Housing Market » Housing

Yorkshire Flower Fund Homes

hortoris — Thu, 19 Jan 2012 14:55:25 +0000

Yorkshire is known for its involvement in social welfare, the Co-operative movement and the foundation of many Building Societies. The county seems to be the center of the Rotary Club initiative to build retirement homes under the charity banners of Flower Fund Homes.

Bradford Flower Fund Homes

This is a registered charity founded in 1957 by Ernest Marriott a prominent Bradford businessman. Its main objective is “the relief of elderly folk by the provision of homes and dwellings”. They provide easy-to-manage homes in pleasant surroundings for elderly people of pensionable age to enjoy their retirement. The Fund takes its name from the original funding idea, whereby donations could be made in lieu of funeral flowers after bereavement. The Fund still receives some of its support in this way, along with other donations, legacies and self-generated income.

The homes generally have one bedroom, a living room, a kitchen and a bathroom. Flats may be ground floor or first floor and there are stairlifts in the three Main Houses at Flower Mount, Flower Hill and Flower Garth.

Scarborough Flower Fund Homes
The Scarborough and Filey homes arose from an idea promoted by the local Rotary Club during the 1960′s when, at the time, there was a pressing need for affordable homes for those members of the local community who were single and for various reasons were unable to enjoy a retirement home of their own – often after a lifetime of service to the community.

The Bingley Flower Fund Homes.

Registered as a Charity in 1962 this organisation was formed by local business people, raising money from charitable donations, to provide bungalows and flats for retired people from Bingley district.
In 1966 eighteen units were opened, a further sixteen in 1969, thanks to the enthusiasm of the entirely voluntary committee.In 1986 the final phase at Littlelands in Cottingley provided a further six flats. The complex includes a common room, laundry and a flat for the warden.
Subsequently a new development took place at Lyndhurst in Hall Bank Drive, Bingley, comprising eight flats and facilities as at Cottingley.

Other West Yorkshire Flower fund charities include Spenborough Flower Fund Homes Ltd, Bingley, Littlelands and Aireborough who build and maintain one bedroomed bungalows for the elderly in need in the Aireborough area. We aim to allow tenants to lead an independent life in affordable homes and work to support them in this.We are a registered charity.
Managed by Harrogate Flower Fund Homes, Fulwith Close has age exclusive housing including 18 one and two bedroom flats Built in 1991.

Funding Of Flower Fund Homes

The original funding idea, or flower fund principal is one whereby donations could be made in lieu of funeral flowers after bereavement.
Whilst initial funding was based on this ‘flower fund’ principle, it was realised that even with the additions of the modest rents to the budget, there was a considerable shortfall if development of the existing site was to continue and new sites bought and developed.
With the help of publicity, local business and the community many were encouraged to donate, but more particularly to consider Flower Fund as a deserving local cause for legacies and inheritance or when making a will. Such provision plays a considerable part in the development of our sites.
Most of the work done by these charities is undertaken by volunteers including organisation, fund raising and routine maintenance.

Comment

Any house building is to be welcomed at the moment and the government could do worse than encourage a whole new flush of Flower fund charities.
Flower funds fits in well with The Big Society.
These homes also fit in with the agenda that wants to see retired folk downsize to make more space available for young families.
Read Yorkshire Gods Own County.

Upsides of Investing in Property

hortoris — Mon, 16 Jan 2012 20:25:13 +0000

There are many downsides to investing in property but you also need to consider the risks of alternative investment strategies. Property prices may have further to fall in the short term and funding a buy-to-let purchase may be hard or impossible but it may be worth the effort.

