Overseas property and finance expert, Simon Conn, has over 35 years’ experience in the overseas property market and in this article, gives his opinion on overseas property investment in the wake of our decision to leave the European Union. Since Brexit, there have many different comments in the press about how people feel the market and economy will develop during the next few months and most, unfortunately, have been rather dour. From my experience of the overseas property and mortgage sector, although some clients have put their plans temporarily on hold, there have been very few outright cancellations. As I have stated in previous comments once the Brexit vote was known, there should not be any knee-jerk reactions and it will take time for markets to return to normality and further key decisions to be made – such as interest rate setting, Theresa May settling in as PM, exercising Article 50, new Trade deals to be sorted – HOWEVER, there are still opportunities to be sought. In the most popular countries I deal with (France, Spain, Portugal and the USA), there are clients who are still purchasing, but with the following observations. Interest rates continue to remain the lowest they have for many years, with many now choosing to also consider Fixed Rates with terms longer than 5 years, where pre-Brexit Variable Interest Rates or 2/3 year Fixed Rates were the norm. Although prices may have increased for a Sterling buyer by 10% for those purchasing in a Euro or Dollar Zone, previous cash purchasers or those with a higher deposit are now approaching me with a more specific mortgage request, to cover any shortfall due to the currency exchange changes or shortfall. For those UK based clients purchasing to rent out the overseas property (and not requiring a mortgage on the new asset), they could possibly benefit from the higher rent to be received when their Euro or Dollar rental payments received are converted back to Sterling. With the speed of the political changes in the UK and the subsequent impact on the money markets, it is therefore definitely worthwhile in the next few months keeping watch on the overseas property industry and the different mortgage options that could be available. Source link

Relentless supply constraints and home price growth outpacing wages are testing the patience of home buyers in the United State this year, but existing home sales are still on track to come in at their highest pace since 2006. Monthly existing home sales were uneven in the first quarter but still came in at a seasonally adjusted annual rate slightly higher at 5.29 million than last year’s overall annual pace of 5.26 million, National Association of Realtors chief economist told the 2016 Legislative Meetings and Trade Expo. He pointed out that demand has mostly remained strong, especially in the top job producing metro areas and is being upheld by mortgage rates near three year lows and the 14 million jobs gained since 2010. ‘The housing market continues to expand at a moderate pace in spite of the fact that home prices are rising too fast in some areas because of insufficient supply fuelled by the grossly inadequate number of new single family homes being constructed. Pending sales in recent months have remained stable and should support a modest gain in home sales heading into the summer,’ he explained.  Yun forecasts existing sales to finish 2016 at a pace of around 5.40 million which would be the best year since 2006 when it was 6.48 million. After rising to 6.8% in 2015, the national median existing home price is forecast slightly moderate to between 4% and 5% this year. Senator Elizabeth Warren told the meeting that college debt is hampering young people from getting on the housing ladder. She explained that seven out of 10 college graduates that need to borrow thousands of dollars to attend college and then spend countless years afterwards repaying the debt at high interest rates. ‘Student debt is crushing young people, it’s hurting the nation’s economy and delaying the opportunity for many to buy their first home. Every monthly payment going to reducing their student debt could instead be money going towards saving for a down payment on a house,’ she added. Yun remarked that the ongoing absence of first time buyers is the missing link to a full housing recovery despite it being a time when conditions are ripe for a larger share of them buying homes. ‘Job growth has been strong for multiple years, rents have soared in many areas and mortgage rates are historically low. Unfortunately, a multitude of factors such as increasing home prices amidst flat wage growth, the lack of available starter homes and repaying student loan debt is thwarting many young would be buyers,’ he told the meeting. ‘Spectacularly low mortgage rates mean today’s prospective home buyers are the luckiest in a generation but the unluckiest in actually becoming home owners because of the roadblocks hampering their ability to buy,’ added Yun. Warren urged Congress to pass the Bank on Students Emergency Loan Refinancing Act, which would give a much needed break to student debt borrowers by giving them a chance to refinance their federal and private student loan debt at the same low rates offered to new borrowers in the federal student loan programme. Although contract signings nationally have held steady for several consecutive months, Yun said regional differences are beginning to appear in places where home prices have appreciated the fastest, specifically in parts of the South and in the West. Although data from the NAR confidence index shows that home buyer traffic is still strong, demand is somewhat weakening from a lack of available inventory and the subsequent affordability pressures it’s putting on a large segment of would-be buyers.  Yun believes that home builders need to significantly ramp up production so that more existing home owners can trade-up and list their home for sale. ‘Otherwise, inventory shortages will continue and demand could soften even more in some areas as a greater number of buyers are unable to find homes at affordable prices,’ he said. Ultimately, Yun foresees housing starts ending up higher than last year’s 1.1 million, but still below the 1.5 million necessary each year to keep up with current demand. New home sales are likely to total 540,000 this year, which is only a little more than half the rate from the pre-boom years in the early 2000s. Yun said rents, which rose last year at a seven year high, will be a big driver of future inflation, along with gas prices, and will ultimately steer the direction of mortgage rates. If rent growth continues at its current pace, inflation will be stronger and push rates higher. He explained that slowing rent growth would have the opposite effect by keeping a lid on inflation and holding rates at a very manageable level. For now, he foresees mortgage rates continuing to hover around 4% in coming months before gradually moving upward into next year. Despite solid job gains in the past few years, Yun stated that economic growth continues to be unimpressive and he added that even with underlying challenges, the housing market has come a long way since the depths of the recession. For example, mortgage delinquency rates have gone down to near pre-crisis levels and home prices have rebounded substantially in a majority of metro areas, which in turn has boosted household wealth for many home owners. ‘The economy should still expand enough to continue the current pace of job creation, which will in turn lead to slow, but steady sales gains for the housing market,’ concluded Yun. BOOKMARK THIS PAGE (What is this?)      Source link

