First-time buyers 'at fresh low'

The number of first-time home buyers in the UK has dropped to its lowest point since 1980 as house prices soar, mortgage lender Halifax says.

An estimated 300,000 first-time buyers entered the market in 2007, 15,000 fewer than a year earlier.

The average house was out of the reach of a typical first-time buyer in 96% of UK towns, Halifax found.

The average price paid by a first-time buyer for a property increased by 15% during this year to £175,093.

Priced out

The price has soared 82% over the past five years, it added.

"Rising property values have priced many potential first-time buyers out of the housing market," Martin Ellis, chief economist at Halifax.

"When they do enter the market, first-time buyers are now more likely to be in their 30s rather than their 20s and buy a flat rather than a terraced house."

Henley-on-Thames was the UK's least affordable town, with an average property price of £642,672 - more than 13 times the average income of first-time buyer households in the area.

The big council house sell-off

Camden council has announced plans to sell off 500 of its existing rented properties, in order to pay an estimated £242 million repair bill for the rest of its housing stock because the Government is refusing to provide the cash. The news emerged as the Queen’s Speech in Parliament promised the building of millions more homes and an increase in council-house stock.

Under the headline Investing in Camden’s Homes, the council is advertising its intention to sell vacant homes to private buyers to raise money for the repairs. But tenants are opposed to the plan. Members of the Defend Council Housing campaign are now busy knocking on doors and getting people mobilised against it.

Liberal Democrat council leader Keith Moffitt said there was no option but to sell, as the Government would not give Camden the funds needed to bring council homes up to its own decency standards. It is estimated that £242 million will be required for this. The Government has made financial support conditional on the council privatising the management of its housing stock.

A spokesman for the Department for Communities and Local Government said: “We have not yet taken a view on Camden’s proposals. Our policy in general is to make it easier for councils to build homes, and we are expecting all areas to increase the number of social homes.”

Liberal Democrat housing spokesman Paul Holmes MP said: “This is the Government’s fault for refusing to give Camden the money it needs for repairs unless it privatises the management. The tenants are sensibly opposing this, and the Government is punishing them for not toeing the line.”

Surge in 100% mortgages means thousands risk negative equity

Thousands of first-time buyers could find themselves in negative equity following a big increase in the number of 100% mortgages available, according to new research issued yesterday.

An estimated 33,000 first-time buyers borrowed the full value of their property, or in some cases more than it was worth, between January 2006 and August 2007, said the mortgage website mform.co.uk. Such deals are allowing people to get on to the housing ladder without having to raise a deposit.

But earlier this week, the body representing mortgage lenders warned that the housing market was about to stall, and some commentators believe this has already begun. A report from the website Hometrack, published on Monday, claimed house prices fell by 0.1% during October - the first fall for two years. There has also been a warning that home repossessions could rise by 50% next year.

Homebuyers who have recently taken out 100%-plus loans are particularly vulnerable to price falls, as they have no equity to cushion them if there is a drop in the value of their home. In some cases, even a small fall in house prices would leave them owing more on their mortgage than their home is worth.

Rising property prices have meant that people need to borrow even more money to get the property they want, and lenders have responded by dramatically increasing the number of 100% mortgages available, according to mform.co.uk

"In April this year, our research showed there were 92 different 100% mortgages to choose from, but by October 1, this had increased to 160," said Francis Ghiloni, the site's marketing and business development director. "If house prices fall, as some commentators predict, those homeowners with these mortgages are likely to encounter negative equity."

The high-street bank Abbey recently began trialling the "100% Plus Mortgage", which, in addition to allowing people to borrow the full value of their property, enables them to borrow up to a further £25,000, secured on their home. Abbey suggested the money might be used for "renovating your home, buying a new car or consolidating all your debts".

Property viewed 'safer than cash'

A majority of British people believe buying property is now a safer place to put their money than saving with a bank or building society.

Research for the BBC Two series, The Truth About Property, found 53% of respondents believed owning property was safer than cash.

The poll took place in the aftermath of the Northern Rock crisis, the first run on a British bank in nearly 150 years.

The findings come despite mounting evidence of a slowing housing market.

Booming house prices in Inverurie

Inverurie has the fastest-rising property prices in Scotland, according to new figures.

The Aberdeenshire town has joined Aberdeen and Edinburgh as the only places in Scotland where the average cost of a home is over £200,000.

The Bank of Scotland survey showed householders in Inverurie have seen their property value rise by 35%.

But the town's councillor warned that the housing boom also brings hidden costs to the community.

According to the bank's figures, average house prices across Scotland as a whole rose by 14% in the last year to just over £141,000, 3.5% above the UK average.

