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.