I would like to take this opportunity to wish everyone a Merry Christmas and a Happy and Prosperous New Year. A list not too long, but I would like to thank all our customers, suppliers, staff and anyone we have come into contact with over the year and infact the past 150ish years of doing business in Liverpool as Roberts & Edwards, or JH Worrall and since 1955 Roberts, Edwards & Worrall. We are always happy to assist and answer any of your property related questions. Our advice as always is FREE!
Enjoy your Christmas holidays and we look forward to working with you in 2012!
Michael Siely
Managing Director
Roberts, Edwards & Worrall
Friday 23 December 2011
Monday 5 December 2011
Public refuses to believe that house prices have gone down
Consumers have given a decisive clue as to why asking prices have been slow to register any decline – most simply do not believe that house prices will go down.
Indeed, more than one in five confidently expect them to go up.
Whilst Rightmove has finally reported a dip (of 3.1%) in asking prices within the last month, asking prices have still held up remarkably well. They are 1.2% up on a year ago, and at £232,144 are some £70,000 ahead of ‘actual’ prices reported by the Land Registry.
But while agents have been in the firing line for alleged over-pricing, a new survey –ironically by Rightmove, which frequently tears its hair out over the issue – goes some way towards solving the mystery of the reality gap.
The massive poll, of over 26,300 consumers, shows that two-thirds (63%) do not believe house prices will be lower in a year’s time than they are now. They expect them to remain the same or, according to 22%, to be higher.
Less than one-third (three in ten) expect lower prices – unchanged from a year ago.
Despite ongoing economic gloom, the optimism among consumers is almost universal. While Londoners are the most optimistic, with 29% of consumers expecting higher house prices in 12 months’ time, in Wales – the most pessimistic regions – only 35% are predicting price drops over the coming year.
A baffled-sounding Miles Shipside, director of Rightmove, said: “The public’s belief in the value of bricks and mortar seems to defy the deteriorating economic situation. This is a clear message that the majority of consumers view the property asset class to be as ‘safe as houses’ in these times of economic uncertainty.”
He added: “It should be remembered that in spite of the overall confidence expressed in this survey for property prices, transactions volumes are still well down on historic norms. Economic stability in the UK and Eurozone will be needed before many are willing or able to re-engage with the property market.”
The survey did, however, reveal some extremely localised opinions.
For example, in the North-West 26% of respondents in Preston expect prices to be higher in 12 months’ time, compared with just 14% in Lancaster only 20 miles away.
Shipside said: “Local variations highlight how patchy confidence can be, depending on an area’s housing mix and wealth demographics.
“The wealthier middle-to-upper price brackets may be feeling fairly blast-proof from any further economic eruptions, and see a less turbulent outlook.
“Meanwhile, some of the more cash-strapped terrace and semi dwellers may feel far more exposed to the negative pressures of reduced mortgage availability and job uncertainty.”
Indeed, more than one in five confidently expect them to go up.
Whilst Rightmove has finally reported a dip (of 3.1%) in asking prices within the last month, asking prices have still held up remarkably well. They are 1.2% up on a year ago, and at £232,144 are some £70,000 ahead of ‘actual’ prices reported by the Land Registry.
But while agents have been in the firing line for alleged over-pricing, a new survey –ironically by Rightmove, which frequently tears its hair out over the issue – goes some way towards solving the mystery of the reality gap.
The massive poll, of over 26,300 consumers, shows that two-thirds (63%) do not believe house prices will be lower in a year’s time than they are now. They expect them to remain the same or, according to 22%, to be higher.
Less than one-third (three in ten) expect lower prices – unchanged from a year ago.
Despite ongoing economic gloom, the optimism among consumers is almost universal. While Londoners are the most optimistic, with 29% of consumers expecting higher house prices in 12 months’ time, in Wales – the most pessimistic regions – only 35% are predicting price drops over the coming year.
A baffled-sounding Miles Shipside, director of Rightmove, said: “The public’s belief in the value of bricks and mortar seems to defy the deteriorating economic situation. This is a clear message that the majority of consumers view the property asset class to be as ‘safe as houses’ in these times of economic uncertainty.”
He added: “It should be remembered that in spite of the overall confidence expressed in this survey for property prices, transactions volumes are still well down on historic norms. Economic stability in the UK and Eurozone will be needed before many are willing or able to re-engage with the property market.”
The survey did, however, reveal some extremely localised opinions.
For example, in the North-West 26% of respondents in Preston expect prices to be higher in 12 months’ time, compared with just 14% in Lancaster only 20 miles away.
Shipside said: “Local variations highlight how patchy confidence can be, depending on an area’s housing mix and wealth demographics.
“The wealthier middle-to-upper price brackets may be feeling fairly blast-proof from any further economic eruptions, and see a less turbulent outlook.
“Meanwhile, some of the more cash-strapped terrace and semi dwellers may feel far more exposed to the negative pressures of reduced mortgage availability and job uncertainty.”
Friday 25 November 2011
Bellefield launch by Bellway Homes
I was invited to the launch of the new Bellefield development by Bellway homes last night. Bellefield, the ex training Facility for Everton FC for over 50 years, has been bought by Bellway homes, the national housebuilder and will be developed into 74,four and five bedroom detached executive properties. The launch took place in the amazing Sakura Japanese restaurant on Exchange Flags in Liverpool. It was great to see some Everton FC legends at the launch as well as the Bellway Execs and sales team. Loads of photos were taken so I'll get some and post here soon. In the meantime check out this great new development at Bellefield.
Friday 28 October 2011
Support your local businesses
Please support your local independent family run businesses (like ours here at Roberts, Edwards & Worrall).
A new venture Laser Skin Clinic has recently opened its doors in Woolton and in West Derby. Go and be treated like a VIP. Please show your support by checking out their website at thelaserskinclinic.co.uk or go to their facebook page facebook.com/thelaserskinclinic and you could win over £500 worth of Skin treatments!
A new venture Laser Skin Clinic has recently opened its doors in Woolton and in West Derby. Go and be treated like a VIP. Please show your support by checking out their website at thelaserskinclinic.co.uk or go to their facebook page facebook.com/thelaserskinclinic and you could win over £500 worth of Skin treatments!
Roberts, Edwards & Worrall pleased to support Imagine Appeal
Michael and Ashley from Roberts, Edwards & Worrall attended The Clothes Throw last night, a stylish way to support the Imagine Appeal at Alder Hay Childrens Hospital. The event, which was an auction of celebrity clothes modelled on the cat walk at Liverpool Ones fabulous Palm Sugar lounge. Thousands of pounds were raised on the night and loads more cash is still being donated throughout this week as part of the Clothes Throw event. Check out http://www.theclothesthrow.com/ for all the details.
Thursday 13 October 2011
BBC report - Three Reasons for rising rents
Three reasons for rising rents
The rental market has created some tough conditions for tenants
People are cutting spending on food and heating in order to finance their rent payments, according to the housing charity Shelter.
In August, the cost of renting a home rose at its fastest rate for a year, and tenants increasingly missed payments, LSL Property Services found.So, as housing charities warn that rents are becoming unaffordable for some, how did the market end up like this?
Are the roots of the issue found in long-term housing strategy, or is it all to do with the state of the UK economy?
Here, those involved in the market explain what they consider to be the key reasons behind rising rent levels.
Not enough homes have been built
Shelter say that private rents are unaffordable in 55% of English boroughs, having already risen at one-and-a-half times the rate of incomes in the 10 years to 2007.The "primary reason" for this, it says, is the failure to build enough homes in recent years, and in recent decades.
David Newnes, of LSL, who owns letting agents Your Move and Reeds Rains, says the supply of rental properties has not increased enough to keep pace with the rising number of tenants.
The lack of newly built properties also comes as the UK population is growing.
New house building is at a post-war low, with just 134,000 new homes built in the UK in 2010, government figures show.
That was the lowest number in any year since 1949, and just 31% of the peak number for building, which was 426,000 in 1968.
Since 1990, the building of "social" housing by housing associations has been lower than new local authority building seen in the 1960s, 1970s or the early 1980s.
Housing Minister Grant Shapps says that councils will now be rewarded for freeing up disused public land to build on.
Renting is a lifestyle choice
The Shelter research suggests that rent levels are more affordable in cities such as Manchester and Birmingham, than in some rural areas.But estate agents say that demand is higher, even in the cities, because people like the flexibility of renting, rather than owning a home.
"Historically, we have been a nation of home owners, but we have started to see a shift in the way people live, a shift which could well gather pace in the future," says Carolyn Mellor, of Manchester-based estate agents Homes4u.
"Now more people are making a lifestyle choice not to commit to the financial burden of a mortgage, and to benefit from the flexibility of renting in the long term rather than the short term.
"Inevitably, this means that less old stock is coming back onto the market, and the supply-demand balance is being disrupted."
Simon Ward, director of the Dorset-based estate agents Mr Green, says: "With many young people still reluctant to take on the responsibility of a mortgage, there is a temptation to talk of a Generation Rent - suffering ever increasing rent, but unwilling or unable to take out a mortgage."
A recent report for the Royal Institution of Chartered Surveyors suggested that home ownership in England has been falling since 2003 and has also fallen in the US, Australia, Austria, Finland and the Irish Republic, among others.
If current trends were projected forward, then by 2025 the percentage of home ownership could be below 60% - lower than most other European countries.
First-time buyers cannot get on the property ladder
The banking crisis had a significant impact on those trying to buy their first homes. Banks had to pull back their lending, and be more careful who they were going to give mortgages to.As a result, many first-time buyers realised they needed to save a lot more than they expected for a deposit. In the meantime they needed somewhere to live - and that often came through the private rental sector.
"With more people seeking to rent, rents will inevitably rise. It is pure supply and demand," says Suzanne Bradshaw, of Derby-based independent mortgage broker Mortgage Arena.
"As long as mortgage criteria remain as they are at present, namely stringent, rents will remain very high."
Matt Hutchinson, director of flat and house-share website Spareroom.co.uk, says: "People who would normally be looking to buy their first property after renting for a few years are either unable to because they cannot secure a mortgage, or are reluctant to because of all the uncertainty surrounding interest rates and property prices so are renting for longer as a result.
"The knock-on effect is that existing rental properties are off the market longer, and with fewer new rental properties becoming available, the supply-demand balance is completely off kilter."
This has also provided an opportunity for investors, if they can afford it, says Mr Newnes, at LSL.
"With high demand and the expectation of high rental income, there are a growing number of investors turning to the buy-to-let market as an alternative investment opportunity," he says.
"In response lenders are now offering a wider range of mortgages, at more affordable prices, which is driving investors to purchase properties which would have normally been bought by home buyers."
Wednesday 12 October 2011
Tuesday 4 October 2011
Marketing Madness
What is going on! Rightmove says the average marketing price of properties on their property portal is £233,139 (Sept 2011). The Land Registry tell us that the average selling price is £162,347 (Aug 2011). A MASSIVE difference of over £70,000! If your average house was on the market for £230,000 would you accept offers of around £160,000?? Who is causing this gap? Are sellers being greedy? Are they inflating the price to test the market? Are they showing off or being cheeky and really not expecting to sell? Is it the Estate Agents overvaluing to get the business. Its true to say that sellers are savvy and will on most occaisions invite multiple agents to offer them a true market appraisal! Well Rightmove and many other property spokespeople are saying prices are too high. This index proves it!
As an example - we at Roberts, Edwards & Worrall have just agreed a sale on a nice semi detached property marketed at around £170,000, The sale was negotiated and agreed at £165,000. A good deal for both buyer and seller. Another, very similar property in the same road has gone on the market with another local agent. This agent, known for their sometimes under hand tactics, are marketing theirs at £185,000. Yes, definately pushing the price up trying to get a better sale (and commission no doubt)! Thats not too bad, and the chances are that, if they want to sell, the sellers will need to bring the price down. Well, today, just further up the road, a smaller house with a smaller garden, with an extra room has just been put on the market for £280,000!
Its no wonder so many overpriced houses are on the market and why there is such a gap between the marketing value and the selling price.
To all sellers- get your valuer to explain how he/she has valued your property and get them to show you proof! Get them to talk about what sales are happening in your locality and to show you some comparible evidence. Get your Agent to market your property at a realistic price, else you may never sell!
As an example - we at Roberts, Edwards & Worrall have just agreed a sale on a nice semi detached property marketed at around £170,000, The sale was negotiated and agreed at £165,000. A good deal for both buyer and seller. Another, very similar property in the same road has gone on the market with another local agent. This agent, known for their sometimes under hand tactics, are marketing theirs at £185,000. Yes, definately pushing the price up trying to get a better sale (and commission no doubt)! Thats not too bad, and the chances are that, if they want to sell, the sellers will need to bring the price down. Well, today, just further up the road, a smaller house with a smaller garden, with an extra room has just been put on the market for £280,000!
Its no wonder so many overpriced houses are on the market and why there is such a gap between the marketing value and the selling price.
To all sellers- get your valuer to explain how he/she has valued your property and get them to show you proof! Get them to talk about what sales are happening in your locality and to show you some comparible evidence. Get your Agent to market your property at a realistic price, else you may never sell!
Thursday 29 September 2011
#Property In The News - House prices see decline of 0.3%
House prices saw a 0.3% decline in August, leaving the sale price of the typical home at just over £162,000, the Land Registry has said.
House prices saw a 0.3% decline in August, leaving the sale price of the typical home at just over £162,000, the Land Registry has said.
The figures, which cover transactions in England and Wales, represent a reversal on the 1.3% increase in values between June and July.
The West Midlands, Yorkshire and the Humber, the North East, the South East, the North West and the South West all experienced falls in August, while Wales was hardest hit with a 1.7% drop.
House prices in Wales are now down by 5.5% on a year ago, with the average home valued at £117,534.
The latest House Price Index across England and Wales showed an annual decrease of 2.6%, taking the average property value down to £162,347.
Prices in the East, the East Midlands and London all rose between July and August. The East saw the biggest monthly increase, with average prices at £175,079 in August thanks to a jump of 0.8%.
