Double dip recession could stem from house price falls

Officials from the Royal Institute of Chartered Surveyors have stated recently that concerns over a double dip recession have been sparked as a result of house price falls. Earlier in the week the majority of estate agents reported that house prices had fallen for the first time in a year.

According to RICS there has been a surge in the number of properties coming onto the market whilst at the same time the level of interest from would be buyers has fallen as a result of a number of factors. This has sparked a drop in property prices following a period where property prices were regaining strength, and with the economy in the UK still fragile following the recent recession many are now concerned that the nation could be heading back towards a double dip recession.

The figures show that compared to the combined total of estate agents that reports stable or increasing house prices 8 percent more reports falling prices, and this was the first time since July of last year that a majority of estate agents had reported a fall in property prices.

Officials have said that falling house prices tend to take their toll on consumer confidence levels, and with a fall in consumer confidence there could also be an increase in the chances of a double dip recession. Scotland and the South West are said to be enjoying some level of stability, but all other areas of Britain have apparently been hit.

RICS said: ‘This is a reflection of both the increase in supply following the scrapping of HIPs and the more cautious stance from buyers. Significantly, the forward looking price expectations numbers suggest that this softer trend will continue through the second half of the year. However, agents are still generally optimistic about sales activity which should benefit from more realistic pricing of properties.’

Tags: house, Royal Institute of Chartered Surveyors, recession, double dip, Estate agent, prices

House price increase seen in March

Figures released by the High Street lender, Nationwide, have indicated that there was an increase on property prices for the month of March, with property prices increasing by more than £3000 according to the figures. Officials from Nationwide have added, however, that the annual rate of inflation on house prices is set to slow down from its current 9 percent.

In the month of February average property prices fell by 0.8 percent according to Nationwide, but in the month of March property values bounded back with an increase of 0.7 percent. In price terms this reflected an actual rise of 2 percent before any seasonal adjustments were taken into account.

The decrease in property prices that was seen in February resulted from a slowdown in demand and a drop in the number of mortgage approvals. This was partly attributed to the end of the stamp duty holiday, which had caused more people to push through property sales at the end of last year and caused an unusually profound dip at the start of this year.

Nationwide has stated that the average property price in the UK is now £164,519, and compared to February of 2009 this was £16,733 higher. However, quarterly house price inflation has fallen from 3.8 percent seen in September to 1.6 percent in March.

An economist from Nationwide stated: ‘The last two months are consistent with a relatively flat profile for house prices, and in line with the recent drops seen in buyer enquiries and house sales. Preliminary figures show that the number of loans taken out for house purchases failed to recover from January’s large dip, suggesting that weakness in house sales at the start of the year may have been due to more than just the snowy weather.’

Tags: nationwide, annual rate, rise, prices, stamp, price inflation, house, property

Opinions split over housing revival

Over the past few months there has been a turnaround in terms of property prices in the UK, and following a long period of house price falls property prices have been increasing again, albeit at a fairly modest rate. Read more

Tags: agency, conditions property prices, global economic recovery, peak, house price revival, National Association of Estate Agents, housing market

Barclays makes prediction on house prices and unemployment

The chief executive of the Barclays Group, John Varley, has recently spoken out about his predictions for both house price movement and unemployment in the UK over the course of this year.

There have been a number of predictions made by a variety of industry groups and professionals with regards to how quickly and by how much house prices will fall, as well as with regards to how fast and aggressively unemployment levels will rise.

Varley stated recently that over the course of this year he expected house prices to slide by around 10-15 percent, with Barclays having predicted a total slide of between 25-30 percent between 2007 and 2009.

He stated: “We’re probably about halfway through that period, so in other words we’ve got another 10-15 percent to fall between now and the end of next year.”

He also said that he expected unemployment levels to rise by over 7 percent over the course of this year.

With regards to unemployment levels he stated: “I think an additional 700,000 people unemployed over the course of the next 12 months is certainly possible to contemplate.”

He said that banks, central banks, and the government were partly to blame for the recession and the financial problems being experienced in the UK.

He also said that Barclays had refused a government bailout because it wanted to remain independent so that its growth overseas would not be marred, stating: “If British taxpayers’ money is going to be deployed in a bank as a result of the government owning shares in that bank, then a big part of the agenda of that bank and a lot of that incremental capital has to be directed at the UK. Our UK business is extremely important to us, but we employ more people outside the UK than inside the UK, we have more customers outside the UK than inside the UK, and it’s very important to me that that agenda of growth outside the UK is unimpaired.”

Tags: unemployment, Central bank, house, barclays house prices, Barclays Group, Business Finance, group

London rents fall faster than house prices

Recently released figures have indicated that rents in the London area have been falling faster than property prices, and this has occurred since the collapse of Lehman Bros earlier this year. Read more

Tags: Business and Economy, Renting, right time, house prices, house, property, london house prices, Lehman Bros

Financial downturn could last another eighteen months

According to an industry official the financial downturn that the nation is experiencing at the moment could last for another eighteen months until the property slump in the United States sorts itself out. Andrew Hornby, the chief executive of HBOS, said that it could take until 2010 for house prices in the United States to start rising again, and this could mean that the financial problems in the UK will persist for some time to come. Read more

Tags: uk government, meantime reports claim, sixty, credit crunch, Economy of the United Kingdom

Stamp duty rumours spark further slowdown in housing market

Over recent months the housing market in the UK has experienced a real slump, with house prices falling and property sales falling to their lowest level in many years. Property sales and housing transactions have been affected in a number of ways over recent months and for a number of reasons. The tight credit conditions that have come into play since the onset of the global credit crunch have resulted in more people being unable to get a mortgage. In addition to this falling house prices have put many people off taking the plunge for fear of house prices falling further and leaving them quickly facing negative equity. Read more

Tags: recent reports, connection, stamp duty, lowest level, house, property sales

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

UK mortgage market worst in 30 years, warns expert

British home buyers are facing the toughest conditions in the mortgage market the country has seen for 30 years, the UK’s largest house builder, Persimmon, has warned. Read more

Tags: council of mortgage lenders, property market, Mortgages, Darling revealed plans, Merrill

Some areas are at risk of negative equity, claims expert

There are concerns that certain areas of the country may be prone to negative equity over the next two years, according to the UK property market information provider Mouseprice.

A survey published this month found that 23 per cent of 24 to 34-year-olds are worried about having negative equity and 13 per cent of respondents said they had decided to delay their plans to move until the situation in the housing market situation improves.

Jonathan Upton, business development director at Mouseprice, said: “The conditions that are required for negative equity are present in some areas,” adding that the situation will depend on the level of deposit that people took out, when they bought their house and the profile of the housing market where they live.

However, Mr Upton also commented that it is difficult to tell whether first-time buyers will be particularly hard hit.

In their favour, people who are not yet on the housing ladder may benefit from falling house prices, giving them a stronger hand in negotiations.

Tags: survey, house, favour, Business and Economy, business development, equity, business

Bradford & Bingley: Arrears on the up

UK lender Bradford & Bingley has said that mortgage arrears are continuing to rise as more borrowers are facing difficulties in repaying their loans.

Britain’s ninth-biggest listed bank said that it expect increased payment strain and falling house prices to result in higher impairment provisions, according to Reuters.

Hours after meeting with Alistair Darling, the mortgage lender, which makes over 50 per cent of its home loans to buy-to-let landlords, said its margins were under pressure and it is starting to pass the higher costs on to customers.

Yet the bank also said that the buy-to-let area of its business is performing well, suggesting that it is homeowners who are being hit hardest by the credit crunch.

Those faced with arrears will be pleased with Abbey National’s announcement earlier this week that it will cut rates on its two-year tracker and flexible mortgages by 0.1 per cent.

“We will continue to review the cost of funding and will look to reflect further changes in our mortgage range going forward,” said a spokesman for the bank, adding that it hopes other lenders will follow suit and take action to stimulate the mortgage market.

Tags: funding, house, credit crunch, range, loan, Alistair Darling, crunch, announcement

A quarter of a billion pounds left in accounts says investment provider

A new initiative has been launched to reunite consumers with their lost bank accounts after it was announced that an estimated quarter of a billion pounds has been forgotten.

National Savings and Investments said that the main reason for money being left in accounts is moving house.

Ayesha De Silva, online manager for NS&I, said: “People often hold an account with two or three different providers over the course of a lifetime and when they move house, it’s the simple fact they forget to tell all the relevant people.”

She added that this situation is exacerbated by every move that a person makes meaning that the funds can just “sits there for years and years and years”.

In research carried out by TNS Phonebus last year, national statistics show that ten per cent of people believe they have lost savings they had as a child.

Only 26 per cent of these people have tried to reunite themselves with their lost money.

Tags: bank accounts, inflation, cent, fact, lost bank, quarter, National Savings, house

A quarter of home refit projects go over budget say experts

Up to one in four of home makeover projects end up going over budget, according to figures from Halifax Home Insurance.

An estimated million under-budgeters have to find an extra £4,690 to afford £10,000 which is the average cost of completing a home improvement project.

This works out at a total annual budgeting shortfall of approximately £4.7 billion.

Martyn Foulds, senior claims manager at Halifax Home Insurance, said: “It’s interesting to see that the major reason for spiraling costs is often due to homeowners adding extras to a project half way through.”

