London rents at an all time high
There has never been a better time to let property in London. Average London rents have broken through the £1,000 a month barrier for the first time.
They rose by 6.9 per cent to £1,006 in the year to this month as tenants locked out of the mortgage market scrambled to secure a place to live.
David Newnes, estate agency managing director of LSL Property Services, said: “Tenant demand continues to reach higher peaks - and there isn’t enough rental property coming onto the market to match it. It’s not unheard of for rental properties to be let within a day of coming onto the market.
“There’s no sign of a let-up. Despite several new deals on the market, securing a big enough mortgage remains a tall order for the average buyer.”
In some cases, gazumping and sealed bids - normally limited to home purchases - are occurring.
Agents say they have also see a sharp rise in the number of corporate tenants looking for accommodation in central London for senior executives.
Amelia Greene, residential lettings partner at Cluttons, said it had recently let a 6,500 square foot house in Onslow Gardens in South Kensington for almost £10,000 a week.
At the other end of the scale, tenants on housing benefit will have caps on their claims imposed next April forcing an estimated 82,000 London households to move as they will no longer be able to afford the rent, according to London Councils.
Housing charity Shelter said 22 per cent of 18- 34-year-olds have had to move back in or continue living with their parents because they can’t afford to rent or buy a home.
Buying is 16% more cost-effective than renting in London
Renting a home in Britain is currently 9.7% more expensive than owning on average. And it is cheaper to buy instead of rent in four in five of the 50 largest towns and cities across the country, according to the latest research from leading property website Zoopla.co.uk.
The research looks at the current asking prices and rents of two-bedroom flats around the country and assumes interest-only mortgage payments of 5% p.a. to provide a comparison to the cost of renting.
Even in London, which has by far the highest property prices in the country and where the average 2 bedroom flat is going for £431,366, buying is still 16% more cost-effective than renting. With average rents at £2,137 per month in the capital versus an average cost of a 5% interest-only mortgage at £1,797 per month, renters pay an extra £4,080 annually compared to owners.
Nicholas Leeming, business development director of Zoopla.co.uk, commented: “The relative cost of renting as opposed to buying has increased over the past 12 months as rents have risen and house prices and interest rates have remained flat. Almost 750,000 would-be first-time buyers have reluctantly ended up as renters over the past 3 years as a result of being unable to get a mortgage. With current house prices and interest rates where they are and with rents on the rise, for those who can get a mortgage, there may never have been a better time to buy.”
With rental prices increasing all over the city, it appears to be more cost effective to look into getting a mortgage again. Check out properties for sale in the area you are currently renting in - buying your next home might be cheaper than you think.
Source: www.zoopla.co.uk
Rising swap rates put pressure on fixed deals
A number of lenders have pulled their existing fixed rates as the cost of funding has gone up. Although the Base rate has today stayed at 0.5%, the conclusion that we can draw from this is that a rise will be happening sooner rather than later. For all your clients who are dithering about putting offers in, this is invaluable information as we could be coming to the end of historically cheap access to borrowing.
Rising swap rates put pressure on fixed deals
Recent increases in swap rates are starting to force up the price of fixed rate mortgages, say industry experts.
Since November 2010, two-year swap rates have increased from 1.31% to 1.72% and five-year swaps have gone from 2.18% to 2.82% in the same period.
Last week two-year swap rates were 1.62% and five-year swaps 2.75%.
David Hollingworth, director of communications at London & Country, says: “Swap rates have fluctuated over the last two years, but of late they have been on an upward trend.
“We have already seen evidence of lenders increasing their fixed rate mortgages because of swap rates and the sharper fixed deals are under threat.”
But Hollingworth adds that although swap rates play a part in lenders’ pricing they also look at other factors when setting fixed rates.
Alan Cleary, managing director of Precise Mortgages, says two-year swap rates have risen substantially in the past few months as a rise in the base rate looks more likely.
He says: “We are getting closer to a rate rise with every base rate decision and this is starting to affect the price of swap rates.