The only region in England and Wales to see a rise over the last 12 months was London, where homes have gone up by 2.1%. The measure of house prices is seen as being particularly volatile at present because transactions are below pre-recession levels.
The latest figures show that over the year to June, the number of completed house sales in England and Wales went down by 13% to 54,776. Fewer luxury homes are being snapped up, with the number of properties sold in England and Wales for more than £1 million down by 28% over the year to June 2011, to 465.
Lucy Pendleton, of James Pendleton estate agents, said the figures highlighted the gulf between London and other areas.
She added: "The gulf between London and the rest of the country is becoming more acute, with the average home in the capital now costing 2.15 times as much as the average in England and Wales. In other areas of the UK, most notably the North East, prices remain under real pressure."
UK house prices treading water, says Nationwide
House prices continued to "tread water" in September - rising by 0.1% compared with the previous month, the Nationwide said.
This left the average price of a home 0.3% lower than a year earlier, at £166,256, the building society said.Prices for the three months to September compared with the previous quarter were unchanged.
Market turmoil as a result of the eurozone debt crisis had hit confidence among buyers, Nationwide said.
"Sentiment towards major purchases is depressed, as a result of weak labour market conditions and ongoing pressure on household budgets from above-target inflation," said Robert Gardner, Nationwide's chief economist.
'Sluggish demand'
He predicted that property prices would remain fairly stable over the rest of 2011, although the outlook for the global economy had "darkened".
The struggle for people to find new jobs has resulted in "sluggish demand" from potential buyers.
That, together with a gradual rise in the number of properties on the market, had led to the current market conditions.
Some of these issues are most acute in the north-east of England.
Data from the Land Registry on Wednesday showed that prices in the region had fallen by 7.8% in the year to August.
In Hartlepool, prices had dropped by 15.7% over the same period, leaving the average home worth £82,561.
David Sharpe, a sales negotiator at Dowen estate agents in the port town, said that times were difficult for sellers, especially if they were unwilling to drop their asking prices.
"We are telling people to be realistic. If the price is right then it will sell," he said.
Negative equity
Many of the properties coming onto the market in Hartlepool were the result of repossessions, he said. These included repossessed properties from landlords who had overstretched themselves.
This meant there were some two-bedroom homes in need of some work that were on the market for £20,000.
However, at the other end of the market, Dowen had just sold an eight-bedroom period property at auction for £345,000.
Many properties were selling if prices were lowered, Mr Sharpe said, including one "extreme case" which recently sold at auction for £30,000 when it had originally been on the market for £80,000.
Dropping prices was not necessarily an option for some sellers though.
"Those who bought at the peak of the market may well have borrowed more than the property is now worth," he said.
Tuesday 27 September 2011
Changes to EPCs are delayed yet again
Important changes to rules on EPCs affecting agents have been postponed until next April.
They could have been implemented as early as next week, but are now set to kick in on April 6, 2012.
There have been few concessions in the much-delayed changes, but further guidance will be issued before next spring.
The only real concession, as already revealed on LAT, is that the requirement for agents, both sales and lettings, to attach an EPC report to all particulars has been toned down so that only the first page of the EPC will now have to be attached.
However, this is unlikely to please critics who point out that it will still mean having to produce and print another sheet of paper, and it will be almost immaterial as to whether it is printed on one or both sides.
Otherwise, agents will have to prove they have ordered an EPC before marketing, and will have seven days to produce an EPC – or a further 21 if they haven’t managed to do so, despite trying.
The changes in regulations will also mean that Trading Standards officers will have new powers to get agents to prove that they have commissioned an EPC when marketing a property without one. A number of ‘consequential changes’ to the role of Trading Standards, allowing them to enforce their new duties, will be made.
Where the property’s address has been omitted from the particulars, it will not be necessary to put the address on the EPC.
They could have been implemented as early as next week, but are now set to kick in on April 6, 2012.
There have been few concessions in the much-delayed changes, but further guidance will be issued before next spring.
The only real concession, as already revealed on LAT, is that the requirement for agents, both sales and lettings, to attach an EPC report to all particulars has been toned down so that only the first page of the EPC will now have to be attached.
However, this is unlikely to please critics who point out that it will still mean having to produce and print another sheet of paper, and it will be almost immaterial as to whether it is printed on one or both sides.
Otherwise, agents will have to prove they have ordered an EPC before marketing, and will have seven days to produce an EPC – or a further 21 if they haven’t managed to do so, despite trying.
The changes in regulations will also mean that Trading Standards officers will have new powers to get agents to prove that they have commissioned an EPC when marketing a property without one. A number of ‘consequential changes’ to the role of Trading Standards, allowing them to enforce their new duties, will be made.
Where the property’s address has been omitted from the particulars, it will not be necessary to put the address on the EPC.
Monday 26 September 2011
Continued increase in BTL borrowing
The National Landlords Association (NLA) has reported a continued increase in the popularity of buy to let mortgage products.
A survey by NLA Mortgages found that the number of schemes provided during the second quarter of 2011 grew by 25% when compared to the first three months of the year.
Average loan sizes also increased by £2166 to £138,525.80, representing a growth of 6.4% since January.
This growth is mainly due to the greater number of lenders offering higher loan-to-value (LTV) mortgages and the availability of finance for Houses of Multiple Occupation (HMOs), which tend to be higher value properties.
Over 50% of buy-to-let offers processed by NLA Mortgages were for loans over 70% LTV – resulting in an average LTV of 67%.
Low interest rates and future predictions were reflected by the increased popularity of variable mortgage products, comprising 59% of all mortgage applications.
David Salusbury, NLA Chairman, commented:
“These findings by NLA Mortgages are very positive. Landlords provide a valuable source of housing at a time when tenants are finding it increasingly difficult to find properties to rent. Any mortgage products that encourage greater investment in the private-rented sector (PRS) should be encouraged.”
Paul Rockett, managing director of NLA Mortgages, commented:
“Wider choice and better products for landlords mean that the overall buy-to-let market is improving. Although demand for finance still outstrips supply, the level of buy-to-let lending is gradually increasing giving property investors a reason to be optimistic.”
A survey by NLA Mortgages found that the number of schemes provided during the second quarter of 2011 grew by 25% when compared to the first three months of the year.
Average loan sizes also increased by £2166 to £138,525.80, representing a growth of 6.4% since January.
This growth is mainly due to the greater number of lenders offering higher loan-to-value (LTV) mortgages and the availability of finance for Houses of Multiple Occupation (HMOs), which tend to be higher value properties.
Over 50% of buy-to-let offers processed by NLA Mortgages were for loans over 70% LTV – resulting in an average LTV of 67%.
Low interest rates and future predictions were reflected by the increased popularity of variable mortgage products, comprising 59% of all mortgage applications.
David Salusbury, NLA Chairman, commented:
“These findings by NLA Mortgages are very positive. Landlords provide a valuable source of housing at a time when tenants are finding it increasingly difficult to find properties to rent. Any mortgage products that encourage greater investment in the private-rented sector (PRS) should be encouraged.”
Paul Rockett, managing director of NLA Mortgages, commented:
“Wider choice and better products for landlords mean that the overall buy-to-let market is improving. Although demand for finance still outstrips supply, the level of buy-to-let lending is gradually increasing giving property investors a reason to be optimistic.”
Halifax says Go North FTB if you want to buy a house
While the average age of a first-time buyer in the UK is 29, there is almost a decade’s difference between some areas of the country, according to new research from Halifax.
The youngest first-time buyers are in Selby in North Yorkshire where the average age is 25: nine years younger than one of the areas with the oldest first-time buyers, Harrow in London (34).
Other areas where the average age of a first-time buyer is significantly below the national average are Redcar and Cleveland in the North East, Barrow-in-Furness in Cumbria, Bolsover in Derbyshire and South Ribble in Lancashire. The average age in each of these areas is only 26.
At a regional level, rather than at local district level, the differences are less stark. The youngest first-time buyers are in the North East, North West, Yorkshire and the Humber, Wales and Scotland all with an average age of 28; the oldest are in London (32) and the South East (31).
The youngest first-time buyers in southern England are in Swale in Kent and South Gloucestershire with an average age of 27 in both areas. Several areas in Wales also have an average age of 27; Bridgend, Rhonda, Caerphilly and Port Talbot. The lowest average age of first-time buyers for any area in Scotland – Midlothian - is also 27.
Average house prices tend to be relatively low in areas with the youngest first-time buyers. For example, over half of the ten areas with the youngest first time buyers have an average house price 25% to 40% below the national average. South Gloucestershire is the only area in the top ten where the average house price paid by first-time buyers is above the national average of £135,100.
Typically, the areas with the youngest first-time buyers are also areas where housing affordability conditions are the most favourable. Seven of the ten local areas with the youngest buyers have an average house price to average earnings ratio for first time buyers below 4.0. With an average house price of £114,113, Selby has a price to average earnings1 ratio of 2.9. In Barrow-in-Furness and Bolsover the ratio is 3.0.
Unsurprisingly, the areas with the oldest first time buyers are in the south east of England and are mostly in London. Harrow, Barnet, Ealing, Kingston upon Thames, and Three Rivers in Essex all have an average age of 34, the highest in the country. All these areas have an average house price paid by first-time buyers that is in excess of £224,000 (i.e. at least 66% higher than the national average) and an average price to average earnings ratio above 4.0. The youngest buyers in the capital are in Hackney with an average age of 30.
The average age of a first time buyer has remained remarkably stable over time. In 1983, when Halifax records began, it was 28, just a year younger than today. An increasing number of FTBs, however, now require financial assistance to raise funds for a deposit. The Council of Mortgage Lenders estimate that 84% of FTBs under 30 had help with their deposit in 2010 compared with only 38% in 2005. The typical age of those FTBs who did not receive assistance has increased significantly from 28 to 31 over the same period.
Nitesh Patel, housing economist at Halifax, commented:
“There are several areas in the country where the average age of first-time buyers is 3 to 4 years below the national average of 29. Most of these areas are in northern England where house prices are typically lower both in absolute terms and in relation to earnings, helping to limit the size of the deposit needed. In contrast, in London and many areas of the South East the time needed to save up for a deposit can be lengthy, resulting in first-time buyers who are typically several years older than in the rest of the country.”
The youngest first-time buyers are in Selby in North Yorkshire where the average age is 25: nine years younger than one of the areas with the oldest first-time buyers, Harrow in London (34).
Other areas where the average age of a first-time buyer is significantly below the national average are Redcar and Cleveland in the North East, Barrow-in-Furness in Cumbria, Bolsover in Derbyshire and South Ribble in Lancashire. The average age in each of these areas is only 26.
At a regional level, rather than at local district level, the differences are less stark. The youngest first-time buyers are in the North East, North West, Yorkshire and the Humber, Wales and Scotland all with an average age of 28; the oldest are in London (32) and the South East (31).
The youngest first-time buyers in southern England are in Swale in Kent and South Gloucestershire with an average age of 27 in both areas. Several areas in Wales also have an average age of 27; Bridgend, Rhonda, Caerphilly and Port Talbot. The lowest average age of first-time buyers for any area in Scotland – Midlothian - is also 27.
Average house prices tend to be relatively low in areas with the youngest first-time buyers. For example, over half of the ten areas with the youngest first time buyers have an average house price 25% to 40% below the national average. South Gloucestershire is the only area in the top ten where the average house price paid by first-time buyers is above the national average of £135,100.
Typically, the areas with the youngest first-time buyers are also areas where housing affordability conditions are the most favourable. Seven of the ten local areas with the youngest buyers have an average house price to average earnings ratio for first time buyers below 4.0. With an average house price of £114,113, Selby has a price to average earnings1 ratio of 2.9. In Barrow-in-Furness and Bolsover the ratio is 3.0.
Unsurprisingly, the areas with the oldest first time buyers are in the south east of England and are mostly in London. Harrow, Barnet, Ealing, Kingston upon Thames, and Three Rivers in Essex all have an average age of 34, the highest in the country. All these areas have an average house price paid by first-time buyers that is in excess of £224,000 (i.e. at least 66% higher than the national average) and an average price to average earnings ratio above 4.0. The youngest buyers in the capital are in Hackney with an average age of 30.
The average age of a first time buyer has remained remarkably stable over time. In 1983, when Halifax records began, it was 28, just a year younger than today. An increasing number of FTBs, however, now require financial assistance to raise funds for a deposit. The Council of Mortgage Lenders estimate that 84% of FTBs under 30 had help with their deposit in 2010 compared with only 38% in 2005. The typical age of those FTBs who did not receive assistance has increased significantly from 28 to 31 over the same period.
Nitesh Patel, housing economist at Halifax, commented:
“There are several areas in the country where the average age of first-time buyers is 3 to 4 years below the national average of 29. Most of these areas are in northern England where house prices are typically lower both in absolute terms and in relation to earnings, helping to limit the size of the deposit needed. In contrast, in London and many areas of the South East the time needed to save up for a deposit can be lengthy, resulting in first-time buyers who are typically several years older than in the rest of the country.”
Thursday 22 September 2011
Is your home at risk as winter approaches?
Unseasonable late-summer storms and the remains of Hurricane Katia, which caused an estimated £100million of property damage, are a timely reminder of the vulnerability of many homes to the weather.
High winds and heavy rain have brought flash floods and structural damage to parts of Britain ranging from the west coast of Scotland to Cornwall and, while most people are well protected by home insurance now might be a good time to review your cover and make sure your home is ready for winter and secured against intruders who favour the darker evenings.
Simon Douglas, director of AA Insurance points out: "While insurance will help to meet the cost of damage or loss following severe weather damage or a break-in, it can't compensate you for the inconvenience or lingering distaste that a thief has been rummaging through your possessions, for instance.
"Equally, while it's hard to prevent damage in a storm as severe as Katia, a few simple checks and repairs can mean the difference between a distressing claim for weather damage and surviving the winter in comfort."
Most people renew their home insurance regularly but cover can become out-of-date with the result that you are under-insured. That's especially so if you've added an extension or conservatory; or converted the integral garage or roof space into an extra room. If your three-bed home has suddenly become a four-bed one your insurance will need attention. Apart from the increased value of the property, there will be investment in furniture and carpets as well.
