NEWS
Wednesday February 14, 2007,Guardian Unlimited
Buy-to-let mortgages increase by 48%
The number of mortgages taken out by landlords shot up by almost 50% last year, figures showed today.
During 2006, banks, building societies and other lenders handed out 330,000 buy-to-let loans worth a total of £38.4bn. The Council of Mortgage Lenders (CML) said the figure represented a 48% increase in volume and a 57% increase in value over 2005 levels.
In all, the number of buy-to-let mortgages outstanding now stands at around 850,000, worth a total of £94.8bn. Since the end of 2005, when the corresponding figures stood at 702,000 and £73.4bn, the number of buy-to-let mortgages has risen by 21% and their value by 29%.
Buy-to-let lending now represents 9% of the value of all mortgage balances, up from 8% in 2005. The number of landlords falling into arrears also continued to fall during 2006, the CML said. The proportion of buy-to-let mortgages three months or more in arrears dropped from 0.64% at the end of June to 0.59% by the end of the year. The figure is lower than the 0.89% of loans in arrears in the wider mortgage market.
Lenders repossessed 1,142 buy-to-let properties in 2006, representing 0.14% of all landlord mortgages. This compares to a 0.15% repossession rate in the market as a whole. The number of cases where a receiver of rent was appointed - someone who collects rent on behalf of a lender in the case of mortgage default - was recorded at 0.06% of buy-to-let properties.
Michael Coogan, director general of the CML, said: "The buy-to-let market has performed even more strongly than the wider market over the course of 2006. "With evidence from other sources of strong tenant demand, rising rents and falling void periods, buy-to-let looks set to continue to remain popular and successful.
Mehrdad Yousefi, head of intermediary mortgages at Alliance & Leicester, said: "There was a 20% increase in buy-to-let in the second half of 2006 compared with the first half, which would have been helped by attractive pricing and flexible lending policies in the market, along with the return of the portfolio landlords."
Mr Yousefi said portfolio landlords would "continue to thrive, particularly in a single digit house price inflation environment."
Invest In Budapest? Guide To Hungary's Capital
Budapest, aka the 'pearl of the Danube' is the beautiful capital city of Hungary. The country has been a member of the EU since 2004. With the communist years now a fading memory, and hopes of accession to the Euro before too long, it's considered a good long-term investment.
Budapest itself is a thriving city that effortlessly combines beautiful architecture and a buzzing caf culture and arts scene with the commerce that accounts for 60 per cent of the country's GDP.
For Brits who want to own a city bolthole, Budapest is a more attainable alternative to Western European capitals, and numerous airlines, including the low-cost carriers, can fly you there in a couple of hours.
And, of course, the city's blend of students, workers, and international business people, many of whom need to rent accommodation, has not gone unnoticed by, among others, Irish, Danish, Italian, Israeli, and British investors.
Who's Buying, Who's Renting?
Tom Liddell from UK-based Access Hungary says that most of his clients are buying to let:
"They range from seasoned investors snapping up 60 properties at a time, to people in their twenties who can't get on the property ladder at home."
In Budapest potential tenants will depend largely on the area you choose to buy in, but, according to Liddell, the tenants that his clients have found tend to be students, young professionals and foreign business people.
Location, Location: Where Should You Buy?
Budapest straddles the River Danube, and is comprised of 23 numbered districts. The numbers run clockwise out from the middle, with the most central districts having lower numbers and, usually, higher prices.
The districts all have differing attractions. District VI, for example, is home to the best cafes, bars, theatres and the opera house, while District IV, which is on the Danube, offers clean air and easy access to the centre.
But investors willing to take a risk may want to look further afield, for example to District VIII, home to much of the city's gypsy population, which has recently been the subject of much investment, or District X, which used to be an industrial area.
How Much?
Obviously this can vary enormously, but a one bed apartment in District VI could cost 60-85,000, while the same sized place in the less popular District VIII only 43-65,000.
Hungarian mortgages of up to 70-80 per cent are available to British buyers with interest rates of around six per cent.
