Prospects in German property market - finance is a big hurdle

With Germany emerging as one of the best longer term property investment prospects amid the credit crunch it has also become a major topic on the property forums this week.

PropertyWire.com - Thursday, 04 September 2008

One of the downsides in Germany is finance and mortgages can be difficult to obtain. General opinion seems to be that holding off to see if more products are going to become available to foreign investors is a waste of time.

If you are investing in a whole block them German mortgages are less restrictive and it is reported on the totallyproperty.com site that it is possible under certain circumstances to get 92% finance but this is the exception rather than the rule and 75% is more normal.

Deutsche Bank does offer a product for non-German investors but there appears to be tightening because of the credit crunch. Full Article

RICS reveals plan to kick-start property market

The government must take “decisive action” to deal with the current housing market downturn and put together a package of measures to kick start the market, the Royal Institute of Chartered Surveyors (Rics) has urged.

Sharon Flaherty, FTAdviser - Monday , September 01, 2008

As a result, Rics has come up with its own set of market reforms to help address the downturn and help people who want to own a home.

To increase mortgage availability, Rics has called on the government to incentivise the issuance of new mortgage backed securities and covered bonds by allowing investors who buy them to enter into a repurchase arrangement with the Bank of England.

It would use the same repurchase system as the Special Liquidity Scheme but would require MBS or bonds to be sold in a public issue before being eligible for repurchase. Rics believes that a significant proportion of this funding be specifically allocated to first-time buyers. Full Article

Winners and losers in stamp duty holiday

Gordon Brown’s tax holiday will benefit Bridgend but not Brighton, Plymouth but not Poole, and Darlington but not Devon, writes the Times deputy property editor
Brighton seaside 1992

Judith Heywood, Deputy Property Editor, The Times - 3 September 2008

Don’t expect to see too many estate agents skipping off to work tomorrow, ready for a flurry of newly duty-exempt buyers at their office doors.

The Government’s promise of a temporary exemption from stamp duty on all homes priced below £175,000 may seem rather generous in the light of last week’s Land Registry data, showing that the average home costs just £178,364.

But as active buyers will well know, in swathes of the most populous parts of the UK, £175,000 will buy little more than a dingy apartment, too small for a growing family and located in a second-choice area. These might be textbook first-time buyer homes, but with the housing market so uncertain, they are also often the second-choice homes that overstretched householders would be well advised to steer clear of, as an unsuitable long-term investment.

The cost of an average property outstrips the government’s £175,000 cut-off by many thousands in Greater London, where the average price is £348,366, according to the Land Registry. Likewise, the value of an average home also hopelessly outstrips that new stamp duty threshold in the South East, the South West and the East of England. Full Article