At Manse & Garret, we are always looking out for information that can affect our Clients.  Halifax recently claimed that it now costs (on average) £100 less per month to buy a property, than it does to rent the same one, which may have an impact on our buy-to-let Client’s.  In the last year, there has also been a rise in the number of first-time buyers successfully securing a mortgage.

First-time buyers have been able to climb onto the property ladder due to the re-availability of 95% mortgages and a number of schemes, such as FirstBuy, Lend a Hand and the Save to Buy Scheme launched by Nationwide.

At first glance, these schemes seem to be just what is needed for ‘first-timers’ to climb onto the bottom rung of the property ladder.  However, regardless of whether someone has spent years saving up for a 25% deposit, has a generous Aunt willing to put money aside, or manages to get backing from their Local Authority, this still does not guarantee that the mortgage application will be successful.

For a start, a bank or building society will only lend four times the amount of an applicant’s wage.  For those earning the minimum wage (roughly £12,600 per year) the amount a mortgage provider would lend is £50,400.  The average annual salary in the UK is around £26,200, which would generate a loan of £104,800.  This means that those earning the average salary would (at most) be able to purchase a 2 bedroom property in London – but only in areas such as Thamesmead, Abbey Wood or East Ham.  Those on the minimum wage would be able to afford a garage in Prime Central London, a one bedroom houseboat, or a share in a new build property, (which also works out more expensive per month than buying outright).

Realistically, unless you are fortunate enough to be able to purchase property outright, or to earn at least the average UK wage, the chance of owning your first property seems to be slim-to-non-existent.  Whilst there has been a rise in the number of first-time buyers purchasing their first property, I suspect that the proportion of first-time buyers unable to buy is much higher than the proportion who are.  The mortgage schemes available, for some, are most definitely a mirage, as they lack the substance necessary to be tangible.

Fortunately for top-end Buyer’s Agents like us, our first-time buyers are either able to meet the requirements for a residential mortgage, or have the funds necessary to purchase a property outright.  We are well placed to help them secure their first home in the right area and at the right price, as we know how property transactions work in the UK.  If you are looking for your first (or second!) property in London or Brighton, give us a call today to see how we can help you with your search, as we are officially the best Property Finders in London.

Technorati Tags: First time buyers, Mortgage Lending, mortgage schemes, mortgages, property, property market news

Tags: First time buyers, Mortgage Lending, mortgage schemes, mortgages, property, property market news

London Property Finder

News emerged yesterday, 7th December, that HSBC is to make available £15billion for mortgages in 2009.  This equates to a 20%  increase in lending compared to 2008 and almost double the amount it loaned in mortgages in 2007.   In addition HSBC plans an extra £1billion of funding for small businesses.  Annecdotally, we understand from a branch manager that HSBC have closed their books for development finance, but they are open to strong evidence backed proposals from small businesses.  According to The Times, the Federation of Small Businesses (FSB) has ‘singled out Barclays for failing to produce measures to help small businesses since the start of the credit crisis’.

One company cannot bail out the housing market but this is a step in the right direction.  HSBC has a track record of being one of the first to react to interest rate fluctuations and changes in government policy.  As a result of its lower exposure to the sub prime mortgage market, it is in a good position to increase its trading position in  UK mortgage lending.  Let us hope that other banks follow suit!  When you have the finance then cobntct the London Property Finder for a swift move.

Technorati Tags: London Property Finder, Mortgage Lending, Small business loans

Tags: London Property Finder, Mortgage Lending, Small business loans

London Property Search Agent

Mervyn King, Governor of the Bank of England issued a statement today saying that: ” In the UK we face a difficult but temporary period during which inflation will remain high…but provided we do not impede the required adjustment we will come through this temporary period and resume a path of normal economic growth with inflation close to target.”

He adds that sharp increases in global fuel and commodity prices, compounded by a depreciation in sterling have largely caused the rise in CPI (Consumer Price Inflation) this year. 

The reason for these increases is due to supply and demand.  The energy needs of India and China, two of the biggest world populations have increased exponentially.  Also, the financial crisis in August last year drew investors to invest in oil, in view of the demand at any cost.  Similarly, commodites are in short supply with major developments in Russia, China and the Middle East fueling demand.

The Governor goes on to discuss the Special Liquidity Scheme whereby banks can insure borrowings to each other and therefore liquidity.  Sensibly in our view, he adds that his proposals to help us through the Credit Crunch ‘will not and cannot solve the shortage of funding to bank lending, including mortgage lending.’

The tax payer should sigh a communal sigh of relief at this news and mortgagees, most of whom will be tax payers should feel the same.  It is tempting to rant about stupid investment decisions based on ridiculous returns on foreign soil, where there is ample space to build a new condo development or trailer park for half the price.  But it is a common error with the British.  We all live on a small island where lots of people aspire to live but there isn’t much room and rightly, our countryside is protected so we can’t just build a new development wherever there is demand.

High inflation is not good.  0% increases in GDP isn’t good.  But at least the Bank of England is in charge of interest rates and hopefully Merv’s knighthood is relatively assured so his priority should be for a stable economy and respect amongst his peers.  Our assumptions being true, he will take the hard line with banks which have made silly decisions.  Likewise British homeowners who have done the same will come acropper.

As we have said before – it is all in the buying.  Buy well, in any market and you should make money.  If you need help – you know our number!

(It’s 0845 459 1703 – if you’ve forgotten – the London Property Finder!)

Technorati Tags: Consumer Spending, credit crunch, House Prices, Inflation and House Prices, Interest Rates, London Property Finder, Mortgage Lending, Property Supply and Demand

Tags: Consumer Spending, credit crunch, House Prices, Inflation and House Prices, Interest Rates, London Property Finder, Mortgage Lending, Property Supply and Demand