House prices rise by 5.9% in 2009, says Nationwide

UK house prices rose by 5.9% in 2009, making some recovery from the massive falls seen last year, the Nationwide building society has said.

The rise in prices seen this year compared with a sharp fall of 15.9% in 2008, the lender said.

The average cost of a home went up for the eighth month in a row in December, rising 0.4% to £162,103.

However, the Nationwide predicted that prices would change little over the coming year.

“This year’s recovery has to some extent been driven by transitory factors and there are reasons to believe that it will lose momentum over the coming year,” said Martin Gahbauer, the Nationwide’s chief economist.

“At the same time, there is no obvious catalyst on the near-term horizon that would trigger significant renewed falls in prices, such as a sharp spike in interest rates.”

Surprise

Mr Gahbauer admitted that the past year’s price increases had taken everyone by surprise.

“Few could have foreseen this development at the start of the year, when the near-term price trend was still pointing to a repeat of the double-digit annual decline experienced in 2008,” he said.

“Although house prices are still 12.2% lower than their October 2007 cyclical peak, they have now rebounded by an impressive 8.9% since their February 2009 trough,” he added.

The lender said price increases in the past few months had moderated compared with those in the summer.

The Nationwide argued that although interest rates were likely to remain low, which would help mortgage borrowers, there was still uncertainty about whether unemployment would rise much further and whether cash-rich buyers could continue to be a significant feature of the market.

As a result, it argued that the outlook for the coming year was unclear.

“At this stage, it seems likely that 2010 will see no significant house price movements in either direction,” Mr Gahbauer said.

“However, the experience of 2009 demonstrates how unpredictable the market is at the current juncture and that one should always be prepared for the UK housing market to surprise.”

Strong decade

Looking back at 2009, the Nationwide said there were clear reasons for the unexpected upturn in prices.

“The re-entry of cash rich buyers into the market coincided with an extremely low supply of property available for sale, as low interest rates limited the number of distressed sales and a significant number of home movers decided to offer their properties for rent rather than sale,” Mr Gahbauer said.

“This restriction in supply meant that even a relatively modest pick-up in demand was able to put upward pressure on house prices.”

Looking further back, the Nationwide said that the past decade was the strongest on record for house prices, despite the recession.

Property values have risen by 117% since the end of 1999.

Taking inflation into account, the average home increased by 68% in value over the decade, compared with a 14% fall in real terms in the 1990s.

the BBC

loft insulation

One thing that the four inches of Global warming (as Terry Wogan & his listener so succinctly put it) has shown, is the standard of building and loft insulation.

As I went to collect my paper, this morning, I noted the way that all the houses with loft extensions were showing a failure in proper insulation.

I suppose this is to be expected, but, by far the worst houses for insulation are two which were built only last summer. The snow has fallen off them already. So much for all the much-vaunted checks by council officials! If they try to come round inspecting the older private houses, I think that war can be declared.

 

Plumbers

In view of the debate about immigration could I ask for more Polish plumbers please?  Here I am sitting in the middle of a filthy bomb site that I used to call home some six weeks after english plumbers began installing central heating.  Some days they turn up late/leave early; other days they don’t turn up at all.  Rarely do I get so much as a phone call.  I’ve heard every excuse in the book from “needing to get parts” (which we supply) to sob stories about emergency jobs – which spookily  follow  Bank Holidays, sunny days and football matches.  This is the 15th central heating system we’ve installed so we know it should have taken a week – two weeks at most.  We’ve also got a seperate plumber on a day rate doing bathrooms and we’re fast approaching a time when he will be held up because they haven’t done their bit.  Do we lay him off for a while or pay him to do nothing?  He – I hasten to add – is hard-working and reliable (and not english).  If he had not been on site I would have spent the last six weeks waiting for them to arrive – or not.  Now they want some payment – having had to purchase boiler but I’m not inclined to pay now until the job is complete.  At this rate we could be going until next Christmas!  You could cut the atmosphere with a knife but I’m not budging.  Why should my family have to live in squalor with not one room we can use because “Mrs Miggins” needs her extension doing?  Bring on the Poles !!1The more the better!!!  I’d really think long and hard before employing an English again.

