The Brief.

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Property Investment News that matters

EDITION FOUR

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I’m happy to report that our first one2one event, held last weekend in Elstree, London, was well received by nearly all who attended. We have certainly come away with valuable insight into what makes our Members tick, and this will all be incorporated into improving the service we provide.

Naturally, there were areas that can and will be improved for future events, and we’ve found your feedback most useful. For those unable to make it to London, please keep your eyes open for forthcoming events to be held around the UK. We look forward to meeting more of you in person!

Contents02 contents

Welcome from our International Sales Manager

03 WoRK-LIFe IMBALAnce UK property price growth outstrips salary rises

04 FULL oF eAsteRn PRoMIse Strong investment in Asia Pacific’s commercial property market in H2

06 GoInG GoInG Gone! UK property auction sales take a hammering

07 AGAInst ALL oDDs New homes market in the UK overcomes adverse conditions to post price gains

09 on tHe FIDDLe Fraudulent mortgage applications soar in the UK

10 A cLeAn sLAte Transparency in global property markets rises

12 one2one – LonDon eLstRee, sePt 15-16 Thank you for helping make it a success!

13 sPReAD tHe WoRD Share The Brief with others or help us improve it

Mike O’Riordan International Sales Manager

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UK property price growth outstrips salary risesWork-life imbalance

The cost of buying a home in England has increased by more than three times the rate of the average salary in the space of a decade, research by the National Housing Federation (NHF) reveals.

According to the NHF, the typical price of a residential property in 2001 was £121,769, while the average salary was £16,557. A decade later and the price of a property increased by 94% to £236,518, compared to 29% wage growth to £21,330 over the same period.

The widening gap between residential property prices and wages has made it significantly more difficult for many aspiring homebuyers to gain a foot on the housing ladder, forcing a high proportion of would-be first-time buyers

into rental accommodation instead, pushing rental values higher in the process.

The latest data from lettings network LSL Property Services shows that average rents reached an all-time high average of £725 per month in July in England and Wales.

In 2001, the ratio between the average residential property price and salary was 7.4 across England, but by 2011 that had risen to 11.1, the study said.

David Orr, chief executive of the NHF, said: “These shocking figures show that it is getting increasingly harder for millions of people to buy a home of their own in the current climate.

“ With the gap between income and house prices growing ever wider, people can often feel like they have to win the lottery to be able to buy in their local area. Unless we start building more homes people can truly afford to match the demand, this will only get worse.”

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Despite uncertainties in the global economy, the Asia Pacific property market remains largely resilient due to strong investment volumes, according to Jones Lang LaSalle’s (JLL) latest Asia Pacific Property Digest (APPD) for Q2 2012.

However, despite high investor appetite, the slowdown in leasing activity suggests that the region “is not completely immune”.

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Strong investment in Asia Pacific’s commercial property market in H2

Full of Eastern Promise

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The strong direct commercial property investment market in the second quarter (Q2) of this year was reflected by a 26% year-on-year rise in volumes to around £16.3 billion. As stronger investment volumes came in, capital values also increased across most major markets.

On the contrary, office leasing activity fell by approximately 10% in Q2 this year compared to the same period last year, mainly due to “corporate caution and the flow-on effects of on-going economic uncertainty”.

Dr Jane Murray, head of research at JLL Asia Pacific said: “The Asia Pacific property markets are holding up relatively well given the global economic backdrop. Leasing activity levels should continue to trend moderately lower than last year’s record levels, while we expect investors will continue to search out opportunities, particularly in prime locations.”

Moving forward, JLL generally expects capital values and rents to increase in most Asian markets, albeit at a slower rate compared to 2011.

Jeremy Sheldon, managing director for Markets Asia Pacific at JLL, commented: “There has been a decline in the established financial markets, however we are seeing strong demand in key South East Asian markets, and certain cities in China. While this pattern is likely to continue through the remainder of the year, we are optimistic that leasing will remain largely stable.”

We expect investors will continue to search out opportunities, particularly in prime locations

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UK property auction sales take a hammering

Going, going, gone…The property auctions market took a hammering in July, with the volume of lots offered and sold falling year-on-year, according to the latest figures from Essential Information Group.

The auctions specialist said that the volume of lots offered and lots sold fell by 6.3% and 6.8% respectively, whilst the total amount of money raised by action companies across the country dropped by close to 15% to £373 million.

The fall in activity and amount raised from property auction sales follow a prolonged run of positive results in the UK property auction market over the last 12-18 months, partly reflecting growing appetite among property investors seeking to secure high yielding investments.

The decline in property auction sales is owed mainly to the London 2012 Olympics, with more prospective homebuyers opting to stay home and watch the Games rather than focus on buying property, according to David Sandman, managing director at the Essential Information Group.

Sandeman commented: “There are a number of factors that could have contributed to the downturn – not least the amazing spectacle that was the London 2012 Olympics. As the country geared up to what I’m sure you’ll agree was a fantastic two weeks of sport and entertainment, it is likely that buyers and sellers lessened their involvement in the market. Elsewhere, the challenging market conditions continue to affect the entire property market.”

