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Property owners leaving London for better lifestyle

[ Posted April 30th, 2010 ]

According to the figures that have been published in a new survey, property owners in an around the UK capital, London, have been using the economic meltdown as their chance to jump out of the urban rat race in order to purchase much more affordable – and many would argue reasonable, particularly with the good mortgage rates available today – country real estate. Recent research undertaken has shown a clearly identifiable trend for people to perceive the opening stages of the economic recovery as the perfect time to start buying into desirable real estate that would have previously been out of reach financially in country towns before growth in house prices once again sends values soaring out of reach again.

The types of areas include properties in the Suffolk and Norfolk coasts, Dorchester, the West Country and Bournemouth. The survey found that, while the properties in these areas were as desirable as they had ever been, they are also now more affordable than at any time in recent memory. The survey found that these factors accounted for the soaring popularity of such places as Norwich, Ipswich, Torquay and Bournemouth.

The survey also indicates that the most popular UK destination for homemovers is Inverness in Scotland. This news comes as very little surprise to many market experts, as the city has the reputation as being the fastest growing location in Western Europe as a result of high-tech industries, as well as the transportation connections that ensure that it is the perfect pace from which the Scottish Highands can be explored.

The second favourite destination is Truro, a place that has long been viewed by many as a desirable gateway to the charms of Cornwall and the surrounding area.  London itself is the least favoured place to move, which would appear to show that homemovers have become disenchanted with the shining lights of the capital coupled with the fact that first-time buyers and even home owners looking to supplement their portfolio via utilizing a re-mortgage are finding it difficult to purchase any property within the city limits. The least popular place in the London area is Uxbridge.

Storm clouds linger on UK property horizon

[ Posted April 29th, 2010 ]

As the recent run of decent weather may have suggested, Spring is very much in the air, and under normal market conditions, estate agents across the country would be waiting in anticipation of the usual Spring buying season. The trends over the past two years or so have, however, rather dampened the usual enthusiasm and have left a trail of unpredictability and uncertainty in their wake. Many analysts are keen to understand, in the light of all this, whether or not the UK housing market is showing any signs of matching the unusually clement weather and warming up also.

Estate agents in the UK have had some good news over the course of the last year. One of the UK largest agents, Nationwide, have indicated that house prices has climbed by about 9.1 per cent from their nadir in April 2009; and the current average price of a UK home stands at £164,519, a figure that is £14,000 higher than at this point last year. First-time house buyers are also now freed from stamp duty on houses costing up to £250,000, which could net then a saving of more than £1000 on average. There are sign that London has seen a ‘mini-boom’ as a result. Outside of London, Hometrack have indicated that houses are currently taking around 8 weeks to sell after eleven viewings, which indicates that the market is back in line with figures seen during the housing boom of 2007. Added to this, interest rates have stayed extremely low to help fuel good mortgage rates for prospective buyers.

There are, however, still many storm cloud on the horizon, with the Bank of England reporting that the number of mortgage approvals had dropped for the third consecutive month in February, with average earnings also rising by less that 1% in the course of a year. Added to the fact that first-time buyers must now find an average deposit of some £30,000 and even owners looking to bolster their portfolio by utilizing a re-mortgage on an existing property to purchase additional location having some troubles, with figures indicating that London’s boom is not mirrored countrywide with a report by Lombard Street Research suggesting that the long-term effect of the credit crunch may well mean that the next half decade could be ‘flat’, at best.

Mortgage Growth Continues Year-On-Year

[ Posted April 28th, 2010 ]

The beginning of the year has been a particularly strong period for the UK housing market, with mortgage lending rising a marked 20% over last year to round off the first quarter according to the BBA – a sign that both good mortgage rates and buyer confidence has continued to rise.

Overall throughout the UK a reported total of 77,352 mortgages have seen approval by various banks throughout Britain, up over previous numbers of 73,503 as of March 2009. While these figures are still lower than the average over the past six months (coming to a total of 81,810) this does not mean this is particularly a bad trend, particularly with the upcoming election still weighing upon many people’s minds in terms of what it might mean to their homes and property purchases.

First-time mortgages have seen a particular increase for purchases in various areas of the country thanks to the extended Stamp Duty holiday for buyers purchasing homes, yet at the same time this does not necessarily apply to all areas as some markets such as London are still facing particularly hard times with the ever increasing real estate prices found within the city. Re-mortgages for homes to purchase outside of large urban centers, on the other hand, have shown a strong move as more and more people are deciding to relocate and commute rather than deal with the highly-competitive market found in some more heavily developed areas.

