29/07/2007 by Dave.

The OFT (Office of Fair Trading) has advised all estate agents in England and Wales that a failure to comply with the new Home Information Packs (HIPs) regulations could result in a ban from estate agency work.

From August 1st 2007, all homes for sale with four or more bedrooms in England and Wales will need a HIP, with details of the property title, energy performance, planning permissions and searches for prospective buyers. Under the Estate Agents Act and HIPs regulations, the OFT has the power to assess whether an estate agent is fit to practise.

The OFT can impose a ban on an estate agent found to be in breach of the Act and can also issue a Warning Order. Once a Warning Order has been issued, if the agent continues to breach the Act, the OFT can make a Prohibition Order banning the agent from practising as an estate agent in the future.

Mike Haley, OFT Head of Consumer Protection said: “The new HIPs come into force tomorrow and it is important that agents are aware of their obligations and the possible consequences if they fail to comply.

“If an agent fails to comply, this could trigger an investigation into an agent’s fitness to continue estate agency work.”

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27/07/2007 by Dave.

The buy-to-let sector has continued to enjoy steady growth in the first half of 2007, providing affordable accommodation for increasing numbers of households. So says specialist buy-to-let mortgage lender, Paragon.

With the number of households in the UK expected to increase further on the back of demographic factors such as population growth, inward migration and rising student numbers, demand for buy-to-let properties continues to push rents up by slightly more than property prices.

Annual rents were up 13% in the first 6 months of 2007, reaching £10,938 in June, while property values rose 10.5% from £162,776 to £179,793, based on Paragon’s July buy-to-let index. Meanwhile, yields have remained consistently stable at 6% for the past year.

Nigel Terrington, chief executive of Paragon, says: “We’ve seen a stabilisation of yields at around 6% for the last year, reflecting the underlying dynamics of the market. The majority of landlords are cautious by nature, with an average loan-to-value across their portfolios of less than 40%.

“They have also chosen fixed rate mortgage deals, so are not unduly affected by rising interest rates. Strong tenant demand, on the other hand, tends to place upward pressure on rents.”

According to Paragon, investors remain confident and continue to add properties to their portfolios, in the knowledge that over the medium to long-term a combination of capital appreciation and rental growth will continue to generate attractive returns. This month, annual total ungeared returns rose above 10%, with the average buy-to-let property worth £172,772 a year ago generating rental income of £10,433 in rent and £7,021 in capital appreciation over the past 12 months.

“Not only does buy to let generate good returns for investors, but it also performs an invaluable function in providing flexible, affordable housing for a wide variety of tenants. The buy-to-let market remains robust, and all the indicators point to further growth in the future,” says Terrington.

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26/07/2007 by Dave.

Brits are uncertain about taking out a fixed mortgage for an extended period of time, with short-term secured loans a much more popular option according to new research.The Abbey poll comes after the government announced plans to support 25 year fixed mortgages in a bid to increase access to the housing market, something the study suggests would not see widespread participation.

Of the 1,000 people surveyed just 23 per cent said they’d consider a 25 year fixed mortgage, with 54 per cent saying they never would and a further 23 per cent uncertain.

It seems clear that being tied into a financial product for that long is simply not attractive for most borrowers, particularly as they intend to pay their loan back over a sensible time period: taking a secured loan is one such way you can flexibly manage your finances.

“It is clear that the public don’t have much of an appetite for 25 year mortgages,” said Sue Hayes from Abbey.

“We continue to see increasingly strong demand for our five and 10 year fixed deals, indicating that 25 years is just a step too far. Given the great cultural and economic changes we’ve seen in the past 25 years, this is not surprising.

“Few people are prepared to commit themselves to a deal for a quarter of a century,” she added.

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25/07/2007 by Dave.

Nationwide research reveals the most important things to consider when selling a property - this coming against a backdrop of a reduction in the number of buyers visiting estate agents at present.

The building society’s recently commissioned study into what buyers look for in a home, offers the following tips to homeowners.

Tidy up. It may sound like a simple concept, but a clutter-free environment can make all the difference. Over half (55%) of potential buyers say they would find an untidy house a major turn-off.

Be polite. Almost 70% of buyers are most likely to be deterred by a rude seller or estate agent.

Eliminate smells. 75% of people are put off by household smells made by pets or cigarettes.

Tackle DIY disasters. Poor building work or DIY is a big turn off according to around 90% of potential homebuyers.

Fix those fence panels. Over 80% of viewers would think twice about putting an offer in on a house with a garden that lacks privacy.

