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Property Repossessions Fall As Prices Increase

Property Repossessions Fall As Prices Increase

Property Repossessions Make Great Investments

Latest figures from the Land Registry show that property repossessions have dropped in every region of the UK with falls in the past year ranging from 10 – 39% whilst property prices have continued to climb.

The December 2013 data from Land Registry’s House Price Index (HPI) shows an annual property price increase of 4.4% which takes the typical average property value in the UK to £167,353.

The monthly change from November to December 2013 showed a property price increase of 1.1%.

But behind the good news there is a large North-South divide in property repossession volumes, with the number of property repossessions far greater in Northern England than the number of repossessions in the South, even after the recent falls.

Property repossessions are a fantastic opportunity for would be property investors as the mortgage lender in possession of the property are only seeking reimbursement for their initial mortgage outlay, presenting below market value (BMV) opportunities for investors.

Repossession volumes decreased by 31% to just 1,129 in October 2013 compared to 1,636 property repossessions in October 2012.

The UK regions with the greatest fall in the number of repossession property sales were the East Midlands and the South West.

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Property repossessions In the North of England are higher than national average

Property repossessions In the North of England are higher than national average. Property
May Be Cheaper But It Is More Likely To Be Repossessed

4 Of Top 10 Property Repossession Areas
Are In North West of England

A new study by e.surv chartered surveyors has revealed the top 10 hotspots for property repossessions in the UK, and the results show that property owners in the North are less able to keep up with mortgage repayments than property owners in the South.

e.surv’s researchers analysed Ministry of Justice figures for court-ordered repossessions for the 12 months up to 30th June 2013, plus the company’s own data, and found the largest North-South divide since the onset of the financial crisis, with 3.2 repossessions per 1,000 households in the North of England, compared with 2.4 per 1,000 in the South of England.

Four of the UK’s top five “repossession hotspots” are in North-West of England according to the data with Chester, Blackpool, Oldham and Wigan among top five property repossession hotspots.

These areas are among those with the highest proportion of property owners who are struggling to keep up with mortgage repayments.

The data revealed that even despite all the media coverage about surging property prices in and around the capital, two areas within Greater London – Romford (3rd highest number of property repossessions per thousand households) and Croydon came in joint 7th on the repossession hotspot top ten.

Chester is the top UK city for property repossessions by a substantial margin, THREE times the national average!

The rest of the North-West of England does not fair much better with 8 out of 10 towns having above the national UK average number of property repossessions per thousand households.

This news presents an excellent opportunity for new, amateur and seasoned property investors to grab some property bargains as mortgage lenders and banks will be looking to offload these repossessed properties quickly so that they can get their money back, they are not looking to profit!

Lancaster, Liverpool and Carlisle in the North of England showed a lower than the average number of property repossessions, according to the data. However, despite being below the national average, Carlisle had seen a 37% increase in the rate of property repossessions in the 12 months to June 2013.

Other UK regions that also showed huge increases in the volume of property repossessions over 12 months, but remained below the national average are:

  • Taunton in Somerset – 34% increase in property repossessions up to 30th June 2013
  • Brighton – 30% increase in property repossessions up to 30th June 2013
  • Reading – 27% increase in property repossessions up to 30th June 2013

e.surv Director, Richard Sexton, said: “Residential property prices may be high in the capital, and employment prospects may be stronger, but in such densely populated areas, there remain property owners who are struggling with mortgage payments. Many borrowers have seen their finances slowly eroded by high inflation and increasing living costs. This has been particularly potent in London, where less affluent borrowers, by that I mean those who could only just afford to buy, have been badly affected. On a national level repossession numbers are falling as mortgages become cheaper, wages are slowly picking up and the employment market has more vitality. For the UK as a whole, repossessions fell 17% during the 12 month period, with 66,544 repossession orders granted in 2012-13, as opposed to 77,856 in 2011-12. As a region, the north has traditionally depended on public sector jobs, but a squeeze in public sector funding has led to loss of jobs for many, and very slow pay increases for others. Pay increases that are consistently below the rate of inflation have further tightened household budgets, and caused many to fall behind on mortgage repayments. There is still a long way to go before the northern property market returns to its pre-recession health, and all the while the north is still playing catch-up, and falling further and further behind the south.”

Top 10 Property Repossession Areas

 

UK Town / Region

Property Repossessions Per Thousand Households

Total Number Of Property Repossessions In 12 Months To 30th June 2013

1

Chester – North West

8.4

961

2

Blackpool – North West

4.5

570

3

Romford – Greater London

4.4

936

4

Oldham – North West

4.3

829

5

Wigan – North West

4.2

541

=5

Luton – Bedfordshire

4.2

565

7

Bradford – Yorkshire

4.1

1002

=7

Doncaster – Yorkshire

4.1

1356

=7

Croydon – Greater London

4.1

644

10

Northampton – Northamptonshire

3.8

966

 

 

 

 

 

 

 

 

Source: e.surv 

So what are you waiting for?

