Gazumping causes further increase in private rents

Gazumping is something that has been rife in the property purchase market for many years. However, there has been rising evidence that this process has also been spreading through the private rental sector over recent months, as potential tenants become more and more unscrupulous in a bid to get their hands on the rented property of their choice.

Many landlords will be celebrating the recent news that private rents have increased once again in May but demand for rental properties remains very strong. There are now more and more people after each rented property that comes onto the market, with this unprecedented demand for rental homes resulting in processed such as sealed bids and gazumping coming into force.

Many officials have said that the increase in gazumping within the private rental market has been one of the driving forced behind the rental increases that have been seen in the sector over recent months. Whilst rents have not increased hugely between April and May, with the average increase being £4 per month taking the average monthly rent to £696.

Compared to May of last year monthly rents were around 4.4 percent higher. However, there were significant regional variations according to reports, with areas such as London seeing an increase of around 7.8 percent on rents in the last year but places such as the East of England seeing rents fall by around 1.2 percent in the same time period. The general increase in rents for yet another month will be welcomed by landlords, who will be able to see further increases in their investment returns coupled with continued increasing demand for their properties.

An official from the property group LSL said: “The rocketing cost of living, combined with ongoing difficulty first-time buyers are experiencing in obtaining a mortgage, is increasing the number reliant on rental accommodation. With the fierce competition for homes, rental gazumping is becoming more commonplace and properties are being let beyond asking price, putting further upwards pressure on the market. For tenants, unable to buy, renting is becoming less affordable as demand booms. Rents are increasing at twice the rate of wages.”

Tags: first time buyers, rental gazumping, regional variations, london, same time period, Many officials, rental, recent

Shapps wants more help for first time buyers

Since the onset of the global financial crisis banks have become increasingly cautious over their lending levels, and many people hoping to purchase a home have suffered as a result, particularly first time buyers who are being told they have to pay huge deposits to even stand a chance of getting a mortgage. Ministers are now concerned that the High Street banking giants are failing to offer loans to first time buyers even if they have excellent credit ratings and history.

In fact, concerns have become so bad that a meeting is being arranged for next month, where senior officials from major lenders will have to answer to ministers with regards to why lending levels are so high. Recent figures released by the British Banker’s Association have shown that mortgage approvals for 2010 fell to their second lowest level in eleven years, with the lowest number of approvals being seen in 2008.

It has been revealed that the Housing Minister, Grant Shapps, will be demanding answers from lenders with regards to why their lending levels are so low, and why they are no lending to first time buyers even if they have perfect credentials. There are concerns that this failure to lend to first time buyers, who are needed to keep the property market buoyant, could have a serious negative impact on the property market in the UK.

Shapps said: “We have to avoid pulling up the housing ladder and cutting off a whole generation of young people who want to buy their own home. We want to do more to help aspiring first-time buyers – the average age of the first-time buyer with no support from their family is now 37, and there are 1.4m households who aspire to own a home but are simply unable to do so because of house prices and mortgage availability. So I’m calling together key figures from across industry to discuss how we can tackle this problem. “This cannot be achieved simply by top-down diktats from Government – there will need to be a unified effort and creative solutions from across the board to make sure we do not lock young people out of the housing market.”

Tags: level, chance, Loans, history, Recent figures, first time buyers, uk, Association

Problems in housing market for younger Scots

It has been claimed that in the current financial climate many younger Scots are suffering problems when it comes to getting onto the property ladder. Read more

Tags: percentage rate, deposit problems, housing market, first time buyers, house prices, first time buyer, scottish housing market, official

First Time Homebuyers in Scotland Being Frozen Out of the Market

Due to the recession and the slump in the housing market, lenders are requiring higher deposits on mortgages before they will approve a loan for a person interested in purchasing a new home. Read more

Tags: first time home, palpable increase, 25% deposit mortgages, council of mortgage lenders, mortgage, finance, Remax Platinum, first time buyers

Now could be the time to get on the property ladder

According to the results of a recent survey that was carried out many Brits think that it is now a good time to purchase a property and get onto the property ladder. The Building Societies Association carried out the survey, and the results showed that whilst market conditions continued to be difficult in the mortgage sector many Brits were still convinced that this was a good time to buy due to various other factors. Read more

