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Property- UK Housing Market running on hope hype but not facts.
Updated: 16 Jan 2013
Hope of spring bounce in the house market:
Estate agents predict sales increase
thanks to cheap loans and foreign buyers
- A report published today by the Royal Institution of Chartered Surveyors argues the housing market is ‘over the very worst’
By Sean Poulter
UPDATED: 00:30, 15 January 2013
A spring bounce is being predicted for the housing market against the background of a glut of cheap home loans
and a boom in demand from foreign buyers.
Banks have cut mortgage rates in recent weeks, with some two year fixed rate deals at just 1.99 per cent, on the
back of the Bank of England’s Funding for Lending Scheme.
The Bank is allowing finance giants to borrow up to £60billion at a low interest rate on the proviso it is loaned to
home buyers and businesses.
Separately, buyers from the Far East, Europe and India are racing to buy new-build properties worth hundreds of millions of pounds in London.
Some £600million worth of homes, which are to be built on the Battersea power station site, have just been
snapped up within four days.
Prices ranged from £343,000 for a studio to £6million for a luxury penthouse, while the chief executive of the
Battersea Power Station Development Company, Rob Tincknell(correct), said: ‘It’s been like the start of the Harrods sale.
‘We had people queuing from 6.30am on Thursday and the London allocation sold out in days.’
A team of the developments’ agents are now moving on to Singapore to sell the final 200 properties of the 800 to
be built on the site.
The positive signals were echoed by the chief executive of the house builder Taylor Wimpey, Pete Redfern, who
said: ‘Two weeks into 2013, consumer sentiment towards the housing market is more positive than we have seen in recent times.’
A report published today by estate agent members of the Royal Institution of Chartered Surveyors (RICS) argues
the housing market is ‘over the very worst’.
It said 24 per cent more agents are predicting that property sales will increase rather than decrease over the next three months.
RICS said prices held steady in December, and a net balance of 12per cent of agents reported increases in new
buyer inquiries rather than falls.
The group said that its findings add weight to previous forecasts that prices will rise by 2per cent during 2013 and
provides evidence that the market has started to ‘bottom out’.
However, it pointed to a gaping market divide between London and the rest of the country.
Strong demand from overseas buyers meant the capital continues to record relatively strong price growth.
By contrast, there were falls in Wales and the North East.
Significantly, prices in the West Midlands stabilised last month, making it the first time in more than two and-a-half
years that prices have not fallen.
The number of mortgage approvals has been climbing in recent months on the back of the Funding for Lending Scheme.
Most of the new mortgage deals have, so far, been aimed at borrowers with bigger deposits, however lenders such
as Barclays, the Yorkshire Building Society and the Co-operative Bank have recently announced loans for people
with smaller deposits.
Peter Bolton King, RICS global residential director, said: ‘As we start the New Year, confidence in the housing
market does appear to be improving, helped in part by the impact of the Funding for Leading scheme.
‘Indeed, our members are predicting that transaction levels will continue increasing in many parts of the country
and it may be that we are now over the very worst.’
Predictions for the housing market in 2013 have been mixed, with other surveys suggesting that prices will be flat
or show a small drop this year.
The Council of Mortgage Lenders expects sales to pick up amid better credit availability and lower mortgage rates.
However, it cautioned that demand could be held back by the weakness of the economy and any rise in
Economists at Capital Economics, who have a long history of pessimism about the property market, remain cautious.
The firm said: ‘The Funding for Lending Scheme has helped to ease conditions in the mortgage market somewhat,
leading to a marginal improvement in housing market activity.
‘But we expect unemployment to start to rise and real earnings to fall yet again this year.
With housing still overvalued on most metrics, that points to a year of gently declining prices.’
Property- More Mortgage Lending needed to Kick Start the Housing Market
Updated: 03 Jan 2013
House prices still too high, say economists,
despite forecast they won't return to 2007 peak for SIX years
By Lee Boyce
UPDATED: 14:32, 2 January 2013
House prices in Britain are still artificially high according to economists, despite a report revealing that the
property market is set for the longest slump since records began.
The ‘topsy-turvy’ nature of the housing market was in evidence further today with official figures from the Land
Registry showed that prices edged up 0.9 per annually but sales slowed.
According to a host of experts polled by the Financial Times, 44 said houses were overvalued compared to 26
who said they are not – yet despite this few of them expect any sharp falls this year.
House prices: 44 economists said houses are overvalued compared to 26 who said they are not
At the same time, a report by estate agent Knight Frank said the price of the average home peaked at £183,959 in
2007 but has fallen so dramatically it will not return to this level until 2019.
House prices fell by around 15 per cent as the financial crisis struck in 2008 and have barely recovered since then.
It said prices fell two per cent last year and predicted another two per cent fall this year before a meagre one per cent rise in 2014.
The 12-year recovery period would be the longest since records began in the 1950s.
The report said that once the impact of inflation is stripped out, the slump would be even longer and average
prices will not return to 2007 levels until 2031 – an incredible 24 years after they peaked.
In the previous market crash, prices peaked at £62,782 in 1989 and did not reach that level again until 1998 – a nine year slump.
Grainne Gilmore, head of UK residential research at Knight Frank, which produced the report, said: ‘Some five
years after the start of the financial crisis, the housing sector in the UK still does not bear the hallmarks of a fully functioning market.’
A clutch of experts believe that housing is overvalued – but the situation is unlikely to change in the coming years.
Speaking to the FT, George Buckley at Deutsche Bank, said: ‘Possibly the most worrisome statistic on the
housing market is that affordability is still worse than average despite interest rates being at their lowest for more than 300 years.
‘If interest rates were ever to return to “normal”, we would soon realise how overvalued the housing market actually is.
That does appear to be some time off, however.’
David Blanchflower, a former member of the Bank of England’s monetary policy committee, noted average prices
were still about 4.5 times average earnings compared with a long-term average of about 3.5 times.
He told the FT: ‘My guess would be that nominal house prices will have to fall by a further 15 per cent or so.’
But a lack of housing supply means ‘overvalued housing’ will prevail for some time, according to the experts.
Drifting down: A stagnant property market has seen house prices gently slide lower after the brief recovery in late 2009 and early 2010, Halifax figures show
London property is a safe haven to store wealth Keith Wade at Schroders, said:
‘The shortage in housing supply over the past decade has meant that prices are unlikely to return to levels where the medium-paid working family can afford one.
‘This trend has been exacerbated by the influx of foreign money that is using UK property, particularly in London, as safe havens to store their wealth.’
House prices in the most expensive areas of central London have already clawed back all their losses and are
now at record highs as rich Brits and foreigners plough money into the capital, according to the Knight Frank report.
‘Prime’ house prices –those worth around £2million or more – rose eight per cent last year following a 12.1 per cent jump in 2010.
Prices in upmarket areas such as Mayfair and Kensington are expected to be flat this year before rising by
another 4 per cent in 2014, according to Knight Frank.
A report last week named Egerton Crescent in the Royal Borough of Kensington and Chelsea the most
expensive street in Britain – with the average house price topping £8million.
House prices will remain static in cash terms
Professor John Muellbauer of the University of Oxford, told the FT that he believes house prices would remain
fairly static in cash terms, as they have for several years, but would continue to fall gently in ‘real terms’ after inflation was stripped out.
Kate Barker, another former MPC member and author of the 2004 Barker review on housing for the government,
is one of the economists who believes property isn’t overvalued.
She told the FT that prices were 30 per cent lower in real terms from their peak and 25 per cent lower compared with average earnings.
She said: ‘Housing is difficult to access for first-time buyers due to the reduced supply of mortgages at higher
loan-to-value ratios, but this does not necessarily imply prices are "too high"'.
Malcolm Barr at JPMorgan, said: ‘The circumstances of recent years were uniquely favourable to deflating a bubble if it were in place, but the price correction has been relatively mild.
‘We are learning that the scarcity of land value had a lot to do with the move up in home prices, and are not
expecting the land supply situation to change very much.’
Ian Plenderleith, another former MPC member, said: 'I always think this is a pretty meaningless concept, in economic terms
'House prices are what they are and who is to say they should be otherwise and on what grounds?'
Shortage of mortgage lending is to blame
Miss Gilmore said the current downturn was even worse in part due to the sharp fall in transactions triggered by a shortage of mortgage lending.
She said: ‘Transaction levels have roughly halved since the last market peak in 2007, and are 35 per cent below
the 20-year average, as first-time buyers and those further up the housing ladder struggle with tighter mortgage lending rules.’
According to a study by Halifax, public opinion on house values remains positive.
Nearly four in 10 (38 per cent) of the 1,900 people quizzed predicted that house prices will rise in 2013, while less
than a fifth (18 per cent) believe prices will decline.
The overall price outlook balance - which is worked out by subtracting the share of people who expect price falls
from those who predict rises - stands at 20. T
his is the highest reading since the survey began in April 2011
Read more: http://www.dailymail.co.uk/money/mortgageshome/article-2256013/House-prices-high-say-economists.html#ixzz2GrkqxVQE
Property - Buyers Flooding South
Updated: 27 Dec 2012
Southern comfort as house prices rise beside the seaside
North-South divide reflected in changes to property values, Halifax survey shows
James Cusick Thursday 27 December 2012
Seven miles of beaches, 40 minutes on the train into London and the world's longest leisure pier are proving
difficult to resist for Britain's recession-hit house buyers. Southend-on-Sea, once the favourite seaside spot for
England's Georgian-era tourists, is now the best-performing place in the UK housing market.
New research by the Halifax, based on its own housing data, has recorded a rise of 14.8 per cent in the Essex
town's property prices.
Over the past year the average selling price for a house in Southend has gone from £172,782 to £198,418.
The performance is almost matched by other London commuter towns in the South-east, which have
experienced the UK's highest price rises in 2012.
Basingstoke in Hampshire has seen the second-biggest rise with a gain of 14.7 per cent.
And three other commuter towns – Rochester, St Albans and Dartford – continue to reflect the economic influence of London.
Durham in the North-east is the only town in Halifax's top 10 largest risers that isn't in, or on the margins of,
South-east England. All of the top 10 show average price rises above 11.5 per cent.
The widening gulf between the South-east and the rest of the UK's flatlining regional economies is also exposed
when it comes to the worst property-performing locations. Craigavon in the north of Co Armagh in Northern
Ireland has experienced the worst slump, with prices falling by 18.4 per cent over 2012.
The average Craigavon property is now £91,530, down from £112,172 last year.
Although the fall in Wishaw in central Scotland was 12.5 per cent, the average house in the North Lanarkshire
town can now be bought for £87,410 – the lowest level of any UK property measured by Halifax's housing data.
Four towns in Scotland and four in the North of England are ranked in the 10 worst performers.
Grays in Thurrock, 20 miles east of London, is the only town in the South-east to make it into the worst performers of 2012 with a price fall of 7.3 per cent.
Martin Ellis, Halifax's housing economist, said: "Nationally, conditions in the housing market have been largely
unchanged over the past 12 months with little overall movement in either house prices or sales for the second consecutive year."
But he added that this wider picture concealed considerable local differences, with a number of towns and cities
recording significant changes in house prices over the past 12 months.
"Several towns within easy commuting distance of the capital feature in the list of top performers, whilst the
majority of towns that have fared worst in house price terms are outside southern England, where economic conditions have generally been less favourable," he said.
According to Halifax's current forecast, broad stability in house prices nationally are expected for the coming
year, when the North-South divide is also likely to continue.
The bank's optimism is not, however, shared by the Office for National Statistics, which recently indicated that
house prices in the South-east could be slowing.
Central London price growth is also expected to slow following the introduction of the seven per cent stamp
duty rate for homes valued at more than £2m.
Winners and losers: UK house prices
Towns with biggest price rises
1. Southend On Sea, Essex, average house price £198,418 (+14.8% on last year)
2. Basingstoke, Hampshire, £220,320 (+14.7%)
3. Rochester, Kent, £184,908 (+13.3%)
4. St Albans, Hertfordshire, £371,131 (+13%)
5. Dartford, Kent, £209,557 (+13%)
Towns with biggest price falls
1. Craigavon, Northern Ireland, £91,530 (-18.4%)
2. Wishaw, Scotland, £87,410 (-12.5%)
3. Chorley, Lancashire, £125,156 (-9.4%)
4. Carlisle, Cumbria, £123,100 (-9.3%)
5. Wirral, Merseyside, £160,375 (-9.3%)
Property - Stuck with Negative Equity
Updated: 21 Dec 2012
'We paid £180,000 for our house and now it is priced at £115,000':
The two million who can't sell or move onBy Richard Dyson, Financial Mail On Sunday
UPDATED: 22:14, 15 December 2012
..They cannot sell. They cannot move. Nor can they switch to a cheaper mortgage, or protect themselves against future interest rate rises.
This is the plight of an estimated two million households – and, as Financial Mail reveals, their situation is set to get worse next year unless action is taken.
The ‘mortgage prisoner’ problem arose during the financial crisis because house prices fell and, at the same time, lenders withdrew from all but the safest loans.
Now new trends are emerging that threaten to make the problem worse.
The Financial Services Authority has introduced draconian rules that could limit lenders’ ability to assist borrowers in difficulty.
And at the same time banks are pushing up the rates paid by trapped borrowers.
Desperate: Danielle and Michael Winter feel they are caught up in a nightmare situation with no solution
The millions of mortgage prisoner households have different stories to tell, and many are harrowing.
Some are divorced couples, forced to live on together.
Others are growing families with young children, stuck in tiny flats bought at the height of the housing bubble.
Others are too far from work or family.
What they all have in common is that their properties were bought when prices were rising and mortgages plentiful.
Today, with both those factors in reverse, their options are limited, or nonexistent.
Michael Winter, 32, and his wife Danielle, 30, bought a new three-bedroom semi in early 2008 for £180,000.
The house, near Stanley, County Durham, was marketed at £185,000 and the couple believed they were getting a valuable discount.
They borrowed £135,000 from Halifax and, under schemes common at the time, almost all of the rest of the
property’s price was borrowed from Gladedale, the developer.
The Winters must repay Gladedale in 2018 – or sooner if they sell – at a rate of 25 per cent of the property’s value.
But with little equity to start, the Winters’ situation worsened rapidly – thanks largely to the subsequent actions of
Gladedale. In 2010, the struggling company, which operates a range of housebuilder brands including Bett, Ben
Bailey Homes and Country & Metropolitan, slashed the prices of neighbouring properties down to an average of
£85,000 – a 53 per cent reduction.
These knock-down prices dealt a bitter blow to Gladedale’s earlier customers, such as the Winters, whose own
homes plunged in value accordingly. In June this year a surveyor priced the Winters’ house at only £115,000. This puts them in negative equity to the tune of 43 per cent.
The fall in the value of their property – at 36 per cent – is almost double the fall of average properties in their wider postcode. The Winters are keen to start a family.
They have a flawless mortgage payment history, but in recent months both have lost their jobs, although Michael,
who was at the Nissan car plant in Sunderland, is working again part time.
If they needed to move for work, they would have little option but to sell at a loss, leaving them to rent and still owing a big debt to the bank.
Halifax told Financial Mail that in principle it was prepared to help.Measures could include allowing the Winters to pay the interest part of their mortgage only, for a period.
But Gladedale, which reported losses of £57million in 2011, refuses to help. It said it was in ‘significant debt’ in 2010, when ‘the market reached its lowest point’.
Danielle, who worked for a commercial window business, says: ‘It is hard to see how this house could ever again be worth what we paid for it.
Nor can I see how we will be able to repay Gladedale in 2018, even if we can continue paying our mortgage until then.
We are well and truly stuck.’
In a few months the Winters will go on to Halifax’s standard variable rate of 3.99 per cent.
This can rise at any time – it last increased in March from 3.5 per cent.
Other lenders’ rates have also been rising, and last week the Bank of England said average equivalent rates, the
sort typically paid by ‘prisoner borrowers’, had risen to their highest level since 2009.
Consumer group Which? has warned that ‘too little is being done’ and says its research shows ‘many mortgage
prisoners have poor deals and are vulnerable to rises in rates’.
The Council of Mortgage Lenders, which represents providers, is careful not to criticise the FSA.
But it indicates that lenders’ observance of the new regime could limit the help available.
A spokesman says: ‘Some lenders are clearly wary that if they treat borrowers in a certain way, for instance by
granting mortgage holidays or allowing them to pay only the interest, there could be future allegations that they did the wrong thing.’
House prices, meanwhile, are expected to remain flat, or continue to fall in some regions. It is estimated that with
every one percentage point fall in house prices, a further 40,000 borrowers drop into the ‘prisoner’ category of having too little equity to move.
Marooned because of insufficient equity The Financial Services Authority estimates 45 per cent of borrowers who
have taken out a mortgage since 2005 could be unable today to remortgage elsewhere.
A higher 55 per cent of those who bought their first home in that period – because they would typically have put
down a smaller deposit – are likely to be imprisoned, it estimates.
In most cases borrowers are trapped because they have less than the 15 per cent equity in their property lenders typically require to grant new loans today.
According to latest estimates by HSBC, 840,000 borrowers are in this ‘equity-poor’ category, thanks to falls in
value or the fact they never had equity to begin with. Official data suggests as many as one in ten of all post-2005
borrowers are in negative equity, indicating HSBC figures may be too low.
Other mortgage prisoners include the 1.3million with interest-only loans.
The FSA has all but banned these now, so those borrowers whose monthly income will not stretch to the
increased costs of a mortgage on the normal repayment basis are stuck.
And the last group of prisoners are those with poor credit histories.
Until 2008, many lenders did business with them but today, according to the FSA, ‘100 per cent of credit-impaired
borrowers are excluded from the market’. Mortgage prisoners are more likely to live in the North, Scotland and Northern Ireland, where housing has suffered.
Greater London and the South East, which have weathered the crisis better, have proportionately fewer prisoners.
What can these borrowers do about it?The simple answer is to sit tight where possible, while trying to save hard
to pay down mortgage debt in order to rebuild equity.
Savings are also important to cope with future rises in rates, which are expected from 2014.
Borrowers who need to move home, for work or other reasons, may be able to ‘take their negative equity with
them’ if they are with lenders such as Nationwide Building Society or Halifax.
But the lenders will not allow any new money to be drawn down in these cases, so a cheaper home would have to be found. Rising interest rates are a worry.
Existing borrowers with Nationwide, Halifax, Yorkshire and Coventry do have options to fix their rates, even if they have little equity or are in negative equity.
In Halifax’s case, for instance, a borrower with up to 20 per cent negative equity, currently paying the 3.99 per cent
variable rate, could fix for four years at 4.49 per cent.
Coventry offers a 5.5 per cent fix running to 2017, available to existing borrowers in negative equity.
As Financial Mail has previously reported, be wary of overpaying ‘flexible’ mortgages where you might need to draw the money down again.
Lenders are increasingly refusing to give back the money where the contract allows.
Never be tempted to ‘hand in
the keys’, however extreme the negative equity and other difficulties.
A first port of call is the housing charity Shelter on 0808 800 4444.
Read more: http://www.thisismoney.co.uk/money/mortgageshome/article-2248613/We-paid-180-000-house-priced-115-000-The-million-sell-on.html#ixzz2FeRauxOn
Property-Who is liable for building/buying houses in Flood zones -Caveat Emptor- Buyer Beware ?
Updated: 27 Nov 2012
250,000 homes risk losing flood cover
Monday 26 November 2012
A quarter of a million families living in flood-prone areas could lose everything next year after insurers warned today that they wouldn't cover them.
Insurance companies want the government to make sure they're not hit with the full cost of flood damage.
An Association of British Insurers (ABI) spokesman assured the Morning Star there would be no problem with claims from the latest wave of flooding as those with insurance would have "no worries."
