Landlords are going into 2010 with a positive perspective on the market, an industry expert has claimed.
Chris Horne, editor at Property Hawk, commented that the low interest environment had improved cash flow and pointed to rising demand from tenants as the so-called "accidental landlords" are exiting the market.
"With supply reducing, tenant demand still strong and interest rates low - I think landlords are feeling reasonably comfortable going into 2010," Mr Horne said.
He noted that the biggest concern among landlords is likely to be in relation to their tenants' ability to pay rent as a result of job losses or financial hardship.That is why your choice of agent to manage your portfolio is so important.
Research released by Paragon Mortgages in October revealed that many landlords anticipate an increase in the net value of their property portfolios over the next 12months.
This was calculated as an average rise of 0.8 per cent among those surveyed.
The organisation reported that this was the first positive outlook in the market in more than two years.
for further information please visit trustintudor.co.uk
Thursday 17 December 2009
Monday 14 December 2009
Mortgage loans issued rise.
The number of home loans issued in October reached 55,000, according to figures released by the Council of Mortgage Lenders (CML) in December.
Mortgage approvals in October reached their highest level since December 2007, with a rise in the number of buyers on the market also noted.
Data from the CML showed that there were almost 100 per cent more buyers on the market in October than in January this year.
Despite the improvement in new buyer loans, this increase is not matched by remortgaging figures.
CML research revealed that remortgage approvals had remained static at 33,000 for two months.
The National Association of Estate Agents (NAEA) reacted positively to the news, stating that the increase in buyers demonstrated the effect of the stamp duty holiday on the market.
Peter Bolton King, chief executive at the NAEA, said that the return of first-time-buyers is important: "It is really encouraging to see an increase of 34 per cent in this critical sector of the market within the last 12 months."
Mortgage approvals in October reached their highest level since December 2007, with a rise in the number of buyers on the market also noted.
Data from the CML showed that there were almost 100 per cent more buyers on the market in October than in January this year.
Despite the improvement in new buyer loans, this increase is not matched by remortgaging figures.
CML research revealed that remortgage approvals had remained static at 33,000 for two months.
The National Association of Estate Agents (NAEA) reacted positively to the news, stating that the increase in buyers demonstrated the effect of the stamp duty holiday on the market.
Peter Bolton King, chief executive at the NAEA, said that the return of first-time-buyers is important: "It is really encouraging to see an increase of 34 per cent in this critical sector of the market within the last 12 months."
Friday 11 December 2009
Sell before the general election.
Whatever the state of the market, people tend to believe that timing can make all the difference. In fact, this is a bit of a myth. Second-guessing the market isn’t that easy – otherwise we’d all be doing it. So, for all practical purposes, you may as well stop worrying about timing, and simply sell when it suits you.
That said, there is one rather unusual event scheduled for the early part of 2010 which is probably worth trying to avoid. I’m talking about the forthcoming General Election. This must happen at the latest in May, and there are rumours that it could even be as early as March.
Why should you try and avoid it? Well, for the simple reason that historically, elections tend to have something of a depressing effect on the housing market (amongst other things!). Precisely why this should be is not entirely clear, but it is probably due to the added element of uncertainty about the future which they introduce into the normal course of events. In the case of this particular election, that uncertainty is likely to be exacerbated by the widely-held belief that we may well see a change of government. Both buyers and sellers are therefore doubly likely to hold back from making any major decisions until the result of the election – and the consequences of that result – have become clearer.
And talking of the consequences…call me a cynic, but there is a natural tendency, particularly in difficult times like the present, for new governing parties to load all the bad news onto the front end of their administration - and blame their predecessors. You know the sort of thing: “I know we pledged not raise this or that tax, but we didn’t fully appreciate what an utter shambles we would have on our hands until we got a close look at the books!”
So, if I were you, and I wanted to move house in the first half of next year…I would definitely start the ball rolling as soon as possible.
That said, there is one rather unusual event scheduled for the early part of 2010 which is probably worth trying to avoid. I’m talking about the forthcoming General Election. This must happen at the latest in May, and there are rumours that it could even be as early as March.
Why should you try and avoid it? Well, for the simple reason that historically, elections tend to have something of a depressing effect on the housing market (amongst other things!). Precisely why this should be is not entirely clear, but it is probably due to the added element of uncertainty about the future which they introduce into the normal course of events. In the case of this particular election, that uncertainty is likely to be exacerbated by the widely-held belief that we may well see a change of government. Both buyers and sellers are therefore doubly likely to hold back from making any major decisions until the result of the election – and the consequences of that result – have become clearer.
And talking of the consequences…call me a cynic, but there is a natural tendency, particularly in difficult times like the present, for new governing parties to load all the bad news onto the front end of their administration - and blame their predecessors. You know the sort of thing: “I know we pledged not raise this or that tax, but we didn’t fully appreciate what an utter shambles we would have on our hands until we got a close look at the books!”
So, if I were you, and I wanted to move house in the first half of next year…I would definitely start the ball rolling as soon as possible.
Wednesday 9 December 2009
What is a flying freehold ?
A flying freehold applies where part of one property – for example an upper room or loft space – physically extends over another. This means that the owner of a flying freehold does not actually own the structure which supports that part of his or her property. They are therefore entirely dependent upon the goodwill of the owner of the adjoining property for its upkeep and structural integrity. A flying freehold can also exist where part of a property sits over a communal access area, like an archway.
Of course, this sort of thing happens all the time with houses that have been converted into separate flats, or purpose-built apartment blocks. The difference is that these are invariably leasehold, so there is always a freeholder somewhere who retains the power to compel each leaseholder to maintain their part of the communal fabric.
By contrast, no-one can compel a freeholder to do anything!
This may sound drastic, but in practice most flying freeholds have been around for donkeys’ years without causing anyone any trouble. However – precisely because they are a departure from the norm, and something of an anomaly - solicitors quite rightly tend to be rather wary of them. Banks and building societies even more so. Fortunately, they’re relatively rare in most parts of the country these days. Nevertheless, they do persist in some areas, particularly with older properties.
So…what happens if you’re a cash buyer, and the home of your dreams turns out to have a flying freehold? What then?
Well, while it’s undeniable that it can complicate matters, and your solicitor will certainly want to check it out very thoroughly indeed, the fact is that most of the difficulties associated with flying freeholds are easily surmountable – for example, by taking out indemnity insurance.
So, if you’re faced with a flying freehold on a property that you really can’t resist, my advice would be to grit your teeth and go for it.
Of course, this sort of thing happens all the time with houses that have been converted into separate flats, or purpose-built apartment blocks. The difference is that these are invariably leasehold, so there is always a freeholder somewhere who retains the power to compel each leaseholder to maintain their part of the communal fabric.
By contrast, no-one can compel a freeholder to do anything!
This may sound drastic, but in practice most flying freeholds have been around for donkeys’ years without causing anyone any trouble. However – precisely because they are a departure from the norm, and something of an anomaly - solicitors quite rightly tend to be rather wary of them. Banks and building societies even more so. Fortunately, they’re relatively rare in most parts of the country these days. Nevertheless, they do persist in some areas, particularly with older properties.
So…what happens if you’re a cash buyer, and the home of your dreams turns out to have a flying freehold? What then?
Well, while it’s undeniable that it can complicate matters, and your solicitor will certainly want to check it out very thoroughly indeed, the fact is that most of the difficulties associated with flying freeholds are easily surmountable – for example, by taking out indemnity insurance.
So, if you’re faced with a flying freehold on a property that you really can’t resist, my advice would be to grit your teeth and go for it.
Monday 7 December 2009
Next interest rate decision is on 10th December
Mortgage lenders are becoming more relaxed about providing housing finance to buyers, it has been asserted.
According to Moneyfacts.co.uk, lenders have grown accustomed to the post-financial crisis world and the position that they - and market participants - are now in.
As such, more mortgage deals have become available for those trying to get on the property ladder.
The financial advice website suggested that the fact that the Bank of England's base rate of interest has been maintained at its current level of 0.5 per cent for the last eight months or so has helped create this new situation.
"Indeed, the signs from the mortgage market indicate that credit conditions are easing and that lenders are more willing to lend," Moneyfacts.co.uk stated.
The Bank's Monetary Policy Committee is set to take its next decision on whether to raise, lower or maintain the base rate of interest at its meeting on December 10th
According to Moneyfacts.co.uk, lenders have grown accustomed to the post-financial crisis world and the position that they - and market participants - are now in.
As such, more mortgage deals have become available for those trying to get on the property ladder.
The financial advice website suggested that the fact that the Bank of England's base rate of interest has been maintained at its current level of 0.5 per cent for the last eight months or so has helped create this new situation.
"Indeed, the signs from the mortgage market indicate that credit conditions are easing and that lenders are more willing to lend," Moneyfacts.co.uk stated.
