Housing Developers Needed as Property Demand Swells in the UK

Help to Buy Numbers Treble

According to a report from RICS (Royal Institute for Chartered Surveyors) the Help to Buy numbers trebled in the last two months of 2013, so will demand outstrip supply in the UK this year?

A report by the NAEA (National Association of Estate Agents) following their recent member’s survey states that during November its members sold an average of nine homes per estate agency branch, and on average two of those were Help to Buy purchasers.

The Help to Buy initiative launched at the beginning of October 2013 and we dealt with the different Government housing market schemes in our earlier blog post.

Nationally more than 2000 people took advantage of Help to Buy in the first month after launch – by December that figure nearly tripled to 6000. These new mortgages will equate to around £1 billion of new lending to homeowners who may have been deterred or prevented from borrowing because of the need for a lump sum for their deposit before a mortgage company will lend money.

David Cameron Comments on the Increased Demand for Housing

Prime Minister David Cameron hopes many more people will be persuaded to get on the property ladder in the New Year, giving the property market and the wider economy a welcome boost

RBS, HSBC, Lloyd’s, Virgin Money and Aldermore are already offering these mortgages but they will soon be joined by Barclay’s and Santander who plan to introduce their own Help to Buy products this month.

The property market will no doubt continue to heat up as we head towards one of the busiest times of year and Cameron observes:

“. . . too many people have found themselves frozen out of the market in recent years as a result of the size of the deposit required.

That is why as part of our long-term economic plan we introduced the Help to Buy scheme, so hard-working people with sufficient earnings can get on, fulfil their aspirations and enjoy the security of owning their own home.”

UK Economic Growth Relies on a Booming Property Market

The UK economy is so dependent on a raising property market that the Government is always under pressure to find ways to keep the figures rising upwards, but if the market gets too hot it could cause a bubble that would be very painful for our recovering economy if it should burst.

RICS senior economist Josh Miller warns:

“The pace of demand is exceeding that of supply in every part of the country. Clearly the momentum in the market is growing. Help to Buy, funding for lending, and the clear commitment to keep interest rates low for a long time, all three are having an effect.”

Build More Housing to Stabilise Economic Growth

The best way to stabilise the market is to increase supply so that it tracks this increased demand. Providing that buyers can afford to purchase we are unlikely to ever have a situation where available housing stock outstrips demand in London. Therefore building more housing is the answer to increased, gradual and sustainable economic growth in the Capital.

The Shadow Housing Minister Emma Reynolds comments that:

“Any help for first-time buyers struggling to get on the property ladder is to be welcomed.

But rising demand for housing must be matched with rising supply if this scheme is to bring the cost of housing within the reach of low and middle income earners.”

It is certainly true that without a reliable release of new more affordable housing onto the market that the housing ‘bubble’ will stall and even burst, if house prices rise sharply in response to this increased demand. This could spell economic disaster for all of us.

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Tenant Admin Fees Guide for Tenants

Estate Agents fees need to be transparent

Letting Agents Need to Ensure Their Tenant Admin Fees are Transparent

Tenant Admin Fees are a Fair Way to Do Business

Housing Charity Shelter would like to see letting agents fees outlawed in England and Wales having already persuaded the Scottish Parliament to scrap tenants’ fees. We want to explain why this could be a bad thing for tenants.

The job of a letting agent is quite time-consuming and, as we know, time is money. It is expensive to rent property to tenants. There are many costs involved in setting up tenancies, and obviously the majority of these costs are borne by the landlord. However there are costs that link directly to a tenant including references, legal documents, and the time spent with tenants finding just the right property for them. All of these are legitimate reasons that the tenant should bear some of the costs of renting property, and are often charged as tenant admin fees, but perhaps the most relevant one is to ensure that the tenant is fully committed to the process.

Where a tenant does not pay any fees but decides to take a rental property the landlord often suspends marketing the property while the agent takes out references. (Even where marketing continues the agent is accruing costs by keeping that property on the market in terms of advertising and conducting viewings). There is nothing holding that tenant to the property and so in the meantime he finds another property that suits him just a bit better and so off he goes leaving the first landlord and agent high and dry.

Rising Costs Mean Rising Rents

Who should bear the costs of referencing the tenant, and any other legal and administrative work that has been undertaken by the agent? If it is the landlord then he will put his rent up, if it is the agent he will put his fees up, then landlord will then put the rent up.

With no fees charged to them the tenant could switch properties several times before committing himself, with no financial penalty at all. Most landlords will have experienced this problem even where the tenant has had to lose a couple of hundred pounds to move on to another property, so imagine how much worse this will get if there is no financial commitment on his part.

There is a myth that all landlords are rich, that all agents are rolling in money, and that all tenants are honourable people who are taken advantage of by sharks.

Most people are reasonably honest and respectable, and I include landlords, agents and tenants in this generalisation, but of course there is a measure of self-interest driving all of us, so if there is no concrete commitment in place there will be more timewasters costing the industry money, and so overall prices will rise, and this will mean that rents will rise.

In our opinion the only way to deal fairly with this situation is for agents to charge a reasonable fee for the work they do; to be open and transparent with their fees; and for everyone to keep to their side of the bargain.

Guide for tenants

  • Ask your Letting Agent what fees they charge before you view a property.
  • When you have found a property, ask for a written break-down of how much you will pay for the specific property you want to rent.
  • Check if the Agents charge for renewals, check out fees, and any other miscellaneous fees.
  • Make it clear to the Letting Agent that you will not pay for any charges that they do not detail in this initial exchange.
  • Ask for confirmation from the Agent, in writing, of all monies that you will be expected to pay including the rent up front and deposit so you are absolutely clear in your own mind what you will need to pay for.
  • Don’t commit to renting a property unless you intend to move into it.

