However, despite the apparent pick-up in transactions, the number of sales in the first 11 months of the year [...]]]> Property sales hit their highest monthly level of the year so far in November figures from HM Revenue and Customs (HMRC) have shown.There were 85,000 property sales during the month, up from 79,000 in October, it said.

However, despite the apparent pick-up in transactions, the number of sales in the first 11 months of the year was lower than the same period in 2010.

The property market has been subdued for some time.

Since 2007 sales have been weighed down by the continued rationing of mortgages and the initial reluctance of sellers to drop their asking prices.

There have also been concerns among potential buyers about the state of the economy and the outlook for their jobs.

The HMRC figures show that there were 9,000 more property sales in November, compared with the same month the previous year.

The new monthly total was the highest since July 2010.

However, in the first 11 months of 2011, there were 787,000 sales compared with 810,000 in the same period of 2010.

However, the latest Rics survey shows a slight rise in buyer demand [...]]]> A growing proportion of surveyors and estate agents believe that economic uncertainty is holding back housing market activity.This was considered to be a bigger reason than the availability of mortgages and worries about house price falls, the Royal Institution of Chartered Surveyors (Rics) said.

However, the latest Rics survey shows a slight rise in buyer demand and sales in November with price changes continue to show regional variations.

New buyer enquiries “increased modestly” for a third consecutive month, the Rics survey showed.

The average number of sales per surveyor branch climbed to 15.4 in the three months to the end of November, compared with 15 a month earlier. This was the highest level since last September.

Slightly more surveyors expected sales to increase in the coming months than the number who expected sales to fall.

However, these slight rises were coming after a sustained period of subdued activity. More surveyors expect prices to fall in the coming months, than the number who expected prices to rise.

Annual house price changes

• England: down 0.2%
• Wales: down 0.5%
• Scotland: down 1.5%
• Northern Ireland: down 12.1%

“A meaningful recovery still seems some way off,” said Alan Collett, Rics’ housing spokesman.

On a regional basis, London registered a rise in annual house prices of 3.9%, whereas prices dropped by 4.6% over the same period in the north east of England.

It says the programme, which costs £400 million a year, is unsustainable.

The Support for Mortgage Interest [...]]]> Mortgage lenders have raised concerns about potential changes to the way support is given to those struggling to pay their mortgage.The government is reviewing the Support for Mortgage Interest Scheme, where homeowners who lose their jobs may receive financial help.

It says the programme, which costs £400 million a year, is unsustainable.

The Support for Mortgage Interest (SMI) scheme, which helps people receiving some benefits, operates across the UK.

Under the SMI, those who lose their jobs receive financial help with mortgage interest payments. This comes 13 weeks after losing their job, a timescale previously cut from 39 weeks. However, the assistance only lasts for up to two years.

Chancellor George Osborne said in this year’s Budget that the scheme would operate until at least January 2013.

Support for Mortgage Interest is a UK scheme aimed at helping those with a sudden change of circumstances make mortgage payments rather than be thrown out of their home.

Some people on benefits are eligible and can receive help to make mortgage interest payments 13 weeks after losing their job.

Now Lord Freud, the minister for welfare reform, has launched a review of the scheme.

These changes could see a charge put on the property of anyone who receives the assistance, which is recovered when the house is sold.

The suggestion was welcomed by the Council of Mortgage Lenders (CML) and the Building Societies Association (BSA).

Two other proposals have raised worries from the CML, which represents those who give home loans.

The first is a plan to make the payment to the homeowners themselves, rather than straight from the government to the lender. Lord Freud said the current system did not encourage people to get on top of their own finances.

The CML is also concerned that the qualifying period may return to 39 weeks after somebody has lost their job.

The BSA is calling for the amount received in SMI payments to reflect the actual rate the borrower is paying, rather than a set standard rate.

Since 2008, London has been the most traded real estate market in the world [...]]]> The London property market has seen a huge increase in global capital flight- as it is seen by many as a safe haven during the eurozone credit crunch.On the high end of this scale of capital investment is the commercial property market.

Since 2008, London has been the most traded real estate market in the world with 60% of the total investment from foreign investors.