The Bank's Monetary Policy Committee is set to take its next decision on whether to raise, lower or maintain the base rate of interest at its meeting on December 10th
Thursday 3 December 2009
Is this a good time to consider a buy to let purchase ?
According to the Retail price index ,there would have been a 2.4% return on any property investment over last 12 months,taking into account rental income and a slight drop in house prices over that period.
The last time residential property achieved such a return was in the period from July 2007 to July 2008.
Returns have improved significantly since the low in February 2008 when losses were estimated at over 11%.
April 2009 was the best time for buy to let investors with an expected return of 7.4%already and a projected annual return by April 2010 of 15%.
There was also news from the CML recently of an increase in buy to let lending in the third quarter which is the first increase in more than two years.
So now might be the right time to consider entering the rental market, so as not to miss the boat.
The last time residential property achieved such a return was in the period from July 2007 to July 2008.
Returns have improved significantly since the low in February 2008 when losses were estimated at over 11%.
April 2009 was the best time for buy to let investors with an expected return of 7.4%already and a projected annual return by April 2010 of 15%.
There was also news from the CML recently of an increase in buy to let lending in the third quarter which is the first increase in more than two years.
So now might be the right time to consider entering the rental market, so as not to miss the boat.
Wednesday 2 December 2009
Instruct your agent now ?
If you are wanting to move in the early part of next year or by the spring, you should be instructing your estate agent of choice now. Waiting for the new year means putting your property on the market when everyone else does.
Most estate agents are going to have quite a lot of time to spare over the next two or three weeks. My advice is that you use this period to get everything in place, so that you’re in a position to hit the ground running, immediately the festive season is over. So, do your research, select your agent and instruct them. They in turn will have plenty of time to get everything ready – from taking good-quality photographs and preparing property details and other marketing materials, to advising you on any little things you can do to improve the buyer-appeal of your home, and getting your Home Information Pack sorted out.
The net result of all this is that you will be ideally placed to take the fullest possible advantage of the New Year surge in market activity which always follows the Christmas lull, like night follows day. So, while everyone else is waiting for their HIPs to come through, you will be able to begin marketing from Day One.
Bear in mind that one of the biggest challenges facing the market right now is a shortage of instructions - so if you can steal a march on other sellers in this way, you should really be in line for a happy New Year!
Most estate agents are going to have quite a lot of time to spare over the next two or three weeks. My advice is that you use this period to get everything in place, so that you’re in a position to hit the ground running, immediately the festive season is over. So, do your research, select your agent and instruct them. They in turn will have plenty of time to get everything ready – from taking good-quality photographs and preparing property details and other marketing materials, to advising you on any little things you can do to improve the buyer-appeal of your home, and getting your Home Information Pack sorted out.
The net result of all this is that you will be ideally placed to take the fullest possible advantage of the New Year surge in market activity which always follows the Christmas lull, like night follows day. So, while everyone else is waiting for their HIPs to come through, you will be able to begin marketing from Day One.
Bear in mind that one of the biggest challenges facing the market right now is a shortage of instructions - so if you can steal a march on other sellers in this way, you should really be in line for a happy New Year!
Monday 30 November 2009
I live near my local church. Does that mean I’m liable for chancel repairs?
If you had asked me this question a few years ago, I would probably have told you not to worry. Recently, however, a widely-publicised test case has seen a Warwickshire couple forced to auction their home to meet a chancel repair bill of almost £190,000.
So, what’s all the fuss about? Basically, chancel repair liability is a hangover from medieval times, and relates to the fact that the ownership of certain lands in certain parishes still carries with it a legal obligation to pay for repairs to the local church.
Until recently, this remained something of an historical curiosity, and cases were a rarity. Now, however, chancel repair liability looks set to become quite a hot topic. Why? Well, firstly because the Land Registration Act of 2002 gave the church authorities a deadline of 2013 to formally register all such interests, or lose them altogether. Secondly, the test case I mentioned earlier has clearly demonstrated just how much those interests could be worth to a cash-strapped Church of England facing a backlog of repairs totalling almost £1billion.
Not surprisingly, therefore, parochial church councils up and down the land are busily dusting off their records…
Actually, you may not be liable for chancel repairs at all. Not all parishes are “at risk,” and in any case, closeness to the actual church is not necessarily the deciding factor. If, on the other hand, you are liable, then I’m afraid you’re stuck with it – although insurance cover may be available, at a price.
The problem is finding out. There has never been a central register of such historic obligations, and title deeds rarely mention them. Solicitors and conveyancing professionals can access an automated service which will identify at-risk parishes – in which case, it may be advisable to take out specialist chancel repair insurance, just in case. However, to establish for certain whether your particular property is liable will require a full chancel repair search.
Meanwhile, it goes without saying that the last thing you or your solicitor should do is contact the church directly about your concerns. Much better to let sleeping dogs lie!
So, what’s all the fuss about? Basically, chancel repair liability is a hangover from medieval times, and relates to the fact that the ownership of certain lands in certain parishes still carries with it a legal obligation to pay for repairs to the local church.
Until recently, this remained something of an historical curiosity, and cases were a rarity. Now, however, chancel repair liability looks set to become quite a hot topic. Why? Well, firstly because the Land Registration Act of 2002 gave the church authorities a deadline of 2013 to formally register all such interests, or lose them altogether. Secondly, the test case I mentioned earlier has clearly demonstrated just how much those interests could be worth to a cash-strapped Church of England facing a backlog of repairs totalling almost £1billion.
Not surprisingly, therefore, parochial church councils up and down the land are busily dusting off their records…
Actually, you may not be liable for chancel repairs at all. Not all parishes are “at risk,” and in any case, closeness to the actual church is not necessarily the deciding factor. If, on the other hand, you are liable, then I’m afraid you’re stuck with it – although insurance cover may be available, at a price.
The problem is finding out. There has never been a central register of such historic obligations, and title deeds rarely mention them. Solicitors and conveyancing professionals can access an automated service which will identify at-risk parishes – in which case, it may be advisable to take out specialist chancel repair insurance, just in case. However, to establish for certain whether your particular property is liable will require a full chancel repair search.
Meanwhile, it goes without saying that the last thing you or your solicitor should do is contact the church directly about your concerns. Much better to let sleeping dogs lie!
Thursday 26 November 2009
What advice would you give to anyone wanting to buy a property ?
Here are 6 simple steps to follow
1) Find out how much you can afford.
Visit an independent mortgage advisor and confirm how much mortgage you can afford ?
Work out how much deposit you can raise and what the costs will be including solicitor fees and stamp duty.
Remember that there will be utility bills to pay so build those into your calculations.
2) Make contact with an estate agent.
There is only so much you can do on the internet and a good agent can help you sort "The wood from the trees" and help you find you your perfect home a lot quicker.
Let them have all the information you can. What price bracket you are looking in,how much deposit you have and just as importantly what type of property you are looking for.
Make a list of how many rooms you want, the preferred areas, local amenities and anything else that is important to you.
The more you tell the agent the easier it will be for them to find the best property for you.
3) Arrange to view.
Make appointments to view your chosen properties and keep them, if you cannot make an appointment let the agent know.
Take a list of questions with you, such as, what is the area like, how is the property heated ? How much is the Council tax and what are the neighbours like ?
It is important to find out as much as possible so you can make the right decisions.
Make notes after viewing and review them later.
4) Keep in touch.
Let the agent know if your requirements change, you may decide after seeing some properties that you need an extra bedroom or a bigger kitchen.
Your agent may have a more suitable property but not shown you it yet, as they think it is not what you want.
5) Sell your property first.
The best way to cut out disappointment is to place your property on the market and get interest before you find the home of your dreams.
6) Make an offer.
When you have found the property you want make a formal offer through the agent.
Let them know how much deposit you have and the details of your mortgage.
Before you offer make sure you have carefully considered everything, does it meet all your criteria ?
Is it large enough for you now and in the future, is it in the right location ?
If you want to be considered as a serious buyer, the last thing you want to be doing, is making offers and then withdrawing them because you have changed your mind.
When the offer is excepted you will need to chose and instruct a solicitor to deal with the transaction.
1) Find out how much you can afford.
Visit an independent mortgage advisor and confirm how much mortgage you can afford ?
Work out how much deposit you can raise and what the costs will be including solicitor fees and stamp duty.
Remember that there will be utility bills to pay so build those into your calculations.
2) Make contact with an estate agent.
There is only so much you can do on the internet and a good agent can help you sort "The wood from the trees" and help you find you your perfect home a lot quicker.
Let them have all the information you can. What price bracket you are looking in,how much deposit you have and just as importantly what type of property you are looking for.
Make a list of how many rooms you want, the preferred areas, local amenities and anything else that is important to you.
The more you tell the agent the easier it will be for them to find the best property for you.
3) Arrange to view.
