Burghleys News and Views
Property asking prices shoot up to four-year high
Asking prices for homes on the market in England and Wales have moved up a further 0.8% since March, showing the highest annual growth for four years.
But, said property search engine Home, listings of new homes for sale are down by 5.2% on this time a year ago.
Home's new survey, in conjuction with the Land Registry's official number crunchers Calnea, says that asking prices are up 2.1% on this time last year.
But the site warns that it is low volume of property for sale which is the key to market. It warned that the current low volume of home sales also looks likely to persist until the larger economy picks up.
Home also suggests that many purchasers are buy-to-let landlords, and predicts that 25% of all housing stock will be rental by 2020
16/4/2012. 12:21
At last, rays of sunshine on housing market
Monday 27th February 2012Green shoots in the housing market are reported by Hometrack this morning.
It said there has been “a marked improvement in housing market conditions” this month.
The number of new buyers registering jumped 18%, after two months of major declines, and represented the strongest level of demand seen since the start of the downturn. The rise compared with the 15% increase in potential buyers recorded in February 2009.
Property listings also grew, by 15%, whilst average time on the market crept down to just below the ten-week mark.
Hometrack attributes some of the rise in demand to first-time buyers looking to beat the end of the Stamp Duty holiday on March 24.
While average selling prices have not changed at all since the start of the year, this is masked by a small increase in London offsetting price falls across six regions in the North and Midlands, and unchanged prices across the South-East, East Anglia and Yorkshire & Humberside.
However, Hometrack points out that it is a scarcity of supply that remains a key feature of the market.
Hometrack director of research Richard Donnell said: “As investors and first-time buyers have no properties to sell, the growth in demand outpaced the increase in supply across nearly all regions.
“Over the last six months, there has been only a small (1.5%) increase in the supply of housing and this scarcity continues to act as a support to pricing.”
He added: “While the seasonal pick-up in demand is to be welcomed, the fundamentals facing the housing market remain largely unchanged: the average time to sell, for example, remains at relatively high levels and the balance of supply and demand remains in negative equity.
“In the short term, a lack of housing for sale is set to underpin prices, while market activity will benefit from the support of first-time buyers as they race to beat the ending of the Stamp Duty holiday.”
The Hometrack survey is based on responses from around 5,000 estate
27/2/2012. 17:45
Alert: Stamp Duty About to End!
Calling all first time buyers. It’s time to gird your paperwork, clear your diary, bolster your bank account and chum up to your solicitor.
Because if you have recently made an offer on a property (or are about to) then it’s time to put your fastest skates on – because you’ve got very little time to get to legal completion which, given that the average is 30 to 40 days, means it will be a close run thing.
“Legal completion means the ‘effective date’ as detailed on the Stamp Duty and Land Tax submission your solicitors makes to the Land Registry,” says Ashley Gendler of Burghleys Estate Agents.
And Sue Bushnell, of Devon estate agent Bushnell & Green, says all monies must be transferred too for it be considered a ‘completion’.
This rush to the line is the government's timetable but it's chosen the worst possible point in the recession is to end the relief for first time buyers purchasing homes up to £250,000, who from the 25th March onwards will pay the same as the rest of us – 1% of the value of any property bought for between £125,000 and £250,000.
Also, 25th March is an odd date to choose. It’s a Saturday and many banks are shut then, making the nail biting rush to completion problematical.
But what’s more worrying is the extra financial burden this puts on first time buyers. Although the deposit needed to buy the average first time buyer home (on the average first time buyer salary) has dropped from £71,000 to £49,000 in recent years as mortgage rates have fallen, having to pay up to £1,250 and £2,500 extra in tax is an unwelcome extra cost.
And the only way to ‘avoid’ Stamp Duty now when you buy a house is to purchase one for less than £150,000 in one of the 2,000 areas the government considers to be disadvantaged. For more information visit the HMRC website.
27/2/2012. 17:36
Most inventories 'would not stand up in court'
The majority of the inventories presented to deposit scheme adjudicators are not worth the paper they are written on, leading to landlords losing deposit cases, the Association of Independent Inventory Clerks has claimed.
The AIIC adds that most inventories would not stand up in court, were disputes to get that far.
