What can a landlord do when a tenant stops paying their rent?

that rental demand has increased by 15%. Despite this increase demand is still outstripping supply and according to their research an average of 5 people are competing for every one property.

With unemployment at around 8% (National Statistics Office, June 2011), banks enforcing strict lending criteria and general economic uncertainty, it is not surprising that demand for rental property is high. First time buyers can no longer benefit from 100% mortgages to purchase their properties, which leaves very little to inspire confidence. Ever-increasing living costs and spiralling inflation are added factors that cannot be ignored either. With new government initiatives only helping a small percentage of first-time buyers it is obvious why so many will have to rent for longer than planned.

This has left landlords with a positive outlook towards their investment properties with many of the cash-rich continuing to grow their portfolios. The demand for landlord insurance has therefore increased in recent years.

However, the life of a landlord is not always as easy as one may think. There are many reasons why problems might occur during a tenancy. One of the most common issues is tenants not paying their rent. Perhaps a perfectly good tenant might have lost their job and is finding it hard to pay the rent or a couple have split up half way through their tenancy agreement. In other circumstances, it’s fair to say that there are some tenants that were always going to be a problem no matter what.

When a tenant stops paying their rent they are not only in breach of their contract but they start to cause the landlord un-needed stress, mainly because chasing rent soon becomes a time-consuming process and the landlord may start to face financial difficulties. If this happens then the landlord should first write to the tenant and ask them to discuss the situation. The landlord should always try and resolve any issue with the tenant amicably, although clearly this isn’t always possible.

In many cases, the landlord may decide to terminate the tenancy agreement altogether. In such a scenario, a notice is served and then the court takes possession and finally ends the contract. This should be a last resort especially in cases where the financial difficulty may be a temporary one, such as the tenant losing a job etc. The landlord should try to offer and accept other modes of payment such as negotiating part payment terms for a temporary period until the tenant is able to find a new job etc. However, there may be cases where the financial situation of a tenant has changed drastically and receiving the arrears for the rent might not seem possible. In such cases, it is best for the landlord to ask a court of law to intervene and re-gain possession of their property so that they can let it out to a new tenant to avoid further losses. Because of the potential issues that may arise it is always advised that a landlord should speak with an insurance brokers about special cover that includes legal expenses and rent guarantee.

Tags: court, financial difficulties, investment, property, positive outlook

Mortgage lending starts to pick up

Over the past year mortgage lending in the UK has remained very subdued, having gone through a very turbulent and difficult period after the global financial crisis and recession wreaked havoc across the nation’s financial markets. Many people have struggled to get a mortgage over the past year or two, which has resulted in fewer people being able to buy property and far more people having to rent a home.

However, there is some good news on the horizon as recent reports have revealed that mortgage lending levels have increased for a third month in a row, sparking hopes that property sales could start to increase as a result of this. Approvals are now said to be 3 percent higher than they were in July of last year, which is promising news. However, many first time buyers will still struggle to find a deposit for a mortgage, which will continue to cause a problem on the mortgage and property markets.

Despite this news, figures relating to property sales have shown that so far this year property sales have been stagnating. Figures were released by HM Revenue and Customs, showing that in July there were 79,000 property sales. This was the highest number of sales so far this year according to the figures but it was still a lower figure than a year ago.

One economist said that compared to long term trends and norms housing activity was still very low at present despite increases in mortgage approvals.

He said: “With consumer confidence weak and the economic outlook currently looking pretty grim, we see little reason to change our view that modest falls in house prices are more likely than not over the coming months.”

Tags: term trends, property, economist, outlook, horizon, recession

First time buyers could benefit if banks were protected with insurance

For many first time buyers in the UK the dream of homeownership is one that has slipped from their grasp completely, with lenders either demanding huge deposits that first time buyers simply don’t have or refusing to offer a mortgage loan at all. Many first time buyers have been frozen out of the market by cautious banks who do not want to take on the risk of defaults with a high loan to value loan.

However, one major banking group has said that the number of loans granted to first time buyers with high loan to value ratios could increase hugely if insurance companies would offer banks cover that would protect them against defaults. The claim was made by officials at Lloyds Banking Group, who said that the number of first time buyers could double if this sort of insurance cover was made available.

An official from the Council of Mortgage Lenders, Michael Coogan, said recently that he had previously urged the housing minister, Grant Shapps, to look at making improvements by encouraging a ‘more active mortgage insurance market’ which would provide protection to lenders and make them more able to extend low deposit mortgage borrowing for first time buyers. The cover would be mortgage indemnity insurance and would allow the borrower to claim back part of the loss if a person defaults, is repossessed, and then the property is sold for less than the amount owed on it.

One official from Lloyds TSB said: “There’s been a lot of conversation recently about mortgage indemnity and whether it’s a way to manage the transference of risk. You could be missing an opportunity to double the first-time buyer market.”

Tags: mortgage borrowing, value loan, property, claim, tsb, lloyds, lloyds tsb, mortgage

Property Ombudsman reports on estate agent complaint figures

Estate agents have never been known as one of the best loved professions in the UK, and many people joke about how wary they are of estate agents. However, is seems that many people actually are not huge fans of people in this profession and this has been reflected in recent complaints figures that have been released by the Financial Ombudsman, Christopher Hamer.

According to Hamer the number of complaints that were made last year against estate agents in the UK soared to their highest level since records began two decades ago. The previous peak when it came to complaints about estate agents was seen during the peak of the financial crisis and recession back in 2008, but last year’s levels surpassed even this by a massive 28 percent according to the figures.

There were a number of main reasons why people were complaining and in total there were 1338 official complaints that were made against estate agents last year. These related to matter such as lack of communication from the estate agent, marketing and advertising used by the estate agent, and the way in which estate agents had handled complaints made by consumers. Hamer said that the level of complaints was unacceptable and that people were simply not willing to put up with poor service, bad communication, etc. any longer when they were having to shell out a lot of money in the difficult financial climate.

Hamer said: “People are less ready to be satisfied in times of economic stress to accept less than perfect service, especially when they are spending a lot of money.”

The figures showed that the vast majority of complaints related to lack of communications between the estate agents and the consumer. The highest levels of complaints were made against estate agents in the South East.

Tags: Business Finance, percent, property, vast majority, Business and Economy, advertising, The Property Ombudsman

Many could find mortgage repayments lower than rent

These days renting a property is something that a growing number of people are doing, and this is for a variety of reasons. There are many people that are renting purely because they prefer not to be tied down to a particular area or property. Others want to enjoy the convenience of not having to worry about the upkeep of the property. Some people rent because they cannot afford a mortgage, struggle to get finance, or have damaged credit.

Property website Zoopla has recently released data showing that the monthly cost of renting a property is now higher than the cost of buying a home in a massive 80 percent of the UK. It is claimed that it costs about 10.5 percent more on average to rent a home than to buy one, which is an increase from the 8.7 percent seen in the middle of last year.

In fourteen of the largest towns and cities across Great Britain the cost of renting a home was more than 20 percent higher than the cost of buying one. In Milton Keynes, for example, the monthly rent on a two bedroom flat was £785 whereas the monthly cost of buying a home on an interest only mortgage was 42 percent lower at £554.

