Property Articles

The mortgage lending fell again in September in the UK as interest the rate rises slowed the housing market and house prices continued to fall.

According to a recent survey, a total of £30.6 billion was advanced during September. - This is the lowest monthly lending figure since April of this year. The amount lent to first-time-buyers fell sharply to £12.7 billion, down from £16.2 billion in August. They are now spending an average of 20.4% of their income on mortgage interest payments, figures showed.

The increase is part of a trend which began in early summer and reflected interest rate rises in May and July, the Council of Mortgage Lenders said. But the credit crunch, which has led lenders to tighten their belts, has only just started to affect mortgage approval numbers, suggesting interest rates could be increased again in the coming months.

Figures also showed a fall in house prices for the third month in a row. Analysts expect these factors to combine to further cool the property market.

We believe this data suggests that higher interest rates are now beginning to slow down the housing market. However, due to the recent turmoil in the financial markets the mortgage  costs are certainly going to increase.

The Royal Institution of Chartered Surveyors (RICS) claims that the housing market slow-down is becoming more apparent.The RICS UK housing market survey published in November suggests that prices in October fell for the third month consecutively. This is the fastest pace since July of 2005.

Most of the surveyed areas have indicated a slow-down since the summer and London seems to be the only exception.

This is yet the clearest sign of the widely forecasted house market slow-down so far and the recent troubles in the financial sector seems to be a big influence.
A combination of high prices and increased interest rates have finally reined in the housing market, with the unaffordability of homes, relative to average incomes, having risen to record levels.

Enquiries from new buyers also fell, for the 11th month in a row, as other factors came into play.

With the buy-to-let investments becoming more popular everyday, more and more people treat their investments like businesses.

As with any other business, the property investment should therefore aim to maximise the income from the rentals. This is a fine-balancing
act of keeping the property in a “desirable” state while ensuring that the vacant period for the property is minimal.

Naturally, it is not easy or realistic to find tenants that stay in the property for years. Currently, the average tenancy period seems to be
around 10-14 months in the South East of England. So, on average, the landlords go through a tenancy renewal once every year.

As a premier estate agent in Maidenhead, to help our valued landlords strike the right balance, Appleton Estates aim to achieve 2 key objectives
for our valued landlords while managing their properties:

1. Our main aim is to secure the next tenancy in advance so that there is either no vacant period or it is kept to a minimum window. Appleton Estates ensures this with our extensive and timely marketing strategy. We not only market the properties the local printed press but also heavily market them on the Internet well in advance so that a new tenancy can be secured as early as possible.
2. Our second goal is to make sure that the property is cleaned to a professional standard by the tenant who is vacating the property. As part of the change-over process we also ensure that the property is prepared for the new tenancy (cleaning, safety check, etc.). While this process may add a few days to the change-over period, it can easily be justified when considering the need for the property to be well-maintained and well-presented in the market place.

We have a network of highly experienced inventory clerks to ensure that the property is well maintained during the tenancy and is ready for the next.

It is also important for the landlords to consider what upgrades they need to keep the property in a desirable state and time the work well over the tenancy change-over. This would be the best time to carry out maintenance work such as replacing the carpets, repainting the interior walls or tiling bathrooms when the property is vacant.

Whilst novice landlords think that having a ‘back-to-back’ tenancy maximises their income, this may actually be counter-productive for the investment. This would cause long term deterioration and reduction of the asset value of the property. As with any business, the property business requires some ongoing investment.

The recent figures announced by the Land Registry is backing up the recent claims of a housing market slow down. According to the published data, the annual inflation rate for residential properties fell in September to 8.7%, down from 9.4% in August.

Although the Bank of England has kept the base interest rates unchanged this month, many analysts are predicting some cuts before the end of the year.

The slow down in the residential sales market traditionally increases the rental demand as more first time buyers tend to keep hold on to their money until everything settles down. The managing director of Appleton Lettings in Maidenhead, Sarah Akkus said “this is certainly in-line with the increase we have experienced in our rental and management division”.

According to the Islamic law, Sharia, the Muslims are forbidden to pay or receive interest. Most of the mortgage products on the market thus were unsuitable for Muslim borrowers as these mortgages are mainly based on interest.

As a result of the increasing demand by the Muslim borrowers, lenders have in the recent years expanded their product ranges with Sharia compliant mortgages. Under Sharia law, two mortgage types are available to potential homeowners: Ljara (Lease To Own) and Murabaha (Deferred Sale Finance) loans.

The Ijara Loan

By this method, the mortgage lender would buy the property from the vendor; becoming the owner. The lender then leases the property to the over 20 to 25 years with a monthly lease payment. The lease payments would take all of the lender’s costs into account.

Now the Muslim borrower’s payment would now be treated as rent instead of “interes”. And the payments would fluctuate with the interest rate changes.

The lease agreement would also specify that the occupier can buy the property off the lender for a very small sum, usually £1, at the end of the lease period.

The Murabaha Loan

By the Murabaha method, the mortgage lender purchases the property and immediately resells it to the Muslim borrower at a higher price.

The profit that the lender essentially makes out of this transaction is the equivalent of all the interest on a fixed interest loan as well as any costs incurred. The borrower then buys the property from the lender at that gross figure, which is then repaid to the lender in equal installments for a period, typically of 15 to 20 years.

If you are searching for Cookham Estate Agents, then you have come to the right place. We are one of the best estate agents Cookham area with an exceptional reputation for outstanding residential property services.

