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UK Property Market Predictions For 2015

UK Property Market Predictions For 2015

What Will Happen To
The UK Property Market In 2015?

Happy New Year to all our readers, and welcome to the usual confusion over what the year ahead will bring for the UK property market.

Property prices are still predicted to rise in 2015, albeit at a much slower pace than in 2014, with economists and property experts providing forecasts ranging from 3% to 5% property price growth.

However, there are a few events that might affect the UK property market in 2015, namely the general election that will be held in May and the growing probability of Bank of England (BoE) raising the base interest rate.

Regarding the general election, it all could depend which party wins or what coalition combination is named to form the Government, after Labour recently confirmed that they would introduce a mansion tax if they come to power. Meaning that the changes to Stamp Duty that were announced in the 2014 Autumn budget would be negated if Labour win.

Less clear is what will happen with Bank of England interest rates. It had been predicted that a small rise, either by a quarter to half of a percent, was going to be introduced before the end of 2014, but that didn’t happen. Then it was going to be early 2015 but that is now also looking very unlikely.

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2014 UK Property Prices To Increase Further

2014 UK Property Prices To Increase Further

UK Property Prices Continue To Increase

There could be more good news for UK property investors over the coming months as projections for the rest of 2014 indicate that property prices are set to rise even more, providing the potential of greater Return On Investments (ROI).

Since the UK housing market crash in 2008, UK property prices slumped and were depressed for some time afterwards due to uncertainty in the economy, however, the end of 2013 saw the UK property market spring back to life.

According to data from the Halifax House Price Index (HPI), there were over 1 Million residential property transactions in 2013 for the first time since 2007, and residential property sales increased for the ninth month in a row in December 2013,  30% higher than in 2012.

The data from Halifax is great news for property owners and shows that the UK property market is well and truly back on its feet.  So, if you’re a property investor who is planning on investing in property in 2014, you can expect to see property prices continuing to rise.

2014 started with residential property prices on the increase and more people buying and selling. The introduction of the 2nd phase of the Government’s Help-To-Buy scheme in October 2013 allowed property purchasers to get 95% Loan-To-Value (LTV) mortgages, heralding the return of the first-time buyer to the UK property market. 

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Buy-To-Let Property Investors Reap High Rental Rewards

Buy-To-Let Property Investors Reap High Rental Rewards

Activity In UK Buy-to-Let Property Market
Continues To Increase

Activity in the UK Private Rental Sector (PRS) has reached an historic high, with demand continuing to heavily outstrip the supply of available rental properties, according to the latest National Rental Report by Sequence, owners of Barnard Marcus, Fox & Sons and other well known high street property chains.

The Sequence rental index shows that activity in the UK’s private rental sector hit an 11-year high last month, with strong tenant demand driving up rents to a new monthly average of £751 (GBP).

New tenancies being agreed have increased by 6%, when viewed on a monthly basis, and the figures were actually up 18% when viewed annually.

The strong demand for rental property from would-be tenants is helping to fuel a rise in the cost of average rents, with prices up 2% month-on-month and 6% compared to July last year.

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Top Economist Warns Of Fresh House Price Crash

Top Economist Warns Of Fresh House Price Crash

Disastrous House Price Crash Could Be Caused By
Government’s Funding for Lending Scheme

One of the UK’s leading economists has warned of a potentially disastrous house price crash and points the finger at the Government home buying scheme for being the cause of another unsustainable property bubble.

Chief Economist at the Institute of Directors (IoD), Graeme Leach, said the introduction of the new Help-To-Buy scheme, under which UK taxpayers are underwriting thousands of new mortgages for property purchases, means the world must have gone mad.

Mr Leach said “The Funding for Lending scheme is very dangerous because it will drive up property prices at a time when it seems likely that (property) prices are already over-valued.”

The scheme is one of Chancellor George Osborne’s financial initiatives where the Government will underwrite mortgage loans allowing new and first time borrowers up to 20% of a property’s value as part of their deposit, effectively giving the Government a proportionate stake in the value of the mortgaged property.

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UK Property Prices Increase Again

UK Property Prices Increase Again

UK Residential Property Prices
Return To Good Health

UK residential property prices increased again in June 2013, marking the return to good health of the property market.

Property price rises are at their fastest rate in over two-and-a-half years as mortgages became more available and less expensive, adding to fears of another property market bubble as overall housing supply remains low.

The latest monthly residential property price index from UK mortgage lender, Nationwide, shows that UK property prices were up 0.3% in June 2013, while the annual increase of 1.9% was the sharpest residential property price increase since September 2010, but those gains were below the 0.4% monthly rise and 2.1% year-on-year price increases forecast by many economists.

In May 2013, residential property prices rose an unrevised 0.4% on the month and 1.1% on the year overall, signalling the recovery of the UK property market.

The number of mortgages approved by UK banks also increased by a quarter in the twelve months to May 2013. However, over the same period, the value of outstanding mortgage loans secured on property dropped by 0.2%.

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Is There A Dark Side To The Help-To-Buy Scheme?

Is There A Dark Side To The Help-To-Buy Scheme?

