Residential property price growth in Australia has moderated with values in capital cities up just 1.7% in the second the second quarter of the year.

The latest figures from the Australian Bureau of Statistics show that while prices are still on an upward trajectory they are not growing as fast as they were a year ago.

This means that prices are easing back to a more sustainable pace, according to the Housing Industry Association (HIA), the voice of Australia’s residential building industry.

‘Capital city residential property prices grew by 1.7% during the June 2014 quarter. While this pace was slightly faster than in the March quarter, this growth is more modest compared with what occurred during mid to late 2013,’ said HIA economist, Diwa Hopkins.

‘During that period, residential property prices were increasing between 2% and 4% per quarter. While it’s too early to call a trend, the signs are mounting that price growth is easing back to a more sustainable pace,’ she explained.

She pointed out that annual growth reached what looks to be a cyclical peak rate of 10.9% in the March 2014 quarter. This rate eased back to 10.1% per annum in the June quarter.

Residential property prices in Sydney continue to grow the most rapidly, in both quarterly and annual terms but growth rates remain highly divergent across the different capital cities.

‘Steady and sustainable price growth reinforces confidence in the market and is a key ingredient to achieving healthy levels of new home building activity. We expect starts to break through 180,000 in 2014, following nearly 170,000 last year,’ said Hopkins.

‘Continuing improvements in the supply of new homes will be important in taking some of the momentum out of house price pressures, and we may already be seeing early signs of this,’ she added.

A breakdown of the figures show that over the June 2014 quarter, residential property prices increased fastest in Sydney with growth of 3.1%. In Brisbane they increased by 1.8, in Melbourne by 1.3% and in Adelaide by 1%.

Canberra saw prices increase by 0.8%, Darwin by 0.7% and Hobart by 0.3% while prices fell in Perth by 0.3% during the June 2014 quarter.

Hopkins also pointed out that the ABS Residential Property Price Indexes may be discontinued as part of reductions to the ABS work programme and said this was a blow to the real estate industry.

‘There have already been significant cuts to data provision for the housing industry in recent years. At a time when governments and businesses need more not less official information about economic conditions, the reduction in ABS data represents a cost to the economy, not a saving,’ she said.

Residential property price growth in Australia has moderated with values in capital cities up just 1.7% in the second the second quarter of the year.

The latest figures from the Australian Bureau of Statistics show that while prices are still on an upward trajectory they are not growing as fast as they were a year ago.

This means that prices are easing back to a more sustainable pace, according to the Housing Industry Association (HIA), the voice of Australia’s residential building industry.

‘Capital city residential property prices grew by 1.7% during the June 2014 quarter. While this pace was slightly faster than in the March quarter, this growth is more modest compared with what occurred during mid to late 2013,’ said HIA economist, Diwa Hopkins.

‘During that period, residential property prices were increasing between 2% and 4% per quarter. While it’s too early to call a trend, the signs are mounting that price growth is easing back to a more sustainable pace,’ she explained.

She pointed out that annual growth reached what looks to be a cyclical peak rate of 10.9% in the March 2014 quarter. This rate eased back to 10.1% per annum in the June quarter.

Residential property prices in Sydney continue to grow the most rapidly, in both quarterly and annual terms but growth rates remain highly divergent across the different capital cities.

‘Steady and sustainable price growth reinforces confidence in the market and is a key ingredient to achieving healthy levels of new home building activity. We expect starts to break through 180,000 in 2014, following nearly 170,000 last year,’ said Hopkins.

‘Continuing improvements in the supply of new homes will be important in taking some of the momentum out of house price pressures, and we may already be seeing early signs of this,’ she added.

A breakdown of the figures show that over the June 2014 quarter, residential property prices increased fastest in Sydney with growth of 3.1%. In Brisbane they increased by 1.8, in Melbourne by 1.3% and in Adelaide by 1%.

Canberra saw prices increase by 0.8%, Darwin by 0.7% and Hobart by 0.3% while prices fell in Perth by 0.3% during the June 2014 quarter.

Hopkins also pointed out that the ABS Residential Property Price Indexes may be discontinued as part of reductions to the ABS work programme and said this was a blow to the real estate industry.

‘There have already been significant cuts to data provision for the housing industry in recent years. At a time when governments and businesses need more not less official information about economic conditions, the reduction in ABS data represents a cost to the economy, not a saving,’ she said.

With the football season starting in the UK an annual analysis of the price of homes close to Premier League football grounds shows that they have increased by 129% over the last 10 years.

The average house price in the surrounding postal districts of the 20 clubs contesting the Premier League for 2014/2015 is now £329,520, some £79,918 higher than the average for the whole of England and Wales which is £249,601.

This is more than double the 55% increase in house prices across England and Wales as a whole over the same period, the research from the Halifax shows.

This represents an average increase of £185,478 during the past decade; from £144,042 in 2004 to £329,520 in 2014, and is equivalent to a weekly rise of £386.

The biggest increases in value have been seen in homes close to Manchester City’s Etihad Stadium, where the average home value in this postal district has risen by 150% over the decade.

The area around Hull City's KC Stadium has seen the second biggest increase with a rise in average property prices of 123% and house prices around Chelsea’s Stamford Bridge ground have recorded the third biggest rise of 121%.

Newcastle United finished bottom of the Premier League house price table with the average value of properties close to its home ground falling by 22% between 2004 and 2014, the only stadium to record a decline in prices over the past decade.

Despite not seeing the largest percentage increase in prices, the postal district covering Stamford Bridge in SW6 is the most expensive area to live in currently, with an average house price of £959,522. This is more than 15 times the average price in the least expensive Premier League postal district of L4 which is home to both Liverpool and Everton Football Clubs.

At £329,520, the average house price outside a Premier League ground in 2013 may not stretch a Premier League footballer as average wages reportedly topped more than £30,000 a week in 2013 but it’s a different story for everyone else, as this is10 times higher than national average gross annual earnings.

Nevertheless there are some variations, and while four of the five least affordable Premier League postal districts are in London, it’s not the same story at other grounds around the country. Chelsea has the least affordable Premier League postal district with the average property price of £959,522 being 18.4 times gross average earnings in the area. Arsenal at 11.7 times is in the second least affordable postal district, followed by Queen Park Rangers at 10.6 times and Tottenham Hotspur 8.7 times.

However, at the other end of the league, the postal district L4 for Liverpool and Everton Football Clubs is the most affordable Premier League postal district with the price of the typical home just 2.2 times gross annual average earnings.

‘With the Premier League hailed by many as the best in the world, for many clubs some of this success also seems to have rubbed off on the…

Closing down businesses and laying people off is not the same as creating synergies, Balfour Beatty has pointedly said this morning.

In a rallying call to shareholders to keep the faith, Balfour Beatty’s board has put out another wordy statement that seeks to maul Carillion’s analysis of merger benefits.

Yesterday Carillion set out details of how it expected to make synergy savings of £175m through a merger. (See previous report here.)

Balfour Beatty retorted that Carillion’s plan meant cutting its £2.8bn a year UK construction business to just £900m. Balfour Beatty said that it planned to grow, not scale back, and said Carillion’s assumptions were flawed.

Today Balfour Beatty’s board has issued a more detailed analysis of Carillion’s business plan, once again affirming its rejection of the merger proposal.

It said: “The board believes the proposed plan involves reducing Balfour Beatty's UK construction revenues by up to two thirds. Such rescaling would require a significant reduction in overheads, just to maintain current margins (equivalent to over 6% of the lost revenue).  This cost reduction will reduce the amount of available synergies that flow through to profitability. Cost savings driven by shrinking the business should not be confused with synergies. These reductions in cost will reduce the amount of the £175m that could enhance profitability.

