In last week’s column, I referred to one of the problematic aspects of the “People’s Initiative to Limit Property Taxation,” more commonly known as Proposition…
Posts Tagged ‘Property’
Byron Williams: Aspects of Proposition 13 simply must be reformed to save California
July 19th, 2009 |
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Cheap housing offers lifeline to Indian developers
July 18th, 2009 |
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“No frills, Simple homes” reads the banner hanging in the Delhi headquarters of Unitech, India’s leading property developer. It’s a mantra that has been taken up by realtors across the country with a new-found passion for affordable housing that owes little to their social conscience and
Royal policeman guilty of £3m scam
July 17th, 2009 |
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Paul Page defrauded colleagues and friends to fund expensive lifestyle and keep afloat spread-betting scheme run from palace
A former Scotland Yard royal protection officer was found guilty today of a £3m property investment scam.
Paul Page, 38, defrauded colleagues, friends and others out of life savings, redundancy cash, pension payouts, retirement money and loans.
Many of his “innocent dupes”, including police officers guarding the Queen, lost five- and six-figure fortunes. Some were pushed to the brink of financial ruin by “rampant deceit”, and several saw their marriages crumble under the stress.
All thought they were investing in a thriving property development company. In fact its assets were “so much moonshine” and as real as “fairies at the bottom of the garden”, Southwark crown court was told.
Their money funded Page’s expensive lifestyle and gambling addiction, paid debts and kept afloat a spread-betting scheme which he ran from Buckingham Palace.
“The ability to inspire confidence and to sound plausible even when telling the most outlandish lies was very much Mr Page’s stock in trade,” said Douglas Day QC, prosecuting.
Page was convicted of one count of fraudulent trading between 2003 and 2006. He was cleared of making threats to kill against one of his victims.
He began working as a royal protection officer in 1998 and set up a number of sidelines, including a spread-betting venture called The Currency Club, in which up to 100 colleagues took part. When he and other officers lost more than £250,000, Page set up a fake property company, United Land and Property Development, in 2003 and persuaded his colleagues to invest hundreds of thousands of pounds.
The glossy brochure he used to lure them in was a fake. Page, who drove a Porsche and lived the life of a high-flying executive, owned none of the properties that his victims bought into. He conned 20 colleagues out of £1.3m and other victims out of a further £1.7m.
Page, who was charged after an investigation by the Met’s department of professional standards, claimed he had set up the property firm as a way of recouping losses from the spread betting for his colleagues. The jury decided he had deliberately set out to defraud his victims in order to fund his lavish lifestyle.
In a notepad found at his home, investigators found a drawing of a house, underneath which Page had written: “United Piss your savings up against the wall Ltd.”
Sergeant Adam McGregor, a royal protection colleague, lost £150,000 and had to sell his home to stave off bankruptcy. The officer persuaded his mother to invest £17,000; his brother and his girlfriend put in £20,000 and his father-in-law £30,000.
“I was totally sucked in by Paul. He is a very charismatic person,” McGregor said.
Fahim Baree, Page’s childhood friend and best man at his wedding, invested the £150,000 he had been left in his late father’s will. He was promised “significant returns”. He said he was dazzled by the fleet of luxury cars Page was driving and was keen for a share of the profits.
During the trial, Page made a string of allegations about widespread indiscipline and supervisory failures within SO14, the elite team who work – some of them armed – within the royal palaces in London, Scotland and Windsor. Many of his claims were unsubstantiated and denied but there were admissions in court to some of them.
McGregor accepted that he and others had sat on the Queen’s throne and had their pictures taken by each other as “something to tell the grandkids”.
Asked about a scheme the officers used to cover for each other so that one could have a sleep on duty, McGregor admitted he had fallen asleep on duty at Buckingham Palace. “I was on my post and unfortunately, in the middle of the night, I fell asleep,” he said.
Page alleged that armed SO14 officers used police cars to courier tens of thousands of pounds in cash between palaces while on duty. McGregor accepted he had escorted a car containing cash made from the spread betting during a refreshment break.
Page’s defence statement said the Currency Club involved 100 officers from the Met and other forces and ran for six years. He claimed that officers traded pornography and played poker on duty.
