CHANCELLOR'S FTB INITIATIVE IS JUST WINDOW DRESSING!

Adam Offer, managing director of Besley Hill Estate Agents, with 17 offices in Bristol and Gloucestershire, gave a cool welcome to the Government's new scheme to help first-time buyers get on to the property ladder.
He said: "The budget today has offered very little to assist in stimulating the housing market. The FirstBuy scheme announced today will offer 10,000 first-time buyers up to £25,000 each in the form of a loan towards their deposit on any NEW HOME purchase. The scheme will be administered by the Department of Communities and Local Government (DCLG) – who in the past have announced schemes before they were ready to market, producing massive confusion.
"This initiative will encourage first-time buyers to buy new homes at inflated prices on cramped developments with huge inherent parking problems – potentially slums of the future – rather than stimulate the wider housing market where there are many sensibly priced homes. The key is surely in unlocking this end of the market which will ultimately generate more transactions through the chains – stimulating the market as a whole – so it is an opportunity missed in my opinion.
"George Osborne's FirstBuy scheme won’t go beyond scratching the surface of the problem faced by the vast majority of first-time buyers as it’s exclusively for new-build properties and only around 10,000 buyers will benefit - a fraction of the overall number of potential first-timers currently misplaced by the mortgage famine in higher LTV (loan-to-value) deals.
"Although this is a tiny step in the right direction, it's merely window dressing the wider problem of lack of assistance to first-time buyers."

England faces 750,000 housing shortfall by 2025

England faces a shortfall of 750,000 homes by 2025, according to a new report from the IPPR.

Its analysis of official government projections show that when the economy bounces back the gap between supply and demand could be equivalent to the entire housing demand of the populations of Birmingham, Liverpool and Newcastle combined.

It says the best case scenario for the economy will require more than 280,000 extra homes each year. But if housing supply continues at the rate of the last twenty years – around 160,000 additions per year – the gap between the number of households and the number of available homes ranges from 255,000 and 1.2 million by 2025.

The worst supply and demand mismatches will be in London, the South East, South West, West and East of England and Yorkshire and Humberside. In these regions demand is projected to be substantially higher than net additions to the housing stock in recent years.

The North West of England is the only region where supply could meet demand, with 40,000 extra homes compared to the number of households, due to the high rate of unoccupied premises at present.

The report shows that the social housing sector in particular will be under extreme pressure, no matter how the economy performs in future. If the economy performs poorly, up to 1.2 million households will priced out of the private sector and will need social housing.

Even under good economic circumstances, an additional 550,000 households will need social housing by 2025. The report says that without a new housing policy, this demand will not be met.

Nick Pearce, director of IPPR, says: “We can’t go on as we have done. Britain needs to build more homes. That’s not going to happen without a fundamental review of housing policy. This new analysis shows the serious scale of the problem.

“If the rate of house building doesn’t radically increase, we face a growing housing crisis. Whether the economy performs well or poorly, a serious gap looms between housing supply and demand. Our ageing population and rising expectations for living standards are going to drive up demand but if there’s no change in housing policy it will seriously hold back supply.”

Our Opinion: Here at Besley Hill we firmly believe that 2011 will be the turning point - and the last year you will be able to buy reasonably priced homes - as the market recovers an acute shortage will be the norm. Talk to any local Besley Hill branch for more on this opinion.

Thanks to Mortgage Strategy 14.03.11

83% of MPs say FTBs need more support

The majority of MPs believe more must be done to help first-time buyers, research from Genworth Financial shows. About Time - we say!

A survey commissioned by the specialist insurer and carried out by ComRes reveals 75% of MPs think people with a stable income but who are unable to put up a deposit of 10-20% should have access to mortgage finance provided repayments are affordable.

Furthermore, 83% of those asked stated their constituents need more support in getting on the housing ladder, a figure that rises to 100% for MPs with constituencies in London.

The survey also shows 84% of respondents agree that a more fluid housing market, stimulated by easier access for first-time buyers, would help the UK’s financial situation and improve the social mobility of their constituents.

Angel Mas, president of mortgage insurance for Genworth Financial in Europe, says: “The deposit remains the biggest barrier to homeownership in the UK, along with the prudent approach taken by lenders, which are allocating their scarce capital to other segments of the mortgage market.”

He says it is crucial that high loan-to-value lending returns to the market in order to make it accessible for individuals who have a sound credit profile but are unable to save for a deposit.

“Lenders can participate safely in the high LTV segment by transferring default risk to a specialist insurer. This model creates additional safeguards for the overall system as insurers will only accept this risk if appropriate lending criteria are applied and monitored.”

Mas highlighted the example of other major economies that have continued to make finance available to first-time buyers.