Tags: Mortgages, Royal Institute of Chartered Surveyors, first time buyers, economics, building societies association, Business Finance

More first time buyers try and get mortgage advice

According to a recent report more first time buyers are now looking to get mortgage advice, as the market continues to throw hurdles in the way of the average first time buyer. Read more

Tags: business, whilst, council of mortgage lenders, low, first time buyers, mortgage advice

Possible lower deposits for first time buyers

It has been claimed that many first time buyers could find that they are able to get mortgages with lower deposits over the course of this summer, following a turbulent period where lenders have been demanding sky-high deposits that first time buyers simply cannot afford, which has further impacted on the downfall of the property market. Read more

Tags: economics, previous property, Banking, credit, deposit, low deposit mortgages, downfall

One year high for fixed rate mortgage lending

According to recently released figures fixed rate mortgage lending levels have recently hit their highest level in the space of around one year, as first time buyers and existing homeowners that are ready to refinance try and secure low rates clamour to take advantage of the all time low base rate, which still stands at 0.5 percent, which is the lowest level in the three hundred and fifteen year history of the Bank of England. Read more

Tags: personal finance, fixed rate mortgages, Mortgages, lending, council of mortgage lendres, first time buyers, higher deposit levels

Economic growth will be slow according to CBI

According to the Confederation of British Industry the growth of the UK economy still has a long way to go, and progress is likely to be slow. The comments from the CBI came amidst a variety of other industry reports that showed encouraging figures with regards to output and growth over April and May, and showed a rise in consumer confidence, as well as increased interest in the housing market from first time buyers. Read more

Tags: May, bank of england, first time buyers, economic growth. growth, cbi officials

Two thirds of potential buyers giving up on homeownership dreams

It has been reported that around two thirds of would be buyers that were hoping to get their foot onto the first rung of the property ladder have now decided to give up on their dream for now because of the difficult financial climate and the lack of mortgage availability. Read more

Tags: first rung, it's little wonder, first time buyers, time, homeowners

First time buyers still having to put up with renting

For many years many non-homeowners that simply couldn’t afford to buy a home due to ten years of rocketing property values have been waiting in the wings for property prices to start coming down again, over in the latter part of 2007 many were delighted to find that this was indeed happening at last. Read more

Tags: bank of england, housing market, first time buyer, Mortgages, year

Deposit levels could shoot up further for would be buyers

Until the end of 2007 the UK, along with many other nations, had enjoyed around a decade of easy credit, and for many the sudden financial restrictions that came into play with the onset of the global credit crunch in 2007 came as a real shock. Read more

Tags: part, Commercial mortgage, high income multiples, first time buyers, tens of thousands, house deposits, mortgage industry, nigh

Woolwich launched cheapest mortgage since first loan

According to recent reports the Woolwich recently launched its cheapest mortgage deal since its first loan, which was made around one hundred and sixty years ago. Read more

Tags: bank of england, fixed rate mortgage, cheap mortgages, mortgage, confidence, woolwich, low interest rates, first time buyers

Mortgage rationing could get worse states CML

The Council of Mortgage Lenders has recently warned that mortgage rationing in the UK could continue to get worse, adding that mortgage lending has already been restricted for the past year due to the effects of the global credit crunch but that the restrictions on lending levels could get even worse over the coming year. A senior official from the CML, Michael Coogan, said that things could get increasingly difficult for many people as a result of the ongoing restrictions on mortgages. Read more

Tags: mortgage rationing, whilst, lending levels, deposit requirements, mortgage, Banking, loan, first time buyers

Many new buyers getting help from parents

A recent study has shown that many first time buyers are getting help from their parents in the current financial climate, especially when it comes to getting a mortgage. Conditions in the mortgage and financial sector have become increasingly difficult, and for many first time buyers getting a mortgage has become very difficult or even impossible. This has resulted in an increasing number of first time buyers turning to their parents for help in order to boost their chances of getting a mortgage in the current market. Read more

Tags: loan, property, Mortgages, record, stark contrast, current market, first time buyers, parental help

