London hit by property slowdown

Research from estate agency Knight Frank shows that the number of houses being sold in the capital is at its lowest level for over 10 years.

The agent said prime properties in Central London have been affected. Sales of expensive homes from January to March were down by 20% compared with last year’s figures.

In the same period, there were just 1,160 sales at above £1 million in London compared with 1,450 in the first quarter of 2007.

As a result, sellers are being forced to reduce their property price by hundreds of thousands of pounds.

In the first quarter of 2008, approximately 9,000 properties were sold in London. Last year, homes were being sold at the rate of 16,000 a month. Mouseprice.net, the property information website, said sales have been slower than in any period since 1995.

For example, a property in Paultons Square, Chelsea, has had a quarter of a million shaved off its original asking price of £3.5 million in an effort to find a buyer.

Miles Shipside of property website Rightmove said many sellers are trying to cash in on the equity they have made from the boom of the last 2 years. However, pricing your home on this basis is ignoring the worldwide financial turmoil, increased competition from other unsold properties and the challenge buyers now face in getting a mortgage, added Mr Shipside.

It’s human nature but in the current market sellers should price below their competition to avoid a larger price drop later in the year, said Mr Shipside.

According to Seema Shah of analysts Capital Economics, prices in the South-East and London fell by 0.7% in January and 0.5% in February.

The latest London View report from estate agents Cluttons said properties at the top end of the market are still selling quickly despite a cooling property market.

The report said high-end properties and those in desirable locations have, to date, been immune to the slowdown that is affecting the rest of the property market. These homes are selling quickly and they are going to best bids.

Mortgage squeeze: How is it affecting you?

Mortgages are getting harder to come by. First Direct has become the first high-profile lender to close its doors to new customers.

The bank - one of the country's top 20 home loan providers - gave only five hours' notice that it was effectively closed to new business on Tuesday.

The move came as figures showed that more than 90 mortgage products a day have been scrapped over the past week as lenders try to hoard cash. At the end of March there were 5,785 products available to borrowers - there are now less than 5,320.

It is now also almost impossible to get a 100 per cent mortgage, with Scottish Widows wanting at least 5 per cent deposit for young professionals such as doctors and accountants - previously they were able to borrow 110 per cent of the property's value.

Experts warn that more than two-million home owners on variable interest rate deals could find that their mortgage bills increase if other lenders follow suit.

The hardest hit, however, are first-time buyers and the estimated three-million home owners who are due to refinance their mortgages over the next 18 months.

We want to know if you have been turned down for a mortgage or are finding it hard to get an affordable deal from lenders?

Sabban Property Investments launches unique internship program in partnership with Birmingham City University

Sabban Property Investments (SPI) has announced the launch of a unique internship program in partnership with UK-based Birmingham City University (BCU), which will involve students in the construction of the Sabban Towers. Six international university students vying for a one-year paid internship in Qatar will put into practice the theory of construction and planning in a 12-day training program at the construction site, where they are expected to gain a broader understanding of the regional property development landscape. After an intensive course in the core areas of construction, real estate and planning development, the two most outstanding students will be awarded the coveted remunerated work placement and join the construction experts working on the project.

The leading Dubai and Qatar based developer invited students from BCU’s Property, Construction and Planning Department to submit their proposals on how they would add value to SPI as an organisation and comment on the booming real estate sector in Qatar, in addition to their study on the culture of the country and their views on sustainable construction and design. Following an intensive selection process, SPI selected the pool of winning students, which include Quantity Surveying majors Andreas Kounass and Imran Salam, and Planning and Development student Rosanna Sterry; in addition to Benedict Gannon, who is in his second year in Real Estate Management; Thomas Nicholls, a Building Surveying scholar; and Michaela Campbell Lynch, who is completing her degree in Architectural Technology.

