House prices look set to fall next year, housing minister Grant Shapps has said.
Meanwhile, the Council of Mortgage Lenders this morning warned that a critical new era of even tighter lending would be ramped up from spring onwards.It is forecasting the lowest levels in lending for 30 years in 2011.
In an unusual break with tradition – housing ministers do not normally predict markets – Shapps said in the House of Commons: “House prices have doubled in the last ten years, putting home ownership beyond the reach of many potential first-time buyers.
“This Government believe that what is needed now is not a return to rapid house price growth but a period of house price stability.”
He said that house price forecasts from the Office of Budget Responsibility and the Treasure “suggest there will be modest falls in house prices in 2011 and rises beyond”.
Shapps did not address the crucial issue, as to whether lenders would actually start lending again.
This is, however, confronted head-on in forecasts published today by the CML.
The CML warned: “From April next year onwards, lenders will begin to have to repay the funding advanced through official support schemes. This is likely to limit the availability of credit to support mortgage lending next year and beyond.”
The CML also took another swipe at the Financial Services Authority, saying that its ongoing Mortgage Market Review – intended to herald an era of ‘sensible lending’ (which some fear will mean ‘no lending’) – “continues to be a major and unhelpful source of uncertainty for the lending industry”.
It went on: “Firms do not know when the FSA will issue firm rules or whether it will modify its current excessively risk-averse approach. This uncertainty will itself reinforce lenders’ caution.”
The CML is predicting 0.86 million housing transactions next year, down from this year’s estimate of 0.89 million. It thinks the number of loans will shrink to £6bn, down from an estimated £9bn this year. It also thinks that arrears will climb from 175,000 to 180,000 and that possessions next year will creep up from 36,000 to 40,000. It has also forecast that remortgaging will remain subdued.
The CML’s forecasts are in line with what the RICS is saying. It said that in November, the number of first-time buyer inquiries fell for a sixth month, with some individual surveyors predicting that the flat picture will continue into next year.
Source:estate agency today
Friday, 17 December 2010
Monday, 13 December 2010
Intercounty annual conference, hits the cat walk
As I mentioned in a previous blog, we held our first ever Intercounty conference last month, here are some photos of some of the creations our team made on the day. Go JC!
Finding hard to sell your property? We've got some invaluable tips
As estate agents, we know and understand the issues involved in selling houses - not just the marketing issues, the market trends, facts and figures but also, and as important, the emotive issues that inevitably occur during the process of moving house.
We always remain calm, cool, professional and analytical in our approach allowing us, on your behalf, to exercise maximum control over the entire sales process.
Adopting a similar approach as a vendor, the factors you can control are firstly your choice of estate agency, secondly your selling price and thirdly the condition of your property.
By choosing the right estate agent, pricing your home correctly and ensuring you present your property in the best possible condition, you help us achieve the best possible price for your home.
In essence, the primary role of your estate agent is to:
Carefully and correctly position your property on the market place whilst presenting it to the widest audience possible.
To work with you, our client, to ensure your property is presented in the best possible light thus enhancing it's saleability and attracting serious buyers from the market place.
Negotiate the sale on the best possible terms for you, our client.
Progress the sale smoothly through to a successful conclusion.
...sounds simple enough but not all estate agents are the same!
Intercounty provide professional advice, experience, in-depth local knowledge and a commitment to providing personal service at its highest standards.
Choosing the Right Estate Agent
In Britain, unlike anywhere else in the world, anybody can set up as an estate agent - no licence or qualifications are required and some estate agents have little skill or expertise.
Being a large well-known national is no guarantee of good service either. Unlike supermarkets which sell exactly the same products throughout the country, the service you get from any estate agent is only as good as the people staffing that particular branch.
At Intercounty, we pride ourselves on having an unrivalled team of professionals who have lived and worked in the area we serve for many years.
The selection of your advisors is critical - and you will be particularly reliant upon your estate agent. You will need sound advice as to values, you will need to be sure of the presentation and the marketing of your property and you will need to be assured that, once sold, your sale and any related purchase will be progressed efficiently to a successful conclusion.
It really is not as simple as choosing the agent who offers the lowest rate - this almost automatically leads to the lowest rate of marketing - or picking the agent who says he will achieve the highest price - this will almost certainly cost you time and money and cause you disappointment and anxiety.
Reputation and Standing
Is this a company of serious reputation and standing?
Does this estate agency adhere to the highest standards of professional conduct?
Do they have a code of conduct and carry professional insurance? .. Or do they just look and sound good?
Our reputation is second to none and we believe we are recognized as our area's leading estate agent.
As members of The National Association of Estate Agents, The Guild of Professional Estate Agents and the Ombudsman scheme, we have agreed to adhere to the highest standards of professional conduct. These organisations operate to a strict Code of Conduct in residential estate agency and are all committed to raising the standards of estate agents throughout the UK.
Trust and confidence
How do you know you can trust and have confidence in the estate agency you have chosen? As members of the three organisations described above, you can be assured that you are dealing with professionals.
Where will my buyer come from?
These days the mobility of the market is not only local, but regional, national and international - your buyer could come from anywhere. By being a Member of the Guild your estate agency is demonstrating a real commitment to local, regional and national and international marketing.
National network
You will need to ensure your property benefits from the widest exposure - does your estate agent belong to an established and extensive network of sales offices to generate enquiries from a wider market place?
Guild Members are part of a 700-office b national network, with over 4000 professionals working together to serve you better. The Guild is based in showrooms on Park Lane, in Mayfair, London, providing you with access to the lucrative London and international investor markets.
Marketing ability
Does your estate agency present a marketing strategy that convinces you your property is presented to the widest pool of potential buyers and, thus, achieve the best possible price?
A little local advertising is of some use but a small part of a much larger picture. With their own monthly national magazine, a network of professional photographers and floor plan surveyors and dedicated publishing studios, Intercounty and other members of the Guild are able to present your property professionally ensuring it reaches the widest pool of potential buyers, thereby creating the best opportunity to achieve the highest possible price for your property.
Internet marketing
Did you know that over 87% of purchasers start their property search on the internet - the probability is that you did it yourself.
In addition to our own superb website, which you are using at this moment, Intercounty as Guild members has its own dedicated website and in addition they have created a combined national site - property-platform.com.
This site presents a selection of over 30,000 properties nationally, is updated daily, provides location maps for every property and very useful local information.
Property-platform.com is promoted by Guild Members, advertised in the national press and is, increasingly, well placed on all the search engines that matter.
You could achieve a far better result buying or selling your home through a Guild Member .
The Guild of Professional Estate Agents is a body of over 600 independent estate agency offices, with over 4000 professional estate agents whose combined strength and experience helps in selling houses.
Each is carefully selected, are leaders in their local marketplace and are committed to the highest industry standards. You could achieve a far better result buying or selling through a Guild Member.
Risk of Over Pricing
With consumer confidence at an all time low this is one of the most important factors in selling your house. We all want to get the very best price for our home, and so it's always tempting to ask just a little bit more for it. Unfortunately some less scrupulous estate agents are only too well aware of this and will deliberately over-value your home in order to get your instruction.
This does not mean, however, that you will end up with more money! Remember, buyers often spend months looking for the right property. They know an overpriced home when they see one, and will simply walk away.
Think about it - would you pay thousands of pounds more for something that you know is not worth it? No, we didn't think so!
All that happens, should you put your house on the market at far too high an asking price, is that it will languish there while other, more sensibly priced properties sell all around you.
In the end, you will have to bring the price down to where it should have been in the first place. Meanwhile, of course, you will have missed out on all that initial market interest.
Beware the estate agent who gives you a price on the basis of little more than a casual glance round your home!
A house is viewed most during the first four to five weeks it is on the market. So, getting the price right - right from the start, enables you to take full advantage of this initial burst of market interest, and gives you your best chance of getting the best price, in the shortest possible time.
There are a number of other risks associated with over-pricing:
Buyers notice the amount of time a property is on the market, and may wonder if something is wrong with it.
The huge amount of property information available on the Internet makes it much easier for buyers to become 'experts' on asking prices.
Having your home on the market for an extended period can be very stressful because it can mean your life is on hold. Also, constantly trying to keep it in a suitable condition to be inspected by complete strangers can be inconvenient, to say the least!
Some buyers won't make a low offer for fear of insulting the seller - so they just go away without even giving you the chance to negotiate.
Missing out on a sale may mean losing the dream home you want to buy. Or, it could mean you end up trying to pay two mortgages for a while!
The longer your property is on the market, the greater the chance that something will need repairing leading to expense that could have been avoided.
Last, but by no means least, mortgage lenders are not impressed by over-priced properties - so even if you do find someone willing to pay your asking price, there is more than a good chance that your house will then be down valued by the survey.
Your best chance for achieving the highest price for your home is to have it valued by an experienced local independent estate agent who can set a fair market price for it. Your home will compete successfully with other houses on the market and give you the best chance of achieving the best price for you.
Presenting Your Home
It is amazing just how much first impressions do count - many a property has been sold and many not before the prospective purchaser has even set foot inside the front door.
So take a little time - step outside your own front door and approach your own house as if for the first time .. critically! Try to look for things you have learned to live with, but which for some buyers are really negative distractions . the front garden should be neat and tidy, any rubbish etc stored out of sight, the path weed-free, a newly painted fence or freshly clipped hedge is welcoming and gives the distinct impression of someone caring!
As the for exterior of the house, a lick of fresh paint costs next to nothing but is proven as one of the most important factors in creating a good impression - clean windows with neatly painted frames also add a little sparkle. The front door is worth particular attention - we have seen property transformed by a new front door, it is what your potential buyers concentrate on whilst waiting for you to let them in.
Obviously in presenting your property, internally, it should be neat and tidy, all paintwork should be clean and free from cracks, stains and chips and should be touched up - but, in addition to the obvious, there are a number of simple but highly effective sensory tools you can use to create a pleasant ambiance .
Creating an exciting and enticing interior can be accomplished at surprisingly little cost
...a little light on the subject
Studies have shown people react positively to properties shown under bright light. Even during the day leave as many lights on as you can, keep the curtains wide open and windows clean. At night switch on all lights, replacing any blown bulbs and dingy fluorescent tubes.
...the sound of selling
Classical music playing softly in the background can create an atmosphere of calm serenity - otherwise go for peace and quiet, avoiding loud noises, barking dogs, your children and the TV.
...the sweet smell of success
Smell has more impact than you might think. It can work either for you or against you. So if at all possible .
Scour kitchens and bathrooms with bleach, and use lemon oil or fine polish on your furniture to add richness.
