Blogs

Taking Advantage of Stabilising Property Prices

There is a new trend in the UK’s property market. With price stabilisation sweeping through many areas in the country, many people have resorted to strategies that allow them to benefit from the property price adjustment in the UK. According to new research from Abbey, there is an estimated two million homeowners who are looking to take advantage of the levelling out of property values.

Industry professionals are certain that the trend of renting before buying is here to stay. By renting most people see it as stress-free option – the absence of worry over maintenance bills or the need to be concerned about having an exit strategy – many people have decided that the current climate is appropriate and they are thus readily leaping feet first into the letting market. While there are those that have been inclined to question the validity of the strategy, many have chosen to take advantage of the rising number of people looking to rent.

Lettings firm Hamptons International has reported that since the start of the year, the number of people scouting for rental accommodations has risen by a third. The company states that the demand from motivated renters has been extraordinarily robust and that sellers have opted to rent out their property between sale and purchase.

Rental converts

One group of people have wisely turned to a strategy that not only help them beat the evening out of property prices but allow them to reap returns despite the doom and gloom that some in the industry are foretelling. Rather than selling their property in a stabilising market, they have decided to enter the rental market.

In addition to this, Abbey reports that more than 800,000 homeowners are planning to sell their properties and move into rental accommodations. These people referred to as renting converts intend to buy new properties when property values reach their all-time low. Considered an astute move, this strategy could lead to sizeable cash earnings – with some people looking at many thousands of pounds – as well as the possibility of purchasing a more superior home at a good price.

Rental regulars

Meanwhile, those who have already been in the rental market for some time have chosen to remain in the sector. Proof is Hamptons’ data revealing that over three-quarters of tenants are extending their rental contracts. This occurrence in addition to the growing numbers of people looking to rent is thus prompting a significant rise in rental charges. Tenants have been particular about locations with good commuter links to London and first-rate learning institutions.

Property investors and buy to let owners

Property investors and buy to let landlords also stand to gain from the balancing of property prices, particularly because of the rising number of people looking to rent rather than purchase their homes. According to the National Landlords Association, rents have risen by 13.8% in the past year. As this trend persists, buy to let investors are sure to reap significant revenues. Lettings company Bidwells says that demand has now exceeded supply and has cited some instances where rental returns have exceeded 10%.

Those thinking about making the most out of a healthy rental market would do well to remember the most important factor when buying investment property – which is to buy below market value. Veterans in the property investment arena know that the key to a good investment is to purchase at the lowest price possible price as you make your money when you buy not when you sell. And when you purchase from a distressed seller, you’ll be able to acquire a property for the best price thus enhancing your strategy and allowing you to sidestep the negative equity trap. When you’re able to achieve this on regular intervals, you’ll be ensured of doing well over the medium to long term.

So You Want to Invest in UK Property

Investing in property can be a daunting experience. It is an exciting venture nonetheless, but one that should be entered into with a fair degree of caution. Some developers and salespeople can sweet-talk and lure you into purchasing a property that is not as profitable as you would like. Some people make rash decisions when it comes to investing in property and come out with costly mistakes. Do not be too trusting, and do your own research.

Admittedly for most people, property investment is confusing. Property investment is often associated with the stigma of being risky and with many pitfalls. Nothing could be farther from the truth. It is hardly surprising that once property concepts are grasped – and it is easier than you think to do so – you could be well on your way to confidently investing in property.

The first thing you need to be is a discerning investor. Come armed with research and know the right questions to ask. Of course, the first thing you must know about the property is the reasonability of the price. It is not enough that the price of the property you are eyeing fits your budget. The more important question is if the property is properly priced according to fair market value. It is important to research the prices of similarly situated properties to assess the market. If you are purchasing a property as an investment or to make a profit, compute the yield you will most likely obtain. For buy-to-let investment, make sure that the rental income is enough to cover the mortgage. Finally, choose your location well. As with all property investments, location is the clinching point. Choose areas that are up-and-coming or developing, as property values in these places are most likely to increase as well.

