RICS comments on Government's Homebuy scheme

Property prices in central London surge ahead

Allsop brace themselves for what could be their largest ever auction

Developers moving to suburbs due to lack of opportunities

Interest rates kept on hold

Property prices rise 1% in September - Halifax

Gambling firm takes a punt on shopping complex

Property prices set to escalate in the South East

RICS comments on Government's Homebuy scheme

RICS has responded to the British Government's launch of the new Homebuy Mortgage, which will help existing tenants of local authorities and housing associations buy their own home on the open market.

RICS head of economics, Milan Khatri, said: "The scheme is so small that it will account for less than half of one percent of transactions per year, benefiting only 20,000 buyers over five years.

The decline in government sponsored housing over the last twenty years is the single most important factor in the affordability crisis for those most in need.

Only 21,000 publicly sponsored homes were built last year, compared to 110,000 in 1980."

Property prices in central London surge ahead

Average residential property prices in central London are appreciating at their fastest rate in nine years, according to a recent survey.

Knight Frank reveals that property prices in central London rose by 23.5% in the 12 months to September this year.

Liam Bailey, Knight Frank's head of residential research, said: "Buyers came back into the market in serious numbers after the summer break. Our records reveal that the number of buyers registered to purchase property in central London is 111% higher than the same period last year.

“In September, supply had fallen by approximately 50% compared to the same month last year… this together with the overwhelming number of applicants was the difference between 0.3% monthly growth experienced in September last year and the strong 2.2% monthly growth this year."

Allsop brace themselves for what could be their largest ever auction

Allosp believe that their October auction which is to be held later this month, could prove to be the company's largest sale to date.

The two-day auction, which will be held on the 18 th and 19 th October 2006 wll feature a total of 291 lots, including 22 shops let on new 15 year leases to Johnson’s Cleaners, 9 Kwik Fits let on leases expiring in 2027 and 13 lots let to Kwik Save on new 25 year leases. The auction also includes 10 sale and leasebacks for HSBC and 23 for Threshers.

Company auctioneer, George Walker, comments: “Over the last 12 month, total returns on commercial property have averaged 21.3% and compared to savings rates of below 5% the interest from investors looks set to remain strong for high street shop, office and commercial property investments. Vendors are currently keen to offer properties at auction and appear confident that there is sufficient demand to meet the largest selection for some time.

“In 2006 a number of retailers including Barclays, HSBC and Threshers have offered large property portfolios at auction. This has served, not only to inject considerable money into the auction market, but also to raise the profile of the auction room. Consequently, private buyers are seeking to build on their success with residential property and are turning to commercial property, in particular high street retail investments. Properties such as these with strong tenants offer solid returns over the longer term and remain the preferred choice for private buyers at our auctions.”

Developers moving to suburbs due to lack of opportunities

Urban development on brownfield sites is being steadily replaced by new developments in suburban locations, according to research by Savills. The company’s recent analysis of all regionally important sites and development schemes in the UK shows that the proportion of development schemes/sites located on the edge of city/town centres has increased from 4% in 2003 to 15% this summer.

Yolande Barnes director of Savills research comments: “We suspect this increase is due to a lack of potential development sites in city/town centres, which has forced developers to move into peripheral locations where you tend to find redundant manufacturing/industrial premises. These sites present even bigger challenges to developers as they often lack inherent heritage or landscape features. They often have to be re-created, landscaped and designed as completely new places in order to become commercially viable for development. These schemes now account for 38,000 acres and most are earmarked for mixed use development. We suspect that a large proportion of these schemes are residential developments with other uses tagged on.”

Since Savills started their analysis in 2003, the nature of the development schemes in the planning pipeline, and under construction, has changed markedly. There has been an increase in the proportion of former manufacturing/industrial sites being brought forward for development. At the same time, there has been a fall in the proportion of land being brought forward as waterside developments in former dockyards.

Barnes explains: “Former docks with their waterfront location have tended to be preferred for development in the past. This is largely because there has been high occupier demand, (both commercial and residential), for this type of waterside location. The availability of this type of site over the years has dwindled as more and more have been developed. Waterfront sites now represent 30% of schemes down from the 44% recorded in 2003”.

Interest rates kept on hold

The Bank of England's Monetary Policy Committee have opted not to increase interest rates and as a result they remain unchanged at 4.75%

Many experts are forecasting that interest rates in the UK will rise to 5% in November.

Property prices rise 1% in September - Halifax

Average UK property prices rose by 1% in September, according to the Halifax, which means that the annual price increase now stands at 8%, the lowest rate since April 2006.

Martin Ellis, chief economist, said: “We expect increased utility bills and higher interest rates to curb housing demand over the coming months, causing annual house price inflation to ease between now and the end of the year."

Gambling firm takes a punt on shopping complex

Stanley Casinos, the UK's largest casino operator has launched a bid to open a new £7m casino within the St Enoch Centre in Glasgow.

If planning permission is approved, the casino complex would be located over three floors of the redeveloped centre and would include shops, restaurants, a nightclub and multi-screen cinema.

A spokesman for Stanley Casinos said: "We have applied for a standard casino licence for the St Enoch Centre and look forward to putting our case to the licensing board."

Property prices set to escalate in the South East

Average property prices in the South East will rise to over £322,000 in the next five years, representing a rise of 40%, according to a National Housing Federation report.

The report, which used projections by Oxford Economic Forecasting, found that property prices will continue to rise due to a severe lack of housing supply and a growing population.

Derek Cash, head of south region at the National Housing Federation, said: "Our projections may seem like good news for current homeowners in the region, but they actually spell disaster and not just for tomorrow's first time buyers.

"People will be unable to find a home in the area where they grew up and key public sector workers will have to move to cheaper parts of the country to ease their housing problems, making essential public services in the region more vulnerable.

"This will not help build the balanced neighbourhoods required for sustainability, which will have devastating consequences on communities - both rich and poor alike."