End to recession fears brings buyers back

The UK’s top tier property markets experienced a buoyant month in April, with Prime prices increasing by 0.5% to £449,689 and Prime Platinum prices rising by 1.1% to £625,849. Annual growth of 3.2% and 6.0% was recorded for Prime and Prime Platinum respectively.

The slightly subdued start to the year has given way to a much busier period of activity, driven by a release of substantial pent-up demand. Consumer confidence climbed this month, amidst clearer signs that the economy is stabilising and a double-dip recession has been averted, resulting in a flurry of buyers returning to the market.

Now more optimistic of a lasting property market recovery, many buyers who had been putting off their move over the winter have taken the opportunity to purchase. This is particularly the case for families hoping to upsize to a larger home further out of town, fuelling competition for these types of property.

Supply-demand balance restored
The level of quality Prime stock increased by 4.4% in April, making it 41% higher than its level twelve months ago. However, supply is now being balanced by strong buyer demand, with all the typical characteristics of an active spring market being displayed.

Election could be tonic for the market
Astute buyers and investors see this as a good time to purchase Prime property in the right location and the General Election is unlikely to stall property transactions across this sector. Wealthy UK and overseas buyers will be largely unconstrained by the financial impact of any tax changes and the prospect of a new government may even help to strengthen the already improving consumer optimism.

All evidence points to a continued high volume of activity post-election, when the economic and financial outlook will be clearer, and we could be facing a busier than usual summer as home movers and investors prioritise property transactions while the timing is right.

Extract taken from Primelocation

The lastest mortgage figures make for interesting reading

Some 34,905 mortgages were approved in April, up slightly on March’s 33,360, show the latest figures from the British Bankers Association.

It says the effects of the year-end change to Stamp Duty have now worked through, so although numbers appear subdued compared to the latter months of last year, house purchase approvals were some 20% higher than in March last year.

The average value of house purchase approvals was £146,100 - 11.8% higher than a year ago. Numbers of remortgaging and equity withdrawal approvals continue to be lower than a year earlier.

The 4.5% annual growth in the banks’ net mortgage lending substantially exceeds annual growth of just 1% across the whole market in February, as banks continue to provide the majority of all mortgage finance.

Gross mortgage lending of £8.7bn in March was less than the average of the previous six months - £9.2bn and 0.4% lower than in March last year.

Repayments were stronger than usual as banks actively encouraged borrowers to use surplus cash to reduce their borrowing where possible.

As a consequence, net mortgage lending grew by £2.4bn in March compared with £2.7bn in February, and was below the previous six month average

David Dooks, statistics director at the BBA, says: “Low interest rates continue to influence customer behaviour. Homeowners are reducing mortgage debt by making, or maintaining, higher repayments using the extra cash generated by lower mortgage rates. People are also holding more cash in their everyday accounts, rather than building up savings accounts and overall unsecured borrowing levels are standing still.

“Uncertainties in business trading are constraining company demand for finance, with large corporate sectors still seeing contractions in borrowing”.

The election and the housing market

As usual, I have just read David Smiths article in the Sunday Times. The election is snapping at our heels, we are moments away from potentially having a new government in power, a hung parliament or indeed the ‘same olds’ remaining exactly where they are.

What will the election mean for housing? Inevitably, the big picture matters most: whether we get a hung parliament and what that means for the pound and mortgage rates. Housing policy also matters, but it has so far been the poor relation. The resounding housing pledges of past elections are missing from a campaign in which the only excitement has been Vince Cable’s proposed 1% mansion tax on £2m-plus houses, which will limit the Liberal Democrat surge in Mayfair.

Also missing, according to the industry, are answers to the biggest questions facing housing over the next few years. The Council of Mortgage Lenders (CML) has been through the three main party manifestos and found policies it likes, but its big worry is in an area none of the parties appears to have ideas about: how fill a £300 billion mortgage funding gap during the next parliament.

