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IN the strongest indication yet that confidence is returning to the real-estate sector, UK property companies announced plans to raise more than L1 billion ($1.9 billion) to strengthen their balance sheets.
House builders Barratt Developments and Redrow disclosed plans to raise more than L900 million through rights issues and placements, while Liberty International - the country's largest industrial real-estate investment trust - said it would raise about L310 million through an issue of new shares.
The capital increases are the latest in a burgeoning trend that has seen similar moves earlier this year by house builders Taylor Wimpey, Bovis Homes Group, Berkeley Group Holdings and Bellway.
Home builders have been struggling for more than a year with the worst housing-market conditions in decades. Mortgage financing evaporated in the banking crisis, reducing the number of buyers to a trickle and forcing house prices lower. As a result of falling prices, companies had to put developments on hold and take write-downs on the value of land and work in progress.
However, signs continue to emerge to suggest that conditions in the real-sector have eased. Both Barratt Developments and Redrow said that house prices in the past few months had risen, visitor numbers at sales sites had increased and sales were up.
"We have definitely seen the market stabilise during the calendar year 2009," Redrow chairman Steve Morgan said.
UK house prices in August rose for the third time in four months while the annual rate of decline continued to ease, Lloyds Banking Group said earlier this month. Its Halifax house price index was up 0.8 per cent from July, but down 10.1 per cent from August, 2008.
"Demand for housing has increased since the start of the year due to better affordability and low interest rates," said Martin Ellis, Halifax's housing economist. "This, together with low levels of property available for sale, has boosted house prices over the last few months."
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Jenny
House builders Barratt Developments and Redrow disclosed plans to raise more than L900 million through rights issues and placements, while Liberty International - the country's largest industrial real-estate investment trust - said it would raise about L310 million through an issue of new shares.
The capital increases are the latest in a burgeoning trend that has seen similar moves earlier this year by house builders Taylor Wimpey, Bovis Homes Group, Berkeley Group Holdings and Bellway.
Home builders have been struggling for more than a year with the worst housing-market conditions in decades. Mortgage financing evaporated in the banking crisis, reducing the number of buyers to a trickle and forcing house prices lower. As a result of falling prices, companies had to put developments on hold and take write-downs on the value of land and work in progress.
However, signs continue to emerge to suggest that conditions in the real-sector have eased. Both Barratt Developments and Redrow said that house prices in the past few months had risen, visitor numbers at sales sites had increased and sales were up.
"We have definitely seen the market stabilise during the calendar year 2009," Redrow chairman Steve Morgan said.
UK house prices in August rose for the third time in four months while the annual rate of decline continued to ease, Lloyds Banking Group said earlier this month. Its Halifax house price index was up 0.8 per cent from July, but down 10.1 per cent from August, 2008.
"Demand for housing has increased since the start of the year due to better affordability and low interest rates," said Martin Ellis, Halifax's housing economist. "This, together with low levels of property available for sale, has boosted house prices over the last few months."
Read more ...
Jenny