You can find find a selection of our fantastic reviews here. At Appleton Estates, we take pride in our customer-friendly agents and trust our long-time landlords have placed in us.
We cover Cookham Village, Cookham Dean and Cookham Rise areas. At Appleton Estates we have an extensive knowledge of the Cookham, Maidenhead and the surrounding areas at a personal and professional level.

Our vast range of residential property services includes the sales, rentals and management as well as house staging. We have been successfully dealing with town houses, cottages, flats as well as new developments.

If you are a landlord or tenant or an investor, please contact us for advice on purchasing, lettings, management, rent reviews, general maintenance, rent collections and sales market appraisals.

When beginning to invest in residential property, a big question that will have to be addressed is “Should you let it or fix it up and sell it?” There are advantages and disadvantages associated with each choice. While the best answer depends on many different factors, in many cases there is a long-term advantage to letting the property versus flipping it for a profit.

Owning rental property can generate a good level of income if the property is located in the right area. If the property is in a transitional area, one where individuals tend to move within about five years, then a rental property at the right price is a great commodity. In these cases, the investor will have no trouble finding a renter who will be interested in the property.

Letting the property can result in a greater profit for the investor over time because the investor is obtaining money from the property each month for a number of years instead of one lump sum payment. The money can quickly add up and the cost of the mortgage on the property can be built into the monthly rental payments.

Buying suitable properties cheaply enough, however, to generate a profit generally means that there are things that will need to be fixed with the property before it is ready for renting. This may take a great deal of additional money and recouping the initial investment will take longer because of the money spent to renovate the product, not to mention the time the property remains vacant during renovation.

If the investor cannot find a tenant or the tenant has to be evicted for any reason, the investor will lose money until another renter can be found. If you never understood the expression “Time is money” before, it will be your mantra if you find yourself in this situation. Routine maintenance becomes a one-sided drag on your finances without a rental income, and if the property becomes damaged the list of people to pay for it begins — and ends — with the investor. However, using property specialists, such as Appleton Estate Agents in Maidenhead will help the investor deal with these types of potential issues before they start costing time and money.
There are many advantages for an investor to rent out a property instead of selling it for a quick profit. The prospect of regular payments over an extended period of time is typically enough for many investors to decide to rent out the property, but all investors must remember that there is a downside to hanging on to the property as well. Each decision must be made depending on the situation at hand, but in many cases, after a careful analysis of the risks involved, the investor will go with the advantages of lettings.

Article contributed by Colorado’s Fort Collins real estate service, Automated Homefinder.

The Prime Minister, Gordon Brown, has announced today that the long awaited Crossrail project will go ahead and the Government will supply the final third of the required funding. The £16 billion project will start in 2010 and become operational from 2015.

The news has been welcomed with eagerness by the property agents and investors alike. The line will start in Maidenhead, expectedly boosting the local property market as well as the businesses. It will almost halve the travel into the City of London and the Maidenodians do not need to even change trains.

The Crossrail will not only help modernise the rail travel into London from Maidenhead but will also create a lot of jobs into the Maidenhead area; with a very significant impact on the local housing market. Already there is a big build up of office headquarters in and around Maidenhead, most of which is currently vacant at the moment.

The BBC website reports almost a train every few minutes from Maidenhead. This is going to make some of the areas around Maidenhead property hot-spots.

However, there is still a long time to the launch of Crossrail and it would be safer to be cautious until all the specific details are published.

According to the Nationwide Building Society, the recent financial concerns (especially the Northern Rock problems) have not affected the UK housing market in September and the prices are still rising in the month.

As expectedly, though, the sub-prime (or riskier) mortgages have become more constantly to the borrower.

The prices rose by 0.7% in September but more importantly the house price inflation has slowed down to 9% from 9.6%. This is almost the lowest level over the last 12 months. The Building Society suggests that this slow down is mainly due to the base interest rate increases by the Bank of England.

Different surveys from different sources indicate conflicting conclusions, though. For example, Halifax claim that the house prices are still on the increase whereas other sources, such as, the Royal Institution of Chartered Surveyors are now more certain that the long awaited slowdown in house prices has already started this summer.

Slowing property demand

Earlier this week, Barratt, one of the biggest house building companies in England, published up to a 10% fall in its property sales over a week following on from the Northern Rock difficulties.

Good news for the borrowers?

Many market analysts are now forecasting that the Bank of England will start cutting the base rates before the end of the year in order to help the economy. This should certainly help the existing borrowers. But one thing seems certain that the high risk borrowing cost is not going to get much cheaper for a foreseeable future.

Essentially, home staging means setting up the property so it can make the best possible impact on the potential buyers or tenants.

Start the home staging process as early as you can once you have decided to sell/let your property. Don’t wait until your property is on the market for a long period that you are potentially forced into lowering the asking price.

View your home honestly from a buyer’s/tenant’s perspective. You may need to invest some money and effort to carry out small repairs. Give your house a touch up or get it painted. Ensure that your property has “curb-appeal”; trim the hedges and mow the lawn.

Organise your belongings and eliminate all the clutter or unwanted items. If you don’t use something throw it away. This will help when you move. Clean all areas from the outside to the inside. People look at corners that you might over look so inspect your home before you show it and give it one last cleaning before your buyers/tenants arrive. With everyone’s help, organize and make your house look neat and in order, this will make it less stressful
and everyone can take pride in what a great job they have done.

Lighting is very important too. Good lighting with lively colors will increase the rooms’ visual appeal.

If you cannot figure out what to do by yourself, you may consider hiring someone to help you. Appleton Estate Agents Reading would be happy to come to your house examine you property, and make skilled and very useful observations and recommendations on what you need to do.

When the potential buyer or tenants arrive, let them imagine what the property would look like with their own furniture in it.