Central Heating

There is something contradictatory about having plumbers in your house. Firstly, since I’m homeschooled they are there all day and although they are upstairs, manage to get in our way, play music I don’t like, and just invade personal privacy (I mean, come on, I didn’t want my bedroom floorboards pulled up)

But, in a way, far outweighing the bad points, there is this wonderful promise of CENTRAL HEATING. I haven’t had central heating in my bedroom for, well, er, maybe 7 or 8 years.

I know, I know, you all had that when you were my age too, but this is different – we’re in the 21st Century, right?

It reminds of the engineer who came to fix my laptop a year ago, and I took him into a room, where the laptop was, and he started working.
After a while, I asked him if he wanted a cup of tea.
“Is it paussible I coold have a leetle heeting?” He wanted to know.

It was then I realised that he’d put his coat back on and his hat, scarf and gloves.
It was a funny moment.
“I’ll get someone to bring the fridge in” I informed him.

Maybe I should have said it in an Indian accent? He might have got the joke then?

But then, it was much more delightful for me to watch the look of incredulous horror on his face….

House prices up for sixth month, says Land Registry

House prices in England and Wales rose for the sixth month in a row in November, the Land Registry says.

Prices rose another 0.9% last month, which means that prices were just 0.3% lower than a year ago.

The average home in England and Wales now costs £161,554 – £8,800 higher than at its recent low point in April.

Prices in London have been rising the fastest and are now 3.5% higher than year ago, although prices in Yorkshire and the Humber still 4.7% lower.

The Land Registry said the volume of sales had picked up, but was still relatively low:

“In the months June 2009 to September 2009, transaction volumes averaged 55,520 transactions per month,” it said.

“This is an increase from the same period last year, when sales volumes averaged 50,187.”

Nigel Lewis, of property website Findaproperty.com, said the Land Registry figures were very encouraging.

“Price drops in many regions of the UK and in particular London and the South East are easing, and in some parts of London even increasing as demand overtakes supply – particularly in the premium, higher end of the market,” he said.

“But the most promising part of the report is the number of homes being sold, which are beginning to increase again.”

Paying off debt

Other figures, from the Bank of England, show that home owners have continued to reduce their mortgage debts.

In the third quarter of 2009, peoples’ equity in their homes rose by another £4.9bn, the Bank said.

It was the sixth quarter in a row in which homeowners increased their stakes in their properties, and means that in the 18 months to the end of September, £34bn was knocked off the nation’s collective mortgage debt.

With house prices now picking up again and lenders relaxing their lending criteria slightly, the amount of equity injected into property in the third quarter was the smallest since the spring of 2008 when the process started.

Between the middle of 1998 and early 2008, homeowners had borrowed £325bn against the inflated value of their homes, topping up their mortgages and spending their money on things other than their homes.

However, the sudden house price crash, triggered by the recession and the banking crisis, brought this sort of borrowing to a halt.

The process was then reversed, with home owners taking advantage of record low interest rates to repay chunks of their mortgages, or being forced by cautious lenders to put down higher deposits when buying a new home.

the BBC

Scottish & Southern Energy’s EDF takeover bid hopes fading

SCOTTISH & Southern Energy’s hopes of becoming the UK’s largest electricity network appear to be fading as the sovereign wealth fund of Abu Dhabi prepares to bid for assets put up for sale by EDF.
Perth-based SSE was thought to be the leading contender to buy EDF’s three English electricity distribution networks, which are expected to fetch more than £4billion.
According to the reports, the ADIA is investigating a joint bid with Canadian Pension Plan, a pension fund, and has hired investment bankers at Goldman Sachs and Lexicon Partners to advise on the bid.

Emerging as an early leading candidate for the sale, SSE has already appeared to play down the chances of it snapping up the assets.

Following Ofgem’s review on what utilities are allowed to charge customers of distribution networks between 2010 and 2015, SSE warned that the level of returns allowed by the energy regulator may put it off investment in the sector.

Earlier this month, SSE begrudgingly said it would accept Ofgem’s findings, but a spokeswoman told The Scotsman that the review was likely to reduce what it would be prepared to pay for EDF’s distribution networks.

The Scottish utility has already said that if it did bid it would probably do so as part of a joint venture with Borealis, a Canadian pension fund.

