New houses have many advantages over the Victorian and Edwardian homes that dominate many of Britain’s towns and cities. They boast the latest fixtures and fittings, they are cheaper to maintain, you do not have to move in, rip off the gruesome wallpaper and spend the next three years repainting them. But they do have one — fundamental — drawback. They are too small for modern living.

Indeed, when it comes to living space, people in the South East of England have to endure some of the most cramped conditions in the developed world.

Research by the Commission for Architecture and the Built Environment (Cabe), a government advisory body, has found that owners of new homes in the South East do not have enough space to prepare food easily, to have friends round for dinner or even to find a quiet place to relax.

Moreover, more than 50 per cent of people living in flats, bungalows and houses built between 2003 and 2006 said that they did not have enough storage space; 47 per cent did not have enough room for all of their furniture and 44 per cent said that there was not enough space for children to play safely in the kitchen while a meal was being prepared. Almost three quarters had nowhere to keep three small recycling bins to separate out household waste.

The findings will add to pressure on housebuilders to switch to building larger homes, after they came under fire for supplying too many small flats in high-density urban developments during the property boom.

The Government, too, is likely to be under pressure to set minimum space requirements for all housing. Boris Johnson, the Mayor of London, began a campaign last year to rid the capital of so-called “hobbit homes”, but plans published last month by the Greater London Authority apply only to publicly funded schemes.

Richard Simmons, the chief executive of Cabe, said: “This research brings into question the argument that the market will meet the demands of people living in private housing developments. We need planning authorities to ensure much higher space standards before giving developments the go-ahead.”

The average newly built home in the UK is smaller than in any other European country, at 76 square metres, according to the most recent figures, compiled in 2004. In Japan, the land of the micro-home, the average property was 94.8 square metres in 2003. A typical new-build in Australia is 239 square metres.

Mr Cabe said that lack of space was a particular problem for low-income households. In 2006, when the Government last compiled the figures, the average household, old or new, measured 91 square metres. In deprived areas, that figure fell to 83. Insufficient demand for small flats has led to price falls of up to 40 per cent for such property in the downturn.

Steve Turner, of the Home Builders Federation, said: “In an ideal world, everyone wants space for a grand piano, but if you increase the size of homes without more land becoming available, the cost to the end user will go up, which contradicts the aim of offering affordable housing.”

Pressure to build as many new homes as possible has resulted in overcrowded developments, as well as smaller homes. The average number of new dwellings per hectare in the England has risen from 22 in 2002 to 44 last year, according to official figures.

We cant see a recovery to the new housing market if the builders cant give the consumers what they want.  People need to feel comfortable in their homes and the builders will need to adapt to their needs.

I hope  people get the word out,

Sandy Hutchens

Tags: Affordable Housing, builder, builders, consumers, developments, dwellings, Home Builders Federation, housing market, recovery, Sandy Hutchens, Steve Turner
Posted in CMHC | | No Comments »

Homeowners struggling with mortgage repayments can be shy in talking about their difficulties, despite pleas from lenders and debt charities to seek help and advice early.

According to research from the Financial Services Consumer Panel (FSCP), 41% of those having difficulty paying their home loans struggle on unaided, even though seven out of eight borrowers in this group defined their problems as “serious”.

Of those who did seek advice, 65% contacted their mortgage lender and 25% approached the Citizens’ Advice Bureau.

The Panel, which aims to be an independent voice for consumers of financial services, reported a mixed response from lenders.

Some were described by borrowers as “unhelpful and inflexible”, whereas others did all that could reasonably be expected.

The research also found that the most significant driver for those not seeking advice was their perception of the advice sector and their own situation.

In some cases this led consumers to believe that seeking advice was either unnecessary or inappropriate for them.

FSCP chairman, Adam Phillips, comments: “There is an urgent need for more investment in publicising and supporting sources of information and advice in this area. We need to do much more to encourage consumers in difficulty to get advice early.”

He adds: “Debt advice agencies must not be seen as a last resort when all else has failed.”

Bringing you more of whats happening in the mortgage world is Sandy Hutchens a industry specialist.

Posted in CMHC | | No Comments »

Posted by Sandy Hutchens

New accounting standards effective at the beginning of 2009 will impact the accounting for mergers and acquisitions (M&A). The new standards, effective for all acquisitions consummated in the first fiscal year beginning on or after December 15, 2008 (for calendar year-end companies, beginning in 2009), will have an impact on deal negotiations and deal structure, in addition to accounting implications.

Fair Value Accounting
The focus of the new accounting standards is the use of fair value accounting. All assets acquired and liabilities assumed in an acquisition are to be measured at their fair values at the date of acquisition (called the acquisition method). By contrast, the former standards, although they applied fair value accounting, focused more on an accumulation of costs related to the acquisition (called the purchase method).

Transaction Costs
M&A transaction costs typically include payments to investment bankers, attorneys, accountants, appraisers and other advisors. Previously, these costs were capitalized as part of the overall purchase price for an acquisition. Under the new standards, these costs will be expensed as incurred (negatively impacting earnings in the prior period) because these are considered incremental costs to the transaction and not a component of the fair value of the business acquired.

Restructuring Costs
Under the new standards, costs to restructure the operations of an acquired company can be recognized as part of the acquisition accounting only if certain conditions are met – that is, the acquirer’s restructuring plan must be in place at the date of the acquisition. The cost of these restructurings will be charged to earnings in the post–acquisition period, not recorded as a liability at the time of acquisition.

Earn-Outs
(Contingent Consideration)
Previously, earn-outs were considered part of the acquisition cost. Under the new standards, earn-outs and other contingent consideration are to be recorded at fair value at the date of the acquisition, regardless of the likelihood of payment. Subsequent changes in the fair value of most contingent consideration will be recorded in earnings. However, if the contingent condition is classified as equity, it would not be adjusted for changes in fair value in subsequent periods.

In-Process Research and Development (IPR&D)
IPR&D will continue to be measured at fair value at the acquisition date. However, these assets will no longer be written off as a one-time expense immediately after the acquisition. Instead, IPR&D will be capitalized and recorded as an indefinite-lived intangible asset, subject to impairment until completion. Abandoned projects will be written off as an expense.

Acquisition Date and Valuation Date
The acquisition date is the closing date of the M&A transaction. If equity securities are issued as all or a part of the purchase price, these will be measured on the closing date of the transaction, rather than the announcement date. Therefore, changes in the value of the acquirer’s stock after the announcement date and before closing will have an impact on the amount of the purchase price for accounting purposes.

Adjustments to Acquisition Accounting
Companies will continue to have a one-year period of time to recognize adjustments to the provisional values that are recorded. However, the new standards require that prior period financial statements be revised to record any material adjustments of the estimated provisional amounts recorded at the acquisition date, likely increasing due diligence efforts.

In summary, fair value accounting is pervasive throughout the new standard. The resulting changes, which may not appear dramatic at first blush, are indeed significant.

Tags: Acquisition Date and Valuation Date, acquisitions, beginning in 2009, Earn-Outs, Fair Game, Fair Value Accounting, mergers, New M&A, Restructuring Costs, Sandy Hutchens, Standards, Transaction Costs
Posted in CMHC | | No Comments »