“Officers in the command are earning £50-60,000 per year with overtime for doing very little,” he said.
Scotland Yard said there had been no other disciplinary hearings in relation to the allegations and admissions made in the Page trial.
Detective Superintendent Tony Evans, head of specialist investigation at the Met’s directorate of professional standards, said he would not be making any further inquiries into the culture within the royal protection unit. He said the allegations were “historic” and “unsubstantiated”.
“I took the decision that [the allegations] would not be investigated. Following the verdict I don’t think I will revisit that decision,” Evans said.
Page will be sentenced on July 30.
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Richard Chin: NOVEL APPROACHES TO IP COLLABORATIONS: ADVANCING CURES FOR NEGLECTED DISEASES
July 15th, 2009 |
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While this week’s news is being dominated by Supreme Court nomination hearings, there’s also good news this week for intellectual property and global health. The…
Arrests in Florida double murder
July 14th, 2009 |
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A total of six people have been arrested following the killing of a wealthy Florida couple in their home last week, police have said.
Melanie and Byrd Billings were shot dead while they slept in the home they shared with their 16 children.
They had four biological children and 12 adopted children.
The sheriff of Okaloosa County in north-west Florida said there had been two new arrests on Tuesday. Four suspects were arrested on Monday.
The couple, who lived near the city of Pensacola, were known for caring for children with special needs in their large, nine-bedroomed house.
US media report that all the children’s rooms were equipped with cameras so the children could be monitored. A swimming pool next to the property was gated.
Two of the suspects were captured entering and leaving the property on one of its many CCTV cameras, according to the reports.
Nine of the Billings’ children were reported to be at home at the time of the attack. None were harmed.</p
This article is from the BBC News website. © British Broadcasting Corporation, The BBC is not responsible for the content of external internet sites.
House prices fall 12.5% year on year
July 14th, 2009 |
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• Government figures to May show big drop in house prices
• Sharpest falls in Northern Ireland followed by England
The price of the average UK house fell by 12.5% in the year to May, government figures showed today.
However, the pace of price falls has slowed, according to the monthly house price index published by the department of Communities and Local Government. In the quarter leading to May, prices edged down by 0.4%, compared with a drop of 4.8% in the quarter ending in February 2009.
Falls were steepest in Northern Ireland, where the price of a house has plummeted by 23.2% over the year. Average prices fell by 12.8% in England, 8.8% in Wales and 6.9% in Scotland.
According to today’s figures, first-time buyers paid 14.8% less for a property in May 2009 than they had in the same month last year. Owner-occupier price falls were slightly less pronounced, with prices dropping an average 11.6%.
The figures lag behind those issued by the lenders, which recently published indices for June.
Last week, Halifax reported a year-on-year fall of 15%, while Nationwide said prices had gone down by 9.3% over the year, despite a monthly rise of 0.9% in June.
Estate agents have been reporting signs of improvement in the property market, but many economists expect a sustainable recovery will be a long time coming.
Simon Rubinsohn , chief economist at the Royal Institution of Chartered Surveyors, said the government’s data provided further evidence that house prices were stabilising.
“The May figures show that prices across the UK were essentially unchanged compared with April. Month-on-month, prices actually rose in Scotland and Wales, fell slightly in England and more so in Northern Ireland.
“The flatter trend in prices signalled by this report follows the lead provided by the monthly RICS survey which showed price expectations amongst surveyors turning positive for the first-time since May 2007. Significantly, the lack of new instructions of property to agents is providing a key element of support for the market.”
Meanwhile, consultancy PricewaterhouseCoopers said today that recent signs of a recovery were a false dawn and predicted that prices would continue to fall over the next year, and that it was likely a recovery in house prices would stay modest until “the middle of the next decade”.
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House prices ‘to stay in the doldrums’
July 14th, 2009 |
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• Estate agent survey a false dawn says consultancy
• Buyers not confident enough to join market
Britain’s housing market will stay in the doldrums until the middle of the next decade, and there is a 30% chance that prices will take until 2020 to return to their peak before the crash, a consultancy firm predicts.