The networks put up for sale by EDF cover London, the South East and the East of England, distributing electricity to almost eight million homes

House price increase ‘slows down’ in December

Growth in house prices in England and Wales slowed in December, according to property website Hometrack.

It said the average cost of a home rose by just 0.1% to £156,900, as the number of house-hunters fell by 2.2%.

Spokesman Richard Donnell said slow growth in household incomes and unemployment would curb demand in 2010.

Hometrack said house prices would fall by 1% next year, but the Centre for Economics and Business Research (CEBR) predicted a rise of between 2% and 4%.

Latest figures from the Halifax, one of the UK’s biggest mortgage lenders, suggested that prices rose by 1.2% in October.

The CEBR said it expected prices to be about 15% higher at the end of 2012 than they are today.

Seasonal slowdown

The BBC’s Joe Lynam said house prices in much of the UK had risen modestly, but steadily for most of this year, buoyed by record low interest rates, limited supply and better than anticipated employment levels.

However, Hometrack suggests this trend has slowed in December, although this is in part due to the traditional seasonal slowdown as potential buyers put off house-hunting until after Christmas.

The number of new buyers entering the market fell for the first time in 11 months and only 11% of postcodes saw price increases during December, down from nearly 18% in November.

Hometrack says house prices are now 1.9% lower than they were a year ago and will fall by a further 1% by this time next year due to limited demand.

Mr Donnell said: “Unexpectedly buoyant demand and a chronic lack of housing for sale were the key drivers of the housing market in 2009.

“While a scarcity of housing is set to remain an important feature of the market in 2010, it is the prospects for demand that will dictate the outlook for prices in the next 12 months.”

Hometrack collects data from 3,500 estate agent offices from all 2,200 postcode districts in England and Wales.

They reported a 41% increase in demand during the past year, with a rise of 70% in London.

But the number of properties for sale has risen by only 7% during the same period and in south-east England there was actually a fall in availability.

the BBC

Buyers priced out of the UK housing market

House price affordability has started falling for the first time since the slump in property values, meaning that prices are now once again moving out of reach of the average buyer.

The affordability of UK property market has been falling since the middle of 2009, according to exclusive new research produced for The Sunday Telegraph by Lombard Street Research (LSR).

The survey shows that house prices have once again started outpacing the increase in the average family’s disposable income, meaning that the best opportunities for good value property have passed.

The findings would have seemed highly unlikely at the beginning of 2009, when house prices were tumbling and past experience suggested that it would take some years for the property market to find its feet again. However, the combination of record low interest rates and a series of Government programmes to support homeowners have helped prices to turn around far quicker than expected.

In a study to be published on Monday, the Centre for Economics and Business Research is expected to predict that house price growth will continue next year – albeit at a slower pace than in 2009, with property prices finishing the year between 2pc and 4pc higher than today. It will also predict that by the end of 2012, house prices will be around 15pc higher than today.

LSR’s housing affordability index, in which 100 points represents the average affordability level since the early 1960s and a lower figure means prices are more overvalued, dropped from 118.2 points to 117.9 in the third quarter of the year.

The fall is the first since the beginning of the housing correction in mid-2007, at which point the affordability index was at a nadir of 82.7.

According to experts, this suggests that the high point for affordability has now been and gone. The peak, in the second quarter of 2009, was not far shy of the 118.9 reached after the early 1990s property crash.

LSR economist Melissa Kidd said: “Affordability has now peaked. The major effect driving that is that house prices have risen quite quickly. Disposable income is up as well, while mortgage rates are low.”

LSR’s affordability index is different from other attempts to gauge the value of housing in comparison to people’s ability to pay for it.

Whereas others simply compare mortgage costs or gross incomes with prices, LSR’s index compares prices with definitive household disposable income and the monthly mortgage burden. The comparison is key to working out whether homes are of an accessible price or not, since fast-rising incomes can make property more affordable.

Nationwide and Halifax will next month confirm that house prices rose during 2009, turning around major falls to end the year higher than they began it.

Over the course of the entire housing correction, prices dropped by around a quarter. However, these overall figures mask significant variation from region to region.

In particular, the areas which have prospered most in the past year are those tied to occupations which have benefited from low interest rates and Government bail-outs – in particular the City.