What To Buy: New Build Or Crumbling Beauty?
While the beautiful Habsburg-era dwellings can be tempting for the romantic British buyer, agent Robert Weiner, from GPL Hungarian Real Estates warns extreme caution.
Not only can renovating from a distance be costly and difficult, but, he says, pricing resale property is tricky, and you could easily end up paying too much.
In addition, according to Weiner, an older property may not appeal to the local rental market.
As the standard of living of many Hungarians has risen, they are looking for more modern accommodation. You can rent out resale properties but tenants prefer the newly built, says Weiner.
In addition, older properties may come with larger, but fewer rooms, which reduces the amount of potential rental income. "A 40sq metre property might be a resale studio," says Weiner, "but it would be a one bedroom new build."
You could have the best of both, however, in the form of the new loft apartments that are appearing on top of many of the historical buildings.
Developers install a new lift, and build up a couple of extra storeys on top. "The buildings are beautiful," says Weiner, "but the loft conversions are a better investment."
The Prospects: Get Rich Quick?
According to the agents, although there has been a huge amount of new construction, tenants are still out there, and rental incomes are covering foreign investors' mortgages, (though yields of 7-8 per cent may be more likely with international tenants).
But, in terms of capital growth, this is no high-risk, high-profit emerging market. Although the city has seen huge price rises in recent years, it now looks set for more moderate growth, and investors are tempted more by stability than high profits.
According to a recent Knight Frank report on global house prices, year-on-year price growth in quarter two 2006 was five per cent.
Robert Weiner at GPL Hungarian Property says: "I have people who say they want to invest for a few months, and I have to tell them that really it's a three-to-four-year investment."
The Buying Process
If you are buying only one or two properties in Hungary the process is drawn out but straightforward. Permits are required, which appear to be a formality, but can take three months.
However, if you need to speed it up, or plan to hold a portfolio of properties, you will have to establish a Hungarian company.
This will reduce your tax bill on any rental income, but may cost you around 700 to set up, plus monthly payments to maintain your books. In addition, as a business, you may have trouble borrowing more than 50 per cent on a Hungarian mortgage.
Your total legal expenses will vary according to price and whether the property is a new build or a resale.
Stamp duty on new builds is six per cent, but it starts at 15 million forints (around 37,000). So if you're buying a HUF 20 million (around 53,000) new-build property, you should set aside around HUF 800,000 (2,115 or four per cent) for legal expenses.
For resale properties duty is two per cent on the first HUF 4 million rising to six per cent thereafter, so you would need to add an extra HUF 740,000 (nearly 2,000) to your costs.
Tips
Choose a reputable agent and developer.
- Avoid inspection trips offered by agents - don't be pressurised into making any decisions.
- If you want to buy in a less salubrious area, be realistic. It may take a long while for it to become 'gentrified', so look at the reality, as well as the potential.
- If you are asked to pay any fees or commission to an agent, look elsewhere.
Hungary: The Facts
Total Population: 10.1 million
Budapest population: 2 million
Government: Parliamentary democracy
Official language: Hungarian
Currency: Currently the Hungarian Forint (1 = approx HUF 400), but accession to the Euro looks likely by 2014
Major religions: Roman Catholic, Protestant, Greek Catholic, Jewish, Orthodox
Members of: the IMF (1982), NATO (1999), OECD (1996) and the EU (2004)
How to get there: By air: Budapest (Ferihegy) International Airport is ten miles from the city centre. By rail: direct links between Budapest and 25 other capital cities. By water: hydrofoil services during the summer months link Budapest with Vienna and Bratislava.
Within the city: Three subway lines, buses and trams carry passengers throughout Budapest.
Nikki Sheehan Find A Property 2000-2007
Lender backs buy-to-let prospects
Phillip Inman
Wednesday November 22, 2006
Guardian Unlimited
A current boom in the market for rented properties will fuel the buy-to-let market for a decade, the third largest buy-to-let lender said today.Paragon Group said a rise in the number of twenty and thirty somethings wanting to rent rather than buy a home will stoke the market for the next 10 years.