The system in London is very investor friendly with transparent legal structures and it has fiscal benefits in terms of tax and capital gains which give it a certain advantage.

International corporations use London as a base for Europe, Africa and the Middle East- and London also responds quickly to global market pressures.

In late 2008, there was a 40% drop in values post the Lehman Brothers crash and as Sterling weakened. Bizarrely, perhaps, this huge markdown did little to dampen investor sentiment. In contrast to the fortunes of the US and other real estate markets, it led to a substantial increase in overseas interest.

As such, London stole the crown from New York in 2008 as the most traded real estate market in the world.

During the 2008-2011 period, some 42% of sales were from UK owners to foreign investors, with just 6% being traded the other way.

These foreign investors are discerning and are focusing on prime assets.

UK buyers are still the biggest group, holding 48% of all property here, followed by German investors which own 16%, US investors which own 10% and Middle Eastern investors which own 6%.

Japanese investment has fallen two percentage points from a high of 11% in 1995, while and European investment excluding Germany has fallen to 5% from a high of 8% in 1995.

There has also been a growing trend towards the super-rich, often labelled high net worth individuals, buying property.

The super-rich are also buying in the City. Officially they own some 6% of the office space there, but many think that could be an underestimate as it is difficult to trace ownership and there is a culture of secrecy.

November saw a rise in new contracts and [...]]]> Growth in the UK building sector fell back in November after a surprise gain in October new research suggests.The Markit/Cips Construction Purchasing Managers Index, which is based on a monthly survey of building firms, fell to 52.3, down from 53.9 in October. A value above 50 indicates growth.

November saw a rise in new contracts and the first increase in residential construction for six months.

Markit described growth as modest due to economic head-winds in the industry.

“Raw materials, energy and fuel prices continue to hinder the sector, construction companies cite these as the main contributing factors for high input prices which have increased for the 22nd month running,” said David Noble, chief executive at the Chartered Institute of

On Thursday, Markit/Cips data showed that the UK’s manufacturing sector shrank at its fastest pace in 18 months.

London was the only region where house prices had risen, with prices up by 2.8% in the [...]]]> Average UK house prices fell by 0.7% in September  according to official figures from the Department for Communities and Local Government (DCLG).The fall took the average UK house price to £207,326. Prices were 1.4% lower from a year ago.

London was the only region where house prices had risen, with prices up by 2.8% in the year to September.

By contrast, the largest price falls were in Northern Ireland, where prices were down by 12%.

The DCLG figures chime with the results of other monthly house price surveys from organisations such as the Halifax and the Nationwide.

These have also shown that prices have changed little in the past year, in a market subdued by the continued rationing of mortgage funds by lenders.

Experts have explained that the resilience of house prices in the capital has been due to a combination of factors, including the relatively buoyant level of employment and the continued influence of rich foreigners who continue to view houses in London as a good investment.

However, the [...]]]> Activity in the UK housing market showed some signs of picking up in October, according to the latest poll of surveyors.Sales and new buyer inquiries edged up compared with the previous month, the Royal Institution of Chartered Surveyors (Rics) said.

One theory from the industry was that sellers were becoming more realistic about pricing homes.

However, the picture remained dark for first-time buyers’ prospects.

Economic conditions – including low wage growth, relatively high unemployment and restricted lending from banks – would have suggested that prices should have dropped sharply over the last year or two.

However, various surveys have shown that prices have remained relatively static. Nationwide Building Society recently described house prices in the UK as “treading water”.

Some surveyors have now reported that some sellers are becoming more willing to take lower offers to secure a sale. This meant 8% more surveyors reported a rise in newly agreed sales than those who reported a fall.

Although low compared with the boom years in the market, this was the highest level on this measure since April 2010.

Completed sales and new buyer enquiries rose compared with September, the Rics survey showed.

A greater proportion of surveyors reported that prices had fallen, rather than risen, and they expected this trend to continue.

“It is encouraging that activity levels appear to have edged upwards over the past month. Indeed, chartered surveyors are generally upbeat about the near-term prospects for transactions,” said Ian Perry, housing spokesman for Rics.