Property in the United Kingdom is very much a promising and viable investment. A quick look at the population trend of the UK shows us why. The UK population is consistently on the rise and is projected to reach over 62 million in the next ten years. This trend is attributed to the fact that people are living much longer due to improved health care, less pollution, better working conditions and higher standards of living. Most of this growth is concentrated in the progressive part of south-east England.

Immigration has also dramatically altered the areas where population is concentrated, and thus where demands for properties, houses and rentals is greatest. For example, as the very populous baby boomers reach retirement age and prefer to move out of the bustling cities, suburbs, leisure areas and properties close to the sea or mountains is on the rise. Generally, baby boomers prefer quiet spots close to the city, as they still want to maintain close ties with family and friends. Another factor you might want to look into is regeneration areas. Some parts of Northern England, for example, are fast becoming hot property areas due to improved infrastructure, retail establishments and commuter lines in the area.

Because of these demographic and socio-economic shifts, property investment strategies also change. With some parts of the UK fast becoming up-and-coming property hotspots, it would be a good idea to get ahead of the rest and purchase an investment property below market value in these areas.

Shopping for Kitchen Cabinets Let the Adventure Begin!

When we decided to renovate the kitchen, we quickly realized that kitchen cabinets are expensive. There are a large amount of choices ranging from your average cabinet on the store shelf to the RTA – ready to assemble cabinets that are becoming more popular. Keep in mind, there is an equal amount of junk cabinets that are over priced. So how do you find a good cabinet at a fair price

We found various kitchen cabinet web sites and then stumbled across RTA cabinets. While laying out the kitchen ourselves, it became apparent that we could easily assemble the cabinets as well, so it then became an easy decision to choose RTA Cabinets.

Everyone is accustomed to going to a hardware store and paying high prices for kitchen cabinets. Now, you can go online, order cabinets, find a much larger and better selection, and have the kitchen cabinets delivered to your door. Another nice feature is that these cabinets are actually made of better material than the cabinets you would buy at Home Depot, IKEA, or Lowes. The preceding stores use wood faces (the door of the cabinets), but the rest of the cabinets are made of cardboard or particleboard. It sounds strange to say cardboard for a kitchen cabinet but these stores are selling cabinets that are made of high grade cardboard.

On the other hand, RTA cabinets are made of solid wood faces and solid plywood sidesbacks. RTA cabinets are imported directly, saving you money because there is no retail to increase the overhead expenses. If there is a negative aspect about the cabinet, it could be that they have to be assembled. Fortunately, all these cabinets can be assembled with a screwdriver and nothing else. Each cabinet has only one page of directions, so assembly can be done by almost everyone.

So remember that the typical RTA Kitchen cabinet is 30% to 45% less than a retail cabinet! The RTA cabinets are a better choice because of the real wood used in the cabinets and because of the lower price. Also, include the convenience of home shopping and the delivery to your house. Because of all this, the best bet is going online and looking for an RTA kitchen cabinet website.

Searching for Property in Majorca

First and foremost we are all aware there is a ‘credit crunch’; this is basically because of the poor exchange rate from the English pound to the euro.

Property, especially property in Majorca, has always been seen as a good investment. Yet it would appear those who are not economists are treating this time as a cautious time to buy. Although figures released by Estate Agents across Europe show that Property in Majorca remains one of the most buoyant and flourishing markets in Europe.

The more astute person will realize that in an ‘unsteady economy’ there are several panic buttons pressed; and I refer specifically to both the property seller and the property buyer. What happens is two fold … allow me to explain further.

First the buyer becomes cautious. They hear several comments and cannot comprehend exactly what they mean. They are listening to views from others who are also confused. This mass confusion instigates the pause button or a panic button to be pressed and the buyer backs off from making any decisions. Perhaps they will leave it for this year and start looking again next year.

Generally speaking all a buyer wants is a property in or around the location they’ve decided to buy in. The other main factor in making their decision is that the property will have a good resale value and be seen with ‘time’ as a good investment.

