Housing Market » House prices

Garden Features That Sell Your House

hortoris — Fri, 27 May 2011 13:26:49 +0000

Location, Price and Size are the crucial items when someone is buying a house. However there are lots of emotions attached to the buying decision and you can influence viewers of a property.

The garden is one area where emotions and perceptions can be shaped and formed. It is also one reason why Spring is thought to be a good time to put your house on the market.

Quick Improvements to Add Value

A perfect lawn is an eye catcher. Put kids equipment firmly and neatly in place to emphasise the size and potential use of the grass. Add fertilizer to green up your grass and mow regularly but not too close.
Show off your ecological credentials with a wild flower area and bird feeders. It makes buyers feel good to be doing their bit for the environment. Keep this area tidy, ecofriendly doesn’t equal scruffy.
Fruit trees are popular but take a long time to grow and become productive. Bushes of Gooseberry and Currants are quick to look established and so are the cordon, ballerina type apple trees available from Thompson & Morgan
Kitchen gardens are popular to look at but represent more hard work in the future. Raised beds seem easier to cope with for a prospective buyer. Plant your vegetables in neat rows and keep the weeds down or cover them in mulch.
Tidy up dead plants and old pots and have only one out of sight glory-hole.

Structural and Construction Features

Decking and Chelsea garden features quickly date but make sure there is a ‘Sitoutery’ with seats in the sun.
A tree lined drive for those with a drive worthy of the name adds panache and cache.
A good terrace or summer house makes the property seem like a sociable location.
If you have a walled garden use the hight to foster the sense of intimacy and privacy.
Big properties can do a lot worse than install a covered pool and tennis courts. It becomes obligatory for property priced over £2m.

Garden Maintenance That Helps

Consider adding window boxes, hanging baskets or planters but resist the temptation to over do these features as it may seem like work for the new owners.
Clean stained and moss covered patios and paved areas. Freshen up gravel with a new covering or a good rake.
Cover eyesores with flowering containers or pots strategically placed to draw the eye away from any unsightly areas.
Improve your boundary fence with fresh preservative or trim you hedges. Neat boundaries show evidence of care.
Keep the street clean and make sure your house number is visible.
Yellow is meant to evoke a buying emotion. A few appropriate annuals like marigolds, pansies and petunias are inexpensive yet add a splash of colour that will brighten up even the dullest of days.

Top Garden Turnoffs for New Homes

(Curtesy of Lazy Susan)

Old junk in the garden such as old fridges, mattresses and toys
Dog poo on lawns, patios and flower beds
Un-emptied and Overflowing rubbish bins
Damaging plants such as Ivy in the walls of the house
An old falling down shed
Dilapidated, splintered or rotting decking
Lots of weeds
Uneven badly laid patio
Wild overgrown lawns
Monstrous out of control trees

House Price Hot Spots

hortoris — Wed, 25 May 2011 14:23:33 +0000

Are you living in a house price hotspot asks This is Money? Unlikely according to various responders to the question.

The economist in Paul, Planet Earth has a view:
‘So the governments only plan is to use high RPI to erode national debt and bring House Prices down. Its a bit of a balancing act to pull off over the long term.

High RPI = Wage Inflation = Rates Rise = HP fall
or
High RPI = Falling Disposable Incomes = Less Debt = HP fall

House Price Hot Spot Comments

‘This is Money’ has an interesting graphic where Nottingham, Southwark and Cardiff are Hot Spots.
Still stockbroker territory seems to be holding its own. Cheshire and Surrey have their hot spots.
Executive London and international buyers are forcing prices above and beyond hot spot. The Prime properties are red-hot.
Luke warm spots may be all you would ask for that is no further falls or aggressive downward negotiation. Some mature sellers are resolved to hang on to there main asset keeping prices stable but volumes close to zero.
It is easy to view the housing market as one market but really the housing market is a number of markets and the temperature changes with circumstances.
Buy to let investors seeking capital growth may have to whistle for some time but rental yields are currently growing. Where will this create market hot spots? Not near universities and FE colleges I suppose.
With other investments producing very low returns property will become attractive if more lending is made available ar current low rates.

