Buying, selling and letting - May, 2005

Tuesday, May 24, 2005

In today’s shopaholic society, knowing that you’re near good retail facilities is a home-buying bonus. Johnny Turner scouts a few of the best new homes for shoppers.

Those in the market for a new home will keep in mind the practicalities such as transport, schools and entertainment spots. Another must is proximity to good shopping, and there are quite a number of new developments that make purchasing a pleasure.
Barratt has been busy in the regeneration department with its Centreway development in Ilford. Centreway is located on the site of derelict shops and carries on the shop-til-you-drop ethos, with its High Road location very well located for shopping options. Following on from the neighbouring Barratt development Spectrum 67, Centreway comprises 239 apartments, mainly one- and two-bedrooms, in a spectacular series of buildings rising to a maximum 16 storeys.
The apartments will offer designer kitted kitchens complete with integrated appliances, fitted family bathrooms (and en suite shower rooms where appropriate). There is also central heating, double glazing, mains-wired smoke alarms and TV, satellite and telephone points.
Rooftop penthouse apartments will have terraces which give panoramic views over eastern London and metropolitan Essex.

There will be private parking under the building, as well as audio entry system and a daytime concierge. The development will also include a private day nursery and a fitness room for residents, and an adjoining health centre/doctor’s surgery is proposed.
Apartments at Centreway start at £186,995. Call the sales office on 020 8514 7125.

Another Essex location that is great for proximity to shopping is Purfleet, where Weston Homes is selling Chambers Place. The development, launched a month ago, is situated adjacent to Barratt Homes’ scheme The Haven. Weston showcases its newly upgraded specification at Chambers Place, and will offer the highest quality of fixtures and fittings available in the area.
The apartments will feature spacious reception rooms with open-plan kitchens and dining areas – ideal for entertaining. Fully fitted kitchens will have stainless steel oven, hob and splashbacks, as well as a range of optional appliances including freidge/freezer, washing machine and tumble dryer. Spacious master bedrooms will include built-in wardrobes.
Purfleet is a thriving environment in the Thames Gateway area, with London within convenient reach for commuting. The location is also just miles from two of England’s largest shopping centres, Lakeside and Bluewater; between them you’ll have access to over 650 shops.
Prices for apartments at Chambers Place start at £139,500. For further information contact the marketing suite on 01708 864252 or visit westonhome.co.uk.

Berkeley Homes provides homes that are perfect for a fully rounded shopping experience at its Tabard Square in the Borough area of London. Not only is the location central enough to be within easy reach of London’s most popular shopping districts but the homes themselves are above shops! That is in addition to the wonderful gastronome’s paradise that is Borough Market, just moments away.
Besides the 46,000 sq ft of commercial space, Tabard Square will provide high-style one-, two- and three-bedroom apartments that are ideally suited to today’s metropolitan dweller, priced between £320,000 and £615,000. Call 020 7321 2122 to find out more. Six penthouses are also soon to be launched; register your interest on the same number or visit berkeley homes.co.uk.

Buying

posted on Tuesday, May 24, 2005 12:50:40 PM (GMT Standard Time, UTC+00:00)

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Tuesday, May 17, 2005

Market News

Houses ‘cost eight times salary’

A new report by the National Housing Federation (NHF) shows that average house prices in England have risen to almost eight times the average salary. England’s Housing Crisis: The Facts points to an urgent need for an increase in the provision of homes for affordable rent and low-cost ownership. It shows that house prices have increased by 125 per cent since Labour was elected in 1997.

Regionally, the South West is shown to be the country’s most unaffordable area, with house prices at 9.5 times average salaries in the region. Meanwhile, North Easterners would need to be earning £31,207 to take out a mortgage on an average house – and the average salary in that region is £18,570.

Liz Atkins, director of strategy at NHF, says, ‘The property market may be cooling but for thousands of people it’s too little too late. Home ownership is now well beyond the reach of many moderate earners, including dual-income families.’ She concludes: ‘If we want to keep families and communities together and revitalise our towns, cities and villages, we need to build more affordable homes for rent and low-cost ownership.’

Buyers are coming back

Buyers, it seems, are coming back to the market, according to two new surveys. The latest report from Hometrack notes that the number of buyers registered on estate agents’ books rose by 6.2 per cent last month, only the second time that the number of registered buyers has risen since last year.

Hometrack’s figures indicate that in the London area viewings were up by 1 per cent from April 2004, while offers being made on properties were 13 per cent higher. The length of time taken to sell a property has fallen from 7.6 weeks to 7.4 weeks. Meanwhile, prices in the capital have largely recovered from the price drops witnessed at the end of last year and buyer commitment and confidence is stronger, with 35 per cent fewer transactions falling through.

