Where does the liability for water usage lie?

The Flood and Water Management Act 2010 came into force in October 2011. Section 45 of the Act amends the Water Industry Act 1991 to place an obligation on the Landlord to provide the tenant’s contact details to the relevant water company. The rationale behind this is to prevent tenant’s departing properties without providing water companies with appropriate forwarding addresses and leaving unpaid bills. Should the landlord fail to comply with this provision he will become jointly and severally liable for the invoices of the water usage at the rented property.
The supplemental regulations that the government has created to bring the provisions into force are still in draft. However we understand that they will require the water companies to set up appropriate websites for landlords to provide the necessary information.
These changes place a significant new obligation on landlords. It also gives the water companies a substantial benefit over other utility providers who do not have the benefit of this kind of statutory protection. Landlords and agents should consider amending their tenancy agreements to specify that tenants must provide evidence of the water bill being paid to date otherwise it will be deducted from the deposit.

Halifax - 'Homes at Most Affordable for 12 Years'

The proportion of disposable earnings devoted to mortgage payments - a key affordability measure - is at its most favourable for 12 years, according to new Halifax research.
Nationally, typical mortgage payments for a new borrower - both first-time buyers and homemovers - at the historic average loan to value ratio stood at 28% in the second quarter of 2011: the lowest level since 1999 and down by almost half from a peak of 48% of average disposable earnings in 2007 Quarter 3. There has also been a modest decline over the past year from 30% in 2010 Quarter 2, reducing mortgage payments relative to earnings further below the average of 37% recorded over the past 27 years.
Lower house prices and reduced mortgage rates - which have fallen since 2007 from an average of 5.84% to 3.85% - have been the main drivers behind the significant improvement in affordability. However, the average deposit put down by buyers has increased over the same period from 20% of the property value in 2007 Quarter 3 to 25% in 2011 Quarter 2.
All 12 regions have experienced the improvement in affordability since mid 2007 with affordability better than the long-term average in all regions. The most substantial percentage falls in average mortgage payments as a proportion of average disposable earnings have been in Northern Ireland (-62%) and Wales (-45%).
Locally, the fall in house prices and mortgage rates has also led to improvements in affordability in all local authority districts since 2007.  Sixteen areas have recorded an improvement of 50% or more. The overwhelming majority have seen a fall in mortgage payments as a proportion of average earnings of at least 25%.
Eight of the ten local areas that have experienced the biggest improvement in affordability since mid 2007 are in Northern Ireland. Carrickfergus has seen the biggest percentage improvement in mortgage payments as a percentage of average earnings (-63%) followed by Castlereagh (-62%) and Craigavon (-61%). Corby and Forest Heath are the other two areas in the top ten.
Martin Ellis, Housing Economist at Halifax, said: "Lower house prices and reduced mortgage rates have resulted in a substantial improvement in housing affordability since the peak of the housing market in 2007.  Housing is now at its most affordable for 12 years, and mortgage payments for a typical new borrower, compared with average earnings, are now comfortably below the long-term average.
"The improvement in affordability has been an important factor supporting housing demand this year. With the prospect of continuing low rates for some time yet, affordability is likely to remain favourable.  These affordability gains, together with a slowly improving economy, should help to support demand in the face of pressures from weak earnings growth, relatively high inflation and higher taxes."
Other Key Facts

• Mortgage payments account for the lowest proportion of disposable earnings in Scotland (22%), Yorkshire & the Humber (23%) and the North West (23%).
   
• Six of the ten most affordable local authority districts are in Scotland. East Ayrshire is the most affordable local authority district in the UK with typical mortgage payments accounting for 17.7% of average local earnings.  This is followed closely by North Ayrshire (17.8%) and North Lanarkshire (18.0%).
   
• Kensington and Chelsea is the least affordable local authority district in the country with average mortgage payments on a new loan accounting for 75% of average local earnings. Mole Valley and South Buckinghamshire both in the South East are the next least affordable at 54% and 51% respectively.

Slightly Better News for First Time Buyers

The Council of Mortgage Lenders has issued a press release stating that June saw the highest number of mortgages taken out by first time buyers in 10 months.

The 18,100 loans to first-time buyers were worth £2.2 billion – 24% higher by volume and 29% higher by value than in May.

Government abandons controversial phasing-out of cheques

Controversial plans to abolish printed cheques by 2018 have now been scrapped, the bank trade body, the Payments Council, has announced.
The group, which represents banks and payments groups, has now said cheques will be available to bank and building society customers for “as long as customers need them”.
Work started last year on an alternative paper-based system, but the Payments Council said it had now decided that this was no longer the best option and that “retaining the cheque is a better approach”.
Richard North, Chair of the Payments Council said: “Listening to over 600 stakeholder groups, working with the banks and following our appearance before the Treasury Select Committee, we have concluded we should reassure customers that the cheque is staying.”

Loan numbers for home buyers increase - CML

The number of loans for house purchase and remortgaging both increased in May, showing further signs of stabilisation in the mortgage market, according to new data from the Council of Mortgage Lenders. However, lending volumes are still weak on a historic basis.
There were 41,500 loans worth £5.9 billion advanced for house purchase in May, up from 40,800 (£5.9 billion in value) in April.
Despite the monthly increase in house purchase activity, it is still below the level seen in May last year (43,800 advances worth £6.3 billion).
Remortgage lending picked up slightly in May. Some 29,000 remortgage loans were advanced, worth £3.6 billion, compared to 24,700, worth £3 billion, in April.
Compared to May last year, remortgage lending has increased by 9% in value, but remains below the recent peak in March (£4.1 billion).
The majority of borrowers continued to opt for fixed-rate mortgages in May (62%). It is likely that borrowers prefer the certainty of mortgage payments in a period when future interest rate movements are uncertain. Only 22% of all borrowers chose tracker mortgages in May. This represents a significant change from May 2010 when fixed rates were less popular at 46% and tracker mortgages more popular at 36%.
Lending to first-time buyers was virtually unchanged in May: 15,900 first-time buyer loans were advanced compared with 15,800 in April. The value of these loans remained unchanged in May at £1.9 billion. Compared with May last year, first-time buyer activity has fallen by 2.5% in volume (from 16,300) and 5% in value (from £2 billion).
First-time buyers borrowed on average 80% of their property's value in May for the second month in a row. This is still well below the 90% that first-time buyers typically borrowed before 2008, but has eased a little from the 75% experienced throughout 2009 and early 2010.
In May this year, only 3% of first-time buyers took out an interest-only mortgage. Before 2008, it was typical for around 30% of loans to first-time buyers to be on an interest-only basis.
The number of mortgages advanced to home movers edged up in May to 25,600 advances from 25,000 in April, while the value of loans advanced stayed the same (£4billion). This is an increase of 2.4% by volume compared with April. There were larger year-on-year falls in lending to this group than in the first-time buyer sector, down by 7% in volume compared with May last year.
Home movers have typically borrowed just below 70% of their home's purchase price since the middle of 2009 and this continued in May.
CML director general Michael Coogan said: "Over the coming months seasonal factors are likely to push up lending for house purchase. There is no evidence of any drastic changes on the horizon or any significant shifts in direction for the mortgage market. These stable conditions are expected to continue for the rest of the year.
"Funding market conditions appear a little more positive. For example, recent securitisation deals suggest confidence has returned as investors regain their appetite to invest in bonds backed by mortgage assets. Overall this is a positive influence on mortgage market conditions."

