Edinburgh’s 509% house-price boom

HOUSE prices in Edinburgh have rocketed more than five-fold over the past 25 years – one of the highest increases in the UK.

Across Scottish cities, property values have shot up by an average of 351 per cent over the period, exceeding the increase of 347 per cent for the UK as a whole, according to the Bank of Scotland.

Edinburgh’s 509 per cent increase is the third-highest of any city in Britain, behind Truro at 550 per cent and Westminster, London, at 522 per cent.

Inverness is also in the top ten, experiencing a rise of 450 per cent.

“With an increasing and more affluent population in Edinburgh over the last 25 years, and strong economic growth for much of this time, it is no surprise to see the city near the top of this table,” said Tony Perriam, director of residential sales at Rettie & Co.

Nitesh Patel, housing economist at Bank of Scotland, said: “Cities have typically seen higher house price growth than the UK average over the past 25 years.

“City house prices are generally supported by demand from those looking to gain from the economic and lifestyle benefits often associated with residing in major urban areas.”

The study, carried out ahead of a new round of applications for city status to mark the Queen’s Diamond Jubilee, found that towns which had become cities since 1986 – including Inverness and Stirling – performed above average.

The 26 towns which have applied for city status this year have, on average, not experienced as rapid a house price growth over the last quarter of a century as existing cities. Scotland’s applicant, Perth, has seen prices rise by 372 per cent since 1986 – well above the average for all applicant towns of 345 per cent.

Ms Patel added: “The performance of cities in Scotland has been similar, with four of the six cities outperforming the Scottish average. Edinburgh and Inverness have seen very strong house price growth, both featuring in the top ten UK cities since 1986. Glasgow and Stirling, however, have seen average prices rise more slowly than for Scotland as a whole.

“There are, therefore, no guarantees that city status benefits its population’s homeowners.”

The experience of those towns that became cities in 2002 to coincide with the Queen’s Golden Jubilee has been more mixed.

Only Newport, Wales, has recorded stronger price growth than its region since 2002, while Preston, Stirling and Lisburn, Northern Ireland, have all underperformed relative to their regions. During the decade prior to 2002, both Stirling and Lisburn outperformed their regions.

Sarah Speirs, director of RICS Scotland, said: “Property in sought-after areas always attracts more buyers and therefore sells for a premium. Cities that offer good jobs, respected schools and a range of social and family activities will always be popular with investors and owner/ occupiers, so it’s no surprise that house prices have risen so much in the past 25 years.

“However, city status alone is not enough to push up prices. The city has to have enough going for it to attract buyers and investors.”

For more information regarding UK residential property investment, please visit www.grantpropertyinvestment.com or contact us directly on +44 (0)131 2473131

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The UK Property Market 2011/2012

Hi All,

We’ve been getting a lot of questions about the market, and I thought it worth sharing both questions and answers - so here goes.

I’ve kept it very brief, so if you want further details, let us know click here or visit our website www.grantpropertyinvestment.com

Kind Regards

Peter Grant

CEO

1. What's happening with prices.

Prices fell in 2008 but have been very stable since then. We predicted that prices would be flat in 2011 and in fact they have risen slightly, according to Nationwide Building Society.

2. Has the financial crisis changed the market?

Yes. Since 2008 the market has moved from being a sellers market to becoming a buyers market - favouring investors. There is lower mortgage availability for first time buyers. Buy-to-Let mortgages on the other hand have risen sharply in 2011, allowing investors take advantage of very favourable buying conditions.

3. What's happening in the rental market. 

Rents have been rising as have yields. We have 100% occupancy in prime areas. The Scottish rental market has performed better than England.

4. What impact has the euro crisis had this past 6 months.

None. Prices have in fact risen slightly.  It's been similar to other past 'crisis'. In good times property prices rise and in less good times property prices remain flat.

5. Why is property less volatile than shares and bonds.

Shares and bonds make headlines and react to headlines because they are completely liquid so there can be dramatic price movements. Property prices don't react to headlines and have always been very stable by comparison.  

6. What is likely to happen in 2012? 

2012 is predicted to be similar to 2011, with prices stable and perhaps rising slightly. Nationwide are predicting 2% growth. Rents are likely to carry on strengthening as are yields. We expect occupancy in prime areas to remain very high.

7. How does property compare as an investment?

Over any period (3 years or 30 years) residential property has outperformed shares and commercial property. Over the last 40 years, the average growth is 7% pa. Through gearing that‘s a 28% return pa.