It is thought that the reason that there is now such a wide gap between renting and buying in so many places is because the high demand for rental homes has resulted in an increase in rents. At the same time low demand for purchased property had driven down the price. With the addition of the all time low base interest rate this has resulted in a situation where it actually costs less per month to pay a mortgage than to pay rent.

Tags: percent, property, buying, massive 80 percent, renting a home, Swansea, low demand, rent

Mortgage rationing to continue next year

Officials from the Council of Mortgage Lenders have stated in a recent report that mortgage rationing is set to continue next year, and consumers that are hoping to get mortgage finance in order to get onto the property ladder may still face disappointment as banks continue to slash their lending.

One of the problems facing the banking industry is repayment of some of the bailout money that they took at the height of the global financial crisis, which needs to be repaid. Sadly, it is likely to be consumers that pay the price once again, as this will result in further restrictions on mortgage and other types of lending, making things more difficult for those that need to take out finance.

The CML has also said that repossession numbers are likely to increase next year, although the increase is likely to be modest. There are a number of factors that may affect repossession numbers, and this includes the government Spending Review and cuts, which could affect people’s jobs. Buyers are also likely to be put off from taking out mortgage finance even if they are able to get it, and this is due to the fragile state of the economy.

The CML said: “Given the continuing economic uncertainties, there is little to encourage buyers. First-time buyers will continue to find it difficult to get into the market. With funding in short supply, the availability of mortgages for first-time buyers will remain limited.”

The Council of Mortgage Lenders concluded: “Activity in housing and mortgage markets is set to remain broadly flat in 2011 and we do not envisage a return to the lending levels that characterised the middle of the last decade for many years to come.”

Tags: money, cml, bank, disappointment, economics

Half of young Brits think renting is a waste of money

It has been revealed in a recent survey that around half of young Brits believe that renting a property is a waste of money. However, despite this opinion many are being forced to rent because they are unable to get a mortgage in the current climate to get onto the property ladder and get a place of their own.

Recently released figures have shown how restrictions in the mortgage market are driving up the cost of renting, and whilst many non-homeowners believe that renting is a waste of money more and more are having to do this and pay more for the privilege. With so many would be first time buyers unable to get a mortgages the demand for rental properties is high, and this is driving property rental prices up further.

Recent research has shown that the amount that buyers are now expected to pay out by way of a deposit is unmanageable for many people, and whilst buyers may have no problem affording the repayments on a mortgage, especially with the base rate at an all time low, many simply cannot raise the deposit required by lenders, which is running into tens of thousands of pounds in some cases.

The level of deposit required in London has reached nearly £30,000 for first time buyers, which means that many are relegated to renting or living with friends and family. However, with the cost of rents having also rocketed some people in the London area would be looking at paying close to £1000 a month just for a one bedroom flat, with the average rent across the UK having now increased to nearly £700.

Tags: research, Renting, property, first time buyer, tens of thousands

Third consecutive drop in asking prices

It has been revealed that asking prices for properties have fallen for the third month in a row, raising further concerns that the UK economy and the property market may be heading towards a double dip. The data comes from a report released by the specialist property website Right Move.

During the five weeks leading up to September 11^th the average asking price on a home put up for sale in England and Wales fell by 1.1 percent, taking the average asking price to £229,767. During the past three months sellers have dropped their average asking prices by 3.4 percent in total, equating to £8000 in terms of value.

The drop in asking prices over the past three month has wiped out half of the gains that have been made during the first part of this year. This gloomy data relating to property prices adds to a number of reports that have painted a bleak picture for the immediate future of the property market in parts of the UK.

Estate agents are currently reporting record numbers of properties on their books that remain unsold, as more people rush to sell their homes at the same time as a greater number of potential buyers decide to hold off committing to a mortgage or are unable to get finance to buy a property.

Officials from Right Move have said that there was a fall in the number of properties that came onto the market over the course of the month, with just over 26,000 properties a week going up for sale each week during the month, reflecting an 11 percent fall compared to August and resulting in the lowest levels seen since April of this year. However, the record number of unsold properties per estate agent stood at seventy nine.

Tags: Right Move, Estate agent, england, property, Wales

Is a ‘friends’ mortgage’ a good idea?

In the past most people that were buying a home either did so alone or with a partner/husband, which was the traditional way of getting a first home. However, things have really changed over recent years, and these days many people cannot afford to buy a home on their own.

This means that many have had to look at alternatives when it comes to moving out from their parents or from rented accommodation and trying to get their foot onto the property ladder, and things aren’t always easy, particularly given the difficulties that many face when it comes to raising a deposit and getting a mortgage in the current financial climate.

One of the solutions that some people have considered is to get a mortgage out with a friend, whereby both friends – or a group – are all in on the mortgage and they buy the property between them. This can certainly solve a few problems, such as being able to raise the amount needed for the deposit and being able to borrow the amount required for the property.

However, this can cause issues in the event that one of the friends involved wants to sell up and move on, as it means that they would have to get rid of their share of the mortgage. Another problem is if there is a falling out, and whilst most friends hope that they will never come to blows to a degree where things cannot be resolved this can happen.

Whilst a friends’ mortgage can be a good way of getting onto the property ladder in the current financial climate it is important for anyone getting involved to ensure that they consider both the pros and cons before making any firm decision or commitment, as things otherwise turn very sour very quickly – and it could end up being a costly mistake.

For those that do not really want to get involved in a mortgage with someone else but do want to get onto the property ladder another solution is to look at shared ownership, where only part of the property is purchased and the remainder is rented through a housing association and can be purchased in stages at a later date as and when the buyer is in a financial position to buy further shares in the home. The buyer then has the choice of buying the remainder of the home until it has all been purchased or remaining a part owner and selling their share when they decide to move on.

Tags: property, mortgage, friends, Mortgage loan, share

Making money from your home

These days many people are finding it difficult to sell their homes, largely because there is a shortage of buyers fuelled by lack of mortgage availability and low consumer confidence amongst would be buyers. The scrapping of the controversial Home Information Packs by the coalition government resulted in more people wanting to put their properties up for sale, but the low level of interest from buyers may have put many sellers in a difficult position.

Whilst it may be difficult for sellers to actually get their properties sold in the current climate there are ways in which it may be possible to make some money from the property if a decision is made to take it off the market until conditions improve. For some people this could be a viable way to clear some more of the mortgage whilst the property market improves.

Hiring out a room to a friend

Many people probably know of a friend, colleague, or even a family member who may be looking for a place to live, and offering a room out to such a person could help out the friend or family member and bring in some more money to pay the bills and mortgage. For many this is a great solution because they are sharing with someone that they know rather than a complete stranger but at the same time will still be able to make some money to make the mortgage and bill payments each month.

Taking in a lodger

In the current climate many people are struggling to afford a mortgage or even to rent a property of their own, and this has resulted in many looking for just a room to rent. If you do not have a problem offering up a room to someone that you do not know personally then taking in a lodger could be a good way to make money on your property. You could advertise your room, or you may find that there are people that place adverts to say that they are looking for a room.

