UK property prices continue to gain

[CityFarmer]

UK property is hot...

UK property prices continue to gain

LONDON — Housing prices in the United Kingdom last month increased for a 14th consecutive month, the longest run of gains in almost seven years, as momentum spread across the country.

Values in England and Wales rose 0.6 per cent from February, while prices in London continued their relentless gain, climbing 0.7 per cent.

Record-low borrowing costs and a government incentive plan have spurred concern that the UK housing market risks overheating.

Financial stability officials from the Bank of England (BoE) said last week there was increasing momentum in the market and pledged to take more action if needed.
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http://www.todayonline.com/business/uk-p...tinue-gain

[CityFarmer]

One of the reasons, contributed the boost of the property price in London...

London house prices face boost from Ukraine turmoil

The central London property market stands to benefit from the crisis in Ukraine as wealthy Russians and Ukrainians funnel increased amounts of money abroad to escape domestic turmoil, investors have argued.

Property prices in the British capital have soared because foreign investors view London bricks and mortar as a safe haven for their cash. Research earlier this year found that geopolitical instability abroad had a direct positive effect on London house prices.
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http://www.ft.com/intl/cms/s/0/6105101a-...z2xW8sglXz

[pianist]

London homes are indeed beautiful, their old Victorian design , really can melt one heart

[greengiraffe]

http://www.cnbc.com/id/101571779

UK house prices to rise annual 6% for five years
Arjun Kharpal | @ArjunKharpal
4 Hours Ago
CNBC.com

UK housing: Low supply squeezing prices
Thursday, 10 Apr 2014 | 4:30 AM ET
Simon Rubinsohn, chief economist at RICS, highlights that while there's been a rebound in activity in U.K. housing, it's still a third down from its peak and lack of supply remains the main issue.
U.K. house sales hit a six-year high in March, a survey revealed on Thursday, but a supply shortage continues to send prices soaring.

The Royal Institution of Chartered Surveyors (RICS) study forecast property prices in Britain would rise 6 percent yearly over the next five years, fueling fears the market is in bubble territory.

RICS' survey showed that the average number of houses sold per surveyor in March rose to 22.7, the highest since February 2008.

Read MoreBubble alert? UK house prices rise to 6-year record
Simon Rubinsohn, chief economist at RICS, was confident the property bull run had further to go.

"I think we are still a third down on the high watermark in terms of activity, and in fact, in many parts of the country, we're really only just beginning to see a real emergence from what was quite a stagnant property market for quite some time," he told CNBC in a phone interview.

"So I think…in terms of activity levels, (we have) quite a way to run."


George Clerk | E+ | Getty Images
U.K. house prices have been rapidly rising, particularly in London and the south east, buoyed by historically low interest rates, an acute shortage of supply and a government mortgage scheme called Help to Buy.

Read MoreNo UK housing bubble, just a London one: EY
RICS' house price balance - calculated by subtracting the number of surveyors reporting a rise in prices from the number reporting a fall - rose to 57 last month, from 47 in February. This meant an increasing number of respondents saw prices rise.

Supply shortage

New sale instructions dropped for the third time in a row in March, highlighting concerns about supply shortage.

"The real problem actually is the lack of supply, there is just not enough stock out there. And in some markets…you're seeing prices squeezed up," Rubinsohn said. "I don't think anybody can feel very comfortable with where the level of house prices are now."

Read MoreUK finance minister pledge sends homebuilders soaring
The Bank of England waded into the house price debate last month, saying it would remain "vigilant to emerging vulnerabilities" in the real estate sector, in a statement published on March 27. U.K. Chancellor of the Exchequer George Osborne echoed the sentiment, and told a parliamentary committee last week that a "close eye" should be kept on the market.

Analysts are split on when the U.K. could see an interest rate hike, with many banking on a rise in 2015. This will have implications for mortgages and could help cool down the property sector, Rubinsohn said.

"I think obviously at some point the cost of money is going to go up one way, or another and that's going to slow the market," he said.


