Many property pundits and property professional like to make predictions on the future of the UK property market and house prices. There are also a number of banks and economists that are prepared to put their reputations on the line and estimate where the average UK house price will end up. These projections rarely vary greatly but some have proved far more accurate than other particularly after the last property boom. Amongst one of the best respected and accurate is the Royal Institute of Chartered Surveyors. They do have the advantage of having so many members who have the unenviable task of valuing people’s homes and properties. For the new year of 2013 they are predicting a rise in house prices of around 2 percent which given the economic landscape is a positive and sustainable increase. They are also tipping an increase in transaction volumes with the number of property sales thought to rise by a around the three percent mark edging them tantalisingly closer to the million sales marker. This is still a far cry from the heady days of average number of transactions edging up towards 1.7 million at the height of the property boom in 2006.
The property market may have been in the doldrums for the last couple of years with the number of new build properties and transaction volumes languishing at historic lows but many potential buyers are still out there. Many have become feed up of waiting for signs of a housing market recovery and with no signs of prices falling are choosing 2013 as the year they step on the property ladder. So are there still bargain properties to be had? Well the answer is yes but as with most bargains there is usually a catch, and in the case of cheap properties it is usually either the area is less desirable not much can be done about this. Or the property requires some form of a renovation, repair or improvement project it is important that you get an idea of what sort of costs are involved in these works prior to you buying the property. The other issue is that especially in the current climate mortgage companies are becoming far pickier about the type of remedial repairs that will affect a property’s mortgagibility. So ideally get a good local building contractor around before you buy to give you some indication of the costs that will be incurred in bringing the property back up to standard. They also have the experience to know where to look and what problems are associated with that type of property. For instance a good local builder will know that certain streets suffer from poor foundations or issues with the concrete floor slabs. This costs nothing and could save you thousands of pounds so take the time to check your bargain property has not got expensive building works that you may have missed.
Many older properties suffer from cracks to walls and ceilings they are usually around the joins between the two or around doors and windows. The reason for these cracks can vary from a simple deterioration in old lat and plaster ceilings though to poorly fixed windows or door frames. They can also be a sign of movement within the building usually in the form of settlement of subsidence. The majority of period properties have suffered from this to some degree and it is usually just a matter of monitoring the cracking for any signs of deterioration. However if there are a lot of cracks or the cracks are more than a couple of millimetres wide there may be a need to carry out some remedial structural repairs. It is really a case of catching these issues early because a simple repair can stop some structural defects from deterioration into larger and more costly structural issues. Another symptom of structural issues is parts of the buildings fabric being out of level. Look at the openings in the building like external and internal windows and door openings pay particular attention to the tops of the openings. This is where the lintels that support the masonry are and they can show cracks or be out of level. Check the walls and floors with a sprit level and look at the roof inside and out. The roof timbers can often begin to sag or push the top courses or brickwork away from the walls this is known as roof spread and often effects terrace properties. With lots of structural defects and repairs if they are caught early they can be repaired with additional bracing timbers or simple modern structural repair techniques like heli tie crack stitching bars. These masonry repair bars and straps are either tied to ceiling or floor joists or used to tie gable ends back to the roof rafters. With Heli tie crack stitching bars they are simply inserted between brick or stone courses. The mortar is removed with a grinding disc and the bars are placed in between the brick courses and fixed into position using resins usually on every third course of bricks. It has been know for home owners to hide these structural defects particularly before they sell their house to avoid a surveyors flagging up these defects and effecting the value or saleability of their houses. Hence the phase “papering over the cracks”, we have seen a number of structural defects hidden using render to hide issues with external walls and door frames or windows being replaced to hide movement in the door and window openings. The doors and windows are removed and the openings straightened up using new plaster. One easy to spot cover up is when a section of timber trim is attached to the bottom of the skirting board. This is a sign that the floors have moved away from the walls and left a gap so the trim has been fixed to the bottom of the skirting board to hide the gap. If you have any doubts about your house or one you are thinking of purchasing it is best to contact an experienced building structural repair contractor or a structural engineer. They will be able to check for any visible defects or advise if there has been a potential cover up.
