Property Asking Prices On the Rise

A survey from property website Rightmove has shown that asking prices for homes across the UK rose for the third month in a row as buyers sought to choose from a fairly restricted availability. Additionally, Rightmove claim that the average asking price for UK homes has risen by 2.4% in the past twelve months and currently stands at £246,235.

It’s questionable however as to what this statistic really means because, according to the Land Registry, the housing market at the moment is static at best. In simple terms, vendors can ask what they want for their homes but the market dictates that there is no guarantee they will achieve the figure they really desire.

Additionally, with a set of new builds about to enter the market, a dip is now predicted as supply starts the catch up with demand.

But the overall message for vendors is to not get excited about the new figures and to not become complacent about realising a fair asking price that suits both parties. Property experts advise that cutting prices and promoting any unique features in your home will both be vital factors for anyone looking to sell in today’s climate.

“While the national average price of property coming to market has set new records in each of the last three months, sellers should not break out the bunting in celebration until they have done their homework,” said Miles Shipside of Rightmove.

“It remains a very local market ruled by property style and location. Cutting your asking price to be cheaper than your competition and promoting your selling points better will be the key to avoid being an also-ran in the race to sell.”

In addition, Rightmove claim that there is a confused, two tier market at present: On the one hand there are sellers who price at a realistic figure while others have so little equity in their home that the numbers are increased in a desperate hope to sell.

“‘Agents report a two-tier market where those who can afford to price realistically are selling, while those who are equity-poor are struggling to sell as they often have to price up to make any prospect of a move viable,” Mr Shipside added.

Any summer of optimism is also expected to tail off as the London Olympics approach. Major events such as these have traditionally led to a slower market which causes sales to stagnate at best and it is felt that further estimates in 2012 will reflect this.

Moving to the City Putting Village Life At Risk

Recent property news has highlighted regional anomalies in the current housing market. Figures released last week indicate that while demand for new properties grew in London by around 0.4%, elsewhere in the country there were some notable slumps.

That contrast is highlighted again today with news that more and more buyers are moving away from the villages and back to the towns and cities as recession starts to take hold. As a result, property experts suggest that a depressed market in rural areas is the only logical conclusion.

The public transport network has historically allowed commuters to enjoy a more idyllic life in the outlying villages. Some of these commuters are occasionally featured on regional TV taking a long trip from the North of England into the capital.

However, that trend seems to be disappearing as Estate Agents Smiths Gore suggest,

“In Yorkshire, buyers are keen to avoid the lengthy commute into the cities and are moving from the outlying villages back into towns,” said Smiths Gore’s Andrew Turner.

That lengthy commute is an obvious reason for this shift. Higher train fares and increasing petrol prices make a longer journey into work far less attractive. There is however another issue here and it may surprise many to hear of its contribution to this pattern.

We were all led to believe that so-called teleworking was the future: With a telephone and an internet connection to hand, workers across the country were moving away from the daily commute and setting up a home office to liaise directly with their employers.

Occasional visits to the main office would have been necessary but on the whole, teleworking was the way forward for many firms. Once again however, Smiths Gore are suggesting that the trend is quickly being reversed.

“There has been a real push from employers to get people back into the office,” said Fin Hughes of Smiths Gore’s Andover branch. “They feel that offering the luxury of working from home is no longer financially viable. They need to feel that they’re getting real value from their employees.”

With the teleworking option taken away from those living in remote villages, the only sensible option from a financial point of view is to move to towns and cities with better transport links.

Overall, experts suggest that this is just beginning and the disparity between the rural and suburban housing markets is set to increase dramatically in the coming months and years.

Thousands of First-Time Buyers Trapped

If you bought your first property at the peak of the market you might be feeling a little trapped by the unstable situation right now.  Falling house prices have trapped upwards of 350,000 first-time buyers and that figure looks to be rising.

Many young people buying their first property have experienced on average £11,000 stripped from the value of their homes since 2007.  The report released by HSBC also reports many first-time buyers finding themselves in negative equity.  Others are finding it hard or impossible to move to their second bigger home due to the volatile housing market and the high costs involved in moving home.

HSBC reported that first-time buyers in Northern Ireland have been the worst hit by falling house prices.  Those who bought during 2007 could be facing a 42% decrease in their property value totalling a negative equity of £45,000.

London seems to be the only region where the house prices for first-time buyers has shown an increase since 2007.  However, despite having equity of £48,000 in their first properties, second-time buyers are still facing problems when finding enough money to trade up to their next property.

But Matt Hutchinson, director of flat and house share website Spareroom.co.uk, said that even though house prices are falling, few are actually able to take advantage of this fact.  More people are waiting to see what happens with the market, choosing to rent, or trying to raise the cash for their deposit.

“It is a frustrating time for many prospective buyers because they are having the carrot of some very attractive mortgage rates dangled in front of them, but because they aren’t able to afford the sizeable deposits still demanded by lenders, homeownership continues to remain just out of reach,” he said.

