Property Pathways 2010 Predictions!

Searchwells Crystal Ball Predictions for 2010!

“Business has definitely picked up since the summer and I’ve been busy moving people into new homes and lifestyles.  My enquiry book for 2010 is also healthy – although I must admit that anything is better than 2008 and the first part of 2009!

Whether the property market will pick up for a sustained period of time is hard to call as the market has changed outside of the usual seasonal norms several times this year and I predict this will continue in 2010.  The General Election (whenever it happens) and its result will effect whether potential purchasers feel confident enough to think of buying and new home and maybe selling their current home.

I predict two very different marketplaces.  First time buyers and those of us purchasing property around £500,000 in value will need to ensure they have a secure mortgage offer and also a fair purchasing price agreed before they proceed with their transaction.  If not, when the property is surveyed/valued by the mortgage provider, you could still be at risk of a down valuation and your purchase may fall through if a compromise cannot be met.  If you are buying a new home, make sure the builder offers you the best deal possible and you’ll be fine.  And, if you are selling a property make sure you have a secure offer on your property (or even be on the way to exchange) before you start looking for a new home.  My advice to you is to therefore get organised and make your offer for your next property the most attractive it can be.

On purchases over £500k and particularly on purchases above a million, I predict there will still be a shortage of good quality properties available to view and purchase.  Prices will therefore continue to rise in this sector and purchasers will need to ensure they are able to proceed to exchange as quickly as possible in order to be able to secure and acquire their next property.  Again, make sure you are well organised and focused on what it is you want – then when you find it, you’ll be in the best possible position to be able to negotiate and then proceed to exchange.

Property is still a good investment – but now it is more of a long term investment than it has been since 2007.  Remember that 99% of us aren’t property developers – so go after the best property for you and remember, buy the best location, the best build and the house that suits your needs the most.  Then I’ll predict – you’ll love your new home! “

Leonora Wollner  – Director and Co-founder of Searchwells Property Finders www.searchwells.com 01245 344 844

For the Buy to Let Market

“2010 will be the year of opportunity. The number of buy-to-let mortgages available has increased[1] and will continue to do so. “A number of providers are beginning to enter the buy-to-let space, and, as a result, existing landlords are adding to their portfolio. New landlords are also entering the market and this is the ideal time – before inflation kicks in.  Unemployment levels will dip further early in the New Year, and the affordability gap for first time buyers will increase, which will result in an increasing demand for property rentals. House prices will continue to increase, but this will not be reflected by peoples’ salaries. And, a shortage of housing will drive up prices in 2010, particular in tenant hot spots, such as London and other major UK cities.”

James Davis, founder and CEO, UPad.http://www.upad.co.uk

[1] In September 2009, there were 179 buy to let mortgage products available, compared to 3662 in August 2007. There are currently 239 buy to let mortgages available.

Kim Peters, Redrow’s group sales and marketing director says: “When it comes to predicting where the housing market will go in 2010, one thing is certain – nothing is certain! Even the experts can’t agree.

“However, even in the most challenging conditions there are always people who want or need to move and we will be doing everything we can to make sure our new homes are at the top of every purchaser’s wish-list.

“This will include the introduction of a new collection of traditional family homes, with fewer apartments and townhouses in our collection; while work started earlier this year to enhance our interiors and add value to our homes will also evolve further.

“Redrow will continue to assist home buyers as much as possible through initiatives such as part-exchange, Mastermove, HomeBuy Direct where relevant or help with deposits and other moving costs. This ability to help facilitate a move gives new homes a major advantage over the second hand sector in a more challenging market.”

Redrow has a variety of developments across England, Scotland and Wales. For more information call 0845 676 0500 or go to www.redrow.co.uk .

Mortgages and lending in 2010

We are not expecting dramatic changes in lending going into 2010 but what we will see, will be quite significant.  Rates are predicted to remain low at the start of next year but they will increase at some point and we are strongly recommending any clients committing to new mortgages to assess affordability at a higher rate to take into account future increases to both the base rate, which will, in turn affect the tracker deals. Fixed rates will be re priced ahead of rate rises too so it is advisable to consider carefully what your future payment could be. There is some concern for those clients who are on standard variable rate, unable to change to a different rate due to lower levels of equity/negative equity, or just a change in their circumstances. These clients will also need to prepare for future rate rises which could in turn lead to higher arrears levels/repossessions and therefore more pressure on lenders.

Some lenders have already begun increasing their standard variable rate even though the base rate hasn’t moved – the main reason being that this is a way to increase income. We can see more building society mergers which unfortunately does reduce competition and therefore does affect borrowers in the long run.

The self certification mortgage market is a non starter at the present time and we do not see this changing.  Many borrowers are going to be restricted when they come to move or reassess their mortgage if a rate change is due and it is essential that these clients speak to a broker for advice. They will need to plan ahead if they are looking to move and be more realistic with their accounting as proof of income will be needed.  Each lender has their own requirements for what they will accept as proof of income so it is worth taking advice in advance of when you may need to remortgage or move.

On a positive note, we do know there are new lenders waiting in the wings – we feel this will help get more unusual lending propositions moving again and some lenders who have not been lending during the last 12 months will be re launching. It is expected that lenders will become more competitive going into Spring so hopefully this will give a much needed boost to the housing market and we can look to a brighter 2010.

Salli Anstey – private wealth mortgages