• Berrimain Eaton News and Updates

Mortgage market Shake up

A wide-ranging shake-up of the mortgage market has been unveiled today by the financial services regulator FSA, aiming to prevent a return of irresponsible lending and stop borrowers taking out deals which turn out to be unaffordable.

The new rules spell the end of self-certification mortgages, often used by the self-employed, and also the end of “fast-tracked” mortgages, an accelerated approval process under which verification of income may not be asked for at the lender’s discretion. Self-certification mortgages have sometimes been dubbed “liar loans” because applicants declare their own earnings.

It estimated that up to 15% of borrowers who took out mortgages between 2005 and 2010 could be in negative equity and also expressed concern about borrowers who are “trapped” into paying a high interest rate by their current lender because they are unable to go elsewhere.

Bruce Attwood of Berriman Eaton commented: “The FSA confirming that all self certificate mortgages will no longer be offered will have a negative impact on the housing market as so many self employed opt for this type of mortgage. The mortgage availability has been a real issue in recent times and is looking likely to become even tougher.“

Tettenhall Office Autumn Review

As autumn draws to a close and winter is upon us I thought it would be interesting to cast an eye over the year to date and see how much the dynamics of the market have, in actuality, changed since its peak in 2006 and 2007.

 

2011 has certainly been a challenging year within the residential market as the housing sector continues to find its feet after the turbulent times of 2008. We have seen a steady stream of business continue throughout the year once the ice and snow affected January market was put behind us. We have consistently found that there are willing and able buyers out there although the buyers are very price sensitive. A pro-active stance to sales has had to be taken as the days of 2007, when a house would almost sell itself, are far gone.

 

The trend within the market has been that lower priced houses have sold well whilst the upper end of the market took some time to re-emerge. October, however, saw the same number of sales agreed on properties at prices in excess of £750,000 as were agreed in the preceeding nine months put together. Of the October sales it was interesting to note that three were agreed within a month of the launch of the marketing campaign and that one price agreed was almost 11% over guide price!

 

So what of the widely reported doom and gloom that we so often read about? The fact that the glory days of 2006 and 2007 are history and there is no life in the housing market at all? I would never try to claim that the current market is full of life, but I would argue against the death sentence that the press has imposed on house sales. The Tettenhall branch of my firm agreed the same number of sales in October 2011 as it did in October 2006 and a higher number than in 2007. Of course agreeing sales is all well and good – it is seeing the sale through to completion that really counts. The same branch saw the same number of completions take place in October 2011 as it did in October 2007 and more than in October 2006!

 

I admit that this was one month taken at random, it being the last month of figures being available as I write this article – other months may have fared less well in the comparison stakes. I also acknowledge that average sale prices are lower now than in 2006 and 2007 but, nevertheless, it makes interesting reading.

 

The market is now approaching its pre Christmas slumber and all of the analysts will no doubt be preparing their pessimistic forecasts for 2012 and beyond. Global prophesies are always of merit but I prefer to look at the local reality and I would like to think that next year will continue in the same vein as the year has ended – let us all wait and see!

Paying mortgage is cheaper than renting

Paul Farrow wrote in The Daily Telegraph on 14th December 2011:

Mortgage repayments are cheaper than rental bills but many first-time borrowers can’t get a mortgage.

Renting a home is cheaper than buying in just three of Britain’s 50 biggest towns and cities, a study from Zoopla.co.uk found.

Swansea, Plymouth and Bournemouth are the only three locations in the survey where renting works out cheaper than buying a property.

In London, renting is 31pc more expensive than the cost of ownership, leaving renters paying £6,888 annually on average compared with owners.

Rents have soared due to high demand in the sector, as would-be buyers needing large deposits or finding the terms of some deals too restrictive have struggled to get on the property ladder.

It means that struggling would-be home owners are paying the price in more ways than one in not being able to get a mortgage.

To read the full article click here:  Daily Telegraph website.

Shropshire Commumnity Infrastructure Levy

Bruce Attwood, associate partner of estate agency Berriman Eaton in Bridgnorth, said he believed the possible introduction of the Shropshire Community Infrastructure Levy could have a significant impact on the housing market, for all the wrong reasons.

“Developers and individuals alike will think twice when applying for planning permission for a new build with this proposed new levy, costing approximately £40 per square meter. It is another cost to swallow in a fairly stagnant market that needs lifting, rather than dampening. The result could mean job losses in the construction industry, less work for architects and builders, not to mention tradesman. The knock on effect could be significant, which is why we would recommend that Shropshire Council seriously consider quashing yet another tax.”

Latest housing strategy by the government – review by the NAEA

GOVERNMENT HOUSING STRATEGY NOV 2011 The Government published a rather weighty housing strategy review last week. One of the points in it is a Mortgage Interest Guarantee for First Time Buyers purchasing a brand new property. This is something that the National Association Of Estate Agents have mentioned to the Government on quite a few occasions and will help First Time Buyers to obtain a 95% loan. In addition they have announced an independent review into the lack of investment in the Private Rental Sector. Finally it is good to see that they accept there is a need to work with the industry to drive up standards in the lettings industry.

