* The Bank of England has cut interest rates to 0.5% – a fresh all-time low – and says it will now boost the money supply to help revive the economy.

Interest rates have now been reduced six times since October, and the latest cut from February’s 1% was expected.

The Bank said it would expand the amount of money in the system by £75bn – a policy called quantitative easing – in an attempt to boost bank lending.

Bank Governor Mervyn King said the policy would “eventually work”.

* Source: the BBC

Well, this was probably expected due to the actions taken by the UK Government and Bank of England over the last few months and the speculation by the media.

What this generally means for you and I, is that house prices are at their lowest for more than a decade, interest rates are at an all time low and the majority of monthly mortgage payments here in the UK are nearly at rock bottom, with some people paying less than £100.00 a month.

So right now in the housing market, although there is a lot of fear out in the general public and things are still a bit slow, this is absolutely the BEST time to go looking for bargains in the housing market.

House prices are low, Banks are being leaned on to lend again and if you can get a mortgage, you can get a really great lending rate.

Unfortunate and heartless as it may be for some, the recession has created an upturn in repossessions, which in turn has created opportunity for those cash buyers who can afford to take a risk and buy at the drop of the hammer.

Plus if you’re a tenant looking to move or renew your existing tenancy agreement, you currently have the upper hand as you know that your Landlord could probably drop the monthly rental price and still make good money over and above their mortgage payments.

However, my heart goes out to those who did not see the downturn coming and took out a fixed rate mortgage just a couple of years ago, and are now caught short with a higher interest rate mortgage, fixed for 3 – 5 years. Unfortunately you will just have to bite your lip and learn from your mistake.

But if you want to get on the property ladder and bag yourself a real bargain, get in with the real property investors who concentrate on Below Market Value Investments (BMV) and generally get at least 25% – 40% off the asking price still.

Times Online
August 10th 2008

Two weeks ago, a country home in Dorset sold for £210,000 above its guide price within minutes. How? It went to private auction. Seven of the 12 invited buyers gathered in the dining room of the 18th-century farmhouse in Gussage All Saints, near Wimborne. All of them wanted to buy the red-brick and flint property, set in nearly five acres of gardens and paddock, with stables and a swimming pool, on the market for £1.25m.

The polished dining table was pushed up against the fireplace and the auctioneer took up his position with his gavel. The rest of the room filled with rows of chairs gathered from all over the house, on which sat nervous buyers – many willing to push their finances to the limit to get the property. As the minutes ticked away towards noon, the tension mounted, then, bong! The church clock next door struck 12 and the auctioneer rose.

“You could have cut the atmosphere with a knife,” says Jamie Hawksfield, who sold the house following the death of his parents. “It was nerve-racking, but we’re happy with the result. We’d had a lot of interest, so, when the agent suggested a private auction, I thought, ‘What?’ But I said, ‘You’re the expert, we’ll go with it.’ ” Only four of the seven parties invited made a bid – the rest presumably realised early on that they couldn’t compete. All four live locally – any City slickers looking for a country retreat were left by the wayside this time. The underbid was £1.45m, the hammer price was £1.46m.

It’s heady stuff – and, as a way of selling your property, it beats any other method hands down in terms of excitement. In today’s market, moreover, it is one of a handful of ways to more or less guarantee a quick sale – something sellers across the country are increasingly desperate to achieve.

The number of unsold homes is building up, and anxious vendors – many of whom have been trying to sell for the past year in the wake of the collapse of Northern Rock and the credit crunch have seen the value of their homes tumble and offers fall through.

Take Sue and Don Reed-Jones. The couple put their home, Grade II-listed, four-bedroom Tump Cottage, near Avening, Gloucestershire, on the market last September for £575,000. “It was right at the end of the summer, so we knew it probably wasn’t going to sell over the winter,” admits Sue, 55. “Come spring, when we thought things would pick up, we only had trickles of interest. We reduced the price to £550,000, but that didn’t seem to have any effect. So we put it on with other agents and reduced the price again, to £525,000.”

This tactic seemed to work, and they found a buyer. Unfortunately, by the time delays in the chain had been ironed out, the mortgage he had lined up was no longer available. “We said that we couldn’t keep cutting the price, so he had to drop out,” Sue says. “We’ve had to put it on the market again. We’d love to sell it and fulfil our dream going to Malaysia, but all I can see is that winter is coming again.”

They are not alone. Figures from the Land Registry suggest that the number of transactions has fallen by as much as 80% over the past year. Henry Pryor, the director of Housingexpert.net, estimates that the registry recorded 17,681 sales in June, compared to 105,000 in the same month last year. According to research for The Sunday Times by the property website Rightmove, 8.5% of houses – or nearly 65,000 properties – are still on the market with the same agent as they were a year ago.

