Special UK Property Blog

The percentage of landlords selling their properties is at a three-year high, according to a surveyors’ group.

The Royal Institution of Chartered Surveyors (Rics) blamed the move on previous interest rate rises and a more cautious stance from lenders.

It said new landlord instructions, an important indicator of the strength of the buy-to-let market, also dipped in the quarter to the end of October.

Yields on flats continue to fall thanks to the oversupply of such properties.

Some analysts fear a slowdown in the buy-to-let sector could exacerbate existing problems in the wider property market.

Exodus

Tightening lending criteria and successive interest rate rises [have] started to hit the buy-to-let market
Jeremy Leaf, Rics

Rics’ latest Lettings Survey revealed that the proportion of landlords selling properties when tenants’ leases expire rose to 6.5% from 6.1%, the third consecutive increase and the highest level since January 2005.

At the same time, new landlord instructions fell to a balance of plus 11%, down from 19% in the previous quarter.

Rics housing spokesman Jeremy Leaf said potential investors were being dissuaded by the current economic uncertainty and a more cautious approach from banks and building societies.

“A combination of tightening lending criteria and successive interest rate rises has started to hit the buy-to-let market,” said Rics housing spokesperson Jeremy Leaf.

He warned proposed tax changes could prompt an even larger exodus in 2008.

“With the drop in capital gains tax due in April next year, many landlords will resist selling until the spring,” he added.

More broadly the survey found that although rents are still rising, the rate of increase is slowing.

Rics said overall yields remained broadly unchanged, but highlighted an increasing gulf between houses and flats.

While the yield on houses rose for the second successive quarter, the yield on flats fell for the fifth consecutive quarter, thanks largely to an oversupply of such properties.

‘Rich man’s game’

The buy-to-let market has grown sharply in recent years.

In 1996, when buy-to-let mortgages were first launched, only 20,000 were taken out.

According to the Council for Mortgage Lenders (CML), by September 2007 this figure had grown to 990,000 and the total amount borrowed to £116bn.

But the recent problems in the wholesale financial markets have prompted a tougher approach from lenders, some of whom have withdrawn buy-to-let products altogether.

In November, Rics said property investors were typically being asked to produce a 30% deposit, costing an average of £65,600.

That constrasts with 2002 when a 8% deposit was common, an average of £10,100.

Many lenders now also require that the rent on any prospective buy-to-let property equates to more than 125% of the monthly mortgage payment, which can be hard to achieve in some areas.

Rics concluded buy-to-let had become a “rich man’s game”, with all but the wealthiest priced out of the market.

But a recent survey of more than 3,800 landlords conducted by Bradford and Bingley, the UK’s largest buy-to-let lender, painted a more positive picture.

It found 60% of those surveyed were “undaunted” by reports of a buy-to-let slowdown, with 86% planning to leave their property portfolio untouched or expand it in 2008.

Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/business/7149406.stm

What rights do homebuyers have when dealing with estate agents in England, Wales and Northern Ireland?

I have put an offer in on a flat - is the estate agent obliged to pass it on?

When an offer is made for a property, the estate agent must pass it to the seller promptly and in writing, except those which the seller has told the estate agent not to be passed on - for example, all those below a certain price.

The estate agent does not have to give you details of other offers they have received.

I have been told the seller has received a higher offer. Should I believe that?

Badly-handled offers are one of the top complaints at the estate agents’ ombudsman.

People who try to increase the price of a property after accepting an offer can cause heartbreak for a buyer.

But even if it is questionable ethically, if you are the vendor and are offered an extra £20,000, then you are likely to accept.

But could a higher offer simply be a ruse to get you to part with more money? It can be difficult for the buyer to know.

According to the Office of Fair Trading (OFT), an agent must not invent a bid or claim to have a cash or first-time buyer unless this is true.

Nor can they state that they have a potential buyer unless this is true.

The OFT suggests people should demand to see evidence if they have suspicions.

This can be difficult in practice, though, particularly if you want to keep on good terms with the agent.

Can I force the estate agent or seller to take the house off the market, or stop advertising, after I have had my offer accepted?

You can not force an estate agent or seller to take the property off the market, or stop advertising - just because you don’t want to lose your dream home.

