism product in Cyprus and boosting economic activity,” he said.
Dominic Farrell, director of InvestinCyprus.com Developers, the company behind the much acclaimed Grove Spa Resort in Mazotos says:
“This is excellent news for homebuyers and investors alike and will provide a substantial boost to rental demand, re-sales and economic activity in general.
Additionally, seasonality will be reduced in areas surrounding courses as the winter months in Cyprus are ideal for playing golf. Combined with the increase in low cost flights from airlines such as easyJet, we will see a sharp increase in visitors to the island.
Owners of high quality properties with all-year-round facilities will benefit most.”
For an article by Jet-to-Let Magazine on the benefits of investing near golf courses click here
Friday, February 6, 2009
Dominic Farrell Comments In The Irish Sunday Business Post
Commercial tenants are feeling the blues
Sunday, January 25, 2009 By Diarmaid Condon
The recent instability in the worldwide economy has prompted an interesting question - have we seen the end of blue chip tenants, as we have come to know them?
In the property industry, a blue chip tenant is a term generally used to describe a company which is of the highest quality, and which would be considered as low-risk as it is possible to get - with regard to payment default.
Unfortunately for investors, severe cost cutting and a huge increase in companies going bankrupt are making commercial property landlords very nervous indeed. While commercial tenancies are renowned for their stability, when they go wrong, they tend to do so spectacularly.
When a tenant or its parent company files for bankruptcy, landlords are left with no contract and no tenant. In a climate such as this, with a surplus of property and a dwindling pool of tenants, it can be virtually impossible to find new tenants to take up the vacant lease.
If the landlord in question has substantial loans on the property, then it can lead to a bankrupt landlord very quickly. This issue is taxing landlords in a number of overseas markets, including the US, Britain and Germany.
‘‘It had been rare to see commercial leases show renewal reductions, but we are now starting to see tenants approaching landlords to renegotiate, claiming inability to pay due to current economic conditions,” said Jonathan Miller, chief executive of Miller Samuel, a New York-based appraiser.
‘‘With rising vacancy rates and a lack of blue chip tenants, landlords are likely to have to become more flexible as the recession progresses.”
According to Miller, things had been going surprisingly well up to about six months ago, but there is now a lot more weakness as the regional US economy begins to unwind.
‘‘I don’t see much light at the end of the tunnel I’m afraid, although a new presidential administration and unprecedented federal spending may provide more clues in the next several months,” he said.
On the question of banks and financial institutions’ standing as tenants, he said that ‘‘banks have been some of the best paying retail tenants for the past several years. Consolidation by banks and more fiscal austerity may serve to pull back their activity in the next two years.
‘‘Landlords are concerned about the financial stability of banking tenants but frankly, with a weaker economic environment, it’s not clear how much leeway they will have in terms of being discerning about tenants.”
Gavin O’Reilly, business development director at Young fields OCP, a company active in the German commercial market, said that, while Germany was, in general, weathering the storm better than most, there had been a dramatic shift in requirements for all investors.
He also said that there was now a marked move away from single blue chip tenanted units in favour of smaller, multi-tenanted units in key locations, just off prime streets.O’Reilly believes this move towards multi-location, multi tenanted assets with a strong cash surplus and strong local banking will continue through 2009, in order to diversify portfolios.
This has the additional effect of giving a spread of rent reviews across time and tenants, making it more likely that landlords will achieve consumer price index (CPI) and upward rent reviews. ‘‘Up to now, the easier approach was to have one large, blue chip tenant in a prime location,” he said.‘‘But investors are now a lot more anxious about their exit strategy, and it is currently easier to dispose of a portfolio of ten smaller assets than one large one.”
O’Reilly said that the German model regarding commercial leases had always been different.‘‘Typically, outside of the large, blue chip tenants, it is common to find five-year leases with indexed reviews, thus allowing quicker reactions to a changing market,” he said.
‘‘There will be flux in the market regarding current values and yields, and this will create both difficulties and opportunities.”
