U.K. House Price Gauge Increases to Three-Year High, RICS Says

The number of real-estate agents saying prices increased exceeded those reporting declines by 35 percentage points last month, up from 34 points in October and the most since November 2006, RICS said in its monthly survey released today.

The property market is recovering from its slump as banks provide more mortgages and the economy shows signs of exiting the recession. Bank of England Chief Economist Spencer Dale said yesterday that low interest rates are helping consumers manage their debt and stave off joblessness.

“Despite modest increases in the number of properties coming on to the market, it is clear that this is not significant enough to keep pace with the levels of demand,” Ian Perry, a spokesman for RICS, said in a statement. “Buyer enquiries are continuing to grow and with the pace of job losses now easing, the risk is that the new year could see a further wave of interest in the market.”

Real Estate Acquisitions: Liftoff, or Dead Cat Bounce?

Property deals are rising, but is this the market taking flight…or dead cat bouncing? Deals involving premium property and players Canary Wharf, HSBC and Blackstone suggest that things are heating up for the high end of commercial real estate. At the same time, many believe that we may be seeing a bifurcation of this market, with the low end stagnating. Driving this shift are multiple factors, both legal and financial, and a whole lot of foreign money flowing in from places from Bermuda to Korea.

As backdrop, until recently the banking crisis has badly battered the commercial property sector in London. The market was doubly damaged by twin cyclones of falling property prices and a deflating banking and finance sector – a sector that central London property developers are heavily reliant upon. Amidst this trouble, a new level of activity has emerged for premium properties in particular.

Bank of England Says Property-Loan Default Risk Is Increasing

By Simon Packard

Dec. 18 (Bloomberg) -- U.K. banks face an increased risk of default on some of the country’s 250 billion pounds ($403 billion) of commercial real-estate loans, the Bank of England said today.

In the past year, the longest recession on record meant the “probability of default by U.K. real estate companies has increased significantly,” the central bank said in its Financial Stability Report, which is published every six months.

Property owners may struggle to service loans as the recession and mounting unemployment boost building vacancies and depress rents. Falling property values and larger down payments for new loans mean investors, particularly smaller companies, face “significant” challenges in refinancing 160 billion pounds of loans coming due through 2013, the bank said.

Direct investment in UK commercial real estate to stand at c. £23bn in 2009

UK - Jones Lang LaSalle expects total direct investment in commercial real estate in the UK to total around £22bn - £23bn by the end of 2009, which is comparable with turnover in 2001. Compared with 2008’s total of £21bn, this represents a 10% rise.

Julian Stocks, Head of Capital Markets England, Jones Lang LaSalle said: “2009 has been a year of two halves. The first six months of the year were characterised by low investment volumes, falling prices and worsening occupational markets. However, over the second half of the year investor sentiment dramatically changed and a confidence formed over the summer resulting in demand for stock outstripping supply. This wave of optimism has resulted in higher prices and rising activity.”