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There have been a lot of grim stories in
the media. But the housing market is more complex than the headlines. Could now
be a good time to snap up a bargain? We asked the experts…
The housing market has been suffering since the credit crunch, but behind the gloomy headlines is a more complicated reality.
While house prices fell for the fourth month in a row over January, nationally the falls only affected 23 per cent of the country, compared to 30 per cent in December, leaving 77 per cent of the country unaffected.
And although loans for house purchase are
down, and buyers are adopting a wait-and-see attitude, website traffic reveals
that people still remain very interested in bricks and mortar.
Our stat
Commenting on the figures, our own expert,
says: "A cooling market has put buyers in the
driver's seat, and with prices falling in some areas there are undoubtedly
deals to be done.
"
That point is borne out by recent figures from Home track revealing that sellers are accepting offers at an average of 93.5 per cent of asking price. Not great for them, but a relief for struggling first-time buyers.
But does it really make sense to buy now? We asked seven experts from the industry to read the tea-leaves.
1. The Biggest Bear In The Forest
First up, let's start with the man who thinks the market still has a long way to fall.
Jonathan Davis, Chartered Financial Planner
and Managing Director Spokesman for House Price Crash, has been waiting a long
time for a downturn and is gleefully predicting a bloodbath:
"It's a great time to sell, but there's no one buying. Buy-to-let is effectively dead so no one is buying at the bottom of the chains and they are falling apart.
"I think prices will fall by about ten
per cent this year, and around 35 per cent over the next four or five years,
but the timing depends on which part of the country you live in.
"We should be looking at house prices
falling until 2010 in
"If you're trading up it's a terrible time, but it's a brilliant time to rent because there's a massive glut of properties available and owners continue to offer great deals."
2. The Bullish Economist
Economist
"It's a good time to buy as long as
you're in it for five years or so, not looking to make a quick buck.
"Over the longer term house prices will grow because of lack of supply. There's population growth, the green lobby, immigration, divorce, demand for holiday homes, and with a fixed supply and growing demand there's no way other than up.
"We've probably reached the end of the
boom, but if you're wanting to get onto the ladder it doesn't really matter
when you get on. Prices won't crash, and in the long term you can't lose."
3. The Buy-To-Let Guru
As for buy-to-let, David Lawrenson, author
of the best-selling
Quite the opposite, though he urges investors to do their research:
"It's an extremely good time to buy
investment property. Vendors are willing to take offers and you can generally
get very good deals, depending on the area.
"First-time buyers are getting scared by the headlines and they're choosing to rent. Rents are going up very strongly and will continue to do so. I'm buying, and the other investors I know are very excited about the opportunities available now, especially from the auction houses.
"One problem for both first-time
buyers and buy-to-let is that though the base rate may be coming down, the
margins charged over the base rate have increased and the fees are going
higher.
"And there is an oversupply in the landlord market of one- and two-bed flats in the cities. Look for properties anywhere where the transport infrastructure is improving and buy two- and three-bed houses in areas with strong economies. Avoid the oversupplied one- and two-bed identikit flats.
"If I was a first-time buyer I'd get
on with buying now. Come the end of the year the opportunity may be gone."
4. The Mortgage Broker
Given recent headlines about mortgage
lenders scaling back and rebuilding profits, we asked a broker, David
Hollingworth from independent mortgage broker
"In terms of getting a mortgage, for the vast majority of mainstream borrowers with a deposit who are not looking to stretch on their income, there's not really a problem.
"While tracker
"High loan-to-value pricing i
"For some people this is about timing. It's not such a bad idea to keep an eye on the market at the moment. People are waiting to see if they hang on for six months whether they'll get a cheaper property."
5. The Buying Agent
Tracy Kellett at BDI Homefinders, who works
on behalf of buyers, says the market is variegated at present, and is by no
means in freefall:
"We're finding it a two-tiered market. The differential is quality in terms of both location and standard of the house. We're seeing the lower end stuff, for example the buy-to-let properties, going south pricewise.
"Good quality properties, such as
traditional family homes in good areas are holding their own. The prices of
these properties aren't falling because of a lack of stock and the fact that
there are plenty of buyers who have got enough money.
"We don't believe people buying quality property are going to see much growth, but prices are not going through the floor. The alternative, renting, is expensive and there's a lack of good rental stock.
"There are much more considered
purchases going on. The madness of the spring and the summer is over.
"Last year I was at a viewing in Ealing where there were thirty people in a semi, and they were having to make a decision under pressure on a £1.3 million purchase. Now it's a much more realistic and considered market."
6. The London Estate Agent
Julian Reid from Savills, Stoke Newington
Branch says:
"I think it's a much better time to buy than this time last year if you intend to stay in a property for the medium term.
"Selling is slightly more difficult
because there are not so many buyers. But anything that comes on at the right
price still sells.
"For our bread and butter, a two-storey terraced house, we'll generally get an offer within two to three weeks.
"Oddities are taking longer. But you
will always get the odd one or two with fantastic demand, for example, because
of school catchment areas."
7. The Provincial Estate Agent
Neil Rose at Savills, Harpenden, says:
"We're being positive because we're getting good quality registrations and a lot of viewings and bids. The underlying view seems to be that people are just getting on with it.
"We do a lot of open houses and
recently I got about 30 viewings on a detached house close to the station and
good schools.