Make appointments to view your chosen properties and keep them, if you cannot make an appointment let the agent know.
Take a list of questions with you, such as, what is the area like, how is the property heated ? How much is the Council tax and what are the neighbours like ?
It is important to find out as much as possible so you can make the right decisions.
Make notes after viewing and review them later.
4) Keep in touch.
Let the agent know if your requirements change, you may decide after seeing some properties that you need an extra bedroom or a bigger kitchen.
Your agent may have a more suitable property but not shown you it yet, as they think it is not what you want.
5) Sell your property first.
The best way to cut out disappointment is to place your property on the market and get interest before you find the home of your dreams.
6) Make an offer.
When you have found the property you want make a formal offer through the agent.
Let them know how much deposit you have and the details of your mortgage.
Before you offer make sure you have carefully considered everything, does it meet all your criteria ?
Is it large enough for you now and in the future, is it in the right location ?
If you want to be considered as a serious buyer, the last thing you want to be doing, is making offers and then withdrawing them because you have changed your mind.
When the offer is excepted you will need to chose and instruct a solicitor to deal with the transaction.
Monday 23 November 2009
Is this a good time to consider a buy to let purchase ?
According to the Retail price index ,there would have been a 2.4% return on any property investment over last 12 months,taking into account rental income and a slight drop in house prices over that period.
The last time residential property achieved such a return was in the period from July 2007 to July 2008.
Returns have improved significantly since the low in February 2008 when losses were estimated at over 11%.
April 2009 was the best time for buy to let investors with an expected return of 7.4%already and a projected annual return by April 2010 of 15%.
There was also news from the CML recently of an increase in buy to let lending in the third quarter which is the first increase in more than two years.
So now might be the right time to consider entering the rental market, so as not to miss the boat.
The last time residential property achieved such a return was in the period from July 2007 to July 2008.
Returns have improved significantly since the low in February 2008 when losses were estimated at over 11%.
April 2009 was the best time for buy to let investors with an expected return of 7.4%already and a projected annual return by April 2010 of 15%.
There was also news from the CML recently of an increase in buy to let lending in the third quarter which is the first increase in more than two years.
So now might be the right time to consider entering the rental market, so as not to miss the boat.
Friday 20 November 2009
Is stamp duty changing again ?
The key issue at the moment is that the so-called Stamp Duty Holiday - which the Government brought in just over a year ago as a temporary measure to help boost activity levels in the property market – is due to come to an end on December 31st. Precisely what impact this will have on the market as a whole is, of course, something only time will tell. Nevertheless, for first-time buyers and investors, it could be very significant indeed.
Back in the autumn of 2008, the Government temporarily raised the base level for Stamp Duty from £125,000 to £175,000. By taking around half of all transactions out of the net altogether, this measure was designed to breathe some much-needed life into the crucially important bottom end of the market. Originally, it was due to lapse last Spring, but in April the Government extended it to the end of the year.
What does this measure actually mean to you and me? Well, if you’re looking to buy a property for, say, £150,000, it means that you won’t pay a penny in Stamp Duty – as long as you actually complete before December 31st. Any later, and you’ll be liable to pay the Government a whopping £1,500.
Of course, it’s always possible that the Government will relent, and decide to extend this concession still further. After all, with things just starting to look up again in the housing market, many would consider it foolhardy in the extreme to risk jeopardizing that recovery. On the other hand, it has been calculated that the Stamp Duty Holiday has already cost the Government some £200million in lost revenues - and considering how cash-strapped they are, I wouldn’t bank on any last-minute reprieve.
Longer term, of course, what is really needed is a complete overhaul of the entire Stamp Duty regime. But since it has been a nice little earner for Governments of every hue down the years, I wouldn’t hold my breath on that one either – whatever happens at the next election!
Back in the autumn of 2008, the Government temporarily raised the base level for Stamp Duty from £125,000 to £175,000. By taking around half of all transactions out of the net altogether, this measure was designed to breathe some much-needed life into the crucially important bottom end of the market. Originally, it was due to lapse last Spring, but in April the Government extended it to the end of the year.
What does this measure actually mean to you and me? Well, if you’re looking to buy a property for, say, £150,000, it means that you won’t pay a penny in Stamp Duty – as long as you actually complete before December 31st. Any later, and you’ll be liable to pay the Government a whopping £1,500.
Of course, it’s always possible that the Government will relent, and decide to extend this concession still further. After all, with things just starting to look up again in the housing market, many would consider it foolhardy in the extreme to risk jeopardizing that recovery. On the other hand, it has been calculated that the Stamp Duty Holiday has already cost the Government some £200million in lost revenues - and considering how cash-strapped they are, I wouldn’t bank on any last-minute reprieve.
Longer term, of course, what is really needed is a complete overhaul of the entire Stamp Duty regime. But since it has been a nice little earner for Governments of every hue down the years, I wouldn’t hold my breath on that one either – whatever happens at the next election!
Wednesday 18 November 2009
When will the housing market recover ?
It depends what you mean by recover.Many would take that to mean strongly rising house prices, which may be a little way off still.
However there are strong indications that first time buyers and buy to let sales are growing.
First-time buyers increased their share in the mortgage market in October, compared with the previous month.
In October first-time buyer activity rose to 15.3 per cent as a proportion of total purchases last month, compared with just 10.4 per cent in September.
Research released by the Council of Mortgage Lenders earlier this month demonstrated that first-time buyers were rushing to take advantage of the stamp duty holiday.
Almost one-third (32 per cent) of all loans issued to first-time buyers in September were for properties valued at between £125,000 and £175,000.
The number of buy-to-let mortgage packages available on the market is slowly rising as well.
Statistics released last week by the Council of Mortgage Lenders revealed that the buy-to-let market had grown for the first time in two years during the third quarter of 2009.
For any market to recover it needs a firm starting point and the above activity shows, that the property market is heading in the right direction.
However there are strong indications that first time buyers and buy to let sales are growing.
First-time buyers increased their share in the mortgage market in October, compared with the previous month.
In October first-time buyer activity rose to 15.3 per cent as a proportion of total purchases last month, compared with just 10.4 per cent in September.
Research released by the Council of Mortgage Lenders earlier this month demonstrated that first-time buyers were rushing to take advantage of the stamp duty holiday.
Almost one-third (32 per cent) of all loans issued to first-time buyers in September were for properties valued at between £125,000 and £175,000.
The number of buy-to-let mortgage packages available on the market is slowly rising as well.
Statistics released last week by the Council of Mortgage Lenders revealed that the buy-to-let market had grown for the first time in two years during the third quarter of 2009.
For any market to recover it needs a firm starting point and the above activity shows, that the property market is heading in the right direction.
Monday 16 November 2009
When will there be the right mortgages available ?
One of the main problems with the property market still, is the availability of mortgages for well positioned purchasers. Despite all the quantitative easing by the government, banks and building societies are still reluctant to lend.
If first time buyers with sensible deposits of 5% or 10% and 3 times income, could more readily obtain funding, on sensible terms the property market would come back to life in an orderly way.
This would encourage more homeowners to place their properties on the market, so the supply and demand balance would be restored.
When is this likely to happen,?
One clue is in interest rates. No not the rate mortgages are offered at but the relationship between the Bank of England base rate and the LIBOR rate ( London inter bank offer rate ) The more these two rates move apart the less likely lenders are to have the funds to lend those realistic mortgages. This is because it is costing them more to borrow the money on the wholesale market, so they have to find ways of making profits from expensive funds.
Once banks start trusting each other again, so the strong banks with funds start lending to the others, money will start to flow again.
This confidence between the banks is reflected in base and LIBOR rates moving closer. So a simple way to monitor potential property market activity is to track these two rates.
As they converge you will see more sensible mortgages being offered to well placed first time buyers something that needs to happen to enable the buying and selling process to start .
While they remain further apart and if you have funds available now is a good time to invest in property.
I must stress this is just one factor to take into account and others need to be weighed up when considering purchasing.
If you have a question on property buying in this market please feel free to contact me by posting a comment.
If first time buyers with sensible deposits of 5% or 10% and 3 times income, could more readily obtain funding, on sensible terms the property market would come back to life in an orderly way.
This would encourage more homeowners to place their properties on the market, so the supply and demand balance would be restored.
When is this likely to happen,?
One clue is in interest rates. No not the rate mortgages are offered at but the relationship between the Bank of England base rate and the LIBOR rate ( London inter bank offer rate ) The more these two rates move apart the less likely lenders are to have the funds to lend those realistic mortgages. This is because it is costing them more to borrow the money on the wholesale market, so they have to find ways of making profits from expensive funds.
Once banks start trusting each other again, so the strong banks with funds start lending to the others, money will start to flow again.
This confidence between the banks is reflected in base and LIBOR rates moving closer. So a simple way to monitor potential property market activity is to track these two rates.
