Real estate is a legal term (in some jurisdictions, such as the USA, United Kingdom, Canada, Australia and The Bahamas) that encompasses land along with anything permanently affixed to the land, such as buildings, specifically property that is fixed in location.[1] Real estate law is the body of regulations and legal codes which pertain to such matters under a particular jurisdiction and include things such as commercial and residential real property transactions. Real estate is often considered synonymous with real property (sometimes called realty), in contrast with personal property (sometimes called chattel or personalty under chattel law or personal property law).
However, in some situations the term "real estate" refers to the land and fixtures together, as distinguished from "real property," referring to ownership of land and appurtenances, including anything of a permanent nature such as structures, trees, minerals, and the interest, benefits, and inherent rights thereof. Real property is typically considered to be Immovable property[2] The terms real estate and real property are used primarily in common law, while civil law jurisdictions refer instead to immovable property.
Sunday, 25 October 2009
Tuesday, 13 October 2009
Mortage Lending
Mortgage lending remained largely unchanged during August as homeowners continued to obtain loans for purchasing houses, according to the latest data from the Council of Mortgage Lenders (CML).
Some 52,317 mortgages were approved for house purchase in line with the figure recorded in July and above the previous six-month average as remortgage loan approvals hit 29,059, below the 33,880 recorded during the previous month.
Commenting on the data, Council of Mortgage Lenders' economist Paul Samter said that for the first time in the last eight months, net lending achieved a positive result as it totalled £5.5 billion.
"Housing market activity has flattened off, but remains stable and well above the very low levels seen a year ago," he said, adding that improvements will continue to be hampered by the weak economy and constrained lending capacity.
The month also saw gross lending by the 52 building societies in the UK reach £1.5 billion, with loan approvals by the organisations totalling £1.3 billion.
Reacting to the figures, Building Societies Association director-general Adrian Coles commented that the market is still underperforming compared to previous years.
"Gross lending was subdued in August, but appears to be at broadly similar levels to recent months after seasonal factors are adjusted for," he explained.
"Despite signs of a modest improvement in market conditions in recent months, activity will not return to normal levels until funds for mortgage lending are more widely available to building societies and other lenders."
Simon Rubinsohn, chief economist at the Royal Institution of Certified Surveyors, also weighed in saying that despite net lending remaining below pre-credit crunch levels, "it is reassuring that the negative reading recorded in July proved to be a one-off".
New buyer enquiries' data from the organisation suggest that demand for mortgages continues to expand steadily, although scarcity of appropriate properties on the market is holding back potential purchasers.
The news comes as further lending to first-time buyers was unveiled by HSBC, which announced that it is expanding its 90 per cent loan-to-value (LTV) mortgages with the addition of new products.
According to moneysupermarket.com, the bank is now the cheapest lender offering 90 per cent LTV in the market, although its fees are more expensive compared to its competitors.
The website's mortgage spokesperson Hannah-Mercedes Skenfield commented that HSBC has been "one of the most visible players in the mortgage market" throughout the credit crunch because it provided lending through a variety of products as rivals floundered.
"HSBC's commitment to further lending to first-time buyers is an indication of its belief in this part of the market," she said.
"The last year has seen lenders place far too much emphasis on equity over affordability, and so it is encouraging to see HSBC grow its 90 per cent LTV lending book."
Some 52,317 mortgages were approved for house purchase in line with the figure recorded in July and above the previous six-month average as remortgage loan approvals hit 29,059, below the 33,880 recorded during the previous month.
Commenting on the data, Council of Mortgage Lenders' economist Paul Samter said that for the first time in the last eight months, net lending achieved a positive result as it totalled £5.5 billion.
"Housing market activity has flattened off, but remains stable and well above the very low levels seen a year ago," he said, adding that improvements will continue to be hampered by the weak economy and constrained lending capacity.
The month also saw gross lending by the 52 building societies in the UK reach £1.5 billion, with loan approvals by the organisations totalling £1.3 billion.
Reacting to the figures, Building Societies Association director-general Adrian Coles commented that the market is still underperforming compared to previous years.
"Gross lending was subdued in August, but appears to be at broadly similar levels to recent months after seasonal factors are adjusted for," he explained.