But he said that unless a new flood deal is reached with the government around 200,000 households would find it either too expensive to get insurance or they won't be able to get cover at all.
The problem has come to a head because there have been more and bigger floods hitting Britain and insurers are facing flood damage claims of between £20,000 and £40,000 each.
Since severe flooding in 2000 there has been a "safety net" agreement between the companies and the government, where companies with existing customers in high-risk areas had to continue to insure them.
But new firms don't have to do that, putting pressure on older companies.
The agreement ends next June and the two sides have been locked in talks for two years.
Currently, people living in flood risk areas pay a premium which usually goes into a general "high-risk" pot in each individual insurance company - but their premiums are rocketing.
The ABI want an extra £8 charge on every home insurance payment that would go into a national pot, with the government providing an overdraft to pay claims for high-risk households in the event of serious flooding.
The overdraft is meant to cover the first few years as the pot builds up.
But Environment Secretary Owen Paterson attacked the insurance industry for causing flood victims "alarm."
The death toll from the latest flooding remained at three today afternoon while some 530 flood warnings and alerts remained in place.
Property -Homelessness and Overcrowding in Britain up 23%
Updated: 14 Nov 2012
It's another triumph for Victorian values - the return of mass homelessness and slum overcrowding.
The staggering 23 per cent rise in rough sleeping is just one of the terrible consequences of slashing jobs, axing housing benefits, flogging off council homes, deregulating rents, banning squatting and deliberately pumping air into the buy-to-let bubble.
It should be a source of shame to the Con-Dems that in 2012 in one of the richest countries in the world we are seeing a return to conditions that should have been banished decades ago.
But this is an inevitable result of their ideologically driven assault on public services, public ownership and any form of regulation that stands in the way of profit.
Homelessness is just the most visible sign of a housing crisis that affects all but the wealthiest.
We need urgent action - not vague talk of "affordable" homes but a mass programme of council-house building and strict rent controls to stop private landlords profiteering from a basic human need.
Property- Find an address ?
Updated: 02 Nov 2012
YOURS OR ANY ADDRESS IN THE WORLD!
Much faster than Google Earth.
Now this might scare the heck out of you . . . . it's unbelievable technology.
Is there nowhere to hide??
After opening the link below, type in the address you want slowly,
Letter by letter, space by space, and WATCH what happens with each letter and number.
Property UK- Urban Police finally drive out of town to address Rural Crime
Updated: 29 Oct 2012
Out on the rural beat in the battle against countryside criminals
28 October 2012 |
By Olivia Midgley
AS the rural crime bill to agriculture is expected to top £60m this year, Olivia Midgley visited Lancashire Constabulary to see how the force is upping the ante against countryside criminals.
On a crisp autumn evening in rural Lancashire, PC Ivan Leivers turns off the engine and lights on his Land Rover Freelander and scours the area.
He is looking for flashes of light and vehicle headlamps in fields - two of the tell-tale signs a criminal is in his midst.
PC Leivers is the community beat manager for Lancashire’s southern parishes, and is one of the force’s specialists on rural crime.
Each night, PC Leivers spends eight hours on the look-out for countryside thieves, poachers and hare coursers.
In one shift, he can cover up to 100 miles of Lancashire’s most remote spots. So remote, he said, they are a ‘dream’ for criminals.
“Farms are an easy target for thieves because there is less chance of them being observed,” said PC Leivers.
“Farm thefts require fairly low intelligence and don’t need a great deal of planning. It’s usually a case of them driving round to see what looks good, and then they think they will chance their arm.”
He explained diesel is high on thieves’ hit lists.
“Gangs will creep across fields and attack farms,” said PC Leivers. “They stab the tank and put a drum underneath.
“They’ve become wise to syphoning off diesel because they know if they get stopped by police with a tube and a container, they can be charged with going equipped for theft. If they take along a screwdriver, they know it’s less likely.
“There is a strong black market for red diesel, so it is worth it for the thieves, but for farmers it means the vehicle is out of action until it gets repaired.”
As well as hunting for criminals in the act, police officers also rely on information from the public.
“Farmers will often ring us up and tell us if they’ve seen something suspicious in the area, whether it’s a vehicle or people acting suspiciously, then we will use that intelligence to go and target those areas with our patrols,” said PC Leivers .
“I know the areas people are most likely to poach in, so I will target those regularly, but farm thefts are not as easy to spot.
“If I see torch lamps or headlights where I know they shouldn’t be, I’ll turn my lights off in case my uniform reflectors show up and then move towards the lights to get a closer look.”
Sometimes the reaction from would-be thieves can be intimidating, he explained. “When we are in the middle of nowhere, it can be a bit scary.
“It’s usually dark and I don’t have anything to protect myself with. Getting home safe to my wife and child at the end of a shift is the most important thing to me.”
In situations where the officer thinks his safety could be compromised, he calls for back-up.
“Last year I stopped a van I had seen driving around earlier and I pulled it over.
“There were four people in the van and none of their stories matched. They had some bolt cutters in the back and there was a strong smell of diesel.
“I called for back-up and on searching the van we found some diesel-soaked gloves, which had been stashed under the springs of the seat, and a crowbar which had been thrown out of the back window.”
The men were charged with going equipped for theft and the case was sent to court, where the men were handed prison sentences.
• If you encounter suspicious behaviour in your area, or have a non-emergency request, dial 101
• Many police forces operate Farm Watch schemes, which are partnerships between the force and rural community. Contact your local constabulary for details.
• Many people have also signed up to Online Watch Link. See www.owl.co.uk
Lancashire Police rural crime statistics May 2011-12
• Trailer theft: 48 thefts. Total value of all 53 trailers stolen - £260,000.
• Livestock theft –13 offence. More than 75 per cent of the offences were sheep thefts. Total value of all thefts £28, 511.
• Quad theft: 68 crimes. Total value of all thefts £185,000.
• Machinery theft: 86 crimes.Total value of thefts approximately £157,000.
• Fuel theft: 120 crimes. Total value of all fuel thefts £45,000. Average theft is £375 worth of fuel – thieves target large vehicles and HGVs. One theft from a rural petrol station saw £12,500 worth of fuel taken.
• Metal theft: 394 offences. Total value of stolen metal - £505,428.
Other thefts in rural areas between May 2011 – May 2012:
• Other theft: 1,053 incidents
• Burglary in a dwelling – 272 incidents
• Burglary other than in a dwelling – 649 incidents
• Stealing from a motor vehicle – 469 incidents
Property- Second Home Owners should be Taxed to build new houses for rent
Updated: 27 Oct 2012
The real cost of holiday homes for the wealthy
Friday 26 October 2012
While millions of people across Britain are suffering the effects of austerity there is still a wealthy minority in our divided society who have enough cash to splash on a holiday home.
The first wave of data from the 2011 census was released this week and showed 2.3 million people across England and Wales have more than one address.
Many of this number can be accounted for by students who return to live at home during holidays or children with parents living at different addresses.
But it is the 165,000 holiday homes, usually in stuning areas of natural beauty like Cornwall and Gwynedd in north Wales, that are leaving people jobless and in some cases homeless.
There are 12,012 second homes in Gwynedd and more than a quarter of those are holiday homes - a higher percentage of holiday homes than any other area in Wales or England.
And this could be just the tip of the iceberg, according to Plaid Cymru MP Hywel Williams.
"Many parts of Gwynedd have far more holiday homes than the '64 people per 1,000 residents' figure given by the Office of National Statistics, especially in some areas of Pen Llyn for example," he said.
"We will not know for certain until the full census figures are published but it seems that there are by now far more holiday homes in villages than in remote rural areas.
This can put pressure on the local area in the sense that property prices are kept high."
That has meant the once steady stream of jobs in the area has dried up, says Federation of Small Businesses regional vice-chairman for north Wales Raymond Evans.
Mr Evans tells the Star that part-time residents don't buy many souvenirs from local craft shops as tourists might.
Nor do they live in the community long enough each year to regularly use local services or small businesses.
And on Wednesday the Star reported that areas with high numbers of second homes are also more likely to have high and rising numbers of people sleeping on the streets or in temporary accommodation.
Holiday home hot-spot Cornwall is one of these areas and Roger Harding of housing charity Shelter explains: "House prices in Cornwall are already more than eight times the average wage.
"Every day Shelter hears from young people and families in Cornwall and across the country who, despite working hard and saving up, find that getting a home of their own remains out of reach," he added.
Cornish MP Andrew George is now lobbying for changes to the planning system which could mean people need permission to buy a home for part-time residency in the future.
"This is not the politics of envy, it's about dealing with the consequences of unequal housing opportunities," he says.
And this week's figures show holiday homes are one ingredient in a toxic cocktail that has sparked a housing crisis affecting all but Britain's rich.
Once again the response of the cold Con-Dem government has been to turn its guns on our poor and vulnerable.
Its Welfare Reform Act means social housing tenants who claim housing benefit will be stripped of around £48 per month for every unoccupied room in their house in a bid to force them out into "more suitable accommodation."
But once tenants have been given the boot from their homes they will be joining a queue of millions of young people desperate for decent accommodation suitable for one or two people.
All of this evidence smashes any semblence of substance behind the "one-nation" message the Labour and Tory parties are squabbling over.
The alternative is to build new, green homes which cater for all in society, getting people off the streets and creating quality jobs at the same time.
And holiday home owners should be made to pay their way in tax which can be ploughed back into these house-building schemes.
It's an alternative that has growing support among progressive political parties and part of the cause that drew 160,000 people onto the streets of London, Glasgow and Belfast last weekend.
This week's news has shown the housing and unemployment crisis is often at its worst on the periphery of these islands - in Cornwall to the south and in Gwynedd to the west.
But ending the crisis by building homes and creating jobs must now be at the front and centre of resurgent progressive politics across Britain.
Property - Higher Rents help flatten the housing market
Updated: 22 Oct 2012
Tenants caught in a 'dangerous spiral':
Rents up 3.2% to hit another record high as market continues to 'overheat'
By Lee Boyce
UPDATED: 12:32, 19 October 2012
The squeeze on tenants’ finances continues to intensify as the private rental market overheats and shows no signs of easing, with rents reaching yet another record high last month.
Typical rents increased by 3.2 per cent annually to £741 a month in September across England and Wales.
This is the fastest year-on-year rise since February, according to statistics from letting agent network LSL Property Services.
September's rent figures surpasses a previous record high of £734 seen in August and rents have now been on a relentless upward march for half a year.
Trapped: As rents increase, potential first-time buyers are finding it even harder to save for a deposit to buy a property
The research also found that tenants' budgets worsened compared with the previous month, with 9.1 per cent of rent late or unpaid at the end of September.
However, this was still below the 12-month average of 9.5 per cent.
It comes after charity the Money Advice Trust (MAT) yesterday revealed a record 12,000 tenants struggling with arrears had contacted its National Debtline this year – worryingly, this is the biggest number in its 26-year history.
The charity warned of a ‘dangerous spiral’, with increasing demand in the sector pushing tenants' rents up even higher, putting the possibility of raising a mortgage deposit even further out of their reach and leaving them 'trapped'.
More...Ten tips for buy-to-let: the essential advice for property investors
Tesco Bank launches cheapest mortgage in the UK with fixed rate of 1.99%
House prices up 1.8% on a year ago but rise is thanks to London and the South East
Potential first-time buyers face wait of more than eight years to save their £26k deposit
LSL said that any sustained fall in rents will hinge on would-be first-time buyers being able to get better access to low-deposit mortgages.
Demand for rental homes has rocketed as people struggle to get on the property ladder because they cannot raise a deposit or meet lenders' toughened borrowing criteria.
An £80billion government scheme launched in August to kickstart lending has increased mortgage availability, although much of this so far has been concentrated on people with bigger deposits.
Rental prices: They have gone up by almost £100 a month on average since 2009
For instance, Tesco Bank has today launched a two-year fixed mortgage that offers a record low 1.99 per cent rate.
However, it is only available to those who have a 40 per cent deposit.
There have also been a range of other low mortgage rates launched in recent months, but again these have mainly been made available to those with high deposits.
David Newnes, director of LSL Property Services, said: ‘Every pound monthly rents go up by is another pound that renters can't save for a deposit for their first home.
This is lengthening their stay in rented accommodation, and increasing competition in the private rented sector.’
He said that new tenants may see some relief in the coming months as the rental market moves out of its peak season.
But he cautioned: ‘Over the long term, any sustained fall in rents will be closely tied to a consistent and significant improvement in lending at higher loans-to-value to prospective first-time buyers.’
Campbell Robb, chief executive of charity Shelter, said: ‘In our out-of-control rental market, it's almost a given that rents will reach a new high each and every month.
‘But what many forget is the devastating impact that every rent rise has on people who are already feeling the strain.
‘Particularly with arrears on the increase and almost 10 per cent of rents late or unpaid, the reality is that more and more people will be facing a monthly battle to keep a roof over their head.’
Regional breakdown: London, the South East and the North West saw the highest annual rises in rental costs
Rents in London up 6.2% in a year
Average rents in London hit a new high of £1,092 last month, representing a 6.2 per cent year-on-year increase as rents in the capital hit their fastest monthly rate since November 2010.
Rents fell in just two regions annually, dropping by 1.5 per cent in the South West to £638 and 1.4 per cent in Wales to reach £556, although the rate of decline slowed in both these areas compared with August.
In the last month, rents rose across seven regions. London and the South East saw the strongest increases, with rents rising by 1.7 per cent and 1.9 per cent respectively.
Three regions saw rents fall in September: the East of England, Yorkshire & the Humber, and the West Midlands.
Rising rent increases appeal for landlords to enter buy-to-let sector
Landlords saw an average total annual return of 6.2 per cent on a rental property in September, up from 5.5 per cent in August.
This represents an average return of £10,216 with rental income of £7,909 and a capital gain of £2,307.
If rental property prices maintain the same trend as the last three months, an average investor in England and Wales could expect to make a total annual return of 9.2 per cent per property over the next 12 months – equivalent to £15,226 per property.
The average yield on a rental property increased slightly to 5.4 per cent, from 5.3 per cent in August.
David Newnes added: ‘Rising rents may be a source of financial pain for many tenants, but they are underpinning annual returns for landlords, increasing the appeal of entering the buy-to-let sector.
‘Yields are climbing steadily, comparing favourably with other forms of investment, and in the context of historically low mortgage rates, the key ingredients are in place for lucrative long-term investment.
‘If lenders can support the growing appetite for property investment, it should lead to an improvement in the supply of homes available for tenants.
Read more: http://www.thisismoney.co.uk/money/mortgageshome/article-2220032/Rent-costs-soar-3-2-year-hit-741-month.html#ixzz29zsIFTAV
Property- For UK Growth the Government must kick start the mainly flat housing market
Updated: 22 Oct 2012
Property market inches ahead but sellers are warned to be realistic:
What next for house prices?
By Simon Lambert
UPDATED: 17:57, 19 October 2012
Optimistic sellers are raising expectations and house prices are up slightly, but estate agents warn that over-optimistic sellers unwilling to cut their asking prices will not get a sold sign up.
As London skews the figures and the property market struggles to stay above water, are things looking up or down.
The latest house price news, predictions and market reports are analysed by This is Money's property expert Simon Lambert
Inflation busting: House prices have massively outstripped inflation over the long term, the chart above from Nationwide shows
The market outlook
Simon Lambert, This is Money's property expert, runs the rule over the latest house prices reports
House prices climbed 1.8 per cent over the past year, according to official figures, buoyed by London properties racing ahead more than three times faster than the average.
Homes in the capital were up 6.3 per cent in the 12 months to August, the ONS house price index has reported.
That puts property inflation in London at three-and-half times the UK’s 1.8 per cent average and three times England’s 2.1 per cent average.
The ONS study, which lags other major reports by at least a month, is based on Council of Mortgage Lenders mortgage data and puts the average UK home at £234,000 – far higher than the Land Registry’s £163,376 for England and Wales.
Towering above: London house prices dwarf the rest of the country and are even streets ahead of the surrounding South East.
While the property market maybe stagnant beyond London, the South East and in-demand pockets, optimistic sellers are still raising expectations.
New sellers hiked their asking prices by more than £8,000 in October in the biggest jump seen in eight months, Rightmove said.
The typical property asking price rose by 3.5 per cent month-on-month to £243,168, as all regions across England and Wales saw prices increase.
That spells bad news for getting most properties sold, however, says the Royal Institution of Chartered Surveyors.
RICs warned in its most recent report that a stand-off between overly-optimistic home sellers and buyers on price still remains, a major factor in property sales remaining stuck near historically low-levels.
Peter Bolton King, RICS Global Residential Director, said: ‘Prices are still dipping but at a much lower rate than seen in previous months.
'Despite this, problems still exist and more needs to be done to get the market moving. Unrealistic expectations on the part of vendors seem to be stalling the transaction process.’
Better mortgage rates and banks and building societies becoming slightly keener to lend are helping to lift the property market mood, the organisation’s member estate agents said in its September report.
But house prices are still falling everywhere except London and are not forecast to rise before the end of the year.
The report showed 9 per cent more surveyors said they expected prices to fall rather than rise over autumn and 15 per cent more reported house prices falling rather than rising in September.
Flat lining: Property sales remain stuck in the doldrums with the average RICs estate agent branch selling just under 15 properties per month.
The longer-term forecasts: gloom or growth?
Economists the CEBR have predicted house prices will rise by 15 per cent over the next five years, as a shortage of homes counteracts economic gloom.
However, If house price did rise 15% over that period it would be an average of 2.8 per cent annually – a far slower rate than the 1980s to 2000s period.
Tip: How to move this year
If you want to move home be prepared to be flexible on your own asking price and to do some serious negotiating work getting the seller of the home you hope to buy to act accordingly.
And don't forget, estate agents don't get paid for homes that don't sell, so make them work hard for you when either buying or selling.
.Painting a far more dismal picture is economist and investment manager David Kauders has suggested that this is actually the start of 'a slow-motion crash - so slow that many commentators will not even see it. They will observe only the shorter-term trends.'
His prediction centres on his analysis that claims the substantial house price rises seen since the 1970s have reflected an exceptional period of time when mortgage credit expanded.
That has now come to an end, Kauders suggests, and a slow Japan-style crash will now occur over the coming decades with short rallies punctuating a gradual decline in property prices.
One aspect of the market that backs up Kauders' argument is the ongoing property market freeze, which saw home buyers hit the lowest level in 27 years in 2011 despite record low mortgage rates on offer, Council of Mortgage Lenders show.
Mortgages for house purchases fell below even the level seen during the 2008 and 2009 property slump when house prices were falling at almost 20% annually.
Expert views: What next for house prices?CEBR forecast prices rising from 2011 to 2016 by 15%
Rightmove says asking prices will rise 2 per cent in 2012
Howard Archer, chief UK economist at analysts IHS Global Insight, suggests prices will be 10 per cent lower than their mid 2010 levels by the end of 2011
RICS forecasts a 3 per cent fall in house prices in 2012, but says property will not dip by more than 5 per cent
Nationwide predict prices to be flat in 2012
Halifax predicts a 2 per cent decline to 2 per cent rise in 2012
Hometrack forecasts a 3 per cent decline in 2012
The headwinds facing the market
The big potential stumbling blocks for the property market.
Interest-only mortgage crackdown
Lenders face a mortgage crunch
Austerity measures and the Eurozone crisis
Lenders have made it much tougher to take out cheap interest-only loans, which had helped prop up the property market.
This is a reduction in credit and will exert downward pressure on prices.