As they converge you will see more sensible mortgages being offered to well placed first time buyers something that needs to happen to enable the buying and selling process to start .
While they remain further apart and if you have funds available now is a good time to invest in property.
I must stress this is just one factor to take into account and others need to be weighed up when considering purchasing.
If you have a question on property buying in this market please feel free to contact me by posting a comment.
Friday 13 November 2009
Over valuaing your property ..do not let it happen !
Some agents are currently over valuing properties by as much as £20,000 to £30,000 in my area. They are doing this because they are desperate to get properties on the market.
The problem is, it unrealistically raises the seller’s expectations of what price they may achieve. Which means the client might start looking for properties in the wrong price bracket or worse still lose the property they have set their heart on.
Also this approach can be very frustrating, as the best placed purchasers will not be interested in viewing the property. This is because most buyers become expert in the price range they are looking to buy in, so an over priced property stands out like a sore thumb to them.
Another problem is, the only way interest is going to be created is by reducing the price. This disappoints the seller and does not look good to the buying public, especially if it is done too many times.
So how can you avoid falling into this trap? Firstly only use an agent that backs up their valuations with comparable sales data, so they prove to you what is selling, at what price and what has happened to the market since that sale. Secondly try a sales technique we have used for years,“Offers in excess “this works well and often achieves a higher sale price.
It also shows the best price achievable in any market.
It is always tempting to place your property on the market at a high price and see what happens but the agent that does that is doing you no favours.
The problem is, it unrealistically raises the seller’s expectations of what price they may achieve. Which means the client might start looking for properties in the wrong price bracket or worse still lose the property they have set their heart on.
Also this approach can be very frustrating, as the best placed purchasers will not be interested in viewing the property. This is because most buyers become expert in the price range they are looking to buy in, so an over priced property stands out like a sore thumb to them.
Another problem is, the only way interest is going to be created is by reducing the price. This disappoints the seller and does not look good to the buying public, especially if it is done too many times.
So how can you avoid falling into this trap? Firstly only use an agent that backs up their valuations with comparable sales data, so they prove to you what is selling, at what price and what has happened to the market since that sale. Secondly try a sales technique we have used for years,“Offers in excess “this works well and often achieves a higher sale price.
It also shows the best price achievable in any market.
It is always tempting to place your property on the market at a high price and see what happens but the agent that does that is doing you no favours.
Tuesday 10 November 2009
What do I need to do before renting my property out ?
Here is a useful checklist I give to my clients
CONTACT:
Mortgage lender for permission to let.
Freeholder if property is leasehold, for permission.
Buildings/Contents insurers inform them of change of circumstances.
( i.e. property now empty, you are going abroad, going to let )
Utilities and service companies
Local authority (council tax)
Mail redirection service.
Inform them all of the date you are moving.
Energy Performance Inspector for an Energy performance certificate.
MAINTENANCE:
Complete any outstanding repairs and Health & Safety modifications.
Arrange Gas safe inspection - obtain Landlord safety certificate.
Electrical inspection - obtain a portable appliance test, and (if the property has not been inspected within the last 5 years) a wiring certificate.
Smoke alarms (if fitted). Test and ensure they are working correctly.
SUPPLY YOUR AGENT WITH:
Your new contact details (address, phone, fax, email).
2 sets of keys to the rented property.
Any service agreements and signed tenancy agreements prepared by Tudor.
GOING ABROAD?
Inform your Accountant.
Apply to your Tax Office for an Exemption Certificate.
Ask your Solicitor to draw up a Power of Attorney
(for signing agreements and insurance claims)
CONTACT:
Mortgage lender for permission to let.
Freeholder if property is leasehold, for permission.
Buildings/Contents insurers inform them of change of circumstances.
( i.e. property now empty, you are going abroad, going to let )
Utilities and service companies
Local authority (council tax)
Mail redirection service.
Inform them all of the date you are moving.
Energy Performance Inspector for an Energy performance certificate.
MAINTENANCE:
Complete any outstanding repairs and Health & Safety modifications.
Arrange Gas safe inspection - obtain Landlord safety certificate.
Electrical inspection - obtain a portable appliance test, and (if the property has not been inspected within the last 5 years) a wiring certificate.
Smoke alarms (if fitted). Test and ensure they are working correctly.
SUPPLY YOUR AGENT WITH:
Your new contact details (address, phone, fax, email).
2 sets of keys to the rented property.
Any service agreements and signed tenancy agreements prepared by Tudor.
GOING ABROAD?
Inform your Accountant.
Apply to your Tax Office for an Exemption Certificate.
Ask your Solicitor to draw up a Power of Attorney
(for signing agreements and insurance claims)
Friday 6 November 2009
Here is the good news.Base rate stays at 0.5 % and more FTB mortgages are available.
On November 5th 2009, the Monetary Policy Committee decided to maintain its base rate at 0.5 per cent for the eighth consecutive month.
Lenders are becoming more lenient with their deposit requirements, according to Moneyfacts.
Since the Bank of England first cut interest rates to a historic low of, 0.5 per cent in March 2009. Financial institutions have started to increase the number of high loan-to-value (LTV) products on their books.
The number of products requiring a 15 per cent deposit had increased from 169 to 231 while the number of mortgages requiring ten per cent of the property value in advance had risen by 16, to 105.Source Moneyfacts
Lenders seem to be getting a bit more comfortable now that property values are levelling out and are prepared to advance to a higher value.
This should allow a greater number of first-time buyers to access the property market.
Lenders are becoming more lenient with their deposit requirements, according to Moneyfacts.
Since the Bank of England first cut interest rates to a historic low of, 0.5 per cent in March 2009. Financial institutions have started to increase the number of high loan-to-value (LTV) products on their books.
The number of products requiring a 15 per cent deposit had increased from 169 to 231 while the number of mortgages requiring ten per cent of the property value in advance had risen by 16, to 105.Source Moneyfacts
Lenders seem to be getting a bit more comfortable now that property values are levelling out and are prepared to advance to a higher value.
This should allow a greater number of first-time buyers to access the property market.
Thursday 5 November 2009
Swan hall, available for charities to fund raise, free of charge.
Any registered charity can apply to use our historic head office for a fund raising event free of charge. Past events have included,cheese and wine evening,fun auctions,musical concert and wine tastings.
Below is a short history of the builing.
Tudor Estates are proud to be the owners and latest custodians of Swan Hall, the oldest privately owned property in Southend on sea, Essex. Dating from 1407 Swan Hall was originally built as a merchants house and over the years has been used as the medieval market hall, the Swan Inn public house and since the 19th century a bakery.
The building was damaged by a fire in 1998 and has been painstakingly restored using the original methods and materials. It was decided that as a part of the restoration the building would be returned as near as possible, to the way it looked during the medieval period. Using traditional techniques the timber frame was rebuilt incorporating as much of the original timbers as possible. Where there was fire damaged or rotten wood, new green oak timbers have been used to replace them.
The property was first recorded on 8th March 1574 as "a shop in the market place with land" owned by Richard Welkes who had bought it from John Cocar. By the 2nd August 1619 it had been inherited by John Welkes, and was then described as: “The Swan” with an orchard. The list of publicans in Prittlewell states Mr Littlebury held the Swan in 1702, with an orchard at the side, later 3 cottages were built in the orchard which became our original offices. By 1841 it was a bakery owned by Samuel Tabor and William Rankin, they also acquired the windmill that stood at the back in Roots Hall Avenue. Today fully restored Swan Hall is a piece of living history and Tudor Estates are keen for it to be seen by the wider community we would like to hear from any local charity, groups or schools, interested in visiting.
Below is a short history of the builing.
Tudor Estates are proud to be the owners and latest custodians of Swan Hall, the oldest privately owned property in Southend on sea, Essex. Dating from 1407 Swan Hall was originally built as a merchants house and over the years has been used as the medieval market hall, the Swan Inn public house and since the 19th century a bakery.
The building was damaged by a fire in 1998 and has been painstakingly restored using the original methods and materials. It was decided that as a part of the restoration the building would be returned as near as possible, to the way it looked during the medieval period. Using traditional techniques the timber frame was rebuilt incorporating as much of the original timbers as possible. Where there was fire damaged or rotten wood, new green oak timbers have been used to replace them.
The property was first recorded on 8th March 1574 as "a shop in the market place with land" owned by Richard Welkes who had bought it from John Cocar. By the 2nd August 1619 it had been inherited by John Welkes, and was then described as: “The Swan” with an orchard. The list of publicans in Prittlewell states Mr Littlebury held the Swan in 1702, with an orchard at the side, later 3 cottages were built in the orchard which became our original offices. By 1841 it was a bakery owned by Samuel Tabor and William Rankin, they also acquired the windmill that stood at the back in Roots Hall Avenue. Today fully restored Swan Hall is a piece of living history and Tudor Estates are keen for it to be seen by the wider community we would like to hear from any local charity, groups or schools, interested in visiting.