While the Tories talk about “less reliance on unstable wholesale funding” as a long-term ambition, the shorter-term problem will arise when lenders are weaned off emergency official support and have to roll over their borrowings in the markets. The danger, says the CML, is of a prolonged mortgage famine. Perhaps they will lower their lending criteria on mortgage approvals to pay back their borrowings and begin to take advantage of the inexpensive money that is now available to them on the money markets.

Housing supply, according to the Home Builders Federation, is another problem. The industry body says the shortfall amounts to almost 1m homes and is rising because of very low building levels. At current rates, it warns, every home in the country will have to last for 1,100 years before replacement.

If, as the Office for National Statistics suggests, Britain’s population will hit 70m in the next 20 years, we will require many more houses. Gordon Brown’s pledge, made in 2007, of 3m new homes by 2020 appears to have been quietly ditched and does not appear in Labour’s manifesto.

The Tories’ promised shake-up of planning, meanwhile, giving local people a greater say in permitting new developments, is seen by builders as a “nimbys’ charter”, hardened up by a manifesto pledge to allow referendums on local issues if 5% of people sign up. That could include blocking new developments. Even worse, some say, will be the Lib Dems’ proposal to slap Vat on new housing.

So the post-election housing landscape looks to be one with limited supplies of both mortgages and new houses. There is symmetry in that. It does not, however, make for a very healthy housing market.

Ideas for upgrading your bathroom

My favourite room in the house is my bathroom. I am positively possessive in the extreme when it comes to this sanctuary of mine. The end of the day comes, and all I can think about is soaking in my supersize tub, aromatic aromas fill the air, dimmed lights and the soft flickering of calming candles.

Of course this has not always been the case, not so long ago; I was ever so slightly hunched up in a delightful ‘avocado’ coloured bath. The flooring was very interesting brown shag pile, complete with faded stained patches, green and yellow wallpaper completed this retro scene.

A bathroom, can with a little planning turn into that much needed haven, a place to escape from all the hustle and bustle of modern day living. Not only will you enjoy this restoration project but will add value to your property at the same time.

Here are eight tips for upgrading and updating this vital space.

1. If you have a coloured suite, it really is time for it to go.

White is the preferred choice for most homebuyers - it's clean, light and space-enhancing. And with the right colour accents, accessories and bathroom products, it doesn't have to be boring.

2. Planning the layout of your bathroom is a must.

If the layout works for you now, don't change it. Re-plumbing a bathroom is the most expensive thing you can do.

That said, if the layout doesn't work for you, and then work with a plumber to look at how it can be redesigned. If you are thinking about moving the bathroom into another room, then consider where the waste pipes would need to go and how much of the garden would need to be dug up if you had to relocate the soil pipe and drains.

Anything is possible at a price, but think carefully about how the work will interrupt your lifestyle and whether or not the payoff will be worth it. It's possible your dream bathroom can be achieved without a major overhaul. Don't spend unnecessary money on the location - that way you'll have more to spend on the details.

3. Small spaces can be made to work with the right pieces of furniture.

Corner basins and even toilets are available, but consider who will be using the room and how often. Avoid replacing a bath with just a shower, even if you rarely take a bath yourself. A change like this has the potential to impact your sale price. The word 'bathroom' has a little clue in its name - keep the bath in there!

4. Your choice of bathtub is an important one.

It shouldn't be taken lightly if you plan to use this newfound space for relaxing. There are a number of great spa tubs available so you can get the benefit of a spa treatment in the comfort of your own home. If you've ever had a Jacuzzi bath, you'll always want one.

Try to avoid corner baths where possible. They can be good for small awkward spaces, but they can also affect the resale value of your home.

5. Install a power shower to add maximum value to the space.

Choose one with an adjustable head so you can change the pressure. A high blast can be great for relieving aching shoulders.