Underpinning is used to describe the repairs or upgrading of defective or insufficient foundations on houses and other buildings. It can be carried out in two main ways and the costs can vary from a few hundred pounds to tens of thousands. This is why many potential home buyers or home owners often fear the word underpinning. It can frighten off potential home buyers sometimes with and sometimes without good reason. The two main ways that underpinning is undertaken is by excavating sections of the substrates under the existing foundations or by the use of pile foundations. The first and more common solution is usually carried out by removing sections of the substrates or ground and then back filling below ground with concrete. The key is to only remove sections usually around one metre in width at set distances apart to avoid destabilising the structure above. This is why underpinning is best left to experienced contractor who have a good understanding and experience of this type of work. The second but often more costly solution is the use of pile foundations the process is not dissimilar but relies on individual core holes that are drilled under the building and filled with concrete and steel reed bar details. These are then often tied to a ring or linear beam that is cast on site under the existing building. The use of pile foundations as a remedial solution to subsidence is often used when the ground conditions are poor or unstable often on sloping sites. So how do you find out how much underpinning is required and the costs of the underpinning? The answer is to employ a good experienced specialist building contractor or structural engineer. They will excavate trial holes these are small holes usually around half a metre wide and expose the existing footings so its size and condition can be inspected. Then the buildings structure will be examined and the size of the new footings will be calculated depending on the loads that the footings will carry.
The property market has been short of good news over the last few years but could 2012 mark the turning point for the housing market? There have been several pieces of encouraging news this week, firstly the base rate has remained the same. Secondly the government has announced a targeted policy for housing and construction. Thirdly the land registry has released data showing a monthly increase in house prices of 0.8 percent. For those who study the property market there has been interesting news from Northern Ireland one of the worst hit areas by the property slump. The top end of the Northern Irish property market is showing signs of recovery. With all this positive news even the most pessimistic of property pundits are being forced to revise their forecasts. This is good news for the construction industry, home owners and property developers. There is pent up demand from many house holders to either buy or sell their homes many wishing to invest in home improvements or house extensions. In previous years when they have seen the price of their main asset dropping and had concerns over the wider economy they have been reluctant to commit to spending on home improvements and house alterations. Now that many home owners feel more confident that UK house prices are set to go up they are looking to improve their homes to get the maximum benefit from the increase in house prices. House extensions can often add more value than they cost to build with house prices increasing these increases in house values are compounded. Considering that the government has relaxed the planning guidance and rules for home extensions. We look set to see an increasing number of skips on our streets and building contractors picking their jobs. The number of builders and trade people in the UK has dropped dramatically as many have left the industry as contracts and building work levels have reduced. So as the construction and property market starts to recover those building contractors who have had the skills to weather the challenging economic conditions will be increasingly busy. Building contractors will also see their workloads increase as the property market recovers. Most home owners carry out building work either prior to selling their home or when they buy a new home. So now is the time to secure those last few property bargains before the market turns and find a good builder before they are booked up.
The government is set to announce new plans to simulate house building and the property market with further backing to fund mortgages. This comes as the housing market is suffering from the lowest levels of agreed sales for the past four years. House prices are still falling in the UK with greater falls only being controlled by the buoyant London housing market. With the government also looking to relax the social housing requirements for some developments combined with further financial stimulus could this kick start the property market? The answer is that no one can really answer that question, the property market is so closely linked to the UK money supply which is at the mercy of the international financial markets. So many home owners are still stuck in limbo unsure when they can afford to move or will find that allusive home buyer. For many they have decided to stay put and improve their home ready for an improvement in the property market conditions. Apart from making sure that their homes are in a generally good state of repair they are also looking to add home improvements. Adding home extensions, loft and garage conversions and other home improvements that will add value to their homes as well as making them easier to sell. The other bonus is that items like home extensions add valuable space to homes which home owners can enjoy while they wait for the housing market to improve. So rather than letting your home sell at the current depressed values it might be a good idea to add value and ride out the property slump.
