Online advice is fine but one-to-one is better

Despite the reported popularity of internet use amongst the over-50s and the emergence of the ‘silver surfers’, new research shows that today’s retirees prefer human interaction when either researching or getting advice on financial matters.

Prudential’s research shows that less than a quarter (24%) of over 50s would consider using the Internet to research a financial product as they are opting to speak with friends & family as well as their bank or product provider.

The human touch
Whilst over two thirds of respondents (70%) stated that they are more confident in making financial decisions now than when they were younger, the research highlights that most still prefer human interaction during the financial advice process. 71% of the over 50s would like to receive advice face-to-face, with just 15% stating they would like to receive advice over the phone.

While it is apparent that some (24%) of the over-50s are still utilising the online approach as part of their information gathering, many are opting for the traditional offline approach. One-to-one interaction such as speaking to their bank or building society or their friends and family, top the list of preferred research methods (41% and 40% respectively) instead.

Women controlling their own finances
Prudential’s research further found that women are more confident than men in making financial decisions in their 50s and beyond. Seventy Four% (74%) of women stated they are more confident now, than when they were younger – compared to only 66% of men.

And while women state that they are more confident in their financial decision making than before, they are also using a different method to research the options available to them. Women opt for ‘real life’ recommendations as their first choice, naming their friends and family as their first port of call for financial research. Men, in contrast named speaking to their bank and building as their first choice for researching financial products.

Buying financial products the traditional way
When asked about which financial products the over 50s would prefer to buy the ‘traditional way’ – having met face-to-face with a financial representative, over two thirds (39%) stated savings products, followed by investment products (35%).

Ali Crossley, director for lifetime mortgages at Prudential comments: “It is interesting to see that while more and more financial services are available to us online, for many people this only provides part of the solution to understanding more about their financial needs.”

“While it is important to have online facilities that provide information on financial products, our research has shown that face-to-face advice resonates strongly with customers.”

“In line with this result, we have recently launched a face-to-face sales force, advising on Prudential’s flexible lifetime mortgage. Extending our commitment to allow customers access to qualified Prudential advisers who can visit and talk to people in their own home, at times and in surroundings they are comfortable with, is a logical progression for our business.”

Number of Brits owning property abroad trebles

The number of UK households owning property overseas has trebled in the last ten years, reports Grant Thornton...

Leading business and financial advisers, Grant Thornton, have recently published new research showing that the number of properties owned overseas by UK households has almost trebled from 102,000 in 1995 to an estimated 300,000 in 2006. If this trend continues, there could be around 1.3 million British nationals living abroad by 2025.

The analysis, undertaken in association with Lombard Street Research (LSR), puts a definitive figure of 2% of the UK population on owning a property overseas and identifies the typical owner as either a pensioner with their main residence abroad, or an affluent person above the age of 45 owning a second home overseas as an investment or as a holiday home.

Maurice Fitzpatrick, Senior Tax Manager at Grant Thornton commented, "We anticipate that the trend of a gently rising number of people deciding to leave the UK permanently and live abroad (upon retirement) will continue. If this trend continues at the same rate, by 2025 there could be around 1.3 million British nationals firmly settled in another country and drawing a pension".

Brits buying foreign property increasingly for investment reasons

The Survey of English Housing (SEH) found that investment was a more popular reason for purchasing a foreign property than wanting a holiday or retirement home, with 40% of respondents citing this as their main motivation in buying compared to 38% who were more interested in the lifestyle implications. This trend of overseas property being purchased as an investment has increased. In 1999 30% quoted investment as the purpose of their purchase rising to 40% in 2004.

The report closely examines tax considerations for individuals purchasing property abroad, highlighting the opportunities and pitfalls. In particular, it looks at capital gains tax and income tax considerations if a property is owned overseas, explaining some of the planning options to consider. The report then looks at how tax systems operate in popular destinations such as France, Spain and America.

Mike Warburton, Senior Tax Partner at Grant Thornton commented, "Purchasing a property abroad has important tax implications. Contrary to popular belief, you are still subject to tax on your offshore income and capital gains if you are a UK resident and domiciled. And, if the UK tax system is not complicated enough, the purchaser of a property abroad has to cope with a local tax system that may be culturally dissimilar to our own".

Demand for overseas property linked to fortunes of UK housing market

The analysis finds that demand for property overseas is intrinsically linked to the UK property market, and asserts that given the current level of interest rates and income levels the UK housing market is set for another good year during 2006. However it suggests that there is a danger of house price bubble in 2008-2009 which would have an adverse effect on demand for property abroad.

The report also points out that demographic changes over the next 10 years could have a positive effect on overseas property demand due to the fact that 70% of the heads of households who own a second home are currently aged 45 and over and in the next 10 years this age group will significantly increase.

Maurice Fitzpatrick, Senior Tax Manager at Grant Thornton comments, "Any continued increase in overseas second home ownership is heavily dependent on the strength of the UK property market and the wealth it generates. It is this liquidity which influences people in taking the necessary steps to invest abroad. By 2025 this could mean that 1.5 million to 2 million households in the UK will own a property overseas, an amount which would equate to one-tenth of UK property owners".

Property prices push first-time buyers abroad

3.8 million first time buyers would consider buying abroad just to get onto the property ladder, according to the new research from MRI Overseas Property...

