Posts tagged: property
House Price Surveys Explained – It’s Not All Guesswork
Well, here at the Big Property List we seem to be reporting on house prices going up and down every other week so we thought we would take a look into the house pricing process and what it all means. How are these figures generated and do they give an accurate picture of what is happening in the UK with regards to house prices. If you are looking to move home in the near future, it pays to check out the latest properties in your area and get a good idea of what is going on.
Land Registry
The Land Registry has been recording property prices since April 2000 and records all completed property sales in England and Wales. Their data however goes back as far as January 1995.
Using a process called Repeat Sales Regression, the Land Registry measures the changes in property prices over time. This means it will only measure the change in price of properties that have been sold in the past. This gives a fair and proper comparison.
Most property sales are included in the Land Registry survey except the sale of commercial properties and ex-council properties sold at a discounted price. Any property transfers or repossessions following a divorce are also excluded to avoid misleading the statistics.
A report is published each month on the Land Registry website and a quarterly survey is also published on the BBC News website.
An average price is reached by adding up all the transactions in any given month and then dividing the total number of sales. Almost all residential sales are included and recorded providing a really unique picture of national and also local property prices. The Land Registry can actually give a fairly accurate insight into prices at postcode level.
Government Price Survey
The Government also produces its own monthly house price index. This is issued by the Department of Communities and Local Government (DCLG). The survey covers the whole of the UK and is based on the data received from the Council of Mortgage Lenders.
As a result of data being supplied by the Council of Mortgage Lenders and including the number of mortgage-based sales, cash sales are not included.
Nationwide and Halifax
Both surveys provided by the Nationwide and Halifax, cover the whole of the UK and are based on a sample of their loans each month.
Property prices measured in these surveys are those which are agreed with a mortgage is approved and not later when the sale is at completion stage.
Just like the DCLG survey, the Nationwide and Halifax surveys are based on mortgage-based property sales so no cash sales are recorded.
Royal Institution of Chartered Surveyors (RICS)
The RICS survey reports on confidence in the property market and not the latest changes in property prices. A survey is conducted of 250 estate agents in the UK (all members of RICS). They are asked whether they feel the prices in their areas of business have been rising or falling over the previous 3 months.
Whilst this might not appear to be a reliable way to measure the property market, it is actually quite useful in reflecting changes and how professionals feel the market is developing over a given time period.
As well as house prices, respondents are also asked how they feel about a number of other subjects such as the number of property buyers falling or rising.
The data provided by these house surveys is very useful and helps those in the industry determine the latest trends and property prices and those looking for a new home to strike whilst the iron is hot or hold back until situations improve.
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Property Prices In Yet Another Tumble
Once again the housing market has taken a tumble. The average cost of a home fell 1.4% last month – a drop that hasn’t been seen since July 2009. The Halifax house price index reports the latest plummet has led to property values being 3.7% lower in April than during the same period last year. This is the biggest decrease since October 2009.
What’s the Cause?
Well, Halifax have blamed the recent fall on fragile and cautious consumer confidence. The economic climate is still relatively uncertain and this has decreased demand on property and caused a downward pressure on property prices. Since the low that property prices hit in April 2009, they have only risen 4% whilst they are still 20% below the peak they hit before the credit crunch struck back in August 2007.
During the past year, house prices have been particularly volatile and if you’ve been keeping track of the Big Property List blog then you’d have seen our reports of house prices going up and down like a yo-yo. House prices have dropped in seven months, risen in four and remain unchanged in one month and that volatility looks set to continue.
Often seen as a slicker and better indicator of property market trends, the quarter on quarter indicators showed acceleration in the rate of falling property prices. During the three months towards the end of April, homes lost 1.2% of their value. That’s double the 0.6% drop that was recorded during the three months to the end of March and also the most dramatic quarterly fall since October last year.
Regardless of these miserable figures, the Halifax has said that they expect the rate of falling property prices to slow down. Martin Ellis, Halifax’s housing economist, said “Signs of a modest tightening in property market conditions, an increase in the number of people in employment, and a relatively low burden of servicing mortgage debt are all factors that are likely to provide support for house prices, curbing the pace of the decline.”
