House prices at 2006 levels

House prices in England and Wales are now at similar levels to those seen in the summer of 2006, according to the Land Registry.

However, property values crept up by just 0.1% from May to June, taking the average cost of a house to £166,072.

Prices were 8.4% higher than a year ago, marking the eighth consecutive monthly rise in year-on-year prices.

Various commentators have suggested that house prices are likely to remain relatively static in 2010.

The Land Registry's survey is widely regarded as the most authoritative, although it only covers England and Wales.

Regional breakdown

All regions of England and Wales have seen average property prices rise in the year to June, the Land Registry said.

The highest increase was in London - up 12.2% - with the smallest in the North East of England - up 0.7%.

However, the North East has seen typical house prices drop by 1.3% in the month from May to June. The highest month-on-month rise was in Wales, up 2.9%.

Can you put up the rent up every year?

It is normally stated in a letting contract that the rent will go up with the Retail Price Inflation (RPI) if you are doing a lease extension.

However, some years it can go up a great deal more than that. Other years it might not increase at all.

The biggest influence on rent increase is supply of available property for rent.

If lots of new properties to rent have just appeared next to yours, then increasing rates will be difficult.

Conversely, when the cost of buying property increases too sharply, more people stay renting and so the extra demand often feeds through into higher rents being achieved.

Bear in mind that the increase will be uneven. It is also easier to make larger increases when you change tenant.

 

 

Buying cheaper

Buying a property is a big step for anyone to take. A property will be the biggest purchase of your life and for low to medium earners one that can be very hard to initially buy. The hard work often pays off though as you can find yourself with a good return on investment, especially if you buy a Below Market Value Property which often come in the form of repossessed homes.

A repossessed home is becoming more and more common and whilst there are a wide variety of reasons for them to happen, one of the most common reasons is the owner struggling to pay their outgoings on a monthly basis. Once this happens more frequently, a back log occurs and they get into more trouble. Often, the only option for them is declare themselves bankrupt and it is generally at this point their house is repossessed and is put up on a Residential property auction.

Because these houses often require a quick property sale they can be available for far less than if they were valued and put on the open market which makes them a great investment for first time buyers. Of course, its not just first time buyers that like to take advantage of the investment opportunity, it is honed business men and women who see their next money making opportunity.

It is because of this that it is important that you do your research prior to attending the auction and if possible attend other auctions before the one you want to bid in so you can get a feel for how they work. If the process is all a little daunting or you find attending these live auctions problematic then there are a whole host of online property auctions these days that you can safely bid in the comfort of your own home.

 

House prices: Rises slow as sellers flood the market

Plans to tighten the rules on furnished holiday lettings will make it more difficult for owners to qualify for generous tax relief.

The Treasury proposes to raise the minimum period that a holiday home must be both let and available for letting each year, limiting the time that investors can relax in their own properties.

At present, the rules require homes to be let for 70 days a year and available to let for 140 days. But the Treasury plans to raise these levels to 105 days and 210 days, respectively.

Leonie Kerswill, a partner at PriceWaterhouseCoopers, said: “The changes will hit holiday homeowners who regularly use their properties for family trips and don’t tend to leave much time available for members of the public to use them.

“They will have to work harder to ensure that they let their homes out for 3½ months of the year.” The proposals, announced yesterday, include plans to tighten the rules on how losses can be offset against future income, bringing holiday lettings in line with other lettings businesses.

Owners will be able to offset losses only against income from the property, rather than from other income or investments. However, the Government is not proposing to change the tax relief available to owners of furnished holiday lettings, which includes the qualification for entrepreneurial relief on capital gains tax at 10 per cent and rollover relief on the tax.

The European Union has ruled that Britain’s furnished holiday lettings rules must also apply to properties owned across Europe.

The Labour Government had opted to scrap the scheme entirely, fearing that it would lose significant revenue as investors took advantage of the various tax reliefs available to invest in properties abroad.

Patrick Stevens, of Ernst & Young, said: “There are a substantial number of Brits with holiday homes in Europe and extending the present rules to the whole of the EU would prove too expensive.

“These changes will ensure that it is less of an easy option for investors.”

Proposed changes to pension tax relief will hammer another nail into the coffin of final salary schemes, accountants and pensions experts have said after the publication of Treasury plans to curtail tax relief for higher earners. The Treasury wants to replace the existing, hugely complex regime with a much simpler one with a much lower annual allowance. The sting in the tail comes in a change to the way the Treasury plans to calculate the notional contribution made by employers for staff in final salary schemes.

Article taken from the Times

 

Cash in on the generosity - while it lasts

Something extraordinary is happening in the mortgage market: banks are falling over themselves to offer better deals. If they're not cutting their rates or fees, they're cutting up the small print that determines who qualifies for their best deals.

