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.

Surrey Tops the Tables in the Property Price League

In recent weeks we’ve seen just how regional variations differ in property statistics and how significant the respective rises and falls can be in some cases. As an example, London has generally stood out as a region where house prices are increasingly steadily whereas areas such as the West Midlands and Northern Ireland are experiencing some alarming drops in sales figures.

A recent survey by primelocation.com has shown the property divide even more clearly with a survey that indicates just how much the south of the UK dominates housing wealth. Overall, homes in the UK are worth a total of £5.6 trillion pounds and heading the county tables is Surrey, which accounts for around 5% of that combined figure.

Total property values within the county amount to £287.6 billion pounds which equates to £255,125 per head of the population. Below Surrey in second place comes Dorset but the top ten UK counties show just how the much the south prevails throughout the country.

The top of the table reads as follows:

1. Surrey (£255,125 per head; £287.6 billion total)

2. Dorset (£207,220; £83.8 billion total)

3. Buckinghamshire (198,490; £98.8 billion total)

4. East Sussex (£196,300; £101.2 billion total)

5. Essex (£178,705; £252.4 billion total)

6. Hertfordshire (£175,492; £194.3 billion total)

7. Devon (£161,817; £121.3 billion total)

8. Hampshire (£159,171; £206.4 billion total)

9. Kent (£157,288; £224.5 billion total)

10. Warwickshire (£145,431; £77.9 billion total)

The survey went on to indicate just how the country is divided on a regional basis and once again, the final table shows a clear pattern when it comes to overall regional property wealth.

1. South East (£1.6 trillion total property values)

2. London (£1.0 trillion)

3. South West (£488.3 billion)

4. East (£482.5 billion)

5. West Midlands (£367 billion)

6. East Midlands (£336.1 billion)

7. Scotland (£322.1 billion)

8. Yorkshire & Humberside (£300 billion)

9. North West (£253.9 billion)

10. Wales (£223.3 billion)

11. North East (£162.9 billion)

Of course, that table only gives you the overall total and it may be fair to assume that the North East for example, is less densely populated with housing that London. However, those figures are a good indication of an overall picture.

”Property wealth per head is driven by one key factor – demand,” said primleocation.com’s Nigel Lewis.

”Homes in and around the capital will always be sought-after because of the increased population density in the South and its better employment opportunities.”

Action Required to Make Home Ownership More Than Just a Dream

Earlier in the week we saw the reaction of Shelter, the housing and homelessness charity to a survey claiming that property rental could soon become a permanent way of life for many. The organisation suggested that the government had to wake up to the reality that only a quarter of the UK population may be owning their own home by the year 2025 and to ensure that improvements were made in all areas.

“It’s time government woke up to the fact that ‘rental Britain’ is here to stay,” said Shelter’s Chief Executive Campbell Robb.

While these are apt comments, some observers were surprised that the organisation didn’t take the opportunity to suggest that home ownership needs to be more affordable. To be fair however, Shelter have been vocal on this subject in the past but for the time being, this particular challenge has been taken up by another charity – the Joseph Rowntree Foundation.

The organisation focuses on potential buyers between the ages of 18 and 24: At present it claims that 2.4 million of them live in private rented accommodation but as they attempt to save for home ownership, ‘inflated’ house prices mean that they face an uncertain future.

The foundation then calls for major reforms in order to avoid a permanent rental trap by the start of the next decade. By 2020 it claims that young people will be staying with their parents for longer and they will subsequently need to call on those parents to help them purchase their own home.

Those that decide that staying at home has run its course face the prospect of a long period of private rental.

“The challenges facing young people by 2020 will require fundamental changes to the UK housing system. Young people are particularly vulnerable in a badly functioning housing system due to their lack of resources and opportunities,” the report states.

It goes on to echo the comments made by Shelter in suggesting that huge reforms are needed in the private rental sector.

“There is a particular need to reform the private rental sector, balancing the interests of both landlords and tenants. The growing number of families living in the private rental sector will create a need for more stability in the sector,” the report concludes.

While Shelter and the Joseph Rowntree Foundation may be approaching things from slightly different angles, they both agree that home ownership may become just a distant dream unless more positive steps are taken to address the issue.

Rental Trap or New Way of Life?

In previous weeks, studies and surveys have told us that many families are currently caught up in a rental trap. With the lack of available mortgages and the struggles for first time buyers to raise a deposit for a new property, a significant proportion of potential buyers are having to be patient in the current climate.

However, there are increasing suggestions that this pattern is set to become a permanent way of life for this and possibly future generations. A study by Cambridge University which has been published by The Observer suggests that much of the UK buying public face being locked out of the market for the long term.

