10 | EXTRA WORDS | Adrian Bishop
More from the markets C
Extra, extra! We’ve picked up two more stories that we felt deserved a little more coverage this month. First, the Help to Buy scheme announced by the British government – opinion is mixed concerning its potential impact on the housing market. Then a quick look at Hong Kong and the backlash from cooling measures...
hina dominated the headlines somewhat over the last month, but these two stories caught
our eye as well. For the latest word from the industry, keep up to date with
www.opp-connect.com for our full news coverage of the global real estate markets.
UK Budget includes mortgage scheme
Chancellor George Osborne announced a new three-year Help to Buy scheme, starting in January 2014 and open to all, in a bid to boost the country’s struggling residential real estate market. On Wednesday, 20th of March he told the House of Commons that the government is committing £3.5 billion to shared equity loans for new build homes worth under £600,000 allowing buyers to purchase them with a 5% deposit. The government will offer a loan worth up to 20% of the property, which will be interest-free for the fi rst fi ve years.
Roarie Scarisbrick, partner at independent buying agents Property
Vision that advisers buyers on UK property purchases, told OPP Connect: “The destructive impact of last year’s budget measures has not been alleviated but at least no further damage has been done to the property market. “Whether the Government’s ‘Help-
to-Buy’ scheme will have more success than previous schemes will be closely monitored, but this has the potential to help boost the number of new homes available with positive knock on effects for the construction industry and other businesses linked with the property industry.
“Whilst the London property market relies on international investors and buyers, it will continue to be at risk of our political masters. However it is reassuring to see that in this year’s Budget, the emphasis is on making the UK an attractive place to do business and enticing wealth creators to live and work here,” he says. Richard Way, Editor of The Overseas Guides Company, said: “Most disheartening was that Osborne gave no indications that annuity or interest
rates might rise anytime soon – driven down by the continuation of the Bank of England’s quantitative easing programme – or when infl ation might creep back down towards 2%. Neither was there any mention of the freezing of council taxes, another over-infl ated cost of living in the UK, where annual rates are around three times those levied by councils in, for example, Spain. “All the while the cost of living remains high in the UK, expect more
“This has the potential to help boost the number of new homes available”
That time of year | The UK’s budget almost always causes controversy
retirees to be tempted by a move to a warmer, more affordable place.” Mr Osborne says, “Help to Buy is a dramatic intervention to get our housing market moving. For newly built housing, the government will put up a fi fth of the cost. And for anyone who can afford a mortgage but can’t afford a big deposit, our mortgage guarantee will help you buy your own home.” The initiative is an extension to existing government programme New Buy, whereby buyers could purchase homes worth less than £500,000 with a 5% deposit and a shared equity scheme for fi rst time buyers called First Buy. The Council of Mortgage Lenders immediately confi rmed that it will work constructively with the government to help deliver a workable scheme, but emphasises that the detail of its operation will be crucial to its success. “Clearly, to be successful the voluntary scheme will need to be robust, not overly complex, result in the delivery of products that are attractive to borrowers, and be commercially viable for lenders. “To achieve this, the scheme will need to ensure that all lenders will be able to gain capital relief in recognition of the risk mitigation offered by the Government guarantee. “Without capital relief, and depending on the size of the fee, the cost of the commercial fee that lenders will have to pay to gain the benefi t of the scheme could make the
scheme uneconomical.” The CML says that as the scheme will not be introduced until next year, there will be no immediate benefi ts. “However, a successful scheme could ultimately enable lenders to offer more low deposit loans than they would otherwise be able to do without incurring concerns from funding markets, prudential regulators, or their own internal risk committees.”
Fear over Hong Kong agent job losses
Hong Kong real estate agencies will be forced to close in the coming months with big job losses as government property-cooling measures take effect, it is feared.
On February 22, the government announced a doubling of stamp duty on residential and non-residential properties over HK$2 million. Combined with other market cooling measures, including a new 15% tax, called the buyer’s stamp duty, the move has forced investors and speculators out of the market, leaving estate agents fi ghting to stay afl oat.
Chu Kin-lan, chair of Hong Kong Real Estate Agencies General Association, has told the South China Morning Post newspaper, “An estimated 10-20% of agency fi rms will be forced out of the market in the coming months if the situation persists,” he said.
As a result, more than 10% of the 40,000-plus individual agents could lose their jobs.
The association has joined six other real estate agency associations to call on the government to revive the property market.
Members of the Estate Agencies
General Association usually work at smaller agencies.
“Many members have told me that they have not brokered any deals since the government announced the doubling of stamp duty in February,” Chu Kin- lan says.
Many of the association’s members had started closing branches, says Chu Kin-lan. For example, her company, Bo Fung Property Agency Group, had to close fi ve branches since the end of last year following slow business, leaving six branches.
NEWS
www.opp-connect.com | APRIL 2013
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68