Economists expect figures on Thursday to show that GDP fell 0.4% in the second quarter, up from a decline of 0.5% at the last estimate and 0.7% in July’s preliminary assessment.

The revised figures, which suggest the country’s double-dip recession has not been as deep as feared, come as high-profile commentators have detected signs of recovery.

Spencer Dale, chief economist at the Bank of England, said on Friday there was “light at the end of the tunnel”, echoing Sir Mervyn King, the Bank’s governor, who said last week there were definitely “signs of a slow recovery”.

Britain is expected to emerge from recession in the third quarter with growth of at least 0.5%, more than recouping the output lost in the second quarter. The preliminary estimate for June to September will be published on October 25. However, the economy is still expected to shrink by 0.3% to 0.5% over 2012 as a whole because growth in the second half is unlikely to offset the contraction from January to June.

The financial policy committee of the Bank of England is due to publish its latest statement on the economy tomorrow. It is expected to renew calls for banks to raise capital levels.

source: www.thesundaytimes.co.uk 23/09/2012

The maximum penalty will be six months’ prison and/or a £5,000 fine.

Trespassing will be where someone knowingly enters a residential building as a trespasser, and is either living there or planning to live there without the owner’s consent.

There will no longer be a requirement for the property owner to ask the trespassers to leave before being able to involve the police.

Police will have a specific duty to enter the property to arrest anyone suspected of squatting, and can ignore ‘squatters’ rights’ notices.

The new offence will make it harder for trespassers to claim trespassers’ rights, because their occupation will be a criminal act.

Squatting as a criminal offence will not apply to residential tenants who continue to stay in a property, despite paying no rent. They will still be subject to the normal eviction proceedings.

Nor will it apply to people who think they had permission to live in a residential property. Government guidance specifically gives as an example a situation whereby a bogus letting agent encourages an unsuspecting tenant to occupy someone else’s property.

The offence will not apply retrospectively, so people already squatting in a residential property by September 1 will escape prosecution.

The offence is part of the Legal Aid, Sentencing and Punishment of Offenders Act 2012.

source: Letting Agent Today

In a new PrimeLocation survey, around two thirds (63.4 per cent) of parents said they had contributed to their children buying their first home. Of these, a lucky one in nine children (11 per cent) were given £100,000 or more, while seven per cent of parents said they’d bought a house for their offspring outright.

“Time was when parents would cut financial ties with their children after they left school,” said PrimeLocation’s property analyst Nigel Lewis.

“But increasingly, the costs of getting started in life are rising, and parents are having to step in and help – including getting them onto the property ladder.”

PrimeLocation.com surv-eyed 712 UK parents in March 2012. They found many had made significant sacrifices to fund their children’s first property, with a considerable number downsizing or remortgaging to find the money for the deposit.

“We’re seeing an increasing number of first-time buyers unable to leave home without parental support,” said Jason Tebb, regional managing director for Your Move, which has offices in Sutton.

“However, recent trends suggest this assistance goes beyond that of ‘bank of Mum and Dad’ deposits.

“With rents continuing to increase – albeit slower in April than in March according to the latest buy-to- let index from our parent company, LSL Property Services – we’re finding renters also need to get parental help to fund their first deposit on a rental home too. And due to ongoing economic uncertainly, we don’t see this situation easing in the short term.” The PrimeLocation survey also found 11.2 per cent of parents allowed their children to live at home to save money for a deposit, while 5.2 per cent helped with the mortgage payments.

Among parents whose children still live at home, an overwhelming majority said that they would be willing to make significant sacrifices to ensure their children are able to buy a home. More than a quarter (28 per cent) said that they would be willing to sacrifice luxury or non-essential purchases, 20 per cent would withdraw money from a pension or savings, 17 per cent said they’d downsize or release equity in their homes and 13 per cent would take on new or additional mortgage debt. Only 6.4 per cent said they wouldn’t be contributing at all.

“With nearly two thirds of the UK’s parents providing financial assistance, this shows that despite the difficult economy, people are still viewing the property market as a worthwhile investment,” concluded PrimeLocation’s Nigel Lewis.

source: Croydon Guardian

It says that currently first-time buyers are trying to get on to a housing ladder that has no rungs.