Are the signs there?
Martin Ellis also went on to say that he thinks the signs that the housing market is stabilising are there albeit at a lower level than the historical average. However, Howard Archer, chief UK and European economist at HIS Global Insight showed less optimism saying, “We believe that house prices are likely to end up in decline by around 10% overall by the start of 2012 from their peak in 2010. This implies that they will fall by about 5% more.”
It seems to be a tough one to call, but one thing’s for sure. The Big Property List will be reporting on property market news as it happens and giving you access to the latest views from the industry experts.
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Going Going Gone!
If you are thinking of buying a property at auction it’s a great time to do so. There are a huge amount of opportunities on the market right now and more and more people are turning to auctions in order to sell a property quickly or snap up a bargain. The slow market and increasing number of houses being repossessed has resulted in a dramatic surge in auction sales and it’s good know the advantages as well as the risks involved with buying a property this way.
Where to Look
You can find out about local and national auctions through estate agents, newspapers, and our online property auctions directory. Many auctions are also advertised by the roadside so look out for signs advertising local auctions. If you are buying in a new area it is a good idea to do some research before you decide which auctions to attend. There is plenty of information online that can assist you so that you don’t make any hasty decisions.
On the Day of Auction
Before you head off to the auction house, it’s a good idea to call up to make sure any property you are interested in bidding on has not already been sold or has been withdrawn. You should also ensure you have your deposit to hand – many auction houses accept cash or cheques, but it’s best to check beforehand. You will normally need 2 forms of identification in order to register.
Once you have been issued with your bidding number you’re ready to get started. If you are interested in a particular lot it’s important to stay calm once bidding commences. You should already have a maximum price that you are prepared to pay for the property and make sure you stick to this figure. Many people get carried away by the bidding process and have bid well over the odds as a result. It’s a good idea to gauge interest in the property before you start bidding yourself.
All lots up for auction will have a reserve price which is the minimum price the sells is prepared to accept on a property. This figure is not disclosed, but if bidding doesn’t reach this figure the property owner may well decide not to sell on the day for anything less. However, the guide price (that is the price the property is expected to sell for) should give you a rough idea of what the reserve price may be and hopefully this figure is in line with what you are prepared to pay. Otherwise you may be in for some touch negotiations with the buyer or lose out on the property completely.
Tips for Bidding at Auction
Buying or selling a property at auction has a host of benefits and is becoming more and more popular across the UK. As long as you stick to the golden rules below you should find the process enjoyable and very rewarding.
- Always research the property you are interested in fully
- Make sure you have your finances in order and the required deposit (usually 10%)
- Get to the auction house early to register and take stock of the environment
- When bidding commences, don’t get carried away – remember your budget!
- Bidding can be intimidating so try to stay calm and focused
More information on property auctions in the UK can be found in the resources section on The Big Property
List website.
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Advice for First Time Landlords
Buying a first buy to let property is exciting and can be a great investment. It also means that you have to get some of the important legal and financial issues sorted out before you have tenants move into the property.
If you’ve never owned a buy to let property and never had tenants there are probably quite a few unknowns you might be unsure of or that could be causing you concern.
This article will give you a run-through of some of the most important requirements you need to have covered in order to rent your property to tenants legally and safely.
Provide an Energy Performance Certificate
It’s a legal requirement to give tenants the chance to view an Energy Performance Certificate of your property. These certificates give ratings from A to G regarding the energy efficiency of the property. A is the most energy efficient and G is the least. In order to get a certificate you will need to contact an accredited domestic energy assessor.
Protect your Tenant’s Deposit
By law you need to put tenant’s deposits into a deposit protection scheme within 14 days of receiving the money. A Tenancy deposit protection scheme is there to guarantee that tenants get their deposits back at the end of their rental agreement providing that the property they have rented isn’t damaged.
