Cold Turkey For The UK Housing Market?
March 2, 2011
And they’re off. The property market pundits have begun their traditional house price predictions for the coming year. Hometrack, the estate agent pollster, says that values will drop by 2% in 2011. Rightmove, the property website, disagrees and prophecises a drop in (albeit) asking prices of 5%.
But that’s the thing. These dozen or so indexes and the hundreds of property ‘experts’ will all conjure up a mish mash of sooth saying which will all be at odds with each other and as proven year on year, much of it wildly off the mark.
Hometrack’s sub two percent prediction is made with a cosy ‘it will all be ok’ demeanour which is influenced completely by the very nature of the fact that their predictions themselves come from that core of self-interest merchants, the estate agency industry. It is entirely in their own interests to predict a softening to the market against an inevitability of price decline, rather than the usual banter from the wider commentators which is hell bent on talking of numbers more akin to a ‘crash’ or a ‘melt down’.
I myself won’t ‘foresee’ a figure that property prices will end at in December 2011 because it’s an entirely pointless exercise. Rather a lot can happen to steer the house market in 12 months. Interest rates, lending policy, unemployment figures, political crises, media hysteria, terrorism, banking failures, foreign events etc…
However, just take a look at where we are and what is around the corner.
Property prices have dropped for the last five to six months according to the majority of the indexes.
Rightmove says that average asking prices have dropped by 3% in December alone and 3.2% in November before it. A whacking 6.2% price tag cut in just two months.
175,000 households are in arrears with their mortgages with lenders holding off evicting them only due to political pressure and the hope that values might have further bounced back in 2010 thus making repossession more worthwhile down the line. They didn’t though.
Interest rates are seen by most as set to rise in 2011. A 2.5% base rate would be low still, but nonetheless a five fold increase on currently. With many mortgage holders having gotten rather comfortable with near zero rates, a multiplying of their monthly home loan repayment may turn out to be quite a motivator for thousands to sell and to price their home aggressively in order to do so in a stubborn, buyers’ environment.
Whilst public sector job loss forecasts have recently been revised downwards, the UK is still certain to see redundancies there and in related private sector jobs in the hundreds of thousands. Not confidence inspiring for those living in areas that are heavy on public sector jobs in particular.
Stocks of available properties amongst estate agents are at a near all time high at around 75 per agent (say Rightmove), up 24% in 2010.
This contrasts to buyer registrations which have fallen a very significant 18% in the past six months.
I am a property market optimist. I have spent years talking it up and extolling how home values may drop here and there but that ultimately they will rise again and all will be well in ‘property world’. I still believe that. However, any recovery, any return to sustainable price rises and buoyant transaction levels will now be a long time coming.
One thing that can confidently be predicted is that there is further pain to come before any cure, no matter what the New Year numbers will say.
Property market cold turkey in fact, and not the kind that you ate in sandwiches on Boxing Day.
About
Russell Quirk is founder of eMoov.co.uk the online estate agents. Russell has many years property experience having been Managing Director of a five branch estate agency firm between 1999 and 2009 and which expanded into financial services, property development, land brokerage, recruitment and also specialised in providing project opportunities to social landlords and housing associations. If you are seeking a competent commentator or media subject on all things property, contact Russell on 0845 260 4950.
If you are selling a property anywhere in the UK visit http://www.emoov.co.uk online estate agents for estate agency selling fees that will surprise you.
Article Source: http://EzineArticles.com/?expert=Russell_Quirk
5 Things That Will Affect House Prices By 2011
February 19, 2011
We all have our eyes on the price of houses in the UK at the moment. Not just because we may be looking to buy one, or want to know how much ours is worth, but because house prices are a good indication of how the country is doing financially in a kind of microcosm of overall economic measures.
Weather
If the last few weeks have been anything to go by the weather in the UK is heading towards the wet end of the scale. Surprisingly the state of the weather on the day that people go to view a house can have a big impact on the opinions of the buyers. If the UK is on for its wettest year on record, then the number of houses sold will be affected, even if those buyers don’t know it.