One in three Brits (32%) would consider buying a property abroad just to get onto the housing ladder, according to the new research from MRI Overseas Property.

The pressure of the UK housing market is having the most significant effect on 18-29 year olds when it comes to considering their options to get onto the housing ladder.

Almost three quarters (71%) of 18-29 year olds would consider buying abroad and four in ten (39%) of them who don't currently own their own property would consider purchasing a property abroad as a means of getting a foot on the ladder.

The stereotype of overseas property owners as retired holiday home-owners is also changing as one in five (21%) 18-29 year olds who would consider buying abroad would now buy a property abroad as a financial investment.

Londoners first to go
First time buyers in London under pressure from the capital's sky-high property prices are anxious to find a means to owning their own house. 41% would turn to buying a property abroad as a potential solution. However, only 24% of Scots are prepared to follow suit.

Darragh MacAnthony, Group Chairman of MRI Overseas Property, said: "The UK property market's ever-increasing prices are now having a serious impact on people's attitudes towards buying property in Britain. With so many young people unable to get onto the property ladder, buying a property abroad can seem an attractive option, either as a means of generating a financial return or to experience living abroad at a time in their lives when they have less ties to home.

MacAnthony continued: "For the thousands of Brits planning to buy a home abroad the most important thing is to do their research. Research into which country and region is right for their needs, what the legal requirements are and what the additional cost implications should not be underestimated. Making the right decision is critical whether you are looking in Spain or Brazil. Buying a property in any location is a decision that should not be entered into lightly as it's a big responsibility, especially for first time buyers."

Why the housing market will not crash

With the average price of a house likely to have reached £200,000 and residential property making up 53% of household net wealth, whether the housing market is going to crash or otherwise makes regular pub conversation.

It is quite easy at a first level to worry that the market could crash in the next few years, argues a report from the centre for economics and business research. With house prices rising by 10.2% on average every year since 1996 and average gross earnings rising 4.2% every year, the ratio of house prices to incomes has increased from 4.4 to 7.9 in the same period. It is an easy and lazy argument to make that the house price inflation seen in recent years is driven by speculation — and we all know that speculative bubbles must all eventually burst.

However, says the cebr, there is one fundamental problem with the housing market in the United Kingdom that will prevent a housing market bust: the demand for houses by far exceeds the supply of houses. This fundamental mismatch, which developed after the housing market fully recovered in 1996 from the 1989 crash, is caused by a number of factors — which are likely to persist in the foreseeable future.

First, the United Kingdom does not have a large enough stock of houses. In 2005, 193,000 new houses were built — the highest in over fifteen years. In her housing review in 2003, Kate Barker said that to bring real house price growth down by a significant amount, the United Kingdom needs to build 245,000 houses every year. Government planning restrictions and schemes such as key worker housing prevent the construction sector from fully responding to the house market’s price signal.

Second, population growth — boosted because more of the world’s people want to live in the United Kingdom — and an ever smaller household size means that there are more people who need to live in houses than ever before and, also, that more houses are needed per person.

Third, when thinking about buying a house, potential house buyers do not compare their income to the price of a house. Rather, they compare their income to their annual mortgage payments. With interest rates at or below 5.0% in recent years, mortgages remain affordable when compared with the early 1990s. Although mortgage payments as a share of household income have risen from 15.0% in 2001 to 19.6% in 2005, they remain well below the 34% recorded during the 1989 crash.

Fourth, the new large and rich countries of the world — oil producing countries and the Asian dragons — remain happy to park their new found wealth in the world’s main financial centres: New York and London. A significant amount of money that flows in to the City of London, by one mode or another, ends up in the property market.

Fifth, because of the nature of economic growth it is natural that certain areas of the country will see more economic activity as the economy expands. Because of lack of transport infrastructure, these growth areas are unable to geographically increase their labour catchment areas, meaning that more people need to live in certain locations — exacerbating the mismatch of supply and demand.

Looking forward, as long as supply continues to fail to react to the burgeoning demand for housing, it is very unlikely that house prices will crash. In our latest house price forecast, we see inflation slow from an average 8.2% this year to 4.6% next year and 1.3% in 2008, before picking up again. Higher interest rates, tight household bills and the world economic slowdown will cut back house price inflation, making talk of a possible crash more of a pub topic. But as long as the fundamentals remain unchanged, a housing bust is very much off the cards.

Moving? Get your broadband sorted early

Broadband deals are tricky enough to navigate at the best of times, but if you are moving home you’ll have an additional hassle to negotiate.

Part of the trouble comes because broadband suppliers are using a raft of tricks and ploys to discourage people from swapping suppliers.

One in six people with broadband (15%) admit their confusion about broadband deals is the reason they haven’t switched providers, price comparison website moneysupermarket.com discovered.

Migration Authorisation Codes have long been a bugbear for broadband switchers. Similar to mobile PAC codes (Porting Authorising Codes), someone switching broadband providers needs to give a MAC reference number from their existing provider in order for broadband connection to be immediately switched to the new provider. Without a MAC code the connection has to be terminated and then switched on again, which can leave people without broadband for weeks.

