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LIES, DAMN LIES AND STATISTICS
SALES
SALES NEWS
LETTINGS
MORTGAGE NEWS: ARE YOU PAYING TOO MUCH?

OCTOBER 2011
LIES, DAMN LIES AND STATISTICS

Welcome to the second edition of our newsletter, distribution is growing rapidly so I hope this is a sign that readers are finding it informative. You will soon become aware that I have a bee in my bonnet when it comes to the press and their reporting of the housing market and economy in general.

I'll give you a wee outline of what's being said by others before coming back to what our experience is telling us is actually happening in the local property market. I warn you in advance, the headlines in the past month could leave you having mood swings like Charlie Sheen the morning after a particularly heavy session. On with the show...

This Month in Other People's Words

(Oh no...) Poor consumer confidence has dashed hopes of a recovery in the depressed Scottish housing market, the latest survey shows today. Average house prices fell by 3.7 per cent across the country between May and July compared to a year ago, Lloyds TSB Scotland said. - The Scotsman

(Oh yes...I think...) House prices rose in many areas of the UK in June compared with the previous month, but year-on-year values have fallen, government figures show. On average, prices increased by 0.6% in June compared with the previous month, the Department for Communities and Local Government (DCLG) said. The annual change was sharpest in Northern Ireland, where prices fell by 8.1%, followed by Wales, down 5.6%, and Scotland, down 2.3%. - BBC News

(Oh good...) Mortgage lending to house buyers is starting to pick up, according to the latest figures from the Bank of England. In July, a further 49,239 mortgages were approved, but not yet lent, to house buyers. That was the third monthly increase in a row and means approvals were 3% higher than in July last year. The figures suggest that sales may start to rise gently in the coming months. - BBC News

(Whoop whoop...!) There was some cheer for homeowners today as new figures suggested prices have risen ten per cent in Edinburgh in the last year. The claim from Lloyds TSB showed that the average house price for the year to July 2011 was £229,720, the biggest rise in Scotland. - Edinburgh Evening News

So What Does This Mean?
What is Actually Happening?

They do say that there are lies, damned lies and statistics. However, this month's stats seem to be playing poacher and gamekeeper at the same time.

The statistics saying that prices in Scotland were down 3.7% and the ones saying that Edinburgh prices had gone up by 10% were published on the same day. In many cases, in the same newspaper. The bad statistic came with the headline, "Falling house prices dash recovery hope." The positive statistic carried the headline, "Experts hit the roof as new survey suggests 10% rise in house prices."

However, the eagle-eyed amongst you will have noticed that the statistics are from the same report by the same lender. So how can both statistics be compatible?

The answer is that the headlines are based on pretty dodgy statistics, based on a very small cross section of properties in the Scottish property market and even smaller number when you break it down to the local areas of Scotland. What is of course frustrating is that these headlines are overwhelmingly negative and quite alarmingly so in some cases. And these statistics, whilst clearly contradictory, are picked upon with gay abandon and a healthy dose of gusto by the press. So what's actually happening?
The more balanced view of all of these statistics, I think, would be that we have been seeing a gradual decline in property prices throughout Scotland. This is hardly surprising given the economic backdrop in the past few years and, since it's hardly rosy in the garden of world economics at the moment either, it's unlikely that this trend will be dramatically reversed overnight. However, these price falls are not as drastic nor do they paint the doomsday scenario that the Press makes out a lot of the time. With mortgage approvals rising for the third successive month, it's actually looking relatively positive when it comes to the chance of the number of property transactions increasing in the next few months.

At HomeLink, we've had a positive August. And wait for this, are you ready, we even had a few closing dates, remember them? Whilst this is still the exception to the rule it is a very positive turn of events. And if you listen to the press and some of our competitors, that apparently nothing is selling and prices are in free fall, does this just mean that we're abnormally amazing? Of course it does! But is also means that that there is actually still movement in the property market. Indeed, the increase in mortgage approvals suggests that not only is demand increasing but, most importantly, the number of buyers who actually have the finance to purchase a property is increasing. We ourselves have seen a heavy increase in enquiries from our website for buyers enquiring about mortgages, especially at the first time buyer level. Many are still struggling with deposits but we are now 3 years into this recession and canny buyers have been saving heavily over this period.

As for property prices, they are now sitting at the equivalent of mid 2007 values, so if you bought after this date you should expect the value of your house to have fallen. But it’s all relative; if your home has fallen in value then the house you are buying will have done the same, so you are not loosing money in real terms. It’s actually a great time to move house due to the selection of properties available. But patience is a must. Doesn't make for great headlines and won't sell papers, but it's the true position in the market that we are experiencing.

