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Rebound and Domestic Fears Sees Investors Turn to French Properties

[ Posted June 5th, 2010 ]

The number of people seeking to buy properties in France has risen during the last two months, with the number of new enquiries for mortgages more than doubling during May as compared to April. Many UK investors are especially attracted to France currently due to the current weakness of the Euro, as well as the competitive mortgage rates and the willingness of French banks to offer them to  foreign investors, industry experts stated.

Athena Mortgages, a French mortgages specialist, stated that it had witnessed a dramatic increase in the number of enquiries made by investors from the UK seeking to purchase French properties, with May being the company’s busiest month for new enquiries. In fact, May turned out to be the busiest such month for Athena Mortgages compared to any month in the last year.  The start of 2010 saw increased interest being generated by UK buyers, with new enquiries from British buyers seeking to purchase properties in France rising by 72% during the first quarter of this year as compared to the final quarter of last year, according to Athena.

The opening quarter of 2010 also witnessed the highest volume of UK investor enquiries of any quarter since the final three months in 2007.

Due to the fact that property prices in France have recovered during the past year, investors are regaining their confidence with regards to coming back into the market. It appears that the new-build market is especially strong at present. For instance, prices in Paris and Marseille respectively have risen by 8% and 11% as compared to the same period in 2009.

The increase market confidence has also been reflected in the volume of enquiries received by Athena that developed all the way through to a firm mortgage offer in February and March of this year, engendering strong overseas interest in the local market.

John Busby, director of Athena Mortgages, is upbeat about the prospects for foreign investors in France.

Home Repossessions Fall

[ Posted May 30th, 2010 ]

According to the latest figures from lenders, the number of repossessed homes in the UK dropped by 7.5% during the first quarter of this year. The figures have shown that the total number of repossessed homes in the UK fell from 10,600 during the final quarter of 2009 to a figure of 9,800 in the opening quarter of this year. This figure was lower than the figure of 13,200 recorded at the same point last year, according to the CML.

The Council added that many homeowners are still vulnerable to the threat of falling into mortgage arrears, and has said that it might revise its overall forecast of 53,000 total repossessions during this year – and has described this figure as ‘pessimistic’ assuming that there are no more economic ructions.

The number of repossessed homes stood at its lowest level for two years, falling 7.5% on the previous quarter and an overall 26% lower than during the opening three months of last year.

The Council stated that the principal factor behind the falling repossession figures is the low interest  that has allowed people, even those made redundant, to avoid the threat of losing their homes as a result of low monthly mortgage bills thanks to the consistently low interest rate.

The latest figures also show that the percentage of mortgage holders experiencing difficulties in paying their mortgages also dropped during the first quarter of 2010.

The overall number of home loans standing in arrears has also dropped, although the director general of the Council of Mortgage Lenders, Michael Coogan, has insisted that the figures give no cause to relax at this stage.

Through England’s Mortgage Rescue Scheme homeowners are able to sell their properties to local authorities or housing associations and subsequently stay living in it by paying monthly rental fees, or to sell a part of the property in what is called a shared equity deal that results in lower mortgage payments. According to the CML, such government help for homeowners had worked to curtail repossessions and figures are still far lower than during the slump in the housing market during the early 1990s.

Change in property buying urged for UK market

[ Posted May 25th, 2010 ]

Consultants in the property industry have welcomed the new UK coalition government’s commitment to abolish the much-reviled home information packs (HIPs), although they also signalled that it could do a lot more besides to aid the real estate recovery. Many believe that the scrapping of HIPs merely travels half way towards bringing the more speculative sellers to the market as well as cutting down on wasted consumer spending, according to the head of residential research at Knight Frank, Liam Bailey.

Mr  Bailey pointed out that the reason for this is that a seller still requires the Energy Performance Certificate before they can put their property on the market. He added that despite the fact that the certificate is a requirement under an EU (European Union) directive, it is only required in other European Union countries when the terms for purchase are agreed and finalised.

Mr Bailey further called for changes to the directive itself, also stating that the process of getting papers and undertaking searches before the sales could also be refined and improved, especially with regards to what he described as the ’slow and cumbersome’ process of undertaking and completing local authority searches as well as confirming planning problems.

Mr Bailey stated that introducing compulsory time limits on local authorities would be a good first measure, along with the possibility of sharing best practices from excelling authorities in this area of performance. He further  suggested that the licensing of estate agents and lettings agents would aid consumer protection as well as increase general consumer confidence in the market. This should help bolster both the commercial and overseas interests as well by helping to stimulate personal financing and purchases. Many are also calling for the reform of the Stamp Duty system which has a current ’slab structure’ that results in a soaring tax bill in the event that an emptor spends just £1 in excess over the £250,000, £500,000 or , from next April, the £1 million thresholds.

