Mortgage Lenders Continue To Let Down House Hunters

Buyers are still failing to overcome the significant barriers to home ownership that the current housing market represents, according to the National Association of Estate Agents (NAEA).

The latest monthly market report from the NAEA showed only minor decreases across supply and demand during the month of May, when 275 people registered with an average estate agents office, compared to 277 in April.

The average number of sales agreed per estate agency office stayed at eight for the fourth month in a row. But the percentage of sales to first time buyers increased from 21% in April to 24% in May. The average number of properties for sale per office decreased slightly from 69 to 68.

According to the NAEA, the combination of large deposit demands, pressure on household finances and the gloomy economic picture for the UK is causing stagnation in the housing market.

President of the NAEA, Wendy Evans-Scott said: "Demand for property remains consistent but the barriers to buying are proving impossible to overcome for the vast majority of consumers.

Mark Green, Chairman of the UK’s first not-for-profit online estate agents, imove Cornwall says "The banks must find a balance between the easy ‘give-money-to-anyone’ lending of the past ten years and the strictness of the current mortgage lending rules; the governments attempt to force banks to lend has clearly failed and many buyers are still facing strict criteria which prevents them from obtaining a mortgage”

So is there a solution?  “Well assuming the coalition will steer clear of introducing legislation to ‘force’ the mortgage lenders to actually lend there is no real solution, says Green.  “I think we will have to sit it out and wait for them to begin lending in their own time”

http://www.imovecornwall.org/

House prices will have fallen over 30 per cent in real terms

Unless something odd happens, this week is likely to see an interesting but under-announced milestone: falls in house prices, in real terms, from their 2007 peak, exceeding 30 per cent (on the well-known Halifax measure). In cash terms, house prices peaked in August 2007, and fell 22 per cent to March 2009. After picking up a little in the second half of 2009 and early 2010, they went back to falling from mid-2010, and have been broadly flat during 2011.

But because inflation is high, that flat performance in cash terms for housing in 2011 means that, after adjusting for inflation, house prices have been falling apace. In real terms, since January 2010, house prices have fallen a further 12 per cent.

David Gilmore from imove Cornwall says :
"In real terms, house prices are now down 20 per cent.  They are now back to the levels seen in 2002 – a year in which prices rose around 19 per cent. If the experience of the 1970s and 1990s is duplicated, they would fall perhaps another 5 to 10 per cent. In our view they are only over-priced about 5 per cent now. But when there are large swings, markets overshoot. The price-earnings ratio is now around 4.4. In 1995, the price-earnings ratio fell below 3.1. Falling back to that would mean nearly 30 per cent further falls in prices – as much again as we’ve already had".

"If sellers are motivated to sell they need to be pricing their property to sell.  Do your own research on average prices in your area and select a competitive marketing price".

imove Cornwall is the UK's first not-for-profit online estate agents. Sell any size property for just £399 (no VAT) with all profits donated to local good causes.  www.imovecornwall.org

Online agents could kick start the housing recovery

Imove Cornwall is the latest online estate agents to open it’s virtual doors to the Cornish property market and it is claimed these new breed of digital agencies could kick start the housing recovery.

David Gilmore, from imove Cornwall, says: 'Similar to low cost airlines who changed the market with the introduction of online bookings and discounted flights, we believe that online estate agents are the way forward.  I would even go as far to say that the revolution of online agents could kick start the housing market if the much lower fees allow sellers to reduce the prices of their house in order for a quicker sale”
Online agents are certainly cheaper than traditional agents. High street agents tend to charge percentage fees based on the sale price of your property but with nothing to pay if you don't sell.
In the height of the property boom some agents would charge as little as 1 or 1.5% but a sluggish market has seen that creep up to around 2.5%. This means selling a £200,000 property would cost £5,000 plus VAT.
Online agents on the other hand tend to offer a range of pricing options. Typically these include a flat fee option and other pricing deals which have a smaller upfront fee and another fee on completion.
Currently imove Cornwall has started with one fee option for customers in Cornwall.  A straight low cost fee of £399, with no VAT to pay.
Imove director Mark Green says the site offers massive internet coverage for a simple low cost.  “We are in the process of developing additional fee options for customers, which we hope to launch within the next few months”
“High Street agents charge a fortune in fees in order to cover the colossal overheads of multiple premises and the wastage from 'no sale-no fee' which, attractive as it initially sounds, means that the successful seller heavily subsidises those that do not sell” says Green.
Most online agents get your property as much coverage on internet property portals as traditional estate agents do.  But many do not offer local newspaper advertising.  Imove claims to be different as it offers it’s customers local newspaper advertising at cost price.
“Most estate agents will advise seller’s that newspapers do not attract buyers” says Mark Green from imove, “however many seller’s still want their property advertised in the local newspaper.  With imove seller’s can purchase cost-price advertising”.
Imove Cornwall was launched in June 2011 and is the UK’s first not-for-profit online estate agents where all profits are donated to local good causes.
http://www.imovecornwall.org/

Renting is more expensive than buying

Renting a home in Britain is currently 9.7% more expensive than owning on average. And it is cheaper to buy instead of rent in four in five of the 50 largest towns and cities across the country, according to the latest research from leading property website Zoopla.co.uk.