There will never be a better time to purchase repossessed properties, there are a great number of deals to be had from the areas listed in the table above.

Think of the table as a treasure map, with 10 UK locations offering repossession property deals direct from the banks and mortgage lenders.

Property In The North Is Cheaper

Property In The North Is Cheaper

North of England Leading The Way
For Renting Property

Renting property is more affordable in Northern regions of the UK as property prices in some areas stretch beyond of the reach of the average earnings of first-time and next-time buyers.

Chichester is the least affordable place to buy or rent property in the UK, whereas Hull and Belfast are the most affordable.

Middlesbrough, Dudley and Wolverhampton have the most affordable rental markets in the UK with 99% of properties within an average working couple’s budget.

The North-South divide is still prevalent in the UK property market with the most affordable properties located in the North of the country, where first-time and next-time buyers in full-time employment have the largest pool of properties within budget to choose from

Rental prices in East Anglia and the South East of England are among the highest in the UK according to analysts as these areas outperform the rest of the country, due to high tenant demand.

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UK landlords with rent guarantee insurance stay happy despite property doom and gloom

Landlords with Rent Guarantee insurance remain happiest

New data released by Nationwide and Hometrack show that overall UK residential property values have fallen when compared to this time last year and the fall has been attributed to the changes in stamp duty.

The average residential property value in March 2012 was £163,327. That is 0.9% lower than property prices were in March 2011, the largest fall in UK house prices since June last year.

Nationwide’s figures showed a fall in nearly every region of the UK, compared with the previous quarter and data from Hometrack shows a clear North – South divide.

However residential property prices increased by 0.6% in the north of England, property values also increased in Scotland, and Greater London.

UK mortgage applications were also affected by Stamp duty changes, approvals dropped to 48,986 in February 2012, some 9,000 lower than the 25-month high recorded in January 2012, the lowest mortgage approval figures for three years, according to the Bank of England.

UK residential property prices may have fallen for the first time in six months, but UK landlords with Rent Guarantee insurance are still smiling.

Buy To Let landlords remain unfazed by the dip in UK residential property prices as they continue to maximise their rental returns, as demand for rental property continues to increase. In fact BTL landlords have been experiencing higher rental yields during the past 6 months than at any other time since the economic crash in 2007.

UK landlords are utilising specialist products and services such as Rent Guarantee insurance to keep the cash coming in, ensuring that the rent is paid, irrespective of any changes to their tenants circumstances.

Residential property values increasingly disparate between North and South in UK

Residential Property Disparity Between The North and South

UK property values posted a monthly price rise for the first time in 20 months in March on the back of increased demand, activity and a scarcity of residential properties for sale.

However, UK Property Prices overall were up in the South and down in the North

According to fresh data released by Hometrack, UK residential property prices are still rising in the South, but property values have seen widespread falls throughout the East Midlands, Wales and the North.

During March 2012, residential property values did dip a little in a few parts of London, the South-West and East Anglia. However, in Yorkshire and Humber, about half the region saw property prices fall. Property values were also down in the East Midlands, North West and Wales,

With such widespread variations, the Hometrack survey shows that nationally residential property prices as a whole are barely moving, up just 0.2% from February 2012.

There was only a 4.4% increase in new buyers registering with agents, compared to 18% in February.

The length of time taken to sell a residential property also varies widely across the country, from 11.6 weeks in the Midlands and North to under six weeks in London.

Hometrack’s Director of Research, Richard Donnell, said: “The housing market is not firing on all cylinders nationally. The divergence in the relative strength in northern and southern England is set to remain. We expect prices to track sideways in the short term, with the outlook for the second half of the year hinging on households’ expectations for the economy and their incomes.”

The Hometrack report does not give residential property prices, but said that in London property prices rose 0.5% in March, the highest monthly increase since April 2010.

However, the increase in London property prices were recorded pre-Budget, when Stamp Duty on properties valued at £2 Million (GBP) plus increased from 5% to 7%, for private purchasers, and 15%for properties bought by partnerships, collective investment funds and companies.

The survey results reveal a clear divide in the strength of the UK property market between southern England and the rest of the country.

Hometrack reckon that all the evidence points to a continued firming up in UK property prices over the next few months as demand for residential property increases and the supply of available properties remains subdued.

There Will Never Be A Better Time To Invest In Property

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