What is a Hot Spot?

In a housing market context a hot spot generally refers to small areas of intense economic activity with prices moving upward. It could also relate to a large amount of social activity making it a desired location.
‘What’s a ‘hot spot area’? Is it synonymous with ‘hot spot’ and therefore an example of redundancy, or is it in some way different to a common-or-garden hot spot? Perhaps a hot spot area contains a number of hot spots, or maybe it’s just like a hot spot but larger.’JD The Engine Room
Where is the next Boom? read Finance Blog on Mortgage Guide

Prime Country Houses

hortoris — Sun, 27 Mar 2011 10:25:00 +0000

Where better to see and read about ‘The English Country House’ than in a Country Life Publication.

‘Look at the architecture and interiors of sixty-two stunning houses in a range of architectural styles spanning seven centuries—from the medieval Stokesay Castle to the newly built, Lutyens-inspired Corfe Farm.’

The English Country House (Country Life Magazine) by Mary Miers is available from Amazon for £28.50

Prime ‘Country’ House Market

‘The price of prime country properties in now increasing across the country as the recovery that started in London during spring 2009 continues to spread further into the regions, says the latest Prime Country House Index from Knight Frank.’ source Property wire

‘Prime country house prices in England fell by just 0.4% on average in the fourth quarter of 2010 and are still 3.3% higher than they were 12 months ago…’ from property talk

Rich List Villages by the number of houses sold last year over £1m include East Gorsley, Cookham, Alderley Edge, Chalfont St Peter, Prestbury, Penn, West Clandon, Stoke Poges, Bramley, Wonersh and Seal.

Conflicting House Price News

hortoris — Thu, 03 Mar 2011 08:41:13 +0000

New build companies and Persimmon in particular are trying to put a gloss on house prices and the market. With most of the builders returning to good profits it is interesting to see Persimmon increased the average selling price of houses it sold in 2010 by 5.7%. This may be due to bigger houses in better locations but helped generate profits of £154million. Fewer first time buyer houses were sold, down to 20% compared to 33% the previous year.

Mortgage approvals increased in January but that was after a dire December. On the back of this Nationwide said prices had climbed 0.3% month on month in February. Are house prices bumping along the bottom or do they have further to sink?
Two days later and Halifax’s housing economist retained their forecast of a 2% fall in 2011 house prices. This was after reporting a 0.9% drop in February.

Many economists continue to be concerned about the liquidity and confidence in the market. House prices have not fully taken into account the cuts in public spending nor the extent of tax increases. Thus there could be further to fall. ‘Beware the ides of march’ as someone once said and most of his home town is now in ruins.

Beware also the misleadingly specific pundits who impute accuracy when the issue is complex and multi-faceted. The 0.3% Nationwide figure is a generic snapshot across the whole country and could be interpreted as a misleading impression of accuracy. Regular readers will know how I love statistics and statisticians.

Prime House Prices Rocket

hortoris — Mon, 28 Feb 2011 18:00:47 +0000

Do you wish you had seen a 24% increase in your house price since the post credit crisis in March 2009. Well prime houses in London’s top streets have done just that. Prime properties are defined by Knight Frank Rutley as £2m plus and they attribute much of this increase to international demand.

