Monday, September 11, 2006

Borrowers shelter in 10-year fixes

Long-term home loans are growing in popularity due to concerns about more rate rises.
By Clare Francis (The Sunday Times)

"INTEREST rates were kept on hold last week, but borrowers are still flocking into fixed mortgages due to fears that base rate could go up later this year. Some are even opting to fix for 10 years because rates are lower than on five-year deals.

The Bank of England’s monetary policy committee (MPC) voted to keep interest rates at 4.75% last week, but most economists polled by Reuters, the data firm, think there will be a further quarter-point increase in November.

The risk of further rises has caused huge demand for fixed rates. Short-term fixes are still the most popular — 75% of people opted for two-year deals last month, according to Mortgagesdirect, a broker — but 10-year deals are looking increasingly competitive and you do not have the hassle of remortgaging every couple of years.

David Hollingworth at L&C Mortgages, a broker, said: “While the majority of people still prefer short-term deals because it gives them the flexibility to reassess their circumstances every few years, the cost of remortgaging is rising because fees have gone up so much. An increasing number of people are looking to lock into longer-term deals as a result.” "

This is something I arranged for most of my buy-to-let properties some time ago. I never thought that a two-year deal was a true fixed rate because of the shortness of the period.

Chris Bell


Thursday, August 24, 2006

Online chain check for housebuyers coming up

Sarah Arnott, Computing 24 Aug 2006

"The Land Registry is developing a prototype system to allow property buyers to check the status of all purchases in their chain.

The Chain Matrix software is the core of the Registry’s eConveyancing programme, says head of market change Julie Barry. ‘The system will allow purchasers to go online and track the progress, not just of their own transaction but the others that are relevant to them,’ she said.

‘You cannot see who the others are, or where the properties are, but you can see what stage they have reached in the run-up to completion.’"

I can see this being really useful to housebuyers frustrated by an apparent lack of progress in their sale or purchase.

Chris Bell


Tuesday, August 15, 2006

Bombing overseas investors

Monday 14th August 2006: 16:00
By Jonathan Boyd

"Do you really still want that second home abroad?

Second homes abroad has been a thriving market in recent years, driven by a few key factors but clients may now ask whether to still consider it following the latest threats to the airline industry."

The latest bomb scares and airport reaction is going to add hassle to visiting investment properties in Europe. Something you need to take into account before you invest in property abroad. This is a good analysis of several factors involved in assessing overseas investment in property.

Chris Bell


Sunday, August 13, 2006

Britains Top Ten small towns

Another top ten! This time of pleasant towns in which to live. They are well spread throughout the country so you may well find there's one near you. Could make a good investment too!

Chris Bell


Top Ten hotspots in England

Here's an interesting list of places to invest with reasons given as to why they have been chosen. The top three were Ipswich , Gillingham and Peterborough with massive development plans given as the reasons for their place at the top of the list.

It certainly provides a starting point for someone looking to invest in the English property market.

Chris Bell


Tuesday, July 11, 2006

New apartment prices fall

11 July 2006

"The average price of a new home in the UK in June was £258,581, down 0.5% compared to May. But the fall was caused by an increasing oversupply of new apartments, said in their new homes index for July. All other property types increased in value over the month.

Despite apartments being the only property type to fall in price this month their domination of the housing mix (58.6%) has meant just a 1% fall in price has had a negative effect on the overall average cost of a new home.

Over the last three months new properties have fallen by 2.3% and over the year to last June they fell by 1.1% the new homes website said."

Anyone who invested in apartments recently is now likely to be in a difficult position with a choice of selling at a loss or letting for a lower than anticipated rent.

Chris Bell


Monday, July 10, 2006

Parents/Students Buy-To-Let Bonanza

SUNDERLAND has recorded the biggest increase in house prices in a survey of 109 university towns and cities across the United Kingdom.

