Wednesday 24 July 2013

Parent-guarantor mortgages on the rise for first-time buyers

Remember how you used to be able to get a lone or a mortgage, by having a guarantor, well results from a recent survey suggests that almost one-quarter of all parents planning to help their children buy their first property would act as guarantors for their children in order to get them onto the housing ladder.

The survey was conducted by Family Investments, they found that 24 per cent of parents plan to help their children get onto the housing ladder by acting as guarantor, compared to two-thirds of those who plan to just give their children the money outright.

Earlier research from Lloyds TSB has indicated how the so-called Bank of Mum and Dad is evolving.

It is no longer simply a case of parents chipping in with a cash loan to help their first-time-buyer children – now two-fifths of those taking their second step on the property ladder are turning back to their parents for financial assistance. The Family Investments survey shows that this evolution also includes parents putting the equity in their own homes on the line too, rather than simply handing over the cash.

The report also found that more detailed knowledge of guarantor mortgages was low among the 53 per cent who had heard of them – when asked a series of true or false questions about the characteristics, just under half of respondents were able to correctly identify the right answer every time.

Of the 529 parents who responded, only four noted that they had received support in the form of a guarantor mortgage from their own parents. This is especially significant and highlights the change happening in today’s mortgage market, where first time buyers can only get high LTV mortgages with some form of additional guarantee.

The Family Investments research also highlighted just how important the Bank of Mum and Dad is as a lender in the current climate. Of the non-homeowners questioned over a third are planning to buy and nearly a third of these expect their own parents to help in securing a mortgage.

The head of Savings and Investments at Family Investments, Kate Moore, commented: “It’s obviously becoming increasingly difficult for young adults to get onto the property ladder. As it becomes harder for young people to save enough for a deposit on their first home, parents have to consider other ways of supporting their children into the future.

If you need help and advice on buying your home or looking to invest then take a look at our services, we are set up to support service personnel, call us on 0300 1111 239 and speak to an adviser who can help.

Wednesday 17 July 2013

Monthly house sales have increase to 2009 levels

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Positive trends are beginning to emerge in the property market as estate agents have seen monthly house sales increase to levels not seen since 2009.


The latest figures from the National Association of Estate Agents (NAEA) housing market report revealed another monthly increase in the average number of sales made by NAEA members. Average sales increased from nine per branch in April to ten in May. This follows a continued rise from the beginning of the year, where in January the number of sales reported by NAEA members was only seven per branch.

The NAEA also revealed a 12 per cent rise in the average number of house hunters compared with last year’s figures – up from an average of 274 per branch in May 2012 to 313 in May 2013. This is in addition to a month-on-month improvement, up from an average of 310 in April 2013 and 286 in March 2013.

Meanwhile, the average number of first time buyers (FTBs) has dropped from 23 per cent in April to 20 percent in May, which suggests more still needs to be done to help this section of the market. The supply of properties also saw a slight decrease from 61 average properties for sale per branch in April to 60 in May, possibly due to the record sales figures in recent months.

Managing Director of the National Association of Estate Agents Mr Mark Hayward, said: “These really are encouraging figures; serious house hunters are continuing to enter the market and are intent on buying. The current low lending rates have created attractive conditions for those with sizable deposits who are thinking of buying or moving home. The story is reversed for first time buyers though with figures down on last month, suggesting that there are still issues surrounding access to finance for this group.

“We are hopeful that this positive trend will continue, with the sunny weather likely to bring even more house hunters to the market; plus if banks continue to compete on rates and offer increasingly attractive deals, savvy home buyers may find their options in the market increase.”

Thursday 11 July 2013

Shared Ownership what’s it all about…?

There has been much news recently concentrating on promoting shared ownership, we thought it was time that we expelled some myths.

Shared ownership doesn't really mean that you share your house/flat with anyone, what it does mean is that someone is helping you out to be able to buy a property. You can buy as little as 25% of a property or as much as 75% with the Housing Association or a private developer keeping the remaining share of the property and you pay rent to the Association or Developer on the percentage of the property that you don’t own.

The schemes are designed to help young people get on to the property ladder with a 5% deposit rather than the 10% required by most mortgage lenders.
It is thought that there are 170,000 shared ownership properties across the UK and developers are building more every day.

Of course with everything in life there are pros and cons, we have set out the most important ones here:
The Pros:
  • Younger house buyers can get on the housing market with a 5% deposit

  • You can buy a nicer property than you would have been able to afford

  • You are eligible to buy these houses even if you earn quite a lot (capped at £60,000 per annum)

The Cons :
  • You are paying both a mortgage and rent

  • You can’t sublet the property

  • They can be more difficult to sell, as you don’t own the full 100%



For more objective advice why not watch Cherry Healey’s Property Virgins on Mondays at 8pm on BBC3
for a full insight into what the younger generation think about these houses.

http://www.bbc.co.uk/programmes/b036mqvv



There are other ways of getting help with buying a house and the new Government Schemes are those that aren't limited to first time buyers.
 Why not call our team now to find out how we can help you 0300 11 11 239.

Happy house hunting.

Thursday 4 July 2013

Growth in Property Price Reductions

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According to new research from Zoopla.co.uk the average property seller has had to reduce the asking price of their home by nearly £20,000 to secure a sale. Over 40 per cent of all UK properties currently on the market for sale have experienced at least one price reduction, as sellers try to entice buyers.


The amount by which sellers have reduced their price expectations has risen significantly over the past 12 months, with the average property now being discounted by £3,500 more than this time last year. Last November, amongst those homes that had been reduced in price, the average price reduction was 6.1 per cent. Today that figure stands at 7.4 per cent which represents a discount of nearly £3 billion off the initial asking prices as sellers become both more realistic and more desperate to close a sale by the end of the year.

Glasgow tops the list of towns where the biggest discounts are on offer with the average reduction in the city currently standing at 9.1 per cent (£12,881). Newcastle and Bolton follow closely with asking prices currently discounted by an average of 8.9 per cent and 8.8 per cent respectively. All but one of the top ten areas with the highest price reductions are in the North, where the number of sellers reducing their asking price is also the highest. Sunderland tops the list of towns with the highest proportion of properties on the market that have been discounted at least once with more than half (53.6 per cent) of sellers there having to reset their expectations downwards at least once.

Whilst the London property market continues to demonstrate its resilience with the lowest proportion of price-reduced homes in the UK , nearly a third (32.6 per cent) of properties for sale in the capital have had to be reduced in price indicating that London is not entirely immune from the conditions being felt around the rest of the country.

Business development director of Zoopla.co.uk, Mr Nicholas Leeming said, “With the current economic uncertainty and difficulty buyer’s face in finding funding, it is no wonder that sellers are having to reduce prices in order to encourage sales. And with the latest economic forecasts looking decidedly gloomy, sellers may have to reduce their expectations further if they are serious about making a move.”