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New rules for sale-and-rent-back market
The Council of Mortgage Lenders welcomed today’s publication by the Financial Services Authority (FSA) of new rules and guidance to provide full protection for consumers in the sale-and-rent-back market.
Lenders have for some years campaigned for statutory regulation to improve protection of home-owners who may be considering sale-and-rent-back as a means of dealing with mortgage arrears.Sourcve
Lenders welcomed the FSA’s decision to move quickly to introduce interim regulation of sale-and-rent-back last July to tackle the most immediate issues. Now the FSA has published details of the scheme for full statutory regulation from 30 June 2010.
Commenting on today’s FSA announcement, the CML’s director general Michael Coogan said:
“We are pleased to see FSA pressing ahead with its plans to reinforce protection in an area where there has clearly been potential detriment for borrowers in arrears. Rules guaranteeing security of tenure for five years and banning cold-calling by sale-and-rent-back firms are particularly welcome.
“Borrowers in arrears should always continue discussing their problems with their lender, who will work to devise a solution depending on their individual circumstances. There are likely to be a number of options for them other than sale-and-rent-back, but it is re-assuring that borrowers who may still wish to consider this option will be better protected.”
Source: Council of Mortgage Lenders
Gross mortgage lending reached an estimated £13.7 billion in December 09
Gross mortgage lending reached an estimated £13.7 billion in December, a 14% rise from £12.1 billion in November and up 3% on December 2008, according to the Council of Mortgage Lenders. This is the first time the annual monthly comparison has been in positive territory since October 2007. However, other than in 2008, this is still the lowest figure for December since 2001 (£13.4 billion).
Lending totalled £39.1 billion in the fourth quarter, up slightly from £39 billion in the previous quarter but down by 14% on the last three months of 2008. There is typically a 6% fall between the third and fourth quarter.
Source: Council of Mortgage Lenders
Do ‘Fast House Sale’ deals work?
Being in the online property media industry you see a lot of coverage and advertising for ‘quick sale’ or Fast House Sale schemes but I realised recently I’d had no direct dealings with them and had always put them down as being a bit dodgy.
Talking to an estate agent friend at a national estate agency chain a few years ago he told me that he has contacts with serial cash buyers who will snap up a property that the seller is willing to sell at a discount for a fast sale – perhaps if they can’t afford mortgage payments or deperately need to liquidate their capital. This is often done outside his remit with his employer who never even sees the property on the books and I’m lead to believe is not uncommon practice among some estate agents.
Many Landlord groups offer advice on buying Below Market Value (BMV) properties as part of their investment strategy – a recent thread on the property forum Singing Pig discusses how to aquire property at BMV. Obviously property can be viewed as below market value for a variety of reasons, but the most common is a distressed sale where the owner is in a position where he must sell quickly and doesn’t have the luxury to advertise and await the perfect buyer at the best price.
The main routes to finding BMV property are:
Auctions
Specialist BMV firms
Estate Agents
Property Finders
Your own research
So how do the ‘Fast Sale’ businesses work?
Some examples that I looked at today are below, but a google search will bring up many companies hungry to ‘sell your house fast’.
www.quickcashforproperties.co.uk
www.aquicksale.co.uk
www.propertyrescue.co.uk
www.cash-sale-today.co.uk
www.choices.co.uk
www.nationalhomebuyers.co.uk
The pitch is that you are desperate to sell your house, whether for divorce, debt, emigration reasons, and the Fast House Sale companies have a database of willing cash buyers sitting in the wings waiting to snap up a bargain.
Fast Sales services are ‘free’ to the seller and don’t require the services of an estate agent or a Home Information Pack so the seller will save on fees in that respect – all contributing to the BMV price.
So is it a useful service to match people in dire need with willing buyers, or is it a practice that falls into the grey area of socially acceptable behaviour?
Your comments please…
Footnote
Please note that although some of the links in this post are paid affiliate links, thebigpropertylist.co.uk is not recommending or endorsing any action or service mentioned above.
New PropertyScout.com website launched today
Since researching the online property market for thebigpropertylist.co.uk we’ve come across a mixed bag of blogs and online property services, ranging from the home-made and popular to the very slick but relatively unknown.
One service we’ve been watching is thePropertyScout.com, run by Ben Bloomfield, which has launched a good looking new website today offering a property finding service.
According to the Press release:
ThePropertyScout.com is an exciting new website going live today. It is aimed at anyone looking to buy or rent property. ThePropertyScout.com is a personal online scout doing all the work for the buyer. No irrelevant, automatic emails, no time wasting, just accurate results. ThePropertyScout.com removes the requirement to sort through endless lists of properties by only producing results that have been hand picked and reviewed by a person, thereby offering a personalised property finding solution for free.
Buyers submit a request on the website specifying exactly what they are looking for. Agents then review the buyer’s criteria and are able to forward them properties that match their requirements. The buyer starts to receive emails from The Property Scout with results that are specific to their search. It is up to the buyer to contact the agent when they feel ready.
“For those buyers who don’t have the time to trawl the web for hours looking for their new property and also don’t want to receive loads of spam ThePropertyScout.com is the obvious answer. Once you’ve entered your requirements you just sit back and wait for the results. Simple as that!” – Michael Cleall, Property Investor.
On the website this morning it says that the service is launching in postcodes SW3, SW5, SW7, SW10 at present – so quite localised. One also wonders what the propertyscout will offer that Garrington did not – Phil Spencer’s beleagured property finding service which was eventually rescued by a management buy out.
But good luck to Ben and let’s hope thepropertyscout finds some success.