He added: “Clearly it is all too easy to get carried away with adding more expensive fixtures and fittings as the project unfolds.”

The most commonly cited reason for escalating costs, from over half of the survey’s respondents, was upgrading to higher specification fixtures and fittings.

A further 20 per cent said costs had risen after building works had unearthed problems with their house that needed urgent attention.

Meanwhile, more research from Halifax has found that over two thirds of respondents believe the government could be doing more about the number of vacant properties in the UK.

Tags: house, home insurance, respondents, Real estate economics, expensive fixtures, specification, Financial services

2008 will be a ‘double-edged sword’ for first-time buyers

Falling house prices and uncertain times will make next year a “double-edged sword”, according to the Council of Mortgage Lenders (CML).

Sue Anderson, head of external affairs at the CML, said: “On one hand, if the prices come down or even if they just stabilise, to a degree, that is good news for first time buyers.”

It is expected that consumers’ earnings will close the gap between that and house price inflation.

On the other hand consumers may “feel a bit wobbly in light of what has been going on in the market,” said Ms Anderson.

First-time buyers will be subject to confidence issues in relation to predicting behaviours in the housing markets, she concluded.

The Halifax House Price Index detailing the month of November stated that prices dropped by 1.1 per cent, yet prices are 6.3 per cent higher in annual terms.

Overall growth in house prices has slowed over recent months as the increase in interest rates between July 2006 and July 2007 has taken effect.

Tags: house, mortgage, increase, time, time buyers."It, loan, council of mortgage lenders, sue anderson

Majority of first time buyers will not benefit from credit crunch

Recent falls in house prices are unlikely to benefit the majority of first-time buyers, says real estate provider Savills.

The company said a slowdown in the housing market will “provide some opportunities” for first-time buyers.

However, Lucian Cook, director of research at Savills, said it was unlikely to help most as they would still be reliant upon mortgage finance.

Mortgage finance is expected to be harder to acquire as a result of the credit squeeze.

“The first-time buyers who [price falls] will help are those who have accumulated relatively high levels of cash reserves, and who are well placed to buy,” he continued.

There will be less “brochure collectors” and “serial viewers” and thus less competition for property.

“The people who are going to be in the market to buy are really going to be in the market to buy,” said Mr Cook.

The November Halifax House Price Index, released today, found a 1.1 per cent monthly fall in house prices.

This is the third successive month it has reported a fall with the average UK house price now standing at £194,895.

Tags: house, cent, Mr Cook, uk, estate provider savills, property, mortgage finance, serial viewers

House prices tumble at fastest pace since 1995

According to recent figures released by the Nationwide Building Society house prices across the UK took the biggest tumble since June 1995 in November.

The figures from the mortgage lender showed that house prices had fallen by 0.8%, which was the first fall since February last year and the biggest fall in twelve years. The annual rate of inflation on homes has also tumbled, falling from 9.7% in October to 6.9%.

The fall of 0.8% equates to an average £1500 drop in house prices, and this means that the average house price now stands at £184,099. However, this still means that the average house price is around £12000 more than just one year ago. In addition to the house price fall, the Bank of England has confirmed that mortgage approval levels have also slumped, with 88,000 new mortgage approvals in October, which was 12% lower than the previous month and 31% lower than October last year.

Nationwide officials confirmed that the housing market was facing a cooling off period, stating: “Poor affordability, weaker house price growth expectations and the effect of earlier increases in interest rates have all affected demand in the market.”

The Council of Mortgage Lenders added that the effects of the credit crunch and turmoil in the financial markets were affecting the housing market, and that the government needed to invest more money in the financial markets.

Michael Coogan from the Council of Mortgage Lenders stated: “We would like the government and the Bank of England to consider how best to unblock the funding log-jam that some UK lenders are experiencing, so that they can continue to fully meet consumer demand.”

Tom Smith
5th December 2007

Tags: approvals, lenders, house, prices, government

AHIPP: Hips will benefit first-time buyers

The advent of home information packs (Hips) will offer many benefits to first-time buyers, according to the Association of Home Information Pack Providers (AHIPP).

Recently the Royal Institution of Chartered Surveyors claimed that Hips would end up making things more difficult for first-time buyers.

But AHIPPS has maintained that actually Hips and the Energy Performance Certificate included in it, will save first-time buyers time and money.

Paul Broadhead, the deputy director general of AHIPP, said: “The latest Hips allegations from RICS appear to have disregarded the many benefits that the packs will offer first time buyers – the most vulnerable of buying groups.

“With more information upfront and the costs incurred in gathering and providing information such as searches transferred to the seller, first time buyers will find their first step onto the housing ladder a more affordable.”

Because it is the seller of the house that must pay for the Hip, many expenses for the actual buyer will be discounted, Mr Broadhead added.

Hips became required for homes with three bedrooms or more on September 10th this year.

Tags: advent, director, gathering, house, paul broadhead, Chartered, Home Information Pack, AHIPP

High-end mortgage industry sees growth

Despite only representing a small amount of mortgage business, demand for high-end products is growing, an industry expert has said.

According to Andrew Arnott, a spokesperson for Investec, larger-scale mortgage growth is hailing particularly from “areas of multi-currency mortgages”.
“Certainly more banks offer larger-size mortgages than in the past,” he said.

“A lot of the products on the market aren’t available if the loan size is over, say, half a million or a million pounds.

“It is more specialist players that deal with those sorts of mortgages, so it’s more difficult for borrowers to find products right for them.”

Recent research by Halifax Estate Agents revealed that the number of house sales for £1 million has tripled in the last five years, with 6,107 homes selling for over a million from June 2006 to June 2007.

Halifax has estimated that there are currently 88,000 houses in Britain worth in excess of £1 million.

Tags: Real estate, house, loan size, business demand, mortgage, Britain, high-end products, research

Benefits to paying off debts with personal loans

The main reason people take out personal loans is for debt consolidation, which is no harm, an industry expert has said.

Steve Baillie, head of loans at Sainsbury’s Bank, explained that doing so can be a positive way for someone to start to bring their finances under control.

He said that there are three big financial issues for people, getting out of debt, paying for a new car, and home improvements.

“What you’ll probably find is, anybody that’s doing debt consolidation will probably be doing an element of a purchase at the same time,” he added.

“So there’s a trigger to sorting things out, whether they’re sorting out the house, or putting a new bathroom in or whether they’re getting a second car for the family et cetera.”

Total lending was up by £11.2 billion in September this year, according to research by Credit Action. Meanwhile secured lending saw growth of £9.8 billion during the month.

Tags: finance, home, house, main reason people, new car, harm

Abbey slated over 125% mortgage

Amidst the turmoil and chaos that has hit the financial and mortgage markets over the past month, high street bank the Abbey has announced the launch of a 125% mortgage deal for first time buyers and other property purchasers, and this move has been strongly criticized by many financial professionals.

The mortgage allows consumers to borrow over and above the value of the property, but experts state that many consumers could find themselves left in negative equity as a result of taking on these loans.

Experts state that if consumers default on the 125% mortgage they could quickly find themselves locked into negative equity, and this could be further fuelled if, as expected by many analysts, property values in the UK tumble over the coming months. The government has been urging financial institutions to be more responsible with lending in light of the current financial situation, and Abbey is now being accused of ignoring this advice.

The Abbey is offering consumers the opportunity to borrow 100% of the property value, and an additional £25,000 on top. The recent chaos with Northern Rock has increased concerns over irresponsible lending by financial institutions, and many experts are now accusing the Abbey of further fuelling the debt crisis in the UK by offering this type of mortgage in the current economic climate.

Officials from the debt charity Credit Action have commented on the availability of this 125% mortgage loan, and one official stated that the loan posed ‘real dangers’ to borrowers, adding that anyone that decided to take on this type of loan would have to be ‘incredibly bold or incredibly stupid’.

Tom Smith
24th October 2007

Tags: 125%, buyers, time, abbey, property, first, mortgage, house, cost

London property purchasers being hit hard by stamp duty

A recent report has highlighted just how hard property purchasers in the London area are being hit when it comes to stamp duty.

The extortionate cost of buying a property in London means that buyers have to also pay more for their stamp duty, as well as for their deposit, and it is estimated that the average upfront fee required by first time buyers in the city comes to over £20,000. This covers just the deposit and the stamp duty, and does not include additional fees such as legal costs and removal fees.

Figures indicate that London stamp duty costs have rise by over 800% in the space of just ten years, which equates to an 80% rise per year in the cost of stamp duty. With the average apartment price in London standing at around £263,000 the 3% stamp duty comes in at a shocking £8000. Coupled with the 5% deposit of just over £13,000, this brings the cost of just the deposit and stamp duty on an apartment with an average value to around £21,000.

The survey was carried out by Zoomf.com and shows the difference between the average apartment price and stamp duty costs in 1997 compared to today. In 1997, a decade ago, the average value of a flat in London was around £87,000, which meant that the stamp duty cost would have been under £900. In just ten years potential property purchasers for the London area – as well as other areas – have had to deal with rising property prices, rising stamp duty costs, increased interest rates, and increased additional costs such as legal fees.

Zoomf.com reported that it has tens of thousands of properties listed for the central London area, but only several of them fell under the £125,000 value, which is the threshold for stamp duty.