OCTOBER 2011
SALES

Current Local Statistics
Average Sold House Price in North Lanarkshire £101,688
Average Sold House Price in Scotland £160,395

Breakdown:

Airdrie £108,962
Bellshill £89,249
Coatbridge £95,498
Motherwell £112,328
Shotts £83,330
Wishaw £91,176

OCTOBER 2011
SALES NEWS

The sales market in Lanarkshire remains on a bit of a roller coaster ride. The big change sellers have seen over the last three years, other than the valuation of their property, is the length of time properties are on the market. Three years ago the average time on market was approx 60 days. This has increased to over 240 days. So patience is required when selling.

Unfortunately one thing we have seen growing evidence of is some agents over valuing properties to gain the instruction. With this recession lasting longer than anyone expected, some agencies are really feeling the pinch and are desperately seeking business. It is a difficult process at present to put a valuation on a property, given the topsy-turvy sales prices, but we have seen evidence of deliberate over valuing. If you call an estate agent out for a valuation, they need to supply you with evidence that backs up their valuation, some examples of properties selling for the valuation they are providing, thus supporting their figure. This should then be backed up with a Home Report by a reputable surveyor.

Also, beware of quarterly marketing fees. Some agencies are charging a quarterly fee to keep a property on the market. This means it is not in their interests to sell the property, so make sure you ask this question of any agency.

OCTOBER 2011
LETTINGS

There has never been a better time to add or start an investment portfolio. In a financial market such as we have at present unfortunately a great many people find themselves in financial difficulty resulting in lenders repossessing properties.

These properties come to the market at greatly reduced prices compared to the normal sale price. We have also found the quality of such stock to be increasingly good, with good locations and well presented properties. Don’t get me wrong, there are still properties requiring a lot of work in poor areas, but increasingly, due to the increased volumes, and the fact that this economic downturn is affecting everyone, no matter where they reside, the quality of these “Sold as Seen” properties is very good in relation to the price being asked. So great investments!

So how do you go about building an investment portfolio?

Well in these days of tight fisted lending the first stop must be an independent mortgage advisor who is whole of market, that means this advisor can scour the hundreds of products available from all the lenders and find the one that best suits your needs. You as the potential investor needs to work out your financial strategy, what funds you have available for deposits, and hence what borrowing you can acquire. Working with the advisor you will quickly determine the best lending strategy and armed with this information you can start looking for potential investment properties. HomeLink Financial Services are expert when advising investors and are happy to spend time with potential landlords working out the best financial strategy.

If you are thinking of adding or starting a portfolio then we would strongly recommend that you contact us for an informal chat as soon as possible. We envisage a high demand in the second half of this year for the quality investment properties we are expecting to arrive, and with the market bottoming out and hopefully beginning to turn, prices increasing, then we expect them to turn over quickly.

So don’t delay, if you have dreamed about starting to invest in property, or are thinking or increasing your portfolio, call us now!

OCTOBER 2011
MORTGAGE NEWS: ARE YOU PAYING TOO MUCH?

COULD YOU BENEFIT FROM A MORTGAGE REVIEW?
Is your mortgage costing more than it should, month after month? If it has not been professionally reviewed recently, the answer to this question could be ‘yes’. Of course it may be ‘no’, but without doing a thorough review how can you be sure?

The mortgage market has been changing. In the past, borrowers stayed with the same lender for 25 years, but that happens less often now. With interest rates at all time lows then there are many great deals about. And with the continual talk of potential rises in interest rates on the horizon then it is probably the right time to review your current arrangements.

With the maze of products available it is now even more important that you use a mortgage expert who is familiar with the deals currently in the market place. For example, it doesn’t always follow that switching to a lower interest rate will save you money. A good mortgage adviser will take into account any fees or charges that may arise from switching lenders, and clearly present the total costs so you can see the full financial impact of a decision. A good independent, whole of the market advisor, will look at all the products, from all the lenders, their overall costs, and present their recommendation as to the mortgage best suited to your individual circumstances.

Unfortunately the high street banks are unable to do this. There is a battle going on right now between the banks and the FSA, whereby the FSA are stating that bank employees offering mortgages cannot be called advisors, but must be called salespersons. This is down to the fact the banks only offer their own products, so cannot advise as to whether this is actually the best product for that individual. So rather than advising, they are actually simply selling.

