#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.

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.

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.”

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.”

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.

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.”