Housing Market Stuck

David Cameron said high-street lenders were being too cautious and were preventing the housing market from progressing, yet the Lib/Cons are doing too little to encourage responsible lending release through the likes of Northern Rock or the Lloyds/TSB/C&G/HSBO group. Agents, homeowners, and related services would all like to see 'Actions speaking louder than words' alone.

His comments follow a report which revealed millions of Britons have resorted to using a credit card to meet their mortgage payments.

Speaking to voters in Leicester, Mr Cameron said it was vital for the economy that Britain's housing market became more competitive. Banks and building societies have introduced more restrictive mortage rules since the global economic crash revealed millions had been sold mortgages beyond their means.

But the prime minister called on lenders to return to 'respectable' lending in order to stimulate growth.

"In a way the pendulum has now swung too far the other way,' he said.

"If you are a single person, you are earning a decent salary. You go to the bank or building society, you are actually quite a good risk - they won't give you 80 per cent of the value, they won't give you four times your salary."

He added: 'You need a housing market where people are able to sell and move.

"The housing market has become very stuck and we've got to get it moving again."

Assetz launches top-up mortgage fund

Housebuilders and mortgage providers are in advanced talks to back an investment fund that will allow home buyers to use smaller deposits to secure new-build property.

Assetz, the property investment company, is creating a gap finance vehicle that will allow home buyers to "top-up" mortgages to provide up to 90 per cent of the value of a property.

Mortgage banks are generally asking for high deposits, which is a struggle among first-time buyers in particular. Although high loan-to-value mortgages are available elsewhere, they tend to be at a relatively high cost and restricted to borrowers with strong credit histories.

According to the most recent data from the Council for Mortgage Lenders, credit criteria have remained tight and a slight easing of loan-to-value ratios appeared to have reversed. First-time buyers borrowed on average 76 per cent of the value of their property in September, while home movers borrowed 67 per cent.

Assetz has agreed with a regional lender and a national housebuilder to back a pilot for the scheme, although both are still waiting for board sign-off.

There is an initial provision of £50m ($79m) from the lender for the mortgages, with an additional £10m in equity from a group of private investors managed by Assetz for the additional debt, enough to support the purchase of about 500 homes. The mortgages will be offered through housebuilders on their new-build schemes.

This is expected to be expanded across other building societies and builders in the next year. Assetz has ambitions to expand the scheme to as large as £1bn, which would fund 70,000 home purchases, and has already explored the idea of creating an investment fund open to high street investors.

The scheme will offer borrowers a blended interest rate of about 5 per cent, according to Assetz, with the top slice charged at about 12 per cent but then brought down by a 3-4 per cent interest on the rest of the loan

Stuart Law, chief executive of Assetz, said the fund aimed to replace shared equity products such as HomeBuyDirect, the government-backed scheme which is being wound down.

Shared equity has been a much needed prop to housebuilding, with some developers selling as many as a quarter of homes through the scheme.

Mr Law said that the scheme benefited the banks that needed to restrict lending to low-risk mortgages. "It is a safe 75 per cent level for most banks, as we are taking the most risk at the top slice of up to 90 per cent."

Developing middle - to large-sized housing estates has become quite a profitable business again under the right circumstances

Yes! You heard me right. New home development from scratch can make you good profit under the right circumstances.

But what about the tens of thousands of empty new homes sitting idly out there?" you holler. "Aren't we in the thick of the biggest property crash the country's ever experienced?" Before you call the men in white coats, hear me out.

A successful developer needs to make a decent profit after costs (mainly land, materials and labour) and there must be a demand for the finished product. So build cheap, sell cheap and you can still make the usual percentage margin.

Land prices have fallen by 70% since the crash and are almost back to 1990s levels. Materials and fittings such as bathrooms and kitchens are also cheap: costs are slightly lower than during the boom, plus builders will always stock up from fire-sale clearances.

Building labour costs have collapsed by 33% to 40% to the point that one third of the construction workforce is unemployed. Last week a survey by Hays Recruitment found that more than half of builders in Ireland (56.2%) would consider working for free if they thought they'd get a new job out of it.

As for ghost estates, they're no threat to new developers because either

• They were built where nobody wants to live
• They can't be sold because they're frozen by banks or the National Asset Management Agency
• The developer selling them has priced them too high because he has to recoup his boom-era outlay.