The association claims that when there are disputes, many landlords and agents fail to present thorough and fully detailed inventories, copies of which have been given to the tenant at check-in and check-out and, ideally, signed by the tenant – although an unsigned inventory is still acceptable by deposit scheme adjudicators, if it is dated and proof is available that the document has been given to the tenant at time of check-in.
Pat Barber, chair of the AIIC, said: “It is so important for landlords to ensure they have all the right paperwork to present to adjudicators.
“Time and again we see landlords losing disputes because they fail to provide the right evidence to show that a tenant has damaged the property.
“It should always be remembered that the deposit is the tenant’s property until a landlord can prove justification for any deductions.”
All Inventories prepared by Burghleys are undertaken by professionally qualified and totally independent inventory clerks.
13/2/2012. 18:36
2012 set to be a strong year for tenant demand
When asked whether they thought rental income would increase during the next 12 months, 45 per cent of landlords surveyed said that levels will increase, whereas 53 per cent said that it would remain stable – only two per cent said that it would decrease.
Over the coming year, two thirds of landlords said that they thought arrears levels would stay stable and 20 per cent said that they thought arrears would rise moderately.
Nigel Terrington (left), Chief Executive of Paragon Group, says, “It is no surprise that landlords are expecting a healthy level of tenant demand in the New Year, based on the levels of demand we have seen steadily increase throughout the past 12 months.
“2011 was certainly a good year for the buy-to-let market, with not only increasing tenant demand but landlords investing in their portfolios, low levels of arrears and more available finance.
“This year will bring its own challenges, especially with the uncertainty in Europe and the wider financial markets affecting overall confidence levels. But I believe that the foundations that we laid as a sector in 2011 will allow lenders and landlords to continue to do business, in particular if we see a greater level of product innovation. We should look to 2012 with optimism as it is sure to bring further opportunities.”
17/1/2012. 15:29
New homes creation 'will receive autumn boost'
The new homes sector is set to receive a boost in 2012, with many more new properties coming into the market, one industry body has predicted.
Brian Berry, director of external affairs at the Federation of Master Builders (FMB), said that although the economic situation is still tough, there is light on the horizon for the construction sector, as far as new property is concerned.
He pointed to March as a significant month for the new homes market, as this is when the government is going to respond initially to the National Planning Policy Framework, with a positive response then being fed through into the economy.
If all goes well, it will be the second half of the year when improvement will be seen, although this depends on the government sticking to its original proposals.
Nonetheless, Mr Berry noted that mortgage availability is still "really tough" and there is currently no easing in the amount of deposit that is required.
It comes after Persimmon recently said it anticipates an increase of around 50 per cent in underlying profit before tax in 2011 as a result of a significant improvement in underlying operating profitability, combined with a reduction in net finance costs.
In anticipation of an active spring 2012 selling season, the company stimulated the new homes market by opening around 25 new sites in the last quarter of 2011 and, subject to market conditions, expects to open a further 60 new developments in the first six months of 2012.
10/1/2012. 18:24
Buy to let 'an attractive investment'
An increasing number of landlords are entering the UK buy to let market as it continues to appear an "attractive investment", one industry specialist has claimed.
David Lawrenson, private rented sector expert, made the comments after the Association of Residential Lettings Agents (Arla) reported that the number of homes coming onto the rental market because they cannot be sold is increasing in some parts of the UK.
This in turn has led to a rise in the number of 'reluctant landlords' - something Mr Lawrenson said is not surprising, considering the fact that there have been many reports in the press about the rents going up strongly, especially in London.
"If they see that, then people will think, 'I can get quite strong rents if I just let the property out'. Therefore it is quite an attractive thing to do, especially if they are in a position where they have perhaps been trying to sell their house and couldn't," he added.
The expert said that people will be thinking it is "quite a good investment", compared with the very low rates which are achievable on leaving money in the bank.
He explained that the best rate that you can get is about 4.6 per cent over five years if people put money into the highest five-year bond, but can get a net yield of about that level by letting a property out.
10/1/2012. 18:21
Property Wisdom – Keep It Real
There’s no rational reason to expect property to always be a sound investment. As with stocks and shares, it’s the starting point that matters most. Both have proven something of a disappointment over the past decade - overpromising and under delivering.
