26th September 2011 Kent Reliance improve BTL yields on all their BTL rates including new rates at 4.19% for 2 year fixed and 4.49% for three year fixed - both up to 75% loan to value- Contact your broker or Kent Reliance direct for further information 3rd August 2011 Somehow it seems to have become common knowledge that London always leads the way out of a housing slump. But what actually happened in the last recession in the eighties and is there anything we can learn from it? According to the Halifax, after a prolonged boom, property prices finally reached their peak across the country in 1989 and did not begin to recover until a full 6 years later in 1995, losing an average of 12.5% of their value in the process. In contrast, this time around most of the falls have been far shorter and sharper, with prices dropping by almost 22% in a frenetic 2-year period. In the eighties London’s prices peaked a full year before the rest of the country and hit the bottom a noteworthy two and a half years earlier (1993). In this period, both the price rises and the slump were more dramatic in London than in many other areas, with price rises of up to 25% during the boom years and an overall fall of 28% from peak to trough. During the recent boom, London prices rose much more slowly than the rest of the country, up to a maximum of 17% annually, whereas in many other areas prices rose by over 30%. This relatively modest price expansion may help to explain why London has weathered the storm so much better than everywhere else and is now, yet again, leading the way to recovery. According to the statistics, it began bucking the downward trend in June 2009, since when prices have been rising fairly consistently. There is no doubt that much of the property market outside London and the Southeast is still struggling, but there are signs that it may finally be following London’s lead. A recent reduction in the average asking prices in Yorkshire and Humber have seen sales volumes increase faster than anywhere else in the country. If this is a pattern that continues, it could point to a brighter future on a national basis. House Prices In May the Halifax House Price Index rose by 1.2%, although the Nationwide index was flat over exactly the same period. Despite the contradictions it does seem that prices have, at the very least, stabilised recently, with minor upward and downward movements on a monthly basis. In fact, the price of an average house has hovered between £160,000 - £170,000 for almost a year, which represents a maximum swing of around 6%. The current short-term trend does appear to be heading upwards, but there are many factors that might have an effect on this. On the positive side are the continuing stability of interest rates, improving access to mortgage finance, rising levels of employment and the positive news emanating from London’s housing market. On the negative side, it is still not easy to get finance, Government cuts will have an increasing influence, the economy is much weaker than the experts had predicted and the instability in the Eurozone may create financial difficulties for the money markets throughout Europe. Rental Market Many people are beginning to wonder how long the rental boom can last. Is it a short-term trend or a structural change? It does appear that lenders are slowly relaxing their criteria and as the housing market recovers, so this process will accelerate. This means that first time buyers are now getting better access to mortgage finance, but not in the kind of numbers that will have any effect on the buy-to-let sector for the time being. In many areas demand for rental property is outstripping supply on such a large scale that it may take years to reverse the trend, leading to many aspiring buyers being forced to remain in the rental sector for an extended period. There will be distortions in the market as a result of this process, for example when the market finally frees up, many people will be coming onto the housing ladder later in their lives, looking for family houses rather than one bedroom flats, but without having had the benefit of building up some additional equity from a starter flat. Consequently they would require even more generous terms from their lenders and will be likely to remain in the rental sector for even longer than other first time buyers. Whichever way you look at it, it seems likely to remain a landlord’s market for quite some time to come. House Prices London house prices, according to the Land Registry (one of the most reliable indices), have risen by 5% over the last 12 months. The National average fell by 1.3% over the same period and it should be noted that this figure would have been substantially worse had it not been artificially inflated by the London mini-boom. London traditionally leads the way out of a housing slump and it has now been remarkably buoyant for a statistically significant time period. This may seem a whole world away from someone trying to sell a house in Liverpool, but history tells us that the rest of the country will eventually follow London’s lead. If first time buyers return to the market in significant numbers then this process may speed up dramatically. 14th May 2011 House prices to start recovering House prices will start to recover next year and climb to be a sixth higher over the next four years, according to an influential forecasting house.
Return of the 95% mortgage gives hope to first-time buyers House hunters may be able to find more credit, but rates can be steep – or you may need a little help from mum and dad 7th January 2011 Will this be the right year to buy? This is the question prospective hoe owners have been asking since the financial crisis struck but with interest rates remaining at a record low and property price remaining stable now may be a good time to enter the property market. There is a latent demand for property across the country that is likely to resurge as soon as confidence returns quickly pushing up prices. Currently rental prices are surging which money could be put to better use purchasing a property. Now is not the time for get rich quick schemes but for a longer term plan to provide you with a home of your own giving you freedom to move around and ultimately a fully paid for home so that you do not have to continue shelling out ever increasing rent every month once you retire and no doubt in common with most people your income will drop significantly
4th July 2011
