According to Zoopla buying property is now cheaper than renting in 47 of the 50 largest towns and cities across the country.

However Zoopla have been a little bit loose with their maths to arrive at that conclusion.

They have taken a 100% Loan-to-value mortgage product (which probably does not exist) and compared the monthly costs with renting.

The website “letting agent today” goes on to explain that to compare the cost of buying versus renting, Zoopla analysed the current asking prices and rents of over 78,000 two-bedroom flats currently on the market, comparing the rental cost to the cost of ownership based on servicing an interest-only mortgage at 5% pa.

If you want to move, do some research on the internet about different communities and neighborhoods. Using the web, you can nearly become an expert on the area without even leaving your home. Consider the salary margins, population and unemployment rate of your desired location before purchasing a house there so you ensure that you will love where you live.

Swansea, Plymouth and Bournemouth are the only three locations on the list of 50 towns where it remains cheaper to rent than buy today.

In contrast, Milton Keynes comes top of the list of locations where buying beats renting and where renting is 36% more expensive than owning, leaving renters £2,436 per year worse off on average.

Get a warranty for the house. When you are buying a new home from the person who built it, or from an owner, get a warranty. Builders should be willing to warranty their home products for a certain time period. Previous owners should be willing to purchase a home warranty for at least a year to help you offset any impending repairs.

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Read more about this subject here: Is renting really more expensive than buying property?

Companies will no longer be able to offer customers mortgage suggestions about a non-advised basis under proposals in the Mortgage Market Review. And whilst the activities of commercial mortgage brokers are not currently regulated it could have a knock on effect.

The FSA says it felt borrowers could not make the main difference between what was advised and non-advised and therefore proposes to get rid of the non-advised sales process and instead require that mortgages are sold either on an advised basis or, in the limited circumstances on an execution-only basis.

The FSA proposes however to permit high net worth people and mortgage professionals to opt-out of receiving advice and to be able to buy a product on an execution-only basis, irrespective of whether the sale involves some form of interactive discussion with an intermediary.

Consumers can also ask for execution-only, however they must know precisely what they want to buy. With regards to a home loan, the FSA expect the consumer to know, and to be able to supply the intermediary with information about the product they want, including:

• The Lender’s name
• The rate and type of interest product, including length of term.
• The price or value of the property
• Whether they want an interest-only or a repayment mortgage

Customers who the FSA class as vulnerable, such as people looking for right to buy, equity release, sale and rent back, and those consolidating debt will not be able to opt out of advice. The only exception being sale and rent back customers who can reject the advice being offered.

The FSA’s consultation is open until March 2012 with the final rules expected to be in place in the summer of 2012. Brokers who are not currently qualified would have until 2013 to implement the rules. However the timescale could be moved depending on the state of the UK and Eurozone economies.

All of the above are contained in the FSA’s Mortgage Market Review which is a long awaited shake up of how mortgage lenders interact with their existing and potential customers. There is a potential negative impact for property developers and commercial customers as although these products specifically will not be regulated it is hard to see how many commercial mortgage brokers will remain in business.

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Some recent statistics show that the lending situation is starting to recover.  The Council of Mortgage Lenders has released figures that show a 20% increase in lending from February to March, and although the lending figures are down from a year previously.

Throughout the recession house prices and mortgage lending dropped consistently over a number of months, and consequently the market place becoming stagnant.  So if these figures show that things are starting to recover it has to be good news, not only for the residential market but also for commercial and buy-to-let borrowers.

A spokesman from the Council of Mortgage Lenders confirmed that it would appear that the mortgage market is moving again, with more people finding that they can now obtain the financing that they require in order to help pull themselves out of their own financial crises.

Mortgage Application Fees Going Up.

In a separate report it has been revealed that the application fees associated with mortgage and remortgage lending have increased considerably over the last 18 months.  If you are considering a remortgage, it is essential that you fully research the total cost implications of switching lender – not just the headline rate.

Between September 2009 and March 2011 the average application fee charged on mortgage and remortgage products in the UK increased by just under £100. That’s the findings of recent research from a leading price comparison website and featured in the specialist finance publication Mortgage Strategy.

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Paragon have announced that they are entering the buy-to-let lending market again.

It seems that the new range of buy-to-let products will be targeted at professional landlord investors.  Paragon will apparently commence lending with immediate effect through a panel of brokers and will widen distribution over time. Paragon says it will also accept direct business.

If the investment institutions are buying securitised debt again then it is quite likely that others will start to follow. Apparently Paragon have managed to secure a £200m mortgage warehouse facility from Macquarie Bank.