“If you add into the mix that demand for rented properties at the moment is driving rental costs higher and higher, forcing first-time buyers to dip into their deposit funds to pay rising living costs, then taking that first leap on to the property ladder seems a distant and forlorn dream.”

Howard Archer, chief UK economist at IHS Global Insight, agreed: “There still seems to be significant difficulties in getting a mortgage for many people, notably including the need to raise high deposits, particularly for first-time buyers. And there is significant concern that banks’ future ability to lend to homebuyers could be hit by difficult wholesale funding conditions.”

Top 10 Mortgage Tips for First Time Buyers

Finding your first house is an exciting time.  Opening the front door to your new home will be one of the happiest and most memorable times of your life, but there are lots of hurdles you need to jump before you reach the finishing line.  We’ve given you 10 tips to help you get the best out of the property buying game so that you experience less stress and get a great mortgage deal.  The home buying experience is different for everybody, but following our basic tips will ensure you buy your first home with confidence.

Shop Around

Once you have found your dream home and had an offer accepted it’s time to find a mortgage.  In fact, this should be the first thing you consider before you even view properties.  Knowing how much you can afford and what your monthly payments will be will prevent nasty shocks later.  There are literally thousands of mortgage deals on the market at the same time so it’s important that you research the market as much as you can.  You can use mortgage comparison websites or seek the help of a professional mortgage broker.

Seek Professional Advice

Feeling lost and confused is something many people experiencing when looking for a mortgage.  You may have been refused a mortgage or told your credit score is low.  There is usually a product that is suitable for these situations and a mortgage advisor can give you the lowdown on which product to go for.

Make Up Your Mind

Again, a mortgage advisor can assist you here.  Decide whether you want variable or fixed rate payments – it’s all about risk and whether you want the security of fixed payments each month or variable payments which follow the Bank’s interest base rate.  Interest rates are very low right now and many mortgage advisors will advise you to fix your mortgage for as long as you can.

Ask Questions

Make sure you understand everything you can about the mortgage application and home buying process.  If there is anything you aren’t sure about, ask.  As a first-time buyer you aren’t expected to know it all and with a mortgage being a huge financial commitment it makes sense to ask questions before you sign on the dotted line.

Read the Small Print

Boring, we know!  However, the small print might contain something that you weren’t aware of or a clause that you need more clarification on.

Keep it Real

Never attempt to borrow more than you can afford to pay back.  Whilst that 5 bedroom house with the swimming pool might be the home of your dreams, you won’t think so when you’re struggling to meet the demands from the mortgage company when you miss your first repayment.  The good news is that many mortgage lenders have tightened their lending requirements to ensure you don’t bite off more than you can chew.

Honest is Always the Best Policy

All lenders will lend to you based on your income and your outgoings.  Don’t be tempted to lie about your income or exaggerate the truth about bonuses.  Don’t play down your debt commitments either.  The mortgage application process is very thorough and your lender will check everything to verify the truth.  It’s so much better and easier to be honest.

Think About the Future

When choosing a mortgage, think about your next likely house move and your next mortgage.  This might be the last thing on your mind right now, but it might help you to choose your mortgage and the lender you go with.  Find out whether your lender will give you a good deal when you decide to move or whether they save their best deals for first-time buyers.

Shop Around Again

Once you have found the mortgage deal you are happy with, it’s time to shop around again for your home and contents insurance.  Building insurance is compulsory when buying a home and you are strongly advised to also take out contents and life insurance policies. Mortgage payment protection might be another option to consider.   Mortgage lenders may be able to offer you advice, but they are not insurance specialists and may recommend you seek professional assistance from an expert in that field.  Shop around online.

Keep Focused and Be Happy

The trials and tribulations of moving home may stay with you long after you have moved, but once you are in your home and happy with your mortgage payments it’s time to take a big deep breath and think ‘I did it’.  Congratulate yourself on jumping through all the buying your first home hoops and enjoy your new home.

To get a free telephone consultation with an impartial mortgage advisor please complete the form below.

Take the Stress Out of Moving Day

Here’s a guide that will move you, quite literally!  If you’re soon to be moving house then it’s time to start thinking about how you’re going to get all of your things from here to there.  The most sensible option, especially if you have a lot to move, is to hire a removals company.  You should never underestimate the time and effort it takes to move the contents of your home.  It’s not all about putting things into boxes.

Consider how many rooms are in your house.  If you live in a one bedroom flat then you may well be able to move yourself using a rental van, but if you live in anything bigger, then you really should consider hiring a professional removals company.  Packing boxes is one thing, but hauling heavy or fragile furniture, taking items apart and assembling them at the other end, and dealing with valuable items can be a much more challenging prospect.

Choosing a removals company can also be a challenge, but you can often find a wealth of companies either online or the good old Yellow Pages.  It’s worth asking around as most people have moved home at one stage so you may get some good recommendations.