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Against all oddsIn spite of the recession and the general slowdown in the residential property market, new home sales have increased across much of the UK pushing prices higher in the process.

The latest data compiled and released by new homes portal, smartnewhomes.com, reveal that the average price of a new home in the UK appreciated by 1.4% in July to £235,579 compared to the previous month and 3.8% in the last three months. Unsurprisingly, the greatest price rise was recorded in the South East of England.

New homes market in the UK overcomes adverse conditions to post price gains

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The rise in new home prices reflects a general shortage of new homes in relation to demand, while more homebuyers have been taking advantage of incentives such as NewBuy.

According to the Home Builders Federation, approvals for just 24,872 new homes across England were granted during the second quarter of this year, marking a sharp decline on the previous quarter when 36,761 new homes were approved.

Planning permissions granted now will, in the main, be built over the next three or four years. At a time when fewer homes are being built in England than at any time since the 1920s - just over 100,000 new homes a year compared to a projected household requirement for 240,000, on top of the historic shortfall - the figures reveal how the current position is intensifying the country’s housing crisis.

But while construction levels fall, demand is growing, with over 1,300 buyers signing up to the Government-backed NewBuy initiative in the past six months. The scheme enables homebuyers to purchase a brand new home with as little as 5% deposit.

The NewBuy scheme is proving so popular that the Scottish and Welsh governments are developing their own versions. MI New Home will launch shortly in Scotland, whilst HBF is working with the Welsh Government to develop a scheme following its commitment to do so in a recent White Paper.

Various house builders have reported strong profits in recent months, on the back of a surge in new home sales and prices, further reinforcing the fact that market conditions in the new homes sector appears to be rapidly improving.

Steven Lees, director of SmartNewHomes, said: “Housebuilders have enjoyed an unseasonal strength in buyer demand at the start of the summer not seen for five years.

“The government has recognised that the new homes market can play an important part in pulling the UK out of recession and has unveiled plans that include public funding for new development and relaxing social housing requirements to stimulate construction that should make a further contribution towards the three million new homes it wants built by 2020. However, mortgage availability remains the linchpin for the industry and will ultimately determine the role house builders can play.”

Market conditions in the new homes sector appears to be rapidly improving

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Fraudulent mortgage applications soar in the UK

The latest Fraud Index by Experian, the global information services company, shows that a total of 39 in every 10,000 mortgage applications were identified as fraudulent between April and June 2012, up from 32 in during the same period in 2011.

Experian’s fraud analysis also revealed that the majority of attacks on mortgage products continue to come from first party fraudsters, individuals misrepresenting their own circumstances. Almost a quarter (24%) of attempted mortgage fraud was due to individuals hiding adverse credit information and a further one in five (21%) applicants providing misleading employment histories.

Nick Mothershaw, director of Identity & Fraud Services at Experian in the UK and Ireland, comments: “Over the course of the last year, we have seen mortgages continue to be targeted at a high rate, with more people trying to misrepresent their personal, employment and credit information on applications to get properties out of their reach. At the same time, we have also seen an increase in the number of properties where the use of the property is misdeclared, such as applying for a regular residential mortgage on a buy-to-let property.”

There was a staggering 23% increase in attempted fraud rates in the mortgage

industry between April and June 2012, it has

been revealed.

On the

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A clean slateTransparency in global property markets rises

Recovering global property markets have prompted renewed impetus to transparency improvements following a slowdown in progress during the financial crisis in 2008 and 2009, according to a biennial index produced by Jones Lang LaSalle and LaSalle Investment Management.

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Almost 90% of markets have registered advances in property transparency during the past two years, driven by improving market fundamentals data and performance measurement, combined with better governance of listed vehicles.

The 2012 Global Real Estate Transparency Index, a proprietary Jones Lang LaSalle survey that calculates transparency in 97 real estate markets worldwide by weighting 83 different factors, provides investors and corporate occupiers with data and analysis critical to transacting, owning and operating in global markets. The Index also assists governments and other industry organisations interested in improving transparency.

The survey shows that the USA ranks as the world’s most transparent property market this year, followed closely by the UK and Australia.

Also in the ‘Highly Transparent’ category are the Netherlands, New Zealand, Canada, France, Finland, Sweden and Switzerland.

Among the leading improvers in the survey are the MIST growth markets (Mexico, Indonesia, South Korea and Turkey).

Regionally, Latin America has seen the strongest progress in transparency, thanks particularly to improvements in Brazil and Mexico.

“While the world economy is still in recovery, the 2012 Index reveals that real estate investors and corporate occupiers are widening their activity across a broader range of markets. This cross-border activity encourages faster rates of transparency improvement in growth and emerging economies as the markets open up further to international competition and their real estate sectors embrace global best practices,” said Jacques Gordon, global head of strategy for LaSalle Investment Management, the investment management arm of Jones Lang LaSalle.

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The USA ranks as the world’s most transparent property market this year, followed closely by the UK and Australia

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Thank you for helping make it a success!The input and feedback we have received from many attendees has made

it clear that our live sessions are to become a permanent feature of the service we provide.

We’ll be announcing new dates across the UK shortly; in the meantime, here are just a few of the comments we have received…

15th & 16th September, London Elstree

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