“This work placement program, which we have undertaken through our partnership with Birmingham City University, is a part of SPI’s Corporate Social Responsibility policy to further our involvement in the development of the education sector by nurturing talent through experience,” said John Browne, MBE, Managing Director, SPI. “As an alumnus of BCU, I can attest to the exemplary academic training, which the selected students have been exposed to on campus, and our goal now is to match their theoretical knowledge with real life professional experience. Through this initiative, we are not only showing real interest in the students’ future but also, looking to the growth of SPI and the industry as a whole.”

First timers' stamp-duty up 82%

The average stamp duty bill for first-time buyers has almost doubled over the last five years, says a report from mortgage lender Halifax.

The average bill in 2007 was £1,751 compared with £960 in 2002.

In the south-east, south-west and east of England almost all first-time buyers paid stamp duty, while in northern regions only 42% were liable, it said.

The Treasury pointed out that half of first-time buyers will pay no stamp duty this year.

The lowest, 1% tax band hits homes worth between £125,000 and £250,000.

'Raise thresholds'

Homes valued between £250,000 and £500,000 attract a 3% charge and properties worth more than that are taxed at 4%.

Although the government has raised the threshold at which buyers pay 1%, it has not kept pace with the surge in house prices.

"Stamp duty has again become an issue for first-time buyers because the stamp duty thresholds have not kept pace with house price inflation," said Martin Ellis, Halifax chief economist.

"We call on all political parties to raise the stamp duty thresholds to compensate for house price inflation over the past decade," he added.

But the government defended its record.

Mortgage fraudster banned by FSA

A mortgage fraudster from East London has been banned by the main City regulator from anything to do with the financial services industry.

The Financial Services Authority (FSA) said Andrew Kiplimo was "not a fit and proper person in terms of honesty, integrity and reputation."

Kiplimo, who has disappeared from view, fed bogus mortgage applications to potential lenders.

The FSA said its action was part of a wider investigation of mortgage fraud.

Introduction fees

Kiplimo, who acted as a mortgage "introducer", was accused of making up the pay and employment details on mortgage applications, and also of using false accounts and tax

Surveyor gloom close to a record

The number of UK surveyors reporting house price falls in February was close to the historic level of June 1990.

Cautious homeowners have caused housing stockpiles to rise to levels not seen for a decade, the Royal Institution of Chartered Surveyors (Rics) said.

Some 64.1% more surveyors reported a fall than a rise in house prices in February - up from 54.7% in January.

But the survey said Scotland was bucking the trend, with 25% more reporting price rises - up 18%.

Highs and lows

The survey showed the UK trend had continued for the seventh consecutive month and was close to the June 1990 low, when 64.5% more surveyors reported house price falls than increases.

But the picture in Scotland mirrored economic data coming out of the country, showing a rise in the balance of surveyors reporting price rises from 7% to 25%.

Across England and Wales, enquiries from would-be new buyers are still dropping fast and fell for the 15th month in a row, suggesting a continued slowdown in the market is likely in the coming months.

"Many would-be-buyers are either struggling to raise the necessary finance to precipitate a move or are exercising caution in light of current economic uncertainty," said Rics.

News in brief: House prices fall

House prices have fallen for the third month in a row, dropping 0.1% in January according to Nationwide. Annual house-price inflation is down at 4.2%, the lowest rate for two years, and the average house price has dropped to £180,473 from £182,080 in December.

Dearer energy

Scottish Power has become the latest energy supplier to announce price rises. The group, which has 5.2m customers, said electricity prices will rise by an average of 14%, with gas prices up by 15%. The move follows rises at EDF, British Gas and Npower.

Footsie boosted by mining stocks

- The FTSE 100 closed up 160 points at 6,029, boosted by takeover talk in the mining sector centred on Rio Tinto.

Over the past 12 months the index has fallen by 2.8%

Over three years the index is up by 24.3%

Over five years the index has risen by 69%

FKI had the biggest gain, up 39% to 67p

Vanco fell the most, down 44% to 101p