Cheap Flats In London

Expert commercial property predictions remain extremely mixed.  It appears that the long-term effects of the credit crunch have left even the commercial property specialists confused.

Looking at current and past performance figures we can see that there is physical evidence that commercial property rents are continuing to decline across Europe, the Middle East and Africa (CB Richard Ellis’s latest research) and that the fallout from the recession is persistently affecting SMEs and large corporations alike.  Even Tesco our biggest supermarket chain are reducing their spending on new properties in order to decrease their costs during the recession.  However, this doesn’t quite tell the full story and in a similar pattern to Sainsbury’s and the other large grocers Tesco are still planning to expand their UK selling space by six to seven percent each year by developing their existing stores.  Comparable to residential home owners who rather than looking to purchase larger properties are instead looking to make the most of the space they already have.

The declining rental values are visibly affecting UK commercial property values and the Royal Institute of Chartered Surveyors (RICS) believe that our commercial property market is only now halfway towards recovery and won’t recuperate for at least another two years.  These predictions are in stark contrast to other industry experts who believe that 2009 will see the end to the current declines.

Confidence in commercial property investment does appear to be improving however with investors feeling far less pessimistic than at the end of 2008.  This combined with the current weakness of the pound and the fall in commercial property values over the last twelve months mean that investor interest in London commercial property has increased significantly over the last month alone.  Foreign investors are leading the way with many deciding now is the prime time to invest into UK commercial property.

Despite the increased interest investors are being warned that rents are still likely to continue to fall throughout 2009 as vacancy rates increase and the recession takes its toll.  Tenants are continuing to enjoy the declining rents which simply didn’t occur at the same pace in previous commercial property recessions due to the fact that leases are now much shorter and more flexible with increased break clauses.

In the aftermath of the recent Northern Rock crisis many property experts are now warning of the risk of a 1990’s style property crash in the future, although they put the chances of this actually occurring at 10 percent. Whereas these same experts had previously predicted continued increases in property prices, this change of tact in property price predictions is due not only to the events at Northern Rock, but also due to what has happened recently in the sub-prime lending market in the United States, as well as the seemingly endless increases seen in UK property prices.

However, Simon Rubinsohn, chief economist at the Royal Institution of Chartered surveyors told Reuters that while talk of a “crash” was legitimate and not irresponsible, homeowners were unlikely to see a repeat of the previous slump. Rubinsohn had previously predicted further increases in prices over the next 12 to 15 months, estimating growth of around 3 percent. Now, however, he is forecasting a flattening of prices across the same time period.

The huge increase in property prices seen throughout the UK over the past few years has made its share of the headlines – highlighting the need for more housing in the country. Property news and price forecasts have driven people towards making decisions regarding buying and selling their homes and investment properties and we are likely to see this new prediction change the property market yet again.

The number of people buying property to rent has already been subject to increase and these numbers are only likely to climb even higher in response to the latest news regarding the fall of property prices. Rubinsohn predicts London property will have the greatest likelihood of experiencing a drop in prices, claiming that were was a 20 percent chance of a decline in property prices in the City – possibly as much as 10 percent. As a result, many homeowners who have recently sold their properties are now hedging their bets on further price reductions, while in the meantime renting properties as they wait to purchase property at an even lower rate.

Renting accommodation allows these people who have recently sold their property to sample life in a new area, town or city. Furthermore, many people who have recently sold their property have been placing their profits into savings accounts in order to take advantage of high rates of interest currently on offer through banks – often generating a sizeable income while waiting for the perfect opportunity to reinvest in the property market.

If the drop in prices of property for sale in London and across the country does occur, it will also give hope to many people who have previously been out of reach of the property ladder as prices and deposits will be lower than before.

Soho Properties set to become King Sturges’ sole agent in Thailand

According to property sources in the UK, there are an increasing number of Asian investors looking to purchase property in the UK. Due to the drop in property prices and the large increase in some Asian currencies against the pound, it makes them more affordable and a sound investment.

According to the Guardian newspaper, the Nationwide has said house prices rose by 1.6% in August 2009: “The chief reason why house prices have not fallen by as much as many of us expected is that, unlike the early 1990s, interest rates are extraordinarily low. At the same time, banks are being more cautious about repossessions, because it’s the people who now own the banks.”

It seems that one of the main reasons house prices are rising again is that mortgage lending has not been extended to investors without significant deposits. The average price of a home is now £160,224 (nearly 9m baht), or 14.4% below the October 2007 peak. The Nationwide said a key factor in lifting prices was “the exceptionally low level of interest rates”, which have been kept at 0.5%.

