« November 2007 | Main | January 2008 »

19 posts from December 2007

December 24, 2007

First-time buyers 'at new low'

First-time buyers 'at new low'


Source:- The Press Association

Nick Says…

This can only lead to one thing… these people need to rent my property/s. more importantly with this sort of information we can conclude that rents will probably rise and have done for my properties.

The number of first-time home buyers has sunk to its lowest point since 1980 as house hunters increasingly struggle to get on the property ladder, a report has said.

An estimated 300,000 first-time buyers entered the market in 2007 - 15,000 less than the total a year earlier - as soaring prices make homes increasingly unaffordable, mortgage lender Halifax said.

However, industry experts have offered hope to beleaguered prospective buyers, saying conditions may improve in 2008 as the UK property market cools.

Halifax's annual First Time Buyer Review found the average house was out of the reach of a typical first-time buyer in 96% of all UK towns. The average price paid by a first-time buyer increased 15% during the year to £175,093 and has soared 82% over the past five years, it added.

Martin Ellis, Halifax chief economist, said rising property values have priced many potential buyers out of the housing market.

"When they do enter the market, first-time buyers are now more likely to be in their 30s rather than their 20s and buy a flat rather than a terraced house.

"First-time buyers are also buying proportionately more in cities than towns as they opt for convenience over size."

He said the financial position of most first-time buyers is sound, with purchasers typically putting down a deposit of 20% - equivalent to a year's earnings.

"There is no quick fix to the first-time buyer problem. A more subdued housing market over the next few years is a positive step for potential new entrants.

"Lower than average earnings house price growth together with more government initiatives may, in time, address the issue," he added.

December 22, 2007

Rental voids expected to fall

Rental voids expected to fall

4wallsandaceiling.com Newsletter

Source:- Residential Landlord

The fourth quarter of 2007 has seen much speculation surrounding where the housing market and the buy to let sector are heading in 2008.

Mortgages for Business, the independent buy to let mortgage broker, has compiled information based on 2007 and made a number of predictions for the New Year. They are as follows.

The housing market in 2007 had an annual capital growth of approximately 7 percent, while buy to let lending grew to account for 12 percent of all new mortgage advances, compared to just 3 percent five years ago.

The Association of Letting Agents (ARLA) says tenant demand at a five year high, and rentals are underpinned by increased immigration, an increase in people living alone and affordability issues for first time buyers.

The demand of rental property is particularly high in the South East where there is a shortage of rental property. The lack of supply and surge in demand is likely to see an increase in rental income throughout 2008 and decreases in void periods. Paragon reported overall yields in November at 6 percent but the North East and North West at 6.7 percent.

The availability of competitive mortgage funding will be become an increasing issue in 2008, as securitised lenders who have previously sought funding from the city find new finance either harder to come by or priced at a higher level.

This is due to increasingly nervous sentiment in the city towards new lending following the sub prime mortgage lending issue in the US and the Northern Rock problem in the UK.

Lenders who rely on their own retail funds, such as building societies, will be able to exert increasing dominance on the marketplace. This decrease in competition and funding availability, and re-emergence of traditional lenders is likely to mean the period of highly competitive mortgages where lenders make a low margin will gradually begin to curtail, as the remaining lenders seek higher margins on a smaller pool of loans.

In 2008, buy to let investors may also face higher lender arrangement fees on mortgages, as lenders seek to find margins on competitively priced mortgages against a backdrop of higher lending base lines.

Many analysts are predicting The Bank of England could implement two quarter percentage interest rates cut in the first half of the year, which will ease mortgage payments against rental incomes. Additionally any interest rate cuts will lessen pressure on the rent to interest cover calculation the process for granting new buy to let mortgages.

Negative commentary on the buy to let sector in 2007 focused on city centre new builds, where supply in some cases outstripped demand.

Many mortgage lenders chose to further tightening lending criteria towards the new build sector focusing procedures on stringent valuations and in some cases increasing deposit requirements. It is likely that shrewd investors in 2008 will avoid this property type in favour of terraced housing in up and coming areas.

Jonathan Moore, Head of Marketing at Mortgages for Business comments: “The buy to let market still represents a viable investment option. Prevailing market conditions now mean that investors must make informed decisions, where as previously rapidly accelerating house prices across all areas of the UK and property types meant any investment represented an unquestionably good return.”