Immigration
Net migration in the UK rose in 2009 by 33,000 from the numbers in2008. If the trend continues there will be a net increase again in 2010 making an ever increasing amount of people searching for an ever decreasing number of houses. Prices will be affected accordingly.
Aging Population
The average age of the UK population is increasing year on year and 2010 is no different. More old people in the UK means (morbidly) that there are less houses coming up for sale so new houses must be built to accommodate the demand and price of older houses shoots up.
Government Spending
With the purse strings being tightened in the murky halls of Westminster, every council in the UK is facing less and less funding for new housing or for renovations to older buildings. This will probably have the biggest effect on house prices as the government and its councils are the biggest builder of housing in the UK. Without the money to accommodate all the immigrants and new families filling the country the prices of existing private housing will go up. It’s simple economics.
Sellers
Greed is a terrible thing but if you are selling your house amidst these market conditions there must be a little bit of hand rubbing that takes place. However, there may be a lot of demand for a property such as yours, but the problem is that those looking to buy, just don’t have the money to meet your wild expectations so making your house available only at an inflated price may be a catastrophe. It may be a good time to perform and house improvements or repairs that could add value to your home. Double glazing repairs to tired, old windows may be just just be the boost your house needs to sell. Lean to conservatories are a more involved house improvement, but they can add value to your home, while also giving you a nice space to use while you wait for your property to sell!
Sam Qam is a housing analyst evangelising for home owners to perform double glazing repairs and add lean to conservatories to their property if they are looking to sell.
Article Source: http://EzineArticles.com/?expert=Sam_Qam
Tips in Buying a House for Sale in Scotland
November 30, 2010
Before anything else, you should know that buying a house for sale in Scotland is a lot different than buying properties anywhere else in the United Kingdom. The huge difference lies on the time when the whole contract becomes legally binding. In England, for example, a contract can become legally binding towards the conclusion of the negotiations; while in Scotland, the contract can become legally binding on the early part of the negotiations, so withdrawing your interest to purchase the property in the middle of the negotiations, after the contract has become legally binding, will lead to a very unwanted situation wherein you will be held accountable and be forced to pay for any subsequent losses. So, if you are interested in purchasing a property in Scotland, you have to really make sure that it is the property you want; that you have the money to pay for all the expenses, costs, and fees; and, most especially, that you are committed to purchasing the property.
For this reason, here are some tips on how you should go about purchasing a house for sale in Scotland.
One, be sure to get a good Scottish solicitor to represent you, and in conjunction with this, you have to also make sure that you are comfortable with your solicitor since you will be working with him. Aside from this, you also have to make sure that the solicitor is very well versed in the necessary procedures needed in purchasing properties in Scotland. Although you may already have a solicitor in your own country and may think that he or she can deal with the negotiations on your behalf, you should know that Scotland has a very different legal system from the rest of the United Kingdom, and it would take someone, a Scottish solicitor preferably, knowledgeable in their laws to help you with the purchase.
Two, once you have a solicitor to guide and help you through the negotiations, you have to make sure that you always stay in touch with him. In fact, it would be very advisable that you get involved throughout the whole deal and not just rely on the solicitor. Remember, you would not want to end up purchasing a property that you do not want. Have a good working relationship with your solicitor and make sure that he is aware of your position and that he understands your instructions very well.
Warners explain impact of Home Reports on Scottish property market
September 13, 2010
Scott Brown, estate agency partner with Warners Solicitors in Edinburgh, explains how new Home Reports legislation will affect the Scottish property market
Duration : 0:2:34
10 Tips For Buying Or Selling Real Estate
July 3, 2010
Whether you are a buyer or seller, here are some helpful tips to enable you to make the best out of a real estate transaction.
(there is a free ebook: 101 Tips For Selling Your House,for you to download, from a link at the bottom of this page).
Buyers
Pick a developing area. You can scientifically predict which areas are boom towns or not by reading the business pages.
Learn the real estate market in the area you picked. You need to develop a thorough knowledge of what properties are available and the going rates for houses. Be ready to make an offer in the shortest time possible.
Make your offer to buy conditional on a thorough inspection of the property. If you discover some problems, try to negotiate for a lower price to offset the inherent property flaws.
