London Hotel

According to a new study by STR Global and Whitebridge Hospitality, London hotel profitability over the last 11 years has outperformed the rest of the UK seeing the profit gap between London and regional hotels across Britain widen since 2000.

London hotels between this time and 2010 have experienced a real gross operating profit. Having managed to keep up with inflation according to the study, London hotels have performed better than the rest of the UK which has seen profit margins in regional hotels decline by 11.6% since 2000 with a 6.7% drop in the compound annual growth rate for real gross operating profit over the same period.

While Elizabeth Randell, STR Global managing director suggests that the findings ‘highlight the tougher market conditions for regional UK hotels’, the findings display positive news for the capital where occupancy levels at London hotels have risen from about 82% in 2000 to nearly 85% in 2010.

Meanwhile, the average daily rate (ADR) at London’s hotels increased from 140 British Pounds back in 2000 to around 145 British Pounds last year, while by comparison, regional hotels in the UK have experienced a decline in ADR, from 85 British Pounds in 2000 to just 70 British Pounds in 2010.

Ray Withers, Director of property investment experts, Property Frontiers, comments, „The findings from the study show that London is the best performing player.

It is no secret that there is an air of uncertainty surrounding the capital but the overall trend for London has been positive, showing itself as a resilient hotel market while the rest of the UK has found it difficult to manage inflation causing performance losses.

With this in mind, the hotel market in London this year has been forecasted at near double digit growth while 2012 is expected to be a record breaking year for the capital with over 5,000 new rooms opened or re-opened in response to growing demand for accommodation thanks to the 2012 Olympic Games and the Queen’s Diamond Jubilee celebrations for example.

“Indeed as demand in London sky rockets next year numerous hotel brands including Holiday Inn Express have been popping up around the city, particularly in east London, fuelled not only by the new Olympic Park but also but the creation of new Special Enterprise Zones including the Royal Albert Dock, launch of Westfield shopping centre in Stratford and expansion of ExCel exhibition centre and London City Airport.

With tourists spending in excess of 9.3 billion British Pounds a year in the city and a predicted increase in visitor numbers, new hotels in the east of London are a welcome addition with a very rare opportunity having emerged for investors.

Withers explains, „Affording an enhanced hotel experience, we at Property Frontiers are allowing investors from all over the world a rare opportunity to purchase an asset class seldom accessible to individuals.

Holiday Inn Express, London Excel, located at the Royal Albert Dock will allow investors the opportunity to gain affordable entry into the highly sought after, lucrative London market.

Indeed, many investors have been previously put off investing in Hotel rooms due to the lack of a viable exit strategy but with this particular development there is a buyback plan at the end of the investment term.“

Priced at 22% below independent RICS valuations and with VAT paid by the developer, saving investors a considerable 25,000 British Pounds, Holiday Inn Express, London Excel welcomes buyers from all over the world with 50% non-status finance upon completion available.

Set over four floors and consisting of two buildings with 204 en suite rooms, investors can purchase a hotel room on a 199 year leasehold for 125,000 British Pounds and along with an established Holiday Inn Express brand, investors can enjoy a projected 10.5% net incomeby year 5 as well as a defined exit strategy.

Source – www.property-magazine.eu

Mortgage Statement

Responding to today’s announcement that the temporary first-time buyer stamp duty concession will end on 24 March 2012 as planned, CML director general Paul Smee said: “It is disappointing to see the government withdrawing the stamp duty concession that currently benefits first-time buyers.

“While the concession may not have stimulated additional demand, it was a significant help to home-owners entering the market and its removal runs counter to the themes of the new housing strategy.

“It is likely that we will see a bunching of eligible first-time buyer transactions early next March to beat the expiry date on the concession.”

Wendy Evans-Scott, president of the National Association of Estate Agents, agrees. She said: “We were disappointed to see that the first-time buyer holiday for Stamp Duty Land Tax is not being extended beyond March 2012.

“As such, today’s Autumn Statement fails to provide much comfort to the property market. First-time buyers are the lifeblood of the property market, and our recent data shows the number of first-time buyers getting on to the housing ladder has reached a three-year low.

“With the stamp duty holiday disappearing from next March, the Government will need to do more to help the fragile first-time buyer market.”