Landlord Insurance
Having the right Landlord Insurance for your property is crucial. This is a different kind of insurance than you would normally take out if you were living in your own home. If something in your property is damaged or if someone is injured in your property you may well need Landlord Insurance to cover a claim.
Make Sure your Property Complies with Safety Regulations
It’s important to make sure that your property meets all the appropriate safety regulations. The electrical appliances need to be checked every few years. Gas appliances need to follow a similar procedure. A “Gas Safe” engineer needs to inspect your gas appliances to make sure they meet all the correct requirements.
Hire an Agent
If you don’t want to deal with a lot of the administration and safety checks yourself you can always appoint an agent to look after the property. They will charge you a certain amount of the rental income but it could save you time.
One of the best things you can do when becoming a Landlord is do a bit of research yourself and try to become as knowledgeable as possible about the whole process. There could be legal issues and implications you might need to familiarise yourself with as well as the procedures for resolving disputes between Landlords and Tenants.
The legal and safety issues might seem overwhelming if you’re just starting out as a Landlord but once you have them all sorted out, being a Landlord doesn’t need to be so daunting.
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Politicians have no idea about housing
Politicians have no idea about housing, so said the press yesterday morning. Why should they, it’s a market?
No one has really got any idea, so disparate is our market, and with Labour admitting they got it wrong and CLG carrying out a review of the private housing market it’s perhaps time for everyone to go back to encouraging people to move and to stop hand wringing.
Ultimately various Governments have failingly addressed the supply side of the market, and they’ve periodically tried to encourage the demand side with the resulting boom and busts. So sensitive are homeowners as voters that it wouldn’t be that prescient to suggest that interest rates are watched more for their effect on the housing market than they are for Industry or anything else.
If it is that important why is there so little attention given to keeping the wheels oiled. It’s been an immutable law that as Stamp Duty has gone up so the volume of sales has gone down. The plethora of amateur (and apart from the Land Registry that’s all they are) commentators can say what they like about whatever sector but volumes continue to fall and we’re about to get another cynical rise that’s going to lead to a further contraction.
Is it really that much of a leap of faith for the Coalition to accept that the best way they can free us the supply side of the property market is to put Stamp Duty where it should be, at 1%? There’s little doubt prices would come down in the short term but those voters they help move and get on the ladder would, I’m sure, be eternally grateful.
Ed Mead is a regular contributor to The Big Property List blog. An Estate Agent for over 30 years, he has been writing and commentating on the market for over half of that as the Sunday Times Property Expert and The Agent Provocateur for the Telegraph. He sits on the Board of The Property Ombudsman Ltd, has a regular LBC slot, and is happy to say it as it is.
Other places you can find him online are the Douglas & Gordon blog and Twitter
Ed Mead is carrying the Olympic torch (not literally)
For many who spent the tail end of last year trying to predict this year it must have seemed a doddle compared to forecasting now. Suddenly the press, and even me, are beginning to sense that although the year may be a dreadful dirge, it does look as if prices in London will end the year higher than they started. This is not saying a whole lot but from where I’m sitting there are occasional deals being done that simply beggar belief, whereas if you wander out of London, particularly in a Northerly direction, the stories are of a very different nature as the press are keen to let us know.
Sadly all commentators agree that volumes will be a victim this year, and many fear this malaise will continue into next year which is depressing. But hang on a minute next year is Olympic year isn’t it? We’re all supposed to feel good about that, and I’ve even registered for tickets as any self respecting Londoner should, but will it be enough to dispel the fog.
One thing everyone forecast, and the auspices loom good, is that rental numbers will increase in London next year because of the 2012 Olympics being here. With perhaps the worst area for sales currently being small flats, no demand from first time buyers still, it’s very likely, and beginning to be the case, that buy to let investors are beginning to lick their lips and dive in. I sat in a meeting with some heavyweight agents yesterday and all the ones I spoke to said if they had money they’d be buying investment property now. The fact that they can’t shows the general level of nervousness and lack of income in the estate agency game at the moment, but perhaps whilst many top end agents gloat about how many £5m plus properties are selling those who deal at the bottom end might just be about to get their own timely boost.