Home buyers urged not to forget survey

For many people, buying a home is one of the biggest decisions they will ever make. However, by failing to commission a survey before purchase, homebuyers across England and Wales are risking potential bills running into thousands of pounds.
According to RICS research, a quarter of all homebuyers who fail to have a survey are forced to undertake unplanned building works to their property after purchase.
The average bill for these works, such as damp proofing or repairing a roof, is over £1800 - but the cost can be much higher.
A common misconception is that a mortgage lender's valuation report represents a survey when in fact, it is merely a valuation carried out on the mortgage lender's behalf and is not designed to highlight any potential problems with the property. By commissioning a home survey, any structural problems or urgent defects are highlighted, enabling the buyer to make an informed decision before committing to the property.
The RICS Condition Report is a new home survey which is both simple and affordable. Designed for newer properties and conventional homes, it provides a clear report on the condition of the property, plus details of urgent faults and advice for legal advisors. It does not provide an additional valuation, but sits alongside a mortgage valuation.
Alongside the Condition Report, RICS offers two additional surveys, tailored to the type and age of a property:

• RICS Condition Report: A clear, concise picture of the property with "traffic light" ratings. It shows the condition of the property, offers advice to legal advisors and highlights details of any urgent defects. The lowest priced of the surveys; it is aimed at conventional properties and newer homes;
   
• RICS HomeBuyer Report: Contains all the features of the Condition Report, plus a market valuation and insurance rebuild costs. It also includes advice on defects that may affect the value of the property with repairs and ongoing maintenance advice.
   
• RICS spokesperson, David Dalby, said: "In difficult economic times it pays to be prepared. Nobody wants to be left with a home that needs extensive repairs or one they can't sell on. By having a survey you'll be armed with information on the condition of the property which puts you in a stronger position to decide whether to proceed with the purchase, or negotiate a better deal.

"Interestingly, other parts of the housing market are also using surveys to their benefit. For landlords this can be to assess their investments, while we are also seeing sellers turning to surveys in order to prepare for the sale of property. These highlight any problems that may potentially delay the sale or impact on the price later in the process."

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UK repossession hotspots pinpointed

Housing and homelessness charity Shelter has revealed the nation's repossession hotspots.
Its research shows the places in England with the highest proportion of homeowners who have been issued with a possession order for their home, and are therefore at serious risk of repossession.
With experts predicting repossessions will rise to 45,000 next year, the charity is highlighting the research to encourage homeowners who will be hit when interest rates rise to start preparing now for higher mortgage costs so they don't find themselves at risk later down the line.
Shelter conducted the research by analysing the latest Ministry of Justice data on the rates of claims leading to possession orders per 1000 households across every local authority.
Some 65 local authorities have been identified as repossession hotspots because they are in the top fifth nationally.
The analysis shows that Corby in the East Midlands is the country's top hotspot, having the highest rate of at-risk homeowners, closely followed by Barking and Dagenham and Newham in London, Knowsley in the North West and Thurrock in East of England.
The results also reveal worrying groups of local authorities in parts of the country, including a red ribbon of repossession hotspots across the North from Merseyside to the Humber, large parts of Tyneside, a cluster of Kent and Essex coastal towns and a collection of areas around the Wash in East Anglia.
The research also found a strong link between unemployment and rates of possession orders with unemployment having risen at more than double the rate in hotspots, compared to the least at-risk areas.
Campbell Robb, chief executive of Shelter said: "This research paints a frightening picture of repossession hotspots across the country where homeowners are literally on the brink of losing the roof over their head.
"We know only too well that the combined pressures of high inflation, increased living costs and stagnant wages are really taking a toll on people. All it takes is one thing like job loss to tip people over the edge and into the spiral of debt, repossession and ultimately homelessness.
"And with interest rates due to increase in the near future this research is a clear warning sign of difficult times ahead for many thousands of homeowners across the country."

Government announces delay to EPC changes

 

Two changes to the current requirements in respect of EPCs were expected to take place on July 1 and October 1. However the Government has announced a delay as the Regulatory Policy Committee, which scrutinises new regulations, has yet to give clearance.

The delay means that all the EPC changes are now likely to be introduced later in the year although we have yet to be told of any new dates. No doubt there will be pressure to lay the Statutory Instruments prior to the summer recess.

As previously reported, the changes would have still allowed the marketing of a property without an EPC providing it had been ordered. In addition the time to make one available was to be reduced from 28 days to 7 days. These changes were meant to have come into effect from 1 July.
From October, there was to have been a requirement to produce more than just the graph on details, although we are still in discussion with the Department as to exactly what this would mean.
The Department has promised more information shortly.

Outlook for recovery improves

 

Consumers are slightly less negative about the outlook for the housing market, the latest BSA Property Tracker survey reveals.
The proportion who did not think it is currently a good time to buy dropped to 21% from 29% in March.
Some 41% think it is a good time to buy, the same proportion as in March.
Though it remains one of the main factors holding back prospective buyers, the proportion selecting a lack of job security fell by 9 percentage points compared to the previous survey, being chosen by 48% of respondents in June.
And the proportion concerned about future falls in property prices reduced by 5 percentage points to 19%. Meanwhile, raising a deposit attracted the highest proportion this barrier has achieved since the Property Tracker began, being selected by 62% of respondents.
Obtaining a sufficiently large mortgage was also a significant barrier, with 53% of respondents saying this was an impediment.
Paul Broadhead, Head of Mortgage Policy at the BSA, said: "There appears to be a little less negativity in consumers' opinions on the housing market, but it remains to be seen whether this is just a blip or the start of a trend. People are slightly less nervous about the outlook for the jobs market, and are less inclined to think that house prices are going to fall. For the first time since September last year a greater proportion of respondents think that house prices will rise rather than fall in the following 12 months.
"And more people think that raising a deposit is a barrier to buying property, which though unsurprising when considered against the ongoing squeeze on household finances could indicate that more people are looking at getting into the market. This barrier to potential buyers might reduce in the months ahead as a greater number of higher LTV products come onto the market."

Accelerating your Reputation

 

How you can take pro-active steps to harness the power of your reputation, rather than waiting for it to follow years of good service.

