marlborough newsletter - october
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Marlborough NewsOctober 2014
A major house price survey done for the Royal Institution of Chartered Surveyors (RICS) shows that London house prices fell last month for the first time in more than three years and prices nationwide showed their smallest increase in 15 months.
The RICS reported that prices in London fell for the first time since January 2011, ending the longest unbroken run of increases in more than 20 years. “Fading price momentum is more than just a London story,” RICS said.
RICS data is based on its members’ views on whether house prices in particular regions have risen or fallen in the past three months. In their benchmarking survey for September, members did not expect recent levels of activity to continue. Over the next 12 months, they predict prices will rise 1% in London and 2% in Britain as a whole. Over the next five years, it expects average
annual price growth of just under 5%. RICS Chief Economist Simon Rubinsohn said that the slowdown in the housing market was “a healthy development”.
“Part of this is down to the Bank of England becoming more vocal about the risks, part of this is down to affordability, part of this is down to the new mortgage rules and part of this is down to expectations of higher interest rates,” he said.
Editorial: On Marlborough High Street, we have seen the level of interest from London buyers lessen over the last few months. The momentum from the spring frenzy of sales slowed and almost stopped as the UK held its collective breath over the Scottish vote. Like a sea going liner, the engine of the property market takes some time to get up to full speed again and the autumn response to new properties has been a bit slow. 2014 has been a strong selling year, but 2015 is not likely to replicate this market.
London Prices Dip
The Halifax has produced figures showing that the average monthly mortgage costs associated with owning a three bedroom house for a typical first-time buyer in the UK stood at £677 in June 2014; £110 lower than the average monthly rent paid on the same property type at £787.
“There has been a significant decline in the cost of buying a home since 2009 and this improvement is due to a combination of lower mortgage rates (typically down from 4.92% in 2009
to 3.09% in 2014) and rising private rents,” says Craig McKinlay, Mortgage Director at Halifax.
But is this trend universal? The Halifax study shows buying is cheaper than renting in all regions, except the East Midlands and East Anglia.
First-time buyers can save £1,300 per year buying a house rather than renting
Annual change in house prices: EnglandScottish Tax ChangeHomebuyers in Scotland will pay no tax on properties less than £135,000 following a recent announcement by Finance Secretary John Swinney. The Scottish Parliament’s new Land and Building Transactions Tax will see a 12% marginal rate for houses costing more than £1m introduced from April next year. A marginal tax of 2% will also apply to the proportion of a transaction between £135,000 and £250,000. A 10% rate will apply to that proportion of the purchase price above £250,000 up to £1m.John Coleman, Head of Estate Agency in Scotland comments:
“Although this new tax assessment will benefit those transacting at levels up to £325,000 it will make it even harder for people to prosper and progress up the property ladder as their family grows. The prime market in Scotland above £1million will soon only be affordable to the very rich, most of whom are likely to come from other countries. Lenders will likely be reluctant to fund the extra tax, so the burden will fall on the buyers.”
House price data
House prices rise and fall depending on which property index you read: Rightmove; RICS; Office for National Statistics; Land Registry; Hometrack; Nationwide and Halifax to name just some. Here we review the RICS House Price Index.
• Who compiles it? RICS, the trade body for surveyors.
• What does it show? How surveyors think the property market is behaving in their area.
• What time period does it cover? A calendar month. Surveys are sent in the second week of the month and received by the end of the month.
• What is it based on? Responses to a monthly survey of 450-500 surveyors (usually 250-300 reply). They are asked 10 questions covering changes in prices, sales and interest over the previous three months and what they expect to happen over the next year.
• They are also asked for firm figures on how many homes have been sold and how many are for sale.
• What area does it cover? England and Wales. Information is collected across 10 geographical regions.
• How long has it been going? Since January 1978. Is it seasonally adjusted? Yes.
• What else is done to the raw data? It is regionally weighted using long-term averages based on Land Registry figures.
• Why should I trust it? Figures showing how many properties are on sale and how many would-be buyers are signing up can give you a good idea of what is happening in the housing market.
Smiths Gore has generated a list of questions which we will be publishing over the next 3 editions of our Newsletter.
The questions cover pertinent agency issues to help you select the best estate agency which is key in providing you with the best service and ultimately securing the best outcome for your home.
1. DO YOU ACCOMPANY VIEWINGS?
It is extremely important that the agent conducts all viewings. Doing so allows him or her to assess the applicant’s position, motivation and character in detail. Such information becomes extremely relevant during the negotiation when fine judgements often need to be made about whether to accept an offer or push for a higher figure.
Smiths Gore personnel always accompany initial viewings.
Edward Hall of Smiths Gore’s Marlborough office says: “This is a sample of our level of service and one of the reasons we stand out from the crowd as an estate agent!”
2. DO YOUR BROCHURES INCLUDE PROFESSIONAL PHOTOGRAPHY AND FLOORPLANS?
A study conducted by the property website Rightmove, found that their users spend an average of 20 seconds looking at the summary detail of a property before making the decision to look in more detail or move on to the next available house. In that 20 seconds, they look at the photographs, the summary description and the location map.
Failure to present the best possible image to the audience will have a negative effect on the numbers of people who request detailed information and that, in turn, will affect the number of viewings achieved and the likelihood of generating competitive interest.Smiths Gore always use professional photographers and generate clear and professional floorplans.
Shona Ford of Smiths Gore’s Marlborough office says: “A picture is worth a thousand words, but a poor image can cost you thousands of pounds in the sale price!”
To request a free market appraisal click here.
We are more than just the largest rural
For more information, contact:
Edward Hallt 01672 529056edward.hall @smithsgore.co.uk
Shona Fordt 01672 529057shona.ford @smithsgore.co.uk
There were only 8,500 self-builds completed throughout the UK last year and this is largely due to the restrictions in the number of mortgages offered. These mortgages are typically released in 4-6 stages in arrears so the borrower has to have enough to reach each stage before the build is re-inspected and the next tranche of funds released.A Shropshire Council self-build scheme aims to open the property market to first-timers and create affordable homes. It maintains these houses as affordable by making sure the advertised sale price on re-sale is set at 60% of the worth for the first 6 months and precludes extending the property without valid reason.
Questions To Ask An Estate Agent Before Instruction: Part 1:
Less Land for Sale
There is likely to be less land for sale in England this year according to Smiths Gore's latest research. The volume of all land available for sale has dipped since the beginning of July but there is a disparity between the types of land. The market for equipped land has experienced a marked drop in volume recently while the amount of bare land has increased slightly.
The value of farmland is still dominated by overriding factors such as availability, location and quality; farmer buyers and investors looking for a safe haven for their funds remain the dominant players in the marketplace.
Can you imagine climbing onto your kitchen work surface to access the stairs to your bedroom? Or a bathroom so small that the w/c is almost part of the shower? Winkworths in London is selling just such a property for £275K in Islington. Advertised as a ‘one bedroom terrace house’ the 188 sq ft of space is cleverly used, there is even storage under the raised part of the living area. The prospective buyer for such a property? Winkworths seem to think it will probably sell to an investor who will let it out.
A London Pad