However, Mr Perry warned that the effects of the eurozone crisis would mean any recovery in sales would be modest, and affect the ability of UK banks to lend. This could mean that first-time buyers will still need high deposits.

“This will inevitably leave many people who would like to own a home unable to access the market,” he said.

But HMRC is pursuing tax avoiders and law firms have issued warnings.

Homebuyers are legally [...]]]> HM Revenue and Customs (HMRC) says it is chasing unpaid tax of £35 million amid tax planning and “mitigation” schemes being offered on the internet.Dozens of websites are now advertising deals, for a fee, claiming there is a loophole in the law.

But HMRC is pursuing tax avoiders and law firms have issued warnings.

Homebuyers are legally required to pay a stamp duty land tax of between 1% and 5% of the value of a home they buy.

Buyers are liable for the tax when they spend more than £125,000 on a property.

The websites claim that tax specialists will use “stamp duty tax planning” to negate a homebuyers requirement to pay the duty. They charge a fee of around half of the amount that would have been paid in tax.

Online calculators aim to assist people to work out how much they can save. Those who sell the schemes say customers are attracted because of tough economic times and mortgage lenders’ requirements of higher deposits.

Stamp duty thresholds:

• 1%: Properties of £125,000 to £250,000, but first-time buyers are currently exempt
• 3%: £250,000 to £500,000
• 4%: More than £500,000
• 5%: More than £1m, residential property only

The main methos is to set up a limited liability company to buy the property, which then immediately sold it back to the individual.

Tax planners claim they are legally exploiting loopholes in the current law.

But an HMRC spokesman said: “The schemes rely on an interpretation of law that produces an outcome different from that envisaged when the law was enacted, and that HMRC does not accept.”

Anyone using an avoidance scheme was artificially reducing the tax due on property transactions, giving them an unfair financial advantage over the majority of property purchasers who played by the rules, he said.

The tax authority was investigating 1,200 people it believed had underpaid tax totalling £35m.

HMRC was gearing up to challenge the schemes through the courts, the spokesman said.

Law firms have warned against the internet schemes’ tactics.

When a property is purchased through a company, whether based offshore or in the UK, it pays the same rate of stamp duty as if it were an individual.

Stamp duty may be avoided by future purchasers when the company decides to sell the property. This is done by the owner selling shares in the company rather than the property itself, but the duty will be paid on the initial purchase.

In London, prices rose by 0.3% in September compared with August, and [...]]]> House prices have continued to drop sharply in some regions of England and Wales – but still rose in London an official a survey has found.The Land Registry data offers evidence of the varying nature of the market in different areas of the country.

In London, prices rose by 0.3% in September compared with August, and were up 2.7% compared with a year ago.

Yet the North East of England witnessed a 3.9% drop in month-on-month prices, and an 8.2% fall in annual values.

On average in England and Wales, prices were down 0.3% in September compared with the previous month, the Land Registry said, and fell by 2.6% year-on-year.

That left the average home valued at £162,109, it said.

In the last year, prices of terraced homes have fallen the sharpest, the Land Registry’s survey said.

The average price of a property ranges vastly, from £100,616 in the North East to £349,026 in London, the data shows.

Regional house price changes:

• North West: 1% monthly rise, 2.7% annual fall
• South West: 0.5% monthly rise, 2.4% annual fall
• Yorkshire and Humber: 0.4% monthly rise, 4.9% annual fall
• London: 0.3% monthly rise, 2.7% annual rise
• South East: no change monthly, 2.1% annual fall
• West Midlands: 0.2% monthly fall, 4.1% annual fall
• East: 1.1% monthly fall, 3% annual fall
• East Midlands: 1.6% monthly fall, 4.3% annual fall
• Wales: 1.7% monthly fall, 5.8% annual fall
• North East: 3.9% monthly fall, 8.2% annual fall

Source: Land Registry, September 2011

Houses sold by the Newcastle [...]]]> UK house builder Bellway has reported a 50% jump in annual pre-tax profits to £67.2 million during a year in which it said the market had “stabilised”.Higher sales, better margins and tighter cost control were behind the improvement, with turnover in the year to 31 July up 15% to £886.1 million.

Houses sold by the Newcastle based group increased 7% to 4,922, with the average price up 8% to £175,613.

