Home Values Plunge: Nationwide Building Society Reveals Worst Annual Dro...

Home Values Plunge: Nationwide Building Society Reveals Worst Annual Drop Since 2009

The housing market continues to decline and the latest figures from Nationwide Building Society show that house prices have fallen by the highest amount since 2009. According to the lender’s own data, prices were down 3.1% compared with a year earlier, the largest annual decline since July 2009.

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A contributing factor is the recent rise in interest rates, which has made mortgages more expensive and pushed the economy towards recession. This has made it more difficult for people to get onto the property ladder and has also led to some homeowners struggling to keep up with their mortgage payments.

Last month the Office of Budget Responsibility – the body that advises the government on the the economy - predicted that house prices will drop by 10% between their peak last year and the middle of next year.

The Nationwide said that prices were already 4.6% below their peak, taking into account seasonal factors.

Despite the challenges facing the housing market, there are some reasons to be optimistic. For one, interest rates are still relatively low compared to historical norms, which means that mortgages are still relatively affordable for those who are able to secure them. Additionally, there is still a shortage of homes in the UK.

If you are thinking about buying or selling a home in the current climate, it is important to do your research and work with a reputable estate agent who can provide you with expert guidance and support. While there are certainly challenges to be faced, there are also opportunities for those who are willing to be patient and take a long-term view.

In conclusion, the latest figures from Nationwide Building Society show that house prices have fallen by the highest amount since 2009. While there are certainly challenges facing the housing market, there are also reasons to be optimistic, and those who are willing to take a long-term view could find opportunities in the current climate.

 

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Average House Prices Falling For The First Time In 2021 But Will Propert...

Average House Prices Falling For First Time In 2021 But Will Property Crash?

House prices have fallen for the first time this year, according to property website Rightmove, but does this mean we are heading for a market crash?

The website reports that the “average price of property coming to market in August fell 0.3%”, which is a small drop of £1,076, to £337,371.

The property market slowdown follows the ending of the stamp duty holiday and a subsequent fall in demand for bigger homes.

"Average prices have only fallen in the upper-end sector," said Tim Bannister, Rightmove's director of property data.

First-time buyers and second-stepper properties are still in demand, leading to new record high average prices in those sectors, he added.

Rightmove figures revealed a 0.8% drop in the four-bedroom-plus sector, but new record price highs in the two-bedroom sector, up by 0.6%, and three to four bedroom second-stepper-type properties, up by 0.3%.

Summer holidays normally lead to a slowdown in activity in August, experts pointed out, with many anticipating a slackening in demand. Source: BBC and Rightmove.

The small property price falls, based on new houses coming onto the market, do not yet indicate a market crash. Minor price fluctuations could be seasonal or influenced by a post-stamp duty holiday slowdown.

Property investors should see a return to a more normal buyers property market in the coming months. I am definitely noticing more price reductions and properties coming back on the market after a sale fell through.

However, markets, like the bond and stock markets, are not always rational and frequently react to external events, such as a war or political instability in the Middle East.

The actual figures based on sold properties for the current period will be revealed in official Land Registry data later this year.

Professional property investors make money in property in any market – UP, DOWN or SIDEWAYS! You can make money in property if you know how, and you do not even need to use your own money. You can start with zero capital using many of the ‘no money down’ strategies.

Would you like to learn more about making money from property?

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UK House Prices Drop As Stamp Duty Holiday Ends - Is The Property Bubble...

House Prices Fall As Stamp Duty Holiday Ends

UK House prices dropped by 0.5% in June just as the long stamp duty holiday began to be phased out, according to the Halifax.

Annual property prices still rose 8.8%, resulting in average prices more than £21,000 higher, which is more than most people saved on stamp duty in the mad scramble to buy a home. The average price of a UK property according to the lender is now £260,358.

The Government removed the need to pay stamp duty on some properties for much of the pandemic in a bid to stimulate the market in England, Wales and Northern Ireland.

The move worked, but critics argue that it caused price inflation and could created a property bubble if demand falls.

Mortgage lenders, like the Halifax and Nationwide, long with estate agents are confident that, "The power of home movers to drive the market won't fade entirely as the economy recovers”.

Demand remains high among buyers seeking larger family homes with the average price of a detached property climbing faster than any other type over the past 12 months - shooting up by more than 10% or almost £47,000 in cash terms.

Detached homes now cost on average more than half a million pounds, £200,000 more expensive than the typical semi-detached house.

Double tax on holiday homes

A Welsh local authority plans to double council tax on second homes in order to deter the growing number of English buyers snapping up seaside holiday homes on the coast of Wales.