Many Estate Agents think that their business will be judged on its level of service, or assume that their excellent sales record will in itself attract more business. Whilst not altogether incorrect, these are dangerous assumptions. New vendors, by definition, have not experienced your service before. They are therefore attracted not by the actual service you deliver, but by what they perceive you will deliver. In the quest to drive business forward, perception is as important as reality.
Whilst reputation is not necessarily an accurate judgement of your service, a good reputation is the platform from which your sales will happen more easily. Sadly, estate agents start with a disadvantage – their collective reputation! We all know that much of this generic dislike is probably based more on the frustrations and anxieties associated with the emotive business of moving house, and the misdemeanours of a small minority, than a collective will to upset our clients.
When Gerald Ratner famously described his stores’ jewellery products as “crap”, he proactively mismanaged his reputation and created a perception shift without any actual change in the products he sold. The public perceived the products to be of inferior quality and, even if they had been made of the finest materials, it was the perception, not the reality, which kept people out of Ratner’s stores for a decade.
Too many Estate Agents work hard for years in the hope that a good reputation will follow by default. For most of us, our business targets are measured in months or even weeks – not years, yet we fail to be proactive in the management of our reputation. Progressive Estate Agency businesses go out of their way to ensure that their reputation precedes them. Once this has been achieved, new business can be secured more readily stimulating expansion and prompting organic growth.
Reputation is a source of significant competitive advantage, and in a crowded marketplace it is often the single element that differentiates one agency from another. As the market tightens and Estate Agents aim to reduce risk, it is reputation that will see companies through the leaner times. Swift action now can rapidly augment your reputation as perceptions can be proactively engineered in order to “fast-track” your agency right in front of your prospects’ noses. In marketing terms, your reputation can never die of exposure.
The biggest problem that most Estate Agents currently face is a lack of decent instructions, and it is instructions that attract applicants, not reputation. More instructions = more ads and boards; more ads and boards = more applicants; more applicants = more sales.
Paradoxically, the problem has been exacerbated by the efficiency of the Internet, which in one respect has been counter-productive in promoting Estate Agents to their target audience, which should be vendors, not applicants.
This is because potential vendors used to see the agent’s advertisements in the press, and this played a significant part in the agent’s marketing efforts. Today Estate Agents who simply post their vacancies on line forget that, whilst this is great for buyers, it is useless for exposure to prospective vendors – the people who actually pay your fees. If you have fallen into this trap, you may now be suffering from under-exposure to prospects, and only have cold calling and your reputation on which to rely for new instructions.
So we have to look at other ways of generating meaningful exposure that will get clients knocking on your door, rather than you on theirs.
One of the best-proven ways of doing this effectively is to secure relevant media coverage. In other words, get your business regularly mentioned editorially in support of your press or on-line advertising. This does not just mean advertising properties “for free” in the “advertorial” coverage you receive in return for your regular ad-spend with a publication. It means offering innovative advice and newsworthy opinion, and can be incredibly powerful.
Firstly, the right publication can position you precisely in front of your target audience. Secondly, unlike advertising, the tacit endorsement of the publication conveys instant credibility and positions you as an authority on property sales. This can make major inroads into positively moulding your reputation around your aspirations. A car manufacturer may spend hundreds of thousands of pounds advertising a vehicle in the glossy Sunday magazines, but how much more valuable would it be if Jeremy Clarkson were to rave about it in just one column centimetre? PR such as this can instantly boost your business like a shot in the arm, and provide lasting direct and indirect benefits to your reputation.
However, a word of warning before you go knocking down the doors of your favourite journalists or local newspaper editor. Press coverage can be extremely profitable, and should be embraced, but Estate Agents are often ill-prepared when the time comes and do not maximise their exposure. There is little point in getting your name in the press if it has no meaning or relevance to your business. You need to consider exactly what your business stands for; identify your core values and carefully define those key messages that differentiate you from the competition.
A good starting point is to prompt a creative “round table” discussion of junior as well as senior employees about the personality of your company. Each should make contributions about the values, ethics, methods and processes that drive your agency. Consider the weaknesses of your competitors and strengthen your own attributes. How can you add other dimensions to the buying/selling experience? Why are your staff proud to work for you?
This personality platform provides the base from which a distinctive approach can be defined. If an agency is not distinctive, it is simply average; and in terms of reputation, average is simply not good enough.
These core values and key messages now need to be refined and developed into a few meaty phrases (or “soundbites” in PR speak) that encapsulate your agency’s distinguishing style. These can be integrated with any announcements or comment on newsworthy property and lifestyle issues which you should offer editors, or be articulated whenever a journalist asks for your views on the housing market.
Editorial coverage that includes your comment on the issues of the day can help develop your reputation as an authority in your market, as your news and views will appear credible and important. By providing editors and journalists with advice and opinion that will be of interest to their readers, you are likely to secure frequent and meaningful coverage, and it is this regular, relevant exposure in addition to your advertising that is the key to managing and accelerating your reputation.

Policy and Political Report

 

24-31 May 2011
Parliamentary question on affordable housing and the New Home Bonus
Responding to a parliamentary question from Conservative MP Damian Hinds on the New Home Bonus, Housing Minister Grant Shapps confirmed that the New Homes Bonus“is based on the council tax from the net increase in effective housing stock with a further enhancement of £350 for affordable homes and will be paid for the following six years”.
HMRC statistics on property transactions
HM Revenue and Customs has released statistics on revenue-based taxes and benefits on property transactions.  The statistics give estimates of the number and aggregate value of property transactions in England and Wales, Scotland and the United Kingdom, for 2007 to 2009, broken down by various items.
Parliamentary question on energy in new homes
Communities Minister Andrew Stunell has said that areas being explored for energy efficiency improvements include“improving guidance and dissemination to raise awareness and understanding of the requirements and how to achieve them, and improvements to the building control system to facilitate compliance, such as enabling wider use of competent person schemes”.
Stunell also said that the Government was working to ensure good take-up of the Green Deal scheme, including “improved rights for private tenants to benefit from energy efficiency measures; exploring proposals for using building regulations to promote the retrofitting of buildings when undertaking other major works; and working with social landlords to encourage large-scale projects to retrofit homes with energy efficiency and micro-generation technologies”.
National Audit Office Report on the Government’s Mortgage Rescue Scheme
The NAO has published a report into the Government’s Mortgage Rescue Scheme, highlighting that despite aiming to help 6000 households, it provided assistance to just 2600.  Furthermore the Scheme ran over budget by some £35million.
Shelter poll suggests first time buyers support responsible lending
A YouGov poll for Shelter has revealed that despite difficulties getting onto the property ladder, 75% of first time buyers believe that banks must lend responsibly.  The poll also shows that 53 per cent of first time buyers agree the high cost of homes, not the availability of credit (41 per cent), is the biggest barrier to them getting on the ladder.
In response, the Council of Mortgage Lenders issued a press release stating that the CML “expresses surprise that Shelter seems unaware that mortgage lenders do, in fact, support reform”.
Progress update on the Penfold Review
The Department for Business, Innovation and Skills has published a “progress update” on the Penfold Review.  The update sets out the progress made since November 2010, when the Government responded to the review.  Steps include:

• Expanding the simplified approach to the environmental permitting system, allowing developers to apply for one consent rather than several
   
• Creating a lighter touch application process for low-impact environmental consents
   
• Setting out service standards for the major consenting bodies to improve the ease of applying for consents, such as named points of contact, clearer guidance on whether consents are needed and encouraging early discussion to smooth an application process
   
• Consulting on a code to increase transparency of the decision making process in Local Authorities
   
• Creating a protocol to guide working between the Environment Agency, Local Authorities and developers to cut out duplication and confusion

BBA Figures – Mortgage Lending
The BBA has released figures on mortgage lending in April, which show that annual growth of the banks’ net mortgage lending was 2.2% in April – “substantially ahead” of the 0.7% for the mortgage market in March, according to the BBA.
In response to the BBA figures, the Royal Institution of Chartered Surveyors stated that although they agree with the BBA that lack of demand for mortgages was a factor, “the cost and availability of finance for first time buyers remains the bigger problem”.
Nationwide House Price Index update
Nationwide has published its monthly house price index for May, suggesting a 0.3% increase in house prices

Tougher mortgage rules backed by first-time buyers

 

Three-quarters of first-time buyers believe banks must lend responsibly despite the fact it will stop some people getting a mortgage, Shelter has revealed.
The exclusive YouGov poll shows just how much the majority of people wanting to get their first step on the housing ladder support stronger mortgage regulation.
Shelter is currently calling on the Financial Services Authority to implement reforms set out in the Mortgage Market Review and for the Government to support this.
The survey also found that 79% of first-time buyers think banks and building societies lent irresponsibly before the credit crunch and more than a third (38%) do not think they can be trusted to lend responsibly in the future.
The spiralling cost of housing means that many first-time buyers would have to overstretch to get a foot on the ladder. But survey respondents did not agree that easy credit was the answer to overpriced housing with more than eight out of ten first-time buyers (84%) believing that banks should only offer mortgages to borrowers who can prove they can afford it.
Other findings from the survey, which provides a unique insight into first-time buyer attitudes towards mortgage lending, include:
* 83% strongly agreed that lenders should check a borrower’s income before giving them a loan;
* 75% believe banks should make sure borrowers have enough cash to pay the mortgage once other costs have been taken into account;
* 53% of first time buyers agree the high cost of homes, not the availability of credit (41%), is the biggest barrier to them getting on the ladder;
* Nearly a third (28%) said they had been offered a bigger mortgage than they had asked for, or knew someone that had.
Campbell Robb, chief executive of Shelter said: "This survey shows people really want simple, common-sense rules in place to ensure people borrow money responsibly. What is most striking is the level of support among first-time buyers who clearly want greater protection and are well aware it might limit their chances of getting mortgage credit in the future.
"So far the voice of the consumer has been completely drowned out by the mortgage industry, when in reality it is this very group who most recognise the need for stability in the market. We must not let banks go back to the old ways of irresponsible and reckless lending."

