Blanchard Consultancy – the independent construction consultant

Property bargains are increasing daily as sellers cut their asking prices in an attempt to make wary buyers commit in a slow summer market – but the mortgage drought and a loss of confidence among buyers means that few are taking advantage.

Sellers are asking £5,403 less for their homes than a month ago, with the typical price of a house down, on average, by 2.3 per cent at £229,816, according to a survey on Rightmove, the property search website.

In London, where the market has deteriorated sharply, asking prices have dropped by £21,096, or 5.3 per cent, to an average £379,162 in a month. Prices are down 3.8 per cent in the capital over the past year, compared with 4.8 per cent across the UK.

Despite such reductions, properties appear to be more difficult to sell, with Rightmove-registered agents reporting 78 unsold properties on their books, up from 77 last month. Miles Shipside, a director of Rightmove, said: “Buyers are currently benefiting from the best choice in years.”

Rightmove blames the mortgage drought for the state of the market, adding that transactions are in danger of dropping to levels last seen in 1959.

Despite fears that there could be a surge of properties put on the market as the slumping economy and soaring prices forced more borrowers into difficulties with their mortgages and pushed asking prices even lower, Rightmove says that there is no sign yet of a rush of homes for sale. New listings are 106,000, about 25 per cent lower than typically seen at this time of year. Mr Shipside said: “Those who do not have to sell are holding off.”

Read the full article at Times Online.

Labels: falling house prices, findaproperty, House market, property analysis, property prices, Rightmove, uk housing

Large scale public sector projects such as Crossrail and those linked to the 2012 Olympic Games, including the East London Line and Thameslink, are in danger of dipping further into the public purse due to significant increases in costs, according to the Civil Engineering Market report from RICS’ Building Cost Information Service (BCIS).

Raw materials and labour costs have risen by 12.2 percent over the past year and, with costs forecast to rise by a further 12 percent over the next two years, public sector project contingency plans will come under increasing pressure to stay out of the red.

With infrastructure output rising by eight percent and new orders growing at a rate of 26 percent in Q1 2008, this sector is expected to be one of the few growth areas in UK construction over the next few years, offering some firms an antidote to the current downturn in the market.

However, the rises in the costs of cement, steel piling and fuel are having a dramatic impact on civil engineering construction costs.

Overall infrastructure output is predicted to rise by nine percent in 2008 and seven percent in 2009, while BCIS forecasts costs to continue to rise at a rate of 6.5 percent in 2008 and 6 percent in 2009.

Read more at the RICS newsroom

Labels: Civil engineering market report, Crossrail, infrastucture projects, Olympic Games, RICS, rising costs public projects, Thameslink

THE trade body that represents hard-pressed estate agents is to create its own free advertising website, a move that threatens to torpedo the business plans of its quoted rival Rightmove.

The National Association of Estate Agents, which represents residential estate agents, is planning to launch Property Live in October and is being supported by its 10,000 members.

The new website could prove devastating to sites such as Rightmove and Findaproperty.com, which charge a monthly subscription of up to £495 to advertise houses and flats on their property portals.

Any further upgrades, such as displaying extra photos, can cost an additional £100 per property.

Article continues at Times Online

Labels: findaproperty, free house advertising, free propoerty listings, House market, National association of estate agents, property live, property prices, Rightmove

In the past decade, home buyers have paid the government £32bn in stamp duty, with the annual amount rising dramatically as the housing market soared and increasing numbers of properties were caught by the tax.

According to the Halifax, just over a quarter of the privately-owned homes in the UK, more than 5.5m, were valued above £250,000 at the end of last year, the threshold at which stamp duty is levied at 3% of the property's value. In 2002, there were just 1.8m properties valued above £250,000.

A family buying the average-priced home in Greater London, currently £291,500, would pay the Treasury £8,745 in tax.

