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8 July 2010
PROPERTY INVESTMENT – BACK IN VOGUE?
Presented by Ruth McCarthy
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• Worst recession since 1930’s – slow recovery.• Low returns on savings.• Property vs the Stock Market.• Rising assets
– UK house prices rise 117% in the “noughties”.
• The rise of “buy to let”.
Why Property Investment?
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• Commercial vs residential.• Commercial – industrial, retail, mixed use.• Residential – buy to lets, HMO, holiday lets, off plan.• Land.• Property Investment Funds.• Types of investor
– cautious– moderate risk– speculative.
• Sourcing property.
Types of Investor and Investment
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• 2007/2008 “annus horribilis” x2– Paralysis of credit availability– House price falls.
• Recent price rises– Low supply– Very low mortgage rates.
• Little competition from alternative investment options.• Price rises – sustainable?
– Slow recovery– Volatility on a month by month basis.
Residential Market – The calm after the storm? (1)
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• Future concerns – increased unemployment, future
finance costs, inflation, government debt, tax rises and
spending cuts.
• Hung Parliament - Conservative/Lib Dem Coalition
– What does it mean to the housing market?
Residential Market – The calm after the storm? (2)
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Investment Yields
Source – Savills Research/Residential Property Focus 02/10
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Market Snapshot
Source – Savills Research/Residential Property Focus 02/10
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Market Snapshot
Source – Savills Research/Residential Property Focus 02/10
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• Strong demand – UK and international.• “Boom and bust” more extreme.• Why “out performing”?
– Same reasons as elsewhere in UK but more
pronounced.– Returning confidence – economic prospects brightening
more rapidly.– Resilient demand.– Plummeting supply.– Devaluation of sterling since 2007.
Focus – Prime London leading recovery
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Focus – Student Accommodation
Demand Supply
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Focus – Student Accommodation
Rental growth prospects Yields & values
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• What is an HMO?• The attractions.• The downsides.
Focus - HMO
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• Mortgage availability will remain tight.• Banks beginning to repay government loans.• Banks rationing mortgages and using sharply
differentiated rates depending on deposits.
The Funding Environment
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• The process.• The “do’s” and “don’ts”.• Risks vs rewards.
Buying at Auction
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• T.I.B./Receiver/Administrator.• Caveat emptor!• Undervalue issues.
Buying Distressed Property
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• Seek professional guidance.• Always check discounts and rental indications.• Do your research.• Be careful of “free” seminars and property clubs with
expensive membership.• Always leave some spare capital for unexpected
purchase costs and potential rent voids.• Maintain diversity in any portfolio.
A cautious approach
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• Development - The end of “high rise developments”
The Future
Source – Savills Research/Residential Property Focus 02/10
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• The land market
The Future
Source – Savills Research/Residential Property Focus 02/10
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Should you require further information or if you would like
a copy of these slides please contact.
Ruth McCarthySlater Heelis
Dovecote HouseOff Old Hall Road
Sale MoorM33 2HG
e: [email protected]: 0161 975 3827
For Further Information
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Disclaimer
Risk warning and disclaimer:
These slides are produced for general information only and are not to be relied upon in anyway. No responsibility or liability whatsoever can be accepted by Slater Heelis for any loss or damage resulting from any use of, reliance or reference to the contents of this document. As a general document, this material does not necessarily represent the view of Ruth McCarthy or Slater Heelis in relation to a particular property, properties or projects. You are advised to seek additional guidance from property and other professionals.
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20 May 2010
THANK YOU FOR YOUR TIME
Presented by Ruth McCarthy
THE END