"Despite signs of a modest improvement in market conditions in recent months, activity will not return to normal levels until funds for mortgage lending are more widely available to building societies and other lenders."
Simon Rubinsohn, chief economist at the Royal Institution of Certified Surveyors, also weighed in saying that despite net lending remaining below pre-credit crunch levels, "it is reassuring that the negative reading recorded in July proved to be a one-off".
New buyer enquiries' data from the organisation suggest that demand for mortgages continues to expand steadily, although scarcity of appropriate properties on the market is holding back potential purchasers.
The news comes as further lending to first-time buyers was unveiled by HSBC, which announced that it is expanding its 90 per cent loan-to-value (LTV) mortgages with the addition of new products.
According to moneysupermarket.com, the bank is now the cheapest lender offering 90 per cent LTV in the market, although its fees are more expensive compared to its competitors.
The website's mortgage spokesperson Hannah-Mercedes Skenfield commented that HSBC has been "one of the most visible players in the mortgage market" throughout the credit crunch because it provided lending through a variety of products as rivals floundered.
"HSBC's commitment to further lending to first-time buyers is an indication of its belief in this part of the market," she said.
"The last year has seen lenders place far too much emphasis on equity over affordability, and so it is encouraging to see HSBC grow its 90 per cent LTV lending book."
Family values
First-time buyers now need to raise a deposit of a year’s salary to get a foot on the housing ladder. Are they all effectively shared owners now?
New figures issued by the Council of Mortgage Lenders (CML) today show that the average advance for a first-time buyer in August 2009 was £100,000 and was worth 75% of the value of their home. That means the average deposit was just over £33,000 - the same as the average salary.Contrast that with August 2007, just before boom turned to bust.
The homes first-timers were buying were worth £132,000, about the same as now, but they were getting a 90% mortgage on that worth £119,000.
The average deposit of just over £13,000 represented just over four months’ worth of their slightly higher £35,000 salary.The CML estimates that 80% of first-time buyers are now receiving help from their family compared to a little over 40% two years ago - an extraordinary statistic given that homes have apparently become more rather than less affordable in that time.
Interest payments now take up 15.2% of their income compared to a peak of 20.7 at the end of 2007 while mortgages are worth just over three times their income compared to a peak of 3.38.
The other obvious source of a deposit for first-timers is their local housing association. It remains to be seen whether loans from parents and grandparents will ever actually be repaid but their effect is remarkably similar to the equity loans available through homebuy schemes. Which begs the question of why lenders are apparently more resistant to housing help (especially shared ownership rather than shared equity) when it comes from the state rather than the family.
The other stats show a first-time buyer market that is still sclerotic. The number of first-time buyer loans is up 29% on this time last year but not much more than half what it was in 2007. There is also some evidence that the recent recovery is slowing down - the number of loans was actually down 5% on July.
New figures issued by the Council of Mortgage Lenders (CML) today show that the average advance for a first-time buyer in August 2009 was £100,000 and was worth 75% of the value of their home. That means the average deposit was just over £33,000 - the same as the average salary.Contrast that with August 2007, just before boom turned to bust.
The homes first-timers were buying were worth £132,000, about the same as now, but they were getting a 90% mortgage on that worth £119,000.
The average deposit of just over £13,000 represented just over four months’ worth of their slightly higher £35,000 salary.The CML estimates that 80% of first-time buyers are now receiving help from their family compared to a little over 40% two years ago - an extraordinary statistic given that homes have apparently become more rather than less affordable in that time.
Interest payments now take up 15.2% of their income compared to a peak of 20.7 at the end of 2007 while mortgages are worth just over three times their income compared to a peak of 3.38.
The other obvious source of a deposit for first-timers is their local housing association. It remains to be seen whether loans from parents and grandparents will ever actually be repaid but their effect is remarkably similar to the equity loans available through homebuy schemes. Which begs the question of why lenders are apparently more resistant to housing help (especially shared ownership rather than shared equity) when it comes from the state rather than the family.
The other stats show a first-time buyer market that is still sclerotic. The number of first-time buyer loans is up 29% on this time last year but not much more than half what it was in 2007. There is also some evidence that the recent recovery is slowing down - the number of loans was actually down 5% on July.