Rise in the supply of rental properties coming onto market

Homeowners that have been keen to sell their homes before house prices plummet further have found themselves hitting a brick wall over recent months, as a number of factors have contributed to the housing market facing its worse slump in decades. Estate agents have reported very poor sales figures for properties, and many homeowners have found that they simply cannot sell their properties. Read more

Tags: Royal Institute of Chartered Surveyors, demand, slump, duty, rental property, purchase, first time buyers, uk

First-time buyers face bigger deposits

First-time buyers are now having to stump up bigger deposits than before to buy their first home, even though property prices have been falling in recent months, it has been reported. Read more

Tags: cash, home, Mortgages, mortgage deposits, belts, first time buyer

First-time buyers “struggling” to get mortgages

People looking to secure funding to get onto the property ladder are more likely to have difficulties than those in more established jobs and who have bigger deposits to put down, according to Cobalt Capital partner Andrew Montlake. Read more

Tags: lenders, working lunch, first time buyers, Mortgages, Association of Mortgage Intermediaries, property ladder, credit problems

Property situation ‘bad as ever’ for first-time buyers

Despite recent reports that house prices are stagnating and even falling in some areas, Firstrung has said that the property situation is “as bad as it’s ever” for people trying to buy their first home. Read more

Tags: home, Firstrung, first time buyers, house, market, Mortgages, year

Housing boom an ‘unmitigated disaster’

The housing boom has been an “unmitigated disaster” for the UK’s economy and society, Firstrung has said. Read more

Tags: home, society, UK's economy, housing, month, first time buyers, Mortgages, housing boom

Repossessions least likely for first-time buyers

The operations director of Firstrung has said that first-time buyers are the least likely group to have their homes repossessed under the current economic conditions.

Paul Holmes said this group is unlikely to face the same difficulties repaying their mortgages as families who have recently upgraded to larger houses.

First-time buyers have tended to take out mortgages that are “very manageable”, with the average loan being £115,000 over the past two years.

In contrast, buyers with mortgages in excess of £250,000 on a four or five bedroom property are likely to have “real problems”, Mr Holmes warned.

Mortgage possession claims, the first stage of the repossession process, increased by 16 per cent in the first quarter of this year, according to statistics from the Ministry of Justice.

“First time buyers who have recently climbed onto the first rung [of the property ladder] are least affected by the problems than any other buyer group,” Mr Holmes commented.

Tags: bedroom property, first time buyers, First-time, average loan, Ministry of Justice

First-time buyers turn to families for help

First-time buyers are increasingly being forced to ask family members for help in raising a deposit as the mortgage market tightens under the global credit crunch. Read more

Tags: mortgage lenders, business, ladder, first time buyers, family, income, First-time

Stamp duty takes its toll on first time buyers

Rocketing house prices mean that hardly any properties in the south of England are selling for less than the stamp duty threshold.

A new survey from Halifax found that in 2007, the average first-time buyer paid stamp duty in 99 per cent of local authorities in the south-east, south-west, London and East Anglia.

That figure was just 42 per cent in the rest of England and Wales.

A buyer becomes liable for stamp duty at a rate of one per cent of the sale price – payable on top of all the other costs – when the property bought costs more than £125,000.

And not only are the numbers having to pay stamp duty rising, but the sums actually paid are much higher than in the past too.

The average first-time buyer paid £1,751 in 2007, compared to just £960 in 2002.

Moreover, in 19 per cent of local authorities in the south, 19 per cent of first-time buyers were actually having to pay the higher rate of stamp duty – three per cent, which applies to purchases worth over £250,000.

Halifax’s chief economist Martin Ellis warned that the stamp duty system is making buying a home less and less affordable.

He said: “We call on all political parties to raise the stamp duty thresholds to compensate for house price inflation over the past decade and to commit to index the thresholds for house price inflation in the future.”

Tags: rising, stamp duty thresholds, Herald Sun, property, higher rate, East Anglia, rest

Cash lump sum still needed for overseas mortgages

First-time buyers looking to invest in property outside of the UK will still need a cash lump sum to get an overseas mortgage approved, a property advisor has warned.

BuyAssociation said that it was “quite possible” for consumers to get a mortgage approved on a property abroad, a tactic which can help build up equity quickly.