It will be interesting to see how the Scottish system works out over a period of time, and whether in fact tenants are any better off due to this change in legislation north of the border.

If you want to find out more about becoming a tenant, and avoiding tenancy pitfalls check out the Top 10 things tenants should know, when renting a property on DIY Doctor’s project pages.

You can read more about Protecting yourself from Rogue Agents if you are thinking of renting a property.

Mediation and Flat-pack furniture makes divorce easier

children of divorced parents need room in both households

Bunk beds in bright colours make a great space saving solution at a reasonable cost.

Source

People move house for lots of different reasons, and sadly divorce is one of them.

If our title seems flippant it is not meant to be, it is simply a trend we have noticed emerging, when Dad moves out (it’s often but not always Dad). Now he usually wants a better environment, and to include the children into his daily life following separation.

Divorce figures released today
According to figures collected by the Ministry of Justice the Greater London area has the highest number of divorce petitions in the country, which is not surprising given the density of the population. The next highest number of divorces are in Midland cities with Birmingham being the highest outside London. Leicester is in third place behind (of all places) Weston Super Mare. Quite why this popular tourist hotspot should be so high in the divorce steaks is unclear

The figures cover the period from 2011-2012, and it is expected that numbers will continue to rise as austerity measures kick in, causing financial strain on families.

Mediation rather than litigation
In order to lessen the financial burden of paying for legal proceedings The Government wants to encourage families who are separating to use mediation. Reaching  agreement over child maintenance and access agreements through mediation is far less costly than court proceedings.

According to a release from the Ministry of Justice today the average cost of resolving disputes over money and property after separation is approximately £500 if dealt with via mediation. A similar claim settled through the courts averages £4,000 for a publicly funded client. The average time for a court settlement to be reached is 435 days compared to 110 days for non-mediated cases.

If agreements can be reached via mediation they are often far less stressful for all members of the family, and mediation allows for a more sensitive and flexible agreement to be made than those laid down in a court of Law.

Family Justice Minister Lord McNally said:

‘All too often I hear stories of families going through expensive and traumatic court hearings but we know that when working out how to split assets and arrange time with the children, mediation is a far simpler and cheaper approach for everyone and leads to better outcomes.

When families split it is important for children to keep contact with both parents. So wherever possible, it makes sense for the non-resident parent to have enough space for children to visit and sleep over. Having their own space, in both homes, will help to make them feel more settled and comfortable when they spend time away from the resident parent, especially if they are very young.

The Modern Family
The stereotypical scenario of dad having to move into a bedsit, while mum and the children live in the family home does still happen but as separated families become more and more normal the ways that people choose to split their time and their assets can be much more creative. There is no need for dad (if it is dad) to move into a empty flat and eat his meals of a packing case.

While it may seem a trivial social change the rise of popularity of cheap furnishing shops can make this transition between homes much easier. The partner who moves out is now able to, relatively cheaply, set up a new home using cheap and cheerful flat-pack furniture to brighten up the second home. They can cheaply and attractively provide enough beds and bedding to house a couple of kids – utilising bunk beds, folding beds or a sofa bed at a price that wont break the bank.

At Riley Marshall we are also able to offer full furnishing packs at very reasonable prices, and these are available to landlords, tenants, or householders who need a quick and price-effective solution to setting up a second home.

Click here to find out more about our Furniture Pack Service.

Finally some good news for first time buyers!

light

Light at the end of the tunnel for First Time Buyers as lending increases

The Council of Mortgage Lenders (CML) announced a significant rise in the number of first time buyers in the UK for the first time in the last six years

They reported that the number of first time buyers rose by 12% last year – the highest number since 2007. While the Office for National Statistics (ONS) also reported a rise in average house proses in the UK of 3.3% last year.

“the number of first-time buyers rose by 12% to 216,000” (CML)

“UK house prices rose by 3.3% last year.” (ONS)

“property sales rise by 4th month in a row” (RiCS)

This picture of a confident property market emerging from a previously stagnant market is backed up by the Royal Institution of Chartered Surveyors (Rics), whose latest survey showed property sales rising for the fourth month in a row since October 2012.

Cause for celebration?

Maybe not yet, but is is good news that lenders are extending more mortgages to first time buyers as this has a positive effect on the housing market as a whole

Why this upturn now?

Mortgage Lending has been boosted by the Funding for Lending Scheme, which was launched by the Bank of England in August 2012. The aim of the scheme is to boost overall lending in the UK by some £60bn stirling. Under the scheme Banks and Building Societies are offered access to cheap funds, on condition they then lend it down to customers.

The effect has been to gradually improve the flow of funds to home buyers, including those who had been unable to borrow because they did not have a large enough deposit to put down.

According to the CML some first-time buyers have found it easier to get mortgages, even if they only had a deposit of 5- 10%. They commented “one in 40 first-time buyers took out a 95% mortgage compared with less than one in 100 a year earlier. And around one in five first-time buyers borrowed 90% or more”

Other positive signs

HM Revenue and Customs (HMRC) reported that completed sales rose by 5% last year to 932,000, the highest level of sales since 2007.

The  Bank of England reported that the number of mortgages agreed but not yet lent by lenders for home buyers but not yet lent rose in December for the fifth month in a row. This is a good indicator of upcoming house sales.

55,785 mortgages were approved in December – the most since January 2012 and, before that, the highest since December 2009.

If you are looking for property, whether you are a first time buyer or not, please visit our property search section on our home page.

If you would like to talk to us about putting you property on the market please call and speak to our sales team on 020 7394 1160