Property Investment Up Sides

It is a buyers market and if you have a property the rental market is strong and looks set to remain so for some time.
Renting is growing even more rapidly with ownership out of favour. Life styles are changing in a way that favours rented homes.
Property values tend not to fluctuate as much as other investments. They retain considerable value even in dire circumstances.
Property is still seen as good security for a loan and interest rates are in landlords’ favour.
Rental income is steady and more or less reliable. Rent beats bank interest and many riskier investment returns.
If a property investment is ‘washing its face’, covering all costs and mortgage payments you are growing your equity value
The layman finds property investment easier to understand than stocks and shares never mind more complex investment products.
You can change or use property for a range of purposes and it should always retain the land value at the very least.
There is the probability that values will again increase over time leading to capital gains. Just have an exit plan as it will be a slow process.

Special Property Investment Upsides

A second home that can act as a holiday retreat but bring in casual income can fulfill a dream. It may be unconventional as a houseboat, converted windmill or an American apartment.
Overseas property carries a currency risk or potential reward. Sterling, dollars, euros and Yen have been stable currencies but what rate you buy at may not be what the rate is when you come to sell.
You can get personal satisfaction and other rewards from property that do not come with normal investments

There always seems to be a housing shortage and successive governments have been unable to square this circle of supply and demand.
Property is a hedge against hyperinflation and also provides a well worthwhile rental income.
Like all investments try to consider the downside and risks set against the return and the alternatives available.
For more Downsides of Investing in property read

Study Housing Bubbles, Bankers and Busts

hortoris — Mon, 16 Jan 2012 13:10:22 +0000

There is a flow of new and recent publications that provide a slant on the profligate housing finance that contributed to the economic woes of the western economies over the last half decade. Two tomes from USA and one from Ireland are worth seeking out in your university or business library.

A new format for information on The USA Housing Bubble and it’s economic impacts comes in the form of an environmentally friendly, print-on-demand book of US Senate Papers.
At £18.99 the documents are not cheap but the research time saved could make this a viable purchase.
The Housing Bubble And Its Implications For The Economy from United States Congress Senate in [Paperback] is available from Amazon.
This is for the advanced student, researchers and those with a detailed interest in the cause and effect of the property boom and bankers role in the rise and fall.

The Bankers: How the Banks Brought Ireland to Its Knees by Shane Ross is also available from Amazon.

This is a review of a different order.

Three years ago, the Irish economy was still booming and the state coffers overflowing; now, the country is tackling an unprecedented crisis.

This is the story of how Ireland got from there to here in a tawdry tale of collusion, back-scratching and denial among bankers, developers, regulators and politicians.

Shane Ross – independent Senator, long-time champion of citizens against misbehaving corporations, and Journalist of the Year 2009 – tells in of going behind the scenes and the headlines to explain what happened, how it happened and who made it happen.

They’re all here: Sean FitzPatrick, Michael Fingleton and the other bank bosses; Patrick Neary and his colleagues in Ireland’s failed regulatory apparatus; the property developers, whose borrowings ruined the banks, and many of whom are now personally ruined; and the politicians, whose policies helped inflate the property bubble and who have allowed the banks to dictate the terms of their bail-out.

In ‘The Bankers How the Banks Brought Ireland to Its Knees’ Shane makes sense of a scandal that will haunt Ireland for years to come.

Returning to the United States of America ‘The Future of Housing Finance: Restructuring the U.S. Residential Mortgage Market by Martin Neil Baily was published in December 2011 and is the most up to date review of the fundamental flaws in the U.S. housing finance market.

Contents Include

Ideas for the introduction of a new system that reduces the incentives for excessive risk taking take centre stage.

New approaches, of interest to all western markets, for regulating mortgage securitisation, with the primary goal of financial stability.

A limited role for government in providing credit guarantees for qualifying mortgage securities.

The gradual withdrawal of Fannie Mae and Freddie Mac from the housing finance system.

Amazon

Housing Finance Reform in America (Housing Issues, Laws and Programs; American Political, Economic, and Security Issues) by Benjamin W. Virtanen and Elias A. Laine (26 Aug 2011)

House Builders Did Well in 2011 – Forecast 2012

hortoris — Fri, 13 Jan 2012 12:03:50 +0000

The annual announcements and trading updates from the house-builders start to become public in January each year. There seems to be some good news with several companies doing well at least according to their PR machines.

