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Green light given to massive building programme

Thursday, July 21st, 2011

As the need for good affordable housing becomes ever more pressing, the announcement by housing minister Grant Shapps that the government has released £1.8 billion to facilitate the building of new homes will be welcomed by many, especially those interested in building their own home.

20,000 homes for sale in the west

Prospective homeowners are finding mortgages difficult to come by at the moment and the announcement that the West and South West will get almost £250,000 million of the budget will delight many families in one of England’s most rural areas. Although approximately 75% of the planned 80,000 homes will be for rent and will be built by housing associations, that will still leave 20,000 homes at affordable prices for people to buy.

Agency will oversee planning

The planning will be under the auspices of the Homes and Communities Agency (HCA) and will be ongoing for over a decade. For many young couples who thought they would never get to own a home of their own, the start of the scheme cannot come quick enough.

Self builders to be included

A portion of the money will also be set aside for people to partake in self build schemes. Minister Grant Shapps has long expressed an interest in self builds and of course for many it is the only way they will ever afford a place of their own. The Ashley Vale self build project in Bristol demonstrates what can be done by a collective of people determined to complete a project and the green, ecological standards introduced at Ashley Vale will certainly find favour with the HCA.

Ashley Vale a good example

The community at Ashley Vale is now over two years old and has come under the scrutiny of many project leaders and politicians keen to learn from the experiences and drawbacks the self builders encountered while developing their project. The main problem for the project managers was that the site was covered with a huge block of concrete that could not be disturbed. This meant all the buildings and all the utility services had to build on top of the concrete. It caused many problems and the homeowners had to arrange special homeowners insurance to take account of this. However, the buildings, many of them wooden eventually took shape and the individualism of the self builders has made the project something special.

Tags: Ashley Vale self build project, Build Your Own Home, Building New Homes, First Time Buyers, new homes
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Vendors must get a grip on reality

Tuesday, June 21st, 2011

The frustrations of prospective house buyers looking to purchase a home of their own may soon be coming to an end, or at least may be eased a little. The latest report from giant, online estate agent Rightmove, is suggesting that house prices will soon starting dropping like a stone as homeowners looking to move on become more realistic. There is a real chance that new home insurance deals will become more commonplace towards the end of this year.

Vendors turning a blind eye to the market

The report by Rightmove is something of an eye-opener. Although the industry has been stagnating for well over a year, due to a number of factors that have all been making headlines in the press throughout the year, vendors putting their homes up for sale are still asking more and more for their properties. Incredibly Rightmove reveal that the average price of a home going on sale has risen every month in 2011 and is now 8% higher than the start of the year, a year that has seen mortgage approvals drop by half.

Asking price rocketing

At the moment the average price of a home for sale with Rightmove is slightly over £240,000, at the beginning of the year it was £223,500 and although it must be understood that many sellers will have hiked up the asking price because they were aware that buyers would automatically offer less than the brochure price, Rightmove believe June may be the month that sellers finally get a grip on reality and start to place their homes at a marketable price.

Reality will set in

Rightmove are convinced the fact that estate agents across the country are reporting more unsold properties on their books month by month because of the shortage of buyers, will start to sink in with those desperate to sell, and that prices will drop by around 7% in the second half of the year. This is just the news that many people are waiting for.

Banks slowly loosening purse strings

The difficulty prospective buyers have encountered when trying to arrange a mortgage has forced many into taking out rental house insurance on a let until the situation changes, and banks do seem to be slowly grasping the fact that people can’t afford what they are asking. Some loan providers are beginning to offer mortgages requiring only a 10% deposit without the interest rate being too prohibitive.

Basic ingredients are there

A noticeable drop in asking prices, a realistic approach to lending criteria by the banks, and low interest rates guaranteed for the short term at least, could just be the catalyst for the housing sector to gain momentum.

