Tag Archives: middle-east
Brexit unlikely to affect Dubai real estate markets
British investors are one of the largest group of investors in Dubai’s property markets but the decision by the UK to leave the European Union is unlikely to have much of an impact, according to experts. As the most open real estate market in the Middle East, Dubai has always found itself more susceptible to external factors. But, despite the interim uncertainty brought about as a result of Brexit the emirate unlikely to feel any long term effects, says a report from international real estate firm JLL. British citizens are the third largest investors into Dubai’s real estate market, potentially leaving them more susceptible to any negative impacts from Brexit, however, JLL’s Craig Plumb, head of research for The Middle East and North Africa, believes that any negative ramifications will only be temporary. ‘Even though it is too early to predict the long-term implications, overall there is a slight probability of British investors being negatively impacted by the devaluation of the British Pound following Britain’s decision to exit the European Union,’ he said. ‘However, we believe the effect of the decision will only have temporary repercussions as a substantial number of British investors who work and reside in the UAE avoid sourcing their income in sterling,’ he explained. ‘If we dissect the market further, particularly for residential, we notice that expatriates in Dubai are most likely to continue renting their homes instead of switching to ownership, resulting in sales being more negatively affected than the rental sector. If external factors stabilize over the rest of the year, we expect the Dubai residential market to easily recover in early 2017,’ he pointed out. During the second quarter of the year, office vacancy rates throughout Dubai showed a general downward trend. However, Plumb attributes this to a lack of supply, confirming that Dubai remains the largest and most active office market in MENA with many businesses still preferring to use the Emirate as their regional hub. Meanwhile, the retail and hotel sectors have fared less well in the immediate aftermath of the decision given the devaluation of the British pound. ‘Dubai and the MENA region as a whole has become an increasingly expensive destination for European visitors,’ Plumb added. Continue reading
UK interest rates cut to lowest ever at 0.25% in boost for home borrowers
The decision by the Bank of England to cut interest rates in the UK to their lowest ever level at 0.25% is not expected to have a major impact on the general property market but it is a signal that borrowing on a home is not likely to rise in the near future. It is the first time that the interest rate has been cut for seven years and some experts had even been predicting that it might rise but the potential economic fallout due to Brexit has ensured that borrowing will remain historically low. However, some parts of the real estate market could see an effect. According to Andy Pyle, UK head of real estate at KPMG, it will depend on location and price. ‘Whilst a number of overseas investors are being cautious, others are attracted by the depreciation in sterling enabling them to buy more cheaply, and the reduction in interest rates has already had an impact on the value of the pound,’ he said. Adam Challis, Head of residential research at JLL, pointed out that the reduction will signal to mortgagors that cheap mortgage rates will be around for even longer. ‘This will benefit many would be home movers and we are encouraged by the Term Funding Scheme that will ensure lenders pass on most of the rate reduction to consumers,’ he said. ‘More important for the housing market is a strong, stable economy and the rate cut will help. Post-referendum we need greater certainty that will encourage house builders, protect jobs, and ultimately provide a range of housing that people can afford,’ he added. While it will be welcomed by many home owners, Mark Hayward, managing director, of the National Association of Estate Agents (NAEA) explained that for future first time buyers saving for a deposit on their first home they face getting less interest on these savings. ‘It represents a body blow for savers and those hoping to get their first foot on the property ladder. Home owners with outstanding mortgages are currently enjoying some of the lowest fixed rate mortgages seen for a long while, with lenders battling it out to offer the cheapest deal. Cutting interest rates further is likely to improve confidence among those prospective house-buyers who may have put their search on hold, following the Brexit vote in June,’ he said. ‘But for those saving to pay a deposit on a future home, the interest rate cut will be frustrating. The last government focused heavily on supporting first time buyers with the introduction of schemes such as Help to Buy. Many of those looking for help now will have to wait for initiatives such as the Lifetime ISA to launch, which will then only help those under 40 to save for a home,’ he pointed out. ‘The outcome of the today’s rate cut is simple in that we will see aspiring homeowners saving harder for longer, which will no doubt have an impact on… Continue reading
Call for administration of UK leasehold property sales to be streamlined
The Conveyancing Association (CA), the leading trade body for the conveyancing industry in the UK, has outlined a number of recommendations to end what it believes to be significant delays and overcharging taking place within the leasehold sector. A growing number of leasehold sales are taking place each year across all UK regions, up from 220,000 in 2011 to 260,000 in 2015, with 57% in Greater London and 40% in the North West. As a result the CA wants to see a streamlined process taking out the unnecessary delays and a cut to what it describes as ‘unwarranted’ fees charged by many lease administrators who administer the terms of the lease to the leaseholder. In a recent survey of conveyancers some 56% of CA member firms said they believe that in 30% of transactions lease administrators charge unreasonable fees, and a further 32% said in 16% to 30% of sales they charge unreasonable fees. On top of this, 62% of estate agents, the traditional buffer between the consumer and the process, say that the provision of leasehold sale information causes real issues in the house moving process, with 34% branding it ‘an absolute nightmare’. Common problems within the process include identifying the lease administrator as there is no registration or regulation required and significant delays can be incurred attempting to find the right person or company. There is also a recognised imbalance of bargaining power between the lease administrator and the leaseholder as there is currently no requirement for the publication of costs or any control over their extent in relation to receipt of service of notice, deed of covenant, share transfer or certificate of compliance. When it comes to overcharging on the part of the lease administrators the CA has seen cases where costs levied are up to nine times more than what the conveyancing industry might expect them to charge for carrying out such work. On average Lease Administrators are charging between £250 per hour and £360 per hour for administrative work, far in excess of what conveyancers and customers might expect those charges to be. The CA also points out that there is also often a duplication of costs with leaseholders required to pay multiple parties to complete their LPE1 (Leasehold Property Enquiry) form and no redress system is currently available to existing or incoming leaseholders with no effective consumer rights and no recourse to the Ombudsman given its lack of jurisdiction over costs unless the complaint is in respect of a breach of agreement for those costs. It points out that there can be significant delays in the provision of the LPE1 information and dealing with other requirements post-sale necessary for the registration and protection of the leaseholder’s title. This causes significant distress to a chain of house movers and can cause sales to fall through. To reduce the impact of these issues the CA suggests that delays in the… Continue reading
