Nottingham Property News  

OPTIMISTIC estate agents have put asking prices up sharply in expectation of a spring recovery from the housing slowdown, figures released today suggest.

28/02/05 - OPTIMISTIC estate agents have put asking prices up sharply in expectation of a spring recovery from the housing slowdown, figures released today suggest.

Residential estate agents mark up the price on the hope of a spring boom: By Gabriel Rozenberg, Economics Reporter
OPTIMISTIC estate agents have put asking prices up sharply in expectation of a spring recovery from the housing slowdown, figures released today suggest.

Asking prices rose by 2.3 per cent this month, the biggest increase since last June, according to Rightmove, the property website.

Analysts predicted that house prices are set to rise over the next few months after a seasonal drop in activity during December and January, when prices fell by 0.3 per cent and 0.1 per cent, respectively. Last week the Council of Mortgage Lenders reported that the number of mortgage approvals had fallen to its lowest level in six years.

However, there were indications that estate agents may have raised prices too much this month, after surveys showed that buyer demand has dropped significantly. Rightmove said that inexperienced estate agents were failing to price realistically and were gambling on the market recovering.

Miles Shipside, commercial director of Rightmove, said: “Asking prices have risen this month, as is typical of the last few years, but it’s not a typical year that sellers and their estate agents have become accustomed to. Activity levels have been really low since summer last year.”

The average rise of £4,321 took the annual rate of house price inflation to 11.1 per cent, up from 10.9 per cent last month. The length of time that houses remain on the market declined from 87 days to 85.

The price rise was highest in the North West and the West Midlands, at 5.9 per cent and 4.9 per cent, respectively. However, asking prices in the North of England fell by 3 per cent, Rightmove found.

All types of property saw an increase in asking price. The strongest recovery was in higher-value houses, which is seen as an apparent signal that the market remains weaker among first-time buyers.



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17/01/05 - The multiple problems of going it alone

WITHOUT the support of their parents, many children could not
Kerry Howard, who lives in Eastbourne, helped Shelley, her 24-year-old daughter, to buy a £200,000 mews house in nearby Brighton.
Although Shelley had savings of £30,000 from the sale of a flat in Eastbourne, her income was not enough to satisfy a lender. So her mother took out a home loan in her own name to circumvent lenders’ requirements.

Most banks and building societies will lend three and a half times the income of a single person. Ms Howard chose a two-year tracker mortgage with Birmingham Midshires through Savills Private Finance, the mortgage brokers. The loan has a current pay rate of 3.99 per cent.

Ms Howard says: “My daughter will make the monthly repayments, but the house cannot be transferred to her name until her salary is enough to meet the lender’s income multiple requirements. The £30,000 has been recorded as a legal charge on the property.”

When the house is transferred into her daughter’s name, Ms Howard will be liable to pay capital gains tax (CGT) on any increase in the value of the property. “The way the housing market is at the moment, I am not worried about CGT, but Shelley will have to pay stamp duty again, which is galling.”

Parents can also help their child to buy a house without taking out a mortgage in their own name. Ian Giles, of Purely Mortgages, recommends Bank of Ireland’s “child-friendly” 1st Start scheme. The home loan allows first-time buyers to borrow up to four times their salary, or up to four times a parent's income. Alternatively, the bank will lend up to 2.75 times the joint income of a parent and child.

Parents need not fear that their home is at risk because the mortgage is secured on the child’s property. Bank of Ireland’s two-year 1.39 per cent discount has a pay rate of 5.45 per cent; the five-year fix is pegged at 5.89 per cent.

A family can also pool their funds to help out. Simon Tyler, of Chase De Vere Mortgage Management, says that Newcastle Building Society permits a group of family members to pool their savings, which are then offset against the child’s mortgage. The loan’s current rate is 4.6 per cent, rising to 5.3 per cent after six months.

11/01/05 - Property will beat shares in 2005

'Property will beat shares in 2005'

British property will continue to outperform shares and bonds this year to produce a total return of 10% or more, according to property consultacy King Sturge.

King Sturge has predicted that the supply of property in the UK would be restricted by higher construction and compliance costs, while pension funds, developers and private funds would continue to pour money into the industry because higher returns cannot be found elsewhere.

In 2004, property was the best-performing major asset in the UK, with a total return of 18%, compared with 13% for shares and 8% for government bonds.

King Sturge investment partner Richard Batten said: "Given the continued uncertainty in shares combined with the anticipated poor performance from gilts, especially in an election year, property is likely to be a major and increasing component of any institutional investment."

