UK houses for sale

Launch of new property sourcing company - RedSofa.com

2007-01-04T13:14:00.000-08:00

[UKPRwire, Mon Jan 01 2007] December 2006 saw the first stages of the development of the RedSofa.com website, with the launch of the property sourcing activity, more commonly known as Below Market Value (BMV), which is aimed at providing tailored solutions for homeowners who are looking for either a quick sale or guaranteed sale on their property.

BMV business is becoming an established player in the property market, catering for the needs of those people who choose not to rely on the traditional methods for selling their property. On average, it currently takes 153 days to buy and sell property in the UK, and with around one third of sales falling through, property investors have identified a niche where they can step in and break the property chain, ensuring the sale completes without the usual stress and complications.

This is nothing new, but todays transient population has meant that the traditional property market selling mechanism, the estate agent, doesn't facilitate the needs of people looking to sell quickly. More recently, the record levels of secured and unsecured debt levels in the UK, has seen the demand for BMV services increase significantly. Property owners who have over-stretched themselves during the recent property boom, are now struggling with the increased cost burden of the servicing of debt, and are looking for solutions to prevent either repossession or county court action.

Speaking about the recent website launch, Jeremy Vernon, Co-founder of RedSofa said: 'the BMV business was a natural choice for our inaugural internet presence, as this will compliment the future development of the both the property development and property management aspects of the RedSofa brand'.

The internet site has been designed by Stockport based design agency Ego, who demonstrated a clear understanding of the fresh and innovative concept required by RedSofa. Jo Clarke, Ego's Creative Director commented that the site 'reflects their strong customer focus' and is looking forward to working with RedSofa on their future projects.

So what does Below Market Value actually mean? Simply it means that, if property owners are willing to accept a lower offer, typically between 75% and 90% of the open market value, in return for a quick and guaranteed property sale, then a service such as this is for them. Obviously not everyone is willing to accept a 'discounted sale', but to obtain their required asking price they are relying on an inherently unpredictable process to be able to achieve this.

The problematic property market has not gone unnoticed by the Government, who have attempted to resolve some of the inherent issues, with the proposed introduction of the Home Information Packs (HIPs) due to become law in June 2007. However this has not been without its problems, the Home Condition Report, seen as the most important element of the HIP, was withdrawn in July 2006 in a shock u-turn from the Government. So whether this will help the already lengthy process of selling a property in the UK remains to be seen.

For the vendors peace of mind, RedSofa have teamed up with Hometrack, the market leading automated property valuation system, to provide a more scientific property valuation. This eliminates the trick of deflating property prices to offer artificially smaller discount %, a tried and tested method used by some BMV investors. So vendors can satisfy themselves that the benchmark valuation is fair and up-to-date. The Hometrack system uses various different sources of information, from neighbourhood price and market trends to property sales prices, to value every property in the UK. This system is also used by mortgage lenders, high street banks and estate agents.

Next year is going to be an interesting year for RedSofa, with fears of a stagnating property market and increased interest rates, taking advantage of less forgiving conditions, than those witnessed in more recent years, will prove to be a testament to the RedSofa business model.

Anyone interested in contacting RedSofa should contact their Co-founder, Jeremy Vernon at info@redsofa.com or on 0800 0436631.

For further details on the service provided by RedSofa visit www.redsofa.com

Halifax Reports Annual House Price Inflation of 9.6%

2006-12-11T13:22:00.000-08:00

The Halifax has published its November House Price update. Key finidings are:

· House prices rose by 1.7% in November. There are some signs, however, of a likely cooling in housing market activity over the next few months. The market continues to be supported by strong fundamentals underpinned by a UK economy that has now recorded 57 successive quarters of growth.

· Employment – a key factor determining housing demand – continues to rise. The number in employment increased by 56,000 in the three months to September compared with the previous quarter. A lack of supply also maintains the upward pressure on house prices.