“A smaller UK construction business would have a lower addressable cost base, further reducing the potential synergies available from any transaction. Incremental value for shareholders can only be generated by increasing absolute profit and cash returns.”

It also said that keeping Parsons Brinkerhoff rather than proceeding with the sale “exacerbates the scale of the challenge at a time when the management team would be undertaking a fundamental downsizing of the UK construction businesses”.

Balfour Beatty said that Carillion’s axe would come down heaviest on its UK Regional construction business, which accounted for £1.8bn of last year’s £2.8bn UK construction revenues. Yet the Regional business is the “best placed to benefit from any recovery in UK construction, and is already showing signs of such a recovery”, Balfour said.

It also said that Carillion’s sums failed to take into account the overlap between the businesses of the two competitors. “This could result in revenue and profit leakage,” Balfour said.  

Carillion’s plan to stop the Parsons Brinckerhoff sales process remains a massive stumbling block for Balfour Beatty. This is what caused the merger talks to collapse in the first place and move into hostile takeover phase. (See our 31 July report here.)

“Terminating this process risks damaging a significant part of the value of Balfour Beatty,” it said today.

Balfour Beatty is seeking to persuade its shareholders that its own plans for the business are better than Carillion’s axe.

It plans to close some regional offices and make some reductions to overheads, sell Parsons Brinckerhoff and refocus as an Anglo-American construction and specialist services group. Joint ventures in Asia and the Middle East will be retained subject to them being value accretive.

More selective tendering to focus on repeat customers, frameworks and larger contracts over £5m will “result in a large reduction in the number of contracts but only a modest reduction in revenue”.

Balfour Beatty said that its own strategy was already showing signs of success. “Balfour Beatty has already demonstrated that cost savings can be achieved independently of a merger; £70m of annualised cost savings have been delivered over the last three years,” it said.

“We will continue to demonstrate this plan is working by sharing leading indicators on a periodic basis, including on the size, composition and margin of our order book and in respect of overhead efficiencies. Our plan of progressive but substantial improvement avoids operational and value destruction risks, and leaves it much better equipped to exploit the market recovery that is under way.”

Annual rent rises in England and Wales have increased to 2%, the first real time growth since September last year, to average £753 per month, the latest index shows.

It means that rents have returned to levels last seen in November 2013 but the rise is just 0.1% when inflation is taken into account, according to the index from LSL Property Services.

The report also shows that tenant finances have improved with 7.3% of rent in arrears, down from 7.8% in June and 8.1% last July. But landlords have seen total returns moderate, down to 10.3% per annum as property price rises cool.

‘The rental market is approaching its busiest period yet rent rises remain modest. However, tenants looking to rent a new property this month still need to budget the same as they would have in November. At a time when the UK is facing a serious shortage of homes, and with purchase prices rising steadily, that is an immense achievement for the private rented sector,’ said David Brown, commercial director of LSL Property Services.

‘Rents have tracked inflation for many years and as of July remain down 0.2% in real terms since the start of 2010. This is testament to serious improvements in the supply of new homes to let, thanks to investment by landlords. If that investment keeps flowing, and the right incentives for new landlords remain, this positive trend should continue,’ he pointed out.

A breakdown of the figures show that rents in nine out of 10 regions are higher than a year ago. The fastest annual increase is in the South East, where the average monthly rent is now 3.8% higher than in July 2013.

This is followed by a 3% annual increase in the North West, and annual rent rises of 2.3% in London. The North East is the only region where rents have dropped over the last 12 months, falling 3.8%.

On a monthly basis, eight out of 10 regions have seen rents rise in July. The fastest month on month increases are in the South East and North West, with rents respectively 1.7% and 1.6% higher than in June. Coming a close third is the East of England, where rents are up 1.5% over the past month.

Only two regions have seen rents fall on a monthly basis. The South West experienced a 1% monthly drop in average rents in July, while in the West Midlands rents were 0.5% lower than in June.

As of July the gross yield on a typical rental property in England and Wales stands at 5.1%. This represents a fall of 0.2% since July 2013 when the gross yield on a rental property averaged 5.3%. However, yields are steady on a monthly basis, at 5.1% over the past six months. .

Taking into account price growth alongside void periods between tenants, total annual returns on an average rental property stand…

A rebuilding of Ealing Broadway railway and tube station in west London has been approved by local council planners.

Platforms will be extended to accommodate the high-capacity Crossrail trains that will pass through the station every six minutes at peak. To cope with the extra traffic, a new ticket hall will be built and the entrance will be doubled in size. New lifts will also be installed.

Construction will now start next year, with Vinci as main contractor, and is expected to take 18 months to complete.

The new station, designed by Bennetts Associates, will have a long, curved canopy running the length of the forecourt. The façade will be replaced with a new glass structure.

Client for the project is Network Rail, whose programme director for Crossrail, Matthew Steele, said: “Crossrail is one of the most important projects that Network Rail is working on and promises to deliver huge improvements to rail transport in Ealing, west London and out to Reading. The project team are committed to delivering these important works efficiently and in partnership with the local authority.”

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Property bridging loans have provided investors with the greatest annual returns and the lowest volatility across a range of alternative asset classes, according to the latest research.

In the 12 months to the end of June, private investors in short term secured loans have seen a total annual return of 10.5%, almost twice the 5.3% return from collectable art, and compares with negative returns for gold and wine investments.

Physical gold investments are worth 1.6% less than a year ago, while investors in fine wine have suffered an even greater loss of 16.5% over the 12 month period.

Those who invested £500,000 in bridging loans on 1st July 2013 would now see their investment worth £552,000, while the same investment in fine art would have gained approximately half as much value, to reach £526,500, according to the research from West One Loans.

If invested in gold, the same £500,000 would be worth just £492,000. However this drop represents only a fraction of the losses seen for fine wine. A £500,000 investment in fine wine would have lost more than £80,000 in the course of the last year, to be worth £417,500 as of July.

‘Economic recovery is strengthening across the developed world, led by the UK. So alternative investments are no longer a question of finding havens. Growth is on the agenda – and investors are on the hunt for ways to get involved,’ said Duncan Kreeger, director at West One Loans.

‘Property now has an enormous capacity for growth, to overcome a particularly sharp downturn and make up for the ground lost over the last five years. But while developers are in no way short of projects, finance is the tightening bottleneck to further progress,’ he explained.

‘For those private investors who can offer assistance, this is presenting enormous opportunities. Bridging loans can give individuals and smaller institutions access to the property lending market previously dominated by increasingly cautious large banks,’ he added.

When compared by volatility, the same major asset classes also favour bridging for stability of returns, with a three month standard deviation of 0.03% for property bridging loans.

Second lowest for volatility, though reflecting consistently low returns, is fine wine, with a volatility of 1.6% over the last three months. Meanwhile, fine art has seen a three month volatility of 1.7%, a considerable improvement since art investments saw a peak in volatility earlier in 2014. However, these assets all compare favourably with gold, which saw volatility spike over 10% in the three months to July.

‘Sophisticated investors are looking to alternative assets as a new way to navigate risk and return, spreading their capital between a greater variety of asset classes. But alternatives are also about new ways of linking the investor to the asset. For example, physical gold or art works are an excellent way to hedge against more mainstream markets but the ownership and investment structures are…

Housing maintenance contractor Mears and trade union representatives have agreed to talks with the arbitration agency ACAS.

