The Property Forums

After nine-months the prime price rally ends

Alan — Mon, 06 Feb 2012 16:14:36 +0000

After 9 months of successive growth, the price of prime properties has started to fall, but the overall prices have risen by 4% since this time last year, further boosting prices by a further £20,000. Still leading the race by a long way is London property and the price differences are becoming so fast that it seems to be becoming an entirely separate entity from the rest of the UK.

Prime property asking prices, which are the top 25% of the market according to value, fell by 0.5% over the last month. This brought the 9 month rally, which had seen the asking prices for the prime properties reach record highs, to an end, according to the latest house price index for prime properties from property website PrimeLocation.com. The full index can be seen here http://www.primelocation.com/house-price-index/

Despite the dip in prices during December, the average asking price of a UK prime property in the UK is now around 4% higher than last January, which equates to around £19,097, and they now stand at £473,373. When you consider that the asking prices in the UK property market overall have increased by just 1%, or £2,471, over the same period of time, and that the average asking price is now £218,468, this is a huge leap.

Prime property prices for houses for sale in London rose 0.9% to an average of £1,232,278, though some areas saw substantially higher increases than this. Haringey and Camden had the fastest appreciating prime properties, with monthly price increases of 6.1% and 2.4% respectively.

Nigel Lewis, property analyst at PrimeLocation.com says: “The London prime market continues to defy the rest of the country, with prices over 10% higher than they were this time last year. Prime asking prices are increasing at roughly double the speed of the average property in the capital, largely due to continued interest from overseas investors, which are helping push prices higher and higher.”

But overall, falling prices have been recorded in the Prime market across much of the nation with London and Wales the only regions posting significant gains. Asking prices in Wales rose for the 11th consecutive month in December, with gains of 0.4% taking the average Welsh prime property value to £366,638.

“Prime properties have performed well over the last year; outperforming the general market over the same period and boosting the value of the nation’s most expensive homes by almost £20,000,” says Nigel Lewis.
“As we’ve seen in previous years, the property market slows down in winter, with fewer transactions and lower prices as a result. This provides a great opportunity for people looking to buy, but the window is short, as the winter slowdown usually only lasts a month or two.”

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People spend a third of their income on their mortgage

Alan — Sun, 05 Feb 2012 10:33:42 +0000

In the fourth quarter of last year it was estimated that people were spending nearly 30 percent of all the disposable income on mortgage payments. This figure includes people who are home movers as well as first-time buyers.

Mortgage payments are at their most affordable level in nearly 15 years and in some parts of northern England and areas of Scotland mortgages are accounting for less than 20 percent of people’s incomes. The research that has developed these figures comes from Halifax.

The amount of disposable income that people are putting toward the mortgage is at its lowest rate since 1997 when about 25 percent of income was being spent on mortgages. Over the last three decades the average amount spent on a mortgages accounts for nearly 40 percent of disposable income.

The study highlighted an important difference between the south and the north of the country with more affordable areas being located up North and the least affordable areas being in London and the south-east.

The least affordable area in the country is Kensington and Chelsea where mortgage payments are responsible for about 80 percent of peoples disposable earnings. East Ayrshire, located in Scotland, is the most affordable place to have a mortgage were it only takes up about 16 percent of household income. Another very affordable area included West Dunbartonshire where the percentage figure of income is about the same as North Ayrshire.

In the UK in general the amount people are spending on their mortgage has halved since their peak of nearly 50 percent which occurred in 2007. House prices have fallen as have mortgage rates in Scotland which is currently the place with the most affordable homes were an average figure of about 20 percent of disposable incomes is recorded as being spent on mortgage payments. This compares favourably with rates in London which are up to 35 percent of income.

Other areas with favourable mortgage payments include Yorkshire and Humberside as well as Northern Ireland. In these areas the average amount of disposable income was just over 20 percent. When compared with the south-east of England, which has a rate of about 33 percent, the figures are very favourable.

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Keeping your children safe on the stairs

Alan — Tue, 31 Jan 2012 14:10:03 +0000

Keeping your children safe on the stairs

Most parents consider the stairs to be one of the most hazardous areas of the home, as toddlers climb up stair gates and young children seem to consider banisters as some kind of slide. It is even more worrying, however, that some parents are unaware of the dangers of unregulated staircases and the serious accidents and subsequent injuries they can suffer.