Wednesday 4 November 2009
Should I sell at auction ?
That rather depends on what you are selling. For instance, the auction system of competitive face-to-face bidding can often be used to advantage in the case of unusual or “non-standard” properties, where their very uniqueness makes it much more difficult to arrive at an accurate market valuation in the usual way.
Since completion normally follows in 20 working days, auctions are also particularly suitable where a quick sale is required. May be because you are moving abroad, face repossession, or are committed to using the monies elsewhere.
What a roomful of canny investors and assorted bargain-hunters probably will not get you, however, is the best possible price for your typical, well-maintained three-bed semi. After all, that’s not what they’re there for.
If you genuinely want to look at the auction option, then ask the advice of a reputable agent who specialises in auctions. If they feel you would be better off going down the traditional route, then they will tell you – after all, it certainly is not in their professional interest to be left with a lot of unsold properties which failed to reach their reserve price.
Generally, guide prices are set at about 20 / 25 % below the open market value to attract the right buyers to the room. Then the competitive bidding process takes over and very often properties sell significantly higher than their reserves.
Both sellers and buyers will incur fees and a 10 % deposit is payable on the day, for those that are successfully bidders
To re cap, auctions can provide a fast, certain and exciting way to sell for the right type of residential and commercial properties but as always seek professional advice before committing.
For further information go to www.trustintudor.co.uk
Tuesday 3 November 2009
Am I legally entitled to extend the lease of my flat – and if so, at what point would it be most beneficial to do so?
Under the Leasehold Reform, Housing and Urban Development Act 1993 (as subsequently amended), you are entitled to a 90-year extension on your lease – as long as you have already held it for more than 2 years. However, this comes at a price, since the legislation entitles the freeholder to a degree of monetary compensation for having to wait an extra 90 years before getting their property back.
When is the best time to apply? Basically, the sooner the better. The really critical moment is when the unexpired term falls to 80 years. At this point, as well as the afore-mentioned compensation, you also become liable to pay so-called “Marriage Value” – i.e. 50% of the increase in the flat’s market value due to the lease extension.
Needless to say, this is a highly complex and time-sensitive process, with all sorts of pitfalls along the way. For instance, formal notice must first be served under Section 42 of the Act. Get any part of this wrong, and the whole application could be thrown out – and you could find yourself paying the freeholder’s abortive costs. You would also then have to wait at least another year before being able to reapply, and a year’s delay could mean a significant increase in both compensation and Marriage Value.
So, the essential first step is to seek proper professional advice – and not from just any solicitor or surveyor, but from one that belongs to the Association of Leasehold Enfranchisement Practitioners (ALEP). They are the real specialists in this area, and will therefore be fully up to speed on all the most recent legal precedents.
Finally, is it all worthwhile? In a word, yes - particularly if you are going to be selling at some point in the future, since you will benefit from the resulting increase in your flat’s market value. If you are selling sooner rather than later, i.e. after formal notice has been served, but before the extension you are seeking has actually been granted, then you can even assign that notice to your purchaser - so you don’t have to sell at the shorter lease value.
When is the best time to apply? Basically, the sooner the better. The really critical moment is when the unexpired term falls to 80 years. At this point, as well as the afore-mentioned compensation, you also become liable to pay so-called “Marriage Value” – i.e. 50% of the increase in the flat’s market value due to the lease extension.
Needless to say, this is a highly complex and time-sensitive process, with all sorts of pitfalls along the way. For instance, formal notice must first be served under Section 42 of the Act. Get any part of this wrong, and the whole application could be thrown out – and you could find yourself paying the freeholder’s abortive costs. You would also then have to wait at least another year before being able to reapply, and a year’s delay could mean a significant increase in both compensation and Marriage Value.
So, the essential first step is to seek proper professional advice – and not from just any solicitor or surveyor, but from one that belongs to the Association of Leasehold Enfranchisement Practitioners (ALEP). They are the real specialists in this area, and will therefore be fully up to speed on all the most recent legal precedents.
Finally, is it all worthwhile? In a word, yes - particularly if you are going to be selling at some point in the future, since you will benefit from the resulting increase in your flat’s market value. If you are selling sooner rather than later, i.e. after formal notice has been served, but before the extension you are seeking has actually been granted, then you can even assign that notice to your purchaser - so you don’t have to sell at the shorter lease value.
Monday 2 November 2009
Why sell property at auction ?
It’s fast – exchange contracts on the fall of the gavel, with completion in 20 working days
It’s certain – no chains, no negotiation, no gazumping or gazundering
It’s efficient – serious buyers with cash and finance: no time wasters
It’s transparent – all interested parties have the opportunity to bid
It’s the place to sell property – residential, commercial and land. Properties that failed to sell on the open market. Properties likely to attract competition from buyers. Probate or executor sales and properties in need of modernisation or repair
It’s exciting! – go along and see for yourself. Competitive bidding in the room works to the seller’s advantage
for further information go to www.trustintudor.co.uk
It’s certain – no chains, no negotiation, no gazumping or gazundering
It’s efficient – serious buyers with cash and finance: no time wasters
It’s transparent – all interested parties have the opportunity to bid
It’s the place to sell property – residential, commercial and land. Properties that failed to sell on the open market. Properties likely to attract competition from buyers. Probate or executor sales and properties in need of modernisation or repair
It’s exciting! – go along and see for yourself. Competitive bidding in the room works to the seller’s advantage
for further information go to www.trustintudor.co.uk
Thursday 29 October 2009
What can I do to be taken seriously as a buyer ?
Here are 6 simple steps
1) Find out how much you can afford.
Visit an independent mortgage advisor and confirm how much mortgage you can afford ?
Work out how much deposit you can raise and what the costs will be including solicitor fees and stamp duty.
Remember that there will be utility bills to pay so build those into your calculations.
2) Make contact with an estate agent.
There is only so much you can do on the internet and a good agent can help you sort "The wood from the trees" and help you find you your perfect home a lot quicker.
Let them have all the information you can. What price bracket you are looking in,how much deposit you have and just as importantly what type of property you are looking for.
Make a list of how many rooms you want, the preferred areas, local amenities and anything else that is important to you.
The more you tell the agent the easier it will be for them to find the best property for you.
3) Arrange to view.
Make appointments to view your chosen properties and keep them, if you cannot make an appointment let the agent know.
Take a list of questions with you, such as, what is the area like, how is the property heated ? How much is the Council tax and what are the neighbours like ?
It is important to find out as much as possible so you can make the right decisions.
Make notes after viewing and review them later.
4) Keep in touch.
Let the agent know if your requirements change, you may decide after seeing some properties that you need an extra bedroom or a bigger kitchen.
Your agent may have a more suitable property but not shown you it yet, as they think it is not what you want.
5) Sell your property first.
The best way to cut out disappointment is to place your property on the market and get interest before you find the home of your dreams.
6) Make an offer.
When you have found the property you want make a formal offer through the agent.
Let them know how much deposit you have and the details of your mortgage.
Before you offer make sure you have carefully considered everything, does it meet all your criteria ?
Is it large enough for you now and in the future, is it in the right location ?
If you want to be considered as a serious buyer, the last thing you want to be doing, is making offers and then withdrawing them because you have changed your mind.
When the offer is excepted you will need to chose and instruct a solicitor to deal with the transaction.
Good luck with your house hunting, if you have any other questions please ask
1) Find out how much you can afford.
Visit an independent mortgage advisor and confirm how much mortgage you can afford ?
Work out how much deposit you can raise and what the costs will be including solicitor fees and stamp duty.
Remember that there will be utility bills to pay so build those into your calculations.
2) Make contact with an estate agent.
There is only so much you can do on the internet and a good agent can help you sort "The wood from the trees" and help you find you your perfect home a lot quicker.
Let them have all the information you can. What price bracket you are looking in,how much deposit you have and just as importantly what type of property you are looking for.
Make a list of how many rooms you want, the preferred areas, local amenities and anything else that is important to you.
The more you tell the agent the easier it will be for them to find the best property for you.
3) Arrange to view.
Make appointments to view your chosen properties and keep them, if you cannot make an appointment let the agent know.
Take a list of questions with you, such as, what is the area like, how is the property heated ? How much is the Council tax and what are the neighbours like ?
It is important to find out as much as possible so you can make the right decisions.
Make notes after viewing and review them later.
4) Keep in touch.
Let the agent know if your requirements change, you may decide after seeing some properties that you need an extra bedroom or a bigger kitchen.
Your agent may have a more suitable property but not shown you it yet, as they think it is not what you want.
5) Sell your property first.
The best way to cut out disappointment is to place your property on the market and get interest before you find the home of your dreams.
