Kate's top 5 stories of the Christmas week - House Price Rises and Slapdash Repairs

publication date: Dec 22, 2014
author/source: Kate Faulkner, Property Expert and Author of Which? Property Books

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Top 5 stories this week...


House price rise linked to high-performing employment areas

Halifax has established that the average house price in the twenty highest-performing employment areas has risen by 45% (equivalent to £103,785) since 2004, more than twice the 21% national average. Employment in these areas rose simultaneously to an average of 26% compared to the average national figure of 4%.

Martin Ellis, Housing Economist at the Halifax, commented, “This demonstrates the importance of economic conditions to the health of the local housing market.” Northern Scotland and Central London have seen the ten top-performing house price locations in the last ten years, seven of which have also been amongst the top 25% for employment growth.

The top ten house price locations were far ahead of the national average, with an average house price increase of 89% compared to 21% nationally. Meantime, the twenty areas seeing worst employment rates since 2004 have tended to underperform in house price increases too, with house prices at only 13% higher, equivalent to £19,698, and employment falling by 11% on average, compared to the UK average increase of 4%. Northern England and the Midlands performed least well. To read more, go to Halifax House Price Index

Kate’s thoughts:-

The idea that all property prices are moving in the same direction is dead and buried. What is fascinating from this research is it shows ‘average house prices versus average wages’ is also dead as a measure too! Property prices and wages in individual areas are far too diverse to try and use old measurement methods for affordability.

Read - First time buyer quick guide


Story 2

Rentals close to tube or train let faster

Countrywide Residential Lettings has published new data showing that proximity to rail and tube is a big attraction for potential tenants. 66% of UK rental properties are within a mile of a rail or tube station, and public transport links are a particular draw to younger tenants.

Time taken to let, rather than rent level, is the most accurate pointer and these properties tend to let six days more quickly than the average of 39 days. London properties in less transport-handy locations take longest to let out, costing around £225 in lost rent.

Conversely, properties very close to rail stations can take a further two days to let compared to similar properties further away, because commercial uses in areas where there are rail stations can affect residents’ quality of life. 60% of 2014’s new housing was built within a mile of a rail station, and in November, the cost of a new letting agreement was up 1.3% on twelve months ago, with a seasonal monthly drop of £27 to £889 per calendar month in November, and fewer tenants has meant more tenant-landlord negotiation.

This rate is a good indicator for overall UK rental growth and rents have risen by 1.7% in the last year. Nick Dunning, Group Commercial Director, said, “Public transport links are clearly an important consideration for tenants looking for a home. This means changes to transport infrastructure… can offer opportunities for first-time or seasoned landlords.” To see more, go to  Landlordzone

Kate’s thoughts: 

It’s a really interesting review of what is driving rental prices as often there is little difference in rents from one postcode to another, especially when compared to house prices. I’ve always said, if buying to let for the future, make sure you buy someone near a train station – from a tube perspective, though, as the prices can be so high in London near a tube, you have to balance your objectives for capital growth versus yield.

Read - Renting a Property Checklist


Story 3

Slapdash repairs rankle most in disputes between family members and tradesmen

Recent research by AA Home Membership shows that one in eleven of us has had to intervene in a dispute between a relative and a tradesman, most often because of poor quality repairs (35% of cases) or because they felt vulnerable relatives had been exploited (10%). When choosing a tradesman, 56% agreed that a recommendation by a friend or family member was the most reliable way, 30% would look for a member of a trade organisation, and only 6% would choose by price alone.

Helen Brooker, Head of AA Home Membership, said, “If you don’t have anyone recommended to you, it could be worthwhile to check if they’re a member of a trade body…. (who) usually accept complaints about members.” There’s a lot you can do if you’re in dispute with a tradesman before going to a third part such as Trading Standards or the Health and Safety Executive, including simply talking to them first to see if they will put things right, paying by credit card in case their business fails, and checking whether their trade organisation has its own dispute resolution service. The AA offers plenty of advice on how to resolve disputes at The AA - Legal Services. For more information, go to The AA - Home Emergency Response

Kate’s thoughts:-

I’m not sure there are many ‘excuses’ now for booking poor tradesman. There are lots of good sites such as Checkatrade and the Home Guarantee that look after you as well as things like Which’s trade people list. So, before you book a tradesmen, make sure you see our handy checklists first.

Read our renovation checklists


Story 4

Mortgage lenders’ record price reductions crank up lowest rates in seven years

Mortgage Advice Bureau has established that lenders offering unprecedented price cuts have prompted two-year trackers (by 28bps to 2.38%), two-year fixed (by 27bps to 3.44%) and three-year fixed loans (by 27bps to 3.52%) to tumble to their lowest rates since 2007.

Five year fixed rates also fell August-November, but are still 10bps higher than in November 2013 at 3.96%, and 13bps more than the 3.83% rate of August 2013. Fixed rate products are still most popular, and likely to remain so as the anticipated bank rate increase draws nearer, but borrowing behaviour has changed slightly. Falling rates are saving consumers hundreds of pounds per month, and only borrowers taking out a five-year fixed-rate mortgage in November 2014 will pay more, besides having higher repayments compared to the same time in 2013.

Mortgage Advice Bureau commented, “It’s likely that we’ll soon hit the bottom of the curve. Consumers playing the waiting game could therefore risk losing out on the most competitive deals.” Competitive rates are likely to offer more savings than stamp duty changes, with only two-year fixed-rate borrowers doing better financially because of these changes. Brian Murphy said, “Perhaps without realising, many (purchasers) have already been experiencing bigger savings in the form of falling mortgage rates.” For more information, see : Mortgage Advice Bureau

Kate’s thoughts:-

Making sure you are on the right and best mortgage rate for you is essential. Checking your mortgage every year or even every six months or so is vital to make sure you don’t overpay tens of thousands more than you need to.

Read - First time buyer legals checklist


Story 5

Belvoir offers its top five time-saving hints for landlords

Belvoir Cheadle letting agents have put together a handy checklist to help landlords minimise stress and maximise efficiency while running rental properties. First on the list is organisation: get paperwork in order and easy to find, use online banking to check rents have been paid, and possibly prepare a ‘welcome pack’ for new tenants about the property, which will save you time in the longer run.

According to them, the best way of saving yourself time and energy is to appoint an agent to advertise and manage your rental property for you. Providing you choose someone reputable, they will do all the hard work in keeping up with legislation, dealing with any problems or repairs as soon as they arise, and do everything from organising viewings to overseeing checkouts. For more information, see Landlordzone - Belvoir Tips

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