Buy online or call us Free on 0800 515 3810800 515 381

Opening Hours

Mon - Fri 8:30am to 8pm
Sat 9am to 1pm

House prices increase by 10% in five months

At the beginning of this year there was much scepticism when it was announced that house prices were increasing, and many people believed that it was just a minor improvement that wasn’t around to stay. However, we are now in the fifth month of 2013 and house prices have been increasing by around 2.1 per cent month on month, meaning that the average price of a house has now increased by an average of ten per cent. Continue reading

Home in Chelsea sells for 18,000% profit

Most news stories concerning the property market these days talk about how house prices are at an all-time low, and that people that invested in properties years ago are now finding that their investment has not grown over time. However, there is one area in Britain where house prices seem to either be unaffected or actually improving, and that’s in London. This has led to a massive rich/poor divide across the UK, as the capital is seeing a boost in housing prices due to overseas investors buying million pound properties in well-known areas.

For example, it has been reported today that a property in Chelsea that was bought for just £17,000 in 1967 is expected to soon be sold for between three and four million pounds, which means a profit margin of a whopping eighteen thousand per cent. Back in 1967 seventeen thousand pounds was still considered a large amount of money to spend on a home, especially if you consider that the average wage was just twenty two pounds per week. However, over the years the property has gained more and more value mainly due to its prime location and the fact that the area has become popular with the rich and famous.

Mathew Kaye, from the estate agents Kaye & Carey is managing the sale of the property, and has said there has already been a huge amount of interest. He went on to say the owners, who wish to remain anonymous, are surprised about how much the area has changed, however Mr Kaye says that it is quite normal for foreign investors to buy property in the Chelsea areas. He went on to say: “I noticed a Porsche parked outside and the owner said “there weren’t any of those when we moved in.” That bit of Chelsea has always been very English but it’s changing and we have already had interest from other nationalities. At least ten viewings were arranged within 24 hours of the house going on the market. It is likely to go for more than the £2,950,000 asking price.”

Landlords who have properties in the Chelsea and Kensington areas will be pleased to hear that their properties are increasing in value, as it means that their investments are safe and that they can make a good income from rent payments. However, due to the fact that these houses are so valuable it also means that landlord insurance could be more expensive, and that maintenance and repairs will be expected on a more regular basis.

Housing Activity on the rise claims report

Since George Osborne announced his plans for the housing industry in the budget last month there has been speculation from many members of the property industry as well as the private rented accommodation sector as to how his plans will work. The ‘Help to Buy’ scheme has been widely criticised as many feel that helping members of the public buy a property is not enough, and that the government should allow buy to let landlords to take advantage of the new scheme in order to alleviate demand for private rented accommodation.

However today it has been revealed in a report by the Royal Institute of Chartered Surveyors (RICS) that the housing market may actually be on the rise, and that there has been an increase in interest from potential buyers looking for a home. RICs went on to admit that even though the figures are well below that of the housing ‘boom’ years, they are still on the rise and are now at a three year high. Discussing the property market, Peter Bolton King from the Institute said: “A buoyant, healthy property market is central to economic recovery, and while these are very much early signs, it is encouraging that sales are beginning to pick up.”

The figures showed that compared to February last year the number of house sales in the UK rose by ten per cent, and it has been suggested that this is down to first time buyers being determined to buy a property even though they need to save around twenty per cent for a deposit. However, buyers have been warned that saving for a deposit is only one thing, actually affording the repayments will also be extremely difficult for some as mortgage interests rates are at their highest levels since the past twenty five years.

For example, Sylvia Waycot from Moneyfacts warned: “It’s easy to get caught up in the excitement of heavily marketed mortgages that shout out about low interest rates, but beware that they will often be at the expense of high fees. The average fees charged have risen by almost 8% since January, though it is hard to justify how setting up costs can possibly have risen by this much.” It seems that even though the property market may be improving, buying a property is still risky, and so if you are planning on investing in a new house you should contact your landlord insurance provider for advice.

Home owners choosing to move into Rented Accommodation

A considerable amount of recent news stories have been commenting on how many people living in the UK are not able to get onto the property ladder and therefore have to rent private accommodation instead. The articles usually talk to tenants who complain that the amount it costs them to rent a property is too high, and that they would prefer to buy a property yet cannot afford to save for a mortgage deposit. However, it now seems that there are some people who are actually choosing to sell their properties and move into private rented accommodation instead.

For example, one woman named Stephanie Betts recently decided to sell her home in Fulham and move to a rental property nearby so she could invest the extra money into her business. She said her husband Martin was initially unsure of the idea, especially as he “used to work in property so he was very keen on home ownership, whereas to me it’s about allocation of resources.” Ms Betts goes on to say that she has actually found that privately renting a property has meant that she gets more for her money and that she now has more options when it comes to what type of property she wants to live in.

Her family currently lives in a privately rented house in Henley-on-Thames, but are planning on moving to an even bigger property which costs around £2,500 a month. In comparison, properties in the area cost around one million pounds to buy, which would require a deposit of £250,000 – a price that is simply out of reach for the family. Ms Betts said: “I have noticed a real change in attitude. Friends used to be down on renting, but they are beginning to see the flexibility. No stamp duty, hardly any fees and sometimes more choice.”