King Sturge predicts residential property will be flat or rise 3% this year, with homeowners unlikely to benefit. The effect of inflation mean that house prices could fall, as many economists are predicting.

House prices are also forecast to fluctuate widely across Britain, with the south-west and East Anglia expected to do the worst and the north-west and Northern Ireland the best. London property is rated "above average”.

The best returns are expected to come from office buildings and industrial property, tipped to rise 9.4% and 10.4%. The majority of investors seeking exposure to these sectors would need to buy shares in property companies or managed funds

07/01/05 - Nationwide expects house price

Nationwide expects house price
increases in 2005

House prices fell by an average of 0.2 per cent in December but still left 2004 as being the fourth consecutive year of double digit house price inflation, the Nationwide has reported. Its latest survey put the annual rate of house price inflation at 12.7 per cent in 2004, down from 16 per cent last year, 25 per cent in 2002 and 14 per cent in 2001 – meaning the price of an average house has more than doubled over the last five years.

The high rate of annual house price inflation masks a year of ‘two very distinct parts’, commented Nationwide group economist Alex Bannister. ‘Over the first seven months of the year prices rose 11.4 per cent but since July prices have increased by only 1.2 per cent. December’s fall in the price of the average house was the second monthly fall in the last
three months. Despite this, house prices are up 0.7 per cent (2.8 per cent on an annualised basis), compared to three months ago’.

Although monthly house price inflation is now much weaker than earlier in the year, ‘the trend in prices remains moderately upwards’, said Bannister. Although the Nationwide’s own survey evidence paints ‘a somewhat weaker picture’ it was consistent with a market that was ‘treading water’ in most regions.

‘ A sharp downturn in prices cannot be completely ruled out, but whilst the economic outlook remains positive it looks unlikely’, said Bannister. ‘Importantly, we do not foresee a reoccurrence of the sharp increases in interest rates and large-scale joblessness that resulted in house price falls in the early nineties.

‘ It is our view that the economic climate and housing market conditions over the last few months will be a reasonably good guide to conditions in 2005. We expect house prices to end 2005 up between 0 and 5 per cent. However, the likelihood is that price growth will be towards the bottom end of this range, probably at 2 per cent’.

The north-south divide in annual house price increases which became evident in 2003 persisted into 2004, said the Nationwide. ‘Prices rose fastest in the north west (up 24.6 per cent) and Wales (up 24.4 per cent). Price growth was slowest in London (up 7.6 per cent), followed by the outer metropolitan region (up 8.0 per cent) and the outer south east (up 10.5 per cent).

‘ In pound note terms, the biggest increases were in the north west (up nearly £28,000) and Wales (up nearly £27,000). In contrast, the average price in London rose by just over £16,500. The smallest increase came in Northern Ireland, where although prices were up just over 16 per cent, this equated to a £15,000 increase in price.

‘ More specifically, Derwentside experienced the biggest price rise in the country, closely followed by Burnley. Neath Port Talbot appears in the top 10 for the second year running. North Ayrshire, Warrington and Liverpool also experienced rapid increases in house prices’. Meanwhile house price falls were ‘more widespread than during 2003’ with prices falling by an average of 4 per cent in 18 (or 4 per cent) local authorities. As in 2003, most locations experiencing price falls were in the south east including Ealing, Islington, Epping Forrest, and Tower Hamlets. Away from the south east, Chesterfield and Cannock Chase (in the east and west Midlands respectively) , also experienced price falls.

The Nationwide’s list of likely property ‘cold spots’ for the coming year features fewer London boroughs than last year although does include a number of regions in the south east including Tunbridge Wells, Woking, Maidstone and Kingston upon Thames. Other areas include the New Forest, North Dorset, and Oadby and Wigston.

Areas said to be vulnerable to house price falls include Blaby, Bracknell Forest, Harlow, Portsmouth, Leeds and Trafford.

‘ Since 1995 house prices have trebled but average incomes have risen by just 50 per cent. This has made it increasingly hard for would-be first-time buyers to enter the housing market’, said Bannister. ‘We expect just 349,000 properties will have been bought by first-time buyers in 2004. This would represent the third consecutive year of falling first-time buyer numbers and the lowest figure since the mortgage market was deregulated in the mid-eighties. Those that have managed to enter the market, in addition to many existing homeowners trading up, have been forced to purchase further down the housing ladder than was the case in 1995’.

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