Will your home withstand the winter storms?
The last couple of winters have produced some very unwelcome weather with claims for snow, ice and water damage last winter alone exceeding £1.4 billion, according to the Association of British Insurers. So if the weather is OK this weekend, why not give your home a visual check-over? Here are some of the things to look out for along with some other tips to keep your belongings where they belong:
* Slipped tiles or slates that a strong wind could lift and result in tiles raining down and the rain or snow getting in;
* Branches from nearby trees that could break a window in a strong wind. Check also that soil or debris isn't bridging your damp proof course: if it is, clear it away or you could end up with damp coming through your walls;
* The state of your gutters and downpipes: after the autumn they can become blocked with leaf fall and debris. In winter this can freeze and cause overflow, in turn causing icicles that get heavier and heavier - eventually bringing your guttering down. If necessary, get a local handyman to help clear them out;
* Pipes and tanks in your roof space - are they adequately insulated? If you have up-to-date roof insulation your roof space can become very cold indeed. A burst pipe up there, especially if you are away, could leak hundreds of gallons of water through ceilings and carpets, ruining furniture and possibly ruining your electrics too. If you're going away for a while during winter, leave the heating on at a low level and if you can, ask a friend or neighbour to check your home from time to time. If you do have a burst pipe, turn the water off at the main stopcock: you might find this in the downstairs cloakroom, under the kitchen sink or perhaps under the stairs. There will be a stopcock in the street, too, beneath a little metal or plastic cover but you need a special key to turn this off (available from most plumbing or DIY stores). It might be worth checking which one is yours though, so you can point it out to a plumber if need be;
* Smoke alarm! You should have smoke alarms fitted upstairs and downstairs - they're not expensive and can be a life-saver. Check that they work (the alarms have a button for that purpose) and change the batteries if necessary. And while talking about fire safety, don't overload sockets with too many plugs; make sure you never leave your cooker unattended when it's on (the biggest cause of fire claims is cooker fires - chip oil for instance can spontaneously ignite if it's left on the ring too long and it produces a lot of nasty smoke). So if the phone rings, either ignore it or turn your cooker rings off while you take the call!
* All safely locked away? Your insurance policy is likely to specify that you have a decent lock to BS3621 standard for your main exit door and key lockable windows. Always make sure doors and windows are locked if you aren't there - even if you are just "popping out". Otherwise a burglary claim might not be valid. While talking about keys, don't leave your car keys on the hall table or hanging on a convenient rack just inside the door - the number of cars stolen by thieves taking the keys first is going up sharply, often simply by "fishing" for them through your letterbox using a long pole or even a fishing rod! If you do have valuable jewellery, think about fitting a small safe - they aren't too expensive and can be fitted relatively easily. After all, the real value in a necklace or ring can be in its emotional or sentimental attachment rather than what it's worth in monetary terms. Don't leave ladders or tools that could be used for a break-in lying around - make sure they are locked away in your shed or garage;
* What else? You could think about joining your local Neighbourhood Watch; fitting movement-sensitive exterior security lights; an intruder alarm or just putting interior lights on a timer if you are away, giving the impression someone is home. Good security measures can get you discounts on your home insurance!
* Emergency! If you are unlucky enough to suffer a water leak, electrical failure or blocked drain in your home, you need help pretty quickly. The AA is well known for rescuing motorists at the roadside, it can help householders too through AA Home Emergency Response.
* Finally, if you are in an area where there could be flooding and you are warned that this could happen imminently, move as much as you can of your property upstairs and make sure there are no electrical items left switched on. If the worst does happen, turn off your electricity supply and don't attempt to use wet electrical equipment - and call your insurer who will give you help and advice.
High winds and heavy rain have brought flash floods and structural damage to parts of Britain ranging from the west coast of Scotland to Cornwall and, while most people are well protected by home insurance now might be a good time to review your cover and make sure your home is ready for winter and secured against intruders who favour the darker evenings.
Simon Douglas, director of AA Insurance points out: "While insurance will help to meet the cost of damage or loss following severe weather damage or a break-in, it can't compensate you for the inconvenience or lingering distaste that a thief has been rummaging through your possessions, for instance.
"Equally, while it's hard to prevent damage in a storm as severe as Katia, a few simple checks and repairs can mean the difference between a distressing claim for weather damage and surviving the winter in comfort."
Most people renew their home insurance regularly but cover can become out-of-date with the result that you are under-insured. That's especially so if you've added an extension or conservatory; or converted the integral garage or roof space into an extra room. If your three-bed home has suddenly become a four-bed one your insurance will need attention. Apart from the increased value of the property, there will be investment in furniture and carpets as well.
Will your home withstand the winter storms?
The last couple of winters have produced some very unwelcome weather with claims for snow, ice and water damage last winter alone exceeding £1.4 billion, according to the Association of British Insurers. So if the weather is OK this weekend, why not give your home a visual check-over? Here are some of the things to look out for along with some other tips to keep your belongings where they belong:
* Slipped tiles or slates that a strong wind could lift and result in tiles raining down and the rain or snow getting in;
* Branches from nearby trees that could break a window in a strong wind. Check also that soil or debris isn't bridging your damp proof course: if it is, clear it away or you could end up with damp coming through your walls;
* The state of your gutters and downpipes: after the autumn they can become blocked with leaf fall and debris. In winter this can freeze and cause overflow, in turn causing icicles that get heavier and heavier - eventually bringing your guttering down. If necessary, get a local handyman to help clear them out;
* Pipes and tanks in your roof space - are they adequately insulated? If you have up-to-date roof insulation your roof space can become very cold indeed. A burst pipe up there, especially if you are away, could leak hundreds of gallons of water through ceilings and carpets, ruining furniture and possibly ruining your electrics too. If you're going away for a while during winter, leave the heating on at a low level and if you can, ask a friend or neighbour to check your home from time to time. If you do have a burst pipe, turn the water off at the main stopcock: you might find this in the downstairs cloakroom, under the kitchen sink or perhaps under the stairs. There will be a stopcock in the street, too, beneath a little metal or plastic cover but you need a special key to turn this off (available from most plumbing or DIY stores). It might be worth checking which one is yours though, so you can point it out to a plumber if need be;
* Smoke alarm! You should have smoke alarms fitted upstairs and downstairs - they're not expensive and can be a life-saver. Check that they work (the alarms have a button for that purpose) and change the batteries if necessary. And while talking about fire safety, don't overload sockets with too many plugs; make sure you never leave your cooker unattended when it's on (the biggest cause of fire claims is cooker fires - chip oil for instance can spontaneously ignite if it's left on the ring too long and it produces a lot of nasty smoke). So if the phone rings, either ignore it or turn your cooker rings off while you take the call!
* All safely locked away? Your insurance policy is likely to specify that you have a decent lock to BS3621 standard for your main exit door and key lockable windows. Always make sure doors and windows are locked if you aren't there - even if you are just "popping out". Otherwise a burglary claim might not be valid. While talking about keys, don't leave your car keys on the hall table or hanging on a convenient rack just inside the door - the number of cars stolen by thieves taking the keys first is going up sharply, often simply by "fishing" for them through your letterbox using a long pole or even a fishing rod! If you do have valuable jewellery, think about fitting a small safe - they aren't too expensive and can be fitted relatively easily. After all, the real value in a necklace or ring can be in its emotional or sentimental attachment rather than what it's worth in monetary terms. Don't leave ladders or tools that could be used for a break-in lying around - make sure they are locked away in your shed or garage;
* What else? You could think about joining your local Neighbourhood Watch; fitting movement-sensitive exterior security lights; an intruder alarm or just putting interior lights on a timer if you are away, giving the impression someone is home. Good security measures can get you discounts on your home insurance!
* Emergency! If you are unlucky enough to suffer a water leak, electrical failure or blocked drain in your home, you need help pretty quickly. The AA is well known for rescuing motorists at the roadside, it can help householders too through AA Home Emergency Response.
* Finally, if you are in an area where there could be flooding and you are warned that this could happen imminently, move as much as you can of your property upstairs and make sure there are no electrical items left switched on. If the worst does happen, turn off your electricity supply and don't attempt to use wet electrical equipment - and call your insurer who will give you help and advice.
Lenders back landlords in bid to get housing benefit payments changed
The Council of Mortgage Lenders is backing attempts by landlords to get the Government to change its mind over how housing benefit is paid.
In last week’s second reading of the Welfare Reform Bill in the House of Lords, the Government re-stated its commitment to proposals to pay housing benefit directly to tenants as part of wider plans for welfare reform.
The Government believes that encouraging benefit recipients to take greater responsibility for managing their own financial affairs is a crucial part of its welfare reform initiative.
Landlords have repeatedly called for tenants to be given the right to choose whether to receive their housing benefit, or to have it paid direct to landlords.
Currently, Local Housing Allowance is paid directly to housing benefit tenants in private rental accommodation. The Government plans to do the same with the housing benefit element of the new Universal Credit, but this time social housing landlords will also lose out on not having rent paid direct.
Landlords have repeatedly complained that LHA tenants often fail to pass on their rent, choosing to spend it on other things. Landlord bodies say that as a result, landlords are leaving the social housing sector.
The CML said this week that lenders need to have their own mortgages repaid by social housing landlords, and this was underpinned by the certainty of them getting rent payments.
A recent survey of 1,000 tenants carried out by the research consultancy Policis, working with the National Housing Federation (NHF), found that 93% were in favour of the government paying rent directly to their landlord.
Meanwhile, in 2009, Shelter said that, among those claimants who would choose payments to be made directly to their landlords, 95% were struggling to manage their finances.
Organisations representing tenants, landlords and housing managers in both the social and private rented sectors, as well as lenders, have now joined together to support an amendment to the Bill that would enable benefit recipients to choose whether to receive their housing payment themselves or have it paid directly to their landlord.
The CML said: “Making tenants responsible for their finances against their wishes imposes additional worries and concerns, and problems that may unnecessarily arise from an inability to cope. The Government needs to acknowledge this as it develops its proposals further.”
It added: “Lenders support tenants, consumer groups, landlords and managers in the social and private rented sectors in urging the government to let benefit recipients make rational decisions about what is in their own interests.”
In last week’s second reading of the Welfare Reform Bill in the House of Lords, the Government re-stated its commitment to proposals to pay housing benefit directly to tenants as part of wider plans for welfare reform.
The Government believes that encouraging benefit recipients to take greater responsibility for managing their own financial affairs is a crucial part of its welfare reform initiative.
Landlords have repeatedly called for tenants to be given the right to choose whether to receive their housing benefit, or to have it paid direct to landlords.
Currently, Local Housing Allowance is paid directly to housing benefit tenants in private rental accommodation. The Government plans to do the same with the housing benefit element of the new Universal Credit, but this time social housing landlords will also lose out on not having rent paid direct.
Landlords have repeatedly complained that LHA tenants often fail to pass on their rent, choosing to spend it on other things. Landlord bodies say that as a result, landlords are leaving the social housing sector.
The CML said this week that lenders need to have their own mortgages repaid by social housing landlords, and this was underpinned by the certainty of them getting rent payments.
A recent survey of 1,000 tenants carried out by the research consultancy Policis, working with the National Housing Federation (NHF), found that 93% were in favour of the government paying rent directly to their landlord.
Meanwhile, in 2009, Shelter said that, among those claimants who would choose payments to be made directly to their landlords, 95% were struggling to manage their finances.
Organisations representing tenants, landlords and housing managers in both the social and private rented sectors, as well as lenders, have now joined together to support an amendment to the Bill that would enable benefit recipients to choose whether to receive their housing payment themselves or have it paid directly to their landlord.
The CML said: “Making tenants responsible for their finances against their wishes imposes additional worries and concerns, and problems that may unnecessarily arise from an inability to cope. The Government needs to acknowledge this as it develops its proposals further.”
It added: “Lenders support tenants, consumer groups, landlords and managers in the social and private rented sectors in urging the government to let benefit recipients make rational decisions about what is in their own interests.”
Three-quarters of property investors set to buy more rental homes
Over three-quarters (76.8%) of UK property investors are considering buying additional investment properties over the coming year.
According to the perennially upbeat investment firm Assetz, a new survey of its investors shows confidence, with landlords highlighting strong rental demand as their main incentive for expanding their portfolios, also high and rising rental values, and the belief that prices are at or near the bottom.
Just 10% of investors believe now is a bad time to invest in UK buy-to-let, with the majority citing concerns about the economy as the main deterrent.
Investors are taking a long-term view of the property market, with 50% stating that long-term capital gain is their top priority, closely followed by rental income (44%). Just 6% stated that they were hoping to benefit from short-term capital gain.
Nearly half of those surveyed (45.9%) said they are currently achieving gross rental yields of more than 5.5%, with almost a fifth (19.4%) achieving 9% yields or higher.
Stuart Law, chief executive of Assetz, said: “Risk-averse lenders are making no secret of the fact that they would rather allocate the limited funds they do have to the lower-risk option of buy-to-let loans with deposits of typically 25–40%.
“The sector has not been as hard hit by the recession as originally feared, due to the fact that interest rates have remained extremely low. This has protected landlords by giving them cashflow, and future rate rises, which are likely to be small and gradual, will be covered largely by rental increases.”
Assetz says it has seen its sales of UK investment property more than double in the last 12 months and predicts it will expand at least 50% again over the next year
According to the perennially upbeat investment firm Assetz, a new survey of its investors shows confidence, with landlords highlighting strong rental demand as their main incentive for expanding their portfolios, also high and rising rental values, and the belief that prices are at or near the bottom.
Just 10% of investors believe now is a bad time to invest in UK buy-to-let, with the majority citing concerns about the economy as the main deterrent.
Investors are taking a long-term view of the property market, with 50% stating that long-term capital gain is their top priority, closely followed by rental income (44%). Just 6% stated that they were hoping to benefit from short-term capital gain.
