UK ‘Pays Highest Property Taxes’

This article by This is Guernsey on November 7th, 2013 tells us that in the developed world, British people are the one who pays the highest level of property taxes.

British people pay the highest levels of property taxes in the developed world, a think-tank says.

 

British people pay the highest levels of property taxes in the developed world and more than twice the average for the 34 rich countries in the Organisation of Economic Co-operation and Development, according to a think-tank report.

The right-of-centre Policy Exchange said politicians should reject new levies on property – such as the “mansion tax” on residences worth over £2 million favoured by Liberal Democrats and Labour – and instead pledge to bring down housing costs by building 1.5 million new homes by the end of the decade.

The report called for at least one new “garden city” and changes to planning rules to deliver 300,000 new houses a year.

Councils that fail to hit their own housing targets should be forced to release land to local people who want to design and build their own homes, said the thinktank.
The report calculated that property taxes including council tax, stamp duty, inheritance tax and capital gains tax amount to 4.1% of GDP in the UK – the highest in the OECD and well above the average 1.8%.

By comparison, Canada levies 3.5% of national income in property taxes, the USA 3%, Japan 2.8% and Germany 0.9%.

Alex Morton, head of housing and planning at Policy Exchange, said: “No other developed country taxes property more heavily than the UK. Yet rising house prices and falling levels of home ownership have led to many calling for an increase to land and property taxes.

“But these issues will only be solved by genuine reform of the outdated planning system, not a tax raid on peoples’ homes. Politicians cannot try to do everything at once and must focus on the most crucial issues.

“The evidence shows where excess credit and under-supply exist, taxation or subsidy can only have a limited impact. That is why policymakers should ignore calls for a new round of property taxes and instead commit to spreading the benefits of homeownership and stabilising the UK economy by building at least 1.5 million new homes over the course of the next Parliament.

“This means serious reform of the planning system and creating new ways to deliver housing.”

A Government spokesman said: “The UK has the fourth lowest transaction costs for moving house with property taxation making up the smallest component of overall costs.

“The Chancellor has been clear there are no plans for a new house price tax on family homes. This Government has frozen Council Tax for hard-working people and cut business rates for small firms, despite the need to pay off the deficit left by the last administration.

“We have delivered a series of reforms to speed up and simplify the planning system, including a comprehensive package to support self-builders. House builders credit Government action for getting the housing market moving again, and schemes like Help to Buy are giving hard-working people a helping hand to increase home-ownership”
Dan Wilson Craw, spokesman for the PricedOut campaign for people who would like to buy a home but cannot afford to, said: “Every month, private tenants are seeing their dream of home-ownership slipping further from their grasp – and all the while they’re paying off the mortgage of their landlord who gets rich from rising house prices.

“This is a symptom of a society that treats houses as an asset to speculate on rather than somewhere for people to live. Tinkering with the tax system could help make the system fairer, but under-supply is the real problem. If political leaders were bold and built 1.5 million more homes over the next Parliament, they could make a real difference to the cost of living.”

Article Source: http://www.thisisguernsey.com/news/uk-news/2013/11/07/uk-pays-highest-property-taxes/

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U.K. Outlook Raised by NIESR as Property Boom Feeds Spending

This article by Jennifer Ryan of BloombergBusinessWeek on November 4th, 2013 reveals the fast growth of the UK economy as opposed to what was previously reported according to NIESR.

The U.K. economy will grow faster than previously forecast as a pickup in house prices stokes consumer spending, according to the National Institute of Economic and Social Research. 

Gross domestic product will expand 1.4 percent this year and 2 percent in 2014, a 0.2 percentage-point increase for each year, London-based Niesr said in a report published today. Forecasts for annual house-price growth in 2014 were raised to 5 percent from 0.5 percent, adding about 0.5 percentage point to spending projections.

“The housing market has thawed quite noticeably by almost every measure you want to look at,” Simon Kirby, an economist at Niesr, said at a press conference yesterday. “We’ve got quite a buoyant housing market compared with the previous few years. That feeds through and has a knock-on effect to our consumer-spending growth forecasts.”

k Ltd. said last week prices in England and Wales rose 3.1 percent from a year earlier, the biggest gain since 2007.

Bubble Warnings

Help to Buy allows people to buy homes costing as much as 600,000 pounds ($957,000) with a 5 percent down payment. The program began in April with interest-free loans for buyers of newly built properties and the second phase -- mortgage guarantees covering all homes -- was brought forward to last month from January.

The plan has drawn warnings from the International Monetary Fund, and former Financial Services Authority Chairman Adair Turner said last month that Britain risks a repeat of the debt-fueled binge that led to the credit crisis.

“I don’t think any of us are fans of Help to Buy,” said Jonathan Portes, director at Niesr. Angus Armstrong, an economist at the institute, said “the design of it is so wretched, that’s what’s depressing about it.”

“Banks have an incentive to loosen underwriting requirements for mortgages,” Armstrong said. “If you’re going to intervene in the mortgage market there are a lot better ways to do that,” such as through the mortgage-backed securities market, he said.

‘Unsustainable’ Growth

Growth based on consumer spending is “unsustainable” because it’s based on the housing market rather than increases in real incomes, and it’s coming at the expense of household saving, Kirby said. Significant contributions from business investment and trade won’t start until 2015 and 2016, respectively, he said.

Unemployment, now at 7.7 percent, will fall below 7 percent at the start of 2016, though there’s a one-in-five chance it will reach that level in the first quarter of next year, Kirby said. A 7 percent jobless rate is the threshold at which Bank of England policy makers say they’ll consider raising the benchmark interest rate, provided none of the three “knockouts” in their forward-guidance policy are first triggered.

Kirby said that the knockout related to financial stability risks will probably lead to a rate increase in the second half of 2015. The caveats related to inflation forecasts and inflation expectations won’t be triggered, as inflation will drop to the bank’s 2 percent target in the first quarter of 2015, he said.

Article Source: http://www.businessweek.com/news/2013-11-04/u-dot-k-dot-outlook-raised-by-niesr-as-property-boom-feeds-spending

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89% 'Expect House Prices to Rise'

This article by the Express on October 15th, 2013 reveals that 9 in 10 homeowners confident that house prices to rise to highest level in four years.

Nine in 10 home owners expect house prices to rise in the coming months as market confidence surges to its highest level in at least four years, research has found.

Confidence in the housing market has surged to its highest level in four years, research suggests [PA]
 

Some 89% of more than 9,000 home owners surveyed by property search website Zoopla predict further house price hikes in the next six months, marking the highest proportion seen since its records began in 2009.