Another benefit of living in a private rented accommodation is that it is the landlord’s responsibility to keep the property maintained, and as the costs are usually covered by landlords insurance it’s generally a win-win situation for both tenants and landlords. Some people are still wary however as many landlords only offer short-hold tenancies, but Geo Theo, who has rented a flat in London for the past ten years, said: “I have a great relationship with my landlord, so I’m pretty sure they wouldn’t kick me out with two months’ notice. I looked at buying again but it just doesn’t seem worth it for the expense and hassle.”

Halifax says Housing Market continues to improve

Exactly one month ago we published an article discussing how Halifax claimed that the UK housing market is improving, and that hopefully this would lead to the alleviation of the housing crisis in both the private rented sector and the buy-to-own sector. Critics were initially wary of Halifax’s findings, and even those that agreed with them said that they did not expect the improvement in the housing market to continue throughout 2013. However, it has been reported today that a new survey commissioned by Halifax has shown that the UK housing market is still going strong.

The survey revealed that in February house prices increased by 0.5 per cent, meaning that the price of houses in the UK are now 1.9 per cent more than at the same time last year. The average price of a house is now £163,600 and Halifax have claimed that property sales are on a “modest upward trend”. Martin Ellis, Halifax housing economist said: “This was the third successive increase in the measure of underlying trend. This increase in both house prices and activity in recent months is consistent with evidence of some improvement in market conditions. The more than half-a-million increase in the number of people in employment over the past year is likely to have been a factor supporting housing demand.”

However, much like last month, there are still those that do not believe that the housing market will continue to improve, such as Mark Harris, a mortgage broker from SPF Clients who said: “The housing market presents a confused picture. One the one hand, prices continue to rise on a monthly and quarterly basis, according to the Halifax, and on the other, lending fell in the final quarter of last year, according to the Bank of England. We need to see some easing of criteria in order to make mortgages more accessible. This is surely the next move from lenders, many of whom tell us they have had enough of a rate war.”

There have been many calls for banks to increase lending for property purposes recently, especially from buy-to-let landlords who want to expand their property portfolios and take advantage of the demand for private rented accommodation. Other industries are also looking to banks to start increasing lending, such as housebuiling industries, landlord insurance providers and the UK public who will all benefit from the creation of new properties across the country.

UK Housing Market may be Improving

Yesterday we reported how it is currently taking young people an average of ten years to save up for a deposit in order to buy their own property, and up to twenty four years for those that want to move into London. However, now there have been reports that the UK housing market may actually be improving, as the Council of Mortgage Lenders (CML) have said that the amount of first time buyers has actually increased in the last year.

At the same time, the Office for National Statistics has also reported that the housing market is improving, and that last year house prices increased by 3.3 per cent. Furthermore, the Royal Institution of Chartered Surveyors found that property sales have now increase for the fourth month in a row in January, meaning that all signs are pointing towards the worst of the housing market crisis to be coming to an end.

Discussing the statistics, Peter Bolton from the Royal Institution of Chartered Surveyors said: “It is interesting to see that the amount of completed transactions are on the rise, as confidence returns to the market place. While it is still very early days to talk about a comprehensive market recovery, activity levels are still encouraging and there is some optimism out there that things could continue to improve.”

“That said, in many parts of the UK – such as London and the South East – high house prices and the lofty deposits required by many lenders continue to prevent may first-time buyers from getting a foot on the ladder, which is preventing any significant movement at the lower end of the market.” Private rented sector landlords could use this new information to their advantage, especially if they are planning on investing in more properties to add to their portfolios.

It is important for landlords to consider how the housing market could affect their business, especially if there is soon less demand for private rented accommodation. It is important for landlords to invest in landlord insurance that includes an unoccupied property policy that can help with mortgage payments should any houses in their portfolio become unoccupied for a substantial period of time.

Halifax says House prices have Increased

The housing market has suffered in the past few years, and the knock-on effects have been felt by the private rented sector as well as the British public. More and more people are looking to rent instead of buy due to the fact that they now cannot afford to get on the housing ladder, which means that landlords have to deal with an increased demand for properties. Furthermore, landlords are now under more pressure to keep their properties at certain standards, but at the same time are more likely to lose out on money due to the higher likelihood of rent arrears, so would have to rely on their landlord insurance.

It’s good news for all then that Halifax has announced today that the housing market improved last month and that house prices increased across the UK by an average of 1.9%. According to Halifax, this is the first time that the house prices have risen since October 2010, and the price of an average home is now valued at £162,932. Halifax’s housing economist Martin Ellis has attributed the increase in housing prices due to the Bank of England’s Funding for Lending scheme as well as mortgage approvals rising in recent months.