The upsurge in sales has been stimulated by stable interest rates, an improvement in the selection of property for sale and a more realistic view of pricing on the part of vendors.
Meanwhile, Hamptons International, in its monthly market observation, finds that the return of the much-missed buyer is particularly pronounced in the southern counties. London, Hamptons says, is ‘leaping’.

One persistent problem in the market, the study finds, is shortage of homes in the market. ‘Although we report more new stock for sale,’ says the report, ‘the shortage continues in many regions, helping to support prices in these areas. Properties in some areas are achieving premium prices.

Strong demand is one sign that the present market is ticking over in a reasonably healthy manner. ‘There remains a good level of underlying activity in the market and our managers highlight the quality and commitment of buyers. Well-presented, realistically priced properties are finding buyers.’

Buying

posted on Tuesday, May 17, 2005 11:47:03 AM (GMT Standard Time, UTC+00:00)

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Sunday, May 15, 2005

Market News

New home prices up

The average anticipated selling price of newly built homes started during October to December 2004 increased by three per cent on the same period the previous year. According to the New House-Building Council (NHBC) the average anticipated selling price was £179,000, while in terms of actual selling prices the proportion of new homes priced over £100,000 went up to 93 per cent, a significant increase on the 88 per cent recorded in the same period in 2003.
Imtiaz Farookhi, chief executive of NHBC, says, ‘NHBC statistics show that the number of applications to start new homes in the private sector remained steady compared with quarter four of 2003 and the social housing sector has experienced growth during the same period. UK-wide figures show a total of 41,824 applications to start new homes during quarter four of 2004, a one per cent decrease on the same period in 2003.

Lettings market healthy

The London lettings market started the year 2005 on an encouraging note, with levels of prospective applicants and stock increasing. Contributing factors include City bonuses, a static interest rate and a hesitancy for potential first-time buyers to enter the property market. Research by Hamptons International shows that landlord confidence is set to increase.
Discounting the traditionally slow December, properties available rose by 11 per cent in London between November and the end of January, compared to seven per cent UK-wide. Terry Inskip, Hamptons’ senior manager for Sunningdale and Windsor, says, ‘Market appraisals are definitely picking up, with more landlords ready to instruct.’
A healthy lettings market has a positive effect on the sales market, as investors tend to buy further properties when their rentals are generating good income.
Demand is currently high, particularly for one- and two-bedroom apartments, with many prospective applicants and tenants waiting to see what effect the upcoming general election will have on interest rates; it is widely believed that rates will head downward after the spring election.

Pension property boom?

Changes in pension investment rules next year could cause a boom in the housing market by up to 15 per cent, according to experts at a recent property trade show. Major changes to the rules regarding self-invested personal pensions (SIPPs) will take effect on 6 April 2006. SIPPs can presently contain several types of investment, including commercial property. However, after ‘A-Day’, when the new rules come into force, it will be possible to invest pension funds in residential property and non-commercial overseas property – and there will be tax breaks for those who do so.

Buying

posted on Sunday, May 15, 2005 3:01:51 PM (GMT Standard Time, UTC+00:00)

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Buy-to-let

Buying a property as an investment is a popular move. But how do you get the right mortgage for buy-to-let? Mortgage Active examines the process.

Understanding buy-to-let

A buy-to-let mortgage is, in simple terms, a home loan used to buy an investment property. Lenders do not offer their standard mortgages on a property that you don’t intend to live in, so if you are going to purchase a second property you will have to take out a buy-to-let mortgage. In many ways these mortgages are similar to traditional mortgage deals, and the application process and costs involved will be similar. In most cases the mortgage amount you are able to borrow is based on the potential rental income of the property. Lenders will usually require you to have your own personal income from an employed or self-employed source, however clarification is not often required for this.

There are now a large number of lenders offering buy-to-let mortgages which has only fuelled the competitiveness of product offerings. There are discount, fixed rates and trackers available. Many lenders are also now offering flexible buy-to-let mortgages and specific products if you have had some previous credit difficulties, therefore not precluding any potential landlords from the market.You will, however, need a deposit, as most lenders limit borrowing to 85 per cent cent of the purchase price.
Lenders will calculate the rental income required on between 100 per cent and 130 per cent of the mortgage payment. This is usually based on an interest only mortgage payment at a nominal rate decided by the lender. Dependent on the lender, this will be assessed either by the valuer when the property valuation is carried out or by recommendation from a local letting agent.
Most buy-to-let investors have benefited from the recent increase in property prices and reportage these properties to release equity. This has enabled many people to use the funds as a deposit for another. Some lenders will offer portfolio products enabling further properties to be purchased without the need for completing endless application forms. The maximum is either capped by a number of properties eg 10 or a maximum loan amount of £1,000,000 or £2,000,000.
The majority of buy-to-let products are aimed at properties being let on Assured Shorthold Tenancy agreements, such as to families. Some lenders have specific products for the purpose of letting to students or multi lets.
Rental incomes can vary quite dramatically across the country and it is therefore important to research the area you are intending to purchase in. Local factors are important to consider such as amenities, schools, universities and travel links. The market you are intending to target your property at will be affected by this.
It is advisable to look at the local market and some of the properties available to rent. If there are properties which have been on the market for a while you may wish to consider other areas.

