The office of budget responsibility has today released a report stating that house prices are expected to fall by 0.4% in 2012. This forecast, which has come after the budget and has pointed out that the fall is higher than earlier predicted, which was at 0.2%. The report goes on to state that prices are likely to slide further by 2.3% in the next year and 2.5% the year after. If these figures are any indication about how the property market is going ahead it is certain that investors in homes are likely to lose on their equity until the end of 2015.
Before the budget was announced there were reports that property prices were improving with London showing the highest returns. This could perhaps have given citizens of the country some hope for an improvement in the property market. Unfortunately, with the data released today there is going to be a sense of disappointment among homeowners who could be wondering about the future. They could perhaps begin believing reports, which had been published earlier predicting price falls in the property market until 2020. This report is certainly not going to bring in any optimism among homeowners in the country.
What does this mean for those that are looking forward to climbing up the housing ladder? The news is going to hurt a large section of the population that was making attempts to purchase homes for themselves. They would not want to make investments in properties, which will lose in value soon. They would perhaps continue living in rented accommodation and remain at the mercy of buy to let investors. The citizens of this country would have to wait longer unless drastic changes are seen for the better in the property market. With no such prospects in sight, it is quite likely that the dream about owning a home will become an unrealistic proposition for many in the country.
From a sellers point view, the market remains slow. More and more people are turning to specialist homebuyers to complete property sales in a short time time period. With market conditions showing no sign of getting better, the outlook for companies who buy houses remains good. If you are looking to sell however, the options and prospects remain restricted, but you can at least look into some ways of selling your property, if you do feel you need to sell a house quick
It has been reported that gross mortgage lending in April has dropped by 19% from the previous figure of £ 12.6 billion in March. The sum total of all mortgages approved in April was at £ 10.2 billion according to figures provided by the Council of Mortgage Lenders. The Council has reported that the drop in mortgage lending was largely because of the stampede caused by people before the end of the stamp duty holiday in March. They could very well justify the statement they make by giving out additional figures. However, there are other reasons, which have not been spoken about for the drop in mortgage lending.
Mortgage lenders were willing to offer mortgages at low rates of interest before the end of the stamp duty holiday on March 24. This was definitely one reason why people were scrambling around to try and complete purchases before the end of the deadline. The Chief economist of CML, Bob Pannell has stated that the downward slide seen in the figures of mortgage approvals is still better than the figure that was noticed in April 2011. The conditions have since then seen a change which is making it difficult for people to consider property purchases.
After the end of the stamp duty holiday, mortgage lenders have decided to increase interest rates unilaterally in spite of no changes being asked for by the Bank of England. While the base rate for mortgages has remained steady at 0.5%, mortgage bankers have increased interest rates for mortgages and are now demanding a lot more in return for a mortgage provided. This information has not been mentioned in the report provided by the Council of Mortgage Lenders.
While the council would not be wrong in stating that they witnessed an unprecedented demand for mortgages before the end of the stamp duty holiday, they would certainly be wrong in saying that demand has dropped without sufficient reasons. People have today realised that they will be unable to return the money borrowed for the purchase of a property after considering the high rates of interest that are being demanded by banks. People are considering the fact that they are required to spend a lot more money on essential commodities along with the fact of an uncertain future which awaits them. The fear of becoming redundant is also a factor that is considered by prospective home buyers before they think about looking around for a home.
The drop in mortgage lending which is being reported is largely because of the uncertainty in the minds of people and not because they have completed purchases of a home. The numbers of homeless in the country have not reduced by any margin but are only expected to go higher. It is rather unfortunate that the Council has decided to point fingers the expiry of the stamp duty holiday rather than the higher costs of a mortgage which are now in force. People are aware that they will never again get an opportunity to evade stamp duty, and this is reflecting on the property market which looks ahead at an uncertain future.
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Dozens of London families trying to purchase homes forfeited away today when chains worth tens of millions of gbp flattened due to Chancellor’s surprise stamp duty rises.
Agents across central London cited irritated patrons pulling out of savings with what was identified as “complete chaos”, just after George Osborne revealed the day past that the rate would certainly climb from 5 per cent to seven percent at the hours of darkness on every home costing quite £2 million.
For individuals getting a business to buy such buildings – a trusted arrangement in the UK – there exists a new fifteen % quote, in a bid to shut a property tax avoidance loophole.
Martin Bikhit, of estate agents Kay and Co, said a wealthy central London customer near the top of the chain lost his deal mainly because “his purchaser would be paying another two per cent, and couldn’t manage to pay the down payment money in time to change contracts.
“Below which [in the chain], there was a household getting their £600,000 property, which within central London is relatively modest, in order that they could move their own young children directly into a school catchment location, therefore that’s now not happening and perhaps they are going to need to commence all over again.
“If you peer at a £2?million house in Clapham – a region in which you are not really counting on foreign cash except a move up the marketplace – I have little question how the effect might move down to your first-time purchaser. It’s just a sequence associated with five or six.”
Ed Mead of real estate agents Douglas & Gordon said a Belgian buyer of a £2.85 million house within Knightsbridge had got out soon after the Chancellor’s announcement. He explained: “This is so short-sighted. Exactly what this particular Govt did not understand is how the London marketplace is pulled through the top up. Should you cut away the rope, the whole market may fall.”
Mark Pollack, director associated with central and north-west London real estate agents Aston Chase said: “Within an hour of the actual statement we shed one particular deal and a couple other people are getting renegotiated. I had a property investor that routinely utilised an overseas firm taking a look at buying a £6.7 million property and assets in Regent’s Park. Together with the fifteen per cent levy it absolutely was no longer commercially viable.”
However, numerous discounts had been swapped ahead of the midnight deadline along with agents and attorneys dealing with the particular evening in a “manic” struggle.
Jeremy Raj, head associated with household property at attorneys Wedlake Bell mentioned all of the these deals he was working on yesterday was traded in a Holborn wine tavern from 11.13pm, conserving the client even more than £50,000 in taxes.
He explained: “We had been renegotiating one of many points on the package as well as redrafting inside the wine bar.”
Homeowners who have simply put their places on the market said they were now braced for buyers demanding price cutbacks to pay for several or all the extra stamp duty. Musician Chris Grist, whose family home in Balham had been placed up for sale this week for £2.65 million, mentioned the brand new band might add £53,000 to any buyer’s costs.
“We have got our own first viewings reserved for the ending in this week,” he explained. “It will be fascinating to ascertain if men and women terminate, and their mindset if they are viewing.
“My feeling is always that people will be considerably tougher in negotiation to try to claw back that £53,000.
“The Chancellor should have come up with a sliding level. The way in which he’s done it, everyone looking at buildings in between £2 million and £2.4 million may either go down below or well over, which is a big portion of the market inside South-East. It’s impossible now we will be able to think about relocating to some estate over £2 million. We can’t see us all ever being able to raise the supplementary 2 % stamp duty.”