Grenville Turner, chief executive of Countrywide, said: “At a time where deposit affordability remains a significant barrier to not only first-time buyers, it is disappointing that the Chancellor did not take the opportunity to extend the Stamp Duty holiday for first-time buyers and has instead added another barrier for first-time buyers to get onto the property ladder.

“A positive antidote to assist the vast majority of homemovers and the resale market would have been a Stamp Duty holiday for all homebuyers up to £250,000

“Whilst the measures announced in the Government’s housing strategy are a step in the right direction, they only scratch the surface of the fundamental issues that have restricted the housing market in recent years – housing supply and the high level of deposits required.

“The prediction that 100,000 families will benefit from the Mortgage Indemnity Scheme may be optimistic, as we are yet to hear the detail of whether it enables lenders to offer cheaper rates.”

Ben Thompson, managing director of the Legal & General Mortgage Club, said: “It is disappointing that the Government did not consider relaxing the prohibitive strain of stamp duty as this may be a way of kick starting movement in a largely stagnant section of the housing market.

“Whilst the Government is obviously limited in its ability to offer huge tax giveaways as the public coffers stand largely empty such a move may have ended up proving beneficial as it would grease the wheels of what has become a vitally important part of the UK economy.

The super-rich are costing the taxpayer up to £1billion a year by exploiting a legal loophole which allows them to avoid paying stamp duty when selling their exclusive homes.

The dodge involves transferring ownership of a property to an off-shore company so when it comes to be sold the buyer purchases the company as a whole assuming de-facto ownership of the property.

Because the deal is classed as a corporate transaction as opposed to a property sale there are no stamp duty obligations involved.

A spokesman for the treasury said the government is committed to ensuring that owners of expensive properties do not avoid paying the fair amount of tax.

However experts believe the tax dodge is costing at least £500million a year with the true figure likely to be around £1billion.

The savings involved can be vast. Someone who purchases a £50million property though an off-shore company would avoid paying the treasury £2.5million.

Most of the transactions involve central London properties which are currently seen by the super-rich as a safe haven.
Flats in the luxurious One Hyde Park development in London’s Knightsbridge cost upwards of £65million each.

Ukraine billionaire Rinat Akemtove recently splashed out £136 million on two which he transformed into a single luxury Penthouse.

While Nick Candy, chief executive of developers Candy & Candy is at pains to point out that stamp duty has been collected for every one of the flats sold for a total cost of £1.4 billion, many were immediately transferred to offshore companies.

Properties transferred into offshore companies include celebrity homes such as Welsh singer Katherine Jenkins’s £4.7 million London residence and reality TV star Tamara Ecclestone’s £10.75m home.

Although there is no suggestion that they have avoided paying stamp duty on purchasing said properties, it would now be possible for them to sell them on as a corporate transaction.

The practise is believed to have become more common since the levy on £1million-plus houses was raised from four to five per cent earlier this year.

It is rumoured that the top rate of stanp duty will rise to six per cent in the Autumn statement next week. In exclusive Cornwall Terace in North London, where the average asking price is £35 million, every single home has been transferred to a company on the Isle of Man.

Now Chancellor George Osborne is coming under increasing pressure to clamp down on the practice. Former Teasury Spokesman Lord Oakeshott of Seagrove Bay told the Times newspaper: ‘George Osborne highlighted the problem in his budget but only ticked it with a feather duster.

‘The City lawyers and accountants know how to dodge stamp duty – it is worth paying one of the millions to tell the Treasury how to stamp out the stamp duty scandal.’

Source – Daily Mail

London & Stamford - Property Developers

Veteran developers Raymond Mould and Patrick Vaughan, who lead London & Stamford, plan to take advantage of Treasury proposals set to be announced next month that could allow residential property investors to avoid stamp duty on bulk purchases and capital gains tax if the assets are held in an income-yielding Reit vehicle.

London & Stamford plans to raise the value of its residential portfolio from £170m to £300m and focus on one- and two-bedroom properties which are just outside Central London.

The company believes demand to rent homes is rising as affluent young professionals struggle to afford mortgages to buy a home.

The company is in talks with an unnamed international investor, which is already involved in the London residential market, to help fund the expansion and become a partner in the residential Reit.

London & Stamford already has £700m available to invest in property after Mr Mould and Mr Vaughan raised funds in 2007 to try to acquire distressed properties. The new investor could raise this figure to £1bn,

On Thursday, the property company posted a half-year pre-tax loss of £3.4m, compared to a profit of £23.2m last year, due to a £10.2m downward movement in derivatives and a slowdown in the growth of property values.

