Experts view - What next for house prices?
Confidence in the housing market has strengthened from its record low at the end of last year, according to research by Zoopla.co.uk. The Telegraph asked a panel of economists and industry experts if they agree.
Simon Rubinsohn, chief economist at Royal Institution of Chartered Surveyors (RICS)
“I think that confidence has improved since the end of the year but it remains fragile and has a strong regional dimension. Confidence in London and the South East is more upbeat than in many other parts of the country, in particular parts of the Midlands and the North.
“Our headline forecast remain unchanged with prices projected to be 2pc lower in the last quarter of 2011 compared with the same period in 2010. However, there will be significant regional variation with London the only area to be slightly up.
“May still seems highly likely [for an interest rate rise] unless the activity takes a marked turn for the worse – with the ECB set to move this month and inflation continuing to push upwards it will prove difficult for the BOE to stick with its current position – however we only expect one more move this year taking the base rate to 1pc at end 2011 – there will be further tightening in 2012.”
Martin Ellis, head of housing economics at Halifax
“There are signs that both house prices and the level of sales have stabilised in the early part of 2011. This would be consistent with the evidence of improved confidence.
“Overall, we expect a modest 2pc decrease in house prices in 2011. Uncertainty over the economic outlook is likely to weigh down on housing demand this year.
“There is considerable uncertainty over the timing of the first interest rate rise. We expect it to be around the middle of the year but do not expect it to be followed quickly by further increases.”
Melanie Bien, director of independent mortgage broker Private Finance
“I find it surprising that confidence in the housing market has significantly risen since the end of last year. On the contrary, the soaring cost of living, fears over job losses and rising interest rates, seem to be making buyers and sellers sit on their hands and adopt a ‘wait and see’ attitude. The number of transactions is extremely low as a consequence.
“House prices are likely to remain flat at best this year but this national average will conceal significant regional differences. The north-south divide is set to become increasingly pronounced with prices rising in London and the south-east, particularly in the prime markets, while falling in the north, Scotland, Wales and Northern Ireland.
“Interest rates will start rising in the next few months but I believe this will now happen at the end of the summer – September, rather than May. The economy is simply too fragile and the impact would be so devastating for many home owners already struggling to make ends meet that I think a move will be delayed for as long as possible.”
Opinions are conflicting, but the general consensus seems to be that confidence in the market has strengthened since last year. Greene & Co. have experienced a positive end to the first quarter of the year and feel good about the year ahead.
Early interest rate rise less likely after budget
In an exclusive Mortgage Solutions TV panel debate, industry experts agreed a May rate rise is less likely following the budget and the unchanged voting pattern revealed by the Monetary Policy Committee.
AMI director Robert Sinclair, Tenet Lime managing director Gemma Harle and Private Finance director Melanie Bien agreed the MPC Minutes the morning of the budget and the Chancellor’s prediction inflation would remain up at between 4 to 5% this year make a rise within the next two months less likely.
Sinclair said the Office for Budget Responsibility’s (OBR) revised projections for GDP growth for 2011-12 down to 1.7% from 2.1% meant tax take will also be lower than hoped.
“As such, any rate rises could stifle the economy and are less likely to happen because any stop on the economy could increase the danger of a double dip, which would be catastrophic,” said Sinclair.
“That’s the real juggling act that follows now,” he added.
Harle agreed, adding: “Hopes of a rate rise are largely wishful thinking on the broker front.”
Bien predicted the first rate move in “September at the earliest.”
Robert Sinclair suggested there might be a vague chance of a move in July, but agreed with Bien September was more likely and then probably just 0.25% basis points.
Bien said: “Because we’ve had it so low for so long, rates won’t need to rise by much to have an impact. Actually, just by starting to rise, rates should affect the market.”
Source: www.mortgagesolutions.co.uk
Stamp duty hit for prime buyers in April
5% Stamp Duty to cost prime buyers an extra £17,000 on average
The UK’s prime house buyers will have to pay an extra £17,112 in Stamp Duty Land Tax (SDLT) when rates increase from 4% to 5% for properties over £1m in April. The increase will bring an extra £113m into the government coffers according to research by leading property website Zoopla.co.uk.
* April’s increase in SDLT will cost £1m+ buyers £17,112 extra on average
* The average SDLT paid on £1m+ properties was £68,449 in 2010
* Increased SDLT will take average duty to £85,561 from April 6th
* Total SDLT on £1m+ properties will rise to £565m from £452m in 2010
In 2010, there were 6,610 property transactions conducted in Britain at a value over £1m with an average sale price of £1.71m, resulting in an average SDLT payable of £68,449 and a total take by the government on £1m+ properties of £452m. As of April 6th the average figure for £1m+ transactions will rise to £85,561 with the government collecting £566m p.a., an extra £113m annually at the expense of the British property millionaire.
Closer analysis shows that as much as being a wealth tax, the increase in SDLT at the £1m threshold is a regional tax since 85% of the total stamp duty paid on £1m+ properties last year came from transactions in London and the South East.