Housing market fears as 'generation rent' keeps away from property ladderSurvey shows high prices and hefty deposits means two-thirds of would-be first-time buyers are unlikely to buy a home in the next five years

Two-thirds of potential first-time buyers have no realistic prospect of owning their own home in the next five years and lack the long-term saving mentality they need to get onto the housing ladder, according to a report on home ownership by one of the UK's biggest mortgage lenders.

Owning a home has been a priority for most Britons since the 1950s when living standards began to rise, but the Halifax says that the high cost of property, strict lending rules and unwillingness of non-homeowners to save a deposit have fundamentally changed the attitudes of younger people towards home ownership.

In a survey of 8,000 people aged between 20 and 45, only 5% of those described by the Halifax as "Generation Rent" (those with no realistic prospect of getting on the housing ladder) are making spending sacrifices to save towards their first home. The remaining 95% have no spare cash, no interest in saving or are trying but failing to save.
Almost half the people questioned predicted that Britain would become a nation of renters within the next generation.
The report says that such a development would have far reaching consequences for the economy and living standards in Britain. As much of Britain's wealth is tied up in housing, an increase in the rental sector could widen the wealth gap between homeowners and non-owners. It would also have an impact on retirement living standards, as less people would have the money in their homes to support their retirement and long-term care.
A rise in renters would also lead to a more transient population – although good in terms of labour mobility, the phenomenon would not encourage the building of strong communities.

However, the most immediate impact would inevitably be on the housing market. The report says: "In order for the market to remain sustainable, homeowners need to be able to move up the housing ladder. Without first-time buyers, there could be a standstill in the market as many people living in their first homes would not be able to move up the ladder without a first-time buyer purchasing their home."

London is the most difficult area for aspiring homeowners to buy in, thanks to the combination of the highest property prices in Britain and increasing rental costs, reducing the amount that can be saved towards a deposit.

According to recent analysis by Findaproperty.com, first-time buyers who have no financial assistance from their parents will rent in the capital for an average of 31 years (from the age of 21, based on figures from the National Housing Federation) before buying their own home, spending £308,558 on rent. The average price of a home in London for first-time buyers is £257,249.
The average time spent renting in England is 16 years, taking the average age of the financially unassisted first-time buyer to 37. The National Housing Federation predicts this could soon rise to 43 as more people struggle to raise deposits.
Sarrah Laspa, a 29-year-old who has lived in London for seven years, regards rent as "wasted money" and would love to buy her own home, but has no disposable income left at the end of every month with which to save a deposit. She lives in Borough, a central area of south London, which is within walking distance of her legal publishing job and spends half her monthly income on rent.
"I could live further out, but then I would have to pay for public transport which would negate the benefits of cheaper housing," she said. "And being single, it would be pointless living in the middle of nowhere."
While the main barriers to home ownership are financial, the study found that many non-homeowners are deterred by fear of the mortgage application process, with 84% believing that banks do not want to lend to first-time buyers. Many worry that if their application for a mortgage is rejected by one bank, this would stay on their credit record and hinder further attempts to borrow.

Stephen Noakes, commercial director of mortgages at the Halifax, says the bank will publish more information about the criteria used to assess applications and explain that failed applications do not have a long-term negative impact. Home ownership rates have remained virtually static at 70% since the 1990's, but the number of first-time buyers has slumped in the last few years as property prices increased and lenders began to demand much bigger deposits. According to figures produced by the Council of Mortgage Lenders, 36,200 first-time buyers bought a home in the first quarter of this year compared to 43,600 in the first three months of 2010. But both figures are dwarfed by the 167,400 people who became homeowners at the peak of the market in the third quarter of 2001.

The size of deposit required to buy a first home has soared. In 2000, a first-time buyer needed an average deposit of £9,865 or 14% of the property price, but this grew to an average of £28,770 or 21% of the property price by last year.

Remortgaging tips balance on lending in Q1 2011

 

The balance between house purchase and remortgage lending tipped towards remortgaging at the start of 2011, according to the Council of Mortgage Lenders. Remortgaging accounted for 37% of all lending in the quarter, an increase from 30% in the last quarter of 2010.
The number of loans advanced for house purchase in March increased by 24% to 37,800 from February, and the value increased by 26% to £5.4billion. While this is a significant increase compared to the start of the year, house purchase lending activity is still below the levels seen at the same time last year - down 17% in volume and 16% in value.
There were 33,900 loans for remortgage, worth £4.1billion, advanced in March, up 16% by volume and 17% by value compared to February and up 17% by volume and 13% by value compared with March 2010.
Looking at the first quarter as a whole, house purchase lending was down 26% by volume and 27% by value from the last quarter of 2010. Remortgage lending was up 14% by volume and 11% by value from the fourth quarter.
The increase in remortgage activity is likely linked to the expectations of an increase in interest rates.
Although any significant rise in rates is unlikely, recent increased sentiment in favour of remortgaging looks set to be reflected in a strengthening of remortgage lending over the next few months,
The number of mortgages to both first-time buyers and home-movers fell on a quarterly basis. First-time buyers fell 23% and home movers 28%.
CML director general Michael Coogan said: "We saw a significant increase in both house purchase and remortgage lending in March but, over the first quarter of the year as a whole, the picture was subdued and that is unlikely to change for the foreseeable future.
"Looking ahead to lending figures in the coming months, the Easter, royal wedding and May bank holidays will impact on the level of activity, timing and spread of completions in the second quarter meaning that any one month's data should not be interpreted as a reflection of a trend. It may take until publication of the second quarter's activity to get a full understanding of how the market has reacted to the squeeze on household incomes."

Political Report

 

Monday 2^nd May 2011
Lloyds Banking Group – Million pound home sales rise at fastest rate since 2006
The number of homes sold for more than £1million increased at its fastest rate for four years during 2010 as the top end of the property market bounced back, according to research from Lloyds Banking Group.
A total of 7185 properties changed hands for a seven-figure sum during the year, 54% more than in 2009 and the biggest annual increase since 2006.  Edinburgh accounted for almost half of Scotland's £1million sales and saw more homes sold in the top bracket than anywhere in the UK outside the south east of England.
But despite the increase, sales of homes for £1million or more are still 13% below the level they reached in 2007, before the financial crisis struck.  The group estimates that there are now around 184,000 homes in Great Britain that are worth at least £1million.
Tuesday 3^rd May 2011
Department for Communities and Local Government – Grant Shapps: Government backs self-builders
Housing Minister Grant Shapps MP has announcedthat the Government will help self-build to become a mainstream housing option – and that Government would play its part by making available publicly-owned land for use by ordinary people to build their own homes.
Self-builders are Britain's largest housebuilder, accounting for about one in five of Britain's new homes each year; but the UK has one of the lowest proportions of new homes built by self-builders in Europe.
Grant Shapps said he wanted to see more land being made available – both private and public – to enable more individual and community self-build schemes.  He called on private investors to bring forward plots, and for local authorities and Housing Associations to show their support.
The Minister said central Government would lead the way: he will shortly announce the first publicly-owned sites to be made available to housebuilders to include plots exclusively for self-builders.
Wednesday 4^th May 2011
Nationwide – House Price Index, April 2011
The Nationwide has published its latest house price index for Aprilwhich shows a 0.2% drop during the month:

Headlines	Apr 11	Mar 11
Monthly Index *	329.1	329.9
Monthly Change *	-0.2%	0.5%
Annual Change	-1.3%	0.1%
Average Price	£165,609	£164,751

 

* Seasonally adjusted figure (Note that monthly % changes are revised when seasonal adjustment factors are re-estimated)

