Here's a strange one. Colin and Collette - immediately that sounds as if I'm making this up, but I'm not (they are) - design their own Lancashire palace on a computer, print it out and use it to get planning permission. Now that the property's built, however, it's bigger than they'd specified, and they might face having to tear it down. So how did it happen. Apparently, the computer automatically scaled the blueprint down when it printed it out. Hmmm. The council isn't convinced, and points to 15 other discrepancies.
Seven of London's boroughs are in the country's top ten for noise complaints. Which means you're either noisier than the rest of the country, or quicker to complain. Westminster topped the list, confiscating five sounds systems and issuing an ASBO, followed by Haringey and Tower Hamlets. In my experience, neighbours are split into either perps or complainers... and rarely cross the line. Which one are you?
That's right, since January the Government's £200m initiative has helped a total of six families, up from two in just an entire month. Your domestic economy is safe in their hands. More here.
Labour MPs Ann and Alan Keen have a main home and an expenses-aided second home less than ten miles apart. They don't seem to have been spending much time in their Brentford main home, however. If they had, they might have noticed the squatters have moved in.
And these must be the most popular squatters in London.
Joe's back now - he has just popped into a neighbour's house to use the internet and download details of Ann Keen's expenses. He is not impressed. Another neighbour knocks on the door with some milk. "Good on you," he shouts.
Here's a strange one... 1980s right-to-buy legislation including a covenant excluding selling a property on to anybody who doesn't have ties to the region... in this case, Dorset.
There's been chatter, in recent years, of similar covenants returning, in a bid to stop second home buyers pricing locals out of rural beauty spots. While this former council property languishes on the market, its value diminishing, I'm sure the Collins's will be keen to tell all just what good such a covenant does for the local community.
HM Revenue and Customs report a 7% rise in the number of residential properties sold in May, bringing the monthly total to its highest since October. This follows yesterday's report by the British Bankers' Association, claiming a steady six-month rise in mortgage approvals.
Don't be offended if every day isn't Valentine's Day between you and your lender. You're in good company. According to an interesting piece in the Daily Mail, some lenders are paying borrowers as much as £25,000 to get rid of them.
Ah yes... paid to be somebody else's customer... the sign of a healthy mortgage sector. You're most likely to be made the offer if you're in negative equity (obviously); in which case... jump at it.
A terrific piece in Citywire... about how purchasers of £500,000 plus properties can avoid paying Stamp Duty. There are a number of systems, but what they share is a nominal "middle man"... a company that pays "85% of the purchase price", leases the property to the buyer with an option to transfer the freehold. Because, technically, the property hasn't actually changed hands, no Stamp Duty is payable. It's complex, involves lawyers who'll take up to 50% of the duty saved, but it's real and according to Citywire, it's happening.
Manhattan's East 5th Street residents, caught up in an ongoing feud with Cooper Square Hotel (a trendy white media palace encroaching on the vanishing NY keep-it-real grit of the 5th Street tenements), have decided to air their dirty washing.... hanging soiled pants on a washing line mere inches from the noses of the hotel's residents. According to experts, the brown stains "were not authentic", but message was clear.
Turn up to a viewing at an expensive house in your best togs, boasting about your homes in Jamaica and Barbados, make a cash offer, ask if you can rent in the period up until completion because you've sold your previous property, and then move in claiming squatters' rights. Hmmm, crafty. But who could pull that off?
A couple in their 60s called Richard and Hazel Jerome, apparently.
Council of Mortgage Lenders figures show a 16% increase in lending for new homes in April, bringing the figure to its highest since October (although still 28% lower than this time 2008). Interestingly, affordability among first-time buyers also continues to improve. The average ftb loan is now 2.96 times income... but includes a hefty 25% deposit.
Quite frequently, according to Property Portfolio Rescue (one of those cash-for-your-home companies). Here, they claim chains are falling apart left, right and centre, due to offers being withdrawn for no apparent reason at the very last minute. The idea, they argue, that it's becoming easier to get a home loan is illusory.
A survey by PropertyLive - the National Association of Estate Agents' property portal - suggests one in five will take a viewing simply for a snoop... with neither the intention nor the means to purchase a property. More here.
Another day, another drip of positive data. Mortgage approvals are at a 12-month high, after April showed a third consecutive monthly rise, according to the Bank of England. April showed an 8% rise on March, 27% up on the six month average.
The BBC is reporting that Jacqui Smith is about to announce her resignation (as Home Secretary)... the highest profile casualty of the expenses scandal.
.... as cash-strapped parents turn from private education and go looking for the best the state has to offer. The data is from PropertyIndex.com, and comes just as private education has started to shrink for just the second time since the early 90s.
More data by National Association of Estate Agents property portal PropertyLive... this time showing that almost seven in ten wannabe first-time buyers have given up hope about being able to afford to step onto the property ladder. Eagle-eyed readers (and sub-editors) will have spotted that if they've given up hope, they can't be wannabe ftbs... but we know what they mean. NAEA-sponsored... the data appears to be directed toward the Government... a disguised call for help in loosening lending criteria.
The article goes on to cite the new Lloyds 95% mortgage - which accepts a 5% deposit on the basis that 20% of the loan value is held in a Lloyds savings account... effectively an insurance or guarantor element which can be provided friends or family - as an example of a new breed of innovative mortgages set to launch on top of the new interest rate stability. Watch this space.
Mark and Karen Ball's £1m "dream home" - three storeys, gym, sauna, triple garag - began to crack apart just days after completion. The problem? Dodgy foundations... a perfect metaphor for something... the Commons, the economy perhaps... but at 6pm I no longer have the energy to decide what. Anyway:
Council of Mortgage Lenders figures show a 29% rise in lending for March, with 40% borrowing by first-time buyers. Buy-to-let lending, however, crashed... down 70% in the first quarter, compared to the same period in 2008. It accounted for just 6% of all mortgage lending.