Trading across the country had been “encouraging”, Bellway said.

Reservations in the first nine weeks of the new financial year were also 11% ahead of the same period last year.

As of 30 September, the company had an order book of £418.8 million, against £396.7 million last time.

Chairman Howard Dawe said that “against a backdrop of ongoing economic uncertainty”, Bellway “has performed very well”.

The final dividend for the year increased to 8.8p, from 6.7p.

In August, the index had read 52.6.

Markit said fewer new orders was the reason behind the slowdown, but [...]]]> Activity in the UK construction sector slowed to “near stagnation” in September, a closely-watched survey has suggested.The Markit/Cips construction purchasing managers’ index (PMI) fell to 50.1, just fractionally above the 50 “no-change” threshold that separates expansion from contraction.

In August, the index had read 52.6.

Markit said fewer new orders was the reason behind the slowdown, but added that staffing levels rose slightly.

Confidence in the sector remained relatively subdued, the research group said.

Also last week as the Re-Mortgager reported, builders’ merchant Wolseley announced a return to full year profit but said recent weaker economic forecasts were likely to have an impact on its markets.

On Monday, Markit/Cips data showed surprise growth in the manufacturing sector.

Wolseley reported a pre-tax profit of £391 million in the year to July, compared with a £328 [...]]]> Building and heating materials group Wolseley has returned to a full year profit in 2010/11.The group suffered when the housing market was hit during the recession, but said it had focused on improving its “customer, product and vendor mix”.

Wolseley reported a pre-tax profit of £391 million in the year to July, compared with a £328 million loss a year earlier.

It said markets were broadly stable but there had been “no strong rebound in activity after the recession”.

Sales revenues rose 3% to £13.6 billion.

The group also took a £39 million charge on its Bathstore and BCG brands in the UK, “reflecting a deterioration in the outlook for retail markets”.

It added that in the current environment, it remained cautious about its cost base.

“Recent economic forecasts have weakened, and over time this is likely to have an impact on our markets,” said chief executive Ian Meakins.

The company has been selling off units as part of a disposal strategy over the past 18 months.

In July, it sold its French distribution division Brossette and British Build Center business to France’s Saint-Gobain for £310 million.

However, the [...]]]> The number of properties sold in the UK fell to 78,000 in August, figures from the official tax authority show.This was 6,000 fewer sales than in July – which had seen the highest total for a year – although a drop is often recorded in August during what is traditionally a quieter holiday month.

However, the figure was down 3,000 compared with August 2010, HM Revenue and Customs (HMRC) said.

At the height of the property boom in July 2007, 151,000 homes were sold.

Since 2007, sales have been weighed down by the continued rationing of mortgages and the reluctance of sellers to drop their asking prices.

Separate figures published by the Council of Mortgage Lenders (CML) showed that UK mortgage lending rose by 6% in August compared with July.

Gross mortgage lending stood at £13.4bn in August, up 10% on the same month a year ago. The CML said that the overall picture for mortgage lending was subdued, but stable.

Stripping these charges out, the company made [...]]]> Barratt Developments, the country’s largest homebuilder, says it has had its best result in three years helped by a rise in average selling prices.It reported a pre-tax loss of £11.5 million for the year to June, including £54.2 million of exceptional charges relating to financing and reorganisation.

Stripping these charges out, the company made an underlying profit of £42.7 million for the year to June.

Its average selling price rose 2.3% to £178,300.

Barratt said it expected to make further progress in a tight UK housing market.

The company’s chief executive, Mark Clare, said: “This has been a further year of recovery for the group.

“We have made considerable progress in rebuilding profitability – by optimising selling prices, improving operational efficiency and securing new higher margin land.”

The company said the mortgage market was holding back demand for newly built properties, saying that there was a limited number of lenders and that borrowers were typically being asked for a 20% deposit, rather than a 10% deposit for older properties.

It said the outlook for the housing market remained challenging, particularly outside London and the south east of England.

Redrow posted a pre-tax profit of £25.3m in the 12 months to the end of June, compared with £700,000 [...]]]> House builder Redrow Plc has reported a better than expected annual pre-tax profit, on the back of a 12% rise in its house sale prices.But the Ewloe-based firm warned the outlook for the property market was challenging.