Just 4% of home owners across Britain believe prices will drop, down from 17% this time a year ago. People typically expect prices to rise by 5.7% between now and next spring, with London home owners predicting particularly strong growth at 8.3%.

Some 97% of Londoners surveyed expect to see values increase. Separate research by another website, Rightmove, published earlier this week showed that house sellers' asking prices in London have jumped by 10% in the space of just one month to reach a new high of over £544,000.

Two-thirds (66%) of those across the survey who think property prices are on the up said the level of property sales they have already seen in their local area is their main reason for believing this.

Despite home owner confidence remaining higher in the South than the rest of Britain, every region recorded an increase in the proportion of people who think prices in their area are rising. Even in areas of the North and Wales, where confidence was at its lowest, 84% of home owners believe prices are rising.

The West Midlands and Yorkshire and the Humber recorded the biggest jumps in home owner confidence over the last quarter. The proportion of owners predicting price rises has risen from 78% to 90% in the West Midlands, while Yorkshire and the Humber has seen a jump from 72% to 84%.

The low point for home owner confidence recorded by the study was in winter 2010, when just over half (54%) of home owners were expecting price increases.

The Zoopla research was conducted between the end of September and the start of October - just after Prime Minister David Cameron announced that the launch of new phase of the Government's flagship Help to Buy scheme offering state-backed low-deposit mortgages was being brought forward by three months.

Mr Cameron has rejected fears that the UK is heading for a house price bubble, with borrowers being encouraged to over-stretch themselves in a market where the number of houses for sale is in relatively short supply, which is putting an upward pressure on house prices. He has said the market is generally still recovering from a low base.

State-backed lenders Royal Bank of Scotland (RBS), NatWest, Halifax and Bank of Scotland all started offering loans to first-time buyers and home-movers with 5% deposits under the new phase of the Help to Buy scheme from this month. Other major lenders including Santander, HSBC and Barclays have confirmed plans to join the scheme at a later date.

Lawrence Hall, spokesman for Zoopla, said the new phase of the Help to Buy should boost confidence further "across the country" and not just in London, which has continued to attract wealthy overseas buyers looking for a safe haven to place their cash.

Office for National Statistics recently showed that even before the new phase of Help to Buy was launched, UK house prices reached a record high of £247,000 in August and the British Bankers' Association (BBA) reported this week that mortgage approvals to home buyers are at a four-year high.

The Government's Funding for Lending scheme, which was launched in 2012 and has given lenders access to cheap finance to help borrowers, has already had a major impact on the housing market, with the choice of mortgages rapidly increasing and lenders dropping their rates to ultra-low levels.

Here is the proportion of home owners predicting house prices will rise over the next six months by region, according to Zoopla:

:: Yorkshire and the Humber, 84%

:: West Midlands, 90%

:: Wales, 84%

:: South-west England, 90%

:: South-east England, 95%

:: Scotland, 85%

:: North-west England, 84%

:: North-east England, 84%

:: London, 97%

:: East of England, 92%

:: East Midlands, 88%

Article Source: http://www.express.co.uk/news/uk/439012/89-expect-house-prices-to-rise

Mortgage Approvals Rise Ahead of ‘Help to Buy’

This engaging article by Lucy Tesseras of Marketing Week on October 24th, 2013 tells us that Help to Buy scheme could open doors to brands but could damaged consumer trust.

A rivival in the property market thanks to government schemes such as Help to Buy could open new doors for brands, but damaged consumer trust and squeezed disposable incomes requires a fresh marketing approach. 

 

Above: Furniture company BoConcept is tapping into the market where people can’t afford to move and so need to use the space they do have more effectively. It has seen a huge uptake of its free interior design service it launched to raise its brand profile

Signs that the property market is recovering may feel like a boon to businesses related to the sector, but brands must meet this potential mini-boom with new strategies, according to marketers from companies including Santander, retailer Furniture Village and estate agent Savills.

Mortgage lending, house prices and transactions are beginning to bounce back thanks in part to government incentives including the Help to Buy scheme, which means marketers will have to adapt quickly. House building was up 6 per cent in the second quarter of the year, while mortgage debt dropped by £15.4bn, according to the Bank of England. This will greatly affect industries beyond those that deal solely with the buying and selling of houses.

The £12bn Help to Buy scheme continues to be the cause of much debate both inside and outside government. Some parties expect it to fuel recovery and open up the market for first-time buyers, while others are against it, fearing it could create another pricing bubble.

Despite a Bloomberg survey of 31 economists finding that two-thirds believe it is a “bad” move, there is interest from consumers. The Royal Bank of Scotland is offering loans under the scheme and booked 5,000 mortgage appointments within three hours of the scheme being launched on 8 October; appointments doubled to 10,000 after four days – twice the number it typically expects.

Either way, there is movement in the sector so a level of adjustment is necessary in the way brands communicate with consumers.

Santander, which will begin offering mortgages under the scheme in the new year, has embarked on a big marketing push for its existing mortgage products. The ads are fronted by Formula One champion Jenson Button and their tone is very different from previous ones.

“The market has realised that price is not the be-all and end-all,” says Keith Moor, director of brand and communications. “Consumers are much more savvy. It’s a value judgement now. They understand that going with the cheapest doesn’t necessarily mean going with the best.

It’s still a competitive market and you have to be priced in the game to play it but companies are increasingly realising that leading on that one dimension is not wise. Banks have a big job to do to rebuild trust and part of that is not forcing people to make big decisions based solely on price.”

This year, Ikea launched its ’Make small spaces big’ campaign in the UK and Ireland after finding that homes here are 15 per cent smaller than in Europe

Santander’s approach this time is based on insight about how consumers feel about mortgages. As they are a long-term investment, people fear it will be a noose around their neck.

“To answer that concern we have launched a range of mortgages that give people more freedom. People are free to overpay within the mortgage, but people are also free to leave whenever they want. It’s tapping into insight rather than the commoditised approach based on price,” says Moor.

Other banks are taking a similar tack. Lloyds Bank kicked off a £30m marketing campaign following its rebrand from Lloyds TSB in September, which focuses on the ‘moments that matter’. One example is an ad that tells the story of a 31-year-old man who is relieved of the frustrations of having to live with his parents after getting a mortgage through the bank. Barclays has based its proposition around listening to customers’ ideas, while TSB has relaunched with the message: ‘welcome back to local banking’.

