Southend property market up date June 2010

Sales
The month of May saw record numbers of homes sold and new properties coming to the market in the Southend area and across Essex. At Tudor we saw significant rises in the level of activity; this was also seen by other agents in the wider area.
The Nationwide survey showed that house prices increased by 0.5 per cent during May. The rise may be due in part to the "honeymoon period" following the election of a new government as consumers begin to embrace a more stable economy. Plus the removal of HIPs has been a positive move in encouraging people to place their properties on the market
However prices are unlikely to keep rising as fast and at Tudor we expect them to even out over the coming year.
The Nationwide report also noted that the annual rate of house price inflation was 9.8 per cent. The report shows that the typical value of a dwelling stood at £169,162 last month, which was up from the £167,802 registered in April.
It is interesting to see following a drop of 19.3 per cent from their October 2007 peak, house prices have risen by 12.2 per cent and are now just 9.5 per cent below the October 2007 high.
Meanwhile, the Land Registry figures confirm that the average value of homes in England and Wales in March was up 9.7 per cent compared with the same period last year.
The new coalition government has also given positive endorsement of the housing market. Aspiration to home ownership will be encouraged, says housing minister Grant Shapps. In his first speech as housing minister, he said that “The age of aspiration was back,” and he underlined the importance of first-time buyers to the market .He said “It was not right to deny a new generation something his own generation had enjoyed, the chance of home ownership.”
Shapps went on to say, ”There are an estimated 1.4m households who aspire to own a home but are unable to do so because of house prices and mortgage availability. There are hundreds of thousands of people in rented accommodation, or living with parents, who yearn to be first-time buyers. It is now true that the average age of the first-time buyer is 37. He said “The new Government would promote shared ownership schemes, and wanted to see more house building.” The government will give planning powers to local people. “We understand that the transition to a more open, transparent and democratic planning system is not entirely anxiety-free for many involved. But we know that there is no future in this centrally planned system which has so dramatically failed, delivering fewer homes now than during any peacetime year since 1924.”
At Tudor we believe the local housing market will remain strong in the medium to long term due to the continued investment in the areas infrastructure and the lack of land to build new homes for the increasing demand.
Rental
Certainly the demand for well priced and presented properties remains as strong as ever.
However, with the government’s announcement over possible changes in capital gains tax some landlords have taken the decision to bring forward the sale of their rental portfolio’s and avoid the risk in paying higher tax. This has been very limited in our experience and the majority of our investment clients are looking to expand their rental portfolios.
One note of caution should be sounded, a recent survey of 500 private landlords has shown that rental arrears have reached their highest level since the research began in 2006.The survey, by market research agency BDRC Continental, found that in the last 12 months, 34% of landlords have had tenants who fell into rental arrears. This shows the importance of dealing promptly and effectively with a potential problems and the need for experience in handling rent arrears. At Tudor we are happy to report that the small amounts of tenant arrears have not increased.
Auctions
Our auction in May proved very successful with all our available lots selling, maintaining our 100% sales record. More importantly for our vendors the prices obtained were either very close to or in excess of the estimated open market value. This confirms that our approach that realistic guide prices and reserves deliver the right investors to the auction sale. This in turn produces excellent results for anyone wanting to sell rental portfolios, land, commercial investments or freeholds.

Mortgage Market Update by Kit Thompson, Director, Amber Mortgage Solutions
There is some positive news so far this month, with a number of lenders reducing the cost of mortgage funding on fixed rate products, including Nationwide, Abbey, Alliance and Leicester. Nationwide has also shaved up to 96 basis points of some of their fixed rate products.
Platform are set to launch a new "couples" mortgage for joint borrowers, with preferential rates and income multiples, on the basis of joint mortgages historically performing better than single mortgages. Rates to be announced tomorrow, but are expected to be as low as 3.19% fixed, at 70% LTV.
In the secured loan market, NEMO have re launched second charge lending up to 85% LTV, an extremely positive sign that they believe property values can only be on the up. Coupled with this, they will now lend to self-employed up to 75% LTV (they formerly only considered employed applicants) and they also lowered the credit score on their 80% products, to allow more cases through.
The Mortgage Works (specialist intermediary lender of Nationwide) has also launched a new 'prime' mortgage range, available exclusively via mortgage brokers. TMW’s new prime range includes free valuation on purchases, capped trackers, early repayment charge free trackers, a range of cash-back
options and a lifetime variable rate product. Other highlights to the range include a two year early redemption charge free tracker from 2.99% up to 75% LTV, and a range of two, three, four, five and seven-year fixed rate mortgages from 2.59%.