6) Make an offer.
When you have found the property you want make a formal offer through the agent.
Let them know how much deposit you have and the details of your mortgage.
Before you offer make sure you have carefully considered everything, does it meet all your criteria ?
Is it large enough for you now and in the future, is it in the right location ?
If you want to be considered as a serious buyer, the last thing you want to be doing, is making offers and then withdrawing them because you have changed your mind.
When the offer is excepted you will need to chose and instruct a solicitor to deal with the transaction.
Good luck with your house hunting, if you have any other questions please ask
Tuesday 27 October 2009
Out all day Wednesday 28th see another answer Thursday. What is the best way to sell in the current market?
If you are going to sell in the current market, it is so important to have the right approach, so you can maximise the amount of interest from the very best purchasers.
There is no such thing as one size fits all. Most people put their property on the market, leave it and hope for the best.
You need to find an agent that will take a far more individual, innovative and proactive approach.
Here are some of the ways we help our clients move in any market.
Offers in excess
Is one of the best ways of obtaining the maximum amount of interest in your property.
It encourages the best place purchasers to view your home and quite often achieves more than one offer.
Which results in potential purchasers out bidding each other.
Part exchange
Any well connected agent will have a system to identify potential home swaps, such as a retired couple wanting to down size,with a young family looking to expand.
Often it can be easier to exchange properties rather than a normal sale and purchase.
Auction
Offers speed, simplicity and certainty.
If you require an exchange of contracts and completion 20 working days later
because your are going abroad or moving to start a new career.
Then auction may be the solution, providing you are able to agree to a realistic reserve,typically 15/20 % below the market value.
Remember a purchaser is legally bound to complete once the gavel has gone down.
Open house
Can produce an added excitement amongst potential purchasers as they all veiw on a given day within a limited 1/2 hour period.
This also avoids the hassle of having to keep the property tidy and arranging individual appointments.
Renting
Is an alternative solution to consider.
Rent your property and rent somewhere you want to move to.
It may be a compromise but it allows you to get the full value of your home when the market is more favourable.
Make your agent be creative in moving you.
There is no such thing as one size fits all. Most people put their property on the market, leave it and hope for the best.
You need to find an agent that will take a far more individual, innovative and proactive approach.
Here are some of the ways we help our clients move in any market.
Offers in excess
Is one of the best ways of obtaining the maximum amount of interest in your property.
It encourages the best place purchasers to view your home and quite often achieves more than one offer.
Which results in potential purchasers out bidding each other.
Part exchange
Any well connected agent will have a system to identify potential home swaps, such as a retired couple wanting to down size,with a young family looking to expand.
Often it can be easier to exchange properties rather than a normal sale and purchase.
Auction
Offers speed, simplicity and certainty.
If you require an exchange of contracts and completion 20 working days later
because your are going abroad or moving to start a new career.
Then auction may be the solution, providing you are able to agree to a realistic reserve,typically 15/20 % below the market value.
Remember a purchaser is legally bound to complete once the gavel has gone down.
Open house
Can produce an added excitement amongst potential purchasers as they all veiw on a given day within a limited 1/2 hour period.
This also avoids the hassle of having to keep the property tidy and arranging individual appointments.
Renting
Is an alternative solution to consider.
Rent your property and rent somewhere you want to move to.
It may be a compromise but it allows you to get the full value of your home when the market is more favourable.
Make your agent be creative in moving you.
Monday 26 October 2009
I am looking at buy to let. What advice can you give me?
There are lots of things to consider if you are thinking of becoming a landlord. Here are my top tips :
1) Before making an offer, you need to have an accurate idea of the rental value and the work you need to do to maximise your rent. Then you can make a well informed offer, a common mistake first time landlords make is to offer before they have all the relevant information.This means they often come unstuck, end up re offering and as a result lose credibility.
2) Never rent to relatives, friends or work colleagues,without a written contract, proper referencing and a deposit.It sounds harsh but I hear of more tenancy's going wrong when relatives are involved than any other.
3) If you considering buying more than one property it is important to have a balanced portfolio between house, flats and also areas. This is because different types of properties rent well at different times. So you do not want to be exposed to the market with all your eggs in one basket.
4) Be careful what repairs you carry out, for instance a tenant will not want to replace a broken pane of glass and it could put them off renting.If you are replacing a kitchen make sure the draws have metal runners.
1) Before making an offer, you need to have an accurate idea of the rental value and the work you need to do to maximise your rent. Then you can make a well informed offer, a common mistake first time landlords make is to offer before they have all the relevant information.This means they often come unstuck, end up re offering and as a result lose credibility.
2) Never rent to relatives, friends or work colleagues,without a written contract, proper referencing and a deposit.It sounds harsh but I hear of more tenancy's going wrong when relatives are involved than any other.
3) If you considering buying more than one property it is important to have a balanced portfolio between house, flats and also areas. This is because different types of properties rent well at different times. So you do not want to be exposed to the market with all your eggs in one basket.
4) Be careful what repairs you carry out, for instance a tenant will not want to replace a broken pane of glass and it could put them off renting.If you are replacing a kitchen make sure the draws have metal runners.
Thursday 22 October 2009
I have only been on the market a couple of days, I’ve had one viewing and they have made an offer. Does this mean my property was undervalued?
I can understand why you might think so. In fact, you probably won’t be surprised to learn that this is one of the commonest issues that people raise. Which is interesting, when you think about it. After all, if something is offered for sale – particularly given the current state of things - and it’s snapped up straight away, then it would normally be reasonable to assume that the seller would be absolutely delighted! But instead – this being the property market, and human nature being what it is - it’s immediately tempting to believe that we could all have got a higher price.
And of course, that may be true, even with the way the market is at the moment - although to be frank it’s pretty unlikely. But in any case, that does not necessarily mean that your agent has somehow been at fault. After all, the whole point of pitching the asking price at a particular level is to attract buyers - not drive them away! Besides, it is generally accepted that most properties attract the maximum amount of buyer interest during their first 2 weeks on the market. Finally, let’s not lose sight of the fact that you are under no obligation whatsoever to accept this - or any other - offer.
Taking all this into consideration, I would suggest that your agent has actually done a pretty good job – not only with the valuation, but by skillfully filtering your potential buyer from his or her existing mailing list, and knowing that they were looking for a property like yours.
The real key question here is, how close is the offer to your asking price? Use the fact that this is the first viewing to play hard ball. Perhaps ask your agent to negotiate and/or clarify the buyer’s bona fides. And don't agree to take your home off the market immediately. You don’t have to do so, as long as you make your intentions clear, and it’s always possible that this buyer may disappear back into the woodwork just as quickly as he or she popped out. But at the same time, be careful – you don’t want to drive this buyer away, because in the current climate they might just be the only one you get.
And of course, that may be true, even with the way the market is at the moment - although to be frank it’s pretty unlikely. But in any case, that does not necessarily mean that your agent has somehow been at fault. After all, the whole point of pitching the asking price at a particular level is to attract buyers - not drive them away! Besides, it is generally accepted that most properties attract the maximum amount of buyer interest during their first 2 weeks on the market. Finally, let’s not lose sight of the fact that you are under no obligation whatsoever to accept this - or any other - offer.
Taking all this into consideration, I would suggest that your agent has actually done a pretty good job – not only with the valuation, but by skillfully filtering your potential buyer from his or her existing mailing list, and knowing that they were looking for a property like yours.
The real key question here is, how close is the offer to your asking price? Use the fact that this is the first viewing to play hard ball. Perhaps ask your agent to negotiate and/or clarify the buyer’s bona fides. And don't agree to take your home off the market immediately. You don’t have to do so, as long as you make your intentions clear, and it’s always possible that this buyer may disappear back into the woodwork just as quickly as he or she popped out. But at the same time, be careful – you don’t want to drive this buyer away, because in the current climate they might just be the only one you get.
Wednesday 21 October 2009
My alleged cash buyer actually has a property to sell. How can this sort of thing happen, and what can I do?
Actually you’d be surprised just how easily this sort of thing can happen - and how frequently.
The simple fact is that people often describe themselves as cash buyers when in reality they aren’t. Sometimes, particularly in a raging bull market (remember them?), this may be a deliberate ploy to try and hoodwink the seller into accepting a particular offer. More often, however, it’s a simple matter of ignorance. So, for example, some people will claim to be cash buyers when what they really mean is that they won’t need to borrow any additional money to fund the purchase - once they have sold their existing property! Others may indeed have the cash – but it may be tied up in savings accounts that require anything up to 6 months’ notice or more before it can be accessed. The same often goes for people who claim to have sufficient funds to put down a large deposit.
The simple fact is that a genuine, non-dependent cash buyer is just that: someone with sufficient funds ready and waiting to make the purchase - without having to sell anything else first. If the money is held in an account that requires an extended period of notice before it can be released, then this notice needs to be given straight away – and you will have to decide for yourself whether you are willing to wait for that length of time.