According to the Council of Mortgage Lenders, it's a 50% increase year-on-year, from 8,500 homes in the first quarter of 2008 to 12,800 in the first quarter of 2009. Pre-repos, loans with more than 2.5% of the balance in arrears, were up 62% measured over the same period. Sounds bad? The CML were actually fairly bullish about the figures, and are expected to revise downward their headline-grabbing 2009 prediction of 75,000 repossessions.
New figures by ratings agency Moody's suggests 3.55% of landlords are at least three months behind on mortgage repayments... a significant rise from 0.95% this time last year. The data suggests landlords are finally catching up with homeowners in the arrears race. At the end of last year, the Financial Services Authority revealed that 3.4% of all mortgages were in arrears.
A couple of weeks ago we reported on the pitiful failure that is Government's Mortgage Rescue Scheme... five months in, one person helped. Now, the Times reports that the Bates family - trotted around by the Department for Communities and Local Government in a PR exercise designed to attract attention away from the crumbling economy - has had its own application rejected.
I suppose that's the value of the license fee... the BBC has the resources to uncover proper, top-notch idiots while the rest of us have to make do with hear-say or, at best, D-list idiots. This one - after losing work and consolidating his debts during the early days of the crisis - ended up with a £250,000 mortgage, negative equity and a Champagne headache. Stay tuned for the BBC's Propertywatch programme (May 11-14, BBC 2, 8pm) for more.
Gordon Brown switches designated second home ten days after Blair's resignation, to throw gardener's and cleaner's bills relating to his Scottish house onto the public purse.
Hazel Blears claims for three different properties in a year, claiming home entertainment equipment from Selfridges, claiming mortgage payments then pocketing £45,000 profit on a property and charging the taxpayer so she could stay at an award-winning £211 a night hotel.
The improvers:
Douglas Alexander earns £141, 866, we pay £928 to have his chimney relined.
The piss-takers:
John Prescott charges us hundreds of pounds to fix and then re-fix a toilet seat.
Margaret Beckett attempts to claim £600 for hanging baskets at her constituency home, while living in a grace-and-favour London property.
Harriet Harman's damage limitation exercise on this morning's Today programme (listen again, here) included admitting that "I know it looks bad. We've already agreed we need to make a change". Harman and Brown are desperate to push through changes to the rules so that they're seen to have acted. They want to shift the argument from individual MPs and their personal ethics and onto the system, as if it's only right and natural for MPs to push rules as far as they'll go before warping. We need to make it clear to them that simply changing the rules isn't enough. We want MPs to be held accountable for their personal decision making, their personal ethics. Don't just change the rules, change the MPs.
Go here for the Telegraph's extraordinary catalogue of Cabinet members' greed, deceit and cynicism.
One and a half thousand Bacchus vines planted in Enfield marks the launch of Forty Hall Vineyard, a new vineyard aiming to supply consumers within a ten-mile radius with a wine to define the London terroir. Cheeky. Fragrant. Cockney. Profits will be used to promote sustainable urban agriculture. More here.
The question of which property is a principal residence runs deeper than simply how many thousand pounds can be scooped from the public coffers in so-called "expenses". Jacqui Smith's controversial claim that a room in her sister's flat was her principal residence (allowing her to claim more expenses on her larger family home Redditch) appears to be contradicted by Redditch Council... where she's paying council tax as if it's her main home. We wonder whether she'd thinking ahead... to the Capital Gains Tax sting she may (and should) encounter when she comes to sell her Redditch property?
Sutton council is to teach children to be street wise, by building a "virtual south London street", complete with shops, cafes, dealers, gangs, paedos... all of the facilities usually associated with south London. Children will be bussed in from as far afield as Kent and Berkshire, where they'll navigate the street - which will have a giant video screen at one end - and then leave with medication for any trauma. The council has been criticised for spending £8m on the scheme, when schools and council homes are dilapidated and there's a big Icelandic hole in the financing, but the Rat and Mouse can see how the Welcome To South London project might have a combined future as a tourist attraction. More here.
The entire electorate gathered together today to toast the overwhelming success of the Government's Mortgage Rescue Scheme, which was launched last January, after it emerged that the scheme had helped a homeowner. New figures from the Department for Communities and Local Government revealed that the scheme - which was designed to help 6,000 people - had, so far, received 452 applications, one of which was successful.
But it was a case of right house number, wrong road. When Mr Parrott did finally gain entry, he found the bailiffs had emptied his fridge (greedy buggers) and turned off all the utilities. It's an odd mistake to have made. I always thought you had to have an Oxbridge degree (or Ivy League equivalent) to be a bailiff. Anyway, click through to the story, and enjoy the comment left by Peter Jones of Amersham... surely not the first time Falling Down has been mentioned on the Daily Mail's comment section. It's political correctness gone mad.
Estate Agent Today has an interesting story about REDC, the big, pile-'em-high US auction business that hit the UK before Easter warning us that "some Brits may well be overwhelmed by the event". If the event was so overwhelming, asks EAT, why won't anybody from REDC give any results?
Sandeman's MD of Essential Information Group, arguably the single source for up-to-the-minute property auction data. We wonder whether REDC's reticence might have something to do with this. We'll watch this with interest.
It doesn't seem like such good value now. A Devon widow is taking Barclays to court to seek an amendment to her 1998 agreement to pay pack 75% of any appreciation in the property's value on its sale. The mortgage will have cost her almost six times the loan amount.
According to the Sunday Times, the Government's preparing to sell off Northern Rock. Except, just the good bits. The bad bits - the stupid loans - we all get to keep:
Yeah... because those are just the kind of shares I can take a pride in owning. They're also, apparently, headhunting a banker to run the bad bank book.
"It defies logic that during the worst recession for a generation the government should ignore some very simple practical solutions laid on a plate in front of it that would cost practically nothing and would have helped the property industry to recover more quickly from the effects of the recession and get back to doing what it does best for society namely building and managing the places we need for business, shopping and leisure."
