Determine your investment strategy
Friday, 12 February 2010 Determine your investment strategyThere are a number of different ways of generating wealth from property: one size doesn't fit all For example, maybe you want to buy for long term capital growth or maybe you want to achieve monthly cashflow. The strategy you choose to follow will determine the type of property you will be looking for. Different options to consider: - Buy to let income i.e. generate a monthly income with rents in excess of costs
- Buy to let capital- monthly cashflow is flat, but the investment has the potential for significant capital growth
- Buying a distressed/repossessed house at undervalue
- Back to back trading i.e. Buy and sell within a short time frame to make a profit
- Investing abroad
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Why borrowing money significantly increases your return on investment
Tuesday, 26 January 2010 The ability to borrow money to invest in a property is called "gearing". Gearing provides significant improvements to return on investment.
A typical investor needs a deposit of circa 25-35% of the purchase price to purchase an investment property in conjunction with a buy to let mortgage.
Although you only need to invest a portion of the value, you will actually receive capital growth on 100% of the asset. As an example, if you were to purchase a buy to let property for £150,000, dependant on the rent you would probably get a mortgage of £105,000 leaving you to find a deposit of £45,000.
If you assume that after 10 years the value of the property has doubled the property would then be worth £300,000. However, the mortgage is still £105,000.
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Set the right price for your property sale.
Wednesday, 13 January 2010 The property market has recently been showing significant signs of improvement. For many this may be the time to consider putting their property on the market.But you must make sure you set a realistic price to get the viewings. It may be tempting to put a high asking price with the view to accepting a lower offer. But you must consider whether the high asking price infact will deter potential viewers. No matter how attractive your property is, if you cannot get the viewers through the front door on one is ever going to see that. But unless you are desperate for a quick sale and willing to sell at a very low price, you must also avoid pricing too near the lower end of the market. Potential buyers will be wary of anything which looks too cheap and will wonder what's wrong with it.
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Property is a long term investment
Monday, 11 January 2010 A recent review of my website has shown a large number are searching under the typical query:- Predicted house prices for 2015? I'm delighted that the number of people who've raised similar question are all looking at the timescale 2015. Why?
Property is a long term investment. Due to the large costs involved in purchasing property, even in a steadily rising market you cannot expect to purchase and sell within a short period of time and make a decent profit. Unless you are buying property that you know you can add significant value to, it would be a very risky strategy to buy only with the intention of making a short term profit. Regardless of the stage in any property cycle in my view property can always be viewed as a good long term investment.
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Availability of refurbishment mortgage for buy to let
Wednesday, 2 December 2009 The Mortgage Works (TMW) has recently launched a light refurbishment product as part of its buy to let range.The aim is to assist clients to buy property in need of home improvement and then increase the capital value and rental value by doing minor refurbishment. Minor improvement will cover such things as a new kitchen or bathroom. Remember, there does need to be a bathroom or kitchen in the property at purchase. So this covers minor refurbishment rather than major works. TMW will make retention of a maximum of £25,000 at completion which will be released when the work is completed, subject to an acceptable reinspection report. The work must be carried out within 3 months of completion and prior to letting out.
The maximum LTV for this product is 70%.
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How will house prices move in 2010?
Thursday, 19 November 2009 The Times Online had a very interesting article yesterday. They asked 5 property experts what their predictions were for 2010. As you would expect there were 5 very different replies.Yolande Barnes head of residential research at Savills predicted prices would fall in the year to December 2010. The prediction was based on a continuing weak mortgage market, further unemployment and increased supply.
Savills forecast for longer term growth is for UK house process to rise by 27% over the period 2012 to 2015. Hetal Mehta, senior economic adviser to Ernst & Young ITEM club predicted a fall of 5%, again due to rising unemployment
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Savills predict house prices to rise by 30% by 2015
Monday, 9 November 2009 We have seen many house price surveys recently showing house prices have been rising. However, as I have noted a number of previous occasions I believe this is a short term increase rather than sustained recovery.High unemployment and restricted lending on mortgages will, in my view prevent a sustained increase in house price. Prices have risen recently due to diminished supply, rather than healthy demand. A number of people (myself included) believe prices will fall in 2010. But how long will they take to recover after that?
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Stamp duty holiday about to end
Thursday, 22 October 2009 Since September 2008 stamp duty has been exempt on properties up to £175,000. This limit was extended from the original limit of £150,000, which meant anyone buying a property between £150,000 and £175,000 could save up to £1,750 on the 1% stamp duty.