Bank of Scotland economists said the market in Inverurie is being driven by the high prices in Aberdeen which is creating a ripple effect to the rest of Aberdeenshire.

'Younger families'

But Councillor Richard Cowling, who represents Inverurie on the local authority, warned many people were being priced out of the market.

He said: "I think initially people will be delighted that they own expensive houses but I think it is going to cause a lot of grief and a lot of problems at the lower end of the scale and for those attempting to get on the property market.

"Currently we are seeing a large influx of younger families. It is having an impact on our education and our schools."

Concerns have also been raised that migrant workers who have increasingly found work in Inverurie will be priced out of the housing market.

Other services in the town are also being put under pressure, including its only GP practice, which is now the biggest in Scotland. From - BBC NEWS

Britain's deflating buy-to-let bubble

It sounds too good to be true.

Take out a mortgage to buy a property and then, while the rent covers the mortgage repayments, the capital value of the property increases year on year.

For many years, that was the way it was, but now there are signs that the years of easy money may be coming to an end.

In 1996, when buy-to-let mortgages were first launched, only 20,000 were taken out. By June 2007 this figure had grown to 940,000 and the total amount borrowed to £108bn.

It has been phenomenally successful and one of the best performing investments around.

Many buy-to-let investors have made fortunes as house prices increased and mortgage rates remained low.

One such investor is Raj Shastri who has seen his initial £950 investment grow over the last five years into a portfolio worth £8m.

Slow-down in NI's property market

Figures on mortgage lending obtained by the BBC show a significant decline in the number of home loans for house purchase.

According to the Council of Mortgage Lenders (CML), 16,500 mortgages were granted in Northern Ireland between January and August last year.

Three thousand fewer loans were made in the same period this year - a 19% drop.

In August, banks and building societies loaned £193m in mortgages to local homebuyers, down from £270m in the same month last year - a decline of 39%.

These figures do not include re-mortgaging, they cover first-time buyers and people moving from one house to another.

Sources in the banking industry say some of the small, independent mortgage brokers who entered the market during the house price boom may not survive the slow-down.

Two recent house price surveys - from the Halifax and Nationwide - showed that the market locally has cooled.

If the data is taken togther, it suggests that house prices in the last quarter stayed level.

It is understood that some developers have stopped building new homes in recent weeks, as house sales have tailed off.

Surveyors see house price falls

House prices are continuing to turn down, says the Royal Institution of Chartered Surveyors (Rics).

Its latest survey says UK house prices in September generally fell again, with more of its members reporting a fall in prices locally than an increase.

It said enquiries from new buyers had fallen for the tenth month in a row.

Rics blamed the downward trend on a combination of factors, such as higher interest rates and lenders tightening their lending criteria.

"A major correction in the market seems unlikely while economic growth is above trend and employment conditions remain buoyant," said RICS spokesman Jeremy Leaf.

"The combination of rising interest rates, the introduction of home information packs (Hips) and volatility in the financial markets resulting in tightening of lending criteria, has certainly affected the confidence of buyers and sellers," he added.

Rics said that the downturn seems to be severest in East Anglia, and the West and East Midlands, though prices are still going up in Scotland and London.

Lawsuit: Layoffs at Foxtons broke law

Two former Foxtons Inc. employees said the real estate company violated federal law when it didn't give them and their co-workers at least 60 days' notice before laying them off, according to a lawsuit filed Thursday in U.S. District Court.

Marco Cimmino of Neptune and Abram Covella of Pine Beach, who worked as home consultants, filed the lawsuit on behalf of a class of workers. They're seeking to recover lost wages and benefits, said attorneys David A. Krenkel and Lisa C. Krenkel.

West Long Branch-based Foxtons, a real estate broker that billed itself as a low-cost alternative, last week said it couldn't continue to operate in the faltering real estate market. It laid off 350 of its 380 employees and said it plans to file for bankruptcy.

The question: Did Foxtons violate the Worker Adjustment and Retraining Notification Act, which requires companies with 100 or more employees to give workers at least 60 days' notice before a mass layoff?

Foxtons could not be reached for comment. But the law has caveats. Employers don't need to give advance notice if they are the victim of a natural disaster or unforeseen business circumstances, or if they believed giving notice would have ruined their chances to obtain financing. More>>

London Design Festival

The fifth London Design Festival (LDF) - a dizzying design jamboree of more than 200 happenings in shops, galleries, outdoor spaces and erstwhile empty buildings all over town - runs from 15 to 25 September, says Barbara Chandler

Head first to the Festival Hall on the South Bank, SE1, which is this year's "hub" or info point. Admire the sparkling chandeliers from festival sponsor Swarovski, then look for staff wearing red T-shirts with LDF logos - they will tailor a personal route. You can pick up a chunky free booklet with a full programme at any festival venue.