Tom Smith
20th October 2007

Tags: house, duty, stamp, hme, taxes, charges, london

Is a house price crash on its way?

According to some experts in the UK there could be a housing market crash around the corner, similar to that seen in the 1990s.

The predictions come from industry professionals at the Royal Institute of Chartered Surveyors. Over the coming year expectation for house prices in the UK have been lowered by the RICS. According to one senior official from the institute the predictions are perfectly ‘legitimate’ and have not been made irresponsibly.

Over the coming year officials from RICS are predicting that there is a 20% chance that house prices will fall by 10% in the London area. In a similar housing market crash in the 1990s, house prices plummeted on average by around 35%. However, despite these predictions from RICS officials there are other industry professionals that disagree and feel that the chances of a housing market crash are very slim.

One industry expert stated that although interest rates have gone up by a total of 1.25% over the past year in
a series of 0.25% rises, there has been no sharp rise in interest rates. This, along with other factors, made the chances of a housing market crash very unlikely, he stated. Banks and building societies in the UK have been reporting a slowdown in the housing market, and independent research has indicated that both consumer interest and agreed sales have been slowing down over the past few months.

If the housing market does crash, as it did a decade ago, many could see the equity levels in their homes plummet, and for those that have recently taken out 100% loan to value mortgages this could leave them in negative equity, which means that they will owe more on their mortgage than the value of their property.

However, for first time buyers who are looking to get onto the property ladder a housing market crash could prove to be the ideal opportunity to increase affordability – recent reports have indicated that many first time buyers are taking a ‘wait and see’ stance rather than rushing into purchasing, amidst rumours that house prices will fall over the coming months.

Tom Smith
16th October 2007

Tags: cost, rates, crash, Mortgages, house, price, interest

HIPs In Place For Three Bedrooms

Estate agents are warning that the new Home Information Packs (HIPs) are going to cause a shortage of larger properties on the market. One agency reported that the number of large homes on offer for sale is down by 40% over the last 12 months, and experts in the industry are blaming the packs for the problems. Each pack costs around £500, and they have been compulsory for homes with four bedrooms and more since 1 August.

The Government says that the packs will shorten the time of the buying process, but agents claim that they are actually putting off sellers and pushing up prices as they try to cover costs. Each pack must include an energy performance certificate and standard searches.

Estate agency Chancellors said that it had seen a fall of 42% in the number of large homes being brought to market since 1 August when compared directly with the same period in 2006.

Many sellers are unhappy with the process. Some say that it verges on interrogation, with questions on construction dates, central heating, loft insulation and the use of low-energy light bulbs, and multiple photographs throughout the property. Some people have seen the process through to sale, but many more have not. The Royal Institution of Chartered Surveyors (RICS) said that 53% of its members reported a drop in the number of four bedroom homes put on the market since 1 August, compared with the same period last year – worse even than the Chancellors figure. This fall has not been in line with expectations, despite rising interest rates, stock market turmoil and the credit squeeze, and HIPs are being blamed.

Now, since Monday 10 September, HIPs are required for homes with three bedrooms, despite warnings from those within the housing market.

Jeremy Leaf, housing spokesman for RICS, is unhappy with the way the government has handled the implementation. He said: “I have never known legislation so badly introduced. Homeowners clearly have no faith in the packs or the policy, which have only brought more bureaucracy and mass uncertainty to an already paralysed market. Before they are heaped on the rest of homeowners, we need to see some evidence-based justification that this policy benefits consumers. At the moment it doesn’t exist.”

Nick Salmon, an estate agent and founder of the campaign group Splinta (Seller’s Pack Law is not the Answer), said: “I cannot think of any [benefits consumers have seen from HIPs]. There is a great deal of anger among homeowners who do not see the point of these packs and consider them another stealth tax. HIPs have simply heaped more expense at the wrong end of the transaction, and sellers have nothing but contempt for the new law.” The Government stands to boost its coffers by the VAT applied to the Packs.

There are still loopholes in the law. Sellers can avoid a HIP by 1) converting a bedroom to a study, 2) cancelling a pack after it has been ordered, as it only need to be ordered, not actually purchased, 3) pay the £200 fine for not having a HIP – much cheaper than the £500 a HIP costs. In fact, getting caught is unlikely as trading standards officials admit they don’t have the resources to enforce the packs.

Mr Salmon believes the government is running the risk of drying up the housing market by introducing HIPs for three bedroom properties. Gordon Brown, he claimed, may rue the day he passed up the chance to kill of HIPs.

Tom Smith
29th September 2007

Tags: hips, surveyors, packs, fine, information, government, house, bedroom

London Leads The Way On House Prices Again

The Land Registry’s latest House Price Index suggests that the average price of a property in England and Wales was £181,039 in June 2007. That is a 0.4% increase for the month (slightly less than the May), and the annual house price inflation rate is now at 9.1%.

It is prices in London that once again have driven the price growth. For the third consecutive month London’s rate of increase was more than 6% a year higher than the rate for England and Wales overall, and the difference is at its greatest since early 2005, but at that time it was London that was behind the rest of the country by 6%. The average house price in London in June 2007 was £338,950.

Average property prices across England and Wales for detached house were £271,530 in June 2007, up 7.5% from their level of £252,573 a year before. Flats and maisonettes showed the greatest increase on the previous June at 9.7%, increasing from £154,838 to £169,874 on average. For semi-detached properties the rise was 8.7% from £157,244 to £170,952, and for terraced houses the rise was 9.3% from £129,246 to £141,278.

All regions saw increases in their average prices over the last 12 months. The highest annual increase was in London at 15.8% – 1.5% on the month. The next highest annual increase was in the South East 1t 9.1%, although the region experienced a 0.3% decrease in prices during the month. The highest monthly change behind London was in the West Midlands at 1.2%, and an annual increase of 7.1%. The biggest loss in the month was in Wales at 1.1%, although its annual change was still an increase of 6.6%. The smallest annual rise was in the East Midlands at 5.5%, with a monthly fall of 0.6%. All in all half (five of ten) regions showed a decrease in average prices during the month.

In terms of county and unitary authorities Brighton and Hove saw the greatest annual price change with a rise of 16.3%. There were 25 areas in total that experiences an annual price increase in double digits. There were no county or unitary authorities that saw an annual price fall to June 2007. Strongest monthly growth was seen by Rutland at 2.5%, whereas Powys saw the highest fall of 2.4%. Behind London, Windsor and Maidenhead has the highest average prices at £327,345. Lowest prices were to be found in Merthyr Tydfil at £81,697.

The metropolitan district with the biggest annual increase in average prices was Manchester at 11.7%. Bury saw the highest monthly increase of 1.7%. The lowest annual rate of house price growth was in Salford, with growth of 2.8%. The district with the largest fall in house prices for the month was Barnsley with a fall of 0.6%. In Metropolitan districts Solihull had the highest average prices at £210,139, and the lowest average prices were in Oldham, at £106,971.

In London, the borough with the fastest rate of growth was Kensington and Chelsea, up by 25.7% for the year. The same borough had the highest monthly growth at 2.2%. Newham saw the lowest annual growth of only 6.3%, and Barking and Dagenham saw a monthly fall of 0.1%.

In the first four months of 2007, the number of house sales averaged 87,734 per month, representing an increase from the same period last year when sales volumes averaged 87,559.

Tom Smith

Tags: london, prices, cost, increase, home, house

Norwich Union tried to catch out insurance customers

One of the UK’s leading insurance companies, Norwich Union, is targeting customers that hold critical illness insurance policies in order to try and find out whether they have withheld information in the past that could in effect mean that their policies are null and void.

The insurance giant is writing to five thousand critical illness policyholders to try and find out whether they withheld information when they initially took out their critical illness cover.

This is a pilot scheme being trailed by the insurance company, and the policyholders being questioned have been selected at random. However, if the scheme does prove successful then the insurance company is looking to widen the scheme to all two million of its critical illness policyholders. Critical illness cover has already been at the centre of controversy over recent years, as statistics show that around 20% of critical illness claims from customers end up getting rejected due to either incorrect claims on diseases that are no covered, or due to lack of information from the policyholder when the insurance was first taken out.

Critical illness cover is designed to pay out a lump sum to the policyholder in the event that he or she is diagnosed with one of the critical illnesses that are specified on the policy. The policyholder gets to keep the money even in the event that he or she goes on to make a full recovery from the critical illness. However, the level of rejected claims with this sort of cover has resulted in a great deal of negative publicity for critical illness insurance cover.

Norwich Union states that the exercise is to try and update all customer information before any claim needs to be made. One official from the insurance company stated:  ‘We want to be able to clearly advise people . . . how to proceed if they believe they may have missed something off their application form. We feel this is the right approach to try to help customers prevent non-disclosure in the event of a claim.’

Tom Smith
17th September 2007

Tags: union, norwich, protection, critical, Insurance, cover, illness, home

Homeowners prepare to ‘hide’ bedroom

Now that the advent of home information packs (Hips) has become a reality, many homeowners in Britain are preparing to exploit a loophole in the scheme.

Because Hips only applies to houses with three bedrooms or more, many homeowners plan to call their third bedroom an office or something else in order to get out of having to buy a pack, Abbey has discovered.