Even upmarket areas, which until now have withstood the worst of the property downturn, are looking fragile. Savills estimates that the number of transactions in London is down by 45% compared with this time last year. According to Lucian Cook, its director of residential research, the rest of the country has not been so badly hit, with transactions down by an average 20%. “The lower price bands tend to be more affected in the south, with the under£500,000 and £500,000-£1m categories seeing the worst decline,” he says.

So, why the auction – and why not a public one? John Young, director of Humberts’ Dorset office, in Blandford Forum, was the selling agent and auctioneer. He explains that the only real difference between private and public auctions is that the former are by invitation only. They are sometimes held among family members or neighbours when there is land or property that interested parties want enough to bid for. Until recently, they were rare in other cases, but with the downturn in the market they are increasingly being used to sell unique and highly desirable properties, which often means those in the countryside.

“Last year, before the market turned, “sealed bids were common when you had several ‘proceedable’ buyers,” Young says. “But they are not legally binding and, in a flaky market, buyers get cold feet and pull out even after a successful sealed bid. Private auctions are fair and transparent, and you get closure – that’s attractive to both sellers and buyers in this market.”

The simple of art of selling a home has become complex and increasingly fraught as transaction numbers tumble and prices continue to slide. Private auctions may be making a comeback, but they are still unusual and, warns Young, don’t suit everyone or every property. There are, however, other ways for anxious sellers to ensure a quick – and binding – sale.

One of these is selling through a public auction. This can be a good way to get rid of a property that needs modernising. Try www.allsop.co.uk , www.savills.co.ukor www.a-r.co.uk. Fees are usually about 1.5% of the property’s price, and there is a catalogue charge of £300-£700. You will also need to pay a solicitor to complete the sale.

If you want to go it alone, consider listing your property on the online auction site eBay in the hope of catching bored office workers surfing the web in their lunch hours – you might even spark a bidding war. To list a property, you’ll be charged a flat fee of £35, which will keep it posted for 28 days. It’s not mandatory to give a reserve price, but set one just in case.

Or you could always try www.home.co.uk the free private property advertising site.

Another option is to sell your home to a developer in a part exchange. You negotiate an offer – usually about 90%-95% of the value, based on two or three valuations – and the developer buys your house. Meanwhile, you move into the developer’s newly completed property in your preferred location. The advantage is that you can get out quickly and the deal is completed within a month. On the down side, you will get a new-build, which could well fall further in value.

What about buyers? If you are angling for a bargain and planning to wait, then think again. Cook warns that, come next year, the potential bargains could begin to dry up. “The more discretionary sellers will move out of the market, and there will be low supply to match low demand, creating stability,” he says.

“Buyers will head for quality, so, if you’re going to get the transaction through, you need to be sure you’ve minimised the risks. People will buy the best property they can in the price bracket they’re looking at. Even if you have a great house, you might have to be prepared to accept a bit less for it, but it’s more likely to sell.”

Additional reporting by Anna Mikhailova

Be your own house doctor

Having trouble selling? Try these tips to tempt half-hearted buyers into making an offer.

Drop the price If your house has been languishing for a while, it could well be that it’s too expensive. When you lower the price, you should make the reduction significant. “You have to bring the property into a new band of buyers,” says Ed Mead, director of Douglas & Gordon’s office in Chelsea, southwest London. “If you have a property on at £595,000, reducing it to £575,000 is going to do no good at all. You need to bring it down to £550,000, which is in the range of people looking at the £500,000 market.” Be warned, though: go too low and your home could look so blighted that it fails to attract any interest.

Be flexible “Try to accommodate your buyer and offer flexibility in the sale,” says Christopher Bramwell, head of Savills’ office in Chiswick, west London. “If that means delayed completions, or reducing the price because work needs doing between exchange and completion, it’s worth it to hold the deal together.”

Call in an expert House doctors are back and business is booming. Indeed, it is probably the only area of the housing market that is seeing growth. Even estate agents are paying for the service to clinch a deal – and their commission.

“Recently, we helped a couple who were living with a small child in a riverside flat in east London,” says Polly Maxwell, whose company, Milc (www.milcstyle.co.uk ), advises desperate sellers on strategies for selling their home in the shortest time possible. “They had these two huge electric-blue sofas in a really big open-plan reception room with windows looking out over the river. When you walked in, all you saw were the sofas, and you didn’t notice the view. We told them to put them into storage, then furnished the whole flat in a contemporary style. It sold really quickly.” Prices for house doctors vary – Maxwell charges from £175 for a one-day makeover, and suggests that clients spend about 1% of a property’s asking price on smartening it up. Home Stagers (www.homestagers.co.uk ), a nationwide agency, offers tailored consultations that cost £250 for a two-hour visit, written report and proposed time scale for changes. The company says that 60%-70% of the properties it handles sell within three months.

