London's Real-Estate Gold Rush

Prime London commercial real estate has emerged as an improbable postcrisis safe haven. Despite the U.K.'s precarious economic situation, international investors poured more than €6 billion ($8.17 billion) into London offices and stores in the 18 months to June 2010, almost as much capital as the next nine most popular cities combined, according to CBRE. Having fallen 50% from its peak, City offices have outstripped every other European market, at 25% higher, compared with a mere 2% gain in Paris, according to Investment Property Databank. But with some West End offices now changing hands at yields as low as 4%, global real-estate investors can find better value elsewhere.

For property investors, London's appeal lies in its perception as a reliable store of value, the real-estate equivalent of gold or the Swiss franc. International investors value its transparency and liquidity. Access to deals is open, unlike parts of Europe and Asia, where foreign investors are often shut out of the bidding or where legal protections are weak—making it hard to deploy capital. Investors are also attracted to its relative stability: Average leases on U.K. offices at 7.5 years are more than two years longer than in Germany. Prime London property is relatively decoupled from the fortunes of the U.K. economy and has been boosted by the pound's weakness.

But asset prices have started to become divorced from the fundamentals. London West End offices yield just 4.25% and City offices, 5.25%—close to the peak of the boom levels. True, 10-year gilt yields have fallen since then to 3.6%, but interest rates are likely to rise next year and rental growth is uncertain. London City office rents fell in real terms by 4.2% over the past decade, a steeper decline than in Frankfurt and Paris, according to IPD. Further, U.K. banks hold billions of pounds of secondary commercial real estate, which they may start unloading in 2011.

So, what should investors do? Within London, the smart money is now focused on new developments, betting that the supply of inward investment will remain strong while the supply of investment opportunities will remain weak. The pipeline of new office developments is running at less than half of the 25-year average. That also means there is likely to be a shortage of new office space available in 2014, when a large volume of long-term City leases start expiring, helping to boost rental growth. Land Securities, which is planning to start development on four London sites this year, is forecasting unleveraged returns of at least 14% on these ventures.

But for real-estate fund investors, other European markets now look more enticing: German shopping centers are benefiting from the strongest consumer outlook since reunification and yield 5.5%-6.5%. Investors also point to Paris offices, where the recovery has been slower. Swedish property, buoyed by an economy that grew 5.5% last year, also looks like a good value, despite the recent yield compression. With London an increasingly crowded trade, expect to see more international capital flow to these markets.

Fewer buyers for £1 million plus properties in the UK, research suggests

Competition for properties worth £1 million in the UK has fallen over the last two years, with just five buyers for each compared with eight previously.

Research by Investec Specialist Private Bank conducted with estate agents, developers and mortgage brokers operating in this market, also reveals that on average it takes between on and two months for sell a property worth £1 million or more.

But the market does vary. A quarter of those questioned or the Investec £Million Plus Property Market Barometer said that it takes less than a month to secure a sale while almost one in ten says that it currently takes more than four months.

High end estate agents, mortgage brokers and developers claim that the top three obstacles facing sales of million pound plus properties are a lack of stock, fear of a 'double dip' recession (and the impact this has on buyer confidence levels) and a lack of finance.

Indeed, almost half of those surveyed, some 45%, claim that the availability of credit to purchase million pounds plus properties is either 'poor' or 'very poor'.

‘Although there remains a lack of stock for sale, particularly at the upper end of the market, our Barometer shows that competition for £1 million plus properties has fallen over the last two years,’ said Jack Jones of Investec Specialist Private Bank.

‘Our findings suggest that one of the main reasons for this is the difficulty in securing credit and the inflexibility of lending criteria among some organisations,’ he added.

Investec recently launched a £Million Plus mortgage targeted at high net worth professionals who are not paid along conventional lines, but rather accrue irregular income such as lump sum bonuses. The new custom-made mortgage offering takes overall income and wealth into account rather than just the value of an individual's property and their regular monthly income.