However, as MAC codes are only a voluntary scheme, there are still some providers who will not give them out to their customers, consequently making it difficult for people to switch.

According to OFCOM, some of the broadband providers who have not signed-up to the MAC code scheme include Tesco Broadband, Talk Talk and PlusNet.

Penalised for moving home

If people are planning on moving house, charges from a broadband provider range from £24 – £150 to switch the service to the new property. Some providers, such as PIPEX, will even reset contract terms so customers start a new 12-month contract when they move in.

Movers may also find the phone line has been blocked by a previous broadband provider, adding weeks of frustration, delays and additional costs to discover which provider was responsible. If broadband is essential to you – say if you intend to work from home - it would certainly be wise to investigate the broadband status of the property before making an offer on the property.

Another hidden charge is a term of the ‘no minimum contract’ deal offered by providers such as Virgin.net, PlusNet, biscit and EFH Broadband. These deals are supposed to offer flexibility rather than locking people into a long contract period, but in reality consumers would still be hit with a typical cancellation fee of between £50 and £70 if you leave within the first twelve months.

Even after a year people would still have to give between one and three months’ notice before they could terminate the contract.

Be prepared to contact your provider well in advance of moving home as you may find a minefield of red tape top go through – even if you are staying with the same provider.
Jason Lloyd, head of broadband at www.moneysupermarket.com, said: “Unfortunately few broadband providers’ deals are as good as they first seem. Some advertised ‘free services’ will incur a monthly fee after a year, so I would urge people to double check the small print before signing up to a new broadband deal to guard against any hidden charges.”

“If you are having problems with your existing provider, it could be worth letting them know you are thinking about leaving the contract to see if they can offer a better deal.”

Charged to upgrade

People are used to upgrading their mobile phone for free with their mobile operator but upgrading to the latest broadband deal is often costly. Broadband providers make it difficult for customers to upgrade to better deals by charging them for new hardware as well as a switching charge. Many providers will upgrade your speed for free if the network has improved, but will charge around £20 as a one-off fee for doing so.

Lloyd added: “It is clear providers are using underhand methods to prevent their customers being tempted away by the range of attractive broadband offers. Hidden charges and a lack of transparency by providers are the main reasons for switching inertia.”

“The first port of call for anyone considering switching should be to speak with their existing provider about what they can offer. In most cases they will have cancellation teams in place who will invariably offer a better deal to anyone threatening to terminate their contract.”

Tough time for London’s first-time buyers

London's property market remains buoyant, resulting in prices reaching new record levels, according to Rightmove’s latest research.

But this is creating an unaffordability spiral with potential first-time buyers renting for longer and boosting the buy-to-let market, thus pushing up property prices even higher.

The average asking price in Greater London is now at £344,949, a 2.8% monthly rise and an 18.2% annual increase, said Rightmove.

Demand is still outstripping supply with top end addresses continuing to see a mini-boom and break new landmarks. Average property prices in Kensington & Chelsea have now surpassed the one million pound threshold. Hammersmith & Fulham, Kingston-upon-Thames and Wandsworth, which have all seen substantial annual price increases, have also risen in value since last month.

Miles Shipside, Rightmove's commercial director, commented: "The divide between London and the rest of the country is still growing. The capital is leading the way, with prices 50% higher than the national average.”

“This head of steam could mean that the hike in interest rates to 5% will not affect the majority of the London property market.”

Forget about first-time in London

Miles Shipside continued: “However, many first-time buyers can almost forget about owning a property in London. Average house prices are now 4.4 times income, compared with 2.6 times in 1970, making it the least affordable city in the UK.”

“Rising prices also mean only 2% of the capital's properties are below the stamp duty threshold of £125,000, so nearly all first time buyers have to find at least another 1% to fund their first home.”

Sloshing money undermining market stability

The extraordinary amount of money around in London at the moment isn't helping the market to stabilise.

“It is a tough time for first time buyers who have to rent for a longer period of time than ever before, leading to a more and more buoyant buy-to-let market which in turn causes prices to rise even higher," said Miles Shipside.

First-time no-goers look to Spanish home first

UK residents buying a home in Spain, has for the most part, been a second-home or retirement purchase. But an international report points to an increasing number of under 25s getting on the property ladder aboard, while they can’t yet purchase a house at home.

The gap between the ground and that first step onto the property ladder is so great in the UK that most under 30’s are to stay at home or rent for longer today than ever before. According to a recent survey the number of under 25’s who own their own home has decreased from 35% to 22%, the lowest in two decades, house prices are almost five times higher than that of 20 years ago.

Owning overseas property is becoming more favourable for first time buyers as it is often cheaper than in the UK and the returns can make for an excellent investment. It is also a lot easier to buy overseas property than you may think.

Spain is the most popular choice to own a second home making it a land of opportunities for those new to the property market. A survey commissioned by Atlas International confirmed that 22% of those aged 16-24 years were considering purchasing property abroad as their long-term aspiration. With property prices starting from £65,000 on the south coast there is more to Spain than sun, sea and sangria.

Why is Spain the number one destination?
It’s close to home. Spain is a mere two hours away and flights throughout the UK and Ireland are inexpensive and frequent. If you are looking for a buy-to-let purchase or simply a place to spend multiple short-breaks throughout the year, Spain is the first choice. With some of the best beaches in the world and annual average temperatures of 18°C, Spain will always be a popular destination.

