Latest figures from whitehotproperty.co.uk, the corporate property website run by property specialist movewithus, shows that many developers are removing their ‘new build’ premium, bringing the price of like for like new-build and second-hand properties much closer.
According to Robin King, movewithus founding director, many developers are seeing a significant rise in enquiries from first-time buyers as new homes move into their price range. Many home builders are offering buyers help with deposit payments, making a new home an even more realistic prospect.
Robin King, movewithus founding director, said: “New homes have traditionally been the reserve of second or third time movers who are able to afford the premiums that home builders add. With premiums being cut and incentives included to attract buyers, new homes are proving particularly attractive to FTBs looking for a solid foundation in the property market. As soon as demand returns and the supply of homes runs out, the premiums will probably return, so if FTBs are interested in a new home, now’s the time.”
Monday 23 March 2009
Friday 20 February 2009
The real cost of your children living at home
Recently released research from movewithus’ online property portal, whitehotproperty.co.uk, has revealed that children living at home for 5 years could cost their parents as much as £12,500, or the price of a 12.5% house deposit*.
The research conducted by the movewithus website, which specialises in helping FTBs onto the property market, highlights that the average child is costing parents at least £170 a month**, not taking into account the fixed costs of running a large home. With an annual cost of £2,500, including extras, such as Christmas and Birthday presents, having a child live at home for another five years could amount to a total cost of £12,500.
With property prices and interest rates at their lowest point for ten years, experts are claiming that now is the optimum time for First Time Buyers to enter the market, with affordable houses and cheap borrowing available.
But, with lenders adopting stricter criteria for borrowing and asking for larger deposits, in some cases over 25%, First Time Buyers are unable to take advantage of the market.
In a bid to save up the money for a deposit, many potential First Time Buyers are now resorting to the Bank of Mum and Dad and staying at home. If they managed to save £500 a month, it would take 50 months to save for a deposit for a £100,000 property: four years and two months – thus costing their parents well over £12,000.
whitehotproperty.co.uk offers one in four properties on its website with a buyer incentive, such as cash towards a deposit, paid stamp duty or assisted purchase schemes, specifically to help struggling First Time Buyers in this position.
Robin King, founder of movewithus, commented: “The research has revealed some quite staggering results. Children are no longer able to flee the nest, as before, and are having to opt for cheaper living with their parents. However, there is a price to pay for having your offspring at home and, with the average age of people moving out of the familial home continually rising, the costs can be significant. With whitehotproperty.co.uk we aim to alleviate the situation through offering First Time Buyers incentives, such as cash towards a deposit.”
*The £12,500 cost of having a child stay at home for five years is equal to a 12.5% deposit on a £100,000 property budget. If the child/ren can also find a property with a gifted deposit of 5%, then the child only has to raise the final 2.5% to equal a 20% deposit. If they were saving £500 a month, then this will take five months compared to 50, meaning the opportunity is unlikely to be missed. Based on a 4.59% interest rate this is a monthly repayment of £450.72. Obviously other factors must be considered.
**Monthly cost per child
Gas = £59/4 = £14.75Electricity = £36/4 = £9Food = £400/4 = £100Phone = £22/4 = £5.50Broadband =£12/4 =£3Water = £28/4 = £7other/car = £10Clothes/holidays = £20.75Total = £170Annual Cost = £2040 + Five year = £10200
Thursday 19 February 2009
The bottom of the market - are we nearly there?
By Robin King, movewithus founding director
"The housing minister who mentioned “green shoots of recovery” last month may have been universally lambasted but, according to reports we’re getting from estate agents, developers and lenders, she may have had a point. There are real signs that the bottom of the market is nigh and, more encouragingly, that the conditions are shaping up for a limited recovery in the near future.
From what we’re hearing, the distressed market is retreating. Competition from investors and first-time buyers for the finite supply of properties at the bottom of the market is firming prices, with bidding often pushing final sale prices over asking prices. This is especially true of properties with seven-day notices on them.
Two recent cases spring to mind which illustrate a real change in buying habits. An estate agent recently told me about a seven-day notice property in Old Trafford, Manchester, which was independently valued at £57,000 and is currently accepting bids of £74,000 and rising. Another agent in St Ives told me about a property which had been on the market for seven months at £195,000, had an offer of £165k just before Christmas and now, after multiple viewings and bids in January, was sold last week for £192,000. What a turnaround!