The £Million Plus mortgage is aimed at the top end of the market, with loans available exclusively to individuals looking to borrow a minimum of £1 million with sustainable earnings in excess of £300,000 a year and an established balance sheet in excess of £3 million. Investec says that these individuals typically purchase properties worth in excess of £1.5 million.

The mortgages may be secured against a variety of assets including property, shares, investment holdings and offshore deposits, and are available in a number of currencies. The offering is not limited to UK nationals and includes the purchase and refinance of UK property residence and investment properties.

Courtesy : propertywire

House prices to fall further in 2011, claim economists

House prices are expected to fall further in the new year as banks maintain a tight rein on mortgages amid government austerity measures, economists claim.

Experts predict that property values will plunge by 5 to 10 per cent in 2011 following a period of declining prices since the summer.

Of 56 economists polled by the Financial Times, 50 said they expected house prices to continue falling next year, compared to just six who thought they would rise.


Ian McCafferty, chief economist of the CBI employers’ body, told the newspaper: “Traditionally, in the absence of distress selling, the UK housing market adjusts more through volumes than prices, so prices are likely to slip rather than plummet next year.”


From their peak in 2007, British property prices plummeted by 20 per cent to a trough in 2009 but have subsequently recovered around half that figure.


He said sales would remain depressed by tight mortgage conditions, high prices relative to earnings and fragile consumer confidence.

Andrew Goodwin, of Oxford Economics, added: “Last year’s supply shortage has been corrected, which has taken away the major support to prices, but while the market fundamentals remain weak they are more favourable than they were in the house price crash of 2008.”

The Office for Budget Responsibility has predicted that prices will fall by 1.4 per cent over the next 12 months.

Declines in prices are expected to be most acute in areas further from London.

However, those polled were divided on whether the predicted falls were a cause of concern. Many said prices are still fundamentally too high and causing social problems, so a movement lower represents a normalisation in the market.

Willem Buiter, chief economist of Citi and a former member of the monetary policy committee, said: “Anything that reduces UK house prices has to be a good thing on balance.”


Some economists said housing market weakness would undermine the economy. Mike Dicks, of Barclays Wealth, said: “Debt deflation can kill off a recovery, or keep it from gathering strength in the normal fashion.”

The average cost of a home in England and Wales dropped by 0.4 per cent during the December, according to Hometrack, the housing intelligence group.

The drop was driven by the ongoing shortage of buyers, with estate agents reporting a further 4.8per cent fall in the number of people registering with them in December, the sixth consecutive monthly decline.

Overall, the group said house prices had fallen by 1.6 per cent during 2010, with property values ending the year at a lower level than they started it in 71 per cent of England and Wales.

The group expects house prices to fall by 2 per cent during 2011, due to weak demand and the ongoing problems in the mortgage market.

But it added that a fall in the number of homes for sale, along with continued low transaction levels, would act as a support to house prices, and help to limit further falls.

House prices enjoy unexpected December lift to end 2010 'flat', says Nationwide

House prices unexpectedly climbed in December for the first time in seven months, according to a leading index, leaving them almost unchanged across the year as a whole and dampening fears for a dramatic crash.

The average property price rose 0.4pc month-on-month to £162,763, mortgage lender Nationwide reported, reversing the 0.3pc drop seen in November.

The upswing did not lift the annual rate of change above the 0.4pc rise reported for the previous month. Prices climbed on average just £660 over the last 12 months.

That meant they ended the year "essentially flat", after the gains seen in the first half were wiped out in the last six months as supply increasingly outstripped demand, Nationwide said.

The lender thought the abolition of Home Information Packs (HIPs) following the election could have triggered the flood of property on to the market, as the removal of the extra cost stopped putting off speculative sellers.

Nationwide cautioned that the latest surprise monthly rise, while welcome, did not mark an end to the market's underlying downwards trend.

