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More Auction Action For Property InvestorsEasier Access To Finance Increases The Number
Of Property Auction Purchases

There has been a sharp rise in the number of property investors snapping up property at auction and the reason has been credited to easier access to finance, as lenders report significant growth in lending, surpassing pre-property crash levels.

The number of properties sold at auction is booming as property investors seek to build rental property portfolios below market value (BMV), without breaking the bank.

There has been a huge increase in the number of loans that have been financed by specialist lenders over the past 12 months, with average loans increasing by more than 22% according to property finance lender, Auction Finance Limited.

The news comes as the latest Essential Information Group (EIG) figures show a seven year high for UK’s auction houses, with lots sold in October 2013 up by 30% compared to October 2012. These record figures have now surpassed pre-recession auction house transactions.

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Investors Prefer Property Over Stocks And Shares

Investors Prefer Property Over Stocks And Shares

UK Property Investors are far more positive about continuing to invest in bricks and mortar over stocks and shares as the outlook for the UK property market continues to improve.

The latest Lloyds TSB Private Banking Investor Confidence Index shows that positive sentiment in the UK property market has improved massively in the last 3 months, whilst investors shy away from speculating in other markets with stocks and shares.

In April the positive sentiment for property was only 8%, and improving sentiment in regions such as Wales, West Midlands and North West has added to the strong confidence in London to lift the overall UK property sentiment level to 32%.

This means that UK property is now the fifth highest asset class, behind gold, emerging market shares, commodities and UK company shares. Over the same timescale, sentiment for gold showed a remarkable slump, dropping from 46% to just 12%.

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Empty Property Rates - £1.1 Billion Tax Bombshell

Empty Property Rates – £1.1 Billion Tax Bombshell

The taxpayers Alliance have reported that a massive £1.1 Billion (GBP) was paid last year in Business Rates on empty properties, a rise of 19% between 2009/10 and 2011/12

This is the first time that a figure has been calculated for the amount collected in empty property rates since exemptions for empty commercial and industrial properties were abolished at the 2007 Budget.

Before 2007, empty industrial properties were exempt from Business Rates and empty commercial properties were subject to extensive reliefs and reductions.

Apart from a short exemption period and extremely limited reliefs, full Business Rates are now payable on all empty commercial and industrial properties.

With the economic downturn making it increasingly difficult for commercial landlords to find new tenants, this tax has had some devastating effects:

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Are Landlords Sure Thay Are Not Victims Of A Rent To Rent Scam?

Are Landlords Sure Thay Are Not Victims Of A Rent To Rent Scam?

There are more worrying developments in the UK PRS, as the practice of Rent To Rent within the UK residential lettings market is causing increasing concern among industry professionals.

The practice of Rent To Rent, sees one set of individuals renting a privately owned residential property within the UK private rented sector (PRS) and then sub-letting it to another tenant for profit, as a business.

It is widely believed that many Rent To Renters are operating without the landlord’s knowledge or consent.

Professional tenants have reportedly accepted a tenancy, signed agreements of multiple properties, then they have proceeded to sublet the properties to unsuspecting third parties, unaware of the true situation.

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Sir Adrian Montague’s review of how best to encourage greater investment in the UK private rental sector properties

 

Property Investors Set To Cash In Following Montague Report

Property Investors Set To Cash In Following Montague Report

Property investors across the UK are buzzing recently after the long awaited release of the Montague review, which set out to review the barriers to institutional investment in private rented sector properties.

Despite the reassurance of Sir Adrian that his report would be relatively short, at 28 pages it isn’t really light reading material.

Here are some of the statistical highlights to give you a flavour of the review.

  • Today the UK private rented sector (PRS) houses 3.6 million households – this compares to 2 million in the early 1980s. (An increase of 56% over 30 years)
  • Around a third of households in the private rented sector are families with dependent children
  • 20% of households in the private rented sector have been at the their current address for more than 5 years
  • 1% of landlords own more than 10 properties
  • Every £1 million of new housing output supports 12 additional jobs per year – 7 directly and 5 indirectly
  • For every £1 invested in the construction industry, £2.60 is generated elsewhere in the supply chain
  • The number of households will grow by an average of 232,000 per year until 2033
  • Mortgage lending across the board has roughly halved since 2006-07
  • Returns on residential property have totalled 9.6% on average over the last 10 years – in comparison, commercial property ranges from 7.3% to 5.7%
  • Capital growth delivered an average of 5.9% annually over the last 10 years compared to 3.5% in income return
  • Britain has enough surplus land to build 100,000 homes by March 2015

All statistics taken from the Montague Review

 

Read the Montague review of the barriers to institutional investment in private rented homes in full.

Properties across Greater Manchester including shops, offices, flats and a restaurant will come under the hammer in London on Thursday 24th May 2012.

The eight sites will be sold at a commercial property auction held by Jones Lang LaSalle.

They feature among a catalogue of 25 lots with a total guide price of £16 Million (GBP).

The properties include The Apple Building, Oldham Road, Manchester, which comprises 53 flats and has a guide price of £3.15 Million (GBP). The Lakeside Villas & Apartments, Blackley, comprises nine flats and 23 houses and has a guide price of £1.6 Million (GBP). Two shops at Stockport’s Merseyway development occupied by chain stores will be up for grabs with a guide price of £1.55 Million (GBP) along with a site on Great Underbank, Stockport, which is currently let to Lloyds estimated at £1.2 Million (GBP).

Salford office blocks Balmoral House and Sandringham House (£1.25m in total) and Windsor Court (£450,000) are among the lots. Lombard House, Cheadle, which is currently let to Countryside Estate Agents, and an Est Est Est leased restaurant on Manchester Road, Bury, have guide prices of £500,000 (GBP) and £475,000 (GBP) respectively.

For more information about the Manchesterproperty auction
Contact Charlotte Maynard Auctions Co-ordinator – Jones Lang Lasalle
+44 (0)20 7087 5497 or email: charlotte.maynard@eu.jll.com

Whilst UK banks remain awash with loans made against sub-prime property – a legacy of irresponsible lending during the years leading up to the 2007 financial crisis. The UK’s largest commercial property market lender, Lloyds has been particularly active in trying to reduce its exposure to the volatile sector.

Lloyds Banking Group has been considering bids by dozens of private equity groups, opportunistic buyers and pension funds following the launch of distressed real estate loans three weeks ago.

The banking group now seem set to accept a loss of about 35% on up to £1Billion of commercial property debt as it continues to negotiate with up to four remaining bidders for the portfolio.

Initial bids for the distressed portfolio of loans were tabled at almost £650 Million (GBP) or $1 Billion, a price that would represent a 35% discount to the loans’ face value.

Lloyds hope that accelerating the process could mean that the sale could take place before Christmas this year.

The sale of a portfolio of loans marks a step change in Lloyds’ strategy. It previously only sold individual loans. The move could signal a more aggressive push to deleverage its balance sheet. Lloyds’ overall ambition is to unwind the £24bn worth of bad property loans it holds.

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