The second problem is that lenders are still cash-strapped and the eurozone debt crisis is weighing heavily on the banking sector - it may have contributed to a dramatic fall in swap rate money market costs and the fixed rate mortgages that these heavily influence, but if things get worse banks will find their balance sheets hammered.
Government cuts will also start to filter through soon, as the UK tries to balance the books.
That will mean public sector job losses, higher taxes and a dip in confidence.
The cost of moving is also sky-high.
Those buying family homes in areas where a relatively modest property of this kind costs more than £250,000 face a stamp duty bill of at least £7,500, add estate agent and solicitors' fees and moving can set a normal family back £15,000 or more, without even having to find the extra cash for a 25% deposit on a more expensive home.
House price forecasts are a mug's game - so here's mine
House price forecasts are a mug's game, that's something I've learnt over many years of being cajoled into making them.
Nothing highlights that more that how the property market defied gravity in 2011, with a catalogue of bad news failing to drag prices down substantially.
However, the headline figures do not tell the full story, as they only measure properties that sell, or mortgages that are approved for buyers on them - they cannot measure what it would take in terms of price falls for all the properties sat on estate agents shelves to be shifted.
This is likely to continue in for the foreseeable future, as while household finances are getting worse it would take a fairly substantial downturn in them to see large numbers having to sell or else.
If interest rates stay low and keep the forced sellers from the estate agents’ doors, it is unlikely that home sellers will be deterred from their hit and hope pricing strategy.
The figures for unsold properties show they might be wise to though.
But what about my forecast for 2012? London and the South East will continue to outperform, although some popular family areas have seen prices driven back up to beyond most people's affordability even with super-low interest rates.
Northern areas and the Midlands will suffer, as while property is far more affordable here, potential buyers are much more worried about their jobs and struggle to raise big deposits.
Overall, anything could happen - prices could even rise slightly - but I suspect not, so I'll go for a two to five per cent fall.
More affordable: Property is slightly cheaper than the 2005 to 2007 average and mortgage rates are lower.
Buyers vs sellers: the great stand-off
Estate agents still report a stand-off between sellers and buyers, with the former reluctant to cut prices and the latter unwilling to pay over the odds.
Home sellers must either have a desireable property to sell in an in-demand area or be willing to lower their expectations, if they want to get a sold sign up outside their house.
But the real mark of this housing slump is not the statistics based on mortgage approval figures (Halifax and Nationwide) or even sold prices (Land Registry and others), it is what's happening to the homes that aren't selling.
With buyers seriously limited, properties that don't tick all the right boxes are sitting on the shelves unless sellers are willing to cut the price, and with low rates keeping forced sellers to a minimum many are just sitting unsold.
Should you buy a home?
For many areas confidence never returned after prices started falling at the end of 2007, but for in-demand locations, especially in the South East and London, it was back to the boom from mid-2009 onwards.
But that looks to have ended, although some hopeful sellers are still demanding 2007 prices.
The flipside to the lack of confidence and falling prices is that on the surface mortgages continue to get slightly easier to secure and borrowed money at the moment is cheap by historic standards.
So if you can get a good deal and a good rate, now is a good time to buy provided you accept prices may fall in the short term.
Mortgage rates for those with a 25% deposit look very good, while rates for those with 15 per cent and 10 per cent deposits are improving.
If lenders are willing to let borrowers through their tough lending criteria, this could deliver buyers for whom property looks affordable if prices ease back.
The questions are whether they want to take the plunge while the effect of spending cuts filtering through the economy and how on the other side of the fence lenders will be hit by tougher regulation and their own lack of confidence.
So should you buy?
The answer should be based on how long you plan to own the property (whether as a home or investment), whether it personally suits you and most importantly whether you can afford it.
Buyers preparing to take the plunge should bear these factors in mind and ensure they can take the hit of future interest rate rises and a fall in house prices.
Confidence may return and the property market rise from here, but if things take a turn for the worst it is also not unrealistic to see prices falling by 10% over the next year or two.
Caveat emptor (buyer beware) and make sure you'd be happy in your new home, because you could be stuck there in five years' time.
Priced out: How first-time buyers have seen the cost a home vs their income soar
House price history - what you need to know
Anatomy of a house price slump: how it happened
The party finally came to a sticky end for UK property prices in 2008.
After a decade long boom, the market peaked in late summer / autumn 2007, and then prices tumbled as banks beat a hasty retreat from easy lending.
House price falls accelerated through 2008 and property market activity hit record lows in late 2008 and early 2009.
The property market's performance in 2008 was worse than almost all of the gloomiest predictions made for the year.
Of the major reports, the gloomiest picture was painted by the Halifax.
Its index showed the average property losing a greater percentage of its value in just 12 months than during the whole peak to trough period of the 1990s crash.
In December 2007, the Halifax index said the average home was worth £197,074, a year later this had fallen to £159,896 ' a drop of 18.9 per cent. At the peak before the 1990s crash, Halifax's figures show the average home was worth £70,247, in May 1989.
Six years later, property prices bottomed out, in July 1995, at £60,965. This was a peak to trough loss of 13.2 per cent, although it was much larger in real terms.
The Land Registry's report showed property prices falling by 13.5 per cent over the year, with the average home in England and Wales worth £158,946 ' a similar value to October 2005.
Even in the supposedly robust London market, the average home lost 12.9 per cent, or £45,585, to end 2008 worth £307,071 ' a similar value to November/December 2006.
How the property market was hammered?
While property price statistics for 2008 and early 2009 painted a fairly bleak picture, they did not fully reflect the devastation wreaked so rapidly.
In a little over a year, a booming property market became desolate, with the Royal Institution of Chartered Surveyors reporting its agents selling less than one property per week of the year.
A perfect storm hit the UK property market in 2008. With property prices having risen by 200% in the ten years to December 2007, according to the Land Registry, property was in a bubble.
Many economists had predicted that this bubble was ripe for bursting, but after showing signs of a slowdown in 2005, the market sped up again and the average price peaked between August 2007 (Halifax: £199,612) and January 2008 (Land Registry: £184,784).
The pin that burst the bubble was the credit crunch.
The sub-prime crisis that had been brewing in the United States erupted in the summer of 2007, and as the year continued, the residential mortgage-backed securities market that had driven massive growth in credit for homeloans essentially ceased to exist.
These allowed lenders to sell packaged residential mortgages to a special purpose vehicle, which then issued debt to investors, lured by strong returns from a supposedly liquid and low risk investment.
According to the interim report by Sir James Crosby, commissioned by the Treasury, between 2000 and 2007, the total amount outstanding of UK residential mortgage backed securities and covered bonds rose from £13bn to £257bn.
The report said that by 2006 mortgage-backed security funding accounted for two-thirds of new net mortgage lending in the UK.
In July 2007 this market came to an 'abrupt halt', according to Crosby.
This brought about the collapse of Northern Rock in the UK, problems for banks such as Bradford & Bingley that had fuelled the buy-to-let boom and major issues for all mortgage players.
In February 2008, Northern Rock was nationalised and American bank Bear Stearns, which had specialised in the fancy finance that fuelled the mortgage boom, collapsed. It was the final sign that the party was over.
Banks fearful of huge losses began to dramatically cut back on mortgage lending and a vicious circle began.
The more banks cut back on lending and raised deposits, the fewer homebuyers could secure finance, the more property prices fell and banks became more fearful and cut back further on lending.
The mortgage crunch and property prices
Mortgages are the key to the property market.
The vast majority of buyers cannot purchase a property without a homeloan and the price, availability and restrictions imposed on these have the biggest impact on their ability to buy a home.
The dramatic slump in property prices in 2008 and early 2009 came as lenders turned off the mortgage taps.
Lenders suffered a lack of funding, with the mortgage backed securities market that accounted for two thirds of new lending suddenly seizing up.
Meanwhile, banks were also hit by a crisis of confidence, as they looked over the Atlantic and saw the devastation wreaked in America heading for the UK.
Mortgage rates rose, deposits were hiked and reports abounded of lenders pulling mortgages at the eleventh hour.
Mortgages for home purchases dived by 49 per cent in 2008, to just 516,000, according to the Council of Mortgage Lenders. This was the smallest number since 1974 and represented a third less than the 723,000 approved in 1991 ' the lowest level of the 1990s slump.
The Bank of England's monthly figures have also shown mortgage activity drying up. The number of mortgages for homebuyers hit a record low of 27,000 in November 2008.
In September 2007, just before the downward spiral began Bank of England figures showed mortgage approvals for homebuyers of 102,000 ' significant at that time as this was the lowest level for two years.
Inflation and paying off your home
One of the effects of the rapid inflation in property prices since the early 1980s is that it paid off a generation's mortgages.
Those who bought a home in the 1980s to early 1990s, and then held on through double-digit interest rates and the 1990s crash, have emerged with properties that have risen to be worth five to ten times their mortgage.
The average UK property cost £30,898 in 1983, according to Halifax, and £198,500 in September 2007 ' an increase of 542 per cent.
Even allowing for the current slump that property was worth £160,327 in February 2009, an increase of 419%. For a similar effect to be delivered to a modern day homebuyer, the cost of the average property would need to stand at £832,097 in 2035.
In 1983 the average wage according to the Office of National Statistics was £7,700, today the most comparable measure stands at £24,900, an increase of 223 per cent.
If both property and salary inflation are sustained at the same long-term rate, the average wage by 2031 will be £80,500 and the home will cost 10.3 times more.
This compares to the average home costing four times the average wage in 1983 and 8.5 times the average wage (£23,300) at the peak of the Halifax index in August 2007.
The big problem is that since 2000 wages have not risen anywhere near as fast as property prices or general prices in the economy, and since recession struck they have barely risen at all while inflation has returned with a vengeance.
The idea that inflation pays off individuals' debts really only helps people if their wages rise in line with prices - otherwise inflation is just making them poorer.
The positive side - demand and supply and property prices?
Pessimists would have you believe that property in the UK is doomed, but this ignores the fact that housing is not stocks and shares.
Owning a home is an emotional desire, a must-have aspiration for most Britons, and the demand for property in Britain remains high.
Prices may have fallen by 20%, but many potential buyers see this as a good purchasing opportunity.
The shortage of supply of property in the UK compared to demand has arguably been exaggerated by developers and the Government, but decent sized family homes in popular areas are typically in short supply.
Government development targets and planning guidelines have focused on quantity rather than quality.
Target-led development has encouraged major scheme developers to concentrate on flats and small properties in order to deliver the most homes at the cheapest price.
A report by the National Housing and Planning Advice Unit the government's independent housing experts said that an undersupply of larger homes pushes up the cost of all properties and exacerbates house price inflation problems.
House price crash: Not everyone is upset
While falling property prices has brought tough times for those who have seen equity slashed, fallen into negative equity or even had their homes repossessed, there are others who are pleased that prices are falling.
Lower property prices are a boon to first-time buyers and those moving up the property ladder, but only if they can raise the substantial deposit needed to take advantage.
The UK's high house prices are a drag on its economy, they hamper movement, encourage boom and bust and leave it vulnerable to shocks.
Narrowing the gap between property prices and wages and making buying a home less of a gamble, would be a good thing.
Read more: http://www.thisismoney.co.uk/money/mortgageshome/article-1671748/House-prices-What-expect--news-predictions.html#ixzz29zoPrkbv
Property- Economy 7
Updated: 19 Oct 2012
Economy 7 Meters
Radical says,that we have Economy 7 - We use the washing machine at night,make the coffee by heating two large electric kettle fulls and we make the bread in a home bread making machine, but two points. We could save more by doing the ironing at night and switching to electric heating at night and turning it off during the day.
We use a gas boiler and cook with gas too. We don't use a dishwasher but could at night.Saving on water too.
1. Econ 7 does not mean 7 hours because they cannot switch everyone over at 1am or 2 am but stagger it. However they all go off at 7am or 8am.
2. We have never been offered advice by our Energy supplier as to whether we are actually saving money !
Soaring energy bills are a real financial headache for most of us, but using an Economy 7 tariff is one way to keep electricity costs down.
Advantages of Economy 7
Economy 7 tariffs are generally cheaper than other price plans because you commit to using most of your energy at night when electricity costs less.
They are most suitable for people with storage heaters and a hot water tank, which can be heated up at night and then used to provide hot water and heating the following day.
The off-peak night time is often a seven-hour period, hence the name of the tariff.
The Economy 7 discount times are usually 1am to 8am during winter, and 2am to 9am in summer.
Disadvantages of Economy 7
One of the biggest problems with using Economy 7 can be that even though you can heat your water and storage heaters throughout the night, this still might not provide enough warmth to last you throughout the next day.
That means your house could get chilly in the evenings when the Economy 7 heating has run out, and you may have to forgo a long soak in the bath after work in favour of a shower or bath in the morning.
You will need to be quite disciplined if you are planning to use an Economy 7 tariff, and you might need to install timing devices on domestic appliances such as washing machines and dishwashers at night to ensure you use them then and not at other times.
If you use them in the daytime, then the cost of electricity with an Economy 7 plan can often be almost double the rate you are charged at night-time, therefore wiping out any savings you might have made.
Switching to Economy 7
If you don't have an Economy 7 meter already, you'll need to have one installed.
There may be a cost to get a new meter fitted, so check this before proceeding.
The meters show both night and daytime readings although they can display these in different ways.
Certain meters have two sets of numbers, while others have one set of numbers which is the 'day rate' and you will have to press a button to display the 'night rate.'
Before switching to Economy 7, you should compare the cost of tariffs online through MoneySupermarket.
This will provide you with the cheapest quotes to help you decide which supplier to go for.
As a general rule, you need to use at least 20% of your electricity at night to make a saving.
Switching away from Economy 7
If you are already on an Economy 7 tariff, but you find it doesn't really fit in with your lifestyle, then you can switch back to a standard tariff at any time.
However, this is likely to involve a new meter which you will probably be charged for, although in some cases you might be able to keep your existing Economy 7 meter.
You can compare the costs of energy tariffs online using MoneySupermarket's energy channel.
This will provide quotes quickly and easily and once you have decided which tariff is right for you, you can use the service to switch online
Property- Saving Fuel Bills
Updated: 19 Oct 2012
Worried about rising energy costs?
Here are 10 crafty tricks to cut your bill
By Dan Hyde and Victoria Bischoff
UPDATED: 11:27, 17 October 2012
1. Fix your deal to save £300
All of the big energy companies are announcing price rises. Battle the hikes by grabbing a cheaper tariff.
There is a £300-a-year difference between the best and worst tariffs, according to the price comparison website uSwitch.
Make sure you sign up to a fixed deal.
The lowest-cost deal available is First Utility’s iSave Fixed v4 March 2014.
A family of four living in a three-bedroom, semi-detached house — seen as a typical customer — would pay, on average, £1,087 a year for gas and electricity.
Crafty tricks: Try these 10 tips to cut your bills
The price is fixed until March 2014.
In the unlikely event of prices falling heavily before then, you would have to pay a £30 exit fee for each fuel you use.
Deals without exit penalties include Scottish Power’s Online Fixed Price Energy April 2014 tariff.
This costs a typical household £1,140 a year.
You need to act fast. The top deals are disappearing rapidly.
If you don’t want a long fixed deal, you can get First Utility iSave v12, which costs £1,054.
To see if you could save money, compare prices using the This is Money Fuel Bills Finder.
2. Stop paying by cash and cheque
You can make serious savings just by changing the way you pay your bills.
Most energy companies reserve their best deals for online customers.
So if you have access to a computer, use it.
Energy providers will also give you a better deal if you sign up to gas and electricity — a so-called dual fuel tariff.
More...Scottish Power raises energy prices by inflation-busting 8.9%
Is British Gas taking the mickey? Energy giant hikes bills by 6%
Energy bills: Is it worth switching and which are the best deals?
You can also get a hefty discount — often as much as £100 a year on the average bill — if you pay by monthly direct debit.
Paying by cash or cheque is expensive.
Only use this method of payment if you have to.
If you have access to the internet, you can also cut costs by viewing bills online, rather than receiving paper bills in the post.
Scottish and Southern Energy, for example, offers a £6 per fuel annual discount if you go paperless.
3. Put on a cardigan
Most families have the heating on at 20 degrees centigrade all day, and wander about the house in a blouse or T-shirt.
Turn down the thermostat just one degree, to 19 degrees, and put on a jumper or cardigan and you can shave 10 pc off your heating bill.
This is a £60 a year saving for the typical household.
You’ll hardly notice the difference if your house is well insulated.
If your hot water is piping hot, it’s probably too high.
Set the thermostat to no more than 60c/140f.
Make sure the central heating and hot water are off when you’re out for the day — whether that’s at work, school or visiting relatives.
Use the timer sparingly so it comes on only when necessary.
Turn off the radiators in rooms you’re not using and keep windows and doors closed if the heating is turned on.
Buy a hot water bottle — Tesco and Asda sell them for just £3.
Off: Don't waste money on lighting when you're out
4. Turn off the lights
Lighting accounts for 19pc of the average household’s electricity bill.
Energy-saving bulbs can knock £55 a year off your bills.
These last ten times longer than normal versions, and use 80 pc less energy.
Each bulb replaced can save you around £120 over its lifetime, according to the Energy Saving Trust.
Ignore anyone who says it takes more electricity to switch lights back on than is saved switching them off — experts say that is just a myth.
Cut out any bad habits.
Turning off lights when you nip to the shops on a gloomy winter evening and on landings at night can save £10 a year.
Unplug appliances that have a light on when idle.
That’s the TV, DVD player and even the mobile phone charger.
Wait until the dishwasher is full before you switch it on — one full load uses less energy than two half loads.
5. Close the curtains
Don’t let heat slip through the cracks.
Draw the curtains or blinds at night and use draught-blockers for doors.
Turn down the heat on your washing machine: use the 30 degrees setting or the quick wash function if your machine has one.
Use tumble-driers sparingly.
Don’t waste hot water — the more you use, the more you have to heat.
A dripping tap wastes enough hot water to fill 69 baths a year.
Tighten it with a spanner or ask a friend or plumber.
Running a bath uses up to 100 litres of water.
Showering instead uses much less — rarely more than 35 litres — and saves £18 a year.
In the kitchen, only boil as much water as you need (as long as it covers the element in the kettle).
A good idea is to measure out how many cups of tea you want to make.
This can save £7 a year on its own.
Put a lid on saucepans if you’re boiling vegetables or rice and turn down the heat on the hob.
6. Claim your benefits
Last year, the Government paid out £2.1 billion in winter fuel benefits to more than 12 million people.
The winter fuel payment is an annual, tax-free benefit paid to people over the age of 61, irrespective of how much they earn.
The amount you receive ranges between £200 and £300, depending on your age and circumstances.
For example, people aged between 61 and 70 can claim up to £200.
Those aged over 80 can claim up to the full £300.
However, if you live with a partner who also qualifies you will get only part of the benefit.
Be aware that the qualifying age for this benefit for men and women is rising in line with the increase in women’s state pension age — currently 61.
A separate benefit, called the cold weather payment, is paid in the event of exceptionally cold weather.
If the temperature is below zero degrees Celsius in your postcode area for seven days in a row between November and March, you will receive an extra £25.
These payments are usually paid automatically to those who are eligible.
But if you haven’t received the payment before and are not getting the state pension or another benefit, you may need to apply.
Men under 65 who are too young to claim their state pension are most likely to miss out.
7. Read your meter regularly
Avoid estimated bills at all costs.
This is when your energy supplier guesses how much energy you use in a year and averages it out.
It can leave you paying much more than you need.
Provide your supplier with accurate meter readings instead.
Check your meter once every three months at the very least.
Record your usage by calling your supplier or setting up an online account.
If you’re heavily in credit, ask for some money back — this way it will be earning interest in your bank account.