"Despite December's increase, house prices have fallen in four out of the last six months and it would be premature to suggest that the recent downward trend has been broken on the basis of one month's figures," Martin Gahbauer, Nationwide's chief economist, said.

The three month on three month rate of change, which smoothes out volatility to provide a better picture of market trends, pointed to a continued fall in prices. However, the rate of decline improved from minus 1.3pc in November to minus 1pc in December, rather than accelerating alarmingly.

"The December figures do underscore the fact the current downtrend is only very modest, particularly when seen in comparison to the second half of 2008," said Mr Gahbauer.

Across the fourth quarter as a whole, Nationwide reported prices fell in 10 out of 13 UK regions.

East Anglia saw the biggest improvement, with prices rising 1.6pc over the three months, while Northern Ireland was the region suffering the largest drop, as prices fell 3.4pc.

Looking ahead, Nationwide sees little chance of a strong recovery in demand.

End of 2010 sees strong surge in land sales in England

The final three months of 2010 saw a strong surge in English farm land values, the latest Farmland Market report from rural property consultants Smiths Gore shows.
Overall values rose 4% to close the year up 12%. Equipped values increased slightly more, 1%, than bare land values but both have now increased for four consecutive quarters. This compares with a 10% fall in 2009.
At the end of the year, bare land values averaged £5,400 per acre, whilst equipped land averaged £8,300 per acre. The ‘equipped premium’, which is the difference between bare land values and the value including houses and buildings, has increased again. It now stands at £2,900 per acre, but is still considerably lower than the average for 2008 and 2009 of £3,200 per acre and significantly below the 2007 average of £4,300 per acre.
Equipped farms values have increased consistently and more strongly 15% in 2010 compared with a 14% fall in values in 2009. Bare land values have increased 12%, following a 2% decrease in 2009.
The lack of supply of land for sale continues to be a major issue with less than 10,000 acres for sale in the final quarter, which is the lowest amount of land marketed in a quarter since the first quarter of 2007.
The report says that 2011 will be a crucial year in the land market. CAP reform and changes to the planning system should both have a negative impact on land values but the main influence on prices at present is the lack of supply. If lack of supply persists, then prices should continue to rise but the normal underlying factors would suggest prices stabilising or dropping.
The size of properties brought to market has been noticeably smaller this year, the report also shows. Equipped properties have averaged 228 acres compared with 269 acres last year and 264 acres in 2008. This decrease in farm size could have been attributable in part to the observed increase in equipped farm values, as the value of the dwelling is spread across fewer acres.
The average property size for bare land sales has also fallen, averaging 130 acres in 2010, down from 145 acres in 2009 and 150 acres in 2008.
Looking at the year as a whole, 121,700 acres of land was marketed in England, just 5,300 acres more than in 2009. In terms of equipped land 98,700 acres were marketed, just 2,000 acres more than last year. Some 18% more bare land was available this year relative to last year, with 23,000 acres brought to market.


By comparison, 2008 was the most active market of the last 5 years when 158,000 acres were marketed, comprised of 128,000 acres of equipped land and 30,000 acres of bare land.
Some 68 farms and parcels of land over 50 acres were marketed in the fourth quarter of 2010. This is comparable to the same period last year (69 farms) and 35% less than during the equivalent period of 2008 when 105 parcels were marketed.
Some 9,800 acres were marketed in the final quarter of 2010, which is less than the 11,700 acres in 2009 and the 24,800 acres in 2008.
In the fourth quarter 45 equipped farms were marketed compared with 43 in the same period in 2009. Less land was marketed (7,600 acres) than during the fourth quarter of last year (8,600). The area marketed was substantially less, 60% down on the same period in 2008 when 19,100 acres were brought to market. The average unit size in the fourth quarter was 169 acres, smaller than the average in 2009.
Some 22 parcels of bare land were marketed, slightly less than the 26 from the same period in 2009 and 2,100 acres were marketed, 16% less than the 2,600 acres in 2009.

