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Housing market

Help to buy scheme to boost housing market

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Help to buy scheme to boost housing market

Help to buy scheme Introduced back in April new government initiative Help to buy scheme  have gathered a lot of positive and negative attention in a short period. Help to buy is a first leg of the government initiative to boost housing market and is focused on helping first time buyers and home movers to buy new-build houses. The loans only offered to home owners, not to landlords for buy to let property, with a cap of £600k. Gov.UK describes Help to Buy Loans as “With a Help To Buy equity loan, you buy your newly built home with at least 75% of the cost met by a mortgage and a deposit of at least 5% of the purchase price. The rest is paid for by the government through an equity loan.” Help to buy scheme helps to raise house prices Initial market reaction has been very positive. According to Home Builders Federation (HBF) 4,000 people have reserved a new home in the two months since the scheme launched. Stewart Baseley, the executive chairman of the HBF said: “The Equity loan part of Help to Buy has got off to a flying start”. The houses prices have been raising in the first half of the year with Halifax reporting 2.6% and Nationwide 1.1% in 3 months to May as shared by BBC.co.uk in their article “Help to Buy off to ‘flying start’ as house prices rise”. Home builders and estate agents have been promoting the scheme which help to raise people awareness. With low mortgage rates and low deposits people feel more confident they can afford to buy a home, which expects to push the prices higher. Risk of a “price bubble”? However for many people there is still no solution. The Help to Buy scheme only works for new-build houses, so if people want to move, but don’t like a new-build, then it’s not for them. In many cases to raise a deposit still remains a problem, as the inflation and raising prices impacting people ability to save. ThisisMoney.co.uk  highlighted in their article “almost a quarter of those surveyed by BSA for its Property Tracker report said they still need more help to save for a deposit, with 54 per cent of those hoping to buy saying raising a deposit remains a significant barrier to getting on the ladder.” People also concerned about the interest on a Help to Buy loan. There is no interest for the first 5 years and after that the interest is 1.75% and it will grow every year, which might put an extra pressure on homeowners when they need to pay back a mortgage and a loan. Help to Buy scheme have also gathered a lot of negative publicity and have been criticised by many economists for artificially raising the house prices, which might impact the economy later.  The house prices already started to raise following the first part of Help to Buy and expected to go up further after the second leg...

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House prices rising. Time to sell your house quickly?

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House prices on the rise. Does is mean the worst is over and the property market is on the way to recovery?

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If you need to sell your house in Swindon – house prices are falling

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If you need to sell your house in Swindon – house prices are falling

Where are UK house prices heading? UK house prices have been falling for a while and according to Halifax house values have decreased by 1.7% over past year. There are pockets of rising values, specifically in London, but overall UK house prices fell by 0.7% over a month for the fourth month running in October According to economists housing demand has been very weak, with more sellers on the market than buyers. Lack of buyers on the market is mainly driven by the reduced number of people able to get a mortgage. Banks are not lending which stops people from purchasing property. Bank of England figures show that there were 50,024 house purchase loans approved in September vs a long-term average of more than 80,000 per month. With this reduction in mortgage approvals, no surprise there are no new buyers on the market. What if you need to sell your house Swindon? The situation in Swindon is no different. House prices have been falling for the last few years making it harder and harder for people to sell their property. Land registry report (below) shows that the average house price went down from £127.5  K in October last year to £125K  September 2012. Same is happening to the house sales. Despite fluctuations overall sales volume trend is going down reaching the figure of 50 last August. House prices and sales go hand in hand: when house prices drop the sales drop as well and as when sales drop, people are forced to reduce house prices. The situation is also different from area to area:  sales in the centre of Swindon are much more fluent, where some houses on the outskirts have been on the market for many months.  As a result people drop price, go to auctions, in the worst cases houses get repossessed. So, if you need to sell you house Swindon – prepare for a tough competion with other house sellers for potential buyers. To your happiness Dasha      ...

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How can I prepare for the mortgage rate rise?

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How can I prepare for the mortgage rate rise?

What will happen when the mortgage rates go up? Either we think about our own house or about investment house we let, we all have the same question: what will happen when the mortgage rates go up?  In good times and in bad times, we need to make sure that we make our mortgage payments to the lender.   In the last couple of years we enjoyed a dramatic drop in mortgage rates with Britain’s Bank of England holding rate at 0,5%, certainly the lowest for a long time. Many homeowners have their mortgage rate at 1% or 2%, which is a great help considering rising prices on fuel, food and about everything.   And of course if people have no equity in their houses, then they find it easier to keep the house and rent it out, while mortgage payments are manageable.   However, we all fear the time when the interest rates will go up, so we need to start thinking and planning in advance. We saw already some changes starting. Despite the Bank of England rate being help at 0.5%, some banks have already increased their rate by 0.25 to 1.5% at the start of May, which impacted many families.  Halifax raised their rate by 0.49%, which affected around 850,000 customers.  Of course this will further impact the housing market, which is already very slow with first time buyers struggling to get onto the property ladder.  The number of approved mortgages started to grow last month, but the growth won’t sustain with the rates raising.      How can I prepare for the mortgage rate rise? Is there anything we can do? Most importantly, “don’t bury your head in the sand”, instead review your current mortgage, talk to your lender, and understand your options. If you mortgage is low, then enjoy the ride and  save some money for hard times to come. If your mortgage rate is still high, above 4%, then mortgage specialists suggest considering a re-mortgage to secure a fix rate for a few years, so your mortgage payments won’t go up when rates start to grow. To your happiness....

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