However, this "holiday" will finish on 31st December 2009 and at this stage it does not look as though the date will be extended further. Therefore if you're a first time buyer or maybe looking to buy another buy to let and you fall into this bracket, do make sure you can complete before the end of the year.
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Should self certification mortgages be banned?
Tuesday, 20 October 2009 The Financial Services Authority (FSA) has suggested new rules which will ban self certification mortgages.Self cert mortgages work whereby the borrower does not have to prove their income. They advise the lender what their income is and confirm they can afford the mortgage. Unfortunately self cert mortgages have been used in the past by some less scrupulous brokers to mean "make up whatever income figure you want". However, there are a number of valid reasons why a self cert mortgage can be used. If someone is relatively recently self employed and their business is growing the historical figures do not reflect the current income. It therefore is reasonable for the client to self cert what they expect their income to be for the current year rather than what it has been historically.
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Property millionaires outnumber those of any other investment class.
Thursday, 15 October 2009 Typically those that haven't made their money directly from property generally invest in it indirectly. There's nothing wrong with seeing what successful people are doing and modelling this by applying those principles to your own life. If the majority of extraordinarily wealthy people have used property profitably, it stands to reason that there's money to be made in this sector. Read more... |
Is now a good time to nab a property bargain?
Tuesday, 13 October 2009 Experienced property investors do not tend to follow the sheep, and now will be an ideal time to add to their portfolio. Inexperienced property investors buy when all around them are buying, which pushes the prices up and makes it more difficult to buy at a competitive price.
Experienced investors know that now is the time to look at buying property at a bargain. It has been said that there is no such thing as a "cheeky offer" in the current environment. Read more...
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Borrowing money significantly increases your return on investment
Friday, 9 October 2009 Since you can borrow money to invest in property you need to find only a proportion of the value in order to be able to purchase. But you will actually receive capital growth on 100% of the asset.
Imagine you purchase a buy to let property for £150,000. You will put down a deposit (say 30%) and you borrow the balance (£105,000) from the bank.
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The ability to borrow money to invest in property
Wednesday, 7 October 2009 The return you get on property if you pay for your purchase using all cash (i.e. without getting a buy to let mortgage) is not much different to that which you could achieve with other types of investments.
The important difference is that with property you usually do not pay using cash- instead you use someone else's money to buy your property. Banks have always recognised property, and especially residential property, as an excellent security. The reason they'll lend such a high percentage of the value of a property is that they know property values have never permanently fallen over the long term.
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Is property still a good investment?
Monday, 5 October 2009 Despite the falls in the property market there are still many reasons why property is still a good investment.
A good investment has two elements:
- Good long term capital growth potential, which allows your net worth to increase
- Secure income, which increases over time.
This is still true of property even in these difficult times, and residential property satisfies the above criteria.
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Tax tip: should you have equal share to property income?
Thursday, 17 September 2009 If you own a buy to let property with your partner each person is responsible on their tax return for their share of income and expenses and their share of any capital gain.
HM Revenue & Customs (HMRC) will deem that each person has an equal share unless they have unequal entitlement to income and you ask the tax office to split it differently. So if you own a property jointly with your spouse, unless you tell HMRC otherwise, you are each responsible for reporting 50% of income and expenses and then 50% of any capital gain or loss.
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Can the recent house price rally be sustained?
Friday, 11 September 2009 Yesterday the Halifax house price index showed a rise of 0.8% in August. This is the third increase in prices in the past four months. Based on latest information it is anticipated that the house price market will show no reduction for the current year.
Based on all the recent positive information which has come to light during the summer months can we all now breathe a sigh of relief the market has recovered?
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House price crash over?
Monday, 10 August 2009 The Telegraph has today reported that the Centre for Economics and Business Research (CEBR) has declared that the house price crash is now over.They forecast property values will grow between the autumn and the end of next year.
CEBR has predicted that there will be further falls of 3% throughout the remainder of 2009. At the end of the year prices will be 24% below their peak in the 3rd quarter of 2007.
However, it believes that will be the extent of the falls and has forecast average UK house price will grow by 2% between the fourth quarter of 2009 and the end of 2010. It has also suggested the rise may be faster due to the collapse in new homebuilding.
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Nationwide offer 125% mortgage
Friday, 10 July 2009 Nationwide have announced that existing borrowers who want to move will be able to obtain a mortgage of up to 125%.The aim is to help homeowners who are unable to move because of negative equity.
Customers will be able to obtain a new loan based on 95% LTV and then also carry over up to 25% of the loss on their existing property. The 95% loan will be on a fixed rate with a higher interest rate attached to the negative equity balance carried over.