From Monday 17 to Wednesday 19, there are free energy-saving light bulbs to be had in Trafalgar Square. And reinforcing the eco-message will be designer Tom Dixon's huge chandelier, featuring 500 lights made from recycled plastic suspended from a slimline frame. These will be given away on Wednesday at 5pm.

Several key events run from Thursday 20 to Sunday 23 September:


Tent London is a huge amalgam of shows in the Old Truman Brewery (Brick Lane, entrance on Hanbury Street, E1), which will be crammed with edgy new talent, avant-garde international brands, vintage furnishings for sale, and more. Admission: £10 for adults; £5 for under-16s; free for under-sevens. www.tentlondon.co.uk

Designers Block is a sensational assembly of international alternative talent, as well as dramatic live glass-making demos that will use up all the empty bottles generated by the event. Sunday is family day. Out the back, in the spacious yard, will be cosy igloos made on site using p‰pier-machŽ made from discarded newspapers. The Nicholls & Clarke Buildings, 3-10 Shoreditch High Street, E1. Admission: £5 for adults; £3 for concessions. www.designersblock.org.uk

Both Liberty and Selfridges have their own impressive shows, and there are also idiosyncratic events in lots of London's smaller shops. For example, at Twentytwentyone in EC1, you can bid for a Fairtrade organic shopping bag decorated by one of 40 international star designers. www.twentytwentyone.com

RAISE STAMP DUTY THRESHOLD IN TODAY’S BUDGET

Ahead of today’s budget, leading Central London Estates Agents Hurford Salvi Carr are backing Gordon Brown to take the brave decision to raise the threshold where 3% stamp duty kicks in, to properties with a starting value £300,000 rather than the current level of £250.000.

David Salvi, Director at Hurford Salvi Carr comments:” The Halifax have recently reported that an estimated 3.5 million homes across England and Wales are now valued above the £250,000 stamp duty threshold. These homes equal an amazing 19% of all residential properties for sale in the country, in Central London this is even more pronounced with perhaps 80% of London properties now being valued at £250,000 and above.

“As house prices have risen across the country in recent years, more and more people are finding they are being caught in the 3% stamp duty threshold as values of properties they wish to purchase rise above £250,000. This can be particularly difficult for young families who look to move out of smaller Clerkenwell properties as their families grow.”

“Hurford Salvi Carr feels that a rise in the 1% Stamp Duty threshold to £300,000 would to a certain extent offset the high borrowing costs that first time buyers and young families face as a result of the recent interest rate rise. This would also reflect the substantial increase in values of residental property across the UK since 1997”.

Waterside property: 'One of London's best secrets'

You don't have to head out of the capital to enjoy the tranquility of waterside property.
By Ginetta Vedrickas
Published: 31 May 2006

With summer around the corner, many Londoners will indulge themselves with an annual fantasy; living by the coast. The city seems particularly stifling in warmer months but, as London's rivers and canals undergo huge regeneration, a scenic waterside location is within easy reach.

The Thames' success story is legendary but less talked about are London's many canals. Winkworth's Islington Property branch is selling a stunning mews house on Regent's Canal at Union Wharf, N1. Set within a private gated mews development, the house has three bedrooms, two bathrooms, a garage/gym, large conservatory plus a roof terrace with views over Regent's Canal and beyond. Priced at £850,000, agent Matt Chapple believes that the location will clinch a sale: "Demand for canal side property has never been higher. You only have to look at the regeneration and new development springing up throughout the city to see that it's now very desirable."

Three years ago the same property sold for £625,000, showing a healthy appreciation, but Chapple finds that buyers of waterside homes are less concerned with investment than with quality of life: "People in the city want space, peace and quiet and, importantly, the knowledge that no development is going to spring up directly in front of them. Buying canal side is one way of guaranteeing that." Properties such as this one also give buyers new access routes into the city, says Chapple who sees many joggers and cyclists regularly using its towpaths.

Much is heard about the eastern stretch of river, especially Docklands, but the western stretches are also attracting those looking for waterside homes.

Based mainly in Bermuda, Sally Ann Smith regularly travels to London and has just bought a pied à terre at the Pumphouse, a development of converted and new build homes from St James on the site of a Victorian pumping station in Hammersmith. Smith loves the design of her two bedroomed apartment but, having lived on an island, her new apartment's riverside location was crucial. "Living by water is very important to me," she says.

