Tag Archives: economy

House prices take a slight fall but will still be rising in the next year

May 4, 2012

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House prices seem to be fluctuating widely at the moment, Halifax have commented.

The mortgage lender and bank have said there was a 2.4% drop in April, this may have something to do with the stamp duty deduction as sales dropped after rising with the deduction.

With the drop in April it took the average house price down to £159.883 which is slightly lower than last year by 0.5%.

Halifax have warned that house prices are still rising even with this small dip.

“Prices in the three months to April were 0.3% higher than in the previous quarter, marking the first rise in this measure for seven months,” The Halifax’s housing economist, Martin Ellis, has commented.

“The ending of the stamp duty holiday for first-time buyers in late March appears to have boosted home sales early this year as buyers strove to beat the deadline, and has probably contributed to the volatility in house prices in the last few months,” he added.*

Nationwide have given a slightly different percentage to Halifax, but as the different mortgage lenders use information from their own lending it isn’t surprising that they all have different numbers.

Nationwide have put the annual fall at 0.9%.

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House prices have a small rise in the UK

April 26, 2012

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House prices have only had a slight change in the last year by having a small rise of 0.3%, the office for national statistics (ONS) have commented.

Obviously there are big differences in different regions in the UK with prices continuously rising in London but Northern Ireland and the North East have seen a sharp fall.

The average house price in the UK is £224,473, this is from February 2012 when prices rose 0.2%.

Average house prices around the UK

Rugby – £183,779 – 3rd Highest in Warwickshire

Daventry – £237,113 – 2nd Highest in Northamptonshire

Milton Keynes – £202,425 – Most popular place for first – time buyers to step onto the property ladder at the moment.

Barnet (North London) – £435,448

City Of London – £482,851

Kensington and Chelsea – £1,362,925 – A lot higher than the other average prices!

The ONS have taken over the publication of the index from the Department For Communities and Local Government.

They have commented:

 “In the 12 months to February 2012, average house prices increased in both England and Scotland by 0.4% and 1.1% respectively,” the ONS said.

“These increases were offset by decreases in Wales, where average prices decreased by 0.5%, and Northern Ireland, where average prices fell by 9.7%.

“The annual increase in average house prices in England was driven by increases in both London and the South East, where prices increased over the year by 1.7% and 1.2% respectively,” the ONS added.*

 

*Quote from BBC News

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Rents took a small fall in March, according to letting agents

April 20, 2012

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They only went back slightly but in march private rents in England and Wales fell, according to the letting agency group LSL.

The drop was only 0.3%, just £2 making the average rental price £705 per month.

The LSL group commented on the fall but said it may be a one-off. The drop may have something to do with first time buyers making the most of the stamp duty deduction and moving out before it came back.

The price of renting privately is more costly than last year, they are up by 2.7%.

“The rental market was still feeling the knock-on effect from the stamp duty deadline in March, with an increased number of tenants rushing to leave the sector in the first part of the year, easing tenant competition,” said David Newnes of LSL.

“With the passing of the stamp duty deadline increasing the cost of moving, and banks’ funding conditions likely to limit high value mortgage lending to first-time buyers, would-be buyers will be more reliant than ever on rented accommodation.”*

 

*Quote from BBC News

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Rise in mortgage lending may only be temporary say CML

April 17, 2012

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The CML (Council of mortgage lenders) have spoken of a mortgage lending rise in February.

In February last year mortgage lending for house purchases were down 17% on January this year (in January loans rose by 4% to 36,600).

First time buyer loans have also taken a rise, up by 8% in Januaty to 14,100. Making that 18% up on last year.

 The CML (Council of mortgage lenders) have spoken of a mortgage lending rise in February.

The CML (Council of mortgage lenders) have spoken of a mortgage lending rise in February.

The director general of CML has warned however that this rise in loans may only be temporary.

He said: “It is encouraging to see the continuing year-on-year improvement in house purchase lending.

“However it is not clear whether the end of the stamp duty concession will lead to a falling off in first-time buyer numbers and how much this may be offset by the government’s New Buy scheme, available to all buying a new build property.”*

Lending and sales are still far behind those before the banking crisis in 2008, they may even fall behind in activity again even with the New Buy scheme.

*Quote from BBC News

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Landlords may be looking at bleaker time, but still being told to invest

April 4, 2012

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Landlords are now facing bleaker times with rent prices dipping and also the cost of mortgages rising.

In February the average cost of monthly rent was down 1.6%, in England and Wales the price went from £719 (at its highest in October 2011) and went down to £707.

The big mortgage giants are now upping the cost of borrowing. The Daily Mail have reported that Santander and Leeds BS have now increased their mortgage rates, they are blaming the Euro zone crisis for this price hike.

Landlords have been told to keep investing as price of renting is staying high and house prices are expected to stay where they are for the next few years.

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New buy scheme takes over the stamp duty holiday

March 26, 2012

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The stamp duty holiday for first-time buyers has now ended so they will now join in with others and pay 1% tax on properties worth more than £150,000

The BBC have reported saying that the Government have changed back to the original 1% tax for first-time buyers because the holiday had been ineffective in helping people to buy.

The Government now think that the new buy scheme will get Britain’s first time buyers onto the property ladder.

When the stamp duty holiday was introduced back in 2010 it made savings of up to £2,500 for first-time buyers for homes worth up to £250,000.