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Significant increase in mortgage fixed rates
Tuesday, 7 July 2009 There have recently been a number of increases in fixed rates for mortgages, initially due to expectations that interest rates will be considerably higher on the future. Rates started to increase following a rise in the swap rates which determine the cost of bank funding.
Even though swap rates have stabilised, fixed rates have continued to increase.
This is due to the fact banks are less willing to lend that they had previously been. The shortage of bank funding has seen banks increase rates to control demand. Once one lender starts to increase all other lenders follow, because no lender wants to be the one with the cheapest rate picking up all the business.
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Increase in the number of tenants facing rent difficulties
Monday, 6 July 2009 ARLA, the Association of Residential Letting Agents , this week reported an increase in tenants struggling to meet their rental payments.
Two thirds (65%) of ARLA members surveyed said they had noticed an increase in the number of tenants having difficulties paying their rent in the last six months.
With the current economic climate it is more important than ever for landlords to be fully aware of their options regarding late paying tenants. Tenants are frequently experiencing cashflow problems. And as a result landlords are now suffering delayed or missed rent.
But do you know what steps are open to you if your tenant fails to pay on time?
With UK average monthly rents at £795 per month, each weeks delay in taking the appropriate action could cost almost £200.
What are the steps you need to take to recover your rent?.............
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Positive news from Nationwide House price survey
Wednesday, 1 July 2009 The Nationwide House Price survey showed house prices increased by 0.9% in June. This follows the increase of 1.3% in May and brings the annual house price reduction to 9.3%.It is also the first time the 3 month change figure has been positive since Dec 2007 Although house prices have fallen nearly 10% in the last year this is the first time in 3 years that the annual rate of decline has been in single figures for almost a year.
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Auction prices improving
Monday, 29 June 2009 Last week the FT reported an increase in average auction values being realised. At the beginning of the year auction prices were at a 40% discount to the conventional market price. In May that figure had reduced to an 11% discount.
The discount is at its lowest level for 15 months.
However, the article went on to report that futures markets are still pricing in modest falls in prices in the coming year - about 7 per cent.
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Has recovery begun in the buy to let sector?
Monday, 22 June 2009 Last week Residential Landlords Association (RLA) news reported there were increasingly clear signs that a recovery had started in Britain's buy to let sector.
They reported that after falling rents during the past 12 months, rents had stabilised in May. The extent of the fall in rents is seen by the fact that average monthly rent in May was £795 compared to £895 last year.
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Mortgage rates start to increase due to fear of inflation.
Friday, 12 June 2009 A number of lenders have increased their fixed mortgage rates today, following increases in their own funding costs.
Interest rates are at an all time low but it is considered there is now only one way they can go. And once they start rising the rise could potentially be quite steep. Interest rates will have to rise to counter inflation.
The Guardian highlights the following reasons why there are fears of inflation:
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Should Home Information Packs be scrapped?
Thursday, 11 June 2009 Changes were introduced on 6th April 2009 regarding Home Information Packs (HIPS) in relation to selling your property.
Previously a property could be marketed provided a HIP had been instructed. This temporary first day marketing exemption for a HIP has been removed and it is now unlawful to market a property unless the HIP is actually available.
However, at a time when the housing market is in a very difficult position, there has been much criticism that the new rules are deterring potential vendors from putting their property on the market. At a cost of circa £300 vendors have to think carefully before incurring this cost just to "test the water" and see how much demand there may be for their property.
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When interest on a BTL mortgage is not tax allowable
Monday, 8 June 2009 Interest on a buy to let mortgage would typically be allowable for tax purposes. That's because typically the loan would have been taken out at the time the property had been purchased. It therefore would have fulfilled HM Revenue & Custom's guidelines of an expenses needs to be "wholly and exclusively" for business purposes to be tax allowable. Read more... |
Tax tip, accrued expenses could reduce your tax liability
Thursday, 4 June 2009 An important thing to bear in mind is that for tax purposes all income and expenditure must be on accruals basis. What that means is that what is relevant to the taxman is when the income or expenditure arises. Not when you are invoiced or when you pay for it. So for example, if you have repair work done to your property on 29th March 2009 but you don't get invoice until 10th April, the expense needs to go into your tax return for the period to 5th April 2009. You didn't receive the invoice or pay it until the following tax year, but you need to include the expense in the return for the year in which the expenditure was incurred- not the year in which it is paid.
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Recent good news on the property front
Wednesday, 3 June 2009 Over the past week there has been an increase in positive date coming from the house market:
- The latest house price survey from Nationwide showed an increase of 1.2% in May. This has been the single highest monthly improvement since late 2006. It is also the second average rise in the past 3 months.
