House prices

Lucy Warwick-Ching

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Lucy Warwick-Ching

Home information packs are one of the first casualties of the new coalition government and on the whole this decision has been welcomed as good news for the housing market. After all, sellers see them as an annoyance, buyers don’t ask to see them and solicitors often refuse to rely on the information they contain.

Very few people can say that the introduction of HIPs was not full of good intentions – they were designed to speed up the home-buying process and prevent people from pulling out of purchases further down the line. But the packs were ultimately diluted to the point where buyers and mortgage lenders did not have the information they needed – such as a structural survey – and they’ve been on borrowed time ever since.

In a note out about the decision to scrap HIPs, Nicholas Leeming, commercial director of, is calling for the government to act quickly to scrap these plans as a delay may cause homeowners considering selling to wait before putting their homes on the market. He says:

A reduction in the supply of homes for sale at this crucial stage in the housing market recovery would harm the revival.

He also says that the retention of Energy Performance Certificates is an environmentally positive move it is more about “complying with EU directives on reducing carbon emissions than helping home buyers and sellers” and that “the new government should now consider replacing HIPs with a simple pre-sales pack to include local searches and a draft contract for sale only.”

Liam Bailey at Knight Frank also believes the HIP decision could go further. He says:

The need to provide an EPC will remain and is still a hurdle to get properties to market. The objective must be to follow the French and Portuguese and require an EPC only when terms have been agreed on a sales – not prior to marketing.

Whatever happens to HIPs it is clear that all eyes are on the UK property market and how the new government’s policies will affect house prices.

Lucy Warwick-Ching

So it seems nothing is to be left untouched by the hung parliament calamity. Now experts are saying that it could add £52 a month to the average mortgage!

This is because, claim flatshare website, all long-term lenders price their mortgages with reference to the price of gilts – or units of government debt in plain english - and mortgage rates are now rising as the cost of gilts rise.

Tanya Powley

Forget the Bank of Mum and Dad. First-time buyers have found a new way to raise the extra money they need to finance the deposit for their first home: selling make-up from cosmetics company Avon.

The door-to-door makeup sales firm, for whom Hollywood actress Reese Witherspoon advertises their products, says it has seen a “huge growth” of new recruits who cite saving for their first property as a reason to join Avon and supplement their income.

Lucy Warwick-Ching

With prices rising all over the country, and the UK now out of recession, we could be forgiven for thinking that we’ve made it through the worst. But it seems that first-time buyers are doomed to be shut out of the housing market recovery altogether because of the difficulty in securing the funds to buy a home.

Here, ten experts give their top tips on how individuals can get onto the property ladder:

Tanya Powley

Homeowners were given good news today as Nationwide Building Society revealed in its latest house price index that property values had surged 1.2 per cent in January, showing a year-on-year gain of 8.6 per cent.

The lender also helped buoy the market by stating: “Unless there is a fall in property values in February, annual house price inflation is likely to move into double-digit territory next month for the first time since May 2007.”

But before you crack open a bottle of champagne and get drunk on the excitement that this month’s housing data will set a precedent for the rest of 2010, it’s worth looking at a few of the comments from the experts out there.

Tanya Powley

Some buyers may be worried they’ve missed out on a buying and investing opportunity following the recent rally in house prices but experts say 2010 will still provide some interesting buying opportunities.

Jones Lang LaSalle, the property consultants, are forecasting UK house prices to experience a double dip and fall 7 per cent during 2010, with a return to growth expected in 2012.

James Thomas, head of residential and investment, says investors seeking debt financing should try to capitalise on the current record low interest rates which are forecast to rise little, if at all, during the course of 2010.

Similarly cash rich investors are likely to be attracted to potentially higher income returns on investments in residential property compared with current bank deposit rates.

Thomas says: “By 2012, Jones Lang LaSalle expect there to be a strong recovery in the UK housing market with growth in the region of 6 per cent, with similar annual returns for the two years thereafter. Well timed investment in the UK housing sector this year could well prove to be a good medium to longer term investment.”

Here are some of Thomas’s tips for buying property in the UK:

Tanya Powley

It’s that time of year again. With 2010 drawing closer, get ready for a surge of house market predictions.

Today the National Association of Estate Agents (NAEA) said it believed house prices in the UK are likely to remain flat, or, a slight drop in some markets, for the first six months of 2010, before picking up again and remaining stable in the second half of the year.

The prediction matches Halifax’s view in its latest house price index that house prices would remain flat, on average, next year.

The NAEA’s other predictions for the UK housing market include:

  • Housing supply will remain stable in the run up to the General Election, after which there are likely to be more houses available for sale, particularly if Home Information Packs are scrapped.
  • The General Election will cause a lull in activity as people adopt a “wait and see” approach.
  • A number of buyers will continue to take advantage of lower interest rates and lower priced property.
  • The continued presence of first time buyers will be critical to market success.