It’s a central base in Spain. This could be your start to discovering Spain, whilst property prices are still relatively cheap, an investment here doesn’t have to restrict you to the south coast. Madrid is a 3 hour direct train journey from Alicante, so visiting the Spanish capital is easily accessible.

Make the most of the Mediterranean with the world famous coast of Tarifa in Andalucia, the most southern part of Europe. The wind here blows throughout the year, making it the perfect climate for surfing and wind surfing. There is also the island of Tabarca, just 11 nautical miles from Alicante, a popular location for snorkelling.

Further south in Almeria is the Sierra Nevada, Spain’s number one location for winter sports. With five months of snow between November and April, a holiday during the winter is just a short drive from the coast. Ibiza is a 30 minute flight away from Alicante airport if you want to cross over to this Balearic Island.

Bricks and Mortar. Buying overseas property is a lifetime investment and the options are flexible to suit your needs, for example choosing to rent your property and then later use as a holiday home or for when you retire, it’s totally up to you.Spain has seen one of the largest economic growths in Europe over the last five years with regards to property and a continuing strong economic growth and low interest rates confirming that Spanish property is a good investment.

Work in Spain. To relocate permanently or as a stop gap, having your own place in Spain can make this a real option. As an EU member, working in Spain is not too dissimilar from here in the UK. With a minimum of 30 days annual leave and 12 public holidays a year, Spain has to be the ideal place to work.

First-time buyers bounce back

The good news is first-time buyers increased their share of the market by the largest amount for over a year and a half in October. However, the housing market in some areas of the country is slowing to the point of faltering, according to a report from the National Association of Estate Agents.

Average asking price October 2006
£226,768
Average asking price September 2006
£208,617

The overall national picture for the property market in October showed a buoyant market place in advance of interest rate rises announced earlier this month, said the report.

However, the national story is being led by the ever strong South East, whilst other regions are reporting a slow down in activity. The vast regional differences mean that some areas of the country have housing markets that are beginning to falter.

The number of house buyers and houses for sale on estate agents books were both proportionally up from figures reported in September, although people looking to buy decreased from the same period last year. Actual house sales remained level from September but, encouragingly, had increased from October 2005.

First time buyers bounce back

First-time buyers made a dramatic return to the housing market in October increasing their market share to an encouraging 16.4%; this is up from 11.1% in September. This is the highest percentage of first time buyers reported since April 2005 when first time buyers accounted for a healthy 23.6% of the market.

This increase could be akin to a slow down in the market with first time buyers taking advantage of a decrease in buyers on books. However, the interest rate rise will certainly work against this vulnerable sector.

Sales up 7.7% from October 2005

Completed sales in October remained at a level from the previous month revealing a consistent housing market. Agents reported an average of 14 sales each, as buyers rush to move before the forthcoming festive period.

Reflective of the strong market seen throughout 2006, sales had increased by 7.7% from the same period last year increasing from 13 sales per agent.
Housing stock replenishes as buyers sit back

The number of people looking to buy property increased in October by 4% from September as estate agents were involved in the yearly pre-Christmas rush. However, buyers were down by 3.5% from the same period last year as consumers in some parts of the country could have been deterred by the widely anticipated hike in interest rates at the start of November.

Housing stock replenished slightly in October with an average of 64 properties for sale per agent, up from 61 in September, a 4.9% increase. This is also a 4.95 increase from October 2005.

Decrease in failed transactions

The percentage of failed sales in the housing market decreased in October to 8.4% from 9.85% in September.

Regional differences apply

NAEA President, Charles Smailes, commented: “October is often a busy month in estate agency as people endeavour to be in situ before the festive period, which means realistically they need to be agreeing a purchase in the next couple of weeks.”

“I am delighted to see some first-time buyers coming back to the market, but I am also concerned that the rise in interest rates and the further rises rumoured for the New Year will significantly disadvantage people trying to climb onto the property ladder.”

“The overall picture is that of a healthy active market, however regional difference applies, with some areas beginning to look quite flat, whilst the South East looks extremely strong. I encourage sellers to take heed of their estate agents advice and lower asking prices where necessary in order to attract a sale.”

Surveyors confident as prices hit 4-yr record

House prices rose at the fastest pace in more than four years in October with the lack of available housing continuing to drive the trend upwards, the Royal Institution of Chartered Surveyors said today.

The report from RICS said 48.1% more of its members reported a rise in prices than a fall during the month, up from 45.7% in August. This was more than double the long run average of 21%, RICS said.

Along with rising prices, there was also an increase in enquiries by new buyers. This is the 17th month in a row there has been an increase in inquiries - the longest run RICS has ever seen.
Confidence in sales amongst RICS members fell slightly but the expected interest rate rise in November did little to dampen optimism over price outlook.

RICS's spokesman Ian Perry said, "Even after last week's interest rate rise, surveyors are still confident that the housing market will remain buoyant."

According to the survey of members, London and the South East continued to lead the charge. House prices in the capital accelerated at the fastest pace since June 1999

But this revival is not good news for all, with the first rung on the property ladder moving further away from first-time buyers.