Signs of initial recovery in the housing market have sparked renewed interest from investors too, encouraging estate agents Foxtons and Countrywide, as well as housebuilder Crest Nicholson, to float on the stock exchange. There has also been speculation that property website Zoopla is contemplating an IPO after it appointed Credit Suisse to explore “strategic opportunities”, though the Daily Mail and General Trust-owned business has downplayed such talk.

Zoopla estimates that the second phase of Help to Buy could reduce mortgage debt by £22.1bn. Its research finds there are 665,000 eligible homes on the market with an average price of £222,168. Under the mortgage guarantee scheme, the deposit needed to buy a property has dropped by two-thirds to £11,108.

As a result, property searches are going to be at an all-time high over the next year, according to the company, so it will be investing heavily to tap into consumer interest.
“First-time buyers are arguably the most important segment of the property market, as they allow those further up the chain to move, which creates supply and fluidity in the market,” says Charlotte Harper, marketing director of Zoopla Property Group. The company also owns PrimeLocation and has acquired four property portals from Trinity Mirror to compete with market leader Rightmove.

People spend more on their homes in the first 6 months than in the next 5 years so any growth in the property market is good news for us

Although the government schemes will not affect Zoopla’s marketing activity directly, says Harper, it is likely to influence some of the content it produces to ensure consumers have up-to-date information and understand the likely consequences of being involved in such a scheme (see Q&A).

The company became a sponsor of Premier League team West Bromwich Albion last season, which has helped it widen its reach and profile in the UK. It also launched its largest marketing campaign to date at the beginning of September, which incorporates outdoor ads for the first

time in addition to a major TV push. The multi-million pound ‘Smart’ campaign illustrates key features of the website’s property search, such as data about proximity to local schools and transport links.

“With the property market beginning to turn, consumers are looking for guidance and information in order to help them make better property-related decisions,” she says. “Our Smart campaign seeks to own the rational side of home-buying and help people to make confident and informed choices within that process.”

While some analysts have predicted the Help to Buy mortgage guarantee initiative will lead to another property boom, specialists at Savills and Knight Frank believe that idea might be premature.

Yolande Barnes, director of residential research at Savills, said in the firm’s Q3 market analysis: “Despite all the talk of an artificially induced housing boom, resulting from Help to Buy and other government measures, this infant housing market is far from performing like the previous housing cycle did [in 2006/2007]. We are still far from a housing market boom, although the next three years may look like a mini boom in relation to the past five.”

Knight Frank associate John Waters has a similar view but nonetheless is positive about the market.

“I don’t think it is likely to cause a pricing bubble,” he says. “Central London has been quite solid for the past few years in terms of pricing, but outside of London it is a very different story. As the broader economy improves, prices will begin to rise outside of the capital a lot more than they have done for a long time. I think it will help the market to recover and it will certainly help many people outside of London that are in negative equity to get back to where they were.”

Santander will offer mortgages under the Help to Buy scheme from early next year

Lynda Clark, editor of First Time Buyer magazine, which hosts the First Time Buyer Home Show in London, confirms that consumer’s interest is on the increase as both registrations and exhibitor numbers are “markedly up”.

“Help to Buy is making the prospect of owning a home more affordable for people, even in central London where prices are much higher than elsewhere in the country. I know there’s lots of controversy about it, but anything that helps somebody buy their own home, which will be one of the biggest purchases of their life, has got to be a good thing,” she says.

An uplift in the property market will benefit home retailers too. Charlie Harrison, marketing and ecommerce director at Furniture Village, says: “We know that people spend more on their homes in the first six months [after moving in] than in the next 5 years, so any growth in the property market is good news for furniture retailers.”

He expects to see many more first-time buyers entering the market following the launch of the second stage of Help to Buy and has been scaling up accordingly.

“We have been increasing our range of fast delivery items and introduced more lines that are available to take home the same day, such as vacuum packed mattresses that fit into a car. Furniture Village offers an interest-free credit option, which is also popular with customers furnishing their first home, and we will continue to include this as a key promotional message.”

While budgets might be tight, Capital Economics property economist Matthew Pointon does expect the fortunes of home retailers to bounce back if the housing market improves.

“When the number of transactions rise you tend to get an increase in spending on things such as white goods and home improvements as people do up their homes. I’m not sure we’ve seen much evidence of that occurring just yet but it is certainly what I would expect to happen if transactions really take off,” he says.

However, he is doubtful the mortgage guarantee aspect of Help to Buy will help to fuel the industry as much as the government believes, since the monthly payments on a 95 per cent mortgage could make it more expensive than renting.

“We’re not convinced it’s going to lead to a huge increase in buyers. Even though you can get a mortgage with a 5 per cent deposit, you still need to pass strict affordability checks in order to obtain them. Concerns that there is going to be a stampede of demand are exaggerated,” he adds.

Retailers may have another crack at the whip though, because over the past year while transactions have been down, people have turned their attention to renovating existing homes by building extensions, redecorating and generally improving their home environment.

Furniture Village, Ikea and BoConcept have all tapped into the idea of making better use of space in the realisation that not everyone has been in a position to move up the property ladder.

Harrison says: “As a result of the ‘don’t move, improve’ trend, Furniture Village has expanded its range of items that help homeowners make the most of their existing space. Products with hidden storage, such as ottoman beds, are proving popular and we have also seen an increase in sales of compact kitchen dining.”

Likewise, Ikea launched its ‘Make Small Spaces Big’ campaign in the UK and Ireland this summer after learning that homes in Britain are 15 per cent smaller than in Europe. Its global sales jumped 3.1 per cent to €27.9bn in the year to the end of August, although it does not separate UK figures.

BoConcept has seen a “huge increase” in the uptake of its free interior design service in the UK, according to country manager Zoe Shields.

“A trained member of the BoConcept sales team visits the customer’s home, measures the space and works with them to find the best possible solutions,” she says. They are then invited back to the store where they are presented with “mood boards, 3D design drawings and a set-up to reflect the products they have selected”.

As the market picks up, BoConcept will be looking to partner with local estate agents to offer the service to their clients and will also promote options such as deferred payment.
In June, B&Q launched a campaign urging homeowners to turn their attention to ‘unloved’ rooms. The retailer struggled in the early part of the year, blaming bad weather for the poor sales. But B&Q owner Kingfisher was more positive at the half-way point with a 4.3 per cent rise in group sales.

”With the property market beginning to turn, consumers are looking for guidance and information in order to help make better decisions.” - Charlotte Harper, managing director, Zoopla Property Group

Group chief executive Ian Cheshire says: “We remain ready to capitalise on any improvement in conditions or opportunities as they arise, including the potential pick-up in the UK housing market.”

