The new rules look set to be introduced next April and will stop property investors with second homes from being able to write-off their mortgage interest and other maintenance bills as a business loss. Investors will also not quality for capital gains tax (CGT) relief, hitting those who will look to buy a new holiday home from the proceeds of other property sales.

Old rules state that if rental income did not meet costs (i.e. mortgage interest and maintenance costs on the property) on holiday lets, the losses could be used to reduce the amount of tax payable on the rest of the investor’s income. However from April 2010, second homes will be treated as a fully-fledged business i.e. as buy-to-lets as professional landlords.

The news is not all bad though. By switching to the buy-to-let business type, different taxes are applicable. For example they will now be able to claim a ten percent deduction for wear and tear on furnishings within the property and the property may qualify for things such as energy saving allowances.

It is important to note that the new rules will only affect UK property investors who have holiday homes in the UK. Foreign property investment is not yet affected thanks to European rules introduced earlier this year, thus foreign property investors will still be able to claim the old tax breaks.

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Partly the rise has been fuelled by property investors believing that the housing market is nearing bottoming out and therefore property bargains can be had. There is also a lack of good quality property on the market so when good properties have a For Sale sign on them, they are being snapped up quickly at close to the asking price. Central London is also perceived as a good area to buy in as it is relatively low risk compared to other major city properties as it is home to so much business and there will always be a good supply of renters who are professionals.

However experts are keen to warn that this doesn’t mean the housing market is about to start rocketing again. Mortgages are still thin on the ground and many are struggling to find lenders willing to lend them the money to fund property purchases. Many of the current property buyers in central London are property investors and cash buyers, both of whom make up just a tiny proportion of property buyers as a whole. The housing market will not start to free up until mortgage lending is freed up to the masses.

However the increase in property prices in the central London area should inject some confidence into the property market and this may mean that the housing market in the UK may start to slowly start its recovery over the next few months.

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Londoners are getting increasingly protective over their skyline. Londoners are proud of the heritage and history behind the London skyline and skyscraper developers are starting to face challenges from historical bodies and planning authorities over the erection of any more ivery tall buildings. If English Heritage are not sure about your plans, they call a major public enquiry where the building plans must be justified to the Secretary of State.

The current crop of tall buildings started in 2000 when Ken Livingstone, mayor of London, gave the green light to tall buildings after decades of stifling in which towers had been capped to ensure that London landmarks remained as unoscured as possible. At the time, the City of London authority welcomed the move as it was worried that many major firms were moving out of the City of London into the Docklands where skyscrapers were not as restricted, therefore taking much finance out of the centre of the City.

Englishg Heritage have proved to be the biggest thorn in the side of skyscraper development – both the Shard of Glass and the Heron Tower underwent reviews by the Office of the Deputy Prime Minister after English Heritage objected to the plans. Although developers won both cases, the war is not over. English Heritage have teamed up with a top barrister and have objected to the plans for a 160 meter ‘Walkie-Talkie’ building. In 2006,

English Heritage’s campaign was further boosted when the World Heritage Committee criticised the British government for failing to protect the views of the Tower of London and other World Heritage Sites against encroachment by other tall buildings. The World Heritage Committee threatened to add the Tower of London to it’s list of sites in danger and has demanded that the British government put together a report on how they intend to protect the Tower.

This could be the start of a new trend away from skyscrapers towards other forms of development. Looking to the east of London and the Docklands, a lot of the money is being poured into redevelopment rather than taller buildings. Skyscrapers are expensive to build and don’t always offer a good return on investment, whereas the redevelopment of the area is likely to give much better returns. However, people love a skyscraper. Although they may not be as profitable as a different sort of real estate development, they often become icons – something instantly recognisable. People love landmarks, and skyscrapers fulfill that need.

So it seems for real estate developers in the City of London, skyscrapers are not the way of the future and developers will be looking for other real estate development trends to give themselves good returns on investment.

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The estate will feature natural power generation through the use of wind turbines and solar panels. Tree branches will be collected from around the east London area and given to the community – these branches will be burnt to help heat and power the estate. Rainwater will be collected around the estate to flush toilets and to water the community plants. Each flat will have their own allotment too and there will be roof terraces for growing vegetables. The flats will also have their own cycle club and car pool/

The development is support by the London Development Agency who have handed the builders some grants to help subsidise the build. Half of the flats have been earmarked for social housing with the other half being sold at commercial rates. Work is due to begin next month.

It is planned that the flats will be constructed from so-called ‘green’ materials – sustainable wood, locally produced gravel and reclaimed concrete, to try and minimise the carbon footprint and to stay in keeping with the project plans and aims.

So, if you are looking for a house which is carbon-beutral with good investment potential, you could do worse than look at this new building project.

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So what do you get for your money? Built on the site of the old Bowater House which formed an arched gateway from Sloane Square into Hyde park, you get 20,000 square feet with commanding views over Hyde Park and central London, although the complex isn’t expected to be fully complete until 2009.

At a staggering £4,200 per square foot, the price-tag is much higher than other desirable areas of London such as Chelsea or Kensington, where top properties attract a paltry £3,000 per square foot.

However, you will be in good company with Kylie having two flats near by, and Harrods just around the corner. With London prices still soaring, the owner will probably still make a tidy profit if they choose to sell up in future years.

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At the end of 2006, research showed that the UK housing market was buoyant and not showing any signs of slowing down. However, the Bank of England raised it’s base rate in January 2007, throwing a lot of people off their guard. With at least one more rise predicted, and most analysts believing this year holds another 2 rate rises, the after-effects are starting to hit a lot of people causing the housing bubble to stagnate.

The UK had 113,000 new mortgage approvals in December 2006. This was a decrease of 12% over November, which showed 129,000 mortgage approvals – a 3 year high. In the UK, new mortgage approvals are used as an indicator to predict where the housing market will be moving in the coming months.

With a softer housing market predicted in 2007, and some people over-stretched and being forced either into bankruptcy or downsizing, now could be the perfect time to invest in the British housing market. A dirge of properties are appearing on the market – and many are not selling due to investor concerns over the market, meaning silly offers can become reality and excellent properties can be picked up at good prices. In the long-term, the housing market is expected to rise again, leaving investors pocketing excellent returns.

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