UK Property Headlines
Buy a bungalow in Galashiels, make a Scottish property fortune
● Property boom in Scotland as prices rise double the rate of UK in last quarter
● Average house price in Edinburgh over £205,189, an 11% increase making it most expensive place to buy.
● Edinburgh “halo” effect in Dalkeith, strong city buyer interest causing 35% plus housing inflation. Rail links benefical to areas like Fife where Lochgelly property price breached £100,000 barrier but still most affordable town in Britain. Scottish Border town of Galashiels experiencing ripple effect as buyers travel further for larger semi-rural property
● Average price of a property in Scotland £138,655 behind the UK average of £192,314.
● Strongest growth for bungalows followed by detached homes then flats.
● Call for stamp duty raise from current £125,000 threshold to give first-time buyers first rung property ladder opportunity.
● Prospect of more expensive mortgages may halt boom, expected May interest rate rise to 5.5% followed by 5.75% summer increase after prices rose above the government’s inflation target last week.
UK is a top global buy-to-let location
● New study based on buying costs, rental yields and capital growth reveals UK second-best place to invest in buy-to-let property globally.
● Poland top with 165% return on cash investment followed by the UK (63%), Bulgaria (54%), France (51%) and Turkey (45%).
● UK offers investors continued strong sustainable housing market growth with low investment risk, low purchasing costs and self-management option.
● Demand for rental property from unsuccessful first-time buyers strong basis for buy to let investment coupled with housing shortage driving house prices up by 8-10% in 2007/8.
6 major UK house price indices show 9.8% average annual growth as at Feb 2007 result of supply and demand imbalance.
● Investors should take long-term view for strong capital gains despite low yields.
Halifax research reveals top ten fastest rising property hotspots in Northern Ireland
● Halifax regional house price survey of 489 UK towns finds Craigavon and Newtownards in Northern Ireland experienced the largest growth in house prices rising 55 per cent in a year.
● 1st quarter 2006 average Craigavon property price £118,551 now £183,795 whilst Newtownards average prices rose to £197,134 from £127,590.
● Cheapest town to buy a home in the UK - Lochgelly in Fife - house price average £104,738.
● A north-south divide emerging, escalating prices rises in south-east, south-west and London and price rises slowing in the North. Overall, house prices increased by 2.8% in Q1 2007 compared to 4.2% rise in 2006 Q4.
● House prices still rising in a tight market but emerging signs dampening housing demand as pressure on householder finances increases. Evidence of reduced market activity.
higher level of interest rates, negative real earnings growth and above inflation council tax bill increases expected to lead to slower future house price growth.
● A shortage of housing supply and sound economic fundamentals should support UK house prices.
Tesco joins the property bandwagon
● Tesco owns property assets worth £28bn, Europe’s biggest property company currently owning 84 per cent of its freeholds.
● Tesco constructed 300+ homes in past few years with “pipeline” proposals to build 2,000 affordable homes in mixed-use schemes.
● Plans for £7bnsell over the next five years via 50% stake joint ventures under sale and leaseback scheme.
● Downside upfront gains remove future involvement in market, securitisation regarded as sensible alternative like a commercial mortgage where retailers still own the outlets.
● New option of REIT a tax-efficient investment vehicle which holds property and all profits are paid as dividends but scheme riddled with problems
● Plans to capitalise on the booming demand for UK commercial real estate in the UK as capital values of retail, office and industrial properties soared 20% annually since 2004
● Noteworthy £36bn market capitalisation less £28bn property Tesco worth £8bn, equivalent to just nine weeks’ sales- overvalued?