Headlines This week

‘Galliford Try defies gloom to post record housing sales.’

‘Barratt gets sales boost.’

‘House Builder Persimmon builds up profit forecasts ‘towards top end”.

Cala Group claim increase in average selling price up to £290,000.

Why Did Builders Do Well in 2011

The market may be sluggish but it has stabalised and builders have adjusted to the new norm.

Margins on the houses sold have increased despite any price reductions that were necessary.

The cost bases must have been aggressively reduced to achieve the margin improvement. This has been most significant with those whose land banks were bought at a low price.

A move to more expensive up market properties and a dropping of low margin ‘starter homes’ has created a profitable mix.

Some builders are now reaping a paper benefit of earlier write downs.

Completed house sales increased at some companies and comparisons are all against poor results in earlier periods.

Will Builders Do Well in 2012

Higher margin land is still being sold so there is hope for good financial results

Some believe that the Government’s new housing strategy will have a positive impact on the industry.

Improving operational efficiency can only be taken so far and an increase in volume is needed to spread fixed costs over more houses sold.

With relative stability to boost confidence then further financial progress is likely. If there are big hiccups in the national economy then stormy waters will return for the sector.

Cost of finance for the builders balance sheets and purchasors borrowing look set to remain low even if money supply remains tight.

New equity may be brought into the industry to take advantage of some of the perceived bargains still available. This could lead to yet more consolidation in the house building area.

Builders to Watch

Persimmon Homes & Charles Church
Taylor Wimpey & George Wimpey, Laing Homes & Bryant Homes
Barratt Developments & David Wilson Homes
Bellway Homes
McCarthy & Stone
Bovis Homes
Berkeley Group
Redrow Group
Crest Nicholson
Keepmoat Homes
Fairview Homes
Miller Homes
Kier Group & Bellwinch, Twigden
Linden Homes & Galliford Try

Why is Buy to Let Booming

hortoris — Sat, 07 Jan 2012 10:56:05 +0000

Investors continue to help the but-to-let market go from strength to strength. Private landlords now make up a fifth of the housing stock after a 40% increase in renting since the financial crisis.

Investor Led Boom

Investors can see good returns on rents that seem to be on the increase.

Alternative potential investments have a higher risk and lower return for many investors.

Investors tend to have the required equity and leverage capacity easing the funding issue.

Longer term investments including land and property are less risky than short term options.

There is still the hope of a long term capital gain when the housing and lending markets become less rigid.

Housing Market Buy to Let Impact

Demand for rented property is high and is exceeding supply in most regions.

Tighter lending standards has reduced the pool of potential buyers. Good investment opportunities have been created.

The prospect of rising rental income is a serious incentive although current rents offer a good return.

Vacant time with no rental income is low.

Large amounts of capital have been invested in university housing and student demand is high despite the increase in tuition fees.

Politics of the Buy to Let Boom

The tax regime still offers some benefits to landlords.

The boom is partially at the expense of first time buyers. Political pressure will mount to offer more direct help to this sector.

New build is a key component of the UK’s economics. Private landlords and builders will not be dissuaded from investments in this area as it would be counter productive.

Renting has become progressively more socially the norm. The proportion of home ownership compared to renting is dropping. Currently 67% of UK home property is owned.

The shortage of rental property (particularly small units and HMO’s is likely to get worse due to changes in housing benefit rules.

More housing is needed and demand will continue rising. New funding will have to be released to make it happen.

UK Housing Market

tejvan — Fri, 23 Dec 2011 13:58:26 +0000

Different aspects of the UK Housing Market:

What factors Determine UK House Prices?

Why UK suffers from boom and bust in housing Market

UK House Prices

Why are UK House prices so Expensive?