This stretch of river, between Chiswick and Hammersmith, is regarded as being particularly attractive and owners have private gated access to the Thames path through the gardens. The final homes, including seven penthouses, will be released this summer with prices starting from £245,000 for studios and £395,000 for two-bedroom apartments.

But bagging yourself a waterside home doesn't have to mean buying new build. Further west in Hanwell W7, agents Kinleigh Folkard & Hayward are selling Lock Cottage, which overlooks the Grand Union Canal and the River Brent. This two-bedroomed Grade II listed cottage has ishing rights and its own jetty. Priced at £525,000, the detached house is entered from the canal path and has many period features including cast iron fireplaces but also has a heated outdoor swimming pool, sauna and a kissing bench overlooking the canal.

Many other lesser-known rivers are becoming attractive for buyers wanting waterside locations. Management consultant Chris Pailthorpe, 56, bought a seventh floor apartment at the Iron Works, overlooking the River Lea, near its junction with Limehouse Cut.

"I was attracted to the space, light, water and wildlife," says Pailthorpe, whose 1,000sq ft apartment has an extensive living area with spectacular cantilevered glass wall. A balcony maximises the waterside views but Pailthorpe also enjoys the river's external benefits where he regularly walks: "Along the River Lea, Lea Navigation, Limehouse Cut and Limehouse Basin, it's like a refuge of tranquility and one of London's best secrets."

Tranquility and views may be driving the market but investment is key to some buyers' decisions. Agents Hurford Salvi Carr, based in central London Estate Agent and Docklands, has carried out research showing a hierarchy in Docklands waterside locations and showing that riverside is invariably more expensive than canal side. The firm also found that property values are in direct proportion to the width of the body of water that they overlook, with a Thames-side two-bedroom apartment in Docklands typically fetching up to £500,000 more than an equivalent property overlooking a canal.

Land director Jonathon Woodfield explains the draw: "In this part of London it's a big working river as opposed to somewhere like Twickenham. Here the tidal variations make it more interesting, as do all the big boats which pass through. Sitting right on the river or overlooking the big basins the views really are fantastic and it makes a big difference to buyers."

Hurford Salvi Carr is currently selling new development Shepherdess Walk N1, which fronts the Grand Union Canal. This contemporary scheme by developer Mount Anvil is due for completion in early 2009. Twenty-eight apartments, comprising a mixture of one-, two- and three-bedroom homes from 430sq ft to 915sq ft, are priced from £260,000 to £475,000. Hurford Salvi Carr is also selling Tequila Wharf, a contemporary scheme by Telford Homes, where many of the one- and two-bedroom apartments have west-facing views along the Regent's Canal or, from the higher levels, south-east to Canary Wharf, Wapping Property. One-bedroom apartments start from £225,000 and two-bedrooms from £285,000.

Many new riverside developments continue to come on line but the future market may be restricted to resales as riverside locations become increasingly scarce. St James Homes' Robin Rixon says: "There's a lot still going on in areas around Greenwich but in west London there are few sites left as developers have realised the river's potential." Rixon believes that St James's flagship riverside development Grosvenor Waterside stands apart from most. The mixed-use scheme will transform the historic Grosvenor Dock and is the only Dockside scheme in Zone 1. A series of stylish glass fronted apartment buildings rising from four to 11 storeys have been created around the dock basins, with prices starting at £395,000 for one bedrooms up to £2.25m for the penthouse. Some apartments have dock views only while others have river and dock.

River views are always higher on buyers' wish lists, says Rixon, "particularly as this is an incredibly attractive stretch:you have views of Chelsea Bridge and look east to the iconic Battersea Power station.". London Property Directory

House price inflation picks up

LONDON (Reuters) - House price inflation in England and Wales picked up to an annual 12.8 percent in early August from 10.3 percent in early July, property website Rightmove said on Monday.
(Advertisement)

The figures suggest Britain's property market remains resilient in the face of five interest rates rises over the past year.

Rightmove said figures not adjusted for seasonal factors showed asking prices for property rose 0.6 percent on the month, double that seen in July. That took the average asking price to 241,474 pounds.

The monthly increase, however, was smaller than rises seen at the start of the year and Rightmove said it expected house price inflation to slow in the coming months.

The survey also showed asking Property prices in London fell on the month for the first time in a year.

LONDON AGENT WARNS LANDLORDS OF LIMITATIONS OF ASSURED SHORTHOLD TENANCIES

Landlords should be aware of the limits of Assured Shorthold Tenancy (AST) as it is no longer applicable for many residential properties in London warns London estate agent Hurford Salvi Carr in its recently published half-yearly review. With entry level prices to the London residential property market continuing to increase and residential rents for many one and two bedroom rental properties Clerkenwell following the upward trend, many tenancy renewals are now exceeding the legal threshold.