A full 8.5 million people with houses that have three or more bedrooms admitted that they would utilise this loophole.

Nici Audhlam-Gardiner, head of mortgages at Abbey, said: “While Hips might seem a hassle we think it would pay in the long run to play it a straight rather than going through this loophole.

“By remarketing your home as a two-bedroom house with a study, you’ll become invisible to thousands of potential buyers that are searching online.”

Many of those looking to buy may see the price advertised for a supposed two-bedroom house and think it overpriced, said Ms Audhlam-Gardiner.

Hips became compulsory for houses with three bedrooms at the beginning of this month.

Tags: hips, head of mortgages, pack, house, Home Information Pack, Foreclosure, Non-profit organization, Audhlam

ABI says younger drivers “should have year of lessons”

Younger drivers – traditionally a higher risk when it comes to car insurance – have been recommended to take a full year of lessons before their test.

The advice, from the Association of British Insurers (ABI), would in effect raise the driving age limit in the UK

A one-year rule of sorts is already in place in other European countries, with the ABI citing Sweden in particular as a positive example for the UK to follow.

Association spokesperson Malcolm Tarling said: “We suggest a minimum of one year pre-test driving experience before you get to the stage of taking your test.

“The overall aim is to reduce the number of young newly qualified motorists and their passengers that die or are seriously injured on the road.”

He added: “The key thing is to ensure that young drivers, once they have passed their tests, are better equipped to be in control of a potentially lethal weapon.”

The ABI’s position is backed up by recent research from the House of Commons Transport Committee.

It reported last month that adoption of a one-year training programme prior to all UK driving tests would reduce the UK’s road accident rate.

Statistics from the Department for Transport show that 3,150 people were killed on roads in the UK during 2006.

Tags: house, car insurance, advice, UK driving tests, Department for Transport, abi citing sweden, driving age limit, test

Homebuyers might be paying over the odds for Hips

The government’s beleaguered Home Insurance Packs (Hips), which will cover all UK homes by next year, have apparently hit yet another setback.

It emerged today that several of the biggest mortgage lenders do not see the new packs as sufficiently authoritative on issues such as determining whether the property faces any outstanding planning approvals or enforcement orders, and are telling home buyers to conduct their own checks.

As a result, people are being forced to pay for what is essentially the same service twice over, along with purchasing their mortgages.

A spokesperson for HSBC said: “If someone wants to buy a house from someone who has a Hip containing a personal local search, we would tell their solicitor we would not lend to them unless they commissioned their own search.”

The bank’s comments came after it emerged that Hips providers – which charge around £500 for their services – were using “personal” searches rather than more expensive “full” searches from local councils.

Hips were originally brought in by the government in an attempt to speed up and simplify the home buying process.

Tags: mortgages.A spokesperson, process, someone, house, odds, personal searches, Insurance, Insurance Packs

Is fixing your bills a good idea in light of interest rate rises?

The recent interest rate rises enforced by the Bank of England have hit many homeowners really hard, leaving them with very little in the way of finances due to rising repayments. In light of these rises, many people are now wondering whether it might be a good idea to fix not only their mortgage but also other payments as well in order to benefit from increased financial stability.

Interest rates have gone up five times in the past year, with rises of 0.25% each time, and each of these rate rises has added a significant amount to the repayments of many homeowners, pushing many into the red. With these increased repayments along with the threat of further interest rate rises some experts feel that fixing as many payment as possible, including a mortgage, could prove beneficial in terms of financial management, although others feel that this could prove costly in the long run, particularly when interest rates start to fall again.

One industry expert stated: ‘Having certainty of monthly outgoings is worth its weight in gold, especially for people who are stretching themselves to take out the loan. People have been buying two year fixes, but with arrangement fees and other costs so high, we are now seeing more three and five-year fixes being taken out to avoid paying these fees so regularly.’

Another stated: ‘Fixed rates are going up as lenders factor in possible future base rate rises. Trackers are cheaper, but you have to accept that the rates are likely to go up before coming down, so you have to make sure you can afford higher monthly payments. The rates for three and five-year fixes are quite similar, so the key is to do your homework to get the best deal and make sure you are clear how long you want the fix to last for.’

Tom Smith
1st August 2007

Tags: house, increase, rises, debt, home, cost, interest, pay, bills, Mortgages

Super-Prime London Prices Shoot Upwards

The price of houses at the very top of the London property market achieved record growth in June. Research by estate agent Knight Frank shows record growth of 3.1%, which is the fastest growth in a month since the agency began its records in 1976. It also found that the annual rate for the same market was 34.5% in June, which is the largest figure for a years seen since 1979.

Those properties seeing the largest rises were between £1m and £2m, and those valued at over £4 million. House prices in the latter bracket have gone up by an amazing 43% in the last twelve months. The areas where house prices have gone up the most are SW3 and SW10, with a 40% rise on houses valued at over a million in the last year. Properties over a million pounds represent 7% of the London property market.

It looks as though prime London is having an almost unstoppable surge in house price inflation, but deeper research actually shows that the highest growth is at the very top end of the market – super-prime London. For example, the growth of properties valued at just below a million in the same areas had slowed down, no doubt under influence from recent interest rate rises and other economic factors putting the squeeze on homebuyers. A slowdown for super-prime London house prices would probably mean that there was a huge economic problem on a global scale as many buyers are foreigners.

Further out of central London, areas like Hampstead, Wapping and Wimbledon have seen growth of 11.4% in the first six months of 2007, giving annual growth of 21.8%. These don’t match up to super-prime increases, but still show superior growth to the broader London house market.

Knight Frank’s assessment is that the normal house market slowdown in the summer will be cooled even further by other economic factors, but super-prime central London will still have annual growth of around 25% come December.

Meanwhile it has been calculated that the cost of an extra bedroom in a large property in London is £161,221. That figure is £20,000 higher than the cost of an average home in Scotland. The figure is worked out from the average price of a three-bedroom property in the capital as £396,387, and the average price of a four-bedroom home is £557,608.

It is such a difference that forecasts are that London homeowners will look for more ways to improve or increase the size of their existing property such as an extension or loft conversion, rather than seek to move.

The difference between and one-bedroom property and a two-bedroom property is much less, at an average of £89,751. In London there are currently around 13,600 two-bedroom properties up for sale, but less than 6,000 one-bedroom properties. Such as shortgage of smaller properties is a concern for first-time buyers as that key difference in price for an extra bedroom would evidently be a showstopper for many new buyers. It is unlikely that this situation will ease with London market continuing to push upwards.

Tom Smith
26th July 2007

Tags: Mortgages, property, house, increase, prices, foreigners, london, interest, inflation

FTBs saving longer for their deposits

First-time buyers (FTBs) are saving for “around five years” to put down a deposit for their home, Your Mortgage said yesterday.

FTBs are also relying on loans from parents more and more, as house prices increase and interest rates rise.

Editor of Your Mortgage Paula John said that the average savings time had increased by a full 11 months in the past year alone.

“Of course, in the light of recent interest rate increases houses are even less affordable for first-time buyers so they are being kicked out of the market altogether”, she said.

Ms John also stated that house prices in London, which have increased by 15 per cent on average in the last year alone, have led FTBs to “lower their sights” and “buy a lot further out”.

According to HousePriceCrash.co.uk, in the last decade numbers of FTBs have shrunk from 55 to 29 per cent of the market.

The Office of National Statistics has also stated that the average price paid by FTBs in the UK has risen by 204 per cent over the same period.

Tags: house, average savings time, Real estate economics, National, Ms John

International medical insurance growing

Demand for international medical insurance is strengthening, according to the private healthcare company Bupa.

With more and more Brits flush with cash from selling their houses in the current UK house price boom and choosing to retire abroad, private healthcare can prove an affordable option for many.

Coupled with the growing number of “internationally mobile” employees working for businesses relocating to the strengthening economies of Russia and India, for example, the market is expanding.

Bupa spokesperson Thomas Flygare said: “We have done research that shows that the number of internationally mobile employees will continue to grow over the next five years. Add to this an extra 2.3 million Brits who are set to retire abroad and by 2020, one in five older people who will be living outside the UK.

“So, naturally the number of companies providing international medical insurance has increased.”

He also advised that customers research the market place to find the insurance that best meets their needs.

“Experience has shown that peace of mind wins when choosing a provider”, Mr Flygare concluded.

Tags: choosing, Russia, affordable option, next five years, finance, cash, demand, house

Chancellor Darling Would Like Longer Fixed Rates

New Chancellor of the Exchequer, Alistair Darling, has indicated that he would like to see longer terms for fixed rate mortgages in the UK.

Darling would like to see more fixed rates lasting up to 25 years and on Monday 9 July he pledged a shake-up of the housing market following concerns that have been expressed regarding lenders only offering short term fixed rates in order to maximise their profits.

If homeowners have to renew their fixed rate deals more often, they will be liable for thousands of pounds worth of charges in arrangement fees, which have rocketed in the last couple of years. As interest rates have risen five times in the last twelve months, consumers are looking to fix their interest rates so they know what their payments will be for a reasonable period of time, but the number of deals beyond two years are few and far between.