6.If space allows, 'his and hers' double vanity basins are fantastic, and a much sought after bathroom feature. Bowl basins which sit on a wooden stand are the hallmark of an inspirational bathroom.

7. Take time to consider your fittings.

Chrome is very popular in modern bathrooms, and good quality fixtures can set off even the most basic of bathroom suites. Your strategy might be to save money on the suite, but finish it with high quality fixtures. This approach works very well on low to mid-range budgets.

8. Be careful when choosing flooring and tiles.

If you can afford to tile the whole room you might want to consider installing a wet room. Taking this approach you'll end up with a very streamlined space, but remember - there won't be any 'dry' areas in there.

 

Downing Street drops in value

Downing Street is valued at £4.5 million, a drop of 9.18 per cent since Mr Brown became Prime Minister in June 2007, costing the taxpayer more than £460,000.It is in sharp contrast to Tony Blair who saw the property’s price climb from £1.65 million when he took office in 1997 to more than £5 million when he handed the keys over to Mr Brown.

There is a change in leadership over the next few weeks, Gordon Brown is likely to drop quite a few rungs on the property ladder as house prices in his own constituency of Kirkcaldy are among the lowest in the country, averaging £120,910 compared to his current address in SW1 where average house prices are £920,361.

This is quite ironic, Downing St, in common with a great deal of other UK property - tripled in value from 1.65M to 5M in ten years.

Downing Street drops in value

Downing Street is valued at £4.5 million, a drop of 9.18 per cent since Mr Brown became Prime Minister in June 2007, costing the taxpayer more than £460,000.It is in sharp contrast to Tony Blair who saw the property’s price climb from £1.65 million when he took office in 1997 to more than £5 million when he handed the keys over to Mr Brown.

There is a change in leadership over the next few weeks, Gordon Brown is likely to drop quite a few rungs on the property ladder as house prices in his own constituency of Kirkcaldy are among the lowest in the country, averaging £120,910 compared to his current address in SW1 where average house prices are £920,361.

This is quite ironic, Downing St, in common with a great deal of other UK property - tripled in value from 1.65M to 5M in ten years.
Nothing was created - certainly not a tripling of wages to afford to pay mortgages on properties three times as expensive.

This was a bubble, manipulated by a deliberately weak regulatory climate which enabled soft mortgage deals and ultra low interest rates - from which countless billions were leveraged from the same assets.

What the forthcoming election will mean for the property market

Last year saw a remarkable turnaround in the UK property market and although there will be further challenges in 2010, most notably the general election; a recovery is underway, according to a new report.

This year has got off to a very satisfactory start and sentiment in the property market has improved as mortgage finance, while still restricted, continues to cheapen.

The prime property market remains buoyant, with a deficit of available properties and currency weakness attracting a steady stream of overseas buyers. With prices showing some recovery, we hope to see more properties coming to market over the course of the year, especially family houses where there is still a significant shortage.

In the lettings sector a limited availability in stock reflects a return to historic levels, without significant upwards price pressure, the report shows. Corporate rentals are slowly returning, although they still remain well below the levels seen in 2007. The report predicts that the rental market should continue to firm up, with shorter void periods and limited upward price pressure.
 
The big unknown of 2010 is the general election, with a hung parliament now being tipped as a relatively likely possibility, which could herald a period of uncertainty in the property market. But the report concludes that it is easy to over estimate the impact this may have on the housing market and the economy generally.
   
Although general elections do not usually have much sway on the property market in the UK, this year’s election could have a greater impact, particularly on mainstream real estate, than past elections because of where we are in the housing cycle.
  
Because the property market is already in a state of low turnover and is only partially functioning due to the global financial crisis, it is perhaps more vulnerable to the slightest political changes, according to a residential research director at Savills.
 
‘We have a partially functioning market where recent price growth has been driven by cash and equity rich buyers chasing low stock levels. With continued constraints on mortgage lending, the market is heavily dependent on sentiment amongst a certain class of buyer, particularly against the background of continued economic uncertainty,’ he explained.
 