A similar process has unfolded with residential property – a salutary lesson being the buy-to-let binge – which has left us with a glut of unwanted new-builds cluttering up the market. The illusion of housing wealth has also prevented many of us from noticing that we’ve been struggling to maintain our standard of living, as real incomes have stagnated over the past 30 years. Given that the housing market rarely spends any time at ‘the average’, your house will always be either ‘over’ or ‘under performing’ the market at any given moment, so don’t get too anal about it. In the end, you’re looking to get the best mix of financial and family outcomes from your property choice.
If there’s one thing we can be certain of – it’s another boom-bust cycle. Perhaps next time around we can look further ahead and hatch a smarter plan – recalibrate our expectations to more realistic levels: save more, value what we already have, and spend more time and money on productive investments with long-term value. Our houses are, first and foremost, homes, places where our lives are lived or missed, and in the end, our years of family fun will massively outweigh any financial leg-ups we may achieve along the way.
10/1/2012. 18:19
London leads the way for UK property
London is the city that leads the way with property prices, says one mortgage expert.
Catherine Hearnden, director of brokerage site MyMortgageDirect.co.uk, said that when property values in the nation's capital change, the rest of the country tends to follow suit.
"I think it is wise to look at London as a guide to what is going to happen," she commented.
However, she stressed that the future remains unclear and much depends on availability of employment and interest rates.
She added that mortgage lending is also improving, with banks and building societies now offering affordability multiples that are as good as they have "been for ages".
Her comments come in the same week, Nationwide announced that house prices increased by 0.4 per cent in October and are now 0.8 per cent higher than they were in the same month in 2010.
The average UK house value now stands at £165,650, although London properties are in most cases significantly higher.
Despite this, David Warren, senior sales negotiator at Paramount, stated that the market has changed slightly in the past few years and the capital maybe does not have the same bearing nationally as it once did.
“I do think that the capital generally guides the rest of the UK property market but it doesn’t seem to have been the same over the last couple of years," he said."
Whilst we have seen busy periods since 2009 and a shortage of stock which has meant prices have risen by 20 per cent, it doesn’t seem to be the same across the markets outside London.
"I think this is due to the amount of cash in London, we are finding that at least 50 per cent of our transactions are being agreed to cash buyers and a large proportion of these buyers are parents from the UK, mainland Europe and Asia.
"People think London is a safe market. Where buyers outside London tend to be buying more traditionally with a mortgage, finding the deposit for these is hard in these tough times”.
12/12/2011
Insulation could increase your home's value
People looking to add few pounds to their property value should make it warmer and more energy efficient, says the National Home Improvement Council (NHIC).
Andrew Leech, executive director of the body, says that loft and cavity wall insulation will not only help to keep your energy bills down it will also bump up the value of your home and make it more appealing to potential purchasers.
He also stated that the house has to have what he calls "kerb appeal", meaning it looks good from the outside and suggested that ideally the windows should be double glazed and secure.
"If you're talking about looking at selling a house on then you have got to make it look as normal as possible, you don't want any garish paintings, decorations or [colour] schemes running throughout the house. You want to make it a very neutral environment because people can relate to that more," Mr Leech added.
Phil Spencer, presenter of Channel 4's Location, Location, Location, said last year that painting the outside of the house may cost between £100 and £1,000 but could add around £5,000 to its value.
8/12/2011
Repossession levels drop
The level of property repossession in Britain has held steady in the third quarter of 2011. 9200 properties were repossessed, compared to 9100 in Q2, according to the Council of Mortgage Lenders (CML).
In total, over the course of 2011, 27500 properties have been repossessed and that's down on 2010. The CML predicts there will be fewer repossession in 2011 than last year. Considering the economic doom and gloom, and thinking back to the 1990s when repossession was endemic, these numbers are quite remarkable and seem to be bucking economic trends.
Moreover, unlike like rent arrears which are growing, mortgage arrears are falling and are at a lower level than 2010. We wonder how long this will last as household budgets continue to be squeezed, incomes remain static, inflation rockets and, as is inevitable, interest rates rise again at some point.
Paul Smee, of the CML, comments: "The fall in the number of mortgages in arrears, and the stable picture on repossessions, are testament not only to the beneficial effects of low interest rates, but also to effective arrears management, and good communication between lenders, borrowers and debt counselling organisations."
