Help to Buy could swell transactions by 75%, says Carl King @ Lynks Estate Agents

Friday 15th November 2013

The second phase of Help to Buy could boost current transaction levels by 75% a year, Carl King has said.

The firm, in its forecasts for 2014, said that the first phase of Help to Buy – available on new homes only as a shared equity scheme – has had a “noticeable” effect.

Lynks Estate Agents report says: “Some 15,410 buyers have already used the loan to augment their deposits for a new-build home.

“If take-up for the scheme continues to proceed at this pace, funding will run out in mid-2015 before the scheme is due to end in early 2016.”

Of the second phase of Help to Buy, a mortgage indemnity scheme available on both new and secondhand stock, the firm says: “[This] was launched three months earlier than planned by George Osborne.

“A month in, around 2,800 buyers have submitted offers for homes, around three-quarters of these being first-time buyers. The average purchase price has been £163,000.

“If this trend were to continue, the number of mortgages which could be approved under the scheme could be as high as 1.5 million, boosting current transaction levels by 75% a year and taking sales volumes back to levels seen in 2005.”

The firm adds that the full range of mortgage products for the second phase of Help to Buy is not yet available. It says that as more lenders offer mortgage deals under the scheme, rates will come down.

Mr King who is experienced both in the London and UK wide property market and considered a property professional forcasts steady price rises into next year. Carl and Lynks Estate Agents plan to give all the information they can to buyers in the North West. Carl said ” With the Help to Buy scheme being launched this will help not only first time buyers to get onto the property ladder but also purchasers who currently are selling and moving on as long as its not a second home purchase.

“For the first time in five years we can be broadly positive about the UK housing market.”
Property sources forecast 8.4% house price inflation in London, and elsewhere, price rises in all the regions of between 6.3% and 7.6%.(stats from Knight Frank)

We explain what you need to know about Help to Buy – the government’s schemes aimed at first-time buyers with low deposits and current owners with limited equity.

BACKGROUND ON HELP TO BUY!

Help to Buy is expected to help make up for the lack of higher loan-to-value products available.

While it’s still occasionally possible for people with a deposit of only 5% to get on the property ladder, the government felt there should be more competition between mortgage lenders to provide greater choice to home buyers.

Savings rates and wage increases are also well below the rate of inflation, making it harder for buyers to save a deposit.

Another big reason for the introduction of the scheme comes down to current house prices, which have risen by 3.3% in the past year. If they continue to rise at this rate, people with deposits of 5% to 10% will find it even harder to buy a property in the future.

Help to Buy has so far been very successful. The number of homes bought through the equity loan scheme topped 12,500 by the end of August 2013, putting it on track to meet the government’s target of 74,000 homes by 2016.

 Help to Buy – key facts

Mortgage guarantee scheme – what you need to know

If you’re thinking of applying for the Help to Buy mortgage guarantee scheme, you’ll need to consider the following:

  • Borrowers will need to pass affordability checks with mortgage lenders. This varies by lender, but usually involves them checking that you’ll still be able to meet payments should interest rates go up.
  • Borrowers will need to state that they have no interest in any other property worldwide, or won’t have by the time they complete on a mortgage guarantee scheme mortgage product.
  • You may be able to apply if you’ve had minor credit problems in the past, but you’ll still need to pass the mortgage lender’s credit checks.
  • Borrowers need to have at least a 5% deposit, and be able to cover costs, for example Stamp Duty and any legal and valuation costs.
  • If you want to rent out the property you’re going to buy, the Help to Buy schemes

Footballer Lee Barnard and Playboy model told tenants: get out in 14 days or we cut power

Lee Barnard, 28, a Southampton forward, and Tonya French, 26, who were due to get married today, bought a 14-bedroom town house in Chelmsford, Essex, in which 11 tenants were living.

The couple, who wanted the house emptied, sent letters to the tenants telling them to find a new home and warning them that the gas, water and electricity would be switched off after 14 days, even if they were still living there.

Those renting the house, who by law should have been given two months’ notice, were left fearing that they would be made homeless.

Barnard, a former Tottenham Hotspur player, even offered a £100 “incentive” to the tenants, some of whom were on housing and disability benefits, to move out quickly. Sandra Keeble, who has lived in the detached house, which has been separated into flats, for five years, said: “We are being completely bullied. I think it is abhorrent and horrible.

“We were told to get out with our belongings, but there was no chance of us finding the money [to live elsewhere] within two weeks.

“Nobody has a way to contact the new owner — we tried the number at the bottom of the letters but it goes straight to voicemail and no one replies to the emails we have sent.”

Ray Ellis, 52, a resident who receives disability benefits, said: “I have asked for more time to find somewhere else to go — we are not finding it easy to find an alternative.”

Three of the residents have moved out since the demands were made last month.

Barnard claims that there had been a mix-up and the letters had been sent with the wrong leaving date. He said: “It’s just a misunderstanding with the handover from the previous owner who said we only had to give them notice of a day.

“The council are fully aware of the situation and are happy with the arrangements — the first letters were just sent out with the wrong date.”

He said that the tenants had been given a rent-free period and a £100 incentive which he felt was a “good offer”.

Officials from Chelmsford city council have stepped into the dispute and told the tenants they are legally entitled to stay.

Chess, a charity which helps homeless people in Chelmsford, has helped the residents look for new accommodation. Rob Saggs, the charity’s operations manager, said: “I’m pleased that the council have intervened and worked in partnership with tenants for the best result.

“The last thing we want to see is people we have worked with over the last few months and years, who have successfully found private rented accommodation and turned their lives around, to be on the streets again. Imagine how they would feel.”

A Chelmsford city council spokesman said: “I confirm tenants did contact us and they were advised they have been served an illegal notice and that they don’t have to leave by June 1.

“We informed them of their rights and offered our help and support in finding new housing when the tenancy ends. The new owner has been advised of their legal obligations and the new owners have been completely compliant and are now following the correct legal process.”

 

Britain’s cheapest house on sale for £0

The tumbledown three-bedroom Victorian terraced house is up for sale in the former mining village of Nantymoel, near Bridgend, South Wales.

It has been described by the auctioneers as “little more than a shell requiring complete renovation”, which explains why it has a reserve price of “nil pounds”.

Auctioneer Paul Fosh said: “We haven’t been inside the house as the windows, or what’s left of them, are all boarded up.

“We’re told all there is of the house are the walls. The only concession to comfort appears to be a leather sofa which is in the forecourt to the front, outside of the building.”

He added: “The freehold property has a nil reserve which means that it could be sold for just a few pounds.

“But the new owner must be well aware that they’ll need funds to renovate the place as it is currently unfit for human habitation – it doesn’t even have slates on the roof.”

Auctioneers have not revealed who is selling the house but it is believed the former owner died.
Neighbours remember when it was a happy family home before it fell into disrepair more than 10 years ago.

One neighbour said: “It would be lovely if someone could wave a magic wand and turn it back into a home again. It is a bit of an ugly eyesore.”