Be patient and prepared to keep looking until you find the right house that will give you a good return on your investment.
Sellers
Make sure that you let natural light inside the home during a buyer’s inspection. Open curtains, draw the blinds and turn on all lights in all rooms of the house.
Repair and/or renovate door and window hinges, door handles, broken shutters, leaky faucets, broken bulbs etcetera. Make sure that there are no squeaking doors, windows close and open smoothly and faucets are leak-free!
Deodorize the house to neutralize pet or tobacco odors. Better yet, bake bread or chocolate chip cookies before a buyer makes a visit to your home!
Make sure the house is cleaned from top to bottom, inside and outside including all those hidden corners, under the sinks, bath tubs and baseboards. Mow the lawn and trim the hedges!
Get rid of all unnecessary clutter and personal souvenir! Buyers want to see the home as they would live in it and not as you live in it!
Give your home a fresh coat of paint inside and out. Painting your home is one of the most important and inexpensive investment you can make to maximize your sale price.
Real estate is slowly becoming a rewarding investment, more rewarding in fact than stocks and bonds because they have not been performing as in the past.
On the other hand, real estate investment is performing beyond expectations because of its appreciation and due to demographic factors.
Analysts have been claiming that the real estate boom will fizzle out but that was 4 years ago and the market continues to improve due to demographic factors, lower loan interest rates and easier mortgage requirements!
Gerald Mason
http://www.articlesbase.com/real-estate-articles/10-tips-for-buying-or-selling-real-estate-103212.html
Protect Your Deposit When Buying Real Estate
June 28, 2010
When you start the process of buying a home or any type of real estate, you’ll no doubt hear the term “earnest money deposit” (EMD). So what exactly is an EMD?
An EMD becomes relevant when you are ready to make an offer on a property. In most states, your Real Estate Agent prepares the offer on your behalf. The offer usually takes the form of a written contract that is submitted to the seller by way of their agent.
In addition to the offer document, sellers typically expect an EMD. An EMD is a monetary deposit submitted via check to demonstrate to the seller that you are a serious buyer. In some regions of the country, only a photocopy of the check is submitted with the offer, and the original check is delivered to the appropriate entity if the offer is accepted. Ask your Real Estate Agent to clarify how deposits are handled in your region of the country.
The check is usually made out to an independent third- party such as a Title Company, Escrow Company, Real Estate Attorney or your Real Estate Broker. Ask your Real Estate Agent to clarify who will hold the EMD.
The amount of the EMD sellers expect varies by region. The EMD amount is based on the customs and practices for a region, but is generally from 1% to 2% of the purchase price. In a competitive market place where demand exceeds the supply of homes, some buyers may offer a higher EMD than expected to impress the seller of their intent. In determining the amount of your EMD, consult your Real Estate Agent and balance the need to demonstrate your serious intent, against the good business practice of minimizing the deposit amount.
The amount of the EMD is usually applied to reduce the purchase price of the property or to cover closing costs, as you dictate. For example, if you are purchasing a $300,000 property and you give an EMD of $3000, then the remaining balance owned at closing is $297,000 (plus closing costs). Alternatively, you may direct that the EMD be applied toward the closing costs.
Once a valid contract for purchase is created, an independent third-party usually holds the EMD until the purchase is either completed or cancelled. At this point, the money belongs jointly to both the seller and the buyer.
In cases where you make an offer that is accepted but later decide to cancel the offer, the terms specified in the contract (or state law) will dictate if, and under what circumstances, the EMD is returned to you. Be aware that you could loose your deposit if you do not not comply with the terms of your contract. Your Real Estate Agent can provide you information about how EMDs are dealt with if a contract is cancelled.
Since state law varies by region and practices can differ even within the same state, be sure to consult your Real Estate agent about the rules that apply to EMDs in your region of the country. You should also be aware that the EMD is not related to any down payment that you make toward your home loan.
Real Estate Advisor
http://www.articlesbase.com/advertising-articles/protect-your-deposit-when-buying-real-estate-52155.html
Mortgage Options to Help You Get on the Property Ladder
June 28, 2010
Mortgage options naturally change primarily the percentage of a deposit required is the main generic change in types of mortgages available since the credit crunch took hold.