These cases are becoming more and more frequent. Developers we’ve spoken to have told us about a real turnaround in their sales volumes and prices being achieved. Lenders we’ve spoken to are also reporting more positive results. A sample of some 2,000 sales made between October and February 13 confirms a clear upward trend in percentage price achieved, from 91% in October to 94% now.
So why is this happening? What has changed? Well, the cuts in interest rates haven’t hurt and lenders are talking about releasing more affordable mortgage products, but the real driver of this trend is the competition for good-quality homes in good areas which is driving prices and is the clearest sign we’ve had so far that we’re seeing the bottom of the market. Sentiment is changing: borrowing is cheap and people are starting to realise that investment in property is more prudent than saving in banks in the current climate.
Essentially, the finite supply of saleable properties, usually from corporate vendors, is falling away and demand is steadily increasing. Properties from aspirational buyers, the economic engines, are still not coming to market as mortgages on the whole remain difficult to attain and the constant stream of negative reports put people off moving.
As I mentioned earlier, this is encouraging because it lays the foundations for more price firming in the coming months, so much so that the Government may have to be careful to avoid a mini-boom in prices as they release liquidity. I’m surprised we haven’t seen more parents and investors funding deposits for first-time buyer offspring and getting a better rate from an equity and yield rather than leaving their money in the banks earning very little.
The signs are that, as long as properties are priced accurately, there’s more chance now than at any other time that they will be matched by the selling price."
"The housing minister who mentioned “green shoots of recovery” last month may have been universally lambasted but, according to reports we’re getting from estate agents, developers and lenders, she may have had a point. There are real signs that the bottom of the market is nigh and, more encouragingly, that the conditions are shaping up for a limited recovery in the near future.
From what we’re hearing, the distressed market is retreating. Competition from investors and first-time buyers for the finite supply of properties at the bottom of the market is firming prices, with bidding often pushing final sale prices over asking prices. This is especially true of properties with seven-day notices on them.
Two recent cases spring to mind which illustrate a real change in buying habits. An estate agent recently told me about a seven-day notice property in Old Trafford, Manchester, which was independently valued at £57,000 and is currently accepting bids of £74,000 and rising. Another agent in St Ives told me about a property which had been on the market for seven months at £195,000, had an offer of £165k just before Christmas and now, after multiple viewings and bids in January, was sold last week for £192,000. What a turnaround!
These cases are becoming more and more frequent. Developers we’ve spoken to have told us about a real turnaround in their sales volumes and prices being achieved. Lenders we’ve spoken to are also reporting more positive results. A sample of some 2,000 sales made between October and February 13 confirms a clear upward trend in percentage price achieved, from 91% in October to 94% now.
So why is this happening? What has changed? Well, the cuts in interest rates haven’t hurt and lenders are talking about releasing more affordable mortgage products, but the real driver of this trend is the competition for good-quality homes in good areas which is driving prices and is the clearest sign we’ve had so far that we’re seeing the bottom of the market. Sentiment is changing: borrowing is cheap and people are starting to realise that investment in property is more prudent than saving in banks in the current climate.
Essentially, the finite supply of saleable properties, usually from corporate vendors, is falling away and demand is steadily increasing. Properties from aspirational buyers, the economic engines, are still not coming to market as mortgages on the whole remain difficult to attain and the constant stream of negative reports put people off moving.
As I mentioned earlier, this is encouraging because it lays the foundations for more price firming in the coming months, so much so that the Government may have to be careful to avoid a mini-boom in prices as they release liquidity. I’m surprised we haven’t seen more parents and investors funding deposits for first-time buyer offspring and getting a better rate from an equity and yield rather than leaving their money in the banks earning very little.
The signs are that, as long as properties are priced accurately, there’s more chance now than at any other time that they will be matched by the selling price."
Tuesday 10 February 2009
Taken from 'The Sunday Mirror' - 8th Feb
Net a house bargain with new website
Homebuyers who can get a mortgage have been making the most of the credit crunch by snapping up repossessed properties.
And a new website - www.whitehotproperty.co.uk - will make it easier for them to grab a bargain without trekking round auction houses and agents.