UK property rent attitudes changing

Attitude to renting property in the UK is changing as fewer people are able to buy and are forced into becoming reluctant tenants, research suggests.
In the latest fourth quarter survey from the Association of Residential Letting Agents, some 71% of landlords asked said they felt renting was more popular now than a year ago. In 2009 the figure was just 35%.
And, when asked about attitudes to renting and whether consumers would rather buy than rent, the majority of respondents, 67.2%, felt that people were being forced to rent, a slight drop on the previous quarter which was 71.6%, but still up on the same perios of 2009 which was 54.2%.
‘Our research suggests that, while more and more people seem to be renting post-recession, for many this is through need rather than choice, a trend that will likely continue as long as the demand for homes outstrips supply,’ said Ian Potter, operations manager of ARLA.
‘With the average age to buy a first home now reported to be 35, it is also possible that renting will become the norm for more people than ever before,’ he added.
He warns that both reluctant tenants and those who rent by choice, must conduct thorough research before making a move. ‘While there are many benefits to renting or letting a property, as there is no Government led regulation, things can and do go wrong. If you’re letting or renting a property through an agent, check that the agent is a member of an organisation such as ARLA, which ensures landlord and tenant money is protected by a client money protection scheme. ARLA agents are also required to be members of an ombudsman scheme which can offer redress if things to go wrong,’ he explained.
Meanwhile, a separate report shows that property rents in the UK have fallen for the first time in 11 months, dropping by 1.2% in December to an average £684 per month, according to the latest Buy to Let Index from LSL Property Services, which owns the UK’s largest lettings agent network, including national chains Your Move and Reeds Rains.
Christmas spending brought a surge in arrears, with 11.7% of all UK rent in arrears, rising from 9.7% in November. Total annual returns also declined as house prices continued a steady fall.

Despite the decrease, rents in December were 3.8% higher that a year ago. The average yield fell slightly to 4.9% in December, the first drop since January 2010, as rents declined at a faster pace than rental property values.
Rents fell fastest in Wales, down 2.6%, while the average rents in the south east and London decreased by 2.5% and 2.3% respectively. However, rents did drop in all regions of the UK. The west midlands and south west saw rents rise by 2.2% and 1.7%, while there were smaller increases in the east midlands and north east.
The slowdown in rents is down to landlords’ pricing strategies, according to David Newnes, estate agency managing director of LSL.‘Landlords offering properties during the holiday season often lower the asking rent to avoid a costly void period.If a landlord cuts the rental price by 5% to fill a property immediately, he will save £275 over the year rather than seeing their property vacant for the duration of the month. Nevertheless, with the supply of mortgage finance to both first time buyers and would be landlords still constrained, we are likely to see rents restart their upwards march before the spring,’ he said.
The Christmas period had a negative impact on tenant finances. 11.7% of all UK rent was unpaid or late by the end of December, rising from 9.7% in the previous month. Unpaid rent totalled £276 million across the UK in December, the highest total since December 2009.
‘The Christmas break has taken its toll on tenant finances. Many tenants have felt an additional financial pinch from Christmas spending, while others’ payments have been affected as a result of vacations over the holiday,’ added Newnes.

Low cost property auctions set to become more popular in the UK

 Property auctions could be set to become more popular in the UK with more estate agents likely to take up the model as a low cost and efficient selling method, it is claimed.

According to Network Auctions, the national auctioneering firm partnering with estate agencies, their rapid growth is evidence that the industry has woken up to the benefits of selling this way.

The Network Auctions model provides estate agencies with a low cost, low risk, own- branded auction department, utilising their existing staff without affecting their core business, said auctioneer Toby Limbrick.

He points out that the directors of Network Auctions have an estate agency background. ‘We understand the business and recognise the pressure agents are under to create new income streams, to be diverse but without racking up exorbitant costs and to want to differentiate themselves from their competition,’ he said.

‘Selling properties at auction should be a natural extension to every agent’s business, but the logistics of putting together a catalogue, hiring the venue, finding an auctioneer, marketing the event to nationally targeted buyers and producing a well conducted sale can be daunting,’ he added.