- Data from UK Land Registry showed that although house prices in England and Wales fell in April, the drop was the smallest monthly drop in nearly a year.
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Are you claiming enough mortgage interest in your tax return?
Thursday, 28 May 2009 Most landlords are aware that the interest you pay on the mortgage for your buy to let property is tax allowable. (Remember, it's only the interest that's allowable not the capital repayment.)
But what a number of landlords don't know is that you can also claim interest on any other loan which was wholly and exclusively for the property purchase.
Therefore, suppose you've taken out a buy to let mortgage on the property itself for 70% loan to value and funded the 30% deposit by getting an increase in the mortgage on your main residence. In this instance you can charge the interest on the buy to let mortgage, but you can also charge the interest on the deposit element which has been funded by increasing the mortgage on your home.
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Property tax: offset expenses from one property against rents from another
Wednesday, 27 May 2009 If this is the first year that you have owned a property investment you need to ensure you advise the taxman. If you are already doing a tax return you need to obtain the Land & Property supplement pages L1 and L2 from the tax office.
If you are not currently doing a tax return, (which a lot of people who are under PAYE are not required to do) then you should notify the tax office that you effectively have a new source of income and they will almost certainly issue a tax return with the appropriate pages.
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Landlords to be registered
Thursday, 14 May 2009 In an attempt to prevent bad practice by unscrupulous landlords the government has recommended that private landlords sign up to a national register, as detailed in yesterday's report by Julie Rudd.
If a landlord does not adequately look after the interest of their tenants, for example, with regard to repairs, keeping deposits etc the landlord can be struck off the register and banned from renting out property.
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Changes in tax rules for holiday homes
Wednesday, 13 May 2009 The UK has for many years had generous tax rules regarding UK holiday homes. However, these are about to come to an end in order to ensure the tax treatment of UK holidays homes is brought into line with European Law. The tax benefits available to someone letting a UK holiday home:
Firstly, if the tax allowable costs of running the property (eg maintenance, letting fees, mortgage interest costs, cleaning etc) are in excess of the income, it is currently possible to offset the loss against earned income. For example, if your income from letting the property was £10K, but costs were £15K you would be able to get tax relief for the £5K against tax already paid on your earned income. For a higher rate tax payer that would mean a refund of £5K @ 40% i.e. £2K.
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Lack of stock leading to property price increases
Wednesday, 13 May 2009 The Financial times has reported that the number of properties available for sale has significantly fallen. The reduction is sales is due to both the fall in the market value and the pitifully low interest a vendor would earn with the funds if they did sell. A number of vendors who aren't in the position of having to sell are therefore holding off until the market improves. Read more... |
Fixed Rate mortgages increasing
Monday, 11 May 2009 The Financial Times has reported that a number of lenders are set to increase their fixed mortgage rates this week, following a jump in funding costs. The increase is likely to affect 5 year and 10 year fixed rates. The increase is caused by an increase in swap rates which have risen by about 0.2% over the recent days. Don't delay your mortgage application. If your adviser has given you a rate do start the application process ASAP before the rates increase.
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How do you determine your investment strategy?
Friday, 8 May 2009 Suppose you've decided it's the right time to get involved in property investment? How do you get started?
Do you simply start looking at a few properties up for sale, making an offer and then instructing a letting agent? It's not actually as simple as that.
You need to determine your investment strategy i.e. do you want to buy for long term capital growth: do you want to achieve monthly cashflow. Dependant on which option you choose this will determine the type of property you need to invest in to fulfil this need.
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Increased interest from house hunters
Wednesday, 6 May 2009 The Financial Times has reported that Rightmove, the property website, has had a significant increase in house hunters to its website. Traffic rose in April for the first time relative to the same month in 2008. For the first time since the downturn interest on the website is running at a similar level to that shown before the market interest fell. Read more... |
What will the budget do for property investors?
Friday, 17 April 2009 Next week on Wednesday 22nd the Chancellor will produce his second budget. What is it likely to do for landlords and homeowners?
Stamp Duty
Last year the Chancellor increase the threshold at which you start to pay stamp duty from £125,000 to £175,000. This was introduced as a temporary measure which is due to end on 2 September this year.
At a time when house sale volumes have been very poor this relief has had limited impact. Read more...
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More mortgage products soon to be available.
Tuesday, 14 April 2009 Are we likely to see more mortgage products being made available in the coming weeks?
The Financial Times has recently reported that banks are now beginning to ease criteria and "display a renewed appetite for lending".