10…25…40% Deposit Required
Zero percent mortgage have almost disappeared, there are currently only ten deals available however your credit rating would have to be perfect and more than likely have a high salary and or a partner.
Other low deposit mortgages have dropped drastically right up to those who have a 25% deposit. Mortgage lenders are becoming less competitive as they carefully pick only those with gleaming credit records. The lucky ones among us though who can afford a 40% deposit do have more choice than a year ago and this segment of the market has seen a large increase in deals available.
Other options…can a family member help
If you have a family member or close relative who is willing to take an equity stake in the property you can get over the hurdle of needing a deposit at all. A family equity loan means you keep 100% ownership of the property and the family member can help you get your first property as well as make a profit from their investment should it be sold at an ideal time and as the property can’t be sold until the family loan has been repaid, there is security for the person/s taking the equity stake.
If not the government can help you
For those that can’t put up sizeable deposits there is the option of applying to a government support scheme in Scotland. The Low-cost Initiative for First Time Buyers or LIFT scheme will see the government take a stake in your property, normally 20-40%, giving first time buyers that much needed help to buy their first home. When the home is sold the government will receive their stake back at the sale price. Check the “social landlords” that are currently running the scheme to see if your area is eligible. Currently available in major cities including Edinburgh, Aberdeen those wanted a mortgage Falkirk and even the highlands.
Many mortgage brokers have included the above schemes to their library of lenders; if you go with a whole market broker you can get them to search the whole market and can check if they offer the above schemes. If you are looking for a Scottish mortgage then there are mortgage brokers based in Scotland that can provide the above services and often for free.
Chris Borthwick
http://www.articlesbase.com/mortgage-articles/mortgage-options-to-help-you-get-on-the-property-ladder-710907.html
From Home you Can Market your Vacation Rental Property
June 23, 2010
I worked for other people for the first fifteen years before I realized we would never get rich like that. So I set up on my own. Then for the next fifteen years I was traveling the world, setting up companies, getting sales, handling finance with hardly any time to spare for the family. Had a wonderful time. I just wish I’d started earlier.
So I’d like to help others to start their business and here is a simple way to go about it.
We do it ourselves with a property of our own, and enjoy it, even though it is pin money for us now.
I run a free blog site to help vacation rental owners to market their property properly using the web.
Here is how to start your development.
Find an area where there is little property development, but a high tourist trade. We found the Highlands of Scotland. There is very little development there – difficult to get domestic water supply to this region, as rainy as it is.
Compare the high season rental income between different areas, and compare property prices between popular regions. You are looking for a reasonable income against a low property price.
We started it by looking through several tourist areas and comparing the vacation rental income. Strangely, the vacation letting rates were close to each other but the cost of buying properties was very different.
Then we had to think through the problem of managing a property at long range. You need people to do the cleaning for you, and you will definitely need builders and local suppliers. You’ll have problems if you cannot visit the site frequently. Best to try for your first property somewhere near where you live, within driving distance
Research the area
It is important to search for some national statistics about the tourism business, to find out how long is the season, and whether there is off-season business.
You need to research the area, talk to agents, lawyers, but remember they are selling you something – themselves. Better by far to talk to other owners and neighbors. You’ll get far more valuable information from them.
Market through the internet
Now to market your property through the internet.
First of all, behave like a customer and dial in a few search terms to find holiday properties like yours. See what turn up on the first pages.
The search terms that you and your customers use normally are vital to your web site design. The website url, title, description, and opening text on the index page, page one should all concentrate on your critical keywords.
Your area is a problem. If you choose “vacation property USA” your site will be on Google page 3,000 and no one will find you. It is a bit better if you say “vacation rental Florida” but the same problem applies. Better to go for “vacation property, Saratoga” You could get up to page 4 or 5 there. You can find and evaluate keywords if you go to “Google suggest keywords” and use the facility there. Also look at the Google advice to webmasters on setting up your site and making it suitable for Google. Their notes are easy to understand.
Vacation rental directories
There are vacation property directories. A few are free, and might be worthwhile as inbound links but they will not produce much in the way of bookings and referrals. They make their money in other ways, by selling advertising, or books or tours. Your mention in their directory is just a traffic builder for them, and a service for their site visitors.