Mr Mould, executive chairman, said: “In times such as these, we consider it is necessary to remain cautious and, as a result, we have worked to maintain significant free cash balances to ensure that the business retains its great flexibility and its opportunistic nature.”

However, the company increased its interim dividend, payable on December 21, from 3p to 3.5p after profits excluding property revaluations increased 51pc to £13m.

Mike Slade, chief executive of Helical Bar, said he expects the next two years to be “tough” for the property market but that this will be present opportunities for his commercial property group.

Helical yesterday returned to the black for the six months to September 30 with pre-tax profits of £4m, compared to a loss of £3.2m last year.

Mr Slade has built a significant development pipeline at Helical, including Corby town centre and a 1.5m sq ft scheme at White City in London.

The UK’s biggest listed residential landlord, Grainger, also returned to profit with £26.1m of pre-tax earnings in the year to September 30. Last year it lost £20.8m

Source – The Telegraph

Best Mortgage Rates

Homebuyers looking to secure the cheapest mortgage rate should head over to mortgages.co.uk for information, news and guides on mortgages, including remortgages.

The recently relaunched site also features a mortgage calculator for an easy way to find out the true cost of a mortgage.

From first time buyers looking to get their first property and pondering the prospect of shared ownership, to landlords after the best buy to let mortgages, there is information for every situation featured on mortgages.co.uk. Every day the site carries the latest news, views and features on the mortgage market.

Alidad Moghaddam, Head of We Know Money, said: “The housing market has been stagnant for a while now, house prices are even falling in many parts of the country prompting many people to wonder what is going on.

Those looking for answers should visit on mortgages.co.uk where all the latest news on house prices, mortgages rates and new products can be found.”

Liz Phillips, Editor of We Know Money said: “Mortgages.co.uk has a wealth of information written from an unbiased and informed viewpoint by experienced financial journalists.

With fixed mortgage rates recently hitting record lows, homeowners may think now is a good time to lock-in. However, with the base rate remaining at 0.5% those on a tracker mortgage are also getting an extremely good deal.

It’s a tricky choice for many people, if you are wondering what to do, visit the site to help you make a decision.”

Source – PRWeb

London's Prime Property

For sale -

A newly converted Victorian terraced house on Pont Street in Knightsbridge, one of London’s most coveted neighborhoods. Harrods is around the corner, the stylish department store Harvey Nichols just a little further along. The triplex is expected to sell for about £6.15 million.

For sale –

A small terraced house on Pont Street in Ashington, a small town in northeastern England. Two up, two down and in need of a lick of paint. The asking price is £49,950, or $80,015.

The tale of the two Pont Streets is an extreme illustration of England’s real estate market: The prime London market has become a bubble of wealth, blown up by international billionaires, while the rest of the country’s property sector struggles.

In their most recent report on the capital’s prime districts, which include Mayfair, Knightsbridge and Belgravia, researchers at the real estate agency Savills established that prices rose an average of 87 percent over the past six volatile years, with prices of the most expensive 10 percent of the city’s properties rocketing 151 percent — a dramatic gap compared with the rest of the city, where prices rose an average of 25 percent in the same period.

That still leaves London second in world price rankings, behind Hong Kong and tied with Paris, according to Savills. But despite the expense, says Lucian Cook of Savills, “Over the past 18 months London has seen a net inward investment of almost £6 billion by international buyers who are attracted to London as a safe haven.”

It is a view shared by the real estate agency Knight Frank, which forecast a further 5 percent increase in prices for prime property next year as increasing numbers of buyers try to flee economic turmoil, bringing their money with them.

The company reported in October that prime prices had been rising at an astonishing £1,117 per day over the past year, and early this month it reported that prime prices had risen by 12.5 percent year over year, pushing prices to a record high 5.2 percent more than the previous peak, in March 2008.

Charles Vyner Brooks of Brooks Gordon, the property agency that is handling the Pont Street, Knightsbridge, sale, says, “Prices will stay high thanks to the lack of financial help from the banks for developers and because there are few opportunities to build anything sizeable.

Supply is further limited because international buyers rarely sell. These are second or third homes, which the owners can hold on to until the market suits them — if at all.”