Gary Smith, president of the National Association of Estate Agents, said: “The latest statistics from Nationwide appear to confirm that the housing market has finally bottomed out and indications are that we are hopefully moving to a point where the gradual recovery in prices witnessed this year will be sustained.

“With interest rates at historically low levels and unemployment on the rise, but when interest rates start to normalise, it could possibly result in a surge of properties coming onto the market as people are forced to sell. This, in turn, would mean that as higher interest rates emerge, finance will become more expensive, which will reduce demand and again apply downward pressure on prices.”

King Sturge, a leading supplier of property services in the UK industrial, office, retail, hotels and leisure, healthcare and residential sectors, are experts in residential land and mixed-use developments and also offer a complete range of financial services to the property sector

According to James Talbot, a partner in the firm: “We continue to hold successful exhibitions in Hong Kong, Singapore and Kuala Lumpur. We are also holding seminars on buying property in London. Since April this year we have sold in excess of £130m worth of London property to Asian buyers.” Due to the rising demand of London properties with Asian buyers, they have also started to look at other not so traditional areas. One of these areas is Thailand, where they have screened a number of local and International agents and have decided to team up with Soho Properties due to their in-depth local knowledge and enthusiasm.

Central London residential property prices rose by 3.9% in July 2007, the highest jump in a single month for 31 years, according to the Knight Frank Prime Central Location index. Lack of supply of suitable properties is considered the reason for the continued rise in residential prices throughout central London, with rises in house prices consistently outperforming gains in flat prices month on month since January.

July’s figures give an annualised growth of 36.4% – the highest annual growth since 1979 – and now the reasons for the lack of supply driving the outstanding price increases are coming under the microscope. It appears that foreign buyers have a large part to play, as 61% of all property over £4 million for sale in prime central London is sold to foreign buyers who, unlike domestic buyers tend not to have another property to release back into the market, thus restricting supply even further.

The substantial rise in property prices has also led to a shift in the behaviour of foreign buyers who initially buy their property for occupation while working in the City. In the past many would arrive to undertake a prestige job in the City and purchase a property solely for occupation while they were in the country and sell the property immediately after returning home. However, because of substantial rises, such as the 36% recorded over the last year, property is increasingly being retained as an investment once the buyer returns home. This has helped fuel the property shortage and in turn keeps central London property values high.

In 2004 the average period that a foreign buyer would hold onto their property after returning home before selling it, was nine months. Last year that period had risen to 20 months and is still rising. It appears that rather than take a quick profit on their London property foreign landlords are now willing to reap an income from tenants while watching the capital value of their property investment surge.

Of course, foreign buyers cannot take all the blame – or credit – depending upon your point of view, as for the substantial and sustained increases in property prices in central London multi-million City bonuses have been swiftly invested in prime central London property, which is still seen as the most solid of investments. So, unless foreign buyers and city brokers decide to liquidate their investments the outlook for central London property seems bright indeed.

When it comes to buying property in London, the number of choices available to you can be overwhelming. It’s easy to get carried away when looking for your ideal home in Britain’s most exciting city. However, it’s important to be realistic: with the average cost of a London property now reaching over £300,000, you need to be sensible when it comes to your London property search in order to find the home that will best suit you and your budget.

First and foremost, you’ll need to determine how much you can actually afford to spend as this can really affect your search. Typically, property in Central London is the most expensive, with the price of a single bedroom flat often in excess of £200,000. However, as you move further away from the city centre, London properties tend to become less expensive, with property in East London typically costing less than properties for sale in North London (although the 2012 Olympics may alter this pattern). So, if staying within your budget is your primary concern, then excluding central London from your thoughts should help narrow your search.

However, while location is of considerable importance, it’s also crucial to figure out what you’re looking for when it comes to your ideal home, and to make these desires fit in realistically within your property search. After all, there’s no point looking at property if it doesn’t fulfil any of your requirements!

Even if your individual budget is quite restricted, you’ll be able to find a city centre property that meets your requirements and suits your finances if you’re able to pool resources. If you’re buying with your spouse or partner, for example, a one-bedroom property in Chelsea may become more affordable.

What’s more, if you feel the need to live where the action is, why not opt for a house in East London where property prices still remain lower than many other areas of the city. With the 2012 Olympics looming near, the area is soon to be the hub of regeneration and will be the area to which all eyes will turn come the Olympic tournament. As a result, investing in an East London property today may reap a number of benefits in the future.

On the other hand, if one of your chief desires when searching for a property in London is a garden, or a multiple-bedroom property to house your large family, then searching for a house further outside the city centre is a more realistic expectation.

Where ever you choose to look for your ideal home in London, make sure you keep your budget in mind without compromising on your desires and requirements.