This article by the Property Wire on October 10th, 2013 discusses the introduction of a new sales process welcomed by the British Property Federation.
The
British Property Federation has welcomed the introduction of a new
property sales process which will reduce leasehold transaction times by
five to 10 days and save UK consumers a combined total of over a million
days each year.
The new process, based on a standardised questionnaire for the
industry has been created by the BPF and all the major trade bodies,
including The Law Society and the Royal Institution of Chartered
Surveyors (RICS), facilitated by Move with Us, and will be available to
all parties in the process.
The BPF pointed out that buyers and sellers of leasehold properties
have experienced added complications and expensive delays because of
differing information requirements from both the buyer’s and seller’s
conveyancers meaning the landlord or managing agent has to deal with a
different set of enquiries every time a leasehold property is sold.
By
creating an approved set of enquiries for leasehold properties both
landlords and managing agents can introduce systems to collate the
information safe in the knowledge that both the buyer’s and seller’s
conveyancers will accept it, saving an estimated five to 10 working days
on average. Consumers will also save money as the additional requests
for information will only be required where an issue is revealed which
requires further investigation.
‘It is great to see that the whole
residential leasehold sector pulling together and delivering a benefit
to its customers,’ said Ian Fletcher, director of policy at the British
Property Federation.
‘The commercial leasehold sector has had standard enquiries for 10
years and seen the advantages flowing from a more efficient conveyancing
process. The same will be true of these residential enquiries and we
will be promoting them amongst our membership as the standard for the
sector,’ he added.
The new industry created and approved Leasehold
Property Enquiries, Form LPE1 will be available from 10 October and the
overall concept has been approved by the Council of Mortgage Lenders
(CML) and The Building Societies Association (BSA).
Landlords,
managing agents and conveyancers interested in accessing the new
leasehold enquiries form should contact Beth de Montjoie Rudolf at Move
with Us.
Article Source: http://www.propertywire.com/news/europe/uk-leaeshold-property-sales-201310108334.html
Showing posts with label lenders. Show all posts
Showing posts with label lenders. Show all posts
Friday, 11 October 2013
Thursday, 10 October 2013
Help To Buy Lending Scheme Launch Sparks Homes Frenzy
This article by Sarah O'Grady of the Express on October 9th, 2013 tells us the launching of the 2nd version of the Help to Buy scheme swept up Britain's housing market in frenzy.
Borrowers leapt on the new Government initiative
which will allow them to buy homes with 95 per mortgages and slash
average deposit amounts.
As details emerged of the deals available from lenders, David Cameron said the project would unlock the housing market and help young people without rich parents get their own home.
HSBC became the first major bank outside state-backed Royal Bank of Scotland and Lloyds to announce it was joining the £12billion scheme.
Britain’s biggest mortgage lender Halifax also announced details of the home loans it would be offering.
Homes
valued at up to £600,000 will be eligible with some estimates
suggesting 180,000 loans could be taken out – despite fears that the
scheme could spark a housing price bubble.
Taxpayers will guarantee up to 15 per cent of a property’s value, in return for a fee charged to lenders, allowing homebuyers to purchase with deposits as low as five per cent.
As
the scheme was launched, Mr Cameron visited a three-bedroom show home
in Weston Favell, Northampton and met first-time buyers Kayleigh Groom,
28, and her partner Chris Day, 29, from Kettering.
The couple, who have been renting for five years, told him that Help To Buy would enable them to get on the property ladder.
Mr Cameron said: “What we’re doing is making sure that the typical family can buy the typical home.
“The couple I’ve just been with. They’ve both got good jobs.
They’ve both got good prospects. They can afford mortgage payments but
because they haven’t got a rich mum and dad they can’t get a mortgage.
That isn’t fair. That isn’t right.
“So the Help To Buy scheme will help them to get a mortgage and make them homeowners.”
RBS
and its NatWest subsidiary said they expect to sign up 25,500 first and
next-time buyers over the three-year scheme. The two lenders are
extending opening hours at 740 branches to cope with the demand.
Paul Smith, of haart estate agent,
predicted Help To Buy will boost property deals by 10-15 per cent in
the next 12 months and cut first-time buyers’ average deposit from
£33,948 to £7,218.
He said: “We have seen a frenzy of activity with our branches overwhelmed by enquiries in the wake of the launch of Help To Buy.
“We
have had the best first week of October for nine years. Last year we
had 3,800 buyers registering in that first week, this year it was 7,281 –
that’s a staggering 92 per cent increase.”