The research looks at the current asking prices and rents of two-bedroom flats around the country and assumes interest-only mortgage payments of 5% p.a. to provide a comparison to the cost of renting.

The range of results by location provides some very interesting insight into where it is best to rent instead of buy and vice versa. Milton Keynes tops the list of places where renting is the far less attractive option with average rents exceeding the cost of servicing a mortgage by a staggering 43%, leaving renters there on average £2,964 per year worse off compared to owners. At the other end of the scale, it is currently much more cost effective to rent in Poole than buy with renting 27% cheaper and the average tenant better off by £3,240 per year by renting instead of buying.

Even in London, which has by far the highest property prices in the country and where the average 2 bedroom flat is going for £431,366, buying is still 16% more cost-effective than renting. With average rents at £2,137 per month in the capital versus an average cost of a 5% interest-only mortgage at £1,797 per month, renters pay an extra £4,080 annually compared to owners.

Nicholas Leeming, business development director of Zoopla.co.uk, commented: "The relative cost of renting as opposed to buying has increased over the past 12 months as rents have risen and house prices and interest rates have remained flat. Almost 750,000 would-be first-time buyers have reluctantly ended up as renters over the past 3 years as a result of being unable to get a mortgage. With current house prices and interest rates where they are and with rents on the rise, for those who can get a mortgage, there may never have been a better time to buy."

Source: UKPropertyShop

Mortgage Lenders Are Refusing To Move Your Mortgage – Even Though The Small Print Says You Can

The Financial Ombudsman Service – a free service that can compel banks and other financial institutions to compensate consumers when they are treated unfairly has been receiving increasing numbers of complaints from mortgage customers who want to transfer their mortgages to a new property according to lovemoney.com.

Many mortgages are portable. When you sell your home and buy another, you can move your mortgage to a new property. This process is called 'porting'.

The Financial Ombudsman's annual report states that mortgage complaints as a whole are down to 7,100 in 2011 from 7,500 in 2010. And while it does not give exact figures about porting, it writes that it has seen an increase in the number of complaints from people who have had their ports refused.
The problem is that lenders reassess home owners as if they were new customers, yet they have also toughened up their lending criteria in the past few years. Hence, if you fail the new criteria, you can be turned down for the port even if you don't want to borrow any extra money and your financial circumstances have improved.

The FOS writes 'It is unusual to see mortgage contracts that allow the consumer unconditionally to “port” their mortgage as a contractual right.' It seems that lenders might not have explained this clearly enough to some aggrieved customers.

If you have recently gone self-employed, you may be rejected as more risky, even if your income has risen. While this might also have happened to you before the financial crisis, it appears more likely now, since lenders are being more conservative.

Mark Green from imove Cornwall, the UK’s first not-for-profit, community lead estate agency firm says “mortgage lenders should make it clear that the porting of the mortgage (moving your mortgage from one property to another) will only be allowed if your circumstances have not changed.  If your circumstances have changed, lenders should tell customers they will be assessed as a new customer which may mean they may not be able to port the mortgage”

House Prices in South West Continue to Rise Despite Depressed Market

House prices in the South West rose by 0.6% in May 2011, compared to April 2011.  According to property portal website Rightmove, the average asking price in May was £262,243 compared to April’s £260,593.  This is despite the gloomy picture many experts are painting of the market.

Seller’s are now waiting for around 90 days to obtain a sale says the Rightmove report.

“Seller’s need to be aware of just how difficult the housing market is” says Mark Green from imove Cornwall.  “The South West has been hit hard with the average earnings to property price gap increasing, making it unaffordable for many local people to buy a property”.

imove Cornwall is calling on the Government to step-in and help local people.

“We believe that in some Cornish towns, property prices are still relatively too high.  Something needs to be done to ensure that local people can afford to purchase homes in their local area”

Graph from Rightmove, showing the average time a property is on the market

Rental costs will keep rising, says Rics

Rents are continuing to rise for tenants and more increases are expected in the coming months, a survey by the Royal Institute of Chartered Surveyors (RICS)  has suggested.

About 42% more surveyors reported a rise in rents than those who saw a fall during the three months to the end of April, the RICS survey said.

Some 33% more surveyors expect rents to go up than those predicting a fall.

RICS spokesman James Scott-Lee says "Although we are beginning to see more mortgages aimed at first-time buyers, many potential homeowners are still restricted from getting a foot on the property ladder, leading to increased demand in an already oversubscribed rental market".

"There has been a small uplift in supply, but the imbalance between demand and availability can only mean rents will continue to rise."

