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Em Morley

Report Outlines Plans for 1m New Homes to be Built in 10 Years

Published On: February 13, 2015 at 10:31 am

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Categories: Property News

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A report from the Policy Exchange reveals proposals for each of the 353 councils in England to build one garden village, resulting in 3,000 new homes per area.

Over 1m new properties could be built in the next ten years if each council builds one garden village of 3,000 homes, says the think tank. The garden village idea is an alternative to common edge-of-town developments.

Report Outlines Plans for 1m New Homes to be Built in 10 Years

Report Outlines Plans for 1m New Homes to be Built in 10 Years

The report explains that local opposition to building can be beaten by devolving powers from Whitehall to councils to construct these villages. If councils agree to build them, then they would be able to appeal for the right to stop developments around existing communities that have been forced onto them.

The report states that the planning system at present is flawed, as most new developments are based around building in existing communities, generally on the green spaces around a town that are highly valued by local residents.

This can cause land values to rise sharply, and lead developers to build higher-density, low-quality homes. This can make local opposition stronger and worsens the problem.

The increase in land value goes to the landowner, which leads to less money available for vital infrastructure and amenities.

When the property market was booming, between 1997-2007, Britain built an average of just 148,000 homes a year. This caused an increase in property prices in regard to wages, and made homeownership a difficulty for many. Currently, 3.3m 20-34-year olds live with their parent(s), up by 700,000 since 1997. Also, 1.7m families are on waiting lists for local authority housing.1

The Policy Exchange’s proposals would allow local authorities to use the New Towns Act, which would enable them to designate sites for new small towns or villages, including up to 5,000 properties.

Author of the report, Lord Matthew Taylor, a Liberal Democrat peer, says: “Over the next 20 years, we need to build around 300,000 new homes every year to keep up with demand and address the existing backlog of housing need. The current planning system, based on tacking on homes to existing towns and villages, ramps up local opposition to new development and makes it politically challenging for councils to meet local housing need.”1

1 http://www.theguardian.com/society/2015/feb/13/proposal-build-1m-new-homes-10-years

 

Lowest Level of Home Repossessions Since 2006

Published On: February 13, 2015 at 8:57 am

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Categories: Property News

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The amount of people missing their mortgage repayments or having their home repossessed dropped last year to the lowest level since 2006, revealed figures from lenders.

Last year there were 21,000 repossessions, 26% less than the 28,900 of 2013, and the lowest figure in eight years, found the Council of Mortgage Lenders (CML).1

Of this number, about three quarters of owner-occupied homes were repossessed, the rest were buy-to-let properties.1

Lowest Level of Home Repossessions Since 2006

Lowest Level of Home Repossessions Since 2006

Additionally, there were fewer mortgages in arrears at the end of last year than at any time since 2006. Just 1.05% (16,800) of all home loans were in arrears of 2.5% or more of the mortgage cost. At the end of 2013, this figure was 1.29% (144,600).1

The CML said that the two most common reasons for mortgage difficulty: income surprises such as unemployment and interest rates, are both “relatively benign” currently, but it advises homeowners to “keep one eye on the future.”1

Director General at the CML, Paul Smee, says: “No one should be lulled into a false sense of security that the current low interest rates we are experiencing will last forever. Rules are in place to ensure lenders assess future affordability, but these are not a substitute for careful borrowing.

“It is essential for borrowers themselves to have one eye on the future. Think through any borrowing taken on now to ensure it will still be affordable if and when rates rise.”1

Director of mortgage broker Anderson Harris, Jonathan Harris, says that there is worry over how some people would manage rate rises: “We suspect that when it comes to their finances, there are many people teetering on a knife edge and rate rises could easily push them over.”1

A survey conducted by market research company ICM released in late 2014 found that a third of mortgage borrowers believe they will find it difficult to meet their repayments if interest rates increase by 2%.1

Although rates will most likely rise, just 14% of respondents revealed to ICM that they had been making changes to their finances to cope with any potential increase.1

1 http://www.theguardian.com/money/2015/feb/12/home-repossession-lowest-since-2006

 

 

 

 

How to Take Better Estate Agent Photos

Published On: February 12, 2015 at 4:20 pm

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Categories: Property News

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Photography is a hugely important factor in selling a house. Homebuyers rated photos as the feature they use most when searching for a home on the internet, according to the National Association of Realtors.1

Online advertisements with bad photos, or no photos at all, can cause potential buyers to look past a property. This week, we showcased some of the worst estate agent photos. Here are some tips on how to avoid bad photos, and what you can do to highlight the best parts of your property:

Before taking photos

  • Invest in a good quality camera:

Mobile phone cameras have progressed recently, however, they are not the best devices to use when aiming for high-quality shots. Any point-and-shoot digital camera is suitable for the job, as long as it uses five megapixels or more. If you are willing to spend a bit more, or already have one, a digital SLR is perfect for the job, as it offers more settings and lenses.