"Against the backdrop of widespread financial uncertainty sweeping both the UK and the wider European economies, it is impossible to be sanguine about the future influences that households may face. But lenders will do their utmost to help borrowers keep their homes, whatever pressures emerge. Anyone worried about their mortgage should seek early advice and talk to their lender: these figures firmly show that repossession does not have to be an inevitable consequence of mortgage arrears."
2/12/2011
Empty Property?...short-letting could be the answer!
If you’ve got a property that’s vacant, then Burghleys could offer you a solution that could provide you with a potentially good income over a short period of time.
You may be trying to sell a vacant property or going abroad for a few months, it does not matter. Whatever your reason you may be able to let your property out on short term basis from a minimum of one month up to six months (less one day) and achieve rents anything between 50 & 100% above standard rents.
“A number of property owners have been in touch with properties that are on the market for sale with either no takers or with long protracted situations. Their properties are sitting empty, and we’ve been able to put fully referenced tenants into their homes” said Ashley Gendler, one of the partners of Burghleys.
Burghleys register of tenants looking for short lets has grown substantially, from applicants who are, for example, having extensive work done on their own homes, businessmen on short term employment contracts and even enquiries from long term visitors to London using one of their flats as a base.
Ashley went on to say, “It’s a win/win situation for many short term landlords. They receive an income on their property with all the protection that a normal let affords, and the tenant gets a property that resolves their short term accommodation needs”.
However, one major consideration before letting short term relates to the local authority. Unfortunately, a number of local authorities (Camden & Islington included) require anyone looking to rent a property out for less than 90 days to obtain consent from them and the possible need for planning permission to be granted. Only in exceptional cases will this be granted.
For more information on how Burghleys can assist you, either call the office or click on the ‘Find out More’ button on our website homepage.
18/11/2011
Research 'is key' when refurbishing a property
People planning on refurbishing their property in the coming weeks and month need to ensure that they have carried out a great deal of research to ensure the project goes smoothly, it has been claimed.
That is the opinion of Julia Kendell, DIY SOS presenter and interior designer, who said that UK property owners need to be as objective as possible and have "a good think", while writing notes about who they are, what their passions are and where their interests lie.
She advised: "Start collecting images that really inspire you so that when you start to put your own scheme together, you can collate all these ideas together and get a good feel about what is going to float your boat, and excite you, to create the room that you want."
Her comments followed the publication of a report by isme.com, which showed that the average woman spends £419 a year on soft furnishing items for her home, though 61 per cent have no idea about the latest interior design trends.
When it comes to doing up the home, possibly to boost house prices, people need to know exactly what sort of items they're after, as it is possible to buy some "really fabulous pieces" without spending a fortune, Ms Kendell advised.
It is all about forward planning and doing as much research as possible, the interior design expert stated.
7/11/2011
Minor property improvements 'lead to big savings'
Making fairly minor improvements to a property could lead to major savings in terms of cost and energy, it has been claimed.
That is the opinion of Andrew Leech, director at the National Home Improvement Council, who said that many people need more education about the benefits of insulating their home.
His comments followed the publication of a report by uSwitch, which noted that although 59 per cent of people think being green can save money, 13 per cent worry it's too expensive.
Despite 37 per cent of Brits thinking that solar panels are only for those who can afford to be green, 69 per cent of the nation believe they are a good way to cut energy bills, the report found.
Mr Leech said that it needs to be "drilled home" to people that for a relatively modest investment, they can make big savings over the long term.
"It is not just for the next year, but for the year after, the year after and the year after. This is particularly important when you think of the increase in utility prices. It is a big thing to consider and to put into operation," he added.
When they get their new fuel bills through, they need to have it pointed out to them that they could be saving a certain amount of money if they were fully insulated, the expert suggested.
27/10/2011
Buy to let outlook 'is positive'
The outlook for buy to let homeowners in the UK is currently very positive, according to one specialist who has noted how the practice has increased in popularity significantly in recent years.
Buy to let property expert Roger Southam made the comments after the coming of the phrase 'buy to let' reached its 15th anniversary in September 2011, and the expert said that much has changed in the last decade and a half.
He explained in 1996, the residential industry and economic outlook was a "completely different picture", with the average UK price for a flat or maisonette being roughly £55,000, compared with average price for the same property today, which is £163,800.
