fortnightly dispatch « Property News from Saint Property

Dispatch. News And Views From Saint Property. 21st October 2009
Tuesday, October 27th, 2009

Mortgage Market Reforms

· The FSA has set out its proposals for reform in the UK mortgage market to ensure it works better for consumers and is sustainable, changing their approach to a more intrusive & interventionist style of regulation.

· Key points are: affordability tests for all mortgages with lenders responsible for consumers ability to pay; a ban on ‘self-cert’ mortgages; ensuring firms do not profit from people in arrears and for the FSA to cover buy-to-let mortgages currently seen as business loans.

· The paper is out for discussion until 30 Jan 2010 with feedback due in March 2010 & phased implementation

· They have not ruled out further intervention with caps on loan to value, loan to income or debt to income.

· The Council of Mortgage Lenders noted the irony of the politicians encouraging lenders to stop irresponsible lending but at the same time encouraging them to increase their flow of mortgage lending to consumers.

Property Market improved confidence

· Much is being made of the positive signs coming from the property market – lending is up 2% on August but it is to be noted this is still 27% down on this time last year.

· Unemployment has not risen as much as expected with employers offering alternatives to redundancy such as pay freezes, time off unpaid and reduced hours.

· All political parties have stated a desire to cut public spending. VAT returning to 17.5% and the return to stamp duty for properties over £125,000 from 1^st January 2010 makes for an unpredictable market in 2010.

· Much of the positivity is based on the London market and over 70% of households are not in London.

· With inflation contained at present the CML reports interest rates are likely to stay at this historic low for sometime yet.

Foreign Investors

· Saint Property has had an increase in enquiries from investors from abroad in line with the current trend of overseas buyers spotting opportunities in the UK property market.

· Germany and France are making up 33 per cent of European buyers looking for a long term investment in the UK

· Germany and France have both emerged from their recessions and the euro remains strong against the pound offering purchasers further value for money.

· Investors can search for property online and then work with Saint Property Search in acquiring their desired properties limiting the number of visits they need to make to Scotland.

· Buyers are ready to make a cash purchase avoiding the problem of limited loan resource and are currently focusing on Edinburgh townhouses and country houses within commuting distance of Edinburgh airport.

Lifestyle buyers seeking farmland again

· There are signs that the lifestyle buyer is returning to the rural property market with 25 – 30% of farmland purchased attributed to this sector.

· If city bonuses are paid in cash rather than deferred shares the rural market is likely to benefit.

· The farm market has been fairly resilient with bare land averaging £4,500 / acre for arable and £3,000 / acre for good pasture.

· Equipped farms i.e. including houses and buildings have fallen by around 10% from £7000 / acre reflecting the nervousness on the housing market & particularly reflecting the fall in house prices.

· Banks are looking closely at commercial loans to farms. We are likely to see more land come available with the short term pressure on prices and purchased by cash buyers.

· In Scotland SRDP (Scottish Rural Development Plan) funding will help by way of grant aid in marginal areas.

Saint Property

· Saint Property offers advice to buyers looking to purchase property in Scotland.

· We advise on residential & rural property ensuring a property purchase decision is made with sound advice

· We offer a pre-property purchase consultancy service for those who have found a property but need a second on opinion. We a property on the purchasers behalf and report with an unbiased view of our findings

· Please forward this to anyone who may be interested in the Scottish property market

· Contact us for advice on +44 (0)131 478 4533 if you are considering purchasing a Scottish Property

Dispatch. News And Views From Saint Property. 23rd September 2009
Tuesday, September 29th, 2009

Rural v Urban property

· The annual Halifax Rural Housing Review shows that the average property price in rural areas is 7.3 times average annual earnings compared with a ration of 6.1 in urban areas.

· Current mortgage offers are based on between 4.25 and 4.9 times annual salary with deposit and credit rating key factors. The gap between the average property price and mortgage on offer indicate the strength of cash buyers in the market.

· Rural property is less affordable due to a combination of higher average prices and lower average earnings.

