 
Quick Move Blog
Friday, 31 August 2007
Asking prices for London properties have fallen for the first time in a year in August, showing further signs of London's housing market cooling, according to Rightmove.
The report also shows that sellers are increasingly having to realign as affordability limits are increasingly reached.
The Rightmove sees the current trend consistent with house prices rising more in line with wage inflation at around 3 to 4%.
Further signs of a weakening in the housing market was signalled by the latest lending figures from the British Bankers Association (BBA), showing the number of people taking out a mortgage has fallen to its lowest level in three months.
The figures show that during July, 66,965 home loans were approved for house purchase during the month, 1% fewer than in July 2006.
New figures from Hometrack show that house buyer confidence is falling, reflected in the proportion of asking prices being achieved in house sale.
Th proportion of sales achieving the asking price has fallen to 94.9%, where historically a proportion of 94% signals small monthly price falls to come.
Richard Donnell, Hometrack's Director of Research, said: "Buyer confidence has been weakening on the back of increased affordability pressures over recent months, but the turmoil in the global equity markets has added a new external dimension. If this continues it is likely to further undermine market sentiment which will drive weaker levels of demand into the autumn and further undermine the rate of house price growth.
Despite weaker market sentiment, demand for housing still exists but buyers have become far more price sensitive. The net result will be a continued slowdown in the headline rate of growth with asking prices coming under the greatest pressure in the months ahead.History shows that the further the measure moves towards 94 per cent and below, then the greater the likelihood of small month-on-month falls in underlying house prices.
For example, the regions with the lowest year-on-year rates of house price growth - the North (0.7 per cent) and Wales (one per cent) - have the lowest proportion of asking price being achieved - 94.3 per cent and 93.8 per cent respectively."
U.K. house price inflation slowed in August in new figures reported by the Nationwide Building Society.
The cost of a home rose 9.6 percent from a year ago after a 9.9 percent gain the previous month. Prices average £183,898 pounds, up 0.6 percent from July, which compares with a 0.1 percent increase in June.
Higher borrowing costs made it more expensive for consumers to repay the record 1.3 trillion pounds of debt they shoulder. Losses on subprime mortgages in the U.S. have tightened lending standards around the world and may restrain demand for homes in the coming months, today's report said.
"There are now clearer signs of slower demand,'' Fionnuala Earley, chief economist at Nationwide, said in a statement. "The overall extent of any damage to economic growth and hence the housing market will depend on the length of the credit crunch and the monetary policy response by the Bank of England.''
Nationwide's figures reinforce other reports suggesting the housing market is cooling in the U.K. Hometrack, a property research company based in London, said prices stagnated for the first time in 20 months in August. Rightmove Plc, the nation's biggest property Web site, said prices fell for the first time in a year in London this month.
Investors are still betting the Bank of England will raise its benchmark rate, now 5.75 percent, once more to keep inflation at the 2 percent target after U.K. economic growth quickened in the second quarter.
Nationwide forecasts annual house price growth will slow to between 5 percent and 8 percent this year as consumers balk at stretching their finances to buy a new home.
The average value of mortgages taken out by first-time buyers has nearly tripled during the past 10 years.
Research from online mortgage group mform reports that the value of first time buyer mortgages has gone up by 173.6% since 1996, or around 10.7% a year.
In monetary terms, in 1996 people borrowed an average of just £39,811 to get on to the property ladder. This figure soared to around £120,500 by 2006 according to mform.
Mform warned that if borrowing continued to increase at this rate, the average first-time buyer mortgage would be more than £200,000 by 2012.
Francis Ghiloni, marketing and business development director at mform said: "For a first-time buyer to take out a mortgage that is three times their salary today, we estimate that they would need to be earning £40,190, but by 2012, it would need to be a staggering £66,806."
Wednesday, 29 August 2007
House price inflation in England and Wales slowed down in July, according to the latest figures from the Land Registry.
Its survey of all completed property sales showed that prices rose by just 0.1%, dragging the annual inflation rate down from 9.1% to 8.8%. The average property value in England and Wales has now risen to £181,460.
Prices are rising fastest in the London area, where they are currently 15.5% higher than in July last year.
These latest figures suggest the property market is now responding to the five increases in interest rates since last summer.
Earlier this month the Royal Institution of Chartered Surveyors (RICS) said the number of first-time house buyers was falling at its fastest rate in more than three years.
The Land Registry figures also show that there has been a fall in the number of properties being sold.
