When will it happen?

Earlier this month, the Monetary Policy Comittee, ruled to keep the Bank of England base interest rate at the record low of 0.5% for the 28th month in a row.

Going into 2011, Markets and Economists were predicting increases in the third quarter of this year, now there are suggestions that it could be July or August 2012 before the first increase.  On one hand inflation is very high which would normal be a trigger to increase the rate but with the economy remaining so fragile with little signs of recovery, increases at this time could cause another full blown recession. 

I am probably asked this question more than anything else when advising on mortgages and it is becoming harder and harder to predict.  Speaking to lenders on a regular basis and observing the markets generally, I thought we would have at least one increase in the last quarter of this year and at least a couple more next year and end 2012 with a base rate of 1.5%.  However, now all the signs are, that it could well be into 2012 before any increase at all.  As well as the weak economy we also have the huge problem of thousands of mortgage holders unable to remortgage or do anything other than stay on their current lenders standard variable rate as they have little or no equity in their property and/or don’t have the income required to get a mortgage nowadays under the much stricter criteria used and lower loan to values.  With little signs of any consistent or significant growth in house prices, this situation is not going to change any time soon.  For those on a standard variable rate of 2.5% with Nationwide or C&G for instance the impact of an increase may not be too damaging but for those on variable rates of 4.5-5% (as is the case with several lenders) even small increases will have a huge impact on affordability and is likely to result in repossessions and undermine consumer confidence.

This would all suggest low rates for a long time and no increases at all until next year at least, unless the MPC feel they have to act if inflation continues soaring.  This would be good news for mortgage holders and will hopefully buy some time where hopefully property prices will increase, although very bad news for savers, with no real hope of any decent returns on cash in the near future.  Consequently, with variable and tracker available at around 2%, a two year deal would appear to have every chance of being a lower cost than fixed deal over the same period.

As the so called experts and economists can’t seem to decide when the base rate will increase, what chance do I have!  I think whatever happens, any increases will be small and it is likely that rates will only begin to increase next year, perhaps increasing to 1/1.25% by the end of 2012.  The economy is still so precarious that that I can’t see the Bank of England risking large scale repossessions and even a further recession until there are sure signs of recovery.  However, we should all be aware that the current economic climate is unprecedented and the outlook for the future can change very quickly.

On the mortgage products side of things, lenders keep reducing rates, including some excellent Buy to Let offerings, it remains a fantastic time to obtain cheap funding with some great opportunities particularly for landlords or potential landlords.  As always feel free to contact me for further details and guidance.

Simon Compton Cert PFS, Certs CII (MP & ER)

Independent Financial Adviser

Think Finance

Good news for Landlords

Well, have you ever thought of having an investment property, or dreamt of getting on the landlord ladder. Well it seems more and more of us are, and for the shrewd few the leap isn't one to lose sleep over.

There have been lots of figures released about the rise in rents and the demand for rented property, our office is no exception and the level of calls is quite amazing. A recent ARLA report (Ass. of residential lettings agents) states that the average property stays on the market for 3.6 weeks compared to 4.2 weeks in 2009. On top of this the rents achievable are also rising every quarter and the ratio of tenant demand to available (supply) properties has also been rising for four quarters in succession, this from 59% to an all-time high of 70%

So, for landlords, we have:
a) A faster turnaround on market-to-rent
b) Higher rental yields
c) Increased demand in general, i.e. more tenants to choose from.
So if its always been a dream of your to have an investment property then now could be the perfect time. If you're not sure why don't you speak to Simon our in house IFA. We have helped quite a few clients recently with equity release or re-mortgaging for exactly this purpose. (simon@thinkpropertyuk.com)
On top of this we are also getting more and more properties coming on for sale that are ideal investor opportunities. So again please just let us know if it is something of interest. It costs nothing to speak to us and we'd love to help.
Office News.
We have a new member of staff, Lucy has been in the property management business for years and she will be a great asset to our strong team. Like us she is very service driven so that is very exciting for us.
Emma is very happy as she now has a new camera to play with for her instructions. It has the widest angle lens you can buy so I have been giving her lessons !!!
The online side of think www.thinkonlineproperty.co.uk is still attracting a lot of interst, so if you are in the market to sell and want to save £1000's please let me know. From as little as £145 we can have you listed on Rightmove as well as all the other main portals.