However, Sainsbury’s chief executive Justin King is not so positive. He believes UK consumers are likely to have less disposable income this time next year as inflation will be around 3 per cent, while average wages will increase by 1 per cent. Despite the bleak outlook, the retailer has posted a 4.4 per cent lift in total sales for the first half of 2013.

“Although we are starting to see encouraging signs in key economic indicators, our customers’ approach to savvy shopping, which started at the beginning of the downturn, has persisted and continues,” he said in a statement.

The economic downturn has made consumers more cautious, which means companies need to be smarter in their communication.

“Whether there is a boom or not, I don’t think we will see organisations promoting in the same way,” says Santander’s Moor. “It is incumbent on us all to be responsible in the way that we lend and the conversations that we have with customers. Everyone is much more responsible than they used to be and that’s partly because consumers are more cautious but also because organisations need to address some of the concerns, fears and trust issues that people have, particularly with banks.”

Article Source: http://www.marketingweek.co.uk/trends/propertys-path-of-potential/4008241.article

Home Owners Across the UK Confident About Property Price Rises

This article by Property Wire on October 22nd, 2013 reveals that UK homeowners are confident that property price rises over the next 12 months.

Households in every region across the UK expect the value of their property to increase over the next 12 months, with those in London the most confident about price growth followed by those in the South East.

The latest House Price Sentiment Index (HPSI) from Knight Frank and Markit, which reflects the opinions of 1,500 households across the country, illustrates the localised nature of the market at present, with households in the North East and Wales expecting more modest rises in values.

October’s survey is the first taken since the government brought forward the second phase of its Help to Buy scheme and, while the jump in price perceptions since September was relatively muted, the overall level of confidence about house price gains remains at unprecedented levels in the survey history.

Only one in 14 households expect the value of their home to decline over next 12 months and mortgage borrowers and those who own their home outright anticipate the largest rise in the value of their home in the next year.

Overall it is the seventh month in a row that the index has increased and more than 23% of the home owners surveyed said that the value of their home had risen over the last month, up from 6.3% in October last year. Only 5% of households said the value of their home had fallen over the last month, giving a HPSI reading of 59.1. Any figure under 50 indicates that prices are falling, and the lower the figure, the steeper the decline. Any figure over 50 indicates that prices are rising.

This is up from last month’s record reading of 57.9 and marks the highest reading since the index began in February 2009. This is the most sustained period of upward price movements in three years.

The future HPSI, which measures what households think will happen to the value of their property over the next year, rose to a new high in October at 71.1, up from 69.6, in September. On a smoother three month average basis, the future HPSI reading was 68.8, up from 68.2 in the previous three month period.

‘The momentum in house price expectations gained over the past few months continued this month, with households across the country expecting the value of their home to rise over the next 12 months,’ said Gráinne Gilmore, head of UK residential research at Knight Frank.
‘This is the latest evidence of increased confidence in the market, which has been boosted by the Government’s Help to Buy mortgage guarantee scheme, introduced at the start of the month,’ she explained.

‘The difference in the rate of growth expected in the regions is quite pronounced however, reflecting the localised nature of the housing market at present. Households in London and the South East expect the largest rise in prices over the next year, an indication of the strength of the housing market in the capital and in surrounding areas within easy commuting distance,’ she added.

Tim Moore, senior economist at Markit, said the outlook is positive. ‘Looking ahead, only one in 14 households forecast a decline in their property value over the next 12 months. In London, the number of respondents expecting a price fall between now and October 2014 stands at around one in 30 households, and across the wider South East this proportion has reached just one in 20,’ he pointed out.

Article Source: http://www.propertywire.com/news/europe/uk-property-price-outlook-201310228373.html

Bank of England Signals Caution Over Help to Buy

This article by Hilary Osborne of theguardian on October 16th, 2013 reveals BoE's concern on the impact of Help to Buy that cause housing prices to rise.

Concern at the Bank of England about the impact of the government's Help to Buy mortgage scheme came to light on Tuesday as official figures showed the British property market has exceeded its 2008 peak.

Martin Weale, one of nine members of the Bank's rate-setting monetary policy committtee (MPC), warned that the scheme to underwrite home loans could push up prices.

Admitting that house prices were already rising "appreciably more rapidly" than had been expected, Weale said there was a risk that "if the mortgage-guarantee element of Help to Buy is not priced satisfactorily, it will add to demand while supply is weak, leading to increased pressure on prices".

The British property market hit a record high in August, according to the latest figures from the Office for National Statistics (ONS), which showed the average cost of a home is now almost £250,000.

The ONS data showed that even before the launch of the second phase of the mortgage-guarantee scheme, house price growth was gathering pace.

Its main index, which measures the price paid in purchases financed with mortgages over the month, surpassed its previous peak by 0.3% to hit 186 in August. That was its highest level since its launch in 1968. It put the average price of a home in Britain at £247,000.

In written evidence to the Treasury select committee, Weale said a booming property market could distort the economy. "Rising house prices may make people feel cheerful and more prosperous, thereby supporting household spending," he warned.

"But rising house prices impose a burden on those who do not yet own houses but aspire to in the future. Like government borrowing, rising house prices can crowd out productive investment."

Weale's submission was published 24 hours after the incoming deputy governor of the Bank, Sir Jon Cunliffe, said Threadneedle Street would keep a "very firm eye" on lenders as Help to Buy was rolled out.

However, Cunliffe said it was "too early to say we are entering into a bubble".

The second part of the Help to Buy scheme, which offers lenders a taxpayer-backed guarantee to encourage them to offer loans to borrowers with small deposits, launched last week and has already prompted a flurry of mortgage applications from homebuyers.

Royal Bank of Scotland, which was the first lender to offer 95% mortgages through the latest phase of the scheme, reported that it had booked 5,000 appointments with prospective borrowers in the first three hours after the launch and taken 10,000 calls in the first four days – double its usual volume. It has extended branch opening hours to cope with demand.

According to the ONS figures, the rate of house price inflation increased through the summer, with the year-on-year increase reaching 3.8% in August, up from 3.3% in July.

However, the growth figures harboured wide regional disparities: the year-on-year increase reflected growth of 4.1% in England, 1.1% in Northern Ireland and 1.0% in Wales, in contrast to a fall of 0.7% in Scotland.

The ONS noted that the capital remains a strong outlier in the property market.
It said that while "house price growth remains stable across most of the UK … prices in London are increasing faster than the UK average".