Arjun Kharpal
News Assistant, CNBC EU News Digital

[greengiraffe]

PUBLISHED APRIL 12, 2014

London's luxury home owners busy buying out neighbours

Residents creating super-sized homes to increase their value
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London
MERGERS and acquisitions are making London's rich richer. This time, it involves their homes. Some of the city's wealthiest residents are buying out their neighbours to create super-sized apartments that can double the value per square foot compared with the separate properties.
"If you can create a big lateral apartment, as opposed to one with stairs, you can create the beautiful drawing rooms and entrance halls that the wealthy are looking for," Mark Harris, chief executive of Savills plc's private finance unit, said in an interview.
Many homes in London's best neighbourhoods are more than a century old and lack the space and amenities that the rich expect. That's prompted owners to expand upward, outward and downward with backyard extensions and multiple subterranean floors.
In the borough of Kensington & Chelsea, home to Harrods department store and Royal Albert Hall, applications to combine apartments more than tripled last year to 65 and the council received 27 requests in the first two months of 2014.
A typical apartment in one of central London's most desirable areas is worth £1,500 (S$3,143) a square foot, said Oliver Hooper at broker Huntly Hooper. That compares with an average of US$1,363 for condominiums and co-ops in Manhattan, according to a report this month by appraiser Miller Samuel and broker Douglas Elliman Real Estate.
When London apartments are combined, the price can grow to as much as £4,000 a square foot, according to Mr Hooper. After construction costs, the gain is typically about 30 per cent, he said.
Owners are "approaching their next-door neighbours or those in the apartment above them and just asking, 'are you interested in selling'?" he said.
An apartment in a converted townhouse at 9 Vicarage Gate in Kensington recently sold for £1,276 a sq ft, according to Mr Hooper. Number 11 had been expanded and was placed on the market for £2,912 a sq ft, though it was later rented out, he said.
London luxury home prices have surged in the past five years as political and economic turmoil overseas attracted cash-rich buyers and foreign investors seeking a safe haven.
The rise in home expansions comes amid signs that London's boroughs may start taking a tougher stance on them. The city's housing shortage is increasing pressure to consider restrictions on a privileged few making larger spaces for themselves. An assessment of Kensington & Chelsea's housing policies will be published next year.
The policy evaluation prompted a flurry of homeowners seeking to gain approvals for extensions before any new rules take effect, Savills' Mr Harris said. Bloomberg

[greengiraffe]

PUBLISHED APRIL 21, 2014

London calling for mid-sized homegrown developers: OCBC

Funding access is an ace in hand for Asian developers forming JVs abroad
BYJAMIE LEE
leejamie@sph.com.sg @JamieLeeBT
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BT 20140421 JLOCBC21XH3T 1052879
Attractive: Commercial properties in London command a 5% yield. - PHOTO: BLOOMBERG
1 of 2
Listed property developers in S'pore have announced plans to expand into London and Australia.
[SINGAPORE] Mid-sized property developers in Singapore have joined the big boys in expanding overseas - particularly in London and Australia - and are expected to continue in pursuit of better margins amid stiff competition at home, said a senior executive from OCBC.
Last year, 20 per cent of construction loans that OCBC extended to Singapore developers have been allocated to overseas projects, head of OCBC's global corporate banking George Lee told The Business Times.
The developers are driven by the promise of better yield, Mr Lee said. OCBC's loan book in London has fattened about five times since 2010, given the interest in residential and commercial properties from Singapore developers.
Commercial properties in London command a 5-per cent yield. "In the context of Singapore, it's very attractive," Mr Lee said, noting that commercial properties here have a yield of about 3 per cent.
Also, commercial leases in London can stretch up to 15 years, compared to a typical three-year rental agreement in Singapore - a source of comfort to developers, added Mr Lee.
Interest is strong in Australia too, where commercial yield is even higher at about 6 per cent, he said.
Listed property developers in Singapore have announced plans to expand into these two markets, given pressures on home ground.
Hiap Hoe said in February that it would continue its expansion into Australia, having bought an investment property in Perth. In the same month, Heeton Holdings said that it plans to refurbish its recent London purchase, the Enterprise Hotel.
Mr Lee expects more construction loans from these two markets - seeing the same growth in absolute-number terms this year - though he noted that these loans are a fraction of the bank's overall loan book. OCBC has the second-largest construction loan book in Singapore after DBS. It booked about $25 billion in building loans last year, up 11 per cent over the year.
Property developers in Singapore see "intense competition and sluggishness in the market", said Mr Lee. Besides fending off competition from Chinese and Malaysian developers, property firms here have had their margins squeezed by the government's cooling measures.
"Given these dynamics, there is an impetus to go overseas," said Mr Lee.
While navigating unfamiliar territory, smaller property firms from Singapore and the region hold an ace in hand when negotiating joint-venture deals with foreign developers.
By bringing in a Singapore bank such as OCBC to the table, these developers offer a valuable credit line from Asian lenders when Western banks, particularly those from London, are shying from construction loans as they repair their balance sheets, said Mr Lee.
Hotel Properties sealed one such partnership with London developer Native Land and Malaysia's Amcorp Properties in 2012 to acquire an office building in London for £85 million (S$178.8 million) for redevelopment.
Malaysian developers have played the same hand. A consortium made up of the Employees' Pension Fund of Malaysia, SP Setia and Sime Darby, snagged a 400-million pound bid for London's Battersea Power Station in 2012, beating Chelsea Football Club, which planned to build a new stadium there.
Much attention has been drawn to the project, since the site of the idle building - which was featured on a Pink Floyd album cover - will be designed by famed architect Frank Gehry.
The site will become a residential area, with the redevelopment plans backed by funding from Asian banks such as CIMB Group, OCBC, and Maybank.