Pricing It Up

It’s important that you get more than one quote for removals.  You’d be surprised how much the rate can differ and the services also vary quite wildly.  For example, some companies offer a complete packing service where you don’t need to even worry about taking items out of cupboards or out of the loft and this is a great option if you are in full-time employment or have young children around.  You simply leave the packing to your removals company and they handle everything!  Of course, this kind of service comes at a price, but could take a lot of stress out of the removals process.

Oh, one more thing about the quotation stage.  Make sure that a representative from each company visits your home.  Most good companies will insist on doing this anyway.  Any company that says they can give you a quote before first seeing how much they will be moving or discussing any special requirements is probably best avoided.

Insurance, Insurance, Insurance

It’s essential that your removals company has all the required insurance in place before they move you.  Most companies will provide you with dedicated moving insurance which covers you against any breakages or loss of property whilst in transit from your old home to your new home.  It might also be worth calling out your home insurance company to check whether your property is insured whilst in transit.

Check Out Accreditation

Avoid those rogue traders!  Check that your chosen removals company is a member of the British Association of Removers or The National Guide of Removers and Storers.  These particular organisations are committed to ensuring removal companies across the UK provide outstanding services that comply with a range of industry regulations.

Special Requirements

If you have any particularly large items of furniture, for example wardrobes or a super king-size bed that needs to be taken apart, these jobs might be costed separately.  That’s why it’s important that you arrange a home visit with a removals representative.  You might also have valuable items such as paintings, antiques or jewellery that need to be dealt with away from your other items.  Many removals companies are expert in handling these items and won’t even blink an eye if you mention an old family heirloom worth thousands of pounds.  It’s all in a day’s work for these guys!

Speaking of a day’s work, most removals companies will always aim to have your move completed on the same day.  In fact most removals are completed before 2pm on the same day as long as transactions have gone smoothly.

Hiring a removals company is a very sensible idea if you are moving home with lots of furniture.  They will ensure each items is adequately protected and that all areas of your new home are protected when your items are being moved in.  The result is total peace of mind and less stress once moving day comes around.

Understanding Property Valuations and Structural Surveys

Once you have found the property of your dreams and have had your offer accepted, it’s time to think about a structural survey.  Not obtaining a survey might save you money, but could cost you dearly in the future.

What is a Structural Survey?

A structural survey is designed to evaluate a property and give the consumer peace of mind that there are no structural defects.  This type of survey can be very useful in identifying defects that are not noticeable to an untrained eye and can help you to make an informed decision before signing on the dotted line.

There are 3 kinds of structural survey to consider:

Basic Valuation

Homebuyers Survey and Valuation

Full Structural Survey

Each report differs in detail with the basic valuation obviously containing the least amount of detail.  The full structural survey report will be the most in-depth and many people choose to purchase this type of survey for additional peace of mind.  For example, older properties are more likely to have more defects and therefore a more in-depth report will highlight these and allow you to either accept these defects or withdraw your offer and move onto another property.  The ‘Homebuyers Survey and Valuation’ is by far the most popular chosen by consumers and gives a good amount of information.

Basic Valuation

A basic valuation is usually performed by your mortgage lender.  They need peace of mind that they are making a sound investment in your property and that in the event of you defaulting on your mortgage they will make their money back.  This valuation isn’t really a survey as such and the inspection criteria is very limited.

Homebuyer’s Survey

A homebuyer’s survey is the most popular of all three types of survey.  The format of the survey and the criteria within are areas which have been defined by the Royal Institute of Chartered Surveyors.   Designed for properties that were built within the last 150 years, this survey report focuses on urgent or significant problems or causes for concern.  These might include:

The general condition of the property

The value of the property on the housing market

Comments about drainage, insulation, roofing, damp proofing

Results of any tests such as dampness

Any defects which may affect the value of the property

Urgent problems which need attention before you exchange contracts

Full Structural Survey

If you are buying an older house or you have cause to believe there are some structural defects then a full structural survey is a good idea.  Whilst this survey is the most expensive of the three it could save you money in the long run.  Armed with a list of surveyed defects you could approach the seller of the property to negotiate a lower price.  For example, if the survey makes a recommendation for a new roof you could negotiate the price of this work off of the asking price of the property.  The surveyor will have estimated the rough total for any works required and this can out you in a great bargaining position.   On the other hand, many people get the results of a full structural survey and choose to walk away from a property if the works required are too extensive.  A full structural survey can give peace of mind and also save you a lot of heartache.

The Biggest Purchasing Decision of Your Life

For most people, buying a house is the biggest purchasing decision they will ever make.  Buying a home is expensive and for this reason many people choose to scrimp on the survey and rely on the information given in the basic valuation.  This could turn out to be a costly mistake and spending a few hundred pounds before you buy the property could be much more cost effective.   Paying out £1000 for a full structural survey may sound like a lot of money, but imagine moving into a property only to find you need to spend £15K on re-roofing.  Remember, once you have exchanged contracts, the seller is no longer responsible for the works on the property.

There are many companies offering surveys with prices differing wildly.  Obtain some quotes and more information before you go ahead, but try to get the best survey you can afford.  It could save you money in the future.

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