"In the mid range, people aren't so affected by borrowing. Some people were worried at the lower end but flats in the £200-250,000 range are getting good viewings too. But action on the £1 million to £1.5 million sector is not so strong.
"I don't see property prices as drastically different to last year. Asking prices are coming down but that tends to be on properties that were too high to start with. I don't think anyone's being tactical, they're just moving when they need to."
It’s anticipated that one in five pensioners will wave goodbye to British soil in favour of foreign shores by the year 2050...
So says a report from the
Why this seemingly mass exodus of elderly
Brits? There appears to be three main
reasons
1. We’re a healthier and wealthier population who are living longer and retiring earlier.
2. Property costs in many overseas
countries are still at levels far lower than we’re used to on British shores.
3. Low-cost airline
And, as a
Mutual residential rights mean that as a
Planning to retire to a non-EEA member country is more complicated, however, and would require discussion with the Foreign and Commonwealth Office about the particular regulations of that country.
Research Fellow
Jon Jones is one of the thousands of Brits enjoying an early retirement overseas.
Living in Oliva in
"You’re not coming on holiday when you
come here and you have a whole new set of rules and regulations to adhere
to," explains Jon. "There’s a
long list of things you need to do if you want to live here worry-free
legally. Luckily we have nice Spanish
neighbours who have helped us.
"Best recommendation is that if you’re not sure then rent over here for a year and look around," he continues. "That way you get a good idea of what the place is like all-year round in all weather, and also what the locals are like."
Jon also suggests checking out some of the ex-pat forums on line, where you can seek advice from people who have already made the move overseas.
Knowledge is Power
These sentiments are echoed by Gordon Lishman, Director-General of Age Concern, who comments: "Retiring abroad can be a great experience for many but the key to a successful move is knowing what to expect.
"Thinking ahead about your situation
changing and what health and social care services and benefits will be
available may help people to avoid potential problems."
Pensioners tempted by the prospect of retiring abroad should research the following five areas before boarding the plane and bidding goodbye to Blighty: pensions; tax; health; property; and coming home if it all goes wrong.
1. Pension Plans
• You can get a forecast of your state pension entitlement from the HM Revenue & Customs (HMRC) or The Pension Service.
•
• Most countries outside the EEA freeze
pensions at the level of first claiming – this includes
• Private pensions should be payable worldwide but check with individual companies as some won’t pay into non-British bank accounts.
2. Taxing Matters
• Each country’s tax laws – and therefore how much tax you’ll pay - vary widely so do your homework: the HMRC lists the tax rules for many countries.
• Research the regulations governing income
tax, inheritance tax, wealth or capital gains tax, gift tax, and if there are
any extra taxes that you are liable for.
• Make sure you are classed as non-resident
in the
• Once you have non-resident status, you
will be exempt from paying
• Tax matters tend to be very complex so it’s best to seek professional advice.
3. Good Health
• The International Pension Centre (IPC) in
• Once you arrive in your new country, register with the local authorities regarding welfare and health entitlements.
• If
you are of pensionable age, ask the IPC for an E121 form which allows you the
same healthcare entitlements as the locals - this usually involves paying for
some if not all of your treatment so it’s best to also have private medical
insurance.
Pre-retirees will need an E106 form which
entitles you to two year
• And, as a general rule of thumb, if you
were receiving benefits such as disability allowance or widow’s pension in the
• When it comes to wills, it is advisable
to do this in your new country of residence as one drawn up in the
• Again, the best way of doing this is to seek professional advice from a lawyer specialising in your particular country’s regulations.
4. Overseas Property Purchase
The main options for buying your oversea
1. Buying outright – if can afford it, this is the simplest method.
2. Re-mortgaging your existing home – if you have enough equity in your British home and don’t mind holding on to the property, this is a good option.
3. Equity Release – generally suitable for older homeowners – minimum age is usually 60 – and allows you to release the equity in your home.
Various schemes are available so seek advice to find out which may be suitable for you, and check with the HMRC if the income released is taxable.
4. Foreign Mortgages – taking out a foreign mortgage may be an option for younger retirees.
It’s becoming more common to secure a
foreign mortgage in the
If organising a mortgage in the country where you’re purchasing, hire an international broker and an independent lawyer who speak English.
5. Alternatively, you could rent or arrange
a home exchange initially which gives you a taste of the lifestyle as well as
time to house-hunt.
5. No Place Like Home
Of course, for some people the reality of living abroad doesn’t live up to their expectations and they choose to return home.
Age Concern’s Gordon Lishman comments:
"Retiring to another country is very different from holidaying there.
"Different customs and the strain of being away from family and friends are common complaints that cause many older people to re-pack their bags and return home."
But what many people returning to the
Everyone, including retirees, is eligible
to sit this test, but the reality is that it depend
Although it doesn’t apply to people claiming state retirement pensions, it does affect housing and council tax benefits, and pension credits.
To Go or Not To Go
So, there’s no denying that there’s a lot of red tape and research to wade through before you reach the sun and sangria stage of overseas retirement.
But if it’s all beginning to sound like too
much hassle, here’
"We can more or less depend on the
weather, eat out for as little as eight euros each for a menu
Which, you have to admit, sounds rather more appealing than bingo, bowling and battling against the inclement British climate.
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