The first signs of the end of the first rally in UK house prices have arrived, data shows house prices have dropped by 1% last month ending a nine month long rally in home values. This data ties in with news from the British Banking Association that mortgage approvals have also dropped to an eight month low.
One of the biggest issues for the UK housing market is not just the availability of mortgages but more importantly the lending criteria. Since the 70?s home buyers have enjoyed lending of 90% and over LTV (loan to value). It is very difficult for first time buyers to raise deposits of 25% that have been required in recent times. The good news is that in the last few months the mortgage market is producing more workable deals with Loan to values hitting 85%. On a ?200,000 pound house that would mean buyers would have ?20,000 less to rise and that is what really makes a difference to the housing market.
Landlords and property investors are set to make higher profit margins as rents are rising and a shortage of suitable rental properties are coming to market.
The current increases in rents achieved are in complete contrast to the final quarter of last year as rents showed no increase back in 2009. Results from the Royal Institute of Charted Surveyors show their surveyors as optimistic about the future for rents. They reported the highest level of optimism for rising rents since the start of the survey in 1998. The increase in rents is driven by a direct decline in the number of properties available to let. With sound economic principles behind the increases in rental costs there appears little doubt that rents are and will continue to rise for the foreseeable future.
These statistics come at a time when many accidental landlords are choosing to leave the market as they have seen a recent rally in capital values. The demand for rental property also appears to be on the increase which coupled with less rental housing stock is a sure sign that rents will continue their upward course.
With the first signs of a freeze in the buy to let lending market starting to turn to a thaw and rents raising this is the best time for landlords for years! The banking and property finance market always follows a similar course. When things go bad the banks panic and stop lending, then they start to gradually lend to the ?safest bets?, top earning domestic mortgages and low loan to value mortgages. With a marked increase in the number and type of buy to let mortgage products available, it bodes well for other sectors in the property sector. The next area that should receive positive news after the buy to let lending has recovered is the commercial property market. With time, better deals will make the commercial property market again a better proposition for property investors. Then that most interesting of all property sectors the world of speculative property development. This area of the property market has been brought to its knee?s by the worst lending drought for decades. This sector has been out of vogue with lenders and partly blamed for the financial crisis. It is true that speculative property development did play its part in the financial crisis. You only need to look at the volume of available property for sale in Spain. The whole country is crippled by a huge over supply of new build properties, with many experts in the European property market expecting fire sales and some real bargains as lending and reality bite.
Bungalows still remain in big demand, and I have heard on the grapevine of a case located outside the Midlands which apparently, according to neighbours of the property, has been a very worthwhile investment. The small 2 bed-roomed semi-detached bungalow had been occupied by an elderly lady who sadly died, and the family of the lady who owned the bungalow put the property up for sale with an Estate Agent who asked ?140K. One neighbour reckons the builder who bought the bungalow told him that he sold it for ?225K and another source said it was sold for ?250K. Now even if the lower sale figure is correct it still shows it to be a very good investment.
However, the work by the builder over several months has to be taken into account, with two or three people working on site at the bungalow daily (5 days a week) when, during such time, the loft has been converted to a bedroom (with an en-suite); two rooms downstairs have been made into one; a back window has been taken out and replaced with pvc French Doors leading from the lounge to the back garden; a new kitchen together with white goods (fridge /freezer/washing machine) have been supplied and fitted; the property has been decorated throughout; the concrete driveway has been dug up and removed, and a new red-bricked driveway provided together with a wide matching pathway below the front window; and the front garden has been dug and levelled with a new lawn laid (but I don?t know what has been done to the back garden); and all rubbish has been removed from the site by skips. Thus the investment by the builder who bought the property has been good even if he sold it for the lower price quoted, although of course the cost of the works listed and anything else he may have done such as re-wiring and a new gas boiler, and fees, has to be taken into account and has to be deducted from the profit of selling the property, nevertheless it is good news for those who are involved, or thinking of becoming involved, in the property investment market.
1. Financially it will probably make more sense to extend your house than move home, as you do not incur the stamp duty, estate agents fees, and other moving costs. The money you spend can be seen in your new living space.
2. Space this is the number one reason that people chose to extend, they simply feel that they lack the space in their home to enjoy the lifestyle they want.
3. To spend more time together in your home, many families lack a nice space to relax together or dine together and a home extension can really give them the beautiful space to be together in.
4. Many home owners are simply proud of all the hard work and they want to extend their homes to give them that ?wow factor?, modern and contemporary home extensions really do set your home apart from your friends and neighbors.
5. Property development or adding value, some properties are simply crying out for a home extension. If you look at the rear of some streets you will notice that most of the home in the street have had an extension. There is just some housing stock that was not built to suite modern living, and really benefits from a home extension.
6. Is your family getting bigger? It may be a new baby or an elderly relative coming to stay and you might have decided that more space and a downstairs toilet would improve your lifestyle.