Commenting on the figures, Robert Gardner, Nationwide's Chief Economist, said: “The price of a typical house fell by 0.2% in April, which left prices 1.3% lower than the same period of 2010.  The three month on three month measure of house prices, a better measure of the underlying trend, showed a modest rise of 0.6%.
“There is still little evidence to suggest that price declines will accelerate in the months ahead.  While the UK economy only managed a modest bounce-back at the start of the year, after the weather-induced contraction in late 2010, the economic recovery is expected to gather momentum.”
Bank of England – Lending to Individuals, March 2011
The Bank of England has reportedan increase in the number of home loans approved for house purchase, from 46,708 in February to 47,557 in March. It was the highest mortgage approvals figure for five months, with activity rising slightly after a winter slowdown.
But the figure is still down on the 48,967 loans which were in the pipeline in March 2010, and significantly below the 70,000 to 80,000 a month that economists consider to be consistent with a stable housing market.
Building Societies Association – Mortgage approvals by mutuals jump 29% in March
Mutuals approved £2.1billion worth of mortgages in March 2011, which is up 29% on the £1.7billion approved in March 2010 and compares to £1.7billion in February 2011, according to the Building Societies Association (BSA).
Gross lending by mutuals totalled £1.7billion in March 2011. This is up 8% compared to £1.6billion in March last year, and compares to £1.5billion of lending in February this year.
The key statistics for March show that:
-     Mutuals’ gross lending amounted to £1736million in March 2011 compared to £1605million in March 2010.
-     Net lending by mutuals in March 2011 was -£476million compared -£765million in March 2010.
-     Mortgage approvals by mutuals in March 2011 were £2145 million compared to £1666 million in March 2010.
Friday 6^th May 2011
Scottish, Welsh and Local election results
Election results have been declared from the elections held for the Scottish Parliament, Welsh Assembly and local elections in England.
In Scotland, the Scottish National Party claimed a majority for the first time in the Scottish Parliaments, having claimed 69 seats out of a possible 129, up by 23 seats from the last election.  Labour failed to capitalise on the haemorrhaging of support from the Liberal Democrats, losing seven seats to leave them with 37 overall.  The Liberal Democrats now have only five MSPs, falling into fourth place behind the Conservatives.
In Wales, Labour failed to claim a majority, having won 30 seats in the 60 seat Assembly.  The leader of Plaid Cymru, Helen Mary Jones, lost her seat in Llanelli, as her party lost four seats overall, leaving the nationalists as the third party in Wales with 11.  The Conservatives are now the main opposition in Wales, with 14 seats.
Local elections also took place for 279 councils, with Labour increasing the number of councils which they control by 57, and with 800 additional councillors overall.  The Conservatives fared better than expected, with an increase of 81 councillors and more importantly, 157 councils.  The Liberal Democrats were again the ones to suffer, losing 10 councils and 1056 councillors.

Sellers emerge to test housing market

 

Supply of property increased during April, as sellers returned to test the Spring housing market, according to the latest RICS UK Housing Market survey.
Around a fifth (18%) more chartered surveyors reported a rise rather than fall in new instructions, up from 4% more in March. Spring is traditionally a busier time of year, but respondents suggest that a stabilisation in property prices has also tempted many back.
Demand also showed signs of steadying, with new buyer inquiries moving to a net balance of 0% and taking the series out of negative territory for the first time in 10 months. During April, respondents noted that the good weather led to increased numbers of viewings from potential buyers in some parts of the UK. Despite this, surveyors continue to report that a lack of mortgage finance is hindering many, with only the cash-rich able to really take advantage of the market.
Significantly, average sales per surveyor over the past three months rose to 15.2, the best level since December. Alongside this, newly agreed sales also edged up in April, as 8% more surveyors reported increases not falls in agreed sales, taking the series to its best level for a year.
The picture remains more downbeat for house prices, in part due to the continued imbalance between demand and supply.
Some 21% more surveyors reported prices fell rather than rose in April, but this is the best level since June last year. Similarly, surveyors' expectations for prices over the next three months remain in negative territory, at a net balance of -18, also taking the series to June 2010 levels.
Looking ahead, 11% more surveyors predict sales to increase rather than decrease over the next three months.
RICS housing spokesperson, Michael Newey, said: "The return of sellers to the market is positive, but activity still remains subdued and it is difficult to see it picking up materially over the coming months.
"Although there are signs that some lenders may be reducing their grip on the purse strings, in particular with mortgages aimed at first-time buyers, there is still a long way to go before lending levels increase enough to have any real impact. Economic uncertainty may also continue to weigh on sentiment for a while to come."

Political Report

 

Tuesday 26^th April 2011
Halifax – Buying 14% more affordable than renting
The cost associated with buying a home in the UK is typically 14% lower than renting a property, according to new research by Halifax.  The average monthly costs associated with buying a three-bedroom house in the UK stood at £608 in March 2011; 14% (£98) lower than the average monthly rent paid on the same property type of £706.  Three years ago, the average cost of buying was 43% more than the typical rent paid.
The significant fall in the monthly cost associated with buying compared to renting has been driven by the decline in the average mortgage rate since 2008.  The mortgage rate for a new borrower has fallen to an average of 3.59% from 5.82% in March 2008, helping to reduce the average monthly mortgage payment by 39%.
Despite the improvement in the affordability of buying relative to renting, the tightening in lending criteria since 2007 has meant that many potential buyers have not attempted to enter the market.  Nonetheless, market data shows that the average deposit paid as a percentage of the purchase price has been broadly stable since early in 2009 at around 27%, following a marked rise in 2008.
Home Builders Federation launches local election manifesto
The Home Builders Federation's local election manifestooutlines the need for local politicians to shoulder the responsibility of tackling the country's housing crisis and enable the construction of the homes the country needs.
The manifesto underlines the economic benefits of increasing house building to local areas. In total across England house-building could create around 200,000 jobs and £1.2billion of investment from central Government through the New Homes Bonus.
Among the measures requested in the manifesto, HBF is asking councillors to pledge to immediately draw up Local Development Plans to ensure a sufficient supply of viable land for housing.
HBF has also called on councillors to work with home builders to reduce the cost, complexity and uncertainty of regulation that is preventing the building of more homes.
Wednesday 27^th April 2011
British Bankers Association – March 2011 figures for the main high street banks
The latest statistics from the British Bankers Associationshow that the annual growth of the banks' net mortgage lending was 2.3% in March, remaining substantially ahead of the 0.7% for the whole mortgage market in February.
Gross mortgage lending of £7.7billion in March was slightly lower than the recent six month average of £7.9billion and 11% lower than gross lending in March 2010.  Despite gross mortgage lending holding up fairly well recently, this is due to stronger remortgage activity rather than new house purchases.  However, net mortgage lending increased by only £0.8billion in March, due in part to higher repayments.
House purchase approvals were slightly higher than in February but 10% lower than in March 2010.  The average value (£145,400) was 0.5% lower than a year earlier.  Numbers of remortgage approvals in March were 7% lower than the previous month but 1% higher than in March 2010.  Approvals for equity withdrawal continue to be weak and were 19% lower than March 2010.
House of Commons – Debate to take place on social housing in London
A debate on social housing in London, hosted by Jeremy Corbyn MP (Lab, Islington North), will be held in the House of Commons main chamber on Thursday 5 May.
The debate will focus on current proposals for changes to the administration of local housing allowance after several MPs representing London constituencies requested that a debate take place.

More confidence in stronger property prices - Rightmove

 

The number of people expecting house prices to go down over the next year has fallen, according to the latest Consumer Confidence Survey from Rightmove.
The proportion of those expecting prices to drop has slipped from 32.3% to 24.9%.
Despite this, a further finding of the survey is that across the UK consumers feel prices in their local area are overvalued and need to come down.
Rightmove director Miles Shipside said: "Our Q1 survey measured the highest proportion of home movers recorded to date forecasting that prices would be lower in 12 months’ time.
"That was the position of a third of them then, but now that proportion sharing that view has dropped to a quarter."
Each quarter for the past two years Rightmove has charted whether the home-moving public believe prices will increase, decrease or stay around the same.
For this latest survey the public were also asked whether they believed prices in their area were overvalued, undervalued or about right. The results reveal that just under half (48%) of respondents believe prices in their local area are overvalued, with just 15% of the opinion that they are too low.
In London (60.8%), the South East (51.7%) and the South West (52.7%) the proportion of those feeling prices were overvalued were in the majority.
Shipside said: "There is a growing sense that many homes coming onto the UK housing market are priced too high and this is borne out by the views expressed in this survey.
"We now have a situation where half of the UK public feel house prices are too high, yet three quarters of the same public are expecting prices to either stay the same or increase over the next 12 months.
"This suggests the prospect of a market stand-off and rising unsold stock levels if sellers don’t wise up to the house price views of their target market."