The apartment on Pont Street, Knightsbridge, is typical of the city’s prime market stock, aimed directly at investors from more than 50 countries who buy in the city.

Along with the triplex, there are two duplexes, with prices ranging from £1,904 to £2,376 per square foot, all fashionably fitted with marble-tiled bathrooms, heating under the oak flooring and top-end audiovisual technology. Mr. Brooks says they already have attracted the interest of three potential buyers from Asia.

Over all, Knight Frank says, London’s real estate market has become detached from the rest of the country’s — a statement supported by the property Web site Rightmove, which reported in October that the average price of a residence in the north of the country was £164,347, while in the south it was £336,743.

In Ashington, its rows of terraced houses built for colliery workers are a legacy of the days when it was an important mining community. The pits were closed in the ’80s, but the Northumberland town of about 28,000 residents still basks in the reflected glory of producing some of the country’s greatest soccer players, notably Jack and Bobby Charlton of

England’s victorious 1966 World Cup team, and being the home of the Ashington Group, a group of miners who took up art with such success that their lives have been celebrated in “The Pitmen Painters,” a play now running in London’s West End.

The best Pont Street, London, can claim is that the Victorian actress and royal mistress Lillie Langtry once lived at No.21.

The average price for all types of Ashington properties is £83,159, according to the Web site Home.co.uk, with prices for terraced houses down 33 percent year over year.

The Pont Street, Ashington, residence is typical- two small rooms, a kitchen and a toilet downstairs, two bedrooms upstairs, a gas stove for heating, and a scrappy backyard. It is, as the property agency Rook Matthews Sayer admits, “in need of updating.”

Richard Sayer, a director of the real estate agency, which has 17 branches in the northeast, says, “There is the strange pull of London, with all the foreigners who see it as a safe haven, and then there is the rest of the country, where we see prices slide.”

“The market here dropped 20 percent between the peak of mid-2007 to mid-2008, but there has been very little price movement in the last two years,” he said.

“I can’t forecast what the next 18 months will hold. I used to be able to sit in my office in October and know what was going to happen in January, but I can’t be certain now, though I would forecast another 5 percent fall.”

He says the region’s biggest drop in prices has been on the newly redeveloped Newcastle quayside, where too many apartments were developed and too many investors were looking for quick profits. In contrast, Mr. Sayer says, “Luxury homes in the countryside like Bamburgh and Alnwick are only down by 10 to 12 percent.”

Rook Matthews Sayer is now marketing a range of properties, including a substantial five-bedroom detached house on the outskirts of Newcastle for £1.55 million and a pretty stone end-of-terrace house in the village of Stamfordham for £379,950. In comparison, in southern England, a five-bedroom house in Liphook, Hampshire, is offered by the Chesterton Humberts agency for £2.25 million.

“On the other hand,” Mr. Sayer said, “one way to look at our Pont Street is that 10 years ago it would have fetched £10,000. Now it’s £49,000-plus, which is an increase of more than 400 percent. Would you get that price rise in London?”

Mayfair would be the nearest comparison in the capital, says Savills, with average prices up 117 percent in six years.

But there is a bit of a gap: Home.co.uk estimates the average for a terraced house in Mayfair at £3,098,667.

That’s the price of about 62 properties in Pont Street, Ashington.

Source

Investments

The overseas property market is now more accessible than ever. What’s more, holding real estate in foreign countries can be a great way to diversify your portfolio if you want to invest in property, but don’t want further exposure to the trials and tribulations of the UK economy.

The state of the domestic economy and the health of the housing market are irrefutably linked. So with the prospects for UK growth looking anaemic at best, perhaps now is the time to look further afield for investment in the asset class.

But buying property abroad comes with its own hazards, not least of these is the money investors could lose by not paying sufficient attention to currency markets.

A recent report published by Moneycorp and Rightmove Overseas showed the five most popular countries for Brits searching for overseas properties last month were Spain, France, Italy, Portugal and the United States.

In the last year, the pound has traded at levels between 1.6707 and 1.5349 on the dollar. Against the euro it has traded in the range of 1.1065 and 1.2256.

So, depending on the time you exchanged, £100 could have bought you any amount between $167.07, or $153.49. It could also have bought you between €110.65 and €122.56.

While the difference might not sound extreme when it comes to changing £100, for amounts running into tens or hundreds of thousands, as most property values do, we’re no longer talking about petty cash.