The influx of 500,000 Polish immigrants and more to come from other east European countries will also play a part in maintaining the boom, the firm said, after issuing figures showing profits before tax up 15.3% to 82.8m in the first six months of the year.
Next door to Santa Claus - Buy a house in Finnish Lapland and watch out for reindeer either on the road or on your plate, says Peter Conradi
The Sunday Times December 17, 2006
It is close to midnight on a Saturday night, 90 miles north of the Arctic Circle in Finnish Lapland, and the karaoke machine in the wood- panelled Yllashumina restaurant and bar is humming. Most of the performers opt for Finnish tango, a melodious if somewhat improbable mix of Nordic and Latino culture that is highly popular with the locals. But then a British voice mangling an old Gloria Gaynor number sounds out through the clink of glasses.
Courchevel, Chamonix or St Anton it aint, but Akaslompolo, a little Lappish village in the shadow of the Ylas fell, whose name translates as a bend of the river, where the reindeer graze, is an intriguing alternative for those looking for guaranteed snow without the hustle and bustle of the Alps.
Introduced to Lapland on trips to Father Christmass post office in Rovaniemi, to the south, Britons are now also buying property in this northernmost corner of Europe, drawn not just by the pristine forests and lakes and the prospect of a glimpse of the aurora borealis (northern lights), but also by Finlands steadily appreciating property market. A house near Santas, it seems, can be for life not just for Christmas.
Like many British buyers, Colin Brunt, 45, a chartered surveyor from Ingatestone, Essex, discovered Lapland when he took his children on a Santa holiday in December 2002. Out for a walk in Akaslompolo one day, he came across a half-built cabin in the snow. He got talking to the owner and was so impressed by what he saw he started to think about buying.
After going back to Britain we tried to do some research on the internet, but it was impossible to find anything in English, so we went back the following summer and spent two weeks touring around, says Brunt. We ended up going back to the original ones we had seen half-built and bought one. He paid 93,000 for the three-bedroom cabin, taking possession in February 2004.
When told by the locals that he was the first Briton to have bought in the resort, Brunt had an idea: if he loved Lapland so much he wanted to own his own place there, then wouldnt some of his fellow countrymen, too? His company, Above the Arctic, was born.
The first year, we only sold one property and, like with any new business, we felt like giving up, he says. But we persevered and the following year sold 10 or so. This year it is likely to have been about 40.
Indeed, Brunt is so keen on Lapland that he and his wife Beverley, 40, intend to move to Akaslompolo in February, putting their children Fabian, 10, Tristan, 9, Blythe, 5 and Osbourne, 3, into the local school.
There is definitely a group of people who love snow and want to have their main holidays in places like Lapland, he says. It may also be a good investment. Restrictions on building have helped property prices in the area rise more than 50% in the past six years with annual growth now close to double figures. Brunts own experience reflects this: he recently sold his original cabin for 141,000, has since bought another two-bed one and is on the lookout for a larger three-bedder.
So, Santa Claus apart, why come to Lapland? If downhill skiing is your main interest, then it is probably not worth making the trip all the way from Britain, more than three-and-a-half hours away by plane. Yllas, the local ski resort, in use since 1927, when reindeer were used as a natural ski lift, is the biggest in Finland, with 57 slopes and 27 lifts, but that is not really saying much. The slopes are not especially challenging and the summit a mere 2,355ft high.
But that is not really the point, says Mauri Kuru, managing director of Yllas Travel Service, a local rental agency that is branching into property development. Lapland is something exotic, he says. People may come to ski if they are beginners or intermediate, but it is more about the snow and the huskies, the ice fishing and the snowmobile safaris.
And, of course, the reindeer encountered either on the snow-covered roads (local drivers always carry a knife to put the poor beasts out of their misery in case of an accident) or, less traumatically, on your plate: the local restaurants do a fine smoked reindeer soup that can be followed with poor Rudolph, either sauted and covered in loganberries, or filleted and served in cream sauce. The more adventurous eaters might prefer the bear or wild boar although vegetarian alternatives are available.