Tags: Home Insurance, House buyers, house insurance, rental insurance, Rightmove
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Bank survey reveals sad plight of would be borrowers

Tuesday, May 31st, 2011

A survey carried out for the High Street Bank, Halifax, reveals today just how disillusioned a generation of workers in the UK are, and how they view the prospect of purchasing homeowner insurance as an ever dwindling dream.

Generation of tenants

The report shows that a whole generation is becoming reconciled to the fact that they may never be able to afford a home of their own, as banks make the qualifying criteria for getting a mortgage more difficult. The report shows that although the vast majority of 20 to 40 year olds want to follow in their parents footsteps and possess a home of their own they are quickly coming to realise that they are trapped in a financial straightjacket.

Huge survey, huge deposits, huge disappointment

The report is more worrying because of the number of people who took part. This was no bite size sample, over 8,000 were questioned and 9 out of 10 still aspired to have their names on a mortgage deed, however, the stress of actually applying for a home loan and the damaging effect on one’s credit rating when being turned down was turning more and more people away from pursuing their dream.

Of course the main factor quoted was the huge deposits most banks are demanding before they will hand out a mortgage, the report shows that many of those questioned had tried to save the cash but realised it was beyond their reach. It seems as though we now have a generation who through no fault of their own will be buying home contents insurance on a house they rent rather than one they own. It is not only a worry for them; it should be a worry for the banks.

Impact could be far reaching

If the UK suddenly becomes a nation of tenants then the banks will be bidding goodbye to a source of revenue that has kept them wealthy for a long time, mortgages have been the lifeblood of the Halifax and other banks for a long time. To this end the Halifax has declared to take action on the report by the National Centre for Social Research immediately.

New approach from the Halifax

A spokesman for the bank said it would have new measures in place by midsummer to give prospective mortgage applicants a comprehensive insight into its lending requirements before they start the process. It will involve prospective buyers being given a promise of the amount the bank will lend to them. The process won’t show on their credit report, and if their application is rejected, the reason why, with tips on how to become more successful in the future will be given.

Tags: banks, First Time Buyers, halifax, home owner insurance, mortgages
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Halifax reports big drop in house prices

Tuesday, May 10th, 2011

With the UK’s largest mortgage provider suggesting that house prices are beginning to drop significantly in price again, prospective buyers looking to purchase cheap home insurance on a property for the very first time may just see a glimmer of hope on the horizon.

Difference in figures surprising

With the Halifax Bank reporting that their House Price Index dropped a surprising 1.2% in April, compared to March figures, the likelihood of bargains a plenty are out there for those that can manage to get a loan. It should be noted, however, that the figures vary quite considerably from those supplied by the UK’s largest Building Society, the Nationwide, who last week said that there index suggested a fall of just 0.2%. Considering that both major players in the market base their figures on housing values placed on new mortgage approvals it is confusing as to why there should be a big difference.

That doesn’t change the overall picture though, and that is, house prices are still falling and although many prospective buyers would love to get a home insurance quotation on such properties, it is just not happening. The uncertainty of interest rates remaining at their record low level, the price hikes in the shops and garages and the uncertainty surrounding jobs, particularly in the public sector still seems to be having a profound effect on the general public. The situation is not helped of course by the fact that banks still seem very reluctant to lend unless a big deposit is secured.

Value dropped by one fifth

The Halifax confirmed that the latest drop means that the average price of a dwelling in the UK has now dropped 20% from the peak values of August 2007, a sobering thought for all those who bought at that time and also for anyone thinking about entering the realms of house purchase at the time.

Green shoots of recovery?

The Halifax did point out, however, that not everything pointed to further decline. The Royal Institute of Chartered surveyors (RICS) have reported a shrinking of unsold properties on Estate Agents books. The Halifax asserts that this is a sign that house prices could actually soon start to rise.

Time to make a move?