You probably fear being gazumped. But the agent is working to get the best price for the seller, and is employed by him - not you.

WHAT IS GAZUMPING?

If you put in an offer to buy a house which is accepted by the seller, but then the seller decides to go back on the agreement and accept a higher offer from a different bidder, then you have been gazumped.

However, some will offer to do so out of goodwill, or if you are seen as a good buyer, for example, because you are not in a chain.

Can an estate agent demand a deposit?

Yes, in England, Wales and Northern Ireland, but the estate agent should not hold a deposit or any other money unless they are covered by adequate insurance.

And all money must be held in a separate client bank or building society account or accounts, as set out in the Estate Agents (Accounts) Regulations.

Receipts for deposits must be provided.

Estate agents can be known for using rather “creative” language to describe properties. Is this allowed?

One of the most common gripes handled by the Ombudsman for Estate Agents are “inaccurate sales particulars”.

While some artistic licence may be acceptable, it is an offence for an estate agent to make certain statements about a property which are false or misleading.

Can estate agents put for sale or sold signs outside empty homes?

This is generally seen as an “undesirable practice” by the authorities, and estate agents can be prosecuted.

Can the agent hit me with extra charges - and misleading contracts?

Estate agents must state either the exact amount you will be charged, or when this is not possible, provide details about how the costs will be worked out or give an estimate.

Top tips
Find an agent which belongs to an Ombudsman’s scheme
Be aware of the agents’ legal obligations
Remember the agent is working for the seller, not the buyer
Complaints about agents should be made to your local authority’s trading standards office
If the agent cannot sort out a problem and he is signed up to the OEA code of practice, you can take your complaint to the Ombudsman
Do not use the same legal adviser as the seller

Source: Office of Fair Trading
According to research by Which?, contracts can be badly worded and misleading.

It warns people to watch out for terms which could catch them out.

For example, if you opt for sole selling rights, and then find a buyer yourself, you will still have to pay the estate agent.

Another one to watch out for, if you are a seller, is a “ready, willing and able purchaser contract”.

You will have to pay once a buyer, who is able to exchange unconditional contracts, is found.

This still applies if you withdraw your property before the sale is completed.

In this scenario, you may also be charged for the cost of “For Sale” boards and advertising.

Can an estate agent discriminate against me because I don’t want its financial advice services?

No.

Estate agents must treat all buyers “fairly”, under the terms of the Estate Agents Act 1979.

So-called “preferential listing” is also not permitted.

This is when buyers are told they will be put on an open and fast-track priority or preferential service list if they take financial services, such as insurance or a mortgage, offered by the estate agent.

However, with limited sanctions in place, Which? believes it can be very difficult for consumers to challenge these sorts of practices when they occur.

What about conflicts of interests an agent may have?

If you are selling or buying a property that your estate agent or his/her close associates wants to buy, you must be told promptly and in writing.

Who can I complain to, if it all goes wrong?

For a long time, many consumers have been frustrated by the fact that the estate agency industry is self-regulated.

Contact addresses
The Ombudsman for Estate Agents Scheme: 01722 333306
The National Association of Estate Agents (NAEA): 01926 496800
The Royal Institution of Chartered Surveyors and the National Association of Estate Agents operate internal complaints procedures.

The Ombudsman for Estate Agents offers a complaints service for its member agencies.

The ombudsman can award compensation and publishes a list of members on its website.

Under the government’s Consumer Act, all estate agents have to belong to an industry body with an ombudsman scheme attached.

This should boost consumer access to a complaints resolution procedure. Prior to the legislation, many large estate agency groups did not belong to a industry body or the ombudsman scheme.

Who else can I complain to?

If a buyer or seller believes that an agency has failed to meet its obligations they could complain to their local trading standards department.

The OFT can also issue warnings and banning orders if it has sufficient evidence of a breach of law.

Where do I go to for further information?

The OFT has a free booklet, called “Using an estate agent”, which is available from its website.

The guidance covers England, Wales and Northern Ireland.
Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/2/hi/business/2946170.stm

LONDON, Dec 14 (Reuters) - Capital and Regional (CAL.L: Quote, Profile, Research) on Friday became the latest leading British property asset management firm to announce sharp fund valuation cuts in the wake of a slowdown in the UK commercial property market.