UK Housing Stock Rises on Lending Stagnation

[ Posted May 20th, 2010 ]

The latest report from UK estate agents, Rightmove, has suggested a rapid rise in unsold stock within the housing market in the UK, largely due to a lack of lending which is serving to dampen down buying activity, coupled with the fact that, countrywide, house asking prices went up by just 0.7% during the course of the last month. The sudden increase of stock in London  has resulted in the fact that there are now twice the number of new properties on the market as compared to the same time last year. The report also details that asking prices dropped a little, by just 0.4%.

The largest rise in new sellers on the market was seen in the week prior to the May 6th General Election, and the increase was the largest since June 2008. There was also, however, a sudden rapid rise in unsold properties as a result of buyers getting less finance for mortgages according to Rightmove.

During the month of May, overall asking prices went up by 0.7%, as compared to 2.6% during the previous month, and represented the first price fall on the Rightmove index since December last year. The annual increase rate also fell from 6% to 4.3 % leading analysts to speculate that the UK real estate market is beginning to slow after consecutive months of price rises. The sudden surge in new sellers coming onto the market coupled with a crippling of demand as a result of the dearth of mortgage finance coupled with the slump in first-time buyer financing and even re-mortgage approvals has seen estate agents being lumbered with a larger number of unsold properties.

According to Miles Shipside, commercial director at Rightmove, first-time house buyers, as well as property investors have suffered in particular in regards to the perceived “famine” of financing now on the market, with sellers beginning to lower prices in order to attract lower-end buyers yet these lower-end buyers still being unable to afford many of the homes. He added that possible buyers were placed in an invidious situation as a result of lenders insisting on large deposits as well as high levels of ‘credit worthiness’.

Mr Shipside believes that the UK housing market must either work on reduced sales volumes or place faith in the possibility that sellers can sell to each other, a likely solution to an already difficult situation.

Repossession from a Postive Outlook

[ Posted August 21st, 2009 ]

A Positive Outlook on the Current Status of UK Repossessions

I am sure you are wondering what is there that is truly good to say when it comes to repossessions.  The good news is that the number of repossessions occurring across the UK is on a downhill slide.  The number of people who are currently under extreme financial stress and facing repossession of homes and/or businesses is gradually decreasing.

The current drop cannot be considered a permanent trend, but at least offers a breathe of fresh air not only for lenders but also for many individuals whose investments were on shaky ground.  The primary key to saving many of these distressed properties are the in truth the low interest rates that have emerged as the best rates in quite sometime.  This has allowed struggling individuals and business to have a little extra breathing room when it comes time to make those monthly mortgage payments.  With the overall amount of debt across the country in a state of reduction, the outlook for those who were fighting to survive is finally headed back towards to the direction of self sustaining and healthy. 

While these improvements have thus far been short term, the hopes for continued forward movement are strong.  With many factors possibly contributing to this upward trend of improvement such as season factors, current interest rates, and slight rise in employment, it is important that those in distress take advantage of this dry time just in case another storm blows in disrupting the postive movement.  Buckle those seat belts and enjoy the ride while the opportunity is there.

CML Happy With Arrears Stance

[ Posted August 12th, 2009 ]



In response to the Treasury Committee’s finding, the Council of Mortgage Lenders (CML) is happy to see that lenders are being pro-active when their borrowers hit difficulties with their mortgage handling.

According to their study, there are many lenders who are helping borrowers to keep their homes when they are facing temporary difficulties.

When it comes to fees, the CML agrees with the FSA (Financial Services Authority) of England that it should reflect actual work being done and that the fees and charges should not be for the pure profit motive.

While they may not be appropriate for everyone, there are mortgage rescue and homeowner support schemes that were developed by the Government, which could be used by those borrowers who are currently in arrears. They do suggest that lenders and borrowers should be in communication with each other to figure out the best way to resolve the problem.

Regarding the stance that the CML has on the lending industry, the CML head of policy, Jackie Bennett, had to say, “The industry is fully engaged to help its customers through the recession where they have a good prospect of being able to get back on track and sustain their home-ownership in the long term. Repossession remains a last resort.”

She continued, “Lenders have worked hard to ensure that treating customers fairly is at the center of their arrears management. This doesn’t necessarily mean that consumers won’t be charged, but it does mean that the charges will be a reasonable reflection of costs and that they will be applied in ways designed not to exacerbate the borrower’s financial problems.”

She finally said, “We will be publishing our arrears and possessions figures soon. These are likely to demonstrate further that lenders remain committed to helping borrowers who fall into difficulty, where those borrowers are talking to their lenders and committed to helping themselves.”


PropertyEarth Says To Put Cash In Real Estate

[ Posted July 27th, 2009 ]




Over a third (35%) of finance professionals would have the temptation to invest a redundancy payout in a buy to let property, this according to new research from PropertyEarth.net, the chain free property portal.

According to the research, around 30% of finance professionals would use a redundancy payout to cover everyday living costs. Property is the preferred outlet for those looking to invest their lump sum of the money that they have. This would be followed by a savings account (14.6%), gold (10.7%), FTSE 100 stock market shares (7.8%) and oil (1.5%).