Credit Tightens for Small Businesses
Many small and midsize American businesses are still struggling to secure bank loans, impeding their expansion plans and constraining overall economic growth, even as the country tentatively rises from its recessionary depths.
Most banks expect their lending standards to remain tighter than the levels of the last decade until at least the middle of 2010, according to a survey of senior loan officers conducted by the Federal Reserve Board. The enduring credit squeeze appears to reflect an aversion to risk among lenders confronting great uncertainty about the economy rather than any lingering effects of the panic that gripped financial markets last fall, after the collapse of the investment banking giant Lehman Brothers.
Bankers worry about the extent of losses on credit card businesses as high unemployment sends cardholders into trouble. They are also reckoning with anticipated failures in commercial real estate. Until the scope of these losses is known, many lenders are inclined to hang on to their dollars rather than risk them on loans to businesses in a weak economy, say economists and financial industry executives.
“The banks are just deathly afraid,” said Sam Thacker, a partner at Business Finance Solutions in Austin, Tex., which helps small businesses line up financing. “I don’t see commercial banks coming back to the market anytime soon.” In the long view, tighter loan standards seem healthy after a terrible crisis attributed in part to years of recklessly lenient lending.
But some economists worry that bankers have overshot the boundaries of a healthy reaction, as even strong companies are finding it difficult to borrow.
“The banks are still very risk averse,” said Robert J. Barbera, chief economist of the research and trading firm I.T.G. “Regional banks are in a particularly tough spot, because they’re choking on commercial and residential real estate.”
Bankers acknowledge that loans are harder to secure than in years past, but they say this attests to the weakness of many borrowers rather than a reluctance to lend.
“Banks want to lend money,” said Raymond P. Davis, chief executive of Umpqua Bank, a regional lender based in Portland, Ore. “The problem is the effect that the recession is still having on us. Some of these businesses are still trying to come out of it. For them to go to a bank, if they are showing weak performance, it is harder to borrow.”
As the financial crisis has largely eased in recent months, big companies have found credit increasingly abundant, with bond issues sharply higher.
But for ordinary consumers, the picture is quite different. What was once of a flood of come-ons for home equity loans and credit cards has been replaced by notices of lowered credit limits.
For many smaller companies, too, borrowing remains tough.
Some 14 percent of small businesses found loans harder to secure in August than in July, according to the most recent survey by the National Federation of Independent Business. Among companies borrowing regularly, less than one-third reported that all their credit needs were being met.
“It’s quite significant, because small businesses generate significant job growth,” said Andrew Tilton, a senior economist at Goldman Sachs. “And small businesses rely more on bank financing, whereas large businesses have the alternative of raising money in the capital markets.”
Businesses with fewer than 500 employees hold more than half of the nation’s private sector jobs, according to the Small Business Administration.
In Port Arthur, Tex., Five Star Feeds, which sells gardening supplies, pet food and livestock feed, is stuck in a holding pattern on a planned expansion as the owner, Tina E. Bean, tries to persuade her local banker to provide $150,000 in credit.
Ms. Bean began the business in 2001 and has been profitable ever since, she said. She has already borrowed about $800,000 for her expansion, more than doubling the size of her storefront as she adds new product lines, including Western-style clothing like jeans and cowboy boots.
But without the last $150,000, she is unable to order the new products. Her new shelves remain bare. She missed the deadline to tap her final $150,000 in credit, she says, and her banker refused to offer a new loan, even as she insisted that she could not move into the new space.
“His answer is, ‘We’ll cross that bridge when we get there,’ ” Ms. Bean said. “Well, I’m there. I can’t open the store if I don’t have anything to put in it.”
Until she obtains financing, she has no reason to hire the two or three people she will need to run the larger space. She has no reason to place orders that would increase work for truck drivers who ferry blue jeans and pet grooming supplies to retail stores, and no need to bring on accountants, insurance agents, lawyers, forklift drivers and auto mechanics whose business opportunities would be incrementally expanded by more commerce.