However, Paul Collins, property editor for BuyAssociation, said that these forms of purchase arrangements can often make getting a mortgage more time consuming, particularly in emerging markets.

“And you will find in a lot of these markets that you won’t be able to get 100 per cent mortgages, so again there is still the issue that you will need some form of cash deposit to be able to actually do that, ” he explained.

A recent study published by UK National Savings & Investments found that 84 per cent of 18 to 30-year-olds believe buying property abroad is a more viable option than buying in Britain.

Tags: tactic, Subprime mortgage crisis, First-time, cash, investments

House price ‘correction’ of 35 per cent expected

The affordability of house prices are expected to correct themselves by 35 per cent, according to an economic expert.

Firstrung have said that inflation on property, “as a phenonmenon”, is over for the present generation of consumers.

However, some first time buyers who might have a good income are going to struggle in the wake of the credit crunch, despite having clean credit histories.

Paul Holmes, chief executive officer of Firstrung, said: “Last year first-time buyers watched prices go up on first-time buyer properties by an average of £19,000.”

“We’re now reverting back to the lending standards that the banks and building societies operated within in the 1980s. It’s become that bad.”

He estimated that prices will fall by 12 per cent over the course of the next year.

Just before Christmas it was announced by the Halifax that the average house in 96 per cent of towns are now not affordable for first time buyers, and that the number of first-time buyers was at the lowest level since 1980.

Tags: first time buyers, Paul Holmes, Business Finance, cent, house prices, price, buyers watched prices, officer

Life insurance with mortgage ‘good for parents’

People with dependants are advised of the benefits of getting life insurance when taking out a mortgage.

According to Key Financial Consultants Ltd, many first time buyers neglect to take out life insurance due to other expenses.

It advised that, as life insurance is cheaper the younger the applicant, it would be beneficial for people to take it out when getting a first mortgage.

Managing director of the independent financial advisory firm, Dominic Mansley, commented: “If it’s a single person looking to buy a flat by themselves, and they’ve got no dependants, then we wouldn’t really worry about a lack of life cover.

“However, if it’s a young family with children then we would very much make them aware of the need for [life insurance].”

Furthermore, he said, if people fail to take out life insurance along with their mortgage, they do not tend to take it out later.

The Association of British Insurers states that as many as one in every three Britons does not have life insurance.

Tags: Consultants, person, family, life, three britons

Sharp decline in first-time buyers

Britain has seen a steep decrease in the number of people investing in property for the first time.

The number of first-time buyers has gone down by 20 per cent since March this year, according to research by YouGov.

Partly blamed on mounting house prices and inflated interest rates, the reduction is also put down to a swelling of the buy-to-let market and a decrease in the properties available for purchase.

Head of mortgages at moneysupermarket.com, Louise Cuming, commented: “The past month has been fraught with uncertainty and lenders have begun acting independently of the Bank of England in terms of rate pricing.

“It’s not surprising some potential first-time buyers are getting cold feet and steering clear of home ownership.”

She added that figures from the Council of Mortgage Lenders shows the proportion of first-time buyers to have dipped six per cent against total borrowing in the first six months of this year compared to the same time-frame last year.

The website reported that a total of 56 per cent of homeowners have a fixed-rate mortgage whereas over a quarter choose to go for a fixed-rate of just three or five years.

Tags: Moneysupermarket.com, Owner-occupier, time.The number, fixed rate mortgage, steep decrease, cent, first time buyers, bank of england

Fixed-rate mortgages on expensive buys

Property investors are advised to take out fixed-rate mortgage when purchasing high-value properties.

According to Bestinvest, when mortgage repayments increase by even a small amount, homeowners paying off debts on a high-value property can find their repayments increasing dramatically.

With any changes to the Bank of England’s interest rate, house prices and borrowing costs are directly impacted. With a fixed-rate mortgage, buyers are not vulnerable to these fluctuations.

Peter O’Donovan, mortgage manager at Bestinvest, advised that young professional first-time buyers should consider a mortgage with a fixed rate: “It obviously is down to the person’s view of risk, and what they have in the background to support their mortgage repayments.