Mears has withdrawn its proposal to de-recognise the unions GMB, Unite, Ucatt and Unison at its Brighton & Hove City Council contract and the unions have called off a planned protest demonstration.

As previously reported, Mears was looking to change the contract conditions of workers it had taken over from the council when the service was outsourced.

All parties will meet with the Advisory, Conciliation & Arbitration Service (ACAS) on 12^th September.

GMB branch secretary Mark Turner said: “Although we are very pleased to see Mears reverse their decision on de-recognition, the joint trade unions are fully aware that there is still a lot of work to be done on both sides at the meeting planned for September. Having ACAS involved to both facilitate and lead those discussions is a further positive step. It should do much to ensure that all sides are happy with any end agreement and that going forward all parties then work within the spirit of that agreement."

GMB organiser Gary Palmer added: “Mears conciliation in removing the threat of de-recognition means the joint unions will immediately reciprocate and therefore we have agreed to halt all planned actions against them, including in the first instance the August 19th Brighton race day demonstration. I look forward to now sitting down with Mears and ACAS to settle our differences and move forward within the spirit of an approved agreement."

A £12.8m programme of works starts in September to improve harbours links in Cornwall and the Isles of Scilly.

The government has allocated £7.3m of funding towards the scheme to improve harbour infrastructure at both St Mary’s and Penzance plus a further £1.8m to repair and resurface public roads on the island.

The harbour scheme will see the pier extended and widened at St Mary’s, along with provision of new freight storage facilities and improved access for passengers. It also includes dredging and some highway improvements in Penzance.

The roads funding for the Council of the Isles of Scilly will fund resurfacing for the majority of the local road network on the island and is a one off payment. The work will be done at the same time as resurfacing of the island’s runway, while all the necessary plant and machinery is already on the island.

The harbour infrastructure works are expected to begin this September and be completed by June 2015, with the St Mary’s Quay extension to be complete by March 2015 ahead of the summer season.

The Miami residential real estate market continued to see rising prices in the second quarter of 2014 due to strong demand, according to the latest report from estate agents.

The data from the Miami Association of Realtors show that there is particularly strong demand for single family homes priced between $200,000 and $400,000.

Overall the median sales price for homes in Miami-Dade County was $245,000, an increase of 8.9% compared to last year, while the median sales price for condominiums rose 5.6% to $190,000.

The market has now seen prices increase for 10 consecutive quarters for both single family homes and condominiums with demand from both domestic and overseas buyers.

‘While supply is growing and creating more balance between buyers and sellers, inventory in certain price points and market segments remains tight, particularly for single family homes. Financing for condominiums is still difficult to obtain, a fact that is hurting sales for this property type,’ said Liza Mendez, chairman of board.

Compared to last year, the average sales prices for single family homes and condominiums increased 3.5% to $460,018 and 6.7% to $375,941, respectively.

While in the whole of Florida the median sales price for single family existing homes in the second quarter was $180,000, up 5.3% from the same quarter a year ago and for condominiums it was up 10.1% to $142,000.

There were 8,139 homes and condos sold in Miami-Dade County during the second quarter of 2014, a negligible decrease of 0.9% compared to the second quarter of 2013, when there was record sales activity. Sales of single family homes increased 4.9% and condominium sales decreased 5.2%.

However, sales of single family homes priced between $200,000 and $400,000 surged 68% in the second quarter while sales of condominiums priced between $100,000 and $400,000 increased 35%.

‘As the Miami real estate market continues to normalize and perform in a healthy manner, there are increased opportunities for all types of buyers. While inventory is still limited depending on the area and price range, buyers generally have more to choose from and prices remain at affordable 2003 levels,’ said Francisco Angulo, residential president of the Miami Association of Realtors.

The Association also said that its initiatives to increase inventory and focus on assisting members to get more listings has proven successful along with some additional distressed properties coming on the market. The fact that sales remain at historically strong levels while inventory is growing points to seller confidence, it said and sellers are listing properties for sale because they have confidence in the market.

Home and condominium listings also increased in the second quarter but by narrower margins. There were 8,635 new single family home listings during the second quarter, a growth of 4% compared to a year ago. New condominium listings increased 3.8% from 6,025 in the second quarter of 2013 to 6,255 this year.

At the current sales pace, current inventory represents 5.5 months of inventory for single family homes and 7.8 for condominiums. Compared to the second quarter of 2013, supply…

There has been a huge surge in student housing investment activity in the UK over the last two years, according to a new analysis paper from Savills.

There was £5 billion worth of standing stock and development sites sold in 2012 and 2013, and the early signs for 2014 suggest there will be similar high levels of investment activity this year.

Indeed, the latest data shows that in the first four months of the year, there have been transactions worth £950 million and this equates to over 17,000 beds, above the level seen in the same period of 2013 and well above previous years including 2012.

The report points out that with a further £1.4 billion worth of investments on the market Savills expects to see activity in the region of £2.5 billion by the year end.

According to Yolande Barnes, Savills director of world research, the lower volume of investment activity in 2013 relative to 2012, some 33% less compared to only 18% fewer beds traded reflects an important trend. She also pointed out that 2013 saw a substantial increase in the number of deals in prime regional markets which were up 76%.

‘This trend is likely to continue given the attractiveness of the student housing sector to investors, although investors will have to bear in mind some of the risks,’ she said.

‘We saw some compression of blended average yields in the sector over the last year, with average initial yields falling slightly to 6.2% compared with 6.3% previously. This reflects the increased competition for investments in prime London and super prime regional markets,’ explained Barnes.

‘Although activity in prime and secondary regional markets increased by 80% last year, yields remained relatively static reflecting the riskier profile of student demand in these markets,’ she said.

‘For 2014, we are forecasting total returns of 13.7%. This is comprised of average blended yields compressing to 6.0% and rental growth of 3.5%,’ she added.

The report points out that the introduction of university fees for UK domiciled undergraduates has led to falling student numbers in the 2012/2013 academic year. However, UCAS application data suggests that numbers are recovering, but a close look at the figures shows evidence of a flight to quality emerging.

It also points out that there is a lack of certainty over the position of tuition fees in the event of Scotland gaining independence. Under European Union law it is possible to discriminate against students from other parts of the member state but not those from other parts of the EU. It appears likely that the government would charge all students the same fee but offer Scottish domiciled students a grant equal in value to the fees. This leaves the future position of other EU students studying for free in Scotland uncertain.

Savills has expanded its analysis of how the purpose built student accommodation sector can play its part in solving the housing crisis and identified 77,000 student properties across the UK that, with the provision of more…

Much has been written about the property market in prime central London cooling but there are now signs that this is spreading to other parts of the country as asking prices begin falling.

Price rises are slowing down in response to rising supply and the average asking price for a flat has actually dipped slightly since July to £161,956, ending a 14 month rally, according to the latest asking price data from Home.co.uk.

Less affected by supply issues are detached, semi and terraced properties and asking prices are continuing to rise for the time being overall but home prices have dropped back during the last month in some regions.

The relatively strong regional markets of the South East, South West, East Anglia and Yorkshire have seen asking prices fall by 0.1%, the first time this has happened this year and is regarded as further evidence of a cooling market.

Greater London posted a more muted month on month asking price rise of 0.3%. Price rises in other English regions, Scotland and Wales since July were all similarly modest at 0.2% or less with the exception of the East Midlands where asking prices increased by 0.5%.

It means that the average annual appreciation for England and Wales fell by 0.3% to 9.3% as the dynamics in the residential property market show signs of changing. The increase in supply was particularly high in Greater London, up 39% compared with a year ago.