This has led to many home prices in rural settings near cities receiving increased buyer interest, however, which has led to homes in more secluded areas further increasing in costs as demand further outstrips supply. Nevertheless the growing interest by many landlords looking to take advantage of the current high prices are helping to curb this trend with increasing offerings in various locations. Many larger homes in particular have come onto the market as home owners are looking to downsize into smaller, more manageable estates and potentially even purchase two locations to live in rather than one set location.

UK landlords planning bumper portfolios on back of rising tenant demand

[ Posted April 27th, 2010 ]

According to market experts and analysts, a growing number of landlords in the UK are making plans to buy more properties as the demand from tenants increases. Around 12% of landlords are currently planning to buy investment property towards mid 2010 leverage good mortgage rates available on buy-to-let mortgages and record-low fixed-rate mortgages, a figure that compares to just 10% for the three months prior to now. Around 12% of landlords responding to the study also said that they had seen tenant demand grow during January through March.

The report also shows that the average value of portfolios has climbed for the second quarter in a row. Of those landlords planning to buy properties it appears that terraced properties are the preferred choice, with more than two-thirds of all landlords (some 67%) planning to buy this particular type of property. This was followed some way back by more urban semi-detached houses, standing at 25% on the study.

According to Nigel Terrington, the chief executive of the Paragon Group, the demand for properties both for private use and investment purposes has stayed strong during the course of the economic recession, and has continued to improve as house prices have become more stable. “Landlords are aware that the long- as well as short-term forecast is extremely healthy for tenant demand, with many economical and socioeconomic changes resulting in the growth o the number of households considering the private rental market as home,” Mr. Terrington commented.

Mr. Terrington also said that government figures also indicated that the private rental sector is currently the only housing sector that continues to grow. “One in every seven families now live in what is registered as privately rented accommodation,” Mr, Terrington commented.

As far as future predictions are concerned, landlords generally anticipate that tenant demand will strengthen, with almost four out of ten landlords (36%) anticipating the public demand for their real estate to be much higher in a year’s time.

Access to mortgages is still an outstanding issue, with around 82% of those who are attempting to secure finance for a mortgage or re-mortgage saying that they found it that much more difficult than in the previous quarter. Only 7% reported that the process was easier. 

Many analysts agree that landlords are currently in a very strong position given recent market trends, as they enjoy what Terrington calls “unprecedented levels of renter demand.” Structural changes in the UK are most likely to lead to even higher demand, which is likely to result in higher rental income. Analysts and experts are urging banks to be more flexible with regards to the buy-to-let sector in order to prevent a new type of housing crisis.

General election uncertainty adds to house price and sales pressure

[ Posted April 26th, 2010 ]

According to the latest real estate price index published today, growth in the UK residential property market has gradually slowed as many buyers are choosing to delay house buying and selling decisions until after next month’s general election.

Despite the loss of momentum in the housing market, however, house prices themselves continue their upward climb.

Prices increased by an annual rate of 1.8% during April, which represents the fastest rate of increase since April 2008, according to the results of studies by the property data company, Hometrack, a company that surveys estimates of realistic selling prices from surveyors and estate agents. The figures also showed, however, that monthly house price growth levelled out to 0.2% in April from March’s figure of 0.3% on a non-seasonally adjusted basis. The figures also reveal that the picture varies throughout the country, with April’s rise being principally fuelled by a 0.6% rise in London.

Comparatively, prices in other regions were either flat or up by a modest 0.1%. An exception to this was Yorkshire and Humberside, which saw a 0.1% price drop. The new figures also show that demand from new buyers was also being outstripped by the rate at which houses were coming onto the market in England and Wales-and this for the third month in a row. This phenomenon acted by further reducing the recent upward pressure on house prices. Hometrack also reported that estate agents had revealed that buyers were now taking longer to commit to buying houses, which pushed the number of viewings required per sale up for the third month in a row despite many people looking to lock-in good mortgage rates on possible fixed-rate mortgages before the markets recover more.

The average time it takes to sell a property has also plateaued out, standing now at 8.3 weeks. According to Richard Donnell,Hometrack’s director of research, the supply of homes is still outstripping demand, a trend which, he says, has been largely in evidence for the last quarter. “It is, though, in marked contrast to the final months of 2009, when buyers greatly outnumbered the supply of homes for sale.” Mr Donnell expects the price rise impetus to wane as the supply of houses for sale continues to stay ahead of demand and investors – domestic and overseas alike – turn their eyes to other markets. He also cited the upcoming general election as a definite factor in the sharp slowdown in the rate of agreed sales.