Look at local amenities

It is a good idea to look at local amenities in your area, as you may find that there are colleges, universities, schools, or hospitals nearby where students, teachers, or doctors and nurses may be looking for local accommodation close to their work. Again, it may be a good idea to advertise if you are willing to rent out a room or you may find that those looking for accommodation place adverts themselves, enabling you to contact them.

Tags: month, property, scrapping, position, mortgage, room, accommodation

Why first time buyers could benefit from shared ownership

Buying a property has become an almost impossible feat for many first time buyers in the UK these days, not least because getting a mortgage loan has become so difficult. Whilst property prices have fallen since their peak they are still very high in the UK, and with lenders demanding a large percentage of the property value by way of a deposit many first time buyers still find themselves priced out of the market.

In some cases lenders are demanding in excess of 15 percent of the property value by way of a deposit, and this is something that most first time buyers cannot manage, as they have no pervious property from which to take equity. As a result of this many first time buyers are having to move into rented accommodation, which makes it even more difficult to save a deposit to get themselves onto the property ladder.

However, there is another option that could prove ideal for many first time buyers in the UK and this is an option known as shared ownership. With a shared ownership property buyers only get a mortgage for a set percentage of the property value, and the they then pay rent on the remaining share to a housing association. Because they are only buying a share of the property initially they will need a lower mortgage and a lower deposit, but can still get themselves on the property ladder, albeit more gradually than in the traditional way.

The share of the property that first time buyers can get will vary based on the property and the housing association, and could be anything from between 25 percent and 75 percent. Often the houses that are sold as shared ownership are new build, which means that buyers can get their hands on a brand new property without having to find a huge mortgage and deposit upfront.

The great thing about shared ownership is that you will not have to rent the remaining share of the property forever, as you can ‘staircase’. This means that over time you can buy additional shares of the property as and when finances allow until eventually you own 100 percent of the home. Alternatively you may wish to continue on a shared ownership basis and then sell your share of the home to another person that wants shared ownership when you want to move on.

A number of housing associations deal with shared ownership properties, and there are both new build properties available as well as resales from those that want to sell their own shares in these properties. Whilst there may not be a huge difference in the amount that you pay out monthly with shared ownership compared to getting an outright mortgage (although it is generally cheaper) the key advantage is that you will not need a huge mortgage or deposit to start off with and can buy the remainder of the home as and when it is viable for you.

Tags: first time buyer, property ladder, mortgage, property, Equity sharing

Is renting more viable than getting a mortgage?

 

Homeownership is a dream that many people hope to achieve, but over recent years many have experienced a range of hurdles when it comes to getting onto the property ladder. First time buyers in particular have experienced many difficulties from sky high property prices to lack of mortgage available, crippling deposit demands, and more.

 

One recent report has now questioned whether first time buyers are better off renting a property rather than trying to buy in the current climate. In the recent emergency budget it was announced that the new government was looking into scrapping the stamp duty holiday extension for first time buyers, creating further financial difficulties for those that were looking to buy.

 

In addition to this the new chancellor, George Osborne, announced that the Financial Services Authority would no longer exist in its current form and that the Bank of England would be given greater powers to regulate the banking sector, which could mean that a cap is placed on the amount that banks can lend, creating further difficulties for first time buyers.

 

Officials have said that this means first time buyers could face difficulties in finding an affordable property, getting an affordable mortgage, borrowing the amount that they need for the purchase, raising a deposit, and affording the repayments. If they rented, on the other hand, they would only have to pay a month’s rent and a deposit upfront and would not have to worry about repairs because this would be dealt with by the landlord.

An official from the National Landlord’s Association said: “At a time when government funding is strapped, it is private investment that will enable essential housing needs to be met. Rather than being seen as a last resort, private tenancies are becoming the choice of many people who need the freedom to choose homes where they need and for as long as they need.”

Tags: mortgage, property, Renting, first time buyer, home

Property prices increase again

According to data released by a High Street lender property prices have increased again in May, and the average property price is now closing in on the peak achieved in 2007 before the inset of the global credit crisis sent property prices tumbling. The data has been released by the Nationwide Building Society, which has reported a 0.5 percent increase in May, taking the average house price to £169,162.

Despite the increase in property prices the lender did warn that there was a shortage of properties on the market for sale, which meant a low level of property transactions that was affecting property prices. Since February of last year average house prices have increased by 12.2 percent according to the lender, and the average house price is now only 9.5 percent lower than the peak in 2007.

In terms of monthly increases the level of the increase seen in May was lower than those seen in March and April, with the May increase coming in at 0.5 percent compare to 1 percent in March and 1.1 percent in April. Officials have said that whilst the news of rising property prices will be welcomed by homeowners the lack of transactions in the housing market had remained relatively low since the end of last year.

One industry official said that stock shortages and low interest rates had been lifting house prices, but added that it was likely that more properties would come onto the market as a result of the government getting rid of Home Information Packs.

An economist from the Nationwide said: ‘Housing market conditions remain characterised by thin transaction volumes and a relative scarcity of properties for sale, despite a slow return of more sellers in recent months. The current supply-demand balance on the market is still consistent with relatively stable to modestly upward trending prices.’

Tags: Business and Economy, building, low interest rates, Nationwide Building Society, property, prices

Should Brits take out loans for weddings?

As most married couples will already know getting married can be an expensive affair if you want all the trimmings, and those that are looking to have the perfect wedding, entertain guests, provide food and entertainment, and round things off with a romantic honeymoon will know that the cost can run into thousands of pounds.

In the current financial climate it can be difficult for couples to save the kind of money that they need for a wedding within a reasonable space of time, particularly if they also want to put a deposit down on a property. It would therefore be natural to think that many couples look into taking out a loan for their special day.

Many couples do turn to personal or wedding loans in order to pay for the big day, and those that do are advised to look for the best rate of interest and the best deal possible, although some people may be put off from starting their married life in debt.

Whilst those getting married may consider a loan for their big day, recent research has shown that attendees are far less likely to take out a loan in order to pay for expenses at the weddings of their loved ones. In fact, Santander carried out research showing that only 1 percent of Brits would actually take out a personal loan to fund the cost of going to the wedding of a loved one.

Emma Roberts from Santander said: “It’s easy to overlook the cost involved in being a wedding guest but the outlay can be significant, both before and during the big day. The last thing people want to be thinking about when preparing for a loved one’s wedding is the expense involved but costs can quickly mount up.”