It says that such a scheme could either lend or guarantee first-time buyers ‘a reasonable deposit’ in return for a stake in their homes.

The RICS says that this would free up stagnant chains, give first-time buyers access to the market, and provide the Government and taxpayer with ‘a clear return on investment’.

The organisation says that currently, 38% of potential buyers are trapped in rental accommodation as they cannot afford to access the property market. The RICS also says that one in five people who do try to buy are seeing their purchases fall through, due to difficulties with mortgage finance.

The NewBuy scheme offers purchasers – not just first-time buyers – 95% mortgages, with lenders being given indemnities, backed jointly by developers and taxpayers, to cover their losses if the property has to be repossessed and falls into negative equity.

The scheme covers new-build purchases of up to £500,000, but has come under fire for its high rates.

Peter Bolton King, RICS global residential director, said: “Many first-time buyers are facing the prospect of a property ladder with no rungs.

“With lenders requiring such hefty deposits and affordable mortgage deals out of reach for most, a generation of potential home owners are facing an uphill struggle.

“The RICS would like the Government to consider a mortgage indemnity scheme that works for the whole market, not just new-build. NewBuy could potentially lead to market distortion by reducing demand for secondhand property.

“Without allowing first-time buyers greater access to the second hand market, chains and transaction levels will continue to stagnate.”

Source: www.estateagenttoday.co.uk 25th July 2012

Perry: What’s the main difference between freehold and leasehold Joe?

Joe: If you own a freehold property you own the everything in its entirety. The land, the building, the air above, and the ground below. If you own a leasehold property, you only own the right to occupy the demise set out in the lease for a set period of time. Essentially with a leasehold property, one day the lease will expire and you will either have to negotiate with the freeholder to extend the lease, or simply hand back the keys.

Perry: Are there any current issues our Clients need to be aware of?

Joe: Yes, following the banking crisis which came to light in 2008, much stricter regulations have been imposed on UK banks and subsequently their lending criteria have changed. Many high street lenders will not lend on properties with less than 75 years remaining on a lease, and a number of lenders insist there must be more than 80 years. It is not just the lenders that are taking this stance either. Good Solicitors acting for purchasers will also highlight the issue, and will notify the inspecting Surveyor. Often these “red flags” get raised right at the very end of the process, after everyone has spent a lot of time, effort and money on the home move.

Perry: What impact do short leases have on the value of properties?

Joe: As the lease gets shorter and shorter the value of the leasehold property decreases. If you market a property with less than 75 years on the lease you are minimising your potential purchasers to investors and cash buyers. It is very unlikely these people will pay anywhere near full market value for the property. In short you will not realise the maximum potential value of your property.

Perry: What can our Clients do to pre-empt the issue?

Joe: Everyone should check their lease length, it is a really important fact they must know. If their lease has less than, say 85 years remaining, then there could potentially be an issue. If considering buying a leasehold property, always ask how long is on the lease before you spend any time or money on the purchase.

Perry: What if the lease is under 85 years, what should they do?

Joe: The Leasehold Reform Housing and Urban Development Act 1993 (as amended) gives leaseholders the right to extend their lease by 90 years and at a peppercorn ground rent, as long as they have owned the property for more than 2 years. It also states how to calculate the cost to extend the lease. When a lease drops below 80 years the Leaseholder has to pay marriage value. This significantly increases the cost of a lease extension. We can work out the cost of the extension for your Clients and negotiate the premium with the Freeholder.

Perry: What if the Freeholder is, shall I say, difficult?

Joe: We can ask a Solicitor to serve a formal notice on the Freeholder forcing a lease extension. As a Leaseholder, meeting the relevant criteria, it is your right to have a lease extension. It can take longer on this route. We have agreed lease extensions informally within a matter of days, but it can take up to say 9-12 months if your Freeholder is very difficult. But don’t worry, we can be difficult with them too if need be!

Perry: What is the criteria?

Joe: Basically the lease has to have originally been for longer than 21 years, and you have to have owned the property for more than 2 years.

Perry: So if, after reading this, our Client’s aren’t sure what to do, how can you help them?