If your provider kicks up a fuss, quote ‘condition 27 of the Gas Supply Licence’.
This states that credits must be refunded and direct debits fair.
8. Replace your boiler
Getting rid of an old boiler can cut costs dramatically over the longer term.
Boilers swallow 79 pc of your total fuel usage, according to Energy Saving Trust.
Scrapping a creaking model and putting in a more efficient one can cut bills by as much as £240 a year.
However, you’ll have to splash out to see these benefits.
Get quotes — don’t simply get your energy company to fit one.
The prices can be vastly inflated compared with what an independent plumber will cost you.
The top new boilers from brands such as Vaillant, Worcester or Baxi cost anything from £600 to more than £2,000.
And getting a plumber to fit it can cost another £600.
If you spent £1,800 getting a new A-rated efficiency model to replace a G-rated boiler, you’d save £237 a year, according to price comparison website USwitch.
For bigger houses and families, this may be a good idea — for pensioners, however, it’s likely to be impractical and expensive.
Due to the initial cost, it would take 10½ years to break even.
9. Get free insulation
Take advantage of free insulation deals.
Making your home more energy-efficient could shave hundreds of pounds off your bill each year.
Loft insulation alone can save you up to £175 a year, according to the Energy Saving Trust.
Cavity wall insulation adds a further £135 saving.
Savings: Loft insulation being fitted
Energy suppliers are offering free deals because they have to meet strict efficiency targets, set by the government or face a fine.
This means even middle and high-income households can take advantage.
British Gas, for example, is offering free insulation worth up to £1,000 to all households, regardless of their energy supplier.
But you must apply before the end of November and your home must also meet certain requirements — for example, having less than 60mm of loft insulation. Call 0800 048 0505.
British Gas is also paying a £50 referral fee to anyone who puts forward a vulnerable household for free insulation. The person you refer will get £50, too.
The very poorest can also claim up to £3,500 in government grants to help. The Warm Front scheme pays a company to improve insulation on your loft, cavity walls and hot-water tank.
To qualify, you must receive Pension Credit with your state pension, have an income below £15,860 and receive Child Tax Credit or Working Tax credits, or claim income support.
10... And buy some clingfilm
Double-glazing your windows can save you up to £165 a year.
But just like a boiler, the initial outlay will put off some people.
Prices vary wildly between providers.
Expect to pay from £350 for each small bedroom window, ranging into the thousands to fit more than one room.
However, these fees can tumble thousands of pounds if you haggle with the suppliers, says consumer group Which?
Make sure that you get a minimum of three quotes so you can compare them — and then don’t be afraid to drive the price down.
A wacky alternative is to use cling film.
This creates a DIY double glazing effect by trapping the hot air in.
But instead of stuff you buy at the supermarket, go to your DIY store and ask for ‘double-glazing film’ or ‘stretch wrap’.
Six square metres of Stormguard double-glazing film costs £7.19 from Homebase and is fixed to the window using a hairdryer
Read more: http://www.thisismoney.co.uk/money/bills/article-2218782/Cut-energy-bills-10-tips-reduce-gas-electricity-costs.html#ixzz29j1ZNdkb
Property- Another squalid housing rip off
Updated: 29 Aug 2012
Thursday, 23 August 2012
Another squalid housing rip off
The ConDem government has released a report on the housing shortage in the UK today.
The Montague report advocates the relaxing of planning restrictions and permission, allowing private investors to build on public land, the relaxation of affordable housing criteria and a voluntary code for what constitutes a reasonably constructed home.
It represents a sick joke to the 2 million families that cannot find permanent accommodation in the UK at present.
There is a major housing crisis developing in Britain that is not being addressed by the ConDem government or the Labour Party in opposition.
The end of the property boom and cheap mortgages has left the vast majority of people unable to afford to buy.
Deposits alone are likely to cost £50,000 in most parts of the country.
Private rents are soaring as a result with the average now being £722 per month, far too high for most families to even consider saving towards a deposit.
The myth of the aspirant working class that can benefit from a ‘property owning democracy’ has been evicted.
Adding to the private rental rises is the capping of housing benefit that will leave a permanent shortfall in family incomes.
This is driving families into desperate attempts to seek social housing from their councils only to find that the stock has dried up because no one is building council housing (apart from one or two notable exceptions) and private landlords are refusing to take housing benefit tenants now.
The combination of government policy and the bursting of the property bubble is a disaster for working people.
The idea of allowing private property developers to have more latitude in the type of housing built is no answer to this crisis.
It is as daft as giving the banks more money and asking them to loan it to ordinary people – which the government has done with the predictable consequences that speculation on food prices has increased but loans have not.
Even in its current incarnation, the notion of affordable housing is ridiculous as the family income would need to be in the region of £90,000 per year to qualify.
It is no accident that the Montague report should fall so short in its solutions.
Sir Adrian Montague works at 3i Investments, which owns £10.6 billion in assets including property.
If you want to reform the banks, ask the bankers what they want while if you want to reform housing, ask the landlords....
Britain is desperately in need of sensible housing priorities.
There are currently over 1 million empty properties in the UK.
These should be renovated as part of a government public works programme, which creates jobs, and put under council or coop control in order to alleviate the housing lists.
Private sector rents must be capped and forced down urgently.
There should be a programme of affordable house building in the public sector to rebuild the council housing stock. These should be developed on brown field sites in the cities.
The vicious cap on housing benefit should be abolished and poor families further supported with benefits to help them.
Such a programme requires politics that will stand up to big business and the warped priorities of the free market. These will not come from the major political parties.
They can only come from a political force that refuses to obey the horrific consensus rotting British politics.
Property- Rents up, building homes down
Updated: 18 Aug 2012
UK’s rental costs ‘at record high’
Private sector rents in UK have hit a record high.
Fri Aug 17, 2012 10:29AM GMT
The average monthly rent in England and Wales has risen to £725 per month which made the private sector rents hit a new high record in July.
LSL, a leading provider of residential property services in the UK, said that the average rents increased by 1 percent to £725 last month which is 2.9 percent higher compared to prices last year.
The company said this was due to the cut in the number of new homes started by builders and the growing numbers of first-time buyers who are not able to get mortgage funds, the state-run BBC reported.
“The backlog of frustrated first-time buyers in the private rented sector showed no sign of clearing in July- in fact, it is still growing”, David Newnes, director of LSL Property Services, said.
Meanwhile, the Financial Times reported that a review on private sector renting market next week would urge the ministers to drop the requirements for developers to include affordable homes in their schemes.
“Rents have returned to record highs, average yields have hit their highest level this year, and returns are healthy, tempting many investors into the market”, Newnes added.
Meanwhile, the Housing Minister, Grant Shapps, said the Government was looking to increase house building expecting to cut the rents.
Property-Rents rise on housing shortage and affordability
Updated: 23 Jun 2012
Average cost of renting up to £712 a month
as landlords cash in on first time buyers' struggle to purchase
By This Is Money Reporter
PUBLISHED: 12:14, 22 June 2012 | UPDATED: 12:14, 22 June 2012
..The cost of renting rose by 0.4 per cent last month, pushing the average price to £712 a month, data by LSL Property Services has shown today.
This was the second consecutive month that rents rose, with prices returning to January levels, amid strong competition among tenants and the end of a stamp duty concession in March, which had caused a slowdown in the rental market activity.
London rents were the highest, increasing by 0.6 per cent in May to hit a record high of £1,038 a month, the study has found. They were 4.2 per cent higher than a year ago, after rising at their highest annual rate.
Strong demand: The study suggests many people are choosing to rent due to the uncertain economy
The study also suggested rental demand in London is set to increase in the coming weeks as tenants bring forward house moves to try and avoid the disruption of the Olympics.
Meanwhile, the biggest annual decrease in rent was in East Midlands, where it fell by 1.5 per cent to £535 a month.
More...Generation Rent: 1.5m young adults will never be able to buy property
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The annual increase in rents has slowed down slightly across England and Wales, with rents 2.3 per cent higher than they were a year ago, compared with 2.4 per cent higher in April.
David Newnes, director of LSL Property Services, said: ‘The end of spring has brought with it renewed activity in the rental market, and rents have returned to the level seen before the impact of the stamp duty deadline rush by first-time buyers.
‘The reality is that thousands of frustrated buyers are still financially trapped between a rock and a hard place. Historically high rents and rock-bottom savings rates are hampering attempts to save for the larger deposits banks now require - not to mention meeting the cost of the reinstated stamp duty tax.
‘In turn, fewer tenants are able to leave the sector, and the strong tenant competition is pushing up rents as a result, making saving for a deposit harder still.’
Regional breakdown: The capital is the most expensive city where to rent
The study also suggest that it is not just ‘involuntary renters’ unable to raise a deposit to buy a house who have ramped up the competition in the rental sector, as many people are choosing to rent due to the uncertain economy.
The study said that with people still struggling to get on the property ladder and the flexibility offered by renting amid the uncertain economy, there are unlikely to be big declines in the rents any time soon.
Mortgage lenders have been tightening their borrowing criteria and raising their rates in recent months, and analysts have been cautious in their views as to whether recently-launched Bank of England measures to kick-start household lending will have a significant trickle-down effect.
Rise: The cost of renting increased for the second month in a row in May
Mr Newnes added: ‘Given the current concerns over the economy and labour market, the flexibility of renting is proving attractive for those adopting a wait-and-see approach to house purchase.’
Overall rental arrears fell back slightly from April as household budgets have improved slightly with easing inflation, with 8.9 per cent of all rent late or unpaid at the end of the month.
Campbell Robb, chief executive of Shelter, said: ‘This is yet more proof that renting is no longer the easy, cheap alternative to home ownership - for thousands of families priced out of owning a home, renting is fast becoming a way of life.
‘With rents rising across the country, many families will now be approaching crisis point, facing a daily struggle to make ends meet. Shelter research shows that 38 per cent of families with children who are renting privately have cut down on buying food to pay their rent.’
Read more: http://www.thisismoney.co.uk/money/mortgageshome/article-2163137/Average-cost-renting-rises-712-month--London-rents-highest-1-038.html#ixzz1yarsOEdR
Property- House Sales down 40% on five years ago
Updated: 16 Jun 2012
RICS: Spring bounce can't save property market
with house sales 40% down on five years ago
By Simon Lambert
PUBLISHED: 07:24, 12 June 2012 | UPDATED: 15:36, 14 June 2012
..A property freeze has pushed out this year’s spring bounce, with new figures showing house sales have dived 40 per cent compared to five years ago.
Agents sold less than four homes a week in May, despite this traditionally being one of their better months, according to the latest RICS housing market survey.
Sellers are being forced to accept lower prices and properties are sitting on the shelf for longer, RICS said, with an average of 15.6 sales recorded by its member surveyor estate agents last month.
Window shopping: But home-sellers are sitting on their properties
That is almost 40 per cent down on the 25.4 recorded in May 2007, the spring before the credit crunch hit, by the report considered a barometer of property market activity.
In the three months to May, agents sold less than a quarter of the homes they had on offer, shifting just 23.1 per cent of properties on their books compared to 40.9 per cent in the same period on 2007.
More...House prices rise 0.5% in May but property market goes back into hibernation
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Peter Bolton King, RICS housing spokesperson, said: ‘It’s no surprise to see such a sizable drop in transactions since the market peak back in 2007.
‘Ongoing economic instability in the UK and overseas has continued to undermine consumer confidence, and the reluctance of many banks to offer affordable mortgage products has created something of a stagnant market.
‘In spite of this, a gradual stability is returning to the market and surveyors expect transaction levels to increase over the coming months, even if prices continue to dip across most parts of the country.’
Diving: Prices continued to fall last month as 16 per cent more respondents reported falls rather than rises in prices, RICS said
RICS said that prices continued to fall last month as 16 per cent more respondents reported falls rather than rises in prices. House prices have now been falling on this measure since June 2010.
However, surveyors remained optimistic that lower prices will eventually bring more sales, with 9 per cent more forecasting a rise rather than fall in transactions over the next three months.
Looking ahead, chartered surveyors expect transaction levels to see a slight upturn over the coming three months, with a net balance +9 percent more respondents predicting rises, while expectations for future prices remain squarely in negative territory.
Once more London was the only region to see prices rising, while the picture was bleakest for home sellers in the West Midlands, where almost 50 per cent more reported prices falling than rising.
Homes put up for sale and the level of new buyer interest were similar to April, as respondents reported flat net balances of -3 percent and -1 percent respectively
Read more: http://www.thisismoney.co.uk/money/mortgageshome/article-2157767/RICS-House-sales-dive-40-compared-years-ago.html#ixzz1xusrgASt
Property -Construction- Growth ? Never heard of it, says George Osborne
Updated: 08 Jun 2012
UK construction growth slows
in blow to hopes of quick economic recovery
By Rachel Rickard Straus
PUBLISHED: 11:50, 6 June 2012 | UPDATED: 12:30, 6 June 2012
Hopes that the UK can quickly pull itself back out of recession took a blow today as new figures revealed confidence in the construction sector suffered its biggest fall for nearly two years last month.
The influential Markit/CIPS survey showed confidence dropped amid a slowdown in new business growth and opportunities to bid for new work.
Overall activity in the sector fell to 54.4 in May, from 55.8 in the previous month and dropping even further from March’s 21-month high.
Building up slowly: Growth in the construction sector fell to 54.4 last month
A reading above 50 represents growth, so both activity and confidence remained in positive territory.
However housebuilders showed only marginal growth, civil engineering projects saw much slower expansion compared to the previous month.
Commercial projects were most resilient.
CIPS chief executive David Noble said: 'Reports of the UK's return to recession appear to have delivered a blow to general confidence in construction, with this month's PMI posing some big questions for the sector in the coming months.'
While the sector continued to take on more staff for the third month in a row, he added that the weakening in new orders to a four-month low meant this trend may not be sustainable.
Enlarge Graph showing how the construction sector has grown over the past 12 years, according to Markit/CIPS figures
Howard Archer, chief European and UK economist at IHS Global Insight, said: 'This is undoubtedly a disappointing survey that raises concerns about the current health of the construction sector and its near-term prospects at least.'
Although the survey shows growth in the last month was very slow, since it still suggested a slow improvement it may ease some of the pressure on the Bank of England to announce more emergency money printing at its meeting tomorrow.
Enlarge Graph showing how the construction sector has grown over the past 12 years, broken down by sector, according to Markit/CIPS figures
It may help ease some of the nerves following last week’s shocking contraction in the manufacturing sector, which saw the second steepest fall in the 20-year history of the Markit survey.
However the Bank's decision is expected to hinge on the reading for the powerhouse services sector, which accounts for some three-quarters of the economy, and is released tomorrow.
Official data shows a nearly five per cent contraction in the construction sector in the first quarter of 2012, which has been at odds with the Markit surveys that have shown the sector to be much more resilient.
Read more: http://www.thisismoney.co.uk/money/news/article-2155262/Markit-CIPS-UK-construction-growth-slows-blow-hopes-quick-economic-recovery.html#ixzz1x9xLhUi8
Property-Housing- A market with inflated prices has few buyers
Updated: 08 Jun 2012
House prices boom brings £5.6 trillion stash of wealth in Britain's homes
- but the mortgage crunch means no cashing in
By Simon Lambert
PUBLISHED: 09:22, 6 June 2012 | UPDATED: 18:39, 6 June 2012
Made of money: Britain's theoretical house price wealth is £5.6trillion, but people can no longer cash in due to the mortgage crunch.
Huge house price inflation means Britain's property goldmine is worth £5.6 trillion, with almost a third of it stashed in the homes of the South East, according to a new report.
But while the paper value of our homes has barely been dented by the financial crisis, the mortgage crunch means Britons are no longer able to use them as the cash machines they once were.
Despite low interest rates, much tougher lending conditions mean families can no longer pull money out their homes as they rushed to do in the remortgage boom in the decade before house prices peaked in 2007.
Research from property website PrimeLocation claims that there is £5.6 trillion worth of residential property in Britain - although this has been calculated on estate agent asking prices which can be notoriously optimistic.
The study also fails to take into account mortgage debt, which greatly reduces the chunk of their homes that people actually own as wealth.
The PrimeLocation report delivers a much larger estimate of the value of the nation's properties than a wider-reaching exercise by Lloyds TSB Private Banking recently, which put the total value at £3.9 trillion.
That report said that once mortgage debt was stripped out, housing wealth stood at £2.6 trillion.
Inflation-busting: The price of buying a home has hugely outstripped the rise in the cost of living over the past sixty years, Nationwide's chart shows, with most of the property inflation delivered by the 1997 to 2007 house price boom
The Prime Location report highlights the vast imbalance created by the house price boom, with the south of England hit by what some see as a blessing and others a curse.
Here high house prices deliver theoretical wealth to existing homeowners, but hamper movement and lock out first-time buyers and young families from buying properties in the areas they grew up in.
PrimeLocation says the South East holds the greatest property wealth on a regional level, accounting for nearly a third (30%) of the UK’s total, with homes worth £1.65 trillion.
It pips even the capital to top spot, with London's smaller size pushing it into second with just over £1 trillion of property wealth.
Buckinghamshire, East Sussex, Hampshire and Kent all feature in the top 10 counties by property wealth per head, while the South West completes the top three with property wealth of £488 billion.
For many the theoretical value of their homes is now an untappable resource, as banks and building societies are rationing lending and will only offer the best mortgage rates to those with big deposits or equity and a good credit rating.
The current benchmark figure for the best mortgage rates is a 25 per cent deposit or equity, a far cry from the pre-2007 lending boom when homeowners could access top mortgage deals with as little as five per cent equity.
During the house price boom many homebuyers used east credit to extend mortgages, remortgage to new lenders, or even take out second mortgages to unlock the cash in their homes.
This was a major driver of Britain's booming consumer economy, as it was often used to boost people's standard of living, buy new cars, invest in buy-to-let or take exotic holidays.
Read more: http://www.thisismoney.co.uk/money/mortgageshome/article-2155231/House-prices-boom-brings-5-6trillion-stash-wealth-Britains-homes.html#ixzz1x9uznsM5
Property - Boom for 60 years - but you still need a home !
Updated: 18 May 2012
UK's 60-year property boom:
House prices 'have risen more than 100 times' since Coronation
By Harry Glass
PUBLISHED: 15:25, 14 May 2012 | UPDATED: 19:23, 14 May 2012
Today's average house price is 105 times higher than it was when the Queen was coronated in 1952 - making it seem as if we could all afford palaces now in comparison.
Climbing onto the property ladder required just £1,520 that year.
And in the Silver Jubilee in 1977, the average price was still only £9,737 - today's £160,000 average is 16 times higher than that.
Terraced housing: Property has proved a sound long-term investment according to these figures
At a time when the nation is gearing up for a weekend of street parties and celebration, research from Hamptons International also found that the average price of a home in London has risen 134-fold since 1952 and 21-fold since 1977.
In 1952, the average price of a London home was £2,650, and in 1977 it had risen to £16,493, compared with the average price of £354,300 today.
Adam Challis, head of research at Hamptons International, commented on the findings: 'Britons are well known for their love affair with bricks and mortar, and our jubilee property price analysis goes some way to prove just what a reliable investment property has been over the long-term.
'A 105-fold increase in the value of the average home in the UK over a 60 year period equates to a profit of just over £7 a day.
'This profit is inflated even more in London, where price growth represents £16 a day over a 60 year period, representing a rather healthy return on investment.'
Read more: http://www.thisismoney.co.uk/money/mortgageshome/article-2144226/Average-house-price-risen-100-times-Queen-crowned.html#ixzz1vB31Gshr
Property - "Little Boxes on the Hillside all made of Ticky Tacky...."