‘We expect to see these low transaction levels continue up to the election and through the immediate aftermath as political uncertainty makes buyers and sellers pause for thought. In itself this could cause volatility in price movements, with possibly more short term downward pressure on prices in the mainstream market than we have seen in the past twelve months,’ he added.
 
‘Without doubt, and probably regardless of which party wins, an outright majority would be the best outcome for the housing market in 2010, and possibly through to 2012, the year we have penciled in as the start of a more sustained housing market recovery.’

Extracts taken from Property Wire and BBC live

A slip in Rates for a few

Mortgage rates continue to slide down for new borrowers - but mainly for those with big deposits or substantial equity in their home.

• HSBC launched a competitively priced two-year fixed-rate mortgage deal at 2.99 per cent. The downside is that it is available only to borrowers with at least 30 per cent equity in their home. The loan has an arrangement fee of £999.
• Leek United Building Society has a three-year fixed-rate deal at 3.9 per cent. There is a £495 fee and it is available to those with a 25 per cent deposit or equity.
• Co-operative Bank has a 3.19 per cent fix for two years with a £999 fee. Borrowers must have at least 25 per cent equity.
• Over a five-year term, Accord, part of Yorkshire Building Society, offers a 4.44 per cent fix through brokers. It has a £1,995 fee and is available up to 65 per cent loan to value.
• For borrowers who are prepared to live with the risk of interest rates rising, First Direct has a lifetime tracker deal at 1.89 percentage points above the Bank of England base rate, currently 0.5 per cent. Trackers mirror any rise or fall in the base rate. First Direct's starting pay rate is 2.39 per cent, there is a £499 fee and borrowers must have at least 35 per cent equity.
• ING Direct has a lifetime tracker with a starting pay rate of 2.69 per cent and a £945 fee. The minimum deposit or equity is 25 per cent.

Stamp duty break already shows results

Estate agents and mortgage lenders are already reporting surges in demand from prospective first-time buyers after the Government's announcement of a two-year stamp duty holiday for them.

It means a tax saving of up to £2,500 for genuine first-time buyers on property worth up to £250,000.

Last year's stamp duty holiday on properties worth up to £175,000, which ended on December 31, stimulated the market, the latest move on stamp duty will have a similar effect.

HIPs to be Abolished confirm Conservatives

The Conservatives announced in their 2010 Election manifesto on 13th April 2010 that they indeed plan on abolishing the Home Information Pack if they get into power. They would also make the lower limit on Stamp Duty £250,000.To quote the manifesto;

“Help first-time buyers get on the housing ladder, by increasing the stamp duty threshold to £250,000, so that nine out of ten first-time buyers will pay no stamp duty. This is a permanent tax cut, unlike Labour’s plans which are just for two years; and Abolish Labour’s expensive and unnecessary Home Information Packs which increase the cost and hassle of selling homes."

At these early stages the polls are key. The sooner they show a clear winner, the stronger sentiment will be and prices and mortgage offers will stay firm. Uncertainty will operate in the opposite direction with people sitting on the fence unwilling to make a decision.

Neighbourly disputes

I had an early morning call from my friend Alex this morning, you know, so early you think something awful must have happened. After a very tearful greeting, she explained her upset state. She has decided to improve her already cramped home. Her neighbours are making every step forward incredibly difficult. Her neighbours have always been quite cordial….. Until she applied for planning permission. (she didn’t inform them prior to planning application). They have issued forty objections against her planning application. “What can I do to put this right?”

In my opinion (we have self built three times) it is always a good idea to approach the neighbours first and explain your plans, it makes life far easier if you’ve kept them personally informed. It is easy to take your eye off the neighbourly ball when you are involved with the day to day nitty gritty of the project. Annoy them and you may have a lengthy feud on your hands, keeping them sweet is key.