· There is a general lack of countryside properties in contrast to cities where there is a supply of modern developments.

· The rural market has not been subjected to the same boom and bust cycle of urban areas and has a different profile of purchaser with a fewer first time buyers due to lack of affordability and a healthy second home market.

· Suren Thiru an economist at The Bank of Scotland said the slower decline in rural house prices reflects the quality of life benefits associated with living in the countryside but that the rural idyll is difficult for people to realize with lower earnings in such regions.

Higher standards for the residential property market

· A new body, The Property Standards Board, has been launched this week by RICS, the National Association of Estate Agents and the Association of Residential Lettings Agents to set standards across the residential property industry by setting codes of practice and to be a focal point for better consumer information on buying, selling and renting property.

· RICS believes that common and consistent standards for residential agents are long over due with home purchase and renting being too important in people’s lives to be left to a sector with no commonly applied and enforced standards where anyone can set up shop.

· Saint Property welcomes improved standards across the property industry, consistency in the sector will aid us in our role of representing buyers in their search and acquisition of property

Politics and the property industry

· It is political party conference season and with a general election due in 2010 it is worth noting the plans of the three main political parties in the event of gaining power at a time of huge political and economic challenge.

· The Liberal Democrats have announced they would introduce a levy on houses worth more than £1 million.

· The run up to an election has traditionally seen activity in the property market slow.

· Rates of interest, income tax, VAT will all be hot election topics and the policies of the party who gains power in 2010 will have a considerable impact on the mortgage market & homeowners, buyers and sellers in the next four years.

Saint Property

Saint Property offers advice to buyers looking to purchase property in Scotland.
We advise on residential & rural property ensuring a property purchase decision is made with sound advice
Saint property is in the process of concluding on a number of properties for our clients.
Please forward this to anyone who may be interested in the Scottish property market
Contact us for advice on +44 (0)131 478 4533 if you are considering purchasing a Scottish Property

Dispatch. News and Views from Saint Property. 9 September 2009
Tuesday, September 15th, 2009

House Prices bottomed out or false bottom?

House prices are up and the market has stabilised.
- Fewer distressed sales - as long as the interest charge can be covered a home is unlikely to be repossessed.
- Low mortgage rates.
- Supply continues to fall faster than demand.
- Cash buyers, unaffected by mortgage constraints are now more than 40% of purchases, attracted by gross rental returns which are better than cash yields.
- Buyers and sellers believe the market has bottomed out.
Why prices may take another fall.
- Prospective vendors start to cash in by selling rebalancing supply and demand
- Unemployment set to rise further.
- Cost of borrowing set to rise as recovery sets in discouraging investors
- Tax increases likely to feature in the future.
- Any increase in interest rates will hit the market hard leaving many unable to pay their loans releasing repossessed properties onto the market.

· Approach property with the correct advice

Record low mortgage released

HSBC released a mortgage at 1.99% which is a record low with a deposit of 40%
Mortgage arrangement fees are rising with the average now £790.

· For those requiring loans of £500,000 + private banks are offering the best deals, although there is generally a requirement to take out other products to qualify

Rural Property

House prices in rural areas have fallen less than in urban areas in the last 12 months with the average rural house price 21% higher than the average urban house.

· Rural hones continue to command a premium over urban properties reflecting the quality of life benefits that many people associate with living in the countryside according to The Halifax

2009 Harvest update

Non stop rain leading to saturated ground and flooded fields has been a feature of harvest 2009.
Ex Farm wheat and barley prices are up slightly on two weeks ago but still well below last year.

· Farmers cash flow will be increasingly under pressure with costs up by 26% in three years with the value of output falling in the same period.

Saint Property

Saint Property offers a search and advice service to buyers looking to purchase property in Scotland.
We advise on residential & rural property ensuring a property purchase decision is made with sound advice.
Saint Property is in the process of concluding on a number of properties for our clients.
Please forward this to anyone who may be interested in the Scottish property market.

· Contact us for advice if you are considering purchasing a Scottish Property