Ed Mead is a regular contributor to The Big Property List blog. An Estate Agent for over 30 years, he has been writing and commentating on the market for over half of that as the Sunday Times Property Expert and The Agent Provocateur for the Telegraph. He sits on the Board of The Property Ombudsman Ltd, has a regular LBC slot, and is happy to say it as it is.
Other places you can find him online are the Douglas & Gordon blog and Twitter
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Focus on Turkey: Undervalued property in the fastest growing economy in Europe
The Turkish property market is currently enjoying a boom, not least because its economy is currently the fastest growing economy in Europe according to the OECD. This is a position that will not be relinquished any time in the near future said the body.
This is due to the country being in much better shape than the rest of Europe, with a stable banking system, controlled inflation a budget deficit currently thought to be running at around 2%. Its growth is set to continue thanks to its youthful population and the transition of many citizens from eastern Turkey into the cities.
Although the downturn sent property prices down in Turkey, this now means that they are undervalued when compared to the rest of Europe, which makes them a juicy opportunity for investors.
Tourism in Turkey is still growing rapidly and the population is expanding, which when coupled with low interest rates ensures that the property market is increasing in momentum.
The Turkish government makes it relatively easy for foreigners to buy property although there is a little red tape to be negotiated. This red tape comes in the form of the military which has to approve every purchase making sure it does not endanger national security. However because of the rapid pace of reform, which looks like bringing the military under the control of civil courts for the first time in Turkey’s history, this may be removed in the near future.
Rental yields on Turkish apartments are good, with gross yields being up to 7.5% for a relatively small apartment according to research by the Global Property Guide. Larger apartments tend to generate a little less income with yields being around 3.7% to 5.7%.
Finally, increasing accessibility through improved airport facilities means that this country will continue to be popular with tourists, which are bound to boost the property market even further.
This is a Guest article by Julian Walker of Spot Blue, a Turkish real estate agent currently marketing property in Turkey from as little as £25,000.
Buy to Let may be the investment of choice, says Ed Mead
For the first time since I’ve been at Douglas & Gordon we made more money last month from lettings than we did from sales.
Given that we are a medium sized company that’s not as trite as it sounds. Renting seems to have finally lost it’s stigma and even seems to be where sensible people reckon they should be when property values appear to be on the way down.
Those who work in lettings have often felt, because of the lack of crash bang months, that the drip drip [albeit constant] nature of their income means they’re the poor cousins.
But with buy to let borrowing on the agenda again and with all the publicity surrounding Council tenants suddenly they’re front page news. About time I reckon. Having rented for over 20 years and been dead pleased with it, many commentators were amazed and quick to point out how I was missing out on the market. I politely replied that I had been investing in something slightly old fashioned and possibly more rewarding. It’s called your own company.
Such is the obsession with property (thank heavens as I’m an estate agent after all) that investing in something that actually yields jobs AND a return seems to have become a lost art. With 70% of the world’s wealth now tied up with property it’s hardly surprising.
Perhaps with standard investments yielding derisory returns entrepreneurs might start to see the light of day again, but with residential rents looking set to rise sharply, capital values stagnant at best, and borrowing costs as low as they’ve ever been I would think buy to let might just become the investment of choice for a few years to come.
Author Biography
Ed Mead is a regular contributor to The Big Property List blog. He has been an estate agent for over 30 years, and has been writing and commentating on the market for over half of that as the Sunday Times Property Expert and The Agent Provocateur for the Telegraph. He sits on the Board of The Property Ombudsman Ltd, has a regular LBC slot, and is happy to say it as it is.
Other places you can find Ed online are:
Douglas & Gordon blog
Ed Mead on Twitter
Peek inside London’s most Sustainable Homes
If you’re interested in Sutainable Housing, architecture or design then you’ll be very interested in Open House London this Autumn when 700 houses in London will be open to the public.
The event is organised by the architecture organisation Open City and takes place over the weekend of 18-19 September 2010.
