The indicators are still conflicting, if anything, things are not as bad as they were, but that doesn’t necessarily mean that valuations and demand are shortly going to do an about turn. Like most markets, there are levels of support and resistance and the sales that are going through at the moment may not be sustained if the markets heats up too quickly again.

Some Surveyors are starting to report that confidence in the uk commercial building market is growing as the fall in tenant demand for offices and shops has started to slow. Whilst actual demand for commercial building still fell in the second quarter of 2009, the Royal Institution of Chartered Surveyors state that the pace of decline has slowed quite dramatically and whilst new enquiries were still low, they were at their least negative since late 2007.�
It is also reported that the number of “distressed” commercial properties coming to the market rose in every region in the world in the second quarter, with the UK in particular seeing a rise in interest in building sold by owners experiencing problems. There have also been recent reports that some high street banks are selling distressed commercial buildings, that lenders have defaulted on, to their own subsidiary companies in the hope that a recovery in the commercial property market will enable them to recoup their losses. Traditionally, banks sell property on the open market, this practice,( which was popular with banks towards the end of the last recession in the 1990s) enables them to avoid selling distressed assets that have dropped in value to an outside buyer. Whilst it may be prudent to wait until the indicators become stronger, there are definite signs of life from some investors.

Some pension companies that allow policyholders to include commercial property within their plan are reporting an increasing interest in the acquisition of this type of investment. Many owners of shops etc, who previously perhaps found their own business buildings too expensive to purchase, are now considering buying the property via their pension plan because the prices are now more affordable. Commercial Property may be held via a SIPP. ( Self-invested personal pensions) these type of pensions offer far greater flexibility than ordinary personal and occupational pensions because you can have many types of investment in them. Most of the people who buy a commercial property through their Sipp are looking to hold the property in their business in a more tax-efficient way. This has become popular among professionals such as dentists, doctors, solicitors etc, who may have an office or commercial buildings. Holding property in a Sipp means the rental income is paid into the pension free of tax. Any growth from the rental income or value of the property also builds up tax free. However, it must be remembered that he property becomes an asset of the pension fund and hence the value of it will be used to provide retirement benefits for you.

The recession has hit the commercial property market hard and the credit crunch has severely dented the start up of new business needing commercial buildings or established companies moving to larger premises. Landlords of commercial buildings have been particularly hard hit with demand from new tenants drying up and many existing tenants trying to negotiate new improved deals paying a lower rent. No one can truly believe that an upturn is on the way in the immediate future and if and when it does arrive, growth is likely to be slower, markets will remain cautious. However, many business owners and property investors are beginning to cast a glance at commercial property as prices are very low , if you can afford to get in at this level and are prepared to hold on to the property for a while, you may obtain some good, solid investments.

All these people, need to take professional advice regarding the rules surrounding capital gains tax on second homes. The rules are becoming quite topical due to the fiasco over MPs expenses regarding blatant and immoral exploitation of taxpayers money, using their MP’s second home allowance. Their actions have put the political spotlight of the concept of ‘flipping’ between their main residence and second home.

In the UK, everybody is entitled to elect their main residence and benefit from principal private residence relief. This means that they do not pay capital gains tax on their own home that they live in as their main residence. For second home owners, the ability to reallocate their main residence provides an opportunity to minimise capital gains tax bills. This is because there is no PPR relief in respect of a holiday home or second home. So by flipping or reallocating their elected main residence, tax bills can be minimised. Despite the fact that individuals can spend more time in the property that is not elected as their main residence i.e. their family home, the principal of election is still valid in the eyes of the Inland Revenue.

Following a purchase, a second home owner must choose to elect the second home as their main residence within 24 months of the purchase. The onus will also be on the seller to prove that they were living in that second home in order to qualify for selection as their main residence, after that period. This may involve transferring bank, postal and electoral details of the period to prove that you are resident of the second home. There are other factors to consider regarding capital gains tax including taper relief, individual allowances and whether the property was rented out. In addition, an unmarried couple may each own a home that qualifies as the principal residence but a married couple may only nominate one property and must select jointly.

With an increase in the number of empty properties across the UK, due to the recession and credit crunch, people are struggling to sell their homes. More and more people are choosing to let out the home that they currently live in (but have struggled to sell), in order to finance the move elsewhere. This is creating huge increase in the number of accidental landlords UK and an increase in the number of people owning second homes. Ironically, the original buy to let boom started by people investing in second properties as a means of generating an income or supplementing their pension. Now those same landlords are struggling to sell the properties due to a lack of credit facilities for buyers.

