Archive for the ‘Property news’ Category

If you want to invest in property costing under £175,000 and take advantage of the reduced stamp duty fees, then time is running out.

The stamp duty holiday applies to property valued at under £175,000 and means that buyers don’t have to pay any stamp duty on their purchases. This can make a significant difference and save a good chunk of money.

The stamp duty holiday was came into effect on 3rd September 2008, originally running until April 2009, but it was subsequently extended until 31st December 2009. No further extensions have been announced, so it looks likely that it will finally come to a halt at the end of the year.

Assuming it does all end, from 1st Jan 2010, buyers will again be faced with paying 1% fees for stamp duty on all properties with a value of over £125,000.

According to organisations such as the Home Builders Federation, the Building Societies Association and the National Association of Estate Agents, the stamp duty holiday has had a significant effect on the number of property sales this year, which has helped stop the market from becoming too stagnated. They’re concerned that reinstating it could have further detrimental effects and are calling on Chancellor Alistair Darling to extend the scheme until the end of 2010.

For property investors choosing to buy distressed property, they may not be affected by the change, as many properties are available at a greatly reduced price and fall into £125,000 or under price bracket anyway.

But if you’re an investor who likes to have a range of different properties in your portfolio, perhaps by balancing out rental flats or smaller properties with larger homes, and are likely to buy in the higher price range, then you need to get cracking with your purchases now!

A concerted recovery in the UK residential property market is unlikely before 2012 but house prices will end the year 2% higher than at the start, according to analysts.

The real estate recovery will be lead by London and southern England but the mainstream UK market is likely to see modest price falls in 2010, they predict in the Knight Frank Residential Property Market Forecast 2009-2014.

Following an up and down 2010 the market is expected to see a limited rise in prices in 2011 and no sustained recovery until 2012, the report says, pouring cold water on recent optimism that the good times are on their way back.

‘The excitement caused by rising prices in recent months has hidden the fundamentals that have contributed to this performance, particularly the degree to which the affluent and equity rich have led the market,’ explained Liam Bailey, head of residential research at Knight Frank.

‘There are good reasons why we ought to expect a slow down in price growth, with prices even falling in 2010.

However we believe that this reversal will follow a more benign scenario, rather than a more cataclysmic alternative,’ he added.

The report predicts that a weak economy will feed through to lower household wealth and both the ability and willingness to bid up house prices. Continuing growth in unemployment, allied to wage freezes and tax rises, and a rise in average mortgage rates will force a number of sales which, in the absence of greater depth of demand, will see prices slipping back.

‘However we believe that price falls will be capped at around 3% in 2010. It would be wrong to expect a continuation of the current rapid recovery in the housing market, the economy is not in a position to permit this in the short-term.Similarly, it would be wrong to expect carnage,’ said Bailey.

Improvement in market conditions will continue to be led from London and southern England, particularly from the higher price brackets, the report adds, with strong demand from UK and international buyers ensuring that the central London property market, in particular, will continue to outperform in 2010.

However, the central London market will not entirely escape the future uncertainty and recent strong price growth is unlikely to be maintained.

But the positive factors underpinning the capital’s prime market should serve to ensure that price falls are avoided next year.

The report forecasts annual growth of 3% in central London prices in 2010, with a steady increase in this rate to 9% in 2011. The aggregate growth for central London in the five years to 2014 is 38%, compared to 19% for the UK mainstream market.

‘London will benefit from the global economic recovery which is likely to considerably outpace that seen in the UK. Sterling is set to remain relatively weak into the medium-term, encouraging international demand and the economic prospects in central London are brightening more rapidly than elsewhere in the UK,’ it concludes.

Source: www.propertywire.com

As our previous post discussed, the Google Earth satellite mapping tool can offer huge benefits to property investors, as it lets you get another perspective on particular properties and areas.

Here are some more practical ways in which you can use Google Earth to help your property investing process and decision making.

Google Earth can be used to assess the area demographics

As Google Earth lets you zoom in on a specific area, it’s really useful to look at the other types of property close by and get an idea of what the demographics area.

There’s no point in you investing in a property and aiming at it the student tenant market, only to discover that it’s actually primarily an area where families or elderly people live. The types of properties available can give you an idea of what the likely demographic is and help your property investing research.

Google Earth can help identify property problems

Looking at a property on Google Earth can sometimes help you spot potential problems too and identify the good investments from the bad.

For example, if there’s a new development very close to the property, if it’s right next to a main railway line with noisy high speed trains or if there’s no parking available near the property, then these could be warning signs. These are all issues that could affect the rental potential of your property and it’s best to know about them before you part with your cash.

Google Earth can help highlight geographical issues

By using Google Earth, and also Google Maps, you can highlight any potential geographical issues that could pose problems.

For example, if the property is located near a river, then it could be at risk of flooding, or if it’s located near old mines, then could potentially be the danger of mine shafts.

These are just a few of the ways in which you can use Google Earth to aid your property investing. It’s a valuable tool, so if you’ve not explored it, it’s definitely worth having a look.