Tags: Brits, debt, loan, Marriage, property, wedding, interest, whilst

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

Renting out your home short term could be made more difficult

For many people in the past being able to rent out their homes when they are away for a period of time has been a great way to raise a little extra cash as well as to save leaving their property empty. Read more

Tags: time, consent, property, mortgage, Mortgage broker, order, climate, problems

Tenants now carry out reference checks on landlords

There was a time when any tenant was considering moving into a privately rented property that the landlord would be sure to get a credit check carried out on the potential tenant. Read more

Tags: real problems, property, Politics, reference, top, check

High demand for property creates house price bubble

According to a recent report the high demand for property from potential buyers has resulted in a house price bubble being formed in the UK. Read more

Tags: base intrest rate, potential buyers, estate, recent report, house prices, housing bubble, property demand, property

More lenders starting to look at lower deposits

Over the past couple of years things have been very difficult for first time buyers, and one of the things that has really affected the abilities of first time buyers to get onto the property ladder is the huge deposits that lenders have been demanding since the onset of the global credit crunch. Read more

Tags: interest rate, Mortgages, low deposit mortgages, Banking, 5% mortgages, demand, property, cry

Mortgage war could be sparked by HSBC

Earlier this month the High Street bank, HSBC, which also owns the Internet bank First Direct, announced that it was cutting mortgage loan rates even for those with smaller deposits. Read more

Tags: lloyds, small deposit mortgages, property, mortgage debt, hsbc mortgages, hsbc, Mortgages, debt

Homebuyers being shut out by many lenders

A large number of homebuyers are having the door shut in their faces by lenders, according to a recent report. In the current financial climate an increasing number of lenders are becoming more and more stringent about who they will lend to, and as a result of this many homebuyers have been left out in the cold because they are not able to get the finance that they need to purchase a property. Read more

Tags: equity, standard deposit, property, report, bank, bank of england

Mortgage deals keep disappearing

Since the latter part of 2007 the world of mortgages has seen a lot of changes, and the sector has been in turmoil ever since this time. Read more

Tags: range, property, Northern Bank, 100% mortgage, Mortgages, low level

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

Interest only mortgages being affected by price falls

The house price falls that have been ongoing for over twelve months have had many adverse effects, and according to recent reports these price falls could result in real problems for those that have interest only mortgages. These are mortgages where the monthly repayments are all put towards the interest owed on the loan with the actual loan balance remaining the same until the end of the mortgage term, at which point it needs to be paid off. Read more

Tags: Financial services, Loans, official, interest only mortgages, house prices, actual loan balance, property, money

Many new buyers getting help from parents

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

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

Auction cut prices on property

Potential property purchasers that want to take their chances on properties that go up for sale at auction could benefit according to a recent report, which suggests that auctions are cutting the prices of their properties. Auctioneers are being forced to cut the prices on properties going under the hammer due to the housing slump, and many buyers heading for the auctions could enjoy huge savings as a result of this. Read more

Tags: recent report, August, Melbourne, downturn, come down, housing slump, property auctions, property

Buying better than renting in some areas but not all

Over recent months first time buyers have experienced huge difficulties when it comes to getting a mortgage to purchase a property, with the global credit crunch resulting in far tighter credit conditions, and with lenders demanding higher deposits and increasing the interest rates on mortgage loans. With house prices falling, and expected to fall further, those that now commit to purchasing a home could end up facing negative equity in addition to the other problems. Read more

Tags: addition, rent, mortgage loans, loan, savings thousands

Homeowners flock to try and sell homes

According to a recent report many homeowners are panicking because of the ongoing drop in property values in the UK, and this has resulted in a million homes being up for sale recently. Property values have been falling for some months, and many industry officials believe that they could fall by in excess of 10% by the end of the year. Many homeowners are worried that if they wait to sell their homes they could end up losing thousand of pounds more on the value of the property. Read more

Tags: remortgage, property, Business and Economy, report, Real estate appraisal, May, consumers, homeowners

First-time buyers face bigger deposits

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

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

Housing slide gives hope to first time buyers

New data from the Royal Institution of Chartered Surveyors (RICS) claims that house prices are falling at their fastest rate since 1978.

For the seventh consecutive month, a majority of surveyors reported that sale prices are falling – and that is being felt in every part of the UK.

The negative trend is also being reported by ever-more surveyors – 64.1 per cent confirming falling prices in February compared to just 54.7 per cent in January.

RICS spokesman Ian Perry warned: “While there is very little new supply coming onto the market, it is unlikely there will be significant price drops in the short term but the build up of unsold stocks will encourage buyers to negotiate lower asking prices.”

Nevertheless, this could be a positive development for first time buyers, who have seen the price of even the most modest home soar far beyond their reach in recent years.

Ulster Bank head of mortgages Derek Wilson told the Belfast Telegraph: “The expectation is that transaction numbers will now increase and that first time buyers will become increasingly active with asking prices considered to be more realistic.”

Tags: sale prices, little new supply, the Belfast Telegraph, sale, Derek Wilson

Stamp duty takes its toll on first time buyers

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

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

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

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

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

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

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

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

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

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

Housing market ‘in worst slump since 1992′

The housing market in the UK has fallen to its worst economic slump since 1992 when it last came out of a financial recession, according to the Royal Institute of Chartered Surveyors (RICS).

With the balance dropping for the sixth month in succession, 54.7 per cent more chartered surveyors reported a fall rather than a rise in house prices, the highest number for 15 years.

Jeremy Leaf, a spokesman for the RICS, said: “A lack of demand and confidence in the housing market is clearly behind the recent price slowdown.”

He added that tightening mortgage lending criteria is a block to many who are keen to take the “housing market plunge” while sellers are struggling to market properties to consumers content to “watch the current economic theatre from the wings”.

According to surveyors, the only part of the UK where prices continue to rise is Scotland with the net balance of surveyors in that country reporting price rises edging up from three per cent to seven per cent.

Meanwhile, a man who did not make any mortgage repayments for 15 years has had his debt erased by judge in an appeal court.

Tags: RICS, Mortgage loan, consumers, demand, property, Surveying, market, Real estate

Fall in house price tempts buyers

One in ten people who intend to buy a house have brought their plans forward due to the recent price falls in the market, according to new research.

A survey by personal finance information providers Fool.co.uk has shown that 11 per cent of potential home buyers have accelerated their plans.

Out of those respondents, 38 per cent expect to move this year and one in three believe they will change their property in 2009.

David Kuo, Head of Personal Finance at Fool.co.uk, said: “The long-overdue correction in the property market will allow many people who have been waiting to move house to finally realize their dream.”

However he added that many buyers often approach the financial thinking behind purchasing a home in the wrong order.

“Quite often people will ask how much they can borrow when they want to buy a property. But that is altogether the wrong question. Instead, they should ask themselves how much they can afford to repay,” he said.

Fool.co.uk revealed that over a third of Brits spent New Year in their homes to save money.

Tags: New Year, Head of Personal Finance, property, fool, New Year's Day, personal finance information

‘Advice needed’ on equity release options

Homeowners interested in equity release should get more information from a regulated consultant, an expert says.

Bob Mottershead of Newcastle Building Society’s (NBS) Equity Release Service said he was concerned that the results of an NBS survey showed people did not understand equity release.

Almost a quarter (24 per cent) of respondents to the poll said they did not know where to get advice despite almost half (45 per cent) considering it as an option.

NBS included holidays, home improvements and paying off debts among the top reasons for freeing equity from a property.

However, 14 per cent of respondents were reluctant to reduce their children’s inheritance by considering equity release.