In Britain, the capital values of commercial property have plummeted.The Investment Property Databank’s (IPD) all property total return index fell for the fifth consecutive quarter over the three months to September 2008, down by 4.8 per cent. The office and industrial sectors are now experiencing falling rental values, although retail is proving somewhat more resilient.
According to Dominic Farrell of Jet-to-Let, the trend in Britain is for falling rents and higher risk as the recession bites. The banking sector has, to date, lost 70,000 jobs - and this is expected to double by the end of 2009. More pessimistic forecasters are predicting even greater job losses.
‘‘As the banks and other financial institutions fight to repair their shattered balance sheets, the risk for landlords is increasing significantly as branches close, whether through cost saving measures or mergers,” he said.
‘‘In a recession, I do not believe there are too many blue chip tenants. The collapse of Woolworths is just the first shot in what may well be carnage on the UK high street. If landlords are not already thinking of diversifying their risk with multi-tenanted properties, they soon will.’
Sunday, January 25, 2009 By Diarmaid Condon
The recent instability in the worldwide economy has prompted an interesting question - have we seen the end of blue chip tenants, as we have come to know them?
In the property industry, a blue chip tenant is a term generally used to describe a company which is of the highest quality, and which would be considered as low-risk as it is possible to get - with regard to payment default.
Unfortunately for investors, severe cost cutting and a huge increase in companies going bankrupt are making commercial property landlords very nervous indeed. While commercial tenancies are renowned for their stability, when they go wrong, they tend to do so spectacularly.
When a tenant or its parent company files for bankruptcy, landlords are left with no contract and no tenant. In a climate such as this, with a surplus of property and a dwindling pool of tenants, it can be virtually impossible to find new tenants to take up the vacant lease.
If the landlord in question has substantial loans on the property, then it can lead to a bankrupt landlord very quickly. This issue is taxing landlords in a number of overseas markets, including the US, Britain and Germany.
‘‘It had been rare to see commercial leases show renewal reductions, but we are now starting to see tenants approaching landlords to renegotiate, claiming inability to pay due to current economic conditions,” said Jonathan Miller, chief executive of Miller Samuel, a New York-based appraiser.
‘‘With rising vacancy rates and a lack of blue chip tenants, landlords are likely to have to become more flexible as the recession progresses.”
According to Miller, things had been going surprisingly well up to about six months ago, but there is now a lot more weakness as the regional US economy begins to unwind.
‘‘I don’t see much light at the end of the tunnel I’m afraid, although a new presidential administration and unprecedented federal spending may provide more clues in the next several months,” he said.
On the question of banks and financial institutions’ standing as tenants, he said that ‘‘banks have been some of the best paying retail tenants for the past several years. Consolidation by banks and more fiscal austerity may serve to pull back their activity in the next two years.
‘‘Landlords are concerned about the financial stability of banking tenants but frankly, with a weaker economic environment, it’s not clear how much leeway they will have in terms of being discerning about tenants.”
Gavin O’Reilly, business development director at Young fields OCP, a company active in the German commercial market, said that, while Germany was, in general, weathering the storm better than most, there had been a dramatic shift in requirements for all investors.
He also said that there was now a marked move away from single blue chip tenanted units in favour of smaller, multi-tenanted units in key locations, just off prime streets.O’Reilly believes this move towards multi-location, multi tenanted assets with a strong cash surplus and strong local banking will continue through 2009, in order to diversify portfolios.
This has the additional effect of giving a spread of rent reviews across time and tenants, making it more likely that landlords will achieve consumer price index (CPI) and upward rent reviews. ‘‘Up to now, the easier approach was to have one large, blue chip tenant in a prime location,” he said.‘‘But investors are now a lot more anxious about their exit strategy, and it is currently easier to dispose of a portfolio of ten smaller assets than one large one.”
O’Reilly said that the German model regarding commercial leases had always been different.‘‘Typically, outside of the large, blue chip tenants, it is common to find five-year leases with indexed reviews, thus allowing quicker reactions to a changing market,” he said.
