Buying a House is cheaper than renting for first time buyers

Posted on September 1, 2011 by jane

New research shows that the average monthly cost associated with buying a two-bedroom flat for a first-time buyer is around £567. This is £110 lower than the typical rent paid on an equivalent property, according to Halifax, which conducted the research.

The cost of getting onto the property ladder has fallen by 40 per cent since 2008 due to low mortgage rates and a depressed housing market. By contrast, the price of renting has fallen by a fraction of that amount and has even started rising again over the last year.

Suren Thiru, housing economist at Halifax, said that the current economic climate is favourable for prospective first-time buyers.

“The recent decline in the cost of buying a property for first-time buyers compared to renting has been substantial. and reflects the drop in both mortgage rates and house prices since 2008 as well as a marked increase in the average rent paid over the last year,” said Ms Thiru.

Mortgage rates have reduced dramatically over the last few years due to record low interest rates of 0.5 per cent. The average mortgage rate for a new borrower is 3.8 per cent, down from 5.9 per cent in mid-2008, according to Halifax. At the same time the average price of a typical first property has fallen by 14 per cent to £124,378.

Whether you choose to buy or rent, it is always best to weigh up your options carefully and look to see what you can afford to do in the long-term.

Posted in Buy-to-let, Cash Buyer, House buying, Quick house sale, Reposession, UK Housing Market, Uncategorized | Tagged , , , , , , | Leave a comment

To share or not to share……..that is the question

Posted on June 9, 2011 by jane

Last month it emerged that increasing rents are leading to demise of the love nest, as couples can no longer afford to live alone. According to flatsharing website easyroommate.co.uk, one in nine people are looking to rent will be moving in with a partner in order to halve rent responsibilities.

Couples can save more than £3,100 a year by opting to share with others and as rental prices climb, twice as many couples are opting to save.  Couples are also using this as an opportunity to save for a deposit for a property.

In the past 12 months, the number of couples looking to rent with other flatmates has increased 91pc – and landlords are catering for this growing demand. There are four times as many double rooms on the market now than in May 2010.

Is this the way forward to get yourself on the property ladder?

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Simple tips on selling your house quickly

Posted on May 23, 2011 by jane

With a flood of properties on the market, you need to ensure that your house is at its best for prospective viewers. Here are a few helpful tips. Also don’t forget that you can talk to us about selling your house for cash.

Pricing too high can be as bad as pricing too low.

  • If you list too high you may miss buyers in the price range where your home should be.
  • You may not even get offers because you will have scared off interested buyers and they won’t bother to look.
  • When you do get the price right you will have lost a lot of possible customers and wasted time.
  • Your estate agent will suggest a price that compares with other similar properties for sale.
  • When you get a property valuation the estate agent will assess your home’s true market value and put your house up for sale at a realistic price.

Minor repairs make your house easier to sell, allowing you to maximize your return or minimize loss on the sale.

  • Most buyers are looking for a house in good condition that they can move into straight away.
  • Buyers who are willing to do the repairs after moving in automatically take the cost of this work off the price they offer.
  • You save nothing by not doing necessary repairs, and you may slow down the sale of your home.

Buyers probably won’t even come inside your home if they do not like the look of it from outside.

  • Many buyers drive past a house before deciding whether or not to look inside.
  • The outside of your house will have less than a minute to make a good first impression.
  • Mow the lawn, trim shrubs and trees, and weed the garden. Clear paths and drives of leaves and other rubbish.
  • Repair gutters and eaves, touch up the exterior paint and repair or resurface cracked drives and paths.
  • Place flowers in pots and/or hanging baskets at the front of the house near the door.

Buyers will not hesitate to walk out of the front door within 60 seconds if the house doesn’t look and feel as if they could make it their home.

  • Most buyers are looking for an inviting home they can move into straight away.
  • Spending some money for necessary work on your home before you sell it usually makes sure you get a better price and sell more quickly.
  • Your estate agent will advise you which repairs and replacements are most important to get a sale at the right price.

Do not get carried away with repairs and replacements to your home, as you may end up over-improving the house.

  • Be careful that the cost of your improvements does not exceed the amount of additional money they will bring in when you sell. Make sure your improvements to not raise the value of your home too far above that of other similar houses in your area, as you may not get your money back when you sell.
  • You cannot expect improvements to increase your sale price in excess of 20% than that for a comparable home in your neighbourhood whatever you do or spend.
  • Your estate agent can advise you as to improvements that will raise the value of your home when you sell.

Offering flexibility in financing options may encourage more prospective buyers.

  • Consider offering to pay some of the sellers completion costs or include a one-year home warranty, or other buyer incentives.
  • Your estate agent can advise about incentives for buyers

Results are poorer for sellers who attempt to sell their homes on their own and find they cannot complete the sale without the help of an estate agent.