Nicholas Leeming of Zoopla.co.uk, commented: “The government has identified a rich seam of revenue by raising taxes on those buying the most expensive properties in the country. However, with £1m buying little more than a 2 bedroom flat in some parts of the capital, the extra Stamp Duty will not be insignificant for families trying to move up the property ladder in and around London, where the lion’s share of the burden will fall. We may see a small tick up in transactions ahead of April with some buyers trying to beat the deadline but overall the rate change is unlikely to have a major impact on the performance of the prime market over the longer term.”
Source – 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.
How do you fancy designing your own apartment?
Wow, take a look at what Union Developments are offering you if you buy an off plan apartment at Grange Garden before the end of the year. You get to meet with your own personal architect and create your own unique home.
They provide the four walls; the expert architect advises on the interior layout, soecification, colour and finish and and you tell them how the pieces fit together.
Are property prices coming down?
Since the abolishment of HIP’s some interesting things have been happening in the property market. According to Rightmove “the market is starting to turn due to increased competition among sellers and fewer potential buyers”. This could be a great time to buy, as each day more properties are coming on the market and prices are also dropping. Our Managing Director, David Pollock had this to say about the current market situation.
“The London market is a different market place to the whole of England. London is in a bubble and therefore it is always a little dangerous to base house buying and selling strategies on whole of UK indexes. Having said that the abolishment of HIPS in the long run will be great for the London and UK market but without doubt there is going to be a period of adjustment. Will prices in London go up, go down or stay the same. Is now a great, average or poor time to buy or sell? The experts don’t and cant seem to agree. My advise is see property firstly as a home and secondly as an investment, its when you do it the other way round that things start to go wrong.”
We will have to wait until the emergency budget is announced to see the true effect on the market as many fear that capital gains tax could be increased but we wont find out until everything is revealed tomorrow.
HIPS - going going gone
Today HIP’s have been suspended which means that people who wish to sell their property no longer need to provide these. This comes as a great relief to many agents, our Managing Director, David Pollock has given us his opinion on this change
“Like most agents, we are delighted to see HIP’s get abolished. In our opinion, they have been an absolute disaster on two fronts. Firstly, they took away any spontaneity in the market, if someone was thinking about selling and just wanted to test out the reaction that putting their property on the market would get, to see if there are buyers out there for it, etc, it would cost them £300 to get the HIP done first.
Secondly, no one ever truly bought into using them, ranging from solicitors to buyers to sellers to agents. There will be no tears shed here about their demise”
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
Open Days – having great success!
One of the best ways to check out a property you are interested in is at an open day. This is also a great way to speak to the agents and find out what you need to know about the property. Greene and Co West Hampstead has had lots of success with their open days and believe they are one the best ways to show off a property on the market.
Stephen Matthews Director of our West Hampstead shop said “It is a very good way of generating multiple offers and interest”
An article from the ezinearticles.com/Do-Open-Houses says “The biggest beneficiary of a public open house is often the agent holding the house open. Open houses give agents an opportunity to meet prospective home buyers and sellers face-to-face in a relatively non-threatening environment. An open house can be a source of future business leads for the agent.”
Its not only beneficial to the seller to have most of the viewings on one day but it is also takes the hassle away from the buyer have to schedule after work viewings – really the days are a win win for everyone!
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!
The FindaProperty.com house prices and affordability index
Some interesting news from FindaProperty.com’s October affordability index - house prices are rising, but affordability for first time buyers is deteriorating…
“It’s never easy to get on the housing ladder but until the summer we had been seeing a gradual narrowing of the affordability gap. This has led to a definite pick-up in first time buyer activity as people have taken advantage of improved affordability and the stamp duty exemption on properties priced under £175,000. With prices now rising and affordability tightening again it becomes even more important that the Government retain this beyond its end date of December 31st.” Michael Flynn, Director of FindaProperty.com offers his opinion on the findings.
The lowdown on Mansion Blocks
These striking, red brick apartment blocks have a sense of granduer about them, making them an appealing place to live. Often found in well connected areas, such as Maida Vale and West Hampstead, which offer a welcome, but nearby retreat from the hustle and bustle of central London.
Primelocation.com takes a look at the pros and cons of mansion block living, a little bit of history and some advise on buying one for yourself. Read the article on Mansion blocks here.
Rightmove releases new iPhone application
Rightmove make finding your new home even easier! You can simply download their app to your iPhone and start your search from there.
What would you like to see in the blog?
We’re opening up our blog to customers. We feel it’s really important to get your feedback (good or bad), comments and opinions too. Have you got any questions on the market? Any tips you can offer? What’s your outlook on the market? Do you live locally and can offer any comments about the local area?
We are really open to suggestions and want to make this blog just as much about what you want to hear as well as what we’ve already started doing.
Email me on blog@greene.co.uk
Where do you want to live?
Just found this cool little tool on Nestoria. It can help you find the prefect area to live in based on your communte to work. This can be a particular concern, especially for Londoners, and getting to work in the easiest and quickest way is a big consideration when looking for a new home.