Architects, builders and planners all advise sounding out the neighbours prior to purchase. Most objections are raised through fear and uncertainty. Councils don’t necessarily base judgments based upon a neighbour’s objection, but they are susceptible so any help towards your case is good. There are also legal reasons to secure neighbourly co-operation that a conveyancing lawyer ought to bring to light prior to building.

1.  Are there any covenants restricting development?
2.  Any easements granting another party rights over the land, including access?
3.  They should examine wayleave, which allows services to run on or beneath neighbouring land.
4.  They should examine the Party Wall Act, which not only applies to joining walls but also excavations.

Taking care of these issues in advance, protects against legal action later or any ambiguity.
Be good to your neighbours, communicate your enthusiasm and the fact that you are investing in their area, you may find they’re actually more tolerant than they first appear.

I have imparted this advice to Alex, who is going to have a meeting with them and show them all her plans for the extension…  she is on a charm offensive.

How will this election effect UK property?

The date is set for May the 6th, now is the time to consider how this election will effect the property market in terms of activity and prices.

Markets are as much about sentiment as supply and demand. This election brings with it a fair amount of uncertainty, the bookies claim that the Conservatives are favourites to win; others claim that there will be a hung Parliament.

If there is a clear winner, perhaps a Conservative win, prices may creep upwards. If there is a Hung Parliament, or Labour remains in power, they will remain level or indeed may even drop.

It is still quite a difficult time for the property market; we are vulnerable to any changes, especially political. At present we are riding on the back of cash and equity rich buyers chasing very few properties. Undoubtedly an outright majority would be the most beneficial outcome for the housing market.

Mortgage lending is still sluggish, and the market is quite dependant on sentiment. These factors make for a period of uncertainty leading up to the election. Transactions may be low in the lead up to and during the aftermath of the election, while people catch their breath. This could cause a fluctuation in prices.

 
The housing market will only be truly stable and grow under a new governing body if there is to be a general economic recovery, clarity on interest rate movements, true extent of public spending cuts revealed, availability of mortgage finance, Incentives to expand in the private rental sector, new housebuilding, increase in property stock, stamp duty and other hindering factors.

Proposals for the housing market by the main political parties

Labour

• Up to 10,000 new council houses a year by 2014-15, and more affordable housing.
  Councils will retain their rental receipts locally, enabling them to support housebuilding and maintain properties.
  Two-year stamp duty holiday for first-time buyers on transactions up to £250,000; permanent new stamp duty top rate of 5 per cent on transactions over £1 million from April 2011.
  
• Agreements with banks to lend £105 billion to homebuyers and businesses over the next year.
  
• The standard interest rate on the Support for Mortgage Interest scheme will be maintained until December.
  
• A crackdown on tenancy cheats who fraudulently sub-let social housing.
  
• Guaranteed housing standards for social tenants; measures to strengthen consumer protections for private tenants.
  
• New homes to be zero carbon by 2016.
  

Conservatives

• Permanently increase the stamp duty threshold for first-time buyers to £250,000.
  
• Abolish Hips.
  
• Reward councils for building more homes by allowing them to keep more of the proceeds from council tax and business rates from new development.
  
• Create local housing trusts to allow communities to build affordable homes.
  
• Abolish the unelected tier of regional planning, allowing local communities to determine the right level of development.
  
• Give councils stronger powers to prevent infill development in suburbs, and build more family homes.
  
• Give council tenants an equity stake in their home to restore pride in their area and encourage social mobility.
  

Liberal Democrats

• 
  Bring 250,000 empty homes back into use by giving owners cheap loans to renovate them.
  
• Energy improvement packages of up to £10,000 per home, paid for by the savings from lower energy bills; new homes
  
• To be fully energy efficient.
  
• Repossessions will be stopped in cases where the lender has not pursued options.
  
• A new planning “use class” for second homes, allowing communities to control the number of homes given over to holidaymakers.

Extract taken fro the Times online