Joe: We specialise in lease extension valuations. There are various ways to extend the lease in this situation to realise the maximum value of the property. If your Clients don’t have the money available, we could try to negotiate a lease to simultaneously exchange contracts with a sale. There are lots of options available, but it is important to start the process early, and not wait until the last minute, or bury your head in the sand! We will happily run through any questions your Clients may have free of charge prior to instructing us.

Arnold and Baldwin can be contacted here: http://www.arnoldandbaldwin.co.uk/

Like the earlier HSBC deal, Sandander’s 2.99% fix is available only for borrowers with a 40% deposit, squeezing out those without big deposits or who do not have plenty of equity in their existing homes.

It comes with the same hefty £1,499 fee, and is available only for existing customers of the bank.  The HSBC deal is available to non-customers.

The 2.99% rate and 60% LTV maximum compares with Santander’s five-year fix at 3.89% at 70% LTV.

Elsewhere, the Government’s new £80bn ‘funding for lending’ scheme also looks to be having an effect, after the announcement prompted a drop in wholesale borrowing costs – the scheme itself does not come into effect until August 1.

Cheltenham & Gloucester, Northern Rock and Principality all cut rates last week on some deals for new customers. Principality cut up to 0.6%, while Cheltenham & Gloucester and Northern Rock made cuts of up to 0.2%.

The Royal Bank of Scotland cut its five-year fix for first-time buyers with a 10% deposit by 1.7%,  down to 4.79%, whilst Halifax has removed upfront fees on its two-year fix for customers who are remortgaging.

Santander has also launched two new intermediary deals, via Abbey for Intermediaries. One is a 2.99% three-year fix and the other a five-year fix at 3.49%, available for loans of up to £500,000.

Whilst the five-year fix is obviously higher than Santander’s direct-only 2.99% deal, it could attract those who do not fulfill the bank’s strict criteria – borrowers must already either have a Santander mortgage and be moving home, or must have had a current account with the bank for at least 30 days at the time of application.

Both products come with a £1,495 fee and with Abbey for Intermediaries’ homebuyer or remortgage solution.

Homebuyer includes a free standard mortgage valuation and £250 cashback, while the remortgage solution offers a free standard mortgage valuation, and either free legals or £250 cashback. Fees can be added to the loan and the maximum loan size on all products is £550K.

Santander’s mortgage intermediary partners include Countrywide and LSL.

source: www.estateagenttoday.co.uk 24th July 2012

A frequent source of complaint is the suggested asking price given in a market appraisal, usually by sellers disappointed with the price they ultimately achieve. They complain of over-valuation at the point of instruction, or of selling below market value. Sometimes both, which may seem a contradiction in terms to an agent trying to answer their complaint.

THE PALATABLE PRICE
An unusual valuation complaint, however, was recently made to my office. A would-be seller complained that the estate agent had so undervalued her property that she was prevented from instructing them.

Closer consideration revealed that the complainant had been trying to sell her property for three years, using a number of local estate agents, but had attracted no interest at all at the asking price she had set for her property.

The estate agent about whom she complained had put forward a well-reasoned explanation as to why they felt the property was worth 20 per cent less than she was seeking, and supported their advice with prices achieved locally for comparable properties. In particular they had taken into account that, since she bought the property, lenders had tightened their lending criteria such that the property had become unmortgageable. She needed to attract a cash buyer. Though their advice was not what she wanted to hear, it was demonstrably frank and fair, and I commended the agents for declining to market the property at a price they felt stood no realistic chance of success.

The irony of the complaint, which was by no means lost on the complainant, was that she had bought the property years earlier through the same estate agent, and had paid more than they were subsequently recommending as an asking price. I understood why she felt she had overpaid, but made the point that when she bought, the estate agents in question were working for the seller and had no duty to her as a buyer to advise on what she ought to pay.

It seems that the complainant found another agent who was willing to market the property at a price which was more palatable to her. I have not yet learned whether she has finally managed to sell the property, and if so, at what price.

It is a commercial decision for any estate agent as to whether they are prepared to market a property at a price on which their seller client insists but which they consider unachievable. However there is a significant risk of later complaint in such situations, either because the seller blames the agent because they have not sold or because they are disappointed with the offers received. It then becomes essential that the agent can demonstrate to me that they advised the seller client frankly and realistically, both as to a suitable asking price and likely selling price, and that in doing so, they acted in accordance with Paragraphs 2a and 2b of the TPO Code of Practice.

