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Property Sales Boost for July

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According to HM Revenue and Customs (HMRC) there were 79,000 homes sold during the month of July – the same figure as June.  Although these are the highest figures of the year so far, this is 10,000 fewer homes than were sold in July of 2010.  At the height of the property boom in July 2007, there were 151,000 properties sold. 

Since that 2007 peak, mortgage rationing, and reluctance in sellers to lower their asking prices, has resulted in relatively few home buyers being actually capable of seeing through the transaction.  This result of this is only one in three available houses actually selling.Although mortgage lending increased slightly in the month of July, lenders are advancing substantially less home loans than they were at the peak of the market in 2007.  Total mortgage lending for 2011 is expected to be less than 40% of the total lending extended in 2007. 

Lenders are pricing loans against the level of risk; for a 90% loan-to-value mortgage, the best rate of interest that a borrower can expect will be somewhere around the 5% mark, but with a 60% loan-to-value you could get a much more reasonable interest rate of around 2%.

 

Whatever Happened to the £60,000 Home?

 

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Seven years ago the then deputy Prime Minister John Prescott announced plans to build homes for just £60,000 to help first-time buyers get on the market.  His argument was that new construction methods could help to bring down the build costs and that the home buyer would be paying only for the building and not the land.

Ten sites got the go ahead under the Design for Manufacture scheme, but only eight were actually built.  Of these eight not one managed to fulfil the bargain basement price promise – largely because the build price came in at £85,000 and the cost of the land was never separated, as promised, from the cost of the build.  This meant that the eco-friendly builds were sold at prices that ranged from £170,000 to £375,000.Meanwhile the coalition Government has promised to build a further 170,000 ‘affordable’ homes by 2015 under the guise of the HomeBuy initiative. 

Under the scheme, £250,000 has been promised to help 10,000 first-time buyers with their deposits.  Although no one is denying that this is a positive Governmental policy, it will assist less than 1% of all households in the country.