Even if "nearly new" properties do come back to the market, having sat for years they will be considered suspect or tarnished goods.

So why aren't developers working as we speak? Well, aside from those who are bankrupt or lumbered with debt, many are indeed working steadily. However, like the developer's agent I spoke to last week, they don't want to highlight their activities because they fear that the public and the government would view as a travesty the building of new homes when thousands sit vacant.

They're doing it because people still want good family-sized homes in decent areas. And because of their low cost base, they can undercut the hell out of the competition- both nearly schemes and equivalent second-hand properties- and still turn a respectable profit. A look through local planning lists will show many substantial schemes have gained permission and gone on site since 2007.

We in Cps recently have taken 16 deposits in two developments of family homes in Armagh & Belfast. Four-bed semis sold for under £210,000 and three-bed semis went for £135,000. There are undoubtedly empty schemes nearby.

Just like in the 1980s, a new homes market still exists for the right product at the right price. There is still business to be made by those who can do it.

For those who purchased development land at the height of the boom we recommend that our in house financial engineers meet you & asses the right way forward with the bank or indeed yourself building out with a joint venture. Sitting with a problem is no way forward, talk to us & we will work in your interests. There are ample buyers in the market for properly priced quality homes.

Slight rise in NI house prices, says Nationwide

Unfortunately the housing market has been slow during the summer,

However in Northern Ireland alone property prices have rose 1.6% during the past three months, according to Nationwide Building Society.

It has stated that NI was "surprisingly" the best-performing region in its survey, but the trend was still showing falling prices.

The 1.6% rise was not enough to offset previous falls, it said, "so the annual rate of house price falls actually accelerated from 5.2% to 11.1%".

Northern Ireland was the only region in its survey where housing market activity had declined in the past year.

In London, the number of house purchase loans rose 42% year-on-year, but Northern Ireland saw a 2% fall.

It said Belfast was the strongest area of Northern Ireland's housing market, with prices down 4% year-on-year.

CPS Belfast

Sales/Letting Agent Required

Please forward all CV's to fiona@cps-property.com

Buy-to-let: demand for rented accommodation at record levels

Demand for rented accommodation reached record levels during the second quarter of the year, research has revealed.

Countrywide, the UK's largest letting agent, said 50,480 people wanting to rent a property registered with it during the three months to the end of June, the highest level it has recorded since it started collecting the data in 2003.

The figure was also 16pc higher than demand was during the first three months of the year.

June saw the biggest spike in demand with more than 18,000 new tenants registering for rented accommodation, the highest number ever recorded during a single month and 22pc more than in May.

But the increase in the number of people looking to rent a home contrasted with a 6pc fall in the number of properties being made available to let during the period.

As a result there are now an average of 5.5 tenants competing for every property, up from 4.9 tenants per property during the first quarter of the year.

Demand is highest for two-bedroom properties in the South West, where there are 23.1 people chasing each available home.

The group said the mismatch between supply and demand had led to a "marginal increase" in rents, particularly on houses, with the average cost of letting a four-bedroom home rising by 4pc during the quarter to £1,090.

Properties are also now being snapped up within an average of two weeks - six days less than during the final three months of 2009.

John Hards, co-managing director of Countrywide Residential Lettings, said: "The number of tenants entering the market is at unprecedented levels, and we have yet to enter the peak season.

"Student demand for private rental accommodation will increase further with university applications at record levels.

"The buy-to-let sector remains a good source of investment, however, the Government needs to do more to incentivise new landlords in order to appease the current shortage of properties.

"If tenant levels continue to rise at the same rate, this will be further exacerbated."

Mortgage approvals leap by 19 per cent

The number of mortgages approved for house purchase jumped by 19 per cent during February in a further sign that buyers are returning to the market, figures have shown.

A total of 37,937 loans were approved for people buying a home during the month, the highest level since May last year, according to the Bank of England.

The figure suggests that record low interest rates and recent steep house price falls are tempting buyers back to the property market.

Reports from estate agents have suggested that interest in property has soared in recent weeks, but there had previously been little evidence to show that this was translating into sales.

The British Bankers' Association last week released figures showing that the number of mortgages approved for house purchase by the major banks rose for the third month in a row during February.

