• Millionaires flock to 'safe haven' Sep 14 2011

  From The Scotsman

  Scotland’s million-pound-plus property market is bucking the trend as wealthy foreign buyers snap up prime residential homes across the country.
  
  Georgian townhouses in Edinburgh, properties within putting distance of a golf course in St Andrews and Highland sporting estates are particularly in demand by international buyers in search of a Scottish bolthole.
  
  Figures released by the selling agents Savills yesterday show the top end of the property market performing well, with 146 high-value homes costing £1 million or more selling in 2010, compared with 106 in 2009.
  
  Sales at £1 million and more during the first six months of this year were up by a third on last year, from 50 to almost 70.
  
  Among the high-value properties sold was 9 The Links, a terraced house overlooking the 18th green and the 1st tee of the Old Course in St Andrews, which was bought by Canadian energy executive, and golf fan, James Kinnear for more than £4m.
  
  Faisal Choudhry, Savills' head of research, said wealthy buyers were attracted to the Scottish housing market because it was seen as a "safe haven" from global financial turmoil and problems affecting the eurozone.
  
  "Since the credit crunch took hold we have seen the prime market fare better than the mainstream, due to its access to cash and equity in the face of restricted bank lending," he said.
  
  "It is also being fuelled by international buyers who are seeing the UK residential market as a relatively safe haven.
  
  "We're seeing ex-pats who have done well wanting to re-establish their roots in Scotland, international buyers from the Far and Middle East who feel Scotland is good value for money, those relocating from down south, or heading up to the oil market in Aberdeen.
  
  "They are realistic about prices and know that there is 'more bang for your buck' in Scotland."
  
  Mr Choudhry added: "However, where mortgages have been approved, these have been concentrated on the same prime market - a double blow for the mainstream market."
  
  One of the consequences of loan-to-value mortgage lending is that banks favour higher value properties, where equity has been built up over the years.
  
  The research showed loans associated with properties valued above £500,000 increased by almost 40 per cent during 2010 compared to 2009.
  
  But those associated with properties within the average house price range in Scotland - between £125,000 and £175,000 - fell by over 12 per cent over the same period. While the peak of the market was in 2007 when there were more than 287 property transactions equal to or over £1m, business experts said the recent increase showed a return of confidence at the high end of the market.
  
  David Lonsdale, assistant director at CBI Scotland, said: "This is an encouraging indicator that confidence is returning to parts of the housing market which will permeate out in due course. Obviously, the economy is still in a tough position but this shows some semblance of growth and shows that things are gradually starting to grow and improve across different parts of the economy. There are still a number of people and companies sitting on cash waiting for the right investment climate."
  

• Call for Action on Housing Crisis

  From BBC News

  Aug 30 2011

  The housing market will be plunged into ‘crisis’ without government action to address the ‘chronic under-supply of homes’, a body representing housing associations in England has warned.
  
  The National Housing Federation (NHF) said it risked locking an entire generation out of the housing market.
  
  It predicted further falls in home ownership rates and even higher rents.
  
  The government says it has made more land available for building and is investing £4.5bn in lower-cost homes.
  
  Housing Minister Grant Shapps said his plans would ‘get Britain building again’.
  
  ‘That's why I've announced plans to release thousands of acres of public land for housebuilding.
  
  ‘And despite the need to tackle the deficit we inherited, this government is putting £4.5bn towards an affordable homes programme which is set to exceed our original expectations and deliver up to 170,000 new homes over the next four years.’
  
  But the NHF said this represented a cut of 63% on the previous programme of government spending on homes to rent or buy.
  
  ‘What we need to do is to build new homes,’ NHF campaigns director Ruth Davison told BBC Radio 4's Today Programme.
  
  ‘Governments of all colour have not properly understood that we in the grip of a housing crisis, and unless they do something about it an entire generation will be locked out of decent housing.’
  
  'Expensive and unregulated'
  
  The level of house prices, the need for larger deposits and stricter lending criteria set by banks, had combined to cut first-time buyers out of the market, the National Housing Federation said.
  
  ‘People need much bigger deposits now, and typically people can only get mortgages of about 75% of the price of the home,’ she told the BBC.
  
  Research it commissioned from Oxford Economics suggests that the proportion of home ownership in England, which has been falling steadily for the last 10 years, could decline further from its current rate of 67% to 63.8% over the next decade.
  