In the present day, the survey claims that 35% of the population are homeowners although that figure has dropped from 43% in 1993. It goes on to claim that further decline is set to follow and that as few as 27% of us will own our own homes by the year 2025.

The report indicates that those with families are in the greatest danger of renting for life as they continue to spend over half their income on monthly rental charges. As a result, there is simply no money left to save for a deposit and they remain locked in to the prospect of renting on a permanent basis.

“The worse the economy, the more the likelihood of this group’s housing being in the private rented sector,” the report continues. “In London, if current trends continue, tenants will soon outnumber owners, with important political, social and economic implications.”

The news has been met with resignation in some areas and the housing organisation Shelter says that the government has to recognise that renting has now become a ‘way of life’ for many families. It has gone on to call for major investment in the private rental sector in order to improve standards in all areas.

“This report shows what is fast becoming the new reality of our housing market in the current economic climate: home ownership continuing to fall while renting becomes a way of life for British families,” said Shelter’s Chief Executive Campbell Robb.

“Yet despite the growing pressure on the rental market, the government’s recent housing strategy virtually ignored the sector and did little to address the issues of affordability, stability and quality that so many renters face. It’s time government woke up to the fact that ‘rental Britain’ is here to stay.”

Many of those families would naturally want to retain a hope that they can still move into home ownership and as such, will be hoping that the future isn’t as bleak as the report suggests. As far as Shelter are concerned however, maybe a proportion should really be considering that rental has now become permanent.

3% Property Price Fall Predicted For 2012

As we’ve seen with previous months, conflicting sets of figures with regards to the property market are often released by various bodies but some of the more trusted statistics originate from the Land Registry.

Overall, the figures show that while there are big variations in property prices across the UK, the average price of a home in Great Britain is now around one per cent lower than a year ago at £160,417. In addition, the Land Registry confirm that their figures show a fall of 0.3% in prices from March to April and this tends to be consistent with those numbers released by other organisations.

Once again, there is widespread variation across the UK with prices in London climbing by 5.1% in April according to the survey; a rise that also means a 5.1% increase on the same period in 2011. Meanwhile, the biggest monthly fall of 2.7% was experienced in the West Midlands while Yorkshire and Humberside suffered the largest annual drop of 5.6% on statistics released a year ago.

“The divergence between house prices in London and those of the rest of the country has increased sharply this month,” the Land Registry announced.

“The average price of property in the capital is £360,721 in comparison with the average for England and Wales of £160,417.”

The prices across the UK are fluctuating so wildly that some industry experts are finding it hard to see a pattern emerging.

“Very low transaction levels are causing prices to shift unpredictably from month to month,” said Russell Quirk of emoov.co.uk.

“For prices in the capital to have shot up 5.1% during April, after a decline of 1.8% in March, drives home just how volatile and unpredictable the market is.

“Take prices in the North East. These shot up by 5.6% in March but fell 2.1% in April. Where’s the logic?”

Meanwhile, Howard Archer of IHS Global Insight believes that the figures released by the Land Registry are consistent with predictions that the market will start to settle into a steady fall over the next few months.

“We expect house prices to fall by around three per cent by the end of 2012,” he said.

Figures released by various bodies and organisations such as the Land Registry, Office of National Statistics, the Halifax and Nationwide can often give us a confusing set of figures. In addition, the property market picture was masked by the closing of the stamp duty holiday but maybe, as Howard Archer suggests, we are now set for a more stable period even if that reveals a steady drop in house prices for the remainder of 2012.

A Case of First Time Buyer Beware?

An economist from one of the country’s biggest mortgage lenders has spoken this week about the need for first time buyers (FTB’s) to think carefully about the location of their intended purchase. In particular, it has been suggested that those prospective purchasers are being priced out of moves to certain parts of the UK, particularly London.

“The average Londoner trying to save for their first home has to spend around three-quarters of their income on rent, leaving precious little for savings. This compares to around half [of their income] for the rest of the UK,” said Fionnuala Earley of RBS Group.

In addition, it is claimed that while it takes an FTB 37 months to save a 10% deposit in some parts of the country, that period is extended to 51 months for deposits in London.

If you’re concerned about the variations in cost, depending on postcodes, there are many ways in which you can research any area for prices and suitability of property and they aren’t just exclusive to London.

As far as pricing is concerned, we’ve seen comments from some property experts suggesting that there is a huge discrepancy in some cases between property asking prices and the realistic selling price that a vendor can hope to achieve.