Richard Burbridge, a leading UK company dealing with stair parts, have launched a campaign that aims to alert parents to the dangers in untested and unsafe stairways within the home, after concern has increased regarding the safety of young children and toddlers on staircases.

The latest, and 24^th, annual report from ROSPA, the Royal Society for the Prevention of Accidents, has claimed that in just one year, over 58,000 children have had accidents on a staircase. In a bid to makes parents aware of the various dangers, Richard Burbridge has highlighted three major flaws that can be easily prevented when fitting a new staircase.

The first being horizontal balusters or spindles; these are often wide enough for a small child or toddler to get through which could lead to a fall from a great height. Horizontal guarding also represents a climbing hazard especially dangerous on the landing area.

Secondly the width between one vertical baluster to another; this should be no more than 99mm or in simple terms, the width of a babies head. Any wider than this and a child could climb through or even get their head caught between the balusters.

Thirdly there is the issue of the handrail height. Regulations inEnglandandWalesdictate a minimum handrail height of 900mm (1000mm inScotland), this is in place to minimise the risk of an adult or child falling over the railing.

Finally another problem, though often not visible to the naked eye, is the strength of the stairway. Without proper testing the stairway could crack or give way if a child was to fall against it.

Richard Burbidge Product Manager Zoë Lewis, said: “Stairs can be a major hazard in the home if not properly installed or regulated.

“Consumers often believe staircase renovation is a costly, time consuming job which can be the cause of the problem as systems become outdated and no longer safe.

“To save on cost, a lot of homeowners fit stairparts themselves but this could lead to a slip in measurements, therefore increasing the chance of a child getting stuck or falling.

“At Richard Burbidge, durability and safety are extremely important to us to ensure our stairparts do their job long into the future.

“All our products are put through a series of rigorous independent tests and assessments to meet all domestic safety requirements so parents can be assured that their child is safe.

“We have a wide range of stairparts systems readily available off-the-shelf that come pre-finished with pre-drilled rails and bases so consumers can feel confident that they can fit a safe, yet aesthetically pleasing stairway at an affordable price.”

For more information about the safety of Richard Burbidge stairparts visit www.innovate-and-renovate.com and click through to their YouTube page to tune into their discussion with Catherine Gee about safety in the home. (http://www.youtube.com/watch?v=e6KeNfOKRik&list=UUgDpu2er6ptzY7uUZ9bTP6w&index=3&feature=plcp )

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First time buyers not taking advantage of present situation

Alan — Fri, 27 Jan 2012 03:14:23 +0000

The affordability levels for first time home buyers is at an eight year high, according to new research from one of the largest lenders in the nation, but few are actually taking advantage of the rates and buying new properties.

According to the annual Halifax First Time Buyer Review that came out this month the average cost of a deposit has decreased by 15%, but the amount of first time home buyers actually out in the market is the lowest it has been since 1974 for a variety of factors. The review also discovered that there is a large regional divide with homes in the north deemed to be 75% more affordable than those in the southern regions.

In November 2011, the average home price was considered affordable for someone that was able to take home the average earnings based on a ratio that was created of average house price to earnings. This ratio is figured below the average of 4.0 in 44% of the UK’s local authority authorities which is the highest that has been seen in eight years and is higher than the 42% seen back in 2010.

Despite the fact that homes are now more a lot more affordable, there is a distinct split seen between the north and south regions of the UK LADS. In the north about 95% of all LADs are considered to be affordable for first time home buyers while in the south only 5% are considered affordable.

Along the same lines, in London there is an absence of first time home buyer LADs that are considered affordable while in the North East all LADs are considered to be affordable. This may be due to the higher amount of rental properties as well as the higher costs of living in these areas.

Without predicting that affordability could increase even more, at the current rates Halifax is predicting that there were about 187,000 first time home buyers last year; which is the lowest level seen since the lending agent started to keep records of transactions back in 1974.

This figure is also seven percent lower than it was in 2010 and almost half of the peak of first time home buyers that was seen in 2006 right before the credit crisis and economic problems arose that changed the face of the housing market.

The lending agent also explained that a great deal of the decrease seen in first time home buyers is the result of the new requirement by most lenders for higher deposits that many first time home buyers simply cannot afford.

In 2011 the average deposit sat at around £27,000 which is still 15% lower than it was in the previous year. However, in terms of the actual purchase price the average first time deposit makes up about 20% of the home purchase price compared to the 10% that was considered the average LTV back in 2010.