Paragon have publicly stated that:

“The facility will allow the group to recommence lending to the private rented sector, a segment of the UK housing market that has seen considerable expansion in recent years and in which the group has been a major participant. Demand from tenants for rental properties in the UK has been strong and is expected to remain buoyant going forward.”

The fact that Paragon are back is not so special in itself, their rates were never that great.  It does however show that lenders can start to access funds again, which may come as a surprise on the back of reducing house prices.

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Read more about this subject here: Paragon to start Buy to Let lending again.

The government has announced that the Home Information Pack scheme (HIP’s) will be extended to cover 3 bed houses from 10 September 2007.

Despite opposition to the initial introduction of HIPs the government has decided to push ahead with the expansion of the scheme.  The Home Information Packs were originally scheduled to be introduced for all homes from 1st August 2007, but after a farcical u-turn in July only 4 bed houses were initially covered.

The original brief for HIPs was to find a way to improve the house buying process in England, not least to speed up the house buying system. However following an EU directive that all houses must have an Energy Performance Certificate (EPC) the government decided to add the requirement to the HIPs.  This would have worked had they no been forced to withdraw the Home Condition Reports (HCR) from the packs.  If you have a low tolerance for acronyms then  this whole matter could start sounding like double dutch (DD).

HIPs Being Introduced Gradually

Opponents to the introduction of HIPs had hoped that the government would take the staggered launch as a opportunity to review the whole matter and possibly make some positive changes.

Claims that an EPC will somehow help to reduce carbon emissions are somewhat strange given that the observations in the report are only advisory and carry no weight.  Not least given the age of most properties being bought and sold, it is strange to think that an Energy Efficiency Report will recommend that a listed building fits uPVC windows which is in direct opposition to listed buildings regulations.

HIPs can cost around £500 and take about 5 days to compile.  The finished report should include:

• Evidence of title
• Copies of planning, listed building or building regulations consents
• A local search
• Guarantees for any work on the property
• An energy performance certificate

One of the factors which delayed the initial introduction of HIPs was the lack of home inspectors, the government recently confirmed that there are enough inspectors to further expand the scheme.  So, it seems likely that HIPs will soon be required for all properties changing hands.

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unregulated been a lot of talk in the press about homeowners applying for mortgages with “[tags[adverse credit[/tags]“.  The popular press tends to concentrate on the problems this causes for for the applicant, but the issue of adverse credit applications creates problems for brokers and lenders too.

The headlines have been caused by the recent problems in the US non-conforming market.  The finance industry regards any application with adverse credit as “non-conforming” and in the the US lenders have been granting mortgages to people who subsequently were unable to meet their repayments.  With disastrous consequences for some of the major lenders.

With rising interest rates the same problem could easily arise in the UK market, and this is obviously causing concern to lenders and the industry regulators.  The Financial Services Authority (FSA) is watching the sub-prime market carefully.  Sub prime is yet another piece of jargon for adverse credit.

The result of all this is that the FSA are keeping a close eye on the activities of sub-prime lenders and brokers, but it could be argued that the only long term solution to debt problems is the education of borrowers.

How Common is Adverse Credit

There have been plenty of horror stories in the press about rising levels of debt and its consequences, but just how bad is the situation? In the first quarter of 2007 there were (according to the insolvency service) 30,075 insolvencies recorded in England and Wales, roughly a 50% increase on the same period last year.  By the end of April 2007 the total personal debt in the UK was £1,325 billion.

The most worrying statistic is probably the levels of secured debt.  Amazingly there is £1,112 billion secured against homes in the UK, this includes first charges (mortgages) and second charges (secured loans).

With the recent interest rate rises starting to bite there is inevitably going to be an increase in the number of missed payments and this would add to an already increasing number.  For example, recent figures show that around 75,000 payments are missed every month.

Lenders are well aware of the difficulties faces by adverse borrowers, and they are also aware that when someone with adverse credit applies for a mortgage there is (statistically) a good chance the borrower will experience problems in the future.  The FSA has made it clear that it expects lenders to treat borrowers who experience financial difficulties fairly.

To cope with the increasing numbers of missed payments lenders have special departments to look after arrears and missed payments.  The main function of these departments is to try and help the borrower bank on track by arranging payment plans.  However with so many missed payments each month, there will inevitably be some lenders who fall short of the standards expected by the FSA.  The most aggressive tactics are likely to be employed by the un-regulated sectors i.e. buy to let lenders and commercial lenders.

Whatever your circumstances the advice from all the debt counseling services is clear,  talk to your creditors and seek help as soon as you realise there is a problem.