  • Sellers who sell their home without a real estate agent often do not get the best price for their property.
  • As your home is probably your biggest asset it makes sense to take the professional advice of a qualified estate agent when you want to sell it..

Prospective buyers will feel more like the house could be theirs if the current owners are not there.

  • If you are in the house during a viewing it can make buyers feel like they are intruding.
  • They need to be able to visualize your house as their home. This can be difficult when you being around reminds them it is still your home.
  • Your estate agent will be pleased to show people around your home and will know when to leave them alone to look and talk by themselves.

If you approach the sale of your home as the buyer’s adversary, you risk losing a perfectly solid buyer for no good reason.

Both you and the buyer have the same goal: for you to sell your home and for the buyer to buy it. Work with your real estate agent to approach negotiations positively and with a win-win frame of mind.

You should reply immediately to an offer!

When a buyer makes an offer, that buyer is, at that moment in time, ready to buy your home. Moods can change, and you don’t want to lose the sale because you stalled in replying.

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Fuelling inequality in the UK Housing Market

Posted on May 20, 2011 by jane

The UK housing market needs to reform urgently to stop persistent cycles of “boom and bust”, according to a leading social policy research and development charity.

A review of the property market by the Joseph Rowntree Foundation (JRF) Housing Market Taskforce found that volatility in levels of home-ownership is fuelling inequality.

The taskforce found that just one in four couples will be able to afford to buy a home in the future if action is not taken to change the current housing system.

Public and private housing supplies should be increased, stamp duty should rise in line with inflation, council tax should reflect a fixed percentage of a property’s value and a curb on borrowing limits should be introduced to stop future housing booms, according to recommendations made in the report.

Speaking at the launch of the review, Julia Unwin, Chief Executive of the JRF, said: “Since the 1970s, there have been four boom and bust cycles in the housing market. This persistent instability distorts housing choices, inhibits house-building, and drives arrears and possession rates, putting people at great risk, and creates wealth inequality between the generations.

“We have set out to provide a series of policy options that together would help provide long-term stability in the market. I urge policy-makers to look at these and act now, because the seeds of the next housing boom have already been sown.”

Many first-time buyers have been locked out of the housing market since banks and building societies restricted mortgage lending in the aftermath of the recession leaving many stuck in private rented accommodation or reliant on their parents for help getting onto the housing ladder.

The report called for a “housing market that is socially sustainable rather than the current model, which is characterised by volatility” based on need, fairness and responsibility and said that action needs to taken before the next boom/bust cycle begins: “Over the coming year, there is likely to be an increased focus on the depressed nature of the housing market, while unemployment may further expose the weaknesses in the current home-owner safety net.

“Yet it would be a profound mistake to leave the underlying volatility of the housing market unaddressed. We know from past experience that, without fundamental reform, the cycle of boom and bust will reassert itself.”

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Reposession of property up by 15% in Q1

Posted on May 12, 2011 by jane

The number of repossessions in the first quarter of 2011 has increased by 15% when compared to the last quarter of 2010 new figures from the Council of Mortgage Lenders has shown.  However, this figure is 10% lower than the same time a year ago.

So what does this mean for UK mortgage payers who are struggling to make ends meet?  Michael Coogan, director-general at the CML, says: “In essence, good arrears management practice is a balance between giving households every chance to rehabilitate and get back on track, and limiting the damage in the minority of cases where this is not going to be achievable.”

He says that looking ahead, many households are likely to find their budgets stretched for some time, and some will inevitably find themselves in difficulty.

The best advice would be to always speak to your lender first and then take a look at your other options.

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Finding the right house for you

Posted on May 11, 2011 by jane

Finding the perfect house for you should really be a pleasurable experience.

 

If you are about to start the journey of acquiring either you’re first or second home purchase, do you currently feel restricted by price ranges, or by the variety of options? Do you opt for a semi? Is a detached   the better option? Should you go suburban or, should it be urban?

 

Don`t let  that  any of that bother you too much , you can still find that perfect purchase – and don’t let anybody tell you that you can’t afford to be choosy when looking for a home to buy!  Only you know what your dream house looks like, and it is out there. It may just take a little bit of time and patience to find it.

 

What is useful is just to create a simple list, with a few pro`s and con`s. This will help define where you would like to live and what type of house you are you looking for. You may be very surprised with how your list looks.

 

Here are a few suggestions of what your list could include

Location & Neighbourhoods

  • Suburbs or Country?

Pros: Generally less expensive. Often has more character.  Often has more land. More home for the money.

Cons: More time in traffic if driving to town for work. Further away from entertainment options that cities offer.

  • Urban.

Pros: Closer too many employers. Walking distance to theatres, restaurants, schools. Many period homes offer more distinctiveness in styles.
Cons: Often noisier. Higher crime rates. More expensive.