A précis can be found below together with a link to the full document.

Regards
Peter Bolton King

The Government has published its housing strategy, which can be found in full at http://www.communities.gov.uk/documents/housing/pdf/2033676.pdf

‘Laying the Foundations: A Housing Strategy for England’ aims to:

1. Get the housing market moving again
2. Lay the foundations for a more responsive, effective and stable housing market in the future
3. Support choice and quality for tenants
4. Improve environmental standards and design quality

The document claims that the Government will not achieve their aspirations for a thriving and stable housing market “by attempting to control the market from Whitehall. The system of setting top-down targets for housing, vast amounts of planning guidance and excessive regulation did not deliver the homes we need nor the places that people want to live in. This Government is doing things differently – freeing up local areas to provide the homes needed for their communities and enabling the market to work more efficiently and responsively”.

The current Government, it is claimed, inherited the following problems:

• Buyers can’t buy – with the average age of an unassisted first time buyer continuing to rise and families struggling to ‘trade up’
• Lenders are not lending enough – with high deposit requirements excluding young people and families from home ownership
• Builders are not building – without consumers ready to buy and without enough land for development or access to finance
• Investors are not investing – without the right framework or incentives in place
• Affordable housing can do more – to deliver new homes and support the social mobility and aspirations of tenants and communities
• Tenants are struggling – as pressures increase in the private rented sector

The Government sets out its proposed solutions as follows:

1. Immediate action to get the housing market moving:

• Supporting a new and innovative new build indemnity scheme led by the Home Builders Federation and Council of Mortgage Lenders to provide up to 95 per cent loan to value mortgages for new build properties in England, backed by a housebuilder indemnity fund
• Consulting on a proposal to allow reconsideration of those planning obligations agreed prior to April 2010 where development is stalled
• The establishment of a new £500 million Growing Places Fund which will support infrastructure that unblocks housing and economic growth
• Launching a new £400 million ‘Get Britain Building’ investment fund, which will support building firms in need of development finance, including small and medium-sized builders. This will help to unlock progress on stalled sites which have planning permission and are otherwise shovel ready
• Freeing up public sector land with capacity to deliver up to 100,000 new homes – with Build Now, Pay Later deals on the table, where there is market demand and where this is affordable and represents value for money, to support builders who are struggling to get finance upfront
• Supporting and encouraging more individuals to build their own homes through a Custom Homes programme, including making available up to £30 million of new funding to support provision of short-term project finance on a repayable basis

2. Longer term measures to promote a “more responsive, effective and stable housing market in the future”:

• Provision of more support for local areas that want to deliver larger scale new development to meet the needs of their growing communities – through locally planned large scale development – with a programme of support for places with the ambition to support new housing development on various scales
• Strong new incentives for housing growth through the New Homes Bonus, Community Infrastructure Levy and proposals for local business rates retention
• Consultation on simplifying planning policy through the draft National Planning Policy Framework (NPPF)
• Giving communities new powers to deliver the development they want through Community Right to Build

3. Supporting choice and quality for tenants:

• Supporting growth and investment in the private rented housing market. There will be an independent review of the barriers to investment in private homes to rent. The Government are also supporting new Build to Let models of development, where homes are built specifically for the private rental market, with funding from investors with a medium to long term interest. There will be pilot projects to develop this approach.
• Giving more freedom to local authorities which have retained their housing stock. Local authorities will have direct financial and strategic responsibility for the 1.7 million council homes
• Introduction of a radical programme of reform of social housing through the Localism Act 2011, changing the way in which people access social housing, the types of tenancies which are provided and the way that the homelessness duty is discharged
• Doing more to tackle fraud and tenancy abuse – the Government propose to give social landlords the tools to identify and recover properties that are being used unlawfully; to charge more reasonable market orientated rents from people earning very high salaries; and to prevent people who already own a suitable home from seeking social housing as well
• Consideration of how more affordable housing can be encouraged – supporting greater innovation and competition between social landlords – including encouraging new private entrants into the social housing market, and considering innovative new approaches to funding affordable housing in the medium term
• Reinvigorating the Right to Buy by raising the discounts to make it attractive to tenants across England. The Government is matching this with a commitment that, for every additional home bought under Right to Buy, a new affordable home will be built

4. Tackling empty homes:

• £100 million of funding to bring empty homes back into use as affordable housing; £50 million of further funding to tackle some of the worst concentrations of empty homes; consultation on changes to Council Tax to help tackle empty homes and bring them back into productive use