Mr Mottershead said: “It’s quite concerning to see from the research that so many people don’t know where to go for guidance.

“Equity release isn’t right for everyone so our advice is to speak to a regulated consultant.”

Tags: Equity Release Service, Informa, information, poll, regulated consultant

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

Insurance policies ‘will increase value of items over Xmas’

Many insurance policies covering home contents will automatically raise the sum of the items insured both during and after the Christmas holidays, the Association of British Insurers (ABI) has warned.

This automatic increase will take place in order to account for the number of valuable gifts that people receive over the holidays.

A spokes person for the ABI, Malcolm Tarling, also issued a warning to students to make sure and check their policies’ stance on items which are in unoccupied property.

He said: “The value of items in homes tends to go up over the Christmas period, [but also] in the months after Christmas as well.

“I would imagine there is an above average number of iPods and digital TVs and camcorders and technical gadgets and all the rest of it.”

A recent survey from Liverpool Victoria found that the average home in the UK has over £25,000 worth of content.

Tags: Christmas period, content, Xmas, Insurance, technical gadgets, order, property, unoccupied property

HIPs rolled out to all homes from December

The controversial Home Information Packs that are currently required for homes of three bedrooms or more that are being marketed for sale in England and Wales will not be rolled out to all other properties, according to reports.

When Home Information Packs or HIPs were brought in earlier this year they were applied to homes of four bedrooms or more. This was then switched to homes of three bedrooms or more several months ago. And now, according to the report, the government has announced that HIPs will be required for all properties being marketed for sale in England and Wales.

The HIPs will come into force for all properties going up for sale from December 14th, which means that any residential property in England or Wales that goes up for sale from this date will need to have a Home Information Pack. However, various statistics have revealed that HIPs may not be having the impact that the government had hoped, and for the first time since they were introduced the government has admitted that these packs may have adversely affected the housing market.

According to a report released by the Housing Minister Yvette Cooper HIPs had impacted on people putting their properties up for sale, causing delays in people deciding to sell their homes. Another report from Europe Economics showed that HIPs had not sped up home purchase transactions by providing more required information to buyers, which is something that ministers had claimed that HIPs would do.

A statement following this study read: ‘Hips may have had an additional modest-but-material effect on listings activity but no discernable impact on transactions, mortgages or prices.’ Surveyors now state that the introduction of HIPs for all properties may results in a drop in the number of starter homes coming onto the market for sale.

Tom Smith
30th November 2007

Tags: packs, home, sell, december, information, uk, property

Popularity of equity release in the rise

According to a recent report the popularity of equity release schemes is on the up, and experts state that the quality and service in this area is also improving.

Equity release schemes have gained a bad reputation and have been at the centre of controversy, with one equity release provider recently being fined by the Financial Services Authority for giving inaccurate advice to consumers. However, despite its poor reputation equity release is becoming a hit with older homeowners.

According to Norwich Union these equity release schemes are particularly popular with homeowners that are close to retirement. In a survey of 1600 people between the ages of 50 and 56 one in ten stated that they would consider equity release programmes in the future. These schemes were not as popular with those that had already retired, with survey results showing that only one in twenty retired consumers would look at equity release.

One equity release worker stated that the information provided to consumers these days is far more detailed and comprehensive.

She said: ‘The market today is very different. The paperwork given to customers before they sign goes so much further. It really shows what they’re getting into.’

A Prudential equity release customer also said: ‘I was afraid of the financial bits, but my neighbour sat in on one of the meetings. It told me how much I could draw down and I’ve taken about a third of an agreed maximum.’

She added: ‘The compound interest rate is the nasty bit. The man from the Pru worked out that on average I’m likely to live another 27 years. He then told me how much I’d owe, based on the interest rate, if I borrowed varying amounts over various times.’

Alan Wright
26th November 2007

Tags: mortgage, property, loan, value, equity, release, home

Three interest rate cuts predicted for 2008

According to city economists homeowners in the UK will be able to enjoy easier financial management next year with predictions that interest rates will fall two or three times over the course of the year.

Since August 2006 interest rates have risen five times, each time by 0.25%, and this took the base rate from 4.5% to 5.75% in under a year. Since July of this year interest rates have remained stable at 5.75%, despite calls from some agencies for the Bank of England to cut rates.

Economists are now predicting that interest rates could fall back to 5% next year through a series of interest rate cuts. Some economists predict that there may be one interest rate cut by the end of this year and a further one early or mid next year. However, the timing of interest rate cuts will be dependant upon data reflecting continued economic slowdown. GDP growth forecasts have been downgraded for next year, and this is because of factors such as the series of interest rate rises, volatile financial markets, and the current strength of the pound.

One economist stated: ‘Crucially the Bank has validated market expectations that we are going to see two or three interest cuts in 2008.’

Another said: ‘The report is markedly more doveish and indicates that at least two interest rate cuts are likely.’

Any interest rate cuts are likely to be welcomes by homeowners, who have seen their repayment rocket over the past year, with interest rate rises adding hundreds of pounds to the mortgage repayments of some homeowners. There is also set to be financial turmoil for those due to come of cheap fixed rate mortgages deals over the coming months, and an interest rate cut could help to ease the financial impact.

Alan Wright
24th November 2007

Tags: Loans, fixed, cuts, cheaper, property, offers, interest, rates, rate, deals

Mortgage and housing fundamentals ‘broadly positive’

With such variety in predictions about which direction the markets will take, IMLA have said that there is a “broadly positive” outlook for house prices and the mortgage market.

It explains that this trend is unclear due to the disparity between demand for houses and the supply available, as well as the “inadequate” amount of new builds happening over the past years.

Executive director of IMLA, Peter Williams, commented: “Without doubt, there are some clouds on the near horizon but IMLA’s view is that, if the market correction gathers pace in the way some pundits suggest, then we should expect firm action by the Bank of England to support the financial markets, provide liquidity and, if necessary, cut rates to protect confidence and help the markets recover over the medium term.”

He added that, inflation in house prices varies from place to place across the country, saying that, realistically, it will only be those who have bought a property at the market peak who will be effected by the market slowdown.

Tags: pundits, property, amount, market, cut rates, market peak

Signs of housing market cool down

Predictions from many economists and analysts that the housing market in the UK is cooling down have been proven following figures relating to house prices for September.

According to figures house prices in September fell for the first time since December, and to many this reflects the start of the cooling down period for the UK housing market. The figures come from the HBOS house price survey. According to the figures there was a 0.6% drop in house prices, which was a far cry from the predicted 0.4% increase.

The average house prices has now fallen to just below the £200,000 mark, taking the annual three month rate of house price inflation to 10.7% compared to the expected 11.1% rise that had been forecast. Halifax officials state that although the economy remains strong it is likely that house price inflation will fall further in the coming months, as the housing market in the UK continues to cool.

Martin Ellis from the Halifax stated: “September’s price fall is consistent with the normal behaviour of the market during a slowdown. A mixed pattern of monthly price rises and falls is a typical feature of a more subdued housing market.”