Why are Prices Going Up

International demand is causing the strong market. 52-64% of London house sales in the last 12 months have gone to non UK buyers. The bigger the price the larger the proportion of foreign purchasors there seem to be.
61 different nationalities bought London houses in 2010.
Wealth from commodities and Asian growth are big drivers whilst buyers from Spain and Uzbekistan have been the largest in number.
The currency rates have remained favourable for foreign investors.
There have been low numbers of properties available in this prime price band and low stock volumes equals strong prices.
The low interest rates on mortgages may also have encourage people to commit to get good fixed rate deals.
So the answer to why the prices are going up is ‘it’s the market stupid.’ Good old supply and demand.

sources Knight Frank Rutlet, Daily Telegraph and Mouseprices.com, and Bloombergs

Super Prime Houses those worth over £10m are likely to continue rising in 2011 10% increases are forecast by Knight Frank Rutley. This is despite or because of the unrest in the Middle East. Apartments and luxury condominiums have already changed hands in 2011 at £6,000 per square foot.

Who is Mouseprice?

I checked this out on Mouseprice where a 5 bed terrace house in W8 was going for £9.5m while a similar semi in Kensington was £11.4m. Mouseprice say the most expensive street in England is Victoria Road London W8 where the average property is worth £6.4m. All a bit too rich for my blood at the moment.
Mouseprice is a leading source of UK property market information online. Through the provision of comprehensive and up-to-date housing data, they aim to create a more transparent and thus more fair property market. Good going on these price increases.
Their parent company Calnea Analytics is the statistical consultant to HM Land Registry and the creator of the official Land Registry House Price Index.

What Holds House Prices Down

hortoris — Thu, 24 Feb 2011 09:21:08 +0000

External Factors Holding Prices Down

Viable demand is the determining factor for house prices. Someone must want the property and be able to pay the price. Demand without the wherewithal to pay is not viable.
Low demand will lead to low prices.
Lack of appropriate property available for sale at the ‘right price’. Due to falls in recent prices people are hanging on and refusing to cristalize any negative equity.
Most house purchases need some form of financing support. As financial institutions have been more concerned with rebuilding their own balance sheets mortgages have only been funded on a very conservative basis.
The lack of economic and fiscal stimulous, in fact the opposite with increases in interest rates and stamp duty imminent.
Local economic factors create regional variations that impact on supply and demand.

Property Specific Factors Holding Prices

Offer prices need to be reasonable. An overstated price for a house in relationship to similar local properties will be slower to catch the market trend and will suffer a larger price slump.
Apathetic sellers who have not made plans to move look like they are playing the market and hoping to buy cheaper after they have sold their own home.
Long chains that are prone to break down.
Poorly presented and maintained houses deserve lower prices.
Planning matter debates including large developments, new rail links, wind farms or similar issues.
Stagnant property that has been on the market for too long or streets with several properties all for sale or to rent. (the excessive bill board syndrome).
Bad locations particularly in areas prone to flooding or subsidence.

Buying v Renting

tejvan — Thu, 10 Feb 2011 08:38:39 +0000

On Monevator’s blog, there is an interesting article on the old conundrum of buying vs renting.

Despite rising house prices and high house price to income ratios, it still makes a lot of sense to try and buy rather than rent. The main incentive put forward in the article is the ability to pay off your mortgage and live rent free during your retirement. This is a big saving, and as good as creating a pension.

There are certain circumstances when renting is a better option (or at least renting is the only realistic option) For example, if you

frequently move
live in an area like London where house prices are beyond reach of first time buyers.
If rented properties are cheap and good quality in your area.

In many ways there are economic benefits to the economy if more people rented rather than bought. For example, in Germany and France the ratio of people who rent is much lower than UK. In the UK it is around 78% and in France as low as 55%. A higher rented accomodation can make the labour market more flexible. Also, if more people rent rather than take out a big variable mortgage, it means interest rate changes are less damaging on a small group of mortgage holders.

Yet, though it may be good for the economy to encourage renting, from an individual perspective it still makes sense to buy if you can. Don’t just look at costs of mortgages vs cost of renting. Look at long term benefits. One is a perpetual payment, the other is an investment.

