2014 Market Review

The final quarter of 2013 was incredibly buoyant, particularly around the festive time of year when expectations for the housing market are often quite reserved. In fact December 2013 was our busiest December on record and the market continued to out perform well into the new year.

As 2014 began the market showed no signs of slowing and during the first half of 2014 the conditions were just as tenacious as the final months of 2013 had been. Both asking prices and activity levels were very strong across all regions and Rightmove reported that average asking prices were up by 1% (+£2,406), which was the largest ever January rise in the price of property coming to market. Over the first two weeks of January 2014 both website traffic and email leads to agents and developers hit records for the time of year, up nearly 20% on 2013.

The increased prices and activity levels did lead to some fears about the market conditions gathering too much momentum, however these fears were particularly centralised around the Capital and Southern regions of the country, who were reporting dramatic price increases and significantly diminishing stock levels that was accelerating demand to new highs.The market in the North West of England and Yorkshire, whilst still enjoying it’s own favorable conditions with high levels of demand from purchasers, did not see quite the same price rises that the capital did. Increased prices within our local market were far more moderate than the double digit price rise reports seen in the national news headlines.

Whilst the buoyancy of the market was good news for property sellers, the conditions themselves also created problems as fears mounted that the property market was overheating, and steps were taken to try and cool the market.

In April 2014 there were big changes in store for the mortgage market as the Mortgage Market Review (MMR) came into place. This represented the biggest changes in mortgage regulation in a decade.

A borrower’s ability to afford the mortgage, both now and in the future, will now be assessed subject to a ‘stress test’ as part of the new regulatory regime, as is evidencing a borrower’s income in all cases. For those buying with smaller deposits and consequently higher loan to value mortgages the degree of scrutiny is likely to be higher.

Where lenders had previously used income multiples to calculate the amount borrowers were able to borrow, this has now changed to using an affordability model where a borrower’s income and expenditure will be examined to determine what proportion of net income is available to repay a mortgage both today and in the future, if and when interest rates rise as they are expected to at some stage. Factors such as discretionary outgoings, including how much of their income they spend on utility bills, food, and other household expenditure including insurances, pensions and childcare costs (where appropriate) plus other types of expenditure are now assessed.

This was a step towards cooling the market whilst bringing affordability back to the top of the list of priorities for lenders when offering mortgage finances.

The market appeared to peak around Summer 2014 and the later half of 2014 has seen a more subdued market following an incredibly busy 18 months.

As the Autumn budget was announced on 3rd December 2014 Chancellor George Osborne revealed significant changes to the current Stamp Duty system that could provide a welcome resurgence in the market.

Under the previous stamp duty system the percentage of stamp duty that purchasers paid was subject to the price of the property and the amount was payable on the whole price of the property, not just the amount that falls within the stamp duty bracket. So for example if a property was sold at £130,000 then a 1% stamp duty was payable on the full asking price resulting in purchasers paying £1,300. Reforms to the Stamp duty system now though means that buyers will have to pay only to that part of the property price that falls within each band:

 

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The changes came into effect at midnight on 3rd December 2014 allowing anyone purchasing a property after 4th December 2014 below £925,000 to make a saving of up to thousands on their stamp duty bill.

For a purchase at £275,000 the previous stamp duty would have been £8,250 as there would have been a 3% charge on the full purchase price.

Under the new system purchasers will have to pay:

£0 on the first £125,000

2% on the value between £125,000 and £250,000 (2% of £125,000 is £2,500)

5% on the remaining (5% of £5,000 is £1,250). Creating a final bill of just £2,750

Mr Osborne said the changes would save £4,500 on the cost of an average home and cut stamp duty for 98% of house-buyers and described the system as a “fair, workable, lasting reform to the taxation of housing.”

Richard Powell, Director at Ryder and Dutton said, ‘The Royal Institution of Chartered Surveyors have been calling for reforms to the Stamp Duty system for some time and so newly implemented changes are fantastic for both buyers and sellers. Not only does the scheme allow purchasers to make a saving on their Stamp Duty bill, making the cost of moving more affordable, but sellers do not face the same restrictions imposed by Stamp duty thresholds when they are pricing their properties for sale. Previously sellers and agents had the pressure of ensuring properties were priced to tempt buyers within the restrictions of the Stamp Duty thresholds.