Statistics

Housing Market Statistics

Latest interest rate predictions

Supply

Supply of new housing in UK

Economics

How Interest rates affect house prices

UK economy in 2012

Articles for Home-owners

Tips for quick house sale

Saving for first deposit

Economic Impact of a Housing Crash

tejvan — Tue, 08 Nov 2011 12:59:43 +0000

If house prices fall significantly, they will not just leave homeowners with negative equity, they also cause serious economic consequences for the wider economy.

These are some of the most important factors.

1. Negative Wealth Effect.

Homeowners will see their major asset (housing) decline in value. Some who bought recently will see negative equity (House is worth less than mortgage value). Therefore, they will have less confidence to borrow and spend; they will try to increase the value of other savings, leading to a decline in consumer spending. Householders will find it more difficult to remortgage, especially for the purpose of equity withdrawal. Therefore, there will be a significant fall in spending caused by equity withdrawal. In the 1990s and 2000s equity withdrawal played an important role in boosting spending and growth in both the UK and US.

2. Fall In Aggregate Demand. / Economic Growth

Because of the lower confidence and lower consumer spending there will be a fall in aggregate demand. It is worth pointing out that housing is a significant determinant of spending in the economy. Consumption accounts for 66% of AD, and housing is by far the biggest form of wealth. Housing has also become an important barometer of the state of the economy – House price falls make front page headlines.

The fall in spending and aggregate demand leads to lower economic growth and possibly recession.
Lower growth will also increase unemployment.

3. Lower inflation Rates.

The slowdown in consumer spending will reduce inflationary pressures in the economy. This may enable the MPC to cut interest rates as it will be easier to maintain the inflation target of 2%.

Evaluation

The impact depends on other variables in the economy. For example, if there was an increase in exports and or government spending, then AD may continue to rise. However, at the moment, the underlying prospect of the UK economy looks weak. Industrial output and investment show signs of weakness.

Inflationary pressures may not fall because at the moment there is cost push inflation factors. For example, rising oil and food prices is pushing up the inflation rate despite a slowdown in the economy. This makes it difficult for the MPC to cut interest rates because inflation is going above their target. Therefore, they will be unable to cut rates to help consumers and the housing market.

In the US, the government have tried very hard to avoid a recession. Government have cut taxes, and the Fed have cut interest rates to 2%. So far the US, have just about avoided a recession.
House prices fell in the early 1990s by 15%, this was a significant factor in leading to a recession in the UK. see: History of Housing Market

See Housing Price predictions 2012

Buying Housing in Europe

hortoris — Sat, 24 Sep 2011 10:28:55 +0000

Reasons for buying in Europe include needing to move for work, acquiring a second home, making an investment purchase or planning permanent retirement. Whatever the reason some issues are common.

Payment

Buying in the Euro zone is an interesting issue whilst the Euro is problematic and divided by the poor Greeks, Spanish and Italians from the more stable Germans and French.

Sterling has been taking a little advantage of the weakness but at 1.14 the euro is not cheap.

Getting a bad conversion rate can add 3%+ to the cost of a property.

Banks do not excel in making property purchase transactions as they do them infrequently. If you do use them find a branch of your bank with an export department I have found they are generally clued up on currency movements.

Specialist International Money transfer companies may be worth contacting. Here is an appropriate comparison website.

You won’t find dozens of mortgage lenders queuing up to offer you a loan. Be prepared to pay cash.

Location

Greece is not the most popular place for a holiday home at the moment but some good financially astute deals may become feasible in the near future.

Spain and Portugal including Madeira has a lot of expat property on the market and it is slow moving. As ever beware of local conditions and rules.

France seems to be as sound as any property can be at the moment but the cost of renovation can be problematic.

Benelux countries are still absorbing VAT increases and changes.

Comment
Do your home work. Learn about cultural differences particularly if it is your first property purchase in a new location.

What Affects House Prices

hortoris — Fri, 29 Jul 2011 12:08:57 +0000

House prices are affected by a variety of supply and demand factors. The macro economic climate and the micro local issues both play a vital role.