Michael Coogan, director general of the Council Of Mortgage Lenders:
"The most important element of this Budget for the mortgage market over the long term may prove to be the new asset backed securities guarantee scheme. This potentially offers an opportunity to restart the capital market funding for mortgages that will be a crucial factor in delivering an adequate supply of mortgage credit."
Gillian Charlesworth, RICS Director of External Affairs:
"The Chancellor has recognised the need for assistance to the housing market as essential to helping Britain’s economic recovery. Government action to support mortgage lending should help translate buyer interest, which has picked up in recent months, into actual sales. Additional funding for HomeBuy Direct and extending the stamp duty holiday should also encourage those wishing to get on the housing ladder. Measures announced by the Chancellor will help move towards a sustainable and vibrant housing market for the future."
Liam Bailey, Knight Frank:
"The sad truth for the government is that there are very few significant policy leavers open to influence the housing market. The only one of note - interest rate policy - is now exhausted as a means of kick starting activity. The announcements in today's budget are generally welcome - but set against the scale of the problems in the housing sector they are quite small. Their effect in stimulating activity, whether in terms of sales or in building more homes, is likely to be relatively limited. The positive impact will come in terms of sentiment."
Ian Potter, operations manager of The Association of Residential Letting Agents:
"Yet again Gordon Brown’s administration has wasted an opportunity to improve the quality of stock of lettings property by failing to incentivise landlords through tax relief on labour and materials. Not only would this have helped to stimulate the market, particularly in the construction sector, but it would also have provided the greater standards of rented accommodation that this country desperately needs.”
Peter Bolton King, CE of the National Association of Estate Agents:
"The housing market is the engine of the UK economy and it is likely that this Budget will be remembered as largely ineffectual given the magnitude of the problem. There is very little here for first time buyers, who need more encouragement to climb onto the property ladder – which will get everything moving. Mr Darling has used a water pistol to try to put out a fire.”
various moneys for energy efficient home building and renovation of armed forces housing
-£175,000 Stemp Duty holiday extended to end of year
I know... crap, isn't it?
But the real housing budget isn't about housing at all. With this morning's unemployment figures showing a steady and alarming increase, and Darling's revised "growth" forecast at -3.5% for 2009, it's all about jobs. No job, no house purchase. No job, no mortgage repayment. No job, rental arrears. It's that simple. The real question is whether the jobs and training initiatives announced... £1.7bn for Job Centres, more training and work experience placings, more sixth form education places... can make any kind of a dent in dole queues.
That won't make everything alright. I want to see the MPs who thought it was acceptable to ignore ethics and focus purely on what they could get away with taught a lesson. I want them humiliated and then replaced.
It was a a month ago that the Rat and Mouse brought readers' attention to the passing of the Homeowner Mortgage Support Scheme deadline for lenders to sign up. We'd heard stuff. What kind of stuff? The kind of stuff that suggested so many major lenders were planning on kicking the whole scheme to the sidelines that it was going to be as effective as a bicycle with square wheels. Today, a mere four months after the emergency scheme was announced, it goes live. Except, without the support of Barclays, HSBC, Nationwide, Abbey or Alliance & Lester. Never mind, Government-owned Lloyds, RBS and Northern Rock were all keen...
Officially - according to the High Court - it was fraud. Property developer Alan Beesley had planning permission to build a hay barn on land near commuterland Potter's Bar, and from the outside that's exactly what it looked like. Inside, however, it was a luxury home. Beesley apparently planned on remaining in hiding for four years, after which they'd be legally immune from planning law-related eviction. Full story, plus great photos, here.
See, we can all be estate agents. This man wants you to find London sites for new Travelodges. In return, he'll pay you £500 per room. Oi, the glamour.
It's long been said that the time and care taken over viewings is diminishing, but how about this? Ray and Christine Buckler look around a house in Somerset, decide they want it... and only later discover a fire engine in the garden.
There's an interesting piece in Estate Agent Today, posing questions about the legality of recent REDC auctions. The rules are that lenders must obtain a reasonable value for a repossessed property... since, in the UK, the previous owner is liable for the difference between the outstanding debt and the what was raised by its sale. According to data from rival company WhiteHotProperty.co.uk, the auction houses are typically bringing in 30% less than can be achieved. REDC has a reputation for shifting property fast, and charges the buyer a 10% commission. The suggestion is that canny landlords are factoring the 10% into what they pay. Read the full piece, here.
Bumping along the bottom means just that... bumping. So there are bound to be occasional ups as well as downs. Their significance is relative to historical data, not just last month's. So, news from the Council of Mortgage Lenders that there has been a 4% rise in new approvals in February isn't bad news; but - with remortgages still -60% and new loans -50% from where they were a year ago - it's hardly good times either. First-time buyers are, its generally agreed, what makes a healthy market move. Included in the CML report... ftbs are contributing average deposits of 25%.
What's the story? Ten minutes ago, The News Of The World was reporting that, following the failure of his buy-to-let empire, Grant Bovey had started a new business... buying "distressed" homes on the repo market. Clearly, it's not the best PR move considering his wife has a TV career based, one might argue, on appealing to the credit crunched, many of who's homes might be in repo-danger right now. Interestingly, It's still showing up on a Google news search.
That's 18 to 34-year-olds living rent-free with parents, other relatives, friends. This time last year, the figure was around half a million. Now - according to research by Abbey Mortgages - it's 1.6m. And there's a further 300,000 aged 35 to 54.
The MPs' expenses row has taken a turn today with some attention to MPs who have the use of grace-and-favour properties. Geoff Hoon came under the spotlight first, and the latest name to be hitting the headlines is none other than the Chancellor's. Darling spends time at 11 Downing Street (note to foreign readers: the traditional Downing Street property that comes with the job), and claims expenses for a second home in his Edinburgh constituency. There's just the question, however, of his own London flat, designated for the purposes of expenses his principal residence, which he rents out at a profit. It's all legal. But is it ethical? Should - perhaps - the earnings from the flat off-set the money he claims in expenses? Summary, here.