The best new offers can slice £55 a month off the cost of a typical £125,000 five-year fix, knock almost £1,000 off the remortgage fees on a new deal, or get you on the housing ladder with a much smaller deposit than you needed in the spring.
Unfortunately, few experts predict that the generosity will last. In the autumn banks will have to get serious about repaying some of the emergency funding they needed to ride out the credit crunch.

The good deals may disappear as lenders struggle to refinance their own debts and run out of cheap cash to lend to their customers.

So if you see a good offer now it could be worth signing up - even if your current fix, discount or tracker doesn't expire until the end of the year. Most lenders let you book a rate up to six months before you need it.

Here are some hot offers.

WANT A LOWER RATE?
The newly merged Britannia/ Cooperative group has launched the biggest summer sale, knocking 0.5 per cent off its two and five-year fixes. The deals, aimed at first-time buyers with just ten per cent deposits, are now priced at 4.99 and 5.89 per cent respectively. The lender is also reducing the application fees by almost £500. Nationwide has knocked almost 0.3 per cent off the rate on its three-year tracker - the rate you start paying now is
2.69 per cent. But even this can be beaten by the new deals from the Nat West/Royal Bank of Scotland group. As long as you've got a big deposit or plenty of equity it's offering two-year trackers at just 2.19 per cent, two-year fixes from 3.39 per cent and five-year deals from 4.49 per cent.

WANT LOWER FEES?
First Direct has set the pace by cutting its application fees on its low-rate trackers and fixes to just £99 - that's a saving of up to £900 on its old prices. Meanwhile, Nationwide is knocking £500 off its £896 fee for first-time buyers picking most of its new trackers and fixes while Santander has cut fees to zero for existing borrowers moving home. Yorkshire building society is going one stage further. As well as removing its fee for first-time buyers, it's also offering them a £500 cash-back when the deal goes through.

WANT MORE FLEXIBILITY?
Santander and Norwich & Peterborough building society are extending the availability of their best rates to people with lower deposits or less equity in their homes. N&P borrowers needed 20 per cent deposits or equity to get its best-buy fixes. Now you can qualify with 15 per cent, and the society's five-year rate has been cut to 5.89 per cent.

WANT HELP DECIDING?
An element of confusion marketing has crept into the summer sales and it's right to ask if money saved on a low fee might be taken back on a higher rate, or vice versa. You can line different deals up against each other and see how much they'll really cost by using the new 'True Cost' mortgage calculator at www.thisismoney.co.uk.

Article extracts taken from Mail Online.

 

 

House price inflation slows during June

Rate drops from 9.8% to 8.7%, with average house price £170,111
Scrapping of HIPs partly causing increase in housing supply

The annual rate of house price inflation dropped from 9.8% to 8.7% in June, and the rate of inflation is expected to "drift lower", according to the Nationwide building society.

Although the price of a typical UK property increased by 0.1% in June compared to the previous month, the rate of increase has slowed markedly from 0.5% in the previous month. The average price rose to £170,111 from £169,162 in May.

Martin Gahbauer, Nationwide's chief economist, said: "The month of June presented a picture of broad stability for the housing market. Barring a significant pick-up in house prices over the next few months, the annual rate of inflation should continue to drift lower, in light of the very strong price increases recorded during the summer of 2009. Over the first half of 2010, UK house prices have risen by a cumulative 3%.

"Recent indicators point to an increase in the supply of property coming to the market for sale, perhaps in response to the abolition of HIPs in the opening days of the new coalition government. With the level of demand remaining broadly stable, this would help to explain the recent slowdown in the rate of house price inflation."

He said the government's decision to implement an immediate hike in the rate of capital gains tax from 18% to 28%, rather than deferring the increase, helped to prevent a short-term supply distortion caused by large numbers of property investors selling up to avoid the tax rise. A flood of properties being put up for sale would have driven prices down more drastically.

However he added: "Looking beyond the short term, the spending cuts and tax increases in the budget will squeeze household disposable incomes, which are undoubtedly an important driver of house prices. Given that the already elevated level of house prices-to-earnings ratio, this limits the very strong upward momentum in property values we have seen over the past year. However, the acceleration of the fiscal consolidation means that interest rates are likely to be lower than they otherwise would have been which should provide some offsetting support to households and mortgage affordability."

The curtailed inflation rate reported by Nationwide is in line with other statistics published this week. Yesterday the Bank of England said the number of mortgages approved for house purchase remained broadly unchanged during May, while the Land Registry reported a 0.2% drop in house prices in England and Wales in May – the first monthly fall in values since April 2009.

David Smith, senior partner at property consultants Carter Jonas, said: "The latest Nationwide figures are broadly what we were expecting to see in June, as the abolition of HIPs start to have an impact on the supply-demand balance. There has certainly been more properties coming on to the market in recent weeks, and although on the one hand this is positive news for a market that has been bereft of stock, at the same time there hasn't been any noticeable uplift in buyer demand, which will inevitably see a suppression in house prices as a result.

"Where house prices go from here is difficult to predict because there are so many factors at work at the moment. The fallout from the budget will certainly have a major role to play in the coming months, with uncertainty surrounding impending public sector cuts and higher taxes, and of course we still have the ever-present threat of interest rate rises in the mix.