· The latest RICS survey reported a fall in surveyors' confidence in the outlook for house sales for the third successive month and buyer enquiries are below the levels seen between May and August. The House Builders' Federation reported an annual fall in the numbers looking at new homes for the third successive month in October.

· 'Real' average earnings growth has slowed markedly over the past six months. According to the latest ONS figures, annual average earnings growth in September (at 3.9%) was only 0.3% higher than retail price inflation (headline measure of 3.6%). Six months ago, there was a difference of 1.7%. This slowdown in real earnings growth, higher interest rates and a squeeze on households' discretionary income due to higher utility bills, should temper housing demand. In turn, house price inflation should ease over the coming months.

Commenting, Martin Ellis, Chief Economist, said:

"House prices increased by 1.7% in November. The marked slowing in real average earnings growth over the past six months, and a squeeze on households' discretionary income due to the substantial increase in utility bills during the last year, should temper housing demand. As a result, we expect house price inflation to ease over the coming months."

1 IN 4 PREDICT HOUSE PRICE CRASH WITHIN 18 MONTHS

2006-12-14T13:43:00.000-08:00

The first cracks in Britain’s personal debt laden economy were revealed today as debt solutions consultancy, Thomas Charles (www.thomascharles.com) announced a widespread lack of faith in the stability of the UK housing market.

According to research published today, almost 1 in 4 (24%), or 11 million UK adults, expect property prices to crash within 18 months.

The research, conducted in conjunction with YouGov with 2,353 respondents, also revealed that almost 1 in 5 (19%), or around 9 million adults, expect a crash to come within 12 months, with 1 in 3 (29%), or 13.5 million adults, expecting a crash within 24 months.

Regionally, Londoners were found to be most concerned with 28% expecting a crash within 18 months while the South West remain cautiously optimistic at 18%.

Young adults, 18 – 29 were shown to have the least faith in the market, with 27% predicting a crash within 18 months, compared with 23% of 30 – 50 years olds and 21% of over 50s.

The research also revealed the recent rise in interest rates to 5% in November as a contributing factor to the predicted market slow down.

When asked ‘by how long do you think rising interest rates will delay your first step onto the property ladder’, 30% of non-home owners, or 4 million adults in the UK, reported some delay, with almost 1 in 5 (19%), equivalent to over 2.5 million UK adults, reporting a delay of 3 years or more – enough to have a significant impact on the housing market.

Regionally, the hitherto soaring London market was shown to have seen the greatest impact as a result of the November hikes. 35% of Londoners reported some delay in their house purchasing plans, followed closely by the West Midlands at 34%. Figures were lower in Scotland where 16% report a delay and a comparatively small 6% report a delay of at least 3 years.

Again, young adults, 18 – 29, were shown to be most affected by the hike with 44% reporting some delay in their first step onto the property ladder, compared with 29% of 30 – 50 year olds, and 5% of over 50s.

James Falla, Director of Thomas Charles, commented:

“The research shows that a high proportion of UK residents have lost their faith in the stability of the UK housing market. With interest rates rising and bad debt soaring, fewer and fewer people can afford to gamble with a mortgage. Young people are particularly affected since they are likely to have substantial unsecured debt and no equity, making it almost impossible to take that first step onto the housing ladder.
We may begin to see a trend whereby those with equity tied up in their homes may begin to sell up to preserve their capital, sparking a crash in the near future.”

Earlier this year, Thomas Charles revealed that the number of adults in the UK in over £10k of unsecured debt had risen to 8.4 million with 2.5 million struggling to meet repayments 1.1 million on the brink of insolvency.

Young people struggle to get a foothold in housing market

2006-12-14T13:35:00.000-08:00

The latest annual analysis of the housing market covering every local authority area across Great Britain shows house-price to household-income ratios for working households has reached record levels.The geography of affordable and unaffordable housing by Steve Wilcox specifically looks at the difficulties facing younger working households (aged 20-39) in buying homes within their local area in 2005.

