Archived Entries - Housing
Part 2: Confessions of a House Move - The Inside Story
After an anxious few days of waiting, our second offer has finally been accepted. The vendors initially rejected it, obviously hoping we would just keep on increasing our offer. We decided to leave it a few days and see what happened. Actually, we were so concerned that another potential buyer would view the house we had fallen in love with and offer more than us that we decided we would increase our offer to the full asking price. However, the waiting paid off and just before I called the agent to increase our offer, she rang me and asked in a worried tone if we were still interested. I read the signals and said that we were still interested but were not willing to increase our offer. Half an hour later she called back to say that the vendors would accept.
It's obviously a great moment when your offer is accepted, but it's best not to start celebrating until you put the key in the door as so much can go wrong. The first thing you have to do is chose a solicitor. In our case the estate agent recommended one that they use regularly. You could easily assume that this is because they get a cut of the fee which may be the case, but it is more than likely that they like to recommend one that they know from experience will do a good job. After all, they want the sale to complete smoothly as well.
It is worth negotiating on the solicitor's fee as in a tough market they will want your business. We told them we had received a much lower quote elsewhere (we hadn't) and they matched it immediately. Next begins the long process of waiting for all the searches to be done and signing documents. The other advantage we are finding of using a local solicitor is that you can easily drop off all the important documents by hand without having to rely on the postal service. The sale is unable to proceed any further until the solicitors have had some documents back so you don't want to be delayed by a postal strike. Our vendors have specified an exchange of contracts within 28 days of contracts going out which I am told is fairly standard. We will obviously be doing everything we can to ensure we meet this deadline.
Confessions of a House Move - The Inside Story
They say that moving house is one of the most stressful things that you do in your life. As a first time buyer trying to get on the first rung of the property ladder this year, I will be finding out if this is true over the next few weeks.
After spending years watching house prices climb every month at a rate faster than it would ever be possible to save, the recent property price crash probably came as a huge relief to most first time buyers. Initially as the market began to fall in 2007, some analysts said that it was not a property crash, merely a readjustment to realistic levels. As prices fell further and with the banking crisis and global economic downturn, the challenge became getting a mortgage agreed. In the height of the boom, banks were giving away mortgages to anyone who walked through the door, regardless of whether they were likely to be able to afford the repayments. Now they are far more cautious and most require a hefty deposit.
After spending several months looking on property websites such as Rightmove, my partner and I have finally found a house we liked the look of in the area we wanted. We went to the estate agent and arranged a viewing. We fell in love with the house straight away which I'd always been told you should never do as you risk lining yourself up for severe disappointment if things don't work out. Personally, I disagree with this and think that you should get a strong positive feeling from somewhere you're considering making your home and which is also the largest purchase you will ever make. The key is not to show the agent how keen you are.
We put an offer in the next day at a reasonable amount to show that we were serious but still a fair amount under the asking price. This was rejected straight away by the vendors who had no urgent need to move and were keen to get as close to the asking price as possible. The property has only been on the market 2 weeks and has already had several viewings. We were afraid that someone else would love the house as much as we did and better our offer so we got straight back to the agent with an increased offer. We now have the anxious wait to see if our offer will be accepted.
Calling All Independent Estate Agents
Dear Agent,
With the property market in a state of flux, most homeowners remain undecided about either moving or improving their present home. In order to assist the homeowner, Orchard Planning Solutions is seeking to work collaboratively with independent estate agents across England and Wales. If you are interested in this exciting and unique opportunity to add to your income stream and raise your local profile, please do not hesitate in contacting us by clicking on the following link:-
http://www.doineedplanningpermission.co.uk/contact.aspx
Kind Regards
From All the Team
Good News for First Time Buyers?
With low interest rates and the recent falls in property prices, most people would be better off buying than renting. For the estate agency profession, this news could not have come at a better time as the property market is traditionally entering a slow down period in the run up to Christmas.
According to the high street bank Abbey, first time buyers in all areas of the country (outside London) could save £52 a month by becoming owner-occupiers rather than renters. The reason for this is due to the sharp falls in property prices and low interest rates. It is estimated that the typical starter flat or home has fallen by approximately 9% meaning that a terraced home or 1 bedroom flat can be bought for approximately £92,000.
Whilst this is all very exciting for those thinking of buying rather than renting, the bad news is that you will have to have saved hard in order to raise the 25% deposit upon which these calculations have been based. If you are lucky enough to be in that enviable position, based on a 4.38% mortgage rate, your monthly repayments would be £382. Renting a comparable property costs an average of £434 per month meaning that you could be some £600 better off a year. Great news and yes worth a celebratory drink (not too many as remember the deposit). However, the uncomfortable reality check is the 25% deposit. In the dim and distant past when I bought my first property, I managed to cobble together a 10% deposit for which I was extremely proud. Today, those nest seekers have little choice other than negotiate a "loan" from the Bank of Dad or purchasing a property with a partner. Have the days of independence gone forever?
Back To The Future As House Prices Return to the 2008 Level
For many of us, we can breath more easily (at least for the time being) as house prices have recovered to the same level as a year ago. According to the latest statistics from the Nationwide, the average price of a house last month rose by 0.9% to £161,816 which is almost identical to the September 2008 figure.
However, this is not all good news as the Nationwide continued by warning that the recent house price increases were unlikely to continue at this present rate if more homes were to enter the market. Like so many other sectors, the property market is influenced by the feel good factor, which as we all appreciate is in short supply at the present moment. However, life is not simply about statistics and economic forecasting. As I maintain, our investment in property is long term and above all, our homes should be enjoyed to their maximum potential. Yes, things are depressed at the moment, but as we all appreciate, the long term trend is for house prices to continue rising. So, get out there and improve or move home!