In the new budget the Government announced a 7% rate on homes over £2m and they want to stop stamp duty avoidance for property buyers at the higher end of the market.

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Renting boom can be a great income for landlords

March 16, 2012

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If you have recently brought a property and would like to become a landlord, great!

Renting property at the moment is a good earner as more and more people are unable to afford a mortgage deposit and monthly payments.

Landlords should make the most of this opportunity especially in this economic climate.

Make sure you have taken out a landlord insurance policy, this is very important as the consequences may be a very high price.

When the household isn’t occupied you must do regular checks on the property and if any maintainance work needs to be carried out it must be done before the tenants move in.

Landlords should abide by the gas safety regulations 1998 and prove that all gas appliances are safe. If you do not abide by the regulations you may face a big fine and have a vacant property for a period of time, making you lose out on the tenants rental payments.

Abide by gas safety rules or face the consequences...

Abide by gas safety rules or face the consequences...

Fire safety is paramount, the London fire brigade released a report of figures which showed that six out of ten people who died in a house fire in 2009 didn’t have smoke alarms fitted in the home. Get your tenants to test the smoke alarms weekly and if there are any problems sort them out as soon as possible.

If you are advertising your property to be let out it must look clean, attractive and be well maintained. It doesn’t cost much to freshen up a home with paint and small extras, what you spend will be paid back when your property has tenants.

Keep your property looking fresh and clean...

Keep your property looking fresh and clean...

Check for faulty electrics, broken boilers and if you have any pipes that are uninsulated rectify this! The cost of a burst pipe and no tenants is high, fix the situation before it becomes a problem.

Obviously keeping you property secure is also important. Always have a burglar alarm fitted in the home and keep padlocks on garages and any other external buildings that may hold expensive items.

Renting can be a fantastic income, make sure you follow the above and you portfolio may expand in the future.

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Newbuy, Government backed scheme to help first-time buyers get their feet onto the property ladder

March 13, 2012

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Most first-time buyers are struggling to raise a deposit for a mortgage so they can own their own home. Some deposits can be around £20,000 or even £40,000 which would take years of saving to get.

Now the government backed scheme ‘Newbuy’ is allowing first-time buyers to have the chance to own their own property and they may even only have to raise a deposit of 5%.

On new build homes (flats & houses) the buyer can get a mortgage of up to 95% of the purchase price and it is only available in England only.

If you are interested in a new build property and you already have at least a 5% deposit saved, you can go to a developer, mortgage lender or IFA (independent financial advisor) to see if you’re eligible for the new buy scheme.

Any mortgage applications will go through the normal process and will be assessed in the usual way.

If you pass all the steps to be accepted to get a mortgage (lenders affordability & credit criteria) you may be able to get up to 95% of the purchase price.

Direct Gov have added information on how you need to qualify on their website…

  • You must be a UK citizen or have the right to remain indefinitely in the country.

Newbuy properties must be:

  • New Build – Residential properties being sold for the first time or for the first time in the current form.
  • Priced up to £500,000 – but there will be no cap on income.
  • Full ownership – Newbuy is not available for shared ownership or shared equity purchases.
  • Primary homes – Newbuy will not be available for the purchase of second homes or for buy-to-let purchases.

If you are going to use the Newbuy scheme you cannot use and other publicly funded mortgage scheme or have an interest-only mortgage.

Grant Shapps, Housing Minister has said because younger people cannot afford deposits the average age of the first-time buyer has risen.

“I’m not prepared to stand by, and nor is the Government, to watch an entire generation of people be locked out of the housing market when they can afford proper mortgages” He commented.

For more information CLICK HERE to go to the Newbuy Government backed website.

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Use your home as a profitable income…

March 9, 2012

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Do you have more bedrooms than you need in your house? If you do, have you considered using your rooms as a profitable income and rent them out?

With the economy the way it is at the moment it is advisable to take the opportunity while you can.

You must also consider if your home is a suitable candidate for this. Is the room well furnished and property maintained? Storage space is always a plus point and make sure it is a comfortable living space.

Always investigate your potential tenants, get rental references and check their income just to make sure the tenant can keep up with their payments and you won’t have any loss of income.

The government in the UK have set up a rent a room scheme. If you take this opportunity home owners can receive £4,250 which is tax-free for when you let a furnished room.

If you would like more information on this, go onto the government website DIRECT GOV.

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Predictions have started for let property in 2012

January 25, 2012

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Paragon Group

 

Predictions are now being made for the let property market in 2012, after 2011 being a big year for let property owners are expecting tenant demand to keep rising in the new year.

The Paragon Group have researched and found that 2012 may be another fantastic year for landlords and let property. Over half of landlords researched expected the market to grow this year, a small 6 % predicted a decline in the market.

Expectations have certainly changed from when research was done a year ago at the beginning of 2011. Only 45 % of landlords had predicted a boom in the let property market. Even less landlords predicted a decline as 2 % of them expected this.

With the economy in a bad place at the moment, one in five landlords have predicted a rise in rental arrears because of job losses and pay cuts/freezes. The other two thirds of landlords researched predicted a stable 2012 with rental arrears. It is always wise to look into protecting your property with landlord insurance as with last year the economy will be unpredictable!

The chief executive of Paragon Group, Nigel Terrington has said :

“With the success of 20122 to build on, i believe the private rented sector will continue to perform and provide a valuable tenure choice for even more people in 2012.”*

 

*Quote source – Simple

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