Property Prices Rise by 2.6% in UK

Property prices have risen by 2.6 per cent in May, according to a recent report published by Halifax in UK.

House prices have now risen for two consecutive months in the UK. This is good news for the UK property market that has been hit hard in recent months. Although the 2.6% rise in average house prices is a positive sign for the property market, property analysts say that a down turn in the property market is still far and not in sight. a 2.6% rise in house prices happens to be the largest increase in prices in the last 7 years.

The report on house prices published by Halifax bank has warned not to out too much emphasis on one or two month’s figures even though the finding follows reports from estate agents that there has been a resurgence in buyer interest. According to Halifax who published the report marking the rise in house prices, even though the average price in the year can fall in spite of a rise in house prices in some months. For example during the 1991 and 1992 period, there were 5 months where the house prices rose. Nevertheless, average house prices fell by 11 % in that year. In spite of all this, this is still some cause for celebration as it can be seen as a tentative sign that the housing market has begun to stabilise.

A report by the Bank of England adds to the positive sign displayed by the housing market stating that there were 43,201 in mortgage approvals in April. This is the highest number of mortgage approvals in a one year period. There are many factors that can be attributed to this rise in house prices. Some property analysts believe that the price has risen because there is a reduced supply pf houses for sale in the market. House prices had fallen consecutively fr many months which has made property owners wary of selling property at such low rates. In addition to this many new property development projects have been postponed till the market improves.

At the same time property analysts also point out to the fact that in the 21 months, property prices have risen in only 3 of the months.

Some property analysts argue that although recently there may have been one or two positive indications in the property market, it is tool early to expect a down turn in the market. The overall economic conditions are still bleak and unemployment is set to increase further in coming months. Property finance is still harder to receive and lenders remain cautious. First time buyers are still finding it difficult to raise finance for buying property.

Property Prices in US Show First Signs of Improvement

After the recent reports of stabilisation and growth witnessed by the UK property market in recent months, the property market in US has also shown signs of improvements for the first time in many months.
Property buyers and investors in the US will be finally relieved from the improvement which is one of the first good news in US property market in the last two years.

For the first time in many months, the residential property prices in US have witnessed its first quarterly gain in the last 2 years. In fact this is the first gain in the US property market since 2006. Property analysts and investors in US are seeing this as the first sign that things are finally looking better for the world’s largest economy which also happens to be the worst hit by the recent financial crisis experienced worldwide.

According to property market results released for the month of July, 2009, published by Clear Capital, one of the leading Valuation and Intelligence websites in US, overall property prices in US have increased by 1.7% in the first quarter of 2009. The property market study provides a good look at U.S. house price environment across all levels i.e. national, metropolitan and also local levels.

The report shows that some parts of the country have witnessed a strong surge in prices while some have lagged behind. The Midwest region of US leads the way and has shown the maximum price increase of 5.3 %. House prices in Cleveland have increased by 19.6 per cent overall, in spite of Cleveland being one of the worst affected cities in relation to foreclosures. All in all the overall US property market especially in the residential sector has shown an overall improvement in this quarter. Such an increase in house prices would have seemed far fetched only a few months ago. It is little surprise that the report is a cause of celebration for the US property market.

In the South of US, property prices have also shown improvements and the property prices have increased by 2 % from the previous quarter.

Property analysts, investors as well as home owners are encouraged by the first quarterly increase in three years.

There are many factors responsible for this growth in prices within the US property market. First time home buyer incentives and increased investment activity are some factors that have contributed to the national increase in US house prices.

In spite of the first quarterly overall price increase in US property prices, some parts of the country continued the downward trend in falling house prices. Las Vegas and Orlando was surprisingly were some of the cities where house prices continued to decline by 12.4 % and 9 % respectively. In spite of being popular with tourists, this came as a surprise to many.

In California that was significantly affected by the economy over the last two years, the real estate market has finally started to show positive signs. According to a survey conducted by the California Association of Realtors, the current quarterly period has seen a 27 per cent rise in residential property sales in the state.

Property Market Forecast 2009 – Bulgaria and Romania

There are many UK property buyers with investments in emerging European markets such as Bulgaria and Romania. During the property boom of the last decade there was a marked increase in British Property buyers buying properties in this region of Europe. The recent global recession has also had a huge impact on property prices in these countries. According to property analysts residential property prices in Bulgaria and Romania are set to continue in a steep decline in 2009. While those property buyers and investors looking for a bargain may be able to benefit from the steep fall in property prices, by and large this is bad news for a large spectrum of the property market.

Analysts expect prices in Sofia, the capital of Bulgaria to fall by up to 10 to 12 per cent. Similarly property analysts predict an overall average fall of up to 20 per cent in Bucharest during the coming year. All other areas in these countries are expected to witness a similar decline in property prices.

Property experts believe that the trend of fall in property prices will continue throughout the year. Property analysts do not expect to see positive increase in prices till as late as 2010. Property analysts expect businesses and property investors to adopt a wait and see approach and be more cautious in their approach.

The main factor that is driving down the property markets in Bulgaria and Romania is the withdrawal of foreign investors, but they are also suffering from tight credit conditions that cut into funding options for local investors.

