House Price Spy Blog

The big news of the last day or so was the collapse of one of the previously ‘safe’ financial institutions in the UK, Bradford and Bingley who have been part bought over by the UK government and partly by the Santander Group of Spain who also bought over The Abbey Group. I personally have savings with them but as mentioned £35,000 of your savings will be guaranteed by the Government. All banks and buildings have a brand which they propigate of safe investment and old grannies depositing their giro every week for decades, but what are actually up to? After Bradford and Bingley, Northern Rock and HBOS who will be next to feel the crunch?

With the fall in the housing market there are many casualties (ie apart from you and me) estate agents are one. With some branches selling only one property a week times are dire. Many are reporting having 50% more properties still up for sale, and profits dramatically down on only 1 year.

Are we pricing our properties too high? While you are more likely to sell by lower the price, the time for a ‘firesale’ has not come. Estate Agents will get a percentage of the sale price usually 1%-2%, which means you dont have to set yourself a time limit. There will be more and more sellers happy to ‘sit’ on a property. Could it be time for estate agents to consider a new way of charging sellers? They could consider charging a flat fee of £750 to £1000 rather than a percentage, which this would cost them it would get more work from clients.

From the boom when over 100,000 properties were sold per month, estate agents are just one group who need to look at themselves more honestly. The average time taken to sell is up from 6 weeks to 14 weeks across the UK.

The changes in Stamp Duty have made no difference, but hopefully wont cost the UK taxpayer too dearly. ‘Single reports’ are another reason to hang on rather than sell up!

You can get an exellent valuation for your property by using House Price Spy, you can get data from the last 8 years with stats to compare to other areas and streets. You can save any results and look at graphs which compare results. We will even email you with new sales and statistics for areas.

Price you property right, and dont undersell it-it has not suddenly become worthless in the space of 6 months! Look at similiar house in similiar areas and what people have been paying rather thanw hat next door payed. This all depends on what your position is and whether you are compelled to move and what your plans for the future are.

You will have noticed your utility bills rising in the last 12 months, by 25% for Electric and up to 35% for Gas due to fuel shortage. It would be nice to take all the doubt away from where you are going to find this money from and how high the prices will go by fixing utility prices for a few years untill the economy is a bit more stable and indices like house prices and the stock markets are more stable.

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With prices going up and earnings going down we could all do with a little hand occasionally, thats why this offer is sure to be so popular with people across the UK!

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While US financial giant The Lehmann Brothers recent colapse wont mean much to many of us the dramatic bailing out and ‘closing down’ sale of HBOS (Halifax Bank Of Scotland) to Lloyds TSB will have raised a few eyebrows across the finanacial world. it was only a few short years ago that Bank Of Scotland were THE big beast in UK finance with ordinary savers and investors complaining about the sky high profits that were being made, and also about how ethical the money invested in BOS was.

A few years down the line and upward of 40,000 HBOS employees are facing Christmas on the dole, and the government has had to bend monopoly rules to accomodate the amalgamation which allows HBOS to avoid going bust. HBOS/Lloyds TSB will have a huge 33% of the UK lending market.

50% of the value of HBOS stocks were wiped in the space of one day and this raises questions about the stability of UK finance. Questions about Gordon Brown’s role in the ‘borrowing culture’ that existed during his chancellorship have arisen, how could a previously ‘prudent’ financier inspire so little confidence?

After The Northern Rock and US problems the UK government has set a trend of forcing lenders to change their ways and become more realistic, what this will do for competition in the marketplace where lending is down to a 20 year low and many lenders have withdrawn previous loans.

While supporting financial institutions is all very well for the overall picture how does this affect the consumer in real terms? The whole mess has been caused by mismanagement by lenders rather governments charging too much stamp duty, or even borrowers paying too much for property. The government should use it’s time coming up with a medium term legislation for lenders in terms of what they can offer, to whom and rules about inter-lender finance.