Meanwhile, the Daily Mail wonders whether hanging might be "too good for them". Distasteful?
HSBC has announced the launch of an independent whole-of-market mortgage brokerage service... which means you might walk into an HSBC and be recommended an HBOS product. It's in association with Charcol, and it's to be trialed 19 branches. The cost of independence will be £150.
Wait... I know this... is it they both achieved double starred firsts from Cambridge University? No? Is it they both launched estate agencies and sold them for hundreds of millions of pounds? No? Charlie Brooker doesn't like them? That's probably true, but who does he like? The answer is... they're both to blame for the current economic meltdown. The Times's Sathnam Sanghera picks five alternatives to Fred Goodwin if you've got a little spare hate jangling around and you're looking for somewhere to spend it. At Number Three:
In May 2007 the founder of Foxtons banked an estimated £370million when he sold his estate agency to the private equity group BC Partners at the height of the property boom. Nothing wrong with that, of course - a smart entrepreneur with good timing. The objectionable thing is the misery that Hunt caused in the process of making his fortune.
Misery? Really? He frustrated some buyers and made some vendors (the ones paying his wages) wealthier than they might have otherwise been. Yes - like every estate agency - Foxtons contributed to keeping an unsustainable property market unsustainable, and they made life tough for their new recruits. But - come on - greedy vendors and fresh-out-of-school loadsamonies in flash suits. Not what I'd call victim material. More surprising, though, at Number Four:
When people are losing their jobs, struggling with mortgages, swapping Waitrose for Aldi, the last thing they need is someone who has never really had to work (de Botton's late father was a Swiss financier who apparently left him a trust fund of £200million), pretentiously encouraging us to ask such questions as: “What do I get from work apart from money?”; “What makes work pleasurable?”; “Why do we daily exhaust ourselves?”.
Okay, I can see your point. But that's really painting de Botton as an irritation rather than a cause of actual injury. By the way, at Number Five, the writer blames himself... all of us... and although a little harsh (apparently not a homeowner) comes closest to the truth. It's a good read.
It was March 20... the deadline for lenders to sign up to a scheme touted as the solution to what may turn out to be a repo-crisis in the UK. The program was announced by Gordon Brown last year, and supposed to become active in January. He claimed that lenders were enthusiastic. But it turned out they weren't so enthusiastic they wanted to actually, you know, sign up, and so the date was put off until April. So - now - with the deadline for sign-up gone - where are we? Officially, we don't know, because the Government refuses to say. But the rumours are that less than 50% of lenders are on side. According to sources, and if anyone wishes to correct us on any of this please drop us a line or leave a comment, the following lenders are not part of the scheme:
Abbey
Barclays
Nationwide
Skipton
Yorkshire
Kensington
GMAC
Is this another Government initiative that's announced loudly, swept under the rug quietly?
His parents had just paid for a new roof on their big Berkshire home when posh son Rory decided to make a Google Earth statement by painting a 60ft penis. Pictures, and full "story", here.
She was "live" about a half hour ago, speaking on the subject of second homes, following the Government's rejection of MP Matthew Taylor's recommendation to trial a scheme in which planning laws would stop rural homes being turned into second homes. Now, the Rat and Mouse has never played a part in any of the shrill attacks on Allsopp we see in the property press. In fact, we can't help liking her. It was hard, however, to accept her argument, this morning, that the responsibility for keeping properties within a rural community lies with the individual vendors. If somebody needs to move - especially at a time like this - it seems naive to suggest that they're going to accept a decent offer only if it's from somebody who can guarantee they'll live full-time in the property. It doesn't strike us as constructive, either, to lay the blame for any failure in this regard with the local community. That sounds like a recipe for bullying, conflict, the kind unpleasantness we saw in rural Wales during the 1970s. For an alternative take on the issue, check this out in the Telegraph, which poses the pressing question... who can afford the hassle of a second home anyway?
Poor investment returns and a fall in subscription fee renewals are being blamed for a general salary freeze at the Royal Institution of Chartered Surveyors. Eighteen people are also being made redundant. More here.
The list of local MPs claiming public money to pay for second homes within spitting distance of the family base is growing, including husband-and-wife team Alan and Ann Keen, dubbed Mr & Mrs Expenses, who have taken home more than £87,000 each. More here.
Figures from the British Bankers' Association show an increase in the number of new home loans in February, up to 28,179 from 24,278 in January, but still 31% lower than in February 2008. Net lending was up, too, but the total of all advanced mortgages fell off a little to £9.2bn, its lowest since June 2001.
A few thoughts about (Un)Employment Minister Tony McNulty, whose filthy fingers were found fiddling with taxpayers' money over the weekend. There are two issues here... one of legality, the other of ethics. Was taking £60,000 to spend on Mummy and Daddy's house in his Harrow constituency, a few minutes from his own W6 home, legal? Possibly... under self-imposed rules that favour the greedy. (But possibly not... according to Hammersmith MP Greg Hands who has lodged a complaint, pointing out that McNulty didn't regularly stay overnight in the property.) More importantly, though, was it ethical? There are several clues here. One is that McNulty admits to having felt "some discomfort" about claiming the money, although clearly not enough. There's also the fact that he stopped claiming in January, the very month Jacqui Smith was outed as a sleazy hypocrite, for taking £116,000 to pay the mortgage on her family home, while redefining chutzpah by insisting she actually "lived" in a room in her sister's gaff. Clearly... and I mean clearly... his actions have been unethical. If he had any sense of shame, whatsoever, he'd resign. If Brown - son of a preacher man - had any integrity, whatsoever, he'd fire him.