The Chancellor said that longer-term fixed rates were available around Europe and would be useful in the UK to reduce volatility. He was unhappy with the incentives built in to products that meant mortgage brokers were more likely to advise homeowners to choose short-term products – and the associated high arrangement fees – some now nearly £2,000.

Mr Darling said that the Financial Services Authority have noted the problem of brokers wanting homeowners to return to them every two or three years rather than every ten or twenty.

The Chancellor also talked about the possibility of building on greenbelt land in the future as the lack of affordable housing in the South East in the last five years was now becoming a problem for the whole country. Last year’s Government target of 223,000 new houses was not met with only 160,000 being built. Mr Darling agreed that planning is a sensitive issue, but whilst determined to protect Britain’s heritage he said that if we don’t increase the supply of houses the problem will get worse and worse and worse. There was no way he would accept that housebuilding should stop.
   
Ex-Chancellor Gordon Brown, now Prime Minister, oversaw house prices that trebled between 1997 and 2007, and promised to end the boom and bust cycle in house prices, but as it is evident that we are coming to the end of a boom cycle in house prices, both Brown and Darling will be hoping that we don’t enter a bust period of falling or crashing house prices. However, with interest rates having risen from 4.5% last August to 5.75% last week the increased payments to be found by most homeowners will bring about a slowdown in the market.

Malcolm Harris, CEO of Bovis Homes, yesterday warned that any further rate rises could bring the housing market to a grinding halt. Average mortgage payments are now at a record level when compared with how much people earn.

Mr Darling acknowledged that housing is a huge issue and concerns more than the buyers, with parents and grandparents keen for their children to be able to afford housing, but a monthly repayment on a £125,000 mortgage s now £130 higher than it was last year.

Tom Smith
16th July 2007

Tags: home, chancellor, Mortgages, rates, debt, prices, longer, afford

Middle classes fiddle insurance claims

Although many of us are led to believe that fraudulent activities are usually conducted by those from lower income families, a recent report has suggested that many illegal activities in this field are actually committed by middle classes, particularly fraud such as inflated insurance claims.

The results from the survey suggested that a high number of middle class policyholders inflated insurance claims in order to improve their homes or simply to get back at the insurance companies for having to pay high premiums.

The survey was conducting using nearly 2000 respondents from across England and Wales. The report was compiled by Professor Susanne Karstedt and Dr Stephen Farrall of Keele University. Although other types of ‘white collar crime’ were also highlighted in the report, one of the significant types of crime that middle classes admitted to was fiddling insurance claims.

One official stated: ‘Politicians from across the political spectrum regularly claim that most crime is committed by a hard core of offenders, largely drawn from low-income groups. This research demonstrates that volume crime is far more widespread, with the middle class being responsible for a wide range of illegal activities. The reasons for this are complex, and relate to the fundamental social changes in British society over the past 30 years.’

One professor involved with the study added: ‘Contempt for the law is as widespread in the centre of society as it is assumed to be rampant at the margins and among specific marginal groups. Anti-social behaviour by the few is mirrored by anti-civil behaviour by the many. Neither greed nor need can explain why respectable citizens cheat on insurance claims or in second-hand sales, and do not hesitate to discuss their exploits with friends in pubs.’

Tom Smith
15th July 2007

Tags: claim, working, premiums, class, Insurance

Interest Rates Up To 5.75%

The Bank of England has increased interest rates by another quarter point in July, to 5.75%, the highest level since March 2001.

Only twelve months ago interest rates were down at 4.5%. The last year has seen hundreds of pounds added to mortgage repayments of householders. On an average £200,000 loan, there will be another rise in payments of £33 to add to the £127 since August 2006.

There are also more than a million homeowners with fixed rate deals from two years ago which are around the 4-4.5% level, who will soon have to look for a new mortgage deal and they are going to be faced with rates of over 7.5% on the lender’s standard variable rate (SVR). That could mean crippling increase of £215 per month. Even with a new deal, they are looking at two-year fixed rates of 5.5% and a rise of nearly £100 per month, plus the fees on top.

Many experts think interest rates will go up again. A rate of 6% has been forecast, and Mervyn King was unhappy at the rate being held at 5.5% in June. He warned a higher peak might be needed in the future. That sounded like a threat of 6% to come.

The Bank has been striving to keep inflation and house prices under control, but the signs that they have started to do this since the last rate rise in May, they didn’t come soon enough to head off July’s rise.

Consumer Price Index (CPI), the government’s measure of inflation, reached 3.1% in March and has come down to 2.5% in the most recent figures. Nevertheless, this is still above the government target of 2%, and the MPC may still feel that more action will be needed. Lower gas and electricity prices should help CPI fall again soon. The MPC said: “Although pay pressures remain muted, the margin of spare capacity in businesses appears limited and most indicators of pricing pressure remain elevated. The committee judged that, relative to the 2% target, the balance of risks to the outlook for inflation in the medium term continued to lie to the upside. Against that background, it further judged that an increase in Bank Rate of 0.25 percentage points to 5.75% was necessary to meet the 2% target for CPI inflation in the medium term.”

Higher rates have begun to slow down the housing market. The Halifax, the UK’s biggest mortgage lender, has reported that house price inflation has cooled in the last quarter, lower than the first quarter of the year and the last quarter of 2006.

New Prime Minister Gordon Brown and his new Chancellor Alistair Darling will be frustrated by the rate rise, fresh as they are in their new roles. Mr Brown was always very please with the way his prudent monetary policies worked, but he may have to revise his comments if rates hit 6%, the level they were at when Labour came to power in 1997.

The UK has a big debt problem and these are becoming a bigger burden as interest rates continue to rise. PricewaterhouseCoopers suggest that 19% of an average household’s income goes towards paying debts which is a record level and beats that of 1990 when interest rates stood at 15%.

Tom Smith
15th July 2007

Tags: home, increase, rates, bank, house, interest

Rics: House rise growth ‘weak’ after rate rise

House price growth is slowing, figures released today suggest.

The monthly housing activity report of the Royal Institute of Chartered Surveyors (Rics) shows overall rates of inflation being cut in half across much of England and Wales, although significant increases in prices were recorded elsewhere.

Nevertheless, new buyer enquiries – an excellent predictor for future developments in the market – also declined at a pace unmatched since early 2006, signalling that buyers feel that homes are becoming increasingly difficult to afford.

General confidence in the sales outlook from surveyors, also polled for the report, showed a significant drop. Ian Perry of Rics said that prices “have finally started to cool significantly”.

A major factor behind this apparent cooling off of the market might be the Bank of England’s decision to raise interest rates last week, with Mr Perry adding that “interest rate hikes have begun to affect the psychology of the market with potential new buyers starting to think twice before buying a home.”

However, sceptical voices were raised in the city today. Malcolm Barr at JP Morgan told Reuters that the Rics report was not a failsafe indicator of the market: “The signals coming out of housing are not strong enough to point to a marked slowing in spending in the near term”, he counselled.

Tags: england and wales, significantly".A major factor, house, General, failsafe indicator, house price, Reuters, home

Housing Market Cools

It seems that the UK property market may be cooling at last, as estate agents are reporting that there has been an increase in properties coming up for sale. In the last few months that number of sellers has increased, but interest from buyers has taken a downward turn.

One online agency reported that the number of properties for sale has risen by over 13% in April, far above expectations. Another internet agency said that it had seen an increase in properties on the market by nearly 20% compared with the same time a year before. The trend appears to be the same across the market.

Although the time of year does see an increase in properties on the market, this time the numbers seem higher than usual. The shortage of housing stock that has had an influence on the way the market has risen seems to be reducing. The sellers’ market looks as though it is coming to an end, and the market may be close to its peak.

It seems that properties in the £150,000-£350,000 price bracket are having the toughest time, where affordability is tight and the slowdown is likely to bite hardest. First-time buyers are finding it extremely difficult to get into the market as property has been pushed further beyond their reach.

Another influence on the number of properties coming to market has been the wish to avoid the need for Home Information Packs (HIPs) in the lead up to their planned introduction of 1 June, and again in the lead up to the new date of 1 August.

Bank of England mortgage figure approval figures reached a twelve-month low in April at 107,000.

The Royal Institution of Chartered Surveyors believed that the HIPS, the continued increase in house prices and the increase in interest rates have combined to lead bring about a cooling of the market.

Estate agents believe that HIPs are single biggest reason for the increase in properties coming to market. These look to be extremely unpopular with sellers who will have to go to more trouble than before and, of course, pay for the packs.

Buyers, however, will see benefits with all the information they need in a single accessible pack. The uncertainty surrounding the introduction of HIPs has led to confusion, especially with the change in emphasis by the government, who said that the Packs would only be applicable to homes with four or bedrooms when the new date was announced.

Since then there has been even more confusion with a recent comment that there will be enough trained energy assessors by 1 August to encompass three bedroom houses. The government maintain that they announced that houses of smaller size will be included in the scheme as soon as enough assessors are available. If that happens by 1 August then three-bedrooms homes are likely to be included.

The general economy remains strong and interest in property is liable to remain so too. When confusion over HIPs dies down in the coming months, we are likely to see a return to normal trends.

Tom Smith
8th July 2007

Tags: england, Mortgages, bank, hips, decrease, increase

Smokers lose money on insurance premiums

Most smokers realize that by kicking the habit they could save a fortune each year, with many smokers spending thousands of pounds each year on cigarettes.

