Bricks To Bust. Is A Housing Market Crash Coming?

"Britain 'is on the brink of the worst house price collapse since 1990s': experts predict property costs could plunge by FORTY PER CENT ran the headline in a well know Sunday newspaper this week."

There is no doubt that there is some uncertainty in the market place predominantly caused by the current political situation and affordability for deposits but here is our take onthatbig headline.

A Professor of Economic Geography from the London School of Economics quoted in a Sunday paper this week that negative equity could be on its way back with house prices falling as much as 40%!

His viewpoint pointed to the fall in real incomes alongside low inflation and a rippling trend out of the London marketplace.

Estate Agents comments responding to the story, painted a different view to the one being portrayed in the newspapers reflecting a more balanced editorial about the current state of the property market and what potentially lies ahead.

Another report last week cited the National Association of Estate Agents (NAEA) referencing their latest figures revealing more than three quarters of homes are selling for under the asking price.

Considering asking prices are set generally at a realistic value based on market comparables we did an analysis of our 5 offices' sales for the last month, to look at how the headlines compared to our own statistics.

The figures from Bramleys show our sales achieving from 97% to 103% of their asking prices across a decent sample size of sales.

As we have said since we first started as Estate Agents and despite working in many different economic climates, pricing at the right level to start with means you won’t see many reductions or wild ranges of data. The key is getting the price right at the outset!

The actions of the banks and mortgage lenders are usually a good indicator of the economic situation so before we shut up shop from all the doom and gloom talk we looked at the financial sector by speaking to Bill Keighley our Head of Financial Services.

“It’s true to say that The Financial Conduct Authority (FCA) have been pressing lenders to move to a more prudent approach regarding mortgages and further rules are being put in place over the next few months to ensure that the property bubble doesn’t burst again but that doesn’t mean that lenders won’t be open for business as usual. They most certainly are!

If you are working, have a good credit history and at least a 5% deposit then you will be able to obtain a mortgage and even if your credit history has been impaired you could still obtain a mortgage although will probably need more than 5% deposit.

Even if you are retired, there has been a huge step forward in ‘later life lending’ with mortgages available for people up to age 89. It is usually the smaller building societies doing this and none of the ones doing this are based in West Yorkshire.

Buy to Let lending is the area that has seen the most changes and in many respects this has made BTL a more complex mortgage to apply for given the various rules changes.

There is also the added stamp duty on buy to let which has had an adverse affect on this sector of the market.

Again, lenders are keen to lend but you do need to seek a professional mortgage adviser who can look at whole market and navigate through the options available for you.

When you know you want to buy a house it is important that you prepare in advance to give yourself the best chance of being accepted:

  • Get a copy of your credit report and make sure that the information held is correct
  • Get on the electoral roll if not already on it
  • Ensure your current account shows good conduct and stay in credit if you can.
  • If you are self-employed, make sure your accounts are up to date with HMRC. Lenders will not use business accounts that are over 18 months old.
  • Lenders will need to see 3yrs self-employed accounts and/or 3yrs documents called SA302s and 3yrs Tax Year Overviews which are available from HMRC (they can take 2 weeks to be produced so call them now or ask your accountant)

Go and see a mortgage adviser who can give you advice from the whole of the market which gives you more choice than simply seeing your own bank, which is becoming more difficult to do anyway with branch closures.

All banks have different rules and amounts they will lend you so it is important to see someone who knows what they are doing.

I see so many people who try and get a mortgage approval themselves and apply to a lender who I know wouldn’t accept them only to get declined.

Recommendations from friends are another good way to find an adviser and naturally I would be delighted to help you take your next steps too”.

Having been in the marketplace since 1958 there is no doubt that the climate is not the easiest but it is a million miles away from the picture some of the press like to purport to sell their papers.

People will always want and need to move home. Make sure you work with real experts to ensure your property plans are a success.

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