Regardless of whether you own a second home as a holiday let or are just using a second home as a family getaway, finding adequate second home insurance can sometimes be a bit of a struggle. Insurers will want to know how frequently you access the property, and the type of property it is. They will try and assess the likelihood of a break-in due to being left empty, or the possibility of a burst or leaking pipe causing internal damage. For the purposes of an insurance proposal form, you must answer these questions honestly to provide the broker or insurer with a practical overview of the risks involved with your real second home that you spend less time in, (even though you may have declined this home is your main residence tax purposes).

Most people’s eyes glaze over when it comes to investigating the complicated area of capital gains tax laws and rules. Its always imperative to seek the advice of qualified independent financial adviser, to help you decide whether or not allocating your main residence as a second home is a sensible thing to do. It could save you thousands!!!

However, what these figures don’t show, is how many homes are resale’s and how many are new builds. Recently, many Brits have been finding it tough going, making their income cover outgoings, sterling has devalued significantly against t the euro and this has resulted in many Expats coming home or seriously thinking of coming home. What to do with the property though is a big problem at the present moment. Values are down, its not easy to sell property and further because of the economic downturn, renting is no longer that easy. This slump in the value of Sterling has seen an average Spanish holiday home now cost in excess of £30,000 more than 12 months ago. Many web sites, attempting to sell property are now beginning to mark property prices down, at the present moment, supply is easily out stripping demand.

Savvy investors or would be holiday home purchasers, are wising up to the fact that there is plenty of property around and are thus driving a hard bargain before parting with any money. Advertised prices are simply not being achieved and anyone wishing to sell a property quickly is often having to make some sizeable reductions. Property has basically been overpriced, there is too much of it for sale and a natural correction is occurring. Homeowners are not the only ones with difficulties though.

Beleaguered Spanish property developers are now finding a “double whammy” when trying to dispose of property. Firstly, they are up against the banks often over zealous attitude to dispose of repossessed property, developers claim that the banks are undermining their capabilities to stay in business by deliberately selling property they have repossessed as prices that are too cheap and with preferential mortgage terms for new purchasers. Now, Spanish banks have announced that they intend to reduce debt-for-property swaps with developers, due to, too many holiday homes being on their books, this is being widely reported in the Spanish press. Developers now face being lumbered with the units they cannot shift, which is concerning, given that there it is an estimated one million unsold new-build homes on the Spanish market. Of dear, it seems to the laws of supply and demand are hitting home in the Spanish property markets with a vengeance.  

One million unsold properties, when this is juxtaposed next to the actual amount that are selling, it appears that the correction in the Spanish holiday home market is only just beginning. The situation is likely to get worse before it gets better and in the not too distant future there may be some fantastic bargains. Of course, there are already many companies trying to lure in potential purchasers with tales of bargain property, but has the bottom of the market been reached ? The collapse in property prices in Spain has resulted in many Eastern Europeans, looking to buy property abroad now looking more and more towards Spain but it will probably be quite some time before they overtake the Brits as the largest purchasers. The next few months will be very interesting, prices are still dropping and if Sterling starts to strengthen against the euro prices will drop even further, many Brits may they be tempted to snap up those empty units.

Fractional ownership, originally devised in the United Sates of America, may provide a means for some of “having your cake and eating it” This type of ownership is one of the fastest growing areas of the property market at a time when property markets are stagnating in almost all countries. For a much smaller capital outlay, you can own a share in a property that you may not have been able to purchase out right on your own, or you could have a share in a much better quality property. This idea is catching on in European countries, with purchasers realising that they do not need to own a property outright to be able to enjoy its benefits.
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The first thought that springs to most peoples minds when the concept of fractional ownership is broached is , ” Timeshare”, well this is not the case, fractional ownership comes with full title to the property. With ownership, you will have ( hopefully over time) an appreciating asset because of the freehold nature of the purchase as apposed to the usual depreciating asset of timeshare linked to the typical “right to use” timescale. Fractional ownership properties are also your “standard type dwelling houses, not different from any other overseas home, whereas Timeshare properties, in the past have often been linked with inferior build qualities. 

Who is it for - this type of ownership may be for you, if you fall in to any of the categories below.
You are prepared to accept co-ownership of a property under a managed scheme, with rules & regulations.
You want a second or holiday home but realise that, realistically you will not be able to use it for much of the year
You like the idea of a home abroad but have been put off by the cost.
You are interested in system where you are not solely responsible for all the up keep and running costs of a property that will only be used on a part time basis.