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2012 will see house sales but not prices increase

Alan — Thu, 19 Jan 2012 13:00:45 +0000

While house sales could well rise in 2012, it looks as if property prices will be struggling to follow suit. The RICS, Royal Institution of Chartered Surveyors, has predicted that the number of UK homes sold will rise to 880,000 this year, roughly the same amount of activity that the market saw in 2010. Even if the property market was to improve slightly, levels would still be less than previous years, as there were 1.67m sales in 2006.

Although RICS believes that prices will fall slightly, there will be no large scale drops due to the low supply levels. It said that the weak current economic outlook was expected to remain the same for at least the next 6 months, as is the prospect of unemployment increasing, which means that the demand to buy properties is unlikely to see any significant increases and looks like remaining relatively stagnant.

It is widely hoped that the Governments indemnity scheme will assist many prospective first time buyers in getting a foot onto the property ladder, even though the initiative is expected to only have a limited impact with is only benefitting those who are buying a new build. Simon Rubinsohn is the chief economist of the RICS and he says its likely that the general economic climate will be the largest influence on the property market in 2012.

He also said that prices could start to edge lower if unemployment continues to rise, but any drops are likely to be insignificant due to the lack of supply currently available. He added that they did expect to see a slight increase in the number of transactions taking place, even though mortgage lending will more than likely remain subdued, limiting the scope for improvement.

Other areas of the housing market, however, are expected to fare a lot better, and demand in the rental sector is expected to stay strong. The RICS has predicted that the rental market will stay firm, meaning that rents are likely to see further increases, albeit they will rise at a slower pace that during 2011. Despite the prospects for increasing unemployment, only a marginal rise in repossessions is expected for 2012.

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Competition has intensified in buy to let mortgage market

Alan — Thu, 19 Jan 2012 12:57:42 +0000

Competition has once again intensified in the buy to let mortgage market, as the Yorkshire Building Society has announced that they are relaxing their lending restrictions as well as expanding their deals across England and Wales. The Yorkshire entered the buy to let market last August and offered products through its lending subsidiary Accord Mortgages, but only made their products available in the South East and London.

A spokesman for the Yorkshire Building Society has said that those two area had been pilot areas and it was now looking to start lending right across England and Wales immediately, and that it has entered the buy to let market in steps. Other changes to their buy to let criteria include dropping the level of the minimum property value from £150,000 down to £100,000 and reducing the minimum income by £15,000 to £20,000.

It has also cut 5 years off the minimum age of applicants, which is now 30 and has lifted the current 40 miles distance between the property and the borrower. Many lenders have been expanding deals in the buy to let sector, due to the rental market seeing a boom at the same time as house prices have been generally remaining stagnant.

With more and more potential homebuyers being trapped in rental properties due to the strict lending criteria for mortgages, rental prices have gone through the roof. Recent statistics courtesy of LSL Property Services show that rental prices have increased by nearly £50 a month since 2008 due to the demand, and this is very appealing to those seeking buy to let mortgages.

Rightmove, the nationwide property website, have said that there are now almost three times as many buy to let mortgage products than there was only 2 years ago, and the market is further expanding due to these trapped renters. Lenders in general, however, are expected to tighten their ordinary criteria further in 2012 due to the eurozone crisis and the weak economy.

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Get Britain Building says Cameron

Alan — Tue, 10 Jan 2012 16:02:10 +0000

A new scheme to ‘Get Britain Building’ announced by Prime Minister David Cameron last month has a lot of good proposals, but it remains to be seen how far it will go in accomplishing the stated goal of getting the construction industry back on target and a multitude of first-time home buyers into a new house.

Mr. Cameron said that the average first-time home buyer in theUKwho can’t get assistance from parents or other family members is about 37 years old, and “ . . .that’s just not good enough.” He wants to give all the hopeful buyers who have been stymied by the credit crunch an opportunity to make that crucial move up the housing ladder, and he listed several proposals intended to facilitate the process.

The most promising of the proposals seems to be a mortgage indemnity scheme wherein lenders will be backed by government funds so they can make loans up to 95% of the value of a new home, so a buyer has only to come up with 5% in order to make the purchase. Currently, lenders are requiring an average of around 25% as a down payment, so this move should enable an estimated 100,000 buyers to get the funds they need, according to proponents of the initiative.