He adds: “This framework already exists in a number of other major economies which have withstood the economic crisis, with the flow of credit to prime first-time buyers remaining open through the cycle. The urgency of this situation should point towards their example rather than looking for new and untested solutions.”

Thanks to Mortgage Strategy 14.03.11

HOUSE PRICES IN BRISTOL BUCK THE TREND

The average price of a house in Bristol rose more than £6,000 in the 12 months prior to end of January to stand at £172,376, according to the Land Registry. The average price a year ago in the city was £166,192.

This bucks the trend because nationally the average cost of a home dropped by 0.9 per cent to £163,177 over the same period. The national year-on-year annual drop came despite the fact that house prices edged ahead by 0.2 per cent during January itself.

"The rise in house prices in Bristol reflects our own experience," says Adam Offer, managing director of Besley Hill Estate Agents. "In fact, our branches achieved house price increases over the year in excess of the Land Registry figure."

Northern Rock launches 90% LTV fixed rate deals from 5.99%

Northern Rock is launching a new range of Everyday mortgages available up to 90% loan-to-value.

As part of a support package for first-time buyers, the state-backed lender is introducing a two-year fixed rate deal at 5.99%, a three-year fixed rate product at 6.49% and a five-year fixed rate at 6.59%, all of which have no payable product fees.

Andy Tate, customer and commercial director at Northern Rock, says: “Our new products, which will be offered within our prudent risk appetite and only to customers with good affordability, should appeal to those who have lower deposits and first-time buyers.

“First-time buyers are important to the housing market. Having listened to those customers, we have developed a service that not only helps them to arrange the right type of mortgage that they can afford, but also supports them through the various steps in the process.”

The lender has also cut its interest rates across the rest of its mortgage range, reducing Everyday fixed rates at 75% and 70% LTV by up to 0.19%, Everyday trackers at 75% and 70% LTV by up to 0.3%, two-year fixed rate buy-to-let deals by 0.6% and longer-term BTL deals by 0.2%.

This is the first-time Northern Rock has offered LTVs higher than 85% since its high-profile collapse and government bail-out three years ago.

Nigel Lewis, property analyst at Findaproperty.com, says: “Northern Rock are offering these mortgages only because they must believe that the house price drops seen over the past two years are now over and that a more stable housing market will now follow – they wouldn’t lend at such high LTVs if they thought otherwise.

“This is good news for first-time buyers put off by the prospect of negative equity because at worst house prices are due to be flat for the next year or so with potential rises in areas of high demand.”

For details of homes suitable for first time buyers click here. For mortgages contact any of your local Besley Hill branches - click here for your local branch.

Thanks to Mortgage Strategy for this news 02.03.11

Does anyone care that house prices increased 0.3% in February?

More pointless information in today from the Nationwide stating that prices increased 0.3% in February according to their National House Price Index. On an average £160,000 property that's £480.00!

It will be no news to you that house prices are just not that sensitive for this to be meaningful! Most Besley Hill branches are saying that if a property is marketed correctly many sellers can achieve premiums due to the shortage of homes available.

For sensible advice on the current housing market and to take advantage of our FREE VALUATION call any local Besley Hill branch & you could be moving sooner than you think.

My final rant on this point - come on all you major industry stakeholders and commentators - make these indexes more meaningful report ever 3 months - you know it makes sense!

Adam Offer - Besley Hill Estate Agents

Mortgage affordability hits record level

Mortgage affordability has reached its best level in 10 years, according to research from Barclays.

Analysis of over one million customers’ accounts by the bank found that, on average, people paid out 15.4% of their take-home pay at the end of December 2010 to cover their monthly mortgage payment.

This is the lowest level ever registered by the study, which is now in its tenth year.

Supporting research by Barclays shows 13% of those with a mortgage say they can easily afford their current repayments, 39% are comfortable and 28% are stretched but still have disposable income to help them navigate a potential rise in interest rates.

However, as commentators believe a hike in interest rates to be likely this year, Barclays is urging homeowners to keep their mortgage repayments under review.

Andy Gray, head of mortgages at Barclays, says: “It stands to reason that with interest rates at an historic low, mortgage affordability is at its best in a decade, but it is crucial that homeowners are not complacent.

“When asked specifically about coping with rising interest rates, it was great to hear that 71% say they either already have a plan in place to manage increased monthly mortgage repayments, or that they will be unaffected as they are on fixed rates.

“But homeowners who are not already thinking about their mortgage certainly need to be, to ensure they have a contingency plan when interest rates start to increase.”

For up to date mortgage advice - contact any local branch of Besley Hill Estate Agents

Source: Mortgage Strategy 01.03.11