Among small privately held companies, the amount of debt they carry as a portion of their equity has slipped by about 5 percent since 2007, according to Sageworks, a financial analysis firm in Raleigh, N.C. The drop reflects not only how companies have cut their inventories and paid down debt, but also the tightened credit terms they face when they try to borrow, said a Sageworks spokeswoman, Melinda Crump.
For companies that work on a contract basis bidding for jobs in advance, tight credit sometimes precludes their ability to seek new business: They cannot raise capital to hire workers and add equipment.
In Alexandria, Minn., Bob Novak, president of ACB Construction, has in recent months declined to bid on large-scale government jobs in Utah because of what he describes as a frustrating lack of credit for people in his line of work. His work force has shrunk to 1, from 14, in the last two years, yet every effort to generate fresh business seems to get snuffed out by rejections from banks.
“You might as well not walk through the door of a bank and have construction behind your name,” Mr. Novak said. “You cannot get a loan if you don’t look profitable, and you can’t look profitable if you can’t bid the work. I’ve had to walk away from jobs because I cannot get the funding.”
Med-National provides medical and dental services on a contract basis, mostly to the Defense Department. The San Antonio-based company has been in business for more than 20 years, has never lost money, and logged $5.9 million in sales last year, said the executive vice president, Robert S. Welborn Jr.
Yet as the company recently sought to secure a pair of contracts with the United States Army, its plans were delayed for nearly a year as it tried and failed to persuade a bank to lend it $300,000. The financing was required to hire the roughly 20 people needed to deliver the services — doctors and dentists and support staff.
Mr. Welborn initially called local banks with whom he had done business in years past, among them JPMorgan Chase and Wachovia. Their answer surprised him: no.
“It used to be you could practically just jangle your keys and they would give you some money,” Mr. Welborn said. “It isn’t anything like that anymore.”
In August, Mr. Welborn finally lined up financing from Wells Fargo and began hiring. Yet the delay and the uncertainty have left him reluctant to pursue other contracts.
“If we could borrow the money more easily,” he said, “we would be hiring even more people.”
Most banks expect their lending standards to remain tighter than the levels of the last decade until at least the middle of 2010, according to a survey of senior loan officers conducted by the Federal Reserve Board. The enduring credit squeeze appears to reflect an aversion to risk among lenders confronting great uncertainty about the economy rather than any lingering effects of the panic that gripped financial markets last fall, after the collapse of the investment banking giant Lehman Brothers.
Bankers worry about the extent of losses on credit card businesses as high unemployment sends cardholders into trouble. They are also reckoning with anticipated failures in commercial real estate. Until the scope of these losses is known, many lenders are inclined to hang on to their dollars rather than risk them on loans to businesses in a weak economy, say economists and financial industry executives.
“The banks are just deathly afraid,” said Sam Thacker, a partner at Business Finance Solutions in Austin, Tex., which helps small businesses line up financing. “I don’t see commercial banks coming back to the market anytime soon.” In the long view, tighter loan standards seem healthy after a terrible crisis attributed in part to years of recklessly lenient lending.
But some economists worry that bankers have overshot the boundaries of a healthy reaction, as even strong companies are finding it difficult to borrow.
“The banks are still very risk averse,” said Robert J. Barbera, chief economist of the research and trading firm I.T.G. “Regional banks are in a particularly tough spot, because they’re choking on commercial and residential real estate.”
Bankers acknowledge that loans are harder to secure than in years past, but they say this attests to the weakness of many borrowers rather than a reluctance to lend.
“Banks want to lend money,” said Raymond P. Davis, chief executive of Umpqua Bank, a regional lender based in Portland, Ore. “The problem is the effect that the recession is still having on us. Some of these businesses are still trying to come out of it. For them to go to a bank, if they are showing weak performance, it is harder to borrow.”
As the financial crisis has largely eased in recent months, big companies have found credit increasingly abundant, with bond issues sharply higher.
But for ordinary consumers, the picture is quite different. What was once of a flood of come-ons for home equity loans and credit cards has been replaced by notices of lowered credit limits.
For many smaller companies, too, borrowing remains tough.
Some 14 percent of small businesses found loans harder to secure in August than in July, according to the most recent survey by the National Federation of Independent Business. Among companies borrowing regularly, less than one-third reported that all their credit needs were being met.