The Prime Minister also said that the UK is in dire need of more new homes, and proposed several avenues for their creation. The proposal includes allowing builders to borrow from a £400m ‘Get Britain Building Fund’ to get moving on approved sites; part of the criteria for release of these funds is the developer’s commitment to building ‘affordable’ homes.

Tenants in social housing are to be given the opportunity to purchase their residence for as little as half the market price, with the proceeds going towards the construction of more low-cost homes. That, says Cameron, would hopefully mean that a new home can be built for every one sold in this manner.

Another part of the strategy would allow developers to use government owned land, of which Cameron says there is a great deal, and to proceed on a ‘build now, pay later’ plan wherein they could pay back the cost of the land as new homes are sold. The plan also suggests that the same will be true of building sites already in progress that are ‘stuck’ for lack of financing. The government would put up enough of the initial funds to get construction going again and new homes ready for occupancy.

Currently, new home production is at the lowest level since WW11, curtailed by rising costs and the reluctance of lenders to extend loans. In theory, the new scheme will not only provide affordable housing for a significant percentage of buyers, but also thousands of jobs for workers in construction and many related industries such as plumbers, electricians etc.

The scheme also makes an attempt to address the problems of inconsistency in social housing; reportedly there are at least 6,000 households living in tax payer-subsidised social housing that have an income of £100,000 or more per year. Under the new approach, those residents would have to pay the open market rate if they want to continue living where they are.

The scheme, led by the Council of Mortgage Lenders and the Home Builders Federation, has been criticised by some housing experts who say it is too little, too late. Jack Dromey, shadow housing spokesman, suggested that £400 million is a drop in the ocean compared to the £4 billion that was cut from the housing budget last year.

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Crisis point for supply of retirement property

Alan — Fri, 06 Jan 2012 17:49:40 +0000

The number of people aged over 65 years will increase by 65% in the next 25 years*.
The number over 85’s will double in the next 20 years and triple in the next 30 years*.
There are now 14 million people in the UK aged over 60*.
Over one third of total UK population is over 50 years of age*.

Where will they all live?

Those older people who wish to downsize are effectively being ignored by both planners and developers, and due to this a major crisis is looming as soon there won’t be enough retirement properties for the over 65′s to move into. This is according to Pegasus Retirement Properties.

Care for the elderly is once again hitting the headlines, and the debate and policies that are being proposed on how the country is going to house the ageing population must, in the view of Pegasus, take into account the housing stock currently available for older residents and realise that the need for more retirement properties is now in a state of urgency.

The latest Government figures have state that their latest projection is that in 20 years time there will be over 5.5m more elderly people than there are now, and that number will have almost doubled by 2050 to around 19m. It also said that the age group with the fastest growth was those over 100, or centenarians.

Peter Askew, Pegasus Chief Executive, explains: “The number of over 60’s who will be active and independent well into their 80’s will continue to increase if they can live the right lifestyle – and that is where specialist retirement and assisted living are so important. Because Pegasus owners are able to lead an active, independent lifestyle and their homes are readily adapted for disability, less than 4% of them end their days in a care home. The bill for assisted living is much less than the bill for care – whether it is paid by the State or a family. In addition, the lifestyle requirements of the older generations are changing all the time, yet we have insufficient provision in place.”

He warns: “The number of available specialist retirement developments has shrunk whilst the number of retired people living longer grows. In 2009, only 589 new retirement units were registered and by the end of September 2011 the figure had risen to 1602 new units (apartments and houses). However, this is a drop in the ocean because, as each property is bought and lived in, there are not enough new retirement properties being built to re-stock supplies.

“We do not have enough property in Britain to meet the needs of people already over 60 and the situation for those who now aged 40-50 is bleak. At the current rate of construction, it is probable that we will run out of specialist retirement property.”

Peter also makes the point: “Estate agents are screaming that they do not have enough family property for their registered buyers so it makes perfect sense to give older people living in a family house as many choices as possible to free up these properties. Pegasus has over a quarter of a century of experience of retirement property and we have found that 99% of our buyers who have downsized from a family home where they only used the sitting room, kitchen and a bedroom are very happy once they have moved into one of our apartments because their overheads and worries are almost entirely removed. And, of course, a young family can buy their family house that they have sold on.”

Pegasus has developments in London, The South, South East, South West, Midlands and Wales. Please see www.pegasus-homes.co.uk. Prices start from £129,950.