[greengiraffe]

London is one of the reknown IHMC (International Hot $ Centre)

http://www.cnbc.com/id/101637981

$237 million apartment sale sets record
6 Hours Ago
Reuters


London's red-hot property market has struck a new record with the sale of a 140 million pound ($237 million) unfurnished apartment, but even the developer of the opulent building warned that some asking prices in Britain were unsustainable.

Buoyed by the wealth of Russian oligarchs, Chinese tycoons and Arab sheikhs, London has become one of the most expensive markets on earth, raising concerns ahead of parliamentary elections in 2015 that locals are being squeezed out of the market.

A new luxury penthouse development at One Hyde Park in London.
Getty Images
A new luxury penthouse development at One Hyde Park in London.
"We're in boom-time prices, more expensive than we've ever been in the history of mankind," Nick Candy, one of the developers of London's One Hyde Park luxury apartments, at the pinnacle of the capital's super-prime residential sector, told Reuters.

Read MoreThese cities are rising real estate stars

"There is a concern over the market overheating ... Everyone thinks the main central London is doing so well, (so) the ripple effect is going throughout the UK, and some of the prices being achieved are probably unrealistic and not sustainable."

But money is still pouring in.

A source familiar with the matter said an Eastern European buyer bought a penthouse at the One Hyde Park apartment block for a record 140 million pounds.

Candy confirmed that a 16,000 square foot penthouse had been sold but declined to comment on the price or name the buyer. Developer CPC Group, which is run by his brother Christian, said the flat could be worth 160-175 million pounds when furnished.

Britain's previous record for an apartment was set three years ago by Ukrainian billionaire Rinat Akhemtov, who paid 136 million pounds for a penthouse and apartment at One Hyde Park to knock together into one property.

Read MoreReal estate prices in Hamptons soar 40%

There have been more than $2 billion in sales at the block, whose developer is a joint venture between CPC Group and Waterknights, the private company of Qatar's Sheikh Hamad Bin Jassim Bin Jabor Al Thani.

Candy & Candy, run by Nick Candy, were the interior designers and development managers for the project.

Political threats

The wall of money chasing a finite amount of property has sent luxury London prices soaring almost 80 percent since 2009, and while plutocrats' ostentatious purchases grab the limelight, prices have rocketed even in poorer areas.

Prime central London house prices have risen 79.4 percent since March 2009, against a 40.6 percent increase in Greater London house prices over the same period, according to data from Savills.

Read MoreIs Miami the next Monaco?

Candy, who with brother Christian started out in 1995 with a 6,000 pound loan from their grandmother, said the main risks to the market were changes in government policy, a rise in interest rates or oversupply at the top end.


PLAY VIDEO
Hamptons' real estate market soars
The average price of a home in Long Island's tony Hamptons rose an average 40% to $1.7 million in the first quarter of this year, reports CNBC's Robert Frank.
"If the political climate changes in either (London or New York), so in London next year the government wants to charge mansion tax and other taxes, the market might change. They might have a correction, a significant correction," he said.