‘Record prices in Greater London have tempted many more potential vendors to sell. Supply is up 39% but we must remember that it is rising from an ultra-low level. Some 14,720 properties entered the market last month which is 31% less than the 20,615 properties that were placed on the market in August 2008. Such is the demand in London that supply would need to much more before price stability was seriously threatened,’ said Doug Shephard, Home.co.uk director.

‘If we look at the wider supply dynamics across the rest of the country it is clear that buyer demand is certainly lower than it was before the financial crisis of 2007, but supply remains very low indeed. On the demand side, mortgage lending is working and interest rates remain very favourable for the time being,’ he pointed out.

But he added that on the other hand supply has increased by just 6% over the last 12 months across the UK. Outside of London, the largest rises in supply were found in the West Midlands and in Wales with 9% and 8% growth respectively year on year.

‘Such modest increases, from what is a record low level, are hardly likely to cause a crash any time soon, but they will help tame price rises and that will both help stabilise the market and be welcome news for aspirant buyers,’ said Shephard.

The report also reveals an end to the improving trend observed in the slower markets in terms of marketing times. In August 2013, only four regional markets, London, the South East, East…

Balfour Beatty has dismissed Carillion’s proposed business plan for a merger of the two businesses, insisting that it wants to grow its construction business, not whittle it down to a third of its current size, as Carillion is proposing.

This morning Carillion said that it plans to have only a third of the combined profits of the two companies coming from construction, with the bulk of the money coming from support services, such as serving school dinners and cleaning office, and from investments.

In its statement, Carillion said it was the better managed business and if it got its hands on Balfour Beatty it could make that better too.  While Carillion is implicitly critical of Balfour Beatty management – perhaps suggesting that not many of them would keep their jobs for long after a merger that increasingly clearly would be a Carillion takeover – Balfour Beatty’s board is no less critical of Carillion’s thinking.

Balfour Beatty says that Carillion wants to retain Parson Brinkerhoff – the US engineering subsidiary that Balfour Beatty is in the process of selling – without providing any strategic rationale for it, other than that the turnover it generates would be nice to have.

It said of Carillion’s plans: “Several key business plan assumptions suggest an analysis based on the integration of businesses smaller than Carillion’s, rather than one that is substantially larger. In particular, the substantial rescaling – possibly by up to two thirds – in the revenue of Balfour Beatty’s UK construction business would eliminate future earnings recovery potential. It would also incur cash outflows of many hundreds of millions of pounds of restructuring costs and working capital.

“As a result, the board of Balfour Beatty has serious reservations as to the achievability of the stated synergy number and believes that it creates unacceptable operational and financial risks. In contrast, Balfour Beatty has clear plans for developing rather than partially eliminating the UK Construction Services business, including achieving future cost savings where 100% of the benefits achieved would accrue to Balfour Beatty shareholders.”

Balfour Beatty adds: “Carillion continue to require Parsons Brinckerhoff to remain part of the potential combined business, without providing any strategic or value related logic for its retention, other than for financial presentation purposes. Balfour Beatty has been clear that Parsons Brinckerhoff has not provided synergistic benefits for the group over five years of ownership, and this has not been disputed by Carillion. Their proposed approach would result in the likely termination of the Parsons Brinckerhoff sales process. This risks damage to that business, as well as eroding its competitive position, and potentially resulting in a loss of value to our shareholders.”

Mortgage arrears and possessions in the UK continued to fall in the second quarter of 2014, according to the latest data published by the Council of Mortgage Lenders.

The number of mortgages in arrears of 2.5% or more of the balance stood at 131,400, or 1.18% of all mortgages, at the end of June, down from 138,200 or 1.24% three months earlier and 154,900 or 1.38% a year ago.

The figures shows that there was a fall in numbers across all arrears bands, and the overall total is now at its lowest since the first quarter of 2008.

A total of 5,400 properties, representing 0.05% of all loans, were taken into possession in the second quarter, down from 6,400 in the preceding quarter and 7,600 a year ago. At 11,800, the number of cases of possession in the first half of this year was at its lowest since the second half of 2006.

The totals reported include arrears and possessions in the buy to let sector, which also continued to decline. The number of buy to let mortgages in arrears of three months or more, including cases in which a receiver of rent had been appointed, stood at 13,400 at the end of June, down from 14,700 three months earlier and 17,900 a year ago. In the second quarter, 1,300 buy to let properties were taken into possession, compared to 1,400 in the previous quarter and a year ago.

The figures are broadly in line with the CML’s revised forecast of 135,000 mortgages in arrears at the end of 2014, down from 150,000, and 25,000 cases of possession in the year, down from 28,000.

‘Another fall in arrears and possessions is clearly welcome and shows that borrowers, lenders and money advisers are generally continuing to work well to contain payment problems where they arise, helped by an improving economy and low interest rates. But rates will rise at some stage, of course, and borrowers should be planning for that now,’ said CML director general Paul Smee.

‘We welcome the message from the Bank of England that, when it raises rates, it plans to do so in a series of baby steps, matched to a careful assessment of the ability of households to deal with higher borrowing costs. Any borrower anticipating payment problems should talk to their lender as soon as possible. Today's figures continue to show that in many cases it is possible to work through a period of difficulty, with lenders committed to helping borrowers get their finances back on track,’ he added.

Figures released by the Finance & Leasing Association (FLA) confirm the picture. They show a 27.3% fall in second charge mortgage repossessions in the second quarter of 2014 compared with the same period last year. In the first half of 2014, repossessions were down by 36.2%.

‘The low number of repossessions is what we would expect to see in this market given lenders’ approach to forbearance. The forecast for 2014 suggests that the…

David Fison, who moved from leading a major contractor to leading a smaller family firm, has said that employees set to be made redundant in the wake of mergers and acquisitions have nothing to fear.

In what sounds like a call to come and join him at Osborne, David Fison says that the big company efficiency savings could benefit smaller firms.

He adds that working life at smaller companies can have a lot to offer.

Mr Fison joined family-owned Osborne as chief executive in 2009 after being sacked as chief executive of Skanska. Before that he was head of civil engineering at Balfour Beatty, where he worked for many years.

Without actually naming Balfour Beatty, his comments are clearly designed to be heard by his former colleagues who may become victims of merger synergies and tossed overboard.

He says: “I am watching the merger moves of the large contractors and consultants with great interest. It is what big companies do to gain market share and maximise earnings by cutting costs through combining teams, offices, etc. What that means of course is laying people off, often the most experienced and therefore most expensive – usually described in press releases as ‘creating synergies’. But this is happening at a time when the construction industry is becoming increasingly aware that it faces major issues over resources, by which I mean people as well as materials and plant.

“Various reports suggest that the industry lost 300,000 people during the recession. Another 300,000 are due to leave in very short order as the baby boomers of the 1940s hit retirement age. Replacing them will not be easy or quick. As investment in infrastructure and construction generally ramps us – with predictions of a 10% increase in workload over two years, having enough good quality, trained people is going to be the deciding factor in what work firms have the capacity to bid for and deliver. The anticipated synergies in those big mergers may not evolve as companies find they need to hang on to resources. But if they don’t, big company efficiency savings look like being to the benefit of smaller companies.