Safeguard measures

Fluctuations in currency pairs can cost investors dear, but there are a number of ways to safeguard against this.

David Kerns, personal client dealing manager at Moneycorp, says: “If you are planning to invest in property abroad, it is imperative that you take into consideration fluctuating currency rates.

“By planning ahead, you can avoid getting stung by a particularly bad rate, which could cost you thousands more than you might have paid at another point in the year.”

He uses the example of a €250,000 property in Spain, which on the 10 January 2011 would have cost £13,000 less to buy than on 10 August 2011, due to the exchange rate on both dates.

The first tool to think about using is a forward contract, which allows you to buy currency at a fixed rate for up to two years.

This can protect you against adverse currency movements by locking payments into favourable exchange rates, and is offered by most currency specialists, including Moneycorp, Currencies Direct, Travelex and CaxtonFX.

Of course, the other side of the coin is that the exchange rate could move in your favour and you will miss out on the benefit.

But the peace of mind of having a fixed rate is hard to argue against. Clearly, it is advisable to do your homework before you fix to make sure the rate is competitive and not considerably lower than the 52-week average for the currency pair. If it is then you would be wise to hold off fixing until a more attractive rate is available.

Alternatively, you could use a foreign exchange option, which provides the right but not the obligation to enter into a forex contract at a known exchange rate on a known future date.

In this instance, if the market rate is in your favour when the option matures you can let it lapse and choose to deal in the spot market at a more favourable rate instead. Foreign exchange options are essentially a form of derivative, however, and advice should be sought if you are not familiar in dealing with such instruments.

If the property is not bought outright, a forward contract can also be used for monthly mortgage payments.

The advantage of arranging payments through a currency specialist is that they will almost always beat the rate offered by your bank. They will also offer to exchange the cash with low to no transfer fees.

For example, if you made 12 monthly payments through Barclays or Lloyds in a foreign currency, you would be charged £20 per transaction, amounting to £240 over the year.

With the Moneycorp regular payment plan on the other hand, you would pay £4 per transaction or £48 over the year, and at CaxtonFX there are no transfer fees for making overseas payments.

What’s best for you?

To decide the currency broker that is best for your needs you should compare fee-structure alongside how competitive their exchange rate is.

An alternative strategy to consider if you have a foreign currency mortgage is to move some of your savings or assets into that currency. You will likely incur costs if you exit investments in the UK and set up new ones abroad, but depending how long you intend to hold the overseas property, this could be worth it.

Consolidating overseas payments can also prove to be a valuable method of saving money. If you are sending money abroad on a regular basis, think about reducing the number of payments that you make and increasing the size of them. This means any transfer fees you pay are kept to a minimum.

If you are not solely investing in a property abroad, but also relocating overseas the way you receive your pension will also be an important consideration.

A UK state pension will always be paid in sterling, so there is only so much protection you can get (by fixing in a rate). But if you have a private pension you can transfer it into a new form of overseas plan called a qualifying registered overseas pension scheme (QROPS).

Kerns says: “These allow you to put your pension assets into the currency of your new home and can also reduce your tax bill.”

For a list of QROPS the best place to look is the HMRC website, where you can also get information on how to process and apply for an overseas pension.

Investors should bear in mind the factors affecting an overseas property purchase are highly dependent on the country in question. In addition to the currency exchange rate, it is important to research the tax rates you may be expected to pay if you are resident in the country and also the stability of the housing market in the region.

Property plans

Another issue to consider is how you plan to use the property: Will it be a holiday home for yourself, a place to rent out to tourists, or a place to rent out to locals?

Income received from letting out an overseas property must be declared on your self-assessment tax return in much the same way as income generated by letting out a UK property.

As with all buy-to-let properties it is also wise to do some homework on the area that you intend to purchase a property to make sure the rental market is strong.

It may be that you simply want to buy the bricks and mortar for your own personal use and as a capital investment, rather than for growth. In this instance – as with most investments – you have to be prepared for the value to potentially drop as well as increase.

Overseas real estate is not immune to the ravages of the property asset class in general. The Spanish property market and, to a lesser extent, the French have been hit by the global economic slowdown in much the same way as the British.