UK property loan market shows slight revival

[ Posted April 24th, 2010 ]

February saw a slight recovery for the UK property loan market as the number of mortgages authorized for house purchases rose by 12%. The new figure, however, follows a very weak January market as evidence by the figures released by the Council of Mortgage Lenders. The Council states that several one-off factors, including the severe weather conditions seen at the beginning of the year, as well as the ending of the stamp duty holiday period in December 2009 put a dent in the housing market for the New Year. February’s figures, including some 35,000 loans worth £5 billion, point to only a modest recovery, despite the fact that they are up 49% in volume and 67% in value as compared to the same time last year.

Part of the New Year hangover was due to the ending of the stamp duty holiday in December which resulting in few first-time buyers in January. This led to their number climbing rather faster than the rest of the market in February, which saw 12,600 loans worth £1.5 billion authorized, an increase on January’s figures. Re-mortgaging activity is still weak, even though the number of loans for this purpose increased by 2% over the course of February, signaling the first such rise for five months. The CML expects this weakness to continue for a while to come.

Fixed rate mortgages are still less popular than previously-due principally to the continuing low interest rates, with the proportion of fixed rate mortgages  standing at 47% in February-showing no changed from the previous month’s figures and showing the lowest market share for almost five years. By comparison, the market share for tracker products stood at 36%-a figure also unchanged from January levels-although this remains the highest level since the CML started to record such data back in March 2005. According to Bob Pannel, head of research at the CML, things look unlikely to change in the near future. “Due to the fact that the supply of credit is still tight and the uncertainty generated by the upcoming General Election, there is unlikely to be much change in the market for some time, although the new stamp duty exclusion for first-time buyers might boost the market,” he commented.

What next for house prices?

[ Posted April 23rd, 2010 ]

Two of the UK’s leading building societies, the Nationwide and the Halifax, reported that house prices rose in March following a dip in February, with both lenders citing a strong upward resurgence in house prices since the lows experienced last year.

The Land Registry posted its first monthly drop in house prices in February-its first since April 2009. House prices fell by 0.3%, although the annual inflation rate still rose to 7%. The Land Registry index has not seen such high house price inflation figures since November 2007 when the overall housing market was very much on a downward trend. Not since November 2006 has the index seen such an annual inflation figure during an upsurge. Many analysts have re-stated the dangers of read too much into house price statistics, and point to volume of sales and the thin level of transactions. During the last market upswing in November 2006, the market saw 115,000 transactions, and, by comparison, the figures for the current upswing (from December) indicate that there were 73,889 transactions.

This figure has been further qualified by the fact that it will have been spiked by the end of the stamp duty holiday as buyers rushed to beat the closing window. The period since December 2009 has seen a sharp fall in mortgage approvals and completions for homebuyers, and experts believe that transaction levels for February will be lower still, perhaps around the 50,000-60,000 level, around half of the figure seen in November 2006. Analysts maintain that headline figures in the house price indices are papering over the cracks that still exist in the housing market, particularly with regard to the level of transactions as, in a thin market, they can easily distort the average.

The housing market has also been punctuated by buyers coming in with large cash stocks possessing the ability to put down large deposits, thereby taking advantage of low interest rates – especially when able to leverage competitive offset mortgages and even very low rate fixed mortgage loans. With the shortage of decent properties on the market, this has also contributed to driving up the prices of good properties. Some agents believe that a rise in the number of properties on the market will eventually lead to falling prices, although optimistic asking prices and current stock may yet see prices rise before they fall.

Unexpected rise in prices pre-election

[ Posted April 22nd, 2010 ]

With this year’s election looming just around the corner the housing market is still yet to slow down, even with many experts and analysis fearing for the worse should the General Election turn into a hung parliament and what that might mean to the real estate industry. This has come as a particular surprise given that supply of homes has not actually decreased to help drive up costs but increased, with the number of new properties being listed on the market outpacing the number of buyers registering for new purchases.

Recent studies of the market actually indicate that thus far in April house prices have grown by approximately 2.6% – a substantial increase over the paltry 0.1% seen in March. This increase has primarily been driven by a large growth in both buyer and seller interest in the market supplemented by the continued good mortgage rates offered by lending institutions to support purchases across the country.