NAEA News

Interest in the housing market jumped sharply during March as potential buyers looked for pre-Easter bargains, research indicated today.

The number of new buyers registering with estate agents rose to an eight-month high of 290 during March, up from 268 in February, according to the National Association of Estate Agents (NAEA).

The group attributed the jump to buyers hoping to pick up a good deal on a property before the traditionally busy Easter selling period started.

But agents warned that many homeowners were still being overly optimistic and pricing their properties too high.

With buyers still struggling to raise the mortgages they need to go ahead with a purchase, this approach has contributed to a rise in the number of unsold properties estate agents have on their books during the past year.

The typical estate agent was marketing 68 properties last month, up from an average of 60 in March 2010, although the figure was down slightly from 70 in February.

The number of agreed sales held steady at an average of eight per branch, well up on the recent low of four reached in December.

Michael Jones, president of the NAEA, said: "We are very pleased to see that the market has remained relatively stable despite the continued economic pressures that are making life very difficult for homeowners and those looking to enter the property market.

"The significant growth in demand for homes reported by our agents suggests that house-hunters are searching for a good deal on property before the traditional spike in activity over the Easter holidays.

"That said, the picture is still very varied across the country and significant economic barriers remain."

The group also reported a slight fall in the proportion of homes that were sold to first-time buyers, with this dropping to 23 per cent of sales, down from 25 per cent in February, although the figure was in line with the year-on-year average.

The latest data comes just days after property website Rightmove.co.uk said a glut of unsold properties was building up on the market as new sellers priced their homes too high.

Sellers in England and Wales increased their asking prices for the fourth month in a row during the four weeks to April 9, hiking them by 1.7 per cent to leave them six per cent higher than at the beginning of the year.

But the group warned that the rise in homeowners coming to the market was not being matched by a rise in buyers who were able to go ahead with a purchase.

HM Treasury – Budget 2011

 

George Osborne delivered his “Budget for Growth”from “rescue to reform and reform to recovery” on Wednesday.  Despite operating within clear economic constraints following the announcement of a rise in inflation to 4.4% and weaker than expected tax revenues, the Chancellor still managed some giveaways.  In particular, there were headline tax breaks for companies and for the “squeezed” middle and lower income families.
There were several key, headline announcements relating to access to mortgage finance and housing, including:
-        Reform the stamp duty land tax rules applied to bulk purchases for residential properties and make Real Estate Investment Trusts easier to set up and more accessible to investors.  This will reduce a barrier to investment in residential property, promoting private rented housing supply;
-        The Government will provide £250million to support first-time buyers to purchase a new-build property.  The FirstBuy programme will assist over 10,000 households with equity investments jointly funded with house-builders;
-        The Government will help homeowners facing difficulties by extending for a further year temporary changes to the Support for Mortgage Interest (SMI) scheme.  The 13-week waiting period and £200,000 limit on eligible mortgage capital will now remain in force for new working age SMI claimants until January 2013;
The Budget also revealed that the Government will announce the outcome of its review of the stamp duty land tax relief for first-time buyers in autumn 2011.
There are also several announcements relating to planning.  The Government will:
-        Introduce a new presumption in favour of sustainable development, so that the default answer to development is “yes”;
-        Localise choice about the use of previously developed land, removing nationally imposed targets while retaining existing controls on greenbelt land;
-        Pilot a land auction model, starting with public sector land;
-        Introduce a number of measures to streamline the planning applications and related consents regimes removing bureaucracy from the system and speeding it up.  This will include a 12-month guarantee for the processing of all planning applications, including any appeals;
-        Ensure a fast-track planning process for major infrastructure applications through the Major Infrastructure Planning system; and
-        Consult on proposals to make it easier to convert commercial premises to residential.
Budget 2011 – Industry reaction
Wendy Evans-Scott, President Elect of the NAEA said: “The Chancellor’s help for first-time buyers is a good gesture towards re-starting the stalling property market. However, it is nothing more than a gesture – the focus on new build properties, rather than incentivisation across a broader spectrum of property, means there will still be little upward momentum in the market. While the measures aimed at first-time buyers must be welcomed, it is unlikely that they will provide the kick-start that the housing industry badly needs.
“The review of Stamp Duty, for which we have long-campaigned, is a positive step and we believe the Chancellor is right to address planning laws and change of property use. However, without the ability to overcome the substantial capital barriers that are currently restricting property ownership, the market will stagnate in 2011. Such a stagnation has wider implications for the economy as it restricts the flexibility of the workforce and the ability of families to own the homes they need as they grow. Encouraging first-time buyers back to market is an important first step, but it is just that – a first step on a long road to recovery.”
Ian Potter, ARLA Operations Managerresponded as follows: "We have campaigned for a number of years for the Government to reform Stamp Duty, so its inclusion in this year's Budget is a welcome one - particularly for the Private Rented Sector (PRS).
"The PRS plays a vital role in the housing market but is suffering from a lack of institutional investment, which in other countries is flourishing. In the UK there are many barriers to this kind of investment but by reforming Stamp Duty to bulk purchases, it seems the Government might be removing one of them. This, we hope, will help drive institutional investment to the UK PRS, benefiting the housing market has a whole. In addition, and depending on exact details, the proposed changes to REITs could act as a further step towards enabling institutional investment"
The Council of Mortgage Lenders welcomed the modest support measures announced for housing in the Budget, although they are unlikely to create any fundamentally different landscape for homebuyers.

The time extension of the Support for Mortgage Interest scheme and the introduction of the FirstBuy scheme - a shared equity scheme not dissimilar although less generous than the previous HomeBuy Direct scheme - are the most notable measures relevant to the mortgage market.
TheRICS was pleased that the Chancellor has listened to its calls to make changes to stamp duty and Real Estate Investment Trusts (REITs) to support investment in house building.  As an organisation, the RICS has been calling for these changes for several years and have worked closely with the Treasury and other industry bodies to help support this new approach to rented housing.
The Building Societies Association looked forward to the outcomes of the Government’s review of Stamp Duty for first-time buyers in the autumn.  However, the BSA believes the Government should address the overall fundamental flaws of Stamp Duty.  The current “slab” system results in the bunching of transactions at prices just below the thresholds.   It’s time Stamp Duty in its entirety was reformed.
Shelter warned that the Chancellor’s Budget announcements will have little impact on our housing crisis.
The Home Builders Federation said the measures announced in the Budget to support house-building demonstrate that the Government is listening and has recognised the severity of the housing crisis and the vital economic role the house-building industry plays.  The Government must now build on this positive Budget and ensure it puts in place long-term changes to the planning system to avoid falling further into crisis.

NAEA: Chancellor must free up the housing market further

Wendy Evans-Scott, President Elect of the NAEA said: “The Chancellor’s help for first time buyers is a good gesture towards re-starting the stalling property market. However, it is nothing more than a gesture – the focus on new build properties, rather than incentivisation across a broader spectrum of property, means there will still be little upward momentum in the market. While the measures aimed at first time buyers must be welcomed, it is unlikely that they will provide the kick-start that the housing industry badly needs.
The review of Stamp Duty, for which we have long-campaigned, is a positive step and we believe the Chancellor is right to address planning laws and change of property use. However, without the ability to overcome the substantial capital barriers that are currently restricting property ownership, the market will stagnate in 2011. Such a stagnation has wider implications for the economy as it restricts the flexibility of the workforce and the ability of families to own the homes they need as they grow. Encouraging first time buyers back to the market is an important first step, but it is just that – a first step on a long road to recovery.”