Agencies
Some of them are agencies. These will take you on their books and do the marketing job for you but at a steep cost – 30% or more, commission, most of them. Take care with these, though you should experiment with one in the first year until you gain experience and can dump them later as your site builds up traffic. Some of them want to take all your high season period and market it, but give you no guarantee to get business. Bad news, this lot. You might find an agency which will let you market the high season yourself and just take the shoulder season.
You’ll just be another name on their books though, and they’ll put no real effort into selling your property. These agencies will not put a link to you on their own site – they prevent people from finding you direct.
But some vacation directories will do a good job for you if you pay them $100 or more a year for a good position. They’ll put on a photo of your site, sometimes more than one, and a description, a link to your web site and a straight through to you e-mail link.
Ring round some vacation rental property owners in other areas, non competitive with your area, and ask them on the phone for their experience of internet marketing. Some of them will be reluctant to talk, but at least a third will tell you how they do it and what works for them.
Finally you can select several good ones, which have been recommended to you and which seem to get high on many pages and use them.
Good luck. Within a few years you may have a big vacation rental company.
John
John Winkler
http://www.articlesbase.com/home-business-articles/from-home-you-can-market-your-vacation-rental-property-128175.html
Mortgages for the Self Employed and Buying a Property at Auction
June 23, 2010
Traditionally, mortgage providers have been reluctant to lend to self employed people, preferring the lower risk of those on steady, provable incomes. This left many self-employed people with very little choice in lenders despite often having very high incomes. However, with increased competition in the last few years many lenders have introduced ‘self certification’ mortgages.
Self certs (as they are known in the trade) allow the applicant to state their income without providing any further proof of income. Sometimes all that is needed is a reference from a certified accountant of affordability. These mortgages are particularly suitable for people whose income streams are many and variable.
How much can I borrow and at what rate
What should I do now?
How much can I borrow and at what rate?
Interest rates are usually a little higher for non status or self cert mortgages to reflect the higher risk involved for the lender. Statistics show small businesses have a higher chance of going bust than larger, more established ones so the interest rate will reflect this
Whilst many status mortgages now can go to up to 95% without a higher lending charge, most self cert mortgages require a substantial deposit. Many of the better self cert lenders will not lend above 85% of the purchase price. If this level of loan to value is exceeded, many will decline, apply a much higher interest rate or charge a higher lending charge.
Mortgage providers lend either according to income multiples or increasingly to affordability calculators. Traditionally, three times your income (less regular commitments) would dictate how much you could borrow. Now it can be as much as seven or eight. The important thing to ask yourself is ‘is it affordable’? It is important to factor in how much your ancillary costs will be: e.g. the cost of running the house, associated insurances.
What should I do now?
Get in touch with a mortgage broker. You have to be very financially savvy to be able to satisfy what many lenders will need to prove your status. Furthermore, some lenders only deal with intermediaries, so your broker will be able to fix you up with a great many more mortgage providers than you could via your own research.
Consider a flexible mortgage. These allow you to make overpayments and underpayments- even take ‘payment holidays’. These features can be vital for self employed people who experience peaks and troughs in their monthly income. Some products also offer a drawdown facility where your mortgage functions like an overdraft: you can draw money out from the equity in your home up to an agreed limit. Lenders who provide flexible mortgages include Nationwide, Bank of Scotland and Halifax.
With the advent of lifestyle TV shows like the BBC’s Under the Hammer, buying at auction is becoming increasingly popular. Bargains are possible, with up to 40% off the open market value, and the process is extremely quick.
The most obvious properties that spring to mind are ones which lenders have repossessed. However, perfectly ordinary property and redevelopments are often seen at auction too!
Unfortunately, these auctions are not always well publicized. The best place to look for property for sale by auction is on the Internet, or via local and national newspapers. Remember the process takes roughly three to four weeks from advertisement to auction day, so it is important to get a catalog and investigate your property well in advance. Top Tips
Click below for a shortcut to each section:
Get a catalog
Do your research
Have a realistic budget
Make sure the finance is in place
Get a decision in principle
Retention
Know your maximum bid Get the catalog.