“Most small businesses have a longer horizon, less ambitious profit ambitions and can offer secure job opportunities for construction staff. The jobs may not be so big but we are closer to our customers, more agile, and value what individuals have to offer. For staff, and in fact for clients, it’s a bit like choosing a restaurant. You can go to a top class hotel with formal service or the local restaurant round the corner. Both give you good food to suit your budget but with a different style. It’s just about making the choice. Smaller businesses have a lot to offer, I believe. We are looking forward to welcoming new recruits going forward.”

Having been twice rebuffed by Balfour Beatty’s board, Carillion is now going over its head directly to shareholders.

Carillion has revealed that it has spent the week in meetings with several of Balfour Beatty’s major shareholders persuading them of the merits of a merger for the two companies.

Carillion says that if it gets its hands on Balfour Beatty it can achieve savings of £175m a year by combining the overheads of the two companies, primarily by imposing on Balfour Beatty what it regards as Carillion’s lower cost operating systems.

Carillion says that it has identified synergies across:

• back office, head office, and support function savings as well as from applying Carillion’s business operating model to Balfour Beatty’s UK business – £82m a year saved here.
• supply chain: using Carillion’s category management and demand planning solution, and through purchasing and procurement efficiencies – £36.5m a year to be saved here.
• information and communications technology (ICT): using Carillion’s outsourced back office solution, and through standardisation of systems and processes – £13m a year saved here.
• consolidation of the two groups’ property portfolios in overlapping areas, including head office, would save £17.5m a year.
• plus a further "£26m of annual recurring cost savings from agency labour, fleet, insurance and general overhead savings, including through the application of Carillion’s lean operating structure".

If the merger goes ahead before the end of this year, 40% of these synergies would be realised by the end of 2015 and the full 100% by the end of 2016, Carillion has been telling shareholders.

However, the restructuring would cost £225m to implement.

On Monday Balfour Beatty issued a statement setting out in detail why it had rejected Carillion's merger proposals. (See previous report here.) Carillion is clearly not yet ready to walk away.

Carillion has proposed that Balfour Beatty’s shareholders receive an additional cash dividend (or equivalent) of 8.5 pence per Balfour Beatty share (£59m in total) at the time Balfour Beatty’s final 2014 dividend would have otherwise been paid in 2015. This would be in addition to the final 2014 dividend they would be entitled to receive as shareholders in the enlarged group.

Carillion’s envisaged business plan for the group is to refocus significantly the UK construction services business, similar to the rescaling it undertook of its own construction business, avoiding low margin projects.

Growth would be focused on support services. Under Carillion's guidance, two-thirds of the combined group’s operating profit would derive from services and investments with just one-third coming from construction. This is despite Balfour Beatty being the UK's biggest construction company. Last year Balfour Beatty made £2.8bn revenue from UK construction alone. Carillion only turned over £3.3bn across its entire group.

In a statement this morning Carillion’s board said: “Carillion continues to believe in the powerful strategic logic and financial benefits of a merger with Balfour Beatty and is therefore continuing to consider its position. Carillion will make a further announcement in due course.”

In a separate statement today Carillion also reported its financial results for the first six months of the year, showing 5% rise in profit and a further 5% decline in turnover. (See report here.)

Demand for new homes in the UK fell slightly in July, the first monthly decline since January 2013, according to the latest residential market survey from the Royal Institution of Chartered Surveyors.

At the same time the supply of new properties coming onto the market increased for the second consecutive month and as a result of the rebalancing in demand and supply, house price growth across the UK appears to be moderating.

The RICS report suggests that the housing market has paused, with a net balance of 49% more respondents reporting an increase in prices in July, down from 52% in June and 56% in May.

In London, both sales and new buyer demand fell more sharply than elsewhere, with enquiries falling at their fastest rate since April 2008 and a net balance of 10% more respondents reporting an increase in prices, down from 30% in June.

The average number of sales per chartered surveyor, however, increased to 24.6, up from 21.1 at the start of the year, and sales expectations remain positive across the country, albeit a little less so than previously.

While there is a little more member caution reflected in the comments, prices are still projected to rise nationally over the next year and expected to increase by 2.6% on a 12 month view compared with around 4% at the start of the year. Surveyors in Scotland appear most optimistic, anticipating a price gain of 3.3%.

Loan to Value ratios on mortgages were little changed during the month but the results, nevertheless, show that lenders are now a little more circumspect in providing finance to the more expensive parts of the market. The average LTV mortgage for a first time buyer in the capital remained below 78% for the second successive month, which compares with an average close to 81% during the early part of the year.

‘A range of policy initiatives adopted by the Bank of England in recent months alongside heightened expectations surrounding a turn in the interest rate cycle has clearly had an impact on sentiment in the market,’ said Simon Rubinsohn, RICS chief economist.

‘The shift in the mood music amongst potential buyers in the London market has been particularly pronounced but that is in a sense consistent with the move to a more sustainable market in the capital,’ he explained.

‘Elsewhere around the country, the market in general is showing a greater degree of resilience, but that largely reflects the fact that in some areas the recovery has only recently taken hold and affordability is rather less stretched. Significantly, members now expect price gains over the next year to be faster outside of the capital, than in it,’ he added.

Peter Rollings, chief executive officer of Marsh & Parsons, said the data shows that the market has settled into a more sustainable rhythm. 'The housing market hit the ground running at an unbelievable pace at the start of this year, but it couldn’t maintain this speed long term and as we move into…

Carillion has reported a modest improvement in its finances for the first half of the year, with turnover down 5% but pre-tax profit up 5%.

The fall in turnover was in line with corporate strategy to reduce exposure to low margin construction work. However, the company says it is now “well positioned to target revenue growth in the full year”. The order book, including probable orders, has risen during the first half of the year from £18.0bn to £19.5bn, with £3.2bn of new and probable orders added over the six month period.

Revenue for the six months to 30 June 2014 was £1,871.0m, down from £1,964.6m in 2013. This follows a trend that saw Carillion’s first half revenue come down from £2.5bn in 2011 to £2.2bn in 2012.

Pre-tax profit for 2014 H1 was £67.5m, up from £64.2m in 2013 H1 and £64.1m in 2012 H1.

Revenue in the construction services segment (excluding Middle East) was down 8% to £462.1m. Underlying operating profit was up 1% to £19.2m.

Support services saw revenue shrink 1% to £1,100.8m and underlying operating profit grow 25% to £55.3m.

Public Private Partnership (PPP) projects generated £95.5m in revenue, down 24%, with underlying operating profit down 44% to £20.5m.

Revenue from Middle East construction services was down 4% to £212.6m, with underlying operating profit up 33% to £13.2m.

Chairman Philip Green said: "Carillion continues to perform in line with the board's expectations, reflecting the benefits of the early actions we took in response to the economic downturn, notably the planned rescaling of our UK construction business, together with our continuing strong work-winning performance. Having realigned our businesses to the size of the markets in which we operate, the group is well positioned to benefit from its strong work-winning performance over the last 18 months and from its high-quality pipeline of contract opportunities across our target markets. Consequently, the board's expectations for 2014 remain unchanged and we expect to make further progress in the medium term."

Flat sales in the prime central London property market are down 11% year on year but house transactions are up 20%, the latest market report shows.

The data from agents W.A. Ellis also show that there has been a 13% fall in sales in the second quarter of 2014 of properties priced over £10 million compared with the same period last year.

In the prime central London rental sector new tenancies are up by 84% compared to the same period in 2013 and the student market in full swing as demand exceeds supply.

The fall in the number of flat transactions could be down to concerns about a mansion tax which has not been completely ruled out by the government, according to Richard Barber, partner at W.A. Ellis.