How it works - there are number of schemes available and many companies now specialise in this type of holiday home purchase. Individual research will have to be carried out as to the suitability of any one company. There is usually a minimum requirement of two owners but some groups can go up to twelve. Often, friends and relatives will group together to buy a property, but its not unusual for complete strangers to enter in to a shared purchase agreement. The organising company will take care of all the paperwork, they will introduce you to a range of properties available and then will advise , what shares are available. The number of shares available to you, will be linked to the amount of time you can spend in the property. The selling company will take care of all the paperwork for you and will manage the property on your behalf. Prior to purchase , it is of paramount importance to discover every bodies expectations with regard to the property, in reality it will be no point in joining a scheme where all the owners are families with children who will all want to use the property during the school holidays. All the terms and conditions of the purchase should be studied carefully and to be on the safe side, but your own legal advisor.
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Your investment, can go up an down as property prices fluctuate and you do normally have the right to rent the property ( via the correct channels) for the period allocated to you that you do not wish to use. This may help to offset your purchase costs. As time progresses, you will of course be free to sell your asset or you may even have the option to buy more shares in the property. ( it is usual , if someone decides to sell, to offer it to the other shareholders first)

There will be some on going costs, associated with ownership, Apart from the management fee which varies according to the size of the share purchased, all running costs are shared between all of the owners, except for the utilities (Electric, heating etc.) which will be billed according to each owners individual usage.Again, propr to purchase its important to fully understand all of the charge applicable.

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Therefore, the purpose of the scheme is to improve the overall standard of letting agents care towards tenants and landlords. Despite the fact that the scheme is entirely voluntary, the move by ARLA goes some way to embarrassing the government’s lack of activity, in introducing formal regulation, to mitigate the impact of cowboy letting agents. To qualify for a new license, members of the new ARLA scheme must:-

- Undertake a professional qualification in relation to lettings management;
- Participate in including continuous training;
- Must provide evidence that they have taken out a professional indemnity insurance policy;
- Have plans in place to protect any money they are holding on half of their clients;
- Have an annual independent audit carried out on clients funds.

The collapse of property prices has forced many letting agents out of business, still owing thousands of pounds to their landlord clients. The new scheme will go part way to protecting clients funds in these circumstances in the future. The National Association of Estate Agents is also planning to introduce its own scheme along similar lines, later in 2009. Both ARLA and NAEA have both commented that the government really needs to introduce this type of rigorous regulation at the earliest possible opportunity. The ARLA scheme may form the test bed and a basis for any potential government regulation in the future.

Timed in parallel to this announcement, a new government National landlord registration system is planned to be introduced along similar themes, to protect tenants. The proposals being considered by the government would mean private landlords will have to be registered for being allowed to let out their residential properties to tenants. The new registration scheme would involve private landlords in England and Wales paying a £50 fee to register with a new national body. Landlords would be expected to upkeep of their property or face having their licence revoked and their ability to rent out removed, by being struck off the landlord register. The proposed reforms will be outlined in a Green paper submitted to parliament in the next 10 days. This would then be followed by an independent review into the private rented sector, initiated by the Department of Communities and Local Government.

The new system would be monitored by an independent body to make rulings on tenants complaints. Any upheld complaints may mean landlords losing their licence to rent out property.

Cynics have pointed out that the lack of formal regulation will mean a simple registration fee does little to oversee poor behaviour by private landlords. Those even more cynical might argue that by allocating a licence number to all private landlords in the UK, the Inland Revenue will now be able to very easily chase up at tax revenues accrued from property letting activities. There are over 2.6 million rented properties in the UK and a very large government debt black hole to fill.

The aims of the government proposals are clearly noble and well-intentioned and a pain to ensure landlords maintain and repair the properties to a fair and reasonable state for their tenants. Many commentators have questioned how effective this new legislation will be in preventing rogue landlords or letting agents from behaving badly. Any voluntary schemes mean that the crooks simply don’t bother to register or continue to treat tenants badly, in the absence of any complaints from any tenants fearful of being evicted.

The importance of regulation cannot be underestimated with over one million buy the property is currently making a huge volume of the UK housing stock. As the buy to let boom mushroomed in the late 1990s, many amateur landlords bought second homes for letting purposes. Today, the property market is on a downward spiral and many people trying to sell the properties who cannot find buyers, are alternatively choosing to rent out their properties instead. Both these groups will have to pay the new registration fee proposed.

The changes come into effect at the beginning of the next tax year in April and will mean that property investors will potentially face higher tax bills in future. As the rules currently stand, people that have a large capital gains tax bill following the sale of assets such as shares all their personal personal home, can defer paying this money if they buy a holiday home, until after they sell it. additionally, second homeowners who made accounting losses could offset this against a personal income causing a reduction in total tax owed.