Mr Perry said, "London continues to see city bonuses inflate the housing market beyond the accessibility levels of most first-time buyers, and the rest of nation is showing early signs of building up momentum as prices pick up in the laggard markets of the midlands and northern England."

"But the market is unlikely to feel cold winds from high finance costs until mid year at the earliest as economic conditions are favourable," he added.

House prices surge, but is this a bad time?

Asking prices for UK homes took a 1.3% leap in November, according to the latest asking price index from Home.co.uk. This means that nationally, average house prices have increased for three, successive months and is a sure sign that sellers’ confidence is growing.

Asking prices for homes, currently on the market, in England and Wales increased by 1.3% this month making November the third month in a row of consecutive price rises, according to the latest asking price index from Home.co.uk.

This further rise takes the 12-month change in average asking prices into positive territory for the first time since December 05 and now stands at +0.5%.

Confidence amongst sellers of residential property has increased markedly over recent months as indicated by a plentiful supply of properties new on the market with higher asking prices.

House prices surge toward a ‘tipping point’

A rally in asking prices signals an up-lift in market sentiment and a new upward trend, but the timing could not be worse, argues Home.co.uk.

These asking price rises come in the wake of September’s interest rate hike by the Bank of England suggesting this initial inflation fighting measure was ‘too little too late’ to tame the inflationary pressures faced by the economy. This month, the UK central bank issued a further dose.

Will this second hike have the desired gentle braking effect on the run-away train that is the UK property market or will it stop dead in its tracks?

The combination of rising asking prices and interest rates is taking the UK property market into dangerous territory. In Q1 2005, high asking prices caused the number of monthly transactions to plummet. The market wobbled before transaction levels recovered through cuts in asking prices and the Bank of England base rate.

The market looks set to wobble again. Increases in the cost of borrowing coupled with rising asking prices are likely to slash transaction volumes and drive the market toward a ‘tipping point’.

If the housing market retains some fluidity, the short-term outlook for first time buyers is bleak.

Director of Home.co.uk, Doug Shephard laments: “Since 2004 we had observed a slow, downward trend in house prices - it looked as though the affordability gap for first-time buyers was closing as the ‘froth’ melted away. Over the last six months, the opposite trend has emerged. With sellers’ confidence in the market on the rise and increasing interest rates, the affordability gap for first-time buyers is rapidly widening,”

Caught between a rock and hard place, the Monetary Policy Committee (MPC) has no choice but to try bringing inflation under control. However cautious the approach, their actions could trigger a severe downturn in the UK housing market. The risk of reaching the ‘tipping point’ is real, similarly inflated property markets in Australia and the US have already tumbled, because of inflation fighting, interest rate hikes.

Millions of hours gazing at homes abroad

British holidaymakers have spent almost 22 million hours gazing into foreign estate agent windows in search of the perfect property in the past two summers, according to new research...

The ‘Holiday Habits’ study was commissioned by property investment specialists, The Inside Track Group. Results show that 45% of UK adults venturing out of the country for holidays each spend an average of one hour and 25 minutes looking at local listings for houses and apartments for sale.

The Inside Track Group reports that around 2.2 million UK nationals already own somewhere abroad, and many more who journeyed overseas this summer are seemingly set to join them. Many Britons look to buy a second home in their favourite country to holiday in. According to the most recent Office for National Statistics figures, the top five most popular holiday destinations are:

1. Spain (30%)
2. France (18%)
3. Greece (7%)
4. USA (5%)
5. Italy (5%)

Such interest in foreign property investment has prompted The Inside Track Group to publish its ‘Top Ten Tips’ for buying abroad, to help British investors avoid potential pitfalls.

“It is clear from the results of our study that actually being in a foreign country makes the idea of buying property there much more appealing,” says Inside Track Group chief operating officer Anthony McKay. “Two in five (40%) of the people we spoke to said being away had made them think more seriously about investing in a property abroad, and that’s encouraging as it can provide a very good return on investment.

“What people must remember, though, is that the process can be very complicated, and a good deal of preparation must be done before parting with any money. It’s not simply a case of finding somewhere in the estate agent window and buying it. Our guide to investing in property abroad will show buyers exactly the right process for finding that place in the sun and make sure they cover all bases to secure a sound investment.

The Inside Track Group’s ‘Top Ten Tips’ for buying abroad are available to download at www.iaprops.com.

Deterring burglars in the winter months

The winter months mean more than the advent of colder weather. Longer periods of darkness can provide extra cover for burglars and vandals. Securing your home has never been as vital as it now.

Fortunately, effectively securing your home is easy to do and doesn’t cost the earth. These initiatives, combined with sensible precautions, will make your home more difficult to break into.

You can get a handyman in to fit any of the home security improvements shown below, but even a first-time DIYer will be able to carry them out themselves, following advice from the supplier. Good DIY stores carry a range of free help leaflets and B&Q and others produce DIY handbooks that cover a wide range of household jobs.

There are several key entry points to your home and garden, which should be a good starting point.

Doors

Your front door should be fitted with a mortise lock that carries the British Standard Kitemark, rack bolts top and bottom, a viewer and a door chain. Mortise locks shoot a hardened steel bolt into a keeper recessed into the frame when the key is turned. Obtain greater security by fixing one to front and back doors. They are not very expensive, less than £20 each.