Local and Micro Economic Issues

1. The location of the property is key. Corner plots may be more valuable but access to services of all kinds helps drive up demand and affect price.
2. The age, condition and relative state of the property can be a driver. It renovation is needed this will require a discounting factor on the price.
3. Presentation of the house can play a part. It may not drive the direct price but if it entices viewers and quick buyers there will be less need for final negotiation.
4. Size, development potential and extra features all contribute to a good price.
5. Problems with the environment or neighbours can depress a price.

Economic Factors Affecting Prices

Supply Side Factors

1. In the Short Run Supply of housing is fixed because it takes time to build houses. Therefore in the short run demand affects prices more than supply.
2. Local hot spots are created where supply is constrained due to planning restrictions or local supply factors. If no one is selling prices remain strong.
3. Excess supply will drive prices down. Issues with subsidence or flooding may create a wave of selling.

* As the supply of housing is inelastic then an increase in demand will lead to a big increase in price.

Long Run Supply

In the long run the supply of housing is affected by many factors:
1. The relative rewards for land owners, developers and construction companies.
2. Availability of planning permission and the time delay in getting approvals.
3. Opportunity cost for builders e.g. are there better returns from other investments
4. Existing houses may be knocked down because they are deemed unfit to live in.
5. An increase in the cost of building new houses will shift supply
6. In the UK, it is argued there is a significant shortage of housing. This explains why house prices rose much faster than inflation and earnings. However, in the US, the supply of housing increased in the period upto 2008 and therefore, the excess supply and falling demand led to a big fall in demand. It is important to note that house prices can still fall, even if there is a shortage of supply. In 1992, house prices in London fell over 20%, even though we can say supply is inelastic. A shortage of supply just means they will be on average higher. It doesn’t mean they are incapable of falling.

Demand Side Factors

1. Economic Growth / Real income.

Rising incomes enable people to spend more on buying a house. Traditionally, there was a mortgage ratio of 3 times your salary. Basically if you earnt £30,000 the building society would lead £90,000. Therefore rising incomes enable house prices to rise.

However, the ratio of house prices to income can vary considerably. For example, between 1995 and 2007, the ratio of house prices to incomes have increased significantly. see: House Price to Incomes ratios

When the economy goes into a recession and unemployment rises, the demand for buying houses falls significantly.

2. Interest rates.

Interest rates affect the cost of paying for a mortgage. Interest rates are very important as mortgage repayments are usually the biggest part of a homeowner’s monthly spending.

* In the UK, the majority of homeowners have a variable mortgage which means an increase in rates will cause the cost of mortgages to rise, deterring people to buy.
* People on fixed rate mortgages will be insulated from fluctuating rates for a period. Therefore changes in interest rates can have a time lag of upto 18months before there full effect is noted on demand for housing.
* It is also important to consider real interest rates (interest rates-inflation)
* The Bank of England set base rates and these usually affect all commercial rates. However, sometimes the Bank of England cut interest rates, but, commercial banks don’t pass these cuts onto consumers. Fiscal policy can influence interest rates

3. Consumer confidence

During times of high consumer confidence, people are more willing to take out risky mortgages to be able to buy a house. For example, in the period 2001-07 100% mortgages and interest only mortgages were quite common. In the early 00s, people were optimistic about the housing market and so took out mortgages with a higher debt to income ratio.
During a ressision worrie about debt, jobs and the future dent confidence.

4. Availability of Mortgage Finance

In the 50s, 60s and 70s, there were stringent restrictions on the availability of finance. However, with deregulation of the banking sector increased competition has seen a rise in the number of mortgage products. Products such as interest only, self certification mortgages and mortgages up to 6 times income have enabled people to get more mortgages, thereby increasing demand for housing. However, during the credit crunch the number of mortgage products on offer fell due to a shortage of finance in the money markets.
Finance is still restricted by lender policy on deposit levels, incomes and perceived risk.