If you would like any information on anything I have mentioned or something else please let me or one of the team know.

The do's and dont's if you want to sell your house

Hello all,

 

Well the school are out and the holiday season is about to start. For many of us it is the start of a quieter time at work and especially in the world of estate agency things drop off until September when all of a sudden more and more people decide to try and sell their house with the hope to be in their new dream home before Christmas.

 

So if you are thinking about putting you house on the market after the hols here are some 'selling tips' from Phil Spencer.

1. Target Market and Timing

The first step to selling your property quickly and painlessly is to consider your target market. Who do you think might buy your property? Then try to tailor your space to appeal to the main group without alienating other groups that might also be interested. So if you feel a professional couple would be ideal, then turn the 2nd bed/office back into a bedroom and make a space for a workstation elsewhere in the house. This will ensure that the house would still appeal to a young couple with a small child. Spring (Feb/Mar) and Autumn (Sep) are the key times to sell your property when traditionally demand outstrips supply and therefore prices are usually at their most buoyant.

2. De-Clutter and De-Personalise

Potential buyers need to imagine themselves living in your house, so get rid of ornaments and photos - especially posters in kids' bedrooms. Put things you don't really use on a daily basis in the attic or storage. Large pieces of furniture should also go into storage; this will make rooms feel much bigger. Focus on the hallway - clear away coats/clutter; the bathroom - hide all your products; and the kitchen - clear the bench surfaces of appliances, jars, tins, etc, and replace any ragged tea towels or smelly bins.

3. Freshen Up

A fresh coat of neutral paint, new tiling or lino, and a couple of new kitchen doors can do wonders to smarten up a tired-looking property. If you can't stretch to re-tiling in the bathroom, re-grouting should bring it up new. The same effect can be achieved by installing matching chrome fittings; replacing broken light bulbs; re-painting the front door; ironing sheets in the bedroom; taking down any heavy dark drapes; installing up-lighters in the living room for subtle lighting; and strategically placing flowers throughout.

4. Clean Up

If you'd rather not re-decorate, it is still essential that the house be spotless. Getting industrial cleaners in to really make the place sparkle will be money well-spent; have the carpets, sofa covers, oven and windows cleaned while you're at it. Pay special attention to the kitchen and bathrooms, which need to be inviting and hygienic; finish up with a new loo seat; fresh white towels; and a strategically placed plant or two. Watch out for over-stuffed wardrobes - yes, people do look in them to check the amount of storage space - so clear them out. Finally, the garden is now seen as an additional room, so be sure to make your garden feel like a great space for entertaining and relaxing.

5. Instructing an Estate Agent & Solicitor

When instructing an agent don't necessarily go for the one with the highest valuation, or the one that you may also buy through - this is an old trick used to win instructions. Many agents will also often try to tie you into a 12-week exclusive contract - negotiate the minimum time possible, so that if you are not happy with the service, you can change or go multi-agency. You'll want someone you can relate to personally.

6. Get the Word Out

Always have a board up, and tell your neighbours - word of mouth is a powerful tool. You never know who might live just round the corner, waiting for your house to come to the market.

7. Preparing for Viewings

Everyone knows that first impressions count, and you'll want the house to appeal to as many people as possible; the more people there are who like the property, the higher the selling price should be. So sweep up, and make sure the front yard and hall to your house are tidy and inviting. Leave the pets with a neighbour, and thoroughly clean up any cat hair in particular, as many people are allergic to animal hair. Turn the lights and heating on; air out the house; and don't smoke or cook a curry before viewings. If you've got parking, leave the space free for the buyer - this will add to the whole experience.

8. Showing a Property

You may find your agent will do your viewing but If you must show your property yourself, then decide beforehand what order you will show the rooms, and guide viewers around the property once, showing the best rooms first or last. Don't overload them with detail, such as the size of your boiler or the trouble with the neighbour's cat. Be business-like during the first viewing; if someone is interested, you can always get to know them a little more on the second viewing. Never point out problems or issues, but do feel free to highlight the odd positive point, like a south-facing garden, or very convenient parking. Finally, invite viewers to take another tour round the property on their own... but don't go off and make a phone call - be somewhere nearby, on hand to answer queries.

