Prices ‘Climb’ As Homes For Sale Hits New Low

The following article discusses further price increases as a result of the lack of property on the market . In a recent report the findings displayed that a lack of houses for sale would drive prices higher next year, placing more pressure on the Government.

Surveyors see house price rises being fuelled further by a shortage of homes next year, with the number of properties on the market at a record low last month.

The Royal Institution of Chartered Surveyors (RICS) said it had measured declines in the number of homes being put up for sale over 10 consecutive months.

Reasons include the lack of alternative properties – especially new builds – affordability concerns and stamp duty changes which made prime property more expensive.

RICS said its survey showed an average of 45 homes listed for sale per surveyor in November – the lowest figure since its records began.

Surveyors said they expected construction to gain more momentum in 2016 but it would not be enough to cover pent-up demand.

It pointed to initiatives such as Help to Buy and starter homes – aimed at constructing 200,000 homes to sell to first-time buyers at a 20% discount – as likely boosting sales, supported by stamp duty cuts for the majority of transactions in the market.

The Government used the Autumn Statement and Spending Review last month to raise costs for buy-to-let purchasers and the buyers of second homes in a bid to help further tackle what it sees as an “ownership crisis”.

A recent report by Britain’s biggest mortgage lender, Halifax, expected house price growth to slow in 2016, fearing homes becoming increasingly unaffordable for first-time buyers – nervous about the prospect of interest rates starting to rise.

It also cited low levels of homes for sale as the core factor behind price growth – leaving buyers at the mercy of bidding wars to secure the property of their choice.

The chief economist for RICS, Simon Rubinsohn, said: “I can’t recall a set of comments in the residential survey which have so frequently drawn attention to lack of stock on the market.

“Given this, it is hard not to envisage prices continuing to climb upwards as we move through the early stages of 2016.

“It remains to be seen how successful the Government’s latest set of initiatives will be in driving up the rate of new build, but with the best will in the world it is likely that the boost to demand will come through rather more rapidly than the expansion of the development pipeline.”

Source : Sky News

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Help to buy ISA

The Government’s new Help to Buy Isa is now available to aid people on to the first rung of the property ladder. Below are some frequently asked questions:
What are Help to Buy Isas?

The savings accounts are only available to first-time buyers looking to build up enough cash for a deposit.

The accounts are available from banks and building societies – offering customers competitive rates of interest – and you can switch between providers to maximise available interest rates.

The amounts saved will be ‘topped up’ by a Government bonus of up to 25% to a maximum £3,000, at the point of house purchase.So, for every £200 you save, you receive a government bonus of £50.

The aim is to help tackle what the Government sees as a crisis in ownership, with too many families faced with having to rent.

Do I qualify?

A Help To Buy Isa saver must be a UK resident, aged 16 or over and buying a property in the UK for the first time.

This house must not be for the buy-to-let market.

The cost of the home must not exceed £250,000 unless the property is in London, where the limit is £450,000.

How much can I pay into my Isa?

Savers have the option of paying in a one-off lump sum of £1,000 to get the account under way.

There is a monthly deposit limit of £200. Once the balance reaches £12,000, it is available for the maximum amount of Government support of £3,000.

Couples can open individual accounts, meaning they could potentially claim £6,000 collectively from the Government.

The interest you earn also counts towards your total pot and bonus level.

How long can the Isa run for?

The scheme will be closed to new entrants from 30 November 2019 and the bonus must be claimed, through the purchase of a house, by 1 December 2030.

How can I claim the Government bonus?

This will be handed by your solicitor or conveyancer who applies for the money.

Should the house purchase fall through, the legal representative would have to ensure the bonus is paid back.

Are there limitations on the Isas available to me?

An individual can only hold one Help to Buy Isa.

Such savers are also prevented from opening other Isa accounts but may continue to hold existing Isas.

Are help to buy Isas worth it?

Consumer experts are full of praise for the idea, with moneysavingexpert.com describing them as a “no-brainer”.

Halifax is currently offering a 4% annual rate to lead the market but rates are expected to be more competitive as the scheme beds in.

However, there is no guarantee that future governments will maintain the Isa offer, meaning there is a risk to bonuses

For more information follow the link below

http://www.helptobuy.gov.uk/help-to-buy-isa/how-does-it-work

 

 

 

 

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Coventry Housing Crisis

This article makes for an interesting read regarding the population growth in our city and its effects on property availability.

Coventry faces housing crisis as population growth outstrips home building by four to one

Increasing purpose-built student accommodation near to universities could be one solution, says city councillor.

Coventry is on the verge of a housing crisis according to new government figures.

The numbers show that the population of Coventry has risen four times faster than the rate of new housing over the last decade.

Exclusive analysis by the Telegraph of official data shows that population of the city rose by 39,254 – from 298,174 to 337,428 – between 2004 and 2014.

At the same time, the overall number of new houses rose by just 9,340 in the decade to March 2015.

That means there are 4.2 extra people in Coventry for every one extra home – one of the biggest ratios in the country.

The figures on net housing stock were published by the government this month and the Telegraph has cross-referenced them with population figures for each year since 2004.

Coun Ed Ruane, Coventry City Council’s cabinet member for children, said freeing up existing family homes was one way to address the problem.

He said: “The quickest way to free up family homes is to build more student accommodation next to university campuses.”

He added: “The council recently introduced plans for more affordable housing.

“There’s a definite shortage of three, four and five-bedroom housing.

“The government’s right to buy scheme has made it difficult to encourage housing associations to build large houses because they can be sold off at a loss.