Of primary interest are homes outside of the main downtown urban areas, with investors actually seeking out re-mortgages and, if possible, low-rate offset mortgages to purchase homes in more rural settings where prices are somewhat cheaper yet demand is still high. This has caused many neighbourhoods in areas just outside of London, for example, to grow substantially in the past few months with even more remote homes becoming focal points for investment.

Given current trends the continuing price increase is likely to continue into the coming quarter, with economic indicators still strong. A decisive election could further help benefit this trend, though with current uncertainties about many economic conditions throughout Europe (and Greece in particular) weighing heavily on the area as a whole it may be difficult to expect a full-fledged recovery by the end of the year should extensive re-structuring not occur to help support what may develop into a stagnating economic sector.

UK country property prices continue upward trend

[ Posted April 21st, 2010 ]

Property price in the country in the UK continued their upward trend during the first quarter of 2010 as they rose 2%, standing 4.3% higher than the level attained at the same time last year, according to figures from the latest price index. According to the Knight Frank Prime Country House Index, prices rose in the country property sector in every region of the UK with the exception of Scotland, with the Home Counties leading the way with growth of 2.9% for the quarter and an annual growth rate of 9.1%.

The upward price trend has also been fuelled by a clear imbalance between supply and demand in the market, although more stock could enter the market after next month’s General Election according to analysts. According to Andrew Shirley, head of rural property research at Knight Frank, the shortage of properties on the market coupled with an increase in demand supported by good mortgage rates offered by lenders has helped to fuel the upward price trend over the majority of the UK. He said, “As compared with this time last year, we have seen instructions fall by 30%, with sales rising by the same amount. This includes both first-time buyers seeking homes as well as overseas investors seeking property in different developing areas.

This has resulted in a dwindling pool of good houses for buyers to choose from.” He went on to say that the general pattern of imbalance between supply and demand had been exacerbated in London due to the ripple effect of the frantic rise in the number of foreign buyers seeking prime property in the capital. “Last year, Knight Frank sold London properties to 49 different nationalities, and country properties to people from 38 different countries,” Mr Shirley commented. He also stated that property price rises had not been as dramatic the further out of London you travel, although the annual growth rate of roughly 5% in south west and central England remains very healthy. Price is the north have only just begun to recover, although they are still up by more than 3% on the year. Scotland’s prime market has recently hit the bottom of the cycle, and it is widely anticipated to return to positive growth territory over the course of the next three months.

Many analysts remain cautious as to whether prices can continue to rise over the rest of the year, as the anticipated fiscal austerity measures that are likely  to be implemented in order to deal with the UK budget deficit hit growth. A continued weak Sterling will further tempt foreign buyers to enter the prestigious prime London property market.

Market Strong for Buyers and Sellers

[ Posted April 20th, 2010 ]

The property market throughout the country has seen a significant interest as of late by both buyers and sellers alike, with many people looking at becoming first-time buyers on properties before they feel they increase in value and others looking to sell out their homes and purchase larger estates for the same reason while they can still secure good mortgage rates from lenders. This has become particularly a point of interest in most urban settings where prices have shown continual growth, especially for many London residents that have seen regular price increases over the past year and additional growth still expected in the future.

Many experts feel that this growing interest on both sides is helping to support the real estate industry on a wide scale thanks in no small part to the current recovery the economy is experiencing throughout the country. This has helped encourage many people to invest more in homes both in urban and rural areas, though as of right now even commercial mortgages are seeking increased interest from both foreign and domestic investors seeking to get in while they see prices as being relatively low.

Other concerns still loom, however, about the possibility of the upcoming election having an adverse effect upon the housing economy. While at the same time it could potentially have far-reaching positive benefits as well the risks are causing many people to still hold-off on either purchasing or selling a home despite their own personal desire to do so. While these fears will most likely come to pass soon once the election is over the threat of over-extending one’s personal financial boundaries is still a real issue for many people as thousands of families have experienced countless difficulties caused by just such actions when the economic hard times came about in full force.

Regardless the growing interest is still seen as positive for many people and should continue to help support the development and recovery of both the residential and commercial sectors greatly. aims to provide every client with cheap, affordable and best mortgage loans in the UK market, however the actual mortgage rate available will depend on client's financial circumstances and credit history. Although, has made every effort to ensure that the mortgage rates listed are correct, it bears no responsibility in case of an error. 
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