The Swiss have historically been adept at quietly making money while wars rage around them. That may explain the impressive performance of Sika in tense circumstances. For almost two years, the producer of cement additives has been the subject of a stand-off between its directors and minority shareholders on one hand, and the Burkard family on the other. The family wants to sell its 16 per cent stake (which comes with 52 per cent voting rights) to French building products group Saint-Gobain without a general offer to all shareholders. Minorities have objected noisily. Yet the protracted stand-off over future ownership does not seem to have affected the company’s operational performance. At a capital markets day on Tuesday, Sika reaffirmed its guidance for the current year and reiterated a strategy of organic expansion, cost control and bolt-on acquisitions that has served it well since inception in 2012. Sales have grown and operating margins have risen from 7.6 per cent in 2011 to 12 per cent in 2015. Analysts’ forecasts for this year’s earnings have risen by almost a quarter. The market has noticed. Since Saint-Gobain’s chief executive urged Sika’s board to “concentrate on running the company” rather than fighting the bid, the Swiss company’s shares have risen 56 per cent (in local currency terms). That compares to a 9.6 per cent gain in his own company’s stock. Whether such performance would endure under Saint-Gobain’s tutelage is doubtful. The French company has pledged to maintain Sika’s stock market listing and offered reassurances to its employees. But more than 100 Sika managers have pledged to scorch the earth by resigning en masse if the takeover goes ahead. The market shows few signs of concern at either prospect. It should do. Sika’s directors have so far thwarted the Burkard/Saint-Gobain deal by using a provision in the company’s articles of association to limit the Burkards’ voting rights to 5 per cent, a manoeuvre subject to legal challenge. If the court rules against Sika, little stands in the way of the deal completing. When it was first announced, Sika shares fell by a fifth. They could easily do so again. Email the Lex team at lex@ft.com Sample the FT’s top stories for a week You select the topic, we deliver the news. Source link

Property investment and management company, Pulse Property Network, has announced that it is rolling out Multi-Let UK, a national bespoke management service, with the aim of supporting landlords and investors running HMO, or multi-let portfolios. Since Multi-Let UK’s launch in 2013, the firm has enjoyed early success on their own portfolio now manages, on behalf of landlords and investors, a growing portfolio heading towards 1,000 units of high quality HMOs and house share accommodation, for graduates and working professionals.  Already, the firm has provided safe and secure homes for thousands of professional tenants across the UK.   With headquarters in Nottingham and offices in Lincoln and Derby, Multi-Let UK is opening an additional five offices in Leeds, Warwickshire, Luton, Milton Keynes and Bedford in May and June 2016. Multi Let UK plans to open further offices in 2017.   According to Daniel Hill, Managing Director of Multi-Let UK, landlords and investors with HMO and multi-let portfolios have many challenges to face, from complex legal compliance requirements, mandatory and ‘additional licensing, building regulations and an increased governance over the multi-let sector. Unfortunately, in many areas around the UK there are many HMO landlords providing poor quality accommodation, which discards these laws and puts tenant’s wellbeing and potentially lives at risk. Daniel Hill comments: “Increasingly we are seeing HMO reports appearing in the news for breaching legal requirements and risking the safety of the tenants who live there.  As a landlord of a fast-growing property portfolio of HMOs and multi-lets, I know how demanding the ever changing regulation, legislation, new license requirements and rapidly changing market conditions can be.  It can be very demanding, time-consuming and stressful to undertake this journey alone.   In a typical day, an HMO or multi-let landlord could be dealing with difficult tenants; chasing overdue rent; juggling finances; ensuring compliance with HMO legislation; redecorating a property; or evicting tenants for non-payment of rent. In spite of all the ups and downs, I have managed to build a successful property portfolio and came to a point last year, when I decided to expand the business, to provide added-value services to other landlords. From my research, I knew there were no specialist portfolio management companies with the right experience, knowledge and resources to manage HMO portfolios, offering accommodation exclusively to professional tenants. This is in contrast to the single let and student HMO markets, which have a number of well established and accomplished businesses.   We set up Multi-Let UK to provide a full management service for landlord’s portfolios, giving them control and freedom, along with a high level of return for their investments. Multi-Let UK is the only national specialist multi-let portfolio management company that specialises in professional house shares and has built a reputation as the market leader in houses of multiple occupancy investment.” Source link