It is hoped that as a result of recent easing more products will be available, including to those with smaller deposits. Up until now the only competitive rates were available for those with a 25% deposit. Certainly wouldn't include a typical first time buyer!
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Good news for borrowers in negative equity
Tuesday, 14 April 2009 Halifax and Bank of Scotland have recently offered new mortgage rates aimed at existing borrowers with little or no equity in their homes.
Up until now existing lenders coming out of a fixed or tracker rate could only take the lenders Standard variable Rate (SVR). . Whilst the SVR is currently very low (3.5%) if rates increase later in the year the SVR could then become unaffordable.
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What is your property investment strategy?
Wednesday, 8 April 2009 I highlighted earlier in the week the need to have a good thought out property investment strategy, to ensure your property investment will let well with limited voids at the rent you expect. There are a number of different ways of generating wealth from property For example, maybe you want to buy for long term capital growth or maybe you want to achieve monthly cashflow. Dependant on which option you choose the type of property you will be seeking to meet the need will differ.
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New Home Information Pack (HIP) rules today
Monday, 6 April 2009 With effect from today, 6th April 2009, the following 3 changes are being introduced with regard to selling your property:
1. The temporary first day marketing exemption for a HIP is being removed. Previously a property could be marketed provided a HIP had been instructed. From today it will be unlawful to market a property unless the HIP is actually available.
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Do you have a property investment strategy?
Friday, 3 April 2009 Suppose you've decided it's the right time to get involved in property investment? How do you get started?
Over the next few days I will talk you through the steps you need to follow and the research you need to do to get you started with your first buy to let. It's not simply a case of looking at a few properties up for sale, making an offer and then instructing a letting agent.
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Buy to let market improving
Tuesday, 31 March 2009 The FT has reported that for the first time in 2 years, landlords are now buying more properties than they are selling.
ARLA, the Association of Residential Letting Agents has reported signs of improvement in the buy to let sector. The increased activity is explained by the drop in prices over the past 18 months, now making property prices look very attractive.
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Significant increase in mortgage approvals
Tuesday, 31 March 2009 The FT has today reported that mortgage approvals rose by the biggest margin for three years in February and lending to companies grew at its strongest pace in almost a year.
"It adds to the glimmers of hope that the UK is nearing a bottom, or will reach the bottom in the first quarter of this year," said Colin Ellis, an economist at Daiwa Securities SMBC, whose forecasts for the UK economy are among the least optimistic in the City of London.
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Long term capital growth of property
Monday, 30 March 2009 Residential property has an unequalled track record of producing high and consistent capital growth. In the period since the Second World War the value of UK residential property has on average doubled every 9 years.
Yes, there have been temporary dips in property values but property has subsequently recovered and values have gone on to increase.
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Will increased inflation lead to higher mortgage rates?
Thursday, 26 March 2009 The previous article showed the Consumer Price Index had risen to 3.2% for the 12 months to February. One measure to counter inflation is to increase interest rates. Consumers then have less disposable cash and cut back on spending.
Whether rates may start to rise again depends on whether the February figures are a one off or if they get repeated in subsequent months. Read more...
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Do we have inflation or not?
Thursday, 26 March 2009 There was a confusing set of figures out earlier this week regarding inflation. The Consumer Price Index (CPI) showed prices had risen by 3.2% in the 12 months to the end of February- up from 3% in January.
However, the retail price index (RPI) showed that inflation had fallen to zero.
Why do the 2 measures show such a difference?
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Property millionaires outnumber those of any other investment class
Wednesday, 25 March 2009 Typically those that haven't made their money directly from property generally invest in it indirectly. There's nothing wrong with seeing what successful people are doing and modelling this by applying those principles to your own life. If the majority of extraordinarily wealthy people have used property profitably, it stands to reason that there's money to be made in this sector. Read more... |
FSA to limit size of mortgage advance
Thursday, 19 March 2009 The FSA is considering regulation to prevent lenders offering huge mortgages. Potentially regulation could be introduced with regard to the maximum loan to value and maximum income multiples. A paper will be published in September to consider various proposals.
Whilst it would be hard to argue that all lenders have been prudent in their lending up to now, I'm not sure limiting salary multiples is the right way to go. Read more...
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Estate agents call for the suspension of HIPs
Tuesday, 17 March 2009 The Financial Times has reported that Estate agents are calling for home sellers' packs (HIPs) to be suspended, branding them an expensive waste of time.