Its index showed prices in London rose by 8.7% in the 12 months to August and that, when figures for the capital and the rest of the south-east were stripped out, UK house prices were up by 2.1% over the 12 months.

Only in London and the south-east were prices higher than at their previous peak. However, the east of England and the south-west were coming close to that level, the ONS said. The ONS data showed that new entrants to the housing market have seen a steeper rise in prices than homemovers, with prices paid by first-time buyers up 4.9% on August 2012's figure, compared with a 3.3% rise for movers.

In August 2013, the average price paid for a house by a first-time buyer was £185,000, while existing owners paid an average of £283,000.

Despite the headline figures suggesting that prices are running away, economists said activity was still well below the levels recorded before the financial crisis began, and only London was giving real cause for concern.

Howard Archer, chief UK economist at IHS Global Insight, said: "While the strength of house price rises in London is becoming an increasing concern and pushing up the overall national increase in house prices, the ONS data support the view that we are currently a long way off from an overall housing market bubble emerging.

He added: "In fact, in many areas house prices are still well below their 2007 peak levels and rising only modestly at the moment." Housing eceonomists at Capital Economics said the ONS figures were "weighted towards high-value homes and therefore the very strong London market. On most measures, prices are still 10% to 15% below their previous peak."

However, they ackowledged that price rises had outstripped their expectations and that in the short term Help to Buy could give a "significant boost" to the number of buyers.

"While we suspect many will fail the affordability tests, it will put some upward pressure on prices," they said.

"There is a risk that expectations of a new house price boom will become self-fulfilling, even if Help to Buy supports only a few buyers. In that case, the Bank of England is likely to step in to calm the market."

Article Source: http://www.theguardian.com/money/2013/oct/15/house-prices-hit-record-high

Top Forecaster Says Housing Bubble Risk 'extremely slim'

This interesting article by BBC News Business on October 13th, 2013 tells us that there will be a lesser chance of housing bubble in the UK because according to ET Item Club investment in housing is forecast to rise 7.5% next year.

The risk of a housing bubble in the UK is "extremely slim", according to one of the country's leading economic forecasters, the EY Item Club.

In its quarterly report on the economy, the Item Club said government schemes such as Help to Buy will help boost house prices by 3.5% this year.

It also forecast that house prices will rise 6.6% next year.

Business Secretary Vince Cable is one of those concerned about the effects of the Help to Buy scheme.

Last month he said there were already signs of "serious housing inflationary pressures" in parts of the country.

And in an interview with the Financial Times on Monday, the chief executive of Lloyds Banking Group, Antonio Horta-Osorio expressed his concerns.

He said that new home building needed to be encouraged by easing planning restrictions, to avoid a "substantial" increase in house prices.
'Well-timed' But Peter Spencer, the Item Club's chief economic adviser, said government efforts to revive the mortgage market had been "well-timed and targeted".

"Despite the recent criticism of these initiatives, the chances of seeing another housing market bubble are extremely slim," he said.

"House prices and transactions are only just recovering from the credit crunch and will be paltry in comparison to those of a decade ago.

"Household finances are also in much better shape, with debt to income ratios now at sustainable levels."

Under the second phase of the Help to Buy scheme, now in place, borrowers across the UK can put down a deposit of as little as 5% of the property price.

The government provides a seven-year taxpayer guarantee to the lender covering 15% of the loan value. It is available for properties sold for up to £600,000 in the UK.

The Item Club forecasts investment in new housing will rise by 7.5% next year and an additional 10% in 2015.

It has also raised its forecast for economic growth this year to 1.4%, up from 1.1%. And next year it expects growth of 2.4%, up from its previous forecast of 2.2%.

Article Source: http://www.bbc.co.uk/news/business-24515285

Help to Buy Scheme: How it Works?

This engaging article by The Week on October 7th, 2013 reveals the purpose and objective of the government in launching the help to buy scheme.

The Help to Buy scheme - a government initiative designed to help struggling home-buyers get onto or move up the property ladder - has two phases. The first, a £3.5bn scheme aimed at buyers of newly-built properties worth up to £600,000, was introduced in April and has already been taken up by about 7,000 people. The second phase, which applies to new or second-hand properties up to the same value, starts accepting applications today. David Cameron believes the initiative is essential because "the mortgage market today isn't working". Critics argue that it may trigger a housing bubble, particularly in the over-heated London market. But what is the Help to Buy scheme and who will be eligible?

How does phase one of Help to Buy work? 

The first phase of Help to Buy applies only to new homes and first-time buyers. Borrowers need to raise a 5 per cent deposit on the property and can then borrow a further 20 per cent from the government, initially interest free, up to a maximum of £120,000. After five years, what remains of the loan will attract interest at 1.75 per cent per year. The rate will increasing each year by 1 per cent above inflation. The £3.5bn scheme, which will be administered by home builders will support about 74,000 home purchases.

What happens if you can't pay your mortgage?

If you take out an equity loan and find you can't pay your mortgage, you'll probably have to sell the property or the bank will repossess it and sell it for you. Citywire points out that the 20 per cent equity loan will still need to be paid back to the government.

And phase two?

Phase two of Help to Buy applies to home movers as well as first-time buyers and second-hand houses as well as new ones. In this phase, the government does not loan money to the homebuyer but provides a guarantee to the lender for up to 15 per cent of the loan. That will allow borrowers with only a 5 per cent deposits a much wider choice of mortgage deals. As in phase one, there is a limit of £600,000 on the value of the property.

Why do lenders need loan guarantees?

The government guarantee reduces the bank's losses if a borrower defaults on his or her payments. "That allows them to offer cheaper mortgages to would-be home-buyers with small deposits, who are currently locked out of the market," explains the Daily Telegraph.

Why has the second phase been brought forward?

The second phase was due to start in January. Asked why the government had brought the start date forward three months, David Cameron said: "I am impatient to help young people get on the housing ladder.

Does that mean I can buy a new home this week?

No. Lenders won't be able to get loan guarantees from the government until 1 January, 2014. That means you won't be able to use the second phase of Help to Buy for home purchases that complete before 2014.

Which banks will offer the 95 per cent mortgages?

The scheme will initially be available from the Nat West, RBS and Halifax, but the government says other banks and building societies are expected to sign up over time.

Are there an unlimited number of 95 per cent loans on offer?

No. The government is making £12bn available in loan guarantees, enough to fund mortgages worth a total of £130bn. The scheme will remain open for three years. Mortgage brokers fear "a stampede of new applications" for loans when the scheme opens, reports The Guardian.