PricewaterhouseCoopers said recent signs of a recovery in the market which had been detected by a fresh survey of estate agents were a “false dawn”. John Hawksworth, the chief economist at PWC, said prices would experience a gentle decline for the next 18 months and then pick up slowly over the following years.
“Although the estimated average UK house price overvaluation of around 25% in mid-2007 has now been largely eliminated, our analysis suggests that house prices could still have further to fall over the next year.
“Despite some recent reports of rises, we are not out of the woods yet by any means. It is important for buyers to take a long-term rather than a short-term view.”
He added that house prices were likely to fall by a further 5-10%.
Hawksworth predicted a repetition of house price movements in the 1990s, when a collapse was followed by a long period of little change. “After a recession it takes time for people to get their confidence back and for memories to fade. Credit conditions will remain tight for some time and we expect unemployment to rise for the next year or so. There will be an environment of job insecurity where people are cautious about buying a house.”
PWC said it was more likely than not that real house prices in 2015 could still be below average levels seen in 2008, after adjusting for inflation. Even in 2020, after five years of relatively strong growth, the consultancy saw a 30% chance that real house prices could be below 2008 levels.
In its monthly property snapshot, the Royal Institution of Chartered Surveyors said price expectations rose for the first time in over two years in June due to a lack of homes on the market and an increase in buyer enquiries.
Jeremy Leaf, RICS spokesman, said: “Although the market is showing signs of improvement, it is unlikely that there will be a sustained upturn while mortgage lenders remain risk adverse. A lack of stock on the market is providing a platform for modest price increases. While supply remains tight, the market may continue to show tentative signs of firming but instructions are starting to increase in some regions and this could dampen any meaningful recovery as long as economic conditions remain quite so uncertain.”
Hawksworth said: “What would be a surprise would be if house prices now started to recover strongly in a sustained way. That would go against the lessons of history. There may be the odd month where the market seems to be going up but it is a false dawn because there is no underlying strength.”
He added: “The pace of recovery in house prices seems likely to be relatively modest until the middle of the next decade, although it could pick up again beyond that as supply shortages reassert themselves, credit conditions return to normal and negative memories of the current housing bust fade.”
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McDonald’s moves HQ to Switzerland
July 13th, 2009 |
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US fast-food chain will relocate to Geneva to take advantage of Swiss intellectual property tax laws
McDonald’s is shifting its European headquarters to Geneva, in a snub to the European Union, to benefit from Switzerland’s advantageous intellectual property tax laws.
The US fast-food chain is joining other foreign companies that have moved their European headquarters to a more favourable tax regime. US corporations that have based themselves in Switzerland include Kraft, Procter & Gamble, Colgate-Palmolive, Yahoo! and Google.
McDonald’s said its new European head office would be opened in Geneva before the end of the year. It will bring together all senior management, who are spread across four regional centres: London, Paris, Munich and Vienna. The company’s European president, Denis Hennequin, who until now has split his time between London and Paris, will be among the executives making the move to Geneva.
The four regional centres will remain open and the UK’s business will continue to be run from London by Steve Easterbrook.
A spokeswoman for McDonald’s said the move “will enable us to conduct the strategic management of key international intellectual property rights, which includes the licensing of those rights to McDonald’s franchisees in Europe, from Switzerland”.
She said the decision was “a long time in the planning” and was first announced internally in August 2008, denying that it was related to new UK tax rules that took effect at the start of the month.
The recent changes to the taxation of foreign profits relate to intellectual property rights such as patents, copyrights and trademarks. They have already prompted the publishing and conference group Informa to relocate its tax domicile out of the UK to Switzerland to escape “double taxation” – once abroad and again in Britain.
Under the new UK tax rules, the earnings companies receive from their overseas subsidiaries relating to “real” economic activity involving trade in goods and services will not be taxed by the UK authorities. But income derived from intellectual property rights does not fall into this category and will be taxed by HM Revenue & Customs, even if it has already been taxed overseas.
Other companies have recently moved from Britain to lower tax regimes such as Ireland, Luxembourg and the Netherlands. The list includes the advertising giant WPP, drugs group Shire, publishing company United Business Media, rented office group Regus, financial groups Henderson, Brit Insurance and Hiscox, and engineering firm Charter.