Capital & Regional said the value of units in its flagship 3 billion pound ($6.2 billion) shopping centre fund — The Mall Fund — fell by 12 percent in November, while the 1.3 billion pound retail warehouse Junction Fund shed a further 10 percent.

On a geared basis the Junction Fund is down almost 24 percent so far this year, Capital & Regional said.

Capital and Regional, which co-invests in the funds, said a clawback of performance fees earned in 2006 would help to soften the blow for investors by about 30 to 50 pence a share.

The company’s 1 billion pound leisure facility fund also fared better in the period, easing by less than 1 percent, which left it in positive territory for the year. (Editing by David Holmes)

By Sharon Flaherty

Average UK property prices in December fell by 3.1 per cent compared with the month before, according to property website, Rightmove.

In its monthly house price index it said that the average house asking price in December is £232,396 compared with £239,986 in November.

It blamed seasonal factors and HIP-avoiding first-time sellers for the drop in prices. It also indicated that there were a higher proportion of cheaper homes coming onto the market.

Miles Shipside, commercial director of Rightmove, said: “Whilst 3 months ago we forecast that the final phase of HIPs would drop average prices this month, a substantial element of the fall reflects genuinely tough market conditions, and many sellers who have listed this month have priced below the market to try and sell.

“It is wrong, however, to speculate that prices will continue to fall based on one month’s statistics from a quiet December.”

Many home buyers want to purchase a home directly from the seller to cut out the middle man, but when it comes time to make a formal offer it is often the case that neither buyer or seller knows what to do. Without the aid of a professional real estate agent, making an offer to buy a home that is for sale by owner requires the buyers to complete a real estate purchase contract on their own. Generic purchase contracts can be found at your local office supply store and will typically come with simple instructions for use. There will be blanks to be filled on the contract and wording that applies in the state where the property is located. If you can’t find a purchase contract at the office supply store, you can also try your state’s official website, division of real estate section. Some common information you will need to fill out includes: * Names of buyers and sellers * Property address * Purchase price * Source of funds, and if the buyer is applying for a loan then a loan approval date and type of loan will often be included * Closing date * Earnest money * Seller concessions (money the seller pays towards the buyer’s closing costs) * Any other conditions the buyer chooses to include (a common condition is "subject to appraisal" to make sure the purchase price is not more than the appraised value) Once a buyer has completed the purchase contract, it should be delivered to the seller, at which time the seller can review and either accept the offer, reject it, or make a counter-offer. Wise sellers will always make a counter-offer, keeping the negotiation process alive, no matter how much they dislike the original offer. When an offer is finally accepted by both buyer and seller, the contract is signed in all the appropriate places and the buyer either gives earnest money to the seller or gives it to the title company where the closing is to take place, to be held in escrow. The buyer usually has contacted a mortgage broker for a pre-qualification prior to having their offer accepted by a seller, so the completion of the loan approval process is the next step in the process. Once the lender is ready to close, an appointment is made at the title company where both buyers and sellers will sign the necessary documents for the transfer of title. Good resources for those involved in a for sale by owner transaction are your local mortgage broker and your title company of choice. These professionals are familiar with the real estate world and though they are not authorized to act as agents or represent either the buyer or seller (depending upon their personal credentials), they can point you in the right direction in most cases. If you are having trouble with the paperwork portion of selling your home on your own (or buying a for sale by owner), you can also consider contacting a local real estate agent to see if they will charge a nominal fee for help with the offer/counter-offer process. Many agents will be happy to do this for a reasonable fee.