Budget 2011 at a glance: George Osborne's key points

 

The key points of Chancellor George Osborne's Budget on 23 March 2011.

FUEL, CIGARETTE AND ALCOHOL DUTIES

Fuel duty to be cut by 1p per litre from 1800 GMT
Planned 4p per litre rise due in April to be delayed to 2012
Annual fuel duty escalator to be scrapped until 2015
VAT on fuel will not be reduced
No additional changes to alcohol duty rates
Tobacco duty rates up by 2% above inflation, duty regime to be reformed

INCOME TAX

No personal tax increases
Personal tax allowance to rise a further £630 to £8,015 in April 2012
Consultation on long-term plan to merge income tax and National Insurance
50% top rate of tax to remain but review of how much it raises

UK ECONOMY

2011 growth forecast downgraded from 2.1% to 1.7%
2012 forecast also down from 2.6% to 2.5%
Inflation set to remain between 4% and 5% in 2011

BORROWING

Forecast borrowing of £146bn this year, £2.5bn lower than anticipated
Borrowing to fall to £122bn next year, dropping to £29bn by 2015-16
National debt forecast to be 60% of national income this year, up to 71% in 2012

OTHER TAXES AND ALLOWANCES

Council tax to be frozen or reduced this year in every English council
10% discount on inheritance tax for people leaving 10% of estate to charity
Rise in air passenger duty to be frozen this year
Private jet users to pay passenger duty for first time
Levy on so-called "non-doms" up to £50,000 for those resident in the UK for 12 years
Tax avoidance clampdown to raise £1bn this year
Support for families in the south-west of England with water bills

HOUSING

Government-backed shared equity scheme to help 10,000 first-time buyers

HELP FOR BUSINESS

Corporation tax to be cut by 2% in April, not 1% as previously planned
Bank levy to be adjusted so banks do not pay less tax as a result
43 tax reliefs to be scrapped as part of simplification of tax code
£350m of business regulation to be scrapped
No new regulation on firms with fewer than 10 staff for three years
Business rate relief holiday for small firms extended for another year
New rules to require planners to prioritise growth and jobs
£100m funding for science facilities
21 "enterprise zones" to be launched, backed by tax incentives

JOBS AND SKILLS

Funding for 12 further university technical colleges
40,000 new apprenticeships for young people out of work
Funding for 100,000 work experience placements

PENSIONS

Accepts Hutton review of reform of public sector pension contributions
Long-term aim for £140 a week flat-rate state pension - not to apply to current pensioners

TRANSPORT

£100m for repairing potholes in England
£200m support for regional railways in England

GREEN MEASURES

£2bn extra funding for Green Investment Bank - to launch in 2012

Homeowners fail to grab opportunity to reduce mortgage

 

A staggering eight out of ten homeowners could be missing out on the opportunity to shave years off their mortgage by overpaying even small amounts, research by Barclays has revealed.
The lender is urging those homeowners who are not overpaying to start if they can afford it, while interest rates are still low.
The study found that only 10% of homeowners said they were currently overpaying on their mortgage, while just a further 6% said they planned to start overpaying this year.
It also revealed 24% said they aimed to pay off their mortgage early, with more than half of these (56%) saying they hoped to cut their mortgage term to 15 years or under.
The "average" overpayment is currently £200.82, which on an average mortgage of £150,000 over 25 years could see the term reduced by seven years and three months.
Even as little as £50 can have a huge impact - an extra £50 per month on the same typical mortgage would reduce the term by two years, four months.
Andy Gray, head of mortgages at Barclays, added: "We've seen just a modest increase in the amount borrowers are overpaying on their mortgage in the first two months of this year compared to the same period last year.
"We are still experiencing low interest rates and mortgage affordability is at its best levels for more than a decade so we would urge borrowers who can afford it, to start overpaying now, as putting an extra £100 to their mortgage each month will pay off their mortgage four years earlier and reduce the amount of interest that is paid.
"Most mortgages allow a generous 10% overpayment per year so rounding your repayments up to a few pounds more a month is a really good habit to get into if you can afford it and will reap its rewards when you are mortgage free years earlier than planned!"

House prices achieve premium in spa towns

 

Property prices in spa towns across England and Wales are on average £38,000 (or 16%) above their county average, according to Lloyds TSB research.
Average house prices in 15 of 18 spa towns surveyed are significantly higher than those in neighbouring towns.
Boston Spa (£153,629, or 98%) and Ilkley (£152,022, or 97%) - both in West Yorkshire - command the highest house price premium to their county average. Only three spa towns have house prices below their county average: Epsom in Surrey (-5%), Llandrindod Wells in Powys (-7%), and Boston in Lincolnshire (-15%).
Some 15 spa towns have seen houses prices at least double in the past decade. The largest increase was in Builth Wells in Powys (153%) followed by Tenbury Wells in Worcestershire (143%), Boston Spa (141%) and Matlock in Derbyshire (140%).
* Epsom is the most expensive spa town in the country with an average house price of £357,837, followed by Tunbridge Wells (£337,144) and Bath (£324,250);
* The least expensive spa towns are Boston in Lincolnshire with an average price of £132,912 and Llandrindod Wells in Wales (£168,428).
Nitesh Patel, Housing Economist at Lloyds TSB, said: "Spa towns tend to have a larger stock of period architecture, such as Georgian or Regency, which are often larger and command higher prices. Spa towns are also often thought of as having a high quality of life, including excellent schools, lower crime rates, and lesser traffic volumes, all of which drive desirability in these areas and ramp up value. It all adds up to a significant success story for the housing market in these areas."
* Homebuyers must part with over £100,000 more to live in one of the spa towns in Yorkshire's "Golden Triangle". House prices in the spa towns of Boston Spa, Ilkley, Harrogate and Knaresborough are, on average, £105,000 (or 59%) higher than their county average;
*  The average age of the housing stock in spa towns is 67 years, which is 13 years older than for the UK (54). Bath and Matlock have the oldest housing stocks with an average property age of 92 years;
* Houses in spa towns also tend to be bigger than in the UK as a whole, with an average of 5.5 habitable rooms compared to the national average of 5.2. The largest houses are in Ilkley and Malvern with an average of 5.8 habitable rooms in both towns.

Cheaper to buy property than to rent

 

It is now cheaper to buy a home than to rent property in most of the UK, research has revealed.

Property website Zoopla.co.uk found that renting costs an average of 10.5% more than paying interest on a mortgage for the same type of property.

Low interest rates and falling house prices mean people are better off buying a two-bedroom flat than renting one in eight out of ten towns and cities in Great Britain.

Rents exceeded the cost of having a mortgage by more than 20% in 14 of the largest towns and cities in Great Britain.

Milton Keynes recorded the biggest difference. There, it costs 42% more to rent a home rather than buy one, with rents on a two-bedroom flat averaging £785 a month, while an interest-only mortgage on a similar property would be £554.

However, mortgage supply issues mean many people simply cannot borrow sufficient money to buy their own home - and this is behind the increased demand for rented accommodation.

LUDLOW LEAPS ONTO LIST OF MOST SOUGHT-AFTER LOCATIONS

A local firm of leading property specialists is backing a national newspaper’s claim that Ludlow is one of the UK’s prime locations for house hunters.

Shropshire-based Nock Deighton, which has an office in the picturesque market town, said it was no surprise to see Ludlow recently named by the Daily Telegraph as one of the country’s 20 ‘Hot Spots for a Happy Retirement’, alongside other notable locations such as Bath, Chichester and the Isle of Skye.

