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Property investment likely to become increasingly popular

Rowena — Fri, 13 May 2011 08:32:02 +0000

Buy to let investors have been making impressive profits and returns on their investment for many years. Despite the difficult climates in the financial and property markets over the last few years a recent report has shown that the buy to let market has continued to grow and is set to become increasingly popular as the year goes on.

Many reports and officials have pointed out that now is a great time for property investors to take the plunge, as not only are property prices lower than they have been for some time but rental demand continues to climb to record highs, with tenants almost falling over one another to get their hands on privately rented homes given the lack of mortgage availability in the current climate.

According to recently released figures in the first quarter of this year buy to let lending came to nearly £3 billion, which was just a bit lower than the final quarter of last year.

Officials have reported that in the current market buy to let now accounts for 12.3 percent of all outstanding mortgage in terms of value and 11.6 percent in terms of numbers.

The Council of Mortgage Lenders has recently commented on how well the buy to let market is progressing in an essentially difficult environment. A spokesperson for the CML said: “Buy-to-let continues to progress positively in the context of a stable, but still low-volume, overall market.

Demand for rental property remains strong, and as more funding becomes available we would expect to see buy-to-let lending increasing. The performance of buy-to-let loans is also holding up well, and the differential between arrears rates in the buy-to-let sector and the owner-occupier sector has narrowed substantially so that there is now only a modest difference between them.”

It is thought that with property prices much lower in many areas than they were several years ago, and with tenant demand for rental homes set to continue increasing, there are now some very good opportunities for potential investors.

One official stated: “The owner-occupier and buy-to-let mortgage markets are in much the same situation as Kate and Pippa Middleton on the big day last month – all the attention maybe focused on one of them, but in reality, the junior sibling is quietly stealing the show. As house prices flat-line, the buy-to-let market still provides excellent opportunities for investors and professional landlords. And with rental demand likely to remain strong for the rest of the year, these opportunities will continue to be available.”

More and more people taking out repayment mortgages

Rowena — Thu, 12 May 2011 09:05:26 +0000

It has been revealed recently that the number of repayment mortgages being taken out by property purchasers has reached record levels, having increased steadily since 2007 when they hit their lowest level in six years.

The data comes from Paragon Mortgages’ Financial Adviser Confidence Tracking Index (FACT).

According to the data the number of repayments mortgages for the first three months of this year came in at more than 75 percent having increased from 71 percent in the last three months of last year.

The number of repayment mortgages has increased since the third quarter of 2007, around about the time of the onset of the financial crisis, when it hit the lowest level in six years.

Interest only mortgages have, on the other hand, been decreasing and only 14 percent of mortgages that were introduced in the first quarter of the year were interest only mortgages. A rising number of lenders have been shying away from interest only loans because of the higher risk that they represent.

These mortgages have been very popular with first time buyers in the past because they could keep the monthly repayments down by paying only the interest on the loan for the term of the mortgages. However, this is precisely what also made them higher risk for lenders.

One official said that the decline of the interest only mortgage was already clearly evident and that it was set to continue, with more and more lenders exercising caution over these mortgages.

He said: “FACT shows that residential mortgage lenders have been clamping down on interest-only since the start of the credit crunch and the decline of this market shows no signs of slowing down. The Financial Services Authority signalled the demise of interest-only through changes proposed in the Mortgage Market Review and it appears that lenders are positioning their businesses in anticipation of regulatory changes.”

Paragon data also showed that the number of applications for repayment mortgages was increasing, which indicates that the popularity of these mortgages will continue to rise.

More viewings stem from sunshine

Rowena — Wed, 11 May 2011 10:58:32 +0000

As most industry experts know the figures relating to property sales and viewings have not been all that impressive over the past few years, with everything from unusually cold weather conditions to restrictions in the mortgage market keeping potential buyers away from property.

However, the past few weeks has seen something of a turnaround, with officials reporting some encouraging figures when it comes to the property market.

April has been an unusual month for many consumers for a number of reasons. Firstly, the sunshine this year along with the temperatures have been amongst the highest on record for the time of year, which has delighted many consumers who are often stuck in their homes because of the bad UK weather.

On top of this consumers have been treated to two extra long four day weekends on the trot as a result of Easter followed by the Royal Wedding.