I love the romance of the cold, the snow and the log fire and the peace and then to be able to get on a Ski-Doo and go across the lake at 70mph, says Steve Bird, 48, a parking consultant from Harrow, Middlesex, who together with his wife, Tracy, 41, signed up last week to buy a two-bedroom cabin in Akaslompolo for about 121,000. It takes me back to my childhood.
The couple also first came to Lapland in 1997 on an organised Santa tour with their children, Stephen and Natasha, then seven and four, on what was meant to be the trip of a lifetime. They liked it so much they have been back every December since, discovering Akaslompolo in 2000 and making a number of Finnish friends.
Their only concern apart from the fear that too many British will follow in their footsteps is global warming. Since we have been coming here, it has been getting an average one degree hotter every year, says Bird. Some times we have been here and its been below -40C. But when we arrived at the airport last night it was raining.
Like many of the Britons buying, the Birds plan to use their cabin, which should be completed in February 2008, for only a week or so a year. The rest of the time they hope to rent it out. Local rental agents put the season realistically at 20-25 weeks, which should ensure a rental yield of 6%-8%.
The rental market is a varied one. In December, when the sun never even makes it above the horizon, it is dominated by Britons on Santa tours. Finns, French and Germans tend to come up to ski from February to May, when the days get longer, or visit in September to appreciate the brilliant autumn colours. June and July when the sun barely sets at all, is much quieter not least because of the mosquitoes that emerge from the swampy ground.
And then there are the Russians, who have such a filthy reputation that one of the local letting agencies allows owners to stipulate they dont want their property let to them. Part of it is historical: many older Finns, in particular, have never forgiven their giant eastern neighbour for annexing a large chunk of Karelia after the 1939-40 Winter War. But nor does the behaviour of many of the modern-day Russian tourists endear them to the locals.
Weve had cases when, rather than going to get more wood for the fire when they run out, the Russians just chop up the furniture and use that instead, said the agencys owner, who did not want to be named for fear of upsetting potential clients. And they ruin the cross-country ski tracks by driving their snowmobiles over them. A lot of owners just wont have them.
The majority of Above the Arctics properties for sale are in Akaslompolo. Flats start at 57,175 for a 33sq m studio up to 90,750 for a 55sq m two-bedder. Most British buyers prefer wooden cabins, which also rent more easily, especially outside high season. A 56sq m one-bedder made out of kelo logs a very hard kind of pine several hundred years old will cost 91,600, while 114,150 will buy a 76sq m two-bedder. The company also has a massive four-bed, four-bath 130sq m cabin with 54sq m mezzanine for 303,100. All properties, the smallest studio included, have their own sauna. The off-plan ones come with euro mortgages of up to 60% loan to value, with interest rates that can be 4% or below.
The company is also looking at selling in Yllasjarvi, another village on the other side of the fell and in nearby Levi, a slightly livelier resort that caters for a younger crowd more interested in bars and nightclubs than family restaurants.
Still not quite exotic enough? Next year Above the Arctic is hoping to begin marketing modern two-bedroom traditional Lapp teepees in the nearby Lainio Snow Village, the centrepoint of which is a hotel made entirely of snow and ice, that is built every winter and gradually melts away in the summer. The hotel, which features beds, chairs and tables made of ice, is a popular tourist attraction; teepee owners would most likely be able to rent out their properties through the village to tour operators, generating good rental returns.
But why confine yourself to Yllas and Levi? In theory, those with a little initiative should be able to pick up somewhere away from the big resorts, although finding a property from Britain may not be easy.
Brunt, meanwhile, has his eyes on Swedish Lapland, which lies a short drive away. The company has been considering projects in Overkalix, a popular ski resort set in spectacular scenery just south of the Arctic Circle, where prices are expected to be substantially lower than in Finland. Those in search of complete isolation, meanwhile, should be able to pick up a cabin by a lake for as little as 10,000-20,000. Again, how easy it is to find one for sale remains to be seen. And there is unlikely to be a karaoke bar anywhere near once you get there which, on reflection, may not be such a bad thing after all.