This was back in 2004. Four men - between the ages of 62 and 71 - proved they still had it in them by selling the Candy Brothers 47 acres in Berkshire that they didn't own. They took £6.5m and ran... well, walked quickly.
It's an interesting Observer piece, about a possible precedent set by a mortgagee who failed to make mortgage repayments, unfortunately had his home repossessed, but fought back in court, winning compensation on the basis that he received unsuitable advice and was mis-sold the mortgage. Had he taken action earlier, he might even have avoided repossession. The piece quotes professional negligence lawyers, who see an increase in this kind of activity in the future. More good news for lenders. Click through to the Observer page to read a checklist of possible bases for complaint.
A Financial Services Authority report has examined the likely state of homeownership should prices fall 30% from their peak, and revealed that such a scenario will leave two million in negative equity. Unless you're forced to move house, does it matter? The report suggests that households in negative equity are likely to reduce consumption, and thus further harm the economy. Of course, this is an endless chicken/egg debate, but the Rat and Mouse believes it's far more likely that the state of the economy, and particularly employment, has more of an affect on house prices (and thus bricks-and-mortar equity) than vice versa. Homeowners who stay in work can pretty much weather most problems... especially with interest rates so historically low.
Another report, by Which?, suggests that 35% of mortgagees are worried about losing their property. Interestingly... that's compared to 60% who are concerned about a job loss.
So the news this morning is that for six months after its multi-billion pound taxpayer rescue, Northern Rock continued to loan £800m in high-risk mortgages. The findings are from a National Audit Office report, which directly blames the Treasury for failing to carry out due diligence. Have these high-risk mortgages been significant for the lender? When examining the bigger picture, are they in the foreground? The Northern Rock 125% "Together" mortgage is apparently responsible for 50% of its arrears and 75% of its repossessions. And so... we're left to wonder what "due diligence" isn't being carried out right now, and we continue to sleep walk from crisis to crisis, with an unelected PM hopelessly out of his depth.
According to research by Lloyds TSB, falling house prices are likely to fuel a long term trend toward single living, with two million more single households by 2019. The trend began in the 1970s, but suffered a temporary 21st Century stall when house prices and rents made it practically difficult.
The number of mortgages in arrears by around three months (or 1.5% of the loan value) rose in 2008 by 31%, according to the Financial Services Authority. Astonishingly, in the last three months of 2008, 16.5% of all new mortgages were self-certified. Surely there's a happy medium between this madness, and an incompetent unelected government deciding to hammer the final nail in the residential property market by forcing unrealistic loan limits on the industry? Apparently not. There are new repo figures, too, and they're not any prettier. Repossessions rose by 68% last year, to 46, 750.
And stop smoking. And stop buying expensive coffees. And get used to tap water. And stop buying takeaways. And cancel their gym membership. And sell the car. And switch energy suppliers. And search online for discount vouchers. And then... then... they might be able to meet the new, tougher deposit criteria on that property which will be worth 10% less by this time next year. More here.
The 298-page report to clients by investment bank Numis Securities was written in February, but it's creating some eye-popping newspaper headlines in March. The key points appear to be... house prices remain 17% to 39% overvalued but (because of the nature of property bubbles) could drop a further 55% in an over-correction cause by buy-to-let panic selling... the Government monkeyed up the VAT drop and continues to monkey up the economy with an ill-advised policy of pushing banks toward inappropriate lending... and the clincher:
The bankruptcy of the UK is a very real probability as the UK Government is trying to stimulate a greater debt burden in a grossly indebted economy. We believe the scale of the macro imbalances in the UK means there is no prospect of a recovery in 2009 and we expect the UK to be mired in a deep recession through all of 2010
Mortgage brokers... they've almost less to keep them busy than estate agents. And so they're closing. We heard yesterday from a Rat and Mouse tipster about lay-offs over at Foxtons-linked mortgage brokers Alexander Hall, and a plan to move out of its posh Lombard Street head office. Now, there's news that Chase De Vere Mortgage Management and Cobalt Capital are shutting up shop altogether. That leaves just Alexander Hall and Savills Private Finance of the original five brokers in the once-powerful Concordia consortium. The news continues to beg the question, is there currently a role for the mortgage intermediary?
Before we go and start ushering in the weekend with the help of dry martini and queen olives, there's just about time to once again express our gratitude to our sponsor. Primelocation offers buyers and sellers an international reach, and its portal is a mine of useful information, including useful guides for homeowners, landlords and movers. It also, of course, features property from 4,000 leading estate agency firms. The Rat and Mouse needs the support of forward-looking organisations like Primelocation if it's to continue bringing you your daily dish of property news and gossip, so we hope you'll support them in return, by using the search box in the top right hand corner.
If your firm is interested in advertising on the Rat and Mouse (stop press: 200,000 page impressions in January), or if you've creative ideas about how we might work together, contact me here.
In the meantime, remember... the financial infrastructure might be collapsing, but it's never the wrong time for a party. See you Monday.
Base rates are now at a record-breaking 0.5%, and the bank will be printing an extra £75bn. The message? Borrow now; fail to pay back later. More here.
They're called Real Estate Disposition Corporation, they're an auction house specialising in repos and they're coming to the UK. They're also, apparently, noisy:
I'm sure we'll be okay. We've all seen THE PRICE IS RIGHT.
REDC also has a reputation for stacking high and selling fast, and has contributed to recent rises in volume in the US market. The HotProperty piece (linked above) makes the fair point that - with a good proportion purchases coming from professional buyers looking to flip for a profit - the danger is that these properties might turn into an untouchable tier, constantly being thrown back onto the market and hampering any real recovery.
Three thousand homes, made available at subsidised rental rates... with the opportunity to buy, for a price minus-rental paid so far, later on. More here.
Foreign readers, if you've found this message, please help me. I'm trapped on a small island just off the European mainland, with an unelected Prime Minister and an economy that's heading down the toilet. Meanwhile, the Deputy Prime Minister is hinting at a future in which the Government will pass laws that have the sole purpose of punishing individual citizens, in order to curry favour with the tabloid-reading masses. Please, have a heart... send help, invade, anything... SOS, SOS, SOS...