This combination has obviously given consumers the time and the inclination to get out and about, as officials from the Royal Institute of Chartered Surveyors reported that there was an increase in the number of people viewing properties for the month of April.

It is thought that the great weather and the extra time off helped to spur people on when it came to viewing, and that this may have been further encouraged by lower property prices in many areas of the country.

RICS surveyors did not want to read too much into the encouraging figures, with one stating: “The return of sellers to the market is positive, but activity still remains subdued and it is difficult to see it picking up materially over the coming months.

Although there are signs that some lenders may be reducing their grip on the purse strings, in particular with mortgages aimed at first-time buyers, there is still a long way to go before lending levels increase enough to have any real impact. Economic uncertainty may also continue to weigh on sentiment for a while to come.”

However, with the group expecting property prices to fall further over the coming months there may be many property investors who will be keeping a close eye on the market in order to snap up the bargains as they come along.

Will The Property Market Repeat The Cycle?

Charlotte planning to give her home an overhaul

Rowena — Tue, 10 May 2011 08:33:57 +0000

Most celebrities that move into their luxury properties do not tend to do much to their home in terms of renovation, as the properties that they purchase normally have everything that they need to keep up with their luxury lifestyle.

The same can be said of the luxury five bedroom home of singer Charlotte Church, which has all sorts of features and plenty of space.

However, unlike many other celebrities Charlotte has seen room for improvement in her property, which is worth over £1 million on Twyncyn, in Dinas Powys, Vale of Glamorgan, which is the most expensive road in Wales.

Church is planning an overhaul of her property, which will increase its size and see new additions that are both practical and luxurious.

The average house price on this road is £838,700. Charlotte’s home, which is worth over £1 million, is called The Spinney and it has three acres of land and its own private access road.

She bought the secluded home after her split last year with rugby star Gavin Henson. She has now applied for planning permission to carry out the work on the property, which is all being planned out by an architect that she has on board.

Church, who soared to the heights of fame at a tender young age because of her remarkable singing voice, lives in the property with her two young children.

The twenty five year old star is planning a range of changes to the property, which will double the size of her kitchen, extend the size of her living room, and add a variety of luxuries to the home.

In addition to extending the living room and kitchen, Charlotte is adding an ensuite to the master bedroom, which has a 13 square foot walk in wardrobe, and is adding floor to ceiling windows and retractable doors to the lounge. She is also adding a wet room to the property.

Recent reports have claimed that Wales is seeing steep falls in property prices at the moment. However, if all goes to plan Charlotte could see the value of her already valuable property soar.

Converted hotels make great new apartments

Rowena — Mon, 09 May 2011 08:56:50 +0000

Due to one of a range of factors there are now many hotels across the UK that are lying empty and dilapidated. This could be down to anything from the effects of the recent recession to a slide in tourist trade. Whatever the reason officials have been looking at what can be done with these often huge hotels to make them come to life once again.

Whilst these hotels may never see life as hotels again all is not lost for them as many are being identified as having great potential for conversion into luxury flats and apartment.

Despite some of the opposition relating to these conversions many have been highlighted for conversion to apartments, which could prove to be great news for those that are looking to invest in property as well as those that want to buy their own home in an area with stunning surroundings.

Many of the hotels that may be converted are located in areas such as in seaside towns or in the countryside, which means that those who end up buying the properties or renting them from landlords will end up enjoying life in a unique property in wonderful surroundings and with some fabulous features.

Both investors and potential homeowners will most likely have a strong interest in snapping up these hotel flats because of the areas that they are in, and those that invest in the flats to rent them out will have no shortage of tenants because of the high demand for rental property and due to the likelihood of high demand for flats in such areas.

One resident of a flat created in an old hotel in Devon explained how thrilled he was with his property. He stated: “There are real advantages to it having been a hotel in the past. Its location is absolutely on the seafront so there’s only sand and water ahead of it – no modern home could get so close.

It’s also extremely well-constructed into the rockface behind, which is testimony to how large hotels were built in the 19th century. Something modern or anything smaller wouldn’t have quite such a feeling of solidness.”