5. Demographic factors

There has been a rising number of households in the UK. The number of households can rise faster than the population if the average family size decline and there are more single people living alone.

Demand for housing in the UK has been increasing for various reasons such as:

* an increase in divorce and separation rates
* an increase in net immigration particularly from Eastern Europe.
* Increase in life expectancy and more old single people
* Children leaving home early
* Less marriage and more single home dwellers

6. Speculation

Not everyone buys a house to live in it. An increasing number of property investors buy houses to try and make both capital gains and income from renting. This buy to let investor is typically more volatile, they will buy when house prices are rising and sell when the market appears to turn. This makes house prices more volatile because speculators will buy in a boom and sell in a bust. The number of buy to let investors in the UK has risen in the past decade.

However, there are quite high fixed costs in selling a house, such as stamp duty and estate agent fees. It is not like dealing in shares where you can easily buy and sell. Many buy to let investors claim they are in in for the long term.

The price of rented accommodation

Although UK house prices have increased faster than inflation, renting has also become expensive which is the main substitute to buying a house

7. Inherited wealth.

Many people use inherited wealth to buy houses. This might explain why there has been rising ratios of house price to incomes. It is also becoming more common for parents to lend children a deposit to help get their first house.
In other words higher house prices are not always deterring people from buying a house – people are finding ways around it.

8. Unemployment

Low unemployment is often associated with rising demand for houses.

Improve Don’t Move Your Property

hortoris — Wed, 20 Jul 2011 19:22:50 +0000

Consider the alternative to moving by improving where you currently live.

Firstly consider the reasons why you may be wanting to move. If it is relocation for work or family reasons the improvement may not be a realistic alternative.
However if you want a better asset, more space or quality features then you may be able to accomplish a great deal if you improve and don’t move.

Extra or Improved Living Space

Small changes can make quite a difference. Do not ignore the obvious or simple tweaks when making improvement plans.

Is the front door contained in a porch, can a feature entrance or hall be created.

Extensions and conservatories take up ground space but are a viable method of getting more accommodation. If you don’t have this external option can you instal a retractable awning and create a sit-out-ery for hot summer days.

Is your roof space able to take a dormer or just board out a space for extra storage.

Is there room for a new room on top of a garage

If your garden can cope consider buying a garden room with power and multiple uses.

Better Use of Existing Areas

Feng Shui is a bit esoteric but aggressively decluttering your space is a cheap even a potentially cash generating process.

Do you have rooms that can be partitioned to create an office area for example.

Changes to furniture and fittings may help. A free standing wardrobe is less use than a purpose build unit or a good arrangement of shelving.

Drop leaf tables or stackers may help at feeding time leaving dining rooms for other purposes.

Is the garage and cellar already fully utilised? Can you dig deeper or create more storage space.

Is your main bedroom large enough to become ensuite. There are very tidy shower units now available just consider some of the hotels or cruise vessels you have seen.

Should some walls be knocked down to open up space. Use RSJ’s if necessary.

Funding Improvements

Staying put will save you significant costs of selling, removal, legal and getting a new property ship shape.

Save up or take a second job to fund the changes

You can consider taking out some equity from you current property with an extension to your mortgage, a second mortgage or an equity release plan.

A personal or bank loan may be agreed for a shorter fixed period than a mortgage say 10 years.

Whilst it is not your primary objective your expenditure can help increase the value of your home.

Luxury Improvements

Have you always wanted a swimming pool, games room or other feature? Then it may be easier to put one in your existing home rather than find one, that meets your own specification, on the open market.

Make your improvements with a quality of design and materials that is at the top end for the area where your property is located. You want the area to go upmarket not drift downhill, so set an example.

Spoil yourself if you can afford too with electronics, security and safety features that are state of the art.

Thinking of ‘Art’ I would also like a signature piece for my home. The trouble is I have a wife to appease and compromise is not always luxurious.