“There’s not enough incentive for housing providers to build more. That’s why we have a shortage of house building.

“The housing we do have is in pretty poor condition in some areas.

“It’s not always about building new things, it’s also about trying to regenerate existing housing stock.”

Nationally, the greatest pressure on housing appears to be in London and the south.

In Barking and Dagenham, there are 7.6 extra people for every one extra property. In Redbridge the figure is 6.9, in Luton 6.7 and in Kingston upon Thames 6.3.

At the other end of the scale, Barrow-in-Furness has seen its population fall by 3,197 over the decade, while 570 extra dwellings have become available.

 

Source : Coventry Telegraph

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Stamp duty changes

In his latest Autumn Statement George Osborne announces changes to stamp duty, the chancellor delivered a blow to landlord investors by announcing a 3 percentage point surcharge on stamp duty land tax (SDLT) for people buying a buy-to-let or second home from April 2016.

For more information read the following articles:

http://www.express.co.uk/finance/personalfinance/622851/Chancellor-stamps-down-on-buy-to-let-landlords

http://www.ft.com/cms/s/0/c83e2646-9510-11e5-8389-7c9ccf83dceb.html#axzz3sy0iHfwF

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First Time Buyers

Having read this article earlier on today it seems that home ownership poses a huge question for the younger generation, to buy or not to buy?

First time buyers  face a difficult decision, they desperately want to own property, but they will have to spend more in acquiring their property – as measured against their earnings – than any previous generation. Therefore they will be in more debt and for longer.

The double-bind is that the huge financial commitment they make to property ownership will prevent them from building savings in other assets.

They are staking everything on the property escalator, encouraged by a range of factors. Their parents urge them to spend as much as they can as soon as they can whilst Government schemes such as ‘Help to Buy’ legitimise the idea that homeownership should be everyone’s top priority.

Follow the link below to read the full article:

http://www.telegraph.co.uk/finance/personalfinance/investing/buy-to-let/11991741/Britains-fixation-with-property-will-impoverish-a-generation.html

Further reading

http://www.rightmove.co.uk/news/articles/property-news/first-time-buyer-prices-surge-nearly-10-in-a-year

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New website for Wannamove estate agents

The new website for Wannamove estate agent is shortly to be launched. Wannamove is new new venture from established Coventry estate agents Foster Lewis and Co that simplifies the process of getting your property onto the market and finding a new home.

Wannamove founder Glenn Foster said, “Gone are the days of needing page after page of out dated paper adverts, no more walking up and down the high street registering with every estate agent, now it is all at the touch of a screen, a look at your phone, or the click of a button via the numerous property portals we have come so familiar with. Here at wannamove.co.uk we understand this, and have focused our business around the consumer and the needs of today.”

We combine the knowledge of a local estate agency, traditional methods, with experienced agents covering a range areas, whilst working in a modern cost effective way using social media, and the biggest property portals such as Rightmove and Zoopla among many more. This allows us to market and sell your property without the needless high costs, making the selling process cheaper and more simple than ever.”

Get in touch with our main office on 02476 596203 or send an enquiry form.

 

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Buy-to-let mortgage lending surges

A combination of high rents and ever-growing demand has led to the the popularity of buy to let (BTL) mortgages soaring. Between July and September, 33,600 new mortgages were taken out for property purchases, making it the busiest quarter since the end of 2007, according to data from the Council of Mortgage Lenders (CML). The value of buy-to-let mortgages for house purchase was 36.4 per cent higher in September than in the same month last year, and 61.5 per cent higher for buy-to-let remortgaging. Gross lending on buy-to-let in the third quarter rose by 24 per cent compared to the previous three months, and was 49 per cent up on the third quarter last year.

With interest rates still low and likely to remain that way – see our earlier blog post on Mortgage rates – leading to poor returns from savings accounts, have made property an increasingly appealing investment for savers.

Welcoming the trend in buy to let mortgages

The Bank of England are cautious about the trend. In a speech on Tuesday night, Sir Jon Cunliffe, deputy Bank governor, said the risk was that “they could amplify an adverse shock to the housing market”.

“It is not in my view at all impossible that sharp movements in prices and a loss of confidence in future capital appreciation, in combination with interest rate increases, could cause a substantial number of buy-to-let landlords to seek to exit the market. This could put material downward pressure on house prices,” he said.

However, industry experts suggested a more benign explanation for the rise in buy-to-let lending — that it had far further to go to recover its pre-crisis levels than the owner-occupier market.

Brian Murphy, head of lending at broker Mortgage Advice Bureau, said the growth of the sector was significant over the year. “However, this form of lending is rising from a much lower base than the residential market, as availability of buy-to-let mortgages was worst hit by the recent recession.”

The Council of Mortgage Lenders said that despite the strong growth, buy-to-let remained a minority of its members’ business.

Paul Smee, director general of the CML, said: “Buy-to-let continues its growth this period but, at 18% of new lending in September, remains the fourth largest lending type behind first-time buyers, home movers and remortgages.

“There were five times as many house purchase loans to homeowners as buy-to-let landlords in September, and the growth in buy-to-let lending largely continues to reflect its more belated recovery from recession.”

During the downturn, buy-to-let lending declined more than lending to homeowners, as investing in property looked more risky to individuals and lenders. While loans to homeowners for house purchase declined by 50% in volume terms from 2007 to 2009, buy-to-let loans for house purchase declined 71% in the same period, the CML said.

Further reading

The booming buy-to-let mortgage market

Buy-to-let mortgages at highest level since 2007, says CML

UK buy-to-let lending surges

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