As part of governments’ efforts to stem corporate tax avoidance, there are moves under way to force multinational companies to reveal how much tax they pay in each jurisdiction they operate in.
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“Kiss-In” Held To Protest Detention Of Gay Men Outside Mormon Church
July 13th, 2009 |
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A “kiss-in” drew about 60 people sporting pink paper hearts to the sidewalk just off of LDS Church property near Main Street and South Temple Sunday to protest actions taken by church security late last week.
Chart the ups and downs of UK house prices
July 11th, 2009 |
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House prices fall 0.5% in June
July 8th, 2009 |
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Despite recent signs of improvement house prices have fallen 15% year-on-year, the Halifax says
House prices fell by 0.5% in June to an average of £157,713, Halifax announced today.
Over the second quarter of the year prices fell by 1.9%, the smallest quarterly fall since the first three months of 2008, the lender said, and the year-on-year decline was now at 15%.
Martin Ellis, housing economist at Halifax, said there had been some evidence of a “modest improvement in sales activity” as the number of loans taken out to purchase homes rose for the fourth month in a row in May.
“Improvements in affordability and low interest rates have stimulated housing demand. This, together with a low level of properties available for sale, has helped to stabilise activity and reduce the underlying rate of house price decline in recent months,” he said.
However, he added that despite “encouraging recent signs of improvement” in the housing market the outlook for the UK economy remained uncertain. “Overall, we expect to see a continuing mixed pattern of monthly house price rises and falls over the remainder of 2009.”
The lender previously reported a rise in house prices of 2.6% in May following three successive monthly falls. It said the ups and downs seen so far this year differed significantly from the consistent run of falls last year, indicating that the underlying rate of decline has eased.
There have been signs of small increases in activity in the housing market, with mortgage lending increasing and estate agents reporting greater interest. However, David Smith, senior partner at property consultancy Carter Jonas, said: “While the number of people committing to a purchase is rising, attracted by competitive mortgage finance and low prices, overall transaction numbers remain modest.
“The problem is confidence. The moment we read reports that the worst of the recession is behind us, most recently by the British Chambers of Commerce, any sense of optimism is immediately negated by a piece of poor economic news.
“The housing market has started on the road to recovery, but it’s going to be a long one. We are likely to bump around the bottom for some time yet.”
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Mortgage products decrease 90%
July 7th, 2009 |
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There are only 2,282 mortgage products available to borrowers compared with 27,962 in July 2007, research shows
The number of different mortgage products available to buyers and people remortgaging has shrunk to less than a tenth of the level it reached when the housing market was at its peak in 2007, research showed today.
There are now just 2,282 home loans from which borrowers can choose – less than half the number of products available one year ago and more than 90% below the 27,962 available in July 2007, according to the comparison site moneysupermarket.com. First-time buyers can access 1,195 mortgage products down from 17,756 in July 2007.
Louise Cuming, head of mortgages at moneysupermarket.com, said the lack of loan options for would-be homebuyers was an “ongoing problem” hindering a sustainable recovery in the housing market.
“Until this changes, and more mortgages become available, house price growth will remain muted at best with further falls possible, and many borrowers will struggle to get a mortgage,” she said.
She added that the number of products was unlikely to increase in the short term. “Lenders are competing to attract the same borrowers – those that are seen to offer the least risk to the bank – and there is no sign of this trend changing.”
David Hollingworth of mortgage broker London & Country said that while mainstream lenders were offering far smaller ranges of products, a large part of the drop in numbers was down to the withdrawal of specialist lenders from the market, such as those concentrating on self-certification and sub-prime loans.
“They often had huge matrices of products with different deals at different loan-to-values for different types of customers,” Hollingworth said. “But the specialist market has all but disappeared.”
This morning, the Financial Services Authority’s managing director of retail markets, John Pain, told the Treasury select committee the market for specialist mortgages had “reduced to almost non-existence”.
