Research shows that on average £1,000 is the amount of money wiped off the value of a house painted an undesirable colour!
Auctions: Rovsters Top 10 tips!
Mar
9
Posted by Rovster
Auctions, Great places to find a bargain, but you’ve got to be very careful!
An auction is defined as a public sale of goods or property in which prospective purchasers bid until the highest price is reached and if you are one of the many people trying to get a foot on the property ladder or indeed trying to pick up a property bargain then buying at auction could be the answer.
Auctions are incredible places, more than 30,000 properties are sold at them every year in the UK and you witness the perfect market, willing sellers & willing buyers, selling & buying property for huge amounts in minutes. You will also witness demand & supply, and the various market forces in action right before your eyes. They can be places were your dreams & nightmares can begin or end. Get it right and a bargain can be picked up in seconds, make a wrong move and you’ll end up regretting it for many years to come.
The reason why auctions are becoming ever more popular is because in property you pick up a bargain when you have a motivated seller and auctions tend to have plenty of highly motivated sellers as properties tend to be on the market due to bankruptcy, repossession to clear debts or deceased estates and lots of motivated sellers means lots of bargains. However life is rarely that simple and you have to be extremely careful to ensure success at auction as by no means are all the properties bargains. And just to make sure you ‘can keep your head when all around are losing theirs’ these are my top ten auction tips;
1) Do Your Homework
You need to know precisely what you are buying before you buy it. Sounds simple but you would be surprised at how little research is carried out by the average person bidding at auction. Do you have a copy of the catalogue? Do you understand the market you are buying in? You will need your solicitor to carry out local and national searches; is the title good? Are there any restrictive covenants? You will also require a survey; are there structural issues, what are the costs of refurbishing? This will tell you if it’s worth buying and at what price you should pay.
2) Understand How an Auction Works
In an auction a reserve price is usually placed upon every property in other words if it doesn’t reach this price the property will not be sold. So as long as the reserve price has been reached and if you are the last and highest bidder when the auctioneer’s hammer falls it means you are the successful buyer. This also means you are legally committed to paying the price you bid. You will then need to pay 10% of the cost of the property before you leave the auction and the balance has to be paid in full within 28 days.
3) Beware the Hidden Costs
Don’t forget to take into account the cost of surveys and legal advice. You will also have to pay stamp duty on properties costing £125,000 or more. The auctioneer may demand a ‘buyer’s premium’ equivalent to 1.5% of the sale price. Usually there is an administration fee, typically £150, paid to the auctioneer. Also read the small print, sometimes sellers ask for the auction fee and legal work to be borne by the buyer!
4) Observation
If you are new to the auction game makes sure go to at least a couple of auctions as an observer to gain the valuable experience you will need. Auctions are trickier than they look and the more knowledge you have will ensure you know exactly what you’re doing when you bid for real.
5) Unsold Lots
Always be on the look out for unsold lots. Either there were no bidders or the property failed to reach its reserve price. In this case both the vendor and the auctioneer will be keen to sell and may accept a lower offer.
6) Set your Price Limit
Probably the most important rule of buying at auction is that you must set your price limit before the auction and stick to it! Understand precisely what you are prepared to pay and if it goes above that price walk away, never bid above your pre-set price, you won’t regret it.
7) Do not bid before the final count
Do not bid until the final count. Only the last bidder wins at auction and by letting everyone else show their hand you will know if its worth bidding for or not. This is a simple rule but can prove very effective, ‘going once, going twice… start bidding but only if its below your pre-set maximum bidding price.
Avoid Bidding wars
If you get into a bidding contest either get out immediately or raise your bids by smaller increments to take the heat out of the situation. You must make sure the bidding does not get out of control as you don’t want to end up paying way over the odds and regretting it minutes later!
9) Control your Emotions
Never get caught up in the emotion of the auction and never bid above your preset price. Avoid bidding wars, ego, competitiveness, they all end up costing you a lot of money and if you get caught up in the emotion you will probably lose. Keep a clear, cool head, have patience and you will eventually get the property you want at the best possible price.