In May, the latest month for which transaction figures are available, there were 9% fewer properties sold than in the same month last year.
According to a new report in the Financial Times, the buy to let sector in the UK is continuing to grow, despite interest rates rises meaning that typical rents no longer cover mortgage costs.
The article suggests that recent volatile movements in the stock market may encourage even more people into the apparent security of the property market. But lenders, struggling to raise finance for risky mortgages, are likely to make borrowing more difficult for buy-to-let investors in the near future.
The buy to let sector accounted for 12 per cent of new loans in the first half of 2007, recent figures show. Landlords took out 171,800 buy-to-let loans in the period, raising the total number of such mortgages to 940,000, according to the Council of Mortgage Lenders.
Overall, the sector has grown from comprising 3 per cent of mortgage lending in 2002 to 10 per cent today, after a loosening of lending standards by many banks. Some now offer buy-to-let mortgages without requiring minimum rental cover or income proof, despite rental returns hitting record lows.
Over the past year, rental yields have fallen while borrowing costs are typically 30% higher. This means a typical landlord may buy a property on a 5 per cent gross yield, but receive only a 3.5 per cent net yield after costs such as maintenance and voids – well below a typical mortgage rate.
Anthony Lock, non-executive director of the National Landlords’ Association, said he had been “tidying up” his own portfolio, cutting it from 15 to 10 London properties. “When I started 15 years ago you could get a yield of 12 or 13 per cent – now it’s about 4 per cent,” he said. “A lot of professional landlords are neither going to increase their portfolios nor decrease them.”
Many buy-to-let investors are therefore reliant on capital growth to make a profit.
Pierre Williams, of Instant Access Properties, an advisory group, said investors were still confident of capital growth. But he added: “The era of automatically making money, regardless of the type and location of property bought, is over.”
Andreas Panayiotou, of the Ability Group, a private company that has developed 2,500 flats in London, said the maths on buy-to-let no longer made sense. Many investors were “not really clued up to what’s going on”.
If your buy to let investment is now costing you money, give Quick Move Now a call on 0800 068 3366. We can buy your property from you, quickly and for cash.
Friday, 24 August 2007
UK homebuyers spend on average just 17 minutes looking at a new property before deciding to buy it, according to a survey for bank ING Direct. That is less time than the 54 minutes they take to pick out the new curtains. 49% of buyers cited their main reason for deciding so quickly is the fear someone else would snap up the property unless they were quick. A fifth of buyers blamed their haste on estate agents talking up interest from other parties. As a result of spending just 17 minutes before making their decision to buy a property, 26% of respondents said they ended up regretting moving so quickly. "The pace of today's housing market puts a huge amount of stress on buyers and our research shows this can lead to snap decisions being made when choosing a new home," said ING Direct chief executive Lindsay Sinclair.
According to a report in the FT, there are now over 200 companies in the UK specialising in quick house sales, another sign of homeowners struggling to cope with increasing mortgage rates. “It seems to be yet another indicator that we as a nation are becoming overstretched,” commented John Howard, chairman of the Financial Services Consumer Panel.
Often, these companies agree to buy homes for 70-80 per cent of their market value and pay all relevant fees and costs. Often, in return, sellers can rent their homes for less than their previous monthly mortgage payments.
Consumer bodies urge homeowners to view these companies with caution as standards can vary widely and customers have little protection as the sector is unregulated.
Some, for instance, are not genuine cash buyers, and may not be able to deliver a fast house sale as they will need to wait for finance to conclude the deal. Others will quickly evict tenants who have chosen a sell and rent back option if they need to cash in on their investment and sell the property on.
If you are looking for a professional, independent and genuine cash buyer, choose Quick Move Now. We are the UK's leading professional property buying company. Last year we helped over 400 people move home quickly.
Quick Move Now have substantial funding capacity and can often conclude a sale within 7 days.
We are genuinely interested in buying in volume and therefore we make the best offer we possibly can on every property, typically up to 900% of its value - a far better rate than any of our competitors.
If you would like to know more about what we could offer for your property, visit our website and obtain a FREE estimate. Alternatively, call us on 0800 068 3366.
Tuesday, 21 August 2007
A new study from Alliance & Leicester International (ALIL), the offshore savings bank, reveals the reasons why people are leaving the UK to live abroad.
The main reasons quoted are:
- 52% are choosing to escape Britain's high cost of living, with the move designed to improve their standard of living.