It never does any harm to go into the banks and see what they have to offer. But never make a final decision before you have also sat down with an independent advisor.

We have listed some great examples of deals available right now within this newsletter so take the time to have a quick look. But definitely take the time to have your existing arrangements reviewed, it could save you a great deal of money, especially if we all believe interest rates are going to rise some time soon.

Exclusive Deals
One of the big benefits of dealing with HomeLink Financial Services is the fact that, as we belong to the largest network of independent advisors, we have access to many exclusive deals which generally are not available elsewhere, including the high street banks. Here are some examples of these great deals.

For Homebuyers

Deal 1
Fantastic new 95% LTV exclusive residential product. Please see below for more details:

• 6.49% 2 year Fixed Rate (reverts to BOE + 4.45% - 5.3% APR)
95% LTV
• £195 Application Fee (payable on application and non-refundable) and no completion fee
• Purchase and Remortgage (free valuation and standard legal fees for Remortgages)
• Repayment only
• Maximum loan £250,000
• 3% ERC until 31/05/2013

Deal 2

• 5.99% 2 year Fixed (4.7% APR)
90% LTV
• £99 Fee
• Maximum loan now £300,000
• Product Code N492H

Deal 3
This product, is ideal for those FTBs looking to secure their mortgage payments for a longer term than equivalent FTB rates fixed over 2 years. Please see below for more details:

• 5.99% 5 year Fixed Rate
• 90% LTV
• £199 Booking Fee, and no Arrangement Fee
• ERC free - the flexibility to move to another mortgage product, and the opportunity to make overpayments, without paying a penalty
• Valuation up to £670 included

Key Criteria
• Minimum age of 21 (in the case of a joint application, the principal applicant must be at least 21)
• Applicants must be in continuous employment for one year
• Applicants must not have been declared bankrupt or had an IVA registered
• Maximum loan is £250,000
• Repayment only

Deal 4
3 year Capped Tracker. These products have the benefit of tracking the BOE rate but only up to a rate of 2.50% during the product term, so the maximum the rate may rise by is 2.00%.

• Rates will start from BOE +2.19% over 3 years at 75% LTV with a £1,995 Fee
• Rates will start from BOE +2.39% over 3 years at 75% LTV with a £995 Fee

These products are competitive within the 3 year Tracker market, and offer assurances to customers that their rate will not rise above a certain level.

Products are available at 75% and 85% LTV, and offered both with and without incentives

REMORTGAGE DEALS

Deal 1
Market-leading remortgage rates - these products have a 75% LTV, 0.5% fees and £500 cashback . The product highlights are:

Tracker Product
• 3.79% 2 year Tracker - 75% LTV - 0.5% Fee - £500 Cashback

Fixed Product
• 4.29% 2 year Fixed - 75% LTV - 0.5% Fee - £500 Cashback

Deal 2
2.15% Tracker at 60% LTV. This product is now available on Interest only as well as Repayment, and offers a great opportunity for your remortgage clients to secure a low rate. Please see below for more details:

• 2.15% 2 year Tracker
• 60% LTV
• £999 Fee
• £250 Cashback
• £500,000 maximum loan
• Remortgage only
• Product Codes: Repayment CLC692, Interest Only CLK423

Deal 3
• 3.19% 2 year Fixed (4.2% APR)
• 60% TV
• £945 Fee
• Maximum loan now £550,000
• Product Code now N491R, previously N477R

For More infomation please join our Mailing List >

HomeLink Estate and Letting Agents Ltd. Registered in Scotland No. 388657    
     

Coatbridge Office
18 Main Street
Coatbridge, ML5 3AE.
Tel 01236 700248
Tel (Lettings) 01236 808340
Fax 01236 700291
Email coatbridge@homelinkproperties.co.uk

Motherwell Office
100 Merry Street,
Motherwell, ML1 1NA.
Tel 01698 264422
Fax 01698 264462
Email motherwell@homelinkproperties.co.uk

Mortgage Office
96 Merry Street
Motherwell, ML1 1NA.
Tel 01698 264430
     
Cumbernauld Office
2 Spey Walk
Cumbernauld, G67 1DS.
Tel 01236 723399
Fax 01236 700291
Email cumbernauld@homelinkproperties.co.uk
Wishaw Office
308 Main Street
Wishaw, ML2 7NL.
Tel 01698 264422
Fax 01698 264422
Email wishaw@homelinkproperties.co.uk
Opening Hours
MON - FRI: 9am - 5:30pm (voicemail after 5.15pm)
SAT: 10am - 2pm

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