Property Articles

There have been a lot of changes happening in the property market, not least the recent financial worries, that are affecting the estate agents. New legislations, market developments and the advancements in the technology have changed the traditional role of the estate (or letting agent) and their working practices. As a result some estate agents have been struggling.

A string of legislative changes, such as the Home Information Packs and Tenancy Deposit Protection, have been introduced and have had a significant effect on the daily running of the estate agency business.
On the other side, the Internet is now the main driving force behind a lot of sectors and it is dominating everything like it never did before. The property portals and other online sales tools, such as 360-degree Virtual Tours for the estate agency have increased in popularity.

Added to all this, the toughening market conditions due to the financial concerns have had some estate agents concerned about the future.

In contrary to the speculation, at Appleton Estates, we feel that we are at the cutting-edge of the technology as well as our extensive local knowledge. Looking to the future, we feel our innovative and independent thinking will help us grow stronger.

Technorati Profile

After the announcement of the Chancellor Alistair Darling announcing last night that the Bank of England would all existing deposits, the shares of the Northern Rock has gone up today and there seems to be less queues by the savers to get their cash out.

Over the last few days, there is a lot of hype about Northern Rock. Here are some details on the situation:

Due to the recent issues in the US mortgage market, NR recently decided, for safety’s sake, to open up what’s effectively an overdraft facility with the Bank of England. Due to the problems in the US market, the banks are unwilling to lend each other money and NR’s business model is based on borrowing money from other financial institutions.

Because of the media coverage lead to panic and people are trying to get their savings out.

As a result of these recent events, we have already seen some banks/building societies increasing their rates although the Bank of England has kept the base rate unchanged.

Almost everyone is predicting that getting mortgages is going to become more difficult and the cost of the mortgages are going to go up. However, very few are predicting a housing market crash citing the huge demand for property outweighing the supply at the moment.

We would strongly recommend any investment landlords who have fixed rates mortgages that are ending their period before the end of 2007 to seek professional financial advise as soon as possible.

According to a new study published today by the Royal Institution of Chartered Surveyors, the house prices fell last month for the first time in more than 2.5 years as the recent rate rises have cooled down people’s appetite for property.

House price growth turned negative since October 2005 said RICS.

The demand for property is continuing to weaken as rising interest rates further hit affordability levels, the report added. Overall 1.8 per cent more chartered surveyors saw a fall in prices during August than those who saw a rise, down from 10.8 per cent more who reported a rise in July.

According to the Royal Institution of Chartered Surveyors (RICS), the recent increases in the interest rates have not slowed down the buy-to-let market.

The RICS indicates that the slowing housing market and high interest rates are pushing the first-time buyers to stay rented accommodation. This has resulted in the fastest rent rises.

New landlord instructions, which is quoted as an indicator of buy-to-let activity, increased significantly in the second quarter of 2007 too.

Rent-flation

During the recent years, the number of buy-to-let mortgages has almost doubled. 1 in 10 mortgages are now for investment properties.
The growing influence of buy-to-let investors, with more financial muscle than the typical first-time buyer, helps explain why house prices in the UK are still rising briskly, despite the Bank of England having imposed five rises in interest rates since the summer of 2006.On Monday, BBC news reported that the house price inflation picked up again; rising from 12.1% to 12.4%, its highest since March 2005.

The Bank of England has kept the base interest rates at 5.75 today.

Amid the recent financial problems due to the U.S. mortgage issues, the Bank has recently intervened in the marketplace and today’s news was expected.

Unlike the predictions of the base rate going up to 6% by the end of the year, some analysts are now expecting the rates to be kept at the same level and some even argue that they should be reduced.

Either case, this should be good news for the investment property landlords.

With strong rental demand in the Maidenhead and Reading area, many letting and estate agents are struggling to find new properties to offer to applicants and, in a desperate attempt, are reducing their fees drastically to attract prospective landlords.

At face value, this may sound like positive news. However, the landlords should be wary of offers that seem too good to be true.

Landlords should keep in mind when picking a letting/estate agent that you get the professionalism and service you pay for. Slashed fees may result in a poor letting/management service. Even worse, the agent may end up having insufficient funds to survive.

The letting and management of residential properties is a very complicated and costly process; it demands significant time and resources as well as money. Some people have a misconception of thinking of lettings only requiring to advertise in the local paper.

As a start, having well-trained and knowledgeable staff is vital. Vetting the prospective tenants carefully is very important too. Keeping up-to-date with all the complex legislation is must for both the landlord and the tenant’s sake. Addressing the management issues promptly is very key and tend to be a round-the-clock responsibility for the managing agent. This list can be extended significantly with lots of other issues that people tend to take for granted.

Naturally, landlords will, of course, aim to keep their outgoings to a minimum and will seek a competitive letting/management rate. However, landlords paying unsustainably low letting or management fees must be aware of the risks of associated, such as the property not being marketed in the correct manner or to the right people.

As we have seen in Maidenhead area before the agents being driven to insolvency due to unrealistic fees is a very real possibility.

When choosing a letting agent, the we advise the landlords to base their decision not only on the agency fees alone. They should also take into account the overall service that the agency provides, their experience in the lettings and management business as well as the knowledge of the local area, their reputation and professionalism too.

What is conveyancing?

Conveyancing is the legal process whereby the ownership of a property is transferred from the seller to the buyer. In simple terms, it is the legal process of buying and selling property.

Who does the conveyancing?

In general, the conveyancing work is carried out by a solicitor or a licensed conveyancer. One lawyer cannot act for both parties, as this would cause a conflict of interest so therefore both the buyer and seller will have their own representation.

Nowadays, with the increased popularity of the Internet, the e-conveyancing is on offer as a less expensive alternative too.

The recent data from Nationwide shows that there are clear signs of a slow down in the housing market. Although the house prices have gone up 0.6% in August, Nationwide says that the annual house price inflation has fallen down to 9.6% from 9.9%.

These finding have been backed up by separate sets of data that has recently been published by Halifax and by the Land Registry as well.
The recent actions that the Bank of England have taken seem to be the key factor in this.