Door viewers cost around a fiver but for that extra technological edge, spyhole camera kits which transmit the view of your doorstep to your TV can be bought for under £40.

Outside

Security lights are ideal for illuminating darkened areas such as pathways to the rear of your property. Security lights that become activated through movement sensors start from well under a tenner and are ideal for side or back doors, where burglars generally prefer to break in, where they are less likely to be seen. Make sure you don’t buy over-bright ones that create dark shadows for burglars to hide in and make sure you fit them down-ward facing so they don’t cause a nuisance to your neighbours or light pollution.

Windows

Your windows, as well as your doors, will also need securing. Fit window locks to all frames – particularly if they are easy to access. Laminated glass or double glazing is more difficult to break through quietly. Make sure your putty or glazing beads are in good order so that a pane of glass cannot be easily removed. If you have French windows, each closing door should be fitted with locking bolts top and bottom. Make certain that sliding doors cannot be sprung or lifted off their runners.

Alarm system

Every home should be fitted with an alarm system. Not only do they provide peace of mind, but the presence of an alarm box on the side of your property is a strong deterrent to any potential intruder. There are several choices when it comes to installing security alarms in your home. Infrared movement detectors fitted high up in the corners of each room will activate the alarm if they sense a door opening or the movement of an intruder, although these can be triggered by pets moving about. Alternatively, magnetic contact detectors installed on doors and windows trigger the alarm if the magnetic plates are disturbed.

There are types that work by wireless so there is little or no wiring to install around the home.

Further sensible precautions

If you are leaving your property empty for any significant period, it is a good idea to invest in a few timed light fittings to place around the house which will switch on and off automatically, as if someone were there.

It is also a good idea to ask a neighbour to park their car in your driveway if your driveway is empty.
Portable valuables may be best transferred to your bank or safety deposit centre, or install your own safe.
Invest in a UV pen and write your postcode on possessions, such as TVs, DVD Players, and other valuable equipment.
More information

It is a good idea to contact your local Crime Prevention Officer via your local police station for further advice and information. Staff at your local DIY store should be able to help too. Larger B&Q DIY stores even run training courses on various subjects – some just for women.

Bank rate rises to 5%

Despite calls from housing industry experts and business leaders to hold interest rate steady, the Bank of England’s Monetary Policy Committee today raised rates by 0.25% to 5%.

Mortgage holders are mostly braced for the impact, but many will now see Christmas as a bleaker prospect. Homeowners with an £80K mortgage can expect to see their monthly repayments increase by around £13.

And the already financially-stretched band of credit loving consumers will also begin to feel the pinch as next month’s increased credit card charges appear on their bills.

The rise comes as cooling inflation and high street spending figures have shown August’s increase may have taken hold.

However the MPC is clearly becoming jittery about the continued above-target inflation figures since early summer. Their report said:

“The UK economy has recorded its fourth consecutive quarter of firm growth. Household spending has been volatile, but the underlying picture appears to be one of moderate expansion. The recovery in business investment has been maintained. The outlook for growth in the United Kingdom’s main export markets remains positive. Credit and broad money growth remain rapid, and asset prices have continued to rise.

Although unemployment has continued to edge up, the margin of spare capacity within businesses appears limited. Oil prices have dropped back, but there are signs that other pricing pressures have picked up. CPI inflation was 2.4% in September. It is likely that inflation will rise further above the target in the near term, but then fall back as energy and import price inflation abate.

Against that background, the Committee judged that an increase in Bank Rate of 0.25 percentage points to 5.0% was necessary to bring CPI inflation back to the target in the medium term.”

Every home now has nine potential buyers

There are now on average nine homebuyers for every new instruction coming onto the market in the UK, according to a report from a joint venture property company report.

New research from CBRE Hamptons International, a joint venture between two big names in property, shows that there are now on average nine homebuyers for every new home coming onto the market in the UK.

The Q3 report from CBRE and Hamptons international finds that due to a 20% year-on-year fall in the number of new homes coming onto the market combined with a 44% increase in the number of buyers, the market remains significantly imbalanced.

The result of this disparity is good news for sellers.

Average residential property prices increased by just over 2% in the third quarter, which means more than £12,000 has been added to average property values so far this year. CBREHI now expects total house price growth of around 9% for 2006.

Jennet Siebrits, head of research for the group, said, “Continuing strong market activity and limited availability has led to further price increases in the third quarter. The recovery of the London market now seems well established, with above average price growth in each of the last three quarters.”

“However, Northern Ireland and Scotland yet again outperformed the other regions, both recording double digit house price growth.”

Property transactions in August reached the highest levels since November 1988. In total there were 486,000 transactions in the three months to August, a 16% increase in activity over the year.

With mortgage approvals remaining stable at around 120,000 for the last four months, CBREHI predicts strong activity to continue for the foreseeable future. In addition, the RICS report that the stock of unsold property in September was at its lowest for 2 years, whilst house price growth was the fastest since October 2002.

Siebrits added, “Changes in tenancy regulations and the introduction of buy-to-let mortgages have reversed the long-term decline in the private rental sector. Buy-to-let investors have been particularly active and now account for around a third of the market, with up to 8% of properties in new-build city centre developments.”