This could mean good news for first time buyers that are looking to get onto the property ladder, but could result in problems for those that have recently taken out large mortgage, many of whom could find themselves falling into negative equity.

The likelihood of an impact on consumer spending has also increased as a result of the slowdown in the housing market.

One economist stated: “Since house prices gains have stalled, we believe it is highly likely that spending growth will also hit the wall in the months ahead.”

Tom Smith
4th November 2007

Tags: housing, decrease, mortgage, fall, property

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: house, mortgage, cost, property, first, buyers

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: cost, stamp, prices, taxes, fees, hme, house

First-time buyers must look at mortgage ‘options’

People buying a property for the first time are urged to look at the options available to them, said FirstRungNow today.

The property advisors said that, while fixed rate mortgages provide a risk free service, first-time buyers have a range of possibilities available to consider.

Helen Adams, managing director of FirstRungNow, said: “I’m not a great fan of interest only mortgages, myself, because it doesn’t actually help you invest towards your own home – you just pay off a loan.

“But certainly there are some other shared equity or shared appreciation mortgages which offer a solution.”

She added that “long term payback periods” were beneficial because they allow repayment to take place over an extended length of time, taking pressure away.

However, she said, some people only look to the short term and want to be financially “mobile” adding that 100 per cent mortgages a good for people who are not able to provide a deposit or pay stamp duty.

Chancellor Alistair Darling recently announced proposals to assist lenders in providing more ten-year fixed rate mortgages.

Tags: today.The property advisors, cent mortgages, rate mortgages, fixed rate mortgage, Mortgage loan, Chancellor Alistair Darling, property

Three bed homes to be covered by HIPs

The controversial Home Information Packs, also known simply as HIPs, have so far been used on properties that are being sold and have four or more bedrooms.

These HIPs were designed to cover all homes being sold, but lack of training of relevant assessors meant that there were not enough resources to cover this, and as a result only houses with four or more bedrooms were covered when the scheme was finally launched earlier this year. However, the government promised that as further staff members were trained the scheme would be rolled out to cover all properties.

It seems as though the government is quickly ensuring that it keeps its word, after an earlier announcement this week that HIPs would now also cover three bedroom homes. The plan is to continue rolling out the scheme to smaller properties as time goes on a more staff are trained, until eventually all homes will be covered with the Home Information Packs. These packs will provide a range of details such as energy information, property deeds, and more.

The HIPs have been at the centre of controversy for some months, with many experts stating that they will have a negative impact on the housing market, and that they will prove too costly for sellers. Although these packs provide information for the buyer of a property, and can save them time and money, they will cost the seller, and could prove troublesome for sellers according to some professionals.

According to the Communities Minister Baroness Andrews: ‘We are now ready to start rolling out Hips and EPCs to the next part of the market as promised, and improve the home buying and selling process which currently is not working for consumers or the environment.’

Tom Smith
1st October 2007

Tags: government, property, information, home, hips, packs

Buy-to-let mortgage market affected by credit crunch

The UK’s buy-to-let mortgage market is being adversely affected by the recent credit crunch, according to a financial website.

Research from Moneyfacts.co.uk indicates that it is becoming increasingly difficult for potential property investors to obtain a buy-to-let mortgage as more and more lenders are raising the cost of taking out such a loan.

It is also thought that some lenders have decreased the number of products they have available for potential borrowers.

“The trend over recent years has been a falling rental income cover requirement, so with lenders reversing this trend, it’s a definite sign that some are taking a more cautious outlook,” commented Moneyfacts mortgage expert Julia Harris.

Nonetheless, she did note that while the buy-to-let market is “taking a battering at the moment” if you are prepared to look “there are still some very competitive deals to be found”.

“Perhaps lenders are just taking a breather, giving them time to evaluate the market and perhaps re-launch with re-priced products, which will more than likely be at a higher rate.”

Tags: borrowers, rate, market, launch, moment

High tenant demand benefits buy-to-let investors

Confidence in the buy-to-let sector is sky-high, with landlords reporting an increase in average yields and plans to expand their portfolios.

A buy-to-let trends survey of landlords by Paragon shows that despite rising interest rates, landlords are more confident than ever in their property investments.

Paragon’s confidence index – which is based on the value of their property portfolios now and their expected value in twelve months’ time – is now standing at 160, up from 155 last quarter and from 150 a year ago.

John Heron, managing director of Paragon Mortgages, commented: “Landlords are confident because tenant demand is strongly underpinning the market.

“Young people are choosing to stay in rented accommodation for longer, while there are a growing number of students and immigrants who are fuelling demand for rented property.

“Just this week we have had data on record numbers of students and strong net immigration figures which indicate demand for private rented property will continue to rocket.”

High tenant demand has meant that landlords can up their rents, counteracting the squeeze from rising interest rates and higher house prices.

Slowing in the housing market has also been beneficial, with landlords taking advantage of the dip and building their portfolio, and many plan to continue to do so over the next year.

Tags: confidence, john heron, landlords, Paragon, property

Future demand for buy to let mortgages could fall

According to a recent report the demand for buy to let mortgages could fall in the future, as a slow down in the rise of property values hits, lumbering landlords with higher mortgage repayments but lower house value inflation and rental income.

However, reports have also indicated that at present landlords are doing very well, and in the past year enjoyed returns of around 13%. Reports indicate that landlords saw the property vales rise on average by around 7.3% and saw rental returns of around 5.5% of the property value.

The figures come from a report issued by Birmingham Midshires. The report indicated that although the 13% property value rise seen was up from the previous twelve months of 11.9% rental payments dropped from 5.7% in the previous twelve months to 5.5% last year. Birmingham Midshires warned that the interest rate rises had led to mortgage repayments being higher than rental payments, and that this could have a dampening effect on the popularity and take up of buy to let mortgages.

One economist from the building society stated: ‘While house price growth in the sector is expected to be more subdued near-term, reflecting the impact of higher interest rates, the potential for further increases in rents should encourage long-term investors. There also remains the potential for healthy long-term capital appreciation in the buy-to-let sector, particularly given the backdrop of more households being formed each year than there are new properties being built.’

Along with homeowners buy to let landlords are likely to be hit hard by the interest rate rises that have been applied by the Bank of England over the past year, as it means higher repayments on the mortgage without higher rental income.

Tom Smith
1st August 2007

Tags: Mortgages, cost, interest, rent, let, value, property, landlords, buy

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: house, inflation, foreigners, increase, london, Mortgages

Hips earnings ’sliced in half’

Pack providers have cut the earning potential of home inspectors implementing the new Home Information Packs (Hips), it has been claimed.

Interviewed on BBC Two’s Working Lunch, home inspector Alyson Cadd said that her potential earnings could now have been halved, thanks to meddling by high street providers.

“The pack providers… have now basically driven themselves between us and our clients, which would have been the estate agents or even the self-seller, the seller of the property, we now have the pack providers and these panels that we have to contact.”

She added that providers were “not just taking the commission or a cut; they’re actually taking half our fee in many cases, certainly the larger pack providers which really seem to have cornered the market with a lot of people”.