Proportion of income needed for new mortgages at five-year low
Home buyers in November needed to use less of their income to cover their mortgage interest than at any time for more than five years, according to new data released today by the Council of Mortgage Lenders.
In particular, home movers are experiencing a low debt burden by historical standards. They typically needed only 10.6% of gross income in November 2009 to cover mortgage interest payments, down from 11.1% in October. Other than a brief low of 10.2% in the middle of 1996, this is the lowest debt burden on home movers since the CML started recording this data in 1974.
The debt burden on first time buyers also reduced, with 14.4% of gross income needed in November, down from 15.1% in October – the lowest it has been since May 2004.
Source: CML Press Release
Bank of England Maintains Bank Rate at 0.5%
Bank of England Maintains Bank Rate at 0.5% and continues with £200 Billion Asset Purchase Programme
The Bank of England’s Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%. The Committee also voted to continue with its programme of asset purchases totalling £200 billion financed by the issuance of central bank reserves.
Are you wondering ‘how much will my house be worth in 2010′?
If you are wondering how much your house will be worth in the coming year then you are not alone.
The latest Halifax House Price Index published last week reported that house prices rose for the 5th successive month, rising 1.4% in November to bring the average house price to £167,664. Housing economist Martin Ellis said that rising prices this year have been due to
…increased demand for property, largely due to the improvement in affordability for existing homeowners and first-time buyers who can raise the necessary deposit…combined with a low level of properties available for sale (which has) push up prices.
But where do we go from here? Most house price surveys have reported rises (albeit timid) that have exceeded most industry expectations this year. We review some predictions for the coming year from the leading sources.
Predictions for 2010
Halifax (Lloyds Banking Group)
‘Further ahead, the prospects for the market will depend on how the UK economy evolves and whether there is a significant increase in the supply of properties for sale. Overall, our view is that house prices will be flat during 2010.’
- New Year burst followed by post-election uncertainty, leaving prices on average static at 0% by year end
- Shortage of new sellers and price rises in better locations to continue, though more forced
sellers and price falls in recession hit areas post-election
- Recession-induced structural changes encourage landlords to expand their portfolio
- 2010 transactions to exceed 2009, but still predicted a third down on historic norms
Jones Lang LaSalle (Global surveyors)
The recent pick up in house prices is based on fragile economic fundamentals such as a weak pound, which has driven overseas buyer demand, and a boost from the stock market recovery, both of which are unlikely to be as supportive during 2010. It is very probable the present recovery will stall next year with prices falling by 7% as the rate in the increase of new buyers to the market eases, while the low number of properties on the market bottoms out and starts to rise again.”
Royal Institute of Chartered Surveyors (RICs) Housing Market Survey Oct 09
- Prices continue to rise with surveyors increasingly optimistic
- New buyer enquiries continue to grow strongly.
- Sales expectations and price expectations also improve, although the former does so at a slower pace than in August.
Rising consumer expectations…could signal a period of moderation in house price inflation ahead, which is fully consistent with October’s less pronounced increase in prices.
Nationwide Chief executive Graham Beale says: “The growth in house prices over recent months appears to be driven by lack of supply, and growth in unemployment throughout 2010 will inevitably exert downward pressure on house prices.”
What do you think?
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New Eco-town proposals ahead of Copenhagen
According to the website of Building magazine the Housing minister John Healey has unveiled a new list of second wave eco-town proposals and has set aside £5m for council funding. The Department for Communities and Local Government (CLG) is talking to local authorities in Yeovil, Taunton, South Yorkshire, Leeds, Dearne Valley, and Cornwall to bring forward proposals under the eco-towns planning policy supplement (PPS).
The Housing Minister was quoted by Building as saying that the eco-town funding represents “real and radical momentum to change and to re-think how we design our towns and homes for the future”.
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Two award winning Eco homes in Wales
The Welsh Passive House architectural competition has selected two winning eco-homes that will produce only 20% of the Carbon emissions produced by a standard new house.
The formal press release claims that ‘innovative designs, coupled with high levels of insulation and renewable energy, will dramatically reduce the need for supplementary heating, resulting in fuel bills that are at least two thirds cheaper than the average home’.
The two houses will be both be built at a former steelworks site known as The Works:Ebbw Vale a development by Blaenau Gwent County Borough Council and backed by the Welsh Asembly Government which, according to their website, proposes ‘a mix of uses including the Learning Campus, Local General Hospital, Leisure Centre and Sports Pitches, a Theatre, high quality offices and around 500 homes’.
Read the press release on the architects’ blog.
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Greenhomes: Are AGAs bad for the environment?
The Telegraph stoked up the so called ‘Aga wars’ today with an article continuing the debate started by environmentalist George Monbiot.
Monbiot launched his (notional as far as I can tell) Campaign Against Agas in a Guardian article back in January where he claimed that each of the much adored British farmhouse kitchen icons pumps nine tons of Carbon into the atmosphere each year.
In her Telegraph article today Sarah Lonsdale points out that the Aga’s annual carbon emission of 3.5tons a year doesn’t quite squeeze into the British household target of 3 tons p.a. by 2020 (the average home today produces 6 tons).
Despite that, fans of the Aga point out that you save emissions in other areas – by using the Aga to heat your house, cook, dry clothes – replacing other appliances and energy using devices (probably made in Asia and shipped to the UK) with a Suffolk made product that will last a lifetime.
I have no doubt that the black and white Aga in the corner of my grandparents’ cottage in Hampshire is still going today. As JohnJo says on the Aga central website ‘The last one we had was over 40 years old and had decades more in it’.
Reading the comments after the Telegraph article today reveals a real affection for these ‘last a lifetime’ appliances – when was the last time you heard someone defending their microwave so passionately?
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