Introduce ‘green’ features. When given the choice between two properties of a similar size and value, the majority of homebuyers (82%) claim a house with environmentally friendly features such as solar panels, has more of an influence on their decision to buy than an attic room (68%), period features (63%) or walk-in wardrobes (62%).

Focus on the kitchen. Over half (54%) of potential buyers believe this to be the most influential room when making the decision to buy.

Ditch the decking. Along with Jacuzzis, decking is one of the features least likely to tempt a potential buyer. 

Avoid the summer drought. Choose your time to sell carefully. The summer season is traditionally slow as people are away on holiday. Equally, during November and December, potential buyers are generally too busy preparing for Christmas to think seriously about moving;

Worth noting too is that from August 1st it will be a legal obligation for four bedroom home-owners to prepare a home information pack

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22/07/2007 by Dave.

Consumers who borrow on a credit card and just repay the minimum each month could stay in debt for almost 30 years, far longer than if they’d arranged a structured secured loan.

Calculations from uSwitch show that borrowers with the average UK credit card debt of £1,821 (according to payments body Apacs) will take 29 years and two months to clear their debt if they pay just two per cent back each month.

Several credit card companies have come in for serious criticism recently for reducing the minimum monthly repayment, something consumer groups believe tempts people unwittingly into staying in debt far longer than is necessary.

By contrast, transferring your debts to a homeowner loan or secured loan will offer you both a lower interest rate, but also gives you clear information about how long you’ll be making repayments, allowing you to successfully plan for your future.

“In an environment of rising interest rates where personal debt in the UK has reached a staggering £1,325 billion, of which credit card debt accounts for £54 billion, consumers could now finish repaying their mortgage before their credit card, despite the huge disparity in sums borrowed,” said Mike Naylor from uSwitch.

“We urge all credit cardholders who pay the minimum off their credit card bill each month to think about the amount of interest they’ll end up paying as a result,” he stressed.

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20/07/2007 by Dave.

New research from Birmingham Midshires shows the average total return for a buy to let (BTL) investor was 13.0% over the year to June 2007 (exclusive of fees and mortgage interest costs). By region, total returns for BTL investors were highest in Northern Ireland (35.9%), followed by Scotland (16.6%) and the South East (13.9%). The smallest total returns for investors were in the East Midlands (9.6%), West Midlands (11.3%) and Wales (11.3%).

A year ago, BTL returns were again highest in Northern Ireland (30.2%), followed by the North (16.4%) and Yorkshire & the Humber (14.0%).

Meanwhile, the price of the typical BTL property in the UK increased by 7.3% over the year to June 2007, to an average of £141,776.

Regionally, the biggest price increase over the past year in BTL property prices was in Northern Ireland (30.5%), followed by Scotland (10.1%) and the South East (8.4%). Prices in Northern Ireland have been driven up sharply by a combination of a strong local economy, high levels of immigration, high demand for properties from second homebuyers and interest from investors in the Republic of Ireland. The smallest regional increases were in the East Midlands (4.1%) and Wales (5.7%).

The average price paid for a BTL property is highest in Greater London (£257,494). This is 2.7 times higher than in the North where the average price is £93,675. In fact, the average price paid for a BTL property is above £100,000 in all UK regions, except for the North (£93,675). Meanwhile, BTL property prices are above £150,000 in Greater London (£257,494), South East (£168,394), and the South West (£151,720).

BTL rental yields meanwhile have fallen marginally over the past year to 5.5% from 5.7% in June 2006. Nationally, the average rent increased by 4.5% over the past year to £651 per month, compared with £623 per month in June 2006.

Terraced houses have been the best performing property type for BTL investors over the year to June 2007 with an average 15.9% total return. Terraced properties also have the lowest prices by property type with an average price of £116,884 for BTL investors at June 2007.

The BTL market is expected to see slower house price growth over the remainder of 2007. Higher interest rates, subdued real earnings growth and easing economic growth are predicted to cause house price growth to moderate. And lower capital appreciation, together with mortgage payments rising more quickly than rental income, are likely to constrain demand for BTL properties.

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19/07/2007 by Dave.

Consumers are finding it increasingly difficult to afford what they want to spend, according to new figures, suggesting many may benefit from a homeowner loan.

The research from Legal & General shows a steady fall in Brits’ ability to spend, no doubt pushed on by inflation making everyday items more expensive and rising interest rates increasing the cost of repaying the mortgage and other debts.

If you’re struggling to keep up with your monthly payments then debt consolidation could be just right for you, allowing you to combine your outgoings into one simple payment, at a lower rate than overdrafts and credit cards.