What interest rates will borrowers have to pay?

Citywire says there "could be a catch" in the mortgage rates lenders offer borrowers in the scheme. In the mortgage market those with a large deposit are often able to negotiate a lower interest rate. "It could be that a 5 per cent deposit mortgage incurs a high interest rate particularly if banks are told to hold more capital to cover the risky loan," says Citywire. Banks will also have to pay a fee of 0.9 per cent of the loan value to take part in the scheme. They are likely to recoup that from customers in the form of higher interest rates.

Who is excluded from Help to Buy?

The new loans aren't means tested, but they won't be available to people wanting to buy second homes or buy-to-let properties. Prospective borrowers will be required to sign documents confirming they are first home buyers or, if they already own a home, that they are in the process of selling it.

What do supporters of the scheme say?

The incoming chief executive of the state-backed RBS, Ross McEwan, told The Guardian that his bank was backing the scheme because: "We are committed to helping as many people as possible across Britain to get on with their lives, to buy their first home, to move to a bigger house as their family grows."

What do critics say? 

Business Secretary Vince Cable says the scheme may trigger an unsustainable boom in house prices, particularly in the south-east of England. "I am worried of the danger of getting into another housing bubble," Cable told the BBC. · 

Article Source: http://www.theweek.co.uk/uk-news/55455/help-buy-scheme-how-it-works

Gazumping Returns to Housing Market in Battle of the Bidders

This article by Lauren Thompson of theguardian on October 6th, 2013 tells us the war in the housing market because of help to buy which demand rises up to 17% and supply down by 14%.

Gazumping and other nasties that flourished in the last property boom are making a return, as competition for homes increases with the bringing forward of the second phase of Help to Buy.

The scheme, which allows buyers to purchase a property under £600,000 with a 5% deposit, was brought forward to last week – three months ahead of schedule. Traffic to Zoopla, the property search website, immediately jumped 17% compared to a week earlier.

Yet supply is not matching this surge in demand, with 14% fewer homes for sale than this time last year, according to the property analysts Home.co.uk, and 19% fewer in London.

There are fears that buyers could be caught in a bidding frenzy fuelled by bullish sellers and eager estate agents keen to talk up the market. Around 10% of the adult population – 5.1 million people – say they are likely to buy in the next 12 months, up from 8% (or 3.7 million) in January 2012, according to Santander Mortgages.

So how can homebuyers navigate the risks of this buoyant market?.

Gone in a flash

Buyers in stronger markets will have to work harder to find the right properties, especially in hotspots such as London. However, Lisa Green, director of the County Homesearch Company in the north-west, emphasises: "Buyers outside the south-east and other hotspots should be wary of estate agents talking up the market." She says the market is still quite weak in many areas, such as Oldham, Huddersfield, Hartlepool, and Powys in Wales.

"Buyers in these markets are still in a strong position to negotiate on the asking price," she says.

First-time buyer Helena Gibbon, 29, is struggling to find a property in London's overheated market. She has been searching for a one-bed flat in Walthamstow, east London, all year, with her sizeable budget of £200,000. Gibbon, who works in advertising, has saved for years for a 10% deposit, and currently lives with her parents while she scours the market.

"It's tough out there for buyers. I have friends who have viewed 30 or 40 properties but they go so quickly," she says.

If you are searching in a popular location, make sure you have all your paperwork ready if you decide to make an offer, says Camilla Dell at Black Brick buying agency.

Most serious buyers will be signed up to Zoopla or Rightmove alerts, but sometimes the best properties do not need to be advertised because they are snapped up so quickly.

Buyers at the top end of the market – with a budget of £500,000 or more – sometimes employ a buying agent with good contacts to search the market. But what about the rest of us? Tracy Kellett, a buying agent at BDI Home Finders, says that buyers should "make friends with estate agents" and emphasise their strong and serious position as a buyer. "Ask for the first heads-up when a property becomes available," she says.

Gazumping

It's every buyer's nightmare – your offer on a property is accepted and you spend hundreds, or even thousands, on a survey, mortgage and legal fees, only to have another buyer make a higher offer and snatch the place from under your nose.

While still relatively rare, agents say gazumping is making an unwelcome return in pockets across the country.Vicki Wusche at The Property Sourcers says: "We recently had an offer accepted for a client on a three-bedroom house in Norwich at the asking price of £122,000.

We immediately sent over our paperwork and instructed a solicitor and went to bed thinking it was a done deal. But in the morning a cash investor had made a higher offer that had been accepted."

Have a mortgage agreement in principle and your surveyor and solicitor ready before you make an offer, and request the estate agent in writing to take the property off the market as soon as your offer is accepted.

Kate Faulkner at advice site Propertychecklists.co.uk says: "Above all, remember that a seller or agent who gazumps you is not worth doing business with anyway. Have faith that a better property will come along soon."

Sealed bids

Bidding wars – where you compete with other buyers for the same property – can be stressful, but it is vital not to get carried away and pay over the odds.

Buyer Georgina Janion recently bought a flat in Putney, south-west London. The ground floor Victorian conversion had 83 viewings and 13 offers in just one week. The sale went to "sealed bids", where Janion and the other potential buyers had to email their final offer before midday on the same day.

She says: "I had been looking for a property for months and viewed about 30 flats, so I knew the local market well. Going to sealed bids is tough and it's impossible to second-guess what other buyers might be willing to pay. I just had to stay calm and offer a fair price that I could afford."

First-time buyers, most of whom will have saved years for a deposit, need to be especially wary of blowing their budget in a bidding war. Check sites such as nethouseprices.com and mouseprice.com for recent sale prices. It's important to retain a pot of savings to buy new furniture or cover unexpected maintenance costs.

Wusche adds: "Also remember interest rates will go up and you should use an online mortgage calculator to see how your monthly payments would be affected. Could you afford to pay 8% on your mortgage? It's vital not to overstretch yourself."

Article Source: http://www.theguardian.com/money/2013/oct/06/gazumping-housing-market-help-to-buy

how to Avoid Property Market Dirty Tricks

This article by The Telegraph on October 3rd, 2013 reveals property expert Sarah Beeny's tips on avoiding being ripped off in a rising market.

The housing market is picking up again, which means the familiar cast of property nasties - greedy vendors, gazumping buyers and the oily agents in between - are rising like ghouls back from the dead. And they are bringing with them the old array of dirty tricks that can turn the homebuying process from being merely difficult into pure hell.

Here, Sarah Beeny gives her top tips for avoiding them.