When asked if he thought lenders should be encouraged to begin offering these loans again, even though arrears levels are higher than on mainstream mortgages, Pain told MPs: “90% of these mortgage customers have had access to the mortgage market and are still sustaining their mortgage accounts so we have to think very carefully about just eliminating this part of the mortgage market, otherwise you will close off opportunity for consumers.”
Hollingworth agreed that specialist loans had an important place in the market. “Self-certification was developed as a product because there was a need for self-employed people who didn’t have enough years’ accounts … to go back to a point where people need three years’ accounts to raise a mortgage is quite a retrospective step,” he said.
Ray Boulger, senior technical manager at mortgage broker John Charcol, also backed Pain’s response. “The number of arrears [in the specialist mortgage market] has been lower than many expected. Many buy-to-let mortgages were offered with a loan-to-value of 85%, which gives a useful cushion.
“Since house prices have fallen by around 20% the number of people in negative equity will be relatively low.”
He added that many buy-to-let borrowers will have seen their mortgages revert to tracker loans, which follow the Bank of England base rate, currently at an all-time low. “For a lot of people affordability will not be a problem,” he said.
Boulger said the shrunken mortgage market was continuing to have a negative impact on house prices, but added that a lack of properties for sale may begin to push prices up this year. “I think we may see prices increase by 3%-4% in 2009,” he said.
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House prices rise for three successive months
June 30th, 2009 |
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Nationwide reports positive three-monthly trend in house prices for first time since December 2007 driven by a shortage of supply
House prices rose by 0.9% in June as demand for homes continued to outstrip the number coming on to the market, Nationwide building society said today.
The rise pushed the average price of a UK home up to £156,442 from £154,016 in May, and reduced the annual rate of deflation to 9.3% – the first time since last July that this has been in single figures.
The latest snapshot of the housing market from the UK’s largest building society is the most bullish in more than a year, as it also shows the three-month trend in house prices has turned positive for the first time since December 2007, standing at 0.9% compared with -0.4% in May.
Nationwide’s chief economist, Martin Gahbauer, said if the pattern of price movements seen in the first half of the year was repeated over the second half, then prices could show a small single digit fall for 2009 as a whole.
“This would represent a stark shift from trends seen at the turn of the year when most indicators were pointing to a repeat of the large declines seen in 2008,” he said.
But despite property prices now being only 0.2% lower than they were at the beginning of the year, the group warned that the recent upturn was unlikely to mark the beginning of a sustained recovery.
It said that while the rises seen since March were likely to be more than just “statistical noise”, they were taking place against a backdrop of very low activity.
The number of mortgages being approved for house purchase is still 55% below its long-term average despite recent rises, and at a level which is usually associated with falling prices.
Gahbauer said demand for homes would need to rise “convincingly” to prevent “a possible relapse” in prices as more homes come on to the market, some as a result of the economic downturn.
“While it is encouraging to see that prices are no longer seeing steep falls, there are still many obstacles in the way of a genuine and sustainable price recovery,” he said. “The stabilisation of house prices is a welcome surprise that did not seem likely at the beginning of the year.”
He added: “However, there are still considerable headwinds facing the demand side, and until we see a more robust recovery in house purchase activity it is too early to be confident about a full-scale recovery of prices.”
Minor trends
Last month, Nationwide and Halifax both reported a rise in house prices, and yesterday figures from the Bank of England showed mortgage approvals were also up in May.
However, house price figures from the Land Registry based on completed sales continued to show a fall in May and commentators advised caution. David Smith, senior partner at property firm Carter Jonas, said: “It’s still very early to talk about the beginning of a trend, but you could say we’re seeing the beginning of the beginning of a trend.”
He added: “While the economy and consumer confidence remain weak there is a feeling that we now know where we are and what we are dealing with. The unknown that we were facing only six to nine months ago is now more of a known and this, slowly, is driving property transactions.
“Demand is by no means strong but it is getting stronger, influenced in part by the feeling that interest rates may soon be rising.”
Michael White, chief executive of online mortgage broker Email Mortgages.com, said while those who could raise financing were able to take advantage of low prices and low interest rates, demand from first-time buyers could only pick up when more loans were made available.