Cabin fever
A one-bed 48sq m Kopara log cabin in Akaslompolo, near the Yllas resort, for 91,600, with Above the Arctic (01277 824 200, www.abovethearctic.com).
Like most Finnish properties, it has a sauna This three-bed 100sq m Kurunkolo log cabin, in Akaslompolo, has a mezzanine that can make a sleeping area. It is for sale for 200,600 with Above the Arctic, 01277 824 200, www.abovethearctic.com
Northern house prices to rise 60% by 2011
Thursday, 05 Oct 2006 . Source: aboutproperty.co.uk
Homebuyers in Yorkshire & Humberside should expect the average house price in to rise 60% to 220,000 by 2011, a new report reveals.
The research, commissioned by the National Housing Federation, the Chartered Institute of Housing and Yorkshire and Humberside Housing Forum, has been labelled a "timebomb" due to affordability and supply issues.
The rapid growth for Yorkshire and Humberside is faster, in percentage terms, than the national average - benefiting current homeowners and the regional economy, but preventing first-time buyers getting on the property ladder.
The price rises in the region are particularly sharply felt as Yorkshire & Humberside's average income levels have not risen at anything like the same rate as property prices.
In 1998 the income to house price ratio was 3.4, whereas this year it stands at 6.6, the report finds. In actual terms, the average salary in the region is 21,014, but researchers estimate to afford a mortgage homebuyers need to be earning 38,000.
The report predicts this gap will continue to grow year on year.
Jane Evison, of the Yorkshire and Humberside Housing Forum, commented: "We have the evidence here to demonstrate to government that affordability is not just a southern issue. We will be making a strong case to government as part of our submission to the [government's] comprehensive spending review for the appropriate resources and policy tools to be able to deliver much needed affordable homes across the region."
Also highlighted in the report is a split in the housing market, with average house prices in some locations almost four times the price of the cheapest areas.
Julie Gamble, of the National Housing Federation, said: "The figures revealed today make clear that much more needs to be done in this region to turn these two housing markets into one. We need affordable homes in the areas seeing a rapid rise in prices and continued support to renew the housing market in the more deprived areas of the region.
"It is vital that through the comprehensive spending review 2007 the government make housing a top priority for increased investment."
Around 4,500 to 5,000 new affordable homes are needed to prevent the housing crisis in the region, according to the report
Land Registry: Average house price 169,569 - official !
Wednesday, 01 Nov 2006. Source; aboutproperty.co.uk
The average house price in England and Wales reached 169,569 in September, figures from the Land Registry show.
In its new official monthly regional house price index, the Land Registry reveals that house prices went up 1.3 per cent in September, the first time monthly price growth was over one per cent for two years. In the 12 months leading up to September, house prices have risen 6.3 per cent, the highest growth rate since June 2005, and a sign that across England and Wales, the market is going strong.
However, closer analysis of the regional breakdown shows London leading inflation in September, and some regions remaining static or dropping over the same period. Whereas London's two per cent increase was one of the highest, and the south-east and Yorkshire and the Humber also had strong rises of over one per cent, house prices in the north-east dropped two per cent in September.
At county and unitary authority level, the Land Registry survey shows three Welsh counties have the fastest monthly growth, Denbighshire, Powys and Newport rising over three per cent in October.
At the other end of the scale, house prices in Darlington dropped the most, falling 2.5 per cent during September, and prices in Essex, Leicester, Blackpool, York, Northumberland, Devon, Staffordshire, Warrington and Thurrock all had no monthly price movement.
The survey also shows widespread differences across London's boroughs, with Newham registering the highest monthly rise, up 3.5 per cent in September, and prices in Barking and Dagenham experiencing the smallest increase, at 0.9 per cent.
There was also downward movement in Greater London, with Havering, Sutton, Enfield, Brent and Croydon dropping between 0.1 per cent and 0.5 per cent.