Parents who invested in property while their children went to university in the North East have found that the value has climbed by 147 per cent over five years. Prospective investors need not be put off, however: the average cost of a home in Sunderland remains nearly £5,000 lower than for the region as a whole.

A report by Halifax Estate Agents found that many parents, faced with the prospect of student debts totalling £20,000 or more after years of study, are studying house prices alongside university league tables and are turning to bricks and mortar to help to finance their children’s higher education.

The property generates an income while the student offspring is at university through rooms let out to other students. After graduation it can be let out to tenants, providing a steady income for many years thereafter.

However, parents whose children win places at the top universities will need to lay out large sums if they want to buy a property in those towns and cities, the report says.
London University colleges, which feature strongly in the top 20 of The Times top universities league table 2007, have property prices to match. The parents of a son or daughter who is enrolled at Imperial College, based in Kensington, West London, could pay on average £605,000 for a property in the area.

House prices in areas near the college, which is ranked third in The Times league, have risen by 64 per cent in five years.

For properties close to University College, the average price is more than £444,000, and for anything near the London School of Economics, parents would have to pay on average £310,000.

Outside London, property prices in some of the other top 20 university towns are almost as steep. In Oxford, the top seat of learning for the fifth consecutive year in The Times league table, and in Bath, ranked ninth, property prices are on average more than £250,000. A home in Cambridge, ranked second, costs on average £227,000, while in St Andrews, ranked 18th, the average is just under £200,500.

Durham recorded the highest house price growth of the top 20 university towns. The average cost of a home in the city is now more than £145,000, 122 per cent higher than in 2001.
House price inflation in Loughborough, which had the second-highest increase in the top 20, was 111 per cent over the same period.

Loughborough was also named England’s top provincial university and was rated best for student satisfaction. Nottingham is the least expensive top 20 university location in which to buy a property. The average price is £139,000.

Based on house price growth alone, the top-performing university towns and cities were predominantly in the North and had property prices below the regional average.

Claire Gibb, of the Kensington and Chelsea estate agents Bective Leslie Marsh, said that parents who invested found that the lettings market for student properties was buoyant. “Students frequently look to share in three or four-bedroom houses or flats, but their budgets often don’t stretch that far, so they look for one-bedroom or studio flats where their money goes further,” she said.

“We are always desperately looking for one-bedroom apartments. In August and September properties come and go so quickly on the rental market, the supply just disappears.”

Shared accommodation, whether for students or young professionals, is one of those areas where it is still possible to make good money in property. If you are considering property investment it is worth checking out the returns from renting out rooms individually rather than houses.

Chris Bell


Wednesday, June 07, 2006

1-in-7 are planning to buy a house by end of year

"The number of people planning to move home has doubled since the beginning of the year as confidence in the property market remains strong, research shows.

Around 15% of people now claim they plan to buy a new house before next winter, compared with just 7% at the beginning of the year, according to Alliance & Leicester. The group said that while not everybody would act on these plans, the increase in intentions showed people felt confident about both house prices and borrowing.

The number of people looking to buy their first home has also increased by nearly a third since January, with 16% of under 30's, the key first-time buyer age group, now planning to move, up from 12% at the beginning of the year. Alliance & Leicester said despite high house prices affordability still remained good and was far better than during 1990 when many people defaulted on their mortgages.

It said people taking out a mortgage during the first three months of the year spent an average of 14% of their household income on interest payments, the lowest level since the second quarter of 2004, and well down on 1990's level of 27% debt. Among all mortgage holders, people had an average outstanding mortgage debt of £85,992 at the end of April, nearly 10% more than last year.

But despite this, affordability remained unchanged with interest accounting for 10% of their income due to lower interest rates and rising pay, increasing to 21% if capital repayments were taken into account.

• YouGov questioned 2,000 people during May. Data from the Bank of England, Council of Mortgage Lenders and the Department for Communities and Local Government was also used.
06 June 2006"

Seems like the 'house price crash' people are going to have to wait a bit longer!

Chris Bell