Homeowners trade down to enjoy life

As downsizing becomes ever more popular it seems retirees are no longer downsizing purely for practical reasons, but rather to use the equity they have built up in their property over the years to fund a new phase of life, including once-in-a-lifetime holidays and college courses.
The main drivers for downsizing from a large family home to a smaller, more manageable property such as an apartment or bungalow, have traditionally been the prospect of minimal home maintenance, having fewer rooms to clean and a smaller garden to care for.

However, a report from Linden Homes shows the perception of retirement has changed dramatically over recent years, and more and more retirees are now focusing on enjoying life once they have finished work by travelling, going back to college or even buying their dream car.

It is estimated that one third of the property market is trading down at any one time, releasing on average £112,000 per transaction.

For retired couple Sally and Donald Lawson, the move from their four-bedroom Dorking home to a two-bedroom apartment at Linden’s nearby Deepdene Place, opened a number of doors. They not only made several investments, but the capital also allowed them to buy a new car and enabled Sally to take up a course in computing.

Sally said: “The extra money we freed up by downsizing from a family home has allowed us to really start enjoying life. I have always wanted to return to college and take computer classes, and now I have the funds to do it.”

“I also don’t have to worry about maintaining a family house, with its time-consuming garden and endless chores. Instead we have a low-maintenance home and can spend time doing the things we enjoy.”

Philip Davies, chief executive of Linden Homes commented: “People retiring now are of a property-rich generation, and many of them are using their equity wisely both to buy a more appropriate home and fund an increasingly active lifestyle.”

The home improvement divide

Consumers and estate agents are breeds apart in their views on the type of home improvements that will add value to a property. Whether considering extra space, a hot tub, removing period features or paving over the garden, they find it almost impossible to agree.

To add value, estate agents are more likely to favour improvements that create space or improve decoration, whereas consumers are more likely to support ‘leisure add-ons’ such as garden makeovers or hot tubs, showed research from Alliance & Leicester.

Seven out of ten estate agents say by far the best improvement to increase the value of your home is to add extra living space downstairs, yet only 50% of UK adults see the value of this work. According to agents, the next best improvements are a new kitchen (65%), extra bedroom/study (57%), and garage (42%), but far fewer consumers agree (at 58%, 42%, 38% respectively).

Consumers are also less likely to agree that internal, external decoration or replacing period features will add value.

More consumers than estate agents believe their property value will soar if they add a conservatory, have a garden makeover or even install a hot tub or swimming pool.

Around 5% of adults believe a hot tub or a swimming pool would add value to their property, particularly in younger age groups (19% of under-25s), while less than 1% of estate agents agree.

Detracting value

According to estate agents, the ‘improvements’ that are a sure-fire way to send a property’s value falling are poorly fitted cupboards and kitchens (65%), ‘loud’ external decoration (65%), polystyrene ceiling tiles (63%), and the removal of period features. Yet far fewer consumers agree (at 58%, 51%, 59% respectively). While 55% of agents say removing classic features will harm value, only 34% of consumers agree.

Most UK adults are more concerned about the damage that poorly fitted tiling, cheap laminate flooring, paved over gardens and woodchip walls might do to value, whereas many estate agents feel these to be the least important.

Perhaps influenced by the plethora of home makeover shows, consumers are least concerned by loud internal decoration – only 29% say it would detract value, compared to 36% of estate agents. (See Table for full details).

Men and women also disagree

Men value the quality of workmanship, while women worry about décor. Among the worst features for men are homemade cupboards (60% vs. 56% for women), bad tiling (55% vs. 49% for women) and cheap, badly fitted laminate floors (50% vs. 40% for women). Women are more concerned about the effects on value of patterned carpets (39% women, 27% men), removed period features (37% women, 28% men) and non-neutral external decoration (53% women, 46% men).

Richard Al-Dabbagh, senior marketing manager for loans at Alliance & Leicester, commented: “Whatever we may think of them, estate agents are the experts when it comes to what helps or harms a sale. They conduct valuations of properties on a daily basis so they know that, while you may be proud of your carpentry attempts in the kitchen, they will deter most potential buyers.”

“A personal loan can be one of the most cost effective ways to enable ‘home improvements’ but when considering borrowing money for home improvements it is vital that your planned alterations really do count as improvements!”

Irish housing crash forecast defied again


The Bank of Ireland's Irish Property Review has revealed that the Irish housing market continues to defy commentators predictions of a sharp correction and 2006 looks set to become another record year for completions, house prices and mortgage take up.

However, the Review predicts that 2007 is likely to see sluggish price inflation due to further deterioration of affordability on the back of higher interest rates.

According to the Review the consensus estimate for house completions in 2006 (85,000 - 90,000) is now too low. Completions in the first half of the year amounted to a 24% advance on the same period of 2005 and the conservative estimate for the year as a whole now looks set to reach 95,000, but could go as high as 100,000. The latter figure would represent around 24 completions per 1000 people, an astonishing figure given that the EU norm is around 5 per head of population. It seems likely that total completions will decline somewhat in 2007.

Dr. Dan McLaughlin, group chief economist for the Bank of Ireland Group said: "Despite the growth in completions, it is true that the Irish housing 'stock per head' is still below the EU average, implying a catch-up period might be expected, but few if any envisaged annual house completions of this magnitude, even given the recent surge in immigration and related growth in total population.”