10)If at first you don’t succeed…
If you don’t get the property you want come back another day. Don’t buy another just for the sake of it! The good thing about auctions is that they are becoming increasingly popular so there is always another one around the corner and maybe next time you will find your dream home!
Auctions are exciting places and attending one will give you a first class education in the property market. The price at which a property sells is usually an accurate indication of market value, because the heavily publicised auction draws people interested in purchasing that type of property.
Even more importantly, you will meet many other people who are interested in or are buying property. Work the crowd, get their names, business cards, phone numbers because these people can lead you to property bargains. Networking is essential in the property game, the more like minded people you know the better the chance you have of finding your ideal home or investment and auctions are the perfect place to start.
By Gary McCausland, Founder
Halifax say UK House Prices fall by 1.5%!
Mar
5
Posted by Rovster
UK house prices recorded their first monthly fall since June with a 1.5% drop in February, the Halifax has said.
The drop was caused by the end of stamp duty relief, the cold weather and more properties being put up for sale. The average home is now worth £166,857.
The Halifax said that prices were still 4.5% higher than a year earlier, but the market had slowed in recent months.
The survey found that prices are also a full 8% higher than the lowest point of the market in April 2009.
Lending slows
The icy weather has been widely noted as a major factor in the latest round of data about the UK housing market.
Weather conditions slowed activity, with many potential homebuyers less tempted to look around homes or finding it difficult to travel.
The end of the temporary stamp duty relief was also regarded as a factor in the slowdown.
The stamp duty threshold dropped back to £125,000 on 1 January, after the threshold was at £175,000 for just over a year.
Both these issues were cited last week by the Nationwide building society , which said that prices had fallen by 1% in February.
Mortgage lending also suffered at the start of the year. Recent figures from the Council of Mortgage Lenders also showed that gross lending for home loans fell by 32% in January compared with December, reaching a 10-year low of £9.1bn.
The Bank of England also reported a 17% fall in the number of mortgages approved for house purchase during January.
But the Halifax, which is now part of the Lloyds Banking Group, also pointed to a rise in the number of people putting their home on the market as a factor affecting prices.
"An increase in the number of properties available for sale has helped to reduce slightly the imbalance between supply and demand," said Martin Ellis, Halifax housing economist.
Economy worries
The low supply of quality properties on the market was regarded as a key issue when prices were rising throughout the second half of 2009.
Figures from the Land Registry for properties in England and Wales – which lag behind other data but are considered the most comprehensive – showed that prices had risen for eight months in a row until the start of February.
There is huge uncertainty over mortgage finance, interest rate hikes and over people’s job certainty 
James Moss, Curzon Investment Property
However, the three-month on three-month figures from the Halifax show that the underlying rate of house price inflation had slowed in February.
Prices were 1.8% higher quarter-on-quarter, compared with a 3.2% increase in January, it said.
The state of the economy also remains a key factor in people’s decisions about whether to move home, according to James Moss, director of Curzon Investment Property.
"There is huge uncertainty over mortgage finance, interest rate hikes and over people’s job certainty. None of this is helped by the possibility of a hung parliament," he said.
Simon Rubinsohn, chief economist for the Royal Institution of Chartered Surveyors (Rics), said: "The likelihood is that prices will resume an upward trend, albeit at a more modest pace than seen during the latter part of 2009.
"However, the backdrop for the housing market is set to become gradually more challenging as public spending is cut, taxes go up and the cost of mortgage finance begins to rise."
Dead cats bounce
Mar
1
Posted by Rovster
I know what you are thinking, this blog is supposed to be about property, not some fluffy pet that can fall off a roof. Well the term “dead cat bounce” is a figurative term used to describe where a market rises after a sharp fall, but it is just a temporary recovery which is later followed by a further decline.
So, just because we see some positive news and some observers calling the “bottom of the market” don’t always believe it. Some buyers may have come back in to the property market but this brief surge doesn’t mean that the tide has turned and we returning to the days of continuous and substantial property price increases. Actually this blog was drafted in mid 2009, but not posted as we didn’t feel that the market had recovered sufficiently to discuss it’s demise!