Nearly half of those surveyed (45.9%) said they are currently achieving gross rental yields of more than 5.5%, with almost a fifth (19.4%) achieving 9% yields or higher.
Stuart Law, chief executive of Assetz, said: “Risk-averse lenders are making no secret of the fact that they would rather allocate the limited funds they do have to the lower-risk option of buy-to-let loans with deposits of typically 25–40%.
“The sector has not been as hard hit by the recession as originally feared, due to the fact that interest rates have remained extremely low. This has protected landlords by giving them cashflow, and future rate rises, which are likely to be small and gradual, will be covered largely by rental increases.”
Assetz says it has seen its sales of UK investment property more than double in the last 12 months and predicts it will expand at least 50% again over the next year
Tuesday 20 September 2011
Merseytravel launches Walrus card
The transport authority has launched a new style credit card-sized travel pass with an aim at taking the hassle out of travelling on public transport.
The card, known as Walrus, is the name of a new Smartcard that is similar to the Oyster card used in London.
Neil Scales, chief executive of Merseytravel, said: "This launch signals a revolution in the way people pay for and use public transport. I believe Walrus will play a fundamental role in encouraging and inspiring local people and visitors to fully enjoy the economic, cultural, heritage and leisure experience this area has to offer, and in time become an important part of the identity of the region.
"Walrus will see the widest range of uses of any Smartcard in the country being fully integrated into all our varied forms of transport and ticketing, ultimately saving our customers time and money. We are aiming towards a network where people pass seamlessly through our stations and ferry terminals, while also being able to board buses and even buy a coffee.
"In London less than 2% of public transport journeys are paid for in cash, and while cash will always be an option, Walrus will be a far more convenient option for customers, drivers and operators alike."
Since 2008, Merseytravel has researched and worked on the new technology and gained a £2.2m grant from the government towards implementing the system across Merseyside.
Merseytravel said last year that technology which reads an electronic chip inside the card will eventually be installed on all buses and at rail stations in Merseyside as well as on Mersey Ferry terminals.
Walrus will be launched this weekend with the first products switching to the Smartcard versions.
From Monday, passengers who renew their annual all-zone Trios will receive the Walrus card instead of the paper version Merseytravel currently issues.
From spring next year, Merseytravel said further products will be converted, with a full pay as you go card available from summer 2013.
Walrus is based on the specifications of the government backed Integrated Transport Smartcard Organisation standards.
Details of how much Merseytravel is investing in the scheme was undisclosed.
The card, known as Walrus, is the name of a new Smartcard that is similar to the Oyster card used in London.
Neil Scales, chief executive of Merseytravel, said: "This launch signals a revolution in the way people pay for and use public transport. I believe Walrus will play a fundamental role in encouraging and inspiring local people and visitors to fully enjoy the economic, cultural, heritage and leisure experience this area has to offer, and in time become an important part of the identity of the region.
"Walrus will see the widest range of uses of any Smartcard in the country being fully integrated into all our varied forms of transport and ticketing, ultimately saving our customers time and money. We are aiming towards a network where people pass seamlessly through our stations and ferry terminals, while also being able to board buses and even buy a coffee.
"In London less than 2% of public transport journeys are paid for in cash, and while cash will always be an option, Walrus will be a far more convenient option for customers, drivers and operators alike."
Since 2008, Merseytravel has researched and worked on the new technology and gained a £2.2m grant from the government towards implementing the system across Merseyside.
Merseytravel said last year that technology which reads an electronic chip inside the card will eventually be installed on all buses and at rail stations in Merseyside as well as on Mersey Ferry terminals.
Walrus will be launched this weekend with the first products switching to the Smartcard versions.
From Monday, passengers who renew their annual all-zone Trios will receive the Walrus card instead of the paper version Merseytravel currently issues.
From spring next year, Merseytravel said further products will be converted, with a full pay as you go card available from summer 2013.
Walrus is based on the specifications of the government backed Integrated Transport Smartcard Organisation standards.
Details of how much Merseytravel is investing in the scheme was undisclosed.
Thursday 15 September 2011
Liverpool City Council publishes BSF rescue plan
Liverpool City Council has published revised plans to kick-start school building projects that stalled at the end of Building Schools for the Future.
Education specialist Bryanston Square Consulting advised the local authority that at least eight school projects can be resurrected out of the 25 that halted in July 2010 .
Liverpool plans to use the local authority procurement consortium Scape System Build to appoint contractors, subject to approval for the plans by cabinet members later this year.
Funding will come partly from the sale of surplus council sites around the city, including former schools such as St Julie's in Woolton.
BSF would have seen £350m spent rebuilding or refurbishing each school in the city. Council leader Cllr Joe Anderson commissioned a task force of officers, led by Max Steinberg, chief executive of economic development arm Liverpool Vision, to look at a rescue package.
The initial projects in the pipeline, under programme name EdVenture, are:
Further schemes could take place after 2015 to:
Education specialist Bryanston Square Consulting advised the local authority that at least eight school projects can be resurrected out of the 25 that halted in July 2010 .
Liverpool plans to use the local authority procurement consortium Scape System Build to appoint contractors, subject to approval for the plans by cabinet members later this year.
Funding will come partly from the sale of surplus council sites around the city, including former schools such as St Julie's in Woolton.
BSF would have seen £350m spent rebuilding or refurbishing each school in the city. Council leader Cllr Joe Anderson commissioned a task force of officers, led by Max Steinberg, chief executive of economic development arm Liverpool Vision, to look at a rescue package.
The initial projects in the pipeline, under programme name EdVenture, are:
- Archbishop Beck Catholic High School to be relocated to Long Lane with an option of co-locating with a special school. Start date: autumn 2012 with opening in autumn 2013.
- St John Bosco Arts College on the Stonebridge Cross development with the possibility of becoming co-educational and option of co-locating with special school. Start date: Dependent upon wider Stonebridge Cross scheme.
- Notre Dame Catholic College on a new site adjacent to Everton Park Sports Centre on Great Homer Street as part of St Modwen's Project Jennifer regeneration scheme. Start date: June 2012, opening autumn 2013.
- Holly Lodge Girls College to be partially rebuilt through construction of new buildings and disposing of front half of site. Start date: 2013 with opening in 2015.
- Relocating Archbishop Blanch Church of England High School and St Hilda's Church of England High School on Edge Lane as part of wider regeneration of area. The Governors of St Hilda's may also consult on becoming co-educational. Start date: Early 2013 with opening in 2015.
- Rebuild and co-locate St Julie's Catholic High School with St Francis Xavier's (SFX) College on Beaconsfield campus with a shared sixth form. Start date: 2015 with completion in 2017.
Further schemes could take place after 2015 to:
- Refurbish Clifford Holroyde Special School and Abbots Lea Special School
- Rebuild St Margaret's Church of England High School
- Refurbish Bellerive Catholic College
- Refurbish The Bluecoat
Tenant misery grows over rogue landlords
Shelter is urging councils to crack down on rogue landlords, as our research reveals that they continue to cause misery for tenants across England.
Shelter contacted every local authority in England to build a picture of both the scale of the problem with rogue landlords and what is being done to tackle it.
The results revealed:.
- Local authorities admit there are 1,477 known landlords who are giving them continued cause for concern and repeatedly making tenants’ lives a misery.
- Complaints about serious and potentially life-threatening hazards, including dangerous gas and electrics, have risen by 25 per cent over the past two years.
- Overall complaints about landlords have increased, taking them to 86,628 in the last year.
- Despite the sharp increase in problems, just 270 successful prosecutions have been made by local authorities against landlords during the same period.
In response, Shelter has launched Rogue Landlord Watch, an interactive map showing some of England’s worst landlords.
Shelter’s Chief Executive Campbell Robb said: ‘The reality is that rogue landlords are out there and they’re getting away with it.
'Every day at Shelter we see the devastating impact rogue landlords have on peoples’ lives as they remain trapped in homes that cause misery and, in some cases, put lives at risk.
‘What’s more, we believe there could be thousands more tenants who are suffering in silence, holding back from complaining out of fear of the consequences or because they don’t feel their voices will be heard.
‘Local authorities have the powers to tackle rogue landlords but too many aren’t making the most of their armoury. They must follow the lead of those councils taking a zero tolerance approach to rogue landlords, and support tenants who are suffering by cracking down on the worst offenders in their area.’
Shelter contacted every local authority in England to build a picture of both the scale of the problem with rogue landlords and what is being done to tackle it.
The results revealed:.
- Local authorities admit there are 1,477 known landlords who are giving them continued cause for concern and repeatedly making tenants’ lives a misery.
- Complaints about serious and potentially life-threatening hazards, including dangerous gas and electrics, have risen by 25 per cent over the past two years.
- Overall complaints about landlords have increased, taking them to 86,628 in the last year.
- Despite the sharp increase in problems, just 270 successful prosecutions have been made by local authorities against landlords during the same period.
In response, Shelter has launched Rogue Landlord Watch, an interactive map showing some of England’s worst landlords.
Shelter’s Chief Executive Campbell Robb said: ‘The reality is that rogue landlords are out there and they’re getting away with it.
'Every day at Shelter we see the devastating impact rogue landlords have on peoples’ lives as they remain trapped in homes that cause misery and, in some cases, put lives at risk.
‘What’s more, we believe there could be thousands more tenants who are suffering in silence, holding back from complaining out of fear of the consequences or because they don’t feel their voices will be heard.
‘Local authorities have the powers to tackle rogue landlords but too many aren’t making the most of their armoury. They must follow the lead of those councils taking a zero tolerance approach to rogue landlords, and support tenants who are suffering by cracking down on the worst offenders in their area.’
Tenancy Deposit Scheme publishes new guidance notes on disputes
The Tenancy Deposit Scheme has published a new set of case studies on its site, illustrating how adjudicators approach a deposit dispute when landlords and tenants cannot reach an amicable agreement between themselves.
It is part of a continuing campaign by the TDS to make deposit resolution open and easy to understand.
This latest set of examples cover redecoration problems at the end of a tenancy, where the tenant had done a better decorating job than the landlord.
Guidance notes deal with issues of ‘betterment’ and replacement costs, and also wear and tear.
The publication of these guidance notes and case histories follows consultation with the Members’ Forum of the TDS as well as incorporating the views sought from consumer organisations such as the National Union of Students, Citizens Advice and Shelter.
TDS chief executive Steve Harriott said: “Although disputes cannot always be avoided, by publishing the experience we have gained, we can help landlords and tenants and their letting agents to find an amicable solution without going through the process of Alternative Dispute Resolution.”
The full case studies and guidance notes can be found on www.tds.gb.com in both the Landlords and Tenants sections.
It is part of a continuing campaign by the TDS to make deposit resolution open and easy to understand.
This latest set of examples cover redecoration problems at the end of a tenancy, where the tenant had done a better decorating job than the landlord.
Guidance notes deal with issues of ‘betterment’ and replacement costs, and also wear and tear.
The publication of these guidance notes and case histories follows consultation with the Members’ Forum of the TDS as well as incorporating the views sought from consumer organisations such as the National Union of Students, Citizens Advice and Shelter.
TDS chief executive Steve Harriott said: “Although disputes cannot always be avoided, by publishing the experience we have gained, we can help landlords and tenants and their letting agents to find an amicable solution without going through the process of Alternative Dispute Resolution.”
The full case studies and guidance notes can be found on www.tds.gb.com in both the Landlords and Tenants sections.
Wednesday 14 September 2011
New report questions cutting housing benefit will drive down rents
A new report from the Chartered Institute of Housing (CIH) and the British Property Federation (BPF) demonstrates that, contrary to government claims that rises in the housing benefit bill are caused by landlords increasing rents in order to take advantage of pre-determined benefit levels, the more likely explanation is a change in the make up of claimants as more families are affected by the recession in expensive areas such as London and the South East.
The study of amounts payable for the local housing allowance (LHA) – a form of housing benefit for people in the private rented sector – during an eighteen month period following the start of the LHA scheme in 2008, shows that rates fell in 61 per cent of areas. This demonstrates that the LHA regime is being unfairly targeted for the rise in the welfare bill, while many private sector landlords have actually reduced their rents during the period studied.
This analysis runs contrary to the comments made by Welfare Reform Minister Lord Freud in his evidence to the Work and Pensions Inquiry on the Budget 2010 reforms. He quoted figures that showed housing benefit claimants’ payments went up 3 per cent while the property index declined by 5 per cent from November 2008 to February 2010. While the figures were accurate, his interpretation ignored other factors in the mix – especially the changing geographical spread of claimants - which were more likely to have contributed to the rising bill.
CIH Interim Chief Executive Grainia Long said: “We have shown that LHA does not push up rents and so it cannot be used to bring them down again. These cuts are going to cause a great deal of hardship to a large number of households without either the tax payer or households reaping the benefit.”
She continued: “These reforms are already causing problems for households and this will continue for the next three years, by which time they will be embedded in our new permanent welfare system. We need a welfare system that provides adequate help with housing costs.”
Ms Long concluded: “It is imperative that the government does all it can to tackle the high and unaffordable rents currently seen in the private rented sector, but this is not the way to do it and will cause more hardship in the process.”
Ian Fletcher, director of policy at the British Property Federation, said: “This report clearly demonstrates that the LHA system reflects the overall rental market and is not distorted by concentrations of LHA lettings.
“When RPI inflation is factored into the equation the majority of LHA cases will have in fact seen a fall in real terms.”
The study of amounts payable for the local housing allowance (LHA) – a form of housing benefit for people in the private rented sector – during an eighteen month period following the start of the LHA scheme in 2008, shows that rates fell in 61 per cent of areas. This demonstrates that the LHA regime is being unfairly targeted for the rise in the welfare bill, while many private sector landlords have actually reduced their rents during the period studied.
This analysis runs contrary to the comments made by Welfare Reform Minister Lord Freud in his evidence to the Work and Pensions Inquiry on the Budget 2010 reforms. He quoted figures that showed housing benefit claimants’ payments went up 3 per cent while the property index declined by 5 per cent from November 2008 to February 2010. While the figures were accurate, his interpretation ignored other factors in the mix – especially the changing geographical spread of claimants - which were more likely to have contributed to the rising bill.
