Beat the property slump: House prices

# House prices

One final shove swings the front door wide open. I am hit by the foul smell of stale cat pee and the dank gloom of a house that looks untouched for decades. It is exactly what I've been looking for.

For years I've gorged on Britain's unhealthy diet of property shows. I've watched with envy as amateur investors stumble their way to tens of thousands of pounds in profit. Desperate to climb aboard, I once upped my offer on an east London wreck from the front line while reporting in Afghanistan. As the bombs rained down from the B52s the biggest blow was a distant London agent telling me it had gone to a higher bidder. His only apology was for the bad line, asking whether the "banging" in the background was at my end.

But now it's January 2008, and a friend has given me first refusal on an inherited, foul-smelling, ex-council house in Edgware, north London. Both Nationwide and Halifax predict a year of zero growth, but no falls. It's a very neat street and houses sold here for £285,000 last autumn. I borrow against my home and buy the sad wreck for £200,000.

I know the property market is slowing but figure that even in a static era, I will be able to add lots of value. The total refit should cost about £17,000. I will sell at £249,000 - just below the stamp duty threshold. I can already hear the property show voiceover: "Mark's made a cool £22,000 profit. Not bad for a first time investor."

I start work in mid-February. My mum pops by to inspect what I have risked my lovely home in Hackney for. The stench sends her running into the garden. As she recovers, a kindly neighbour ticks her off for going in without a mask and protective clothing. The house is notorious. Getting people in for quotes is impossible until I conquer the smell. On the internet I discover and order a "pee detector strobe" from America. Like a CSI agent I spend the hours of darkness waving the strobe over floorboards. It works, showing up the glowing yellow crystals. I rip the offending boards out. The smell is gone.

Apart from boiler, central heating and double-glazing, I'm doing all the work myself. It's daunting and depressing. Property shows love the contrasts of before and after. They do not show the weeks in between, with no heating, only the radio for company and a bucket for a loo. Who ever saw Sarah Beeny slopping out? Nothing goes to plan, walls aren't straight; pipes don't always lead where you think they do. The removal of a single old nail brings rubble tumbling down.

Telegraph writers win property awards

Writer Caroline McGhie has been named National Newspaper Property Journalist of the Year.

McGhie, a regular contributor to the Sunday Telegraph's Home & Living section, also won the award for Property Scoop of 2007 for her feature 'The Real Cost of a Commute'.

Judges at the 2008 headlineproperty journalism awards also named London Property writer Sarah Lonsdale Environmental Property Journalist of the Year.

The ceremony took place at The Brewery in the City of London. The awards were among 15 categories deliberated by more than 40 judges.

MS Map and Esate Agents

Invista sees 5-10 percent European property fall

LONDON (Reuters) - Property funds firm Invista Real Estate says commercial property prices in mainland Europe will fall by an average 5-10 percent this year and probably by more in Madrid and Barcelona.

In an interview on Friday, Tony Smedley, who heads Invista's stable of continental European funds, said property valuations were unlikely to tumble on the mainland as much as they had done in the UK, but they had nonetheless begun to adjust downwards.

"My sense is that valuations have come off a bit but there haven't been the transactions to evidence that," Smedley said.

He said there was scope for commercial buildings such as offices, malls, and industrial warehouses to fall by 5-7 percent in Germany, regional France, Belgium and the Netherlands, by 8-10 percent in Paris, and by more than 10 percent in Spain.

Average commercial property valuations in the UK are already down almost 17 percent from their peak last summer but the extent of the post-credit crunch real estate correction in the rest of Europe is less clear.

Invista is majority owned by UK mortgage bank HBOS (HBOS.L: Quote, Profile, Research) and has 8.7 billion pounds in assets under management.

Smedley said about 1.5 billion euros (1.2 billion pounds) was invested in continental Europe, with two-thirds of that in France and around half in the Invista European Real Estate Trust (IERE.L: Quote, Profile, Research).

REFINANCING

He said the Trust was negotiating with several banks to bring forward the refinancing of a 460 million euro credit facility with HBOS-owned Bank of Scotland which was due to expire in December.

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.”