A Didsbury based sale and rent back company has gone into administration leaving many tenants with the possibility of losing vast sums of money. Administrators Baker Tilly said that tenants could rent as normal but they did not want to give tenants “false hope” about the likelyhood of them getting their 30% payback.
UK Housing Alliance (North West) Ltd, bought properties off of 375 homeowners who then rented the property back, the deal was 70% of the price up front and the remaining 30% after renting for 10 years. But after only 4 years in business, the firm has gone bust leaving some tenants possibly out of pocket to the tune of £40,000.
Speaking at a community question and answer session yesterday in Brighton & Hove, the PM suggested council house reform by discussing the possibility of removing the ‘council house for life’ policy currently in existence. Instead he put forward the idea of a contract term of 5 or 10 years based on the fact that tenants circumstances may change and they may want to move into the private sector.
Any reform of this kind would echo that of Maggie Thatchers revolutionary decision to allow tenants to buy their council houses. If you missed the PM Direct session, you can catch the bit on housing here…
Great news, those thinking “I’d like to sell my house fast” will be pleased to know house prices rose again in June according to Nationwide building society figures, the rise comes after a 0.5% increase in May and puts the average UK property at just over £170,000. These figures contradict the Government research which puts the average house price at £207,000 but as we know, these surveys always offer different results.
The Government figures put inflation at 10.1% however Nationwide’s findings suggest a percentile closer to 8.3%, the building society also shows prices have risen by 3% since the start of the year. As for reasons behind the findings, Nationwide say the increase in prices is down to the rise in the number of properties on the market after the suspension of Home Information Packs (HIPs).
At a time when houses are very affordable and mortgage deposits are so high, first time buyers (FTBs) are facing a veritable lock-out unless they can find 15% – 30% of the property value. So, how do you buy a house at a time like this? Well, maybe this can help…
The Council of Mortgage Lenders (CML) has said UK mortgage lending remains subdued after the budget announcement last week. Despite the lack of noticable growth, the number of new home loans rose by 7% in month on month in May to £11.3bn.
The reasons for the stuttering mortgage market can be blamed on higher taxes and public spending cuts said the CML, commenting on the situation CML economist Paul Samter said: “The market will inevitably be affected by how policy impacts on the wider economy – particularly on household finances and confidence.” Whether the market will pick up will depend on whether lenders relax their restrictions on deposits from first time buyers, unlikely for some time.
According to a survey conducted by the Royal Institution of Chartered Surveyors (Rics), the suspension of Home Information Packs (HIPs) has resulted in more property being placed on the market in England and Wales. Despite the rise in homes on the market, a fast house sale is unlikely as the number of completed sales over the the 1st quarter months fell by 5%.
The suspension of HIPs and the abolition which is to follow was announced by the new coalition government in May and described as “needless red-tape” by housing minister Grant Shapps. Although the need for a HIP has been removed, sellers are still required to provide an energy performance certificate will remain. As for a HIP replacement (sorry, couldn’t resist), there are no signs this Government will be entertaining that idea throughout this Parliament.
House Price surveys – they’re like 4 suspected criminals that haven’t got their story straight, all giving different versions of the truth. Ok, that’s probably one of the worst similes you’re likely to see but it kind of gets the point across that the state of the housing market depends on who’s survey your looking at. So why are they always different? Well, maybe this can help explain…
So, you put your house on the market and waited for the calls to come flooding in, actually you were aware they probably wouldn’t come flooding in because a quick house sale in this market is hard to come by. But what’s the next step, where to from here? Well if you could do with some extra cash to cover the bills or mortgage, why not join the thousands of households across the UK that are letting out their spare rooms to lodgers.
There are an increasing number of websites what offer rooms with ‘hospitable hosts’ in houses up and down the country and across the globe. Often it’s parents who have seen their kids move away and have rooms going spare but sometimes it’s professionals who work away from home letting their flat out to guests. There are even flexible tax rules in the UK that make the idea even more attractive, those planning to rent out a furnished room in their main residence may be able to claim ‘rent-a-room’ relief. This relief allows a property owner to pay no tax if the gross rental income for the tax year does not exceed £4,250. So if you’re trying to sell, maybe you should rent!
On Tuesday we discussed the plight of first time buyers (FTBs) who are able to afford repayments for the first time in years but can’t afford the mammoth deposits. To give this some context, industry figures show that the average price of a property bought by a first-time buyer in 2009 was just £133,794, yet the average deposit paid was a massive £29,439.
For those wannabe FTBs who can’t get £30k together, there are other options such as the scheme HomeBuy Direct which is open to households in England earning less than £60,000 a year. The scheme is a part Government, part developer effort to provide new affordable housing for those not on ‘the ladder’ but even this route is threatened with just 60,000 new build completions last year compared with 175,000 in 2007.
Despite a slight rise in property prices throughout May, houses and flats are now more affordable for first-time buyers (FTBs) than they have been for years, but as is often the way – there’s a catch. Many would-be buyers looking for their first home can afford the repayments but can’t get together enough money for the hefty deposit.
With only a few 95% mortgages on the market and only the best credit scores getting them, the choice for the mere mortals is frequently either a 20% or sometimes 35% deposit mortgage. Needless to say, with FTB’s locked out like this, quick house sale figures are down dramatically with the National Association of Estate Agents (NAEA) reporting that just 19% of house buyers were first-time buyers in November 2009. Compare that to 45% in May 2009 and you get the picture. More on this on Thursday.