Owners of holiday homes and empty properties in Gwynedd will be hit with double council tax from next month after Councillors backed the increase in premium from the current 50%. The tax could raise an extra £3m a year for social housing.

More than one in ten houses in Gwynedd was now classed as a second home.

Councillors in the larger city of Swansea are planning a similar tax hike.

Buyers, presumably priced out of the more expensive Devon and Cornwall, have been buying up properties in Welsh beauty spots. The effect of this prices locals out of the market and destroys local village life where properties are only used at weekends.

Councils have powers to increases local taxes on empty properties and second homes.

Cheap money also fuelling the bubble?

There is a buy-to-let mortgage available through the NRLA offering a 2 year fixed rate of 1.25%, with free legal fees and a £250 cashback! You could borrow a million pound on interest only and the mortgage payment would be just over £1000 per month. You couldn’t rent a million-pound home for that.

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London £1 million Property Glut As UK Market Stagnates

London estate agents are seeing a glut of properties on the market priced at over £1 million plus. The market is even slower at the £3-5 million level following higher stamp duty and less foreign buyers. 

Oliver Reed's old house was once on the market for £12 million in 2009

In some cases properties have been on the market for several years and the price of the late actor Oliver Reed’s Surrey mansion has been slashed by £10 million! 

The 12-acre estate set in the beautiful Surrey Hills was once up for sale for £12 million in 2009, but the price-tag has been gradually reduced since. In 2016, the six bedroom, five bathroom house was marketed it for £4.95m and is now for sale by auction at a guide price £2.6 million via Allsop.

Brexit uncertainty is being blamed for the slowdown in the UK property market and this month has seen the first annual fall since 2009. Buy-to-let landlords have bee deterred from investing in property by recent tax hikes and tighter mortgage rules. 

If you would like to learn more about property investment and attend a seminar, I have a limited supply of complimentary tickets for an event with a leading training provider - email me charles@charleskelly.net.

Check out my Podcast episode "London £1 million Property Glut As Market Stagnates" from Money Tips Daily by Charles Kelly, former IFA and author of on Anchor: https://anchor.fm/charles-kelly/episodes/London-1-million-Property-Glut-As-Market-Stagnates-e1lh5m

Check out my Podcast episode "Leasehold Property Is A Legal Landmine, Read This Before You Buy" on Anchor! https://anchor.fm/charles-kelly/episodes/Leasehold-Property-Is-A-Legal-Landmine-So-Be-Wary-e16oof

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UK House Prices Fall Leaving First-Time Buyers And Buy-to-Let Investors Wondering Where The Market Is Heading

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Leasehold Flats Are A Legal Minefield, Read This Before You Buy

Are Leasehold Flats A Ripoff Or A Good Investment?

Welcome to Money Tips Daily this is Money Kelly bringing you money tips to help you save and make more money!

Leaseholds properties are a legal landmine for the hundreds of thousands of uninitiated buyers purchasing leasehold flats every year.

Leasehold flats can be a legal minefield for the unwary buyer

Like me, the majority of first time buyers, as well as buy-to-let landlords, will buy a leasehold flat under rules which exist in very few countries outside the UK.

When you buy most flats in the UK, you are a tenant under a long lease which usually runs for more than 99 years, but diminishes in value as the lease gets shorter.

You pay ‘rent’, known as ground rent, to the ‘landlord’ or freeholder, which used to be a peppercorn rent but on new developments is increasingly running into several hundred pounds with sharp increases in the future.

You will also pay a service charge for insurance and upkeep of common areas. In blocks which have lifts, pools and concierge desks, expect to pay from £2,000 pa upwards.

In my experience of smaller blocks, the charge starts at a minimum of £100 per month for doing almost nothing apart from maybe a bit of cleaning or grass cutting, with larger maintenance being charged on top.

Management companies choose their own contractors to carry out works, which always cost about 5 times what you could get the job done for! 

Have you actually read your lease and if so, do you understand it?

The answer to both questions is invariably “no” because most of us give up after the first few pages because the ancient legal language is virtually impossible to understand unless you’re in the legal profession.

Who writes the laws? Lawyers of course! Of course we need Solicitors when buying a property, but ask them to explain everything and don’t be embarrassed to ask ‘silly’ questions!

Following the Grenfell fire, thousands of leaseholders are facing huge costs to remove unsafe cladding from their blocks of flats following a recent court judgement in Croydon.

Tenants will have to pay thousands of pounds to replace cladding on a recently built Barratt Homes development, despite buying their properties in good faith and presumably being reassured by a survey and NHBC 10 year guarantee against defects.