Of course, establishing the true financial position of would-be buyers is an integral part of the agent’s role. Any reputable, professional agent worth his or her salt would have asked all the right questions at the outset.
The fact that this has happened to you therefore suggests to me either that your agent didn’t do a very thorough job, or that you tried to sell your property yourself, without using an agent at all. Either way, of course, you’re perfectly at liberty to cancel your acceptance of this person’s offer and put your home back on the market again. Nevertheless, with serious buyers currently about as rare as hens’ teeth, I would think twice before doing so.
The simple fact is that people often describe themselves as cash buyers when in reality they aren’t. Sometimes, particularly in a raging bull market (remember them?), this may be a deliberate ploy to try and hoodwink the seller into accepting a particular offer. More often, however, it’s a simple matter of ignorance. So, for example, some people will claim to be cash buyers when what they really mean is that they won’t need to borrow any additional money to fund the purchase - once they have sold their existing property! Others may indeed have the cash – but it may be tied up in savings accounts that require anything up to 6 months’ notice or more before it can be accessed. The same often goes for people who claim to have sufficient funds to put down a large deposit.
The simple fact is that a genuine, non-dependent cash buyer is just that: someone with sufficient funds ready and waiting to make the purchase - without having to sell anything else first. If the money is held in an account that requires an extended period of notice before it can be released, then this notice needs to be given straight away – and you will have to decide for yourself whether you are willing to wait for that length of time.
Of course, establishing the true financial position of would-be buyers is an integral part of the agent’s role. Any reputable, professional agent worth his or her salt would have asked all the right questions at the outset.
The fact that this has happened to you therefore suggests to me either that your agent didn’t do a very thorough job, or that you tried to sell your property yourself, without using an agent at all. Either way, of course, you’re perfectly at liberty to cancel your acceptance of this person’s offer and put your home back on the market again. Nevertheless, with serious buyers currently about as rare as hens’ teeth, I would think twice before doing so.
Tuesday 20 October 2009
Accompanied viewing; why have a dog and bark yourself?
Many clients put their properties on the market with an agent and then insist on showing perspective purchasers around themselves.
Some customers tell me it s because their agent refuses to do them, my advice to anyone in that situation is, change your agent fast.
Showing someone a property with a view to selling it is a skill your chosen agent should possess.
A good agent does this sort of thing all the time; they should have the necessary experience to present the property in the best way.
Agents also enjoy a degree of professional detachment and objectivity, which purchasers not only respect but feel more comfortable with.
When the owner is there people often feel uncomfortable to ask questions, have a really good look around or pass comment, in case they offend them.
Remember they have come to see your house not meet you.
If you feel there are particular points about the property that would appeal to a buyer, then you should make your agent aware of them. It is also common sense to make sure all valuables are put out of sight and the house is tidy.
Then you should leave every thing to the agent do not hover around in the background take yourself out and if you have children or pets take them with you.
Some customers tell me it s because their agent refuses to do them, my advice to anyone in that situation is, change your agent fast.
Showing someone a property with a view to selling it is a skill your chosen agent should possess.
A good agent does this sort of thing all the time; they should have the necessary experience to present the property in the best way.
Agents also enjoy a degree of professional detachment and objectivity, which purchasers not only respect but feel more comfortable with.
When the owner is there people often feel uncomfortable to ask questions, have a really good look around or pass comment, in case they offend them.
Remember they have come to see your house not meet you.
If you feel there are particular points about the property that would appeal to a buyer, then you should make your agent aware of them. It is also common sense to make sure all valuables are put out of sight and the house is tidy.
Then you should leave every thing to the agent do not hover around in the background take yourself out and if you have children or pets take them with you.
Monday 19 October 2009
What are the dangers of over valuing your property for sale?
Some agents are currently over valuing properties by as much as £20,000 to £30,000 in my area. They are doing this because they are desperate to get properties on the market.
The problem is, it unrealistically raises the seller’s expectations of what price they may achieve. Which means the client might start looking for properties in the wrong price bracket or worse still lose the property they have set their heart on.
Also this approach can be very frustrating, as the best placed purchasers will not be interested in viewing the property. This is because most buyers become expert in the price range they are looking to buy in, so an over priced property stands out like a sore thumb to them.
Another problem is, the only way interest is going to be created is by reducing the price. This disappoints the seller and does not look good to the buying public, especially if it is done too many times.
So how can you avoid falling into this trap? Firstly only use an agent that backs up their valuations with comparable sales data, so they prove to you what is selling, at what price and what has happened to the market since that sale. Secondly try a sales technique we have used for years,“Offers in excess “this works well and often achieves a higher sale price.
It also shows the best price achievable in any market.
It is always tempting to place your property on the market at a high price and see what happens but the agent that does that is doing you no favours.
The problem is, it unrealistically raises the seller’s expectations of what price they may achieve. Which means the client might start looking for properties in the wrong price bracket or worse still lose the property they have set their heart on.
Also this approach can be very frustrating, as the best placed purchasers will not be interested in viewing the property. This is because most buyers become expert in the price range they are looking to buy in, so an over priced property stands out like a sore thumb to them.
Another problem is, the only way interest is going to be created is by reducing the price. This disappoints the seller and does not look good to the buying public, especially if it is done too many times.
So how can you avoid falling into this trap? Firstly only use an agent that backs up their valuations with comparable sales data, so they prove to you what is selling, at what price and what has happened to the market since that sale. Secondly try a sales technique we have used for years,“Offers in excess “this works well and often achieves a higher sale price.
It also shows the best price achievable in any market.
It is always tempting to place your property on the market at a high price and see what happens but the agent that does that is doing you no favours.
Friday 16 October 2009
I was surprised to learn that there seems to be quite a discrepancy between the market and insured value of my home. Why is this ?
The market value of a property, and the value that is put on it for insurance purposes, are two very different things. Market value obviously reflects the price someone is prepared to pay for your home, while insured value is based on a calculation of what it would actually cost to rebuild it to the same specification in the event of something like a major fire. Even in the current market, the former is almost always higher – primarily because the insured value doesn’t take into account the value of the land on which a property sits. Consequently, this discrepancy shouldn’t really be a concern.
Whether or not the insured value is actually correct is another matter altogether, however. Generally speaking, insurance companies increase their valuations annually in line with inflation – but that won’t necessarily reflect the true cost of labour and materials at any given time. Besides, they may have got their sums wrong in the first place. Then again, you may have significantly extended or improved your home over the years, and unless you make a point of telling your insurers, they won’t have taken that into account.
As a general rule, I would advise you to check the insured value yourself every 2-3 years. Do this by multiplying the total area of your home in square feet or metres (frontage x depth if it’s a flat or bungalow, or frontage x depth x the number of floors if it’s a house) by the appropriate rebuilding cost per square foot or square metre. These costs are published by the Royal Institute of Chartered Surveyors, and should be available from any qualified surveyor. They will tend to vary, depending on things like the age of the property or whether it is detached, semi or terraced.
Once you’ve done your calculations, compare the result with the insurer’s valuation, and if you’re not happy, ask them to make the necessary adjustment. It might mean you pay a slightly higher premium, but it’s a small price to pay for peace of mind.
Whether or not the insured value is actually correct is another matter altogether, however. Generally speaking, insurance companies increase their valuations annually in line with inflation – but that won’t necessarily reflect the true cost of labour and materials at any given time. Besides, they may have got their sums wrong in the first place. Then again, you may have significantly extended or improved your home over the years, and unless you make a point of telling your insurers, they won’t have taken that into account.
As a general rule, I would advise you to check the insured value yourself every 2-3 years. Do this by multiplying the total area of your home in square feet or metres (frontage x depth if it’s a flat or bungalow, or frontage x depth x the number of floors if it’s a house) by the appropriate rebuilding cost per square foot or square metre. These costs are published by the Royal Institute of Chartered Surveyors, and should be available from any qualified surveyor. They will tend to vary, depending on things like the age of the property or whether it is detached, semi or terraced.
Once you’ve done your calculations, compare the result with the insurer’s valuation, and if you’re not happy, ask them to make the necessary adjustment. It might mean you pay a slightly higher premium, but it’s a small price to pay for peace of mind.
Thursday 15 October 2009
When will lenders start lending more?
One of the main problems with the property market still, is the availability of mortgages for well positioned purchasers. Despite all the quantitative easing by the government, banks and building societies are still reluctant to lend.
If first time buyers with sensible deposits of 5% or 10% and 3 times income, could more readily obtain funding, on sensible terms the property market would come back to life in an orderly way.
This would encourage more homeowners to place their properties on the market, so the supply and demand balance would be restored.
When is this likely to happen,?