CIH Interim Chief Executive Grainia Long said: “We have shown that LHA does not push up rents and so it cannot be used to bring them down again. These cuts are going to cause a great deal of hardship to a large number of households without either the tax payer or households reaping the benefit.”
She continued: “These reforms are already causing problems for households and this will continue for the next three years, by which time they will be embedded in our new permanent welfare system. We need a welfare system that provides adequate help with housing costs.”
Ms Long concluded: “It is imperative that the government does all it can to tackle the high and unaffordable rents currently seen in the private rented sector, but this is not the way to do it and will cause more hardship in the process.”
Ian Fletcher, director of policy at the British Property Federation, said: “This report clearly demonstrates that the LHA system reflects the overall rental market and is not distorted by concentrations of LHA lettings.
“When RPI inflation is factored into the equation the majority of LHA cases will have in fact seen a fall in real terms.”
The sneaky mortgage rate that may cost you
In the old days lenders had one standard variable rate each. But not any more. So which one will you have to pay?Standard variable rates (or SVRs) used to be simple. The SVR is a mortgage lender's basic lending rate. Typically the SVR is the rate a borrower moves to when a fixed or other tied-in deal comes to an end.
And although lenders can set the SVR at any level they choose and change it whenever the mood takes them, the rate generally moves in line with the Bank of England base rate.
Historically, paying the SVR meant you were paying a higher-than-necessary rate for your mortgage, but since the base rate fell to 0.5% more than two-and-a-half years ago, the SVR can be a competitive rate in many cases.
However, some mortgage lenders are baffling borrowers by having more than one SVR; typically one for existing borrowers and one for new customers.
New vs existing borrowers
Nationwide Building Society introduced a two-tier SVR system back in April 2009. Up until then it had a guarantee in place that promised its 'base mortgage rate' (BMR) would never be more than 2% above the base rate. When the base rate fell to 0.5% in March 2009 borrowers on Nationwide's BMR paid just 2.5% interest and have been on to a winner ever since as the base rate stayed put.
But borrowers who took out a mortgage with the building society after April 2009 have not been so lucky. When their deals end they're moved to Nationwide's standard variable rate, which doesn't come with any promises and is currently 3.99%.
For a borrower with a mortgage of £150,000 this would mean repayments would be about £118 more each month than if Nationwide still offered the BMR of 2.5%.
Nationwide justifies the two-tier system by saying it needs to balance the needs of both savers and borrowers; if it doesn't rake in cash from mortgage borrowers then it can't offer decent savings rates.
Lloyds has a similar two-tier system. Up until June 2010 the bank promised that the SVR would never be more than 2% above base. So existing customers who took out mortgages before that could revert to an SVR of 2.5% if the base rate stayed at 0.5%.
But since June last year the go-to rate at the end of a fixed or other tied-in deal changed to the 'Homeowner Variable Rate', which currently stands at 3.99% and doesn't come with any promises.
Buy-to-let
To make things more complicated still, Lloyds also has a 'Buy-To-Let Variable Rate', which currently stands at 4.84%, almost double Lloyds' cheapest SVR. Again, this came into effect in June 2010 - landlords with mortgages taken out before this date can still revert to the SVR of 2.5%.
Clydesdale Bank also has a different go-to rate for residential customers and buy-to-let customers. Residential deals revert to a variable rate which currently stands at 4.49% but buy-to-let borrowers pay 0.5% more at 4.99%.
Nottingham Building Society has different variable rates for landlords too. Most mainstream deals revert to the building society's variable mortgage rate of 6.14% - the highest on the market - while buy-to-let borrowers pay a hefty 6.54% on the buy-to-let variable mortgage rate.
Should you pay the SVR?
The average SVR currently stands at 4.8%, considerably higher than the best buy mortgage deals available at the moment. So should you switch if you're paying your lender's SVR?
In most cases switching away from a SVR will be penalty-free. If you do have to pay early redemption charges, these are likely to wipe out any savings you make.
As a general rule anyone paying a SVR of 3.5% or over will benefit from switching mortgages but they'll need at least 15% equity in their home to be eligible for the most competitive mortgages available.
Borrowers on an SVR of 2.5% with Nationwide or Lloyds should stay put until a rate rise looks imminent, which might not be until 2014 according to some pundits.
When switching it's important to take any arrangement fees into account when working out the total cost of a new mortgage compared to your current deal.
And although lenders can set the SVR at any level they choose and change it whenever the mood takes them, the rate generally moves in line with the Bank of England base rate.
Historically, paying the SVR meant you were paying a higher-than-necessary rate for your mortgage, but since the base rate fell to 0.5% more than two-and-a-half years ago, the SVR can be a competitive rate in many cases.
However, some mortgage lenders are baffling borrowers by having more than one SVR; typically one for existing borrowers and one for new customers.
New vs existing borrowers
Nationwide Building Society introduced a two-tier SVR system back in April 2009. Up until then it had a guarantee in place that promised its 'base mortgage rate' (BMR) would never be more than 2% above the base rate. When the base rate fell to 0.5% in March 2009 borrowers on Nationwide's BMR paid just 2.5% interest and have been on to a winner ever since as the base rate stayed put.
But borrowers who took out a mortgage with the building society after April 2009 have not been so lucky. When their deals end they're moved to Nationwide's standard variable rate, which doesn't come with any promises and is currently 3.99%.
For a borrower with a mortgage of £150,000 this would mean repayments would be about £118 more each month than if Nationwide still offered the BMR of 2.5%.
Nationwide justifies the two-tier system by saying it needs to balance the needs of both savers and borrowers; if it doesn't rake in cash from mortgage borrowers then it can't offer decent savings rates.
Lloyds has a similar two-tier system. Up until June 2010 the bank promised that the SVR would never be more than 2% above base. So existing customers who took out mortgages before that could revert to an SVR of 2.5% if the base rate stayed at 0.5%.
But since June last year the go-to rate at the end of a fixed or other tied-in deal changed to the 'Homeowner Variable Rate', which currently stands at 3.99% and doesn't come with any promises.
Buy-to-let
To make things more complicated still, Lloyds also has a 'Buy-To-Let Variable Rate', which currently stands at 4.84%, almost double Lloyds' cheapest SVR. Again, this came into effect in June 2010 - landlords with mortgages taken out before this date can still revert to the SVR of 2.5%.
Clydesdale Bank also has a different go-to rate for residential customers and buy-to-let customers. Residential deals revert to a variable rate which currently stands at 4.49% but buy-to-let borrowers pay 0.5% more at 4.99%.
Nottingham Building Society has different variable rates for landlords too. Most mainstream deals revert to the building society's variable mortgage rate of 6.14% - the highest on the market - while buy-to-let borrowers pay a hefty 6.54% on the buy-to-let variable mortgage rate.
Should you pay the SVR?
The average SVR currently stands at 4.8%, considerably higher than the best buy mortgage deals available at the moment. So should you switch if you're paying your lender's SVR?
In most cases switching away from a SVR will be penalty-free. If you do have to pay early redemption charges, these are likely to wipe out any savings you make.
As a general rule anyone paying a SVR of 3.5% or over will benefit from switching mortgages but they'll need at least 15% equity in their home to be eligible for the most competitive mortgages available.
Borrowers on an SVR of 2.5% with Nationwide or Lloyds should stay put until a rate rise looks imminent, which might not be until 2014 according to some pundits.
When switching it's important to take any arrangement fees into account when working out the total cost of a new mortgage compared to your current deal.
Architects say new houses are 'shameful shoebox homes'
Many new houses in the UK are "shameful shoebox homes" which are too small for family life, the Royal Institute of British Architects (RIBA) has said.
It says average three-bedroom houses are 8% smaller - the space of a single bedroom - than the recommended minimum.The institute, which looked at 3,418 three-bedroom homes in England, based its findings on building regulations which have come into force in London.
The House Builders Federation says that bigger homes could prove unaffordable.
RIBA's Case for Space study discovered the average two-storey three-bedroom home for five people was 8 sq m (86 sq ft) too small.
It claims the shortfall in space is the same size as a single bedroom with a bedside table, wardrobe, desk and chair.
The most common new three-bedroom house was also found to be only 77% of the recommended minimum - the space equivalent to two double bedrooms.
The institute's research was based on the 96 sq m (1033 sq ft) London Plan space standards which have just been introduced in the capital. There are currently no UK-wide standards.
'Cramped life' RIBA chief executive Harry Rich said new houses were causing some people to endure a lower quality of life.
"Our homes should be places that enhance our lives and well-being," he said.
"However, as our new research confirms, thousands of cramped houses - shameful shoe box homes - are being churned out all over the country, depriving households of the space they need to live comfortably and cohesively."
The institute wants consumers to get better information from estate agents and house builders.
For example, it is calling for floor area to be included in marketing material and floor plans to include furniture, so that people can get a clearer idea of the size of a property.
The Home Builders Federation however, said that if new homes were built bigger, some people would be priced out the market.
"If you increase standards you're going to increase costs," said head of planning Andrew Whitaker.
"That's going to mean houses are going to become more expensive and we're already suffering from a lack of affordability for young people and first-time buyers."
Tuesday 13 September 2011
Sussex village green application over house-building fears
Campaigners in Littlehampton are trying to force a council to designate a patch of land as a village green to stop it from being built on.
The land north of Littlehampton Academy is used by hundreds of people every day to walk dogs, cycle and play sport.But campaigners believe West Sussex County Council wants to build new housing there, something the authority has dismissed as speculation.
The village green application will be decided on by the county council.
Chris Hughes, who is leading the campaign, said the community would be "devastated" if the field was built on and was worried about a conflict of interests.
He said: "There does seem to be a link there and we don't have any vote ourselves, so what we're asking people to do is write in to the council, especially if they use the field, to support our application."
'Regularly used'
He said if the field was built on it would force people to travel to other parts of the town.
"For people in this area they would have to resort to getting into cars and driving to other areas [to use a park] so it's regularly used by maybe up to 200 people a day."
For the land to be designated as a village green, campaigners will have to prove it has been occupied for recreational purposes for 20 years.
A West Sussex County Council spokeswoman said she was unaware of any intention to build on the land.
"An application was received earlier this year to register the county council's land to the north of Littlehampton Academy as a town or village green," she said.
"This is currently being investigated and will be determined this autumn, as part of a statutory process, by the county council's rights of way committee."
It costs £7,248 to die apparently
The costs related to death, such as a funeral and a headstone, have collectively risen by £400 in a year to £7,248, a report says.
The cost is 20% higher than four years ago, according to the report commissioned by financial services company Sun Life Direct.The cost of funerals was key to the increase, it said,
The research comes as the cost of living, measured by inflation, rose in August.
The rate of Consumer Prices Index (CPI) inflation rose to 4.5% from 4.4% in July, according to figures from the Office for National Statistics (ONS). The Retail Prices Index (RPI) measure increased to 5.2% from 5%.
'Concern'
The Sun Life Direct report suggested that the costs related to death were expected to keep rising.
"Currently the number of deaths each year in England and Wales is at an all-time low, with 491,348 deaths registered in 2009," said Kate Woodthorpe, lecturer in sociology at the University of Bath, who co-authored the report.
"It is anticipated, however, that the number of deaths will rise significantly and by 2030, there will be an additional 80,000 people dying a year."This equates to a rise of 17% in the death rate in less than 20 years."
The report suggested that the average cost of a cremation in the UK was £2,720 and a burial was £3,462.
Administration of the estate cost £2,292, it said, and other costs included catering for the funeral at £319 and flowers at £144.
However, the Church of England's law-making body, the General Synod, recently rejected a proposal to increase the price of funerals in Anglican churches from £102 to £150
Landlords rush to remortgage to raise capital for new purchases
Landlords raising capital to fund portfolio expansion are driving the growth in buy-to-let remortgaging.
According to the Council of Mortgage Lenders, remortgaging accounted for over two-thirds of the 21% increase in buy-to-let advances between the first and second quarters of this year.
A survey of mortgage brokers by specialist lender Paragon shows that prime reason for landlords remortgaging is to raise capital for further purchases.
On average, nearly half (47%) of buy-to-let remortgages handled by intermediaries surveyed were for the purpose of raising capital, while three out of ten (35%) were to achieve a better rate of interest.
Other reasons for remortgaging included landlords’ existing lenders actively encouraging remortgaging (8%) and dissatisfaction with an existing lender (7%).
According to the Council of Mortgage Lenders, remortgaging accounted for over two-thirds of the 21% increase in buy-to-let advances between the first and second quarters of this year.
A survey of mortgage brokers by specialist lender Paragon shows that prime reason for landlords remortgaging is to raise capital for further purchases.
On average, nearly half (47%) of buy-to-let remortgages handled by intermediaries surveyed were for the purpose of raising capital, while three out of ten (35%) were to achieve a better rate of interest.
Other reasons for remortgaging included landlords’ existing lenders actively encouraging remortgaging (8%) and dissatisfaction with an existing lender (7%).
Remortgaging hit its highest level since the final quarter of 2008 during the second quarter, according to the CML’s figures. The £1.86bn advanced for remortgage purposes represented 53% of the total £3.5bn buy-to-let lending for the period.
John Heron, Paragon Mortgages’ managing director, said: “Approximately two-thirds of properties in the private rented sector have no mortgage, while the average loan-to-value on those properties with a mortgage is 48%, so there is a huge amount of equity in the sector that landlords are looking to utilise to help fund portfolio growth.
“CML figures show there was a significant increase in buy-to-let remortgage cases between the first and second quarters of this year, and it appears a large proportion of that is from landlords releasing equity to generate seed capital for portfolio expansion.
“In a market characterised by high rental demand, we could see this becoming more commonplace.”
“In a market characterised by high rental demand, we could see this becoming more commonplace.”
Sellers' gloom over property market inactivity
Fourteen homes were sold per UK estate agent in the three months to August - the lowest total for more than two years, a survey has found.
