 
Quick Move Blog
Tuesday, 21 October 2008
The government recently increased the minimum stamp duty threshold from £125,000 to £175,000. Until 2nd Sept 2009 properties sold for less than £175,000 will be exempt from stamp duty.
This was supposed to breathe life into a dying housing market. However the effects have been limited by worsening external factors and because many transactions still occur outside the new bracket. Instead of just tinkering around the edges the government should have overhauled the stamp duty system.
Stamp Duty is a major contributor to government finances (£6.45 billion raised in 2006/2007). However it often has a destabilising effect on the property market.
Buyers need every penny to put towards their mortgage deposit and payment of 1, 3 or 4% stamp duty is just an added burden. Buyers try and avoid paying extra tax and tend to offer below thresholds so limiting potential sale prices achieved by vendors. This has caused marketing “black holes” just above stamp duty thresholds.
Generally buyers are cash poor and sellers cash rich, so why not put the liability for stamp duty on the seller. First time buyers form the base of sale chains and are generally short on cash. Reducing taxation on their purchases will help keep the market fluid long term.
Sellers normally have equity in their property and so have greater access to cash upon completion. If they are buying on they will also benefit from not having to pay stamp on their onward purchase.
These changes would help cash strapped buyers in the short term and would aid faster recovery and improve long term stability. The measures would also be revenue neutral for the Treasury, as stamp duty will just be paid by another party in the transaction.
This would be a big change but would at least be a proactive rather than reactive measure that could have a very positive long term impact.
The number of properties sales in the UK has fallen 53% in the past year according to a new report from HM Revenue & Customs.
In September, 59,000 homes were sold, down from 126,000 in September 2007. The number of homes sold in September was down 62% from its recent peak in sales of 154,000 in December 2006.
Howard Archer of Global Insight described the HMRC figures as "dismal".
"Faster rising unemployment, heightened concerns over the economic outlook and widespread expectations that house prices will continue to fall markedly seem well set to depress housing market activity and prices for some considerable time to come," he said.
Monday, 20 October 2008
Mortgage lending continued to fall in September. Total lending was £17.7 billion down 10% from
August and 42% lower than September 2007.
This is the lowest monthly lending since January 2005 and the lowest for a September since 2001.
The Council of Mortgage Lenders now expect mortgage lending in 2008 to be 37% of the amount lent in 2007.
The traditional 95%-mortgage has all but disappeared, with most borrowers required to put down a minimum deposit of at least 10%, and often more.
And earlier this month, the Bank of England's own official survey of lending intentions by banks and building societies found that lenders intended to restrict lending even further in the rest of the year.
Tuesday, 14 October 2008
A new RICS survey has shown house sales have hit a new 30 year low. Estate agents sold, on average, just one property per week in September. This is the lowest number of properties being sold since the survey stared in 1978 and 52% lower than September 2007.
London showed the lowest number of sales per agent selling on average just 8 properties per agent over the preceding 3 months.
According to RICS, liquidity in the mortgage market is one of the main reasons for the slump with only those with significant finance able to access the market.
However, RICS did see some increase in enquiries from potential buyers, possibly from the clarification of the position on Stamp Duty.
Friday, 10 October 2008
Abbey has confirmed that it is keeping the interest rate on all of its tracker mortgages for new borrowers unchanged, in spite of a half a percentage point cut in the main Bank of England interest rate on Wednesday.
Abbey's existing tracker customers are unaffected as they will automatically have the rate cut passed on.
Abbey blamed wholesale costs for the move on tracker mortgages.
It comes two days after Lloyds TSB - and Cheltenham and Gloucester which it owns - said it would only give new tracker mortgages to customers with at least a 25% deposit. Previously only a 10% deposit was needed.
Ten lenders including Halifax, Lloyds TSB, the Woolwich, First Direct, Royal Bank of Scotland and NatWest all said they were reducing their SVR shortly after the cut.
Relatively few mortgage holders have their repayments based on the SVR. But some end up on the SVR when their cheaper fixed-rate deal runs out.
Some borrowers coming to the end of their deals are finding their repayments rising with an interest rate of as much as 10%, according to Aaron Strutt, of Chase de Vere Mortgage Management.