  • Stage the home:
How to Take Better Estate Agent Photos

How to Take Better Estate Agent Photos

Homeowners should remember that it is the property’s space, not the furniture or ornaments that should catch the buyer’s attention. The home should be cleared of clutter before being photographed, and of course be clean.

The photos

  • Natural lighting:

Rooms appear brighter and more open when natural lighting is used. The flash can sometimes create glares and shadows, so this should not be used if possible. Avoid taking interior photos on rainy or gloomy days, as this will block out the natural light. Darker days can be good for exterior photos however, as this will avoid the sun creating dark shadows over the house.

  • Angles and composition

Shooting from a corner or doorway is the best way to show off the whole room, and includes as much as possible in one picture. This angle will give the room context, and make it seem bigger. Exterior photos should also be taken from an angle, instead of straight on, as the buyer will get an idea of the house’s depth.

After taking photos

  • Editing

It is always best to make photos bigger and determine if they need editing. There could be distracting shadows, or outdoor obstructions that do not compliment the home. Free online editing tools, such as Picnik, or Snipshot are easy ways to crop photos, adjust the brightness and contrast, and correct colours.

  • The listing

Choosing the right website to showcase your property is important, but the wording to go with the photos is also vital. Catchy descriptions can help buyers relate to the image, and will paint an attractive picture of the home.

1 http://blogs.mckissock.com/real-estate/2015/02/10/5-ways-take-better-real-estate-photos/

Landlords Must Safeguard Tenancy Deposits

Published On: February 12, 2015 at 11:25 am

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Categories: Landlord News

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It is vital that landlords take appropriate action and protect their tenancy deposits when issuing an Assured Shorthold Tenancy (AST).

Landlords Must Safeguard Tenancy Deposits

Landlords Must Safeguard Tenancy Deposits

In a recent case, a landlord who served a section 21 notice, to gain possession of the property, was told that this was invalid, as they had not held the tenant’s deposit in an authorised scheme.

Cases similar to this indicate to landlords and letting agents the importance of staying aware of changes in legislation that could affect them and their tenants.

Landlords and letting agents must protect the deposit, or they could risk having to return the tenants’ deposit before being able to serve a section 21 notice.

It is now illegal for a deposit to be held, unless it is in an authorised scheme. The deposit must be registered in one of three schemes: the Deposit Protection Service, mydeposits, and the Tenancy Deposit Scheme.

For landlords and agents who may not be aware of any legal implications, the result of not protecting a deposit could lead to them not being able to evict tenants until they have returned the deposit. Even then, they could face a damages claim.

Tenants can claim for three times the amount of the original deposit, and this would have a massive impact on a landlord’s finances. Landlords may think that if a deposit was paid before the 6th April 2007 enforcement date, they are exempt from the regulations.

Jobs and income are both still vulnerable, and long-term, reliable tenants can still suffer monetary issues and be unable to pay their rent on time. This could leave landlords who have not protected the deposit in a difficult position.

Landlords should keep a positive relationship with their tenants, and have a reputable law firm at hand, who can minimise risk, keep landlord’s aware of changes in legislation, and make changes in an effective manner.

 

 

Highest Eviction Rate in Rented Homes in 2014

Published On: February 12, 2015 at 10:40 am

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Categories: Landlord News

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Properties in England and Wales are being repossessed at a rate of 115 per day, says the Ministry of Justice (MoJ).

The amount of people evicted from their rental homes reached record highs in 2014, as increasing rents and changes to benefits are affecting tenants’ finances.

MoJ data found that landlords in England and Wales repossessed 42,000 homes over the year; equating to 115 a day.1 This is the highest number since records began in 2000, and arrived as the amount of mortgage borrowers having their properties repossessed dropped to the lowest level in eight years.

The MoJ research does not indicate which types of landlords were behind the evictions, which are 11% higher than the previous year, although data for repossession claims reveal that social landlords made more attempts to recover properties than private landlords.1

Highest Eviction Rate in Rented Homes in 2014

Highest Eviction Rate in Rented Homes in 2014

These landlords are generally for housing associations, and provide houses at lower rents than the market rate, typically to tenants on housing benefits.

In the last three months of the year, numbers indicate that social landlords made 62% of possession claims, the first stage of the legal process. Additional to these 21,576 court actions, private landlords made 4,564 claims, and there were 8,555 accelerated claims, which could have been made by social or private landlords. The MoJ expects that 21% of these claims could end in an eviction.1

Bedroom Tax was thought to be causing issues for social landlords, revealed the National Housing Federation, after the threat of eviction by landlords was the highest for a decade in May 2014.1

Benefit sanctions are also believed to be causing problems.

Housing charity Shelter thinks that these numbers “paint a grim picture”1 of the influence the shortage of affordable housing is having on tenants.

Chief Executive of Shelter, Campbell Robb, says: “With the cost of housing sky-high, we are hearing from increasing numbers of families who are terrified that just one thing, like a sudden illness or job loss, will leave them homeless.

