Category Archives: Tips

Russian Ruble And Property Investment

Posted on by Aspen Woolf UK

Russians protect their wealth from currency crisis by sinking it into London property

By Anna White, Property correspondent for www.telegraph.co.uk

Wealthy Russians, desperate to get their money out of Moscow in the wake of the Russian economic crisis, are panic-buying in London this week, according to high-end estate agents.

Russia has lost control of its economy in the last few days after an interest rate hike by the central bank failed to stem the collapse of the rouble, accelerating the trend of Russian buyers in the UK capital.

Beauchamp Estates said it has seen as much as a 10pc uptick in sales of luxury London homes to Russians since the rouble started to spiral a year ago.

“I currently have half a dozen Russian clients urgently looking to spend over £20m each on buying a new home in central London. For them the address must be Belgravia, Knightsbridge, Mayfair and Regents Park, it’s got to be a prestigious postcode and ideally a park side or leafy address,” said Gary Hersham, founder of Beauchamp Estates.

There has also been a rise in Russians looking at investment properties, he continued.

“Previously it was all end use real estate, but now that their commercial ventures in Moscow have slowed, they are seeing London real estate investment as a commercial opportunity, so like the Chinese they are now starting to purchase rental investment property and commercial assets, this has not been seen before in London by them in large numbers,” he said.

Estate agents at Knight Frank have seen an uptick in super prime sales in the second half of 2014, suggesting Russian buyers have been proactive against the background of economic and political instability by investing in the safety of UK bricks and mortar.

“Knight Frank web traffic shows the number of Russians looking at London property was 13pc higher in November 2014 than the same month last year. The figure was 9.5pc up from October, a monthly rise that bucks a trend of previous years when traffic has slowed over the final quarter of the year,” said Katya Zenkovich, Knight Frank Russian desk.

For Becky Fatemi, managing director of estate agent, Rokstone, the number of Russian clients on her books has doubled this year.

“There has been a big upturn in Russian buyers since the collapse of the rouble and the slowdown in the Russian economy due to international sanctions. The Christmas season has not stopped them looking, currently I have several Russian clients looking to spend up to £100m on a home in London.

Buyers tend to be families and business people who originate from Moscow who buy big detached homes not basement or ground floor flats, for security reasons, she added.

“They are not abandoning Russia as they are frequently back and forth from Moscow. What’s changed significantly in the last 8 months is a rise in Russians buying investment properties in London – both residential and commercial properties.”
Aspen Woolf now find that Russians are now more prepared to look outside of London to cheaper, higher yielding areas with assured yields – such as Leeds, Manchester, and Sheffield.

UK Buy-To-Let Sector Confident

Posted on by Aspen Woolf UK

Confidence in the UK buy-To-Let market will encourage significant investment in the sector by UK property investors in 2015, according to new research.

This is despite the fact that 52% of buy to let property investors believe interest rates will rise next year, the report from specialist buy to let business Platinum Property Partners also shows.

While the majority expect an increase, overall 42% believe interest rates will rise by less than 2% and only 10% expect to see interest rates rise by 2% or more. However, 29% cited a rise in interest rates as their biggest concern for 2015.

An interest rate rise of any size would make buy to let borrowing more expensive, this hasn’t slowed down landlords’ ambitions as 43% of existing landlords intend to grow their portfolio of rental properties next year.

Some 23% intend to expand their portfolio by one and 14% say they will purchase two more rental properties in the next 12 months.

Landlords owning Houses in Multiple Occupation (HMOs) for young professionals and key workers have some of the biggest ambitions for 2015 with 52% planning to add to their portfolio during 2015, 29% planning to add two properties and 14% will add three.

The survey also found that landlords still feel confident about capital growth despite recent reports that the housing market is slowing. While the Council of Mortgage Lenders (CML) point to a dip in mortgage lending as evidence that there has been a ‘plateau’ in housing market activity, landlords are confident that house price growth will continue during the course of the next five years.

Just under half, 49%, expect UK property values to climb by up to 10% over this period, while a further 28% of investors predict an increase of 10% or more.

HMO landlords have an even more positive outlook for capital growth with 43% saying property prices will increase by 10% or more, some 15% more than the overall average. None of the HMO landlords surveyed expect house prices to decrease in the next five years.

However, UK buy-To-Let investors have some concerns about what 2015 may bring. When asked for their number one concern, an increase in interest rates topped the poll at 29%, closely followed by future changes in laws and legislations for landlords at 26%. A further 9% are most concerned about the impact of a change of government ahead of the general election and 20% have absolutely no current concerns.

‘A rise in interest rates is one of landlords’ main concerns for 2015, yet the majority don’t anticipate that these rises will be dramatic or unaffordable. As a result, our research reveals that the sector will continue to grow next year, with two in five planning to add to their portfolio despite a likely interest rate rise,’ said Steve Bolton, PPP chairman.

‘Investors in HMOs show the greatest intention to increase their portfolios, which reflects the fact that HMOs and renting to working tenants such as young professionals delivers extremely attractive returns, and offers higher rental income compared to other buy to let options if done properly. This has cultivated robust confidence among those already reaping the fruits of this type of investment, and has sown the seeds for ambitious expansion in the sector next year,’ he pointed out.

He believes this is great news for the long term health and prosperity of the sector, as thousands of ambitious young professionals at the beating heart of economy depend on the flexibility of rental accommodation to follow the best job opportunities. However, they also require more choice of high quality yet affordable homes to help them save for a deposit should they wish to buy in the future.

‘Naturally, as an investor you can never guarantee the level of your return, and even seasoned landlords need to do their homework and seek expert advice before making another investment to maximise their profit potential,’ he added.

Written by www.propertywire.com