Britons remain hopeful that property price rise will boost retirement fund.

Our passion for property has left our older generation feeling decidedly lacklustre over retirement prospects.

According to a recent poll 12% of homeowners aged 50 and over are relying on capital growth from their homes to part-fund their non-working years. The good old days of uphill property prices, has meant that fewer contributions were made to pension schemes in the belief that the price rise would continue.

The expectation continues despite the average home having lost £27,250 in value the past two years, with 29% of the 4,000 people questioned expecting prices to recover in three to five years. Meanwhile, 17% are proposing to revamp their homes to allow for losses while a further 21% will actually save more for their retirement. Nationwide reported that the average price of a home increased by 0.5% in November, marking the seventh consecutive monthly increase and taking annual house price inflation to 2.7%.

It seems that even with both pensions and property having taken a battering lately, faith in good old bricks and mortar remains.

We are emerging out of the recession….and house prices are on the up!

 

Thankfully, Britain has emerged from the longest recession in modern history, but the economy grew by only 0.1% between October and December- way below the expected 0.4% .The likelihood is that the bank of England will keep interest rates at an historic low of 0.5% at least until late this year.

It would appear that the public are only expecting modest rises in house prices this year, after both Halifax and Nationwide reported a near 6pc increase in house prices in 2009, following sharp falls in the early part of the downturn. However, Rightmove said that the shift in the public’s expectations was significant because positive price sentiment played a major role in any housing market recovery and was an encouraging indication of how prices might perform.

Confidence in the housing market has been boosted by rising prices, and by record low interest rates which have pushed up disposable incomes in many cases. I think that we will see transaction levels remaining similar to 2009 for the best part of this year with steady increase in house prices.  The latter part of this year will see additional activity with more mortgage lenders and more mortgage products coming onto the market as lenders once again look to capitalise on a stable property market that is once again increasing in value.

 Lloyd Davies

 

Keeping warm is a costly business

Just over a week ago, we were all huddled up in our house wearing hats scarves and even skiing thermals!

It was -5 outside and, clearly not much warmer inside. The fire was lit and the central heating was going at full throttle, sounding like a 747, but did it make any difference? No, as we all shivered and moaned, it reminded me of scenes from Dr Zhivago (setting light to the chairs for a morsel of heat!)

 

Our house, in the midst of the lovely Herefordshire countryside is a Georgian rectory, a little piece of history. Lovely in the short summer months, come winter it turns into a fridge. All heat, desperate to escape flees from every “original feature”.

 

A new study by the Energy Saving Trust shows that, even in an average year, a family in a three-bedroom Victorian/Georgian will pay £250 more in energy bills than a family in a three-bedroom new-build semi. With the price comparison service Energyhelpline predicting that British families will pay £1.9 billion in extra heating charges as a result of the cold snap, it is clear that the discrepancy will be even greater by the time that the next batch of bills arrives.

 

When environmental campaigners talk of “toxic heritage”, it is houses such as ours that they are making reference to. We may be able to do certain things to bring our houses in to the 21^st century, energy efficient wise, but the cost can be more than the house is actually worth!

In recent years there has been a vogue for knocking down walls to create an open-plan space. But of course, these older properties aren’t designed for this. Originally you had smallish rooms with a single radiant heat source — and a door. If you wanted to keep a room warm, you closed the door. The idea that it’s desirable to heat a whole house to a uniform temperature is a very modern one.

I wonder whether this cold bitter winter will propel a boom in sales of the new build. Who knows, perhaps it will.

A May 2009 YouGov survey carried out for the New Homes Marketing Board found that would-be buyers were increasingly concerned about eco-efficiency: it was their third-most important criterion behind having a garden and somewhere to park a car.

I have given some top tips on trying to retain some of the heat in an older draughty property!

Stop draughts by blocking gaps between floorboards and around skirting boards; around poorly fitting sash windows and doors; around the loft hatch; and unused chimneys (buy a chimney balloon to block it up). Remember letterboxes and keyholes, too Make sure you have the recommended 270mm of loft insulation Look into installing secondary glazing if you can’t afford to replace the windows Solid wall insulation, either internal or external, is an option, though the former will compromise room size and the latter is hard to fit in a way that is architecturally acceptable

 

Property asking prices rise as stock drops

This caught my eye whilst reading the times yesterday.

Homesellers increased asking prices by 0.4% in the past month as the number of buyers searching for property online reached record highs. Rightmove, the property website, said that sellers' expectations had pushed up the average asking price to £222,261 in the UK and by 2.3% in London to an average of £407,731. The rise comes after a decline in the amount of stock on the market.

I can't help but wonder if the record highs in property being bought/sold and searched for online, is also due to the amount of bad weather we've had in the last month. Being sat at home of an evening with a nice cuppa and the left over chocolates, searching online - rather than getting wrapped up and going out to face the cold and snow would be the preferable option for me. With record sales of iphones and Blackberrys over Christmas - the internet is now much more accessible. You can still use your local estate agent - but they're also now online and also on a property search website.

 

 

 

 

Hasn't it been a strange couple of years for the UK Housing Market?

The UK housing market is no stranger to booms and busts, but the recent credit crunch and recent recession has been one of the most testing experiences for the UK property market.

After falling 20% from their 2007 peak, house prices unexpectedly rose in 2009. According to the Nationwide, house prices were 6% higher at the end of 2009 than the start. Many point to house price to earnings ratio’s and point out they are significantly higher than at the end of the last bust. This will certainly be a factor keeping house prices low; it will prevent any rapid increase in prices and could lead to a further downward correction. But, against this backdrop, there are some encouraging signs of a return to more normal lending conditions.
We can see the first positive signs, in the improvement in housing transactions. When housing transactions were very low, it meant changes in house prices were more a reflection of the unusually shortages of property on the market.

Banks gave 60,518 loans to buy homes, up from 57,718 in October; this is highest level since 2008. The amount of net mortgages rose to £1.5bn the most for nearly 11 months. Whilst there will be no return to the boom conditions of the naughties, there are signs banks are slowly expecting to increase the number of mortgages. The proportion of disposable income spent on mortgage payments, by first time buyers has fallen from 50% of average earnings in June 2007, to 27 per cent by November 2009. This is below the long term average of 35% and will definitely encourage more into the market.

The stabilisation in house prices may well encourage people to sell who have been holding off. But, on the other hand, the end of dramatic falls may also encourage buyers back into the market.
The overall outlook for 2010 looks for a period of consolidation. I think the most likelihood for house prices is to remain static. They may go down a little, they may even go up. But, it is hard to see wild swings in house prices this year.

This stability is no bad thing. After the roller-coaster ride of the past couple of decades, a period of consolidation could be just what the housing market needs.