Has the tide really turned for the housing market?
According to figures released by the Nationwide (29th May 2009), it appears that house prices rose sharply in the month of May with the cost of property increasing by 1.2% when compared to the April figures. Now, the typical home costs £154,016. Further good news can be found in the annual rate of house price falls with them easing from the 15% recorded in April to 11.3% in May.
However, don't arrange your house price rise party just yet. Whilst this appears to be good news, it should be recognised that the more reliable quarter on quarter indicator reveals that house prices actually fell by 0.5% (albeit this was the lowest drop since January last year). In essence, it is too early to predict which way house process are going. For example, during the economic gloom of the early 1990s, there were months when prices rose but only to fall back in later periods. The outlook remains less than bright given the present economic uncertainty coupled with rising unemployment and the difficulty of accessing "affordable" credit.
When asked should I move or stay and improve my property, my advice remains the same as that previously offered. If your home doesn't have extension or indeed improvement potential, then moving is really your only realistic option. However, there is no doubt that undertaking any home improvement work will enhance your property and hopefully when it comes to selling, give your property the edge over competing properties.
Has the Chancellor gone far enough in helping the housing market in these troubled times?
In his speech to the House of Commons, Chancellor Darling outlined a £600 million package of new measures aimed at stimulating the beleaguered housing market. In his attempt to stop the slide in property prices and entice new buyers and movers, the Chancellor is to extend the stamp duty holiday on properties worth less than £175,000 which was due to end in September. Homes sold for less than £175,000 will now be exempt from the charge until the end of December. After this, the 0% threshold will fall back to £125,000.
Currently, properties worth more than £175,000 incur 1% stamp duty. If you purchase a home worth between £250,000 and £500,000 you will continue to incur an eye watering 3% charge and buyers of homes priced at more than £500,000 must pay 4%.
The stamp duty waiver is intended to offer an incentive for first-time buyers to step on the property ladder this year, but housing experts fear it could only harm the market's recovery at the beginning of 2010. In a classic smoke and mirrors manoeuvre by the Chancellor, the stamp duty holiday is considered to be nothing more than a gimmick with most homes in the south east exceeding the £175,000 barrier anyway. Additionally, what incentive does this really offer to those homeowners whose properties are worth more than £175,000? From bitter experience, I have recently had to pay 3% stamp duty on a £500,000 purchase. A stealth tax I remain resentful at paying. If the Chancellor really wants to send out a positive message that his government is keen to get people moving again, how about halving these quite preposterous charges or better still, removing them altogether?
Whilst stamp duty is an issue, the main obstacle to recovery is the lack of available mortgage finance at reasonable rates of interest for first time buyers. If people cannot secure mortgages at reasonable rates of interest, what incentive is there to buy a home?
For many, extending the stamp duty holiday will do little if anything in convincing them that now is the right time to move. The Chancellor has wasted a real opportunity to show that his government really does care.
Is Renovating my Property a Financially Savvy Proposition?
For many of us, the first question we will often ask is: Will I get the value of the renovation back on my property? For those with a vested interest such as builders, the answer given is often that you cannot lose money in bricks and mortar. However, is that really the case? In this time of economic instability, the answer to this is not necessarily - unless you live in a "property hot spot" of Mayfair or Sandbanks in Dorset for example.
Take a loft conversion as a typical home improvement project for example. With stringent building regulations in place (they are there to protect you, your property and the public at large), it can often be found that the monetary value gained would only cover half the cost of the work. When measured against house prices in that area, the proposal was not financially viable.
If you are thinking about undertaking a project, one way to get a rough idea of what your extension would be worth is to simply look around estate agents local to you for properties of a similar size to yours or similar to your theoretical finished property. After all, that is what valuations are based upon, comparing like for like and what they sold for. Whilst this will prove a valuable exercise (no pun intended), try to be open minded and appreciate that money does't always make the our lives go round. Home improvements are more about how to meet our lifestyle requirements. I remain personally convinced that in the long term (and as statistics demonstrate), any home improvement will prove a financial investment also.
Making the most of our homes when moving is not an option
Research published by the Council of Mortgage Lenders (CML) has found that two million households (April 2009) have either negative equity or too little equity to finance a house move. With moving home becoming less of an option, more and more of us are thinking of creative ways to increase our living space within our existing homes.
With a little imagination and creative thinking, your home may in fact offer more potential for expansion than we actually realise. You simply need to be pointed in the right direction to spot those hidden opportunities to either add more space or improve the existing layout.
Start by looking at all of the options for your particular house type, from extending up, out or down to changing the existing room plan. Then decide which option best meets the needs of your household and your available budget. Bear in mind that even if your extension adds less to the value of the home than what it costs, providing it gives you the space you need when moving is not a real option. Above all, please remember that we have been through property slumps before and any kind of improvement work you carry out will offer you the potential edge when you do finally come to sell and in the meantime, provides improved accommodation levels.
Five steps to increasing living space:-
- Establish your budget; to help you with this, why not visit the extension calculator located on the home page? This will give you a rough estimate of anticipated costs.
- Understand your property works for you; for example, would a single ground floor space be more beneficial when compared to 2 reception rooms?
- Identify potential constraints; for example, do you live in a listed building, has the house been the subject of previous extensions,
- Consider the potential options your house offers; for example, terraced properties offer considerable opportunity for remodelling and semi-detached properties off opportunity for loft conversions.
- Seek the advice of a building consultant; use their experience to help guide you.