The survey also found a drop in the number of households with money left over after paying all their bills – down from 61 per cent a year ago to 57 per cent now.

“That would suggest more households are finding themselves in a position where they are struggling to make ends meet compared to a year ago when rates were down at 4.5 per cent,” said Julia Clayworth from Legal & General.

“These findings reinforce the consensus view that the Bank of England should take its time before raising rates again to measure the full impact of the latest rise,” she added.

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18/07/2007 by Dave.

Young Britons taking their first steps on the home ownership ladder are stumbling into property nightmares, with two-thirds finding costly surprises in their first year because they didn’t carry out simple checks, according to new research from AA Legal Services.

At a time when young people are finding it increasingly difficult to buy their first home, the results suggest that many are simply rushing headlong into home-buying.

For example, 20% of 18 to 29 year old home owners failed to carry out any basic assessments of their property before agreeing to buy it, resulting in 66% falling victim to unexpected problems in their first year as a homeowner. The most hassle is caused by noisy or obnoxious neighbours, followed by structural problems.

Not only are young home buyers less likely to have met prospective neighbours before buying (12% compared to 15% of all respondents), they are most likely to discover too late that they have anti-social people living next door (35%).

Next on the list of new home complaints were structural defects, including leaking roofs (15%), rotten windows (15%), draughts (12%), drainage problems (12%) and rising damp (7%), coupled with traffic noise (12%) and lack of parking space (12%). Of these, young people were most likely to complain about traffic noise (16%) and draughts (9%).

With fewer than one in three (28%) new home owners seeking an independent structural survey before buying their new property, the research suggests that many of these, sometimes costly, structural surprises could have been identified and taken into account before the sale. Young people are the most likely to forgo a structural survey, just 7% seeking confirmation on the structural integrity of a home before exchanging contracts.

On a similar vein, just 11% of home owners said they had checked the drainage of their building or investigated levels of noise pollution before moving in.

Buying a home is one of the biggest decisions you’ll ever make. If you are being pushed to make a purchase decision, research the area before you find the property. Check out the local facilities, council tax and local development plans.

Also, seek independent advice: Don’t just go with the advice of the estate agent and their allied service providers. Remember that their interests lie in completing the sale on behalf of the vendor. Hence, they may not provide the most comprehensive, independent advice. When looking for independent advice, shop around and ask questions.

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17/07/2007 by Dave.

Research from the Post Office shows that 49% of UK holidaymakers plan to use their credit card to shop abroad, accounting for an estimated spend of around £9.4 billion.

But as the majority of credit cards typically charge 2.75% for each transaction made overseas, people could be paying an extra £258 million in fees. And it’s not just credit card providers that charge a fee: several debit card providers have also recently announced an increase in fees abroad.

Yet, 47% have no idea about these hidden costs. Indeed, 34% believe their provider doesn’t charge a fee at all. And with almost 10 million holidaymakers (26%) not setting any type of financial budget when away, many people could still be paying for their holiday months after the event.

Women are more likely than men to keep to their holiday budget with 69% generally doing so compared to 59%. And 18-24 year olds are the most unlikely to know if they’re paying a fee.

Post Office head of lending Gary Fitton said: “We are now four times more likely to spend on plastic abroad than 10 years ago.

“It’s shocking not only to see how much people are being penalised to use their cards on holiday, but how few are aware of this.”

Fitton urges holidaymakers to check with their bank or credit card provider whether they will be paying a fee to shop overseas before they go. Also, there are a number of 0% deals available, which can ensure you return home with only shopping bags and happy memories, and not a bigger credit card bill.

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11/07/2007 by Dave.

The latest interest rate rise has put borrowers and homeowners under further debt pressure, experts have warned, pushing many people towards sensible debt consolidation.

The Bank of England’s monetary policy committee increased the base rate again to 5.75 per cent, the fifth such raise inside the last year.

Homeowners with a £100,000 repayment mortgage are now facing monthly bills £75 higher than this time last year; individuals with larger mortgages or other debts such as credit cards will face even higher rises.

The bank has moved to slow the economy and bring inflation back under control, but the immediate impact for many people is a struggle to meet many of their essential bills.

“This additional interest rate rise will hit some homeowners hard, possibly including those who may have extra expenses due to the recent flooding,” said Peter Tutton from Citizens Advice.

“A rise in mortgage interest rates could spell disaster for people whose finances are balanced on the very edge of affordability,” he added.

It is also expected that there will be another rise later this year; homeowners looking to bring their finances under control can take a secured loan to help with sensible and positive debt consolidation.

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