Redrow posted a pre-tax profit of £25.3m in the 12 months to the end of June, compared with £700,000 for the same period last year.

Redrow said its average house price was up from £154,800 last year to £174,100.

Redrow, run by its founder Steve Morgan who returned to the group more than two years ago at the bottom of the property crash, said the market remained uncertain as sales rates were flat year-on-year.

“The nature of our land acquisitions over recent times will continue to drive the average selling price in an upwards direction,” said Mr Morgan, who also chairs Premier League football club Wolverhampton Wanderers.

He added that the company delivered a robust performance “in spite of the difficulties facing the home-building industry”.

Redrow said the improvements were driven by strong sales of its New Heritage Collection, a range of two to four-bedroom houses launched in February 2010.

These homes made up 41% of total sales in the second half of the year for the firm.

Redrow’s pre-tax profit of £700,000 last year came a year after the company made a pre-tax loss of £44.2m.

The company is one of the UK’s largest house builders.

It was founded in 1974 when it was a small civil engineering concern specialising in drainage sub-contracting.

The firm moved into house building in the 1980s.

It is the lowest reading since the construction sector returned to growth [...]]]> Growth in the UK building sector slowed further in August  while the housing sector shrank again, builders suggests.The Markit/Cips Construction PMI index – based on a monthly survey of building firms – fell to 52.6, from 53.5 in July. Levels above 50 indicate growth.

It is the lowest reading since the construction sector returned to growth eight months ago, and comes amid worries of a renewed recession.

Meanwhile, separate data showed a sharp fall in new construction orders.

New orders in the second quarter dropped 16.3% versus the first three months of the year, according to the Office for National Statistics (ONS).

This brings the total volume of new orders below the trough registered during the 2008-09 recession, to its lowest level since 1980.

The drop in business appeared to have been driven by government cuts.

Public sector housing and non-housing orders both dropped over 30% from the previous quarter, the ONS data showed, while infrastructure spending was down by a quarter.

The ONS new orders data is typically volatile, showing big swings from one quarter to another.

However, the latest drop is unusually large, and the level of new orders has consistently remained about a quarter below pre-recession levels since 2008.
‘Reality bites’

The two sets of data will fuel worries that the UK – and global – economy may be dipping back into recession.

Equivalent PMI surveys for the manufacturing sector released on Thursday suggested that factory activity in the UK and other major economies shrank in August.

The latest UK construction sector PMI pointed to a continuing downturn in new orders, with respondents reporting that competition among firms was becoming tougher.

Meanwhile input cost rises accelerated in the month – blamed on higher fuel and raw material prices – putting further pressure on profit margins.

With confidence reported to be at an eight-month low, firms said they continued to cut back on employment and sub-contractor usage.

“Reality is continuing to bite in the UK construction sector, as worries over wider economic conditions contribute to a slower rate of output growth,” said David Noble, chief economist at the Chartered Institute of Purchasing and Supply, which commissions the surveys.

“Though overall activity is still in growth territory, there may be some questions about whether this will continue for much longer.”

But while activity in the housing sector continued to shrink, and in civil engineering slowed sharply, there was a small pick-up seen in commercial construction, the survey found.

But, on average prices were unchanged, with [...]]]> House price changes in the different regions of England and Wales varied sharply in June new figures from Land Registry show.There was a 2.8% rise in prices in Wales from May to June, but a 2.1% fall in the same period in the north-east of England, the data showed.

But, on average prices were unchanged, with the average home costing £161,479.

Year on year, there was a 2.5% drop in property prices, with only London recording a rise.

The annual change varied from a 0.8% rise in London to a 7.1% fall in the North East of England.

At the top end of the market, supply is limited and demand is booming. With the pound relatively cheap, ultra-rich international buyers are spraying their money around the most desirable areas.

Households have now [...]]]> UK Homeowners added £5.8 billion into their properties in the first quarter of 2011- marking three years in which they have injected equity, according to the Bank of England.The Bank’s economists think that while some people may be trying to cut debt, the shift to equity injections more likely reflects falling house sales.