“Fixed rates, especially two-year rates, are on their way up and borrowers should look to fix now.”
Industry consultant Mehrdad Yousefi says high inflation is worrying the money markets and pushing up swap rates.
But he says: “Over the next four weeks fixed rate deals will cost more but it remains to be seen whether this will continue throughout the year.
“In the second half of the year when the base rate starts to rise, swap rates will start to predict the next base rate could start to rise and products will certainly become more expensive.”
Halifax raised the rates on its two-year fixes by 0.2% today and blamed the increased cost of funding and swap markets.
House Prices Rising
The housing market seems to be going from strength to strength at the moment. Asking prices have risen for 11 consecutive months with and increase last month of 0.7%. The average entry level price for a house is approximately £155,242. If you are looking to buy a house for the first time now could be a good time to get hunting as prices are going to continue to increase, and although stamp duty does not apply on purchases under £250,000 for first time buyers they still need to have a significant deposit to get into the market.
An article from find a property ““The building blocks are present for a sustained recovery, but we do need lenders to step up to the plate and free the purse strings for first-time buyers. That will not only help the buyers themselves, but also the market overall and the wider economy.””
It could also be good to look into a property for investment purposes as there is currently a huge demand for rental properties in many areas of London, which means there are people out there looking right now! But this is not something you should enter into lightly. A huge amount of research is required to find the right investment property however there are many avenues which can help you along the way. Getting your finances in shape is also one of the keys to getting started with property investments, as depending on how long you keep the property expenses will vary.
To read more about the topics above click on the link below
http://www.findaproperty.com/displaystory.aspx?edid=00&salerent=0&storyid=23504
Stamp Duty – good news for first home buyers
Good news for people who are looking to buy their first home this week, with the government announcing that first home buyers who purchase property under £250,000 will be exempt from paying stamp duty. This is a great benefit for first home buyers and it will be a great saving which they could possibly now add to their deposit or it will simply allow more people who may not have previously been able to enter the market to purchase a home of their own.
David Smith from the Times commented that “Alistair Darling’s Robin Hood coup in last week’s budget was the two-year stamp-duty holiday for first-time buyers of homes up to £250,000, paid for by a permanent increase in the duty to 5% on £1m-plus properties. Clearly, there will be mixed feelings about this.
Despite the skepticism, stamp-duty holidays work, as previous experience has shown. Provided the bureaucracy can identify who is a genuine first-time buyer — a divorced wife or husband who was previously a joint owner will not count — this should give the market a boost, which is why the housing industry has welcomed it.”
Stephen Brown, Director of our Crouch End shop has said that “if we start seeing banks lend more then this will be a nice saving. Hopefully the stamp duty saving should be good for first home buyers as this will give more money to their deposit.”
Either way you look at it this will help more people purchase their first home which is a good thing!
19% leap in mortgage approvals
http://news.uk.msn.com/uk/article.aspx?cp-documentid=15538579
So, mortgage approvals are on the up…could this mean buyers are flooding back to the market? Well, I don’t think we should be too hasty, but things did take a bit of a turn for the better this February. Just having a quick look at our figures, our offer rate is up 43% in Febraury, compared to the previous month and our exchanges have increased by 10%. I think the figures speak for themselves, things are picking up.
Personally, I think it’s a really great time to buy right now and if I was in such a position I would definitely be snapping up a nifty little pad for a bargain price. Then just hold tight and watch it’s value go up again in a few years. What do you think?
Confused about mortgages?
Do you know the difference between fixed, discount and tracker 
mortgages? It’s all a bit of a mine field, especially if you’re a first time buyer!
The money saving expert is a great website that gives you plenty of tips on saving money and explains things in simple terms. Have a look at their tips on picking the right mortgage for you. It also features a calculator which can help you decide whether to ditch your fix rate mortgage.
If you’re still confused, I’m sure the friendly Financial Services team and Greene & Co, would be happy to give you some FREE advise. Visit their website. enquiries@greenefs.co.uk” target=”_blank”>Email them or give them a call on 020 7328 3280.
