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Land Registry Data Show Property Values Not Rising As Fast As PredictedLand Registry Data Show Property Values
Not Rising As Fast As Predicted

Data from the Land Registry’s House Price Index (HPI) in March 2014, shows that overall annual UK property values have increased by just 5.6%, taking the average UK property value to £169,124 (GBP).

The monthly change from February to March 2014 actually shows a property value decrease of 0.4%, however London saw property values increase by 12.4%, while the Eastern and North East regions experienced their greatest monthly rise, with property values rising by 1.1%.

Wales was the only UK region to experience an annual price drop of 1.6% and was also the only region that showed the most significant monthly price fall with values down 4.2%.

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Help-To-Buy Scheme Could Threaten UK Housing Market

Help-To-Buy Scheme Could Threaten UK Housing Market

The Help To Buy Scheme Could Be Scaled Back Amid Concerns That The UK Property Market Could Be Heading
For Another Property Bubble

George Osborne, the Chancellor of the Exchequer has said that the Bank of England are being vigilant on UK house price rises and they would intervene if the situation becomes necessary.

The Chancellor’s comments come after the Organisation for Economic Co-operation and Development (OECD) warned that the booming UK property market could threaten the economic recovery of the country.

Possible action could include reigning back the Government’s Help-To-Buy scheme, which enables people with only a small deposit to take out a mortgage.

In a report the OECD said that “The UK should introduce measures to address the risks of excessive house price inflation, as property values now significantly exceed long-term averages relative to rents and household incomes. Access to the Help to Buy scheme should be tightened, and buyers should be required to put down bigger deposits for mortgages”.

In response to the report, Mr Osborne said: “I’ve said we should be vigilant about the housing market and this Government has given the Bank of England the power and the tools to do what they felt needed to be done to help to contribute to building a resilient economy in an independent way”.

The Help to Buy scheme enables the Government to place a second charge on properties purchased under the scheme, allowing them to have some degree of profitability and allow them a small degree of control over the UK property market.

People buying property worth up to £600,000 (GBP) using a deposit of just 5% may be grateful of the Government’s help but many fail to realise the full implications of the scheme, or spot the Government tactic of controlling properties.

The Government either top up the purchasers 5% deposit with 20% of the property’s value or it will underwrite a portion of the debt allowing lenders to advance purchasers with high loan-to-value mortgages that the Government guarantee.

The £600,000 (GBP) upper limit of the Help-To-Buy scheme has been widely criticised for being too high, however, recent figures show that the average cost of a property bought using the scheme was just £148,000 (GBP).

Concerns are rife that another property bubble may be formed in the UK property market following a continuing run of positive house price trends.

Mortgage lender, Nationwide recently reported that property values had risen by 10.9% during the last 12 months, the first time annual house price inflation has reached double figures since April 2010.

Data from the Land Registry also shows that average property prices in London have already surpassed the previous 2007 peak.

Recent property price increases have caused the typical average cost of residential property in the UK to rise to £262,770 (GBP), according to Zoopla.

New regulations to control borrowing were introduced at the end of April 2014 to ensure prospective property owners are not risking taking on too much debt.

Under the Mortgage Market Review, lenders are required to carry out stringent affordability checks, including making sure borrowers can continue to meet the mortgage repayments if and when interest rates rise.

However, data on the number of mortgage approvals for residential property purchases appear to suggest that the market may be moderating, with the Bank of England reporting a dip in loan approvals for the second consecutive month during March 2014.

One In Five Property Buyers Pay Over The Asking Price To Secure Purchases

One In Five Property Buyers Pay Over The Asking Price To Secure Purchases

20% Of Property Buyers Are
Willing To Pay Premium Prices

One in five buyers willingly paid more than the original asking price for a residential property during the month of March, as the competition in the UK property sales market continues to heat up, according to the latest data published by the National Association of Estate Agents (NAEA).

According to the NAEA data, the average number of residential properties available for purchase through estate agencies across the UK has fallen for the sixth consecutive month (March 2014) resulting in the number of properties available for sale reaching an almost a 10-year low.

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More Auction Action For Property InvestorsEasier Access To Finance Increases The Number
Of Property Auction Purchases

There has been a sharp rise in the number of property investors snapping up property at auction and the reason has been credited to easier access to finance, as lenders report significant growth in lending, surpassing pre-property crash levels.

The number of properties sold at auction is booming as property investors seek to build rental property portfolios below market value (BMV), without breaking the bank.

There has been a huge increase in the number of loans that have been financed by specialist lenders over the past 12 months, with average loans increasing by more than 22% according to property finance lender, Auction Finance Limited.

The news comes as the latest Essential Information Group (EIG) figures show a seven year high for UK’s auction houses, with lots sold in October 2013 up by 30% compared to October 2012. These record figures have now surpassed pre-recession auction house transactions.