He also pointed out that the trend shows that the achieved prices are below the original asking prices, and doesn't take into account any price reductions throughout the property's time on the market. Currently a fifth of all property on the market has had a price reduction at some point.

A breakdown of the figures shows that the average price per square foot paid on property above £10 million in prime central London increased by 31% from 2009 to 2013, however, in the second quarter of 2014 this fell to 5.7%.

There has also been a 13.6% reduction in instructions in the second quarter compared with the same period in 2013. In contrast, the sub £2 million market has seen an average price per square foot rise of 4.1% across London.

‘Over the past few weeks, we've exchanged on a wide range of properties, from a prime car parking space near the Albert Hall to the highly coveted Chester Street at £7,375,000. As we approach the autumn market, realistic pricing is key and serious sellers must look at recent sales evidence before they consider their asking price and not let agents talk them into marketing at a figure that will not be achieved,’ added Barber.

Lucy Morton, senior partner and head of lettings at W.A. Ellis, revealed that it has been the busiest start to a month the firm has ever known with regards to new tenancies, which have increased by 84% compared to the same period last year.
‘The seasonal student market is in full swing, with students focusing on finding accommodation for the upcoming year and demand exceeding supply,’ she said.

‘The family house market is also facing a lack of supply due to landlords selling because of uncertainty around a possible mansion tax. Landlords who choose to stay are benefitting, however, and this week we've seen three good Chelsea houses in Jubilee Place, Flood Street and Markham Square let within a week of reaching the market,’ she pointed out.

‘It is this level of the market that is most interesting and reflective of the recovering employment market. Corporate relocation budgets have increased, and we've seen the family house market rise by 3.4% in the second quarter of 2014,’…

More than one in five property owners in the UK are interested in getting solar panels installed on their homes and many think it will make their home more saleable.

Some 21% said they would like to get panels, some 6.4% already have them and a further 3.6% and planning to get them, according to a new poll conducted on behalf of Ocean Finance.

Across the UK, home owners in London are twice as likely to have solar panels installed on their property than residents elsewhere in the country. Some 15% of property owners in the capital revealed they have the panels, which is almost double that of the area where the products are the next most popular in East Anglia where just 8% of home owners have them.

Meanwhile, 13% said that although they own a property, they do not think their roof would be suitable for hosting solar panels. This might be because the roof is not strong enough to support the panels, is north-facing or because the owners live in a flat.

A further 6% of home owners revealed they have been unable to secure planning permission for the work, while half admitted they are simply not interested in investing in the technology.

When asked why they are not considering solar panels, the main reason given by these respondents was the up-front cost involved, cited by 35%. According to the Energy Saving Trust, the average cost of a solar panel system for a domestic property in the UK comes to between £6,000 and £7,400.

However, it points out that the technology falls within the improvements eligible for the government’s Green Deal, which allows people to pay for the energy efficient work they have had done through the money they save on their utility bills.

Other reasons given by home owners who are not interested in solar panels include a belief that there is not enough sun where they live, with 20% saying this, although usually it is only north-facing roofs that some installers claim may not get enough light.

Some 19% said that uncertainty as to whether they would get a financial return on their investment put them off while 14% revealed they did not like the way the panels look and 8.2% simply don’t see the point in solar power.

‘Solar panels remain a dividing subject among home owners in the UK, but one in five appear to be interested in installing the technology and generating some of their own power,’ said Ian Williams, spokesman for Ocean Finance.

‘While the up-front cost is off-putting to many, the government’s Green Deal finance plan allows eligible home owners to repay the balance through the savings they make on their electricity,’ he pointed out.

‘There are other options available people could use to fund the work, such as home improvement loans, although home owners should be aware that securing finance against their property could mean their house is at risk if they do not keep up with the repayments,’ he explained.

‘Once…

There are signs that the property market in Cyprus is recovering from the downturn which saw sales plunge and prices fall considerably after the island has to seek financial back up from the European Union.

The latest figures from the Land Registry shows that there has been an increase in domestic and foreign buyers but it must be remembered that the growth is coming from a very low base.

Overall sales to foreign buyers have increased by 20% year on year in the first five months of 2014 with the biggest growth in Nicosia, Famagusta and Limassol.

Nicosia has seen the number of sales in this period rise from 246 to 371, a rise of 51%, Famagusta from 89 to 136, a rise of 53% and Limassol from 366 to 529, a rise of 45%.

In other locations popular with overseas buyers, Larnaca has seen a small rise in transactions, up 10% from 264 to 290 but Paphos has seen sales fall, down from 547 to 484, a decrease of 12%.

The Land Registry data shows that overall 551 bills of sales were submitted in May this year, an increase of 157% compared to May last year. Over the same timescale the number from foreign buyers has increased from 71 to 153, a rise of 115.5%.

‘There is a significant increase in the purchase of real estate by foreigners on a national basis. This suggests that Cyprus with its attractive prices offered in combination of quality products and service, good weather, geographical and geopolitical position, the legal framework, the low corporate tax, as well as the conditions in our neighbouring countries, continues to attract the interest of foreign and local investors,’ said Alecos Vilanos, manager of Vilanos Real Estate.

He believes that Limassol is set to lead the way for foreign buyers with its major marina project having been recently opened to the public on June 19. It is expected that recent offshore discoveries and the development of the island’s energy sector is expected to attract a significant number of local and foreign property investors.

‘The real estate sector still retains the leading role in terms of the recovery of Cyprus’s economy. Incentives to real estate investors in terms of permanent residence permits for non-European nationals are expected to increase the demand for real estate and boost the investment market for offices, homes and other facilities,’ Vilanos explained.

‘There is optimism around of a full recovery of the property sector in Cyprus, and in particular in attracting a larger number of buyers and investors. Investments in property over time lead to long term benefits and never lose their values,’ he pointed out.

‘The Land Registry figures point to a gradual recovery of the property market with an increasing interest from foreign investors and buyers. The situation in the real estate market is showing signs of stabilisation. However, in order to achieve a complete recovery and return to normalcy, the restrictions concerning financing for purchase or real estate…

First time buyers have boosted annual growth in the UK’s housing market activity despite a seasonally quiet month of July, according to the latest research from chartered surveyors.

The total number of valuations carried out in July 2014 is 14% higher than in July 2013, according to the latest monthly report from Connells Survey & Valuation.

This is despite a seasonal slowdown of 21% compared to June and in line with an average 22% dip between each June and July since 2007.

Annual increases are led by first time buyer activity which is up 23% since July 2013, and with first time buyers showing the smallest seasonal drop off, at 17% from June to July.

According to John Bagshaw, corporate services director of Connells Survey & Valuation, a motoring economy is bringing with it renewed consumer confidence and emphasis on first time buyers from lenders, partly due to government schemes, appears to be getting people on to the property ladder.

‘We’re not on an open road to prosperity yet. After the summer slowdown, there will be more clarification on the long term impact of various potential speed bumps. The limiter could be interest rate rises or the fundamental squeeze on affordability for many would be buyers. But with consistent double digit annual growth in activity, there is now a growing sense that the housing market is running more smoothly,’ he explained.

Overall the report says that the number of valuations for those already on the property ladder has been more sedate. Home mover valuations number 12% more than in July last year, or around half the annual growth in activity among new buyers. On a monthly basis, the number of home mover valuations dipped by 19% between June and July.

‘Further up the chain the market is more muted. Plenty of householders are content to sit on an appreciating asset, often sticking with a mortgage they know. Jumping in the deep end just before interest rates change direction feels like a leap of faith. Despite this, some home owners, taking advantage of strong property prices, have used their added value to upsize,’ said Bagshaw.