“We would be able to see much more housing market activity if lenders operated sensible lending policies rather than looking to operate with no risk, forcing many would-be purchasers to curtail their efforts to get on the property ladder,” he said.
“Mortgage finance is still extremely difficult to come by, particularly at high loan-to-value levels, and until we see lenders truly willing to meet their public lending commitments any market improvement will only be slight at best.”
Separate figures from Nationwide of price trends for the second quarter of the year showed a moderation in the annual rate at which house prices were falling in all UK regions.
The slide in prices still remained steepest in Northern Ireland, where the average home costs 26% less than it did during the second quarter of last year, while falls have been lowest in Wales at 6.2%.
The group said there had been significant improvements in house prices in London, the south-east, East Anglia and Wales during the past three months, with all of these regions posting quarterly gains.
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Mortgage approvals at 13-month high
June 29th, 2009 |
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Mortgage approvals rise for fourth month in a row, but net lending dives to lowest recorded level
There were mixed signals from the mortgage market today as the Bank of England said the number of mortgages approved in May had reached a 13-month high, but net lending figures were at their lowest level in at least 16 years.
The Bank said the number of mortgages approved for house purchases rose for the fourth month in a row during May to 43,414. The figure is the highest in 13 months and well above the average of 35,670 recorded over the previous six months, suggesting the housing market is starting to recover from the impact of the credit crunch.
However, it is still less than half the average monthly level of 95,000 reported by the Bank of England between 1993 and 2008, and commentators suggest the impact of the recession and ongoing tight credit conditions will keep approvals low for some time to come.
Furthermore, figures for net lending secured on properties, which strips out redemptions and repayments, dived to £324m – the lowest level since the Bank began publishing this data in April 1993. The figure is just a third of that recorded in April and well below the six-month average of £1.1bn.
Although the value of other forms of lending, including credit cards and personal loans, increased slightly to £300m, the fall in mortgage lending pushed down total net lending to individuals from £1.1bn in April to £600m in May.
Mortgage movements
The Bank said that while the number of mortgages approved for house purchases went up in May, the overall number of mortgages agreed by lenders fell from 103,086 in April to 102,330.
This was driven by a drop in remortgaging, with approvals falling to 30,984 from 31,701 in April, and other mortgages including equity release deals. These deals accounted for 27,933 mortgages compared with a six-month average of 31,201.
The falls are a result of stricter lending criteria, continued falls in house prices and falling interest rates, which have made it more attractive for many borrowers to stay on their lenders’ standard variable rate at the end of a special offer deal rather than switch to a fixed or tracker rate.
The increase in house purchase activity backs up other signs that the housing market has recovered slightly since the start of the year. Estate agents and surveyors have been reporting increased demand from would-be buyers for some months, and both Halifax and Nationwide said house prices rose in May as the supply of homes dried up.
However, Land Registry figures released last Friday, which provide data based on completed sales, showed prices had continued to drop over the month.
Howard Archer, chief UK economist at IHS Global Insight, said the Bank’s figures supported his view that the recovery in the housing market would be slow. “The Bank of England mortgage approvals data reinforce the impression that while buyer interest is picking up markedly, helped by the substantial fall in house prices from their 2007 peak levels and much reduced mortgage interest rates, this is only gradually translating into increased house sales.
“Consequently, housing market activity is still down at a level consistent with falling house prices. We believe that the pickup in actual house purchases is likely to remain gradual for some time to come given ongoing tight credit conditions and still relatively poor economic fundamentals (even allowing for the recent limited improvement).”
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House prices stabilise in June
June 29th, 2009 |
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House prices remained unchanged for the second month running in June as demand continued to exceed the supply of homes, according to a survey published today.
The average price of a home in England and Wales stayed at £155,600, researchers at Hometrack said, citing rising sales volumes and a higher number of buyer registrations along with a dwindling supply of housing.
Price falls were recorded in just 3% of postcodes, down from 32% in April and about 60% at the start of the year, while the annual rate of decline eased to 8.7% in June from 9.6% in May.
The survey said that demand for housing in London and the south-east had been particularly strong, rising 52% and 46% respectively over the first half of the year. The increase in Wales over the same period was just 19%, with 20% recorded in the north-east.