5. Better quality homes, places and housing support:

• Providing appropriate support, protections and opportunities to struggling households and to making the best use of social housing: prioritised protection for the vulnerable in last year’s Spending Review; establishment of a Ministerial Working Group to tackle the complex causes of homelessness; a new deal for older people’s housing, with a better offer to support older people to live independently for longer
• A commitment to improving the design and sustainability of housing in ways which give communities a say over the design of new homes and neighbourhoods; funding the Design Council to support communities in shaping development in their area; improving the energy efficiency of both new and existing homes; ensuring protection of the green belt and protected areas
• A commitment to delivering the Zero Carbon Homes standard for all new homes from 2016, which will mean that all the carbon emissions covered by Building Regulations – such as from heating, lighting, hot water and other fixed building services – will need to be abated

Specifically on the private rented sector, the Government states (see Chapter 4) that it is:

• Supporting investment in homes to rent by introducing changes to Stamp Duty Land Tax and legislating on changes to Real Estate Investment Trusts in the 2012 Finance Bill
• Marketing new Build to Rent pilot sites through the Homes and Communities Agency (HCA)
• Putting in place an independent review of barriers to investment in private homes for rent
• Working with industry to drive up standards and improve consumer awareness
• Encouraging local authorities to make full use of the robust powers they already have to tackle dangerous and poorly maintained homes

Of particular note, Chapter 4 states that: “industry also has a key role to play in driving up standards and improving consumer awareness

Wolverhampton estate agents raising money for Compton Hospice

Berriman Eaton for the second year running helped out at the prestigious residential home Sunrise, Tettenhall to host their fashion show in aid of Compton Hospice.

Mel, Linda, Lynn, Andrew and Maddy all gave up their Saturday evening to model day and evening wear from Compton Hospice in front of residents and guests.

All clothes modelled were donated by Compton Hospice and could be purchased on the night together with further rails of clothing.

The night was a huge success and raised in excess of £500.00.

We are very much looking forward to next year’s event.

Bridgnorth Office Negotiator In Cliff Rescue

Ben and Rachael brave 300ft drop to reach car plunge victim

A heroic Bridgnorth couple rescued a woman whose car was left teetering on the edge of a Cornish cliff after plunging 200ft towards the sea.

Ben and Rachael Stafford, discovered the injured woman in her car, 300ft down a cliff at St Agnes Head. Lyn Venton, aged 56 had veered off a costal road in heavy mist and had been trapped in her car, bleeding heavily for 20 hours before being found.

The windows of the car had smashed and the roof had caved in as it had flipped down the cliff.

Ben and Rachael who was holidaying in the area, were out jogging with their friend, Lorraine Holland, from Broseley, at 9am on Tuesday when they spotted the car in its precarious position.

Ben said: “At first I thought it was some sort of optical illusion because it didn’t look like the car should have been resting a t he angle it was”.

“I thought it was someone trying to get rid of their car in an insurance job, but we all agreed I should go down just to check there was no-one inside”.

“To my shock and horror when I got down there, I saw what I thought as first was a dead body,. I couldn’t believe it”

After establishing that Mrs Venton was alive and conscious, Ben climbed back up the cliff to raise the alarm.

“Racheal and Lorraine ran off to fetch help, as none of us had our mobile phones with us, and then I climbed back down to wait with her until the coast guards and rescue services arrived” said Ben.

DANGER
“We just chatted about mundane things to keep her calm. If she had started making sudden movements the car might have gone over”.

“I know the place like the back of my hand as I grew up around here and my parents still live about three or four miles away, so I never thought I was in any danger because I’m quite comfortable on that sort of terrain” said Ben, who moved to Bridgnorth five years ago.

“I didn’t try to get her out of the car or touch it in any way, just in case it plunged into the sea” he added.

“It was fate that her car stopped – it shouldn’t have stopped, but it did.

“Maybe it was fate that we were out jogging too”

Ben, a former Bridgnorth Rugby Club player, said the attention he had received since the rescue had been surprising. (Bridgnorth Journal)

Property Stamp Duty Suggested Reforms

David Wighton in The Times writes the Institute of Fiscal Studies (IFS) suggests scrapping stamp duty and reforming council tax. Today’s banding system favours the rich – if you live in a house valued at£320,000 in 1991, you’ll pay the same as someone in a £50m house. Under the IFS’s system, payments would be around 0.6% of current values. Sure, cash-poor widows in mansions would suffer. But why shouldn’t people be encouraged to use their assets more efficiently and make better use of Britain’s limited housing stock?

Berriman Eaton Editorial – Wolverhampton West Magazine

Looking through some old sale particulars the other day which dated from the 1890s I realised how much things had changed over the years and thought it might be of interest to trace some of the developments. Continue reading “Berriman Eaton Editorial – Wolverhampton West Magazine”

How Long Before I Can Claim Land As My Own?

Mail On Sunday – By Ross Clark

I have been trying to get adverse possession of a fenced-off piece of land at the bottom of my garden since I bought my house in 1981. The land was owned by a development company that was dissolved in 1991 and the title vested in the Treasurer’s solicitor. Do I have to wait 30 years? Continue reading “How Long Before I Can Claim Land As My Own?”