If the plan was to create some attention, it worked... this story's creating some headlines this morning. A GfK document is claiming that almost four million UK homeowners (one-in- are in negative equity. That's a figure way in excess of, in fact, pretty much double, any previous estimate, and it's twice the negative equity peak of the 90s crisis. Does the figure hold water? According to this, it's derived from interviews with 60,000 respondents. I don't know enough about the data business to judge whether that's a large enough sample (there are approximately 12m mortgage payers in the UK) but I do know that - given we're only in the early stages of a national job loss cycle - it's potentially very worrying.
A report, today, by the E-Homebuying Forum suggests merging conveyancing lawyers and estate agents into one single concentrated disliked profession. Its "Blueprint for the Future of Homebuying" seeks "Faster Certainty" in the homebuying process, by a combination of "Greater Transparency", "Greater Efficiency" and "Greater Commitment". Other specific suggestions include estate agency regulation, wider use of automated and electronic systems across the process and legally-binding pre-contracts with financial penalties. We like the last bit, but we're worried about the first. Estate agents are employed by the vendor, and their job is to sell a property. Lawyers are employed by the buyer, and part of their job is to warn the buyer why - on occasion - he shouldn't buy the property. You can read the document here.
It's a £2m mansion in West Sussex, inherited from her mother. The woman, who has never had a job, but also owns a B&B which creates income of around £30k annually, took out a £1.2m mortgage on the property in 2005, to spend on a property development project. She's been unable to make repayments, and her lenders have attempted to evict her. She plans to sue them for reckless lending. After all, it's only fair. More here.
Time for a round-up of news from the trough. First off, it appears that former deputy leader of the Tories and a man reputed to be worth £27m has been asking us to cough up some cash to help him have the moss removed from the walls of his five-bedroom home in two acres of Wiltshire. If you feel that's money well spent... good for you. Elsewhere, fellow Tory MP Chris Grayling is said to have claimed more than £100,000 from the state to pay for a London flat just 17 miles from his family home. The £104,183 claim is across six years, during which time the flat increased in value by as much as £200,000. It appears the property might be little more than an investment at the taxpayers' expense, since Grayling's neighbour didn't recognise him when shown a photograph. On the other side of the political divide, has Foreign Secretary David Miliband been caught out juggling properties to avoid tax? It certainly looks like it. Finally, let's hear it for Jacqui Smith, who is furious about all the accusations of greed. Okay, she did take £116,000 of taxpayers' money and spend it on her family home. But, if she'd have felt really greedy, she could have grabbed a further £58. Oink, oink, oink. Now tell us how the greedy bankers need to be punished.
The Rock owes only £9bn, so - obviously - it's time to start lending. Alistair Darling is said to have given the go-ahead to £14bn of home loans over the next two years.
Last year's repo-stats are in... 40,000 repossessed homes in 2008, which turns out to be slightly lower than the Council of Mortgage Lender's predictions. Interestingly, though, the crunch appears to have finally fed through to the buy-to-let market, with landlords in arrears outnumbering homeowners generally.
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Foxtons founder (and flipper, moments before the crash) Jon Hunt has apparently proved his knack for timing is more than fluke, by shorting troubled developer Hammerson by the order of 1.3m shares. The exact timing isn't known, but movement in the Hammerson share price suggests he's had plenty of time to make a killing.
So our Home Secretary claims her big constituency home - the one she shares with her husband and kids - is her second home, and that she actually lives in London, in a room in her sister's pad. Despite this admirably cost-saving arrangement, she claims £24,000 a year in expenses. It's all - she insists - perfectly legal, and - of course - it is. Which is the point. It shouldn't be. And our public servants should be judged on what's ethical, not just legal. This - for your pleasure - from July 2008:
It's Bank of England data... 31,000 approvals in December, up from 27,000 in November, but still the second lowest on record, leaving 2008 58% down on 2007.
Today, the Woolwich unveils a one-year 2.29% fixed rate mortgage. If you've decent equity in your property (you'll need 40%), and your mortgage is big enough to justify the £995 fee, it looks like a good bet. More here.
That's what we, at the Rat and Mouse, call trust. The banker is, of course, ex-Lehman boss Richard Fuld. The house is a Florida mansion. The reasoning... clearly an attempt to protect assets from furious shareholders. The wife? Not complaining. More here.
The Council of Mortgage Lenders reports December mortgage lending at its lowest level since April 2001. Meanwhile, Revenue and Customs data show December completions 41% lower than December 2007. More here.
It was never going to be straightforward. But exactly why the proposed BBC relocation programme, from London to the regions, is back in the news I don't know. As far as I can tell, none of the details are changed... perhaps it's because of the increased risk the taxpayers will be shouldering by buying properties at 95% market value and then guaranteeing to cover the differential if agents flog them at a loss in a falling market.
The announcement this morning of the Government's latest scheme to help struggling mortgage payers stay in their homes effectively sees not-for-profit housing associations attempt to beat the sell-to-rent-back companies at their own game. They will buy your house; you stay in it by renting it back.
Right. But there's an element of confusion here. The Government's £200m will - apparently - pay for a mixture of purchases and temporarily loans (which the homeowner can pay back at a more financially secure time). If it's the latter, are housing associations really set up to process and run loans? If it's the former, what happens in ten years' time when potentially thousands of ex-homeowners wake up to the realisation that the Government now owns what used to be their increasing asset, and which the Government picked up at the bottom of the market during a temporary dip?
Foreign buyers are taking advantage of the weak pound to secure some impressive London property bargains. In fact, if you're Japanese, you're looking at prices 50% below where they were a year ago. Posh agents report cash-rich foriegners pushing deals through in days.