Updated: 17 May 2012
From dream homes to hellholes:
architects shed light on the way we live
A report by Riba suggests what we want from our homes – big, light-filled spaces – we just don't get.
But in the current economic climate, what can architects do about it?
guardian.co.uk, Wednesday 16 May 2012 16.37 BST
Room for improvement ... private rented accommodation in Newham Council, east London – a garden shed.
We all know the English like to think of their homes as castles.
But according to a report by the Royal Institute of British Architects, "dungeon" could now be a more fitting medieval analogy.
The architect's professional body has produced a report called The Way We Live Now, a study of what people want out of their homes and how they're using them.
What leaps out from its pages is the gap between expectations and reality: people want "large windows for natural light", a "large main living area for eating and socialising" and crucially "space for private time away from other members of the household".
It's wishful thinking, of course, for most of us.
The report, based on interviews with a few carefully selected families, suggested people lack space to store even basic items.
Vacuum cleaners seem to be a particular problem, with one household storing theirs at mum's house down the road, another awkwardly in the downstairs bathroom.
Kitchens didn't have room for washing machines or dustbins.
When there's hardly even room for a hoover, space for private time begins to seem like an impossible luxury.
It's nice that Riba's taking an interest, but is this a problem that its members can solve?
There's a strong argument for taking these findings into account when drawing up building regulations. But the issue is so clearly an economic one, it's difficult to see what difference architects and designers can make.
With social housing stocks falling (there were 1.73m units in April 2011, compared to 2.81m in 2001), and well-proportioned private accommodation way out of most people's reach (the average house-price to earnings ratio is still over 4:1), there's huge pressure on space.
People are forced to sacrifice those hankered-after square feet simply in order to have a roof over their heads.
London is the starkest example.
The BBC's extraordinary aerial footage of illegal accommodation in gardens in parts of the capital brings home the social cost of the property boom.
The Guardian recently reported on desperate tenants shelling out £350 every month to rent sheds.
We seem to be facing the appalling prospect of returning to a time before the social house-building programmes of the 20th century, when British cities hosted slums of the kind we now associate with grossly unequal societies such as Brazil.
But if there's one glimmer of hope for architects in this report, it's that participants said the "feel" of a home was more important than its functionality.
The attention to detail, light levels, the "atmosphere".
This is something good designers can help with, even in the worst of economic times.
"Feel" cuts both ways, however.
Bad housing, even if there is enough space, can affect wellbeing in a profound way.
What are your experiences? Do you have enough room to live?
Property- Millions in Negative Equity - Cannot afford their homes
Updated: 21 Apr 2012
The ticking interest-only mortgage timebomb:
Millions of owners at risk of not being able to afford their home
By Lauren Thompson
PUBLISHED: 09:50, 18 April 2012 | UPDATED: 10:02, 18 April 2012
Borrowers with no plan to repay cut-price interest-only loans, or whose investments have fallen short, risk being forced to sell when their mortgage expires. Some like Walter Harper will have to leave homes they have loved for decades.
Walter Harper has lived in his beloved home for two decades — but last July he was forced to put it on the market. He shared the Luton bungalow with his wife and, after she passed away, his partner, and has watched his grandchildren play there.
But he is being forced to move because he owes £110,000 on an interest-only mortgage that he can’t afford to repay.
Instead of spending his last days in the house he loves, he will be forced to rent elsewhere.
Forced to sell: Walter Harper plans to rent near his daughters and their children as he can't afford to repay his mortgage
Like so many others caught in the interest-only trap, Mr Harper is being forced to leave his family home because of an investment that performed far worse than predicted.
‘I had hoped to own my home by now.
This wasn’t what I planned for my retirement at all,’ he says. When Mr Harper took out his mortgage, he was also saving into a with-profits pension.
In 1997 he was told this would eventually be worth £276,000, allowing him to take £69,000 as a cash lump sum to pay off most of what he owed.
But when he retired in 2008, his pension was worth half this amount, leaving him £78,500 short.
He plans to rent near his daughters, Lesley and Tracy, and their children.
He’ll use what is left from the house sale to supplement his pension income.
How the interest-only timebomb started ticking
Mr Harper’s tale is far from unusual. There are almost four million homebuyers in Britain with interest-only mortgages. With these mortgages, borrowers pay only the interest on the loan, but don’t have to pay back any of the capital on the property.
This happens when the loan matures, usually at the end of 25 years.
Interest-only deals became popular in the Seventies when people were attracted to them because they looked cheap in comparison to loans where you repaid the capital as well.
Homebuyers planned to pay off their capital by using money from an endowment — a type of savings plan linked to the stockmarket.
In the Eighties and Nineties, interest-only loans boomed, driven by commission-hungry bank salesmen who promised huge profits on the endowments.
People were sold a dream that taking one out would not only pay for the mortgage, but also provide them with a handsome lump sum, which they could spend on the holiday of a lifetime and a car. Now thousands, like Mr Harper, who believed this sales pitch have been caught out.
And how the property boom made it much worse
In the housing boom of the late Nineties, a different problem emerged.
Homebuyers took interest-only deals as they were the only way of stretching wages to buy a house.
Many of these desperate homebuyers now find themselves trapped.
This is what has snared National Trust recruiter Dee Wadham. She took an interest-only mortgage in 2004, just as the property bubble was about to peak.
She bought a one-bedroom cottage in the Cornish village of Par for £120,000 with her partner.
Trapped: Dee Wadham is not sure how she will repay the £68,000 she will owe when the mortgage term ends in 2021
After they separated, she bought him out and took an interest-only loan so she could afford the mortgage on her £17,000 a year salary.
As house prices rose, she took on a bigger mortgage in order to renovate the house.
Her monthly repayments on the £68,000 loan are £185, but this wipes out a huge chunk of her take-home pay.
Dee is not sure how she will repay the £68,000 she will owe when the mortgage term ends in 2021.
Her hope is she will be able to extend the mortgage term, but she will be 64 when it matures and banks are reluctant to lend to older customers these days.
Another option is to pay off chunks of capital as and when she can. ‘At no point did anybody say to me: “There is no way you can afford to pay back that amount of money.”
I am sickened and worried about the future,’ says Ms Wadham.
Just how bad is the trap?
City watchdog, the Financial Services Authority, has warned of an interest-only timebomb for 1.3million people whose mortgages mature within the next eight years.
But industry trade body the Council of Mortgage Lenders is playing down the concerns.
It says most of those caught in the interest-only trap have benefited from years of house price growth and so can use this equity as a way of paying off their loan.
They also believe many will have savings to pay it off.
It’s true that many borrowers have large chunks of equity.
Despite recent falls in some parts of the country, since 1987 average property prices are up 279 per cent. This should give the average homeowner at least 75 per cent equity.
But even the banks have wised up to the risks of homeowners banking on property price increases to pay off their loans.
New rules make it difficult for customers to use this as a way of trading up the ladder.
This threatens to affect millions of younger homeowners who bought before these restrictions came in to place.
The major problem hitting now is that lenders are bringing in increasingly stringent rules on who can have an interest-only mortgage.
Those who do not meet them can keep their interest-only deals but will be forced off them if they need to move home or remortgage.
For someone with a £150,000 mortgage over 25 years at four per cent, moving from interest-only to repayment will send payments up by £300 a month, from £500 to £800.
A rise in my home's value will let me repay it
Chloe Halstead, 26, took an interest-only deal in 2009 when she bought a three-bedroom semi in Ewloe, North Wales. A repossessed property, it cost a knock-down £80,000 — and while house prices in the region have been falling since then, hers is now worth £110,000.
Optimist: Chloe Halstead plans to sell soon to buy a bigger house
She chose an interest-only loan, like many first-time buyers, because it dramatically reduced her monthly payments.She plans to sell soon to buy a bigger house.
Though experts say Ms Halstead may find herself trapped by the new mortgage rules, she is confident about the future.
‘I’m not worried about paying the capital because I know I’ll be able to sell at a profit,’ she says. ‘Interest-only is very handy for people looking to invest in property and I hope the banks don’t take away these loans completely.’
Her optimism is typical of many youngsters who sign up for interest-only loans.
Mortgage brokers still believe these are an excellent way for those on low incomes to take their first steps on the property ladder — as long as they start to make capital repayments, or savings, after a few years.
The problem is many don’t.
And years later they are forced to turn to friends and family, or the banks for help. Many rely on an inheritance to pay off their mortgage.
In 1990, Allan Keith Dixon, 58, and his wife Maureen, 62, took out a £100,000 interest-only loan for their bungalow in Tyne & Wear. They also took out an endowment policy, but this failed dismally.
Their house is now worth £325,000, but they don’t want to sell. Instead they will extend their mortgage term until they receive a windfall from a relative.
‘We will just keep paying our mortgage until we receive our inheritance,’ says Mr Dixon, a retired teacher who became a mortgage adviser.
How a cheap deal became a financial disasterWhy did people take out interest-only deals?
From the Seventies until the turn of the century, interest-only mortgages were the most popular type of loan.
Most people were attracted to them because they looked cheap by comparison to capital repayment deals.
At a rate of 4 per cent, interest-only payments are £500 a month on a typical £150,000 loan, compared with £792 a month for someone on a capital repayment mortgage.
The difference is that interest-only borrowers need to pay off the capital part of their loan when their mortgage term ends — typically after 25 years.
Largely, homebuyers planned to pay off their capital by using money from an endowment — a type of savings plan linked to the stockmarket. In 1988 alone, more than one million homebuyers took interest-only loans.
In 1992 three out of every four mortgages taken by homebuyers were interest-only.
Though the popularity of endowments began to decline after the year 2000 a new trend began to emerge — a rise in the number of homebuyers taking interest-only loans who had no idea how the capital would be repaid.
As house price increases raced ahead of average wage rises, first-time buyers saw interest-only deals as a way of getting a foot on the property ladder. Many had small deposits, but interest-only deals allowed them to cut their repayments and borrow more. In some years, as many as one in five of all first-time buyers used this arrangement.
What’s the problem?
City watchdog the Financial Services Authority (FSA) has warned 1.3million borrowers whose interest-only loans mature between now and 2020 that they face a ‘ticking timebomb’ — they have no way to repay the loan. Its data suggests there are 320,000 interest-only borrowers who have missed or were late with at least one mortgage payment. Its fear is that if homeowners can’t even afford the interest on their loan they will never be able to repay the capital.
On average, homeowners with loans maturing in the next 12 years will have to pay off £59,000, according to trade body the Council of Mortgage Lenders (CML).
More than 2.5million households will see their interest-only mortgage mature after 2020, with an average debt of £155,000 to pay off.
Many of those with loans maturing may have never put savings in place to pay them off.
Others may have started with good intentions and put money aside, but ended up using this for childcare, school fees or other living costs.
Thousands more have seen their savings plans, typically an endowment, deliver far less than expected.
The vast majority of endowments sold alongside mortgages were with-profits policies.
Many whose policies mature this year were told to expect upwards of £100,000 from their plans — based on a £50-a-month saving by a man who took out a policy nearing his 30th birthday.
But returns have nosedived by as much as 44 per cent in recent years.
Weren’t people warned?
Many were. Those relying on endowment policies to pay off their mortgage receive a projection letter from their insurer every two years.
These are colour-coded — red if a shortfall is expected, amber if a shortfall is likely, and green if the policy is on track to pay off the mortgage.
Despite this disappointment, some took action and put aside alternative savings.
But this was not possible for those on already-stretched budgets.
Many consumers won redress for being mis-sold an endowment, on the grounds that the risks were not properly explained to them. This cash was supposed to be used to help them pay off their mortgage — but many simply saw it as a windfall and spent it.
Many borrowers missed the deadline to claim redress, and others never got the chance because of complicated regulations governing who sold them the loan.
Recently banks have been writing to interest-only customers reminding them to make plans to pay off their capital.
Read more: http://www.thisismoney.co.uk/money/mortgageshome/article-2131439/Interest-mortgage-problems-grow-Millions-risk-able-afford-home.html#ixzz1sdeL2uKH
Property- House Prices - Talking the Market Up
Updated: 17 Apr 2012
UK Home Asking Prices Now At All-Time High
Asking prices for homes being put on the market have reached an all-time high, breaking a 2008 record, according to new survey.
With a rise of 0.5%, the national average asking price is now £243,737 - compared with the last peak in May 2008 at the start of the recession - according to the Rightmove House Price Index.
The number of properties for sale increased by 8.1% outside of London but overall supply is still down 30% compared with April 2007.
This, and the more active spring market, are buoying up seller confidence, Rightmove said.
The South West, where supply is down 5.5% on last year, is seeing a record-breaking average asking price of £270,735, while the South East and East Anglia are just £810 and £2,489 off their previous peaks.
In London, the average asking price, at nearly £500,000, is at a historic high, as sellers in the capital drag their heels in bringing fresh property to the market.
Director of Rightmove (LSE: RMV.L - news) Miles Shipside said: "Asking price records are being set in the fresh-stock-starved London and South West regions, and agents report this is also the case in markets in other regions.
"Doing research in your area is essential to gauge what type of property is in demand, how quickly it is selling and how close to the asking price is being achieved."
The results conceal the drop in asking prices in the ailing regions of Wales, the North West and Yorkshire and Humberside over the last year, with falls of 1.5%, 1.2% and 0.2% respectively.
Mr Shipside said: "If only taken at face value, national averages can mask varying degrees of volatility at a regional level.
"The richest seams of housing market activity are concentrated around those with access to cash and finance, with a strong bias to the South and London in particular."
The survey warns that the counter-effect of inflation has eroded real term values.
It said: "If prices had kept pace with inflation (as measured by the retail prices index) since May 2008 then they would now stand at £270,459, so they have fallen by 9.9% in real terms.
Property- Relaxed planning rules are not the key to growth
Updated: 29 Mar 2012
The government claims that its new slimmed down planning guidelines will give new momentum to economic recovery.
The Labour Land Campaign says there is a far better way to free up land for housing and business development.
It is outrageous that new large scale developments could be more easily allowed on green land when so many sites in our towns and cities are underused or lay idle.
And house builders have no right to complain about planning constraints when they currently hold land with permission for the building of 300.000 new homes.
The Labour Land Campaign says we need a mechanism that brings idle brownfield sites and land banks into their full permitted use to protect our countryside from urban sprawl with developments in areas where the required infrastructure, health care or education provision is not in place, where there is poor public transport and where people are even more reliant on cars to take children to school and to go shopping and to commute to work.
The Labour Land Campaign advocates a fundamental change to taxation whereby taxes are shifted off labour and investment and on to natural resource wealth including all land according to its permitted use value.
Eleanor Firman, Chair of the Labour Land Campaign, says “we need an Annual Land Value Tax (LVT) on all land which will act as an incentive to bring the numerous empty and underused commercial and residential sites and buildings in our towns and cities into full use, providing much needed affordable homes and business premises. LVT will discourage urban sprawl, unnecessary long distance commuting and will use urban land more efficiently.
By eliminating or reducing other negative taxes such as Stamp Duty Land Tax, Business Rates, Council Tax, VAT, Corporation Tax and Income Tax, LVT will encourage economic revival in depressed areas of the country as marginal costs for businesses will reduce.
We need to put a stop to property speculation where irresponsible and greedy land owners are only interested in taking land wealth that is created by the whole of society and care nothing about the impact their behaviour has on local communities or on the environment.
Land is a precious natural resource and should be used sparingly; urban sprawl damages our environment in so many ways.”
Property-The Landless lose out against the Landed
Updated: 24 Mar 2012
PRESS RELEASE FROM THE LABOUR LAND CAMPAIGNAccording to George Osborne his budget will ensure the richest will pay five times more tax through a cap on reliefs, taxes on high end property transactions and presumed better behaviour.All of these revenues are highly variable year to year, unlike the minimum annual sum £10,000 Osborne has gifted to the highest earners by cutting the 50p rate.
This is unlikely to be fiscally neutral as he claims.
But in any case, the half a billion Osborne thinks these measures would raise is derisory, and as such, a sign of his clear approval of those economy-wrecking Masters of the Universe in the world of financial services who are mostly keeping their telephone number salaries and pensions, unlike those who serve us in the public sector.
The ONS shows gross property wealth in 2010 amounted to 4.35 trillion.
Much of this value is actually land - or location - value. Yet Stamp Duty, Business Rates and Council tax barely touch this and these charges fall disproportionately on the least well off.
Properties in the highest banding for Council Tax for example, are charged only three times more those in the lowest.
Property owners and property speculators will always say a silent thank you to taxpayers for the underlying and uplift in the value of the land they own when projects such as Crossrail are announced and then created.
Property prices in London and parts of the South can be as much as two thirds land value or even more, as a result.
Eleanor Firman, Chair of the Labour Land Campaign says:
"It is unfair that workers wages are taxed, pensions are taxed, business is taxed, goods and services are taxed but land wealth is not taxed.
"By reforming property taxes and shifting taxes from wages and production onto land and other natural resources (including oil, airwaves and airport landing slots) we could reverse the current economic decline and relieve those unfairly bearing the brunt of austerity.
"The wealth that arises from our collective use of these resources should be reclaimed for investment in our public services. This is far fairer than the current system that lets this unearned income to accrue to those who didn’t create it.
"Applying an Annual Land Value Tax on land and other natural resources, will allow new businesses to be able to afford to set up all over the UK as marginal costs to businesses will be reduced and workers are left with more to spend."
Property- The Spring Housing Market - Low cation Low cation Low cation
Updated: 02 Mar 2012
UK property market 'is one of worst in Europe'
as average home sees a THIRD wiped off its real value since 2007
By Simon Lambert
Last updated at 10:27 AM on 29th February 2012
The pain in Spain: This three-bedroom villa was for sale last year at Mazarrón on the Costa Blanca for £191,115, a large discount to prices five years ago
House prices in the UK have taken the biggest real hit since the peak of the boom among a dozen major European property markets, thanks to our persistently high inflation, according to a new report.
A third has been wiped off the real value of the average UK home since the peak of the market in 2007, once inflation is taken into account, according to the Royal Institution of Chartered Surveyors (RICS) European
Without inflation included, the report's 2011 house price league was bookended by Ireland and Spain posting the biggest falls, while surprise winner Iceland joined Norway and France in the top risers.
And the stark effect of how the inflation-adjusted decline in UK house prices far outstrips the nominal falls, was highlighted by the UK’s spot in the middle of that overall European property market performance last year.
There the UK posted a 1.5 per cent fall, on the Halifax index. In real terms though, RICS said high inflation meant property prices fell 5.7 per cent.
Propping up the table: This chart from the RICS report shows how once inflation is taken into account the UK has seen the biggest fall among a dozen European property markets
Inflation-adjusting puts the UK property market’s decline since 2007 as deeper than traditional rivals Spain, where real prices are down 27 per cent since the peak and France, where prices are down just 7.6 per cent.
What about real house prices in Ireland and Iceland?
Separate reports on Iceland and Ireland’s property markets can put the UK’s real fall into context, although not deliver an exact comparison.
A report by Iceland’s central bank Sedlabanki, last year, put the fall in real prices at 33 per cent to 2010 from the 2006 peak.
Figures from a Scotiabank report published in December 2011, show Irish real house prices down 44 per cent from early 2007.
However, the dozen countries reviewed for real house prices did not include Ireland or Iceland.
The report’s author Michael Ball said: ‘Most probably, the housing market will continue to be broadly flat in nominal terms for some time yet and inflation will gradually erode house prices and indebtedness.
‘A sustained upward change will only happen when the economy as a whole shows more signs of growth. In the meantime, the housing market remains a drag on the economy as a whole.’