Remortgaging activity in July is up 11% from July 2013. On a monthly basis the number of valuations for remortgaging purposes fell 25% since June, faster than the overall monthly drop. Due to this, remortgaging as a proportion of all activity has normalised, returning to the average 26% level of the last year, from 28% of all valuations in June.

‘A squeezed middle is still not feeling the full effect of recent good economic news with many choosing to rejig their finances. Particularly ahead of a rate rise many will be looking to catch the fixed rate train, even as lenders already start to price-in slightly more expensive funding over the next few years,’ explained Bagshaw.

The firm reports that buy to let valuations activity has increased 3% on an annual basis but between June and July it saw a 26% fall. This is in line…

Derby City Council has released a time lapse video (below) showing progress on Bowmer & Kirkland’s £27.5m velodrome project.

At high speed, the video shows 265,000 nails being hand-driven into the 250-metre track of the Derby Arena velodrome over a six-week track construction period.

The geometry of the track was designed by a specialist track building company from Germany who also sourced, fabricated and installed the timber, which came from the pine forests of Siberia.

The venue is scheduled to open early next year.

Councillor Alison Martin, Derby’s cabinet member for leisure and culture, said: “Derby Arena is one of the most stunning sports venues in the country, clad in beautiful Olympic colours. This new video allows the world to see the cycle track take shape, which is the centrepiece of this state- of- the- art facility. Many cyclists will be eagerly waiting their chance to use the track, and thousands of people in and around Derby will be keen to use the other fantastic sporting facilities it provides.”

The music, in case you are curious, is Orchid, by Black Sabbath.

Annual house price growth in Scotland has reached a four year high with property prices up 5.7% in a year, outpacing many other parts of the UK.

The latest LSL Acadata index shows prices are up by £8,890 and they are just 0.9% off the pre-crisis peak. This takes the average house price to £164,105.

However the growth is only a third of the pre-crisis rate and in half of Scotland saw prices drop in June. But home sales are also strong, up 15% in June and back on course after a springtime lull.

With the independence vote just a few weeks away, Gordon Fowlis, regional managing director of Your Move, an estate agency chain that is part of LSL, said the housing market is in good health ahead of the referendum.

‘Price growth in the last 12 months is the biggest rise we’ve experienced since September 2010. This is stronger than the annual rises in the North of England, the Midlands and Wales. While the majority of regions across England and Wales are witnessing price falls, the Scottish market is moving the other way,’ he pointed out.

In Aberdeenshire prices climbed to a new high of £228,802 last month and Fowlis pointed out that many households are feeling the weight lift off their shoulders as consumer confidence in the economic recovery mounts.

‘The housing market may have been temporarily subdued in the immediate clamour surrounding the MMR regulatory changes, but activity is again apparent, and sales rose 15% in June, up 26% on the previous year,’ he explained.

While this is widely regarded as a step in the right direction, he also pointed out that in the first six months of this year, property transactions totalled 42,200, which is just half of the volume in 2007/2008.

The data also shows that in reality, it’s a tale of two cities as a quarter of all house sales across Scotland in June were in Glasgow and Edinburgh, pushing average property prices in these cities up 4.5% and 4.2% respectively over the course of the month.

Peter Williams, housing market specialist and chairman of Acadata, said that there were substantial increases in the number of properties changing hands in both cities. Compared to May, 130 more flats were sold in Edinburgh in June and in Glasgow 60 more flats and 30 more terraces. In both cities, this increase in demand raised the average prices paid for flats, by £20,000 in Edinburgh and by £15,000 in Glasgow.

‘The market in Scotland is currently looking robust. The number of housing transactions that have taken place in each of the 11 months from August 2013 to June 2014 have been higher than the same months in the previous five years, with the first six months of 2014 seeing a 25% increase in sales over the first six months of 2013,’ he explained.

‘There were positive house price movements over the year at an average rate of 5.7% in 29 of the 32 local authority areas,…

The ladder exchange programme is running once again this year, starting next month and running until the end of the year.

Under the scheme, contractors, businesses and householders alike can trade in old ladders and get a part exchange deal on a new one. The aim is to encourage the removal of dangerous damaged ladders from circulation.

The initiative was first run by the Health & Safety Executive in 2010 but was subsequently taken over by the Ladder Association, an industry trade body.

Ladder Association chairman, Cameron Clow said: “This is our third year running the Ladder Exchange, which has been an excellent means of getting out the ladder safety message while helping people in a practical way. Thousands of ladders were traded in last year, saving a lot of people and businesses money and, more importantly, hopefully lives as well.”

Information on where to exchange old ladders is available from the Ladder Exchange website (ladderexchange.org.uk).

A new law comes into force this week to stop council building managers ripping off their tenants.

The legislation has been dubbed Florries’ law after a 93-year-old woman who was hit with a £50,000 bill by her local authority for roof repairs that weren’t even needed.

The new law caps the amount councils can charge leaseholders for repairs to their homes.

Outside London the maximum level will be levied at £10,000 in any five year period. Within London the limit is £15,000. Any costs above this will have to be borne by the local authority itself.

Local government secretary Eric Pickles vowed to introduce the cap after his constituent Florence Bourne went to her grave with the shame of debt around her neck.

Newham Council based its fee on a guess because it had not conducted a proper survey on the first-floor flat. It later emerged the roof would have lasted another 40 years and the work was unnecessary. Florrie’s family say she ‘died of shame’ because she had never been in debt in her life and simply could not afford to pay the bill for work on her Brentwood home.

In response, Mr Pickles ordered officials at the Department for Communities & Local Government to review legislation governing council house repairs.

Mr Pickles said: “I was appalled at Florence’s treatment and was determined that no other leaseholder should ever have to endure the stress and hardship she experienced in the final weeks of her life.

“Florence served her country as a WAAF in the Second World War, raised a loving family and believed in paying her way, so to be faced with this excessive fee was more than she could stand.

“Charging excessive amounts for council house repairs not only targets some of the most vulnerable people in society, it can amount to a failure in a local authority’s duty of care.

“Under Florrie’s law, authorities will no longer be able to levy huge bills for future government-funded repair work on people who simply have little or no hope of meeting their demands.”

Mrs Bourne died following a heart attack she suffered when she was startled by the sound of roof tiles falling onto her balcony during the works that were later proven to be unnecessary. A leasehold valuation tribunal found last year that Newham Council had not commissioned a proper survey of the flat. An independent surveyor commissioned after Mrs Bourne’s death found that the roof would have lasted another 40 years.

The property market in New Zealand is experiencing a slight slowdown with rising interest rates and the forthcoming election influencing buyer behaviour.

National median prices fell 2.6% to $416,000 in July but are up 8.1% compared to a year ago, according to the latest index from the Real Estate Institute of New Zealand (REINZ).

In the same month sales increased by 2.3% but are down 13% compared with July 2013 and days to sell improved by two days to 37 days compared to June.

According to REINZ chief executive Helen O’Sullivan, the real estate market is firmly in winter mode at present with listings low and activity muted across the country. ‘Sales volumes picked up a little in July compared to last month but this is about in line with the normal seasonal pattern. Rising interest rates and the forthcoming election are probably also influencing buyer behaviour,’ she said.

‘Reports on the effects of the LVR restrictions continue particularly from the regions, where the reported lack of able buyers is filtering up the price points and on to vendor behaviour,’ she explained, adding that the increase in the national median price is being driven by Auckland and Canterbury/Westland.