Place fresh flowers strategically throughout the house.
For a delicious, homely feel, place a dish of vanilla in a warm oven to create the aroma of freshly baked cakes or bread. Freshly-brewed coffee has a similar effect
...don't colour their judgement
Colours should be kept light and neutral when selling your home.
The condition of your property
In our experience, a few small cosmetic improvements can have a big impact on the way buyers react to your home. You may not actually get more money, but a little effort can make all the difference in terms of attracting buyers - particularly in a very competitive market, or if you need to sell quickly.
Of course, there is no substitute for careful regular maintenance to ensure that a home looks at - or near - its best. Trying to make up for years of neglect can be very expensive! Nevertheless, small things can make a big difference in creating the right "feel."
Remember, first impressions really do count. Potential buyers will form an opinion about your home in the first 15 seconds - so it's important to ensure that it's a favourable one. The fact is, a house that suffers from an unmowed lawn, grubby peeling paint or stale, damp odours feels unloved and uncared for. Prospective buyers will be put off - which could end up costing you valuable time and money.
The key is not to try anything too big - otherwise you're almost certain to lose money. If your home needs a completely new roof, for example, then the most sensible option is simply to adjust the asking price accordingly. No buyer will pay £10,000 more for your house simply because that's what it cost you to re-roof it!
The show home effect
Show homes are designed to make a buyer "feel at home." To recreate the feeling of a perfect display home is almost impossible unless you are starting from scratch, but there are valuable techniques you can apply that will help create a similar atmosphere. When you enter a show home, an interior decorator has made sure of the following details:
• The colours are neutral
• The small is fresh and clean
• The decorations enhance the home's features
• The only sounds are peaceful
• The details are perfect from the manicured lawn to the flowers in the entrance hall.
• Creating a lifestyle that sells!
• You can dramatically increase your property's market potential by paying attention to detail, potential buyers need to visualise themselves living in your house. You are selling
a lifestyle as well as a home.
Pets
In the case of pets, take particular care to clean and deodorise the areas they inhabit - potential purchasers may not love your pet as much as you do!
And finally...
When showing your home to a prospective buyer, avoid having too many people present. Friends and family may be very well meaning but, in this case, less is definitely more!
Be polite, but don't try to entertain your buyers. They want to inspect your home - not pay a social call. Never apologise for the appearance of your home. After all, it is your home! Finally if you are asked questions, answer them truthfully and to the best of your knowledge, and never give people a hard sell - it simply won't help you.
Let Intercounty do the selling - that's what we're here for !!
We always remain calm, cool, professional and analytical in our approach allowing us, on your behalf, to exercise maximum control over the entire sales process.
Adopting a similar approach as a vendor, the factors you can control are firstly your choice of estate agency, secondly your selling price and thirdly the condition of your property.
By choosing the right estate agent, pricing your home correctly and ensuring you present your property in the best possible condition, you help us achieve the best possible price for your home.
In essence, the primary role of your estate agent is to:
Carefully and correctly position your property on the market place whilst presenting it to the widest audience possible.
To work with you, our client, to ensure your property is presented in the best possible light thus enhancing it's saleability and attracting serious buyers from the market place.
Negotiate the sale on the best possible terms for you, our client.
Progress the sale smoothly through to a successful conclusion.
...sounds simple enough but not all estate agents are the same!
Intercounty provide professional advice, experience, in-depth local knowledge and a commitment to providing personal service at its highest standards.
Choosing the Right Estate Agent
In Britain, unlike anywhere else in the world, anybody can set up as an estate agent - no licence or qualifications are required and some estate agents have little skill or expertise.
Being a large well-known national is no guarantee of good service either. Unlike supermarkets which sell exactly the same products throughout the country, the service you get from any estate agent is only as good as the people staffing that particular branch.
At Intercounty, we pride ourselves on having an unrivalled team of professionals who have lived and worked in the area we serve for many years.
The selection of your advisors is critical - and you will be particularly reliant upon your estate agent. You will need sound advice as to values, you will need to be sure of the presentation and the marketing of your property and you will need to be assured that, once sold, your sale and any related purchase will be progressed efficiently to a successful conclusion.
It really is not as simple as choosing the agent who offers the lowest rate - this almost automatically leads to the lowest rate of marketing - or picking the agent who says he will achieve the highest price - this will almost certainly cost you time and money and cause you disappointment and anxiety.
Reputation and Standing
Is this a company of serious reputation and standing?
Does this estate agency adhere to the highest standards of professional conduct?
Do they have a code of conduct and carry professional insurance? .. Or do they just look and sound good?
Our reputation is second to none and we believe we are recognized as our area's leading estate agent.
As members of The National Association of Estate Agents, The Guild of Professional Estate Agents and the Ombudsman scheme, we have agreed to adhere to the highest standards of professional conduct. These organisations operate to a strict Code of Conduct in residential estate agency and are all committed to raising the standards of estate agents throughout the UK.
Trust and confidence
How do you know you can trust and have confidence in the estate agency you have chosen? As members of the three organisations described above, you can be assured that you are dealing with professionals.
Where will my buyer come from?
These days the mobility of the market is not only local, but regional, national and international - your buyer could come from anywhere. By being a Member of the Guild your estate agency is demonstrating a real commitment to local, regional and national and international marketing.
National network
You will need to ensure your property benefits from the widest exposure - does your estate agent belong to an established and extensive network of sales offices to generate enquiries from a wider market place?
Guild Members are part of a 700-office b national network, with over 4000 professionals working together to serve you better. The Guild is based in showrooms on Park Lane, in Mayfair, London, providing you with access to the lucrative London and international investor markets.
Marketing ability
Does your estate agency present a marketing strategy that convinces you your property is presented to the widest pool of potential buyers and, thus, achieve the best possible price?
A little local advertising is of some use but a small part of a much larger picture. With their own monthly national magazine, a network of professional photographers and floor plan surveyors and dedicated publishing studios, Intercounty and other members of the Guild are able to present your property professionally ensuring it reaches the widest pool of potential buyers, thereby creating the best opportunity to achieve the highest possible price for your property.
Internet marketing
Did you know that over 87% of purchasers start their property search on the internet - the probability is that you did it yourself.
In addition to our own superb website, which you are using at this moment, Intercounty as Guild members has its own dedicated website and in addition they have created a combined national site - property-platform.com.
This site presents a selection of over 30,000 properties nationally, is updated daily, provides location maps for every property and very useful local information.
Property-platform.com is promoted by Guild Members, advertised in the national press and is, increasingly, well placed on all the search engines that matter.
You could achieve a far better result buying or selling your home through a Guild Member .
The Guild of Professional Estate Agents is a body of over 600 independent estate agency offices, with over 4000 professional estate agents whose combined strength and experience helps in selling houses.
Each is carefully selected, are leaders in their local marketplace and are committed to the highest industry standards. You could achieve a far better result buying or selling through a Guild Member.
Risk of Over Pricing
With consumer confidence at an all time low this is one of the most important factors in selling your house. We all want to get the very best price for our home, and so it's always tempting to ask just a little bit more for it. Unfortunately some less scrupulous estate agents are only too well aware of this and will deliberately over-value your home in order to get your instruction.
This does not mean, however, that you will end up with more money! Remember, buyers often spend months looking for the right property. They know an overpriced home when they see one, and will simply walk away.
Think about it - would you pay thousands of pounds more for something that you know is not worth it? No, we didn't think so!
All that happens, should you put your house on the market at far too high an asking price, is that it will languish there while other, more sensibly priced properties sell all around you.
In the end, you will have to bring the price down to where it should have been in the first place. Meanwhile, of course, you will have missed out on all that initial market interest.
Beware the estate agent who gives you a price on the basis of little more than a casual glance round your home!
A house is viewed most during the first four to five weeks it is on the market. So, getting the price right - right from the start, enables you to take full advantage of this initial burst of market interest, and gives you your best chance of getting the best price, in the shortest possible time.
There are a number of other risks associated with over-pricing:
Buyers notice the amount of time a property is on the market, and may wonder if something is wrong with it.
The huge amount of property information available on the Internet makes it much easier for buyers to become 'experts' on asking prices.
Having your home on the market for an extended period can be very stressful because it can mean your life is on hold. Also, constantly trying to keep it in a suitable condition to be inspected by complete strangers can be inconvenient, to say the least!
Some buyers won't make a low offer for fear of insulting the seller - so they just go away without even giving you the chance to negotiate.
Missing out on a sale may mean losing the dream home you want to buy. Or, it could mean you end up trying to pay two mortgages for a while!
The longer your property is on the market, the greater the chance that something will need repairing leading to expense that could have been avoided.
Last, but by no means least, mortgage lenders are not impressed by over-priced properties - so even if you do find someone willing to pay your asking price, there is more than a good chance that your house will then be down valued by the survey.
Your best chance for achieving the highest price for your home is to have it valued by an experienced local independent estate agent who can set a fair market price for it. Your home will compete successfully with other houses on the market and give you the best chance of achieving the best price for you.
Presenting Your Home
It is amazing just how much first impressions do count - many a property has been sold and many not before the prospective purchaser has even set foot inside the front door.
So take a little time - step outside your own front door and approach your own house as if for the first time .. critically! Try to look for things you have learned to live with, but which for some buyers are really negative distractions . the front garden should be neat and tidy, any rubbish etc stored out of sight, the path weed-free, a newly painted fence or freshly clipped hedge is welcoming and gives the distinct impression of someone caring!
As the for exterior of the house, a lick of fresh paint costs next to nothing but is proven as one of the most important factors in creating a good impression - clean windows with neatly painted frames also add a little sparkle. The front door is worth particular attention - we have seen property transformed by a new front door, it is what your potential buyers concentrate on whilst waiting for you to let them in.
Obviously in presenting your property, internally, it should be neat and tidy, all paintwork should be clean and free from cracks, stains and chips and should be touched up - but, in addition to the obvious, there are a number of simple but highly effective sensory tools you can use to create a pleasant ambiance .
Creating an exciting and enticing interior can be accomplished at surprisingly little cost
...a little light on the subject
Studies have shown people react positively to properties shown under bright light. Even during the day leave as many lights on as you can, keep the curtains wide open and windows clean. At night switch on all lights, replacing any blown bulbs and dingy fluorescent tubes.
...the sound of selling
Classical music playing softly in the background can create an atmosphere of calm serenity - otherwise go for peace and quiet, avoiding loud noises, barking dogs, your children and the TV.
...the sweet smell of success
Smell has more impact than you might think. It can work either for you or against you. So if at all possible .
Scour kitchens and bathrooms with bleach, and use lemon oil or fine polish on your furniture to add richness.