Article Source: http://www.express.co.uk/news/property/435438/Help-To-Buy-lending-scheme-launch-sparks-homes-frenzy
Tuesday, 8 October 2013
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. ·
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. ·
Wednesday, 21 August 2013
Warning of London Housing Bubble as Mortages Soar by 29%
This article was published on London Evening Standard on August 20, 2013, written by Jonathan Prynn stating the increased in mortgage may result in dangerous housing price bubble in London.
Banks and building societies advanced home loans worth £16.6 billion
last month, up 29 per cent on last year and the biggest rise for seven
years.
Property experts said low mortgage rates, the Government’s Help to Buy scheme and growing confidence about the economy contributed to the increase in lending.
But MPs warned that the lending boom could simply “pour petrol” on a market already showing signs of overheating and price more Londoners out of home ownership.
Mark Field, Conservative MP for the Cities of London and Westminster, said: “The London market has never really been in the doldrums. The danger here is that affordability of property prices becomes ever more a fantasy for more and more people.”
Government figures last week showed prices rising at eight per cent to a record average £425,000 in June compared with one per cent outside London and the South-East.
The Council of Mortgage Lenders figures today reveal lending is bouncing rapidly from the depressed levels of around £10 billion to £13 billion a month seen since the banking crisis five years ago, Last month’s total was the highest since October 2008.
The Treasury’s Funding for Lending scheme, aimed at encouraging bank funding for home buyers and small businesses, and the Help to Buy programme, which has already been taken up by 10,000 new home owners, have contributed to the return of confidence.
Borrowers were further encouraged by Bank of England Governor Mark Carney suggesting that its 0.5 per cent lending rate is unlikely to be increased before 2016.
Fixed-rate mortgage deals are at historic lows, with some lenders offering fixed-rate deals below two per cent, levels described as “quite staggering” by Ed Mead of London estate agents Douglas & Gordon.
There have even been the first signs of the return of interest-only mortgages with lenders such as Clydesdale and Yorskshire offering nought per cent for the first three years on some deals.
But leading property experts called on George Osborne to scrap the second phase of its Help to Buy mortgage scheme in London, due to come into force in January.
Doug Shephard, director at property search website Home.co.uk, warned: “The London property market clearly needs no further stimulus; it’s running too hot already.” Stuart Law of buy-to-let investment firm Assetz said lending conditions are so favourable that he expected “double digit” rises in property prices next year.
Shadow housing minister Jack Dromey warned: “Unless the Government invests in building the homes our capital city badly needs, rapidly rising property prices will put the dream of home ownership beyond the grasp of millions of Londoners.”
The Council of Mortgage Lenders’s market and data analyst Caroline Purdey said: “An improvement in sentiment and activity continues to show in the UK housing and mortgage markets, with a more positive picture also starting to emerge in the economy.
“Our forward estimate of gross mortgage lending in July reinforces a growing evidence base of a strengthening in the housing and mortgage markets.” The CML’s members account for 95 per cent of residential home loans in the UK. There are 11.3 million mortgages in the UK, with loans outstanding worth more than £1.2 trillion. However, with many borrowers still effectively locked out of the market — such as those with impaired credit ratings or negative equity — there is still a long was to go until lending recovers to the peaks of £30 billion in 2006 and 2007.
Nevertheless leading property figures welcomed the return to more “normal” conditions after so many barren years. Richard Sexton, director of chartered surveyors e.surv, said: “The mortgage market has been the pillar of the economic recovery. The freeze on high loan to value mortgages has thawed, and first-time buyer lending is at its highest since the banking crisis.”
Housing minister Mark Prisk said: “Today’s figures show our Funding for Lending Scheme, and record low interest rates, have led to the highest level of mortgage lending since 2008. But alongside this, we’re also pulling out all the stops to get Britain building, and the increased availability of mortgage finance is boosting confidence in the housing market, and encouraging house builders.
“We’ve also been working with the Mayor to invest billions of pounds to deliver the fastest rate of affordable housebuilding for two decades.”
The couple bring home a combined income of about £65,000 and are saving £500 each a month for a deposit — despite the £900 monthly rent for their two-bed flat in Beckenham.
They would like to stay in London but have decided to buy in Manchester.
Journalist Ms Jorsh, 29, whose 30-year-old boyfriend is a manager at the Health and Care Professions Council, said London’s property prices were so high that the help-to-buy schemes would have no impact. “We would love to get on the ladder for the security that it gives you, but we know we are in for a long slog,” said Ms Jorsh.
“We are planning to move to the North so what we can buy will actually be decent.
“Even with a £25,000 deposit here, which seems like so much money, we’d probably only end up with a one-bed flat. It would be wonderful to be able to stay in London, but we just can’t have the kind of lifestyle that we would like.
