Overseas Property Investment Consultancy & UK Property Investment Consultancy

Alternative property sectors could offer some attractive opportunities for property investors in 2012, according to a leading property investment expert.

Alternative property sectors such as student accommodation could offer some appealing opportunities in what may be a challenging 2012.

2012 could be every bit as challenging as 2011, however, there are still many good opportunities for property investors to make well informed decisions. In particular investors may wish to consider a greater exposure to alternative sectors such as student accommodation or healthcare property.

One of the key attractions of these alternative sectors is they generally have a high income yield, an ability to track inflation and have low vacancy rates.

First-time house hunters who have been searching for new homes will have been delighted by recent news that the Government is introducing a mortgage indemnity scheme to help them get on the property ladder.

The scheme means that many creditworthy first-time buyers will be able to secure affordable 95% mortgages, an option that has not been open to many for a number of years. Linden Homes has been quickest off the mark to offer the scheme at its developments in the North East of England.

Calling the scheme Step Up, it means that those hoping to swap renting for owning need only put down a five per cent deposit, rather than the 20% that has been more commonplace since the onset of the economic crisis. Furthermore, the interest rate will be competitive, reflecting the creditworthiness of the borrower, in contrast to some of the punitive rates that accompanied the rare examples of 95% mortgages over the same period.

With the Linden Step Up scheme, borrowers taking up the 95% option will get a rate of 4.99% fixed until April 2015; the 90% option will be charged at 4.49% and the 85% option at 3.99%, fixed for the same period.

Housebuilder Bellway has announced that reservations for its new build homes has increased in recent months raising hopes that the country’s housing market is improving particularly the new build sector.

High demand for new homes means that visitor levels have remained steady despite wider economic concerns, with reservations between August and the end of November having increased, pushing the average selling price up by 7%, thanks to a shift towards building more family homes.

Bellway has commended recent moves by the Government to kickstart the residential property market through a wide range of measures, but insisted that consumer confidence remains the key.

A company spokesperson said: “Whilst the group welcomes such initiatives, the outcome for the full year will be dependent primarily upon consumer confidence, especially during the spring selling season.”

Sales of residential properties in the Miami area in Florida have increased for 13 consecutive quarters as real estate buyers from abroad cash in on lower prices.

The latest report from the 25,000 member Miami Association of Realtors shows that sales, including existing single family homes and condominiums increased 51% in the third quarter of 2011 compared to the same quarter last year.

In the Miami Metropolitan Statistical Area (MSA), sales of homes have increased every quarter since the third quarter of 2008. The Miami MSA has again posted the highest sales increases of any major metro area for condominiums and of all single family home markets in Florida.

Existing single family homes increased 47% compared to a year earlier while existing condominium sales increased 48%. In Florida as a whole single family home sales increased 12% and condominiums increased 13%. Nationally, total state existing home sales, including single family and condo, fell 0.1% compared to the second quarter of 2011 but were 17% below the third quarter of 2010.

‘Strong demand from international buyers is fueling robust sales activity in Miami despite low consumer confidence and high unemployment,’ said Jack Levine, chairman of the Board of the Miami Association of Realtors.

Property prices and rents in the United Arab Emirates may drop a further 20% this year and next because of excess supply, according to analysts.

Meanwhile the latest data from CBRE shows that sales transactions in Dubai fell 45% in the third quarter of the year, adding another blow to the emirate’s already battered residential property market.

‘There is a further leg down to the UAE property market before residential prices and rents recover,’ said analyst Mohammad Kamal of Arqaam Capital.

‘We see a further 15 to 20% in downside to prices and rents in financial year 2011 and 2012,’ he added.

The CBRE report shows that the number of residential sales fell 1,459 in the quarter, down from 2,648 in the year earlier period, despite rents in the emirate’s prime developments showing signs of steadying.

‘There’s a lot of uncertainty in the market still. Despite stabilising prices, there is still reluctance to get back into the market, certainly on the investor side. At the moment, people are still slightly risk averse,’ said Matthew Green, head of research and consultancy at CRBE.