“The failure of successive governments to build anywhere near enough affordable homes, combined with a wave of welfare changes, is making it harder and harder for people to stay in their homes.”1

Figures released this week by Countrywide estate agents revealed that tenants across the UK have faced above-inflation rent increases in the last year.

The price of rent on a one-bedroom property has grown by 2.7% in the last 12 months, to an average of £688 a month. A three-bedroom family home is now 2.2% higher, at an average of £875 per month. Greater London rents have also risen by 4.4%, to an average of £1,137 a month.1

Comparatively, mortgage costs have dropped, and lenders have continued being tolerant of borrowers who struggle with repayments.

The amount of people falling behind with their mortgage repayments, or having their home repossessed last year fell to the lowest level in eight years.

There were 26% less repossessions last year, at 21,000, than the 28,900 in 2013, and the lowest amount since 2006, revealed the Council of Mortgage Lenders (CML).1

1 http://www.theguardian.com/money/2015/feb/12/evictions-rented-homes-record-levels-2014

Why Now is a Great Time to Buy a House

Published On: February 11, 2015 at 3:22 pm

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Categories: Finance News

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Experts reveal that the next six months could be the best time ever to take out a mortgage.

They say that competition between mortgage providers make it a great opportunity for buyers or those remortgaging.

Fixed-rate deals are the cheapest they have ever been, and could even drop below 1%. Variable rates have around halved in the last year to 1.64%.

The Mortgage Advice Bureau’s Brian Murphy says: “The next six months are shaping up to be the best ever window to secure a low interest rate if you are looking to buy or remortgage. Today’s prices have never been bettered in modern times and given that a base rate rise is inevitable at some point, it is unlikely they will be surpassed in the years ahead.

“Lenders have begun the year with a strong appetite for growth, and newcomers are going head to head with established names to launch attractive new deals.”1

Figures from the Bank of England (BoE) reveal that an average two-year fixed rate has declined from 2.37% to 2.01% in the past year.1 On a £200,000 mortgage with a 25% deposit, £420 a year would be saved.

For the same mortgage on a five-year fix, which has dropped from 3.34% to 3.09%, £300 a year could be saved. A typical variable rate has also fallen from 2.74% to 1.64%, cutting £1,300 off yearly repayments.1

Lenders decreased their rates due to economists advising that the BoE will keep its historically low base rate of 0.5% until next year.

With new banks entering the mortgage sector, competition has risen and rates have dropped further.

Andrew Montlake, mortgage broker at Coreco, explains: “We are now seeing rates fall to a level that once seemed unthinkable. Mortgage lenders are in the midst of a rate war, which shows no sign of abating soon, as they battle it out for business.

Why Now is a Great Time to Buy a House

Why Now is a Great Time to Buy a House

“With new lenders coming into the market and competition intensifying we could even see these offerings fall a touch lower. The next few months could well prove to be the best time to lock into low rates which may not be seen again for a generation.”1

Montlake does warn though that these low rates can come with high one-off fees.

Despite cheaper mortgages, spiralling house prices are still causing home ownership to be far off for many. Prices around the UK increased by 10% in the last 12 months, and 15% in London. The average property is now £271,000 or £501,000 in the capital, found the Office for National Statistics (ONS).1

Homelessness charity Shelter’s Campbell Robb says: “Despite talk of mortgages being at an historic low, it certainly doesn’t feel like that for many young people and families for whom buying their own home remains a distant dream.

“Sky high house prices mean families working hard and saving what they can can’t even come close to affording a home of their own. The only way to tackle our housing crisis is for politicians to build the affordable houses we urgently need.”1

Furthermore, mortgage rates for those with low deposits of 5% or 10% are also at record lows.

Despite these reduced rates, aspiring buyers will still have to pass thorough affordability tests, which were introduced by the Financial Conduct Authority last April.

The Mortgage Market Review requires lenders to enquire about applicants’ incomes and spending habits to ensure that they could still afford their repayments if interest rates were to increase sharply.

Last June, the BoE advised that no more than 15% of new lending went to high-risk loans, those worth over 4.5 times the buyers’ income.

Both of these factors affected the mortgage market initially, as providers were hesitant to lend. However, they have since adapted to the restrictions, and the industry is booming. Lenders are competing for customers and offering deals to those with low deposits.

Low-deposits have been supported by the Government’s Help to Buy scheme.

Banks can provide mortgages at such low rates as they have a pot of cash to loan out of from the Funding for Lending scheme. This system was introduced in 2012, and allows banks and building societies to borrow cheaply from the BoE, on the condition that they use some of the funds for mortgages to homebuyers.

Borrowers are reminded that they must still undergo affordability checks before a loan is granted.

1 http://www.dailymail.co.uk/news/article-2948079/Buy-home-say-experts-mortgage-rates-hit-record-low-ve-got-decent-deposit.html