  • Busy Streets.

Pros: Often homes on streets with more traffic are cheaper. If noise doesn’t bother you, don’t pass up homes on busy streets. Drive by at different times of the day / week to ascertain noise levels.

Cons: These types of homes will always sell for less than others in the same area. If bedrooms are located near the front of the home, sleep may be disturbed.

  • Cul de sac.

Pros: Number one choice of buyers with children.
Cons: Less privacy, neighbours know more about you.

  • Corner plots.

Pros: Often larger lots. Fewer neighbours. More visibility.
Cons: More traffic noise. More vulnerable to vehicles jumping the curb. More  pavement  to  CLEAR SNOW FROM IN THE WINTER! .

Type of Home

  • Single Family.

Pros: Good appreciation. Opportunity for gardens. More privacy. Quieter.
Cons: More expensive than our next category. More maintenance.

  • Townhomes,  Flats.

Pros: Less expensive than comparable single-family homes. Generally newer so fewer repairs. Lock-n-go lifestyle. No garden  or exterior maintenance.
Cons: Less privacy. Noisier. Common walls and/or floors and ceilings. Sometimes no garden yard or balcony.

Number of Stories

  • Single Story.

Pros: Easy wheelchair access. Some medical conditions such as bad knees make it hard for certain individuals to climb stairs. Easier to clean.
Cons: Can be noisier if stereos or televisions are located on the same floor as bedrooms. Some people feel safety is compromised if bedrooms are located at ground level. More of the lot is absorbed by living quarters.

  • More than One Story.

Pros: More living space on same foundation than a ranch home. Less noise if entertaining on lower level while other family members sleep upstairs.
Cons: More trips up and down the stairs to carry stuff to bedrooms. If laundry rooms are on the second floor, washer leaks are major. Might need dual vacuum cleaners. It is difficult to maintain consistent temperatures on each level without dual heating and cooling units.

  • Split Levels.

Pros: Often less expensive if purchased with lower level unfinished. Higher ceilings are appealing. Downstairs family room separates noise levels from upstairs. More square footage on same size lots as ranch homes.
Cons: Less storage space. Hassle to take trash downstairs and carry groceries upstairs or vice versa. Kitchens tend to be smaller.

Interior Specifications

  • Number of Bedrooms.

Pros: Common minimum requested configurations are 3 bedrooms. Newer parents prefer bedrooms located on one level.
Cons: 2 bedrooms appeal primarily to first-time home buyers, singles or seniors. However, don’t discount a two bedroom if an extra den will satisfy your space requirements.

  • Number of Bathrooms.

Pros: More than one bath is preferred by most people. One bath homes are often less expensive.
Cons: Don’t pass up a one bath home is there is room to add a second bath. Sometimes it costs less to put in an extra bath than it does to buy a two-bath home.

  • Square Footage.

Pros: larger spaces offer more room and cost less per square foot than smaller spaces.
Cons: Don’t be misled as lay-out is more important than actual square footage. Sometimes well designed smaller spaces appear larger.

  • Bonus Rooms.

Pros: Extra space for media rooms, art studios, children’s playrooms, gyms, den/study.
Cons: More expensive.

This is not an exhaustive list, but hope it helps you get you on to the next stage of house hunting.

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Is this the right time for buy-to-let?

Posted on May 2, 2011 by jane

A recent survey from buy-to-let lender Paragon tells us that nearly half of landlords reported that tenant demand grew during the first quarter of 2011.

The report shows that 49% of landlords recorded growing levels of tenant demand during the period, compared with just 5% who said it was falling – up from 40% during the last quarter of 2010. The proportion of landlords reporting increasing levels of tenant demand has now risen for seven consecutive quarters. And landlords are very optimistic with over half (52%) expecting demand to increase over the next 12 months, and only 6% forecasting a decline.

Nigel Terrington, Group Chief Executive of Paragon tells us, ‘Landlords are experiencing high levels of tenant demand, and this is expected to rise due to a number of factors, including social housing reforms, lifestyle choices, low numbers of first-time buyers and wider demographic changes”, all of which is very good news for Landlords.

All of which is good news for landlords.

Tell us your views – are you a landlord or maybe someone who is thinking in investing in property?

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Is this the year of the cash buyer?

Posted on May 2, 2011 by jane

Is it the year of the cash buyer? If the latest reports are anything to go by then the answer would be a resounding “YES”.  Figures from the Council of Mortgage Lenders show that in January 2011 nearly 40% of buyers did not need a mortgage and there was a reported 27,600 cash transactions.  If you compare this to April 2005 where 16,457 homes were sold to cash buyers, equivalent to 15% of the market then the amount of cash buyers has actually more than doubled since 2005.

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