The price of development land in the UK has stopped falling and there could be a shortage in the long term if the property recovery is sustained, experts are warning.

The latest research from property consultants Savills shows that the value of residential development land rose by 3.6% in the third quarter of 2009 after two years of falling prices that halved values across the UK.

Prices have stopped falling in most regions with the only exception being the North of the country.

Overall greenfield land values rose 3.6% and urban land went up by 0.2%. London saw the biggest rise of 8.6% followed by the West Midlands and the South West at 6.3%.

‘Improved sales prospects for housebuilders mean that the market for good, oven ready sites is active again’, says Yolande Barnes, head of Savills residential research.

She pointed out that there is a noticeable difference between the performance of urban land and greenfield.

‘There is demand for the most easily developable sites but urban sites for flatted development are not often among them.

Similarly, small, oven-ready sites are vastly preferred to large, infrastructure-intensive ones,’ she explained.

There is a noticeable difference too in the Savills indices between the land markets in areas of high housing demand where developers are now keen to build and those where of demand is still suppressed, and where the supply of residential stock has been more plentiful.

The northern region, for example, has seen falls of nearly 12% in urban land values this quarter, bringing total falls from peak to nearly -70%. Meanwhile, the West Midlands and South West rose by 6.3%, meaning that total falls from peak are just 50%.

‘The land market is driven by the confidence of housebuilders.

They have seen some activity return to certain of their markets. Most noticeably, demand has increased for houses in the equity rich markets of the South and housebuilders are looking for small, less risky, easy to develop plots for this type of housing,’ said Barnes.

‘They want plots that they can start, build and finish within a year, without recourse to expensive and difficult-to-obtain debt finance.

The search is on for these small plots with planning permission, for houses in high demand areas.

Anything larger, needing extensive infrastructure provision and costly section 106 agreements is often still in mothballs and unviable given today’s market values,’ she added.

She concludes that the outlook for development land is mixed. ‘Any further stalls in the housing market will reflect in housebuilder confidence and could again suppress demand even for the small sites.

But in the longer term a lack of suitable sites in areas of highest demand will be a very real issue,’ she aid.

Source: www.propertywire.com

Extra rules to regulate “sale and rent back” property deals are going to be brought in by the Financial Services Authority (FSA) next year.

The FSA will ban “exploitative advertising and high-pressure sales techniques”, it said.

It wants to protect financially troubled home owners who consider selling their homes and becoming tenants in them instead.

The FSA started regulating “sale and rent back” firms in July 2009.

An enquiry by the Office of Fair Trading (OFT) last year found that some firms offering these deals were devious and dishonest, luring people into selling their homes at a discount, only to evict the former owners within months so their homes could then be sold at a large profit.

“Many of the people typically targeted are financially vulnerable and have been badly hit by the experience,” said Ed Harley, the FSA’s head of mortgage policy.

“We want to prevent high-pressure and inappropriate sales, and help consumers understand sale and rent back products, so they only enter into sale and rent back where it is an appropriate and sustainable solution for them.”

New rules

Firms offering these sorts of arrangements, typically aimed at people under threat of repossession, are required to be authorised by the FSA and to be run by people who are “fit and proper”.

The extra regulations, which will come into force on 30 June 2010, will:

• bring in a cooling-off period to give consumers more time to make decisions

• ban cold calling and prohibit firms from dropping promotional leaflets through letter boxes

• prohibit the use of emotive terms like “fast sale”, “mortgage rescue” and “cash quickly” in promotional literature

• ensure consumers have security of tenure; and

• require that in every sale, firms check that the consumer can afford the deal and it is right for them.

So far, just 80 firms have applied for FSA authorisation, even though the OFT found there were more than 1,000 companies selling these deals last year.

Firms or individuals that break the rules can be fined or prosecuted, with individuals facing possible imprisonment.

Source: news.bbc.co.uk

How have you found it getting a buy-to-let mortgage recently? Is it still easy to find options, or have you experienced any problems?

According to research carried by The Paragon Group, professional landlords are reporting that buy-to-let mortgages are becoming difficult to obtain.

The findings arouse after Paragon’s recent Trends research, which involved a panel-based survey of UK landlords. Over half of the professional landlords taking part in the research (54%) had attempted to obtain a buy-to-let mortgage in the three months leading up to the end of August 2009, either for buying a new property purchase or for remortgaging purposes.

Of those 54%, nearly nine out of 10 commented that it was more difficult to secure a buy-to-let mortgage than it previously had been.

Nearly one in 10 (8.4%) people said they’d not noticed any change in the availability of buy-to-let mortgages and 2.8% said they’d found it slightly easier to get a mortgage.

The number of buy-to-let mortgage options available has dropped slightly from May 2009, from 218 to 196, but they’re certainly not unobtainable.

One of the advantages of buying property from HBF Investments, compared to on the open market, is that there are dedicated panel brokers at hand to help you get the best mortgage deal.

If you’re going to purchase an investment property with HBF Investments, you’ll be registered with a panel broker, who’ll quickly and efficiently check out the latest mortgage deals and help you find the best option for you.

