Posted on Tuesday, September 24, 2013
Autumn has seen a continuation of the strong property market that has been developing throughout 2013.
Activity levels in both sales and lettings are strong and, with confidence growing in the general economy and the Bank of England having signalled that interest rates are set to remain low for some time, the outlook for the remainder of the year and beyond is positive.
The market may be running fast but I’m afraid that I was still unable to break the 1 hour 30 minute barrier at the Great North Run the other week. This year was the fifth time I have taken part in this fabulous event and I completed the course in 1 hour 37 minutes. I’m not getting any younger but there is always next year!
With the sales market buoyant there are some concerns that a “bubble” may be being created, and indeed fuelled, by Government plans to introduce the second part of Help 2 Buy in January. This will see an extension of the scheme that currently applies to new homes and will effectively “underwrite” higher loan to value lending, enabling many more people to get on the property ladder.
Helping people achieve their dreams of home ownership is, in my opinion, a good thing, but this must be balanced by finding ways of increasing the supply of property to the market if it isn’t to just lead to increasing prices.
The new homes market has grown by around 25,000 new homes this year but this remains a tiny fraction of what is required and a combination of new building, bringing empty home back into use and changes in planning to allow for redundant commercial buildings to become residential will all need to be accelerated to support the increasing demand.
For those looking to move, now is a good time with many attractive mortgage schemes available particularly on two and five year fixed rates. If you are looking for a mortgage, our advisers will be pleased to provide you with access to the best that the market currently has to offer.
One thing to be very aware of in regards mortgages is the impact of utilising a payday loan and its adverse effect on your credit rating. A recent report indicated that lenders are routinely turning down applications from people who have used payday loans even when they have been paid off. Lenders see anyone who has needed to use a payday loan as not being in sufficient control of their finances to take on the greater responsibility of a mortgage.
Many tenants are now looking to buy rather than continue to rent but this is unlikely to see a significant downward turn for the private rental market as demand remains strong overall. It will, undoubtedly, make landlords keener to secure good quality tenants and those tenants will want to secure good quality, well managed properties. Whilst maximising the rent is important for a landlord, ensuring regular rental income, avoiding void periods and keeping a well maintained property are key.
Yours
Richard Lowth MARLA MNAEA
