Well another week and more rain!
If anyone’s been watching the news recently, one could be mistaken in thinking its the end of the world!!!!!.
……..however its not all doom and gloom, don’t worry! If anyone is looking to have the outside of their house painted, don’t despair, we are only a phone call away. I’ll look to post some interesting stuff on the blog this week, maybe keep people entertained eh? Cheer up!
H.a., wrote to us and said…………….
“While browsing through search engines, I came across your blog, which really has great resources. We just posted an article on buying a home in a down market. I thought I’d bring it to your attention just in case you think your readers would find it interesting.”
Well thank you “H” for pointing this great article out to us and thanks for your comments, we try our best!!!!!.
I paused briefly before agreeing to publish it as we are of course in the UK not the USA where this article is from, however with recent developments in the UK housing market starting to replicate what has happened (and is) happening in America with the housing market, I thought it was in fact relevant and agreed to publish it.
Both the USA and the UK have experienced sustained levels of growth in the economy, mainly fuelled by the housing market, however with the global credit crunch taking hold, I think people are finally waking up, smelling the coffee, and realising that it was all a sham. A false economy. My own opinion is that it will correct itself, homes will come down to levels at what THE HOUSE IS WORTH in real terms, and 1st time buyers will start to come back into the market, borrowing at RESPONSIBLE LEVELS. Anyway, that’s no good to you if you are trying to sell your home at present. Although I am thankfully not an estate agent (or “realtor”), I have yet to sell my soul to Satan, (!), but nevertheless, there are many people who do want to sell their house and quickly! Remember, 1ST IMPRESSIONS COUNT! The prospective buyer will decide whether to put in an offer on the basis of seeing your house in the 1st minute of being there.
NPA offers the following advice.
Now enjoy this great article below.
Posted in Personal Finance by Bankaholic.com
April 10, 2008 10:18 AM - 1 Comments
The subprime mortgage bust has scared a lot of people away from the housing market. The nightly news is filled with images and stories of everyday Americans who are losing their homes because they made greedy and uninformed decisions, they were taken advantage of by predatory brokers, or a combination of these situations. However, the news isn’t all bad. This decline in the market has dropped prices and made housing affordable to many fiscally responsible renters who never considered home ownership to be an option.
If you find yourself house-hunting, make sure that you follow these five simple steps to take advantage of this downturn in the market; if you don’t, you could be the next sad story on your local news.
1. Accounting for Extraneous Expenses
As with almost any major purchase, there can be a number of fees associated with buying a home. Costs associated with property taxes, homeowner’s insurance, standard maintenance, and utilities should not be overlooked. In addition, if you buy a home that is part of a complex or attached to a homeowner’s association, you will have to pay annual fees as well. Make sure that you take these additional expenses into account when you are determining how much home you can afford.
2. Acknowledging Special Assessments
Many homes require a number of regularly scheduled special assessments to be performed in order to satisfy local regulations and ordinances. These are fees that are required in addition to standard property taxes. In order to make sure that these costs don’t take you by surprise, obtain copies of prior bills for these services and inquire about any pending and future assessments that need to be done on the property.
3. Finding a Manageable Mortgage
A good question to ask yourself before contacting your local banker to discuss a loan is, ‘how much is too much?’ While you might be tempted to try and get as much money as possible if you can find a good rate, you do not want to make the mistake of taking on a loan so big that your finances will be stretched to the point that you cannot make your payments. Traditional income multipliers are a good place to start. If you have a single income, 3.5 times your annual salary is the maximum that you should consider requesting and if you have dual incomes, the maximum should be about 2.75 times your joint salary. If these amounts will stretch your budget too far, then it is a good idea to consider borrowing less.
4. Determining How Much Home to Buy
Now that you have a handle on all of the costs involved and have determined how much money you can borrow, it is time to figure out just what you can afford to spend on a new home. Whatever you do, don’t bite off more than you can chew; doing so could quickly lead down the road to foreclosure. Take into account your credit history, the closing costs on the loan, the amount of the down payment, and any preexisting debts. Weigh these against your income and savings before making a move.
5. Welcoming Your New Home into Your Basic Budget
Once you have everything in order, set a budget and stick to it. While your new home purchase will undoubtedly become both your biggest asset and your biggest expense, you still have to eat. It is also important to make sure that you start building a rainy day fund in case of emergencies; one of the things that accompany a new home is the potential for substantial unforeseen expenses. Set a reasonable budget that includes an allowance for unexpected costs and you can live happily ever after in your new home.
