Tag Archives: crisis
Prime property market in south west London less volatile, research suggests
The prime south west London property market has change dramatically from a year ago with more domestic buyers and homes taking longer to sell, new research suggests. In prime areas such as Battersea, Clapham, Wandsworth and Chiswick, prices aren't dissimilar, but there are no longer shortages and the market is less volatile, according to a report from Stacks Property Search. ‘Domestic purchasers dominate whereas a year ago the market was dictated by investment buyers, with buy to live purchasers struggling to make an impact. Early in 2014, buyers would have to compete with numerous competitive bidders, and properties were achieving up to as much as 15% above asking price. Successful buyers were using cash and those who needed finance weren't getting a look in,’ said Sara Ransom. ‘The return of domestic buyers means that property is taking longer to sell. Surveyors and solicitors are required to undertake more due diligence, so where property was taking two or three weeks to exchange contracts a year ago, the average is now around three to four weeks,’ she explained. ‘While the market is more grounded, and prices are more stable, there is plenty of momentum, and there's little sign of anything slowing down for Easter or the election. Our expectation is that it will gear up post-election as we don't foresee any political scenario that might adversely affect the market,’ she added. Ransom also pointed out that one of the biggest hurdles for any buyer is now finance. ‘Buyers really need to be on the case well in advance of finding a property as the process is becoming more and more protracted. The difficulty is exacerbated because mortgage companies are reluctant to talk in 'principle' any longer,’ she said. ‘And there are some mortgage companies that are gaining a reputation for approving finance then pulling out further down the line. Another difficulty is that mortgage companies are insisting that borrowers use a solicitor that is on their approved panel, so you will need to check this before appointing a solicitor,’ she added. The firm also believes that buyers should also be aware that it's difficult to get more finance for improvements, so buying a property that needs renovating is tricky unless you have a substantial deposit. ‘My advice would be to seek out potential for future improvement rather than property that has an urgent need of refurbishment. Remarkably, there are good examples of property that offers this kind of promise. For instance, adding a loft conversion to the pretty cottages on the Shaftesbury Estate in Battersea, resulting in three bedrooms instead of two, can add around £100,000 to the value, while the cost of the work is about £50,000,’ said Ransom. ‘Take plenty of time to research and understand the market, and the individual pockets within areas. Prices can vary by as much as 10% to 15% street by street. And don't dismiss areas without doing some pavement explorations. London changes so quickly, and areas that would… Continue reading
Survey reveals 88% of people in London have had a bad time from estate agents
Over 4.4 million in the UK feel that an estate agent had broken promises with more people in London having a bad experience than any other part of the country, new research has found. Indeed, in London 15% felt an estate agent broke their promises and 88% said they had a bad experience with an estate agent, more than any other region in the UK. While, overall 9% of the UK felt there was a lack of transparency from estate agents. The research by estate agency, Strawberry Star, also found different age groups experienced different issues. For example, 8% of 25 to 34 year olds felt pressured into buying a house by an estate agent, twice the national average. It also found that the top frustration for just over 7.5 million people across the UK is ‘the agent’s overriding interest’ in commission rather than concentrating on finding the right property for their client, with 18% of respondents in London stating so. Strawberry Star said it is offering a new approach and clients will able to choose how much of the commission fee they pay, depending on their experience of the service from the pre-sale stage to post sales service. Dorian Beresford, the firm’s chief executive officer, said the aim is to place an overriding level of attention on the relationship value behind the sale or purchase of a property, as opposed to purely the transactional value it holds. ‘Consumers both at home and overseas continue to be dramatically underserved by their agents. The level of unsatisfied customers here in the UK is astonishing and representative of the frankly abysmal service delivered by many in the industry,’ said Beresford. ‘We feel it is our obligation to redress the balance and put the power back into the hands of the public by literally putting our money where our mouth is. No tie-in periods, no false promises and if the client is not delighted by our service they get to choose how much of our fee to pay,’ he explained. The firm has a headquarters in central London, offices in Singapore and Hong Kong and plans for a further 25 UK offices are in the pipeline with expansion into India, China and the Middle East also on the cards over the next five years. ‘We put people over property and ensure every single one of our clients, whether owners, occupiers or investors from the UK and abroad, feel that they are receiving a personalised service and are dealing with people that genuinely care about what matters to them. This commitment stands throughout every stage of the buying, moving, selling and letting process,’ added Beresford. The firm believes that the UK will continue to be popular amongst Asian real estate investors with Singapore and Hong Kong based investment now accounting for 90% of international purchases in the London new build market alone. Continue reading
Low housing supply in the US squeezing affordability
Rental affordability is as bad as it's ever been across the United States, in part because there are not enough new, affordable homes to meet demand, new research suggests. Overall, renters can expect to spend 30.1% of their income on rent, while home buyers can expect to spend about 15.3% of their monthly income on a mortgage payment, according to a study by real estate analyst Zillow. It also found that affordability is worst in fast growing cities that have fallen behind in building homes to keep up with population growth. The firm’s latest rental index is up 3.4% year on year to $1,355 per month while its property price index is up 4.9% to £178,700. Affordability is best in places that either have slow population growth such as Detroit or have met new growth by building new housing units. Chicago, for example, permitted 906 new housing units in 2012 and 2013 for every 1,000 new residents between 2013 and 2014. The index report says that in Chicago renters can expect to spend about 31% of their income on rent, while homebuyers there can expect to put 13.9% of their income toward house payments. It suggests that it is easy to see how San Francisco has become one of the country's least affordable housing markets. Zillow's analysis showed that for every 1,000 new residents, there were just 193 new housing units permitted. Residents of the San Francisco metro can expect to spend 44% of their income on rent, or 39.2% on a monthly mortgage payment. The short supply is no secret to policy makers. The mayor of San Francisco, for example, has pledged to add 30,000 housing units by 2020 and a Boston city report made a similar recommendation to meet demand with 53,000 new housing units by 203o. ‘As the economy continues to improve, more Americans are slowly moving off of their buddies' couches and out of their parents' basements into homes of their own, first likely as renters and then eventually as home buyers,’ said Zillow chief economist Stan Humphries. ‘Unfortunately, the supply of affordable homes, especially affordable rentals, is insufficient in many areas to meet this growing demand. As a result, the competition for those homes that are available can often be fierce, driving up prices and contributing to worsening affordability,’ he explained. ‘More construction will help ease the crunch, and getting a mortgage is also getting easier, which will help more current renters transition to home ownership and further ease rental inventory shortages. But these fixes won't happen overnight,’ he added. Since 2000, rents have grown at roughly twice the pace of incomes. Partially as a result, the percentage of Americans citing cheaper housing as a reason they moved to a different home has almost doubled since then, from 5.6% to 9.6% currently, according to the US Census Bureau. Over the past several years, renting, historically a budget minded choice, has become increasingly less affordable. Meanwhile, recovering home prices, along with historically… Continue reading