There are, fortunately, many websites where you can find out exactly how much homes have sold for in the area. Zoopla.co.uk for example, have prices going back to 1995 and while the earliest of those might not be exactly relevant, more recent examples should give you an accurate picture of sales figures in that postcode.

As far as suitability is concerned, there are many useful tips that have been expounded by property experts for ages but they remain powerful ideas to help you make up your mind.

Firstly, park the car somewhere and take a walk around the area. Look out for noise while you look at present housing and consider its condition, all of which should give you an idea of the neighbourhood. Remember to take this action at all times of the day and night to get a real feel for where you’re thinking of moving to.

If you’re looking for an affluent area with good schools and shops, it is said that there are key names on the high street that only set up in a town when extensive research has told them that the local clientele are financially disposed to their wares. Those names include Waitrose, Starbucks, Pizza Express and others.

The research involved here may not help you reach that 10% deposit any quicker but it could save you money on your property initially before giving you the opportunity to gauge the area and make sure you’ve made the right choice.

UK Mortgage Lenders Not Immune to Eurozone Crisis

UK financial analysts are warning that the crisis hitting many parts of Europe at present may filter through to Britain to the extent that mortgages may become even scarcer to track down than they are at the moment.

Financial trading continues to operate with fewer borders and as such, UK banks with a Europe-wide presence are going to feel the effects of the current problems and their mortgage arms may be set to tighten their criteria and maybe even remove some products altogether.

According to the Council of Mortgage Lenders, short term prospects for the UK mortgage market were going to be directly affected as a result of the on-going problems in Greece and elsewhere. Recent figures released by the CML have shown an easing of mortgage lending following a spike at the start of 2012 as many borrowers sought to take advantage of the stamp duty holiday.

Gross mortgage lending for April stood at £10.2 billion and while that represented a fall of 19% from March, it was still 2% higher than for the same period in 2011. The stamp duty window was always going to give a false picture and the fact that lending is higher than a year ago might give cause for optimism but the CML have warned against complacency.

“The underlying picture appears to be one of easing momentum in the housing market, but with potential for a sharper downwards correction on bad eurozone news,” said Bob Pannell, chief economist at the CML.

Meanwhile, mortgage brokers are urging borrowers to be alert to the danger that the crisis may bring as lenders consider their options.

“The cross-border nature of banking means that UK banks cannot remain immune to what happens in the eurozone,” said Mark Harris of SPF private clients.

“While interest rates are unlikely to rise for three to five years, supporting the market to an extent, borrowers must keep an eye on lenders raising mortgage rates regardless and take action if required and if they are able to.”

On many occasions in the past, prospective buyers may have been put off by dramatic headlines in the media and it is also felt that this factor may apply in the current climate.

“Few could argue that the demand for property, already weak, has been dealt a further blow by the deterioration of the Eurozone,” said Martin Stewart of London Money.

“With apocalyptic headlines every day, who wants to commit to a transaction as big as moving house?”

The volatile situation looks set to continue for the coming months but how much effect will the news from Greece and elsewhere start to have on the UK mortgage market?

Could mortgage market ‘seize up altogether’?

Advice coming from a proportion of mortgage experts suggests that potential buyers should be looking to arrange a mortgage before the market seizes up. The claims come in the wake of moves by Santander to drastically reduce its lending for the near future.

The bank has allegedly dropped its share of the lending market through brokers from 25% to 14% in recent months and the concern from everyone’s point of view is that nobody is stepping in to fill that void. The end result could be that lending grinds to a halt bringing the property market to a complete standstill.

In contrast with these claims, figures from the Council of Mortgage Lenders (CML) showed that mortgage lending surged in March but brokers have recently been suggesting that there has been a slowing of this market for some considerable time now.

“Both confidence and funding could be affected by the renewed eurozone uncertainties, so the underlying picture of a relatively quiet mortgage market seems likely to persist for some time,” said Bob Pannell, Chief Economist at the CML.

There are, of course, many lenders who are currently increasing rates and adjusting their selection criteria so why are Santander being singled out? It seems that the bank have been such a major home loan provider since the Credit Crunch back in 2008 that their absence from the market today is being keenly felt.

Ray Boulger of John Charcoal Mortgage Brokers revealed that 10% of his company’s business was placed with Santander in 2011 and that figure stood at 11.5% at the beginning of 2012. However, at the present time only 5.5% of its present mortgages are funded by the Spanish based bank.

“Those who want a good mortgage deal should act sooner rather than later, in case the market seizes up altogether,” Mr Boulger said.