Hips, sometimes known as seller’s packs, will become mandatory for sales of homes with four bedrooms or more in England and Wales on August 1st, before being extended to cover all properties over the next year.

Ms Cadd also strongly criticised the delays to the scheme, which was originally to have been implemented across the country earlier this year.

Describing herself as “angry and stunned” by the hold up, she said that she knew of people who had given up jobs to become home inspectors in time for the original start date who had been left badly out of pocket as a result.

Tags: inspector alyson cadd, Home Information Pack, half, earnings, start

Brits emotionally detached from their homes

The majority of British homeowners are not living in their dream home and remain emotionally detached from their property.

Research by Alliance & Leicester shows that just 2.3 million UK adults have found their dream property, while the rest are simply making do.

Mortgage holders were asked, on a scale of one to ten, how emotionally attached they were to their homes, with the average rating being just 5.83.

This means that most Brits see their current home as a halfway house and most would rather live somewhere else.

Alliance & Leicester suggests that this may be down to the fact that many people are so desperate to get onto the property ladder that they will accept anything.

The firm also points to an increasing number of new-build flats that lack character and are primarily seen as an investment by young buyers.

“It seems people are happy to move into a property that isn’t their ideal, in order to move up the property ladder and reap the benefit of rising house prices,” said Stephen Leonard, director of mortgages at Alliance & Leicester.

“More and more people seem to be looking for property on the basis of an investment, rather than buying their dream home.”

The research also found that location is the most important factor when choosing a home, followed by price.

Tags: rest, first time buyer, property, Stephen Leonard, Mortgage loan, benefit, basis, house prices

Discounted Mortgages – Compare Introductory Discount Mortgage Offers

With so many different types of mortgages available in the UK it can be difficult for homeowners or property purchasers to determine which is the best one for them.

Those looking to remortgage or those taking out a first mortgage can usually select from a range of special deals on mortgages from lenders that want to entice customers. Once of these is the discounted rate mortgage, which enables the borrower to enjoy lower monthly repayments compared to those on the lender’s standard variable interest rate. Read more

Tags: discounted mortgages, property, Mortgages, remortgage, borrower, Mortgage loan, loan, variable interest rate

Help for flood victims

As much of northern England and parts of Wales suffer at the hands of huge floods caused by torrential rain, Direct Line is offering homeowners information on how to make an insurance claim.

The firm has deployed hundreds of members of staff to the affected regions and help is being offered to those in need.

Flash floods have so far claimed the lives of three people and thousands of properties have been severely damaged by the water.

Rescuers say that water levels are beginning to subside but more rain is predicted for the coming weekend and residents are bracing themselves for another round of flooding.

Once the weather eventually returns to normal and people begin assessing the damage to their homes, many will begin thinking about making a claim on their insurance and that is why Direct Line has gone to the affected areas.

“Our main priority is to help people get back to normal as quickly as possible and with the least amount of inconvenience,” said Andrew Lowe, head of home insurance at the firm.

“Additional staff have been deployed to help manage the higher than average number of calls and we are prioritising those where people’s health and safety is at risk.

“However, we ask our customers to be patient with us as it is taking longer than usual to answer and deal with calls,” he added.

Customers are advised to take photographs of any damage caused and keep all damaged items. Electrical equipment and gas appliances should not be used until they have been thoroughly checked by a professional and redecorating should not take place for a number of weeks so that the property is completely dry.

Tags: property, flood victims, Financial economics, home, patient, health, gas, flash floods

Celebrity former homeowners increase value

Discovering that a famous or infamous person used to live in your house can add around ten per cent to the property value.

That is according to new research by family and social history website Ancestry.co.uk, which is also reporting a boom in people interested in finding out about their past.

This is in no small part down to a desire to increase the value of their property, with 21 per cent citing this as the reason.

Famous former residents make a house more saleable and recent success stories have seen the former home of playwright Noel Coward and Doctor Who writer Terry Nation generate huge interest and get snapped up very quickly.

“If your home has been lived in by a famous former occupant it will inevitably increase the publicity of the property and therefore the saleability,” said Michael Fiddes, head of national estate agency Strutt and Parker.

“Whilst it is hard to say exactly how much value this would add to a property, it can be anything up to ten per cent.”

Many people will be completely unaware that they live in a property that was once the home of someone famous but a few intriguing abodes have yet to be discovered.

The house where David Bowie was brought up in Bromley remains a mystery, as does John Lennon’s Blackpool property and Bob Dylan’s Crouch End house.

Tags: Dylan's Crouch End, new research, playwright noel coward, Family law, property, abodes, doctor who, cent."Many people

Savers are short-sighted

Millions of consumers are only saving money to achieve their short-term goals, new research has indicated.

An estimated 7.5 million Britons save cash just to meet their immediate needs, according to a report by website Unbiased.co.uk.

A further 3.8 million are thought to be “frivolous” spenders, driven to part with their cash because of their desire to acquire certain purchases, rather than their ability to afford them, according to the study.

The report, commissioned by IFA Promotion and based on official data and a YouGov survey of consumers, concludes that there are two frivolous spenders for every Briton who is financially aware.

Dividing the nation into five categories according to their spending habits, the study also suggests that even one in ten “bargain” spenders do not have any savings.

“This year’s research into the nation’s propensity to save shows some improvement, but it is disappointing that we still define ourselves as a nation of spenders rather than a nation of savers,” said Unbiased.co.uk chief executive David Elms.

News that many Britons are failing to save for a rainy day follows research published yesterday indicating that the majority of the nation’s wealth is now tied up in property rather than traditional financial assets such as savings.

Some 55 per cent of the UK’s wealth is now linked to equity in properties, the study commissioned by the insurer Prudential found.

Tags: insurer, propensity, rainy day, money, year, property, spending habits, United Kingdom

Personal loans an option for home improvers

Personal loans are an option that people considering carrying out expensive work on their homes should consider, Alliance & Leicester has said.

According to the company, improvements such as loft conversions can add up to £100,000 to the value of a home.

However, developments like these do not come cheap, with the average cots of a dormer loft conversion currently around £23,000.

Many homeowners may instantly think to add such an expense to their mortgage, but Alliance & Leicester claims that a personal loan could be up to £15,000 cheaper in terms of interest payments.

“Carrying out home improvements instead of moving can have amazing results, potentially increasing the value of your existing property and also saving a great deal of money as well,” said Richard Al-Dabbagh, senior personal loans manager for Alliance & Leicester.

“If you are looking to undertake a sizeable home improvement, there will be a massive temptation to simply take out a further advance on your mortgage. But a personal loan could represent a cheaper alternative for those who can afford higher monthly repayments over the shorter term.”

Tags: alliance, dormer loft conversion, work, home improvement, property, Richard Al-Dabbagh, interest payments, loft conversions

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 Estate Agents, halifax, house, Terraced, average house price increases, property, increase

Fifth paying higher stamp duty

Almost a fifth of us are being forced to pay stamp duty at higher rates because house prices are soaring.

That is according to Halifax which says that the government should act by moving the stamp duty thresholds so that they better reflect the current housing market.