Published by the Joseph Rowntree Foundation, building on earlier studies produced annually since 2002, the report analyses the long-term trends in housing market affordability. Using these analyses, the author highlights implications for regional and national housing policy to help address some of the challenges facing younger households unable to buy their first home. The report shows that while lower interest rates softened the impact of higher house prices, mortgage cost to income ratios reached 1990 peak levels.

House price to household income ratios for younger working households exceeded five to one in 78 areas – over twice as many as in 2004. In 51 areas, over two in five younger working households can afford a social sector rent without housing benefit but cannot afford to buy in the cheapest tenth of the housing market. The author describes working households who cannot afford full ownership as falling within the ‘intermediate housing market’ and presents a full analysis of what they currently face and what might help them get a foot on the first rung of the home ownership ladder.

While house price to income ratios are highest in London, access to home ownership is most problematic in the South West. The South East as a whole is almost as unaffordable as London and the South West, and there are unaffordable ‘hot spots’ in all regions. Overall, Scotland is the most affordable part of Great Britain. But even within the more affordable regions there are local areas where affordability is far more acute; some of the least affordable areas in the country are in the northern regions of England.

The report explores housing market products, policies and strategies that may help working households access home ownership in some form. For example, using various forms of shared ownership where a family cannot afford to buy outright, or moving to an adjacent area to increase affordability.

Professor Steve Wilcox of the University of York said, “The case has already been made for the supply of market and affordable housing needing to keep pace with levels of household formation to avoid more acute problems of affordability. But with both house price and mortgage cost to income ratios at peak levels, additional assistance, in one form or another, is required for working households priced out of the market.”

Policy options that facilitate mobility, instead of trying to provide solutions in local areas where families currently reside or are homeless, should be explored, suggests the author. He cites an example where a Greater London Council scheme provided seaside or rural retirement homes for London residents. As well as meeting the aspirations of the households concerned, the scheme was a very cost-effective way of releasing family-sized rented accommodation in London.

“Regional and national housing market policy needs to review more critically the ‘where’ as well as the ‘how’ of policy interventions. Moving to a cheaper area where a household can buy outright, rather than remaining in a more expensive area where the household can afford only shared ownership, may well be a better long-term strategy in terms of housing market choices over a lifetime,” he concluded.

Global Warming Could Cool Second Homes Market

2006-12-03T15:32:00.000-08:00

As governments prepare to introduce new taxes to combat global warming, and in particular the relentless rise in air travel, one international property agency predicts that property prices in some areas popular with second home buyers could fall.

The call for new taxes on flights to reduce carbon emissions could impact the prices of properties, according to Tribune Properties, who specialise in the sale of overseas property to second home buyers.

'There has been more discussion and calls for action recently over the impact that air travel is having on the environment,' say Tribune, 'And one of the most obvious ways to cut air travel is to raise the price of travelling through taxes. It's a win-win situation for governments, more tax revenue and being seen combating global warming at the same time. It's only a matter of time before cheap air fares on the scale we see it today comes to an end'.

Owning a second home and a property abroad has shown to be an aspiration for the majority of UK residents by recent surveys, and low cost carriers have opened up new overseas property markets by flying to destinations not covered by other airlines, or forcing flight prices down where they compete directly with more established carriers.

Property prices within a one hour drive of regional airports served by the low cost airlines have tended to escalate in recent years, and it is these areas that would be hardest hit by any increased taxes on flying.

The areas which would feel least impact according to Tribune Properties would be northern France, which many UK second home owners access via ferry and the Channel Tunnel, and areas where owning a property abroad was in vogue long before the new airlines started, and when air fares were proportionately higher than they are today. Access to France from the UK has improved recently with Eurotunnel cutting the journey time by twenty minutes.

'The Costa del Sol for example we feel wouldn't be impacted much by increased air taxes - although over development could bring prices down there anyway'.

But there is a warning that the lower priced end of the market could be hit more than the top end.