The company has a comprehensive training, mentoring and business development programme to give agents the best advice on what properties are suitable for auction, when they should be sold and what the reserve price should be.

‘We handle production of the catalogue, the administration and legal matters, marketing and conduct the auctions at our national auction room, leaving partners to get on with what they do best, sell houses,’ Limbrick explained.

Recent firms to join Network Auctions include Aspect of North West London, Forte Homes of East London, Lawsons in Suffolk and Sansome & George in Berkshire. Staff from these and other firms recently attended a training seminar run by Guy Charrison, director of Network Auctions and Vice-Chairman of NAVA. They join established partner firms holding 27 licences throughout the country who have already seen the benefits that an auction department can bring.

A recent example of such benefits was recently demonstrated at the Network Auctions December sale where partner firm, Roberts Newby of Gerrards Cross, achieved 100% success with seven lots offered for sale.

‘On the instructions of a Receiver we were asked to sell two properties by private treaty one of which became a struggle. So we suggested the auction route but they wanted to use their existing auctioneers. However, we were able to convince them to instruct us as we were part of Network Auctions which was seen to give us some real advantages over the incumbent firm,’ said Simon Colman of Roberts Newby.

‘They put their faith in us and then added a further six properties to the sale which we hadn’t even known about. We continue to develop similar business with them. The best part was selling properties that would normally have passed us by and knowing our substantial commission was secure on the fall of the gavel,’ he added.

Little known tax allowance could save holiday home owners thousands

Owners of furnished holiday lets are set to miss out on tax allowances worth thousands if they do not make their claim before the end of the tax year, an expert has pointed out.

Little known tax legislation allows owners of furnished holiday lets, which meet criteria laid down by the Inland Revenue, to offset ‘Capital Allowances’ against their total income from salary and dividends paid in the UK, as well as rental income, according to John Davies, managing director of Hedge Tax Mitigation, niche property tax specialists.

But unless the claim is made before 5 April 2011, the window of opportunity may be shut forever as the Government is thought to be planning to end the ability to offset these tax allowances against income earned in the UK.

Davies estimates that over 97% of holiday home owners are unaware of these tax allowances, due to the specialist nature of this area of property taxation, and that millions of pounds remains unclaimed.

International payment specialist, Smart Currency Exchange has experienced a 50% increase in the value and volume of euro funds being repatriated back to the UK over the last 12 months and expects this to steadily increase as expats continue to return to the country from the eurozone. The tax benefit could make all the difference to the many owners struggling to keep their homes due to the weak pound and lower occupancy rates.

‘It is possible that between 20 and 30% of the purchase price of a property could be claimed as Capital Allowances, which on a property bought for £250,000, could mean a tax saving of £15,000 to £37,500.  These are large sums and the owner has an entitlement to claim them,’ he explained.

‘In these austere times as the government looks to raise revenue, holiday homes, as well as buy to let portfolios are coming under the government spotlight. Irrespective of when they bought their property, owners need to stake their claim now before the legislation changes, or this money, which is rightfully theirs, will be lost forever,’ he added.

The legislation allows owners to claim tax allowances against items such as electrical cabling, kitchen fixtures and fittings, plumbing, air conditioning, and many other items integrated into the fabric of the building, which will not have been claimed for by their accountant.

Claiming Capital Allowances is a specialist area, involving surveying as well as knowledge of this particular part of taxation law. As there are penalties imposed on accountants for inaccurate claims, most accountants will not prepare capital allowance claims, but are happy to use specialists such as Hedge Tax Mitigation to provide the documentation necessary to make a claim.

It is estimated that over two million British tax payers own holiday homes in the UK and overseas, with the estimated value of British owned properties in the eurozone currently considered to be around £47.5 billion.