Fundamentally, Paragraphs 2a and 2b of the Code of Practice expect estate agents to be able to show that any figure advised as to an asking price or a likely selling price was given in good faith and reflected market conditions. It must be supportable, wherever possible with comparables. Marketing strategy must be kept under regular review.

If an agent is asked to market at a price they think is unrealistic, they should confirm their advice as to what is a suitable asking price and likely selling price in writing. Recollections of converations at the point of instruction are all too often a matter of dispute.

THE REDUCED PRICE
In a recent case, I considered the potential pitfalls associated with marketing valuations. The case exemplified the dilemma faced by estate agents. The sellers complained of overvaluation to secure their instruction and undervaluation to achieve a quick sale. Typically such complaints arise where the estate agent has given advice on an asking price, is instructed, and later recommends a price reduction. If followed by a quick sale, sellers can sometimes feel that not only was their property initially over-valued to gain an instruction, but that they have then undersold so that the agent earns a quick commission. My office receives many complaints from sellers who feel they have been duped into instructing an agent by the prospect of a high price, only to discover that they achieve much less.

In the recent case, the estate agent had recommended an asking price which both parties understood was ‘high’.

The complainants were aggrieved that only two weeks after they instructed the agent, they were advised to reduce the asking price by five per cent. They were then advised to accept an offer after six weeks marketing which was ten per cent below the original price.

At first sight, it is easy to understand why the complainants were disappointed and blamed the agent, but, again, closer investigation revealed that the situation was not as clearcut as the complaint suggested. At the time of the valuation, the complainants had no onward purchase in mind. They wanted to test the market and discussed a marketing strategy which involved starting at a high asking price with a view to reducing if needed. I commented that as long as it is clearly explained and suits the client’s circumstances, it is a fair tactic for an agent to suggest testing the market at an optimistic price to assess the level of interest and achieve the best possible price, provided the marketing strategy is kept under regular review.

In the brief time the complainants’ property was being marketed at the initial price, there was one viewing, which attracted no adverse comment about the price. However, the complainants’ situation changed after two weeks when they found a house on which they wanted to offer. They needed to be in a proceedable position to compete with other applicants who were looking at the same property. In short, they needed to find a buyer quickly and asked the estate agent for their advice.

I considered two questions. Was the initial asking price supportable, reflecting market conditions, or was it inflated to secure instruction? The letters sent to the complainants and the market appraisal records within the agent’s file showed that the agent had acted in good faith and took all relevant factors into account, including what was then the complainants’ position as prospective sellers. There had been a viewing at the initial price. The final sale price was within ten per cent of their initial recommendation. The ‘high’ asking price had not, it appeared, discouraged viewings or culminated in offers outside usual parameters for negotiation. There was nothing to support a conclusion that the price was so inflated as to amount to a misrepresentation of the value of the property in order to gain instruction.

The second question I considered was whether, once the agent realised that the complainants needed a buyer quickly, they gave the right advice to reduce and sell for less than initially hoped. Over the four weeks which followed the five per cent price reduction, there were seven viewings and two offers, one of which was accepted. It appeared to me to have been the right advice to achieve the complainants’ objectives, in that it stimulated interest and the offer achieved was a fair reflection of the complainants’ changed circumstances.

THE LESSONS
Key lessons for estate agents to take away:

1. Keep good market appraisal records (Paragraphs 1h, 2a and 2b of the TPO Code of Practice).
2. Explain your reasoning on price and advise the seller in writing whenever possible (Paragraph 2a of the TPO Code of Practice).
3. Be able to support your advice with written contemporaneous records and keep with your file (Paragraphs 1h, 2a and 2b of the TPO Code of Practice).
4. Do not be afraid to refuse instructions to market at an over-inflated price.
5. Carefully explain tactics if they involve testing the market at an optimistic price and make sure your client knows you will be reviewing the price and suggesting a reduction if viewings do not materialise or if their circumstances change (Paragraph 2c of the TPO Code of Practice).
6. Keep the marketing strategy under regular review, particularly after the first few weeks if there is little interest (Paragraph 2c of the TPO Code of Practice).
7. Be prepared to terminate an instruction if your client rejects your advice and insists on marketing at a price you consider stands no chance of success.
8. Always make clear that a suggested asking price, whether it is the price you suggest it or the one your client favours, is no guarantee that it will be the price your client will ultimately achieve.