The upside to this slump in some of the UK’s most popular holiday destinations is that there are some great bargains out there, but as with all property investment, the relative illiquidity of the asset should be kept in mind and the purchase only made if you have a sum of money you won’t need access to in a hurry.

Source

Property Investments

New data from Hometrack has revealed that the average property investment now sits on the market for 9 and ½ weeks before getting a viewing.

And this is sad news for property owners with the winter months fast approaching…

Winter is notorious for slowing down property sales as buyers focus on trying to get past the costs of Christmas. So it is no surprise that the remaining buyers on the property market are making offers which are substantially less than the properties asking price.

But what can you do? Property advisors have come up with the following tips to help increase the saleability of properties –

Take professional photographs

90% of property investments sold are first viewed on property portals before a viewing is arranged. This means buyers are able to browse 100s of properties in a matter of hours before they choose to view your property. For this reason it is essential that you use professional photographs to enhance the appearance of your property.

Have curb appeal

Making the inside of your property look good is not enough. The exterior needs to be neatly presented too – this includes your garden, garage and even the front leading up to the curb

De-clutter

Depersonalise your property and reduce clutter as these can make your rooms look smaller. Also it is important that buyers are able to visualise themselves living there.

Information pack

If you are feeling adventurous, an information pack detailing the advantages to your property – schools, transport links, entertainment etc – could make your property more appealing.

The position of buyers

Once a buyer makes a bid, first consider if the price is right and their circumstances. A lot of buyers are not always in a great financial position to buy or may still need to sell their property. If this is the case do not withdraw your property from the market until you are confident that the sale will go through.

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Commercial Property

While the residential real estate market has been in a slump for quite some time now, the commercial real estate market continues to thrive for a number of reasons. Real estate has always been, and still is a great long-term investment. Here are 5 reasons why investing in a commercial property is an excellent choice for both tax savings and growing your bottom line.

Less Competition

Residential properties attract not only investors but homeowners as well and the growing trends in real estate investment tend to focus on the best ways to buy, sell and flip residential homes. For this reason, commercial properties are often overlooked, despite the unlimited potential that any location may have.

Commercial Property Appreciates Different

Residential properties are valued based on comparable sales in the neighbourhood. This influence doesn’t directly apply when placing a market value on a commercial property. Rates for commercial property sales are determined based on how revenue is generated at that particular location, and then compared to that of similar commercial properties in the area. A small increase in revenue from your newly acquired commercial investment can bump up the value of that property significantly.

On top of this, there are other factors such as the progress of the wider economy, even as far out as the national economy of the country you are investing in. This in particular is a good reason to consider investment in other countries where economic growth is high.

High Potential for Income and Returns

A sound investment in commercial property generally provides significant benefits from long-term leases, business profit and/or capital gains. Not only can you create unlimited income potential with a great business plan, but you can also create long-term security of high returns on leases which range from 3 to 10 years in length.

Greater Choices of Investment Locations

Since leases on commercial properties tend to be longer than on residential ones, it doesn’t matter so much where you invest. This enables you to consider opportunities in Asia, Europe, The US or wherever else you would like to. You can consider properties on the merits of the infrastructure of the countries they are in. Asia of course is growing rapidly and there are several opportunities there for good capital gains as well as a good chance of leasing your property out easily and consistently.

Colourful Financing Options

Depending what plans are included in your purchase of commercial property, there are many financing options that can make it easier and less time-consuming to finish the deal. Not only are there many programs available to finance commercial real estate, but lenders typically look at a different set of data, including how well the property will potentially perform, when approving a loan. It’s not just about your finances but also whether they think the property will provide a reliable return for you.

Source

Jon Purr - Image Courtesy Of The Star

JON Purr (pic), a former investment banker at Barclay’s bank in UK, has been working for the finance sector for around ten years.

Seven years ago, he moved to Singapore to deal with property-related investments, and has been in this field ever since. Within five years, he and a partner set up Qudoss, a Singapore-based company specifically to deal with overseas property investment for foreign investors.

In a recent visit to Kuching, Purr made time for an interview in which he allayed some fears, uncertainties and queries that the average person had on investing overseas.

Question: How can people be sure that your investments or any investments for that matter are genuine and not fraudulent?

Answer: Indeed, scams have not helped to create a good image for genuine investments. You can take a look at Kuching, Sarawak, Brunei, Kota Kinabalu, where people are not really exposed, like you would be in Kuala Lumpur and Singapore, to news and newspapers where you learn a lot about investments.