December 21, 2007

Merry Christmas

Just a quick blog to wish you all a very Merry Christmas and a Happy New Year.

Click here for your Christmas Cheer.

Next year will be a good one.

December 20, 2007

Residential property prices in Cyprus hit another record in November.

Residential property prices in Cyprus hit another record in November.


Source:- Financial Mirror

Nick Says…


If you can’t make it work over here, go over there.

Residential property prices in Cyprus hit another record in November as prices rose by 21% year on year, according to the BuySell Home Price Index. This is the highest year-on-year increase recorded by the index, which began in 2004.

The BuySell Home Price Index rose for an eleventh consecutive month to 141.69, recording a significant monthly increase of 2.5%, compared with a month-on-month increase of 3.7% in October.

In the year to date, prices were up by 21.5%, compared with a more modest increase of 5.9% in 2006.

The increase brought the Average Home Price in Cyprus to CYP 110,390 (EUR 188,613).

The BuySell Home Price Index was created and is updated monthly on behalf of BuySell Cyprus Real Estate by MFC S. Platis. The Index is announced during the second week of each month and depicts the movement of prices at which residential properties are sold in Cyprus, based on the extensive BuySell Cyprus Real Estate database.

For more information on the methodology of the Index and on Hedonic Prices please refer to: The “Asking Price and Transaction–based Indices for the Cyprus Housing Market (Rebased)” by Dr. Stelios Platis and Marios Nerouppos of MFC S. Platis.

The BuySell Home Price Index constitutes the only valid gauge of the Cyprus housing market and is considered as an effective tool for home buyers, sellers and investors.

December 19, 2007

Tracker mortgages "coming into their own"

Tracker mortgages "coming into their own"


Source:- Money Magic

Nick Says…

I’ve just bought 2 houses using tracker mortgages for the very same reason that this piece of writing eludes to.

Firstly you benefit from easier intro costs on what, effectively, is a better or more useable mortgage product. Plus, being as though interest rates are moving in a downward direction (and are forecast to do so again), this can only be of benefit as well!

However, please make sure you take advice before making this decision, having these mortgage products suit me but then they might not suit you.

Tracker mortgages are now a viable option for borrowers following the Bank of England''s base rate cut, it has been claimed.

Ray Boulger, senior technical director and spokesperson for John Charcol, said that the firm has been recommending such mortgage products for some time.

Tracker mortgages ensure that rates move in line with the Bank''s base rate, he explained, stating that borrowers are not "at the mercy of their lender".

Suggesting that trackers are "coming into their own", Mr Boulger claimed that these products can offer better value for consumers.

"Most of the time, a tracker nearly always gets you better value than a fixed-rate mortgage, providing the starting point is good," he remarked.

The Bank of England''s monetary policy committee voted to reduce the base rate by 0.25 per cent to 5.5 per cent earlier this month.

A number of mortgage lenders have now chosen to follow suit and reduce their own rates.

December 18, 2007

Euro set to boost Cypriot property fortunes

Euro set to boost Cypriot property fortunes


Source:- Choices

Nick Says…

Come on get going.

The UK will be a tough, but not impossible, market next year. However, that does not mean that you need to “hang your hat” on property investment.

Cyprus has an awful lot of compelling reasons to invest (Click here to read more) the one below is just a “no brainer”

Drop me an e-mail at nick.tadd@4wallsandaceiling.com to get started.

Cyprus has become an increasing popular target for UK overseas investors, as the nation prepares to adopt the euro.

On January 1st 2008, the country will formally change over to the currency, prompting further British investment in the relatively cheap property market on the island.

And Les Calvert, director of foreign housing company, Property Abroad, revealed that the number of enquiries about the nation's homes is continuing to increase.

He said: "Cyprus has been increasing in popularity over the last year, more people are now making specific enquiries for property in Cyprus and there are still a few properties around that are free of VAT out there so people are jumping on and trying to snap up properties where they can.

"When the Euro comes in it will make the property market a lot more open and I expect the market to rise quite healthily. Until recently you have still be able to buy some properties excluding VAT so that has made the country more attractive," he added.