The cost needs to be incurred by the vendor before they know there is a willing purchaser. The price tag of circa £300 has therefore brought additional problems to sellers in an environment where house prices have been falling for the past year. Estate agents have therefore called for HIPs to be suspended for at least a year to give the housing market a period of time to recover.
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Easy House Exchange
Tuesday, 17 March 2009 The Financial Times has reported that a website attempting to match buyers and sellers of flats and homes directly is attracting attention amid the slowdown in the property market.
The site - www.easyhouseexchange.com - appeals to buyers who are looking to avoid paying estate agents' fees of two to three per cent on a house sale.
More than half of the homes listed on the site are offered by struggling house builders.
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Is now a good time to nab a bargain?
Monday, 16 March 2009 Experienced property investors do not tend to follow the sheep, and now will be an ideal time to add to their portfolio. Inexperienced property investors buy when all around them are buying, which pushes the prices up and makes it more difficult to buy at a competitive price.
Experienced investors know that now is the time to look at buying property at a bargain. It has been said that there is no such thing as a "cheeky offer" in the current environment. Some sellers will have to sell and therefore what seems to be a low offer to you may be acceptable to a motivated seller.
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Property's long term capital growth potential
Friday, 13 March 2009 Residential property has an unequalled track record of producing high and consistent capital growth. In the period since the Second World War the value of UK residential property has on average doubled every 9 years. Yes, there have been temporary dips in property values but property has subsequently recovered and values have gone on to increase.
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The ability to borrow money to invest
Thursday, 12 March 2009 The return you get on property if you pay for your purchase using all cash (i.e. without getting a buy to let mortgage) is not much different to that which you could achieve with other types of investments.
The important difference is that with property you usually do not pay using cash- instead you use someone else's money to buy your property. Banks have always recognised property, and especially residential property, as an excellent security. The reason they'll lend such a high percentage of the value of a property is that they know property values have never permanently fallen over the long term.
With the aid of a buy to let mortgage you put down a small deposit, anything between 25% - 30%, and the bank finances the rest. This is called leverage.
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Borrowing money significantly increases your return on investment
Wednesday, 11 March 2009 Since property is viewed as excellent security, Banks will lend investors money to purchase the investment. As a result you need to find only a proportion of the value in order to be able to purchase. But you will actually receive capital growth on 100% of the asset.
Imagine you own a buy to let property portfolio with a value of £500,000. You will put down a deposit (say 20%) and you borrow the balance (£400,000) from the bank.
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£75 billion of new money into the economy
Friday, 6 March 2009 As was widely expected the Bank of England cut the base rate yesterday from 1% to 0.5%.Whilst this is a great boost to anyone on a base rate tracker mortgage it is dreadful news for the elderly or anyone who relies on their savings as their means of income. Although the government had said it will introduce measures to help those who rely on savings for their income they have not suggested what form this help will take.
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Another fall in base rates expected
Thursday, 5 March 2009 Base rates are expected to fall to a new all time low today when the Bank of England make their announcement at noon. It is anticipated base rate will reduce from 1% to 0.5%. Bad news for savers buy yet more good news for anyone on a tracker mortgage.
The bad news of course is that with rates at such a low there's really only one way rates can go in the short to medium term.
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Cheaper long term mortgages
Monday, 2 March 2009 The Financial Times has today reported that due to new capital available to the banks it is likely that in the coming months there will be some new fixed rate mortgages with extremely attractive rates.
Two of the state-backed banks, Northern Rock and Royal Bank of Scotland, have promised to lend billions of pounds worth of new mortgages this year
Two-year fixed rates are already at their lowest level for six years. The FT states that brokers have warned that opting for a cheaper two-year fixed rate could be risky, as borrowers who do so may need to switch to another deal just as rates become more expensive.
For mortgage advice see www.marywaringmortgageadvice.co.uk Read more... |
Will the additional Northern Rock funds help the market?
Tuesday, 24 February 2009 Mortgage interest rates are currently low. But there is still a shortage of funds and a lack of desire by banks to lend to one another. Anything which can improve that position can only be a good thing. Banks have not wished to be overly competitive because they do not have enough money to get all the business they may want. So instead have been very picky with the criteria on which they will lend.
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Additional funds for Northern Rock
Monday, 23 February 2009 |
How to set the right price for your property sale.
Friday, 20 February 2009 My advice in the previous posting was to price your property realistically to ensure you get people through the door. Because if you can't get them in the front door it doesn't matter how perfect the property is, it's just not going to shift.But whilst you need to ensure your price is not too high to encourage viewings, do make sure you do not price too low either. Potential buyers are very wary of anything that looks like too much of a bargain. They may assume the property has some defect or flaw which hasn't been highlighted in the details. Again, this may reduce the number of potential buyers you have through the door.