Lonesome. When Ms. Angelou moved into a designer house in California, she says, nothing worked. Her pictures didn?t look right on the walls. Cakes fell in the oven. Curtains fell off the rods. The house, she concluded, hated her. And it wasn?t much consolation to realize the house hated her husband, too.
What I want to know is, how could she tell? Let?s face it, most houses hate their new owners. They have adapted to the rhythm of one family and resent being sold. Like most cats that you rescue from the pound, your house probably believes, "If I?d waited longer, a better owner would have come along. So I?m going to make this one?s life miserable."
Those who are trained in modern research methods will be skeptical, but there?s plenty of evidence. Everyone knows what happens when you move into a new house.
"You?ll see a lot of repair services in the first six months," I was warned. "When a house hasn?t changed hands in five years or more, lots of little things will happen when you move in."
Now, you?ll notice this doesn?t happen when you rent a house or apartment. Some friends of mine rented a house while they saved to buy their own property. For two years, the refrigerator purred and the air conditioner hummed contentedly. The plumbing flowed silently and the insect life remained hidden. Encouraged ("see, a house isn?t so bad after all!") they took the plunge and bought their own home. I?d like to say they?re doing great but in fact they?ve dropped out of sight. They can?t take phone calls any more. "Sorry, we can?t tie up this line. We?re holding the phone open till we hear from the handyman…" Or the pest control guy, or the electrician. They considered Call Waiting but were afraid to jinx the only object in the house that seemed to be working.
If you seem particularly gullible, (e.g., the house senses that you?re new to this game), your appliances may join the fun. I am absolutely positive the once-faithful refrigerator sent out a message: "How about this, guys. Let?s really confuse everybody. I?ll put out a leak, send the water over to the sink, and they?ll think it?s a big pipe in the wall. After they?ve poked a few holes they?ll realize it?s time to wake up that sleeping repairman!"
And one day my security system kept getting an "Open Door" signal even when the door was firmly locked. The tech found nothing wrong and it never happened again.
My lawn service person knows how to work the system: Let Them Know Who?s Boss. After he cut back the hedges and pulled some over-aggressive vines that were trying to take over the property, the bushes stopped sulking and started putting out nice flowers. They knew what would happen if they didn?t.
I?ve been told that, after a year or so, the house realizes you?re here to stay. Your new list of reliable helpers can?t be fooled as easily as you were in the beginning. And you?ve emptied your bank account to create a peace offering — a new floor or a paint job or a screen door. "Every so often," I?m told, "you even get thirty days with no service calls. But after six months or so, the house gets bored and it?ll start all over again."
One thing is certain. In your house?s "Lose the Owner" contest, there?s one simple rule. Whoever costs the most, wins.

Cathy Goodwin, Ph.D. author, career coach, speaker
"When career freedom means business"
http://www.movinglady.com/coaching.html
"When caraeer freedom means relocation"
http://www.movinglady.com/reloservices.html
Career Freedom Ezine mailto:subscribe@movinglady.com

Are you selling your tract home? Home sellers marketing their property in development neighborhoods face tough competition. All the houses look alike. All the houses sell for similar prices. Market conditions — whether it’s a cool buyers’ market or a hot sellers’ market — largely determine the sales price, purchase terms, and length of time to sell.

How can you make your home stand out from the crowd? How can you turn your property into a "hot" sale, even if the market’s lukewarm?

Apply Design Psychology strategies to you stage your home for sale. These innovative methods go beyond the usual de-cluttering and de-personalizing advice. Here are three tips to help you sell your home for top dollar:

1. Magnetism. Because most buyers won’t even get out of their car unless a home shows promise, create an exciting exterior that draws prospective buyers to your home. Enhance your walkway with enticing plants or light fixtures that clearly mark the path to the front door. White flowering annuals show up better during twilight when many home shoppers look and also look cooler during hot summer. Use color psychology to paint your front door or its framework a happy, enticing color, such as warm amber gold, copper verdigris, or snappy apple green.

2. Mystery. Most home shoppers only spend around four minutes looking at the typical house. Enchant with mystery as soon as the prospective buyers enter your home. Make the shopper take a second look by using Design Psychology lighting tricks. Place a palm tree so that it partially blocks the view of the hallway. Uplight the palm tree with a canister light that casts captivating shadows on the walls and ceiling.

3. Memory. Home buyers look at many houses one right after the other. Your objective, to get the buyers to remember your home above all others and to pay you top dollar, gets help from Design Psychology. Think about your buyers’ dream home; they want a lifestyle change –not just a house. Make your buyers believe that if they choose your home, they will have the privilege and right to take a nap in that "gorgeous garden hammock," read an escape book in the private reading nook, or entertain in high style in the elegant living room.

Turn heads with your enchanted home. Turn shoppers into buyers. Turn your typical tract home into a buyers’ dream home using Design Psychology home staging methods that create a lifestyle delight.