It should be noted in all this that £35,000 of your savings are guaranteed, so if you spread your savings across a few lenders and types of investment there will be no problem. Gordon Brown was telling us a few months ago to save more for our old age…with many pensions halfing in value in recent days this is looking like folly!

The property market has been the main topic of discussion in the media and it does now appear the both the UK and US governments are concerned enough to put serious money into working through the slump in prices. Since my last blog, the US government has invested billions in two ailing financial institutions while Gordon Brown has pledged billions to raising the lowest level of Stamp Duty and bailing out struggling borrowers who mortgaged in more bouyant times.

With speculation over the future of the PM in terms of his leadership and the upcoming election this could be the last gamble Gordon Brown has to offer. The ‘Tony and Gordon’ package profited massively from the inflated property market in the last 10 years, and now are counting the cost of the inevitable re-adjustment in prices to a viable level.

The backdown on 10% income tax was fairly embarrassing, but this seems to be the one thing which could tip the balance away from New Labour with less than promising poll predictions and by-election results.

Hopefully we will see a bit more leadership in the months to come, with a plan which they stick to! There have been two or three backdowns in recent months (Northern Rock, 10% income tax etc) which never looks good. Are the government expecting people to run out and sell their houses for thousands less just to save an average £550 on Stamp Duty, sounds like a hollow promise-at least we wont have to find billions to fund it if no-one takes it up!

I see there was a property related article on the BBC site, which had an estate agent who offered house swop where you can trade your home for another one and ‘match make’ buyers to sellers like a property dating agency. A few months ago developers were potential housebyers to try new build houses for a weekend to see whether they were suitable or not. Both of these are preferable to the governments announcement of this week that they were going to spend billions of taxpayers money in raising the minimum level of 1% Stamp Duty to £175 rather than the previous £125.

See the whole clip at the BBC site

From the stats we have the average price in England is £230,000, which is the same as last year. The recent government action will give an average sale an extra £550 but average prices should have risen by from £10,000 to over £20,000 during the last year so this a drop in the ocean.

Last year – £230,000 – £125,000= £105,000×1%=£1050

This year – £230,000 – £175,000= £55,000×1%=£550

£550 is not enough to get the property market going, but by the governments figures will cost us billions. By my figures (and bear with me here):

There are an average 100,000 sales in the whole of the UK per month so 100,000×12 monthsx£550 Stamp Duty=£660,000,000 (£0.66 Billion) to give a tiny £500 help! How many council houses could you build for that Gordon?

Gordon Brown and Alistair Darling have made a move to quell the recent unrest about house prices and the apparently impending recession by giving every seller a year long boost. The previous lowest level where you paid Stamp Duty 1% Tax was £125,00, this has now been raised to £175,000. This will last for 1 year from Wednesday 3rd 2008.

Also announced today were measures to help people struggling with large mortgages with increased rates of interest by giving councils and Social Housing Landlords the power to pay off mortages while charging reasonable rents. This money will be found from previous funding and ‘brought forward’ to improve housing in the short term.

Conservatives and Liberals have condemned these measures as short-term solutions and as an attempt to save Gordon Brown from Election defeat or being ousted by his own party.

With the cost of living rising and the global economy facing the worst slump in 20 years, its unclear what Brown could do, the UK property market has been inflated for most of the 21st century and many people are seeing this as a sensible re-adjustment rather than a collapse in prices. People buying in popular areas will never lose much, however builders and speculators may lose out in the medium term.

Where will Gordon Brown be finding the money to pay for this? Millions of pounds will have to be found from somewhere, since someone like me (who bought property last year) wont be moving in the near future I am not keen to fund others just to boost the number of properties sold and artificially raise prices. The government also announced that households earning under £60,000 will get ‘interest free’ loans to fund property.

When you claim your free membership of House Price Spy you get access to millions of sold house price since 2000 in England, Scotland and Wales. Apart from that there are various other ways to gain from free membership…

House Price Spy members benefits are as follows:

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