Halifax's monthly index shows UK house prices down 19 per cent from the August 2007 peak at £199,612, to the November 2011 point used by RICS, when average values stood at £161,556. Since then prices have eased again slightly to £160,907 in January 2012
More...London steams ahead as North West suffers house price drop
What next for house prices?
Can you find a cheaper mortgage? Check the best buys
What a difference an r makes: While Ireland sits at the foot of the table for 2011 house price performance, Iceland is the surprise package taking top spot, as this RICS chart shows
Vive la France: Prices have held up well across the Channel. This 19th-century farmhouse, with two acres and a two-bedroom gite in Riberac in Charentes, was on sale last year for £342,700
Ireland suffers biggest falls in 2011, while Iceland claims largest rise
While the UK suffered the biggest real decline from peak in the RICS report, the wider review looked beyond the dozen nations included in this and at nominal house prices – those where inflation has not been taken into account.
In from the cold: After the country's default in 2009, Reykjavik has enjoyed a recovery last year
This showed, Ireland, at 17 per cent, and Spain, at 9.6 per cent, suffered the biggest house price falls last year, with the property depression in both countries, triggered by the overhang from building booms, continuing.
On the flipside, a surprise winner last year was Iceland, with the nation that suffered a colossal financial crisis in 2008 and allowed its banks to default notching another mark of the road to recovery with house prices up 10 per cent.
But the report said: ‘[The] upswing reflects a relatively small bounce back from the massive fall in house prices seen in recent years after the collapse of the financial system.’
Joining Iceland at the top of the table was oil-rich Norway, which the report said is struggling to contain mortgage credit expansion and control property prices.
Close behind was France, where house prices jumped another 6.5 per cent, although the report said ‘recovery had been encouraged by a range of stimulus measures that have now largely been withdrawn as part of austerity packages.’
House prices in Germany also rose, with the traditionally stable market recording a 4.5 per cent increase. Inflation pulled price rises in France and Germany back in real terms, to 4 per cent and 1.6 per cent in real terms.
Price plunge: The rich and famous flocked to Spain in the boom years. Former rugby international Matt Dawson bought this villa off-plan on a golf course in Costa de la Luz, off-plan, for £1.13million in 2007
Will it be a lost decade for house prices?
The report concluded that Europe’s property markets face more tough years ahead, potentially delivering the lost decade threatened by some economists.
Heavy downward factors include the eurozone debt crisis, banks continued lack of funding combined with piles of bad debt, and the economic slowdown across the continent.
Mr Ball said: ‘Whatever happens, the 2012 outcome for Europe’s house prices may well be worse than experienced in 2011, given the poorer state of Europe’s economies at the beginning of 2012 than was the case a year earlier.’
He added: ‘The downside risk is obviously worse for those countries in the eurozone. Yet, even non-eurozone countries’ housing markets are going to be affected by problems within it. Those countries are major trading partners with the eurozone and their own financial systems would suffers as well.’
Read more: http://www.thisismoney.co.uk/money/mortgageshome/article-2107661/RICS-UK-property-market-worst-Europe-prices-France-Germany-rise.html#ixzz1nvRfacL6
Property-The falling Housing Market & why we should sack Gove, Cameron, and all the Cabinet
Updated: 14 Jan 2012
.Why UK house prices will fall
These 12 problems will drive house prices lower in 2012 and beyond
By Cliff D'Arcy, lovemoney.com | Yahoo! Finance UK
According to the latest Halifax House Price Index, a typical UK home cost £160,063 in December 2011.
A year earlier, this price tag was £163,665, so the average value of a property has fallen by £3,602 (2.2%) in 12 months.
What's more, most economists and property pundits predict further falls for 2012.
For the record, I also expect house prices to decline yet further this year, because of this toxic cocktail of problems for property prices (in no particular order):
1. Higher unemployment
In the three months to October, UK unemployment rose by 128,000 to 2.64 million, or 8.3% of the workforce.
Although this the highest level since 1994, unemployment is expected to continue to rise throughout this year, before peaking at 2.85 million in 2013.
Obviously, weaker employment puts house prices under strain, as people don't buy homes when they've lost their jobs or fear this could happen in the near future.
2. Feeble pay rises
In the three months to October, average earnings growth was 2% a year.
Excluding bonuses, average incomes rose by just 1.8% in 12 months.
What's more, real (inflation-adjusted) wages have fallen in the past two years, making homes less affordable.
3. Elevated inflation
Inflation is the tendency for the prices of goods and services to rise over time.
The Bank of England's target for the Consumer Prices Index (CPI) measure of inflation is 2% a year.
Alas, CPI inflation was 4.8% in November, which squeezes disposable incomes and, in turn, harms house prices.
4. Government austerity
At present, our Government is spending £10 billion a month more than it earns. Faced with this deadly deficit, the coalition is cutting public-sector spending and lifting taxes.
As well as pay freezes, we can expect 120,000 job losses in the public sector in 2012.
Again, these spending cutbacks will hit individuals and companies across the UK, making them less likely to put more money into property.
5. Credit crunch II
The Bank of England's latest survey of credit conditions revealed the worst squeeze on funding availability since the near-collapse of Northern Rock in September 2007.
The ongoing problems in the eurozone make it increasingly hard for banks to borrow money in wholesale markets.
This forces banks to ration their lending to home-buyers and businesses, worsening the long-standing 'mortgage famine'.
6. Higher mortgage rates
Also, the Bank of England is gradually withdrawing two support schemes for lenders, known as the Credit Guarantee Scheme (CGS) and Special Liquidity Scheme (SLS).
Thanks to this new leg of the credit crunch, lenders' funding costs will surely rise.
Indeed, mortgages and loans to businesses have already started to become more expensive.
7. Safer home loans
The UK's financial watchdog, the Financial Services Authority (FSA), is poised to tighten the rules governing mortgage lenders and brokers.
Proof of income will be needed for all home loans, finally killing off self-certified and similar 'liar loans'.
Other regulations governing affordability and income multiples will prevent borrowers from taking on loans they cannot afford.
8. A double-dip recession
Many economists and financial forecasters predict a double-dip recession for the UK in 2012.
What this means is that they expect our economy to shrink for at least two quarters in a row.
Even if we avoid this fresh downturn, our economy will still be smaller than it was in 2007, thanks to the deep recession of 2008/09.
9. Negative equity
At least one in 12 homes in the UK (8%) suffers from negative equity.
This is where the outstanding balance of a mortgage is greater than the value of the property on which it is secured.
With few options to refinance, these troubled homeowners are forced to sit tight, sell at a loss or give up their homes – thus weakening the housing market.
10. Rising arrears and repossessions
The Council of Mortgage Lenders (CML) expects 45,000 homes to be repossessed this year, up 8,000 from the 37,000 estimated to have been seized in 2011.
In addition, the CML expects more borrowers to fall behind on their mortgage repayments in 2012, thanks to mounting pressures on household budgets.
11. Record insolvencies
According to one debt-management firm, 137,500 Brits will become bankrupt or insolvent in 2012.
This works out at 375 insolvencies for each day of the year, which is a tenth (10%) higher than 2010 and the highest number since records began in 1960.
This 'boom in busts' could lead to more forced or 'distressed' property sales.
12. Weak sales
In the 2006/07 tax year, 1,853,000 properties changed hands in England and Wales. In the latest tax year (2010/11), only 981,000 transactions took place.
Given that the property market is running at half its peak level, I firmly believe that this 'phoney market' indicates more weakness to come.
In short, for house prices to rise in 2012, the market must overcome these ‘dirty dozen’ problems, as well as other negative trends.
Frankly, I don't see this happening, which is why I expect house prices to continue falling across the UK, with the possible exception of 'Fortress London'!
Property - Cheapest and most expensive regions to buy (and sell) a home
Updated: 09 Dec 2011
The cheapest regions to buy a home
By Emily Spaven
Posted 27th November 2011
The regions of England and Wales that have the cheapest homes have been revealed.
Does your area feature on the list?
According to the Land Registry’s House Price Index for October, the North East is the area with the lowest average house price, at £100,674.
This is a stark contrast to London, where the average property fetches £340,308.
While this might seem high, it is a 1.6% decrease on the average of £349,026 recorded in September.
Across England and Wales, the average house price is now £159,999, which represents a decrease of 3.2% from October 2010 and a drop of 0.9% compared with the previous month.
Region Monthly change (since September 2011) Annual change (since October 2010) Average price (October 2011)
East 0.7% -2.4% £173,410
East Midlands 0.4% -3.1% £123,811
Yorkshire & The Humber 0.4% -3.6% £120,526
South East 0.2% -1.4% £206,818
South West -0.4% -2.9% £171,384
West Midlands -0.7% -4.1% £129,500
England & Wales -0.9% -3.2% £159,999
London -1.6% 0.3% £340,308
North East -1.8% -7.2% £100,674
North West -2.9% -7.0% £110,425
Wales -3.0% -6.1% £115,923
Property - Have you cleaned your windows lately ?
Updated: 01 Nov 2011
How to Clean House Windows
By Emma Lee, eHow Contributor updated June 28, 2011
Clean Glass Large outside windows clean faster with a squeegee.
There aren't many hands raised when it's time to wash your house windows.
This household chore does go faster when two people are involved, one person outside and one inside.
Two people washing one window is the quickest way to find and eliminate streaks.
A small bit of bribery is well worth it to cut this chore down to half the time.
The end result will certainly be worth it when the sun shines brightly into your home.
Things You'll Need
Remove the window screens, and wash with water and your favorite cleaning solution.
Use a soft brush and light pressure when washing the screen to prevent dislodging the screen from the frame.
Wash the frame that surrounds the screen.
Rinse the screens with a hose or clean water and place upright in the sun to dry.
Replace the screens once the windows have been cleaned.
Select a window that is shaded. Direct sunlight on the window will dry the solution and leave streaks.
Dip a squeeze mop into the bucket of solution and squeeze to release part of the cleaner.
Apply the cleaner to the window starting at the top and moving down until the window is covered.
Use a small amount of pressure while applying the cleaner.
Slide the squeegee across the top of the window to remove the cleaner and wipe the edge of the squeegee with a clean cloth.
Continue removing the cleaner with the squeegee going from the top to the bottom.
Overlap the strokes to ensure all the cleaner is removed.
Wipe the edge of the squeegee after each stroke.
Wipe around the edges of the window with a lint-free cloth to remove any leftover cleaner.
Spray your favorite window solution onto the top of the window and continue down.
Wipe the window clean with a lint-free cloth.
Use a side-to-side motion when drying the inside; this will help distinguish streaks being on the inside or outside of the window.
Examine the window for streaks that could be on the inside or outside.
Repeat the cleaning process until there are no streaks, or simply try wiping the window again.
Raise the window and remove any dirt, webs or bugs that have become trapped in the corners or track.
Property -Protect your self and home from the Winter Weather
Updated: 27 Oct 2011
Act now and get your home winter-ready
The British winter-time can wreak havoc on your home. Unexpected leaks and wasted energy can leave you feeling wet, cold and out of pocket.
Here are five jobs to protect your home
from the worst of the winter weather.
1. Service your boiler
You'll be turning up the heating considerably soon, so now is the time to check your boiler is working fine and doesn't let you down when you most need it.
Gas Safe Register recommends you get your boiler checked annually by a registered engineer.
This protects you and your family from carbon monoxide poisoning, which can cause ill health, and in more extreme circumstances death.
Ask the engineer to advise how you can set your heating controls more efficiently to save on your bills too.
Find your local boiler servicing, replacements and repairs.
2. Clean out your gutters
Post-autumn, gutters can be full of leaves, twigs and general muck. If water can't flow through them and drain away, it will cause gutters to rot or rust. Eventually the debirs weighs them down, pulling them loose from their mountings.
Gutters should be cleaned out twice a year, once in spring and once in autumn, but if they are directly below trees this may need to happen more often. Here are some tips:
•Use a sturdy ladder and NEVER lean it against your gutters or downspouts or stand on the top two rungs.
•Remove any debris with your hands (wear rubber gloves for protection) or a trowel and place in a bag or bucket on the roof.
•Check the downspouts aren't clogged. If they are, gently unblock them with a hose, plumber's auger or unbent clothes hanger.
•Once you are done, use your hose to run water through the gutters to check that everything is flowing freely.
If the gutters are more than 2 stories from the floor, you will probably need a local guttering service to clean them out for you with special tools.
3. Seal draughts to windows and doors
It's no good having a boiler in tip top order if the heat it's pumping out is leaking through cracks and gaps in your windows and doors.
Around a fifth of heat lost from the home is due to draughts, this can be fixed simply by locating draughts and sealing them and is often a much cheaper solution than replacing old windows or doors.
Installing draught proofing will save you around £25 and reduce your CO2 emissions by around 130kg a year, but this is just a rough figure as the amount of draughts in your property usually depends on its age.
Most DIY stores stock a wide range of draught proofing in the form of brushes, foams and sealants in strips or shaped rubber or plastic. They should be able to advise you on what to use and how to apply it. Here are some tips:
•Check for draughts around doors, windows or loft hatches and take their full measurements with you to the DIY store.
•Apply a brush-strip seal to your letterbox.
•For unused chimneys, simply use newspaper to block draughts or buy a chimney balloon, but remember to take these out when you next use it!
•Gaps in floorboards can be sealed with an acrylic sealant.
4. Insulate your loft
The Energy Saving Trust reports houses with un-insulated lofts lose around a quarter of their heat via the roof. There is an associated cost, but as your loft insulation will be effective for around 40 years, you will make back the money over time and start reducing CO2 emissions straight away.
Houses that are most suitable for loft insulation will typically have an accessible loft with no damp or condensation problems. Houses with flat roofs or damp lofts will need professional help.
If you are keen to do the work yourself, you can use loft insulation blankets which are fairly easy to install by a competent DIY-er. For more in depth advice on insulating your loft, see The Energy Saving Trust loft insulation guide.
5. Inspect your roof and chimney
Your roof is the first point of contact between your house and the elements. Everyone loves a white winter, but if your roof is collecting snow for days on end and has weak points, you could end up with some costly leaks. Now is the time to check that your roof is weatherproof.
Steep roofs or roofs covered with slate or tiles shouldn't be walked on. In this case it's advisable to check from a ladder around the perimeter from the eaves. Always make sure you are using an appropriate roof ladder that is securely fastened at the top and bottom and have someone with you for safety.
Here are some checks you should make and replacements where necessary:
•Look for missing, cracked, curled, broken or rotted slates or tiles. These will need to be replaced and old nails removed.
•Check for any broken or missing points where the roof meets chimneys, walls, vents, dormers, or skylights – roofing cement can fix problem areas.
•Check your chimney is free of any unwanted guests.
Print Page | | | More Home Improvements
Energy saving tips room by room
•Always prepare carefully, and never rush a task
•Always set up your ladders as per the instructions that come with them - they are one of the main causes of DIY accidents
•Work safely and carefully, packing things away as you go
•Ensure you use the correct tools for each job to avoid expensive mistakes
•If a job is too big for you to handle seek professional help
Property- Building with Adobe
Updated: 24 Oct 2011
From Wikipedia, the free encyclopedia
Renewal of the surface coating of an adobe wall in Chamisal, New MexicoAdobe ( /əˈdoʊbi/, UK /əˈdoʊb/; Arabic: الطوبى) is a natural building material made from sand, clay, water, and some kind of fibrous or organic material (sticks, straw, and/or manure), which the builders shape into bricks using frames and dry in the sun.
Adobe buildings are similar to cob and mudbrick buildings.
Adobe structures are extremely durable, and account for some of the oldest existing buildings in the world.
In hot climates, compared with wooden buildings, adobe buildings offer significant advantages due to their greater thermal mass, but they are known to be particularly susceptible to earthquake damage.
Buildings made of sun-dried earth are common in the West Asia, North Africa, West Africa, South America, southwestern North America, Spain (usually in the Mudéjar style), Eastern Europe and East Anglia, particularly Norfolk, known as 'clay lump.
Adobe had been in use by indigenous peoples of the Americas in the Southwestern United States, Mesoamerica, and the Andean region of South America for several thousand years, although often substantial amounts of stone are used in the walls of Pueblo buildings.
(Also, the Pueblo people built their adobe structures with handfuls or basketfuls of adobe, until the Spanish introduced them to the making of bricks.) Adobe brickmaking was used in Spain already in the Late Bronze Age and Iron Age, from the eighth century B.C. on.
Its wide use can be attributed to its simplicity of design and make, and the economy of creating it.
A distinction is sometimes made between the smaller adobes, which are about the size of ordinary baked bricks, and the larger adobines, some of which may be one to two yards (1-2 m) long.
Church at San Pedro de Atacama, ChileThe word adobe /əˈdoʊbiː/ has existed for around 4,000 years, with little change in either pronunciation or meaning.
The word can be traced from the Middle Egyptian (c. 2000 BC) word dj-b-t "mud [i.e., sun-dried] brick."
As Middle Egyptian evolved into Late Egyptian, Demotic, and finally Coptic (c. 600 BC), dj-b-t became tobe "[mud] brick."
This evolved into Arabic al-tub (الطّوب al "the" + tub "brick") "[mud] brick," which was assimilated into Old Spanish as adobe [aˈdobe], still with the meaning "mud brick."
English borrowed the word from Spanish in the early 18th century.
Adobe style in Santa Fe, New MexicoIn more modern English usage, the term "adobe" has come to include a style of architecture popular in the desert climates of North America, especially in New Mexico. (Compare with stucco).
CompositionAn adobe brick is a composite material made of clay mixed with water and an organic material such as straw or dung.
The soil composition typically contains clay and sand.
Straw is useful in binding the brick together and allowing the brick to dry evenly.
Dung offers the same advantage and is also added to repel insects.
The mixture is roughly half sand (50%), one-third clay (35%), and one-sixth straw (15%) by weight.
Adobe bricks near a construction site in Milyanfan, KyrgyzstanBricks are made in an open frame, 25 cm (10 in) by 36 cm (14 in) being a reasonable size, but any convenient size is acceptable.
The mixture is molded by the frame, and then the frame is removed quickly.
After drying a few hours, the bricks are turned on edge to finish drying.
Slow drying in shade reduces cracking.
The same mixture to make bricks, without the straw, is used for mortar and often for plaster on interior and exterior walls.
Some ancient cultures used lime-based cement for the plaster to protect against rain damage.
The brick’s thickness is preferred partially due to its thermal characteristics, and partially due to the stability of a thicker brick versus a more standard-sized brick.
Depending on the form into which the mixture is pressed, adobe can encompass nearly any shape or size, provided drying time is even and the mixture includes reinforcement for larger bricks.
Reinforcement can include manure, straw, cement, rebar or wooden posts. Experience has shown straw, cement, or manure added to a standard adobe mixture can all produce a stronger, more crack-resistant brick.
A general testing is done on the soil content first.
To do so, a sample of the soil is mixed into a clear container with some water, creating an almost completely saturated liquid.
After it is sealed, the container is shaken vigorously for at least one minute. It is then allowed to sit on a flat surface for a day or so until the soil has settled into layers or remains in suspension.
Heavier particles settle out first, so gravel will be on the bottom, sand above, silt above that and very fine clay and organic matter will stay in suspension for days.
After the water has cleared, percentages of the various particles can be determined.
Fifty to 60 percent sand and 35 to 40 percent clay will yield strong bricks.
The New Mexico US Extension Service recommends a mix of not more than 1/3 clay, not less than 1/2 sand, and never more than 1/3 silt.
The largest structure ever made from adobe (bricks) was the Bam Citadel, which suffered serious damage (up to 80%) by an earthquake on December 26, 2003. Other large adobe structures are the Huaca del Sol in Peru, with 100 million signed bricks, the ciudellas of Chan Chan and Tambo Colorado, both in Peru (in South America).