New research shows that the average price of a property in a market town in England has increased by 103% in the last ten year, almost £1,000 per month.

The average house price in these towns has gone up from £114,718 in 2001 to £233,416 in 2011, according to research from Lloyds TSB. This is equivalent to an increase of £989 per month over the past decade.

More than half of the market towns in this survey have seen house prices at least double since 2001. Some of the largest prices increases have been in northern England, particularly in the North. The biggest increase was in Stanhope in County Durham where the average price rose by 158% from £57,502 to £148,264. Another market town in Durham, Ferryhill, recorded the second largest rise at 155%.

Alford in Lincolnshire saw prices increase by 150%, Saltburn on the north east coast, Helston in Cornwall and Seahouses in Northumberland were all up 145%. Helston is the only one of the ten market towns with the largest house price growth in southern England.

Two out of three market towns have an average house price that is above their county average. House prices in market towns are, on average, £25,592, or 12%, higher than their county average. The average house price in market towns, at £233,416, is 6.8 times average gross annual earnings; this is slightly below the price to earnings ratio of 7.0 for England as a whole.

Beaconsfield in Buckinghamshire, the most expensive English market town with an average house price of £779,986, has the largest premium with houses trading at 157% or £476,935 above the county average. Wetherby has the next highest premium with prices 105% or £160,469 above the West Yorkshire average.

Since the start of the housing downturn in 2007 house prices in market towns have risen by 5% on average.

Owners of second homes are to lose council tax discounts in a major shake-up to be announced by ministers.

Local authorities will be told they can abolish the rebate, which can mean council tax on second homes is as much as 50 per cent lower than for main residences.

Ministers say the proposal will benefit hard-pressed middle-income families – but it will be unpopular with second-home owners.

It will form the centrepiece of a series reforms which ministers say if adopted, would allow a cut in council tax bills for most people.

The package of measures, to be unveiled by Eric Pickles, the Communities Secretary, would be the first major changes to the tax since it was introduced in 1993, in the wake of the failed poll tax.

It includes an end to discounts on empty properties, which can be up to 100 per cent, in an attempt to increase the available housing stock.

Rising demand from those unable to buy their own homes and those reluctant to commit in the current market means that rents will rise significantly more than house prices in the UK over the next five years, according to international real estate adviser, Savills.

The company forecasts that private renting will account for one in five households by 2016 and it is unlikely that supply will keep pace with demand at least in the next five years. Competition among renters will drive rents higher, with growth in mainstream rents forecast to rise by 20.5% by the end of 2016.

‘We have long been advocates of residential property investment in the private rented sector. Until recently this has primarily been predicated on the expectation of increased capital value, but there is now a strong case on the basis of income,’ said a Savills spokesperson.

UK retail sales rose by 0.6% in September, according to the latest figures from the Office for National Statistics (ONS).

That was stronger than analysts had forecast and more than reversed a 0.4% fall in volumes in August.

The ONS also reported that sales were 0.6% higher than September last year.

Non-store retailing, including online purchases, rose by 15.5% over the year as a whole.

The ONS estimates that internet sales accounted for 9.6% of all retail spending in September, excluding petrol.

Global investment in real estate is holding up well despite the economic growth concerns with transaction volumes up 36% in the third quarter of 2011 compared with the same period in 2010.

Volumes totalled US$99 billion according to the latest figures from Jones Lang LaSalle. In the first nine months of 2011, investment activity increased by 43% with total transaction volumes amounting to US$297 billion, compared to US$208 billion in the same period last year.

Despite heightened economic and sovereign debt concerns, European transaction volumes have held up well, with a total of $US41 billion in the third quarter, an increase of 14% on the last quarter and a 38% rise on the third quarter 2010.

The UK, the largest market in Europe, saw a marked improvement in the third quarter 2011, in part due to deal completions delayed from the second quarter. Germany, France, Scandinavia, Poland and Russia all continue to attract strong investor interest, with safe haven status and relative GDP growth considerations prevalent.