Property

Lucy Warwick-Ching

We have launched a brand new interactive personal finance page, where you can find top tips, beginners’ guides and advice across the whole sector. From tips on the best way to sell your home, to guides to help you check and improve your credit scores, Money Matters will cover the topics from your perspective.

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Tanya Powley

While currency fluctuations have benefited international buyers purchasing property in the UK, the same cannot be said for UK residents who own overseas holiday homes.

The depreciation of the sterling against all the world’s major currencies has seen the cost of owning a property abroad spiral upwards for UK second home owners.

Tanya Powley

So the Budget has brought a smile to the faces of first-time buyers across the UK with the news that from tomorrow, there will be no stamp duty for purchases of property up to £250,000 for the next two years.

But while Chancellor Alistair Darling was a bearer of good news to one part of the market, he also brought bad news to wealthy property buyers by announcing a new stamp duty band of 5 per cent for property costing £1m and over.

This change doesn’t start immediately – it comes into effect from 6 April 2011. No doubt the market will see a rush of property purchases before the higher stamp duty band comes into effect – part of the Government’s plan we assume.

The property and mortgage industry has welcomed the first-time buyer stamp duty relief after months of calling for an extension of the stamp duty holiday for property purchases between the value of £125,000 and £175,000 which came to an end last December.

According to figures from the Land Registry, about 78 per cent of property transactions in England and Wales would fall below a £250,000 stamp duty threshold. This of course varies significantly across the country from 93 per cent in the north-east of England to 48 per cent in London and 68 per cent in the south-east.

Figures from the Council of Mortgage Lenders show that about 91 per cent of first-time buyers bought property worth less than £250,000 in 2009 and that these buyers accounted for about 35 per cent of the total market.

However, many in the industry believe the government should have reformed the stamp duty structure rather than just introduce a new higher stamp duty band.

Melanie Bien of Savills Private Finance says:

Raising the top rate to 5 per cent over £1 million to fund this tax break simply underlines just how unfair the stamp duty system is because it is not tiered. A root and branch reform to make it fairer remains long overdue. It is at the top end of the market where the majority of transactions have been taking place, supporting the housing market. This may make homeowners think twice before moving.

What’s your view on the changes to stamp duty?

Tanya Powley

Reward schemes have proved to be increasingly popular with consumers, from gaining additional points at your weekly supermarket shop to cashback offers from the credit card you use to buy your shopping.

But a new first has happened in the rewards scheme market. Consumers can now accrue points when they buy a new mortgage or insurance policy after Countrywide, the property services group, today launched the industry’s first rewards scheme for mortgage customers.

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….

Josephine Cumbo

The equity release industry is not usually a place for sudden shocks. But some advisers were left a little breathless today by sector heavyweight Prudential’s confirmation that it is pulling out of the market after nearly four years.

The Pru is a household name and was one of three main equity providers; it claimed about 25 per cent market share last year and its strong brand rubbed confidence into a sector tarnished in the past for running rough shod over its elderly customers.

But its withdrawal – largely because returns are not fast enough on the lifetime deals – was sudden and seemed to catch many on the hop, including the industry’s key supporters who rushed out statements today saying they believed the industry still had a strong future – even without a big fish like the Pru.

Matthew Vincent

Do I owe warehouse owners in the Midlands an apology? I ponder this from the safe distance of leafy Surrey, at the FT Fund Links conference, where I’ve just listened to a presentation from Don Jordison, managing director of Threadneedle Commercial Property. A few weeks back, I blogged:

Would you buy a warehouse in Daventry? As an investment? I wouldn’t – not even if the commercial property equivalents of Kirstie and Phil attempted to wax lyrical about its location, location, location. More

My somewhat dismissive analysis was prompted by news that the F&C Commercial Property Trust had spent £17.25m on such a warehouse, attracted by a yield of 9 per cent – while still issuing warnings that “capital values could come under further pressure” if rents and income streams are hit by economic weakness.

Is it a risk worth taking? I’m now thinking it might be, having just heard that Threadneedle bought a similar warehouse for a lot less, at an equally attractive yield. Other fund managers are making similar moves.

Lucy Warwick-Ching

Listen to the latest Money Show, the FT’s personal finance podcast, for up-to-date news and insights from the industry. Today’s show is now LIVE.

This week our special guest came from inside the Pearson Group; Matthew Vincent, personal finance editor of the Financial Times, invited Claer Barrett from the Financial Times’ sister publication Investor Chronicle onto the show.

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 FT.com. 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.

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