The report highlighted the town’s rich architectural history – Ludlow is home to more than 500 listed buildings, a medieval castle and the largest Parish church in Shropshire, St Laurence Church – and also praised its annual Food and Drink Festival, Britain’s first such event and one that is widely recognised as one of the best in Europe. It also took into account local transport links, the availability of attractive but affordable properties, and whether there was a thriving and active local community.

Michael Evans, Managing Director for Nock Deighton and Manager of their Ludlow office since 1989, commented: “This report will come as no surprise to anyone who has lived in, or ever visited, Ludlow.  As someone who has had strong roots in the town for many years, I know what a welcoming and friendly community it is to live in.

“Many of our buyers are attracted to the town from much further afield than Shropshire, including London and the Home Counties, the West Midlands, and the North West of England, and they are all taken aback by the quality of life and beautiful scenery on offer. It’s no wonder the renowned author John Betjeman was said to have once described Ludlow as ‘the most perfect historic town in England’,” Michael Evans concluded.

Formed in 1831, Nock Deighton is one of the Midlands’ most well-established and respected firms of estate agents, lettings agents, chartered surveyors, block management agents, and auctioneers. The company stands at the forefront of the modern property sector by embracing up-to-the-minute technology and industry best practice, and has a firm focus on achieving the very best results through a full range of specialist property-related services and dedicated staff.

For further information on Nock Deighton’s professional services please visit http://www.nockdeighton.co.uk/ or contact: the Ludlow office on 01584 875555; the Bridgnorth office on 01746 767767; the Ironbridge office on 01952 432533; the Telford office on 01952 292300; or the Shrewsbury office on 01743 241251.

Latest Land Registry figures record marginal rise in house prices

 

House prices rose 0.2% from December to January, according to the latest Index data from Land Registry.
Figures also showed an annual price decrease of 0.9% - which takes the average property value in England and Wales to £163,177.
Two regions in England and Wales experienced increases in their average property values over the last 12 months.
The region with the highest annual price change is London with an increase of 2.4%.
Both London and the South West experienced the greatest monthly rises both with movements of 1.6%.
The region with the greatest annual price fall is Wales with a decrease of -6.1%.
Wales also experienced the most significant monthly price fall with a movement of -4.2%.
The most up-to-date figures available show that during November 2010, the number of completed house sales in England and Wales dropped by 12% to 54,012 from 61,058 in November 2009.
Meanwhile, the number of properties sold in England and Wales for more than £1million decreased by 2% between November 2009 and November 2010, from 532 to 520.

RICS calls on Government to support growth in property and construction

 

RICS Pre-Budget submission to HM Treasury.

Measures to encourage growth in the housing and commercial property sectors should feature in the next UK Budget, according to RICS proposals issued today. 
Property and construction act as significant drivers of growth in the wider economy. Every £1 spent on construction contributes £2.84 to economic activity, and the industry employs around 900,000 people. The value of all property in the UK is over £4,500 billion and the sector employs some 500,000 people. By encouraging activity in these sectors, the Government will be able to promote economic recovery and provide long-term, sustainable growth.
RICS would also like to see a detailed plan for achieving efficiency savings of £5 billion in public sector property costs, and disposals of £20 billion, over the next ten years through long-term strategic planning and retention of the brightest professional talent in the public sector. 
While RICS acknowledges that significant cuts have been needed to reduce the deficit, this Budget provides an opportunity to initiate a sustainable recovery by restarting the massive engine of growth that is the construction and property sector.
RICS proposals include:

• Cutting VAT on refurbishment of homes
• Changes to the tax system to encourage residential property investment
• Reinstating empty commercial property rate relief

This Budget provides the Government with a chance to encourage growth and innovation in construction and property, providing much needed jobs, tackling the housing shortage and ensuring that businesses have a continuing supply of high quality premises. With house-building at a desperately low level, it is essential that the Government takes steps to attract investment into the residential sector.
Mark Goodwin, RICS Director of External Affairs

A recent survey of leading property professionals in the public sector shows that most fear the loss of vital professional talent in the wake of government cutbacks*. 

More strategic and efficient management of public sector property assets has rightly been identified as a golden opportunity for the Government to make savings of around £5 billion over the next ten years and release some £20 billion through disposals.
Lead times in property can be lengthy and short-term cuts can have unintended long-term consequences. The success of the Government’s emerging strategy on public sector property asset management will depend in no small measure on attracting, retaining and developing talented professionals.
Mark Goodwin, RICS Director of External Affairs

Fast reaction:

 You will recall the Mary Portas Secret Shopper episode last week which certainly caused some controversy among agents! Despite the dreadful woman's ignorant approach that got under most estate agents' skin, there were some reasonable pointers for basic customer service there if you are not already eg greeting people properly. However, I was most impressed with how some agents quickly turned the show to their marketing advantage. For example Knight and Rennie in Leamington Spa were very quick off the mark and on the same day had a superb flash on the homepage of their website which you can see here. http://sut2.co.uk/clickthrough.php?iD=5&iItem=111475&iLink=31847369&strUnique_ID=bf4024bc05bcafa813306820592e30&strUrl=http://www.knightandrennie.com Superb! This is a great example of an agent always on the lookout for a fresh topical approach to promoting their business. 

Prime property prices rise through short supply

One area of the housing market continues to outperform the rest – prime property.
Tight supply of stock and resilient demand pushed prices higher in central London by 1.1% last month, according to the latest Knight Frank Prime Central London Index.
Recent price performance has contributed to annual price growth of 10.3% in the 12 months to January.
Price rises have been led by the Knightsbridge and Kensington markets, where prices have improved by nearly 6% in three months
Prices are now 26.9% higher than March 2009 and 3.4% lower than their all time peak reached in March 2008.
Liam Bailey, head of residential research at Knight Frank, said: "London has bucked the wider UK trend in recent months, with strong price growth and resilient demand for property. Whereas prices in the wider UK market fell by over 1% in the year to January, central London saw continued double digit growth.
"Demand for property has been strong, applicant volumes were 13% higher in the three months to January compared to the same period a year earlier. The real drivers of this demand have been overseas buyers, especially Europeans, and also City based buyers, who have been more numerous than expected given the uncertain discussions over bonus levels.
"A marker of the strength of the London market is shown by the fact that viewing volumes are up by 30% year-on-year in January.
"On the supply side, the ongoing issue of tight supply continues, while stock volumes are running at 3% above the level seen a year ago, they are still down by over 20% compared to January 2009.
"Current rates of sale compared to stock volumes are still running at approximately 10%, far above the long-run average of 7% to 8%. This again confirms the position of limited stock in the market for buyers to choose from."

Ludlow; Daily Telegraph Article

Hot spots for a happy retirement

Where can you find attractive properties with good transport, shops and a community spirit for your later years? Graham Norwood investigates

By Graham Norwood

Today’s retirees can look forward to decades of active living. The big question is – where? We have scoured cities, along with rural and seaside locations, to find the essential ingredients of a happy retirement.
We shortlisted places that have handsome yet manageable homes to suit downsizers intending to spend their later years in their own properties. We insisted on a good environment and a busy community catering for everyone from bowls players to arts and sports aficionados. Many of our top 20 locations have their own amateur dramatic and music societies, run by volunteers, to keep the creative juices flowing.
Finally, we applied a “five-minute rule” to ensure you could buy a pint of milk or hop on public transport within a five-minute walk of your home.
The absence of good bus and train services sadly ruled out many locations that were otherwise perfect. A few other locations stood out as being a little unwelcoming for retirees, but thankfully that still left more than 20 places in Britain that fit the bill.

Ludlow, Shropshire

With 500 listed buildings and one of Europe’s largest annual food festivals, house prices are far lower than most incomers expect. This is pure heaven for the culture-vulture retiree.
A large period detached house is only £500,000. One of the longest established agents here is Nock Deighton (01584 875555; http://www.nockdeighton.co.uk/).