The current opportunities in the UK property market are attracting private and corporate investors from Jersey. UK house prices are up 9.5% year on year and there has been an increase in transactions of 31% over the same period.
A leading property lawyer and professional valuer recently came to Jersey at the invitation of Standard Bank, to talk about investing in UK property.
At a packed breakfast seminar, Simon Aldous, Director Valuations, Savills warned against believing some of the hype in the market: ‘The stories about an overheated market due to the UK Government’s Help to Buy scheme are not true, if you look at the statistics they make up just 1% of the market and are concentrated in the lower value properties. That’s not to say that there might not be issues on the horizon. If prices or interest rates rise too fast then we could see a bubble in 2018/19. The main issue at the moment is the north/south divide with prices in the north not expected to go up much more than inflation, but prime areas in the south are currently catching up with London rises.’
Simon also said that 2015 is going to be a quiet year in London due to the election and fears over potential new taxes. This follows a record year in 2013 for properties over £5million mostly driven by overseas buyers. This is the area he felt is most at risk from price falls.
Michael Morris, Partner, Collas Crill talked about the importance of obtaining all relevant information before committing to a property purchase, explaining that this was of equal importance to lenders: ‘The conveyancing process can take six to eight weeks and my advice is not to take short cuts. There are necessary searches such as the Local Authority search, flood and environmental searches, but there have also been cases where what would be considered optional searches weren’t done and it has resulted in heavy costs for new owners. This can include ensuring that the correct insurances are in place, there are no on-going disputes, no breach in planning regulations and checking existing lease agreements.’
Host, Martyn Samphier, Corporate and Business Banking Executive, Standard Bank said the seminar was arranged to help industry professionals and their clients alike.: ‘We also wanted to emphasise that we’re open for business, so please come and talk to us whether your clients are acquiring new property or refinancing. We have a locally managed credit process and will provide fast and straightforward decisions, which we will not go back on
‘The big issue at the moment is that interest rates have to rise and so anyone investing in a property has to be sure that their rental yield will service the borrowing in future, not just now. With interest rate rises being a one-way bet (the only question being when these will commence) there is currently a window of opportunity to consider a fixed rate loan and potentially save monies in the longer term as well as gaining peace of mind. Standard Bank is able to quote both variable and fixed interest rate terms..’
The seminar was held at the Royal Yacht hotel.