One of the key concepts that we want to share with you is sustainability. When we are asked what level property prices should be at, sustainability is a key. Is it possible for property prices to increase by 10% per annum, with wages and inflation below 3%? Is it possible for prices to continue to increase from 3.5 times earnings, up to say 5x or even 6x? Perhaps the answer is no! These events are not sustainable. Eventually prices get so high that no one can afford them (least of all the first time buyer) without taking on more debt. Sure if there is plenty of available credit the market can continue to rise, but only until the bubble bursts. Sound familiar? There are lots of factors that influence price which will be covered in future blogs, so stay tuned.
Just because you see a short term improvement in the property market don’t be fooled into believing that the market has bottomed and that we are returning to indefinite price rises, because you could just be witnessing a dead cat bounce.
Regards
The Rovster Team.
House Prices & Mortgage lending Fall!
Feb
26
Posted by Rovster
UK house prices fell for the first time in 10 months in February as icy weather put off house hunters, the Nationwide building society has said.
Average property values dropped by 1% compared with January, with the average home worth £161,320.
But the annual rate of increase accelerated to 9.2% because prices dropped faster a year ago.
Mortgage lending also slowed at the start of the year owing to the hangover from the stamp duty holiday.
A separate Land Registry survey of house prices in England and Wales found that in the previous month, January, prices rose strongly by 2.1%.
That was the eighth monthly rise in a row reported by the Registry and pushed the average house price up to £165,088 – 5.2% higher than in January 2009.
Blip?
A better indication of house price trends is available by looking at the three-month on three-month comparison available from the Nationwide.
This showed a 1.6% increase in the three months to February, having slowed from 2% in January and from the peak of 3.7% in September.
Prices surprised many commentators by remaining relatively buoyant throughout the second half of 2009.
The Nationwide said it was difficult to gauge whether February’s fall was a "temporary blip" or the start of a new downward trend.
"There is evidence from a range of indicators that the market may have lost momentum in early 2010 as the stamp duty holiday ended and house hunters were obstructed by the icy weather," said Martin Gahbauer, chief economist for the Nationwide.
"Even without the impact of stamp duty changes and the snowy weather, it would have been surprising to see house prices maintain the very strong upward momentum seen for most of 2009."
Little increase in household incomes and relatively high unemployment could also have put the brakes on house prices.
Mr Gahbauer said that it was a "positive development" for house prices not to race away from these economic fundamentals.
Mortgage lending
The number of new buyers making enquiries about homes dropped at the start of the year.
Properties in sought-after locations are in short supply
Recent figures from the Council of Mortgage Lenders also showed that gross lending for home loans fell by 32% in January compared with December, to a 10-year low of £9.1bn.
This lack of buyer demand fed through to the drop in agreed prices in February, Mr Gahbauer said.
There has been widespread agreement among commentators that the slowdown in mortgage lending at the start of the year was the result of bad weather and the end of stamp duty relief.
The stamp duty threshold dropped back to £125,000 on 1 January, prompting a rush on mortgage approvals and completed home sales in the final months of 2009.
The government concession, which had temporarily pushed the threshold up to £175,000 for just over a year, had been aimed at halting the rapid slump in the property market.
As a result, first-time buyers would welcome any slow down or fall in house prices, as they were among the most likely to suffer when this relief ended.
Mr Gahbauer said that, with the Bank rate at a record low of 0.5%, mortgage borrowers were sticking to variable rate home loans – rather than signing up to fixed-rate deals – as they expected interest rates to stay low.
Regional variations
In January, house prices in England & Wales rose fastest in London, where they went up by 3.9%.
Over the past year prices in London were up by 10.5% and they were also positive in six other regions – Wales, the West and East Midlands, the South East, South West and East Anglia.
However in the North West, Yorkshire and Humber, and the North East prices fell in the twelve months to the end of January.
In a separate survey, estate agent Knight Frank said strong demand for second homes could cause house prices to more than double in sought-after areas.
It found that the number of second homes in England rose to 245,384 in 2009, some 2.6% more than during the previous year.