Buy-to-let returns rise

Mixed-use scheme in Walsall gets go-ahead

Alliance & Leicester launch wholesale buy-to-let product

Launch of new flood hazard report

UK property prices rise again

Jones Lang LaSalle comments on Pre-Budget Report

Buy-to-let returns rise

Average residential buy-to-let returns in Britain stood at 13.3% in October, up from 10.5% in September (including capital appreciation and rental income), according to Paragon Mortgages.

The report also reveals that the number of tenants has increased by 22% since 2001 with 3.7m people now living in social housing.

Nigel Terrington of Paragon said: "With this solid demand, rental yields have remained at 6% steady over the past six months despite house price increases.

"We have seen steady activity on the part of residential property investors, who are growing their portfolios in response to additional demand from a variety of different types of tenants, including foreign migrants, young professionals, families and students."

Mixed-use scheme in Walsall gets go-ahead

Walsall council has approved a £70m mixed-use scheme in the heart of Walsall which was initially submitted by developer Urban Splash four years ago. Detailed planning permission has been granted for 144,000 sq ft of offices, a 130-bedroom hotel, 150 new homes, two public squares and 41,000 sq ft of leisure and retail. The 17-acre development is the first phase of 10-year £180m Walsall Waterfront project.

Alliance & Leicester launch wholesale buy-to-let product

Alliance & Leicester Commercial Bank has launched a wholesale buy-to-let product aimed at professional landlords with at least five residential properties in their portfolio, worth a minimum market value of £1m.

The wholesale buy-to-let product will allow a maximum portfolio loan-to-value of 75%. However 100% finance on new purchases will be allowed where the existing loan to value against the existing portfolio permits. Landlords will also be able to redraw funds within facility limits where borrowing is reduced from capital reductions or property sales.

Charles White of Alliance & Leicester Commercial Bank explained: "Our wholesale buy-to-let product is designed to offer flexibility and committed funding for professional landlords to facilitate active portfolio management. We are confident that the new product will meet a demand that is not widely catered for."

Launch of new flood hazard report

Richards Gray, a leading national search organisation, has launched a new flood hazard report. The product, developed by GroundSure, is designed to provide property owners with a more accurate assessment of their home’s flood risks.

Given that more than £200bn of property, land and assets are at risk of flooding and the fact that this is only due to increase with the wetter winters that have been predicted as a result of climate change, there is a real need for accurate flood data.

Paul Livett, managing director at GroundSure, explains: “Our new GroundSure Flood report uses the largest and most accurate digital map, developed by Norwich Union, ever undertaken in Britain. It is being used to pinpoint the risk of river and tidal flooding to individual residential properties. We are pleased to confirm that we will be providing this new data in conjunction with Richards Gray.

“In the past, one of the major obstacles to better flood prediction has been the lack of detailed and accurate information on the height of land surrounding rivers. The Norwich Union flood map has been specially commissioned to make use of the latest technology to help tackle this obstacle.”

UK property prices rise again

Average UK residential property prices rose by 1.7% in November, representing a £3,500 increase, according to the Halifax.

The latest Halifax house price index puts the price increase down to a shortage of properties for sale and a lack of new family homes.

The mortgage lender says that the cost of an average home now stands at £187,995, which is 9.6% more than a year ago.

Martin Ellis, chief economist at Halifax, said: "The marked slowing in real average earnings growth over the past six months, and a squeeze on households' discretionary income due to the substantial increase in utility bills during the last year, should temper housing demand. As a result, we expect house price inflation to ease over the coming months."

Jones Lang LaSalle comments on Pre-Budget Report

Gordon Brown’s speech this week revealed two main policy proposals that will impact on the residential property sector – savings for house buyers on stamp duty and Government land sales to make room for more housing.

Stamp Duty Savings Proposal
James Thomas, head of residential at Jones Lang LaSalle, comments: “The Chancellor announced the intention for all new homes to be carbon free within the next ten years and provide buyers with stamp duty exemption for purchasing such property.  With the average price of a new home currently £176,000 this would reflect an average 1% (£1,760) saving on Stamp Duty.  This potential benefit for house builders for increased profitability will depend on the cost of delivering carbon free housing. With investment and development in this area, the costs are undoubtedly decreasing and this announcement will spur ongoing innovation in this field.

“From the perspective on homeowners the positive news on Stamp Duty relief and the knock-on impact of cheaper household running costs delivered by new and eco friendly homes, will need to be balanced against their aspirations. Homebuyer demands are becoming increasingly challenging with requirements for non-eco friendly features such as air-conditioning on the rise. These are in conflict with the Government’s aspirations and will present a challenge for house builders.”

Land Sales
“The Chancellor announced the disposal of £7bn of Government land and property assets next year with a further £30bn over the spending review period. It is likely that much of this land will be passed to English Partnerships and will form a new source of mixed-use development land (including housing) over the coming years. This is welcomed and would ease supply pressures, in turn supporting continued strong house price growth, particularly in the South East”, says Sue Foxley, Head of UK Research at Jones Lang LaSalle.