An official explained why it was better to use these hotels as potential flats stating: “Selling a property with planning consent to become, say, five homes is far more valuable than selling an old hotel needing expensive updating to stand even a small chance of running as a viable business. Secondly, legal requirements of running a hotel – fire standards, kitchen health and safety and the like – are stricter than ever before and some buildings are so old they cannot realistically be upgraded. Finally, expectations have changed. Today’s younger clients want high levels of comfort in a very relaxed, casual atmosphere which doesn’t chime with some of the old oak-panelled hotels that you find, especially in the country.”

Would Your Property Investment Make The Eon Grade?

No change to base interest rate

Rowena — Fri, 06 May 2011 08:55:49 +0000

Many homeowners and a variety of industry groups will be celebrating today after it was announced that the base interest rate was to be held for yet another month at the all time low of just 0.5 percent, where it has been for well over two years.

Following the May Monetary Policy Committee meeting the Bank of England announced that there would be no change to the base rate.

For many industry experts and economists the news did not come as any great surprise, and this is due to growth figures that were recently released.

These figures showed that there had been a slowdown in growth at the beginning of this year for the manufacturing, construction, and service sectors. Many believed that given this data it would be too risky for the base rate to be increased at this stage.

The rate of inflation is now at twice the 2 percent target set by the government, which would ordinarily justify an interest rate increase in order to try and keep a lid on soaring inflation.

However, the fragile economy means that the MPC has the challenging task of deciding whether to increase rates to decrease inflation or keep rates on hold to stabilise the economy.

One official said that it would have been extremely difficult for the MPC to have justified a rate increase given the recent growth figures, which is why they had decided to keep the rate on hold.

Some even think that it will now be towards the end of this year and possible even next year before the base rate is increased – good news for many homeowners but not so good for savers.

One official stated: ‘In recent weeks, relatively soft UK activity data had removed any realistic expectations of a rate hike today. For now we still view an August hike to be the most likely outturn.

However we will be tempted to push this back to November or beyond, should the run of activity data continue to disappoint, or indeed if the tone of next week’s Inflation Report is more dovish than we expect.’

Andrew Goodwin, senior economic adviser to the Ernst & Young Item Club, said: ‘We think it unlikely that the Bank will move before November and it could quite easily be 2012 before we see the first increase in interest rates.’

Housing minister encourages self build properties

Rowena — Thu, 05 May 2011 08:11:51 +0000

The property market in the UK has undoubtedly been through some turbulent times over recent years, and this has resulted in increased difficulties for some people who have been unable to get onto the property ladder or own their home property due to affordability problems and issues with getting a mortgage.

The government has brought in a range of schemes over the past few years in a bid to try and make things easier when it comes to the property market, with initiatives such as home buy schemes to help buyers raise deposits and changes in stamp duty tax thresholds.

The housing minister, Grant Shapps, has now revealed that he is hoping to get more people involved with self-build homes. At present around one fifth of all new homes that are built in the UK are self built homes, and this does actually make self builders the largest house builder in the UK.

However, compared to other parts of Europe the proportion of self build homes in the UK is actually still very low.

Grant Shapps is set to attend the up and coming Grand Designs 2011 show this coming week, where is will be highlighting the benefits of self-build homes and announcing measures to make the whole process easier for those that are interested.

This will include measures to provide easier access to publicly owned land for those that want to build their own homes.

The number of self build properties has fallen over the past few years due to the financial crisis, dropping from around 20,000 self build homes in 2006 to just 14,000 last year.

There has also been a fall in new homes being built by property building firms as a result of problems brought about by the financial crisis. Shapps hopes to address both of these problems by making property building easier.

In his speech he is set to state: “Self-builders deliver affordable, greener and more innovatively designed homes, and make a big contribution to the number of new homes built in this country, yet there is scope to significantly increase the number of self-built homes in the UK – both for individual households and for community-driven projects.”

Tenants scramble for property as rental shortage continues

Rowena — Wed, 04 May 2011 08:20:35 +0000

It has been reported recently that the scramble amongst potential tenants for privately rented accommodation is heating up as the shortage of rental homes on the market continues.

Over recent months the situation has become more and more difficult for non-homeowners, as they have found it difficult to secure a mortgage and get their own home and have found themselves vying against many other people who are vying over the same rental property.