AST agreements were introduced through the Housing Act 1988 to protect the interests of all landlords and tenants in the private rented sector and have been the backbone of the rental market. However, as AST only covers properties with an annual rental income of up to £25,000, an increasing number of properties across the capital no longer qualify under this legislation.

Hurford Salvi Carr Lettings Manager Kari Trajer believes this could have consequences for both Landlords and Tenants alike. “Since 1997, the vast majority of new tenancies let to individuals have been let on ASTs. This is creating a misnomer for Landlords based on the assumption that the ASTs are regarded as appropriate for all rental agreements without realising that their rental value exceeds the £481- per week (£25,000 per year) legal ceiling of the AST.“This crucially means the theoretical ‘fast track’ legal ability to recover possession for rent arrears no longer applies and can lead to serious delays if any rent arrear disputes arise with the tenants. “

The increased use of sealed bids for rented properties, which were reported by Hurford Salvi Carr earlier this year, has been just one result of the housing shortage and a contributing factor to the rising prices now exceeding the legal ceiling of AST.

In its recently published half yearly report, Hurford Salvi Carr outlines how the average weekly rental value for a two bedroom property has risen above £480- per week across the West End, City and Docklands property.

Hurford Salvi Carr Lettings Manager Kari Trajer continues: “At the present time, the Government is not scheduling amends to increase the legal ceiling of the AST, so Hurford Salvi Carr recommends Landlords and Tenants to be aware when letting or extending an existing tenancy of residential property particularly in the high value London market and the impact this will have on possible possession.

“I believe the legal ceiling of the AST will have to be raised sooner rather than later in order to protect Landlords and reduce the number of delays to secure vacant possession for rent arrears. Until then however, it is crucial that landlords understand the implications of Tenancy Agreements and make sure that the correct form of Tenant agreement is used by their agent.”

Property price fears fuel growth in rentals

Demand for rental accommodation is outstripping supply at the fastest rate for six years as fears grow that further increases in interest rates may trigger a property price crash.

Letting agents say rental demand has exceeded all expectations this summer and the trend is widely expected to continue for the next year.

The Association for Residential Letting Agents (ARLA) says the level at which demand from tenants is outstripping supply from landlords is at its highest since they began conducting surveys about six years ago.

“Everyone has their own theories as to why this is,” said ARLA spokesman Malcolm Harrison. “Part of the reason is down to simple demographics because there are more single people looking for housing. But it is probably also to do with a fear of house prices softening.”

The UK housing market has remained buoyant despite a series of interest rate rises from the Bank of England but the number of properties available to rent has been reduced as buy-to-let investors reallocate assets away from property.

“Landlords are leaving the market and investing elsewhere because they feel it’s a good time to make the most of their capital,” said Tim Hyatt, head of UK lettings at Knight Frank estate agents.

“We have seen a 15 per cent reduction in instructions this year and this is indicative that people are feeling uncertain about where the house sales market is going.”

Fears of a slowdown or potential housing market crash have led more people to eschew purchasing a property in favour of renting.

Across the country letting agents say they have seen a huge rise in rental agreements this year with central London witnessing the greatest growth of activity.

Summer is traditionally a busy time for letting agents as graduates, relocated professionals and families moving to prime school catchment areas, vie for rental accommodation.

London property market still buoyant

The cost of the average London home has risen to just under £350,000, according to the latest FT house price index published on Friday, well above the £200,415 average for the rest of the country, indicating the growing wedge between prices in the capital and the regions.

The FT index, which is based on Land Registry data for England and Wales, shows that, despite four interest rate rises since August 2006, the London property market is still hot. This is in contrast to the rest of the country where house price inflation is subdued.

The cost of an average London home increased by 1.2 per cent in April compared to the previous month, to £343,508. Outside London, there were only three regions in which an average property cost more than £200,000; these were the south-west, the south-east and east Anglia.

Peter Williams, chairman of Acadametrics, the consultancy which produces the FT index, said London property prices were increasingly out of step with the rest of the country. “It is the material gap between London and everywhere else that remains the most notable feature of the current market, with all that is implied for labour mobility, recruitment and retention,” he said.

House prices for England and Wales grew by 0.5 per cent in May, unchanged from April, putting the cost of the average home at £220,319. The annual rate of growth ticked up to 8.5 per cent from 8.4 per cent in April. In London, the annual rate of growth was much stronger - at 14 per cent in April from 13.8 per cent in March.