It merges Nestoria’s property listings with average travel times by train and tube, which means you can see the locations and the properties for sale or rent in the areas that match with your work location. It also shows you the average property prices in that area.
It can open your eyes to possibilities you hadn’t considered before. Why not give it a go: Where can I live?
New development in Queens Park, NW6 - fab apartments, great location, reasonable price
Yes, another swanky development under our belts, this time in sought after Queens Park. I was in Queens Park this weekend actually, topping up my tan in the local park. Not only does Queens Park have a quiet suburban feel to it, with lots of families and leafy roads, it’s not that far from West Hampstead, Maida Vale and Notting Hill. This part of town is ridiculously well connected to the rest of London, so if you need to travel a bit further for work or just to do a bit of cheeky clothes shopping, you can pretty much get all over the place.
All that aside, I actually found a fish and chip shop in Queens Park this weekend. Now, I know it’s a bit naughty but there is a serious lack of proper fish and chips shops in London!
Ahem, back to the apartments….they’re simply stunning with integrated kitchens, en-suite bathrooms and balconies.
Have a closer look at one of the apartments here. (The prices and number of bedrooms range from a studio @ 250,000 upwards)
Swanky new apartments for sale in Maida Vale
I don’t normally mention what properties we have for sale, but we’ve instructed on some seriously stunning developments recently. Not only are these apartments state of the art, desirable and a bit funky, they’re in one of the lovliest parts of London and the price tag aint half bad either! I actually don’t live to far from Maida Vale and I love it. Just down the road is Little Venice. Next time we get a scorcher on the weekend, get yourself down there and go for a stroll along the canal…you can even take a canal ride all the way to Camden, if you fancy a bit more hustle and bustle (ooh and maybe a bit of celeb spotting).
Anyway - just gone off on a bit of a tangent! Look at these pics, they speak for themselves…some of the apartment features include solid wooden floors, intelligent lighting systems, Villeroy & Boch Bathrooms, feature gas fire places and decked terraces. Ooh forgot to mention - they’re not far from Notting Hill too - what more can you ask for?
Find out more details on Fermoy building here.
Maida Vale defies the downturn
Have a look at the article from The London Paper.
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.
House price trends
Just stumbled across this website about house trends. You can view the latest property prices and statistics and compare property prices by borough…it’s quite a useful tool if you’re looking to buy or sell at the moment. Have a look at the house trends website here.
To buy or not to buy…that is the question
It’s a hot topic right now, regardless of whether you’re looking to buy or not! All of a sudden everyone is fascinated about the housing market…maybe it’s all that media we’re getting. So, our esteemed MD Daivd Pollock, has put together some reasons for and against, read on and make your own mind up!
I’ve been asked time after time recently from friends, clients and applicants “Is now the time to buy or should I wait?” My answer is always the same… “It depends on your personal circumstances!”
How do you know when it’s the right time for you to buy a property? One day you think it’s a great opportunity to “bag a bargain”, the next day the press tell you that prices are set to continue dropping for another six months.
Of course, no one has a crystal ball when it comes to forecasting and we wouldn’t be so presumptuous as to suggest that this kind of economic climate is a great time for everyone to purchase… but we do have an opinion and we do see what is happening in the property sphere every day.
Reasons to buy…
- You are paying rent. It makes much more sense whilst the market is low, to be paying a mortgage (even if you club together with a mate).
- 75%-90% mortgages (subject to status) are available. If you don’t believe me, call Simon Redler, the MD of our Financial Services Company on 020 7328 3280.
- You are moving up price wise. It is the differential that counts. Say you are moving from a £200,000 home to a £300,000 home and the market has dropped 20%. Now, instead of having to find £100,000 to move up, now you only have to find £80,000.
- Remember, everyone speculates on the market conditions - nobody can ring a bell when the market is at the bottom.
- Property is in true terms, a minimum of 20% cheaper than a year ago. This is more than the papers tell us. Does it mean the market is closer to the bottom than people think?
- Our phones are starting to ring again with developers and investors looking to buy a bargain.
- Research says that we are far off target on the number of new homes needed in London. (See report in link here http://www.guardian.co.uk/politics/2008/nov/20/boris-london)
- More choice on products / homes as there are more available.
- Interest rates are low and therefore more affordable.
- Exchange rates are favourable to overseas investors looking to purchase again in the area, which could lead to higher demand and higher prices.
- It is time to bag a bargain.
- Properties are a home first, then an investment.
- Lack of competition for flats means you can buy at a more competitive level.
- Refurbishment costs are down as builders seek more work.
Reasons not to buy:
- You are moving side wards or down price-wise and are in no hurry.
- The market may drop further.
- You are not secure with your job or earnings and would therefore be foolish to take on a commitment.
- You only plan to be in your new home for a year or so. With the cost of stamp duty and the state of the market, you should stay where you are.
- There is so much supply of properties on for people looking to rent as well as sell, that rents could well drop further.
- Lack of sentiment.
Of course, the choice is yours as to whether you agree that now is a good time to buy. But if you want facts - current property prices in “true terms” then give us a call.