Copyright (c) 2005 Jeanette J. Fisher All Rights Reserved.

About the author:

Jeanette Fisher, author of Joy to the Home, Sell Your Home for Top Dollar–FAST, and Home Staging for Top-Dollar Sales, teaches Design Psychology college courses and professional real estate investing seminars. For home selling tips see http://www.sellfast.infoFor Design Psychology information see http://www.designpsych.com

Real estate values rise and fall in cycles. Currently home prices are nearing a top in many areas.

Skyrocketing housing prices in California are prompting nearly a quarter of the residents to seriously consider moving to areas with more affordable housing.

California had the nation’s third fastest rate of home price appreciation last year, behind Nevada and Hawaii.

Prices climbed more than 18 percent compared to the previous year, 84% in the past five years and a whopping 338 percent since 1980.

Less than one in five… 19%… of the state’s households can afford the median priced single-family detached home, which was $465,540 in September.

Guess what? Lots of these Californians are selling their homes for big dollars and moving to other states where they can buy a similar home for a fraction of the price.

Arizona and Nevada are prime target areas.

In those states the number of sales of homes to San Francisco Bay Area residents has risen by as much as (gulp!) 6,000% percent. That huge demand forces prices up!

Here in the Phoenix area we are smack dab in the middle of a home buying frenzy. In the last three months we have put four of our rental homes on the market. Each of them sold in ONE DAY! Offers above asking price are common.

Real estate agents are tearing their hair out because they can’t find homes for their buyers. Our listings with a flat rate discount broker prompted dozens of calls from desperate Realtors.

The other side of the coin is that it’s very hard to find good renters. Anyone with the slightest record of financial responsibility is buying a home.

If you are a cycle investor you buy near the bottom and sell near the top.

Is this the top in some areas? I can’t say, but when homes are selling a few hours after being listed it would seem to indicate that we can see the top from here.

If you are in a hot area it is the perfect time to buy and flip.

Start walking neighborhoods in the early evening and weekends. Knock on every door asking, "Are you the folks with a home for sale? Do you know of anyone who would be interested in a fast sale?"

You will find properties! Some you may be able to sell within 5 or 6 days. Racking up a profit of five grand a week is not impossible… if you are willing to put in the work.

With buy and flip you don’t have to worry whether or not a top is near. Using options just about eliminates any possible risk. And a fast flip can be generated using the "How to Make Money In Real Estate Without Owning Property" system.

There’s money to be made… if you are nimble.

About The Author - Mark Walters is a real estate investor in Arizona. He uses options in his investing program as explained here http://digbig.com/4cefc

A big debate these days is whether or not to buy a house, or buy a condo. Most of this debate comes from a lack of understanding about condos, and what they are. Hopefully, the following information will prove to be helpful.

When Buying a condo, are you a tenant?

No. That simply isn’t true. When you buy a condo, you are buying a part of the corporation, and are thus an equal owner. It is true that you can be forced to move, if you are really disturbing the other owners, or causing problems. But this is true of residential homes as well. If your neighbors complain repeatedly about smell, health concerns, or criminal behavior, then you may be forced to move. The same holds true in condos and houses alike.

The board can force you to pay thousands of dollars arbitrarily, and without notice.

At first glance, this may appear to be true. But keep in mind that the condo association is made up of owners who have the same goal as you? Having a comfortable place to live that is building equity. The members of the condo association do not make any money from their positions. They are owners like yourself, who are volunteering their time. There can, however, be "special levy’s" brought about by unexpected maintenance in the building. The same holds true of a house as well; the expenses just come from a different place. Ask anyone who owns a house how much it cost them for their last furnace. Or how much they spent repairing the water leak, and replacing the shingles. The advantage in a condo association is that you share these costs with the other owners, and are forced to save money in advance for these repairs, through the reserve fund.

Condo fees cost too much each month!

Again, not necessarily true. If you were to add up the amount of money that a family spends over 5 years on the maintenance of their house, you’ll usually notice that it equals more than 5 years worth of condo fees. Also, many condo associations pay for their monthly expenses as a group. Heat, water, insurance, and maintenance are examples of such expenses. By purchasing as a group, they can often get these services at a lower rate than a single home owner can.