Contact the auction house several weeks in advance and ask for a catalog. Those in the trade get sent these automatically, so a little more work is required on the private buyer’s behalf.
Do your research!
This is vitally important as the tight timescales mean that it is tempting to cut corners or take the catalogs’ description as gospel. Cut corners at this stage could be expensive if structural defects are established after the sale. View the property, ask the neighbors about it, instruct a surveyor and establish good root of title.
Have a realistic budget.
There will be considerable legal and valuation fees to be paid without any guarantee of getting the property you desire. Whilst this will deter people who are not serious about bidding, it does mean that you must have the ability to match other bids. If you don’t win, a bill of over a thousand pounds is likely on a standard residential dwelling.
The finance will have to be in place by auction day.
This means that a deposit of 10% will have to be available on the day, with the remaining 90% payable within 28 days. The 10% will not be refunded if the sale doesn’t go through! This means that there’s no backing out without a significant financial penalty. Be sure that you want the property.
Get a decision in principle
If you need a mortgage or bridging finance, make sure you have a decision in principal from a mortgage lender. The best way would be to use a broker: ask them whether the illustration they are showing you is a Decision in Principle (DIP). A DIP means that the lender has agreed to lend a certain sum based on certain assumptions and details submitted to them.
Retention
If the property needs substantial repair, the mortgage lender may place a retention on the mortgage. This means that they may keep a portion of the funds until changes are made to the property. The auction winner must make adequate provision for these extra costs.
Know your maximum bid
Know your maximum bid and don’t get carried away. It’s easy to get carried away in the atmosphere of an auction room. Ever bought something you regretted on Ebay? Imagine that mistake magnified by thousands!
James Berry
http://www.articlesbase.com/finance-articles/mortgages-for-the-self-employed-and-buying-a-property-at-auction-100784.html
UK Hotel Commercial Property Market Experiences Further Decline
June 23, 2010
Falling hotel occupancy levels and room rates mean that there is less income for hotel investors, many of which have financed these commercial properties through high levels of borrowed debt. As a reaction to the adverse market conditions many hotels are now offering rooms at highly discounted rates. The three and four star hotel market has been hit especially hard and they have had to heavily discount their room rates in order to remain competitive. Holiday Inn / Holiday Express have implemented a credit crunch action plan which includes lowering their rates to around £21 pp in the UK, increased promotions and marketing to their customers and target audience, and asking suppliers for either better terms or lower costs so that they can continue to remain competitive within the hotel commercial property industry.
Budget hotels are not completely recession proof either and companies such as Travelodge have experienced a fall in business stays and leisure at the weekends. However, despite these slight declines they are taking full advantage of the credit crunch’s effects on the commercial property market and have purchased several great value real estate deals that before the recession would have been unavailable to them.
Budget hotel chain Jury’s Inn are also taking full advantage of the increasing demand for budget hotel accommodation that has been created by the recession and are spending £90 million on opening four new hotels across England and Scotland. They are developing hotels in Portsmouth, Bradford, Newcastle and Glasgow as part of their plan for accelerated growth. They are hoping to take full advantage of the trend for business users and British tourists to stay in cheaper hotels and have also secured several lucrative commercial property deals that before the credit crunch simply were not feasible or available to them.
Despite the overall economic downward trend in the UK there have been nationwide sales increases for budget and cut cost retailers and service providers, whether they provide food, clothing or leisure breaks. The UK consumer products and commercial market is becoming increasingly buyer led. Consumers are finding that there are great offers available to them either through heavy discounting of high end brands or through taking full advantage of budget products and services that are also offering promotional pricing and offer based marketing to their customers. Travelodge and Jury’s Inn are taking full advantage of this trend and are setting themselves up for long-term growth with new commercial properties and increased customers.
Despite the overall decline in the UK hotel market cash rich buyers will find that over the next couple of years there will be some great hotel commercial property investment opportunities available to them.
Matt Grimes PC
http://www.articlesbase.com/real-estate-articles/uk-hotel-commercial-property-market-experiences-further-decline-740575.html