Currently the tax rules state that in order to attract the current tax benefits, (i.e. a second home is technically classed as a holiday home), it must also be let out at least 70 days the year. In addition, the property must be furnished and run as a commercial business and available to be rented by the public for at least 140 days a year. The move is likely to anger tens of thousands of people - many of who based retirement plans on the current tax rules for second homes. Small silver lining, those owning homes within the EU, but outside the UK, will get the tax benefits currently enjoyed by owners of UK holiday homes until April 2010. HM Revenue and Customs said it was extending the tax benefit to those owning holiday homes inside the EU but outside the UK until next April because it feared it was unlawful to have the current discrepancy.

At a time when property prices are falling and confidence is at a record low, the government has provided yet another disincentive for entrepreneurs to invest in property market. The failure of government intervention releasing equity from the mortgage market to stimulate new mortgage approvals is causing falls in property prices in residential homes as well as second homes and holiday homes. ironically, the new tax changes may mean that holiday home owners choose to sell their property before the tax changes come into effect on April 5. If you sell before April 5 you will be able to claim entrepreneur’s relief ( which means gains of up to £1 million attract a lower rate of capital gains tax). The drive towards increasing all forms of taxation to pay off government borrowing is this incentivising innovation and entrepreneurial flair.

LandLord investors in overseas holiday lets are now less likely to want to invest in a business proposition that means they will end up paying more tax, related to their overall net income. The residential housing market is already on its knees. what is really required tax incentives to encourage investment in UK holiday homes and overseas property investments. few would disagree with the government in that confidence can only be restored when people begin to spend money again.. surely it is sensible to slash government spending and reduce taxes to allow private investors to spend a greater proportion of disposable income.

The government has quite simply failed to grasp how people are motivated to invest and take risks. Endlessly taxing people only results in fewer investments and less tax revenues coming in as a result. There is no doubt the difficult choices between slashing public spending and increasing taxation are equally unpalatable to the voting public. For an economy built on the housing boom and reliant on services industries, the price sensitive consumer simply can’t stand any more direct or stealth taxes inflicted upon their confidence levels.

Many people coming up to retirement age are now thinking there is no real incentive to buy a holiday home in UK or abroad as for the prices are likely to concede to fall in the short term. Many dream of a life abroad, sunning themselves in popular destinations such as Spain or Italy. For people choosing to move out of major UK cities and retire in their second home in the countryside, the ability to raise equity against their own property is becoming more more limited as well.

He has stated that he maintains insurance on the home but according to the French Civil Code (article 1732), tenants are apparantly  responsible in case of damage caused by fire, an explosion or flood in the rented holiday apartment. He has asked us  to provide evidence of liability insurance for this prior to the rental being confirmed.  Ive rented property abroad before and never been asked for this, is it something peculiar to french holiday homes. Are the above perils, the only thing i have to insure for or will i need cover against any other event that might befall his property whilst we are in it. I cannot believe that we need this type of insurance as after all, he is the owner of the building and surely it should be his responsibility. Im wondering if my Travel Insurance would cover this?

The UK has seen an almost 10% annual average rise in property prices during the 1990s. Our economy is heavily dependent on the economic success of the property market. Recent reports have shown that the number of holiday homes and second homes purchased in the United Kingdom has fallen the first time in 10 years, including the average sale price. Price drops artistically cute in sought-after central London, where city workers have traditionally purchased apartments

It is a gloomy picture in which down pressure on property prices is making the European recession worse. The European Central Bank is forecasting a 4.1% in the gross domestic product of the euro zone area in 2009. A European Central Bank report on innovations in eurozone housing finance last month noted rises in household indebtedness and concluded “the impact of house price changes on the economy is bound to have increased, creating the possibility of more pronounced boom-bust periods”.

Now that the global credit crunch is squeezing consumer’s ability to obtain a mortgage, UK property prices have fallen dramatically. However, the picture is not the same across the euro zone, in countries like Germany in which their domestic property market remained almost stagnant for almost 10 years. Consequently, different countries governments are attaching different levels of priorities to their domestic property market is, relative to other economic concerns such as unemployment and trade deficits. The recent G20 summit in London is rated the difference is that opinions of European leaders in the notion of pumping more money into the euro zone, to prop up financial centres and major industries.