Recent data about the housing market has painted an uncertain picture, with tentative signs of a recovery from the heavy falls of the past two years. Nationwide and Halifax both recorded an increase in prices for May, but last week the property website Rightmove reported a dip in June after four months of gradual improvement.
Meanwhile, separate figures out today showed that the average price of a house sold at auction has plunged by more than 35% from its peak in mid-2007.
The Essential Information Group, property auction specialists, revealed that the average price of a house sold at auction fell 18.8% from March to May compared with the same period a year earlier. The average price now stands at £143,032.
Prices in the north fell by 21% in this period as did prices in the Midlands and Wales. London is faring far better with prices slipping just 5% in this period.
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Supermarkets seize land grab chance
June 28th, 2009 |
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Property crash is boon for ‘big four’ food giants
Britain’s supermarkets are using the property crash to seize sites for new stores in a land grab that could redefine the retail sector for years to come.
The move will consolidate the supermarkets’ stranglehold over the retail sector and alarm MPs, small businesses and green groups.
Tesco and Asda, the biggest retailers, are committed to opening 2.5m sq ft of new space this year, while Sainsbury’s wants to add 2.5m sq ft – 15% of its floorspace – by March 2011. Morrisons is on track to open 1m sq ft by January 2011.
But the Observer has learned that all the major supermarkets are scouring retail parks where tenants have gone out of business, and buying empty high-street shops and pubs for new stores. Sainsbury’s said recently it was raising £450m to buy distressed development sites.
Senior property executives believe local authorities might soon relax objections to new superstores as rising unemployment and lower yields from business rates become major concerns. Property companies say they are in a dilemma over whether to allow supermarkets to buy or lease land on retail parks for fear of antagonising existing tenants.
Property insiders say Tesco, in particular, is using intermediaries to buy boarded-up pubs that already have planning consents before passing them on to the supermarket giant. The big four supermarkets account for 75% of the UK’s £120bn grocery spend.
“There seems to be a renewed space race,” said one leading retail property executive. “There’s a lot of testing of different small- and medium-sized formats. There’s an increased investment online and, in some cases, on retail parks.”
Labour MP Jim Dowd, whose parliamentary small shops group’s report led to a Competition Commission investigation of supermarkets two years ago, said: “This is a matter of concern because it strengthens the position of supermarkets, making it harder for medium-sized stores to enter the market. And it is a matter of concern that local authorities, when confronted with derelict sites in these straitened times, are more likely to grant consent which, normally, would have faced more scrutiny.”
Gideon Amos, chief executive of the Town & Country Planning Association, said: “We must be wary of allowing the downturn to be used as an excuse to abandon the urgent priorities of sustainability – climate-friendly development, and good quality planning and design.”
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Taxman Raises Hdb Property Value, Most Unaffected For Now
November 12th, 2007 |
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The annual values of most properties – including HDB flats – are going up,
but while owners of most private homes will be paying more taxes on their
properties next year, HDB flat owners will largely be insulated from the
taxman’s move.
The annual value is the estimated annual rent of a property if it were to
be let. In determining the annual value of a property, the Inland Revenue
Authority of Singapore (Iras) is guided by prevailing market rents.
The property tax rate is currently set at 10 per cent of the annual value
of the property. For owner-occupied homes, a concessionary rate of 4 per
cent applies.
The Iras said the average increase in the annual value of private
residential properties is about 20 per cent. This is broadly in line with
the rise in real estate prices reflected in data from the Urban
Redevelopment Authority (URA).
According to the URA, private home prices were up an average 8.3 per cent
in the third quarter from the previous three months. Compared to the end
of last year, private home prices averaged 22.9 per cent higher.
“Every year the Iras will assess the situation Â… They are increasing it
because rentals have gone up,” said Mr Eugene Lim, assistant
vice-president at real estate agency ERA.
“We are already seeing a trend of HDB owners renting their flats out and
the rental market has picked up. In that sense, the Government will look
at ways to ensure those who benefit pay their dues,” said Mr Donald Han,
managing director of property consultancy firm Cushman and Wakefield.