Economic uncertainty and a lack of mortgage lending led to the sluggish housing market, the Royal Institution of Chartered Surveyors (Rics) said.More surveyors reported price falls than price rises in August, Rics said.
And an increasing proportion expected prices to drop further in the next three months.
"The risk is that the worsening economic picture will gradually begin to have a more material impact on sentiment and discourage potential house purchasers, even where mortgage finance is available," said Alan Collett, housing spokesman for Rics.
'Flexibility'
The prediction will bring more gloom to John Carey, a developer for 10 years, who has been trying to sell a block of four homes in Bedford, each for between £120,000 and £135,000, since before Christmas.
There had been plenty of interest from potential buyers, he told the BBC News website, but a number of sales had fallen through, owing primarily to mortgage difficulties for people in the chain.
"I would have expected them [the properties] to have gone by spring, and certainly by May, but here I am sitting in the estate agents in September," he said.
"There is no lender flexibility. A loosening of lending terms will help."
His views were backed up by the Rics report, which reported that surveyors regarded economic uncertainty as the biggest factor affecting activity in the housing market, followed by a lack of mortgage finance.
A smaller number considered that buyers and sellers were staying away from the market because of fears over further house price falls.
First-time buyers
Central Bedfordshire has seen an above-average 4.2% fall in house prices in the year to July, according to the latest figures from the Land Registry, but many of the issues affecting the market here are typical of much of the UK.
At Harrison Murray estate agent in Bedford, staff have seen a sharp drop in the number of first-time buyers coming through the doors since the boom in the housing market.
"Those who do have saved up for a long time, and we are increasingly seeing family members helping out," said senior sales negotiator Jo Howes.
She said these first-timers were now often aged in their late 20s or 30s, rather than new to work and in their early 20s.
The Council of Mortgage Lenders said on Monday that first-time buyers were typically having to find a deposit of 20% of the purchase price to get a home loan.
School effect
Ms Howes said that those having the toughest time in the current market were sellers who had bought new-build apartments in 2006 and 2007 and were now looking to move on.
Often this was because they had bought at the height of the market, had found it easy to get a 100% mortgage, but now needed a bigger home having had children or found a partner.
At the opposite end of the scale were sellers in villages further out of the town centre, with larger homes in areas with good schools.
"They are doing infinitely better than the town centre," she said.
Nationally, Rics said that prices continued to increase in London, with prices falling the most in East Anglia and the West Midlands. Scotland and Northern Ireland also recorded house price falls, the survey said.
Monday 12 September 2011
Phil Spencer set to become TV 'estate agent'
Could Phil Spencer be about to take an instruction off you – and if so, would you mind?
The genial Phil (what, no Kirstie?) is joining Channel 4’s daytime line-up in a new programme, ‘Phil Spencer: Secret Agent’, in which he comes to the aid of home owners trapped in properties that refuse to sell.
Says the C4 blurb: “After years of property boom, the housing market across the country has been stagnant and estate agents have seen the biggest rise in unsold houses since 2007.
“With deposit requirements up and mortgage approvals down, it’s harder than ever to sell a house.
“Enter Phil Spencer, who will take on the role of secret agent and work with sellers and buyers to help get the market moving again.
“In Phil Spencer: Secret Agent he will attempt to sell houses stuck on the market. But before he meets the struggling home owners he will don his surveyor’s hat to assess the property, looking at it through the eyes of a buyer, as well as researching the local area and housing market.
“Armed with all the information he needs to make a realistic judgement on why the house isn’t selling, he’ll surprise the owners as their new agent and outline his opinions – all the good and the bad – before recommending what needs to be done to get their home sold.”
Apparently, he’ll seek out potential buyers, create shiny new details and arrange an open house viewing.
Phil doesn’t seem to be under too many illusions as to what he’s taking on: “By working right across the country advising both buyers and sellers, I’ll be trying to broker as many deals as possible.
“It’s a big challenge, but my aim is to make a real difference in the market. And just to up the ante, I’m always going to be focusing on one particularly hard home to shift.”
Hmm.
Three thoughts spring to mind. First, what happens if he does a deal with a buyer introduced by a previous agent? And second, will he finally manage to convince the Great British Public that, actually, being an estate agent really isn’t money for old rope.
Oh, and third, what will he be charging?
The genial Phil (what, no Kirstie?) is joining Channel 4’s daytime line-up in a new programme, ‘Phil Spencer: Secret Agent’, in which he comes to the aid of home owners trapped in properties that refuse to sell.
Says the C4 blurb: “After years of property boom, the housing market across the country has been stagnant and estate agents have seen the biggest rise in unsold houses since 2007.
“With deposit requirements up and mortgage approvals down, it’s harder than ever to sell a house.
“Enter Phil Spencer, who will take on the role of secret agent and work with sellers and buyers to help get the market moving again.
“In Phil Spencer: Secret Agent he will attempt to sell houses stuck on the market. But before he meets the struggling home owners he will don his surveyor’s hat to assess the property, looking at it through the eyes of a buyer, as well as researching the local area and housing market.
“Armed with all the information he needs to make a realistic judgement on why the house isn’t selling, he’ll surprise the owners as their new agent and outline his opinions – all the good and the bad – before recommending what needs to be done to get their home sold.”
Apparently, he’ll seek out potential buyers, create shiny new details and arrange an open house viewing.
Phil doesn’t seem to be under too many illusions as to what he’s taking on: “By working right across the country advising both buyers and sellers, I’ll be trying to broker as many deals as possible.
“It’s a big challenge, but my aim is to make a real difference in the market. And just to up the ante, I’m always going to be focusing on one particularly hard home to shift.”
Hmm.
Three thoughts spring to mind. First, what happens if he does a deal with a buyer introduced by a previous agent? And second, will he finally manage to convince the Great British Public that, actually, being an estate agent really isn’t money for old rope.
Oh, and third, what will he be charging?
Countrywide gets ready for return to stock market
Countrywide, Britain’s biggest estate agency and financial services network, is considering returning to the stock market next year.
The news emerges after its surprise sale of its Bairstow Eves franchise business, which the group said was prompted by a desire to concentrate on its owned branches.
If it does, it will be seeking a £1bn-plus listing – the same value that the company had when it went private in 2007 at the height of the housing market boom, and sold all its shares to US private equity firm Apollo for £1.1bn.
Analysts could argue that the company should be worth more than it was in 2007, since Countrywide’s growth by acquisition last year of Hamptons International. Countrywide’s lettings business has also been booming.
Countrywide’s decision to pull out of the stock market reflected founder Harry Hill’s dislike of having to do business publicly – or, as he famously put it, having to take down his pants in public.
As a publicly listed company, Countrywide was forced into issuing warnings about the housing market, making its share price volatile.
As a private company, it has not had to give out information it would rather keep to itself: for example, the price it paid for Hamptons was not revealed. Nor has it said how much it sold its Bairstow Eves franchise business for earlier this month to Hunters.
Countrywide’s sale to Apollo was followed by the housing market crash and the company laid off hundreds of staff as it struggled with huge debts, driving it to the brink of collapse. A complicated debt restructuring followed, by which Oaktree Capital Management, a specialist investor in distressed companies, acquired an equity stake in Countrywide, along with another private equity firm, Alchemy Partners, and hedge fund Polygon.
The Oaktree deal – said to have called the bottom of the market – reduced Countrywide’s £750m debt mountain to around £150m, and handed the group a £75m cash injection.
Last month, Oaktree raised its stake in Countrywide from 35% to 46%, standing to become a real winner if the group does return to the stock market.
Apollo Management retains a stake of just 25%.
The news emerges after its surprise sale of its Bairstow Eves franchise business, which the group said was prompted by a desire to concentrate on its owned branches.
If it does, it will be seeking a £1bn-plus listing – the same value that the company had when it went private in 2007 at the height of the housing market boom, and sold all its shares to US private equity firm Apollo for £1.1bn.
Analysts could argue that the company should be worth more than it was in 2007, since Countrywide’s growth by acquisition last year of Hamptons International. Countrywide’s lettings business has also been booming.
Countrywide’s decision to pull out of the stock market reflected founder Harry Hill’s dislike of having to do business publicly – or, as he famously put it, having to take down his pants in public.
As a publicly listed company, Countrywide was forced into issuing warnings about the housing market, making its share price volatile.
As a private company, it has not had to give out information it would rather keep to itself: for example, the price it paid for Hamptons was not revealed. Nor has it said how much it sold its Bairstow Eves franchise business for earlier this month to Hunters.
Countrywide’s sale to Apollo was followed by the housing market crash and the company laid off hundreds of staff as it struggled with huge debts, driving it to the brink of collapse. A complicated debt restructuring followed, by which Oaktree Capital Management, a specialist investor in distressed companies, acquired an equity stake in Countrywide, along with another private equity firm, Alchemy Partners, and hedge fund Polygon.
The Oaktree deal – said to have called the bottom of the market – reduced Countrywide’s £750m debt mountain to around £150m, and handed the group a £75m cash injection.
Last month, Oaktree raised its stake in Countrywide from 35% to 46%, standing to become a real winner if the group does return to the stock market.
Apollo Management retains a stake of just 25%.
Rightmove bosses pocket millions in share sales
Rightmove managing director Ed Williams has sold 300,000 shares in the company at £12.42, pocketing around £3.7m.
His wife, Joanna Barkwill, also sold 1,600 shares at the same price.
The sales last Thursday, announced in accordance with City rules, mean they sold at a price close to the all-time high.
The total number of shares sold by the couple represented 0.28% of Rightmove’s shares. Williams disposed of 22% of his own shareholding.
However, he still retains just over one million shares and holds options over a further 2.2 million shares.
Also doing well out of Rightmove last Thursday was Nick McKittrick, the company’s chief operating officer and finance director. He ended the day £4.8m richer.
He exercised 388,364 options and sold all the shares immediately at the same price as Williams.
McKittrick retains 129,000 shares and options over some 1.1m further shares.
News of the disposals sent Rightmove’s share price down 1.7%.
It is not the first time that Rightmove’s boss, who has been managing director of the business since it started, has disposed of shares.
In June 2010, he sold almost half his shares in the company for £8m – just one day after Google Maps announced the launch of its UK property search. Days later, his wife bought around £500,000 worth of shares in an apparent gesture to show support.
The share price at that time was about half the current price.
Back in March 2007, Williams sold 300,000 shares.
Connells will be eyeing the latest disposals with mixed feelings: the company sold its 18% stake in Rightmove in December 2008 when the Rightmove share price was on the floor at £1.55.
In the last fortnight, the price has touched a top of £13.07.
His wife, Joanna Barkwill, also sold 1,600 shares at the same price.
The sales last Thursday, announced in accordance with City rules, mean they sold at a price close to the all-time high.
The total number of shares sold by the couple represented 0.28% of Rightmove’s shares. Williams disposed of 22% of his own shareholding.
However, he still retains just over one million shares and holds options over a further 2.2 million shares.
Also doing well out of Rightmove last Thursday was Nick McKittrick, the company’s chief operating officer and finance director. He ended the day £4.8m richer.
He exercised 388,364 options and sold all the shares immediately at the same price as Williams.
McKittrick retains 129,000 shares and options over some 1.1m further shares.
News of the disposals sent Rightmove’s share price down 1.7%.
It is not the first time that Rightmove’s boss, who has been managing director of the business since it started, has disposed of shares.
In June 2010, he sold almost half his shares in the company for £8m – just one day after Google Maps announced the launch of its UK property search. Days later, his wife bought around £500,000 worth of shares in an apparent gesture to show support.
The share price at that time was about half the current price.
Back in March 2007, Williams sold 300,000 shares.
Connells will be eyeing the latest disposals with mixed feelings: the company sold its 18% stake in Rightmove in December 2008 when the Rightmove share price was on the floor at £1.55.
In the last fortnight, the price has touched a top of £13.07.
14 per cent rise in homelessness shows the need for more homes
The latest Government figures on statutory homelessness in England show that the number of people applying to councils for help with housing has increased by 14% in the last year.
They also show a 26% increase in the number of people accepted as homeless but for whom no accommodation has been secured by local authorities.
Responding to the news, Jenny Edwards CBE, Chief Executive of Homeless Link said:
"The number of homeless people going to councils for help continues to rise. This news underlines the need for urgent action to address the chronic shortage of affordable housing in our cities and our countryside.
"If we want a country where everyone has a roof over their head, we must make it a priority to build truly affordable homes. More land needs to be allocated for the right type of housing, in the right locations. An efficient planning system is key, with a strong focus on delivering affordable housing.
"The Governments proposal to reform local planning policy is an important milestone towards meeting this need for more homes. This is not just about buildings, it about stopping the damage that homelessness causes to individual lives and communities."
According to analysis of the figures by Homeless Link, the umbrella body for 500 homelessness charities, the number of applications for help with housing has increased when compared with last year.
Changes between the period from April to June 2011 (Q2 2011) and the same period last year (Q2 2010) include:
- A 14% increase in the total number of applications in the last year (Q2 2010: 22,850 – Q2 2011: 25,980).
- A 1% increase in the number of applications being accepted (Q2 2010: 44% – Q2 2011: 45%).
- A 26% increase in the number of people accepted as homeless but for whom no accommodation has been secured by local authorities (Q2 2010: 3,780 – Q2 2011: 4,770).
- A 4% increase in the number of people becoming homeless due to the end of a shorthold tenancy (Q2 2010: 14% - Q2 2011: 18%).
- A 29% increase in the number of people being placed in bed and breakfast accommodation by local authorities (Q2 2010: 2,410 – Q2 2011: 3,120).
They also show a 26% increase in the number of people accepted as homeless but for whom no accommodation has been secured by local authorities.
Responding to the news, Jenny Edwards CBE, Chief Executive of Homeless Link said:
"The number of homeless people going to councils for help continues to rise. This news underlines the need for urgent action to address the chronic shortage of affordable housing in our cities and our countryside.
"If we want a country where everyone has a roof over their head, we must make it a priority to build truly affordable homes. More land needs to be allocated for the right type of housing, in the right locations. An efficient planning system is key, with a strong focus on delivering affordable housing.