When an offer is made on a repossessed property, the mortgage company has to try to get the best price by advertising it for a further seven days - which is where the site comes in.
It also highlights chain-free properties which have been priced to sell. One in four also has an extra incentive to lure buyers such as cash towards a deposit or no stamp duty.
Robin King, director of whitehotproperty, said: "Our seven-day notice feature is designed to ensure that repossessed properties achieve the maximum realistic price, which is in the interests of the borrower and lender."
Homebuyers who can get a mortgage have been making the most of the credit crunch by snapping up repossessed properties.
And a new website - www.whitehotproperty.co.uk - will make it easier for them to grab a bargain without trekking round auction houses and agents.
When an offer is made on a repossessed property, the mortgage company has to try to get the best price by advertising it for a further seven days - which is where the site comes in.
It also highlights chain-free properties which have been priced to sell. One in four also has an extra incentive to lure buyers such as cash towards a deposit or no stamp duty.
Robin King, director of whitehotproperty, said: "Our seven-day notice feature is designed to ensure that repossessed properties achieve the maximum realistic price, which is in the interests of the borrower and lender."
Monday 9 February 2009
Property investor activity could cause further reduction in supply of available properties
Increasing numbers of distressed sales to investment buyers could lead to a further reduction in an already depleted supply of UK property for sale to ordinary home buyers. The popularity of property auctions, which sell mainly to investors and speculators who buy low to make profits, has risen in recent months.
Robin King, movewithus founding director, claims that auctions are tailored to investment buyers due to the legally binding nature of transactions made when the hammer falls. This risks excluding private home buyers, who may have paid more for the same property.
King said: “There is a place for auctions and they do give a good indicator of the ‘copper bottom’ of the market. However, they should be used as part of a wider property sale strategy that benefits ordinary home buyers as well as property investment groups. Through white hot property, our sister company which specialises in repossession and part-exchange sales, we are selling 40% of our stock month on month without the need for auction.”
The underlying risk, King argues, is that as investors buy up this stock at low prices, existing UK housing supply problems will be exacerbated which may lead to a rapid rise in prices when mortgage lending becomes more widely available.
King explained: “The number of properties for sale in the UK is already projected to fall short of demand when the market returns - home builders have a finite stock of part-exchange properties and their new-build schedules have been drastically cut, meaning only a quarter of the 240,000 new homes targeted for in 2009 will be built. Also, ‘aspirational’ home movers, the keystone of the property market, are still not choosing to sell due to low prices, erosion of equity and job insecurity. This already limited supply of properties is being diminished further by investors and speculators.”
King continued: “During the second quarter of 2009, as lending becomes more available and ordinary home buyers are able to return to the market, this diminished supply may cause house prices to spike back up again during 2010 - 2011. I urge buyers to take advantage now while there's still properties available at low prices.”
Robin King, movewithus founding director, claims that auctions are tailored to investment buyers due to the legally binding nature of transactions made when the hammer falls. This risks excluding private home buyers, who may have paid more for the same property.
King said: “There is a place for auctions and they do give a good indicator of the ‘copper bottom’ of the market. However, they should be used as part of a wider property sale strategy that benefits ordinary home buyers as well as property investment groups. Through white hot property, our sister company which specialises in repossession and part-exchange sales, we are selling 40% of our stock month on month without the need for auction.”
The underlying risk, King argues, is that as investors buy up this stock at low prices, existing UK housing supply problems will be exacerbated which may lead to a rapid rise in prices when mortgage lending becomes more widely available.
King explained: “The number of properties for sale in the UK is already projected to fall short of demand when the market returns - home builders have a finite stock of part-exchange properties and their new-build schedules have been drastically cut, meaning only a quarter of the 240,000 new homes targeted for in 2009 will be built. Also, ‘aspirational’ home movers, the keystone of the property market, are still not choosing to sell due to low prices, erosion of equity and job insecurity. This already limited supply of properties is being diminished further by investors and speculators.”
King continued: “During the second quarter of 2009, as lending becomes more available and ordinary home buyers are able to return to the market, this diminished supply may cause house prices to spike back up again during 2010 - 2011. I urge buyers to take advantage now while there's still properties available at low prices.”
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