However, many forget that in addition to saving money on the cost of cigarettes, which can then be used for anything from luxury holidays to investments for the future, they can also save money in areas, one of which is insurance.

There are many different types of insurance cover, and the main ones on which smokers can save money include medical or health insurance cover, life insurance cover, and home insurance cover.

Smokers are classed as an increased risk when it comes to these types of insurance cover, and as a result of this increased risk most smokers pay considerably larger premiums than non-smokers, which adds to the overall cost of being a smoker.

When it comes to medical and health insurance, smokers are more likely to make a claim because of the health risks and illnesses associated with smoking, and therefore have to pay higher premiums. With life insurance, smokers are more likely to contract a terminal illness such as cancer due to smoking, and again as a result of this the cost of premiums are pushed up.

And in terms of home insurance, smokers are classed as an increased risk when it comes to fires in the home, and this also pushes up the cost of insurance premiums.

It is also thought that the number of people in the UK smoking in their homes, and therefore being classed as an increased fire risk, will increase, as the smoking ban in public places has now come into force in the UK.

Although many smokers now aim to give up altogether, which could boost their finances in many areas, many others will resort to staying in and smoking in the home rather than going out to pubs and clubs where they can no longer smoke.

Tom Smith
5th July 2007

Tags: house, smokers, smoking, home, life, increased, risk, health, pubs

Uni sacrificed for mortgage

The difficulties associated with getting onto the property ladder are forcing many youngsters to abandon their education.

New research shows that ten per cent of 18-24 year olds are choosing not to go to university so that they can save some money towards their first home.

With house prices seemingly on an endless upward curve, it is now more difficult than ever to purchase a first home and the costs of university are an unwanted burden for many.

Lloyds TSB carried out the research which highlighted that many youngsters are making big sacrifices in order to get a mortgage.

One in five say that they have abandoned the dream of forging a career in their preferred sector, opting instead for a better paid job that they do not enjoy.

In addition, a further one in six say that they are doing two jobs to save some money, while 54 per cent are living at home indefinitely.

“The fact people are willing to forgo their education highlights the importance of homeownership to the younger generation,” said Alison Burns from Lloyds TSB. “However, these extreme measures may not always be necessary, as the research shows a number of misconceptions about the modern housing market.

“Almost 65 per cent of those we spoke to believe a ten per cent deposit is an essential requirement but this is not the case. Mortgage providers are becoming increasingly flexible to accommodate the changing circumstances of first time buyers.”

Tags: deposit, year, Alison Burns, addition, modern housing market."Almost, house, first time buyer

Web makes home selling quicker

Homeowners can sell their house quicker if they miss out an estate agent and advertise the property themselves on the internet.

New research, included in the Alliance & Leicester movingimproving index, shows that web-savvy sellers can shift a house up to one month faster than an agent.

Despite this, 85 per cent of people looking to sell their house opt to go through an estate agent, with the average sale time being around three months.

Those who choose to go it alone, erecting homemade ‘For Sale’ signs and advertising the property online, have an average sale time of just two months.

As well as saving time and getting through the required processes quicker, selling your property yourself is generally cheaper for the homeowner.

“Using an estate agent to sell your home is generally viewed as part and parcel of the moving process with many homeowners continuing to use them to sell their home,” said Stephen Leonard, director of mortgages at Alliance & Leicester.

“But the research suggests that DIY methods such as using the internet to sell a home are becoming more popular.”

The research also showed that 55 per cent of people solely use estate agents to value their property.

Tags: home, Real estate broker/agent, web-savvy sellers, house, homeowner, internet new, parcel, Leicester movingimproving index

Bank Considers Latest Rate Decision

Since the last announcement on 10 May when rates increase by a quarter of a percent to 5.5% there has been a lot of speculation about the way interest rates may go in June.

The latest forecast is for rates to remain unchanged, but another quarter percent rise is still possible. At 5.5% in May rates went up to their highest level since February 2001. Read more

Tags: deals, house, increase, england, repayments, home, bank, interest

The end of loft conversions?

Builders are warning that a new government white paper, touted as making it easier for people to renovate their homes, will in fact make such work much harder.

The Federation of Master Builders (FMB) is warning that impact tests, included in the white paper, are likely to prevent mortgage holders from carrying out work such as loft conversions.

The white paper says that developments which have more than a “low impact” on the wider neighbourhood will need “specific planning permission from the local planning authority”.

This, says the FMB, could effectively spell the end of loft conversions.

“It is quite devious how the Planning White Paper has emphasised the removal of planning permission for home renovations whilst at the same time hiding the effective removal of permitted development rights for loft conversions,” said Brian Berry from the FMB.

“By applying the impact test to front or side roof extensions and to rear roof extensions that are less than one metre from eaves, ridges, verges or party walls, the proposal effectively wipes out all loft conversions in built up urban areas.”

Mr Berry went on to point out that loft conversions are becoming more popular among homeowners as it is often more financially viable to renovate a property rather than move house.

Tags: government white paper, planning authority, low impact, mortgage holders, neighbourhood

Protect your expensive wedding gifts

A new report has highlighted the importance of home insurance for newly weds, citing the cost of ever extravagant wedding gifts as the main reason for needing to get home insurance cover pretty much right away following the wedding.

According to reports wedding gifts are getting more and more extravagant, and with gifts as expensive and luxurious as plasma screen TVs and the like being purchased as wedding gifts in some cases, home insurance cover is more important than ever for newly weds with thousands of pounds worth of presents.

Research was carried out by NFU Mutual, which showed that under ten percent of newlywed couples actually check their insurance policies immediately after the wedding, which means that millions of pounds worth of extravagant wedding gifts could be at risk, as it could be left in the new homes of newlyweds as they jet off to enjoy their honeymoon still caught up in the excitement of the wedding.

Research also showed that many newlyweds couldn’t remember whether they had checked their policies or not following the wedding. Officials reports that millions of pounds are spent on wedding gifts each year in the UK, and those gifts could be at risk from damage or theft – particularly if they are being left in the house whilst the couple go on honeymoon – which could mean huge financial losses for the newlyweds just as they embark upon their married life together.

One official from NFU Mutual stated: “There is a great deal of excitement in the run up to a wedding and naturally, the practicalities of checking your home insurance can sometimes be forgotten.”

Tom Smith
31st May 2007

Tags: theives, burglary, steal, increase, honeymoon, target, Insurance

Brits want to live in Oz

Many people in Britain would like to get a mortgage on a property abroad as house prices and the cost of living in the UK continue to grow.

Research by Bank of Scotland International shows that of all the destinations available for Brits, Australia is the place most would like to live.

It seems that younger people are keener on the idea of Australia than their older counterparts, with 59 per cent of those who chose the country being under 45.

When asked which country in Europe they would most like to live in, the majority of Brits chose France with older people this time proving keener.

There was an even divide between the ages when it came to those who do want to own a property abroad and those who do not.

Around 44 per cent of those who do were under 45, while 39 per cent were aged between 45 and 64.

Tony Wilcox, managing director at Bank of Scotland International, said it is important for people considering moving abroad to do their research first.

“Living, working or retiring abroad can mean a whole set of lifestyle changes, including an impact upon your financial affairs,” he commented.

“Expatriates have different financial requirements and when moving abroad it is important to have the right products and services in place.”

Tags: Abraham Lincoln, brits australia, brits chose france, house, younger people, different financial requirements, bank of scotland international, Impact

What the recent interest rate rise means for your mortgage repayments

On 11th May the Bank of England increased its rates by another 0.25% to 5.5%, meaning that six million homeowners in Britain will face bigger monthly payments for their mortgages. Read more

Tags: rise, consecutive, prices, surveyors, cost, mortgage, inflation, england, increase, bank

Home disasters for returning holidaymakers

Over one million Brits return from holiday each year to find that there home is a disaster area.

Research by Halifax Home Insurance shows that we arrive home to a combined total of £2.3 billion worth of damage and, without insurance, we could be counting the cost for years to come.

The most common problems are criminal damage, faulty utilities and storm damage. According to Halifax, a quarter of us are burgled while on holiday.

Water damage is another costly problem that affects many, with 1.7 million holidaymakers having to pay a combined bill of £960 million to repair damage done by burst pipes and the like.

“Home disasters can be extremely distressing at the best of times, so returning to one after a relaxing holiday would certainly bring you back down to earth with a bump, so having adequate home insurance cover to protect your property – whether it’s occupied or not – is absolutely critical,” said Vicky Emmott from Halifax.

“As well as making sure they are insured there are lots of other practical things that holidaymakers can do to protect their properties whilst they’re away.

“For example, ensuring that the heating comes on during the winter can prevent pipes from bursting, and cancelling regular deliveries like milk or newspapers make it less obvious to a thief that your property is vacant,” she added.

Children left alone on the house are also a common menace for holidaying Brits, with almost one million saying that they had returned to find their home damage by the kids.

Tags: water, milk, house, halifax, adequate home insurance cover, Financial economics

Disappointment over Hips back down

The decision to delay the introduction of Home Information Packs (Hips) into the home-selling process has left a number of industry figures disappointed.

Hips were due to be introduced on June 1st, with the aim of reducing costs for buyers and improving the green credentials of homes in the UK.