Well, as predicted by me a couple of years ago, the housing market is finally starting to bite. Heres what the bbc had to say today…………..
The fall in house prices was greater than expected |
House prices fell by 2.5% in March, the biggest monthly decline since September 1992, much more than many analysts had forecast, the Halifax has said.
House prices are now 1.1% higher than they were a year ago, the slowest annual growth rate for 12 years.
Despite the drop in prices, Housing Minister Caroline Flint denied that the market was heading for a crash. Prime Minister Gordon Brown said that the UK was feeling the impact of problems from the global credit crunch.
Adjustment time?
Speaking to the BBC, Ms Flint said that it was not fair to compare difficulties in the current housing market with the problems it was having in 1992, the last time prices fell by such a margin.
She said that today, the market was underpinned by a healthy employment environment and a steady economy.
However, she added that the government would keep its eye on the situation and was planning to meet the Council of Mortgage Lenders (CML) and other industry representatives next week to discuss if any action was needed to help borrowers.
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The Halifax, along with all other market commentators, is now convinced a big slowdown is under way.
“We are definitely seeing an adjustment in the housing market,” said Mr Martin Ellis, chief economist at the Halifax.
“I am surprised that we have seen a fall of quite this extent, but of course we have been seeing some falls in previous months, so it’s not surprising that there’s actually been a decline during the month.”
For the first three months of the year, the Halifax said prices fell by 1.1% to a UK-wide average of £191,556, according to its data.
Using this figure, the average house price fell by £4,912 in March.
Shrinking mortgages
Separate figures from the CML on Tuesday revealed the rapid contraction of the mortgage market, under the impact of problems in the global financial markets, and the subsequent credit crunch.
Since last autumn, this has restricted the ability of banks and building societies to lend money to customers.
This has led to lenders shrinking the range of mortgages on offer, demanding much higher deposits from borrowers, and raising their interest rates on certain deals.
The CML figures indicated that in the three months to February, lending to first-time buyers was at its lowest level since early 1975.
The number of mortgages granted in February to all groups of home buyers was running at its lowest level since 1992.
And loans for buying a home, rather than for people simply changing deals or expanding their mortgages to finance other spending, now make up only 30% of all mortgage lending - the lowest level on record.
Falling prices
The Halifax has also revised its predictions for 2008 and now expects prices to fall over the course of this year.
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AVERAGE UK HOUSE PRICES
October 2007: £197,00 November 2007: £194,500 December 2007: £197,163 January 2008: £197,243 February 2008: £196,465 March 2008: £191,556 Source: Halifax |
Rival lender Nationwide took a similar stance earlier this month after reporting that prices had fallen for five months in a row.
Analysts said that the weaker-than-expected data from the Halifax would raise expectations that the Bank of England would cut interest rates by at least 25 basis points to 5% on Thursday.
However, because the lack of liquidity in money markets is making it more expensive for banks to borrow, a rate cut would not necessarily be passed on to mortgage holders, observers say.
“The sharp fall in the Halifax house price index in March highlights the growing pressure on the residential market as lenders continue to scale back their activity in the market,” said Simon Rubinsohn, chief economist of the Royal institution of Chartered Surveyors (Rics).
“Loan-to-value ratios are being lowered at the same point as borrowing rates are being raised, putting increasing pressure on first-time buyers who are having to find ever larger deposits,” he added.
THE ABOVE ARTICLE IS FROM THE BBC. HERE IS THE LINK BACK TO THE ORIGINAL ARTICLE.
It’s All doom and gloom in the news about the UK housing market, so I thought i would add my 2 cents worth to the debate. The UK labour government has created a false economy based on irresponsible lending. Now the chickens are coming home to roost.
This is what I think will happen.
1) The uk will see dramatic drops in house prices and dramatic increases in repossessions, just as been happening in the USA, and is starting to happen in other countries, Australia being the one that springs to mind…………… and will be followed by other countries. Spain is the current one to watch. Could be some absolute bargains to be had there soon for the canny investor (me included)
2) With huge increases in living costs, fuel, food and taxation, no-one will be able to afford a house at current price levels, so the market will see values drop drastically back to WHAT THE HOUSES ARE REALLY WORTH!!!!!!!
3) many mortgage companies are WITHDRAWING products, so it will be harder to get a mortgage based on current house price levels.
4) Buy to let is no longer an attractive and relatively risk free investment, in fact, its now quite the reverse.