- 40% of respondents said that they were moving abroad for a new start
- 40% of those questioned cited the UK's weather.
- 32% moved abroad because they were seconded as part of their job.
When it comes to deciding on a destination, the desert sunshine and bustling economy of the Middle East is an emerging expat hotspot, with over a 21% of people choosing to move there. Australia and the USA also remain popular destinations for expatriates to set up home, with Spain and France first choice in Europe.
Simon Hull, Managing Director of Alliance & Leicester International commented: "For the many people in a hurry to start a new life abroad, it is important to properly prepare for relocation. Moving country is not just a case of buying a house and packing your bags, it involves a lot of organisation. Those considering a move need to think about their financial arrangements, legal rights and other practicalities before waving goodbye to Britain. Often those tasks that appear most daunting, such as sorting out savings, are actually very straightforward."
Data from the Council of Mortgage Lenders (CML) shows gross mortgage lending reaching a new record for the month of July, at £34.4 billion.
Although this figure is down 1% on June, it is 13% higher than lending in July 2006.
According to the CML, lending is currently fuelled by people remortgaging to get better deals in cae rates rise again. They also say that we have yet to see the full effects of the five interest rate rises since last summer, suggesting that the efects will be reflected towards the end of the year with lower lending levels.
Monday, 20 August 2007
The latest Rightmove House Price Index survey shows a modest monthly increase as average asking prices rose by just 0.6% (£1,473) on the previous month. In London, asking prices have fallen for the first time since August 2006 as prices in the capital start to cool and sellers realign their asking prices as affordability limts are reached.
Rightmove comments that the new survey shows house prices increasing more in line with wage inflation for the foreseeable future.
4 regions of the country have shown actual decreases in asking prices - London, the South West, West Midlands and the North.
Miles Shipside of Rightmove commented: "This is the first time for over a year and a half that we have seen four consecutive months of such modest increases. This much slower rate is consistent with prices and the market starting to adjust to the increased costs of home ownership. It finally paves the way for a return to a sustainable market without the need for further interest rate rises, though many buyers will still face affordability problems."
A further indication of a slowing market is the average length of time a property spends on the market, which has increased from 80 to 85 days. Further tightening of credit and economic uncertainty could swing the balance of power further from sellers to buyers over the coming months.
If you are finding it difficult to sell your property in the current climate, call Quick Move Now - we can help.
A new report by repossession litigation specialists Moore Blatch has warned that for every property repossessed, at least an equal number is sold because their owners are unable to keep up mortgage repayments.
While headlines focus on the number of properties taken into possession, they fail to account for the hidden majority sold by the borrower to repossession by their mortgage company.
Figures from the Department for Constitutional Affairs (DCA) show the number of Court possession orders in 2006 rose to 89,857, the highest figure since 1993. However only 19% resulted in repossession compared with 56% of the 105,283 possession orders made in 1993.
Paul Walshe, head of lender services at Moore Blatch, said: “Many people who are struggling to pay their mortgage are just selling their property. This is fine whilst the market remains strong, but the recent rises in interest rates are likely to dampen demand and may well result in some of these ‘hidden repossessions’ becoming real repossessions.”
Of course, we would fully advocate sorting our your financial situation long before your mortgage arrears build up to an insurmountable level. If you are really struggling and are threatened with repossession of your property, we would advise you to consider selling your house privately to a company such as Quick Move Now.
While we will not offer you the full value of your home, we are likely to offer more than your mortgage company, which will simply sell your home at auction, at what is likely to be a deep discount to its true value.
The National Association of Estate Agents (NAEA) has expressed unease at the announcement that Home Information Packs (HIPS) are to be extended to three bedroom homes on the 10th September.
The extension of HIPS to cover three bedroom homes just over a month after the scheme became law has surprised many.
Peter Bolton King, Chief Executive at the NAEA, commented: "The NAEA has consistently expressed concerns regarding the implementation of HIPS as there still remains a shortfall of qualified energy assessors taking the exams.
We did anticipate the second phase to be in the Autumn, but with this announcement it now appears that the Government may try and include all dwellings by the end of the year! This will continue to place uncertainty into an already delicate residential market.
The NAEA will be closely monitoring its impact on the market in England and Wales.
The current housing climate remains unsettled at this moment in time. House owners and hunters are already feeling the pressure due to continuing interest rate rises which is placing increasing strains on their wallets. Also, reactions to the instability being experienced in the world's stock markets cannot but continue the current uncertainties. We do not believe that today's announcement will assist in bringing about stability; to the contrary, it will hinder it."