However, the government has now announced that the start date for Hips will be put back to August 1st, initially with only homes with four or more bedrooms being subject to them.

The announcement has caused anger among those who support Hips and some parties have been warning of negative consequences.

“This latest decision is at the cost of the consumer and the environment,” said Mike Ockenden, director general of the Association of Home Information Pack Providers (Ahipp).

He went on to blame the government back down on a recent legal challenge which as launched by the Royal Institute of Chartered Surveyors (Rics).

“It appears to have been Rics, through their call for a judicial review, which has ultimately derailed this vital house buying and selling reform, so soon before its planned implementation,” he continued.

“This is a serious let down and it is both the consumer and the environment which will now suffer as a result of these latest changes. Consumers will have to endure the existing, broken house buying and selling process for at least a further two months, costing them time, money and unnecessary stress.”

AA Legal Services has also expressed its disappointment with the decision, claiming that there will be “many losers” as a result, including mortgage holders.

Tags: Law in the United Kingdom, packs, process, introduction, house, Providers, disappointment, time money

Hips delayed

Home Information Packs (Hips) are to be delayed following months of wrangling between industry officials and MPs.

Communities secretary Ruth Kelly has told the House of Commons that Hips will not be introduced on June 1st as promised but will instead be phased in from August 1st.

The announcement comes just ten days before the packs were due to introduced to the home-selling process and just one day before they were to be debated in the House of Lords.

Only days ago the government won a vote in the House of Commons in which it said Hips should be introduced on June 1st.

Now Ms Kelly has revealed that the date has been put back because there are insufficient numbers of surveyors trained and accredited to provide Energy Performance Certificates.

This comes despite recent assurances to the contrary and led to opposition MPs berating her in the Commons.

Ms Kelly remained adamant that Hips would eventually be introduced in the UK but said that the initial August 1st rollout would only apply to four-bedroom homes.

Tags: recent assurances, insufficient numbers, hips, mps.communities secretary ruth, house, Home Information Pack, Commons, energy

Hips win vote

The introduction of Home Information Packs (Hips) has survived a last-ditch postponement attempt following a vote in the House of Commons.

Hips are due to become a mandatory part of the home-selling process from June 1st but opposition MPs, as well as a number of industry figures, oppose the packs in their current form.

Shadow foreign secretary William Hague, speaking during a debate in the Commons, described Hips as a “looming fiasco” and a “mistake”.

Tory Spokesman Michael Gove said that the introduction of Hips was “folly” and warned that the housing market will suffer as a result.

“They [Hips] will do nothing to take the strain out of home-buying and only add cost and complexity to the housing market,” he said.

“Ministers have botched this process from beginning to end. They have ploughed on regardless of the potential damage that they are doing to the housing market at an acutely delicate time.”

Hips are designed to reduce the number of home-selling transactions which collapse at the last minute, rid the process of gazumping and encourage homeowners to make their properties more energy efficient.

However, those who oppose their introduction say that they offer few benefits to consumers and, with each Hip costing between £400 and £600, add to the cost of selling a home.

Despite their victory in the House of Commons, by a majority of 72, Hips still face a potentially fatal vote in the House of Lords next week, as well as a legal challenge from the Royal Institute of Chartered Surveyors.

Tags: House of Lords, Home Information Packs, cost, housing market, house, mistake

House prices still rising

House prices have continued to accelerate, with the latest figures showing a rise for the 18th consecutive month.

The Royal Institute of Chartered Surveyors (Rics) has published housing market survey and it makes for bad reading for first-time buyers.

Statistics shows that new buyer enquiries fell for the fifth consecutive month in April and the decline is taking place at a faster rate.

Rics says that this is down to the latest round of interest rate rises which helped to make more homes unaffordable.

“Last week’s interest rate hike may not be the last as the housing market has not slowed as quickly as expected given the initial round of rate rises,” commented Ian Perry from Rics.

“With prices buoyant and conditions still tight, another rate rise later in the summer looks likely.”

Things look set to get worst for first-time buyers as the introduction of Home Information Packs (Hips) in June may force some sellers to take their properties of the market.

Currently, the housing market is benefiting from increased supply as people try to avoid having to fork out for a Hip and prices still continue to rise.

“The fear of paying the upfront buying costs of Hips has pushed more property onto the market,” said Mr Perry. “This will continue throughout May but conditions should tighten if Hips goes ahead on June 1st as sellers withdraw from the market.”

Tags: summer, fear, round, house, Royal Institution of Chartered Surveyors, Home Information Packs

Just 96 mins to choose a house

Home buyers are being warned to take more time over choosing the home of their dreams.

New research shows that many buyers spend just 96 minutes viewing a property before taking out a mortgage on it.

This period of time is vastly smaller than how long we spend deciding where we will take our annual holiday, with the average person spending 139 minutes choosing a destination.

In light of these figures, Abbey Mortgages is warning buyers that they should take more time when deciding on a new home or they may be stung by unexpected problems in the future.

“It really is crucial that home-buyers do as much research as possible before making an offer on a new property. Moving is stressful enough, without having to worry about nasty surprises when you arrive at your new home,” commented Nici Audhlam-Gardiner, head of mortgages at Abbey.

According to the mortgage lender, many homeowners have looked back at the buying process that they went through and have regrets.

Of those surveyed, 21 per cent said that they found the decor in the house had been fitted poorly, 14 per cent suffered from nasty neighbours and six per cent had difficulty finding a parking space.

Abbey is offering a mortgage which covers all upfront costs, meaning new homeowners do not have to worry about any nasty surprises.

This deal may benefit many buyers but anyone considering purchasing a property should ensure that they shop around to find the best deal for them and must not allow themselves to be rushed into a decision.

Tags: Financial Services Authority, destination.In light, mortgage, house, abbey mortgages, choosing, average person spending, upfront costs

Hips will put off sellers

The introduction of home information packs (Hips) to the UK housing market is likely to reduce the number of properties sold.

That is according to the National Association of Estate Agents (NAEA) which says the ’see what happens’ seller is likely to become a thing of the past.

Research shows that around 20 per cent of homeowners, who were not even considering selling their home, have been tempted to put their house on the market after seeing their neighbour get a good price for theirs.

However, the NAEA believes that with Hips set to become a mandatory part of any sale from 1st June this year, this type of seller will be put off – adversely affecting those trying to get a mortgage on a property.

It is going to cost up to £500 to obtain a Hip and this may prove to be too costly for a homeowner who is merely interested in finding out how much their home is worth.

“A significant percentage of sales that go through start with a seller testing the water,” explained Peter King, the NAEA’s chief executive.

“The lack of ability to do this without paying for a Hip first is likely to put many sellers off.

“This will reduce the supply of houses available, cause the market to slow down and lead to additional house price inflation. Both these factors could adversely affect the economy,” he added.

The NAEA is calling upon the government to back down over the introduction of Hips.

Tags: National Association of Estate Agents, government, house, price, NAEA, introduction, cent

Record mortgage lending figures

New figures from the Council of Mortgage Lenders (CML) show that we borrowed a record amount of money in March 2007.

In total, £31.3 billion was leant to people who took out a mortgage on a house, representing an all-time record for lending figures in March.

It is the most amount of money that has ever been borrowed during the month of March and shows that the housing market is still very strong.

The figure for March represents a 22 per cent increase on the amount borrowed in February and a 10 per cent rise on the £28.3 billion which was leant in March 2006.

“This is the highest-ever March lending figure,” said Michael Coogan, director general of the CML.

“It is clear that many borrowers are taking sensible steps to shelter against higher mortgage costs.”

Despite the increasing figures, the CML says that the high levels of mortgage lending may not continue for much longer.

“There is still a question mark over just how strong mortgage lending will be over the coming months as the prospect of higher interest rates takes its toll on demand,” added Mr Coogan.

“But, we continue to expect mortgage lending to reach a record £360 billion this year.”

Tags: money, Mr Coogan, sensible steps, economics, question mark, house, shelter, director general

Stamp duty is “big financial barrier”

The tax man is expected to reap the rewards of Gordon Brown’s final Budget with an additional £1.4 billion expected to enter his coffers as a result of stamp duty alone.

It comes as the Chancellor failed to raise stamp duty thresholds despite the average house price soaring in recent years.

The higher thresholds have been in place since 1997 yet in that time the average house price has rocketed by 175 per cent.

It means that more and more people are now expected to pay the tax, with first-time buyers being hit hardest as they struggle to get a mortgage and take their first steps onto the property ladder.

Homebuyers are required to pay one per cent stamp duty on a property which costs up to £125,000, three per cent for a £250,000 property and four per cent for one valued at £500,000.

The problem is that an estimated 3.5 million homes in England and Wales are now valued at more than £250,000.

“Stamp duty should be indexed in line with house prices and inflation,” said the Council of Mortgage Lenders’ Christopher Dean. “It is a big financial barrier.”

The Treasury has admitted that two fifths of homebuyers in the country will now be required to pay stamp duty.

Tags: Victoria, finance, Herald Sun, treasury, tax, 000, budget, house

Terraced houses see biggest growth

Terraced houses in the UK have seen the biggest price increases over the last five to ten years.

That is according to Halifax Estate Agents which used its own price data in its research.