“But in general I would suggest to people borrowing a larger sum for the first time to take a fixed rate, because it’s quite a large part of their disposable income going [towards repayments].”

The latest statistics from the Council of Mortgage Lenders show that 3,000 mortgages worth £250,000 to £500,000 were taken out in July this year by first-time buyers. This represents a rise from January’s figure of 2,000.

Tags: figure, first time buyers, GBP, fixed rate mortgage, Peter O'Donovan, manager, interest rate, risk

Caution advised for first-time buyers looking overseas

As recent studies reveal more and more first-time buyers are looking to make their first steps on the property ladder overseas, it is important they are aware of the possible pitfalls.

A report from UK National Savings & Investments discovered 84 per cent of 18- to 30-year-olds believe buying property abroad is a more feasible option than buying in the UK.

But some industry insiders have been quick to point out that the situation for first-time buyers looking to invest overseas is generally similar to that in the UK.

Helen Adams, managing director of FirstRungNow.com, warned: “People aren’t going to be giving really big mortgages to people who are … renting in the UK.”

She added that “the best thing to do is to find out where you’re interested in buying and then speak to a mortgage specialist in that field”.

The warning comes as the major political parties look to bring the issue facing first-time-buyers to the forefront of the political agenda ahead of a possible election.

The Conservatives pledged recently to remove stamp duty for houses valued between £125,000 and £250,000, which currently stands at one per cent.

Tags: Economy of the Republic of Ireland, thing, first time buyers, possible election.the conservatives, com, cent

Homebuyers ‘prudent’ over mortgages

Homebuyers are increasingly prepared to take special measures to avoid getting a mortgage that will push them to their financial limits.

As the Bank of England continues to increase interest rates, many first-time buyers are cutting back on other expenses so that they will be in a better position to cope should rates rise further.

Research by Yorkshire Bank shows that 24 per cent of buyers are keen to avoid maxing out on a mortgage and this is leading to a change in lifestyle for many.

Almost a quarter of those asked said that owning their own home is so important to them that they are prepared to give up holidays, nice cars and cut back their social life to be able to afford one.

With 77 per cent of Brits apparently expecting further interest rate rises in the next year, it is little wonder that so many people are looking ahead and do not want to strain their finances too much.

“What our survey shows is prudence, not panic – all the signs are that the market will still remain strong,” commented Gary Lumby, head of retail at Yorkshire Bank.

“But with rises in the Bank of England’s base rate and with many economists predicting a further rise if not next month, then in the near future, it is inevitable that homebuyers will become a little more cautious with their borrowing.”

The research also found that 70 per cent of buyers expect house prices to increase in the next 12 months but only 17 per cent are prepared to offer the full asking price right away.

Tags: first time buyers, economics, retail, Banking, rate, rise

Stamp duty reforms get mixed response

The housing industry has reacted angrily to Gordon brown’s failure to raise the lower threshold for stamp duty.

Some experts had been hoping that the Chancellor would introduce a higher threshold so that it would be in line with the average UK house price.

The average person now has to get a mortgage above £125,000 lower stamp duty threshold as house prices have risen dramatically in recent years.

However, Mr Brown failed to offer a break to people looking to buy a home in this bracket, meaning that almost all property buyers are now required to pay at least one per cent stamp duty.

“House price inflation remains a key concern for everyone in the UK, particularly first-time buyers and so it is disappointing that this year’s budget has not addressed the UK’s out of date stamp duty thresholds,” commented Duncan Berry, director of mortgage sales at GE Money.

The Chancellor’s promise to completely do away with stamp duty on carbon-neutral homes up to a value of £500,000 however, has bee welcomed, although Nationwide has highlighted that Mr Brown is letting down the poorest in society.

“We feel that it is important to do more to help hard-pressed homebuyers,” said Stuart Bernau from Nationwide.

“We have calculated that if the stamp duty threshold had been raised in line with house price inflation since 1993 it would now stand at £206,000.”

Tags: GBP, bracket, lower threshold, first time buyers, lower stamp duty, gordon brown, line, concern

First-time buyers paying £150k

Tags: First-time, Business Services, first time buyers, buyer, buyers paying £150k, Supplies and Equipment, time, first time buyer