The big problem is that many first time buyers would love to buy, but just can’t in the current climate because banks require large deposits for the expensive houses. This is unlikely to change in the short term, it is really related to the fundamental shortage of supply, which has driven house price to incomes ratios higher

18 Year House Price Cycle

hortoris — Mon, 07 Feb 2011 08:26:38 +0000

Money Week offer a report entitled ‘When will house prices bottom out and when will you know?’ The report is free if you sign up for a trial of Money Week’s magazine.

Cyclical Approach

Using graphs and statistics going back to the beginning of the 19th century 18 year cycles are identified. From this a thesis is developed that house prices will continue to fall at least until the US stock market starts to turn around.

In another section of the report prices are calculated to fall whilst property is perceived as being expensive compared to GDP. It was in 1995 that this graph last showed property to be cheap against the growth in GDP. The cycle predicts an improvement and return to real value by 2013.

The time lag for house prices bottoming out and stock markets beginning to climb is historically at least 1-2 years. That again points to 2012/13 for property if you believe all the bad news is now priced into the stockmarket. Not a bad assumption for the UK.

UK land prices peaked one year after those in the USA. When considering when propery prices will improve in the UK it is postulated that that will be a year after America.

Conclusion from the report ‘it is completely pointless investing into property since it would still be buying into a declining market…the best property gains come as the property cycle is fully underway … several years after 2010.’

Final note ‘The US stockmarket will lead the way’.

Money Week promotion link

Housing Market – Q and A

hortoris — Tue, 01 Feb 2011 08:31:25 +0000

Question

I read house prices have slowed down again and vendors are having to drop their prices even further. As an investor is now the time to start buying? (Feb 2011)

Answers

There has never been a better time for you to invest in property than right now, according to people with a vested interest.
Do not buy the best house in the worst area because it is cheap, rather buy the worst house in the best area.
Cheap properties are cheap for a reason so caveat emptor.
Understand the area and local values where you plan to invest.
Talk to all the estate agents in your chosen area. They may treat you with respect if they think you are a serious investor.
Check local price discounts through Propertysnake.
Consider buying repossessions or from auctions if you are prepared to improve your purchase.

Question

Should I always look to pay Below Market Value (BMV) when buying a house.

Answers

BMV is a catch phrase that is an Oxymoron. What you pay is the market value because you and the vendor are the market principals.
The concept of a willing buyer, willing seller can help you negotiate when you understand the issues confronting the other party.

Question

What is ‘gazundering’?

Answer

Gazundering means demanding a significant reduction in price by the buyer on or around the day of exchange.
If it happens to you can find another buyer at short notice. A solution may be for the loss to be shared up the chain to keep the chain of deals on track.

UK Housing Market North V South

hortoris — Sat, 01 Jan 2011 08:22:51 +0000

Forecast house price movements for 2011 are not good but for the North East and the North West they are particularly grim.

Where economic pressure is worst then housing markets suffer most. So the North South divide will again bite.

North South Issues

The North, where public sector jobs are 22% of the economy, is likely to suffer more public sector jobs cuts in 2011 than the South. These cuts are in 7% better than average wages in the North. By contrast in the South it is private sector jobs that pay 16% higher. (Gov statistics 2009)

Housing transactions in the North are 50% down in the last quarter of 2010 on the average over the 5 years before the financial meltdown.

Repossessions in the North are averaging in excess of one per thousand whilst in the South it can be as low as 0.4 per thousand. This may be another effect of the equity divide.

The equity proportions in property in the South East is almost double that in the North where the equity ‘haves and have nots’ are in sharp contrast.

New starts in the North are down by nearly twice as much as they are in the South.

Liverpool, Hull and North East metropolitan areas continue to be depressed with weak demand.

Prime properties are not suffering the same housing market squeeze. Even in the North demand has not disappeared and in Manchester prime property prices remain buoyant.

House Price to Incomes Ratio – North v South

This shows that house price to incomes ratios are much higher in London and the South than in the north.

More on UK residential property research from Savills and Knight Frank