Households have now added £63.6 billion to their housing equity – the share of their housing wealth that does not have lending secured on it – since March 2008.

The latest net injection followed a record £7.1 billion the previous quarter.

In contrast, the housing boom years saw a trend for equity withdrawal, as many cashed in on the value of their property by using at as security to borrow and spend.

There is concern that, just as withdrawals supported spending, injections – such as lump sum payments on the mortgage principal – could have a reverse effect.

The shift has often been attributed to households’ desire to shore up their finances.

However, Bank economists think that, while some people may be trying to cut debt, the shift more likely reflects falling house sales.

The overall effect of a housing chain of buyers and sellers would normally be an equity withdrawal, since the equity injected by a first-time buyer is typically “dwarfed” by the withdrawal made by the person at the end of the chain.

“Fewer homeowners trading down and selling a property without buying another mean that a large source of equity withdrawal has disappeared,” a Bank report noted.

Shelter said the worst blackspot for repossessions was in Corby, which had the highest rate of “at risk” homeowners – [...]]]> 60 repossession hotspots are revealed in a report by housing charity Shelter.Corby in the east Midlands is named the place with the highest proportion of homeowners at serious risk of losing the roof over their head.

Shelter said the worst blackspot for repossessions was in Corby, which had the highest rate of “at risk” homeowners – 7.56 per 1,000, nine times higher than the lowest rate in West Dorset of 0.83.

It was closely followed by Barking and Dagenham (6.62 per 1,000), Thurrock in Essex (6.16 per 1,000), Knowsley in Merseyside (5.68 per 1,000), and Newham in London (5.57 per 1,000).

Shelter warned that the figures reflected a need for homeowners across the country to prepare for higher mortgage repayments if interest rates rise as expected later this year.

Repossessions rocketed by 15% in the first quarter of the year, and the charity has found that unemployment rose by 3.3% on average in local authority areas with the highest levels of repossession orders. In comparison, unemployment rose by an average of 1.4% in areas with the lowest rates of repossession.

Shelter analysed Ministry of Justice figures for repossession orders in the first three months of the year to identify the hotspots, with most grouped across the north of England, around the Wash, and the east of London leading out to the north Kent and Essex coast.

Other hotspots include:
• Fenland, next to the Wash (5.04 at-risk homeowners per 1,000)
• Harlow in Essex (4.85 per 1,000)
• Manchester (4.63 per 1,000)
• Peterborough (4.57 per 1,000).

However, Corby confounds the trend: while it is England’s top hotspot for repossession orders, unemployment is relatively low at 6.4%, rising by just 0.9% in the thee years to last September.

Lenders have faced heavy criticism for enabling ill-disciplined and inexperienced borrowers to take on too much debt.

But Shelter’s findings indicate that the root cause of people losing their homes is loss of income through reduced earnings and unemployment.

Shelter’s findings are supported by data from the Consumer Credit Counselling Service, which advises struggling debtors. Of the mortgage borrowers calling the CCCS for help with their debts last year, 19% were unemployed, 28% were suffering reduced income and just 8% were over-committed on credit.

Lenders applied for a total of 13,520 repossession orders in England from January to the end of March – a rate of 0.73 claims per 1,000 households – while unemployment rose by 2.9% to an average of 7.8% during the three years to September 2010, according to the latest unemployment figures by local authority published by the Office for National Statistics.

Although the unemployment rate dropped slightly in England to 7.7% for the three months to April, it is expected to rise sharply later this year as public sector job cuts feed through, with a further rise in repossessions anticipated.

The total was also 3,000 down on the [...]]]> Property sales in the UK remained at a relatively quiet level in May and lower than the same month a year ago, new figures show.
Some 68,000 homes were sold in May, down 2,000 on the revised total of a month earlier, according to HM Revenue and Customs data.

The total was also 3,000 down on the same month a year ago.

Lenders say there is little chance of a rebound in the coming months, judging by mortgage data.

The Council of Mortgage Lenders said on Monday that it expected lending for home loans to be “relatively flat” during the coming months.

This view came despite gross mortgage lending in the UK rising by 12% in May, compared with April, to £11.3bn. The figure was 1% higher than in May 2010.