Rental incomes have been steadily falling as the economic slowdown sees saw fewer people taking vacations abroad. In addition, the weak pound has meant UK based owners of overseas holiday homes have had to convert significantly more sterling in order to cover mortgage payments and other property maintenance costs and taxes.

To qualify as FHLs, holiday homes must be furnished and situated in the UK or the European Economic Area (EEA). They must also be available for letting to the public as holiday accommodation for at least 140 days a year and actually let for at least 70 of these at market rate. Once a claim is made, it can be used to claim back tax already paid or to reduce tax due in future years.

Halifax says UK property prices likely to fall further in 2011

Residential property prices in the UK continued falling at the end of last year with a decline of 1.3% in December, according to the latest Halifax House Price Index.

It means that prices are now 1.6% lower than they were in December 2009 at an average price of £162,435. The index also shows that in the final quarter of 2010 prices were down 0.9% on the previous three month period.

Martin Ellis, Halifax housing economist, said however, that the rate of decline is significantly less than the quarterly falls of 5 to 6% during the second half of 2008 and he expects a fairly flat market in 2011.

‘Looking forward, we expect limited movement in house prices during 2011 but with the risks on the downside. Interest rates are likely to remain very low for some time.  This will continue to support a favourable affordability position for those entering the market and limit financial pressure on existing homeowners to sell,’ said Ellis.

‘Current signs that homeowners are becoming more reluctant to sell would, if continued, help reverse the imbalance between buyers and sellers. Nonetheless, uncertainty about the economy, weak earnings growth and higher taxes could put some downward pressure on demand,’ he added.

The report points out that low interest rate environment has reduced the burden of servicing mortgage debt. Typical mortgage payments for a new borrower have fallen from a peak of 48% of average disposable earnings in mid 2007 to 29% in the last quarter of 2010. This key measure of affordability is at a better level than the long term average over the past 25 years (37%) and is an important factor supporting housing demand, it says.

Overall the market activity is stabilising, it suggests. ‘The number of mortgages approved to finance house purchase, a leading indicator of completed house sales, increased in November following six successive monthly falls, according to Bank of England industry wide figures,’ it points out.

'The number of approvals, at 48,000, was the highest since July on a seasonally adjusted basis. Approvals were 19% lower than a year earlier, 59,000 in November 2009, due to the ending of the stamp duty holiday on properties between £125,000 and £175,000 at the end of 2009, which boosted the number of approvals during the last part of that year.'

Ellis added that some modest variations in house price performance across the country, however, are likely and the regional picture is likely to be affected by the impact of public spending reductions.

Buy to let insurance: Adverse weather will not affect market

Buy to let insurance policyholders have been told that although heavy snowfall in December slightly affected property sales, it will not have impacted on the whole UK housing market.

Helen Adams, managing director at FirstRungNow.com, said that housing prices were predicted to remain largely flat this year.

She explained: "I think that demand is perhaps a little bit worse than last year and sales were down a bit because of the weather. It might have had an effect just before Christmas but I don't think that it is really going to significantly affect the market for the whole of the UK."

Ms Adams added that price fluctuations could be a good opportunity for people to negotiate on the asking price and secure a place on the property ladder, particularly if the market is depressed or dipping.

The comments come as the Royal Institute of Chartered Surveyors revealed that the level of completed house sales stabilised at the end of 2010.