Bargain Properties

'There has been a significant increase in second home ownership in the last decade', say Tribune. 'Gone are the days when it was just the wealthy who owned an overseas property. Developers in Spain, Greece and Cyprus have built apartment blocks with units of two and three bedrooms that are affordable for a lot of middle income families. Given that mortgages are readily available and it's often just twenty per cent of the asking price that needs to be found an overseas home has become reality for millions of Europeans. But if air fares increase significantly and the holiday makers who rent the owners apartments and villas declines, quite a few will need to sell as the rental income pays the mortgage. There could be a glut of properties come to the market which will send prices downwards.'

Exceptions to the rule could be in the two European tax havens of Monaco and Andorra, where there is no income tax for residents.

'Historically tax havens have been popular no matter how the economy is. When someone buys a property in Monaco it often doesn't matter to them if it's a few million Euros as they're going to save more than that in tax during the time they stay there. Andorra is slightly different as it's a tax haven but also people buy ski apartments there, adding to demand'.

Andorra property prices have risen an average of ten per cent a year in the last decade, and some predictions are for that figure to be closer to fifteen per cent for 2006.

If governments do start introducing new air fare taxes to slow and possibly reverse the rise in air travel there could be good news for some property buyers though.

'In some areas the second home market has increased prices significantly, with many of the younger local population being forced to move away from their towns and villages', say Tribune Properties.

'The UK and US populations are quite mobile, but in some countries popular with holiday home buyers there are three or four generations of the same family in a village or town. But as overseas property buyers have moved in and pushed prices up, the younger generations ahave been forced to look away from these popular areas because they cannot afford a property in their home town anymore, and a lot of the local employment has become seasonal. If real estate prices come down they might be able to afford to live in the villages where they were brought up if they choose to do so. Some will still move away but at least they will have a choice.'

Conversely, far from changing traditional towns and villages into holiday resorts, overseas property buyers can sometimes have a positive affect on preserving traditional village life.

'In France for example, many of the rural villages were dying a slow death as the younger generations moved away to the bigger towns and cities to find work. British second home buyers have revived the villages by buying run down properties and renovated them, breathing new life into the communities. The property market is nothing if it isn't adaptable,' conclude Tribune, 'And while there will be regions that will suffer as a result of a declining market, there will be winners too.'

Interest rates beging to temper buy-to-let market according to latest RICS survey

2006-12-02T09:54:00.000-08:00

Instructions to let property rose at the slowest pace since Q2 2005, says the latest RICS Lettings Survey for Great Britain.

The slowdown was skewed primarily towards flats as buy-to-let investors expressing caution in the market, reflecting a fall in landlords’ profit margins as a result of rising interest rates.

6% more Chartered Surveyors reported a rise than a fall in instructions to let property, compared to 13% in the previous quarter.

The slowdown points to a deterioration in landlords’ margins triggered by recent interest rate rises and a renewed fall in gross yields.

Only 9% more chartered surveyors reported a rise than a fall in instructions to let flats, compared to 19% in the last quarter.

Enlarge image Tenant demand for rental property remained solid this quarter, although the pace has eased back compared to the previous three months.

Continuing demand from tenants reflects a combination of factors, including a strong economy and rising migration.

Chartered Surveyors report that migration from Eastern Europe has impacted upon the demand side of the market as demand exceeded supply for a tenth consecutive quarter, putting upward pressure on rents.

The slight reduction in tenant demand – especially for flats – is evidence that some would-be first time buyers have been able to purchase a property.

Surveyors expect rental levels to rise further, though confidence has edged back slightly after reaching record levels.

Gross yields declined for the first time in two years, as house prices rose faster than rents, squeezing income investors. Gross yields were 4.6 % in October compared to 4.8 % a year ago.

RICS spokesperson Jeremy Leaf commented:

"The recent interest rate increases have painted the buy-to-let market as a less than favourable investment.

"With profit margins potentially reduced, affordability conditions could bite hard into investors' pockets and push up rents if interest rates rise further in 2007.

"But investors continue to express a high level of confidence in the longer-term buy-to-let market as selling activity remains low.

"With interest rates still relatively low and the economy gaining steam, first-time buyers are again placing a tentative toe in the property market."