Category Archives: House buying

HIPs compounding problems

A report into home information packs (HIPs) by Birmingham Trading Standards has reached pretty damning results.

The packs have not only been slammed as useless, misleading and uninformative, they have also been credited with worsening the housing market situation. Many believe that the added cost of the packs is putting off both buyers and sellers in a market already rocked by the credit crunch.

Many of the packs examined had fundamental errors which could lead to house sales falling through or purchasers only discovering too late down the line that they had been misled.

Omissions were made in areas such as planning permissions and planning history and whether houses were in conservation areas. Whether these errors were made by poor training of HIPs officers or by fundamental flaws in the system was not explained by the report, but neither makes comfortable reading for homeowners or potential buyers.

In a market already suffering due to the lack of home loan availability and with many worried about falling house prices, lack of confidence in HIPs creates a further burden for those buying and selling.

It is unfair to homeowners who are trying to sell that they are unwittingly attempting to sell their home on a false basis and equally wrong that those who are both investing equity and saddling themselves with a massive loan for are buying something that is not what they were led to believe.

How to Finally be a First Time Buyer

The house price crash is proving to be a boon for many potential first time buyers. Those who have waited for years, ever-frustrated as house prices have rocketed beyond their reach are at last seeing a chance to buy.

With house prices having fallen eleven months in a row (according to figures from Nationwide), buyers poised to step on that first rung are waiting in the wings. So what are market conditions really like?

Well, according to the financial papers, prices are set to still fall, which is why many potential buyers are still holding back.

This may be bad news for those desperate to sell, but for those looking to finally be handed the keys to their own home, the news is great.

Many of these would-be purchasers have been saving up for years, watching prices soar further and further beyond their reach. Provided that they haven’t given up and dipped into their funds, they could be on track to buying their dream home in the next year.

One of the only dampeners that buyers should be aware of is the difficulty right now in getting a loan. Existing home loan borrowers have an easier time, should they find a buyer, as they have a proven credit record on their side and probably a chunk of equity in their property.

Lenders are now asking for as much as 25% deposit – compared to the 100% or even 125% loans that were being offered when prices were still rocketing. Unless you have a good credit record and a hefty chunk of savings, your dream property might not be as close as you think.

So, potential buyers could be wise to use their credit cards and take out cheap personal loans – provided always that they make repayments promptly. By building up a good credit record before they look at getting their home loan, they stand a great chance of getting that mortgage approval they need.

Mixed feelings in the Housing Market

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It’s been a turbulent year so far on the housing market, with Nationwide reporting prices showing their biggest annual fall since 1991, the year of Nationwide’s first survey.

The average home has now dropped by £17,000 in the last year, according to Nationwide – bad news for anyone hoping to sell and re-buy using equity in their home: The equity may just not be there any more.

Homeowners who took out interest-only or 90% or greater home loan deals are particularly at risk of losing everything if they fall behind on loan repayments. Those who need to sell up and were banking on rising prices to give them equity for a new home are having to stay put or face negative equity.

Fionnuala Earley, Nationwide ‘s chief economist said: “The weakening economy and poor housing market sentiment do not suggest that the market will recover quickly.”

However, the National Housing Federation has said that it expects house prices to rise by 25% by 2013, due to the lack of new houses being built. Demand is expected to outstrip supply in a few years, pushing prices back up.

In the meantime, economists are predicting that the Bank of England will be forced to cut the base rate as a means of curbing inflation, as fuel and food prices continue to rise.