7. Have you received a lump sum of money and you want to make sure you spend it wisely a home extension will be there more many years when a new car or holiday will be long forgotten.
8. Are you starting or running a business from home and you need new space for a home office.
9. Football, golf, or motor sport? Do you find that your family is in conflict over the control for the T.V. with another room you could set it up as a snug or T.V. room and you could recline in comfort watching your favorite T.V. sport, or films safe in the knowledge you have complete control of the T.V. control.
10. Do you want to enjoy open plan living? Why not add a home extension and then remove the original external wall and open your home up into your new extension. This will really give your home that contemporary feel and give you extra space you need.
Extending a listed building is something that requires sensible project planning there are several important factors that must be planned out and agreed prior to building works commencing. Many people do not realise but it is actually a criminal offence to alter a listed building without listed building consent. So it may well be necessary to obtain listed building consent, planning permission and building regulation approval before you even break ground. It is the conservation department who hold the responsibility of managing the approval of alterations and repairs to listed buildings and those buildings within conservation areas.
They will decide if your proposal keeps within the character, flavor and appearance of the original building and uses the same materials and techniques that were used in the original construction.
This can make extensions to listed buildings expensive; however the good news is that these repairs or alterations are zero rated for VAT. So you need to make sure your contractor is VAT registered and that he makes the necessary arrangements with the local VAT department so he can charge you zero VAT.
Small extensions especially in kitchens can make a big difference, a home extension of just one meter out for the full width of a kitchen can give you the extra room you may need for a table. The difference in lifestyle for the home owner being able to sit as a family and have a meal can far out way the cost of a small extension.
Small home extensions are usually single story extensions, the design of these smaller home extension can be made to really unique. Fitting roof lights and finishing the external walls in render or quality timber cladding can give a property a really contemporary feel. Clever design and expensive finishes can be used on smaller extensions as the square meters keep the project budget affordable.
Porches and entrance halls can improve the look of a home from the outside as much as giving you that extra bit of space you need to keep shoes, coats and hats tidy. This kind of small home extension can also add value not only because of the extra space but as well it gives the house a unique appearance and a quality feel.
Due to recent changes in planning law not all domestic home extensions require planning permission but all require building regulation approval. There are two routes to the all important completion certificate, one is a full plans submission and the other is a building notice. Without a completion certificate it will be very difficult to re-finance or re-mortgage your home and it will also make it difficult to sell. So that is a very important point of focus during your home extension project.
If possible a building control full plans submission is a safer option as it allows the building control department to spot any flaws in the basic design. Things like means of escape which can become an issue if the property has had previous development works or the thermal efficiency of the new home extension.
The increase in VAT to 20% will add an additional cost of ?1,000.00 to a domestic extension of ?40,000.00. So those who chose to buy their home extension this year will save a ?1000.00. This could be spent of the internal finishing?s, like some nice oak flooring or to upgrade the Kitchen. Would it be nice to sit back and admire your nice new extension knowing that everyone else is now paying extra for their house extensions?
There are those who think they can really beat the system by choosing a builder who is not VAT registered or even worse ?does it for cash?. Builders who are not VAT registered have a very small turn over so they probably lack the experience to take on house extensions. Even worse are those ?cash cowboys?, working for cash is fraud it is as simple as that, do you really want to entrust your new home extension to a builder who is happy to commit fraud?
Extending your house will not only add great extra living space but will also add to the value of your home. With house prices still relatively high in comparison with wages many more people are opting for a single story or double story extension. With the average home now only changing hands every 14 years people are choosing to extend their homes rather than move house. The other reason that home extensions are becoming so popular is those that are looking to carry out a self build are finding it a challenge to find suitable building plots. So they are buying up bargain properties and remodeling and extending them to get their dream homes.
You also consider the prospect of moving up the property ladder and home extensions offer great value for money, it can also save children the disruption of changing schools. The other major financial consideration is stamp duty and estate agents fees. With these expenses taken into consideration the home extension really starts to make sense.
Many properties suffer from cracks to brickwork and signs of movement, there are a wide range of causes for this from heave to subsidence. The most obvious places to check are around windows and door openings.
The causes range from drainage problems, heave caused by the removal of large trees and other factors, through to subsidence. It is a good idea to get these matters check by a qualified structural engineer, do not rely on your friendly neighbourhood builder. It is true that a good builder will know where and what to look for but they do not have the training to pick up on some of the related factors and issues that these faults can have. The builder may diagnose the problem and even the solutions correctly so they may look at cracked or bowing brick work and opt to underpin which may solve the issue. They may have missed the cause, a cracked and leaking drain could continue to erode the sub-soil under the new underpinning and leave you with further issues. Builders do not always know the latest techniques and product technology so they may chose to dig up a sunken concrete slab costing thousands in waste and reworks. When it may have been possible to treat the issue with slab jacking.
So if you are worried that cracks could affect the structural integrity of your home or even its value seek some professional advice from a structural engineer. That way you have the peace of mind so you can enjoy your home!