The London Mayor said the ‘government’ should pay, in other words, taxpayers who don’t even own a leasehold flat!

Did you know that forgetting to pay ground rent or service charges, or complying with maintenance orders could result in your lease being forfeited? That’s right, the freeholder can take your property back like some feudal landlord.

Leases are written in favour of the freeholder granting the lease, not the leaseholder paying hundreds of thousands of pounds.

Charity spends £114,000 to defeat a leaseholder over £6,000 disputed charge

Don’t take my word for it, just Google ‘leasehold problems’ and read some of the cases where leaseholders have tried to take on landlords.

In a recent case, a well known charity spent £114,000 to defeat a leaseholder in Onslow Square in Kensington over a £6,000 dispute – which came down from £8,247 originally demanded. The huge legal cost bill means that the woman leaseholder will have to sell her home.

I had a similar problem with a landlord, who I later discovered owned 12,000 freeholds, which I fortunately won thanks to a brilliant barrister and an understanding judge. Had I lost this David vs Goliath case, I would have had to pay out £20,000 in so-called legal costs over a £500 dispute!

I now prefer to buy freehold for obvious reasons, but realise that it is not always possible.

3 Tips when buying a leasehold property

If you must buy a leasehold flat, make sure you:

1. fully understand the lease terms and
2. try to buy flats where you have a share of the freehold and
3. the tenants/leaseholders have control of the management.

Leasehold tenants can take back control of management subject to the ‘right to manage’ rules, but the law still doesn’t go far enough in protecting vulnerable leaseholders and a proper leasehold reform Act is long overdue.

As always, take legal and financial advice before entering into an agreement, and make sure you READ and UNDERSTAND that lease.

Education is key to investment success

If you would like to learn more about property investment and attend a seminar, I have a limited supply of complimentary tickets for an event with a leading training provider - email me charles@charleskelly.net.

Check out my Podcast episode "Leasehold Property Is A Legal Landmine, Read This Before You Buy" on Anchor! https://anchor.fm/charles-kelly/episodes/Leasehold-Property-Is-A-Legal-Landmine-So-Be-Wary-e16oof

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UK House Prices Fall Leaving First-Time Buyers And Buy-to-Let Investors Wondering Where The Market Is Heading

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Litigation Can Bankrupt You So Be A Mediator Not A Litigator

Welcome to Money Tips Daily this is Money Kelly bringing you money tips to help you save and make more money!

Avoid litigation. The well-known phrase "I'll see you in court" often ends in the bankruptcy court or losing your house to pay legal costs, which can run into millions.  Not only is litigation costly in terms of legal fees, but it can also take up an awful lot of time and energy, and literally drain you emotionally.

I once got involved in a dispute over a £500 unfair charge by a freeholder on a leasehold flat I owned. To cut a long story short, they kept escalating to so-called ‘costs’, like a game of poker, and we ended up going to court, but by this time they were claiming £14,000! 

The case took two years of my life fighting this small dispute. In the end, with the help of a great city barrister, who charged me £2000 upfront, I won the case and got my legal costs back. However, in reality I had lost hundreds of hours of my time, energy and sleepless nights.

At all costs, avoid going to court and use arbitration services, ombudsman or just common sense to settle disputes. Sometimes you just need to talk! 

Courts and Judges are notoriously fickle and you can never guarantee which way a case will go. Barristers know that if you upset a Judge, for instance by arguing or not submitting papers on time, the case could go against you. 

In the case of smaller disputes over charges you think you are incorrect, it is sometimes better to pay the charge and dispute it after (obviously not in the case of a dodgy builder who has just messed up your kitchen) . This especially applies to utility companies, banks and credit card companies, who have an unfair advantage over us in that they can register a late payment or default against us which will damage or credit rating, without even going to court.  

Bonus tip. Add legal expenses insurance to your household and motor insurance. It is usually very inexpensive and could save you a lot of money.

Action...Be a mediator not a litigator.

Check out my Podcast episode "Avoid Litigation Be A Mediator Not A Litigator " on Anchor! https://anchor.fm/charles-kelly/episodes/Avoid-Litigation-Be-A-Mediator-Not-A-Litigator-e1632k

Previous:

The Reason Why Property Is The Best Investment

Does It Matter If Property Prices Fall? Find Out Why You Should Care

UK House Prices Fall Leaving First-Time Buyers And Buy-to-Let Investors Wondering Where The Market Is Heading

New HMO Letting Rules Could Drive Landlords Out Of The Buy-To-Let Property Market

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