Is There A Dark Side To The Help-To-Buy Scheme?

The Government’s Help-To-Buy Scheme was intended to allow first time buyers to get on the property ladder with the hope that this would kick start the UK property market and it appears to be having the desired effect with increasing property transactions and the slow rise in property prices.

However, the Government intervention in the UK residential property market could have disastrous consequences for property owners and could even cause another property bubble.

The Government are spending huge amounts of money to aid first time buyers to get on the property ladder by offering low deposit, high loan to value, mortgages that are underwritten by the Government, effectively giving them a second charge on the property for a period allowing the owners to repay at a set rate per year.

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New Help to Buy scheme may not be much use to first-time buyers as property prices continue to rise

New Help to Buy scheme may not be much use to first-time buyers as property prices continue to rise

Help to Buy scheme may boost

UK property prices
but may not be much use

to first time buyers

The controversial Government incentive scheme “Help to Buy” set for launch on 1st January 2014 is designed to aid first time buyers with property purchases and in turn this incentive could boost the UK residential property sales market without being of any real use to first-time buyers.

Morgan Stanley have issued a forecast that UK residential property prices are expected to increase between 8% and 13% before the end of 2014 and the bank reckons that its forecast is “supported by government policy”.

The investment bank’s prediction follows a warning by the Organisation for Economic Co-operation and Development (OECD) which says that the Help to Buy scheme offering 95% mortgages, due to launch in January 2014, could pump up UK residential property prices but would not necessarily increase the supply of available residential property.

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UK residential property prices are

expected to continue rising during 2013

 

UK Property Market Confidence Grows As Prices Rise

UK Property Market Confidence Grows As Prices Rise

UK residential property owners are expecting house prices to rise by 4.5% within the next six months, according to new research by the property search portal – Zoopla.

The property portal based its findings on replies from 4,116 people in the last week of March 2013, of whom 3,485 were residential property owners.

This is the biggest predicted UK house price increase by home owners in more than three years, the property search site said.

The proportion of home owners who think that residential property prices will increase this year is also at the highest level for almost three years, with 74% predicting house prices in their area will increase, the most since the second quarter of 2010.

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Discoveries That Change Property Investors Lives

Discoveries That Change Property Investors Lives

I was fortunate to attend the PIN National Conference at the weekend and I found the attitude of new property investors is far hungrier than my own property ambitions were when I first started out.

These days property investors are becoming far more creative than they were a few years ago and new ideas and investment strategies are emerging almost daily that enable investors to control and profit from property using other people’s money, other peoples mortgages and even ways to profit without actually owning property.

I started my property investment journey in 2005 when I bought my first property at a price that was significantly well below the true market value (BMV) and used that to leverage my position and raised enough finance to enable the purchase of a few more investment properties.

I entered the property investment arena reluctantly on the advice of my wife and I wish I had listened to her a few years earlier as I would have not dragged my feet and we would have bought significantly more investment properties before the peak of the UK property market was reached in 2007, followed by the property crash in 2008 as the financial reasoning of many western nations was rocked by the collapse of the US real estate market and the aftermath affected property markets around the world.

My wife had realised far quicker than I had that there was profit to be made in property and she set about educating me on the benefits. It was one of those discoveries that changed my life and I remain eternally grateful to Rachel for opening my eyes to the possibilities that property investment can bring.

The property crash forced property investors to examine the strategies that had previously enabled them to profit from property and the contraction of financial availability meant that investors had to become even more creative in order to obtain investment properties. Among the new strategies was the emergence of Lease Options (LO) as a method to control property without owning it outright in the UK. The opportunities seized on by property investors already existed and was already being used by investors to control residential property in other countries. This investment method kept savvy investors ahead of the game and has now become widely adapted as a mainstream strategy.

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Property industry reaction to 2013 budget

Property industry reaction to 2013 budget

George Osborne’s spring 2013 budget included new measures to help more people purchase their own homes and this news has been generally welcomed by property industry professionals.

The Chancellor of the Exchequer firmly believes that the measures announced in the spring budget will provide a major boost for the UK economy, despite calls for an economic U-turn from the Labour opposition.

Mr Osborne told the press that there were far more difficult decisions still to be made regarding the nation’s spending in order to get the overall deficit down, however, the government are taking measures to help people buy their own home.

The Chancellor announced that the FirstBuy scheme which was aimed at First-Time Buyers (FTB) on an income of up to £60,000 (GBP) per year, is being replaced with a ‘Help to Buy’ equity loan scheme available to all buyers looking to purchase a new build home up to a value of £600,000 (GBP), with a deposit of just 5%.

A new mortgage guarantee scheme was also announced during the spring budget, which extends the previous NewBuy Guarantee initiative to include older residential properties as well as new-build homes, which he hopes will result in a sharp rise in lending to potential homebuyers, thus kick starting an upturn in the UK property market. The new scheme will start in January 2014.

Buy to let mortgages are not going to be included under the new scheme, however it remains unclear if existing property owners will be able to purchase property without selling leaving them with an income producing property asset when they offer their old home for rental.

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There Will Never Be A Better Time To Invest In Property

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