“The whole thing is really depressing and deeply demoralising.”
The couple expect it will take two to three years to raise a deposit.
Property experts said low mortgage rates, the Government’s Help to Buy scheme and growing confidence about the economy contributed to the increase in lending.
But MPs warned that the lending boom could simply “pour petrol” on a market already showing signs of overheating and price more Londoners out of home ownership.
Mark Field, Conservative MP for the Cities of London and Westminster, said: “The London market has never really been in the doldrums. The danger here is that affordability of property prices becomes ever more a fantasy for more and more people.”
Government figures last week showed prices rising at eight per cent to a record average £425,000 in June compared with one per cent outside London and the South-East.
The Council of Mortgage Lenders figures today reveal lending is bouncing rapidly from the depressed levels of around £10 billion to £13 billion a month seen since the banking crisis five years ago, Last month’s total was the highest since October 2008.
The Treasury’s Funding for Lending scheme, aimed at encouraging bank funding for home buyers and small businesses, and the Help to Buy programme, which has already been taken up by 10,000 new home owners, have contributed to the return of confidence.
Borrowers were further encouraged by Bank of England Governor Mark Carney suggesting that its 0.5 per cent lending rate is unlikely to be increased before 2016.
Fixed-rate mortgage deals are at historic lows, with some lenders offering fixed-rate deals below two per cent, levels described as “quite staggering” by Ed Mead of London estate agents Douglas & Gordon.
There have even been the first signs of the return of interest-only mortgages with lenders such as Clydesdale and Yorskshire offering nought per cent for the first three years on some deals.
But leading property experts called on George Osborne to scrap the second phase of its Help to Buy mortgage scheme in London, due to come into force in January.
Doug Shephard, director at property search website Home.co.uk, warned: “The London property market clearly needs no further stimulus; it’s running too hot already.” Stuart Law of buy-to-let investment firm Assetz said lending conditions are so favourable that he expected “double digit” rises in property prices next year.
Shadow housing minister Jack Dromey warned: “Unless the Government invests in building the homes our capital city badly needs, rapidly rising property prices will put the dream of home ownership beyond the grasp of millions of Londoners.”
The Council of Mortgage Lenders’s market and data analyst Caroline Purdey said: “An improvement in sentiment and activity continues to show in the UK housing and mortgage markets, with a more positive picture also starting to emerge in the economy.
“Our forward estimate of gross mortgage lending in July reinforces a growing evidence base of a strengthening in the housing and mortgage markets.” The CML’s members account for 95 per cent of residential home loans in the UK. There are 11.3 million mortgages in the UK, with loans outstanding worth more than £1.2 trillion. However, with many borrowers still effectively locked out of the market — such as those with impaired credit ratings or negative equity — there is still a long was to go until lending recovers to the peaks of £30 billion in 2006 and 2007.
Nevertheless leading property figures welcomed the return to more “normal” conditions after so many barren years. Richard Sexton, director of chartered surveyors e.surv, said: “The mortgage market has been the pillar of the economic recovery. The freeze on high loan to value mortgages has thawed, and first-time buyer lending is at its highest since the banking crisis.”
Housing minister Mark Prisk said: “Today’s figures show our Funding for Lending Scheme, and record low interest rates, have led to the highest level of mortgage lending since 2008. But alongside this, we’re also pulling out all the stops to get Britain building, and the increased availability of mortgage finance is boosting confidence in the housing market, and encouraging house builders.
“We’ve also been working with the Mayor to invest billions of pounds to deliver the fastest rate of affordable housebuilding for two decades.”
‘High prices have forced us to look outside capital’
MEG Jorsh and boyfriend Jason Rowbottom have become so demoralised by London prices they have taken their property search away from the capital.The couple bring home a combined income of about £65,000 and are saving £500 each a month for a deposit — despite the £900 monthly rent for their two-bed flat in Beckenham.
They would like to stay in London but have decided to buy in Manchester.
Journalist Ms Jorsh, 29, whose 30-year-old boyfriend is a manager at the Health and Care Professions Council, said London’s property prices were so high that the help-to-buy schemes would have no impact. “We would love to get on the ladder for the security that it gives you, but we know we are in for a long slog,” said Ms Jorsh.
“We are planning to move to the North so what we can buy will actually be decent.
“Even with a £25,000 deposit here, which seems like so much money, we’d probably only end up with a one-bed flat. It would be wonderful to be able to stay in London, but we just can’t have the kind of lifestyle that we would like.
“The whole thing is really depressing and deeply demoralising.”
The couple expect it will take two to three years to raise a deposit.
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