First time buyers' ability to buy has hit an all time low during the second quarter of this year, according to new figures from the National House-Building Council.
The NHBC Ability to Buy Index, which takes into account the average cost of homes bought by first time buyers, average income and mortgage interest rates, fell to 41 points - the lowest level since the Index was started 28 years ago.
Imtiaz Farookhi, NHBC Chief Executive, said: "The Index reduced dramatically in the second quarter to below the previously lowest level in 1989 and is reflective of the increasing difficulties being experienced by those wishing to buy their first home."
NHBC statistics also showed a strong year-on-year rise in new house prices, with the average price of a new home in Great Britain costing £194,000 in quarter two this year - six per cent higher on the same period a year ago (£183,000).
Friday, 17 August 2007
The Government has today announced that HIPS the extension of Home Information Packs (HIPs) to 3 bed houses.
From September 10th 2007, anyone wanting to sell a 3 bedroom house will be required to have a HIP.
The minister in charge of housing said announcements on other properties would be made "in due course".
Tuesday, 14 August 2007
A record number fo buy to let mortgages has been taken out by landlords, despite the slowdown in the property market, according to latest figures from the Council of Mortgage Lenders (CML).
The CML said by the end of June the number of buy-to-let loans outstanding had reached an all-time high of almost 940,000. The value of the outstanding mortgages has reached £108bn - another record - and an increase of 14pc on the second half of 2006.
The news came as the CML reported that the number of loans to first-time buyers has declined to 35,600, the lowest June figure since 2004, as the five interest rate rises since last August "continue to affect the market, with affordability measures edging upwards".
Buy-to-let lending now accounts for 10pc of the mortgage market, compared to just 3pc five years ago. The average buy-to-let mortgage taken out in the first half of 2007 amounted to £123,340.
Although the rate of growth of the buy-to-let sector slowed in the first half of the year, it was stronger than in the wider mortgage market, in which the value of lending dropped by 4pc. Buy-to-let lending therefore accounted for 12pc of all mortgage advances - the highest proportion of the mortgage market seen to date.
According to the CML there are 11.7m mortgages in the UK, with loans worth more than £1.1 trillion.
According to the latest housing survey from the Royal Institute of Chartered Surveyors (RICS), new buyer enquires declined at their fastest rate since August 2004, with stock of unsold property on surveyors’ books increasing to the highest level since January 2007.
House prices rose for the 21st consecutive month in July, but the rate of growth remained well below the survey’s average of 21.6% for the second consecutive month. 12.6% more Chartered Surveyors reported a rise than a fall in house prices, up from 10.6% in June.
Completed property sales for the quarter to July fell to 23.5 per surveyor, down from 24.4 in June.
Surveyor confidence in sales turned negative for the first time since March 2003 as buyers responded to market conditions and a possible sixth interest rate rise.
RICS spokesman, Jeremy Leaf, said:
“The combination of softening demand and supply is causing market conditions to weaken further. Buyer activity has pulled back a little over fears that we may have seen the top of the market. With interest rates perched at 5.75% and a jump to 6% a strong possibility, aspiring first-time-buyers are continuing to rent until the market trend becomes clearer.”
Friday, 10 August 2007
The latest Rightmove House Price Index Survey shows that the average asking price rose by just 0.3% nationally in July. More importantly, in many parts of the country asking prices are actually falling - this includes 3 large regions - the North West (down 1.1%), West Midlands (down 2.0%), the South East (down 0.2%).
Rightmove's Time on Market Indicator also shows an increase from May in the average length of time to sell a property, with 80 days being the average in July.
If you're facing difficulties in selling your house, get in touch with Quick Move Now - we can help you move, fast.
Friday, 3 August 2007
The Council of Mortgage Lneders has announced that home repossessions has risen, with nearly 14,000 properties being repossessed in the first six months of the year, up nearly 30% on the same time last year.
However, according to CML director Michael Coogan, higher UK interest rates and the expanding sub-prime mortgage market are key factors in more people losing their homes.
"Interest rates are clearly higher than many were expecting, and are set to remain so," Mr Coogan said.
"The greater risks inherent in sub-prime lending are resulting in significantly higher levels of repossession in that part of the market compared to mainstream experience."
However, Mr Coogan added that repossessions were still relatively low by historical standards..
"Overall, the vast majority of mortgage borrowers will continue to cope, even in a market where affordability is stretched," he added.
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