Create a good first impression There are some things you can’t influence, such as the location of your home or its proximity to the gasworks, but there are other things you can. Start with the kerb appeal. “Repaint the front door, fence and gate,” Maxwell says. “Tidy up your front garden – pop out to the garden centre and buy some plants. Make sure the doorbell works – people always forget that one.” Inside, keep it spotless – kitchen and bathroom gleaming, with everything tidy. “I’ve seen places that people were trying to sell with dirty underpants all over the place and washing everywhere,” Maxwell says. “ You’d think it would be blatantly obvious, but no. Don’t leave your washing-up piled in the sink. It’s just the basics.”

Do a little DIY “Buyers don’t like to be faced with problems,” Maxwell says. “A lot of people are quite lazy: they like to walk in and know they don’t have to do much.” So, tighten the door handles, check your wiring and paint those scruffy skirting boards. Maxwell also suggests changing the handles on kitchen cupboards and replacing dull old taps in the bathroom with shiny new ones.

Get the look “Switch all your lights on when showing someone around, no matter what time of day it is, and place table lamps to get rid of dark corners,” advises Maria Ford, creative director of Home Stagers. “It’s important to try to give the impression of a show home.” She recommends tactically placed artificial plants, which won’t need maintenance, and adding mirrors to bring in light, especially in dark hallways.

Meet and greet Be there to meet prospective buyers. “People like to have someone who knows the area, and you’ll be able to point out details and create a nice atmosphere,” Ford says. Sellers will be able to receive unfiltered feedback and gauge the market for themselves.

Thank you very much to Lucy Denyer and Anna Mikhailova of The Times Online for writing the article

Find Professional Removal Companies to move you now

BoE: No quick fix for mortgage misery

Wednesday, July 30, 2008

The Bank of England has released some sobering statistics about UK mortgage approvals.

According to the BoE, mortgage approvals have dived by almost 70% in the past year. Just 36,000 new loans arranged for people moving home during June – that is 69% fewer than in the same month last year and 12% lower than May’s figure, according to the Bank of England.

Mortgage lending also dropped steeply during the month, with net advances hitting a near eight-year low of £3.1bn.

The number of home loans approved has now fallen for 14 consecutive months and is at its lowest since the Bank of England first issued figures in 1993.

Lenders have tightened their criteria because of the credit crunch, reducing the availability of mortgages, especially to would-be buyers with small deposits.

The BoE figures come as a report for the Treasury warned there is no quick fix for the problems in the mortgage market.

The Crosby Review, which is being carried out by the former head of the Halifax Bank of Scotland Group (HBOS), Sir James Crosby, says funding of home loans should be left to the market.

Sir James says Britain should avoid setting up US-style government-backed agencies to tackle the funding crisis.

But his independent report stops short of making recommendations on how to tackle the problems caused by the credit crunch.

It moots the idea of possible further support from the Treasury to help kick-start mortgage lending

The Bank of England data shows a fall in all types of mortgage approval, with just 165,000 new loans agreed during June, down from 214,000 just three months earlier.

Howard Archer, chief UK and European economist at Global Insight, said it “heightens concerns over the potential depth and length of the housing market correction”.

“The Bank of England data graphically highlights that housing market activity continues to be throttled by stretched affordability and tight lending conditions.”

Nick Leeming added: “36,000 new mortgages in July is almost a quarter of the peak level in the autumn of 2006. The dearth of mortgage finance is the main sticking point for the housing market. With demand stifled, prices are falling, but that cannot stimulate transactions until the mortgage market is brought out of deep freeze.

“The Crosby report offers a chink of light at the end of the tunnel but this is not a time to delay or be timid. Waiting until the autumn makes no sense at all. The Treasury and the Bank of England should bring new mortgages into the special liquidity scheme straight away to get the market back on its feet”.

Special Thanks to The Move Channel for the article

The Government is not doing enough to help struggling homeowners in the UK, argues the NAEA.

Following the publication of the US government’s housing rescue bill, The National Association of Estate Agents (NAEA), is calling on the government to heed the US government’s late activity on their housing market and to take preventative action.

Peter Bolton King, Chief Executive of the NAEA, explained: “It is worrying to see that it has taken more than a million people losing their homes for the US administration to take action by introducing the housing rescue plan, including a tax break of as much as $7,500 for first time home buyers.