Check that you take the right insurance and it covers you on a buy-to-let property as some building and contents policies are specifically designed for this market because standard policies may not give you the cover required.
mortgageactive.co.uk
0870 116 0320

Buying | Letting

posted on Sunday, May 15, 2005 2:44:19 PM (GMT Standard Time, UTC+00:00)

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Thursday, May 12, 2005

Mortgage News

Come together

Escalating house prices mean that many first-time buyers cannot afford to go it alone. So why not buy with a little help from your friends, asks Christina Jordan of Your Mortgage magazine.
First-time buyers (FTBs) are in short supply – they accounted for just 29 per cent of the home buying market in 2003, according to the Council of Mortgage Lenders. And it’s easy to see why. House prices have boomed in the last two years, rising by an average of 26.4 per cent in 2002 and 15.4 per cent last year, according to Halifax, and the average London property now costs well over £230,000.
Unless you earn a small fortune or have wealthy parents, you will find it difficult to get a mortgage on a single salary, which means you don’t get to own a property and therefore do not benefit from the increases in equity that many existing home owners can afford to smile smugly about.
So if you’re a first-time buyer, you need to look at your options. You could live on bread and water and save every spare penny you have to amass a bigger deposit, but with prices continuing to rise, the goalposts are continually moving while you are not.
You could take out a 100 per cent mortgage, where you don’t need a deposit; but then you’ll be borrowing more and probably paying a higher rate to do so – the best rates are available to those with a ten per cent deposit or more.
Or you could stretch your finances. Some mortgage lenders will lend you four or even five times your income – but only if you have a significant deposit and a particular kind of job. And this can be risky as borrowing to the limit gives you no leeway when interest rates rise or your income drops.

I want to hold your hand

If your salary is not big enough to enable you to buy your first property alone, you could consider buying with a partner or friends. Many couples buy their first home together and the lender will take into account both incomes.
Traditionally, you can borrow two-and-a-half times joint incomes or three times the biggest income plus one times the smaller income, though many lenders now offer more.
Most mortgage lenders will let you buy with up to three other people, but many will only take into account the two highest incomes. Joe Wiggins, spokesperson for Nationwide, explains: ‘We will take up to four people buying together, but we only take into account the highest two salaries when we look at how much you can borrow. Otherwise, four people might be able to borrow a huge amount. We use affordability rather than income multiples, which is a slightly more sophisticated way of calculating how much we lend, as we take into account outgoings as well as income.
‘It’s difficult for first-time buyers to get onto the housing ladder, with the average house price in the UK now reaching over £130,000, so joining up with friends can definitely be a practical option for some.’
But before you dive into buying with friends, you need to be aware of the potential pitfalls.

We can work it out

The most important thing to remember is that you may be best friends at the moment but nobody can predict the future. One person may, and probably will, decide to go his or her own way at some point, perhaps to set up home with a partner. Or, one of the group could become unemployed. It’s essential that you know exactly what will happen when one person decides to leave or can no longer afford to pay.
Each borrower is responsible for the whole mortgage, not just their bit, so if three people bought together and one left the other two would be responsible for the whole thing.
It is important to seek legal advice before buying together; get a document drawn up, usually a trust deed, covering all potential situations. And you need to decide whether to buy as joint tenants or tenants in common.

A service has recently been launched for first-time buyers who want to get onto the housing ladder by buying with others. FirstRungNow offers a Joint Ownership Service that gives advice to groups buying together and helps individuals find potential property partners to invest with. Managing director Helen Adams explains the benefits of the service. ‘You can come to the website, FirstRungNow.com, for information and advice about joint ownership, such as legal and insurance requirements. And if you’re looking for someone to boost group numbers, or to find someone else with whom to buy, you can contact other people wanting to buy in the same town – you read profiles and choose who you want to get to know by email.’

Buying together could provide a valuable stepping-stone onto the housing ladder if your income won't stretch to buying your first home alone, but make sure you fully understand what you are getting into, choose people you know well and always get a legal document drawn up setting out what will happen if someone wants to sell their share. While money can't buy you love, if you go into the process with your eyes open, buying with a little help from your friends could turn out to be a great move.
yourmortgage.co.uk

Buying | Letting | Selling

posted on Thursday, May 12, 2005 9:37:58 AM (GMT Standard Time, UTC+00:00)

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