Manage your client’s expectations from the start.

Source: PropertyDrum 14 May 2012

Property Place, which launched earlier this year, has completed a round of venture capitalist funding with Finance Yorkshire.

This fresh capital has allowed the business to add new staff to its management team to help accelerate its growth, said founder Sohail Rashid.

The chairman is Dean Fielding, who was group financial director of LSL for eight years. He is joined by sales and operations director Yuseph Hedar, formerly CEO of Green Flag, and Alex Craven, digital director, who has founded two successful digital marketing agencies.

Rashid said: “I am really excited about our team and plans. All of them have excellent credentials and we will soon be introducing some exciting new improvements to the application.

“This new team will build upon Property Place’s current success, and continue to help sellers and estate agents in tough market conditions by more efficiently connecting them with the right buyers through our social media platform.”

Fielding said: “When I first looked at Property Place, I was instantly impressed with the business model. There is a real need in the market for an innovative service particularly for independent and regional estate agents.

“Property Place has the ability to change how independent agents market their properties and connect with new clients. We can offer something that no other traditional portal is able to.

“I’m looking forward to help shake up this sector and add some much-needed competition and innovation.”

The new funding will also be used for consumer marketing campaigns.

https://apps.facebook.com/propertyplace/

Source: EAToday 15 June 2012

One in six home owners looking to trade up for the first time may have to ask their family for financial support to make the move.

The price difference between a typical first-time buyer property such as a flat, and a subsequent home such as a semi, is on average £41,000, and in Greater London nearly £98,000.

Over half (52%) of ‘second steppers’ believe they will not be able to afford the deposit for their next property.

The additional capital needed by second steppers to trade up is an almost 200% increase on the £14,000 that was required to plug the gap ten years ago.

Two thirds of current first-time buyers are living in flats (43%) or terrace houses (25%) with an average value of a flat at £148,502. Over half hope their next move will be to a three-bedroom house. The average price for a semi-detached house stands at £189,312.

This means that those looking to make the move face a 27% premium just to trade up, before adding on the cost of moving or the fact that there may be an equity shortfall in their current property.

Stephen Noakes, mortgage director at Lloyds TSB, which did the research, said: “We already know that second steppers face a number of tough challenges, and in many ways have been the hardest hit by the subdued housing market, so it is unsurprising that they are struggling to fund the gap needed to trade up to their preferred second home.

“Parents have long been helping to fund their children’s first home, but many are now having to provide further support as they move up the ladder. This indicates that these customers still need attention and support.

“To achieve a sustainable housing market we need to see movement throughout the market.

“If second steppers get stuck on the first rung, movement at the bottom half of the ladder comes to a standstill.”

Source EAToday 11 June 2012

A SHORTAGE of homes for sale is keeping property prices buoyant, Britain’s biggest building society said yesterday.

Prices rose by 0.3 per cent last month – the first increase since February – wiping out a similar fall in April, according to the Nationwide.

Overall prices are 0.7 per cent lower than a year ago and the cost of a typical three-bedroom semi is now £166,022.

Perry Power, director of estate agents, Power O’Shea, said: “There has been a rise in activity in recent months. The market is stabilising rather than collapsing and while demand overall is still weak, so is supply and this is acting as a glass floor under prices.”

The Nationwide said house prices are still high relative to incomes, at more than five times average earnings.

The Government has launched a scheme allowing buyers to purchase a newly-built home with a fraction of the 20 per cent deposit often demanded by lenders but analysts say this is not enough to kick-start the market.

The Nationwide house price index was first produced in 1952.

During the Queen’s reign, average prices have risen almost 88-fold from £1,891, while the cost of goods and services has risen 25-fold.

source: http://www.express.co.uk/features/view/323728/House-shortages-helps-push-up-prices