At a time when the number of available buy-to-let mortgages seems to have decreased, it’s even more helpful to have such an individual, tailored option available.

A recent press release from the Council of Mortgage Lenders (CML) on current UK Lending stated that in July there was a +19% increase on residential property loans compared to the previous year which is the first significant increase since early 2007.

The figures from the CML showed that house purchases accounted for 56,000 loans totalling £7.5bn. This was a +24% increase on June 2009 and a +19% improvement on July 2008.

Whilst the majority of lending was focused on home movers and remortgages, there was an +18% increase in loans to first-time buyers in comparison to the previous month, and this was a +22% increase from July 2008.

Paul Samter, a CML economist, said: “ There is certainly concrete evidence that lending for house purchase is increasing, but t he overall lending picture is likely to stay relatively subdued for some time, especially as the wider economy is far from robust as yet.”

source: www.property-investor-news.com

The average residential property price in the UK house price rose again in August with houses now just 10% cheaper than the same time last year.

The latest house price index from the Halifax puts the average price at £160,973, up 0.8%. It said low interest rates and cheap prices are attracting buyers back into the market.

‘Overall, house prices nationally are very similar to the level at the end of last year.

Demand for housing has increased since the start of the year due to better affordability and low interest rates,’ said Martin Ellis, Halifax housing economist.

‘This, together with low levels of property available for sale, has boosted house prices over the last few months,’ he added.

The figures will boost confidence in the real estate market as all the major indices are now reporting increasing demand for properties.

Halifax’s analysis shows the proportion of disposable income households devote to mortgage repayments has fallen significantly over the past 21 months, and is below the long-term average of 35% over the past 25 years.

Those who are able to raise mortgages are typically spending 29% of their take-home pay on servicing their debt, well below the peak of 48% in the autumn of 2007 when prices were at their highest.

n recent weeks inter-bank lending rates have started to fall and some lenders have passed on these cuts through more competitive fixed and discount rate mortgages.

However, they are still demanding large deposits from buyers and taking few chances on what they perceive to be riskier borrowers.

Last month Halifax said it expected prices to end the year 7% down, halving its original forecast that the residential market would fall by 15% in 2009.

Nationwide and the Royal Institution of Chartered Surveyors have also revised their year forecast and are more optimistic about the year end.

Source: www.propertywire.com

Residential rental prices in the UK are stabilising as the number of accidental landlords declines due to an improvement in the property market, it is claimed.

The latest figures from the Royal Institution of Chartered Surveyors show that 6% more estate agents reported a rise in new instructions from landlords in the three months to the end of July, compared with 21% in the previous three month period.

The number of rental properties coming on to the market is falling quickly, leading to less choice and potentially higher rents for those priced off the housing ladder, it says in its report.

The main reason for the fall in new landlords is the disappearance over summer of so-called accidental landlords who decided to rent rather than sell their properties in a falling market.

Their numbers increased at the end of last year as property prices reached lows but now evidence of price stability in the housing market has encouraged owners to sell instead.

‘This may be the first indication that the stabilisation in the residential sales market is having an impact on the number of accidental landlords entering the lettings sector,’ said a RICS spokesman.

It now expects rental prices, which had been falling, to start to stabilise.

The balance of surveyors reporting a fall rather than a rise in rents was 29% in the quarter, compared with 55%.

In an optimistic sign for buy-to-let landlords, an increasing number of agents expect rents to rise in the coming months.

The balance expecting a fall rather than a rise improved from 25% to 6%, RICS said.

‘The number of properties coming on to the rental market has slowed as the sales market has begun to stabilise.

This is good news for landlords, who were coming under pressure to reduce rents as a result of oversupply.

The need to respond in this way is easing and, providing the housing market holds firm, the outlook for the rental market should continue to improve,’ the spokesman added.

However, the change in sentiment could put those searching for affordable accommodation at a disadvantage.

Figures from RICS, due next week, are expected to show that housing market activity continued to improve in August.

source: http://www.propertywire.com

The end of the year sees the UK governments stand duty reduction come to an end with properties valued between £125,000 and £175,000 attracting a 1% stamp duty charge from 1 January 2010. Currently the UK government has exempted property purchases within this specific range in an attempt to try and inject some confidence and interest into the UK housing market.

While there is no doubt that the reduction in stamp duty has attracted the attention of many homebuyers across the UK there is a feeling that an opportunity may have been lost because of the reluctance of UK mortgage lenders to increase liquidity. It is only now that UK mortgage lenders are encouraging homebuyers to speed up their purchases to avoid the 1% stamp duty payment, something which homebuyers need to be very careful about. Without doubt, the acquisition of a property will be one of the biggest and most stressful transactions which you will complete in your life and you need to be sure that everything is correct and in order.

Those who are potentially blinded by the opportunity of saving 1% stamp duty by completing before the end of the year may well live to pay the price if they have rushed in and acquired a property which was possibly not “100% right” for them.

source: FinancialAdvice.co.uk