But it was thought that much of this increase was being driven by banks' greater market share, rather than higher overall lending levels.

However, today's Bank of England figures, which beat economists expectations and are well up on the recent six month average of 31,495, suggest sales may be picking up again.

Vicky Redwood, UK economist at Capital Economics, said: "February's household borrowing figures suggest that housing market activity may finally have turned a corner.

"The rise in the number of mortgage approvals for new house purchase... might suggest that the pickup in new buyer inquiries is feeding through into actual activity. With new buyer inquiries still rising, this is clearly quite promising."

But she added that approvals levels would need to broadly double before they were no longer consistent with falling house prices.

Despite the pickup, approvals for house purchase were still 44 per cent lower than in February 2008.

Remortgaging activity also continued to decline during the month, with just 32,633 loans approved for people switching to a better deal, well down on the previous six-month average of 52,780.

The fall in remortgaging activity is likely to reflect the fact that record low interest rates mean many people are better off staying on their lender's standard variable rate when their existing deal comes to an end, rather than taking out a new mortgage.

Net mortgage lending, which strips out redemptions and repayments, also rose during February, increasing to £1.51 billion, up from £1.08 billion in January, but still below December's £1.96 billion.

The figures came as property intelligence group Hometrack reported a slowing in the rate of house price falls during March as activity in the market increased.

The group said house prices in England and Wales dropped by 0.6%, the lowest fall for 10 months, while both the number of potential buyers registering with agents and the number of sales agreed continued to rise.

Howard Archer, chief UK and European economist at IHS Global Insight, said: "The further limited rise in mortgage approvals from last November's record lows, and reports from estate agents that buyer inquiries have recently picked up appreciably, suggests that housing market activity has very likely bottomed out."

But he added that, with rising unemployment and the current problems in the economy, any recovery in activity was likely to be "gradual and fitful for some time to come".

Unsecured lending remained subdued during February, with borrowing through credit cards rising by £190 million, while consumers repaid £435 million more of loan debt and overdrafts than they borrowed.

Meanwhile, building societies continued to see their share of the mortgage market contract.

Net lending by the sector was negative for the second month running during February, with customers repaying £976 million more on their mortgages than building societies advanced through new lending.

But savings levels continued to soar, with mutuals taking in £1.6 billion, the highest amount ever during February and 18% up on the figure for February 2008.

The figure contrasts with one reported by the British Bankers' Association last week, which showed that consumers withdrew £73 million from banks during the same month.

Taken from www.telegraph.co.uk

Strawberry Lane Show Home Opened

Last weekend saw the release of Strawberry Lane, Killylea, the stunning new development by M Girvan & Sons.

Killylea is a tranquil setting, boasting rambling views, just a short distance from the Cathedral City of Co Armagh and less than half an hour from Monaghan. The location of Strawberry Lane is ideal for families and those seeking the benefits of rural life without compromising living standards and at the same time providing the added security that comes with village life.

This exciting new development offers Georgian style townhouses with well planned, contemporary living space, as you would expect from the long established award winning building company M. Girvan & Sons.

M. Girvan and Sons offer craftsmanship, unique design and excellent value for your new home. This family run business as been established for over 40 years, priding themselves on their high quality residential developments.

Strawberry Lane comprises a range of Georgian Style three and four bedroom townhouses meaning you can choose the layout that best suits your needs. Prices for these beautiful homes start from just £129,500 offering superb value for money.

Stamp Duty - Welcome News for First Time Buyers

Wednesday 26th, 2010

Stamp duty on sales up to £250,000 will be suspended for those buying their first property this year and next, Chancellor Alistair Darling said.
However, industry bodies argue this should have applied to all homebuyers as it could be difficult to police.
The change will be funded by a planned increase in stamp duty to 5% for properties costing more than £1m.
Currently, stamp duty for buyers of properties worth more than £500,000 is 4% of the purchase price. It is 1% for properties between £125,000 and £250,000. For properties between these brackets the stamp duty is 3%.

Who qualifies?

The new rules state that in order to qualify for the stamp duty holiday:

• The purchaser - or all purchasers if buying jointly - must be buying their first home
• They cannot have previously owned another property anywhere in the world
• They must be buying somewhere that will be their only or their main home
• The completion date is on or after 25 March 2010 and 25 March 2012.