The opportunity to secure a good investment is never been so good … and that is because the seller is also pressing the panic button.

The seller panics … mainly because their decision to sell is during a slump. It happens everywhere in the world … when there is a property slump the buyer reduces their property price by more than the market needs. They do this to increase their chances of selling amongst the smaller number of buyers buying.

The seller instead of accepting a possible variation of asking price of say 20,000, they increase this variability to 50,000 or even 100,000. This will happen with both resale property and new builds.

Taking property in Majorca as the example in this scenario … in a so called property slump Majorca remains buoyant. Why It is mainly because Majorca itself is a sought after holiday destination. It always remains in the top few property buying hotspots year after year whether there is a boom or slump.

So when all the buyers are backing off through uncertainty, the sellers are pressing panic buttons. The property prices are reduced and the buyer that has nerves of steal captures a real bargain.

I am sure many will have seen ‘new resorts’ being built and the publicity and expectation being excellent. Yet if this new resort doesn’t get the infrastructure correct the property variations can be enormous. Majorca however has been a popular destination for 50 years and will remain as a buoyant property market. Meaning that an investment in property in Majorca is safe and secure.

I’ll give you a quick illustration of what’s happening with the property prices. In this particular example in 2007 a 4 bed villa in Majorca was valued at £400,000 (560,000 Euros approximately). In theory if the same property was up for sale in today it should be still valued for sale at £400,000. Yet to buy it in Euros with the poor exchange rate the actual price should be 480,000 euros. But … because the panic button is pressed they reduce it further than the exchange rate difference, and ask 400,000 Euros.

It is a buyers market and there are some bargains to be had!

Remortgage Versus Secured Loan Which Is The Better Option

Remortgage your property or take out a secured loan, such is the dilemma faced by many homeowners looking to raise cash funds. The better solution depends on a number of factors, the first of which is whether there is a redemption penalty for paying off your current mortgage early. Will the money you borrow be used to pay off your current mortgage

Some banks charge upwards from 8% of the mortgage as a penalty for prepayment. If your bank is one of these lenders, remortgaging early could cost you a pretty penny indeed. These penalties are frequently much more than the that of the secured loan alternative or second charge or second mortgage.

Consider whether you currently have a discount mortgage, with a discounted floating or fixed rate for the first two to three years. These types of mortgages are particularly likely to carry a prepayment penalty. While not very common, it is also possible that this type of common mortgage would also impose a prepayment penalty even after the discount period.

In the case where you do not have to worry about paying a penalty for prepayment, then you should consider the fees involved with taking out a secured loan. Importantly, it is crucial to note that that secured borrowing carries an interest rate generally much higher than what you would typically find on a mortgage, even though it is on a smaller amount. This will tend to favour a remortgage when looking at simply the APR charged on the loan, but that’s not all you need examine.

Bear in mind that the total cost of borrowing is greater than simply the interest paid on the loan. There are fees involving valuation, administration, legal, lender and potentially title and broker fees involved. Most of these fees, except for the last two, are not typically charged in a secured loan transaction.

Also remember that the remortgage is typically a much larger principal amount and so even if the rate on the mortgage is less than the rate on the secured loan, if it greater than your previous mortgage rate, you could end up paying much more in interest over time. You must look at your total borrowing costs, net present value, rather than simply the interest rates or your initial monthly outlays.

Also be sure to check the repayment terms for the different options you have to hand. You may find yourself locked in for longer than you are comfortable with, which could inhibit you from paying off the loan early if you have a cash lump sum available. Note that if you have had any recent credit difficulties, you may find it easier to take out a secured loan.

If you don’t have the luxury of time, a remortgage may not be the best option for you. The approval process for a mortgage typically takes several weeks and it may even be months before the funds are actually deposited into your account. A secure loan, on the other hand, can be approved in two weeks in a best case scenario, so this may be a significant factor for you to consider.