Blackstone Properties

Interest rates have remained at record low of 0.5% since March 2009. Interest rates are likely to remain at 0.5% for the next several months because the economy has experienced its deepest recession since the 1930s. With inflation still above the governments target of 2%, the Bank of England have faced pressure to raise interest rates. The Bank of England face a dilemma. On the one hand the economic recovery has been sluggish and slow. Unemployment is still high and the governments austerity measures – spending cuts and tax rises are likely to keep spare capacity in the economy. However, 2012 has seen a rapid fall in the inflation rate predicted by the Central Bank. The latest inflation figures show inflation falling to 4.2% (Jan 16th 2012). This increases the likelihood interest rates will remain at zero throughout 2012.

Headline inflation CPI has been above the government’s target of 2%. But, these inflationary pressures are caused by cost push factors such as rising oil prices, rising commodity prices. There have been concerns that these cost push factors could cause underlying inflationary pressures to rise. But, given scale of economic downturn, this is not materialising.
Headline inflation CPI has been above the government’s target of 2%. But, these inflationary pressures are caused by cost push factors such as rising oil prices, rising commodity prices. There have been concerns that these cost push factors could cause underlying inflationary pressures to rise. But, given scale of economic downturn, this is not materialising

Desperate home sellers slash record amounts off house prices to generate a sale
By LEE BOYCE
Last updated at 10:03 AM on 8th February 2012
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Over a third of properties currently up for sale have been reduced in price at least once since coming on to the market, research has revealed.
It shows that home sellers are resorting to desperate measures in order to shift their property amidst a backdrop of poor sales figures.
Data from property search website zoopla.co.uk found that 36.7 per cent of properties up for sale have had a reduction, with an average discount of 7.5 per cent – or £19,580 – a record high for the report.
If you add up all the discounts on properties nationwide, £2.5billion has been collectively slashed, as sellers drop asking prices by large amounts to garner interest.

Slashing prices: Homesellers are dropping prices to try and garner interest and generate a sale
Last year, the average discount was £18,475, meaning there should be even more bargains to be had in the current housing climate this year.
Figures from HM Revenue and Customs (HMRC) revealed house sales stuttered in 2011, with just 869,000 residential properties sold.
This was close to the record low in 2009, when just 848,000 homes were sold – the lowest since modern records began in 1978.
Nicholas Leeming, of zoopla.co.uk, said: ‘The current average discount of £19,580 is a new high indicating that sellers have come to terms with the market realities.
‘Pricing correctly remains key when selling a home and whilst there is a shortage of sale stock currently, buyers are more discerning and more informed than ever before.
‘Serious sellers must do their homework and follow the advice of their agent before settling on an asking price – otherwise they may well find their property on the market for longer than they’d hoped.’
Handy tool: Use Zoopla’s calculator to value your house

More…
A storm clouds hang over 2012, what next for house prices?
Can you get a cheaper mortgage: Check best rates
Biggest discounts are found in Glasgow
The biggest discounts on homes currently on offer in Britain are found in Glasgow, Scotland. The average price reduction in the city is 9.2 per cent – £12,566.
Sellers in Scunthorpe and Blackpool are making the next biggest cuts, knocking 9.1 per cent and 9 per cent of property values respectively.
Looking at discounts in money terms, London price drops are the biggest, with the average property reduction coming in at £41,791. However, with the highest property prices in the country by some way, prices have further to fall.
In fact, London is number eight in the table for areas with the smallest percentage reductions, with 6.42 per cent chopped off the average house price in the capital.
Stockport has the highest proportion of discounted properties for sale, with 49 per cent of sellers having to cut their asking prices at least once.
Chesterfield and Rotherham make up the top three positions alongside Stockport, with 45 and 44 per cent of properties receiving a discount in the towns respectively.
Chelmsford in Essex has the lowest reductions, with prices dropping on average by just 6 per cent. York and Swindon follow closely behind as the areas that drop prices by the least.
TOP 10 AREAS WITH BIGGEST ASKING PRICE REDUCTIONS
Area
Avg. Price reduction (%)
Avg. Price reduction (£)
% of homes on market reduced
Glasgow
-9.16%
-£12,566
42.73%
Scunthorpe
-9.12%
-£13,207
43.19%
Blackpool
-8.97%
-£12,316
27.45%
Newcastle
-8.77%
-£21,823
36.99%
Rotherham
-8.62%
-£13,671
44.07%
TOP 10 AREAS WITH HIGHEST PROPORTION OF ASKING PRICE REDUCTIONS
Area
% of homes on market reduced
Avg. Price reduction (%)
Avg. Price reduction (£)
Stockport
48.74%
-8.11%
-£17,384
Chesterfield
45.17%
-7.87%
-£14,028
Rotherham
44.07%
-8.62%
-£13,671
Scunthorpe
43.19%
-9.12%
-£13,207
Wakefield
43.14%
-7.58%
-£14,687
TOP 10 AREAS WITH SMALLEST ASKING PRICE REDUCTIONS
Area
% of homes on market reduced
Avg. Price reduction (%)
Avg. Price reduction (£)
Chelmsford
-5.93%
-£20,329
37.54%
York
-6.01%
-£17,031
31.83%
Swindon
-6.20%
-£12,455
41.58%
Bristol
-6.23%
-£14,658
34.94%
Bedford
-6.26%
-£16,518
41.37%
TOP 10 AREAS WITH LOWEST PROPORTION OF ASKING PRICE REDUCTIONS
Area
% of homes on market reduced
Avg. Price reduction (%)
Avg. Price reduction (£)
Blackpool
27.45%
-8.97%
-£12,316
Bolton
29.11%
-8.11%
-£13,980
London
29.53%
-6.42%
-£41,791
Derby
30.75%
-6.87%
-£11,738
York
31.83%
-6.01%
-£17,031

Read more: http://www.thisismoney.co.uk/money/mortgageshome/article-2097824/House-prices-Desperate-home-sellers-slash-record-amounts-off.html#ixzz1mLdwaoDl

What are Below Market Value properties?
In its’ simplest terms, BMV or Below Market Value is an abbreviation. BMV properties are residential properties that are available below their market value. This is normally because the owners are faced with some kind of financial difficulty and want to or need to dispose of their property quickly and without going through a protracted marketing and sales process. The precursor to this is quite often the threat of repossession.

Where do professional landlords go for their buy-to-let insurance?

How to value a property
The guidance from the Royal Institute for Chartered Surveyors on how a surveyor should value residential property is contained in Appendix 5.1 of the Royal Institute for Chartered Surveyors Appraisal and Valuation Standards (Red Book). The basis for the valuation of a residential investment property is normally its’ market value. Market value is defined in the Chartered Surveyors hand book as:

‘The estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in an arm’s-length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion.’

Therefore if a property has been properly marketed and then a sale agreed, whilst the landlord may consider that they have a bargain and a BMV property because the property is sold at less then similar property sold for previously. For instance an investor buys a property for £180,000. A year previously a similar property sold for £200,000. The investor might consider that they have obtained the property at 10% BMV. This is not the case under the guidance on valuation standards from the chartered institute of surveyors, the investor has actually just paid the market price.