‘The initiative is a simple but powerful concept: hundreds of great buildings of all types and periods open up their doors to all, completely for FREE. It is a truly city-wide celebration of the buildings, places and neighbourhoods where we live, work and play, and is your opportunity to get out and get under the skin of London’s amazing architecture’ says the Open House website.
The ‘open houses’ range from small private home to major lndmarks such as the BT Tower and there will be lots of events such as cycle tours, architects talks and neighbourhood walks to interest and inspire you over the weekend.
Here at The Big Property List we’re particularly interested in the Sustainable Housing element and there should be plenty of eco-homes on show boasting sustainable designs such as The Coach House, 39 Parkholme Road, Retro-eco House and Zero Carbon Loft.
If you’re visiting any of these sustainable houses over the course of the weekend, why not email your pictures and notes to admin (at) thebigpropertylist.co.uk and we’ll publish them here on our blog?
For the full list of open houses you can visit the Open House website or order a guide to see what is available near you – some venues need to be booked in advance.
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The Big Property List officially launched today!
The Big Property List has been quietly online for some time and although the blog has been running for over a year (and has become quite popular) we only opened up the main property portal a few weeks ago.
The initial feedback and response has been good and people are using the site to find properties for sale and to rent in their area.
We are also seeing a suprising number of enquiries being send to Vendors to request viewings – especially given the recent press about fears for the housing market.
Why not look to find out what properties are on the market in your area?
Press Release 11 August 2010 – revised version
LAUNCH OF THE BIG PROPERTY LIST SEES THE UK’S ONLINE PROPERTY REVOLUTION MOVE ON – BIG TIME
The Big Property List (www.thebigpropertylist.co.uk), a new, free-to-use property portal, has been launched, laying down the gauntlet to everyone in the business of buying, selling and renting property in the UK.
The Big Property List displays details of available property, which have been publicly listed on Google Maps the UK, in a familiar portal style, tackling head-on the critics that suggest that users and those looking for property do not like property displayed in a map format.
In June the search engine announced that users were able to search for properties on Google Maps. This announcement led to intense public debate in the property industry about the future of UK property portals such as Primelocation and Rightmove.
Many industry commentators and property portals have dismissed the threat posed by Google, saying that house hunters don’t want to search for property using the Google map view but prefer a list format. The Big Property List addresses this by presenting the information in a familiar listing design.
The Big Property List offers what everyone hunting or selling property wants – a nationwide listing service to match Rightmove, which is free to use by agents. It gives agents, home seekers and sellers on a budget, a no-cost, no frills, nationwide shop-window.
The Big Property List’s managing director, James Cole, says: “Any agent can send property details for free to Google Maps, and if they choose to syndicate this information then this will appear – for free – on The Big Property List.
He adds: “Estate agents fork out millions of pounds a year to advertise on nationwide sites. There will be no reason to do this anymore, with thebigpropertylist.co.uk providing a similar service, in a familiar style, for free.”
“At thebigpropertylist.co.uk we do not have to justify how we have to charge the fees normally paid by estate agents to a portal, allowing us to focus totally on what the consumer wants. If we help people find the property they want, this results in better quality enquiries for estate agents. So what benefits the consumer benefits the agent.”
-ends-
Notes for editors:
· The Big Property List is an independent business and NOT a Google product or service.
· The Big Property List uses the Google Base API to display details of properties which have been publicly listed on Google Maps.
· Anyone choosing to list their property details on Google Maps can choose whether or not to syndicate this data.
· If a user chooses not to syndicate the data, the information regarding their property WILL NOT appear on The Big Property List. Submitting a listing to Google does not mean it will necessarily appear on any other website.
For further information please contact:
James Cole, The Big Property List +44 (0)7551 237 085 press@thebigpropertylist.co.uk www.thebigpropertylist.co.uk
Andrew Barber, Revolution Public Relations +44 (0)7989 553 903 andrew@revolution-pr.co.uk www.revolution-pr.co.uk
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