UK financial watchdog opens public debate on product intervention

Written by Ray Clancy
Tuesday, 25 January 2011 10:19
      

The UK’s financial watchdog has today (Tuesday January 25) published a discussion paper to open a public debate over the future of financial products and how they are regulated.
The Financial Services Authority (FSA) is seeking views on how it and the proposed new Consumer Protection and Markets Authority (CPMA) should pursue the objective of consumer protection and specifically the issue of product intervention.
As part of its new consumer protection strategy introduced last year, the FSA has already introduced a more interventionist approach with the aim of anticipating consumer detriment where possible and stopping it before it occurs. The approach aims to reduce consumer detriment by dealing with problems earlier, scrutinising the whole of the product lifecycle from start to finish rather than just focusing on the point-of-sale.
The paper outlines how the FSA has already begun to make a significant shift towards a more interventionist approach with tighter supervision of the governance of product development.
But it also sets out a range of future interventions that could be introduced in areas where the potential for customer harm is greatest. These might include interventions such as banning products or prohibiting the sale of certain products to specific groups of customers.
‘The crucial issue is how far along this spectrum of earlier and more intense interventions we should progress. This debate comes at a critical time as the scope and powers of the CPMA are being discussed by the government, parliament and stakeholders. It is fundamental to shaping the regulatory philosophy of the new organisation,’ said FSA chairman Lord Turner.
‘Our analysis has led us to the conclusion that a significant shift in approach is required but there are important tradeoffs to be struck between consumer protection and consumer choice, between effective regulation to prevent customer detriment and the costs that that will inevitably impose,’ he added.
Consumer champion Which? welcomed the move and said it is long overdue. ‘We're pleased to see Lord Turner recognise that the FSA's hands off approach to product regulation needs a serious overhaul. Which? has been campaigning for years for the FSA to tackle the problems at the heart of the industry, that many  are fundamentally useless or, even worse, toxic to consumers,’ said its chief executive Peter Vicary-Smith.
‘If left to its own devices, the industry will spend its energy inventing products and sales practices that fill the balance sheets but don't deliver for their customers. From pension and endowment mis-selling to PPI and most recently the emergence of identity theft insurance, this hall of shame is evidence enough that a new approach is long overdue,’ he added.

Courtesy : investmentinternational 

UK property tax increase unlikely to hit prime real estate market

The increase in Stamp Duty in the UK is unlikely to have much of an impact on the high end of the property market in terms of prices, research suggests.


From April 6 this year those buying properties worth £1 million or more will see the amount they pay in stamp duty rise from 4% to 5%, but research from Investec Specialist Private Bank amongst estate agents, property developers and mortgage brokers specialising in this market reveals that 52% expect this to have no impact on prices.
Some 45% expect prices to fall slightly as a result of this, but none of those interviewed believe there will be a sharp fall as a result of this rise in stamp duty.
Similarly, 55% of these property specialists interviewed believe that the decision to raise Capital Gains Tax (CGT) from 18% to 28% last year for higher rate taxpayers has had no impact on prices in the high end property market.
However, some 41% think they have fallen slightly as a result of this, and only 3% think that this change has resulted in a significant fall in prices.
‘The high end property market appears to be quite robust to adverse changes in tax. This is probably because the market is still seen as being very attractive, with opportunities for both British and non UK buyers,’ said Jack Jones of Investec Specialist Private Bank.
‘The sector is very different to any other residential property market, and this is demonstrated in its recent strong show of resilience. Sales are still strong and demand for million pound plus properties although down, remains high,’ he added.

Indeed, Investec’s research reveals that only 41% of estate agents, property developers and brokers specialising in the million pound property market are less optimistic now about it than they were before the credit crunch.
One in three, some 34%, are actually now more optimistic. Investec says this helps explain why one in four, 75%, don’t believe that a ‘bubble’ is developing in the million pound plus residential property market.
Investec recently launched a £Million Plus mortgage targeted at high net worth professionals who do not get paid along conventional lines, but rather accrue irregular income such as lump sum bonuses. The new custom made mortgage offering takes overall income and wealth into account rather than just the value of an individual’s property and their regular monthly income.
The £Million Plus mortgage is aimed at the top end of the market, with loans available exclusively to individuals looking to borrow a minimum of £1 million with sustainable earnings in excess of £300,000 a year and an established balance sheet in excess of £3 million.
The mortgages may be secured against a variety of assets including property, shares, investment holdings and offshore deposits, and are available in a number of currencies. The offering is not limited to UK nationals and includes the purchase and refinance of UK property residence and investment properties.

Courtesy : propertywire

Tuesday, 25 January 2011 : sell house fast