Place fresh flowers strategically throughout the house.
For a delicious, homely feel, place a dish of vanilla in a warm oven to create the aroma of freshly baked cakes or bread. Freshly-brewed coffee has a similar effect
...don't colour their judgement
Colours should be kept light and neutral when selling your home.
The condition of your property
In our experience, a few small cosmetic improvements can have a big impact on the way buyers react to your home. You may not actually get more money, but a little effort can make all the difference in terms of attracting buyers - particularly in a very competitive market, or if you need to sell quickly.
Of course, there is no substitute for careful regular maintenance to ensure that a home looks at - or near - its best. Trying to make up for years of neglect can be very expensive! Nevertheless, small things can make a big difference in creating the right "feel."
Remember, first impressions really do count. Potential buyers will form an opinion about your home in the first 15 seconds - so it's important to ensure that it's a favourable one. The fact is, a house that suffers from an unmowed lawn, grubby peeling paint or stale, damp odours feels unloved and uncared for. Prospective buyers will be put off - which could end up costing you valuable time and money.
The key is not to try anything too big - otherwise you're almost certain to lose money. If your home needs a completely new roof, for example, then the most sensible option is simply to adjust the asking price accordingly. No buyer will pay £10,000 more for your house simply because that's what it cost you to re-roof it!
The show home effect
Show homes are designed to make a buyer "feel at home." To recreate the feeling of a perfect display home is almost impossible unless you are starting from scratch, but there are valuable techniques you can apply that will help create a similar atmosphere. When you enter a show home, an interior decorator has made sure of the following details:
• The colours are neutral
• The small is fresh and clean
• The decorations enhance the home's features
• The only sounds are peaceful
• The details are perfect from the manicured lawn to the flowers in the entrance hall.
• Creating a lifestyle that sells!
• You can dramatically increase your property's market potential by paying attention to detail, potential buyers need to visualise themselves living in your house. You are selling
a lifestyle as well as a home.Pets
In the case of pets, take particular care to clean and deodorise the areas they inhabit - potential purchasers may not love your pet as much as you do!
And finally...
When showing your home to a prospective buyer, avoid having too many people present. Friends and family may be very well meaning but, in this case, less is definitely more!
Be polite, but don't try to entertain your buyers. They want to inspect your home - not pay a social call. Never apologise for the appearance of your home. After all, it is your home! Finally if you are asked questions, answer them truthfully and to the best of your knowledge, and never give people a hard sell - it simply won't help you.
Let Intercounty do the selling - that's what we're here for !!
Landlords - how to prepare and maintain your property
Rental laws have changed drastically over the past few years, which is fantastic news for tenants, but it can be a bit of a mind field for landlords, so therefore I have provided a brief list of how you can prepare your home.
I suggest that all properties are professionally cleaned, including carpets (where applicable) at the start of the rental process. This will allow you to insist on the same conditions at the end of each tenancy.
Properties in good decorative order will always have an advantage, I advise neutral colours and suggest decoration expectancy as follows:
Halls stairs and landing - 2/3 years, as these get a lot of through traffic
Reception rooms - 4/6 years
Kitchen and bathrooms - 2/3 years
Bedrooms - 5 years
Do you need to rent your property furnished or unfurnished?
This is often dependent on the location and individual needs of landlords. An important factor to take into consideration if you are going to rent it out furnished, is that all of your furniture is compliant and kept to a minimum.
If you decide to rent it out furnished it is essential to provide kitchen appliances, a comfortable sofa and or chairs, dining table and chairs (where viable), bed/s, wardrobe/s, and a lawn mower where applicable. Audio/visual equipment is not advisable and towels/bed linen, pots/crockery/cutlery and kitchen utensils together with personal belongings are actively discouraged.
There are a number of important landlord obligations at the start of and periodically during the tenancy concerning the supply of gas and electricity and various other safety issues. I will tell you about these in more detail next time.
Gardens - in most cases a low maintenance garden is preferred. The tenant will be expected to cut the lawn and tend to the boarders. However it is the responsibility to maintain shrubs and trees over a height of 1.5 metres.
However if you have read this and you would still like some more detailed advice then contact us today, we are experts in residential lettings.
I suggest that all properties are professionally cleaned, including carpets (where applicable) at the start of the rental process. This will allow you to insist on the same conditions at the end of each tenancy.
Properties in good decorative order will always have an advantage, I advise neutral colours and suggest decoration expectancy as follows:
Halls stairs and landing - 2/3 years, as these get a lot of through traffic
Reception rooms - 4/6 years
Kitchen and bathrooms - 2/3 years
Bedrooms - 5 years
Do you need to rent your property furnished or unfurnished?
This is often dependent on the location and individual needs of landlords. An important factor to take into consideration if you are going to rent it out furnished, is that all of your furniture is compliant and kept to a minimum.
If you decide to rent it out furnished it is essential to provide kitchen appliances, a comfortable sofa and or chairs, dining table and chairs (where viable), bed/s, wardrobe/s, and a lawn mower where applicable. Audio/visual equipment is not advisable and towels/bed linen, pots/crockery/cutlery and kitchen utensils together with personal belongings are actively discouraged.
There are a number of important landlord obligations at the start of and periodically during the tenancy concerning the supply of gas and electricity and various other safety issues. I will tell you about these in more detail next time.
Gardens - in most cases a low maintenance garden is preferred. The tenant will be expected to cut the lawn and tend to the boarders. However it is the responsibility to maintain shrubs and trees over a height of 1.5 metres.
However if you have read this and you would still like some more detailed advice then contact us today, we are experts in residential lettings.
Economic growth in the lettings sector is great news for landlords
Recent economic growth in the lettings sector has been great news for landlords. Six out of 10 residential landlords are more confident than last month, up from 54% in November, the December Upad Landlord Confidence Index shows.
Key reasons for confidence included stronger and quality rental demand with more opportunity to negotiate on house prices, high demand and low interest rates and low void periods.Those landlords who said that they were less confident, included those who had experienced increases in arrears and unpaid rent by their tenants.
However lack of available finance continues to hamper our investors. The market is currently being held back by banks who just don't want to lend out money to the buy-to-let sector.
In a time of boom in the lettings sector landlords still need to be careful to vet their tenants carefully, as government cuts begin to have more impact, landlords more than ever need to be vigilant about their cash flow and ensure that – if the worst happens and their tenant does stop paying – they have enough available cash to service a mortgage without their rental income.
At Intercounty we make sure that rental applicants are carefully checked, which lowers the risk of finding yourself with clients unable to pay their rent. We have a comprehensive agreement applicable to property, term and tenant, and we use an ARLA approved document, which can be legally enforced. For more information go to www.intercounty.co.uk. Better let through us.
Tuesday, 7 December 2010
Why it's vital not to over value your property
'House prices could drop 10% next year, Capital Economics forecasts'. This is the headline that dominated the press last week.
So how could this impact the housing market?
At a time of house price adjustments, it is vital to make sure sellers price their homes correctly from the outset, as getting it wrong could mean that their home could stay on the market for a long time, which could have a massive impact on the final sale price.
For example if you put your house on the market for £280,000 now, and it was an over inflated price, then for each month your house stays on the market it could loose an additional 1% per month. If house prices do fall by 10% over the next year as forecast by Capital Economics, and you don't manage to sell your house, then you could potentially loose that amount from your sale price.
If you are buying into an identical market, then it's possible that another house you are looking to buy could drop too. However if you are in a hurry to move, or if you are moving out of the area then it would be a good idea to make sure that your house is correctly priced from the offset.
It's true that prices in certain geographical areas can be effected less than others. For example houses closer to London, where demand outstrips available houses, will always stay higher. Houses in more sought after locations will always demand a slightly higher premium than some others.
Sellers may also wish to sell now and take advantage of buying back in at a lower level if prices do fall.
If you are a first-time buyer, currently renting a property and waiting to see if house prices might fall by 10% over 2011, this could also have its risks. House rental prices are set to soar in 2011, as demand outstrips supply, plus with interest rates being at an all time low you could be putting your money into buying your own home, and not your landlords. However if you wait you might be able buy in at a lower price.
Buying and selling a property can be a bit of a mind field, so why not ask us, the property specialists. Contact us today @ http://www.intercounty.co.uk
So how could this impact the housing market?
At a time of house price adjustments, it is vital to make sure sellers price their homes correctly from the outset, as getting it wrong could mean that their home could stay on the market for a long time, which could have a massive impact on the final sale price.
For example if you put your house on the market for £280,000 now, and it was an over inflated price, then for each month your house stays on the market it could loose an additional 1% per month. If house prices do fall by 10% over the next year as forecast by Capital Economics, and you don't manage to sell your house, then you could potentially loose that amount from your sale price.
If you are buying into an identical market, then it's possible that another house you are looking to buy could drop too. However if you are in a hurry to move, or if you are moving out of the area then it would be a good idea to make sure that your house is correctly priced from the offset.
It's true that prices in certain geographical areas can be effected less than others. For example houses closer to London, where demand outstrips available houses, will always stay higher. Houses in more sought after locations will always demand a slightly higher premium than some others.
Sellers may also wish to sell now and take advantage of buying back in at a lower level if prices do fall.
If you are a first-time buyer, currently renting a property and waiting to see if house prices might fall by 10% over 2011, this could also have its risks. House rental prices are set to soar in 2011, as demand outstrips supply, plus with interest rates being at an all time low you could be putting your money into buying your own home, and not your landlords. However if you wait you might be able buy in at a lower price.
Buying and selling a property can be a bit of a mind field, so why not ask us, the property specialists. Contact us today @ http://www.intercounty.co.uk
Friday, 3 December 2010
Intecounty 2 day staff conference builds our group
Last week we held our first ever Intercounty Conference for all of our personnel, which was organised by myself and Jon Cooke. The conference was held in Grantham which was chosen as it is situated half way between all of the Intercounty branches. The team building event was run over a two day period and was aimed at bringing all of the group together.
Every branch member had to split up and mix with other people from other branches to achieve the goals and tasks that we had set. On the first day we set up a work shop based on a real life scenario, where each group had to create a business marketing campaign. The teams came up with some fantastic ideas.
We also had a graffiti board, where everyone had to draw their thought about the company, we then talked about them and expanded them into great business ideas.
We posted pictures of the key personnel on to a board with various history quotes such as "my great, great grandmother was the daughter of a King' and everyone had to put the quote next to the photo of the person they thought this was relevant to. This was incredibly funny.
We wanted to gain feedback from all of the members so we had a post box where people could post their thoughts and opinions anonymously if they wanted to.
