Have You Considered Swapping Homes Instead of Selling?

A new trend has arisen in the housing market among those wishing to either upgrade or downsize in their homes. With the housing market in a slump, many who would like to sell their homes are unable to do so because the prices have hit an all-time low. They would not be able to receive enough profit from the sale for it to be of any financial benefit for them. Read more

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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.

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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.

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House accessibility plunges

The chance of first time home buyers being able to afford a house has plummeted in the last ten years.

Since 1996, accessibility has dropped by an astonishing 230 per cent, matching the low levels seen during the 1980s, says the Royal Institute of Chartered Surveyors (Rics).

An average couple who are looking to get on the property ladder will have to fork out 81.8 per cent of their joint take-home pay, just to make up the £32,784 of up front costs needed to buy a typical house, including deposit and stamp duty.

In 1996, a couple only needed 25.2 per cent of their joint income to start the process of buying a home and analysts predict that things are set to get worse, with a 12 per cent rise in prices in the next two years.

“Spiralling house prices have created a property glass ceiling for many first time buyers,” said David Stubbs, Rics senior economist.

“With couples needing nearly 82 per cent of joint take-home income to fund the upfront buying costs of a typical home, the government’s plans to create an inclusive society seem like a pipe dream.

“Unless the government builds more affordable housing, and raises the stamp duty threshold, many households will continue to struggle to access the housing market,” he added.

Mr Stubbs went on to say that tomorrow’s (January 12th’s) interest rate decision would be watched closely by many households, although analysts expect that another rise will be announced.

Tags: property ladder, Institute, upfront buying costs, last ten years, Politics