When a property market is busy, there is a lot of pressure on the buyer to move quickly or commit more money than they initially planned.

In this situation, it is crucial for buyers to do their homework.

“I truly believe that people shouldn’t panic buy. You should buy when the time is right for you, not in reaction to what the market is doing,” said property expert Sarah Beeny. “You are buying for 25 years and in that time the market will go up and down, so don’t rush into it.
“Make a considered decision and don’t stretch beyond your budget.”

Before you start looking for a property, you should have a mortgage agreed in principle, Ms Beeny said. “Find out how much you can borrow based on your income and then look around for the best mortgage available,” she said.

Ms Beeny also recommended lining up a solicitor in advance. “You can establish a good relationship and have everything in place when you want to put in an offer – it means the process is less painful and you lessen the risk of losing the property because of delays.”

When you start looking at properties, the most important thing is to look at prices in the surrounding area. “If a new build flat is being valued at £100,000 more than the surrounding properties, for example, there is something out of place,” said Ms Beeny.

Information on sold prices nearby is available online and you can ask neighbours for further details.

Article Source: http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/10352319/Sarah-Beeny-on-how-to-avoid-property-market-dirty-tricks.html

House Building Growth Continue to Rise

This article of Belfast Telegraph.co.uk on October 2nd, 2013 shows the increasing demand of house building and now at its fastest pace for a decade.

Home building grew at its fastest pace for a decade in September in the latest sign of the housing sector forging ahead amid Government initiatives such as the Help to Buy scheme.

Figures from the closely-watched Markit/CIPS purchasing managers' index (PMI) showed residential construction activity growing at the highest rate recorded since November 2003.

The wider construction industry continued to grow strongly though the reading of 58.9 - where 50 separates growth from contraction - represented a slowing in the pace of expansion compared to 59.1 seen in August.

It was dragged down by an easing of growth in civil engineering from an August high.
However, commercial construction continued to forge ahead, increasing output at its fastest since May 2012 as analysts predicted a surge in occupier demand pushing up rents.

The sector was badly hit by the economic downturn but Tim Moore, senior economist at Markit, which carried out the survey, said: "Construction is no longer the weakest link in the UK economy."

The figures showed the sector had grown for the fifth month running, adding to hopes that overall gross domestic product for the third quarter will have increased by as much as 1%.

Optimism about the outlook for the year ahead is at its strongest since April 2010, while jobs rose for the fourth month in a row, encouraged by increased volumes of new work, the report said.

Anecdotal evidence pointed to greater levels of spending among both public and private sector clients.

David Noble, chief executive of the Chartered Institute of Purchasing and Supply, said: "The construction sector is firing on all cylinders.

"Having been in the doldrums so long, builders are using this renewal as a platform to invest, with employment seeing the most dramatic upturn in close to six years."

Howard Archer, economist at IHS Global Insight, said: "House building activity is seeing particular strength which is welcome news given concerns that a shortage of properties risks contributing to a new housing market bubble."

Kelvin Davidson of Capital Economics said predictions that commercial rents would only edge up modestly over the year were looking likely to be surpassed.

He said the data suggested property developers were increasingly confident about the prospects for occupier demand and hence the rental values they could expect.

House builders have been buoyed in recent months by easing credit conditions as well as Government initiatives such as Help to Buy.

The latest extension of the scheme offering mortgage guarantees to help buyers get onto the housing ladder has just been brought forward - despite fears it could lead to an overheating in property prices.

Article Source: http://www.belfasttelegraph.co.uk/business/news/house-building-growth-continues-29629083.html

 

Bank of England Watches for Possible Property Bubble

This article by Huw Jones and William Schomberg of Independent.ie on September 26th, 2013 shows how Bank of England will keep a watchful eye for possible dangers of another property bubble.

The Bank of England said on today there was no immediate danger of a property bubble in Britain but that it was keeping a watchful eye out.

It also said it wanted more study on how vulnerable hedge funds that rely on borrowing would be to future interest rate rises.

The central bank's Financial Policy Committee (FPC) said Britain's housing recovery "appeared to have gained momentum and to be broadening" but was under control, based on gauges such as level of activity, debt costs and prices compared with incomes.

"In view of that, the Committee judged that it should closely monitor developments in the housing market and banks' underwriting standards," it said in a statement after its September 18 meeting. "The Committee would be vigilant to potential emerging vulnerabilities."

If any action was needed, it would be "proportionate to the risks and consistent with a graduated response."

House prices in Britain as a whole rose 3.3pc in the 12 months to July but jumped nearly 10pc in London, official data showed last week.

This has triggered some concern that BoE and government lending incentives are creating a housing bubble.

Stephen Lewis, chief economist at Monument Securities said the FPC - which is tasked with spotting risks to the economy from the financial system - was right to hold off for now. "It's probably the right thing at the moment. There is a lot of uncertainty at present about the housing market."

The housing recovery has been helped by government and Bank measures to free up mortgage lending. A new phase of the government's Help to Buy programme is to be launched in January.

Governor Mark Carney and finance minister George Osborne have shown no concern about the prospect of a housing price bubble, pointing to levels of activity in the property market that are below their pre-crisis peak.

But earlier this month, a group representing British property surveyors called on the Bank to take measures to slow mortgage lending if national house price growth exceeds 5pc a year.
Ed Miliband, leader of Britain's Labour opposition party, said this week that if he wins election in 2015 he would more than double the number of new homes built annually to 200,000 by 2020 to ease a shortage that has helped to push up prices.

FOCUS ON HEDGE FUNDS

In June, the BoE ordered an investigation into the vulnerability of Britain's financial institutions and borrowers to higher interest rates when central banks around the world start to wean their economies off massive stimulus.

The FPC said in its statement on Wednesday that a moderate rise in long-term interest rates did not pose an immediate threat to major banks and insurance companies and so far "had not led to dislocations in market functioning or significant impact on financial institutions."

However, levels of leverage within hedge funds, which could make them vulnerable to a sharp rise in borrowing costs, "needed to be looked at more closely," the statement said.

The Financial Conduct Authority, which is represented on FPC, said it asked a number of hedge funds during the summer about their preparedness for changes in interest rates following the June FPC meeting and as part of routine supervisory work.

The FPC's wider review of rate hikes would continue by looking at what impact "more significant stresses" would have and how any impact would ripple through the financial system.

The FPC said it will publish on October 1 a discussion paper on the design of a new framework for stress testing banks.