The government has enjoyed a large increase in revenue from stamp duty since Labour came to power in 1997. That year, the yield from residential properties was just £675m. Increases in the rate of tax combined with the impact of rising house prices meant the Treasury collected £6.4bn from stamp duty on homes last year. However, that figure will fall dramatically this year as the housing market has hit a wall and the number of transactions has plummeted to record lows.

Under the current regime, there are four stamp duty bands. Buyers of homes worth less than £125,000 pay nothing. Between £125,000 and £250,000, buyers pay 1% on the price of the home; between £250,000 and £500,000, buyers pay 3% of the price; and above £500,000, they pay 4%. There were 1m properties in the UK valued at more than £500,000 at the end of last year, a threefold increase in the past five years, according to the Halifax.

Consumer groups, mortgage lenders and house builders have lobbied for the lifting of the current thresholds to keep them in line with rising house prices, and those calls have become louder as the housing market has been paralysed by the credit crunch. First-time buyers are under particular pressure as the banks' lending criteria have become tougher and they are being forced to find much larger deposits.

If the higher stamp duty thresholds of £250,000 and £500,000 had increased in line with house price inflation since July 1997 when they were introduced, they would now stand at £720,000 and £1.44m, the Halifax said.

Read more at Guardian Economics

Labels: Alistair Darling, Bank of England, credit crunch, Gordon Brown, Halifax, House Tax, Mortgage rates, negative equity crisis, property analysis, Stamp duty changes, uk housing

Plenty has happened since the Bank of England last cut interest rates in April. Inflation has risen to 3.8% - almost double the government's 2% target - requiring the Bank's governor, Mervyn King, to write an explanatory letter to chancellor Alistair Darling. At the same time, the economy has weakened rapidly – today's news from the Halifax of an 11% drop in house prices over the past year is merely the latest evidence of a deflating property bubble.

Official figures suggest Britain continued to expand - if weakly - in the second quarter of the year, but all the signs are that the second half of the year will see the economy slide into its first recession in more than a decade and a half.

Against that backdrop, it was hardly surprising that the Bank's monetary policy committee left interest rates on hold today.

Article continues at Guardian news

Labels: Alistair Darling, Bank of England, chancellor, Halifax, Mervyn King, UK Interest rates, UK recession

The high-street bank HBOS must inject about £100m of fresh cash into Crest Nicholson in the coming weeks to prevent the housebuilder from breaching banking covenants.

If HBOS, which owns 50% of Crest Nicholson, decides that it is unwilling to support the builder, its investment could be wiped out and the lending banks could step in and take control.

HBOS is also understood to be contemplating bringing in a partner to provide the funding. Hedge funds and private-equity groups are thought to be interested. HBOS has hired debt specialists at Deloitte to assist with the negotiations.

Crest Nicholson, led by chief executive Stephen Stone, was bought in 2007 at the height of the housing boom by Uberior Investments, the private-equity arm of HBOS, and West Coast Capital, the private-equity vehicle of the Scottish retail tycoon Sir Tom Hunter. Their joint venture valued the business at £715m. Hunter is the richest man in Scotland, according to the Sunday Times Rich List.

Article continues at Times Online

Labels: Crest Nicholson, Deloitte, House market, Housebuilders, HSBOS, property analysis

The chancellor, Alistair Darling, is prepared to disappoint millions of would-be home buyers by ruling out proposals to revive the housing market, Treasury insiders warned last night. After a chaotic week of claim and counter-claim about Treasury plans to suspend stamp duty for first-time buyers, Darling has hardened his stance against the move, which he believes could cost billions to little positive effect.

Senior officials said the Chancellor might well take no action to prop up the market in the Pre-Budget Report this autumn. 'Alistair is not going to be buffeted into doing something by headlines,' said one insider. 'If the evidence is there that suspending stamp duty would help, then we will look at it. But at the moment the evidence is not there.'

Although work is under way on a range of options involving possible changes to stamp duty and other measures to help buyers, there is deep scepticism about the idea in the Treasury.

Read more at Guardian Online

Labels: Alistair Darling, chancellor, House market, property analysis, property prices, Stamp duty changes