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Global Interest Rates Exchange rates £1 buys:
 Market Update The global economic decline continued to show signs of slowing during the month of May. With increasingly positive signs emerging from the US it appears that we may have reached a turning point in the banking crises at the very least. Around the world stock markets continue to bounce back on a wave of optimism that began back in early March. Banking and finance sectors continue to lead with many of the world’s major banks now showing strong increases in share values. Interest rates have also stabilised with no major central bank announcing either an increase or decrease during the May. In the UK the Bank of England has maintained a rate of 0.5%. This alone is helping affordability and enabling an increasing number of first time buyers to enter the market. Sterling is also continuing to strengthen against other leading currencies, most notably the US Dollar and the Euro. The key three-month sterling Libor rate has also reached a new low level of 1.25%, although still significantly above the bank rate. In January 2008 the rate was marginally above 5.5% – broadly equal to the bank rate. It then climbed higher as the extent of the credit crunch emerged. It peaked at 6% in early April, despite the bank rate falling to 5% by that month, and then drifted down throughout the summer to a low of 5.7% on 12 September. A dramatic worsening of the crisis sent it up to 6.3% on 30 September (a 130-point gap with the bank rate). Looking in more detail at the UK housing market we see that there have been no reported price declines during the last month, again potentially a sign that the market is stabilising. The lowest figure was from Hometrack at 0% growth. However, Nationwide, Rightmove and Halifax all reported price increase of 1.2%, 2.4% and 2.6% respectively. Commenting on the figures Richard Donnell, Director of research at Hometrack said: “An increase in the number of sales being agreed rose by 9.4% in May and by over 43% in the last 3 months. However the number of homes listed on agents’ books fell slightly in May – by -0.2% – an increase of just 2.5% in the last 3 months. While supply remains static the number of buyers registering with agents is up by 6% in May and by 21% in the last 3 months. This has had the net effect of supporting prices over the month.” Without doubt this is still a great time to invest in property but be careful not to delay as the window of opportunity may well be starting to close.
In the news Interest in property ‘up again’ Rising interest from potential buyers coupled with falling numbers of sellers is stabilising UK house prices, according to surveyors. New buyer enquiries increased for the seventh month in a row in May – at the fastest rate since 1999, said the Royal Institution of Chartered Surveyors. But there were fewer sellers, continuing a trend of the last two years, the survey found. The Rics survey, which has been running since 1978, takes a snapshot of the degree of confidence in the market from surveyors and estate agents across the UK. Rics members again suggested a further increase in potential new buyers window-shopping for property, most notably in Scotland, London and the south-east of England. Alongside this, there were fewer people asking agents to sell their homes in May, which was also bolstering house prices. “On the face of it, the housing market does appear to be close to bottoming out with activity picking up in a material way and prices at last stabilising,” said Rics spokesman Ian Perry. “However, it is important to remember that the lack of supply has been as important in underpinning prices as the rise in demand.” Mr Perry stressed that the troubled state of the economy could still constrain any housing market recovery. “With the economic backdrop still quite uncertain, unemployment is set to continue increasing sharply and finance for first time buyers is still in short supply, there are a number of significant obstacles for the market to overcome over the coming months,” he said. Some surveyors pointed to the seasonal nature of property sales. “[There are] definite signs of early recovery but we are hoping the usual summer seasonal downturn does not now occur,” said Ian Shaw, who operates in Lincolnshire.
1 Day training workshop
Over the coming months we will be delivering a series of free 1 day training workshops for our registered members. These events are designed to give attendees an understanding of the business concepts behind property investment.
As an open and ethical company we believe it is essential that our clients have an understanding of these concepts before investing in property, whether they purchase through us or another company. We therefore offer this as a free course to anyone who would like to attend.
These informative sessions receive excellent feedback from all those who attend. They are delivered only to small groups and convey real information; they are in no way a sales pitch.
If you would like to attend one of these sessions please click the following link where you will find available dates and an online booking form.
Remember, there is no charge for attending one of our training workshops.