Despite the differences in the severity of the downturn in the property market across the euro zone, one thing is clear - the overseas holiday home investment boom is over. Of course the dream for many UK residents is owning a second home abroad, in a picturesque town or village. The warm climates and relatively low cost of living has attracted millions of UK people away to become expatriates. Until mortgage finance becomes more freely available, it seems inevitable that the holiday home markets across the euro zone will continue to stagnate or fall in price. Savvy investors are sitting on their hands and waiting until the current recession bottoms out. Many more investors are increasingly obtaining euro zone currency mortgages to take advantage of very low interest rates or hedge their bets against currency fluctuations and an average lower interest rate. Fed up Bits seeking a better life abroad the waiting game continues…

Headlines scream: “The number of mortgages approved for house purchase jumped by 19% last month (February 09) in another sign that the housing market is recovering”

Apparently the number of mortgages agreed in February was up. (but still way down on the previous February) The number of loans passed in February 09 was 37,937 or possibly 24123 or even 27156 (variable sources) the highest since last May, as declared by the Bank of England. Estate agents are also reporting more interest from possible purchasers. (Perhaps the winter has ended and people have emerged from their expensively heated homes).

However, actual home prices continued to drop in March, so there appears to be some divergence here, not all the arrows are going in the right direction. However, the good news is, according to another agency, house prices increased in March, so that’s a relief.

On a less complicated note, Banks and Building Societies do seem to  be coming out of hiding and are thinking about lending some money, so possibly some buyers will be tempted to jump on to the market at some very   attractive interest rates. In some kind of semblance of common sense, its being suggested that any would be purchaser should contribute a down payment of up to 15 % of the purchase price, why didn’t anyone think of this before, it’s a great idea. However, the number of first time buyers (mainly the young) may not be able to afford this, so either someone has to come up with some new initiatives or the cost of a home has to fall to a more realistic level.

Popular UK hotspots where the southwest of England in places like Cornwall and Devon, which saw massive traffic jams over the Easter weekend, as holidaymakers and caravan owners made the slow journey back home.

Other surveys have shown that overseas travel is becoming prohibitively expensive and reporting drops in the traditional holiday home or villa rental holiday. The increases in fuel prices charged to budget airlines have recently increased the cost of air travel. The cut-price discounted air fare is rapidly disappearing, as budget airlines are being forced to increase the prices, in response to the increase in fuel prices. People simply choosing to holiday in the UK instead rather than go overseas. People so acutely aware of the impact the credit crunch is having on people’s job security and disposable income, they are changing their holidaying habits accordingly.

However, the double whammy for people choosing to rent out a holiday home or visit a second home abroad is the collapse of pound relative to other currencies. Most notably the Euro has strengthened relative to the pound. This is causing oversees holiday home rental prices to increase dramatically. People are getting less than money and having to pay out more when they get there on things like car hire, food, drink and excursions.

Basic camping, renting out self catering cottage, or static mobile home in a chalet park, is a much cheaper alternative for many families feeling the credit squeeze. The commuting travel time to reach their holiday destination is less than an overseas visit. The daily cost per person is less. The UK also has many great attractions and places to see and experience.

Previously sunny destinations such as renting out a holiday home in Spain have seen dramatic falls in demand. In particular, older age groups are tending to stay at home more with their families and not take advantage of popular destinations like Spain, France and Italy. The collapse of their disposable savings realted income through falls in interest rates has meant that overseas destinations have become prohibitively expensive as that. There has been a 20% drop in a number of people holidaying in main-land Spain during 2009.

Owners of holiday homes and second homes abroad have had to reduce their rents accordingly. A recent survey by Thomas Cook found that overseas resorts were responding to the impact of weakening consumer demand by reducing their prices and producing more package deals.

Owners of second homes in the United Kingdom are also taking more advantage of their investments by spending holidays in second homes (as opposed to going abroad). There are now over 245,000 2nd homes in the UK, up 7.5% over the last three years. Despite local falls in hotspots such as Central London, many people are choosing to get away from the hustle and bustle of the big city to a quiet country location and enjoy the countryside.

The renovation, construction and building of second homes has also ground to a halt as building firms struggle to remain in business (due to the effects of falling property demand and inability to restructure existing banking loans).

Overall less people went away this Easter than in previous years with many people choosing to stay at home and simply unwind and enjoy the relatively good weather. People are rediscovering what a great place the UK is to spend a holiday. There are so many under utilised tourist attractions, historic cities, places to see, natural landscapes and sporting activities. Many overseas visitors to the UK see more of the UK than we do. Buying a second home in the picturesque countryside location is becoming an increasingly attractive option families wishing to invest their money. Many families are also choosing to invest in timeshares and holiday exchanges in order to spend a couple of weeks at their property and use it as a base to explore local attractions on their vacation.