The people here don’t understand investments so much, due to lack of exposure, so they really depend on the person that’s selling the investment. It all comes down to trust. Recently there has been a lot of investments like ‘Swiss Cash’, and another particular gold investment here, which turned out to be scams.

When it comes to property, you should look to get the development planning number, so as to be able to go on government websites to check whether planning has been granted. Also, you should check the contract which should state if it is still waiting to get planning. In my view, you should not invest in developments that don’t have planning permission yet.

Since I can’t see the property overseas, I would do my homework first. I would start with the history of the developer, do a little background check and see what they have done. Then I would check the area out, what has happened to developments in the past, etc. I also check on the funding the developer has, such as bank statements.

You would also want to see legal documents such as contracts. Having access to lawyers in the UK is a big plus. They can clarify matters for you, and the rules in the UK are very stringent. The lawyer that’s acting for you will answer whatever questions you ask. Be sure to get a good law firm.

Q: Economically, the UK isn’t doing very well at the moment. How do we know our investments are safe there?

A: Most economies at the moment are not doing very well (laughs). What I would say is this. When you buy into property investments in my view it should be long term, not short term. Most people who make money in property buy long term investments.

Property will go up and come down. That’s why it’s very important you buy property that can be rented out. Whether the market is good or bad, it doesn’t matter if the property is rented out.

Looking at the UK’s track record for the last 20 years, prices have gone up 150% in the last 15 years alone. However, prices have dropped recently, so I would say that now is a good time to buy.

Now, look at the UK government. The £42bil (RM206bil) the government used to buy in the banking system in the UK is in my opinion not debt, but an investment into the banking system. I’ve no doubt that in about five years, they would most probably sell off the banking system and make a profit. They’ve also done the right thing by dropping the pound and the interest rates. It encourages people like yourself to invest in the UK because it’s cheap. In Malaysia and Singapore, the rates are very, very high.

I would also like to point out that the best performing funds in the UK are student funds. Even during a recession students don’t stop going to universities, making student unit investments very safe.

Q: How is investing in the UK any better than in Malaysia?

A: My honest opinion is that when you look at KL for example, there is an oversupply of condominiums. If you drive towards KL, you’ll see a lot of empty condos on the way. But you can still invest in Malaysia for reasons such as capital appreciation and rent. For me, the biggest concern is whether you can rent out the property, investment-wise.

When you look for investments, you must look for demand overcoming supply.

At the moment, the UK government has to build three million more houses to cope with immigration problems, over 200 properties a day need to be built otherwise, 1.4 million people will be homeless by 2026.

Also, the biggest thing in the UK at the moment is that people can’t get mortgages. Seventy percent of new house buyers in the UK are renting now. That’s fantastic news for an investor because rental prices are going up.

Look at student accommodations. Around 100,000 students could not get a place in the UK last year. Only 9% of students have access to private student accommodations, so 1.9 million students don’t have access. That’s why student rental prices have gone up 150% in the past 15 years, and they will keep on increasing by about 5% to 6% a year. The nearest behind that is 34% for commercial properties.

Q: What do you make of the UK riots? Will something similar happen again and will it affect investments?

A: I’ve just been back to the UK recently. In fact, I hear more about the news of the UK riots here than I do in the UK. UK is big news all over the world. Lots of governments such as Singapore look to UK in terms of investments and how the country is being run.

Now, could the riots happen again? Of course it could. But does it affect your property price? No. London has been a terrorist target for the past 60 years. Eighty per cent of London is owned by foreigners, and such threats have not stopped them from investing in London. London will always be London, New York will always be New York, and so on.

People will always buy property in these places. If there is any damage to the property, than the insurance company will cover you.

Q: Who can best help us with these investments?

A: Transaction-wise, if you’re buying something such as in the UK, you’ll again need a good UK lawyer who is an expert in the property field. Also, look to people with experience, those who have dealt with buying property overseas for many years.

Q: What are the major risks involved in investing overseas?

A: Well, the major risk would be that you get the wrong management company to manage the property for you. At the end of the day, they are the ones who take care and rent out your property for you. I’ve learnt this through personal experience.

The next thing is to be sure you are buying in the right area, and for the right reasons. If you buy in the wrong area of London, you might not get much capital appreciation.

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