First-time buyers

A separate survey, published last month, said that rental costs in England and Wales had reached a record high in April 2011.  LSL Property Services said the average rent stood at £692 a month.

“There is a distinct lack of first time buyers looking for property” says Mark Green, Chairman of imove Cornwall, the UK’s first not for profit online estate agents based in Wadebridge and Truro.

“Since the launch of our new service two weeks ago we have had many buyers register on our database, but not one first time buyer” says Green.  “And that’s despite the fact that we are selling, what I think is a very, very cheap first time buyer property in St Dennis, near St Austell, for just £45,000”.

imove Cornwall - as seen in The Observer newspaper!

We continue to be overwhelmed by the local and national media coverage we are receiving.  Today imove Cornwall has an article printed about us in The Observer newspaper.  The article focuses on the new wave of online estate agents who are saving seller's thousands of pounds, just like imove Cornwall.

imove Cornwall is a not-for-profit online estate agents which charges a low one-off fixed fee of just £399 to sell any size property, anywhere in Cornwall.

"There has been some negative criticism of imove" says Chairman Mark Green.  "However this criticism is from other estate agents.  I think it's difficult for traditional agents to accept that we have decided to setup a not-for-profit social enterprise which invests profits for the local community rather than for investors or shareholders".

"It's not all about making profit for yourself" says Mark, "there are vulnerable people in my community that need financial help and if we can raise significant funds to help local good causes, then that makes me feel a lot better than making profit for myself"

You can read the article here: http://www.guardian.co.uk/money/2011/jun/05/cut-price-estate-agents


www.imovecornwall.org

Dan Rogerson, Minister of Parliament for North Cornwall on imove Cornwall

imove Cornwall has received a welcome comment from Dan Rogerson, MP.

"Your new social enterprise sounds very interesting and I am sure that there is room in the local market place for it"

Dan Rogerson is the Liberal Democrat Member of Parliament for North Cornwall. He is campaigning for a fair deal for Cornwall.

He joined the Liberal Democrats while still at school to help fight for the election of Paul Tyler, who was Liberal Democrat MP for North Cornwall from 1992-2005. Dan then graduated from the University of Wales, Aberystwyth with a degree in politics including a work placement in Parliament with Paddy Ashdown, the then party leader. From 1996 until 2002 Dan worked in local Government and then for a University while fighting political campaigns in his own time. He was elected a councillor in 1999, gaining a seat from Labour with a 27% swing. He then served as Deputy Group Leader.
He was elected to represent his home constituency in Parliament on 5th May 2005

imove Cornwall makes the Cornish Guardian newspaper

This mornings edition of the Cornish Guardian newspaper has carried a storey about imove Cornwall, the UK's first not-for-profit estate agents.

Mark Green, Chairman of imove Cornwall says "we are of course delighted with the press coverage we are experiencing. and hope this leads to more people choosing imove to sell their property".

imove Cornwall is an online estate agents covering the whole of Cornwall.  For just £399 people can sell their property and save thousands of pounds.

Famous philanthropist wishes imove well

Dame Stephanie Shirley (http://www.steveshirley.com/) , the famous philanthropist this week sent imove these very kind comments:

"What an interesting, and ambitious, enterprise! 

You won’t be popular with the established agents but I wish you well!"

FROM WIKI : Dame Stephanie "Steve" Shirley, DBE, FRA, FREng, FRSA (born September 16, 1933, Dortmund, Germany) is a British businesswoman and philanthropist. She originally arrived in Britain as an unaccompanied Kindertransport child refugee.^[1] She was placed with foster parents and later re-united with her biological parents, but later claimed she "never really bonded with them".^{[citation needed]}
In 1962, Shirley founded the software company, F.I. Group (later Xansa, acquired by Steria), and was concerned with creating work opportunities for women with dependents - and employed only women until 1975's Sex Discrimination Act made that illegal. She adopted the name "Steve" to help her in the male-dominated business world.^[2] She officially retired at the age of 60 in 1993 and has taken up philanthropy since then.
Shirley was appointed Officer of the Order of the British Empire (OBE) in the 1980 Queen's Birthday Honours,^[3] and promoted Dame Commander (DBE) in the New Year Honours, 2000.^[4]
In 1987, she gained the Freedom of the City of London. She was President of the British Computer Society from 1989 to 1990. In 1985, she was awarded a Recognition of Information Technology Award. In 1999 she received the Mountbatten Medal.^{[citation needed]}
She has reportedly donated most^[5] of her £150m wealth (from the internal sale to the company staff and later the flotation of F.I. Group) to charity during her retirement.^[6] Beneficiaries include the Worshipful Company of Information Technologists and the Oxford Internet Institute, part of the Oxford University, through the Shirley Foundation. Her late son Giles (1963–1998) was autistic and she became an early member of the National Autism Society.^[7] This special interest has led her to instigate and fund research in this field, for example, through the Autism Research Centre led by Prof. Simon Baron-Cohen.