“The housing market is a pillar of our economy and whilst we are not in the same position as the US and it will require different solutions there are things that that our government can do to ease the pressure and ensure our situation does not worsen.

“The first thing the government could do is introduce a tax break, such as abolishing Stamp Duty for first time buyers and moving the thresholds up to ease pressure throughout the whole housing market giving people a reason and incentive to come back.

“In addition, the Bank of England needs to pump more liquidity into the mortgage markets to ensure people are able to find funding for mortgages.

“The government also needs to support more proactive initiatives, such as the blueprint recently drawn up by The Council of Mortgage Lenders to address the funding problems in the mortgage market”.

“If the government really wants to help the housing market we need to see action now from the government to ease pressure and give consumers hope for the future.”

Thank you to the Move Channel for the Article

Britain’s Credit Crunch hits the Removal Industry harder and harder as we go deeper into 2008.

Next week is the last week of July which should be one of the busiest weeks of the year for Removal Companies and yet there are still some removal companies who aren’t yet fully booked. There are only 6 working days left in July, and Removal Firms are usually turning work away for next week, long before now.

Amazing.

How will our industry survive these next few months?

Come October, the work will completely die away again. If companies aren’t making money now, they will not survive until Christmas. With many Removal Men laid off work earlier this year, this is a very testing time for the Removal Industry. I wonder who will fall under the strain of bad debt, high overheads and low profit margins?

Traditionally, June July and August are the busiest months of the year for Removal Companies. And that is still true this year. But for the first 6 months of the year, House Sales were down by at least 50% and unfortunately for Removal Companies this is naturally a slower time for business as the spring months recover after the slow winter.

It is only once the warmer weather kicks in that people actively look for a new home and once the house sale is concluded the actual removal date might not be for some 3 – 4 months later. Hence why it is always busier from May onwards.

Hopefully the Housing Market will pick up soon and Removal Men can start to feel safe in their jobs again.

Following is a link through to a news story on the BBC website from May this year. It is an interview with SBS Removals MD Jonathan Bramwell and Martin Rose from the Guild of Removers and Storers about how high fuel costs and the downturn in the Housing Market has affected our industry.

(Sorry I can’t figure out how to embed the video into the blog and I couldn’t help make two pictures from the news items as they were both great pictures.)

Click on the picture to view the news report.

Jane Finch, Managing Director of Moving etc…, is guest speaker at a seminar for the Removal Industry, run by the National Guild of Removers and Storers.

Hosted by Martin Rose of the National Guild of Removers and Storers, the seminar focuses on how Removal Companies can survive the slow housing market and what precautions they can take to try and make the most out of the few enquiries for Removal Services that are being made in the current climate.

The half day seminar is being held on Tuesday 24th June 2008 at the Thurrock Hotel in Averley near Grays in Essex. There are 2 seminars, one in the morning and the other in the afternoon and Miss Finch is speaking and presenting at both.

Moving etc… are Independent Relocation Consultants and Professional Move Managers and help take the Stress out of Moving for busy, cost conscious people.

They recommend professional Removal Companies to the public, as they have inside knowledge of the Removal Industry and know all the industry gossip about which Removal Companies to use and which companies “not to touch with a long Barge Pole!”

They only recommend Removal Companies that belong to a Regulating Trade Association such as the Guild of Removers and Storers or the British Association of Removers.

Because the Removal Firms that are recommended are vetted by their peers and have to abide by strict Codes of Conduct, there is a higher level of protection for the consumer than using a non-regulated mover. Although this is not a guarantee, as accidents can still happen and things can still go wrong, the Removal Companies that are recommended by Moving etc… must use trained staff, offer comprehensive Insurance/liability cover, use fair terms and conditions of service and give written quotations so that everything is clear.

All customers who contract Removal Firms that belong to a Trade Association such as the Guild have access to independent arbitration services such as the Removal Industry Ombudsman Scheme.

Jane is speaking to Removal Companies about how they can survive in the current housing market and make the most of the number of enquiries they are currently getting.

June, July and August are typically the busiest months of the year for Removal Companies, however some reports in the media say that house sales are down 60% from the previous year, which will likely cause some Removal Firms and Estate Agents out of business this year.

Removal Companies are definitely feeling the squeeze as people try to move themselves by hiring a truck and utilizing their friends to help them move; or they are just not moving at all, choosing to wait it out and find out which way the housing market and interest rates go.

Jane Finch says, “Choosing the right Removal Company could make all the difference as to whether your house move goes well. After dealing with Estate Agents, Solicitors, Mortgage companies, Vendors and Purchasers and anyone else in the chain for several months at a time, the last thing you need is for your moving day to be a disaster.”

For help with your relocation and to find out which Removal Company to use contact Moving etc… directly.