I could never live in such close quarters

That’s probably true. Condos aren’t for everyone. Every person has to make their own decision, based upon their own lifestyle; now and in the future. If you have 3 large dogs, 3.5 children, and 4 cars? a condo probably isn’t for you. But, if you’re a single young executive who works 80 hours a week, or you’re retired and travel most of the year, then perhaps a condo is the right choice for you. Only you can make that decision, as it is a lifestyle choice. Here are some factors to consider in your decision.

1. How much time do you spend at home?

2. Do you want to shovel walks and mow lawns?

3. Are you used to having your neighbours far away from you?

4. Is the condo association that you’re considering favorable to your children’s lifestyle?

5. Do you want a low maintenance home, or do you like tinkering in the yard and garage?

6. Who’s going to be living there? What are the neighbors like?

    

In fact, these are issues to consider on any home, not just a condominium. It’s just as easy to get "bad" neighbors when you buy a house as it is when you buy a condo. The best advice that can be given is to research your choices, and be objective when choosing a home. My favorite example of this is as follows:

"A friend of mine asked me to help him find a home. He’s a single young man who travels 75% of the time for his job and is rarely at home. When he is home, all he wants to do is sleep and watch TV. He wanted to buy an acreage so that he could have privacy. After looking at the amount of continuous maintenance required for an acreage, he realized that acreage living wasn’t for him. He’s very happy in his apartment style condo."

Make your own decisions, based upon what’s best for you. If a condo is where you’ll be happiest, then buy a condo. If a house is what’s right for you, buy a house.

John Carle & Sharon Gregresh are Realtors with Royal LePage - ArTeam in St. Albert, AB. They pride themselves on providing more than just real estate sales and listings. Their clients benefit from a much larger spectrum or real estate services. Contact them any time at information@workingtogether.ca or through their website at www.workingtogether.ca. They can be reached by phone at (780) 458-5595

The housing market has exploded, with home prices rising beyond all reason in some markets. Home prices have doubled or tripled during the last five years, and in some cities, the asking prices for homes are considered only to be suggested opening bids. Homes often sell in a few days or even hours, and would-be buyers are tiring of losing out to higher bidders. In order to achieve an advantage over other bidders, some people are offering to buy homes without a professional inspection. What do they gain from such an offer? Is declining an inspection an OK thing for a buyer to do?

Traditionally, a professional home inspection is a valued component of the home buying process. While inspections are rarely required by law, most buyers would prefer to have any home they might purchase inspected before committing to purchase. The inspectors look for problems with foundations, plumbing, wiring, and termite infestation. In addition, they often check to make sure the home meets building, zoning, and easement codes. The fee of several hundred dollars, paid by the buyer, can turn out to be a bargain if the inspection determines that the home needs thousands of dollars in repairs. At that point, the buyer can walk away from the home or negotiate a financial compromise with the seller in hopes of having the problem repaired prior to sale.

The current housing market has brought about a lot of changes in traditional real estate rules. Buyers who want an "edge" over other bidders in markets where sales are brisk might offer to buy the home without an inspection. This might motivate the owner to sell to them, rather than another buyer who might insist upon the inspection. In short, these buyers are offering to take the home on an as-is basis. Is there any benefit to this?

Most real estate experts agree that it is foolish to purchase a home without a prior inspection. While some problems can easily be seen by even the most casual of browsers, others, such as termite infestation or a cracked foundation, might only be noticed by a professional inspector. These problems can cost tens of thousands of dollars to repair, and in some cases, might even render the home legally uninhabitable. Anyone who offers to buy a home without an inspection is taking a serious risk, as they could find themselves the owner of a home that he or she cannot afford to repair. There may not even be any benefit to buying without an inspection, as most homes in hot markets sell for more than the asking price whether the home is inspected or not. If you cannot inspect a home prior to purchase, it would probably be wise to pass and wait for another suitable property to come along.

About the Author: ?Copyright 2005 by Retro Marketing. Charles Essmeier is the owner of Retro Marketing, a firm devoted to informational Websites, including http://www.End-Your-Debt.com, a Website devoted to debt consolidation information and http://www.HomeEquityHelp.net, a site devoted to information on home equity loans.

Source: www.isnare.com