Meanwhile, head over to This Is London to read the real life case studies of a bunch of brave people (one from Sweden) who feel now's just the right time to buy property in London.
A likely story... he was just doing an Elvis like we're all tempted to once in a while. Other claims include spectacles stolen by magpie and the theft of a large and valuable collection of sex toys.
It's a 0.5% cut, bringing the base rate to 1.5%, its lowest since the Bank of England was founded in 1694. Sensible? I honestly can't see any way in which this works. It's like backing into a corner, using a manoeuvre that's been failing consistently for most of last year. The big question... where next?
Robin Ellis converted big London houses into fantasy-homes - swimming pools with depth-adjustable floors, car-lifts and other rich-boy toys, before his company automatically retracted itself into administration shortly before 2008 became 2009. Now, the Standard takes its life in its hands with some alarming allegations regarding Ellis's way of doing business. More here.
However, 1.8m immigrants arrived in the Capital over the same period... resulting in the current situation in which - apparently - one in three London workers comes from overseas. The flight of indigenous Londoners is blamed on high property prices... if you want to own it, you need to leave London. But if you want to rent it - and don't mind being crammed into a small conversion with half a dozen other immigrants - London's great. Note that this research ends in 2007. It will be interesting to see whether rising unemployment sends eastern Europeans back home, unemployed Brits back to London.
Of course, we've still our 2009 predictions post to come... we'll do that nearer New Year's Eve. But right now... the 2008 facts are coming in thick-and-fast. Like... London's been hit hardest by the house price downturn. A Hometrack survey shows London's down 10.1% on the year, compared with an 8.7% national average. Those numbers sound conservative to me. We'll know something like the truth after the Government reveals its December completions figures in a month or two. Meanwhile, Globrix claim that - in the UK's most stagnant market, Rochdale's - one in four homes remain on the market after 12 months. Elsewhere - and this is slightly counter-intuitive given the dramatic recent cuts in interest rates - homeowners paid off a record £5.7b of mortgage debt in the third quarter of 2008. Presumably, this is about falling house prices and tricky loan-to-value demands from the lenders. Still... kind of mature, isn't it? More facts and figures as the year draws to an end. And hold on - of course - for those all-important 2009 predictions.
That's according to a survey by uSwitch. And it's alarming because a repayment "holiday" only increases the debt (the interest doesn't go on vacation), and puts the problem temporarily on hold. Our current economic woes, however, look anything like short-lived. More here.
Here's a strange one. The Addymans say they've a £226,000 loan in place with Natwest, that they're completely up-to-date on their payments, their payment history is impeccable, and yet they've received a letter from their lender telling them that the loan is to be withdrawn and if they can't pay back the £226,000 in full within a week, they'll begin repossession proceedings. Why? The bank apparently won't tell them. Nor will it enter into any dialogue about the case whatsoever:
With the head of the IMF warning that possible consequences of the recession could include civil unrest, now would - clearly - be a terrible time to give paid thugs bailiffs the right to thump the poor. Right? Doh!!
Bailiffs are expecting a big increase in business over the next year as tens of thousands of Britons experience financial problems during the forthcoming recession. The new rules, allowable under legislation already passed by Parliament but not yet enacted, would give bailiffs the right to restrain or pin down householders.
Oh yeah, and there's also consideration being given to allowing bailiffs to break into homes, even when they don't believe the owners are present.
According to a survey by the Building Societies' Association, 46% agree or strongly agree that now's a good time to buy a house, up from 34% in September and 27% in July. More here.
The soap opera ran from 1982 to 2003. Now, the set - a cul-de-sac in Liverpool's West Derby district - is due to be auctioned, with a guide price of just £650,000. Allsop will be swinging the hammer, but their next catalogue isn't online yet. In the meantime, more here.
To make a mint like Rosie's (bought the Acton flat for £200,000 in July 2006; sold it, after a side return, for £325,000 just as Lehman's went under), avoid the kinds of areas popular among bankers and City workers. Go where the money is... look for nurses, teachers, social workers.
At last... the Council of Mortgage Lenders reacts to the ludicrous contradiction at the heart of Government policy. No irresponsible lending, says Brown... except now, of course, to help me through the next election.
That's Sir David Frost. Other slebs associated with the fund include Sir Alex Ferguson, Simon Cowell and... wait for it... Grant Bovey (as if that weren't a clue there might be rocky times ahead). Here's the website.
Who, this time last year, would have imagined I'd be writing... as predicted, a base rate cut of 1%? It's down to 2%, its lowest level since 1951. The cost of borrowing is now half of what it was at the start of October. Astonishing measures, astonishing times.
Royal Bank of Scotland borrowers in arrears will now be allowed a six month head start, before the bank sends the repo-men in pursuit. As unemployment inevitably rises, it will be seen as good news by most, and is likely to become a common policy among the lenders. According to the BBC's Robert Peston, it will be seen as less than good news by the estate agents, who have apparently been relying on the disposal of repos as a revenue stream. It's not clear to me how (in reality) a month or two added to the normal period of grace is going to dry up the repo-market. More here.
Most of the purchases are repos, none were for more than £100,000. Two years ago, they were changing hands around the £200,000 mark. And we're supposed to believe only fools are buying now? At this kind of discount, and assuming you're in a position to afford the debt and find the tenants, there's surely not much risk. It's all - as it always is - about the deal.
Brown, Darling, Mandelson puff their chests out and talk about forcing the lenders to pass on rate cuts. Northern Rock - now Government owned - raises rates.
A Government science think tank is "thinking" about home MOTs... regular energy efficiency tests including penalties and incentives linking council taxes to emissions. A report is due shortly.
Research by LV= Insurance suggests that, nationally, we each recognise 14 neighbours by sight. The thrust of research is that we're not as neighbourly as we could be; but looking at that figure I'm positive it's much lower in London. Do you know 14 of your neighbours? Some London-specific data: 42% felt there'd been an increase in local street crime; 12% thought that crime had increased twice as much as in other regions of the UK.
