Associations professionnelles de L'immobilier United Kingdom
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Financing a Property
Most property in the UK if still bought with traditional loans from Banks and other lenders. At the height of the market in August 2007 there some 30,000 mortgage products available. The current climate has reduced this by some 90% to 2,500. This is an improvement over previous months but still indicates that there is a long way to go before sufficient funds are available to satisfy the pent up demands.
The amount of deposit required still remains high if a sensibly priced product is required. On average this is probably still in the region of 20% with very few 95% loan to value mortgages available.
Most mortgages are taken out over 25 years although longer and shorter terms are available.
Variable rate, fixed rate and tracker rates products are all available.
Loans can be obtained direct from lenders or through independent mortgage brokers. All brokers are regulated under the UK’s Financial Services Authority.
Second Hand Residential Sales
Until 2007 the UK Property Market had seen some 12 years of strong growth based on strong demand, limited stock and of course a plentiful supply of finance. By the beginning of 2009 we had seen an average price drop of 20%.
During 2009 many areas saw a bounce back of on average 5% although certain sectors (e.g. city apartments) still proved difficult to sell with realistic pricing necessary. Financing was much tougher with much larger deposits of 20% required by most lenders making life very difficult and especially for First Time Buyers. The surprising growth in prices was a reflection of very limited stock (those who did not have to move were holding back given the economic situation, and, for those with a deposit, more affordable loans at much reduced interest rates. The UK Government introduced some temporary relief by raising the Stamp Duty Threshold to £175,000 but this finished on Jan 1st 2010.
2009 probably saw transactions at no more than 50% of the 2007 level of 1.4 million.
It should be remembered that London remains a market which quiet often does not reflect the rest of the country
2010 has started reasonable well but with a continuing shortage of available stock and a continuing problem, for many, of obtaining finance. There is some concern that the market may well remain quite slow due to the uncertainty of a General Election.
The NAEA publishes monthly market data and this can be accessed though http://www.naea.co.uk/news
Other housing market data is published by a number of organisations including:-
The Halifax at http://www.lloydsbankinggroup.com/media1/research/halifax_hpi.asp
The Nationwide Building Society at http://www.nationwide.co.uk/hpi/review.htm
The Land Registry at http://www.landreg.gov.uk/houseprices
The UK Government’s Communities and Local Government Department at http://www.communities.gov.uk/housing/housingresearch/housingstatistics/housingstatisticsby/housingmarket
Over the past 15 years the UK lettings market has come into its own. Mainly due to the availability of Buy to Let funds, the number of investment properties being let out have grown considerably making up a sizeable proportion of the UK housing stock. With the launch of the Buy-to-Let initiative, the strength and importance of the rental market has been underlined with a flourish. Once again, rentals are fully understood to be such a key element in the housing market that private investors in the sector are being actively backed by mortgage lenders.
And, not since the golden age of the Edwardians, when 90 percent of all housing was rented, has the private rented sector looked so attractive to private investors. Today, the rental market may only stand at some 11 percent, after dropping to an all time low of just seven percent in 1989, but real growth has been achieved since then, and is forecast to continue. This growth was helped by the Housing Act 1988. It de-regulated the rental market while providing a legal framework that has proved fair to both landlords and tenants. This Housing Act brought properties back on to the rental market just in time to meet a surge in demand caused by the recession. Since then the demand for rented housing has proved to be much more than a blip on the once ever-upward sales graph for owner-occupied housing. New working practices have brought about a major change in the social climate. It has not been as dramatic as the 1980s drive for owner-occupation, but it has been as relentless. It fulfills the need for choice in housing, for flexibility and mobility. It has made renting socially acceptable again. Changing working patterns are a primary cause. Contract working has led people to budget more carefully, to ensure that they are free to move around as employment dictates and to spend less time on the responsibilities of owner occupation. It has affected all age groups and economic classes, not only the youngsters who once looked to buy starter-homes. Couples, often both working, may want to move quickly to more lucrative opportunities. Ambitious career-builders delay starting a family and rent either a town house or a weekend cottage. They have no time to take full responsibility for both. And, with increasing frequency, for those approaching retirement or even the retired, the relentless rental revolution has made life simpler.
In 2010 although financing for the buy to let market is much more restricted it still provides an attractive investment and especially for the professional landlord. Lower interest rates have resulted in improving yields. In addition many consumers are holding off buying a property and are currently looking to rent in the short term.
Comprehensive information and quarterly data is provided by the Association of Residential Letting Agents and can be accessed at http://arla.co.uk/buytolet/
LAND and NEW HOMES
Since the economic downturn there has been a dramatic drop in the number of new properties being built and hence levels are way below Government targets. Larger builders find that many of their sites are currently not economically viable to develop and smaller builders have been finding it very difficult to obtain funds.
Despite the large shortage in UK Property, we are currently building fewer homes that at any time since the second world war.
Full information and statistics on this sector of the market can be found on the Home Builders Federation (HBF) athttp://www.hbf.co.uk
As in many other countries, the Commercial market has been badly affected in the UK by the economic downturn. However during 2009 a number of areas started to improve.
CB Richard Ellis’s latest monthly index of British commercial property values state that they rose 3.3 percent in December, their largest monthly gain since records began nine years ago and the sixth consecutive monthly hike Ellis Monthly Index found.
Commercial property values have risen steadily since July 2009, when they were down 44 percent from their mid-2007 peak.
The December rises in capital values were led by retail warehouses, up 6.1 percent, on the back of intense investment demand, CBRE added that end-2009 retail warehouse prices were up 6.5 percent year-on-year.
The values of central London offices also continued their monthly run-up, gaining 3.7 percent in December, although on an annual basis they had fallen 2.1 percent.
Rental values across all commercial property types kept softening, falling 0.3 percent in December. On an annual basis, rental values at the end of 2009 were down 8.9 percent compared with the end of 2008.
Central London office rental values in December 2009 were down 21.5 percent year-on-year.
CBRE’s head of UK research, Peter Damesick, said strong demand from offshore investors and renewed flows of money into UK property funds were the key drivers of growth, with limited availability of good quality assets to buy. “Increased capital flows into property look likely in the near term, giving further momentum to the market in the early part of 2010,” Damesick said in a statement. “The sharply accelerating returns and value increases seen over the past few months inversely mirror the worst of the downturn seen this time last year.”
The Royal Institution of Chartered Surveyors ( RICS) also produces quarterly properties reports on Commercial Property at:http://www.rics.org/commercialmarket
Buying a Property
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