House Prices - the Rise or the Fall?

There’s a lot of talk about the recovery of the property market and a lot of questions:

1) When will house prices stop dropping?
2) Are house prices on the increase?
3) At what rate will they increase?
4) What will they have increased by at the end of 2009/10/11?
5) Is it the right time to buy?

Some House Price Indexes are already reporting that the steady decline in house prices has come to an end and we’ve reached the bottom of the market, others completely disagree! That really doesn’t help at all if you are a first time buyer waiting to take the plunge onto the property ladder and perhaps more importantly it doesn’t help if you are a home owner sitting tight waiting for positive news that you can start thinking about your next house move again.

As always, it’s the ‘news’ that has such power over the property market. The ability of one of the major news agencies to report that house prices are on the increase can be information enough to get people heading for Estate Agencies to make sure they grab a ‘bargain’ home whilst they can. So what are they saying? BBC headlined today with a group of Economists suggesting that house prices would drop by a further 3% in 2009. Although not a massive percentage, it’s still the type of headline that discourages property investment and the headline itself will assist in proving itself correct no doubt….

Nationwide recently reported that their index had actually shown an increase in property values. Any positivity that could be taken from this announcement was quashed by Halifax releasing their figures to state the exact opposite. It is however agreed that in certain parts of the UK, properties values have been holding and increasing steadily throughout 2009.

In the BBC article, the Centre for Economics and Business Research forecast that whilst 2009 would see a drop in prices of around 3% the following year of 2010 would see property prices increase by 2% and then increasing by 3.6% in 2011.

The forecasts are quite timid compared to other suggestions that once property prices are confirmed to be increasing there will be a surge in the market immediately hiking prices by over 10%

Looking at property as a long term investment (15 years +) there will inevitably be rises and falls within this time period, but historic figures show that prices will always recover. It’s safe to say that property will never become a cheap asset to acquire and therefore it will always remain the most secure investment.

To see the property market recover completely there are many other very important external factors to consider such as, the effect of rising unemployment, successful quantitative easing measures to boost UK mortgage lending and then of course the relaxing of lending criteria to ensure these loans are accessible and useable to home owners who’ve found themselves with little or no equity remaining in their property…..

Predicting if, how and when the above factors will resolve themselves is almost impossible and to then base a theory around these to determine your prediction of future house prices is a rather flawed concept.

So it’s back to basics = Property prices could nearly be described as cheap. Property will never become cheap. You draw your own conclusions…..

For Bridging Finance and Bridging Loans visit www.benrandall.co.uk

Bridging Finance Loan to Value Increase!

Hot off the press, today a Primary Bridging Lender increased the maximum Loan to Value available for their Open Bridging Loans to 75% of Open Market Value for Investment Property.

The Finance is available up to 100% of purchase price.

Typical Terms:

1) 1.65% per month
2) 1.5% arrangement fee
3) No Exit Charges
4) £700 Legal Charges.

This is good news as Bridging Finance is often regarding as the pillar to the property market. Other Primary Bridging Lenders will undoubtedly follow suit with their Bridging Loan criteria, enabling more Investors to actively purchase with the availability of these additional funds.

www.benrandall.co.uk

Bridging Finance Summary - Why use a Bridging Loan Broker?

What is available in today’s market place and why use a Broker to place your Bridging Finance application?

If you’re looking for a Bridging Loan it is most likely to be for one of the following reasons:

· Capital Raising *
· Chain Breaking
· Refurbishment
· Speculative Deals
· Business Cash Injection
· Defective Property
· Development Finance
· Commercial & Residential Refinance
· Commercial & Residential Purchase
· Auction Purchases

* For any legal purpose.

Searching on Google will give you the obvious Primary Bridging Lenders out there, but perhaps only 25% of the Short Term Finance providers that exist.

Using a Broker for a Bridging Loan is often associated with additional cost, but in reality most Lenders charge the same arrangement fee whether the case is submitted via a Broker or not.

If their fee is 1.5% of the loan they may pay the Broker 0.5% of that. If the case is applied for directly they will charge 1.5% anyway.

With rates ranging from 0.75% up to 2.5% per month, choosing not to use an expert to place your case can be very costly. An additional 0.5% Broker Fee can be easily negated if you are paying 0.5% over the odds per month!

Fees and terms aren’t always as clear with non-regulated finance, although most lenders do make the upmost effort to make them transparent. Below are the fees you need to look out for and make sure they are detailed fully on your offer of terms:

· Administration Fees
· Arrangement Fees
· Legal Fees
· Completion Fees
· Valuation Fees
· Exit Fees **
· Broker Fees (normally non-disclosed)

** A fee charged to redeem the loan, typically equivalent to one month’s interest payment.

What are our Niches?

· Open Market Value Borrowing
· 100% of purchase price
· Large Loan Bridging Finance
· 24 hour funds
· No upfront fees
· Non Status Bridging Loans

For a no obligation Bridging Finance quote, please do not hesitate to contact us.