"I don't see a massive correction unless a number of things happen, firstly a change of government, second of all, interest rates start going up high and inflation starts going."

The British government has in recent months imposed new taxes on overseas purchasers, while the opposition Labour Party, which is leading in opinion polls for the national election, has proposed a tax on houses worth over 2 million pounds.

Rising prices have prompted a rush of luxury developments.

More than 20,000 residential units—worth over 1,250 pounds per square foot—are scheduled to be built in London over the next 10 years, building consultancy EC Harris said in December, adding that this was more than double the 2011 pipeline.

Grosvenor Group, the landlord for much of London's upmarket Mayfair and Belgravia districts, said on Tuesday it had sold off 240 million pounds in luxury residential properties in 2013 and aimed to reinvest in cheaper districts, as it was concerned that prices at the top end of the market were vulnerable.

Such is London's wealth that Property consultant Savills calculates 10 London boroughs now have an aggregate property value equivalent to the total value of Scotland, Wales and Northern Ireland combined.

[specuvestor]

IMHO London property bust is going to be much more devastating to the local economy than US or China or Australia. On a total debt to GDP basis, UK is one of the highest at ~500%.

http://www.forbes.com/sites/jackperkowsk...ous-is-it/

"But how does China’s debt level compare to its assets and the debt levels of other countries? The CASS report showed that China’s net assets exceeded RMB 300 trillion ($49.3 trillion) in 2011, almost three times China’s total indebtedness. According to data supplied by the McKinsey Global Institute, the 10 largest mature economies in the world — Australia, Canada, France, Germany, Italy, Japan, Spain, South Korea, UK and US — had total debt of almost 350 percent of GDP in 2011. If Portugal, Ireland, Italy, Spain and Greece, the countries worst hit by the debt crisis in Europe, are included, total debt was almost 400% of GDP.

Of these countries, Japan and the UK were over 500 percent, and the United States and Germany were both at about 279 percent. If asset-backed securities, which many analysts include in total debt, are included, US total debt would have been 360 percent. To be fair, Sharma considers China to be a developing country, not a mature economy as those in the survey, and he argues that the “rate of increase” of debt, not necessarily the total amount of debt of a country, is the key measure."

[greengiraffe]

PUBLISHED MAY 15, 2014

Canary Wharf leads sharp rise in London home prices

Home prices around the Canary Wharf financial district climbed at the fastest pace in London in the year to April as hiring by banks increased demand for housing in and around the city's financial districts - PHOTO: BLOOMBERG
[LONDON] Home prices around the Canary Wharf financial district climbed at the fastest pace in London in the year to April as hiring by banks increased demand for housing in and around the city's financial districts.
Values jumped 16.2 per cent in the area from Limehouse to Beckton on the River Thames stretching north to Poplar, Knight Frank LLP said yesterday. Prices increased 2.3 per cent in the district a year earlier. Homes in the City of London financial district and its fringes climbed 15.7 per cent.
"Such strong price growth is built on the improving UK economy and the fact banks are hiring again," said Tom Bill, Knight Frank's head of London research. "When you add in rental income, you will struggle to find a prime residential market in London with a higher total return."
The housing markets in or close to London's financial districts were sluggish after the credit crisis as financial services companies cut staff and wealthy foreign investors opted to buy homes in the West End. Job vacancies in London's financial services industry climbed 67 per cent in April as companies sought employees to manage increasing demands from regulators, recruitment firm Morgan McKinley Ltd said yesterday.
Central London homes overall gained at an annual rate of 7.5 per cent over the last three months, Knight Frank said. New home registrations in London rose to the highest in 26 years in 2013 as developers sought to capitalise on a shortage in the city, the National House-Building Council said. In Tower Hamlets, the borough that includes Canary Wharf, 3,673 new homes were registered, more than any other London borough. Wandsworth was second with 2,136 registrations.
Canary Wharf Group plc, the company that controls the Canary Wharf office district, in March said it received permission to build a 58-storey residential tower named Newfoundland. The homes will be the first to be constructed on the estate.
Singapore-based developer Oxley Holdings Ltd plans to build 3,400 homes at nearby Royal Wharf after paying £200 million (S$419 million) for the site in November. - Bloomberg