  The forecasts are based on assumptions that affordability will worsen, as employment prospects and wages fail to keep up with a predicted 21% rise in house prices over the next five years.
  
  But with rents forecast to keep rising, and more than 1.5 million people on waiting lists for social housing in England, it is also the lack of affordable alternatives to home ownership that is worrying to the NHF and others.
  
  ‘Millions of people across the country remain desperate for an affordable place to live, with more and more forced into expensive and unregulated private rented accommodation,’ said Campbell Robb, chief executive of housing charity Shelter.
  
  'Through the roof'
  
  The number of new homes built last year was the lowest in peace time since 1923, recent figures suggest.
  
  ‘With major developers holding planning permission for at least 188,000 new homes, the government must urgently look at ways to get construction going. This will not only create jobs and drive growth but will deliver the homes people desperately need,’ said Shelter's Mr Robb said.
  
  David Ritchie, chief executive of homebuilder Bovis, told the BBC that he was ‘frustrated by the lack of support for first-time buyers’, saying the firm had itself lent the cost of deposits to help the buyers of its homes.
  
  The NHF said the problem of unsold new homes was particularly acute among smaller one- and two-bedroom homes in city centres built in recent years.
  
  Bovis, which has just revealed a doubling of first half profits, confirmed that it had shifted the mix of new homes it was building to larger, more expensive properties.
  
  'Generation rent'
  
  Oxford Economics predicts that average rents will jump by almost 20% over the next five years.
  
  Matt Griffith of campaign group priceout.org said young people in particular now faced the ‘toughest housing environment in decades’.
  
  BBC News Article 30 Aug 2011
  
  ‘This is producing a lose-lose for 'generation rent',’ he told the BBC News website.
  
  ‘Squeezed incomes from rent rises, inflation and stagnant wages are making saving for a deposit difficult.
  
  ‘We have a slump in house building levels whilst government efforts to stop declines in the wider housing market benefits existing owners over those priced out of the market,’ he said.
  
  Mr Shapps said that he was determined to ‘pull out all the stops’ to help first-time buyers.
  
  
  ‘That's why I've held summits with lenders to encourage them to do more to help people take their first step onto the housing ladder, and I've launched the FirstBuy scheme as a valuable alternative to the 'Bank of Mum and Dad' for those struggling to get together that much-needed deposit.’
  
  Announced in the Budget, the £250m scheme aims to help up to 10,000 people buy their first home by helping them out with a deposit.
  
  Those buying properties from some developers could receive a loan worth up to 20% of the value of the home from the government and the housebuilder.
  
  Pricedout.org said only a small number of those wanting to buy would be helped.
  
  But it praised government proposals to change the planning system to try to encourage more commercial residential housing.
  
  The National Housing Federation also said last month's draft National Planning Policy Framework, which aims to simplify the planning system, was ‘a step forward’.

• Buy-to-let market is the one to watch.

  From Mortgage Strategy

  Aug 29 2011

  DAVID FINLAY, MANAGING DIRECTOR FOR MORTGAGES, BARCLAYS
  It’s hardly a secret that the buy-to-let market has grown over the past 12 months. We’ve seen commentators up and down the land wax lyrical about the opportunities on offer, with some justification.
  
  Now we have additional data that puts even more meat on the bones. Recent figures from the Council of Mortgage Lenders show gross buy-to-let mortgage lending increased 29% by volume and 40% by value in Q2 2011 when compared with the same period last year.
  
  It states that there were 32,000 buy-to-let loans worth £3.5bn advanced in Q2, the highest number and value since Q4 2008 a rise of 16% by volume and 21% by value on the previous quarter.
  
  It’s interesting that these figures came out a day after more positive data from the CML showing that June saw a 10-month high in the number of mortgages taken out by first-time buyers.
  
  This suppresses any outcry about landlords snapping up properties from the clutches of first-timers.
  
  The CML also revealed that the increase in buy-to-let figures was primarily driven by remortgaging, accounting for 65% of the overall quarterly rise in lending.
  
  Such data will continue to be viewed keenly by lenders and landlords. Buy-to-letarguably remains the must-watch specialist sector for brokers.
  
  Let’s hope this competition continues to flourish and delivers the attractive deals that allow landlords to increase portfolios and remortgage existing ones.

• Net Migration Total Up by a Fifth Aug 25 2011
• Average Property Prices increase by 0.4 per cent Aug 08 2011
• Student Digs Graduate to New Level Jul 11 2011

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