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Are you putting your house on the market?
Wednesday, 18 February 2009 Despite the fact that the property market is not at its best there will be those who have to move- maybe divorce, marriage, or relocation. Or indeed there may be those who are seeing the fall in house prices as an opportunity to move up the ladder and buy a property that they may not have been able to afford before now.If you want to ensure a reasonably quick sale you must price your property realistically. There are buyers available but gone are the days when you could put your property on the market for the highest price possible and have a queue of potential buyers waiting to view it.
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Glimmer of light?
Monday, 16 February 2009 I reported earlier in the month the Halifax house price survey for January had shown 1.9% increase in house prices over December. Since then I have read a number of positive comments regarding the housing market.
- Primelocation.com, the property search site, has reported a slight recovery in asking prices in recent weeks
- Propertyfinder.com reports that 11% more consumers contacted estate agents about buying in January this year than December, primarily at the bottom end of the market. .
- The website claims first time buyer interest has increased by 50% in the last 3 months
- A number of estate agents have said they are receiving higher numbers of buyer inquiries.
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Check the qualification of your mortgage adviser
Friday, 13 February 2009 A colleague of mine forwarded an e mail she had received advertising a 3 day course which would training you to be an expert buy to let mortgage adviser.Most people don't know that buy to let mortgages are not regulated by the FSA, since they are deemed to be commercial mortgages rather than residential. Therefore, it is possible to set yourself up as a buy to let mortgage adviser without having relevant qualifications.
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When is a free property seminar a total waste of time and money?
Thursday, 12 February 2009 I attended a seminar yesterday run by Choices Property Acquisitions and Investments, based in Surrey. Always good to check out what the "competition" is doing. However, having travelled for almost an hour to the event it turned out that because there were only 3 of us they decided not to bother running it. Presumably on the basis that their time was more valuable than ours!
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House prices rose 1.9% in January
Friday, 6 February 2009 Yes, I know, it seems odd, but the latest survey from Halifax highlights that the average price of UK homes rose by 1.9% in January compared to December's figures.
Whilst I very keen to inject some optimism into the housing market against all the doom and gloom we need to be aware that this is just one survey and just one set of figures.
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Will the rate cut benefit borrowers?
Friday, 6 February 2009 Yesterday the Bank of England reduced the base rate to 1%. This marks the fifth interest rate cut since October, bringing base rate to a new all time low.
If you are on a tracker mortgage you will get the benefit. And a number of lenders have reduced their Standard Variable Rate, which is the rate you move onto when your initial rate finishes.
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How useful are house price indices?
Wednesday, 4 February 2009 In my article on Monday I noted that Assetz had suggested distressed sales had reached a low and had potentially now bottomed out.However, one important point to bear in mind is that even if this is correct, house price indices will continue to fall over the coming months. This is because indices are looking at historical data which may be up to 3 months old.
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Distressed sale prices already at the bottom?
Monday, 2 February 2009 At the end of last week I was sent an article which suggested distressed house prices had reached the bottom and were now beginning to increase.This was based on a report from Assetz, the property investment advisers group.
They reported that developers are starting to raise prices on distressed housing stock sales and that house prices at auctions also appear to have started to plateau since the New Year.
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First time buyers back in the market
Wednesday, 28 January 2009 The Financial times has reported a significant increase in the number of first time buyers looking for a mortgage during the last 3 months. Figures show that applications from first-time buyers accounted for more than 40 per cent of all borrowers. This compares to less than 10 per cent in October last year. Read more... |
Bank bail out
Wednesday, 21 January 2009 The Government earlier this week set out a package to inject £100 billion into the banking sector.The problem up to now has been the lack of desire for banks to lend to one another. This in turn has caused a severe lack of available funds from lenders, making mortgage finance very limited. To deal with this banks have therefore been extremely choosy has to who they lent money to, and have tended to lend only to the safest of borrowers, i.e. those with a significant deposit. This has made it very difficult for others to have access to funds at anything like a reasonable rate.
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Is it a good time to move up the property ladder?
Monday, 19 January 2009 Due to the recent falls in house prices, now can be a very good time to move up the property ladder.
The Financial Times has reported that according to Propertyfinder.com those looking to make the jump from a one-bedroom to a two-bedroom home now have to find an extra £31,000, while a year ago they would have needed £41,500. This is because the average price of a two-bedroom property has fallen 12 per cent in the past year to £160,600, while the value of a typical one-bedroom home has fallen 8 per cent to £129,874.