Studies and news on the property markets in the UK, Ireland and Spain have already reported that the market has hi t its rock bottom. In these regions a recovery may be expected sooner.

These real estate markets are seeing signs of increased activity as investors show interest in finding opportunities even before confirmation of the market reaching a turning point. In places like London and Spain, some analysts have said that the overall confidence has already started to improve. The property market here may start improving sooner than 2010 as investors will start looking to create new opportunities to maximise investments.

According to some property analysts the current crisis has already started to subside in markets such as London and the property prices are expected to start improving in the coming months. Although signs of improvement could start in the coming months, a complete recovery of the property market will only be possible a couple of years after the economy starts to show signs of improvement. This is based on its historical research into the behaviour of the property markets which shows that recovery in the property market usually takes two years after the economy has started to improve.

Overlooked Government Financing for Investors

While some real estate investors are fortunate enough to have barrels of cash for purchases, the vast majority of investors are using leverage and mortgages for their real estate investments. It’s considered excellent investment strategy to use strategic leverage to multiply assets and net worth. While the major sources of residential and smaller multifamily lending have been much tougher since the crisis of 2006 into 2010, there are some excellent government resources for mortgages focused on the investment property.

FHA and HUD

Sections 207/223 – For five or more units, this loan program will provide up to 85% of value financing for a purchase or refinancing of an eligible property. Financing up to 35 years is possible. Major rehab isn’t allowed, but the next loan option can handle that.

Section 221 – Financing for up to 40 years for major rehabilitation or even new construction is available through this program. Loan limits vary and change, so some research with a lender is advised.

HOME Investment Partnerships Program – New construction and rehabilitation of rental housing for low to moderate income people is the focus here, with grants going to states and local governments to create financing opportunities for investors for making low income housing available.

USDA Rural Development Program

That’s right, the U.S. Department of Agriculture is also in the lending business. In order to aid in rural area development of rental properties for low and middle income people, the USDA offers financing for up to 40 years.

For the single family investor doing flips or selling at retail, keep the USDA in mind in rural areas. Introduce buyers to the single family primary residence loan, as it will finance up to 103% of the appraised value. Picking up the rest of the closing costs can give you an edge, as you can offer a home with zero cash out of pocket!

Multifamily Foreclosures & Cash Flow Funding Advantages

While the vast majority of real estate investors are taking advantage of the foreclosure glut in single family homes, there is opportunity out there for multifamily investors as well. Apartment and multifamily distressed properties and foreclosures are growing in number, and all of the advantages of multifamily investing are there at some steep discounts. Economy of scale creates excellent cash flow per unit, and there are more units than ever before available for short sale or foreclosure purchase.

The advantage to the multifamily investor could be some excellent financing through the current lender. While the single family residential lender may be looking for ten mortgages for homes, the apartment or multifamily investor can speak to and negotiate with a single lender for 10, 25 or even 50 or more units. The same motivations are there for the lender as in single family situations, but they’re multiplied. The costs to hold the property in foreclosure are much higher for multifamily properties, especially if they are occupied, and requiring management. The lender has a very large non-performing asset on the books, with high costs to keep it there.

There are a number of reasons a multifamily owner can get into trouble that aren’t about vacancy or credit loss issues. The property could be a real cash flow generator, with other investments dragging the owner down. The biggest opportunity comes via negotiation with the current lender for new financing. Sometimes offering more for the purchase will look better on their books, and the lender will be willing to trade very favorable financing terms and interest rates for a new loan and removal of the bad one from the books.

Mortgages in Scotland Worst in UK

The property industry has been one of the worst hit in the recent economic recession. Mortgages have become tougher to receive as lenders are cautious in approving new mortgage loans. The mortgage market across UK has been negatively affected however some regions have witnesses a bigger decline than others. Mortgages in Scotland have been one of the Worst in UK according to the Council of Mortgage Lenders. They have claimed that mortgages in Scotland has declined the most and is lagging behind other regions in UK.

The average deposit required to secure a mortgage for a new property is higher in Scotland than ioj most other parts of UK. In Scotland prospective property buyers typically need to produce a 25 per cent deposit towards the property they are buying which is much higher than the rest of UK. The difference in price of the 12 months accounted for an extra £12,000 on average.

According to mortgage lenders, property lending has fallen by 44 per cent in the UK. However in Scotland the decline has been higher and it stands at almost 52 per cent. In spite of this report, property analysts are confident that the situation will begin to improve or art least stay at the same level.

Scotland is lagging behind the rest of UK may continue to stay behind other regions of UK even when the recovery in the property market begins. However property analysts expect the rate of decline in lending volumes to slow in coming months. In recent months there have been some encouraging results by some lenders who have developed innovative mortgage products to assist first-time buyers. however significant lending challenges still exist and there may be some time before the results start to improve.

Recent findings by Mortgage Lenders Council show that first-time buyers are still being locked out of home ownership despite falls in house prices and low interest rates.

In spite of this there are some signs of recovery in Scotland. A property firm in Scotland has registered an increase in the sales of new build properties, sparking fresh hope in the industry.