The average severance package received by banking, finance and insurance professionals on redundancy is £21,300. This would be enough to cover the cost of a 25% deposit on a chain free one-bedroom flat listed on PropertyEarth.net. The cost of the flat would be on average £84,208.

The average PropertyEarth.net net rental yield at 6.59%. With that in mind, an investor could generate a rental return of £14,037 over ten years after costs. This would not take into account potential capital growth. In comparison, the 14.6% who would prefer to invest their lump sum in a savings account won’t account for the same payout.

The research also revealed that prospective investors are generally in it for the long haul. Almost 72% considering property as a long term investment. This is quite a bit difference in thinking from the pre-recession ‘get rich quick’ property investment mentality.

Dominic Toller, Managing Director, commented: “This research shows that property is still viewed as a strong long term investment, despite the recent volatility. Savvy finance professionals are taking a long term view and are attracted by the returns currently offered by the buy to let market, due to the low prices and high yields of chain-free property in particular.”

Lots of advice for buying homes at auction

[ Posted June 16th, 2009 ]

With the huge rise in repossessed properties, banks and building societies have loads of properties on their books to try and get rid off at bargain prices.

Arranging the finance is the same as for any other house purchase, except for the timescales involved in buying are often much quicker, so you should look for the best rate mortgage deal and have the finance lined up well in advance of your bid.

With the Council of Mortgage Lenders predicting 75,000 repossessions for the years, that means lenders are sending properties to estate agents and auctions at a rate of more than 1400 a week.

The best properties tend to go to estate agents to try and get a higher price while the less desirable properties go to auction.

For home buyers with no experience of buying at auction, here’s some tips to bear in mind:

1) Do your research before the auction sale day – visit the property and if necessary have a surveyor or trusted builder take a good look as well so you are not facing any financial surprises if you put in the winning bid

2) Sort out your finances as well – you will need a 10% cash deposit if your bid is successful and then you need to pay the balance within 28 days. If you need a mortgage, you need to have the loan pre-approved subject to survey.

3) Your solicitor needs to be primed as well to complete the purchase within the 28 day time limit

4) Try and visit an auction before the one where you want to buy or take someone who understands the procedure with you. You need to keep a business head on and not let the emotion of the occasion carry you away

5) Remember your budget. Don’t go above your budget or the the figure you have in your mind as the amount the property is worth to you.

6) Don’t worry about other bidders – let them look after their own business and you concentrate on yours.

Finding a mortgage is the same as going through the process of buying any other property. You need to find the best interest rate and best deal that suits you.

Don’t forget that just because the auction house requires a 10% deposit does not mean that the bank or building society won’t require a larger cash deposit.

To source a mortgage to buy whether you are a first time buyer, investor or home mover, try out a mortgage comparison web site like ours.

Buying at auction has pros and cons – you may well pick the property up at well below market value but the risk is you have to pay out for surveys and legal work with a good chance that you might well be outbid at auction.

A commercial mortgage can be great for business

[ Posted March 20th, 2009 ]

Most of us remortgage our homes for better rates and deals – but strangely, few business people consider shopping around for a better commercial mortgage.

It makes sense. We do it with our home mortgage to save money and as a business, one of the best ways to maintain profit margins is to eye expenses as well as income.

If you own commercial property as a landlord or a trader, you probably have a mortgage deal tied in to the same lender who looks after you’re overdraft and banking.

You may think this gives you leverage with the bank if you need working capital, but having all your business cash eggs in one basket is generally not the way to go.

The advantage of separating your business finance between banks and lenders is no single organisation has an overall picture of your finances.

Many business mortgage deals are available from banks, building societies and specialist lenders.

Many building societies and specialist lenders offer more competitive loan-to-values and better mortgage rates than the banks.

With a commercial mortgage, you can:

    •    Buy business premises
    
    •    Buy commercial and residential investment or buy-to-let property
    
    •    Raise money with a commercial remortgage for working capital, expansion, or buying equipment.
    
    •    Finance buying distressed commercial property at below market value
 
Commercial mortgages are generally based on the lender’s risk assessment of the business’ ability to repay the money borrowed.

The lender will look at your business experience, your business performance trends over the last three years, your current trading position and your plans for spending any cash you raise. You should also expect to have a professional business valuation as well.

Finding the right commercial mortgage at the best rate is the problem. Many business mortgage lenders do not advertise their products and rates and set them according to your business sector and trading performance. The lender will also expect you to share the risk by providing a sizeable deposit of at least 20% of the business valuation.

Approaching a specialist commercial mortgage broker is worth considering. A broker can help you put together a polished finance proposal that makes you look professional to a prospective lender.

Many commercial brokers also have good networking relationships with commercial finance managers and can often negotiate a deal on better terms than a businessman could expect as an offer by walking in off the street.If you are cash-rich and in a position to invest in distressed commercial property – that’s premises where the owner is struggling to meet their financial commitments – then a commercial mortgage specialist can help you put together an investment strategy.

A broker can also help with business finance arrangements – like invoice factoring and discounting and arranging specialist finance to buy equipment and machinery.

 
 
 
 
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