“It’s quite significant, because small businesses generate significant job growth,” said Andrew Tilton, a senior economist at Goldman Sachs. “And small businesses rely more on bank financing, whereas large businesses have the alternative of raising money in the capital markets.”
Businesses with fewer than 500 employees hold more than half of the nation’s private sector jobs, according to the Small Business Administration.
In Port Arthur, Tex., Five Star Feeds, which sells gardening supplies, pet food and livestock feed, is stuck in a holding pattern on a planned expansion as the owner, Tina E. Bean, tries to persuade her local banker to provide $150,000 in credit.
Ms. Bean began the business in 2001 and has been profitable ever since, she said. She has already borrowed about $800,000 for her expansion, more than doubling the size of her storefront as she adds new product lines, including Western-style clothing like jeans and cowboy boots.
But without the last $150,000, she is unable to order the new products. Her new shelves remain bare. She missed the deadline to tap her final $150,000 in credit, she says, and her banker refused to offer a new loan, even as she insisted that she could not move into the new space.
“His answer is, ‘We’ll cross that bridge when we get there,’ ” Ms. Bean said. “Well, I’m there. I can’t open the store if I don’t have anything to put in it.”
Until she obtains financing, she has no reason to hire the two or three people she will need to run the larger space. She has no reason to place orders that would increase work for truck drivers who ferry blue jeans and pet grooming supplies to retail stores, and no need to bring on accountants, insurance agents, lawyers, forklift drivers and auto mechanics whose business opportunities would be incrementally expanded by more commerce.
Among small privately held companies, the amount of debt they carry as a portion of their equity has slipped by about 5 percent since 2007, according to Sageworks, a financial analysis firm in Raleigh, N.C. The drop reflects not only how companies have cut their inventories and paid down debt, but also the tightened credit terms they face when they try to borrow, said a Sageworks spokeswoman, Melinda Crump.
For companies that work on a contract basis bidding for jobs in advance, tight credit sometimes precludes their ability to seek new business: They cannot raise capital to hire workers and add equipment.
In Alexandria, Minn., Bob Novak, president of ACB Construction, has in recent months declined to bid on large-scale government jobs in Utah because of what he describes as a frustrating lack of credit for people in his line of work. His work force has shrunk to 1, from 14, in the last two years, yet every effort to generate fresh business seems to get snuffed out by rejections from banks.
“You might as well not walk through the door of a bank and have construction behind your name,” Mr. Novak said. “You cannot get a loan if you don’t look profitable, and you can’t look profitable if you can’t bid the work. I’ve had to walk away from jobs because I cannot get the funding.”
Med-National provides medical and dental services on a contract basis, mostly to the Defense Department. The San Antonio-based company has been in business for more than 20 years, has never lost money, and logged $5.9 million in sales last year, said the executive vice president, Robert S. Welborn Jr.
Yet as the company recently sought to secure a pair of contracts with the United States Army, its plans were delayed for nearly a year as it tried and failed to persuade a bank to lend it $300,000. The financing was required to hire the roughly 20 people needed to deliver the services — doctors and dentists and support staff.
Mr. Welborn initially called local banks with whom he had done business in years past, among them JPMorgan Chase and Wachovia. Their answer surprised him: no.
“It used to be you could practically just jangle your keys and they would give you some money,” Mr. Welborn said. “It isn’t anything like that anymore.”
In August, Mr. Welborn finally lined up financing from Wells Fargo and began hiring. Yet the delay and the uncertainty have left him reluctant to pursue other contracts.
“If we could borrow the money more easily,” he said, “we would be hiring even more people.”
Eskom seeks equity partner for solar plant
Eskom is seeking equity partners to help finance a 100 megawatt concentrating solar power (CSP) demonstration plant, whose R6-billion to R7-billion price tag has up to now put the brakes on its development by the cash-strapped utility.
Eskom was already in talks with more than one party, Barry MacColl, its technology, strategy and planning manager, said yesterday on the sidelines of an International Solar Energy Society congress in Johannesburg.
Bloomberg reports that the utility has budgeted R30bn over the next 10 years for solar and other demonstration projects.