It is an especially welcome move within our local area as there are a great many buyers that will benefit from these savings. Almost all the properties that are sold within our region fall within a price range that stands to make a saving on stamp duty costs.

We look forward to seeing what the market has in store for 2015. The general election that is set to take place in the Spring could have an impact on activity levels as traditionally activity slows down whilst buyers wait to see the results, however the stamp duty reforms will have a positive effect on the market as purchasers enjoy more affordable stamp duty costs, and interest rates are still very low as we approach the 70th month that rates are held at a record 0.5%.

We look to see what the market brings in 2015.

Sellers! Don’t Wait for the New Year!

 

Many think buyers stop looking at houses during the Christmas period and as such, would-be sellers often choose to put their property on the market in the New Year. However, 89% of Relocation Agent Network member estate agents, who responded to a December survey, recommend that prospective sellers go to market before the Christmas break…
Why? Well the Relocation Agent Network survey found two key reasons:

1. 41% of Relocation Agent Network agents said that it was the increased activity in online portal searches during the Christmas period. Once the turkey has been eaten and the tin of biscuits has been emptied, many spend their free time searching for their dream home online.

2. A further 51% indicated that having a house on the market before Christmas allowed sellers to catch early New Year buyers. And with the majority* of survey respondents predicting an increase in buyer activity in January 2015, sellers won’t want to miss out. Indeed, nearly half** of estate agents surveyed expect up to a 10% increase in the number of buyers entering the market in January.

Thinking of selling in 2014?
As a selected member of Relocation Agent Network, we’ve already proven that our customer service is deemed to be the best in our area (in the Network’s opinion). But if that isn’t enough, through our membership, we can offer sellers a completely unique channel of buyer that no other estate agent locally can provide. Visit www.relocation-agent-network.co.uk/how-we-can-help-you.aspx to find out more.

 

Contact Ryder and Dutton on 0161 925 3255 to find out more or check the website. 

Relocation Agent Network
A national network of independent estate agents, Relocation Agent Network is well placed to comment on all-things-property. Each of their members (including Ryder and Dutton) has been handpicked after thorough checks identify them as the best estate agent to represent the Network in their local area.

96 per cent of borrowers could cope with an interest rate rise

According to the Bank of England’s quarterly bulletin, most borrowers would be able to cope with an interest rate rise of two per cent.

 

Taking data from the annual NMG Consulting survey of household finances, the bulletin noted that if rates were to rise to 2.5 per cent, 96 per cent of borrowers would not have affordability issues.

Seeing if a customer can cope with increased rates is a key part of the Bank’s Mortgage Market Review (MMR), where potential borrowers undertake what are known as “stress tests” to see they could manage if rates were to increase by three percentage points.

Head of lending at Mortgage Advice Bureau, Brian Murphy, commented on the news, stating that wage growth will be a key factor in how well homeowners are able to cope with the increase.

“An interest rate rise has been on the cards for some time now, and while it seems homeowners will get an extended reprieve – with a Bank Rate rise not expected until autumn 2015 – it is inevitable that interest rates will increase.

“The Bank of England estimates that only 4% of mortgagers would need to take action if interest rates rise to 2.5%, assuming incomes rise by 10%. However, almost two in five mortgagers would be prompted into action if wages remain unchanged.

“While these figures may look alarming, it’s important to remember a 2% increase in the Bank Rate will not happen overnight. The Bank of England have made repeated assurances that any interest rate increases will be gradual, so it could be a number of years before we reach a base rate of 2.5%.

Homeowners with fixed-rate mortgages – representing 94% of buyers in October* – also won’t be impacted by interest rate rises until their fixed period comes to an end. In today’s market of record low mortgage rates, the security of a fixed rate deal has never been so affordable.

“Although the Mortgage Market Review (MMR) cemented rules such as interest rate stress testing, most lenders have been carrying out this process for several years. This ensures no-one is sold a mortgage that they cannot afford should interest rates rise.

