We Know Property

The Court of Appeal has handed down its judgment in the case of Apostolides v Orams.  The Court of Appeal has decided in favour of Meletis Apostolides and requires the Orams to demolish their house on Apostolides land in Northern Cyprus. The judgment provides that the Cyprus judgments be registered and enforced in the UK.  The judegment included

• Cease trespassing on the land belonging to Apostolides;

• Deliver up possession of the land to Apostolides;

• Pay ‘mesne profits’ (effectively, rent) to  Apostolides in respect of the period of their occupation;

• Knock down the villa and fencing built on Apostolides land; and

• Pay certain sums in respect of Apostolides’ costs of the proceedings.

The case is expected to pave the way for hundreds of similar claims against British citizens who bought property in the Turkish-controlled part of the country. Some of the blame could be placed on those agents and developers involved in the sale, particularly if the Brits bought in good faith.

Gross Domestic Product (GDP) increased by 0.1% in the fourth quarter of 2009, compared with a decrease of 0.2% in the third quarter. The rise in output was due to growths in services and production.

This weaker than expected growth brings the UK economy out of recession. The economy had previously contracted for six consecutive quarters - the longest period since quarterly figures were first recorded in 1955.

The UK has been the last major economy still in recession.

The number of homebuyer mortgages approved by banks rose to a two-year high in December, but a continuing lack of remortgaging activity helped keep total lending down.

The figures from the British Bankers Association (BBA) showed 45,897 loans were approved for house purchases during the month, slightly more than double the number approved in December 2008. However, the number of remortgages dropped by 63.3% year-on-year to 23,480. This was mainly due to specialist lenders largely withdrawing from the market and building society finance contracting.

Over the whole of the year, the BBA said its members had approved a total of 980,000 home loans, the lowest figure since records began in 1997 and 27% lower than in 2008.

UK inflation rose at its fastest annual pace for nine months in December.

The Office for National Statistics said the Consumer Price Index (CPI) measure of inflation had risen to 2.9%, up from an annual rate of 1.9% in November. That was the biggest jump in the annual rate from one month to the next since records began, and exceeded the City’s expectations of an increase to 2.6%.

The annual increase in CPI mainly came about because of a number of unusual factors that had depressed prices a year earlier. These included a near-record fall in oil prices in December 2008, the VAT cut to 15% and retail discounting, the Office for National Statistics said.

Core CPI, which excludes food, energy, tobacco and alcohol, rose by 2.8% on the year, which is the fastest pace of growth since records began in January 1997.

The Knight Frank Global House Price Index for Q3 2009 showed increasing prices in 68% of the countries reporting price changes for Q3 2009. House prices, however, are still lower than 12 months ago in 57% of the locations.

 Israel remains the top performer over a 12-month period with prices increasing 13.7% to the end of Q3 2009. On a quarterly basis, Singapore saw the biggest rise with prices up 15.2% during the third quarter of the year and Dubai recorded the largest annual drop (-47%), but posted moderate positive growth in Q3.

See http://www.knightfrank.co.uk/news/Knight-Frank-Global-House-Price-Index-082.aspx for more detailed information

Invesco Perpetual’s Neil Woodford has warned that there is a very real chance that gilts could lose their AAA-rating as a result of the mounting fiscal deficit in the UK.

Citywire told how Woodford stated “There is a relatively high probability at least of it…There is a decent chance that we will be downgraded. It is a near certainty if we don’t at the next election properly deal with the deficit. If we don’t take the medicine we will be downgraded. If we do then we might avoid a downgrade.”

He also reiterated his view that despite mounting good economic news the recovery will be a slow and painful one, characterised by a series of economic disappointments. Indeed the economic news of the past quarter has not persuaded him that a V-shaped recovery is under way. He still believes there is a possibility of a couple of quarters of negative growth as banks, consumers and governments are forced to de-leverage much further.

See www.citywire.co.uk for the full story

The Halifax House price index for Dec 2009 increased by 1.0 per cent in December, the sixth consecutive month of rises.  The monthly increase was slightly below the average for the preceding five months (1.2 per cent).

Martin Ellis, housing economist, said:”The prospects for the housing market this year will depend on how the UK economy evolves and whether there is a significant increase in the supply of properties for sale. Overall, our current view is that house prices will be flat during 2010.”

see http://www.lloydsbankinggroup.com/media1/research/halifax_hpi.asp for more information