GuestInvest goes into administration

GuestInvest, the company that introduced Britain to buy-to-let hotel room investment and owner of the celebrity-favoured hotel Blakes, has gone into administration.

Anousha Sakoui, FT.com - 3 Oct 2008

A spokesman for Deloitte said Nick Edwards and Nick Dargan were appointed administrators to GuestInvest Group on Thursday.

The company, founded in 2003 by the entrepreneur Johnny Sandelson, allowed private individuals or companies to buy a luxury hotel room, stay there for free for up to 52 nights a year but receive a rental income from its use during the rest of the time – an investment that netted room owners returns of more than 8 per cent.

The business was advertised across London buses, tubes and taxis under the slogan “Earn money while others sleep”. Full article

Property speculators - a breed in decline?

In times like these you might expect the property markets to be slowing down everywhere and although sales figures are decreasing there is certainly no shortage of opinion and analysis.

PropertyWire.com - Thursday, 02 October 2008

The property forums have experienced a decrease in the number of posts, with some being particularly inactive, but those that are busy still show an appetite for what is happening.

Dubai is one market where interest is unlikely to slow and opinion and information on the forums is lively. It is a similar story in terms of what to buy and whether off-plan is still as profitable as it used to.

One thread on the totallyproperty.com buying overseas forum suggests that off-plan has had its day. Not only have developments not made much profit on completion but some have even lost, it is claimed.

This is not just due to the credit crunch and global economic turmoil but due to the disappearance of a special breed - the property speculator. This post asks: Where have all the speculators gone?

It would appear that this special species are no longer pushing up prices and it is suggested that they can’t get the funds anymore. Full Article

Why the rich are buying cheap houses

First-time buyers are squeezed out while cash-rich investors buy properties free of stamp duty
Property developers and house hunters bid for the best price.

Judith Heywood, TimesOnline.co.uk - 26 Sept 2008

Oil, gold and repossessed property - these are the safe havens being sought out by cash-rich investors as financial markets around the world try to shake off the turmoil of the past two weeks. Bargain hunters are wading into the property market - particularly at the bottom end, where prices and sentiment have been most afflicted - despite predictions from many observers that values have farther to fall and signs of recovery cannot be expected for at least a year. Their ability to move fast to snap up affordable homes on the open market is leaving nervous first-time buyers shut out as they struggle to secure home loans.

Liam Bailey, head of research at Knight Frank, believes that in this slowdown there are signs of an enduring belief among investors that, despite falling prices, a recovery must occur. Jeremy Leaf, an estate agent in North London and the Royal Institution of Chartered Surveyors’ spokesman, says that the plunging values of shares and near-demise of HBOS and AIG will, over the medium term, help to bolster the appeal of property as a safe haven for investment.

Some buyers are showing signs that they expect the market to bottom out sooner than next year, at least in the case of properties being sold off by pressured sellers for much less than their peak value. Last week - in the dark days following the shock collapse of Lehman Brothers and only hours after LloydsTSB stepped in to bail out HBOS - the auction house Allsop presided over the first day of a bumper auction, at which 82 per cent of the UK homes offered sold. The second day, held on Monday, achieved a sales rate of 92 per cent. Gary Murphy, an auctioneer at Allsop, says: “The market is not dead. There is plenty of trade, but the key factor is price.” Full Article

House prices ‘to reduce by 25%’

Graham Beale’s forecast for the housing market

The chief executive of the Nationwide Building Society has told BBC News that he thinks house prices could fall as much as 25% from their peak.

Robert Peston, BBC business editor, BBC News - 8th Sept 08

This prediction implies that 2.5 million homeowners could be pushed into negative equity.

Graham Beale also said he does not expect to see signs of recovery in the housing market until 2010.

Nationwide is by far the UK’s biggest building society and is closer to the housing market than many others.

Over the course of the business cycle it provides slightly fewer than one in ten of all the mortgages in the UK - though its recent share of new home loans has been a bit less.

So Nationwide’s chief executive, Graham Beale, carries weight when prognosticating.

What he said in an exclusive BBC interview on Monday is that he does not expect the housing market to show signs of recovery till 2010.

“I think we are into 2010 [before we see signs of recovery],” Mr Beale said.

“I think that next year we will see a similar pattern to this year…we will see further falls in house prices. And I think before we really get to the new world, whatever that is, I think we will be into 2010.” Full Article

Number of rentals ’soars by 20%’

The number of people renting a home has soared by nearly 20% during the past three months as the housing market turmoil puts people off buying a property, a survey shows.

LoughboroughEcho.net - Sep 9 2008

Around 64% of letting agents outside of London said demand for rental property outstripped the number of homes they had on their books, falling to 41% within the capital, according to the Association of Residential Letting Agents (ARLA).

Unsurprisingly, given the boom in demand, rents are also rising, with average rents for a house increasing by 3% to £387 a week during the three months to the end of August, while rents on flats have jumped by 7% to around £253.

At the same time, the average amount of time a property is empty has fallen to just four weeks or less each year, while tenants are now staying in properties for around 16.7 months, rising to more than 18 months in London. Full Article

Like house prices, immigration could fall too

The thing about population projections is that they are usually wrong. Our problem in future may be getting people to stay

David Aaronovitch, The Times - 9 Sept 2008

It was a strange conceit, I thought as I listened to their Laurel and Hardy act on the Today programme yesterday, to suggest that if Nicholas Soames and Frank Field agree on something, then they must be more likely to be right. And I imagine that they conceived that their rectitude was further enhanced by the support of the former Archbishop of Canterbury, Lord Carey of Clifton and the erratic Muslim Labour peer, Lord Ahmed.

There they are then, bound together in a new group, Balanced Migration (well, it’s hardly going to be called, “Chuck ‘em Out” is it?), all their religious and ethnic bases cleared and ready for action. Though why, since they commissioned Migrationwatch UK (aka “Send ‘em Back”) to create their platform for them, they didn’t just join that organisation, is a bit obscure.

Balanced Migration is so called because it wants to create a rough balance between people going and people coming in. It imagines that by so doing it can limit Britain’s population growth to “sustainable” levels, as well as limiting what Mr Field called the transformation of some neighbourhoods “from settled working-class communities to societies they can barely recognise” Full Article

Rapist sues landlady from prison - costs her £18,750

A hairdresser has said she hopes to appeal after a convicted rapist sued her from jail when she cleared out the flat he rented above one of her salons.

BBC News

Thomas Cope, 55, disappeared eight months after moving into the flat above Melody Goymer’s salon in Hailsham, near Eastbourne, East Sussex.

He had been arrested for the rape of a 19-year-old woman and was jailed for life at Hove Crown Court in 2007.

A judge last week ruled that Mrs Goymer had unlawfully terminated his contract.

Cope sued Mrs Goymer, 60, in a publicly-funded case while serving his sentence on the Isle of Wight. Full Article

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