“However, consumers who took out their mortgage a long time ago – or simply haven’t reviewed their monthly outgoings in a while – should remain vigilant to any changes in their finances that could make repaying their mortgage more difficult in the future.

“For the small minority who might struggle as interest rates rise, lenders have a responsibility to work with them to ensure repaying their mortgage is made easier, so engaging your mortgage provider in an honest conversation early on is vital.”

Article: Mortgage Advice Bureau

Christmas Bag Packing with Overgate Hospice

Overgate Hospice were at Marks and Spencers on Friday 12th December to help Christmas shoppers with their bag packing to raise funds for the hospice and members of the Ryder and Dutton team were on hand to help

 

Overgate Hospice M&S!

 

Overagte Hospice is based in Halifax and is one of the local Hospices that we support.

Pictured left to right are are Matthew Barrett from our Halifax office, Richard Pardoe and Georgina Raffle from our Huddersfield office and Darran Joseph from our Auction Team.

 

Christmas Jumper Day!

Friday 12th December 2014 was National Christmas Jumper Day and Ryder and Dutton were proud to participate!

 

Christmas Jumper Day!

Members of staff at each office all wore their Christmas jumpers in exchange for a donation, that will be split between the five local hospices that we support;  Dr Kershaws, Willow Wood, Kirkwood, Springhill and Overgate.

Thank you to everyone that took part!

 

 

 

Did you know that now could be a very good time to speak to lenders about taking out a Mortgage?

In April of 2014 a new mortgage market review (MMR) came into place that saw Lenders move to a tougher regime that put all prospective purchasers through a ‘stress test’ to ensure a borrowers ability to repay the loan, however as we fast approach the final few weeks of 2014 the lenders still need to meet their lending targets for the end of the year.

This has created a greater availability of mortgages and has led to what some have described as a ‘mortgage price war’ amongst lenders. Some mortgage rates have been slashed to record levels, with particularly good deals currently available for first time buyers.

Borrowers are urged to speak to lenders now to take advantage of these deals and not risk waiting until the New Year, when it is likely there may not be such fantastic offers available.

With lenders prices constantly changing, it is imperative that you seek the advice of a professional mortgage adviser so that you can access all the deals that are currently available.

If you are looking to buy a home don’t wait until after Christmas to try and find the best deal – speak to an adviser now!

 

Ryder and Dutton Properties will be ‘On the Market’

 

A new property search service with hundreds of thousands of UK properties to buy or rent will be launching in January 2015.

That new service will be called OnTheMarket.com. It is by far the most serious challenger in recent years to the portals duopoly operated by Rightmove plc and Zoopla Property Group plc. Indeed, many commentators and agents believe that it has the power to disrupt that duopoly permanently.

On the Market

More and more estate and lettings agents all over the UK are deciding to move the advertising of their properties away from one of the current portal leaders and to display them all at OnTheMarket.com. That means it will immediately become a “must view” place to search for property, not least because the vast majority of the properties on the portal will have been effectively removed from Rightmove or Zoopla/Primelocation.

The importance of the “user experience” will be paramount. The property search will be slick, simple, fast and state-of-the-art. No clutter from irritating and distracting third party ads. No spam mail. No spurious online valuation tools. No unnecessary information over-load. Just hundreds of thousands of UK properties to buy or rent at all price points all across the UK.

Every property you’ll see at OnTheMarket.com will be on the market with a locally-based estate or letting agent with expertise on the ground. Property seekers, vendors and landlords alike will have the confidence that they can speak face-to-face with the estate and letting agents who are marketing any of the properties.

As an additional reassurance of the quality of its offering, OnTheMarket.com will be the only portal to be endorsed by both the National Association of Estate Agents and the Association of Residential Letting Agents.

There is still one months to go before OnTheMarket.com is due to go live. For the time being, its management is keeping under wraps some of the features of the portal for obvious reasons. But there is already such momentum behind the growth of agent support and already such a buzz around it that one thing is clear: if you’re in the market to move home next January, you won’t see all the properties on the market if you don’t search at OnTheMarket.com.

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