One lettings agent has recently reported that it now has a large proportion of small landlords, with 40 percent of its landlords having a maximum of three rental homes on the market.

There is a definite opportunity for property investors who are willing to buy to let, as the severe shortage of rental homes on the market means that potential tenants are queuing around the block to rent a home.

The high demand for privately rented accommodation is also driving the monthly rent on these homes up, which means that those coming onto the market as buy to let landlords can expect to not only find a tenant instantly for the property but can also expect to get a very good rental income, enabling them to get excellent returns on their property investment.

According to officials there is now an average of around five people vying for each of the rental properties coming onto the market. Some areas are still seeing tenants having to put in sealed bids for rented accommodation as the frenzy to be the winning bidder for a rental home continues.

The shortage of rented accommodation in the private sector is also pushing people towards the social housing sector, which is already overflowing with people that are waiting.

One housing officer said: “In the past we used to get tenants coming onto the social housing waiting list because they could not afford to move into privately rented accommodation.

However, these days we are getting a lot of people coming onto the list because they don’t seem to be able find a privately rented home that does not already have people queuing up for it.”

Adding value to your property with the right improvements

Rowena — Tue, 03 May 2011 08:59:32 +0000

At this time of the year there is usually a rise in the number of people that decide to carry out work on their homes, adding a variety of improvements that can range from simply decorating the home to installing a new kitchen or bathroom and even adding a new room or extension.

Many people that carry out home improvements do so in order to improve the property for themselves – perhaps to add practicality and functionality or maybe to add more space.

Others that carry out home improvements decide to do this in order to try and increase the value of their property.

There are a number of key improvements that can help to add value to your home as well as to create more space in your home, which is ideal if you are expanding your family or simply want to enjoy the benefits of a larger property. Some of these improvements include:

Loft conversion: A loft conversion is a great way to add more space to your home and even create a new bedroom or study. You will find that you can increase the value of your home considerably with a well finished loft conversion, so if you are selling your home in the future you can expect to get more money for it. The average increase that you can expect from adding a loft conversion is around £20,000.

Room extension: Another way to create a lot more space in your home is to opt for a room extension. This is something that many people consider if it is not practical for them to add a loft conversion or they wish to benefit from a larger room. Again, this can add a considerable amount of money in terms of value to your home, adding on an average of around £16,000.

Conservatory: Adding a conservatory is a great way of creating extra space and benefitting from a lovely room in which to relax during the summer. You can get some great deals on conservatories these days, and by adding one you can add an average of around £8200 to your home.

However, not all improvements will add value to the home, although they can still make the home more comfortable.

One official stated: ‘Householders should primarily do the work with the aim of creating a home they can live in and enjoy as there is no guarantee of increasing property value.’

Property seems safe bet for those with cash to invest

Rowena — Thu, 28 Apr 2011 08:36:11 +0000

It seems that many people that have cash to invest are looking towards the property market rather than at savings and other forms of investment, with the number of cash buyers having soared according to recent reports.

The Council of Mortgage Lenders has recently released a report showing how the number of cash buyers has soared to the highest level since records began in 2005.

According to the report the level of cash based property purchases for January was around 40 percent, and this is where buyers were using cash to pay for the property without the need to take out a mortgage loan.

The figures show that the number of cash buyers has actually doubled since 2005, with one estate agent stating that they were historically high and in some areas the number of cash buyers was much higher than the figure given in the report.

He said that in some parts of the South West the number of cash buyers had soared to 50-55 percent and in some areas of London the figure was much higher at around 80 percent. He stated: “In certain regions, the proportion of cash buyers will be even higher than these figures suggest. For example, in south-west England, I would say it is probably more like 50 to 55%. In some areas of London, it can be up to 80%,”

Another industry official pointed out that many people that had cash to invest were not happy about putting it into savings accounts in the current climate, as with the base rate still at just 0.5 percent they were likely to get little to no return on their cash.

Other investments such as stocks and shares are also viewed as risk by cash investors at present. This has left many deciding that the way to go is to plough their cash into property where they can benefit from a long term investment that will enable them to enjoy healthy returns.

He said: “Putting the money in a bank account may be safe, but you will get a woeful return on it, while stocks and shares look like the two ugly sisters – leaving property as the Cinderella of the investment world,”