The bank says that in the past five years the number of homes in England and Wales which have been sold for more than £250,000 has increased fourfold.

Halifax points out that this means 19 per cent of homebuyers are paying at least three per cent tax, a vast increase compared to the six per cent who were doing so in 2001.

“Stamp duty revenue raised from home sales continues to rise rapidly,” said Tim Crawford from Halifax.

“Bracket creep has been a key factor as a growing percentage of property sales now occur above the higher stamp duty thresholds of £250,000 and £500,000, which have not been changed since their introduction in 1997.

“Nearly a quarter of postcode districts in England and Wales now have an average price above the three per cent stamp duty threshold of £250,000, compared to only one in 20 districts five years ago,” he added.

Stamp duty is only applicable to house sales above the £125,000 threshold, with buyers paying a one per cent tax. The higher duty comes in when a property is bought for £250,000, while an even higher duty of four per cent is levied on properties above £500,000.

Tags: finance, england, percentage, house prices, higher duty, property, stamp duty, stamp

More people renting

The number of people renting in the UK has soared in recent months as house prices continue to rise.

Figures from the Royal Institution of Chartered Surveyors (Rics) show that in the three months leading to January, demand for rented accommodation accelerated at its fastest pace for nine years.

Both flats and houses saw an increase in demand, with houses seeing the greatest change. Rics puts this down to increasing household incomes, which allow people to rent larger properties.

The organisation also points to strong economic activity, good employment conditions and a great deal of migration from eastern Europe as reasons behind the surge in rental applications.

However, it also highlights that concerns over affordability in the mortgage market have had an impact.

“With house prices still rising, the rental market will remain a ‘property purgatory’ for many would-be buyers unless accessibility and affordability conditions improve significantly,” said Jeremy Leaf from Rics.

“However, tenant demand will continue to rise as long as economic conditions remain strong.”

Many people find renting is a great way begin an independent life, however, it is worth considering how much you can afford to spend on rent if you plan on saving up for deposit.

Tags: Supply and demand, years.Both flats, property, Royal Institution of Chartered Surveyors, great deal

Subsidence risk for 100,000 Londoners

Around 100,000 homes in London face an increased risk of subsidence due to the growing trend of turning front gardens into driveways.

That is according to esure home insurance, which carried out research including a report from the British Geological Society.

The report details how driveways cause rainfall to run off into drains rather than filtering down to the soil where tree roots lay waiting.

As the roots receive no water they move to seek some out, leading to changes in soil moisture beneath foundations.

“It is very appealing for homeowners in busy streets to create a bespoke parking space for their property,” said Nikki Sellers, head of home insurance at esure.

“Unfortunately, for houses with a street tree or large front garden tree nearby this can significantly increase the risk of subsidence.

“A dedicated space may increase the value of your home but subsidence damage will do quite the reverse,” she added.

Homeowners are being warned to do their research before installing a driveway or patio and are advised to take out adequate insurance if they are concerned about subsidence.

Tags: soil moisture, business, Insurance, bespoke, head

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: General, Home Information Pack, house, property, Property Information Questionnaire, positive response, opportunity

£44m sitting in unused accounts

A campaign is being launched to reunite customers with their unused bank and savings accounts.

Halifax is attempting to bring people back together with their accounts and the money that is idly sitting in them.

According to the bank, there are around 110,000 unused Halifax accounts in the UK, holding a combined £44 million.

The majority of people who have a forgotten account are said to have less than £100 sitting in them, but some have much more.

Halifax has employed a third party to search for those with accounts containing more than £1,000, but it is calling for other bankers to make themselves known.

“Our job is to reunite as many of our customers as is possible with their cash,” said Mike Regnier from Halifax and Bank of Scotland.

“We are using every means at our disposal to do so – mailings, advertising and the internet. We are also employing search agents where appropriate.”

The move comes as government plans to change the rules regarding unused accounts appear likely to come into force in the next few years.

It was announced in the 2005 pre-budget report that if an account is unused for 15 years it will be officially tagged as dormant.

This means the money can be given by the government to good causes, although the cash will always remain the account holder’s property and he or she can reclaim it at any time.

If you have an account which you have not used for some time it may be worth checking to make sure there is no money in it.

Tags: savings accounts, government, hbos, property, unused accounts, report, Mike Regnier, holder

Danger of only investing in your home

We are being warned that we could be setting ourselves up for a fall by investing almost all of our money into a single property.

That is according to a report which states that almost two-thirds of us are running the risk of financial ruin by investing too heavily in a single asset.

Researchers at Durham University have discovered that as many as 62 per cent of us invest the majority of our money in a house and could face real difficulties if a housing market drop, like that seen in the late 1980s, were to take place.

“This study really draws attention to the precarious position of the majority of English homeowners’ savings,” said Susan Smith from the university.

“While many would think it strange to invest everything they have into one particular company, to all intents and purposes more than seven million people in England are doing just this by ‘banking on housing’.

“In fact, they are investing almost everything they have into just one building, in one neighbourhood, in one town, in one region, despite the hindsight of a recent housing market collapse,” she added.

The research found that 30 per cent of people take out a mortgage but do not see their home as a way of storing and accumulating wealth.

This apparent lack of vision when it comes to the housing market is even more alarming when you realise that 59 per cent have no other savings or investments to fall back on.

Homeowners are being advised to ensure that they have some secondary savings.

Tags: collapse, asset, fact, realise, home insurance, university, property, Susan Smith

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: First-time, research, surveyors, property, house, Gardiner, head, anything

First-time buyers taking risks

First-time buyers are prepared to take bigger financial risks to get on the property ladder as house prices continue to rise.

As the third interest rate rise in five months looks set to have just a minor impact on the price of a house, Yorkshire Bank says many consumers feel forced into taking big chances with their future.

According to the bank, three out of five first-time buyers would consider taking out a home loan that was five times their income.

In addition, 80 per cent would also consider getting a mortgage which is paid back over more than 25 years in order to make the monthly payments more manageable.

“With the average house price nearing £200,000, this year may feel like the last chance saloon for first-time buyers already finding it hard to buy,” said Gary Lumby from the bank.

“Saddling themselves with such huge debts isn’t wise as they could still be paying off their mortgage well into their sixties or even seventies.

“They may also face breaking point should interest rates increase again. Unfortunately for some, they feel it is their only option,” he added.

Yorkshire Bank has also found that 28 per cent of first-time buyers are so keen to get onto the property ladder that they are willing to offer above the asking price straight away for a house which they want.

In response to the current housing climate, 15 per cent of parents have started a home fund to help their children buy a house when they are older.

Tags: property, business, yorkshire bank, bank, council of mortgage lenders, monthly payments

Endowment Mortgages UK – What Are They?

Interest only mortgages

Buying a house is the most expensive purchase you will ever make in your life. In the UK we are a nation of house buyers. In other countries they are quite happy renting property. Here, it’s our great history of land-owning that we can thank for the biggest millstone most of us carry for decades! Read more

Tags: stock market, Margaret Thatcher, life assurance policy, massive growth, endowment mortgages, end, Mortgages, property