“Clearly, there are no appreciable constraints on Irish housing supply, and although many may quibble with the planning process, and whether the distribution of new housing is optimal from a social perspective, the aggregate supply response hardly suggests market failure."

The implication is that demand too has been extraordinarily robust, underpinned by another year of strong employment growth (88,000 new jobs created in the year to May) and a surge in the population, in turn augmented by unprecedented levels of immigration (an inflow of 90,000 in the 12 months to April).

The Review highlights that house price inflation nationally has been in excess of 10% a year since the summer of 2002. The latest reading for Q2 2006 shows an annual rise of 14.1% in the price of existing homes across the country and puts the average price of an existing home in Ireland at Eur379,000.

In Dublin, house price inflation has been stronger at over 17%, and the average price of an existing home in the capital is Eur516,000. New houses tend to be cheaper (nationwide Eur308,000 and Dublin Eur397,000) but again show double digit annual inflation of 11.9% nationally and 14.6% in the capital.

By the close of 2006 the Review predicts a 14% increase but forecasts a slower pace of growth in 2007 and a 3% rise in house prices.

Mr. Joe Larkin, Managing Director, Bank of Ireland Mortgages said: "Mortgage lending growth is set to remain strong in 2007 however, given forecast house completions of 85,000. As a result, we expect gross new mortgage lending to rise to Eur27.8bn, up from Eur26.5bn this year.”

“This implies a mild deceleration in the pace of mortgage growth, reflecting a marginal fall in the number of new mortgages, to just under 120,000, and a slower pace of growth in the average mortgage size. This level of growth in mortgage lending would suggest a 22% rise in the stock of mortgage debt, down from over 26% in 2006."

The Review notes that rents have also picked up this year, rising by 6% in the twelve months to September, which also points to very strong housing demand. Dr. McLaughlin commented: "The latter no doubt reflects both the pace of employment growth (some 88,000 new jobs were created in the twelve months to May) and the sheer weight of population growth - inward migration alone amounted to 90,000 in the year to April 2006. A third factor relates to competition in the mortgage market, which has intensified significantly since the summer of 2005 according to the Central Bank's quarterly survey of credit conditions."

In its analysis of the commercial property market, the Irish Property Review notes that a 28% return is now expected this year given the strength of the market to date. However, this may represent a cyclical peak in the light of low yields now prevalent in the marketplace, so lower returns are expected in 2007, with a forecast of 12%.

House prices could be lower in 2010 than now


Leading accountancy firm PriceWaterhouseCoopers has said faith in rising house prices might well be misplaced and property was not as safe an investment as a savings account.

The risk that house prices will be lower by 2010 than now is likely to be as high as one chance in three, and the odds would jump to two-in-three if the housing market mirrored past form since the seventies, the firm said in its UK Economic Outlook today.

PriceWaterhouseCoopers based its prediction on the ‘Monte Carlo Simulation’ which marries future prediction of house price growth with analysis of how the market has behaved in the past.

The model examines three variants of the house price model (‘Historic Parameters’, ‘Optimistic Scenario’ and ‘Main Scenario’) involving different assumptions on the degree of structural change in the housing market over the past decade or so, to generate ‘fan charts’ similar to those used by the Bank of England to project inflation.

On the main scenario, the odds of prices being lower by 2010 than now fall to one-in-three, while on the most optimistic variant of this view this risk drops to just 7%.

On the optimistic scenario, that prices last year were still “fair”, PWC estimates odds of almost one-in-four that they will rise by another 10 to 20% by 2010, with a two-fifths chance that they will jump by 20% or more.

PWC’s study also examines the odds for prices until 2020. Because prices tend in the long-term to rise as earnings grow, it sees a virtually zero chance of house prices being lower by then than they are now on its central case.

The firm warned that people who relied wholly on house price growth to provide a financial cushion in retirement needed to consider the risk of price falls.

John Raven, senior economist at PricewaterhouseCoopers LLP, commented, “Despite the recent relative robustness of the UK housing market, potential home-buyers and investors should not underestimate its volatility in the medium term.”

Liverpool regeneration project stopped again

No sooner than the bulldozers were ready to bull their way into Liverpool’s Edge Lane this week, then another shot from angry resident Elizabeth Pascoe put them into doze-mode again.

Part of Liverpool’s troubled regeneration project was to finally get going on Monday (see our story Liverpool’s Edge Lane project starts) but a last-minute injunction obtained by angry resident Elizabeth Pascoe was served on Liverpool council leader Warren Bradley and others to stop the bulldozers moving in as planned.

The plan to demolish hundreds of homes as part of the Edge Lane road-widening scheme has been the subject of a long running battle spearheaded by Elizabeth Pascoe and her public interest lawyers. All those due to be ripped down have already been bought up and are not the subject of the court battle between Liverpool Land Development Company and residents but Pascoe’s lawyers argued that if the demolition work planned for this week went ahead it could jeopardise the judge’s final decision on compulsory purchase of the remaining homes.

Ian Hassall, development director of LLDC said: "We are currently consulting with our lawyers and considering the implications of this injunction and the options open to us and our partners."