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Councils must be free to borrow more to build new residential properties

Councils must be free to borrow more to build new residential properties

Councils must be free to borrow more
to build new residential properties

The Government must allow Local Authorities to borrow more money to spend on building so they can tackle housing shortages and build 60,000 extra residential properties in five years, according to the Local Government Association

The Local Government Association (LGA) said that the nine councils listed below were unable to take on any loans at all, even though they have over 40,000 people on accommodation waiting lists.

  • Darlington Borough Council
  • Dudley Borough Council
  • Exeter City Council
  • Gosport Borough Council
  • Harrow Council
  • Royal Borough Greenwich Council
  • South Cambridgeshire District Council
  • Waverley Borough Council
  • Woking Borough Council

The LGA said lifting a cap on local authority borrowing would allow up to 60,000 new residential properties to be built in the next five years.

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Property Investors Using Bridging Finance To Renovate Properties

Property Investors Using Bridging Finance To Renovate Properties

£640 Million (GBP) Bridging Finance Used By

Property Investors In Just 12 Months

There is a fresh warning being issued to property investors that the current UK financial system is not set up to help them develop or renovate property because mortgage lenders are not prepared to take the risk.

Property investors are finding it virtually impossible to secure a mortgage from mainstream mortgage lenders for a property that requires renovation or refurbishment, especially if the property was previously used for commercial purposes, e.g it was previously an office or a flat and requires alterations to allow the change of use from commercial to residential, or it is a property that does not have an existing bathroom or kitchen.

As has already been reported by Spotlight over recent months, there are promising signs that the UK’s economic recovery is building in strength, thanks to the implementation of the Government’s financial initiatives such as the Funding for Lending scheme, designed to encourage business and the Help-To-Buy scheme, which was launched at the start of the year in an effort to help more first time buyers to get onto the property ladder.

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UK Property Prices Up £7,000 In Four WeeksUK Property Prices Hit 2008 Peak Values

UK property prices have jumped up £7,000 (GBP) in a month as UK property market activity picks up.

The huge increase in property values over the last four weeks is confirmation that the UK is enjoying another property boom.

The £1,750 weekly uplift puts the price of a typical residential three-bedroom semi detached property at £252,418 (GBP), according to popular property portal, Rightmove.

The biggest increase in property prices was recorded in London where new vendors have added an extra £50,484 (GBP) to average residential property asking prices this month, however property prices in the nation’s capital are over inflated compared to the rest of the UK.

The rise in UK property prices is being driven by first-time buyers and second step buyers following the introduction of the Government’s Help-To-Buy mortgage scheme.

Fears of a housing bubble have also been eased as the number of new property vendors entering the property market has also increased by 8%, however property shortages have driven up property prices in some UK regions.

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Mortgage Loan Approvals Increase

Mortgage Loan Approvals Increase

More “Help To Buy” Mortgage Lenders Announced

The number of mortgages given to first-time buyers increased by a third in the 12 months to August 2013 according to the latest data from the Council of Mortgage Lenders (CML), with new entrants to the property market accounting for 44% of all residential property purchases during the month.

The CML figures were published as Barclays became the latest high street lender to confirm it was signing up to the second part of the government’s Help to Buy scheme, which is designed to make more 95% mortgages available to first-time buyers, second steppers and home movers.

Barclays join Santander, RBS, Halifax and HSBC in confirming it will use the taxpayer-backed guarantee to make high Loan-To-Value (LTV) mortgages available for property purchasers, meaning that more than half of UK mainstream mortgage lenders are now signed up to provide more mortgages at higher loan to value ratios.

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Autumn Surge In UK Property Prices Predicted

Autumn Surge In UK Property Prices Predicted

Various residential property indices published by banks and mortgage lenders have shown that UK house prices have been increasing for some months, however the latest survey from Rightmove shows that property asking prices have actually declined over the summer although it is predicting an autumn surge in uk property prices.

The Rightmove report says that there was a summer  slowdown in residential property prices as discretionary sellers were distracted by the heat-wave and have been waiting to market their properties.

Those property vendors who were unwilling to wait had priced properties more aggressively and asked an average of £3,704 (GBP) equivalent to 1.5% less for their property in August compared with the previous month’s asking prices.

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Government Seek Bids For Build-To-Rent Scheme

Government Seek Bids For Build-To-Rent Scheme

Build-To-Rent scheme seeking bids from property developers to help bring about the fastest rate of affordable residential property construction for two decades 

UK Government Housing Minister, Mark Prisk, last week announced a second round of funding for the construction of new rental properties and the government are seeking fresh bids for a share of at least £400 Million (GBP) to build new properties specifically for the private rental sector (PRS).

The funding is part of the flagship £1 Billion (GBP) Build-To-Rent fund, which offers support for property developers and property investors who want to get into the private rental sector for the first time.

Mr Prisk said the new Build-To-Rent scheme would encourage investment in the UK’s private rental market and offer prospective tenants a greater choice of rental property. The scheme is intended to run alongside up to £10 Billion (GBP) in government housing guarantees.

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