The subsequent boom was welcomed by many, but the expert did point out that the recession led to the creation of the accidental landlord, and also introduced a stronger call for government intervention to regulate landlords and agents.
"Today, however, for the experienced, savvy and lucky landlords the market is the most rewarding, with a positive outlook for those that have decent stock," he added.
Mr Southam said this is thanks in part to the fall in lending activity and more people being forced to rent while saving for a larger deposit to buy.
13/10/2011
Cheapest mortgage deals in history now on offer.
Homeowners were urged to snap up one of the cheap loans as the interest rates on them continue to fall to almost rock bottom levels.
The latest drive downwards in deals was fuelled by Leeds Building Society as it launched its lowest ever two-year fixed mortgage with a rate of 1.99 per cent. On the back of that, two-year fixed home loans across the market dropped to an average of just 3.82 per cent – also their lowest ever.
The record deals are available because lenders are confident that interest rates will not rise from their current base rate level of 0.5 per cent until next year at the earliest.
The Bank of England’s Monetary Policy Committee is again expected to keep base rates unchanged for the 32nd consecutive month at its meeting today. David Newnes, director of LSL Property Services owners of Your Move and Reeds Rains estate agencies, said last night: “Lenders are driving down rates to record lows. Fixes are so cheap homeowners will be tempted to lock into deals which will give them financial security for years.”
He called on borrowers to act quickly. “As soon as the base rate looks like rising, fixes will get more expensive. Borrowers who wait too long will miss out.”
Miles Shipside, director of Rightmove estate agents, said: “Lenders are fighting over buyers with good deposits, and offering them terrific deals to get their low-risk mortgage business.
“It’s a great time for those with enough equity to trade up.”
Buyers taking up the Leeds deal on a 25-year term with a 25 per cent deposit, would see their monthly payments on a £219,852 property fall by £159.93, according to homes search website FindaProperty.com.
4/10/2011
Buying is now cheaper than renting across 90% of the country, says property website Zoopla.
Tenants pay 13% more on average per year than if they were buying, while renting in London costs almost £6,000, which is £5,959 more each year than owning.
Zoopla, which lists over half a million properties for sale or to rent, analysed the asking prices and rents for all two-bedroom flats currently on the market, comparing the rental cost to the cost of ownership based on servicing an interest-only mortgage at 5% pa.
In London, where the average asking price for two-bedroom flats stands at £430,608, buying still beats renting by a significant margin. The average monthly rent in the capital today is 28% higher than the cost of ownership, leaving renters paying an extra £5,964 annually compared to owners.
29/09/2011
2012 Olympics...and now for the bad news!
As the National Association of Estate Agents (NAEA) calls for a review of the law on short term lettings, BBC News has investigated London councils’ attitude to short term lettings during the Olympics.
People across London are expected to rent out their properties during the games but Londoners hoping to rent out their homes during the Olympics are being warned they could be breaking the law and left facing a fine.
BBC London reports that it has uncovered stark variations in councils' positions on the practice. Some have warned they will crack down on people renting out properties - but others have said it is not a problem.
But at the moment Londoners face a postcode lottery as to whether they can rent out their homes for the games. Juzar Jeevanjee lives in Haringey, one of the areas where the council has said it will not crack down on people letting out their homes. He said:
"Obviously there's a huge opportunity for earning extra money here with lots coming in for the Olympics who can't afford hotels.
"From what agents have told me, I could double or triple what I could get at the moment, so it could be happy times."
But Juliet Rowe, who lives in Westminster, would be in a very different situation if she wanted to rent out her apartment for a short period. Westminster effectively bans short term lets of 90 days or under unless planning permission is obtained - but this is rarely given. If she were to rent out her home anyway during the games, she could face a fine of £20,000 and even a criminal record. Ms Rowe does not plan to do this - but said it was enormously disappointing.
Westminster Council told BBC London it was important to preserve the rental market for longer term residents. It said numerous complaints had been received by residents complaining about noise and disruption in mansion blocks caused by short-term residents.
Councils banning short-term lets include Southwark, Tower Hamlets, Islington, Kensington and Chelsea, Westminster and Camden Chief executive of the National Association of Estate Agents, Peter Bolton King (right), said, "The problem here is a lack of a level playing field which means regulations are not being policed in the same way across London. "I think it's time for a review and to look at whether this is working or not."
16/9/2011
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