On the last day we split the groups up into small teams and we asked them to design and create costumes, which were then modeled by some of the group members.
We also had various guest speakers on the day, such as a representative from the website Zoopla, one of UK's leading market resource for a property finder to search property for sale, find houses and flats to rent.
Everyone loved the day so much that we have decided to make this an annual event, it was a really good way of bringing the whole group together. The feedback and ideas we received were very interesting and positive and we are going to take these on board and incorporate them into our future business strategies.
It also reiterated to myself and Jon how fantastic and professional our staff are across the whole of our 28 Intercounty branches.
Every branch member had to split up and mix with other people from other branches to achieve the goals and tasks that we had set. On the first day we set up a work shop based on a real life scenario, where each group had to create a business marketing campaign. The teams came up with some fantastic ideas.
We also had a graffiti board, where everyone had to draw their thought about the company, we then talked about them and expanded them into great business ideas.
We posted pictures of the key personnel on to a board with various history quotes such as "my great, great grandmother was the daughter of a King' and everyone had to put the quote next to the photo of the person they thought this was relevant to. This was incredibly funny.
We wanted to gain feedback from all of the members so we had a post box where people could post their thoughts and opinions anonymously if they wanted to.
On the last day we split the groups up into small teams and we asked them to design and create costumes, which were then modeled by some of the group members.
We also had various guest speakers on the day, such as a representative from the website Zoopla, one of UK's leading market resource for a property finder to search property for sale, find houses and flats to rent.
Everyone loved the day so much that we have decided to make this an annual event, it was a really good way of bringing the whole group together. The feedback and ideas we received were very interesting and positive and we are going to take these on board and incorporate them into our future business strategies.
It also reiterated to myself and Jon how fantastic and professional our staff are across the whole of our 28 Intercounty branches.
Tuesday, 23 November 2010
New itunes app to help you find your perfect home
At Intercounty we have always been proud of the fact we are not just like any other estate agent. We work hard to make sure that we always give exceptional service to our clients. As part of our companies growth we have identified a need for our clients to have up-to-date information on the move, so in response we have developed our very own app just for you.
We are proud to announce the launch of our new iphone app available now to download free from itunes. Never has it been so simple to find that ideal property. Simply choose to either buy or rent, then select a minimum and maximum price, find your location, type of property and the amount of bedrooms you need. Our app will do the rest, delivering you real-time information within seconds, a perfect app for those busy house hunters. We're on the move to help you move...
We are proud to announce the launch of our new iphone app available now to download free from itunes. Never has it been so simple to find that ideal property. Simply choose to either buy or rent, then select a minimum and maximum price, find your location, type of property and the amount of bedrooms you need. Our app will do the rest, delivering you real-time information within seconds, a perfect app for those busy house hunters. We're on the move to help you move...
- Free
- Category: Lifestyle
- Released: 12 November 2010
- Version: 1.0
- 1.0
- 0.8 MB
- Language: English
- Developer: Technicweb Ltd
- © Intercounty
Banks need to improve buy-to-let deals
I focused on rental prices soaring this week in my blog 'Record high rental prices give landlords reason to celebrate'. However buying a buy-to-let property has become increasingly difficult as banks still haven't improved their buy-to-let mortgages, which is frustrating for both landlords and tenants as demand out strips supply. 16,000 new applicants registered for rental accommodation in October alone.
Landlord Assist, the nationwide tenant eviction and rent recovery firm, believes the shortage of rental properties can only be addressed if banks ease their lending restrictions and improve their buy-to-let deals.
Over the past year the buy-to-let sector has been characterised by a shortage of properties as increasing numbers of people have been forced into rented accommodation due to an inability to get on to the property ladder.
Graham Kinnear, from Landlord Assist, says: “This year has been a year of landlord consolidation. A lack of finance available on the market has meant landlords have been unable to expand their portfolios at a time which ought to have suited investment.
“Landlords have been happy to bide their time for better rates and have focused their attentions on getting their existing stock performing to ensure they are as resilient as possible for potential interest rate increases.
“The buy-to-let sector can play a pivotal role in addressing the shortage of quality housing. However, only when lending restrictions are lifted can we expect to see the supply and demand of rental properties balance itself out.”
But Stephen Parry, commercial director of Landlord Assist, expects the level of demand for rental properties to continue throughout 2011.
He says: “Many would-be first-time buyers have opted for rented accommodation due to the lack of availability of mortgage funding and instability of the market.
“At the same time tenants already in rented properties are extending their tenancy agreements and are renting for longer periods. We expect these factors to continue to define the market during 2011.”
Landlord Assist, the nationwide tenant eviction and rent recovery firm, believes the shortage of rental properties can only be addressed if banks ease their lending restrictions and improve their buy-to-let deals.
Over the past year the buy-to-let sector has been characterised by a shortage of properties as increasing numbers of people have been forced into rented accommodation due to an inability to get on to the property ladder.
Graham Kinnear, from Landlord Assist, says: “This year has been a year of landlord consolidation. A lack of finance available on the market has meant landlords have been unable to expand their portfolios at a time which ought to have suited investment.
“Landlords have been happy to bide their time for better rates and have focused their attentions on getting their existing stock performing to ensure they are as resilient as possible for potential interest rate increases.
“The buy-to-let sector can play a pivotal role in addressing the shortage of quality housing. However, only when lending restrictions are lifted can we expect to see the supply and demand of rental properties balance itself out.”
But Stephen Parry, commercial director of Landlord Assist, expects the level of demand for rental properties to continue throughout 2011.
He says: “Many would-be first-time buyers have opted for rented accommodation due to the lack of availability of mortgage funding and instability of the market.
“At the same time tenants already in rented properties are extending their tenancy agreements and are renting for longer periods. We expect these factors to continue to define the market during 2011.”
Remortgages pick up pace as high street lenders offer cheaper rates of SVR
Over the past year and a half we have seen remortgage applications drop steadily. However last month activity picked up pace - as 25% of all mortgage applications were for remortgages.
So why the sudden swing - there is no doubt that consumer confidence has played a key role in this, as growing concerns over the uncertainty of Standard Variable Rate mortgages has made consumers shift over to new policies with interest rates lower than SVR being offered by a number of high street lenders.
So why the sudden swing - there is no doubt that consumer confidence has played a key role in this, as growing concerns over the uncertainty of Standard Variable Rate mortgages has made consumers shift over to new policies with interest rates lower than SVR being offered by a number of high street lenders.
Record high rental prices give landlords reason to celebrate
Landlords have reason to celebrate this month, as tenant arrears drop and rental prices go up for the ninth consecutive month. In October, UK rents rose by 0.4% to £691 per month. Annual inflation in the average UK rent has grown by 4.5%, which means that if this rental growth continues at the same pace, the average rent will hit £722 pcm by this time next year.
The average yield remained stable at 4.9% in October, as steady rent rises were matched by modest growth in the prices of rental properties.
Rental prices have gradually been increasing on a monthly basis, and the average rental property now stands just a few pounds shy of £700 pcm. With the run up to Christmas we are likely to see a slight slowing in the increase, but a strong underlying growth will remain, as key market dynamics are geared towards further rises in the rental market.
The average yield remained stable at 4.9% in October, as steady rent rises were matched by modest growth in the prices of rental properties.
Rental prices have gradually been increasing on a monthly basis, and the average rental property now stands just a few pounds shy of £700 pcm. With the run up to Christmas we are likely to see a slight slowing in the increase, but a strong underlying growth will remain, as key market dynamics are geared towards further rises in the rental market.
Monday, 22 November 2010
Commission continues to fall for mortgage brokers
It's been a hard year for mortgage brokers and it seems as though 2011 is going to be even tougher. A recent data survey from borro found that 57% of mortgage brokers feel commission has fallen in the last 12 months.
At this month’s Mortgage Business Expo a survey of 454 mortgage brokers found nearly 40% of them found high LTVs the biggest hurdle for their clients in 2010.
Six in 10 respondents also thought the market would not improve next year, and was expected to stay stagnant.
The survey found that 21% of brokers say a client’s ability to prove their income was a big obstacle in 2010.
Only 13% felt that high house prices had been the biggest challenge of the past year.
In the short-term it is difficult to predict any positive change for mortgage brokers, as the biggest hurdle is for house buyers is the large deposit, proof of income and the recent wave of government cuts has left consumer confidence at an all time low.
However Paul Brett, business development director at borro did announce some good news: “We’ve identified a gap in the market for a short-term finance solution for brokers to offer to clients that provides the introducing broker excellent commission rates.”
Tuesday, 16 November 2010
How to get on the property ladder if your a first time buyer
Buying a home will probably be the biggest financial decision you will make in your lifetime, and it's not something that should be rushed. The trick is to budget, budget, budget - and not buy beyond your means. If you are a first time buyer you will need to set a firm limit on what you can afford, and try not to exceed this. And this shouldn't just cover the cost of the property and the home buying process, but stretch to cover any potential refurbishment work necessary - and even the cost of more cosmetic changes, such as redecoration or new furnishings to suit your new home.
For first-time buyers, finding a 25% deposit is the biggest stumbling block in buying a home - unless they ask the 'bank of Mum and Dad' which is also reportedly drying up.
The key is really financial discipline. Setting aside a certain amount of monthly paychecks into a savings account will soon add up - and ring fencing any potential bonuses from work will give savings a boost to a deposit fund. Another way for you to save would be to stay with parents longer, cutting down on monthly bills like rent and council tax would allow wannabe buyers to set aside more cash every month.
For first-time buyers, finding a 25% deposit is the biggest stumbling block in buying a home - unless they ask the 'bank of Mum and Dad' which is also reportedly drying up.
The key is really financial discipline. Setting aside a certain amount of monthly paychecks into a savings account will soon add up - and ring fencing any potential bonuses from work will give savings a boost to a deposit fund. Another way for you to save would be to stay with parents longer, cutting down on monthly bills like rent and council tax would allow wannabe buyers to set aside more cash every month.
Rental Market hits record high
Our October buy-to-let Intercounty index shows that rentals are reaching record highs:
• Rents reached a record high of £689 per month after eight consecutive months of rises - now 3.1% higher than the same time last year.
• London rents rise by 2% to reach all-time high, a driving force behind UK rental inflation in 2010.
• Tenant arrears fell in September, but remain high with 10% of all rental arrears.
•The average yield remained stable at 4.9% in September, as rising rents were matched by modest house price growth in the past three months.
Landlords have seen tenant demand continue to hit new heights. This really has turned the buy-to-let market into a landlord's market.