One clue is in interest rates. No not the rate mortgages are offered at but the relationship between the Bank of England base rate and the LIBOR rate ( London inter bank offer rate ) The more these two rates move apart the less likely lenders are to have the funds to lend those realistic mortgages. This is because it is costing them more to borrow the money on the wholesale market, so they have to find ways of making profits from expensive funds.
Once banks start trusting each other again, so the strong banks with funds start lending to the others, money will start to flow again.
This confidence between the banks is reflected in base and LIBOR rates moving closer. So a simple way to monitor potential property market activity is to track these two rates.
As they converge you will see more sensible mortgages being offered to well placed first time buyers something that needs to happen to enable the buying and selling process to start .
While they remain further apart and if you have funds available now is a good time to invest in property.
I must stress this is just one factor to take into account and others need to be weighed up when considering purchasing.
If you have a question on property buying in this market please feel free to contact me by posting a comment.
If first time buyers with sensible deposits of 5% or 10% and 3 times income, could more readily obtain funding, on sensible terms the property market would come back to life in an orderly way.
This would encourage more homeowners to place their properties on the market, so the supply and demand balance would be restored.
When is this likely to happen,?
One clue is in interest rates. No not the rate mortgages are offered at but the relationship between the Bank of England base rate and the LIBOR rate ( London inter bank offer rate ) The more these two rates move apart the less likely lenders are to have the funds to lend those realistic mortgages. This is because it is costing them more to borrow the money on the wholesale market, so they have to find ways of making profits from expensive funds.
Once banks start trusting each other again, so the strong banks with funds start lending to the others, money will start to flow again.
This confidence between the banks is reflected in base and LIBOR rates moving closer. So a simple way to monitor potential property market activity is to track these two rates.
As they converge you will see more sensible mortgages being offered to well placed first time buyers something that needs to happen to enable the buying and selling process to start .
While they remain further apart and if you have funds available now is a good time to invest in property.
I must stress this is just one factor to take into account and others need to be weighed up when considering purchasing.
If you have a question on property buying in this market please feel free to contact me by posting a comment.
Is selling at auction a realistic option?
That rather depends on what you are selling. For instance, the auction system of competitive face-to-face bidding can often be used to advantage in the case of unusual or “non-standard” properties, where their very uniqueness makes it much more difficult to arrive at an accurate market valuation in the usual way.
Since completion normally follows in 20 working days, auctions are also particularly suitable where a quick sale is required. May be because you are moving abroad, face repossession, or are committed to using the monies elsewhere.
What a roomful of canny investors and assorted bargain-hunters probably will not get you, however, is the best possible price for your typical, well-maintained three-bed semi. After all, that’s not what they’re there for.
If you genuinely want to look at the auction option, then ask the advice of a reputable agent who specialises in auctions. If they feel you would be better off going down the traditional route, then they will tell you – after all, it certainly is not in their professional interest to be left with a lot of unsold properties which failed to reach their reserve price.
Generally, guide prices are set at about 20 / 25 % below the open market value to attract the right buyers to the room. Then the competitive bidding process takes over and very often properties sell significantly higher than their reserves.
Both sellers and buyers will incur fees and a 10 % deposit is payable on the day, for those that are successfully bidders
To re cap, auctions can provide a fast, certain and exciting way to sell for the right type of residential and commercial properties but as always seek professional advice before committing.
Wednesday 14 October 2009
What’s the difference between a valuation, a HomeBuyer’s Report, a Home Condition Report, and a full structural survey?
First, let’s deal with the Home Condition Report, or HCR, which is fundamentally different from the others in as much as it is commissioned and paid for by the seller. The HCR was originally intended to be one of the cornerstones of the new Home Information Pack, but was eventually dropped – or made optional, which amounts to the same thing. In practice, you are highly unlikely to encounter one. The Government still says that it may reintroduce a compulsory HCR if circumstances favour it, but no-one is holding their breath.
As for the other three…all lenders require a basic valuation to help them determine whether a property is actually worth the money you have agreed to fork out for it. They commission it, but you pay for it – unless they offer to waive the fee as part of their mortgage offer.
The Homebuyer’s Report is an intermediate-level survey. Concise and easy to read, it is designed to highlight any urgent repairs that may be required, and any other areas of immediate concern.
Top of the range is the Full Structural Survey – otherwise known as the Building Survey. This combines a comprehensive technical assessment of the property’s current condition with detailed guidance on any repairs required and future maintenance.
Costs vary, but the basic building society valuation is naturally the cheapest. Not surprisingly, therefore - even though it is done for the lender’s benefit, and its prime purpose is merely to establish that the property in question represents sufficient collateral for the loan - the majority of buyers tend to rely on this.
But is this really advisable? After all, buying a home represents the single biggest investment most of us ever make.
I firmly believe it is common sense to spend a bit more in order to be better informed before we commit ourselves to such a momentous decision. In all but the most exceptional cases, a Homebuyer’s Report should be perfectly adequate. 'This can often be done by the lender’s surveyor at the same time as he or she performs the valuation, so it needn’t involve any more hassle for you - although of course, you can always commission a survey independently.
As for the other three…all lenders require a basic valuation to help them determine whether a property is actually worth the money you have agreed to fork out for it. They commission it, but you pay for it – unless they offer to waive the fee as part of their mortgage offer.
The Homebuyer’s Report is an intermediate-level survey. Concise and easy to read, it is designed to highlight any urgent repairs that may be required, and any other areas of immediate concern.
Top of the range is the Full Structural Survey – otherwise known as the Building Survey. This combines a comprehensive technical assessment of the property’s current condition with detailed guidance on any repairs required and future maintenance.
Costs vary, but the basic building society valuation is naturally the cheapest. Not surprisingly, therefore - even though it is done for the lender’s benefit, and its prime purpose is merely to establish that the property in question represents sufficient collateral for the loan - the majority of buyers tend to rely on this.
But is this really advisable? After all, buying a home represents the single biggest investment most of us ever make.
I firmly believe it is common sense to spend a bit more in order to be better informed before we commit ourselves to such a momentous decision. In all but the most exceptional cases, a Homebuyer’s Report should be perfectly adequate. 'This can often be done by the lender’s surveyor at the same time as he or she performs the valuation, so it needn’t involve any more hassle for you - although of course, you can always commission a survey independently.
Q. I live in a semi-detached house. What rights do I have with regards to having work done on the party wall?
Strictly speaking, this is really one for a solicitor. That said, my understanding is that you basically own half the thickness of any party wall - so as far as minor, everyday things are concerned, like drilling into it to install fixings for kitchen cabinets or shelves, or even cutting into it to install electrical wiring and sockets, you are in essence free to do what you like, as long as you don’t do it in the middle of the night! That said, it is of course no more than common courtesy to let your neighbours know before you start.
Major structural work, on the other hand, is a rather different kettle of fish. This is governed by the Party Wall Act, 1996, which enshrines your right to do things like cutting into the wall to take one end of an RSJ, or slicing all the way through it in order to install a new damp course. If necessary, you can even demolish the whole thing and completely rebuild it! However…you must inform the owners of the adjoining property, in writing, not less than two months ahead of the planned start date, and they must give their written consent within 14 days of receipt.
The Act also stipulates that any work done should not cause undue inconvenience for your neighbours. In addition, it makes you legally responsible for providing suitable protection for buildings and property during the course of the work, and for compensating your neighbours in the event of any incidental damage.
In return, your neighbours are legally bound to allow free access to their property as necessary for the proper completion of the work.
Finally, while my understanding is that a neighbour can’t actually stop you from exercising your rights under the Act, failure to do things by the book could trigger a lengthy and potentially costly dispute. And disputes can happen all too easily, since all the neighbour need do to trigger one is to withhold his or her written consent. That’s why I would strongly urge you to seek proper legal advice before doing anything too drastic.
Major structural work, on the other hand, is a rather different kettle of fish. This is governed by the Party Wall Act, 1996, which enshrines your right to do things like cutting into the wall to take one end of an RSJ, or slicing all the way through it in order to install a new damp course. If necessary, you can even demolish the whole thing and completely rebuild it! However…you must inform the owners of the adjoining property, in writing, not less than two months ahead of the planned start date, and they must give their written consent within 14 days of receipt.
The Act also stipulates that any work done should not cause undue inconvenience for your neighbours. In addition, it makes you legally responsible for providing suitable protection for buildings and property during the course of the work, and for compensating your neighbours in the event of any incidental damage.
In return, your neighbours are legally bound to allow free access to their property as necessary for the proper completion of the work.
Finally, while my understanding is that a neighbour can’t actually stop you from exercising your rights under the Act, failure to do things by the book could trigger a lengthy and potentially costly dispute. And disputes can happen all too easily, since all the neighbour need do to trigger one is to withhold his or her written consent. That’s why I would strongly urge you to seek proper legal advice before doing anything too drastic.
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