Over the last ten years terraced house prices have increased by an unprecedented 239 per cent, with flats and maisonettes a close second with a 235 per cent growth.

However, the five-year picture looks slightly different, with flats and maisonettes seeing just an 87 per cent increase, compared to 95 per cent for semi-detached and 113 per cent for terraced houses.

“Terraced properties have seen the largest average house price increases in both the last five and ten years,” said Tim Crawford, group economist at Halifax Estate Agents.

“Although the average price of a terraced house is still below the UK all property average, the gap has narrowed.”

Detached properties remain the most expensive in the UK, with an average price of £326,396.

This figure is in stark contrast to the average detached property price in 1996 which stood at just £110,240.

That sort of money would not even buy you an average terraced house today, with the majority of people paying around £186,316.

Tags: halifax, Halifax Estate Agents, increase, house, Terraced, property, average house price increases

100 days until mandatory Hips

People considering taking out a mortgage on a home are eagerly awaiting the introduction of a law which makes the provision of Home Information Packs (Hips) mandatory.

It is now just 100 days until the law comes into effect and, although the road to this point has not been smooth, it is hoped that the buying and selling process will be revolutionised.

The Association of Home Information Pack Providers (AHIPP) believes that around £1 million will be saved every day as a result of Hips.

This is due to the extra information meaning that the number of transactions which fail to go through each year should fall.

“Hips are being introduced to help improve the house buying and selling process for all involved – bringing more information about a property to the front of the process, allowing buyers to make more informed decisions,” said Mike Ockenden, director general of AHIPP.

“In the locations where packs are being rolled out already we have received a positive response from industry, with many agents taking the opportunity to ensure they are prepared for when packs become mandatory.”

Hips are due to become mandatory from June 1st 2007, with anyone who intends to sell a property on or after that date required to get a pack before advertising the property.

Tags: property, General, Mike Ockenden, Property Information Questionnaire, Home Information Pack, house, positive response

Buy-to-let buyers not causing price rises

A leading property expert says the popular belief that buy-to-let investors are pricing first-time buyers out of the housing market is unfounded.

Michael Ball, professor of urban and property economics at the University of Reading Business School, said investors are not to blame.

He was speaking at the annual conference of the Association of Residential Letting Agents (Arla) and said that there is only one way in which to bring house prices down to a more attainable level.

“It is to build more houses that people actually want to live in and in places where they want to live,” he told the conference.

Mr Ball was keen to emphasise that he feels those considering getting a buy-to-let mortgage are benefiting the market, and society as a whole, and should be encouraged to go through with their plans.

“Without buy-to-let, the private rented sector would probably be much smaller. The quitters would have exceeded new entrants,” he said.

“It enables households to build up their own equity and, although tenants do not share in capital gains directly, they do so through lower rents and lower risk.

“They can do this while living in good standard accommodation, as competition in the rental market is now greater,” added the professor.

Buy-to-let properties account for between five and six per cent of housing in the UK and is a bigger industry than all of the country’s pubs, hotels and restaurants combined.

Tags: house, housing, Letting agent, annual conference, lower rents, risk, buy-to-let

Stamp tax just got easier

An update to the Stamp Taxes Online website could considerably speed up the process of buying a house for many.

Those wishing to submit stamp duty land tax (SDLT) returns online will now be able to receive their certificates electronically, rather than waiting for the paperwork to arrive in the post.

It means that the time between getting a mortgage and moving into a new home will be dramatically reduced.

Stamp Taxes Online was launched in August 2005 and has proved remarkably popular, with over 370,000 of us submitting our SDLT returns in this way.

HM Revenue & Customs says that doing SDLT returns electronically, homebuyers cut down on administration time and are assured greater accuracy.

“We know that Stamp Taxes Online has been incredibly popular to date, and this enhancement will speed-up processes considerably,” said Jim Ferguson, Stamp Taxes’ business director.

“Being able to receive SDLT certificates within a few moments of submitting returns, will be of enormous benefit to busy practitioners working in today’s booming property market.”

If you are in the process of buying a new home and need to submit your SDLT returns it may be worth trying to file them online, potentially saving you time and guaranteeing the accuracy of the information provided.

Tags: SDLT certificates, date, Taxes Online, Rationing, business, Public economics, post, house

First-time buyers making sacrifices

First-time buyers are prepared to give up many of their creature comforts in a bid to get onto the property ladder.

That is according to research from Abbey, which shows that 53 per cent of people are willing to give up their holiday, while 49 per cent would be prepared to not drink alcohol.

Many potential buyers (21 per cent) say that they would sacrifice their independence by moving back to their parents’ home while saving for a mortgage.

A total of nine per cent of those asked are willing to take even more drastic action by splitting from their partner if it meant that they could buy a home sooner.

“With first-time buyers struggling to get onto the first rung of the property ladder, prospective homeowners are having to make big sacrifices to build their finances,” said Nici Gardiner, head of mortgages at Abbey.

“However with a typical first-time buyer taking as long as five years to save up a five per cent deposit, people would need an iron will to sacrifice anything they enjoy for that long.”

Recent figures from the Royal Institute of Chartered Surveyors show that accessibility has got 230 per cent worse in the last ten years due to very sharp increases in house prices.

Abbey says that the average first-time buyer needs to raise £32,784 in order to get onto the property ladder, the equivalent of 81.8 per cent of the average joint income.

Tags: head, Gardiner, anything, surveyors, First-time, research

Housing market may be cooling

There are very early signs that the UK housing market may be slowing down.

That is according to Nationwide Building Society, which says house price growth in January was the lowest it has been for eight months.

According to the firm, prices increased by just 0.3 per cent in January, a significant drop on the 1.2 per cent increase seen in December.

“House prices increased by just 0.3 per cent in January, the smallest monthly rise since May last year, which pulled the annual rate of house price growth back into single digits,” said Fionnuala Earley from Nationwide.

“Prices increased at an annual rate of 9.3 per cent in January, down from 10.5 per cent last month.”

The building society has also predicted that house prices will remain firm despite the recent rise in interest rates and the possibility of further rises in the year ahead.

“2007 started off with a bang as the Bank of England raised interest rates for the third time in six months. Only time will tell how much the surprise decision will affect sentiment in the housing market,” added Ms Earley.

The average price of a house in the UK currently stands at £173,225, down from the £173,746 price in December.

Tags: house, economics, Fionnuala Earley, significant drop, price, firm, Nationwide Building Society

Making sure that you have adequate mortgage protection cover

Recent surveys carried out in the latter part of 2006 seemed to indicate that many homeowners in the UK had failed to take out adequate mortgage protection insurance, and experts warned consumers to make sure that they looked into the type and level of insurance cover that they had for their mortgages. For most people in the UK a mortgage is a long term financial commitment and property purchasing is one of the most costly and important investments that they will make, which is why protecting both is so important.

Most people don’t think about the possibility of not being able to meet repayments on the mortgage when they first take out this loan, but there are many unexpected situations that can arise, which can render is unable to keep up with repayments. For instance, sickness, accidents, and redundancy could leave us unable to earn an income for a certain period of time, which would leave most people struggling to repay the mortgage. Being diagnosed with terminal illness or a critical illness could mean that you can no longer work or earn an income. And if you were to die your family may be left struggling to meet repayments without your income to keep them going. All of these circumstances could result in the loss of your home.

There are different mortgage protection plans available on the UK market these days, and consumers should ensure that they have as comprehensive a plan as possible in place in order to enjoy full peace of mind. Mortgage life insurance is a type of cover that decreases over the term and will ensure that your mortgage is repaid in full in the event of terminal illness, critical illness, or death. Mortgage repayment protection will cover your repayments for a specified period if you are unable to work due to redundancy, sickness, or injury, giving you time to get back on your feet and start work again without worrying about your mortgage.

Tags: unemployed, house, lose, Mortgages, income, Insurance, home, cover

Interest Rate Rise Could Mean Nearly £300M More To Pay For Homeowners

A recent study carried out in relation to the recent interest rate rise enforced by the Bank of England has shown that mortgage payers in the UK could be paying nearly three hundred million pounds more collectively in monthly repayments on their mortgages. The interest rate hike was recently announced, after Bank of England officials increased it from 4.75% to 5%.

The figures with regards to the monthly rise in total mortgage repayments came from an analysis carried out by Egg. Officials from Egg have advised consumers to start shopping around for a better deal on their mortgages in order to try and save money on the amount that they will otherwise have to pay out as a result of the interest rate increase. Those on a variable rate mortgage could find that the 0.25% rise in the base rate could make a significant difference to their monthly outgoing based on the value of their mortgage.

According to the report from Egg, those with variable rate mortgages in the UK will each pay an average of around £35.92 more each month as a result of the interest rate increase. With over eight million mortgage payers currently on a variable rate, this could mean a rise of around £292 million per month on total mortgage repayments.

Officials state that by doing a little research and shopping around for a more competitive mortgage deal consumers could cut back on the financial impact that the interest rate rise has on their monthly outgoings. There are a number of deals available on the market at the moment, and some consumers may prefer to opt for a fixed rate mortgage to avoid further financial implications in the event that the interest rate rises again early next years, as predicted by some financial experts.

Tags: Mortgages, rise, home, debt, reposses, offers, england, interest, deals, pay