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The benefits of renewable energy in your home

admin — Fri, 06 Jan 2012 09:43:06 +0000

Integrating renewable energy into your home is a great way of benefitting from the latest buzz to hit the globe. OK, so it’s been around for a while but the current ability of it is still unknown by many. As we strive towards a goal of 100% renewable energy by the middle of this century, it’s time to understand how this potential can help your home.

While house and property prices continue to rise, people are often looking at new ways to add value to their home without moving. Knowing the benefits of renewable energy can help to ensure that you get the most out of it.

Lowering bills

Electricity bills have been soaring too high for many years, and that doesn’t look likely to change from your standard energy companies anytime soon. But, by installing the equipment – the most popular at this time is solar – you can cut down your outgoings.

Also, there are many renewable energy companies out there that offer carbon free electricity to homes if they want to switch provider. While installing your own would be seen as an investment – one which can bring you profit over time – the best way to cut your bills immediately is through the use of a better supplier.

Clean up your act

Nobody likes to be messy, and it is becoming easier than ever to clean up the home while also helping it. Renewable energy is better for the environment because it is a cleaner power source and will in time become fully integrated into the market.

Similarly, the use of recycling and buying recyclable products is a great way of ridding yourself of clutter and understanding how the little things you do help the environment in a big way.

Let’s put it in numbers

The number of people being open to or involved with renewable energy continues to rise thanks to the media coverage of this form of power. Companies like Good Energy are generating ideas and moving forward with the purpose of making all power 100% renewable.

Surveys are happening all the time, and it is now believed that less than 10% of the population has no renewable energy interest. Alongside this, more than three-quarters are in favour of renewable energy while as many as 15% are actively considering installing systems for the home.

What happens now?

What these surveys also show is that more than half of the population want to know more about renewable. This is probably because we continue to hear about renewable energy but don’t know how this can help us personally. As research continues into integrating this fully into the market, you could also take this moment to find out more about the environmental, financial and personal benefits you get from having this energy in your home.

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Welfare recipients getting further away from housing stock

Alan — Wed, 04 Jan 2012 14:01:25 +0000

Welfare cuts are meaning that it is becoming increasingly difficult for people to buy homes and families with low incomes are finding that they are having to reduce their standard of living in order to meet rent payments. A recent study has estimated that nearly 1,000,000 homes are going to be put out of reach of people on welfare benefits in the near future.

The Chartered Institute of Housing have recently released research that shows that there are going to be more people claiming the properties than there are affordable properties available. This has led many people to speculate those who cannot afford homes are going to move to low rent areas which will essentially become benefit ghettos.

The government have recently limited the amount of housing benefits available to people, an example of the cap is that only £250 per week will be available for people who want to rent a two bedroomed home. This means that many cities will be unaffordable to people on housing allowance and they might have to move to private landlords.

The problem is also being faced by those in London as they will be unable to afford homes in even the cheapest areas. In Croydon it is estimated that there are only 10,000 affordable properties and there is a surplus of 7000 people seeking these homes.

While the south-east of England has the most expensive homes this is not the only part of the country that is being affected and in Birmingham the number of houses affordable to people on benefits has shrunk significantly, the same is true of houses in Merseyside and Liverpool.

Despite the devolved power of the Scottish government, welfare benefits are set in Westminster which means that the effect of the cuts will be felt across the UK, including Scotland. Glasgow is expected to be a city that is particularly badly affected by the budget cuts.

Grainia Long is the current chief executive of the Chartered Institute of Housing and she has said, “The problem with these budget cuts is that many people are going to stop buying essentials and luxuries are simply going to be out of reach. Some people might have to cut the amount they are eating simply to make their rent and this is something that many people are very afraid of and homelessness is becoming an increasingly possibility and scary reality for some.”

Long continued, “The problem is that people who cannot afford homes are going to move to cheaper areas and this is going to cause a large amount of social unrest. In the south-east there are very few areas of low rent and I expect this is going to be one of the areas with the most social unrest outside of London.”

The Institute has also warned that if people have to move house to cheaper areas there are going to be problems with jobs as many people will be seeking them and there will be relatively few. This will mean that incomes will decline even further and conditions will become much worse.

Unfortunately, the benefits changes made by the government are mostly affecting cities where the jobs are most diverse. The benefit cuts are going to seriously hinder the recovery of the economy because people will be unable to find work and unemployment figures will significantly rise.

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