Article Source: http://www.independent.ie/business/bank-of-england-is-watching-for-signs-of-uk-property-bubble-29609879.html

Buy-to-let Mortgage Market is Prospering

According to a report by Landlord Today a large number of buy-to-let market is booming as shown in this article by propertysecrets on September 16th, 2013.

The latest figures from the Council of Mortgage Lenders show strong growth in the buy-to-let market report Landlord Today.

15,200 BTL loans were advanced in July, an increase of 12% compared to June. This represents a value of £2bn which was 11% higher than in June.

Lending for BTL house purchase was up 7% in July compared to June, a total of 7,600 loans. The value of these loans was £900m, up 13% from June.

There was strong growth in BTL remortgage lending which increased by 24% in July compared to June, a value of £1.1bn. This equated to 7,200 loans in July for BTL remortgage in total, an increase by 13.4% on June 2013.

The figures come just a week after a survey by the Royal Institution of Chartered Surveyors (RICS) showed that house prices are rising at their fastest pace for almost seven years. Many pundits are predicting that the introduction of Help to Buy could lead to another house price bubble.

Stephen Johnson, managing director of commercial mortgages at Shawbrook Bank, said: "The announcement of the rise in buy-to-let lending is great news for the industry and Shawbrook is keen to support professional investors looking to take advantage of these market conditions.

"However, as an industry we must be careful to not create another bubble. At the moment lending conditions are very good but these are unusual times and the UK needs to create a sustainable market, not one lurching from peak to trough. Those looking to buy property need to ensure they look at the long term - investors need a portfolio that can still work in a more normalised interest rate environment. Sensible gearing will maximize returns, over-gearing now could potentially put at risk investors' hard-earned equity."

Article Source: http://www.propertysecrets.net/article/buytolet_mortgage_market_booming/3115.html

U.K. House Prices Increase to Record on London Property Surge

This article by Fergal O’Brien of BloombergBusinessweek on September 12th, 2013 reveals the increase of house prices in the UK and property market in London continued to soar.

U.K. house prices rose to a record last month as government measures boosted demand and London’s property market continued to surge, Acadametrics said. 

Values increased 0.4 percent from July to an average 233,776 pounds ($370,000), the London-based real-estate researcher and LSL Property Services Plc said in a report today. In London, prices have risen 40 percent from their peak in April 2009, compared with 16 percent nationally.

The Bank of England-run Funding for Lending Scheme has helped to cut mortgage costs, while Chancellor of the Exchequer George Osborne’s Help to Buy program allows people to purchase a home with a deposit of as little as 5 percent of the value of the property. The BOE has downplayed speculation that a bubble may be brewing, saying activity is still at a low level relative to its pre-crisis peak.

“The property market has turned over a new leaf after years of restrained activity,” said Richard Sexton, director LSL unit e.surv. “The government has been pivotal in providing the aid that the market has been craving for many years.”

Eight of the 10 regions tracked by LSL recorded price gains in the latest three months compared with a year earlier. In the southwest and Wales, where values fell, the declines eased, according to the report.

Acadametrics estimates that completed housing transactions exceeded 70,000 in August for a second month. That would mark the first time that sales over two consecutive months have been above that level since November-December 2007, when transactions were 104,486 and 84,524.

BOE Governor Mark Carney said yesterday that while the market is improving, activity levels, mortgage applications and valuations are still low. He also said prices will continue to increase and the Financial Policy Committee of the central bank will be “vigilant.”

“It is still too early to predict what impact the economy will have on prices, especially as the FPC may apply downward pressure through controls over mortgage supply and pricing,” Sexton said. “Thus nothing can be set in stone yet.”

To contact the reporter on this story: Fergal O’Brien in London at fobrien@bloomberg.net

Article Source: http://www.businessweek.com/news/2013-09-12/u-dot-k-dot-house-prices-increase-to-record-on-london-property-surge

Almost 2 Million UK Would Be Homeowners Can’t Get on Property Ladder

New research suggests that almost two million would be homeowners in the UK, mostly families, can't get on the property ladder because they can't afford to save for the deposit needed, according to this September 4th, 2013 recent article by the Property Wire.

According to housing charity Shelter around 1.8 million families face a life time of renting a home with three quarter priced out of the market and even with the government’s flagship Help to Buy scheme some 78% are unable to afford the repayments on a family sized home.

In contrast, the report finds that mortgage repayments on a shared ownership home would be affordable for 95% of families on low or middle incomes.

The charity is calling for a major new house building programme of shared ownership homes to revolutionise ownership for what is describes as ‘forgotten families’. This would allow families to find an affordable home of their own, and provide a real alternative to the confusing postcode lottery of existing small scale schemes, or the overheated private rental market.

The report says that investing £12 billion, less than 1% of GDP, could build 600,000 new shared ownership homes which would be enough to give almost half of England’s private renting families the chance to own their own home. 

‘We need to see a new generation of shared ownership for the ordinary families priced out of home ownership. The reality is that soaring house prices mean that the traditional market is no longer working for ordinary people,’ said Kay Boycott, director of campaigns and policy at Shelter.

‘Building the new shared ownership homes we desperately need is the only way to give thousands of families a stake in the stable home they want at a price they can afford,’ she added.

But the government says it is doing more to help families onto the housing ladder. As well as schemes like Help to Buy and Funding for Lending, both credited with boosting the number of first time buyers, it points to the fact that it has also launched a new scheme to bring back empty homes into the housing stock.

It is working with the public and private sector through the National Empty Homes Loan Fund (NEHLF) to give borrowers access to a secured loan at a fixed 5% interest to renovate some of the 710,000 empty homes in England.

A joint £3 million initiative has been launched with the charity Empty Homes, the Ecology Building Society and 39 participating local authorities to help home owners who cannot afford to bring the property up to a useable standard.

The Ecology Building Society, a specialist mortgage lender that supports sustainable communities, said that it should provide funding for hundreds of properties and is available to individuals aged 18 and over who own a property that has been empty for six months or more. 

‘We know that many homes are empty because it is difficult for owners to raise the money that is required to bring them back up to a habitable standard. This initiative will kick start efforts to tackle this. This scheme is a first in England and is a great example of central government working together with the public and private sector to try and reduce the number of empty homes in the UK,’ said David Ireland, chief executive of Empty Homes.

Paul Ellis, chief executive of the Ecology Building Society, said that at a time when there is increasing demand for homes but an acute lack of supply it makes sense to bring new life to existing but neglected properties.

Article Source:  http://www.propertywire.com/news/europe/uk-property-ladder-families-201309048193.html