5) The ratio of earnings to house prices is now no longer sustainable and there are NO first time buyers, who up until recently, had been replaced by landlords, and but that is not going to happen anymore, so no-one will be “feeding” the market as before.
So what will happen?
House prices will drop SUBSTANTIALLY, maybe even back to the values seen around 1999. Banks will then be able to start lending RESPONSIBLY again, so a mortgage on a 3 bed house in 1998 would have been maybe £70,000. Thats a lot less RISK for both owner and mortgage provider, than granting finance for the same house today at £250,000
As our economy is now global, wider forces are at stake. both from the point of view of protection, and the point of view of risks, the uk being affected by what’s happening 1,000’s of miles away in the USA is a prime example.
Winners and losers………
winners
Home improvement companies, tradesmen etc (hooray! editor) 
First time buyers.
Losers
Investment banks, hedge funds and so on, and serves them right for being greedy and naive.!
Landlords, and serves them damn well right too, and i speak from experience.
++++++++++++++++++++++++++++++++++++++++
So in summary, property market investments and property investment will, in the short term, be hit VERY hard, but will eventually re-appear years down the line. Houses prices will drop SUBSTANTIALLY to normal levels again, creating an even field and the market will allow new people to come into the market. Banking will recover during 2009 and will be lending in a more prudent fashion with sustainable levels of debt. The housing market will after the above, slowly rise again but at a much lower rate. My top tip is to save a BIGGISH deposit in a high interest account, then wait until the impending property market crash, WHICH EVIDENCE STRONGLY SUGGESTS THAT THIS IS NOW HAPPENING.
As there will be up to 50% less money in the money markets, as predicted by top economists, after the recent G7 summit, houses will HAVE to be cheaper. For examples, a 3 bed semi for 200,000, banks will be unable to lend that amount, however if AND WHEN the market crashes, and the same house is 100,000 to buy, the banks will lend as there is less money and therefore less risk. Simple as that!
Then when prices have stabilised, then and only then, BUY. …..and don’t think you’re gonna make a quick buck, once the crash happens, it will take at least 6 years for the market to bounce back.
I would very much value other peoples opinions on the above. Are you affected? What do you think about what I have said? Please post a comment (moderated)
Guy Bell
As some of you may know, i reside in Devon. No, not the green fields, quaint villages, coves, beaches and rolling hills you see on TV, but the violent chav-town and dump that is Plymouth. A shadow of its former self, a once prosperous navy and garrison town, now we have bedsits, “everything’s a pound” shops, rough pubs and packs of semi wild chav youths terrorising neighbourhoods………………………..However whilst browsing the BBC website i came across this very inspiring article. Have a read of it and tell us what you think…………and if youre actually from plymouth, even better.
The Wolseley Road estate before (left) and after its transformation
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By Megan Lane |
Graffiti. Muggings. Fly tipping. Drug taking. Vandalism. What to do when a housing estate is this blighted? Knock it down and start again is one solution, but it’s extreme.
A year ago, young mother Nicola wanted out of Plymouth’s notorious Wolseley Road Flats. By day she looked out on a rubbish-strewn courtyard, scorched crack spoons discarded in the grass near the swings her children played on.
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FIND OUT MORE…
The Estate We’re In is on BBC One at 0915 each morning from Mon 31 March to Fri 4 April Catch up on previous episodes at BBC iPlayer |
By night she was too afraid to leave her ground floor flat, under siege as hooded youths from nearby estates kicked in the security doors to party in the stairwell.
Her neighbours felt the same. When trouble kicked off, as it so frequently did, they just shut their doors and hoped it went away. But then Silla Carron, who transformed her own grim estate in north London and won a Pride of Britain award for her efforts, started knocking on doors with a plan of action…
1. UNITE - AND GALVANISE - RESIDENTS
It is a symptom of modern life that few people know their neighbours. And with doors locked to keep out a threatening outside world, there are precious few chances to get to know one another.
Support galvanised: Residents of the Wolseley Road estate muster |
But collective action is vital. Start by saying hello, says Ms Carron. And organise a residents’ meeting to raise concerns. Find somewhere to meet - even if it’s someone’s flat, in the first instance - badger people into coming and ask what they want done to improve matters.
Some may well say demolish the lot - the course of action taken recently in Manchester’s New Islington, where a council estate was flattened and smart low-rise houses built in its place. But a few changes can make enough of a difference to both the look of a place and to residents’ attitudes to act as an incentive to do more.