A survey by the Building Societies Association (BSA) also out today shows that the festive season – and maybe all that mulled wine – has had an effect on consumers’ good mood, with consumers giving an upbeat view on property prices.

According to the December BSA Property Tracker survey of over 2000 people, property prices will rise 3 per cent in 2010. This compares to consumers in the same survey a year ago predicting an 8.6 per cent decrease in prices.

While we can be certain that we’ll see a lot more 2010 house market predictions in the coming days and weeks from the wise and perhaps some not-so-wise property spokespeople, it is less clear on what will happen to house prices over the next 12 months. But you can be sure that won’t stop commentators from getting out their mystic balls….

Matthew Vincent

House price indices. Dontcha just love ‘em? Six months of sizzling soaraway surges! Howard from the Halifax? You can bring your ‘For Sale’ sign round any time, with your 1.2 per cent rise in October, and your 7.1 per cent uplift since April!!! Nationwide? After six consecutive price rises, and the first year-on-year increase since March 2008, the feeling is most definitely mutual!!! FT-Acadametrics? Hearing you say “the worst is over“, has certainly left me in the in the pink!!!. Geddit!!?

House price indices? Arentcha sick of em’? A-whingin’ and a-whinin’ about their seasionally adjusted declines. Rightmove? Wrong move more like – with your report yesterday of a -1.6 per cent fall in November, and your forecasts of another three months of falling prices as new sellers drop their asking prices!!! Savills? We’d be better off asking Jimmy to Fix It, after your -6.6 per cent forecast for 2010!!! Fitch? A 30 per cent plunge from 2007 levels? How low can you go, with your dreary house price-to-income ratios??? Yawn!!

Sometimes, house price analysts spout more hysterical contradictory nonsense than Private Eye’s tabloid hackette Glenda Slagg. So who should you listen to?

Sharlene Goff

Are things looking up for first-time buyers?

Halifax has today launched a new mortgage deal for buyers with deposits of just 10 per cent. Sounds good so far. Any new opportunity for first-timers – recently the pariahs of the housing market – to get a foot on the ladder should be welcomed.

But there is one rather large drawback. The interest rate is a whopping 7.29 per cent fixed for three years. On a £250,000 property, this would mean monthly mortgage payments of almost £1,500, based on a loan-to-value of 90 per cent. Halifax claims to be one of the few lenders trying to accommodate first-time buyers. A spokeswoman acknowledged it was “crucial” to have products for new entrants so other homeowners can move up the chain. This is why “Halifax has always been out there in the market, almost alone in doing that”.

But given that potential buyers could rent a similarly priced property for about £500 less a month, and the fact that the recovery in property prices is still fragile, there seems little incentive for anyone to take up this kind of rate.

The FT’s Money blog is a forum for the latest news and insights from the UK’s personal finance scene. Matthew Vincent, the editor of FT Money and his team of reporters will upload their views and insights on what’s happening in the industry and how this affects people’s finances.

This blog is no longer active but it remains open as an archive.

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About our bloggers

Lucy Warwick-Ching is the FT’s new Money Online Editor and has been a UK Companies reporter covering tobacco, pubs and leisure companies as well as the deputy editor on House and Home.

Matthew Vincent is the FT’s Personal Finance Editor and was previously the editor of Investors Chronicle, where he also devised the award-winning online video The Market Programme, and produced the BBC-FT standalone magazine ‘How to be Better Off’. He presents the weekly FT Money Show audio podcast, and previously worked on the BBC TV programmes Short Change and Pound for Pound.

Alice Ross is deputy personal finance editor of FT Money. She specialises in pensions, investments and investment trusts. Alice joined FT Money in April 2008 - prior to that she was deputy editor at Money Management magazine.

Ellen Kelleher has been a personal finance reporter in the UK for close to four years. Before arriving in London, she worked in the FT's New York bureau where she covered the insurance sector.

Steve Lodge is a personal finance reporter on FT Money specialising in savings.

Josephine Cumbo has written about all aspects of personal finance but currently specialises in insurance. She also covered company news for Prior to working at the FT she was a news reporter for the ABC.

Tanya Powley is a personal finance reporter on FT Money specialising in mortgages and the housing market. Tanya joined FT Money in November 2009 after working in Australia covering personal finance for the Australian Financial Review and its sister magazine Asset. Prior to that, Tanya wrote about mortgages for UK trade newspaper Money Marketing.

Jonathan Eley is editor of Investors Chronicle, and has been with the title for ten years. Before that he worked for newswires and trade journals in London, New York and Hong Kong.