• Rents reached a record high of £689 per month after eight consecutive months of rises - now 3.1% higher than the same time last year.
• London rents rise by 2% to reach all-time high, a driving force behind UK rental inflation in 2010.
• Tenant arrears fell in September, but remain high with 10% of all rental arrears.
•The average yield remained stable at 4.9% in September, as rising rents were matched by modest house price growth in the past three months.
Landlords have seen tenant demand continue to hit new heights. This really has turned the buy-to-let market into a landlord's market.
Abbey looks to support B2L market
Abbey for Intermediaries is looking at entering the buy-to-let market in 2011 with products aimed at non-professional landlords.
Abbey currently has no products in buy-to-let sector but with the market growing over the last year, it says it is a market it’s keen to support next year.
Alan Mathewson, managing director at Abbey for Intermediaries, says: “What we’re looking at is the non-professional landlord, the type of landlord that maybe has one to three houses where they’ve not been able to sell their own property and ended up doing a buy-to-let, or the landlord that has inherited a house from their family.No decision has been made but that’s something we want to look at to support the market.”
In the current market renting a property is the only real option for many individuals unable to obtain mortgage finance, with a greatly diminished supply of mortgage products aimed at landlords, this is potentially good news for the buy-to-let sector.Specialist providers such as CHL, Paragon, and BM Solutions are currently almost entirely absent from the market, while mainstream lenders are treating buy-to-let lending with caution. As a result demand is building in these products, and this may be an area where prudent lenders, with an appetite to support the sector, can increase their profit margins.
Resource:Mortgage Strategy
Tuesday, 9 November 2010
Landlords adapt well to new capital gains tax
Despite recent increases to CGT, landlords sentiment remains positive. A recent landlord survey showed the following results:
34% of landlords saw the current market as attractive for investment - property still offers better capital returns than other investments – a drop of 7% since the last quarter.
Landlords with 3 properties made capital gains of £152,219 and face CGT bill of £39,793 – an increase of £11,369 from the previous tax regime (at higher rate tax paid over two years).
34% of landlords saw the current market as attractive for investment - property still offers better capital returns than other investments – a drop of 7% since the last quarter.
Landlords with 3 properties made capital gains of £152,219 and face CGT bill of £39,793 – an increase of £11,369 from the previous tax regime (at higher rate tax paid over two years).
Landlords with just one property have made average capital gains of £75,111. If they sold their properties now, the average single property landlord would face a tax bill of £18,203 – an increase of £5,201 compared to before the budget.
Landlords with one property made capital gains of £75,111 and face CGT bill of £18,203 - an increase of £5,201 compared to before the budget.
The increased CGT hit many property investors' confidence. However the hike wasn't as steep as first feared, and we are already seeing landlords adapt their disposal strategies for their portfolios, planning to spread sales over several tax years to mitigate their exposure to the higher rate.
Housing market becomes more fragile as lending worsens
There is no doubt that the housing market is fragile and with credit conditions worsening last month, it is no surprise that house prices are sluggish. Lenders have made mortgages more difficult to secure for those without large sums of cash to pay up-front by reducing loan-to-value in September. Particularly effecting first time buyers, and the 'Bank of Mum and Dad' a source of funding, is reportedly also drying up.
At the moment we are all waiting with baited breath to see the effects of further austerity measures in government's spending review, and the effect of further policy measures such as another round of quantitative easing. We will be keeping a close eye on the housing market over the next couple of months, but until then we would not expect to see major swings in either direction.
However on a more positive note, at Intercounty we experienced a good sales month in October. We strongly believe that with careful planning and our expertise in the housing industry we can expect to continue to do so.
At the moment we are all waiting with baited breath to see the effects of further austerity measures in government's spending review, and the effect of further policy measures such as another round of quantitative easing. We will be keeping a close eye on the housing market over the next couple of months, but until then we would not expect to see major swings in either direction.
However on a more positive note, at Intercounty we experienced a good sales month in October. We strongly believe that with careful planning and our expertise in the housing industry we can expect to continue to do so.
Mortgage rescue scheme must be kept
Largely due to the previous governments mortgage rescue scheme, possessions have been kept to a minimum by a combination of lender forbearance, sound property management, financial advice and support from the government. Now is not the time for the coalition government to axe support for borrowers in difficulty.
It is essential that the coalition retain this rescue scheme or we will have to face more economic and social problems such as the implications of tackling homelessness and re-housing evicted borrowers, already under pressure from a slashed housing budget.
If the scheme is kept it will mean that borrowers will be put under less pressure we will see mortgage possessions kept to a minimum resulting in a healthy housing market.
It is essential that the coalition retain this rescue scheme or we will have to face more economic and social problems such as the implications of tackling homelessness and re-housing evicted borrowers, already under pressure from a slashed housing budget.
If the scheme is kept it will mean that borrowers will be put under less pressure we will see mortgage possessions kept to a minimum resulting in a healthy housing market.
Home owners face more repossessions
With harsh government cuts across the public sector predicted over the next few years, we are likely to see an increase in mortgage arrears and possessions across the UK. It is predicted that more public sector employees, especially in the North East, who have a greater dependence on public sector jobs will be disproportionally hit by the cuts - and their knock on effects on the owner occupation.
Although the government hopes that private sector growth will be able to counterbalance the losses, it's unrealistic to expect it to absorb such a large percentage of the workforce. It is inevitable that thousands of homeowners will come under intense financial pressure over the next four years. Which will undoubtedly push up mortgage arrears and possessions. Until now, repossessions have been lower than previously anticipated, with 23% less than expected in the first part of the year compared to 2009. Interest rates currently at record lows will only increase over the medium-term and this will heap additional pressure on borrowers trying to keep up with their mortgage payments. The effects will be widespread, but will vary across the country.
Although the government hopes that private sector growth will be able to counterbalance the losses, it's unrealistic to expect it to absorb such a large percentage of the workforce. It is inevitable that thousands of homeowners will come under intense financial pressure over the next four years. Which will undoubtedly push up mortgage arrears and possessions. Until now, repossessions have been lower than previously anticipated, with 23% less than expected in the first part of the year compared to 2009. Interest rates currently at record lows will only increase over the medium-term and this will heap additional pressure on borrowers trying to keep up with their mortgage payments. The effects will be widespread, but will vary across the country.
Monday, 8 November 2010
Spending cuts make tough year ahead for agents
Since the announcement of spending cuts in the in the public sector, public confidence in the housing sector has reached an all time low.
We are likely to experience a cooling in buyer demand, transactions flattening and a modest decline in house prices for the foreseeable future.
Over the past few months lenders have continued to tighten their credit scoring criteria even further in a market where prices are falling and jobs are more uncertain. Public sector employment, especially, could lead to a rise in the number experiencing difficulties in paying their mortgage and a lack of attractive funding will continue to hamper the remortgage market which according to CML is already at a 10 year low.
For many home buyers a large deposit will still be required and for most this isn't a reality with current property prices. The letting market will remain the only option for many buyers but, with the diminishing supply of mortgage products aimed at landlords, the number of available rental properties could well fall as demand takes up any slack, pushing rents up further. Good news for landlords and letting agents - not such great news for many tenants.
Ray Hugill, Executive director of Templeton LPA, commented: 'Today's spending cuts will have widespread effects on the private rental sector. With nearly half a million public sector jobs axed in the next four years, we are going to see a surge in the number of tenants unable to meet their monthly rents. Rents are already at a record high, and with a new wave of redundancies and job losses likely to hit thousands of households in rented accommodation, tenant finances will be placed under an even greater strain. And as many tenants fall behind in their rent, we are likely to see landlord arrears rise over the medium-term. In this environment, it is even more vital that landlords closely monitor their current tenants payment performance - not to mention vet prospective tenants even more rigorously.'
There is no doubt that 2012 is going to be a tough year, however those agents with the foresight to plan ahead, carefully control costs and concentrate hard on diversifying and maximising all available income streams, will come out intact.
We are likely to experience a cooling in buyer demand, transactions flattening and a modest decline in house prices for the foreseeable future.
Over the past few months lenders have continued to tighten their credit scoring criteria even further in a market where prices are falling and jobs are more uncertain. Public sector employment, especially, could lead to a rise in the number experiencing difficulties in paying their mortgage and a lack of attractive funding will continue to hamper the remortgage market which according to CML is already at a 10 year low.
For many home buyers a large deposit will still be required and for most this isn't a reality with current property prices. The letting market will remain the only option for many buyers but, with the diminishing supply of mortgage products aimed at landlords, the number of available rental properties could well fall as demand takes up any slack, pushing rents up further. Good news for landlords and letting agents - not such great news for many tenants.
Ray Hugill, Executive director of Templeton LPA, commented: 'Today's spending cuts will have widespread effects on the private rental sector. With nearly half a million public sector jobs axed in the next four years, we are going to see a surge in the number of tenants unable to meet their monthly rents. Rents are already at a record high, and with a new wave of redundancies and job losses likely to hit thousands of households in rented accommodation, tenant finances will be placed under an even greater strain. And as many tenants fall behind in their rent, we are likely to see landlord arrears rise over the medium-term. In this environment, it is even more vital that landlords closely monitor their current tenants payment performance - not to mention vet prospective tenants even more rigorously.'
There is no doubt that 2012 is going to be a tough year, however those agents with the foresight to plan ahead, carefully control costs and concentrate hard on diversifying and maximising all available income streams, will come out intact.
Monday, 1 November 2010
Location, Location, Location....
Location, location, location is the somewhat overused maxim applied by many as a rule of thumb when selecting a property. However, a closer look reveals that a compromise in this principle can produce significant benefits for tenants in the local area.
Clearly, most tenants’ idea of a dream home is one in perfect condition, with a beautiful garden, massive sunny accommodation, off street parking, and found in the best street in the area – preferably a quiet, leafy, cul-de-sac. And of course, the rent must be low!
Sadly this idyllic combination does not exist, because if the first five criteria are satisfied, then the rent is likely to be astronomical, as everyone tends to want these things as well! So budgetary constraints typically force tenants to accept a degree of compromise. For many, this will mean asking the children to share a bedroom, making do with a patio rather than a garden, or parking the car in the street. Last on many people’s list is renting on a busy road!
Yet consider the advantages. Firstly, the rent on properties on a busy road is usually considerably cheaper than similar properties in a quiet street. This means that you can get far more property for your rent. It could well mean that you will not have to compromise on those very things that contribute to an attractive property lifestyle. You might actually gain attributes such as a playroom for the children, a garage for the car, or a larger than expected garden.
Most people who live on a main road tell us that they no longer notice it, and that it is a very small price to pay for a substantially better property.