In the meantime, Ben Thompson of the Legal and General Mortgage club said that alternative lenders were hoping to fill the gap in the market left by Santander but funding conditions were making it extremely difficult.

In addition, there is a range of potential new lenders looking to enter the mortgage market but have yet to be regulated by the FSA. Those names include Tesco Bank and Castle Trust and as they wait for clearance, the blame for the delay has been levelled firmly at the FSA.

You could certainly name the FSA as a culprit in the lack of capacity,” Ray Boulger added. “It would be helpful if it stood by its own deadlines.”

With Santander pulling back, there is a clear need for someone to fill that gap but is anyone going to be in a position to step in during 2012?

Could Your Garden Help Your House Sale?

In recent weeks we’ve looked at the many ways in which homeowners have undertaken work around their property with a view to achieving a higher sale price and hopefully, a quicker transaction when the time finally comes to move on.

Even if you’re not in a position to move just yet, it can pay to look at methods recommended by experts that will actually help to increase the value of your home. But what are the best ways to achieve this?

It’s generally accepted that first impressions are crucial for any prospective purchaser so the front of your property is an important area to pay attention to. Doors, garages and their accompanying accessories can easily be painted or replaced but there are other aspects that you should also consider.

Your front garden, no matter how small it may be is also one of the first things that potential buyers will see and particular care should be taken to bring it up to a desirable standard. It seems however that many UK homeowners are doing just that as a survey carried out by HSBC suggests that we will spend an average of £185.00 per person in improving our own personal outdoor spaces.

The HSBC Gardens Survey has been published just ahead of the launch of the Chelsea Flower Show and it claims that households are not only improving the look of their outdoor spaces for their own pleasure, they are acutely aware of the difference such actions can make for property prices.

“Britain has traditionally had a love affair with gardens but with households facing financial pressures, people have to make difficult decisions about where to spend their cash,” said Peter Dockar, head of mortgages at HSBC. The inference clearly is that more is being spent on gardens than we might have expected.

“The survey reveals that spend on non-essential items has gone down in favour of general improvements, including landscape projects. Improving the general outlook of the garden can not only boost quality of life but also help to increase property value,” Mr Dockar added.

The survey also revealed a big discrepancy in the amount of money spent across the country. In the East Midlands, the highest spend of £253.00 per person is expected in 2012 while at the other end of the scale, those in Yorkshire and Humberside are due to spend just £112.00 on their garden this year.

Overall, however, it seems we are a nation of garden lovers and whether we are conscious of the fact or not, our efforts can help to drive up the price of our property.

Exchange of Views on the Housing Market

It’s that time of the month again where sets of figures and conflicting views are released in regards to the housing market and the Halifax have greeted their monthly statistics with the claim that prices are ‘fluctuating widely’. Meanwhile, the Royal Institution of Chartered Surveyors (Rics)state that the market is back in the ‘doldrums’ after a brief flurry of activity at the start of the year.

Halifax confirmed that average prices fell sharply in April as the stamp duty concession ended on the 24^th of March. Overall, that drop equated to 2.4% in real terms with the average price of a house across the UK now being recorded at £159,833 – 0.5% less than for the same period last year.

However, the lender still claims that the underlying trend is one of upwards movement.

“Prices in the three months to April were 0.3% higher than in the previous quarter, marking the first rise in this measure for seven months,” said Martin Ellis, Chief Economist of the Halifax.

Howard Archer of IHS Global Insight suggested that the figures pointed to a rather more gloomy trend.

“Housing market activity is very low compared to long-term norms,” he said.

“And the economic fundamentals currently look worrying overall for the housing market with unemployment high and likely to rise further, earnings growth muted, and the outlook uncertain.”

Meanwhile, the Rics carried out its monthly survey of members and also found a sharp fall in sales, across the UK, except in London. The closure of the stamp duty holiday was always expected to have a damaging effect on the market and the institution claim that this is now being shown.

“With the recent surge in activity brought on by the stamp duty holiday coming to an end, it is unsurprising to see that prices across much of the country are continuing to fall,” said Peter Bolton King, the housing spokesman for Rics.

“Renewed concerns over the economy and talk of a double-dip recession dominating the headlines in recent weeks may well have served to undermine consumer confidence.”

Mr Bolton King went on to add that the lack of affordable mortgages was also having an effect on sales.

“What’s more, the continuing lack of affordable mortgage finance is still hindering many first-time buyers who cannot afford to get a foot on the property ladder,” he added.

For once, the Halifax and the Nationwide seem to agree that property prices are falling and only now are we beginning to see the effect of the end of the Stamp Duty holiday.