The Housing Development Board (HDB) Resale Price Index rose 6.6 per cent
in the third quarter and was up 11 per cent from the end of last year.
However, most HDB flat owners will enjoy a two-year reprieve from higher
property taxes, even though the Iras will be raising the annual values of
all HDB flats from Jan 1.
“The amount does impact the dwellers, but because there is a system of
rebates and preferential rates applied to home owners, the tax increase
will be mitigated,” Mr Han said. “The increase will only be felt by those
who lease out their premises.”
As part of the offset package for the Goods and Services Tax announced in
Budget 2007, all owner-occupied residential properties will be given an
additional tax rebate of up to $100 per year in 2008 and 2009. As a
result, 90 per cent of all HDB flat owners will not be paying more
property tax next year, the Iras said.
According to the Iras, one and two-room HDB flat owners will not have to
pay property tax next year, as well as 60 per cent of three-room flat
owners. The other 40 per cent of three-room flat owners will pay less tax
than they did this year.
For the four- and five-room HDB flat owners, 15 per cent will have to pay
higher taxes but the increase will be less than $40, the Iras said.
Meanwhile, in Parliament yesterday, National Development Minister Mah Bow
Tan said the Government would not be taking further action to cool the
property market.
Last month, the Government announced that it would scrap the deferred
payment scheme for private property purchases in a move to reduce
speculative buying and stabilise the red-hot real estate market. Mr Mah
said removing the scheme would not affect genuine home buyers.
Mr Mah also assured Singaporeans that there would be enough new housing to
meet the demands of a growing economy and population.
“At the end of the third quarter of 2007, there was a supply stock in the
pipeline of 65,000 units. This, in fact, is higher than the supply at the
end of the second quarter of 56,000 units. If Singaporeans are aware of
these figures – and these are numbers that we put out regularly – there is
no reason for Singaporeans to panic and feel that there is a real shortage
in the medium term.”
Mr Mah added that while the Government would seek to balance the supply
and demand in the long term, its “bias is not to over-regulate or
interfere” with the market.
“We monitor the growth rate of the market in relation to the growth of the
economy and growth is supported by economic fundamentals,” he said.
The National Development Minister added that more sites would be put up in
the Government Land Sales Programme in the first half of next year if
necessary. But this will be done carefully so as not to create an
oversupply situation in the longer term.
Sub-prime Still Gets Shares Down
November 12th, 2007 |
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But fall cushioned as Govt says no new property measures
Cheow Xin Yi
cheowxinyi@mediacorp.com.sg
SINGAPORE shares suffered their biggest fall in three weeks yesterday as
bourses worldwide slumped on continued concerns over the extent of the
sub-prime mortgage crisis that began in the United States.
But the Straits Times Index (STI) found a foothold at the psychological
3,500 mark, soothed partly by the Government’s reassurance that it would
not be taking further measures to cool the property market.
The benchmark shed 88.55 points, or 2.5 per cent, to close at 3,511.12,
recovering from an intraday low of 3,483.2. Decliners outnumbered gainers
800 to 160, on volume of 2.17 billion shares valued at $2.74 billion.
Banks continue to bear the brunt of the selling. Shares in DBS,
Singapore’s largest lender, fell 70 cents to $19.80. Shares in United
Overseas Bank, the second- biggest, shed 50 cents to $19.60. OCBC shares
lost 15 cents to $8.50.
“There’s been a wave of risk aversion around the world in the wake of last
week’s reports of more (US) banks’ write-offs; so, that clearly scared
investors off. We saw the weakness on Wall Street last Friday and that was
echoed in sell-offs across Asia,” said economist David Cohen from Action
Economics.
DBS Vickers’ retail market strategist Yeo Kee Yan said he expected a
rebound today after National Development Minister Mah Bow Tan’s remarks in
Parliament that the Government would not be “considering any new measure
for the property market” following its move last month to scrap the
deferred payment scheme.
“Some of the property stocks have been sold down quite badly. The market
may see this as an excuse to put some technical bounce on property plays.
But the trend is still uncertain with so many worries like oil prices and
the sub-prime crisis,” said Mr Yeo.