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Practical guide to selling property
Wednesday, 14 January 2009 Selling your house in the current market generally means waiting a long time to find a buyer.But there are ways to speed up this process.
The Financial Times yesterday printed a "practical guide to selling property". Whilst a number of points are mainly common sense I thought it was worth repeating them:
- Know the current situation in the housing market
- Price your property realistically
- But don't go too low
- Smarten up your place to attract a buyer
- Beware of guzundering (where buyers pull the price down at the last minute)
- Avoid delays in the selling process
- Wait for a firm offer on your property
- Eliminate the problem
For the detailed article please click here
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Is the rate cut good news for those looking to get a mortgage?
Monday, 12 January 2009 Base rates have fallen from 5% in October 2008 to 1.5% now. Mortgage rates have also fallen- not by as much but still by a significant amount. This does mean that monthly repayments on your prospective home loan have been slashed dramatically in the past few months. Therefore if you are looking for a loan today you will be able to get that loan at a much lower rate than if you were looking in Autumn, Read more... |
Bank cuts rates to 315 year low
Friday, 9 January 2009 On 8th January the Bank of England cut base rates by 0.5%, bringing base rate down to 1.5%- the lowest figure in its 315 year history.
This time last year base rates were 5.5% and were considered to still be on the increase. The bank has now reduced rates 4 times since it was at 5% at the beginning of October.
However, cutting base rates is not enough on its own to get the economy moving. The biggest problem at the minute is liquidity- banks are just not lending to each other.
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Nationwide introduce 95% mortgage
Wednesday, 17 December 2008 Nationwide has just introduced a 95% loan to value mortgage. This is newsworthy since it is the first lender to reintroduce high loan to values. The maximum which can be obtained from any other lender is 90%.
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Borrowers refused best rates
Friday, 12 December 2008 The Financial Times has reported that borrowers who would have been desirable customers just a few months ago are being refused the best deals for mortgages and personal loans as lenders take an increasingly firm line on the most minor of credit discrepancies.Although there has been a sharp fall recently in interest rates the best rates are only available to customers with an exemplary credit report.
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Royal Bank of Scotland offer free finacial advice
Thursday, 11 December 2008 The Financial Times has reported that Royal Bank of Scotland (RBS) are now to offer the public free financial guidance from every branch. This is in a bid to rebuild the shattered trust of consumers in the banking industry.About 1,000 customer service staff at the bank, have been trained by Consumer Credit Counselling Service, (the debt advice charity) to offer impartial help on areas such as budgeting skills and how basic financial products work.
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Home sellers forced to give more information
Monday, 8 December 2008 Home Information Packs (HIPS) are to be enlarged next April to include further details such as a property's risk of flooding, structural damage and parking arrangements. Sellers will also lose the current 28 day period of grace whereby they are currently permitted to market their homes for sale provided they have commissioned a HIP. Read more... |
Borrowers could see mortgage rates drop to 0%
Friday, 5 December 2008 The Financial times reported that borrowers who took out tracker rates last year could see their interest rate drop to zero-or possibly into negative territory-as lenders are removing the "collars" that prevent rates falling below a certain level. Read more... |
UK interest rates lowest since 1951
Thursday, 4 December 2008 Interest rates were cut by another percentage point on Thursday 4th December. This now brings the Bank of England base rate down to 2%. The last time the UK had a base rate of 2% was in 1951- 57 years ago. The European Central bank also cut its main policy rate by 0.75% to 2.5%- the largest reduction ever.
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Brown throws homeowners mortgage lifeline
Thursday, 4 December 2008 The Financial Times reported, homeowners facing the threat of repossession were on Wednesday offered a government lifeline in the form of a £1bn scheme that will allow mortgage interest payments to be deferred for up to two years. Mr Brown's plan, broadly welcomed by lenders, would help those on "middle incomes" with mortgages of up to £400,000 and with less than £16,000 of savings.
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Mortgage lenders to treat arrears cases fairly
Tuesday, 2 December 2008 The Financial Services Authority has threatened to fine mortgage lenders if they do not give fair treatment to customers who get into arrears on their home loans. The FSA has written to the chief executives of all mortgage lenders giving them until 31st January to ensure that their customers facing arrears are being treated fairly.
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Mary Waring Associates Ltd new site...
Monday, 1 December 2008 I am pleased to announce the new website is launched. I hope you find it of great value. Your comments, feedback and suggestions would be very welcome. Please contact me on info@marywaring.co.uk with your feedback. I look forward to hearing from you,
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