“People need to come out from behind their doors and take responsibility,” says Ms Carron. “If it’s outside your door, it’s to do with you.”
2. IMPROVE SECURITY
With all but two of the estate’s 17 security doors broken, people could just walk in off the street. And they did.
Steel casing around pipes prevents climbing, while old doors make way for new |
Break-ins were a constant fear. And the communal stairwells were magnets for those from neighbouring streets to drink, take drugs, play loud music and hang out - none of which they would do on their own doorsteps. With scant exterior lighting, walking around the estate’s dark nooks and crannies felt decidedly threatening.
But with new lights fitted and security doors that open outwards - making them impossible to kick in - residents began to feel safer, and vandalism and anti-social behaviour in the stairwells ceased.
3. RECRUIT HELP
From local police, anti-social behaviour units and from councillors and housing officials at the local authority. These people are paid to look after residents’ interests.
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Silla Carron |
Make sure they know what the problems are. Provide examples - detailed descriptions or photos of troublemakers, for instance, or photos of broken security doors - and “don’t take no for an answer,” says Ms Carron.
“If you don’t like something, don’t just sit there moaning. Moan to the council; it’s their job to work for you. Then something might get done.”
4. MONEY MONEY MONEY
Security comes at a cost, as does building work. But funding is available for all manner of projects. Find out what’s on offer and start applying. On Ms Carron’s own estate, she raised some £6m for building improvements, a mini golf ground and a five-a-side pitch with tennis court markings for those two weeks every year when the nation gets their racquets out.
At Wolseley Road, the tenants talked hundreds of thousands of pounds out of the council for a paint job, a new roof, lighting and new security doors. Today it looks like a new estate.
5. BE VIGILANT
Vandalism and anti-social behaviour can be tackled, in number |
One person alone will be reluctant to confront trouble. But there is strength in numbers if residents as a whole make it clear that vandalism, drunken or drug-fuelled rowdiness, bullying and littering will not be tolerated on their patch.
As well as a Tenants Association, the residents of Wolseley Road began a neighbourhood watch group. By taking charge of their own security, by reporting suspicious behaviour and providing descriptions, they not only felt safer but actually became safer as trouble evaporated from the estate.
6. MAKE OWN CHOICES
The Clarence Way estate where Silla (inset) lives, and helped transform |
As if piling insult on top of injury, the vandalised communal stairwells at Wolseley Road were painted an unpleasantly institutional gold. Rather than await a vat o’ institutionally hued paint from the council, the residents asked for colour charts to choose their own scheme when the estate was given its facelift.
“It used to be tatty here and now it’s not. It feels like our estate,” says one boy. “We chose the colours and it doesn’t feel like someone else’s property now.”
7. ENGENDER RESPECT
Residents take more care of their surroundings when they feel a place is their own - and that includes children. Those at Wolseley Road formed children’s gardening club to clean up the neglected flower beds and plant colourful primula and hardy vegetables.
And when a boy from a neighbouring street pulled up all the plants, the kids were incensed. They quickly put the vandalised plants back in the soil - the flowers are flourishing once again, and the vandal hasn’t been back.
8. MEETING SPACE
Whether its a tidied up playground or a communal flat for meetings, parent-and-baby groups and coffee mornings, somewhere people can come to find a friendly face and to air ideas is important.
This also provides a central information point for council and community notices.
9. THROW A PARTY
Residents of Wolseley Road celebrate the transformation |
“People get so used to locking their doors, and it stays that way,” says Ms Carron. “While the building is changing and the atmosphere is changing, it’s a good time to let people know they can trust themselves to come out and bring their community back together.”
Having organised several successful festivals on her own estate, Clarence Way in Camden, she encourages those at Wolseley Road to do the same. A bouncy castle, a barbeque and a DJ tempt residents out of their flats - even if for some it’s to hang over the balcony - and actually speak to each other.
10. KEEP AT IT
Tenants associations and neighbourhood watch groups across the nation know that momentum ebbs and flows, and that often it comes down to a handful of can-do types to keep things going. “Without support, nothing will change,” says Ms Carron.
A year on, the estate is clean and safe with a growing sense of community. What does young mum Nicola now think? “It’s looking great with the kids playing outside, it feels a lot safer. It’s brilliant.”
People get so used to locking their doors… While the building is changing and the atmosphere is changing it’s a good time to let people know they can come out 