A breakdown of the figures shows that five regions recorded an increase in the median price compared to July last year and 83% of this growth was in Auckland, 19% in Canterbury/Westland and 9% in Waikato/Bay of Plenty contributing 9%. Together these three regions accounted for 111%of the increase in the median price between July 2013 and July 2014, with the remaining nine regions contributing -11% of the increase in the median price.

Canterbury/Westland recorded the largest increase in median price compared to July 2013, with an 11.1% increase, followed by Auckland with a 10.5% increase and Waikato/Bay of Plenty with a 5.8% increase. Compared to June, Southland recorded the largest increase in median price, up 4.2%, followed by Otago with 3.8% and Auckland with 1.7%.

Some eight regions recorded an increase in sales volume compared to June with Hawkes Bay recording the largest increase of 22.1%, followed by Otago with 12.4% and Manawatu/Wanganui with 12%.

Compared to July 2013 nine regions recorded a decrease in sales volume with Otago recording the largest fall of 20.8%, followed by Hawkes Bay with a fall of 19.8% and Auckland with a fall of 18.7%.

While the total number of sales was down 13% compared to July 2013, the number of sales below $400,000 fell by 21.8%. This follows a fall in sales below $400,000 of 17.3% between June 2013 and June 2014. O’Sullivan said this may be indicative of fewer sales in the lower price brackets since the imposition of the LVR restrictions.

The REINZ Stratified Housing Price Index, which adjusts for some of the variations in the mix that can impact on the median price, is 5.9% higher than July 2013, at 3885.5. The Auckland Index has risen 12.2% compared to July 2013, with the Christchurch Index up 13.9% and…

The second half of 2014 is seeing a switch from a seller’s to a buyer’s market in the UK as a healthy supply returns, according to the latest market report.

Overall the number of new homes coming to the market has increased 7.3% annually across the UK while the volume of new buyers coming to market is down 2.8%, says the report from independent agents haart.

It also shows that there are 9.5 buyers chase every property for sale across the UK, down from 14.4 in January 2014.

National property prices remain robust, increasing 8.1% annually to £204,216, the highest average price over the last two years. Prices were up 0.1% in July compared with June.

But London has seen even more pronounced growth with prices up 18.6% compared with a year ago, although this growth has fallen to 0% in July.

Also, the switch to buyer’s market is more pronounced in London as new buyers are down 15.7% but property supply has soared by 32.3%.

The monthly report also shows that property sales are healthy, up 9.8% annually and up 7.7% month on month.

‘The second half of 2014 marks a shift in favour of buyers as healthy volumes of stock return to the market. Many home owners are adopting a now or never attitude to take advantage of the continuing strength of the market having seen their equity rocket over the last year at a time when mortgage deals with decent loan to values are still available. Interest rates are to remain at historic lows until the start of 2015 at least and this is helping wider confidence,’ said Paul Smith, chief executive officer of haart.

‘At the start of this year demand for homes was growing at a far greater rate than property supply but this trend has flipped and stock is coming to the market in healthy levels, up 7% annually, yet demand has fallen by almost 3% in the same period. There are now around 10 buyers chasing every property for sale, down from 14 at the start of this year. So the market is still competitive, but buyers now have more choice,’ he explained.

‘As positive market sentiment continues this year, and people return from their summer sojourns, we fully expect a busy autumn with a higher volume of sales transactions,’ he added.

The Royal Institution of Chartered Surveyors has signed a memorandum of understanding with a leading real estate association in China which is set to pave the way for higher standards in the country.

The document, signed with the Real Estate Association of Yunnan Province (YNREA) lays the foundation for long term cooperation and the development of professional training programmes.

Through this collaboration, members of YNREA will receive training from RICS on international standards and industry best practices, and be prepared for attaining chartered status.

Both organizations said that they shared a common goal of advancing the standard of real estate industry in Yunnan in the long run.

Comprised of three branches, two professional committees and local associations in 16 cities in Yunnan province, YNREA is a key player of Yunnan’s real estate industry and has established the Yunnan Real Estate Broker Information Management System.

It has also set standards of information registration management for real estate brokers and compiled technical specification for the province’s real estate archives as well as hosting housing trade fairs in all the cities in Yunnan.

RICS North Asia deputy director Tony Ho said there is widespread commitment to setting and upholding the highest standards of professionalism in the property industry. RICS has been playing a key role in advising and influencing government and policy makers.

YNREA president Han Zhongqing said that there are opportunities for both organizations to collaborate in nurturing talents in the region through professional training, industry events and overseas study tours.

UK landlords are leaving themselves exposed to the country’s worst tenants by failing to carry out basic checks, according to new research.

With the rental market’s peak season about to start, insurance giant AXA reveals just how many of the UK’s estimated 8.3 million tenants are behaving badly and how poorly protected landlords really are when the worst happens.

The study shows that almost 60% of tenants admit to breaking the terms of their rental agreement, and a third had broken the law in relation to their rental.

In particular some 26% of tenants pay their rent late and AXA says this is equivalent to 2,158,000 tenants nationwide, and one in 10 tenants admit to having done a moonlight flit to avoid paying the landlord money, equivalent to 830,000 tenants nationwide.

Some 18% have kept pets in the property without the landlord’s permission, 15% have received complaints from neighbours for excessive noise and 8% have sub-let to someone else without the landlord’s permission.

At the most serious end of the scale, 8% of tenants admit to actually committing a crime on the landlord’s premises, and 10% say they’ve had the police called to the property.

While these tenants remain in the minority, landlords do carry a legal responsibility to ensure that their premises are not used for criminal purposes. Under the Misuse of Drugs Act, landlords can face prosecution if a tenant is found to be producing cannabis or banned substances on their property.

In October, the new Immigration Bill is also set to come into force, placing greater responsibilities on landlords to vet their tenants. Under the new law, landlords who fail to check a tenant’s right to be in the country will face a fine of up to £3,000 if the slip up means they have someone on their property who is in the country illegally.

AXA warns that while the responsibilities on landlords to keep their houses in order are getting stricter, many are still failing to carry out any checks on their tenants or even visit their properties at all. The research found that 38% landlords carry out no checks on prospective tenants, and only 5% carry out a criminal record check. Meanwhile, a third of landlords never visit their property during a rental.

And despite many landlords relying on rental income to cover expenses such as mortgage payments and basic living costs, few of them check if their tenants have the means to pay their rent. Just under a third of landlords carry out a credit check, only 27% ask for employer references and just 27% ask for references from previous landlords.

Tenancy agreements are also an important part of the picture, giving the landlord a firm foundation to evict non-paying tenants or claim damages for financial loss caused by the tenant and AXA found that landlords are getting better on this front. This year’s study found that 75% of rentals are now based on a formal agreement, compared to just 52% at the beginning of…

More job vacancies in construction are being advertised but fewer people are applying for them.

That seems to be the message from an analysis by a recruitment website, which supports anecdotal evidence of a growing skills shortage in the construction industry that threatens to impact on growth prospects.

CV-Library says that the second quarter of 2014 saw a 10% increase in the number of construction industry job advertisements posted on its site, compared to the first quarter, and a 111% increase on Q2 of 2013.

Comparing year on year, job applications have seen strong growth on the back of industry recovery. In Q2 2014 there were nearly 31,000 jobs within the construction sector posted on the site and more than 370,000 job applications. By comparison, Q2 2013 saw just 14,500 jobs posted within the construction sector and just 24,0000 applications for them.

More recently, however, there is evidence that the tide has turned. Between Q1 2014 and Q2 2014 there was a 17% decrease in job applications to construction roles.