"Although these figures suggest house prices are starting to flatten out at their current level, the top end of the market is still performing remarkably well, with double digit price growth since the start of the year, and a stronger-than-ever demand for properties in desirable locations."

 

What next, post budget?

The increase in capital gains tax was expected but much more modest than feared. With rumours flying around of an increase to 40 or even 50%, it looks as though the Chancellor bottled it in the face of opposition from backbench MPs and traditional Conservative voters.

With higher-rate taxpayers paying 28%, those who rushed to sell their second homes and buy-to-let properties ahead of the Emergency Budget showed great foresight.

However, while an increase in Capital Gain Tax [CGT] to 40% or 50% was not realised, the lack of taper relief is a serious mistake. Those who invest in property over the longer term, perhaps to supplement retirement income, will be unfairly penalised when they come to sell their assets.

 CGT was the main story, as the proposed increase was heavily trailed in advance. In reality the rise to 28% for high-rate tax payers is a non-issue for the housing market.

The new rate takes us back to a similar rate to where we were under the pre-2008 rules, when taper relief was able to reduce a 40% headline rate of CGT to 24%.

With higher-rate CGT at 28% the argument for property investment still looks strong, and capital gains still compare very favourably with income tax at 40%.

The other issue of note is that with strong GDP growth forecasts for 2011 and 2012 - the inference is that the Bank of England will be encouraged to maintain a very loose monetary policy for longer than recently expected; suggesting interest rates at current levels could be maintained for longer.

This would underpin house prices and also contribute to ongoing low supply in the market.

In a world of imperfect choices, steps that help the economy to recover and help to maintain mortgage rates at affordable levels for most people are the measures that will underpin a healthy housing market in the long term. But in the short term pain is likely, as the effect of tax rises on household finances dampens the already fragile recovery in house-buyers' confidence, housebuilding is affected, and support for housing costs across all tenures is curtailed.

In housing terms this may be the "age of aspiration" as the housing minister said recently, but against an austere backdrop there is a long way to go before the supply of housing, or the ability of would-be home-owners to achieve their aspiration, are likely to show any significant pickup.

 

Google Property Lets You List Your Property for Free

In a move that’s set to topple property portal giants Rightmove and findaproperty, google has launched a new service that allows googlers to search for your property in google maps.

Google finds data from UK property portals to display properties for sale, or to rent. Property portals such as Zoomf, NFoPP’s PropertyLive, Zoopla andSmartNewHomes allow estate agents to list properties for free on their website. Google then aggregates this data, combined with listings on estate agents sites such as Hamptons, Dezrez and, GMG Property Services, whose brands include Core and Vebra, and displays it on a google map.

Searchers can then further refine their search by price, property type, number of bedrooms and number of bathrooms.Try a search now in maps.google.co.uk for any UK postcode, then click 'More' then select 'Properties'

How to list your Property for Free

Once you have decided on an estate agent to value and sell your property you can ask them to place a free listing on one of the property portals, such as zoomf, and google will take care of the rest.

Don't be fooled into any talk of having to pay for an online listing or marketing cost as these services are completely free! 

For Estate Agents

Google currently lets you submit a feed of your properties for free, this will mean your listings are fed into the google maps property search almost instantly. 

 

 

Britons take just 21 minutes to choose a new home

Britons take an average of just 21 minutes to choose their new home - less than that taken to pick a new television or a coffee table, a new survey has claimed.
A short supply of properties means that buyers feel driven to make a quick decision, experts said.
Figures from the Royal Institution of Chartered Surveyors (RICS) show demand for houses has overtaken supply for the last 16 months.

 The study found the average homebuyer spends just 21 minutes viewing a property before deciding to buy it.
On the other hand people take an average to 217 minutes to pick a satellite TV package, 284 minutes to decide upon a new television and 164 minutes to buy a coffee table.
The survey, conducted by mortgage provider ING Direct, found almost half of 1,000 recent homebuyers worried that they needed to make a swift decision to prevent another buyer from beating them to it.
Although most buys are mutual decisions (93 per cent), women are three times more likely to have the final say when there is a disagreement (73 per cent compared to 27 per cent).

Estate agents also play a part, with a quarter of buyers claiming they believe agents ‘talked up’ interest from other parties (26 per cent) and applied pressure to make a quick offer (21 per cent).
Residents in East Anglia were the quickest decision makers, taking on average 18.87 minutes to choose a home. This is followed by homeowners in the South East who take 19.54 minutes and Wales with 19.68 minutes.
In contrast, the most cautious buyers lived in Yorkshire and Humber, taking on average 23.54 minutes. The second longest were Londoners with 23.25 minutes and those is in the West Midlands took 22.31 minutes.
It seems strange that people will spend such little time making one of the most important decisions of their lives. However, in this market, people are afraid of missing out and are making snap decisions.