As a result, prices in the more upmarket areas in London and the south east of England have risen far faster than most others this year although they suffered some of the sharpest falls the previous year.

Ms Kidd said: “We’ve had this huge boost to disposable income from low rates, but there’s not much to see what could drive prices much higher next year. We expect low single digits rises in prices in 2010.

“The problem is that it is difficult, because of the credit crunch, to get access to really cheap mortgages. Plus, there will be more stock coming on to the market which should reduce the pace of house price increases.

“That said, we are unlikely to see the scale of house price declines we did recently for some time.”

Edmund Conway

Foxtons to contest ‘unfair’ landlord charges ruling

The estate agents Foxtons is set to appeal against a High Court ruling on unfair landlord fees, the Times newspaper has reported.

In July, the High Court ruled that Foxtons unfairly charged landlords commission every time their tenants renewed their contracts.

But the estate agent was given leave to contest the decision on 18 December.

A successful appeal could prevent millions of pounds being repaid to landlords subject to the charges.

Foxtons declined to comment on the case.

‘Traps and timebombs’

An appeal by the estate agents would mark the latest chapter in a legal battle dating back to February 2008.

The Office of Fair Trading complained that certain charges included in Foxtons’ letting agreements were not made clear enough to landlords.

Under the agreements, landlords would be required to pay Foxtons commission – typically of around 11% – when their tenants renewed their contracts, even without the involvement of the estate agent.

Landlords were also be expected to pay commission to Foxtons if they eventually sold their property to their tenants.

In July the high court upheld the complaint, saying that the charging of repeat renewal commission by Foxtons represented a ‘trap’ or a ‘timebomb’ for consumers, because details were buried in the small print of contracts.

Foxtons must officially lodge its appeal by 29 January.

the BBC

Home shoppers profit from doing homework

Homework doesn’t just relate to being in school.

It can refer to the maintenance needed to keep a house in good repair, but it should also relate to the research every home shopper should do as part of buying a house.

Whether you’re considering building a new home or buying a used or resale home, the benefits of each should be weighed carefully.

First-time purchasers should definitely consider buying new, especially if they are not skilled tradespeople, handy with tools, or lack related technical knowledge.

What may seem like a small renovation in a resale home, can end up costing thousands of dollars. When buying a new home, professional installation results in less stress and time-consuming organizing for you.

Buying new also means you can control the costs that go into your new home – you will know up front exactly what the home will cost. And new homes come with a warranty.

It also makes sense for empty-nesters or retirees to buy new. Most have already tackled improvements on aging homes, and are ready for a more relaxed, maintenance- free lifestyle.

Buyers looking to move up or downsize (or “right-size,”

according to some condo buyers), know exactly what they are looking for, and can always find it in a new home, because they can select the finishing materials that go into it.

The same applies to families with special needs. If it’s possible to retrofit an older home – and sometimes it isn’t – it can be very costly.

But incorporating barrier-free elements and materials designed for clean air quality, into a new home at the planning stage is easy and costeffective.

Most new-home builders have decor centres with a vast array of interior finishing options to suit all personal preferences and needs. This allows each buyer to imprint their own unique style into their new home. So why get stuck with tea kettle-motif vinyl wallpaper and painted cabinets from the 1950s, or ceramic tile from the ’80s, when you can have the latest trends and styles?

If it is important for your family to have the smallest carbon footprint possible, then a new home is definitely where to live. After all, they’re built with:

Sustainable building materials produced with renewable resources or recycled content. Insulation from natural or recycled materials, from newspapers and waste glass to volcanic rock, steel slag and cotton Shingles made with recycled plastic and rubber materials. Finishing touches such as reused hardwood, low-toxicity finishes, solvent-free paints, ceramic tiles composed of waste glass, natural stone or linoleum, cork or bamboo flooring, and other eco-friendly materials./ul>

Also, your new home will be built under the current Ontario Building Code. This includes the latest in building technology such as increased specifications for insulation, windows, framing, and more.

Improvements to the code also ensure energy-efficiency standards for your home that translate into real savings in energy consumption and costs for you.

Buying new means you get more new, since most new home communities come with new schools, parks and shopping centres, too.

New – it’s just the best reason of all!

Carl DiNardo, Special to The London Free Press