"The Governments proposal to reform local planning policy is an important milestone towards meeting this need for more homes. This is not just about buildings, it about stopping the damage that homelessness causes to individual lives and communities."
According to analysis of the figures by Homeless Link, the umbrella body for 500 homelessness charities, the number of applications for help with housing has increased when compared with last year.
Changes between the period from April to June 2011 (Q2 2011) and the same period last year (Q2 2010) include:
- A 14% increase in the total number of applications in the last year (Q2 2010: 22,850 – Q2 2011: 25,980).
- A 1% increase in the number of applications being accepted (Q2 2010: 44% – Q2 2011: 45%).
- A 26% increase in the number of people accepted as homeless but for whom no accommodation has been secured by local authorities (Q2 2010: 3,780 – Q2 2011: 4,770).
- A 4% increase in the number of people becoming homeless due to the end of a shorthold tenancy (Q2 2010: 14% - Q2 2011: 18%).
- A 29% increase in the number of people being placed in bed and breakfast accommodation by local authorities (Q2 2010: 2,410 – Q2 2011: 3,120).
Juice FM to move into One Park West
Liverpool commercial radio station Juice FM is moving its broadcast operation to One Park West in Grosvenor's Liverpool One.
Juice will take a 5,500 sq ft unit in the residential-led building, which contains a gym and cafes alongside 326 flats.
The radio station, owned by UTV Media, said it will spend £1.1m on the new studio, which will be operational in early 2012. The station is currently on Fleet Street in Ropewalks.
Juice will take a 5,500 sq ft unit in the residential-led building, which contains a gym and cafes alongside 326 flats.
The radio station, owned by UTV Media, said it will spend £1.1m on the new studio, which will be operational in early 2012. The station is currently on Fleet Street in Ropewalks.
Monday 8 August 2011
Support your Local Charity Events
Roberts, Edwards & Worrall are proud to support a great effort that will benefit our local Marie Curie Cancer Care. Laura O'Connor from Lauras Little Bakery (http://www.lauraslittlebakery.com/) and Pauline Cox (Spunky chick and all round good egg, according to her Twitter profile @PaulineCoxy) have organised a BLOOMING GREAT TEA PARTY hosted at Schmooze (a fabulous Venetian Bacaro, Local eatery and wine bar). The event takes place on Thursday 25th August from 12.30pm to 4.30pm. All proceeds go to Marie Curie Cancer Care. Tickets for the event are by way of donations to the following http://www.justgiving.com/BGTP
if you cant make you are more than welcome to donate anyway. Attendees will be served a traditional afternoon tea with scones, sandwiches and cakes by Laura's Little Bakery. There will also be entertainment by Andy Williams from 'Soulful Voices' and 'On the One' Sponsored by Marks and Spencers, Bookers, Almonds Catering and the Liverpool Cheese company, and a raffle with prizes donated by Alma de Cuba, Liverpool Football Club, The Laser Skin Clinic (http://www.thelaserskinclinic.co.uk/) Lush, Coco Rouge and many others.
Friday 15 July 2011
Increase in Mortgage approvals to meet Lenders targets
Mortgage approvals for house purchase rose 6.7% in June, as lenders rushed to meet their half-year lending targets.
But first-time buyers suffered, as lenders continued to prefer wealthier buyers.
The claim is made this morning by e-surv, the surveying and valuations business of LSL, which is also parent group of estate agency chains Your Move and Reeds Rains.
But e-surv said that lending criteria remain tight at the bottom of the market, and June was the worst month this year for first-time buyers, with low levels of approvals on the cheapest properties.
Approvals for homes under £125,000 – typical first-time buyer properties – accounted for only 22% of total approvals in June, down from 23% in May, and the lowest level since November 2010. This contrasts with early 2008 when purchases of the cheapest property accounted for 30% of all approvals.
Approvals overall rose fastest in London, where there was a 12.3% increase, reinforcing the capital’s increasing disconnect from the rest of the UK market.
The upsurge in London activity did include an increase in the number of first-time buyers.
Although first-timer numbers fell nationally, approvals for properties up to £250,000 – typical first-timer property in the capital – accounted for 43% of all approvals in June, up from 40% in May. However, this is still well below the figure for June 2009, when 50% of all London mortgage approvals were for typical first-timer property.
Richard Sexton, business development director of e.surv, said: “There has been a great deal of recent chatter about 95% LTV products hitting the market, but if you delve beyond the headline loan-to-value ratio, it is clear criteria remain too restrictive for the majority of lower income buyers.”
He went on: “Lenders are stuck between the devil and the deep blue sea.
“On the one hand, they are bound by tighter regulatory standards and a commitment to improve their capital, while on the other they are being put under political pressure to offer more appropriate mortgage products to match the financial situations of consumers.
“They cannot do both: these contrasting pressures are entirely incompatible bedfellows.
“Lenders still have to deal with significant risks to their balance sheets so, after a concerted effort to meet lending targets for the first half of the year, the next few months could see a return to a lower level of activity as they ration funds cautiously in the third quarter.”
But first-time buyers suffered, as lenders continued to prefer wealthier buyers.
The claim is made this morning by e-surv, the surveying and valuations business of LSL, which is also parent group of estate agency chains Your Move and Reeds Rains.
But e-surv said that lending criteria remain tight at the bottom of the market, and June was the worst month this year for first-time buyers, with low levels of approvals on the cheapest properties.
Approvals for homes under £125,000 – typical first-time buyer properties – accounted for only 22% of total approvals in June, down from 23% in May, and the lowest level since November 2010. This contrasts with early 2008 when purchases of the cheapest property accounted for 30% of all approvals.
Approvals overall rose fastest in London, where there was a 12.3% increase, reinforcing the capital’s increasing disconnect from the rest of the UK market.
The upsurge in London activity did include an increase in the number of first-time buyers.
Although first-timer numbers fell nationally, approvals for properties up to £250,000 – typical first-timer property in the capital – accounted for 43% of all approvals in June, up from 40% in May. However, this is still well below the figure for June 2009, when 50% of all London mortgage approvals were for typical first-timer property.
Richard Sexton, business development director of e.surv, said: “There has been a great deal of recent chatter about 95% LTV products hitting the market, but if you delve beyond the headline loan-to-value ratio, it is clear criteria remain too restrictive for the majority of lower income buyers.”
He went on: “Lenders are stuck between the devil and the deep blue sea.
“On the one hand, they are bound by tighter regulatory standards and a commitment to improve their capital, while on the other they are being put under political pressure to offer more appropriate mortgage products to match the financial situations of consumers.
“They cannot do both: these contrasting pressures are entirely incompatible bedfellows.
“Lenders still have to deal with significant risks to their balance sheets so, after a concerted effort to meet lending targets for the first half of the year, the next few months could see a return to a lower level of activity as they ration funds cautiously in the third quarter.”
Google Mortgages
Google is experimenting with another foray into the mainstream UK housing market, but this time with the launch of a mortgage comparison website.
This now appears on the very top of the page when you google keywords such as ‘compare mortgages UK’, ‘mortgages UK’ and even just ‘mortgages’.
The site, which bears all the hallmarks of a trial, says it offers ‘fast, simple and clear comparison’ and invites users to say whether they are looking for a purchase mortgage or a remortgage. You then press a ‘compare’ button, without leaving the Google page.
It then switches through to the comparison page, but this currently only lists ‘sponsored’ results’ from a handful of lenders: Woolwich, ING Direct, Lloyds TSB, NatWest and Royal Bank of Scotland.
The website, Compare UK Mortgages, follows Google’s acquisition of Beat That Quote, the UK comparison website for mortgages and other financial products, in March for £37.7m.
Analysts said then that Google only bought it to can it, in order to go after the whole industry amid rumours that Google’s IT specialists were working on a mortgage comparison website based on the software used by Beat That Quote.
At the time, Google said that with Beat That Quote’s expertise “and our technology, we will be able to provide new and innovative ways for consumers to find the right financial products and save money”.
Google is still clearly doing its homework and is using its mortgage comparison trial to run a feedback survey, asking users how they have searched for a mortgage before.
Google has a similar mortgage comparison service in the States.
In the UK, however, as agents know, property has not been altogether good news for the internet giant. It tried to launch the ultimate property search feature, using Google Maps.
Despite the fact that it was free to estate agents to use for their listings, unlike Rightmove, it failed to gain any traction and was aborted in February after just seven month – with red faces all round.
The site, which bears all the hallmarks of a trial, says it offers ‘fast, simple and clear comparison’ and invites users to say whether they are looking for a purchase mortgage or a remortgage. You then press a ‘compare’ button, without leaving the Google page.
It then switches through to the comparison page, but this currently only lists ‘sponsored’ results’ from a handful of lenders: Woolwich, ING Direct, Lloyds TSB, NatWest and Royal Bank of Scotland.
The website, Compare UK Mortgages, follows Google’s acquisition of Beat That Quote, the UK comparison website for mortgages and other financial products, in March for £37.7m.
Analysts said then that Google only bought it to can it, in order to go after the whole industry amid rumours that Google’s IT specialists were working on a mortgage comparison website based on the software used by Beat That Quote.
At the time, Google said that with Beat That Quote’s expertise “and our technology, we will be able to provide new and innovative ways for consumers to find the right financial products and save money”.
Google is still clearly doing its homework and is using its mortgage comparison trial to run a feedback survey, asking users how they have searched for a mortgage before.
Google has a similar mortgage comparison service in the States.
In the UK, however, as agents know, property has not been altogether good news for the internet giant. It tried to launch the ultimate property search feature, using Google Maps.
Despite the fact that it was free to estate agents to use for their listings, unlike Rightmove, it failed to gain any traction and was aborted in February after just seven month – with red faces all round.
Whether the new mortgage comparison site, using the normal Google search rather than mapping, provides a re-entry into the wider housing market, such as For Sale listings, remains to be seen.
Wednesday 13 July 2011
New-look EPCs to be launched next April
EPCs will be reformed and households will be given a month’s holiday from council tax return for signing up to the Green Deal.
The latter is part of an incentive trial, which is being run with Homebase, which also offers vouchers for Homebase and Argos.
Other offers being trialled offer energy efficiency products at a discount if households club together to buy them, or community rewards.
The trials are launched in a new report from the Cabinet Office’s ‘behavioural insights team’, which also says how it will ‘refresh’ EPCs.
The report says it needs to reform EPCs because currently only 18% of house buyers report that they took any notice of them in deciding on their purchase, while only 17% act on the recommendations.
From next April, EPCs will have a different front page, which will signpost the Green Deal by showing which measures are available for grant-aid under the scheme, and detail cost savings over three years, and not just environmental consequences.
It will show the current costs of lighting, heating and hot water, and the potential costs of all three, giving the total cost-saving over three years.
In addition, the front page will list the top three recommendations, with the suggestion that payback times may also be included.
Further research on EPCs will be conducted by the behavioural insights team and Homebase.
Other ideas include setting up a network of Green Deal champions, and forthcoming work with Which? to examine what advice householders find most useful.
You can see the new-look EPCs in the report:
http://tinyurl.com/6yymob8
The latter is part of an incentive trial, which is being run with Homebase, which also offers vouchers for Homebase and Argos.
Other offers being trialled offer energy efficiency products at a discount if households club together to buy them, or community rewards.
The trials are launched in a new report from the Cabinet Office’s ‘behavioural insights team’, which also says how it will ‘refresh’ EPCs.
The report says it needs to reform EPCs because currently only 18% of house buyers report that they took any notice of them in deciding on their purchase, while only 17% act on the recommendations.
From next April, EPCs will have a different front page, which will signpost the Green Deal by showing which measures are available for grant-aid under the scheme, and detail cost savings over three years, and not just environmental consequences.
It will show the current costs of lighting, heating and hot water, and the potential costs of all three, giving the total cost-saving over three years.
In addition, the front page will list the top three recommendations, with the suggestion that payback times may also be included.
Further research on EPCs will be conducted by the behavioural insights team and Homebase.
Other ideas include setting up a network of Green Deal champions, and forthcoming work with Which? to examine what advice householders find most useful.
You can see the new-look EPCs in the report:
http://tinyurl.com/6yymob8
The 'refresh' of EPCs is not the only change mooted. CLG also wants estate agents and letting agents put an EPC report on all their marketing particulars, possibly from as early as this October, meaning extra costs of print and paper. Have you taken part in the all-important SPLINTA survey yet? It's essential that if you have views, you make them plain now. Please refer back to previous story SPLINTA gets ready to fire up new campaign on EPCs
New 20% top-up mortgage could suit half of all buyers, says Castle Trust
There is no launch date for the new Partnership Mortgage being offered by Castle Trust, which promises to revolutionise the house-buying market.
Martyn Guerin, chief operating officer, would not commit himself to saying whether the launch would be this year. It would not necessarily immediately follow getting the required permissions from the FSA and OFT.
He said: “We will launch when we are ready – when we are sure we have got the product right and not before. We need to get things right, because we will be in the market for a long time.”
In an interview with Estate Agent Today, Guerin admitted that there have been a number of misconceptions about the offering, which will be a 20% ‘top-up’ mortgage available only to home buyers who already have a 20% deposit.
He said it was not the case, as has been reported, that borrowers also needed to be investors in the other side of the Castle Trust offering, House Price Savings Accounts (HouSAs). He also accepted that the new mortgage will not help first-time buyers on to the housing ladder, unless they already have a 20% deposit.
He said that closer attention would be paid to communicating the offerings from Castle Trust, which is chaired by the former FSA chairman Sir Callum McCarthy. He said: “I think sometimes you can just get too close to something, but certainly we need to be more careful in future as to how we phrase things.”
He said that on the HouSA side of the business, investors could invest for three, five or ten-year terms, at rates of between 2% and 3%, based on the Halifax House Price Survey. They will be able to choose to cash in on exit, or take a quarterly ‘voucher’, whose value would be linked to the Halifax, or could invest in both strategies.
Minimum investment would be £1,000, he confirmed. He emphasised: “This is not a capital guarantee product, but whatever the index does, the investor will outperform the Halifax.”