Why choose Intercounty?
It seems amazing to us that almost anyone can open up an estate agency and commence trading without any training, qualifications, proof of minimum standards, or certificate of competency.
The sale of your property is far too important to entrust to just anybody. Those who claim to work on your behalf may simply be out to claim the commission from a lack lustre sale which might have happened without their involvement, where there is no accountability, commitment or care. Their objective might only be to secure a sale at any price, as long as they can claim a commission. One has to ask the question – “Will they genuinely act in my best interests, and secure a good price from a well-qualified buyer?” Will they make your move as stress-free as possible, or add to the anxiety of moving?
There are various credentials you should check when selecting the right agent to sell your home, such as membership of the National Association of Estate Agents. Membership of the NAEA is voluntary and demonstrates that the member agent is happy to be bound by a stringent code of conduct and will adhere to the highest ethical standards.
We are proud of our membership of the NAEA and believe it is an indication of the type of service excellence you can expect to receive should you decide to buy or sell through members such as ourselves. After all, when the time comes to sell there is much at stake, so you owe it to yourself to choose wisely.
The sale of your property is far too important to entrust to just anybody. Those who claim to work on your behalf may simply be out to claim the commission from a lack lustre sale which might have happened without their involvement, where there is no accountability, commitment or care. Their objective might only be to secure a sale at any price, as long as they can claim a commission. One has to ask the question – “Will they genuinely act in my best interests, and secure a good price from a well-qualified buyer?” Will they make your move as stress-free as possible, or add to the anxiety of moving?
There are various credentials you should check when selecting the right agent to sell your home, such as membership of the National Association of Estate Agents. Membership of the NAEA is voluntary and demonstrates that the member agent is happy to be bound by a stringent code of conduct and will adhere to the highest ethical standards.
We are proud of our membership of the NAEA and believe it is an indication of the type of service excellence you can expect to receive should you decide to buy or sell through members such as ourselves. After all, when the time comes to sell there is much at stake, so you owe it to yourself to choose wisely.
The reluctant landlord returns to the rental market
The reluctant landlord has returned to the rental market, according to the Association of Residential Letting Agents. Which is great news for the rental market as demand out strips supply at the moment.
ARLA’s research revealed that 34% of member offices In Q3 2010 have seen an increase in the number of rental properties coming onto market because they can’t be sold. This figure was an increase from 19% in Q2 of this year.
There was variation across the UK in the number of agents reporting this trend, with 58% of agents in the North East of England reporting an increase in reluctant landlords, compared to 15% in central London.
The number of reluctant landlords peaked during the recession when at the beginning of 2009, some 94% of agents surveyed reported an increase of property coming onto the rental market because it could not be sold.
Ian Potter, operations manager at ARLA, says: “The rise of the reluctant landlord seems to reflect wider market uncertainty and instability. There is a dearth in available property either to rent or buy, yet people are holding back from selling, perhaps strategically, to secure the best price; or more likely because they simply can’t find a suitable buyer.
“While we welcome new landlords to the market, this trend is not without risks. Letting a property can be full of potential hazards, especially for inexperienced landlords – from material issues, such as a tenant mistreating a property, to financial problems, such as landlord inability to meet mortgage payments. A qualified, licensed agent can help guide both landlord and tenant through the process, to ensure neither party is left out of pocket.”
At Intercounty we can offer you secure and professional advice, vetting tenants and drawing up all legal agreements to protect you against any of the potential pit falls of renting out your home.
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UK mortgage affordability no worse than other countries
In a recent study by Capital Economics they found that mortgage affordability is in-line with other countries. It's analysis spanned over nine major western economies, Australia, Denmark, France, Ireland, Netherlands, Spain, Sweden, the USA and the UK.
The average family with a repayment mortgage in these countries over the past 40 years has spent 48% of its take-home pay on their mortgage.
Comparing these figures internationally the study has shown that the average mortgage costs in the UK have been 50% of our take-home pay over the last 40 years. Spain is still the most affordable at 39% and Sweden is the most expensive at 56%
Paul Diggle, economist and author of the report says one might expect the high population density and apparent structural undersupply of housing in the UK to mean that people in the UK have spent a higher proportion of their earnings on mortgages, but its research contradicts this.
He says: “Our analysis shows that over the past 40 years, long-run average UK mortgage affordability is unremarkable in an international context. To our minds, this casts doubt on the popular view that a chronic undersupply of homes in the UK supports high prices.”
Out of the nine countries researched, between 1970-2010 Sweden was the most expensive in terms of affordability, followed by the Netherlands, France, Denmark, the UK, USA, Australia, Ireland and Spain.
Mortgage affordability in the UK is currently at only 44% of take-home pay, compared with the Netherlands at 64% and the USA at 25%.
The research found that mortgage interest rates are the primary driver of a country’s level of mortgage affordability. Although one factor not taken into consideration in this study is the difference in affordability measures over the past 40 years in the level of house prices in relation to earnings.
Tuesday, 26 October 2010
Paragon brands social housing changes as "dangerous"
The Paragon Group has called the government’s changes to social housing as “dangerous”.
George Osborne, chancellor of the exchequer, revealed a £4.4bn reduction to the social housing budget in his speech to the House of Commons on the Comprehensive Spending Review.
Nigel Terrington, chief executive of The Paragon Group of Companies, says the decision to move social housing rents in line with private sector will strain the private sector.
He says: “The trend in housing tenures over the past 10 years has been away from social housing and towards the private rented sector, and these measures will inevitably accelerate this shift.
“The number of properties in the social housing sector has fallen by one million since 1991, and the private rented sector has largely picked up the slack, increasing by 1.3 million properties.
He adds that the private rented sector stock is under strain as more people look to rent than buy, and this surge in tenant demand is causing rental inflation.
He adds: “Whilst we recognise the positive regulatory changes already made by the government, it has to be careful not to shift the role of housing people on low incomes onto the private rented sector without ensuring it has appropriate levels of support at both an economic and regulatory level.
“Failure to do so could be dangerous because it could lead to a shortage of rental property at a time of unprecedented levels of tenant demand.”
Precise Mortgages approved by FSA
It was announced this week that Precise Mortgages, the specialist mortgage lender, has today confirmed that its application to enter into regulated mortgage contracts as lender has been approved.
Ian Lonergan, CEO of Precise Mortgages, says it's been a very thorough process focusing extensively on the quality of the lender's proposition, including its compliance with the FSA's requirements in relation to responsible lending and its ability to bring secure funding to the UK mortgage market.
He says:”‘We are committed to bringing new funding to the UK mortgage market and it’s fantastic to get the green light from the regulator. Our dedication to the intermediary market remains as we continue with our strategy of distributing exclusively through mortgage brokers.”
Ben Thompson, director of mortgages for Legal & General, says: “I am delighted that Precise Mortgages has got the approval it needs from the FSA in order to start residential lending.
“This is great news for mortgage brokers and borrowers. Precise Mortgages has an excellent infrastructure and business model and I am sure it will bring much needed products to sectors of the market that have been starved of credit.”
Alan Cleary, managing director of Precise Mortgages says it will shortly be launching a new range of products for owner occupiers to complement its current buy-to-let range. It also has plans to launch into new segments of the mortgage market early next year and it has identified good quality borrowers who have been starved of credit.
Property Ombudsman appeals to Shapps to 'fix' regulation in the lettings sector
The Property Ombudsman, Christopher Hamer, is renewing his call for letting agents to be brought under the umbrella of redress legislation.
Mr Hamer has always spoken out on the fact that lettings should be covered just as robustly as sales, saying in March that whichever party won the General Election in May it should make some form of protection for tenants and landlords a priority.
Since the coalition government in May, Grant Shapps the housing minister, made it clear that any form of legislation to regulate the lettings sector would not be a priority.
“More and more people will be looking to the private rented sector for their housing needs whether because they cannot get financing to buy a property or because government cuts will possibly impact on the availability of public sector housing. It is now more than ever imperative that consumers in the private rented sector gained some protection,” said Mr. Hamer as he launched his latest Interim Report for 2010.
“If the Coalition was to review its stance, it could easily gain a quick win by expanding the scope of the Consumers, Estate Agents and Redress Act 2007.
“That Act required all residential sales agents to join an approved redress scheme to settle disputes between consumers and agents. Encompassing a similar obligation for letting agents would be an obvious consistency and could result in the entire sector (not just those firms who have voluntarily agreed to follow its standards) operating in accordance with the TPO Code of Practice.
Our Code is not a heavy-handed regulatory regime. But taking this simple step would mean that the whole industry has parity and no firm would be outside the standards. It would make competition fairer while offering consumers greater protection. I recognise that full coverage of the market place through a formal regulatory structure can only come about through significant legislation but if the government was to take a positive view of my proposals and encourage the industry itself to establish a relevant regime I am enthusiastic about contributing to that concept.”
Mr Hamer is hopeful that he will be able to secure a meeting with Mr. Shapps to press the case for a change in legislation.
“More than 7,000 lettings offices in the UK are already signed up to the TPO Lettings Code of Practice voluntarily so clearly a large proportion of the industry itself sees this move as necessary,” adds Mr. Hamer.
“My report shows there is still a large number of complaints regarding lettings agents, numerically on a par with sales agents for whom TPO membership is almost double the size.
“Visiting estate agents and talking to them about industry issues is a large part of my job and with the backing of legislation to force all lettings agents to join an approved redress scheme it would be much easier to know who is operating in the market and to observe their standards.”
Figures in the interim report show that sales agents and lettings agents ended the quarter with the same number of cases (150) being opened for both industry sectors. But lettings agents generated far more enquiries than sales agents in the same period – virtually 70 per cent higher at 1,975. This is vastly different from the variance in earlier quarters of 2010 although a lightly less dramatic rate of climb than for the same period last year.
“What concerns me more is that the when you survey the membership figures, there are 46 per cent more sales agents in the scheme than there are lettings agents,” said Mr. Hamer. “The ratio of enquiries to membership numbers is one for every 9.7 sales offices compared with one for every 3.9 lettings offices. Clearly there is work to do in the lettings sector to improve standards and bringing lettings agents into the scope of CEARA would be a realistic and easily achieved first step.”
TPO had 7,908 member firms at the end of September, 2010, operating 11,310 residential sales and 7,756 residential lettings offices.
Mr Hamer has always spoken out on the fact that lettings should be covered just as robustly as sales, saying in March that whichever party won the General Election in May it should make some form of protection for tenants and landlords a priority.
Since the coalition government in May, Grant Shapps the housing minister, made it clear that any form of legislation to regulate the lettings sector would not be a priority.