It is estimated that a third of potential first time buyers are trapped in rented accommodation many of these home buyers have experienced difficulties in completing purchases due to the lack of suitable mortgage funding. Research from the Royal Institute of Chartered Surveyors has showed that nearly forty percent of first time buyers are simply unable to afford to buy a house. It is estimated that twenty percent of home buyers are stopped from buying a house by the lack of mortgage funding. The government backed Newbuy scheme only applies to new built homes many of which are often out of reach of first time buyers. Many in the property industry believe that if the scheme was extended to second hand properties it would provide the mortgage funding to allow first time buyers to get onto the property ladder and therefore kick start the housing market from the bottom up. Many home owners who are looking to sell should consider imaginative sales structures that allow first time buyers to obtain a suitable mortgage to allow them to buy their homes. Mortgage lenders are wary of gifted deposits and long stop completions but there are other methods that allow home owners to get their buyers in place. It is possible to offer the option of buyers renting your home before they buy and paying you the deposit in installments before they buy along with some rent. This can give first time buyers access to mortgages with a lower loan to value rate and the availability of mortgages at a 90percent loan to value is much higher than 95 percent loans.
There are several items that sell larger properties when you get over that million pound barrier buyers become rather choosey and the wrong kitchen may not stop a sale but could hit the achieved sale price. Firstly when dealing with top end properties you must fit a kitchen that is both in keeping and of a suitable standard. Buyers will not pay the top asking price for a high end property that boasts a standard kitchen they will be looking for a brand kitchen. They also want to see the right level of bathrooms and ensuite for a five bed house they will usual want to see three ensuite and a high quality family bathroom. Buyers of this type of property usually have big families or lots of guests and if they are being asked to pay a good price they will want plenty of toilet and wash facilities. Large open plan kitchens and family living spaces are essential for modern buyers they are not just buying bricks and mortar but a life style choice. Do not skimp on fittings buyers want to see good quality but neutral tiles and sanitary ware. The other thing to consider is the outside space, I have heard of potential buyers choosing one house over another because one had a big pond or impressive water feature, so you cannot afford to leave the outside to chance. Of course all this comes at a price and it is often better to do very little than spend a limited budget on the wrong areas. Professional property developers make a good living at this end of the market and although they use their money wisely they know not to cut corners if they want to achieve a good sale price. Also entrances can be improved by adding a porch and good quality double doors this can improve the all essential kerb appeal and make your property stand out in an estate agents window.
House prices continue to stumble along with small movements up and down giving neither comfort to the optimists or pessimist. Indeed the same data is often used by both camps with negative data being picked up as continuing pent up demand and the pessimists suggesting that it is because of a lack of demand. If you look at mortgages which have a huge impact on the property and construction sectors you can see both positives and negatives. Mortgages are cheap with low interest rates and good fixed rates available however this is offset by tight lending material. Even though house prices are static it is still an achievement considering the wider economic backdrop. The bank of England has recently continued with its position of low rates and increase quanitive easing with more moves suggested soon to keep inflation on target. But the key is mortgage criteria and money supply when banks have access to cheap money and an increased supply they feel they are in a better position to lend. To increase lending they will relax lending criteria and the upward cycle begins. When lending criteria is relaxed more people can both practically borrow at the same time they have the confidence to borrow. The opposite is currently happening with property buyers and property developers less excited about buying assets that could fall in value while loans become harder to come by. It is interesting that new built homes and developments are seeing price rises against all odds. This is probably due to the recent low build rates in the UK making new homes much rarer than in the boom years of the mid 2000’s when every city’s skyline was peppered with tower cranes. Some economists are now predicting a fifteen percent increase in house prices over the next five years believing that the low supply rates will drive capital values higher.
A recent report issued by Price Waterhouse Coopers on UK house prices has suggested that prices will remain stable for the rest of 2012 although the price to wages ratio remains high a lack of supply is expected to maintain capital values. It has also suggested that young first time buyers will continue to struggle onto the housing ladder. With such low national build rates and prices remaining high it is only buyers with larger deposits and longer credit history who are able to secure properties that would have historically been marketed at first time home buyers. It was expected that London property would expect to see continued gains as foreign investors continue to favour London property as a hedge bet against inflation. With house price stabilising but the transaction volumes remaining historically low many home owners are deciding to stay put. This is increasing the number and size of home improvements projects. With many home owners choosing to extend their homes rather than move up the property ladder. With home extensions starting from as little as £15,000 it often makes financial sense to add a home extension as the money that is spent on a home extension is added to the value of that home.