‘‘There will be flux in the market regarding current values and yields, and this will create both difficulties and opportunities.”
In Britain, the capital values of commercial property have plummeted.The Investment Property Databank’s (IPD) all property total return index fell for the fifth consecutive quarter over the three months to September 2008, down by 4.8 per cent. The office and industrial sectors are now experiencing falling rental values, although retail is proving somewhat more resilient.
According to Dominic Farrell of Jet-to-Let, the trend in Britain is for falling rents and higher risk as the recession bites. The banking sector has, to date, lost 70,000 jobs - and this is expected to double by the end of 2009. More pessimistic forecasters are predicting even greater job losses.
‘‘As the banks and other financial institutions fight to repair their shattered balance sheets, the risk for landlords is increasing significantly as branches close, whether through cost saving measures or mergers,” he said.
‘‘In a recession, I do not believe there are too many blue chip tenants. The collapse of Woolworths is just the first shot in what may well be carnage on the UK high street. If landlords are not already thinking of diversifying their risk with multi-tenanted properties, they soon will.’
Paul Collins Comments On Cyprus Property
This is an interesting article by Paul Collins, who is a respected commentator in the overseas property industry, which you may find of interest.
Dominic Farrell
Cyprus has long been an island that has offered Britons everything they like to get from a holiday destination - sandy beaches, blue seas, a long and hot summertime, friendly locals who can speak English and of course, plentiful golf courses.
And it seems that the former British colony may soon have more of the latter to offer, with the news that plans to build 14 new golf courses have been proposed.
The effect such development will have on tourists is clear as it is unlikely that any keen golfer will not enjoy being tested by a fresh set of holes, but how could such a move impact upon the decisions of property developers?
According to Paul Collins, the property editor at BuyAssociation, an increase in golfing opportunities should provide a boost to the property market in the area.
"Whenever leisure facilities like golf courses go in, it does tend to give a bit of fresh impetus to the property market. There have always been golf courses in Cyprus and it has always been a popular reason for people going over there," he said.
Mr Collins added that some of the courses on offer are "of a very high standard".
Furthermore, it is not just property developments in the locality of the proposed golf courses that will see the positive effect of their arrival, Mr Collins noted. He stated that due to the size of the island, it is probable that the new leisure facilities will profit the entire community.
"The whole island will probably benefit from this. It's not a massive island and it is quite easy to get around, so there are plenty of places that can benefit from this. People don't necessarily want to live right next door to the attractions," he commented.
And if this news is not enough to tempt overseas property buyers to investigate the options in Cyprus, hard data from Statistical Office of the European Communities might do the trick.
It released figures last year that suggest population growth in Cyprus will be the strongest over the next half a century, compared to the other 25 countries in the European Union. It said that the number of people living on the island will swell by 66 per cent, growing to 1.12 million by 2035 and to 1.32 million in 2060.
This is despite the fact that the overall population of the EU will gradually decline over the same period by 2.1 per cent.Overseas property investors who 'putt' their trust in Cyprus now, may well find they land on a small patch of green surrounded by the rough.
Source: Assetz News
Dominic Farrell
Cyprus has long been an island that has offered Britons everything they like to get from a holiday destination - sandy beaches, blue seas, a long and hot summertime, friendly locals who can speak English and of course, plentiful golf courses.
And it seems that the former British colony may soon have more of the latter to offer, with the news that plans to build 14 new golf courses have been proposed.
The effect such development will have on tourists is clear as it is unlikely that any keen golfer will not enjoy being tested by a fresh set of holes, but how could such a move impact upon the decisions of property developers?
According to Paul Collins, the property editor at BuyAssociation, an increase in golfing opportunities should provide a boost to the property market in the area.
"Whenever leisure facilities like golf courses go in, it does tend to give a bit of fresh impetus to the property market. There have always been golf courses in Cyprus and it has always been a popular reason for people going over there," he said.
Mr Collins added that some of the courses on offer are "of a very high standard".