Thermal propertiesAn adobe wall can serve as a significant heat reservoir due to the thermal properties inherent in the massive walls typical in adobe construction.
In tropical and other climates typified by hot days and cool nights, the high thermal mass of adobe levels out the heat transfer through the wall to the living space.
The massive walls require a large and relatively long input of heat from the sun (radiation) and from the surrounding air (convection) before they warm through to the interior and begin to transfer heat to the living space.
After the sun sets and the temperature drops, the warm wall will then continue to transfer heat to the interior for several hours due to the time lag effect.
Thus, a well-planned adobe wall of the appropriate thickness is very effective at controlling inside temperature through the wide daily fluctuations typical of desert climates, a factor which has contributed to its longevity as a building material.
In addition, the exterior of an adobe wall can be covered with glass to increase heat collection. In a passive solar home, this is called a Trombe wall.
Adobe wall constructionThe citadel of Bam, or Arg-é Bam, in Kerman province of Iran: The world's largest adobe structure, dating to at least 500 BC
When building an adobe structure, the ground should be compressed because the weight of adobe bricks is significantly greater than a frame house, and may cause cracking in the wall.
The footing is dug and compressed once again. Footing depth depends on the region and its ground frost level.
The footing and stem wall are commonly 24 and 14 inches, much larger than a frame house because of the weight of the walls. Adobe bricks are laid by course.
Each course is laid the whole length of the wall, overlapping at the corners on a layer of adobe mortar.
Adobe walls usually never rise above two stories because they are load bearing and have low structural strength.
When placing window and door openings, a lintel is placed on top of the opening to support the bricks above.
Within the last courses of brick, bond beams are laid across the top of the bricks to provide a horizontal bearing plate for the roof to distribute the weight more evenly along the wall.
To protect the interior and exterior adobe wall, finishes can be applied, such as mud plaster, whitewash or stucco.
These finishes protect the adobe wall from water damage, but need to be reapplied periodically, or the walls can be finished with other nontraditional plasters providing longer protection.
The traditional adobe roof has been generally constructed using a mixture of soil/clay, water, sand, and other available organic materials.
The mixture was then formed and pressed into wood forms, producing rows of dried earth bricks that would then be laid across a support structure of wood and plastered into place with more adobe.
For a deeper understanding of adobe, one might examine a cob building.
Cob, a close cousin to adobe, contains proportioned amounts of soil, clay, water, manure, and straw.
This is blended, but not formed like adobe.
Cob is spread and piled around a frame and allowed to air dry for several months before habitation.
Adobe, then, can be described as dried bricks of cob, stacked and mortared together with more adobe mixture to create a thick wall and/or roof.
Roof materialsDepending on the materials available, a roof can be assembled using lengths of wood or metal to create a framework to begin layering adobe bricks.
Depending on the thickness of the adobe bricks, the framework has been performed using a steel framing and a layering of a metal fencing or wiring over the framework to allow an even load as masses of adobe are spread across the metal fencing like cob and allowed to air dry accordingly.
This method was demonstrated with an adobe blend heavily impregnated with cement to allow even drying and prevent major cracking.
Traditional adobe roofMore traditional adobe roofs were often flatter than the familiar steeped roof as the native climate yielded more sun and heat than mass amounts of snow or rain that would find use in precipitous roofs.
Cement may be introduced to prevent moisture from penetrating the composite of mud and organic matter.
Vigas are beams across the roof that support the roof.
Raising a traditional adobe roof
To raise a flattened adobe roof, beams of wood or metal should be assembled and span the extent of the building. The ends of the beams should then be fixed to the tops of the walls using the builder’s preferred choice of attachments.
Taking into account the material from which the beams and walls are made, choosing the attachments may prove difficult.
A combination of the bricks and adobe mortar that are laid across the beams creates an even load-bearing pressure that can last for many years depending on attrition.
Once the beams are laid across the building, it is then time to begin the placing of adobe bricks to create the roof. An adobe roof is often laid with bricks slightly larger in width to ensure a larger expanse is covered when placing the bricks onto the beams.
This wider shape also provides the future homeowner with thermal protection enough to stabilize an even temperature throughout the year. Following each individual brick should be a layer of adobe mortar, recommended to be at least an inch thick to make certain there is ample strength between the brick’s edges and also to provide a relative moisture barrier during the seasons where the arid climate does produce rain.
Depending on the materials, adobe roofs can be inherently fire-proof, which is a valuable attribute when the fireplace is kept lit during the cold nights.
The construction of the chimney can also greatly influence the construction of the roof supports, creating an extra need for care in choosing the right materials.
The builders can make an adobe chimney by stacking simple adobe bricks in a similar fashion as the surrounding walls.
Property - UK Stagnation-Thanks to the Tories economic policies
Updated: 20 Oct 2011
House prices dip after the small uplift in July
House prices fell 0.3% between July and August the latest data from the Land Registry house price index shows.
The return to the negative price trending seen in May and June, after the brief rise in July, means the average property in England and Wales is now worth £162,347.
Properties in Scotland are now worth an average of £164,139 according to the Registers of Scotland.
Officials at the Land Registry note that the annual price dip of 2.6% is ‘on a similar level to the past four months.’
Regionally, property prices have been all change, bar one notable exception, London, which continues to resist the overall property trends with a 0.5% monthly increase.
» See the regional price breakdown
London is also the only region to see a year-on-year increase for the month of August.
The East and the East Midlands also saw rises of 0.8% and 0.7% respectively.
All other regions saw a drop in average prices with Wales (-1.7%) faring the worst, taking house prices to £117,534.
The South West (-1.1%), which saw the biggest price increase in July, experienced the second largest monthly slump, with house prices now at £173,137.
Decreases were also felt in the North West (-1.1%), effectively cancelling out the price rises of the previous month.
The expert opinion
Lucy Pendleton, of estate agents James Pendleton, said the market was in a state of eternal to-ing and fro-ing.
‘London, with its unique climate, once again stands out as the most resilient local market in the UK,’ she said.
‘While London prices float upwards due to a shortage of property and strong demand, not least from wealthy foreign buyers attracted by the cheap pound, for the rest of the UK it is not quite so positive.’
The debate around unrealistic asking prices has also reignited.
Speaking to the BBC, Henry Pryor commenting that with asking prices still much higher than selling prices, sellers were still in denial about the true market value of their homes.
‘The result of this difference of opinion is that the market is seizing up with low sales volumes reflecting that very few buyers and sellers can agree on a mutually uncomfortable price,’ he said.
‘Sellers need to wake up and realise that an optimistic guide price just makes you look greedy and unrealistic.’
Sales volumes have dropped by 9% between March and June, when compared to the same time period last year.
Property- Downsizing- Not all its cracked up to be
Updated: 18 Oct 2011
Dream of retirement downsizing can often be a waste of money
Downsizing your property can be less lucrative than you think.
9:38AM BST 14 Oct 2011
Downsizing to release equity from a property may be an appealing way for many expats looking to generate extra cash for their retirement when they return to the UK, but 4.7 million British homeowners are vastly overestimating how much they will generate this way.
Figures from Investec Wealth & Investment (IW&I) show that the average overestimate is £22,000, which would put a real dent in the pension plans of returning expats.
A total of 3.52 million homeowners in Britain have already downsized in the past five years, with two thirds aged over 55, said IW&I.
They managed to raise £98,000 on average, but this is still below the expected amount of £120,000.
The main problem is that while the idea of moving to a smaller home may be appealing, in reality it is much harder for people to downsize than they think.
Nick Gartland, senior financial planning director of IW&I, said: “Downsizing may be a popular way to release capital but homeowners are often wildly over-optimistic about the amount they will crystallise.
This gap between expectation and reality can have a significant impact on their financial circumstances.
“This study reinforces our own experience with clients in that more often than not downsizing turns into samesizing as people find it far more difficult than they thought to move to a much cheaper home.
The situation is often exacerbated because they allow an insufficient amount to cover the costs of moving.
With the housing market remaining in the doldrums, homeowners shouldn’t rely too heavily on downsizing – both in terms of being able to sell and buy a new home and in the amount they generate as a result.”
Location was the biggest hurdle, with few people willing to compromise on where they live.
One in 10 also admitted they ended up spending more than they thought on a new home simply because they “fell in love” with a larger property, which was more than their budget.
Property- Market up-Remortgages up
Updated: 13 Oct 2011
Remortgaging up by more than 30%
The number of loans approved for remortgages in August was up more than 30 per cent in August on a year ago, according to the Council of Mortgage Lenders.
In what the industry body termed “welcome signs of life” loans for house purchases were also up, rising to 52,000, against 51,000 in August 2010.
House prices continue to falter
House prices fell 1.3 per cent in August compared with a year ago, according to the Department for Communities and Local Government. According to the official data, which is based on mortgage completions, the average house price was £208,476.
But prices rose slightly, by 0.6 per cent, over the month
Property- Negative Equity is back
Updated: 06 Oct 2011
Negative equity is back:
House price falls leave thousands unable to move
and stuck on high mortgage rates
By Ruth Lythe
Last updated at 3:33 PM on 5th October 2011
House prices are plunging across Britain. As a result, many families face the financial heartache of being trapped on expensive mortgage rates, while others are unable to move home. Ruth Lythe reports.
It’s the secret nobody will talk about, but is blighting the lives of millions.
Outside London, in streets in every town in Britain, middle-class families are trapped in their homes.
Some of them are stuck in properties that are now far too small for their growing family.
Others are desperate to move for a new job, to live nearer to elderly relatives or to be closer to good schools — and simply can’t.
They all have one thing in common: their properties have fallen into negative equity after they bought at the peak of the last boom market between 2000 and 2007.
In just four years, tens of thousands of pounds have been wiped off the value of their properties.
According to the latest house price figures from the Land Registry, average prices across England and Wales have fallen by 2.6 per cent in one year. But this average is buoyed by London prices which have risen by 2.1 per cent.
And towns in some regions are also bucking the downward trend. For example, homes in Merthyr Tydfil in South Wales have risen by 3.6 per cent.
Trafford in Manchester and South Tyneside in the North East have also seen rises of 1.8 per cent and 1.3 per cent respectively, while neighbouring areas have seen prices fall.
In Scotland, prices have dropped, on average, by 1.8 per cent, according to Registers of Scotland.
Gemma Watkins is now snared by negative equity. The 27-year-old nurse bought her home in Coleford, Gloucestershire for £92,500 at the top of the market in 2007.
She borrowed £100,500 from Northern Rock on one of its now notorious Together mortgages, at 6.9 per cent. This loan allowed you to borrow up to 125 per cent of the value of the house.
Miss Watkins used some cash to pay off a £12,500 personal loan and the rest to buy her flat. But her fixed-rate deal comes to an end in May, and she is struggling to find another lender.
Miss Watkins believes this is because the value of her home has fallen by more than £7,000, and due to the structure of the mortgage, which combines a personal and home loan.
She admits: ‘I was naive when I took on the mortgage.’
Ray Boulger, senior technical adviser with mortgage broker John Charcol, says she has little option but to stay with Northern Rock. But her rate should drop to 4.79 per cent when she switches to the bank’s standard variable rate.
Why are prices falling?
The credit crunch in 2008 put an immediate end to the days of cheap and quick home loans.
Banks suddenly found they were unable to get cheap funds to use as mortgages. As a result, they clamped down on whom they were willing to lend money to.
Crucially, this meant anyone with a small deposit, bad debts, the self-employed and those with black marks on their credit history were excluded from taking a loan.
Things have improved, but the current eurozone crisis is also threatening to push up the cost of mortgages — which have just fallen to an all-time low.
With so few people being granted home loans, this is deterring first-time buyers and anyone who wants to move.
This lack of buyers is making it harder for sellers and pushing down prices.
Worst hit are homes worth between £250,000 and £500,000 — typically favoured by middle-class families.
Land Registry figures show sales of these homes have plunged by up to 20 per cent in the past year.
What is negative equity?
Negative equity is when you owe more on your mortgage than your property is worth. Massive drops in house prices now mean it’s a problem affecting hundreds of thousands of people — especially those who bought at the peak of the last property boom in 2006 to 2007.
Worst affected are first-time buyers, many of whom, at the time, were not required to put down any deposit at all on their home. In fact, some took out loans that were up to 25 per cent greater than their property’s value.
Many also took out interest-only deals. With these, buyers only ever repay the interest on their mortgage, and none of the capital.
As a result, they always effectively owe the same amount. So when prices fell, they were more at risk of losing money.
According to the Council of Mortgage Lenders, 7 per cent of all mortgages, or 827,000 homeowners, are in negative equity.
However, many believe this is a conservative estimate. A study from researcher Standard and Poor’s suggests 40 per cent more homeowners were in negative equity this year than at the end of last year.
By far the worst affected are those in the North — which accounts for one in ten of all homes in negative equity.
In Hartlepool, Co. Durham, house prices have dropped by nearly 16 per cent in one year. So if you bought a home worth £100,000 in August 2010, it would be worth only £84,000 today.
In Rochdale, Lancs, prices have fallen by 13.5 per cent — bringing a £100,000 home down to £86,500 in just one year and Rotherham, S. Yorks., by 10.5 per cent. In Hull, prices have plummeted by 10 per cent, and in Durham by 9.3 per cent.
The South of England has not been immune. Prices in Devon and Dorset dropped by 3.1 per cent and 2.4 per cent over the past year — effectively wiping up to £3,000 off their value.
Despite these plunges, many sellers are in denial about prices falling so rapidly. The average asking price for a home is £233,139. This has fallen just 0.8 per cent since 2007, even though selling prices are actually 11 per cent lower.
In areas where house prices are falling rapidly, the difference between sellers’ expectation and the actual prices homes go for is even more dramatic.
For example, house prices in Hartlepool rose at almost the fastest rate in the entire country during the boom. But four years on, Money Mail has found instances of homes where asking prices had dropped by as much as 40 per cent since they have been put on the market — just a few months before.
The social costs of negative equity are huge. At a time of high unemployment, homeowners will struggle to move to a new area if they lose their jobs.
The Bank of England has even reported concerns from businesses struggling to recruit employees because they cannot move home.
If your family grows, you are unable to move to a larger place and can end up stuck in cramped accommodation.
Plus there is the stress and uncertainty of being stuck with a high mortgage rate and being unable to take a new deal.
Interest rates are low for some people at the moment, with many homeowners paying between 2 per cent and 3.5 per cent. But those who borrowed a lot in the credit crunch could still be paying as high as 6.34 per cent.
When deals such as this end, repayments will fall, but not to the same level as the cheapest deals on the market.
One reader, a recruitment consultant from Leeds, is typical of hundreds of thousands of people, who bought during the boom years. He bought a new flat in a Leeds waterside development for £180,000 in 2005. But, by 2009, he was told the flat was worth between £100,000 and £120,000. He says agents told him it would be at least a decade before he could break even. The flat eventually sold for £120,000 and he is now renting.
He says: ‘The experience has left me quite badly scarred. I will never buy a new- build again, and I am almost sure I won’t get a mortgage again, either. I will save and buy outright or not buy at all.’
What you can do
First, don’t panic. If you plan to stay in your home for many years to come, negative equity should not be a problem.
There are options to combat negative equity. One is to overpay your mortgage — monthly, or in lump sums, depending on how much spare cash you have. This means you will eat into the capital you owe quicker, and reduce how much you pay in interest in the long run.
A second is simply to use your savings and pay off some of the debt when you remortgage or move house.
If you can’t do this and need to remortgage, negative equity does limit your options — however, most banks and building societies should be able to offer a new deal to existing customers.
If your lender’s standard variable rate is low, it is probably better to stay put.
If you need to move home, your lender might be able to offer a specific mortgage that lets you take the debt with you to a new home. For example, Nationwide allows customers to port their mortgage if they are in negative equity, as long as they don’t want to borrow any more money and the negative equity amount remains unchanged. The negative equity is converted into a ‘top-up loan’.
Lloyds has a product that will allow customers who are in negative equity with a property worth 20 per cent less than their mortgage to move. But you will not be able to borrow more than you already have.
If you need to move to a more expensive property, you will have to use your own cash to fund it.
Another option is to clear the negative equity by taking out an unsecured loan. This might be more costly than a mortgage, but will not put your home at risk.
For example, Sainsbury’s Finance will allow you to borrow between £7,400 and £14,999 at a rate of 6.7 per cent. This means that a £10,000 loan, spread over five years, would cost you £11,740 with monthly repayments of £195.
For more advice get in touch with Citizens Advice — 08444 111 444 or www.citizensadvice.org.uk or the National Debt Line — 0808 808 4000.
For more on what you can do if you’ve fallen into negative equity, go to www.thisismoney.co.uk/negative
Read more: http://www.thisismoney.co.uk/money/mortgageshome/article-2045281/House-prices-What-home-fallen-negative-equity.html#ixzz1a0197RBn
Property- House Prices and Mortgage rates
Updated: 04 Oct 2011
House Prices and Mortgage rates
These two go hand in hand.
When mortgages are available house prices will recover.
Especially for first time buyers.
Rents are too high and they leave the tenant with no interest in the property.
The radical would like to see more of the percentages market.
Buyer getting a 25% ,50% or 75% share in a property from the mortgage company
The buyer then pays a mortgage on that percentage.
95% mortgages would go !
The rent on the property reduced or rolled up as the value in the property
increases or the value of the pound decreases
The buyer pays the mortgage on the reduced share only.
Valuations based on market forces.
Would that work to kick start the market ?
PROPERTY - SWINGS BUT NO ROUNDABOUTS -TO ABOLISH THE STAMP DUTY WOULD HELP ?
Updated: 16 Sep 2011
Summer slide in house prices pushing sellers to put off until Autumn, surveyors report
By Ed Monk
Created 9:17 AM on 13th September 2011
Summer slump: Buyers are staying away out of fear of house price falls.
The number of surveyors reporting house price falls increased last month with fears for the economy overtaking a lack of mortgage availability as the main reason for the slide, according to RICS.
The Royal Institute of Chartered Surveyors said its survey of members showed 23 per cent more reporting falls in August than reported rises, up from 22 per cent in July.
Within this, 79 per cent of surveyors blamed 'general economic uncertainty' for the falls, while 66 per cent blamed a lack of mortgage finance.
The survey results added to evidence that the number of transactions falls away. This was most apparent in London where 74 per cent of RICS respondents blamed a lack of stock for the subdued housing market.
RICS reported activity levels as being flat in August, with the average number of sales per surveyor (branch) at 14 (a 26 month low). Also, the average amount of properties on surveyors’ books fell in the month by 4.6 per cent to 67, with anecdotal evidence from surveyors suggesting many sellers are taking their properties off the market until Autumn.
Most house price measures have turned negative during the summer. August's Halifax report puts prices down 2.6 per cent annually, Nationwide has them down 0.4 per cent over the same period and the Land Registry has them sliding 2.1 per cent in the year to July.
According to the RICS data, every region saw falls in house prices apart from London where the balance of surveyors who saw an increase reached a 15-month high. East Anglia and the West Midlands saw the most severe declines, with a balance of 62 per cent and 63 per cent respectively reporting falls.
Graph shows the trend for falling prices with a balance of surveyors reporting falls.
RICS housing spokesman Alan Collett said: 'For the time being, our indicators suggest that demand for homes remains broadly steady, albeit at relatively low levels, despite the renewed bout of economic gloom.
'However, the risk is that the worsening economic picture will gradually begin to have a more material impact on sentiment and discourage potential house purchasers even where mortgage finance is available.'
A balance of 3 per cent of surveyors reported a decline in new buyer enquiries, signalling that demand is set to continue falling.