Prospective shareholders included both local and international investors. "The board is very serious about the project," MacColl said, indicating that funding was the only constraint to Eskom proceeding immediately with construction of the plant near Upington in the Northern Cape.
"Our thinking is that Eskom would be a majority partner, but we would like to invite others to come forward with funding," he said.
The parastatal had already secured the land - about 16km178 is required to produce 100MW of CSP power - as well as environmental approvals for the facility. MacColl estimated it would take three and a half years to build.
MacColl said the country had the potential to generate 58 000MW of solar power.
Eskom has embarked on a R385bn capital spending programme to increase generating capacity, mostly via coal-fired power stations. It has applied to the regulator to hike electricity tariffs substantially to cover the costs.
Leaked reports put the preferred hikes at 45 percent a year over three years, including costs for independent power producers, although one scenario outlines a shock 146 percent hike in the first year.
Click here!
MacColl said Eskom's concern was not so much access to funding for the CSP project - it was already in talks with development finance institutions like the World Bank - but rather how it would pay back loans. "There's no shortage of money - it's the ability to absorb that debt onto the Eskom balance sheet," said MacColl. As a result, the utility was looking at a shared equity model.
Last week, Eskom managing director for corporate services Steve Lennon said the CSP project would be viable if Eskom secured grant-type funding of about $200 million (R1.5bn). He believed the project would need to be seen as "phase one of something bigger", anchoring a roll-out of other CSP projects.
Eskom's preferred CSP technology involves heliostat fields around a central receiver and energy storage in the form of molten salt.
Lennon said there was a lot of potential for localising CSP manufacturing, even on a 100MW demonstration plant - particularly for steel to build the heliostats and tracking technologies. The imported components would probably include heat recovery systems and parts of the molten salt loop.
On Friday, Energy Minister Dipuo Peters signed a memorandum of understanding with the Clinton Climate Initiative to explore the possibility of building a solar park in South Africa, adding 5 000MW of solar electricity to the energy mix.
Eskom was already in talks with more than one party, Barry MacColl, its technology, strategy and planning manager, said yesterday on the sidelines of an International Solar Energy Society congress in Johannesburg.
Bloomberg reports that the utility has budgeted R30bn over the next 10 years for solar and other demonstration projects.
Prospective shareholders included both local and international investors. "The board is very serious about the project," MacColl said, indicating that funding was the only constraint to Eskom proceeding immediately with construction of the plant near Upington in the Northern Cape.
"Our thinking is that Eskom would be a majority partner, but we would like to invite others to come forward with funding," he said.
The parastatal had already secured the land - about 16km178 is required to produce 100MW of CSP power - as well as environmental approvals for the facility. MacColl estimated it would take three and a half years to build.
MacColl said the country had the potential to generate 58 000MW of solar power.
Eskom has embarked on a R385bn capital spending programme to increase generating capacity, mostly via coal-fired power stations. It has applied to the regulator to hike electricity tariffs substantially to cover the costs.
Leaked reports put the preferred hikes at 45 percent a year over three years, including costs for independent power producers, although one scenario outlines a shock 146 percent hike in the first year.
Click here!
MacColl said Eskom's concern was not so much access to funding for the CSP project - it was already in talks with development finance institutions like the World Bank - but rather how it would pay back loans. "There's no shortage of money - it's the ability to absorb that debt onto the Eskom balance sheet," said MacColl. As a result, the utility was looking at a shared equity model.
Last week, Eskom managing director for corporate services Steve Lennon said the CSP project would be viable if Eskom secured grant-type funding of about $200 million (R1.5bn). He believed the project would need to be seen as "phase one of something bigger", anchoring a roll-out of other CSP projects.
Eskom's preferred CSP technology involves heliostat fields around a central receiver and energy storage in the form of molten salt.
Lennon said there was a lot of potential for localising CSP manufacturing, even on a 100MW demonstration plant - particularly for steel to build the heliostats and tracking technologies. The imported components would probably include heat recovery systems and parts of the molten salt loop.
On Friday, Energy Minister Dipuo Peters signed a memorandum of understanding with the Clinton Climate Initiative to explore the possibility of building a solar park in South Africa, adding 5 000MW of solar electricity to the energy mix.
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