Furthermore, it is not just property developments in the locality of the proposed golf courses that will see the positive effect of their arrival, Mr Collins noted. He stated that due to the size of the island, it is probable that the new leisure facilities will profit the entire community.
"The whole island will probably benefit from this. It's not a massive island and it is quite easy to get around, so there are plenty of places that can benefit from this. People don't necessarily want to live right next door to the attractions," he commented.
And if this news is not enough to tempt overseas property buyers to investigate the options in Cyprus, hard data from Statistical Office of the European Communities might do the trick.
It released figures last year that suggest population growth in Cyprus will be the strongest over the next half a century, compared to the other 25 countries in the European Union. It said that the number of people living on the island will swell by 66 per cent, growing to 1.12 million by 2035 and to 1.32 million in 2060.
This is despite the fact that the overall population of the EU will gradually decline over the same period by 2.1 per cent.Overseas property investors who 'putt' their trust in Cyprus now, may well find they land on a small patch of green surrounded by the rough.
Source: Assetz News
UK Bank Repossessed Property And Irish Property Investors
We have received lots of good news this week, some of which we will make public in due course. The sun is shining here in Liverpool as I look out across the city from my perch above Exchange Flags in the heart of the Business District. The weekend is almost here!
From an investment perspective, we have been working hard on the opportunities we have received this week, with many of my staff conducting viewings across the UK, weather permitting. I viewed a small new-build (not quite finished) apartment complex which on the surface appeared to be a good prospect, until our lawyer looked into the detail and found a "house of horrors."
This is the key point. I know of investors and even some companies making offers for bank repossessed property without conducting thorough due diligence. Although this costs money and may not even result in you making an offer, "blind" buying is not a sensible investment option.
We have had considerable interest for UK distressed property assets from our Irish investors, many of whom are cash-rich with Euros. Although property prices in the UK have fallen on average by about 16%, and bank repossessed properties can be bought for up to 50%+ below previous selling prices, the strength of the Euro adds an extra 20% of value for the Irish.
We will be back in Dublin and Cork shortly for a presentation to clients on how to maximise opportunities in the UK and to use the exchange rate to your advantage.
Further details can be obtained from Henry Powell-Jones at henry@jet-to-let-investments.com
Have a great weekend
Dominic Farrell
From an investment perspective, we have been working hard on the opportunities we have received this week, with many of my staff conducting viewings across the UK, weather permitting. I viewed a small new-build (not quite finished) apartment complex which on the surface appeared to be a good prospect, until our lawyer looked into the detail and found a "house of horrors."
This is the key point. I know of investors and even some companies making offers for bank repossessed property without conducting thorough due diligence. Although this costs money and may not even result in you making an offer, "blind" buying is not a sensible investment option.
We have had considerable interest for UK distressed property assets from our Irish investors, many of whom are cash-rich with Euros. Although property prices in the UK have fallen on average by about 16%, and bank repossessed properties can be bought for up to 50%+ below previous selling prices, the strength of the Euro adds an extra 20% of value for the Irish.
We will be back in Dublin and Cork shortly for a presentation to clients on how to maximise opportunities in the UK and to use the exchange rate to your advantage.
Further details can be obtained from Henry Powell-Jones at henry@jet-to-let-investments.com
Have a great weekend
Dominic Farrell
Thursday, February 5, 2009
Breaking News: Bank Of England Cut Base Rates To 1%
Breaking News: Bank Of England Cut Base Rates To 1%
http://news.bbc.co.uk/1/hi/business/7871932.stm
Dominic Farrell
http://news.bbc.co.uk/1/hi/business/7871932.stm
Dominic Farrell
Nicky Campbell Radio 5 Live - Reduce The Bottom Line
In my opinion Nicky Campbell is one of the best journalists/presenters in the UK. He is always on top of a story, asks penetrating questions of his guests and is very amusing too.
The Radio 5 Live breakfast show is a great way to app
The Radio 5 Live breakfast show is a great way to app