“More and more people will be looking to the private rented sector for their housing needs whether because they cannot get financing to buy a property or because government cuts will possibly impact on the availability of public sector housing. It is now more than ever imperative that consumers in the private rented sector gained some protection,” said Mr. Hamer as he launched his latest Interim Report for 2010.
“If the Coalition was to review its stance, it could easily gain a quick win by expanding the scope of the Consumers, Estate Agents and Redress Act 2007.
“That Act required all residential sales agents to join an approved redress scheme to settle disputes between consumers and agents. Encompassing a similar obligation for letting agents would be an obvious consistency and could result in the entire sector (not just those firms who have voluntarily agreed to follow its standards) operating in accordance with the TPO Code of Practice.
Our Code is not a heavy-handed regulatory regime. But taking this simple step would mean that the whole industry has parity and no firm would be outside the standards. It would make competition fairer while offering consumers greater protection. I recognise that full coverage of the market place through a formal regulatory structure can only come about through significant legislation but if the government was to take a positive view of my proposals and encourage the industry itself to establish a relevant regime I am enthusiastic about contributing to that concept.”
Mr Hamer is hopeful that he will be able to secure a meeting with Mr. Shapps to press the case for a change in legislation.
“More than 7,000 lettings offices in the UK are already signed up to the TPO Lettings Code of Practice voluntarily so clearly a large proportion of the industry itself sees this move as necessary,” adds Mr. Hamer.
“My report shows there is still a large number of complaints regarding lettings agents, numerically on a par with sales agents for whom TPO membership is almost double the size.
“Visiting estate agents and talking to them about industry issues is a large part of my job and with the backing of legislation to force all lettings agents to join an approved redress scheme it would be much easier to know who is operating in the market and to observe their standards.”
Figures in the interim report show that sales agents and lettings agents ended the quarter with the same number of cases (150) being opened for both industry sectors. But lettings agents generated far more enquiries than sales agents in the same period – virtually 70 per cent higher at 1,975. This is vastly different from the variance in earlier quarters of 2010 although a lightly less dramatic rate of climb than for the same period last year.
“What concerns me more is that the when you survey the membership figures, there are 46 per cent more sales agents in the scheme than there are lettings agents,” said Mr. Hamer. “The ratio of enquiries to membership numbers is one for every 9.7 sales offices compared with one for every 3.9 lettings offices. Clearly there is work to do in the lettings sector to improve standards and bringing lettings agents into the scope of CEARA would be a realistic and easily achieved first step.”
TPO had 7,908 member firms at the end of September, 2010, operating 11,310 residential sales and 7,756 residential lettings offices.
Wednesday, 20 October 2010
Good news for Landlords as rental market hits record high
UK rents exceeded their pre-downturn peak in September to hit a record high, according to the latest buy-to-let index from LSL Property Services.
In September, UK rents rose to £689, surpassing those seen in August 2008, the previous market peak.
The average UK rent is now 3.1% higher than the same time last year, following eight consecutive months of rises. The average yield remained stable at 4.9% in September, as rising rents were matched by modest house price growth in the past three mo
David Brown, commercial director of LSL Property Services, says: “Landlords have seen tenant demand continue to hit new heights. The mortgage market remains tight and many buyers simply cannot get the finance to get a foot on the property ladder.
And with potential spending cuts on the horizon, and uncertainty over the direction of the economy, many buyers are choosing to remain in rented accommodation for longer – perhaps to wait for house prices to fall."
“As a result, demand for rental accommodation is increasing, and supply is not rising fast enough to match it. This has turned the buy-to-let market into a landlord’s market, and many renters face increasing rental costs while they delay their house purchase.”
The resurgence in rents has been driven by a strong performance from London and the South East in 2010. In September, London rents hit their highest on record. Landlords increased their rents by 1.1% to £972 per month in September. They have risen by 6.8% since January.
Rents in the South East rose by 0.9% in September, while those in the East of England and the West Midlands rose by 1%. The South West and North West reported modest falls.
Brown adds: “The supply and demand imbalance is particularly severe in the capital and London is emerging as a different market entirely from the rest of the UK. There is an acute lack of affordable housing in London, and would-be buyers cannot meet higher house prices – or get big enough mortgages.
“Traditionally, London is seen as a low-yield market. But this isn’t the case. Despite the strong performance of house prices in the capital in the past year, yields haven’t fallen sharply. With rental properties so sought after in the city, landlords have been able to continually hike rents since January and are seeing a yield just 0.1% shy of the UK average.
“In the last twelve months, the average London landlord would have made an annual total return of nearly £34,000 on a typical rental property.”
The rise in rents means that an investor buying property could now expect a total annual return of 9.2%, the equivalent of £15,592 on a typical rental property . Over the past year, the average UK landlord has made a total annual return of 10.4%, £16,567.
In September, UK rents rose to £689, surpassing those seen in August 2008, the previous market peak.
The average UK rent is now 3.1% higher than the same time last year, following eight consecutive months of rises. The average yield remained stable at 4.9% in September, as rising rents were matched by modest house price growth in the past three mo
David Brown, commercial director of LSL Property Services, says: “Landlords have seen tenant demand continue to hit new heights. The mortgage market remains tight and many buyers simply cannot get the finance to get a foot on the property ladder.
And with potential spending cuts on the horizon, and uncertainty over the direction of the economy, many buyers are choosing to remain in rented accommodation for longer – perhaps to wait for house prices to fall."
“As a result, demand for rental accommodation is increasing, and supply is not rising fast enough to match it. This has turned the buy-to-let market into a landlord’s market, and many renters face increasing rental costs while they delay their house purchase.”
The resurgence in rents has been driven by a strong performance from London and the South East in 2010. In September, London rents hit their highest on record. Landlords increased their rents by 1.1% to £972 per month in September. They have risen by 6.8% since January.
Rents in the South East rose by 0.9% in September, while those in the East of England and the West Midlands rose by 1%. The South West and North West reported modest falls.
Brown adds: “The supply and demand imbalance is particularly severe in the capital and London is emerging as a different market entirely from the rest of the UK. There is an acute lack of affordable housing in London, and would-be buyers cannot meet higher house prices – or get big enough mortgages.
“Traditionally, London is seen as a low-yield market. But this isn’t the case. Despite the strong performance of house prices in the capital in the past year, yields haven’t fallen sharply. With rental properties so sought after in the city, landlords have been able to continually hike rents since January and are seeing a yield just 0.1% shy of the UK average.
“In the last twelve months, the average London landlord would have made an annual total return of nearly £34,000 on a typical rental property.”
The rise in rents means that an investor buying property could now expect a total annual return of 9.2%, the equivalent of £15,592 on a typical rental property . Over the past year, the average UK landlord has made a total annual return of 10.4%, £16,567.
Interest rates will stay on hold until late 2012, says Cebr
This week Cebr has forcasted that UK interest rates will stay on hold for at least two years, with an extra £100bn of quantitative easing being pumped into the economy.
It believes the UK economy will show growth of 1.6% in 2010 and 1.3% in 2011, 1.4% in 2012, 1.8% in 2013 and 2.4% in 2014.
It says given the normal margin of forecasting error, these forecasts imply a one in ten chance of negative growth for the UK economy in 2011, though Cebr sticks to its view that a world double dip is unlikely because of the strength of the emerging economies.
However, partly because of the effect of the VAT hike in January 2011, Cebr’s central forecast for growth in Q1 2011 is only 0.1%, which implies that there is nearly a 50% chance of negative growth for that quarter.
The new forecasts incorporate Cebr’s predictions for the effects of the Comprehensive Spending Review to be announced this week.
The report says: “‘We expect the authorities to push the monetary policy levers hard in the opposite direction to the fiscal policy levers.
“Our forecasts include an additional £100 billion in quantitative easing; base rates remaining at 0.5% till late 2012 at least and 10 year gilt yields at in the 2.5 to 2.75% range till end 2013.
“The relationship between monetary policy and economic growth is less predictable than that for fiscal policy and growth in the short term, particularly at times when the flame of economic growth is weak.
“Had a decision not already been made which is administratively difficult to reverse at short notice we would have been tempted to call for the VAT rise to 20% in January 2011 to be postponed.”
Charles Davis, managing economist and main author of the report, says: “All the business survey evidence suggests that despite the consumer starting to run down savings again, confidence remains weak. With the end of the recovery from restocking growth will be slow in the coming months, even without fiscal retrenchment.
“So the levers of monetary policy will be aggressively moved to fast forward again to offset the impact of the CSR in the coming years.”
However these are just predictions, we will have to wait and see what happens over the coming year.
It believes the UK economy will show growth of 1.6% in 2010 and 1.3% in 2011, 1.4% in 2012, 1.8% in 2013 and 2.4% in 2014.
It says given the normal margin of forecasting error, these forecasts imply a one in ten chance of negative growth for the UK economy in 2011, though Cebr sticks to its view that a world double dip is unlikely because of the strength of the emerging economies.
However, partly because of the effect of the VAT hike in January 2011, Cebr’s central forecast for growth in Q1 2011 is only 0.1%, which implies that there is nearly a 50% chance of negative growth for that quarter.
The new forecasts incorporate Cebr’s predictions for the effects of the Comprehensive Spending Review to be announced this week.
The report says: “‘We expect the authorities to push the monetary policy levers hard in the opposite direction to the fiscal policy levers.
“Our forecasts include an additional £100 billion in quantitative easing; base rates remaining at 0.5% till late 2012 at least and 10 year gilt yields at in the 2.5 to 2.75% range till end 2013.
“The relationship between monetary policy and economic growth is less predictable than that for fiscal policy and growth in the short term, particularly at times when the flame of economic growth is weak.
“Had a decision not already been made which is administratively difficult to reverse at short notice we would have been tempted to call for the VAT rise to 20% in January 2011 to be postponed.”
Charles Davis, managing economist and main author of the report, says: “All the business survey evidence suggests that despite the consumer starting to run down savings again, confidence remains weak. With the end of the recovery from restocking growth will be slow in the coming months, even without fiscal retrenchment.
“So the levers of monetary policy will be aggressively moved to fast forward again to offset the impact of the CSR in the coming years.”
However these are just predictions, we will have to wait and see what happens over the coming year.
Tuesday, 19 October 2010
Housing benefit landlords "rip off the system'
Lord Freud, Minister for Welfare Reform has accused "unscrupulous" landlords of ripping off the housing benefit system and exploiting low-income families.
According to Work and Pensions figures private landlords will pocket almost £8.5bn from the taxpayer this year through housing benefit – more than a third of the total £21.5bn bill.