Surveyors had become more pessimistic about future house prices, with a balance of 23 per cent expecting prices to fall over the next three months, up from 13 per cent the previous month. But surveyors were hopeful of a modest pick-up in activity over the coming months
Read more: http://www.thisismoney.co.uk/money/mortgageshome/article-2036793/Summer-slide-house-prices-pushing-sellers-Autumn-RICS-reports.html#ixzz1Y6NIGOLe
PROPERTY- US- SHARP RISE IN FORECLOSURE NOTICES
Updated: 16 Sep 2011
Sharp rise in foreclosure notices
Notices of home foreclosures increased sharply in August, a marked 33 percent rise after slowing to a trickle over the last year. This was the sharpest rise in four years.
The increase suggests that loaning institutions may again be aggressively reclaiming defaulted properties in the wake of the "robo-sigining" scandals where banks anxious to maximize profits forged signatures on foreclosure documents or allowed them to be signed without adequate scrutiny.
State attorneys general have filed suit against the big banks for such practices.
While labor, community groups and civil rights organizations called on banks like JP Morgan Chase, Bank of America and Wells Fargo to declare a moratorium on foreclosures, the delay was due to efforts to avoid legal entanglements.
The Obama administration has sought to address the mortgage crisis by providing struggling home owners with financial assistance and urging banks to renegotiate contracts. Such efforts, however, have had meagre results.
Additionally, the GOP earlier in the year attempted to gut the administration's mortgage assistance programs.
White House officials, however, have not given up and included in their new jobs bill a proposal that will provide employment repairing foreclosed homes: "A measure in President Obama's jobs bill, which is being considered in Congress this week, could relieve some of the downward pressure on the housing market caused by the abundance of foreclosures.
The measure, known as Project Rebuild, calls for $15 billion to be set aside for refurbishing foreclosed and vacant properties, including residential buildings."
Over 800,000 homes are expected to be foreclosed upon by the years end.
The troubled Bank of America, which recently received a several billion dollar bailout from Warren Buffet, is leading the pack in seizing distressed homes in states where court action is not required.
For example, in "California, Bank of America ratcheted up the number of notices of default on homeowners by 182.4 percent from July to August ..."
Similarly JP Morgan Chase has resumed foreclosure action in 43 states.
The mortgage crisis began with defaults on sub-prime loans but as the recession deepened quickly spread to standard loans.
As a double-dip recession looms, nagging high unemployment is now the chief cause of home loan defaults
PROPERTY- TORIES IN THE BLUE AND RED CORNER-FIGHT OVER COUNTRYSIDE DEVELOPMENT
Updated: 10 Sep 2011
Conservatives given millions by property developers
The Conservative Party has received millions of pounds in donations from developers who stand to benefit from the Government’s controversial planning reforms, The Daily Telegraph can disclose.
Dozens of property firms have given a total of £3.3 million to the party over the past three years, including large gifts from companies seeking to develop rural land.
Developers are also paying thousands of pounds for access to senior Tories through the Conservative Property Forum, a club of elite donors which sets up “breakfast meetings” to discuss planning and property issues.
The disclosures are likely to provoke a new “cash-for-access” row and will give rise to fears that planning policies could have been influenced by powerful figures from the property industry.
The Coalition will also face a backlash next week from more than 80 rural MPs and peers, who will meet to discuss concerns that relaxing planning policy will see hundreds of wind turbines built in the countryside. The Daily Telegraph has launched the Hands Off Our Land campaign to urge ministers to rethink the measures, joining opposition from the National Trust, English Heritage and the Campaign to Protect Rural England. The guidance states that there should be a “presumption in favour of sustainable development”, which campaigners have warned would give developers “carte blanche”.
Bill Cash, who is organising the meeting of back-bench MPs and peers, said last night: “This is a demonstration of the deep concern and the first shot across the bows.
The Conservative Planning Forum raises around £150,000 a year for the Tory party and charges members £2,500 to meet senior MPs to discuss policy and planning issues.
Mike Slade, its chairman, has given more than £300,000 over the past decade, individually and through his property firm, Helical Bar.
Mr Slade advocated reforms to encourage local authorities to “see the benefits of development” three years ago, when he warned the Tories to “get over” their image as “nimbys”.
The forum met Grant Shapps, who is now housing minister, while the Conservatives were in opposition early last year, after Mr Slade had written an article strongly critical of plans to devolve more planning powers to local authorities.
Eric Pickles, the Communities Secretary, will meet some of the nation’s biggest housebuilders at a conference next week where he will give the keynote speech.
His presence is likely to lead to further claims that ministers are “stacking the deck” in favour of developers.
Conservation groups have complained bitterly of a lack of access to ministers over the proposals and the National Trust has demanded a meeting with David Cameron. Some of the Tories’ biggest donors are from the property world. David and Simon Reuben, billionaires who own Millbank Tower in Westminster, have given almost £500,000 over the past decade, while Terence Cole, a London-based developer, donated almost £300,000. IM Properties, which is expanding Birch Coppice Business Park, near Tamworth, Staffs, has given around £1 million since 2009.
A senior Tory MP, who did not wish to be named, accused the Chancellor, George Osborne, of “shoe-horning in” the presumption in favour of development in a bid to stimulate the economy.
He said: “This is a clear example of localism being hijacked. Developers will have state licence to print money and we will see a proliferation of identikit suburbs springing up in the countryside.” The Conservative party last night strongly denied that planning policies had been influenced by donations from developers. A spokesman said: “These are Coalition policies based on principles laid out before the election by both Conservatives and Liberal Democrats. There is absolutely no link between donations to the Conservative party and Conservative planning policy – to suggest otherwise is untrue, misleading and unfair.”
He said that reforms would “maintain the protection of green space”.
A spokesman for the Reuben brothers said neither had talked with ministers about planning at any time, while Terence Cole said he had not met ministers or Tory MPs to discuss planning reform.
Mr Slade and IM Properties were unavailable for comment.
PROPERTY - LOAN SHARKS ENTER THE HOUSING MARKET
Updated: 06 Sep 2011
Struggling homebuyers offered '100pc mortgages' in new pilot scheme
Andrew Hough, 7:40, Tuesday 6 September 2011
A mortgage offering struggling families and first time homebuyers the opportunity to borrow the full cost of their property has been launched by Aldermore.
The fledgling bank, a new entrant for home owners and small businesses, is offering the so-called 100 per cent mortgage at an interest rate of 6.48 per cent, fixed for three years.
But the Family Guarantee Mortgage, available to first-time homebuyers and movers aged over 25, requires a relative to guarantee any borrowing above 75 per cent by putting up the family home as collateral.
It is the first bank to offer the controversial “deposit free” mortgage in England and Wales, three years after it became extinct in the wake of the credit crunch when property prices collapsed.
Last month Northern Bank, which operates in Northern Ireland, started offering borrowers the chance to buy a property without any savings behind them.
Critics pointed out the loans were irresponsible, placed young people in a potentially difficult financial position and over inflated the rental market.
But supporters said it was one of the few ways first time homebuyers, struggling to get a foot on a property ladder, would be able to achieve the dream of owning their first home.
Charles Haresnape, Aldermore's managing director of residential mortgages, said large deposits generally required by the majority of high-street lenders had resulted in first-time buyers becoming "disfranchised" from the housing market.
“We believe this is the single biggest issue facing first-time buyers and it needs to be addressed head on if the UK's housing market is to have a chance of recovery,” he said.
"Family support in the form of gifted deposits has become commonplace and is widely accepted by most lenders.
“The Family Guarantee Mortgage gives much greater flexibility, enabling guarantors to retain savings and instead provide a guarantee, requiring no cash deposit.”
Under the pilot scheme, buyers will only be able to take the mortgage, to be issued through Arun Estates Connells Group, and 3mc, on a repayment basis.
The bank, set up in the wake of the financial crisis in 2009, said they will also need to prove they can afford monthly payments on the whole amount borrowed.
Meanwhile, the guarantor, usually a parent or grandparent, will also have to prove they can afford repayments on the amount they are proposing to guarantee. If the loan is defaulted it could mean they also risk losing their home.
The guarantee expires after a decade, leaving the buyer with sole responsibility for the loan - which has a maximum size of £250,000 - over the next 25 years.
Other rules stipulated by the bank include a non-refundable booking fee of £299 and a completion fee of £999.
Mr Haresnape said that market conditions were different from 2008, as house prices were substantially lower.
“We are in a very different point in the economic cycle in terms of house prices,” he said.
"The problem in the past was that these loans were offered at the top of the market on very relaxed terms.”
“We have carefully considered the needs of the guarantor, resulting in a guarantee that is capped at the originally agreed amount."
He added: “The guarantee can also be repaid at any time, or released if the loan-to-value (LTV (Other OTC: LTVCQ.PK - news) ) on the mortgaged property falls to 75 per cent or lower.”
The end of 100 per cent loans in April 2008 coincided with a rise in the size of deposits demanded by lenders after the credit crisis hit the previous year.
Major high street lenders typically require at least a 10 per cent cash deposit from customers but some, including Lloyds Banking Group (LSE: LLOY.L - news) , offer deals requiring as little as five per cent.
A spokesman for Moneyfacts.co.uk, the rate comparison website, said: “Mortgage lenders are still licking their wounds from the credit crisis.”
“Despite recent signs of a return to a competitive mortgage market, lenders’ focus remains very much on risk.”
Matt Griffith, from Priced Out, a campaign group, said the loan “reinforced the two-tier property market”.
“First (OTC BB: FSTC.OB - news) -time buyers need, more than anything else, parents with substantial wealth to access the housing market either to help out with a deposit or to take on some of the risk,” he said.
“This deal highlights how broken the housing market is for most people.”
Last month, mortgage approvals rose to a 14-month peak in July, the Bank of England reported, a rise economists pinned on better deals for buyers.
Lenders approved 49,239 mortgage loans, the most since May 2010, although still well below pre-crisis levels.
PROPERTY - HOUSES UP IN JULY ?
Updated: 05 Sep 2011
Regional House Prices: 2011
Track the house price in each UK region
An average property price for each region is calculated using the official sale prices published by the Land Registry and the Registers of Scotland.
Average prices: July 2011
- Average price of property: £346,416
- Month change: +1.9%
- Average price of property: £209,309
- Month change: +0.9%
- Average price of property: £174,946
- Month change: +2.2%
East of England
- Average price of property: £173,393
- Month change: +0.6%
- Average price of property: £125,335
- Month change: +1.2%
- Average price of property: £133,254
- Month change: +1.6%
- Average price of property: £119,892
- Month change: +0.9%
- Average price of property: £114,452
- Month change: +1.2%
Yorkshire & Humberside
- Average price of property: £122,083
- Month change: +1.4%
- Average price of property: £101,143
- Month change: -2.3%
- Average price of property: £165,756
- Month change: +6.5
- Average price of property: £226,196
- Month change: +8.8
- Average price of property: £139,438
- Month change: +6.7
PROPERTY- WHAT CRISIS ? ONLY IF YOU HAVE TO SELL !
Updated: 02 Sep 2011
Why Britain is heading for a property crisis
By Mitchell B. Feierstein
Last updated at 9:34 AM on 29th August 2011
Riots in London, fear in France and Italy, meltdown in Greece and downgrades in Washington.
These are worrying times for anyone with half a brain and terrifying for anyone with a whole one.
Give or take the occasional riot, we in Britain have tended to think we’re relatively safe from these storms.
Overvalued: UK house prices are about 40 per cent too high in relation to incomes
Yes, the government managed to get into serious debt, but we’re starting to work our way out.
The ratings agencies view George Osborne as Mr Credible. And, hey, at least we’re not in the Euro.
But the British economy is stalling badly and our financial system is much weaker than the authorities would have you believe.
Worse still, the biggest threat to our financial system is one that most likely affects you personally. British property prices are far too high and set for a fall.
Transaction volumes are still unbelievably sluggish, mortgage approvals still in a slump – but the problem isn’t volumes, it’s prices.
There are two main ways of measuring whether property is fairly valued or not.
The first is to compare house prices with average earnings.
The second compares house prices with average rents.
On both measures, the UK market looks screamingly overvalued.
British house prices are around 40 per cent too high in relation to incomes and about the same amount in relation to rents.
That’s not all of it. Housing markets are volatile.
That means they overinflate in a bubble, but they crash too far in a slump. If prices are 40 per cent above their fair value, a collapse of more than 50 per cent is well within the realms of possibility.
Crazy? Think about where on earth the housebuyers of tomorrow going to come from. A recent report in the Mail quoted some young people as saying they ‘don’t think they will ever be able to afford to buy a property. ’ At these prices – they’re right.
That’s why the average age of a first-time buyer has been soaring and why the ‘Bank of Mum and Dad’ remains essential to so many new buyers today.
Then think about what’s happening to interest rates. The Bank of England has been in existence for more than 300 years and it has never once operated a monetary policy which is as slack as the one that has now been in place since 2008.
Prices have already fallen more than 15 per cent from their peak despite a Bank of England rate of just 0.5 per cent.
When interest rates return to sane levels, as they’ll have to if the Bank is to cope with runaway inflation, people are suddenly going to start finding that their mortgage burden becomes rapidly insupportable. All this at a time of high inflation, high fuel prices, high food costs.
You only have to look at the US to realise what happens when you get a cycle of mortgage defaults, repossessions and distress sales. In America, prices have already fallen at least 30 per cent and they’re still headed down with no bottom in sight.
No? You still don’t believe me? Then look at it this way. Can you name any occasion in history when a developed country simultaneously faces savage government cuts, swingeing rates of tax, high inflation, rising unemployment, depressed growth abroad, rising interest rates, huge levels of debt, and doesn’t have a housing crisis?
In the UK housing slump of the early 1990s, the world situation wasn’t nearly so bleak as it is now, yet prices (in real terms) still fell by well over a third from peak to trough.
These thoughts aren’t comfortable ones. Not for me, not for you, still less for George Osborne and his colleagues. But you don’t avoid disaster by wishing it away.
Mitchell B. Feierstein is chief executive of the Glacier Fund. He has been in the financial markets for 30 years. He is the author of Planet Ponzi (due out in February 2012), which argues that the credit crisis has only just begun
Read more: http://www.thisismoney.co.uk/money/news/article-2031172/MONDAY-VIEW-Why-Britain-heading-property-crisis.html#ixzz1Wl3b8QKW
PROPERTY- HOUSE PRICE RECOVERY SLOW BUT ....
Updated: 31 Aug 2011
House prices see biggest leap
in 19 months
but are still down on last year
By Daily Mail Reporter
Last updated at 9:38 PM on 26th August 2011
Good news: The average price of a home increased 1.3% between June and July to £163,049
House prices rose last month in every region of England and Wales apart from the North East, figures showed yesterday.
The average price increased 1.3 per cent between June and July to £163,049.
It was the biggest month-on-month difference since January 2010.
However, the average is still 2.1 per cent lower than a year ago.
Every region of England and Wales has seen prices drop over the past year apart from London, where prices are up 1.3 per cent to £346,416.
London prices are up 1.9 per cent over the past month.
The South West saw the biggest monthly rise, with prices up 2.2 per cent to £174,946, although they are still 1.9 per cent lower than a year ago.
In the South East, prices are 1.1 per cent lower than a year ago at £209,309, despite a 0.9 per cent rise in the past month.
But there was a 2.3 per cent decline in prices in the North East, where the average home costs £101,143 – 8.8 per cent lower than a year ago.
Property prices are particularly volatile at the moment because there are fewer transactions than before the recession.
The figures from the Land Registry showed that the number of completed home sales dropped 10 per cent to 46,870 in the year to May, the most recent month for which those figures are available.
Nick Leeming, of property website zoopla.co.uk, said: ‘Low transaction levels and the year-on-year decline in average prices is representative of the caution gripping buyers and mortgage lenders alike.
‘In addition, the cost of day-to-day living is squeezing peoples’ ability to save for deposits and get on to the housing ladder, leaving a vast backlog of first-time buyers anchored to the rental market.
'Until people feel more confident about their personal finances and are able to put aside money to build even the smallest of deposits the market will continue to stutter.’
Read more: http://www.dailymail.co.uk/news/article-2030510/House-prices-biggest-leap-19-months-year.html#ixzz1WZeHrCW5
PROPERTY- SOME SELLERS CUTTING PRICES
Updated: 19 Aug 2011
Two in five home sellers
forced to cut asking prices
as reality bites
By Simon Lambert
Last updated at 12:10 PM on 15th August 2011
Two in five properties currently up for sale have had their asking prices cut at least once, a new report has revealed, as home buyers play the waiting game.
Buyers taking advantage of the continuing slump in home sales to test sellers’ resolve are seeing their strategy pay off – with the average price reduction of £18,500 shaving 7.1% off the original asking price.
The 38.6% of properties sitting on estate agents’ books that have had their prices cut is up from 37% three months ago and 32% a year ago.
The research by property listing website Zoopla.co.uk shows that even Millionaires’ Row is not immune from the buyers’ market – with 27% of all £1 million-plus homes on the market having had their asking price cut.
This is up from the 25% three months ago and 22% a year ago that had seen cuts.
On sale: Homes are seeing their prices cut as buyers play the waiting game
The cuts come as many initially over optimistic home sellers find that they must lower their expectations if they actually want to sell up.
Nicholas Leeming, of Zoopla.co.uk, said: ‘Vendors continue to have to lower prices due to weak buyer demand. Sluggish economic growth has hit buyer confidence and tight-fisted lenders are currently making it impossible for swathes of would-be buyers to benefit from the price reductions.
‘For those who can get mortgages, now is as good a time as there has been in over a year to bag a property bargain.’
The gap between sellers’ ambitions and buyers’ realistic purchasing power has been repeatedly highlighted in the Royal Institution of Chartered Surveyors’ monthly house price reports, compiled from its member estate agents’ experiences.
Typical of many comments in the most recent RICS report for July, John Frost, of The Frost Partnership in Beaconsfield, Buckinghamshire, said: 'If property is priced sensibly there is still strong interest. Those vendors who are not realistic will receive little interest in this market place.'
This attitude from sellers has been reflected in asking prices managing to consistently rise year-on-year, on the Rightmove index, while at the same time falling annually on major house price reports from the Land Registry, Halifax and Nationwide.
However, there are suggestions from agents that sellers may be becoming more realistic as economic reality bites and the latest Rightmove survey for the four weeks to the middle of August has actually shown a slight annual dip in asking prices.
It showed that August’s sellers dropped average asking prices by 2.1% (£5,054), and year-on-year prices edge down for the first time since September 2009 (-0.3%)
However, the report added that despite transactions having slumped and mortgages become much harder to get, in the four years since the onset of the financial crisis asking prices have fallen by only 4.1% (£9,930).
Where are prices being cut?
Read more: http://www.thisismoney.co.uk/money/mortgageshome/article-2026158/Two-home-sellers-forced-cut-asking-prices-reality-bites.html#ixzz1VS7nVmr0
Northern towns and cities lead the table of places with the highest average price reductions.
Zoopla says Bolton sellers are suffering the most, having been forced to reduce the original asking price by 8.6% on average. Glasgow (8.2%) and Newcastle-upon-Tyne (8.2%) complete the top three, while other major northern cities like Liverpool are also in the top ten.
Conversely, prices in the South East have remained more immune to reductions where properties in Chelmsford (5.5%) have the lowest average discount and the list also includes other prominent south-east areas like London (6.3%) and Croydon (5.6%).
London has the lowest proportion of price-reduced homes in the UK (32.4%). In Stockport, nearly half (47.8%) of all properties for sale have been reduced in price since coming onto the market, closely followed by Huddersfield (46.3%) and Chesterfield (45.8%).