December 17, 2007

Tax change may spark house selling surge

Tax change may spark house selling surge


Source:- The Times

Nick Says…

Looks like rich pickings in the new year.

According to the “have your say” bit, most people believe that the rush to sell will be upon us quicker than April… no s**t Sherlock!

It’s my belief that the first quarter of next year will be telling times, however, that is going to be a benefit… just like beach combing after a storm, the bargains are going to be abound!

FEARS are growing that an overhaul of the tax rules for buy-to-let investors and second-home owners could lead to a surge of selling in April, sending precarious property prices tumbling.

An estimated 650,000 people with buy-to-lets and second homes will see their tax bill fall significantly if the government’s plan to introduce a flat 18% capital-gains tax (CGT) gets the green light.

Although the government is expected to tweak its tax plans in the new year in response to fierce lobbying by business leaders, the proposals for property owners are expected to remain unchanged.

Second-home and buy-to-let owners will save an average of more than £6,000 by selling under the new regime as their lowest CGT rate drops from 24% to 18%.

This has sparked concerns that some landlords, struggling to cover borrowing costs and worried about falling house prices, will rush to sell when the more attractive tax regime takes effect. This could spell trouble at a time when the housing market is expected to be exceedingly weak.

Steve Smith at Andersen Charnley, a wealth manager, said: “The government’s intention to reduce CGT could cause a false market in which fewer buy-to-lets are marketed before April but then there is a rush to sell.

“It is the flipside of 1988, when a false market was created by [chancellor] Nigel Lawson’s decision to end tax relief on mortgage interest. This led to a rush to buy homes before the perk was scrapped and resulted in the property crash.” Estate agents have reported more landlords running into trouble because they can’t find tenants, or because interest-rate rises mean their rental income no longer covers their mortgage repayments.

The average rental yield – the rent expressed as a percentage of the value of the property – has slumped to just 3% after tax. This means many are losing money once mortgage payments and maintenance costs are taken into account.

Until recently, property investors were willing to shoulder these costs because they expected to make money from capital growth. But with the housing market looking shaky thousands are believed to be looking to exit the market.

Simon Rubinsohn, economist at the Royal Institution of Chartered Surveyors, said: “I don’t think we are on the edge of a complete bailout, but some landlords are looking to sell. We could see a pickup in properties coming to the market in April, although I think most buy-to-let investors are still committed for the long term.” If you need to sell, you could defer paying CGT at the higher rate in force now by rolling profits into an enterprise investment scheme (EIS).

The CGT must be paid eventually, but if you sell your EIS shares over several years, using your CGT allowance each time, you may be able to avoid the tax or at least get the lower rate.

December 14, 2007

'Plenty of opportunities for property investors' in the current market

'Plenty of opportunities for property investors' in the current market


Source:- Ludlow Thompson

This is a very poignant piece of writing and ,quite frankly, rather refreshing.

The key phrase is “every market presents an opportunity” and he’s right it does.

In market places like the current one there appears to be a misplaced use of time and effort on analysing instead of taking advantage. We have a changing market that’s true, however, I see no reason why this should be a problem.

For example:- When it starts to rain during an F1 race they don’t stop driving, what they do is put on wet weather tyres and change their strategy. Therefore, the opportunity is with the ones who understand how to take advantage of the situation.

At the moment a change of strategy is needed to suit the opportunity that is presented… the worst thing to do now is sit around whining about property so called “crashing” and scratching your head. Either seize the advantage or shut up and get on with something else. (pardon the expression)

News Image UK property investors should find many opportunities for investment in the current market, an expert has said.

Stephen Ludlow, director of residential property agent Ludlow Thompson, made the statement while giving advice to people looking to find bargains in the housing market.

"Every market presents an opportunity," he said, implying that the current situation could be good for house buyers and investors alike.

Giving an example of how people can benefit from lower house prices, Mr Ludlow remarked: "People will decide to let out their current property and buy another property while prices are down - and then as the market recovers they'll sell their first property."

He also stated his belief that prices in the property market would remain relatively stable and not fall steeply.

The average house price in the UK is £194,895 following three months of decreasing prices, according to the Halifax Price Index.