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Are [tag]HIP’s[/tag] delayed or cancelled? The government (in the form of Ruth Kelly) has now said that [tag]Home Information Packs[/tag] will be required for all properties with four bedrooms or more from 1^st August 2007. The whole affair has been an embarrassment to the government, with the original proposals stripped to the bare bones.

Whilst recently there has been much talk about Home Information Pack training deficiencies, the debate over the value of [tag]Energy Performance Certificates [/tag]and the number of qualified Domestic Energy Assessors it should be remembered that campaigners have been lobbying against HIP’s since they were first proposed in 2003. Many well qualified commentators have said that they whole process is such a mess that they can never come into force.

So what actually happened to cause the government to back down in such a dramatic manor, and at such short notice? The most damaging blow probably came last year when Home Conditions Reports (HCR) were removed. However the bill survived a late challenge from the Conservatives in early May, and was due to be debated again the the house of lords (although the outcome of that debate would not have been binding). The final and most deadly attack came from the Royal Institute of Chartered Surveyors (RICS) who mounted a legal challenge in the form of a judicial review. Faced with this, and emerging evidence that there were not enough Home Inspectors to carry out the task it would have been an act of madness to carry the scheme forward on 1^st June.

Spare a thought though, for the people who have invested considerable amounts of money in training to become Home Inspectors or Domestic Energy Assessors. Had HIP’s gone ahead on 1^st of June for all properties on the market these people would be looking forward to a very profitable summer. Instead they are now in limbo, at best they can hope that they will be producing Energy Performance Certificates (EPC) for approximately 17% of the properties on the market.

What do you think about the introduction of Home Information Packs? Most importantly do you agree with the view that anyone who opposes HIP’s is “anti-green”?

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Some of the companies who have invested the most in the provision of Home Information Packs have started to release so of their pricing plans. LMS are believed to be the first to market with their offering. Their report will consist of an Energy Performance Report (EPC) and all the necessary local searches.

LMS’s version of a Home Information Report will cost between £350 and £550 depending on the value of the property, plus an extra £75 for leasehold properties. Some of these packages will include access to systems such as Home Navigator which will allow homeowners to view satellite images of the area. As we get nearer to the start date for HIPs the competition is bound to heat up.

There will be numerous variations on a theme, and doubtless some HIPs providers will start to include added extras such as location reports and details of local schools etc. These extras will probably have more to do with profits that providing real value for money. Meanwhile, the Association of Home Information Pack Providers (AHIPP) has come out fighting against the many critics of the scheme. AHIPPs has clearly stated that in their opinion there will be plenty of Energy Assessors trained and ready to produce the Energy performance Certificate. Critics of the scheme.

[tags]hips, home information packs[/tags]

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Estate agents, mortgage brokers, and solicitors are all well aware of Home Information Packs (HIPs).  But how many consumers are aware of what’s install for them when the new regulations come into force on the 1st June 2007.

The original intention behind the introduction of  Home Information Packs was to speed up transactions within the UK housing market. The original idea would have seen the HIP include a Home Condition Report and Search details included by the seller when the property was put on the market. Two years later and the project looks a little watered down. In the summer of 2006 the Government had to concede that including the Home Condition Report (or basic survey) in the pack was not going to be viable, not least because the required 7,000 home inspectors could not be recruited and trained in time.

The Home Information Pack that will come into force this year looks a lot different to the original proposal.  The Home Condition Report has been replaced by the Energy Performance Certificate (EPC)  The EPC is intended to give consumers information about the energy efficiency of the property they intend to purchase.  Although this is a noble idea in itself,  it is difficult to see how it enhances the stated aims of the Home Information Packs, namely speeding up the house buying process.

So, from the 1st June 2007 sellers will be able to  market their homes as soon as the EPC and the key legal documents are provided. A HCR can be included if the seller wishes to commission one, but it is no longer compulsory.  Surprisingly, searches will not need to be included in the pack, they simply need to have been “commissioned”.

A cynic may suggest that the biggest benefactor of the introduction of Home Information Packs will be Estate Agents, as they will naturally pick up most of the fees.  Considering that Estate Agents are the least regulated and least accountable parties involved in the house buying process (and also amongst the most complained about) it will be interesting to see how they perform.

Properties which go on the market before 1st June can stay “HIPs” free until March 2008, rather than the original October 2007 deadline, this was possibly intended to try and offset a surge in properties going on the market.

What do you think about the introduction of Home Information Packs? Are you intending to Market your property before the deadline?  Let us know what you think.

[tags]home information packs, hips[/tags]

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Read more about this subject here: Home Information Packs (HIPs) Are Coming