9. Choosing the Best Buyer

The person who offers the highest price is not always the best choice. Listen to your agent's advice on buyers, and push your agent to find out as much about the buyers' circumstances as possible. First, how are they financing the purchase? Cash buyers are best, but if they are raising a mortgage ask to see a mortgage 'in principle' letter from their lender. Are they first-time buyers? If so, they will need some handholding by the agent and could protract conveyancing. Do they have a related transaction? If they have something to sell, then it should be under offer before you take your property off the market. Also, find out about any forward chains that could complicate agreeing completion dates further down the line.

12. Accepting Offers

Your agent will be the middleman and should present every offer that is made. Insist that the agent has all the background information to hand on the buyer's position, and the ability to move quickly and ask that offers be made in writing. Market conditions, competition and how much the buyer loves the property will determine what the buyer is prepared to offer. Similarly, the price you will be prepared to accept will depend on market conditions; how quickly you need to sell; and the size of your moving budget. Compromise on both sides is often the key to securing a deal. Also, know whether you want to keep all your furniture, curtains and white goods, as many of these items may not suit your next home, and can be used as effective bargaining tools to get the price you want.

13. Holding the Deal Together

This is where the hard work starts, and the longer it takes to reach exchange of contracts, the higher the chances of the deal falling out of bed or of the buyer gazumping (i.e. dropping their price). So keep in weekly contact with your solicitor and agent to ensure that channels of communication stay open. You need to be kept informed of where the conveyancing is at, and how your buyer is feeling about the progress of the transaction - you need to know whether they are still highly motivated, or off looking at other things to keep their options open.

 

Well I hope you found that helpful. We are strong advocates of all the points above and it is this attention to detail that led us to be voted No.1 in South East Essex and no. 6 at the prestigious national Esta's awards earlier this year.

So if we can help you in anyway possible please give on of our team a call.

Have a lovely day

Peter

Good news for the property market plus our news.

Hello all,

Well the tennis is over and yet again the hopes of a British champion are over. History is repeating itself it seems, very much like the reports about the housing market.
Only last week the papers were full of depressing headlines that the housing market had “stagnated”. But now look at them: Surge in house sales… Demand for houses jumps… House prices fall but sales increase… Does this sound familiar...? This week’s headlines, however, have been sparked by the Hometrack survey for June.
Simon Read of The Independent summed it up when he linked the increase in buyers with the sellers ‘getting real’ on prices. He pointed out that the number of buyers registering with estate agents may have risen by 10.6 per cent in June but property prices are 3.9 per cent down on last year. Richard Donnell, Director of Research at Hometrack suggests a number of factors will keep prices down over the next few months – and once again the huge regional variations have to be borne in mind. What’s happening in London isn’t true for the rest of the country and can skew the national picture.
So how do you set an accurate price for your property in today’s market? Numerous factors affect a realistic asking price: number of buyers around, how quickly you want to sell, the strength of the local economy and – if we’re to believe the housing experts – whether you’ve got the smell of freshly-brewed coffee wafting through your house when potential buyers come to visit! More seriously, a number of websites offer details of prices in the housing market based on what your neighbour paid for his/her house. At some point you’ll want to talk to an estate agent who knows the local market. We do extensive research in accurately pricing your property but beware of simply accepting the estate agents who offers you the highest value you for your home – ask how they arrived at that price and why it is so much higher than other valuations you have received. A realistic price will save you a lot of heartache and hopefully result in a quicker sale plus more importantly if the banks don't agree with the sale price you will not get your mortgage.
If you want us to give you a free valuation please let us know or click here to fill out your property details.
Office News
A big welcome to our latest member of staff, Lucie. She is going to be helping Mark on the property management and with her years of experience and long standing working relationship with Mark at her previous company she is a great addition to the strong 'Think' team.
Also a well done to Josh who completed his first half Ironman at the weekend - 1.2 mile swim, 56 mile bike followed by a half marathon. All that in 5 and a half hours! Big pat on the back Josh. Well done and I hear a much deserved drink was had after a few weeks on the wagon in preparation.
Thanks again for reading and your support. If you need anything please let us know.
Peter