December 13, 2007

Cyprus property deals hit record CYP 1.7 Billion

Cyprus property deals hit record CYP 1.7 Billion


Source:- The Financial Mirror

Nick Says…

This is awesome, note the developers trying to get in before the land tax is imposed next year.

For those of you who want to get going all I can say is GET GOING, drop me a line at nick.tadd@4wallsandaceiling.com

Cyprus property deals during the first nine months of 2007 surged by a spectacular 42% YoY to CYP 1.7 bln or EUR 2.9 bln from CYP 1.19 bln a year ago in the same period, which was up 73% over the 2005 figures.

Real estate analysts explain that the spectacular activity in property is mostly due to the impending imposition of VAT on land sales, with many developers rushing to lock in the deals before the additional taxation kicks in.

Easy credit by banks is also widely blamed for fuelling an unprecedented buying spree, with many engaging in speculative activity, which the Central Bank of Cyprus is now attempting to stop.

By the end of October, bank lending to the property sector was up 33% with the public and the banks ignoring the new tougher lending measures introduced by the Central Bank, which reduced the leverage of property loans from 70% to 60%.

The government meanwhile is racking in huge gains from the imposition of capital tax on property gains. State income from capital gains taxes jumped 155% to CYP 200 mln in the first nine months of the year compared to CYP 79 mln in the same period in 2006 and CYP 38 mln in 2005.

December 12, 2007

The Pros and Cons of buying a new property

The Pros and Cons of buying a new property

4wallsandaceiling.com Newsletter

Source:-Paul Green

Dun_dealIf you’ve ever bought a brand new car, you’ll know the pleasure of sitting inside knowing you are the first driver, breathing in the new car smell, and just generally feeling pretty smug.

Buying a new property is kind of the same but even better. It’s the ultimate blank canvas – a house that’s only just been completed, and doesn’t have any signs that anyone else has ever lived there. What could be more perfect?

Well, just as with most things in life, there is a flip side. A new property can reveal all sorts of problems in its first few years. Unlike a new car which is being churned out from a factory set up to produce an identical build quality every time, your new property will have been put together by a number of different tradesmen. It only takes one of them to have a bad day and your house has a fault.

Luckily there are many more pros than cons in looking at purchasing a new home. First of all is choice. Drive round any estate being built today, and you’re a lot less likely to see the boxy identikit houses of the 70s, 80s and 90s.

Developers today are a lot more switched on to us demanding a house that looks different to anyone else’s. Plus with a huge number of small developments within abandoned industrial buildings or on brown field sites, it’s a lot easier to find a property that suits you.

Many new homes now come with all sorts of gadgets wired in and ready to go. These can include remote controlled lighting, alarms, sound and multimedia systems. It’s a lot cheaper and less disruptive to have these kind of things put into your new property before you move in.

Another benefit of a new home is how green it is. It’s said that a house built in 2007 is up to four times more energy efficient than the same size house built 100 years ago. In the long-term that’s going to save you money on your heating bills, plus have less of an impact on the environment.

Very strict building and fire regulations mean your new property should be repair-free when you move in. You don’t even need to unpack your cordless power drill! And there’s no worrying about how long the boiler will last – it’s brand new and likely to be guaranteed, giving you peace of mind.

In fact the whole house will be guaranteed for ten years. It’s the standard National House Builders Council (NHBC) warranty for a new property build these days.

And the best feature of a new build? No chain – you move in on the date you want to.

So, to the main problems with a brand new home. There are two to look out for. The first is that building can be held up for all sorts of small reasons, from a bit of bad weather to a problem with supplying some of the materials. That can screw up your plans. After all, you can’t move into a house if it hasn’t been completed.

Once you’re in, you’ll go through a process called ‘snagging’. This is a two year period within your house’s warranty where any small problems or defects in your home should be reported to the builder so they can fix them. Doesn’t matter if the original builder has gone bust; the warranty will cover that and find someone else to do the work.

But snagging can be a real pain. Who wants to spend their days looking for skirting boards that haven’t been attached properly, or light switches which don’t quite work as they should?

You can actually hire a snagging inspector to come and find all of your house’s faults for you, saving you time and probably money in the long-term. Whatever you do, check your warranty carefully, as some faults may not be covered.

We use Dundeal Property Inspection, who are, in my opinion, are the most effective and reputable Snagging company out there.