In the past decade the cost of providing housing benefit through the private rented sector has soared by 36pc above the rate of inflation to £5,720 a year. Where as other providers of social accommodation have raised their charges by just 19pc over inflation to £3,991.
Council rents set to rise
Radical changes going to be set out in the housing budget, could mean that council house tenants having to pay more rent.
The reforms could lead to tenants being forced to give up council homes that they can't afford to buy privately.
No longer will tenants be able to feel as though they have "won the jackpot" when they qualify for a house and pay only percentage of the market as rent.
Instead new rules, means tested will mean that they will have to pay up to 90 per cent of the going rent.
This will also give power to local authorities and housing associations to reassess whether tenants still need a council house after five or ten years.
The policy will not apply to existing council house tenants. Instead those waiting for homes will be subject to a new "affordable flexible tenancy."
This move was driven by the need for large cuts in the 6 billion social housing budget.
Friday, 15 October 2010
Barclays latest lender to defy FSA on PPI
Barclays has become the latest lender to defy the Financial Services Authority and put on hold any complaints regarding Payment Protection Insurance that might be impacted by the forthcoming judicial review.
Yesterday, Lloyds Banking Group announced that customers can continue to log their complaint with the bank but no decisions will be made concerning sales related PPI complaints whilst the judicial review is ongoing.
Today, Barclays, owner of secured loan lender First Plus, has revealed that it is putting a portion of its complaints on hold as well.
A spokeswoman for Barclays, says: “All PPI-related complaints will be reviewed as we receive them - if they are impacted by the issues covered by the judicial review and therefore cannot be resolved at this point then we will write to the customer to inform them of that.
“Complaints on matters not affected by the judicial review will be assessed in the normal way.”
The British Bankers Association has applied to the courts for a judicial review of the FSA’s complaint handling approach.
The BBA says the FSA’s procedure for PPI complaints risks setting a precedent which will allow the regulator to apply new rules to previous sales for any financial product.
The FSA recently published a policy statement and open letter to the industry advising they should consider complaints about PPI not just by reference to the detailed conduct of business rules which applied at the time but also to standards that are based on the FSA’s guiding principles for doing business.
This could result in more than 2.5 million people being refunded as much as £2.7bn in total.
Santander however says it will continue to deal with all PPI complaints.
The BBA says: “We believe the FSA is effectively creating a precedent which permits it to apply new rules to previous sales – even where those sales were regulated by other FSA rules.
“Therefore this ruling might not only affect customers who have bought PPI, but might also set a precedent that could affect all products regulated by the FSA.”
The BBA says it has been necessary to take action because there is insufficient legal clarity about what the FSA and FOS is proposing in this area.
The FSA says it will contest the British Bankers’ Association’s judicial review of new PPI complaints handling measures.
The FSA says in the last five years there have been more than a million complaints made to firms about PPI. In 2009/2010 alone, customers referred 49,196 complaints to the Ombudsman which then upheld nine out of ten in the complainant’s favour.
UK Rents hit record high
UK rents exceeded their pre-downturn peak in September to hit a record high, according to the latest buy-to-let index from LSL Property Services.
In September, UK rents rose to £689, surpassing those seen in August 2008, the previous market peak.
The average UK rent is now 3.1% higher than the same time last year, following eight consecutive months of rises. The average yield remained stable at 4.9% in September, as rising rents were matched by modest house price growth in the past three months.
David Brown, commercial director of LSL Property Services, says: “Landlords have seen tenant demand continue to hit new heights. The mortgage market remains tight and many buyers simply cannot get the finance to get a foot on the property ladder.
’And with potential spending cuts on the horizon, and uncertainty over the direction of the economy, many buyers are choosing to remain in rented accommodation for longer – perhaps to wait for house prices to fall.
“As a result, demand for rental accommodation is increasing, and supply is not rising fast enough to match it. This has turned the buy-to-let market into a landlord’s market, and many renters face increasing rental costs while they delay their house purchase.”
The resurgence in rents has been driven by a strong performance from London and the South East in 2010. In September, London rents hit their highest on record. Landlords increased their rents by 1.1% to £972 per month in September. They have risen by 6.8% since January.
Rents in the South East rose by 0.9% in September, while those in the East of England and the West Midlands rose by 1%. The South West and North West reported modest falls.
Brown adds: “The supply and demand imbalance is particularly severe in the capital and London is emerging as a different market entirely from the rest of the UK. There is an acute lack of affordable housing in London, and would-be buyers cannot meet higher house prices – or get big enough mortgages.
“Traditionally, London is seen as a low-yield market. But this isn’t the case. Despite the strong performance of house prices in the capital in the past year, yields haven’t fallen sharply. With rental properties so sought after in the city, landlords have been able to continually hike rents since January and are seeing a yield just 0.1% shy of the UK average.
“In the last twelve months, the average London landlord would have made an annual total return of nearly £34,000 on a typical rental property.”
The rise in rents means that an investor buying property could now expect a total annual return of 9.2%, the equivalent of £15,592 on a typical rental property . Over the past year, the average UK landlord has made a total annual return of 10.4%, £16,567.
UK rents exceeded their pre-downturn peak in September to hit a record high, according to the latest buy-to-let index from LSL Property Services.
Interest only loans on the up
A spokesperson for Your Mortgage has claimed that interest-only home finance products do serve a purpose.
Editor-in-chief of the website Paula John accepted it is important that regulations are put in place to avoid people taking on such deals if they cannot afford them.
However, she pointed out that lenders are extremely cautious at the moment anyway and interest-only mortgages are useful for certain people.
Her comments were made in response to a statement by the Intermediary Mortgage Lenders Association (IMLA), which declared that such products would be made obsolete if the Financial Services Authority (FSA) goes through with a set of new proposals.
Ms John said: "I think [the IMLA] is right in sounding a warning bell that we could throw the baby out with the bath water and see the end of interest-only mortgages altogether."
In her opinion, the FSA is right to want to get involved, but it may be that the market has regulated itself with tightened lending conditions.
Remortgages at lowest proportion of market for a decade
Remortgaging accounted for only 25% of loans in August, the lowest proportion in over 10 years, the latest survey data from the Council of Mortgage Lenders shows.
With interest rates expected to remain low for some time yet, there is little incentive for borrowers to move from low rates and tight credit conditions mean some find it difficult to find another deal.
There were 51,600 house purchase loans, worth £7.7bn, advanced in August, a fall of 8%, by volume and value, compared to July.
The CML says that while this is in line with the usual summer lull in market activity, a rise of 3% by volume and 12% by value from August 2009 shows that 2010 house purchase lending is still proving slightly more robust than the low levels last year.
The 18,300 loans, worth £2.3bn, advanced to first-time buyers in August represented a decline of 5% by volume and 4% by value from July.
First-time buyer loans were also down 3% by number, but up 5% by value, compared with August last year.
First-time buyers in August put down on average a 21% deposit, compared to 24% in July.
Home movers suffered more than first-time buyers from the summer lull in August with the 33,200 loans, worth £5.4bn, advanced down 10% by volume and value on July and average deposits up from 33% in July to 34%.
This saw movers in August borrowing at the lowest LTVs for six years.
But lending levels have improved on last year with home-mover loans 7% up by volume and 13% up by value from August 2009.
Fixed-rate products are enjoying a slow shift back to popularity with 52% of new borrowers opting for one in August, up from 51% in July.
This is still far below 2009, when in July the proportion of new fixed-rate mortgages hit 80% but started to wane in popularity straight after.
Michael Coogan, director-general of the CML, says August is a traditionally a slow month and with a quiet market expected for some time to come.
He says: “While we do not know what the impact of the comprehensive spending review will be on our sector, it will clearly contain austerity measures that will likely further dampen consumers’ appetite to borrow.
“We would expect lending to slow more significantly, year on year, as we head towards the end of the year, and it is unlikely that the uncertain environment will encourage a tick up of mortgage activity in 2011.
Price increase up by 9.3% England, 0.4% Scotland and down 18.8% in Northern Ireland
Average prices increased 9.3% in England, 0.4% in Scotland and 9% in Wales but fell drastically by 18.8% in Northern Ireland.
The average price paid by a first time buyer increased by 8.2% over the year to August while prices paid by former owner occupiers jumped 8.3%.
Alison Beech, business relationship director, Spicerhaart and Valunation, says: “With the latest positive figure from CLG added to the pile, the house price indices for August have reported a fairly even spread of upward and downward movement, confirming that we should take a step back from one-off statistics that only capture a small and distinct snapshot of the market.
“The outlook for property prices over the remainder of the year is far from clear, although confidence remains subdued and talk of a double dip continues to rumble on. With market activity patterns becoming increasingly localised, it is vital that lenders and surveyors operate on a micro level in order to determine the most realistic property values.”
House prices rose 0.7% in August
There have been so many varying reports over the past couple of weeks, confusing information from many organization announcing increases in the housing market and a decreases by others.
However the Department of Communities and Local government House Price Index shows that prices rose by 0.7% in August, which although is a small percentage, it shows that the underline market is still strong.
The findings revealed that house prices were 8.3% higher than August 2009 and 0.7% up on July 2010.
We have had a very busy month so far at Intercounty compared to August.
Thursday, 14 October 2010
Shapps calls for house price stability
One of the biggest debates this week is about the way in which we treat our homes, through the 90’s and much of this decade we have looked at our houses as a way to increase our property portfolio, especially if we have entered into the property developer market or buy to rent.
More than ever before we have had easy access to mortgages which enabled people who might never have considered by a second home, or leaving their well paid jobs to follow a new career in developing.
At a Housing Market Intelligence conference this week in London, Shapps argues that buying a property should not be seen as an investment, but as a home to live in.
He said: “With a house now liable to cost perhaps seven times someone’s earnings, it is no surprise that the average unsupported first time buyer is 37 years old. This country is in danger of letting down the aspirations of a generation of homes do not become more affordable in the long term.
“So what is required now is a period of house price stability. A home should first and foremost be thought of as a place to live and bring up a family.”
The minister also pledged government support for house builders, in support of making it easier to cut through the red tape in applications, and is asking for industry leaders to work as a team to achieve this.
This work will complement the ongoing review of building regulations launched by communities minister Andrew Stunell earlier this year.
Shapps says: “Last year, house building hit its lowest level for any peacetime years since 1924 as developers have been hampered by regional targets that put them in direct conflict with local communities and an alphabet soup of regulations and red tape they have to navigate.”
He says he is determined to make it easier to build the homes with appropriate building standards.
Visit our website to see our selection of land to buy, and to view the stunning new homes we currently have on offer this week.
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