More reason then for those first time buyers with at least some savings to start chasing the new low deposit loan requirements introduced by some loan providers at the beginning of this month and get out there and find a bargain

Tags: First Time Buyers, halifax banking, Home Insurance, mortgages
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Save to buy account ready for launch

Thursday, May 5th, 2011

For many first time buyers looking to get that important first step onto the property ladder, this first week of May 2011 may well prove to be a landmark. Home insurance providers can expect a little more business to be heading their way shortly if other mortgage providers follow the lead of the UK’s biggest building society and start offering home loans only requiring a 5% deposit.

Sounds good despite the small print

The news that the Nationwide Building Society will be offering a home loan only requiring a 5% deposit will indeed be sweet music to the ears of many frustrated prospective homeowners.

Of course it is not straightforward, these things never seem to be, but if a first time buyer opens a save to buy savings account with a £50 deposit and pays in a minimum of £50 per month, then after a period of at least 6 months the saver can apply for the 95% Loan to Value (LTV) mortgage. The savings account offers an interest rate of 2.5% gross per annum although the AER is variable. This applies to balances up to £20,000.

Cash back reward

If the saver does indeed take out a mortgage with the Nationwide through the offer they also qualify for up to a £1,000 cash back reward. Basically the new account will allow new customers the chance to take advantage of a scheme that was only open to existing customers looking to move home.

Good news for ancillary industries as well

The move is bound to cause a stir in the market, and if the banks decide to chase after the custom then it could be good news not only for prospective home buyers, but for people desperate to sell their homes, estate agents desperate to make any kind of sale and of course for home insurance companies waiting to provide policies on new homes.

It could boost the building industry and give a shot in the arm to the Government, who will be anxious to bring about an end to the bad press the current housing shortage is creating. The account will be launched on May 6th and the rest of the loan sector will be watching closely at the uptake.

Tags: First Time Buyers, Home Insurance, loans, mortgages
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Firstbuy will appeal to potential homeowners

Thursday, March 31st, 2011

When Chancellor George Osborne sat down at the end of his budget speech a week ago, first time buyers looking to get on the first rung of the property ladder had some cause for cautious optimism. Within seconds of his first utterance of the new “Firstbuy” scheme, prospective home buyers were probably already dreaming of doing things that come naturally to so many of us. Things like organising household insurance, home loans and mortgage insurance. Lucky them!

Manageable deposit

The “Firstbuy” scheme promises to allow first time buyers a much easier route to owning their home. Instead of the average £25,000 deposit required to secure a mortgage at the moment, the scheme will demand just a 5% deposit, which will bring the £25,000 down to around £6,000-£7,000 a more manageable figure altogether. The scheme does have several qualification criteria wrapped around it though.

Equity loan will bridge the gap

First of all the “Firstbuy” option will only apply to new builds on specifically named projects. The scheme will allow the homebuyers to put down a 5% deposit and take out a loan to value mortgage for another 75% of the property cost. The remaining 20% will be loaned to the couple in a way not yet actually specified but will probably be a joint equity loan cobbled together by the builder and the Government. The equity loan will be interest free for the first 5 years and after that will gradually start to attract interest repayments.

The loan will have to be paid back when the house is eventually sold and it will not be a precise figure, but the same percentage of the sale price that the property owners borrowed to make the purchase. So if the homeowners took out a 20% equity loan they will pay back 20% of the sale price. This means of course, that if they make a profit on the sale then the Government/builder will get a slice of the profit too.

Experts split, but hopefuls won’t be

Experts are split over the benefits of the new scheme with some pointing out it is not actually as good as Labours “Homebuy” scheme launched 3 years ago. Whatever the experts think it is a safe bet that there will be plenty of takers for the scheme when it is launched later this year. Unfortunately the £210,000 million earmarked for “Firstbuy” will probably help only about 10,000 homebuyers. Many will be pleased to grasp the opportunity of looking at home insurance comparison sites for the first time but I can assure them the pleasure will soon dim!

Tags: first home, First Time Buyers, Firstbuy, George Osborne, Home Insurance
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