Location – Eastern & Central South America Capital – Brasilia Government – Presidential Federal Republic Economy – 10th* by GDP (Nominal) Currency – Real (R$) Population – 191m Language – Portuguese
The world’s 5th largest country by area and population, Brazil is the economic powerhouse of Latin America. Covering almost half of South America and with over 4,500 miles of coastline Brazil is an immense country of great diversity. From the remote depths of the Amazon basin to the busting cities of Sao Paulo, and Rio de Janeiro. One of the four emerging economies referred to as the BRIC economic group (which also includes Russia, China and India), Brazil is well on the way to become a global economic power and is predicted to become the 4th largest economy on earth by 2050. Originally a colony of Portugal, Brazil has been an independent nation for nearly 200 years. A great deal of Portuguese influence still remains with a large amount of Portuguese architecture still in existence and of course the official language of Brazil is still Portuguese. Today Brazil is the 4th most populous democracy in the world and is playing an increasingly important role of the global political stage. Brazil’s economy is made up of many sectors but manufacturing and agriculture are the backbone of the country’s economy. Brazil has a strong aeronautical and automotive sector producing aircraft, cars and space technologies. In fact, Brazil is one of the driving forces behind the International Space Station. In recent years Brazil has discovered massive oil reserves and is totally self sufficient with oil and gas. Although petrochemicals are a major economic sector the country is also a global leader in terms of new cleaner energy technologies. In fact since 1976 cars in Brazil have had to run on a mixed petroleum/ethanol fuel with ethanol now accounting for around 25% of the mix. Interestingly, Brazil also has the world’s 2nd largest hydroelectricity plant. Because it was the world’s first sustainable energy economy Brazil has provided a model that has been widely followed by many other leading nations. Why we believe Brazil is a great place to invest Global tourism is expanding rapidly and Brazil is working hard to secure a significant and growing share of the market. With some of the most diverse and stunning landscapes on the planet, Brazil really does have it all – miles of deserted tropical beaches, rainforest, fascinating culture, modern and exciting cities and a climate that suits everyone. In an effort to position itself as a leading tourist destination, the country has in recent years invested heavily in infrastructure with new roads, airports and drainage systems in addition to historical heritage restoration and environmental preservation. This is having a huge impact on the country’s ability to cope with rapidly increasing visitor numbers. With living costs at a fraction of many first world nations including the UK, even a luxury holiday in Brazil can cost very little. Of course the living costs are also a major attraction to increasing numbers of Europeans who are choosing to settle here. The north east coast in particular is seeing the construction of several luxury holiday resorts and a new international airport at Natal set to open in 2010 (the 4th largest in the world) will enable the region to cope with the anticipated increase in visitor numbers. Because of Brazils growing popularity as a tourist destination, there are an increasing number of scheduled direct flights between major European centres and many Brazilian regions. Surprisingly the flying time from London to Natal is the same as that to Miami. Currently, Brazilian property is probably as cheap as it will ever be, and with huge capital growth potential, Brazil is a property investor’s paradise. Right now you can invest in one of Brazil’s new 5 star resorts for just £1,000. Click the link below to visit our property pages where you will find details of this and all of our other current opportunities, or call us on 01235 553569 for more information.
* Source: International Monetary Fund
What is it? – Stamp Duty Stamp duty is a UK government tax that is levied on all purchases of property or shares. Known as stamp duty reserve tax on share purchases and stamp duty land tax (SDLT) on property purchases we will take a closer look at SDLT for the purposes of this article. Payable on all property purchases over a certain level (currently £175,001), SDLT is a graduated tax which spans several bands depending on the purchase price of a property. Currently these bands are as follows: Purchase price Percentage
Unlike income tax where the higher levels are only payable on earnings above a certain level, a single SDLT rate is payable on the entire amount of the property purchase price. For instance, if the purchase price of a property is £250,000 the stamp duty payable would be 1% or £ 2,500. However, if the purchase price is £250,001 the purchase would automatically fall into the higher 3% band and the amount of tax payable would jump to £7,500. Property in disadvantaged areas Prior to 3rd of September 2008 properties bought in areas designated by the government as ‘disadvantaged’ qualified for Disadvantaged Areas Relief. This meant that the SDLT threshold was higher (£150,000) than for other residential properties. In an effort to stimulate the housing market the government introduced a temporary increase in the SDLT threshold to £175,000 thereby making the disadvantaged areas relief redundant. It is widely expected that the SDLT relief on property purchases in disadvantaged areas will be re-introduced at the end of the year when the temporary higher threshold reverts to its original level. “I think there is a world market for maybe five computers.” – Thomas Watson, chairman of IBM, 1943
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The Worldwide Property Group Ltd. Suite A & B, The Courtyard, Abingdon, Oxford. OX14 5SE Tel: 01235 553569 email: enquiries@w-wideproperty.com Web: www.w-wideproperty.com Copyright – The Worldwide Property Group Ltd 2009 The Worldwide Property Group is a marketing agent for developers and whilst we endeavour to ensure the accuracy of information contained in this site, including figures and forecasts at the time of publication, the Worldwide Property Group does not guarantee or take responsibility for their accuracy
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Global Investor June 2009