For example, an investor puts in £10,000 and the Halifax index stands at 100. By year five, the index stands at 150 and the value of the HouSA has gone up to £17,500. Much more complicated is what happens if the index slips, but the borrower appears to be shielded from the entire slippage.
Partnership Mortgages will allow a borrower to take out a 60% mortgage with one lender, and then a 20% second charge from Castle Trust. On this 20% mortgage, the borrower would pay no interest. In return, on the sale of the property, or at the end of the mortgage term (to be 10–25 years), the borrower would hand back the original 20% stake plus 40% of any uplift in the property’s value.
If the property were to fall in price, the borrower would hand back the original 20% stake, but Castle Trust would contribute 20% of the loss in value.
Thus, a £200,000 house purchase could be funded with a 25% deposit (£50,000), a 20% Partnership Mortgage (£40,000); and a 55% traditional primary mortgage (£110,000). It is sold five years later.
If the house rises in value by 10% to £220,000, then the Partnership Mortgage is repaid for £48,000 (initial £40,000 plus 40% of £20,000).
If the house falls in value by 10% to £180,000 then the Partnership Mortgage is repaid for £36,000 (initial £40,000 less 20% of £20,000).
So, what do people think of the idea? “We have done regular market research, and words such as innovative, exciting, new and accessible are words that come back to us,” said Guerin. “People also view the HousSAs as offering a good alternative investment vehicle.”
Does the word ‘complicated’ ever also come back? “Well, we do take on board all the feedback we get,” he said.
“Our market research also shows that the Partnership Mortgage would be attractive to about half of home-buyers – for example, people who want to reduce their monthly mortgage payments because they want to put their children through private education, or go on regular holidays. And also to people who do not want to move twice, because a Partnership Mortgage will allow them to buy the type of property they eventually aspire to.”
Does he not think it risky, though, that people having to sell up because of one of the four Ds (death, divorce, debt and downsizing) could find themselves having to hand over large sums of money at a time when they might not be in the best financial health?
“The Partnership Mortgage won’t be for everyone, and we have certainly given a lot of thought as to the outcomes you mention,” Guerin said.
“We will also make people think about how they would fund the repayments if, for example, they had not sold the property.”
Guerin also emphasised that the Partnership Mortgage will not be available directly, but only through advisers.
“This will be an advised sale,” he said. “There will be no direct route, but for advisers it will allow them to consider the possibility that clients might take out one 80% LTV mortgage, or a 60% one with a 20% Partnership Mortgage on top.”
Guerin also made it plain that whilst the major investor is JC Flowers, the US equity firm that bankrolled the Kent Reliance Building Society and is looking for other deals with building societies, there will be no special relationship with, for example, Kent.
“There will be no formal relationship, but obviously, we would welcome the opportunity to work with them,” he said.
And how is the permissions process going? FSA approval is needed for the investment side of the business, while the OFT must approve the Partnership product because it is a second charge.
Guerin gives nothing away but says: “We have had good levels of engagement with the parties.”
Martyn Guerin, chief operating officer, would not commit himself to saying whether the launch would be this year. It would not necessarily immediately follow getting the required permissions from the FSA and OFT.
He said: “We will launch when we are ready – when we are sure we have got the product right and not before. We need to get things right, because we will be in the market for a long time.”
In an interview with Estate Agent Today, Guerin admitted that there have been a number of misconceptions about the offering, which will be a 20% ‘top-up’ mortgage available only to home buyers who already have a 20% deposit.
He said it was not the case, as has been reported, that borrowers also needed to be investors in the other side of the Castle Trust offering, House Price Savings Accounts (HouSAs). He also accepted that the new mortgage will not help first-time buyers on to the housing ladder, unless they already have a 20% deposit.
He said that closer attention would be paid to communicating the offerings from Castle Trust, which is chaired by the former FSA chairman Sir Callum McCarthy. He said: “I think sometimes you can just get too close to something, but certainly we need to be more careful in future as to how we phrase things.”
He said that on the HouSA side of the business, investors could invest for three, five or ten-year terms, at rates of between 2% and 3%, based on the Halifax House Price Survey. They will be able to choose to cash in on exit, or take a quarterly ‘voucher’, whose value would be linked to the Halifax, or could invest in both strategies.
Minimum investment would be £1,000, he confirmed. He emphasised: “This is not a capital guarantee product, but whatever the index does, the investor will outperform the Halifax.”
For example, an investor puts in £10,000 and the Halifax index stands at 100. By year five, the index stands at 150 and the value of the HouSA has gone up to £17,500. Much more complicated is what happens if the index slips, but the borrower appears to be shielded from the entire slippage.
Partnership Mortgages will allow a borrower to take out a 60% mortgage with one lender, and then a 20% second charge from Castle Trust. On this 20% mortgage, the borrower would pay no interest. In return, on the sale of the property, or at the end of the mortgage term (to be 10–25 years), the borrower would hand back the original 20% stake plus 40% of any uplift in the property’s value.
If the property were to fall in price, the borrower would hand back the original 20% stake, but Castle Trust would contribute 20% of the loss in value.
Thus, a £200,000 house purchase could be funded with a 25% deposit (£50,000), a 20% Partnership Mortgage (£40,000); and a 55% traditional primary mortgage (£110,000). It is sold five years later.
If the house rises in value by 10% to £220,000, then the Partnership Mortgage is repaid for £48,000 (initial £40,000 plus 40% of £20,000).
If the house falls in value by 10% to £180,000 then the Partnership Mortgage is repaid for £36,000 (initial £40,000 less 20% of £20,000).
So, what do people think of the idea? “We have done regular market research, and words such as innovative, exciting, new and accessible are words that come back to us,” said Guerin. “People also view the HousSAs as offering a good alternative investment vehicle.”
Does the word ‘complicated’ ever also come back? “Well, we do take on board all the feedback we get,” he said.
“Our market research also shows that the Partnership Mortgage would be attractive to about half of home-buyers – for example, people who want to reduce their monthly mortgage payments because they want to put their children through private education, or go on regular holidays. And also to people who do not want to move twice, because a Partnership Mortgage will allow them to buy the type of property they eventually aspire to.”
Does he not think it risky, though, that people having to sell up because of one of the four Ds (death, divorce, debt and downsizing) could find themselves having to hand over large sums of money at a time when they might not be in the best financial health?
“The Partnership Mortgage won’t be for everyone, and we have certainly given a lot of thought as to the outcomes you mention,” Guerin said.
“We will also make people think about how they would fund the repayments if, for example, they had not sold the property.”
Guerin also emphasised that the Partnership Mortgage will not be available directly, but only through advisers.
“This will be an advised sale,” he said. “There will be no direct route, but for advisers it will allow them to consider the possibility that clients might take out one 80% LTV mortgage, or a 60% one with a 20% Partnership Mortgage on top.”
Guerin also made it plain that whilst the major investor is JC Flowers, the US equity firm that bankrolled the Kent Reliance Building Society and is looking for other deals with building societies, there will be no special relationship with, for example, Kent.
“There will be no formal relationship, but obviously, we would welcome the opportunity to work with them,” he said.
And how is the permissions process going? FSA approval is needed for the investment side of the business, while the OFT must approve the Partnership product because it is a second charge.
Guerin gives nothing away but says: “We have had good levels of engagement with the parties.”
Increase in Marketing price reductions
A total of 85,104 properties on the market had their prices cut last month, according to the property search engine Home.
This was 15% more than in June last year.
The website, which takes its data from almost every estate agency website and portal in the UK, also reports that properties are now taking 113 days to sell – 13 days longer than a year ago.
Asking prices have started to show signs of coming down. They are 0.8% lower than a year ago, and 1.1% lower than six months ago.
The website predicts a further slide in asking prices over the rest of this year.
This was 15% more than in June last year.
The website, which takes its data from almost every estate agency website and portal in the UK, also reports that properties are now taking 113 days to sell – 13 days longer than a year ago.
Asking prices have started to show signs of coming down. They are 0.8% lower than a year ago, and 1.1% lower than six months ago.
The website predicts a further slide in asking prices over the rest of this year.
Wednesday 6 July 2011
National Auction House increased activity by 71%
National property auctioneer Auction House has seen a dramatic year on year rise in activity, in both the number of lots sold and the amount of money raised during the first six months of 2011.
From January to June, the brand sold 835 properties compared with 488 in the same period last year – a rise of 71%.
During this time, the company raised a total of £77m – up 68% from last year, when the figure stood at just below £46m. The company’s average sales success rate for this year is 80.3%.
Auction House founding director Roger Lake said: “These are spectacular results – especially for a brand which has been in existence for less than five years. They are a clear indicator that our network of regional auction rooms is becoming increasingly successful, and our policy of selling property locally is now really taking hold.
“With an additional five salerooms across the country since last July, we are now well on course to exceed our target of selling 1,500 lots this calendar year.”
From January to June, the brand sold 835 properties compared with 488 in the same period last year – a rise of 71%.
During this time, the company raised a total of £77m – up 68% from last year, when the figure stood at just below £46m. The company’s average sales success rate for this year is 80.3%.
Auction House founding director Roger Lake said: “These are spectacular results – especially for a brand which has been in existence for less than five years. They are a clear indicator that our network of regional auction rooms is becoming increasingly successful, and our policy of selling property locally is now really taking hold.
“With an additional five salerooms across the country since last July, we are now well on course to exceed our target of selling 1,500 lots this calendar year.”
Wednesday 22 June 2011
Repos on the rise!
The number of repossessions in the first quarter of 2011 rose for the first time in a year, and were up 17% to 9,613.
Meanwhile, the mortgage drought continues.
The statistic on possessions is in the Financial Services Authority mortgage lending data covering the first three months of this year and published yesterday.
The data paints a picture of a housing market that remains stubbornly at a standstill, with new advances totalling £33bn, 10% lower than in the last quarter of last year although 3% up on the first quarter of 2010.
But house purchase mortgages accounted for just 54% – a reduced share – of new mortgages.
Only 2% of all new mortgages were given with a loan to value above 90%.
Borrowers with impaired credit histories struggled to get anywhere at all with lenders, receiving just 0.3% of all loans.
While possessions were up, the number of new arrears in the first quarter was down 8% on the last quarter of 2010. The total number of arrears cases stands at 337,000, 2% down on the last quarter of 2010 and 7% down on quarter one 2010.
David Brown, commercial director of LSL Property Services, the parent company of Your Move and Reeds Rains estate agency chains, said: “Transactions are currently running at less than 61% of the long-term average, which is an indication of just how quiet the housing market currently is.
“According to our research, the greatest fall in transactions has been for flats, which are the property type most frequently purchased by first-time buyers.
“They’re being hardest hit by the mortgage drought. Despite the number of mortgages currently offering repayment rates below 3%, lenders are still exercising caution when giving mortgages to those with limited deposits.
“The greatest fall in transactions appears to be in the South-East and London, where property prices have grown by 2.6% and 7.4% respectively in the last year, while northern England, where prices have fallen by 2.6%, is the only region to see growth in transactions.
“These transaction figures may be the first sign that the regional house price picture in the UK may be about to reverse as prices in the South-East are reaching a peak.”
Meanwhile, the National Association of Estate Agents issued an uncharacteristically gloomy report which referred to ‘stagnation’ in the housing market.
Wendy Evans-Scott, President of the NAEA, said: “Our members have likened the housing market to an obstacle course, with many falling at the first hurdle as the finance required to buy just isn’t available.
“The banks must find a balance between the loose lending of the boom and the rigidity of the current lending rules. House buyers need the Government to act in a sensible and proportionate way by encouraging the banks to offer adequate financial help to buyers.”
In 2006, there were 1.66m housing transactions. Last year, there were 886,000. This year, the Council of Mortgage Lenders has lowered its prediction to 840,000.
Meanwhile, the mortgage drought continues.
The statistic on possessions is in the Financial Services Authority mortgage lending data covering the first three months of this year and published yesterday.
The data paints a picture of a housing market that remains stubbornly at a standstill, with new advances totalling £33bn, 10% lower than in the last quarter of last year although 3% up on the first quarter of 2010.
But house purchase mortgages accounted for just 54% – a reduced share – of new mortgages.
Only 2% of all new mortgages were given with a loan to value above 90%.
Borrowers with impaired credit histories struggled to get anywhere at all with lenders, receiving just 0.3% of all loans.
While possessions were up, the number of new arrears in the first quarter was down 8% on the last quarter of 2010. The total number of arrears cases stands at 337,000, 2% down on the last quarter of 2010 and 7% down on quarter one 2010.
David Brown, commercial director of LSL Property Services, the parent company of Your Move and Reeds Rains estate agency chains, said: “Transactions are currently running at less than 61% of the long-term average, which is an indication of just how quiet the housing market currently is.
“According to our research, the greatest fall in transactions has been for flats, which are the property type most frequently purchased by first-time buyers.
“They’re being hardest hit by the mortgage drought. Despite the number of mortgages currently offering repayment rates below 3%, lenders are still exercising caution when giving mortgages to those with limited deposits.
“The greatest fall in transactions appears to be in the South-East and London, where property prices have grown by 2.6% and 7.4% respectively in the last year, while northern England, where prices have fallen by 2.6%, is the only region to see growth in transactions.
“These transaction figures may be the first sign that the regional house price picture in the UK may be about to reverse as prices in the South-East are reaching a peak.”
Meanwhile, the National Association of Estate Agents issued an uncharacteristically gloomy report which referred to ‘stagnation’ in the housing market.
Wendy Evans-Scott, President of the NAEA, said: “Our members have likened the housing market to an obstacle course, with many falling at the first hurdle as the finance required to buy just isn’t available.
“The banks must find a balance between the loose lending of the boom and the rigidity of the current lending rules. House buyers need the Government to act in a sensible and proportionate way by encouraging the banks to offer adequate financial help to buyers.”
In 2006, there were 1.66m housing transactions. Last year, there were 886,000. This year, the Council of Mortgage Lenders has lowered its prediction to 840,000.
Subscribe to:
Posts (Atom)