This was because some deals, rather than reverting to the SVR, instead go to a margin above Libor - the rate at which banks lend to each other.
The three-month Libor lending rate has been rising and stood on Friday at 6.285%, significantly higher than the Bank rate of 4.5%. Before the credit crunch the difference between these two rates was much smaller.
"Borrowers are advised to check with their mortgage lender what rate they will pay once their current deal expires," said Mr Strutt.
The number of different mortgage products available to borrowers has fallen sharply. Today there are 3,281 mortgages available, down from 10,726 a year ago.
Darren Cook of Moneyfacts said the squeeze in the availability of mortgages was the result of the demise of deals for people offering a deposit of just 5% or 10%.
Banks were unwilling to take on the risk, he said.
A study by mouseprice.com has found that flat in city centres are showing the biggest price drops int he UK housing market.
Birmingham Canal shows the biggest falls with a 17.3% fall in the last 12 months. Other areas in the list include Manchester, Leeds and London.
The areas suffering the most were those that attracted lots of buy-to-let investors during the house price boom. Many are apartment blocks built alongside canals and rivers in old brown field or industrial sites. Supply has now outstripped demand in these areas and has led to these large price falls.
With all the turmoil in the world economy over the last 12 months the introduction of home information packs couldn’t have come at a worse time.
Home information packs were introduced to smooth the house sale process, reduce costs and improve energy efficiency. However it has become clear that the HIP's experiment has failed.
A few examples of the negative impacts of HIP are:
- Home sellers are now unable to test the market without committing cash
- Delays caused because marketing can’t commence until HIP compiled
- Much of the packs info is out of date by the time the property goes under offer. The buyer then has to repay for updated info.
- Some lenders/solicitors will not accept the contents of a HIP and may demand their own information, so duplicating costs.
- Cost of a HIP is an added cost to house sale process
- If the property doesn’t sell the HIP and the money spent on it is wasted.
One of the main components of the home information pack is the energy performance (EPC). In these environmentally aware times we cannot ignore the contribution our homes make to our carbon footprint. However the EPC may not be the best vehicle for energy efficiency improvements. The idea is sound but as with so many government inspired schemes it is let down by its implementation. It doesn't make economic or environmental sense to employ an inspector to undertake a separate property visit when most buyers instruct their own property Surveyor. Why not save the paper, petrol, time and money involved in duplicated property visits and make energy efficiency a section of any Survey undertaken.
The HIP experiment started off as a comprehensive attempt to improve the house sale process in England/Wales. However it has ended up increasing red tape with all the associated delays and costs normally associated with Government meddling.
A review of HIPs is desperately needed however it is doubtful whether the Government will be forced into a u-turn at an already desperate time.
For more info about home information packs and how you are exempt from compiling one if you sell to Quick Move Now visit http://www.quickmovenow.com/
Thursday, 9 October 2008
The Halifax has reported another fall in house prices last month, with a drop of 1.3% in September. This now takes the annual decline in prices to 12.4%.
The average house price now stands at £172,108. The Halifax is now suggesting, however, that the rate of decline is beginning to stabilise. However, when comparing September 2008 with September 2007, prices are 13.3% lower.
Friday, 3 October 2008
UK homeowners have stopped cashing in on te value of their homes - for the first time since 1998, homeowners put more equity back into their homes than out.
Households put £2.8bn of equity back into their houses in the 2nd quarter of this year, the first time there has been a negative withdrawal since 1998. In the first quater, £5.2bn was withdrawn from homes and £10bn taken out in the 2nd quarter of 2007.
This data comes after the reported collapse of mortgage lending in August, with borrowers being affected by higher mortgage costs, tighter credit conditions and falling house prices.
Thursday, 2 October 2008
New figures from Nationwide show that house prices are falling at their fastest pace on record.
The average UK home lost 1.7% of its value in September, leaving prices 12.4% lower than they were a year ago. The drop beats the worst annual fall during the house price crash of the early 1990s, when in the final three months of 1990 prices were 10.7% lower.
The average home is now worth £161,797, down from £164,654 in August.
Nationwide said September’s fall was likely to be beaten next month, as the UK economic slowdown worsens.
|
| |
Quick House Sale Calculator
Fall Through Index
Refer a Friend
T: 0800 068 3366 
Email Us 