However, he has warned that this does not mean that the housing market will continue to improve, but more than likely remain stable throughout the upcoming year. Discussing the economy and its relationship to the housing market, Mr Ellis said: “The outlook for the UK economy and house prices is more unclear than usual. Subdued economic growth and pressures on household finances are expected to constrain housing demand. Overall, we expect continuing broad stability in house prices nationally in 2013.”

Meanwhile, Jonathan Hopper, managing director of the property search consultants Garrington has a more pessimistic view of the housing market for this year and said: “While transaction levels in 2012 were the highest for five years, they are still a shadow of their pre-cash levels, which can make the housing data volatile.” This means that those thinking of getting on the housing market may still struggle in the upcoming months, and landlords should make sure they do as much research as possible before adding more properties to their portfolios.

Drop in house prices will encourage landlords to invest

A report out yesterday from the UK’s leading building society showed the biggest one month fall in house prices for more than three years as the difference between prices in May and June fell by more than 0.6%. The news will shock many home owners planning to move houses but will only reinforce the confidence felt by many property investors across the country. Already reports show many landlords are looking to expand their portfolio and evidence shows they are prepared to consider many types of property if they can see a profit in the making. The news will be welcomed by landlords who are planning to purchase buy-to-let property in the next three months and may well convince other landlords to purchase landlord insurance on new properties.

Meanwhile, rents in the capital have increased for a second consecutive month and are now at a record high of £1,038 per month. Interestingly enough this is an increase of 0.6% over last month. The latest buy-to-let figures showed the average rent in England and Wales rose by 0.4% to £712 per month. This is one of the reasons so many private landlords are seriously looking to increase their portfolio of properties. Rents declined in only four regions, with the largest fall in the North East, where they went down by 1%.

David Newnes, director of LSL Property Services, recently said “The end of spring has brought with it renewed activity in the rental market and rents have returned to the level seen before the impact of the stamp duty deadline rush by first-time buyers. The reality is that thousands of frustrated buyers are still financially trapped between a rock and a hard place. Historically high rents and rock-bottom savings rates are hampering attempts to save for the larger deposits banks now require, not to mention meeting the cost of the reinstated stamp duty tax. In turn, fewer tenants are able to leave the sector, and the strong tenant competition is pushing up rents as a result, making saving for a deposit harder still.”

Families will be renting for at Least the Next Decade

A Cambridge University study has shown that there are millions of young families who are living in an era where renting is the norm. It also shows that there are a growing number of parents who are unable to buy their own property. Price increases are blocking home ownership and this trend is expected to last until at least 2022.

This is good news for property owners who have houses that they protect with buy-to-let property insurance. The future also looks bright for landlords because if the British economy remains stagnant, it means that only 27% will be in a “mortgaged home” by 2022, compared with 43% in 1994 and 35% this year. The research also found that it is not just young people who are being locked out of the property market and forced into the rental sector due to rising house prices, falling wages and banks who are just not willing to lend. The same difficulties are now affecting older people, many of whom are paying half or more of their income in rent and, as a result, have little left each month to save for a deposit to buy their own property.

Shelter’s Chief Executive, Campbell Robb, said “This report shows what is fast becoming the new reality of our housing market in the current economic climate: home ownership continuing to fall while renting becomes a way of life for British families. Yet despite the growing pressure on the rental market, the government’s recent housing strategy virtually ignored the sector and did little to address the issues of affordability, stability and quality that so many renters face. It’s time government woke up to the fact that ‘rental Britain’ is here to stay.”

The study shows that the coalition must acknowledge renting is fast becoming a way of life for the majority of the UK. Many experts want them to do far more to encourage investment in the private sector and to protect the rights of those who are unable to buy. Many in the industry also believe the United Kingdom should move to a regime more like Germany, where the tenant has extensive rights including security of tenure and assured rental rates.

Less homes coming on the market but still no increase in prices

As the rental market goes from strength to strength, more gloomy news from the housing sales market promises yet more opportunities for the ambitious landlord.

A report out today by property analytics outfit Hometrack suggests the housing market is no nearer a recovery and in fact average house prices in the UK could see a reduction of around 5% in 2012. The news, although bad for sellers, could signal even better pickings for property investors looking to buy landlord insurance on new projects.

The latest monthly figures from the Hometrack report show a 10% drop in new homes coming on to the market in January compared to December. That news is bad enough in itself, but November and December were also down on previous months. The financial constraints being exercised by the banks towards lending, and the worldwide financial downturn is driving the housing market in the UK downwards and experts still cannot see light at the end of the tunnel.

The report also showed that houses were taking longer to sell and that prices on average had not moved for around 18 months. However, this is a UK average and in that time London and the South East has seen a marked increase in property prices, which suggests the rest of the country, has experienced a drop.

Richard Donnell, head of research at Hometrack confirmed this, saying “The survey reveals a market dogged by uncertainty. On a national basis house prices have not increased over the last 18 months, since June 2010. However, there was a small rise in London prices, which offset falls in other regions. The relatively positive housing market in the capital is set to continue through 2012 as the Olympics effect continues to boost interest in the City’s property. Overseas buyers looking for a safe haven in the midst of global uncertainty will continue to invest in the capital and the super prime postcodes of central London.”