8. When investing, what should I focus on?

There are several rules to follow in order of priority

  1. Location, location, location. Choose a prime city centre area
  2. Traditional property outperforms new build, so focus on that

  3. Rentability. Look for strong rent and high occupancy

  4. Experience. Use GM as a partner and use our strong experience

  5. Price. Buy well but without compromising on the above points

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Housing rebound coming in 2012

Firstly from all at Grant Property Investment, we would like to wish all our clients and suppliers a Merry Christmas and Happy New Year!

Attached and below is a fantastic article from Barclays outlining their forecasts for the 2012 housing market. As we expected they have forecast a bumper year for 2012. We have further press articles relating to a positive outlook for 2012 within our website, please Click Here to see more.

Barclays Capital (BCS: 10.17 0.00%) analyst Stephen Kim predicts a housing recovery buoyed by improving jobs numbers and the fact prices for nondistressed homes will have stabilized without government support.

"In the absence of a government homebuyer incentives, prices for non-distressed home sales have stabilized for almost a year," Kim said. "This is the most important trend in the housing industry right now, and we are amazed at how little attention it has been getting from the media and the street. This stability on the part of nondistressed prices has occurred despite a very high share of distressed activity and continued declines in overall prices."

Barclays said recent economic data — including higher job creation in November, housing starts and improved homebuyer traffic — point to some improvement potential in the sector.

In mid-2010, the federal homebuyer tax credit expired, leaving the housing market without training wheels for the first time since the 2008 economic meltdown. Yet, prices in some housing markets remained stable on the back end.

With its new outlook in the market, Barclays upgraded D.R. Horton's (DHI: 11.76 0.00%) stock to buy and raised price targets for D.R. Horton, Lennar (LEN: 18.51 0.00%), Toll Brothers (TOL: 19.26 0.00%) and Meritage Homes(MTH: 20.28 0.00%).

At the same time, the investment bank raised its 2012 earnings-per-share estimates for D.R. Horton, Lennar, Meritage Homes, Pulte (PHM: 5.59 0.00%) and Toll Brothers, while lowering its estimates for KB Home (KBH: 7.03 0.00%).

"Thus, the key to timing housing’s recovery depends primarily on when these first-time buyers decide it is safe to buy a house," Kim concluded.

Please visit our WEBSITE for more information on this article and about Grant Property Investment's unique range of in-house property investment solutions!

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UK Property Buy to Let Bank Lending

We've had a number of clients ask us where the banks are with property lending.

By way of background, many banks pulled back their lending on property when the financial crisis hit in 2008. They reduced their LTV's and put up their rates. The volume of lending fell significantly. So how have things changed, since 2008?


The short answer is that things have changed, very much for the better.

A number of lenders are offering 75% LTV and even 80% LTV on investment property -  back to the levels pre 2008.

• Base rates are now at 0.5%, down from 5%. 

• They are forecast to remain low for some time to come

• The margins that banks are charging are once again falling, as more lending competition creeps back in.

• The number of B2L products rose by 26% last quarter

The amount of lending has risen significantly as a result. The last quarter showed an increase of 40% on the previous year, according to CML.

There has been a 'golden period' for investing these past few years, although many investors held off. Investors are now piling back in - demonstrated by increased bank lending, and the greater levels of competition we are noticing on the ground, when buying.

There is still good value to be had. Prices fell in 2008. They then rose again and have been pretty stable since. Prices overall are still around 10% down from their peak.

If we can help with any questions on lending and / or investing, we'd be only happy to help. For further information or just a general chat please contact us on +44 (0)131 247 3131. Alternatively please visit our website for more information and view our current featured property lists.

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Beta Version Website now Live!

Today we launched our beta version of our new website. We have implemented loads new features and optimized the browsing functions to give our clients a new look and feel. Part of the upgrade, we now have a "Featured Property" carousel on our landing page making it easier to view our latest investment offers. A further new feature to our site is a  "Property List" which will feed live property investment opportunities straight to the site, please sign up to have these offers sent directly to you!
                                                                                                                     
The site now also offers live feeds from Blogger, Twitter, Linkedin and Youtube, ensuring all our clients are up to date with the latest investment opportunities and Grant Property Investment news updates!


Please visit or contact us on +44 (0)131 2473131 for any of your property investment queries!

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