Alistair Darling's panic measures included a few nods to the homeowner... perhaps most notably, an agreement from the biggest lenders to allow homeowners three months in arrears before taking court action. The plan has already attracted criticism for not including the smaller, specialist lenders... the lenders with big books of sub-prime mortgages, the ones most likely to be in arrears. But - more importantly - where's the real the content? Perhaps I'm wrong about this, but can somebody point out the larger UK lender who issues repossession proceedings when a borrower is just one or two months in arrears?
Alistair Darling's panic measures included a few nods to the homeowner... perhaps most notably, an agreement from the biggest lenders to allow homeowners three months in arrears before taking court action. The plan has already attracted criticism for not including the smaller, specialist lenders... the lenders with big books of sub-prime mortgages, the ones most likely to be in arrears. But - more importantly - where's the real the content? Perhaps I'm wrong about this, but can somebody point out the larger UK lender who issues repossession proceedings when a borrower is just one or two months in arrears?
There was a time when it was hard to find an estate agent who'd experienced a deal collapsing between exchange and completion. The rapidly changing economic climate have changed that... and the thrust of this interesting Sunday Times piece is that we're not just talking about off-plan new-builds (we all knew it would happen there), but everyday residential deals too. Looks like the lawyers will be kept busy at least.
Let's play Match The Quotation To The Pundit. They're all quoted late in 2007, talking about their predictions for house prices in 2008.
1 - The effect of the credit crunch will dissipate slowly, meaning that those seeking to obtain finance in the first half of 2008 may struggle. However, the employment picture should remain firm throughout the year, helping to prevent significant numbers of repossessions and the subsequent influx of supply into the market.
2 - I predict the net result is that house prices will fall a little in the first half of the year - by up to 5%. But by June, the fall in bank rate and an easing of the liquidity squeeze will stabilise the market, although it will still be very difficult for sub-prime borrowers. In the second half of the year, transaction levels will improve and prices will partly recover, ending the year down 2%.
3 - As affordability constraints are eased and demand continues to outstrip supply, the long-term future is set to be bright and we expect the housing market to return to its previously higher levels by 2009.
4 - Based on the information currently available, 0pc inflation is our best estimate of the most likely outcome, but there are plausible risks in both directions. The main downside risk is that continued financial unrest or a US recession cause the economy to slow even more sharply than expected, leading to a more significant rise in unemployment, higher levels of forced sales and lower house price expectations.
5 - We expect house prices to fall 5% next year and by a further 8% in 2009, wiping out the gains of the last 18 months. The long overdue housing market correction now appears to be underway.
Now match the quote to the pundit: a) Nationwide's Fionnuala Earley b) RICS's Simon Dubinsohn c) Capital Economics' Roger Bootle d) John Charcol's Ray Boulger e) Spicerhaart Financial Services' Steve Cox
And remember, it's just a bit of fun.
It's also time to thank our sponsor and search partner Primelocation.com - portal for more than 4,000 leading estate agents - for their help bringing you your daily dose of London property news. And to wish our readers a great weekend.
Over at the Telegraph, that's exactly what they're doing. Suggestions range from Simon Cowell to Gordon Ramsay to Montgomery Burns. Somebody nominates George Soros, which appears to make a lot of sense.
Over at Rat and Mouse HQ, we can remember when Will Anderson began his ambitious eco-home self-build in the heart of Clapham. In fact, I have a feint recollection of a diary, running in - I think - the Independent. Anyway, it was completed a couple of years ago, and now the Guardian is giving us what we've wanted all along... the house, in pictures.
Standard variable rates... once the "punishment" rate you paid if you'd been too flakey to sort yourself out a nice fixed rate mortgage or tracker. But not any more:
So that's easy then. Just move to a new lender and go onto their SVR... no fees, no problem. Not necessarily. Lenders are apparently refusing new borrowers access to an SVR loan, or charging, as bank base rates drift down.
You don't see paragraphs like that in the wild too often. The piece goes on to characterise the difference between north of the river, and south of the river, as understood west of the Atlantic... it's a fun read.
I've never been happy with the name of my own house - which, of course, I didn't choose. My wife's fixated on "Palookaville", so, for now, we're sticking with what we've got.
Thanos Papalexis is accused of killing Charalambos Christodoulides in his north London apartment in 2000. Christodoulides was apparently refusing to move out, while Papalexis was trying to purchase his home and paying tens of thousands of pounds a week in bridging loan interest while he waited.
Papalexis isn't accused of carrying out the killing himself, but hiring a couple of heavies. He moved to the States in 2001, where he was arrested, at a pizza restaurant, on Friday. He's now expected to be extradited to the UK.
The Telegraph, on how the building societies are insuring themselves against further dramatic interest rate falls. But, given no guarantee that Libor rates are going to move in tandem, and with the eyes of the world on your skills as a business leader, and a responsibility - after receiving billions in public money - to get the bank back on an even keel, what would you do?
That's a comment over at the Daily Mail website, in response to a piece in which it's reported that the lenders (many of which, by the way, have now passed last week's 1.5% interest rate cut) have told Darling they won't be passing on any further cuts, while the Libor rate remains substantially higher than the base rate. Nor is it unusual... it's a response to mortgage interest rates we're hearing over and over again. And it's incredibly, astonishingly shortsighted. Has everybody - already - forgotten how we got into this mess in the first place? Will more cheap credit really get us out? And who, in their right mind, would rather have seen the banks left to fail, taking savers, homeowners and businesses with them? The banks weren't bailed out for the personal benefit of the directors - they were bailed out for the benefit of the economy. Furthermore, who really believes that cutting interest rates is going to prop up the housing market? And - finally - remember that there are still some savers out there, people who didn't take advantage of easy credit but who behaved responsibly in the first place - who'd like to see their savings rewarded with a level of interest that at least keeps up with inflation.
Here's a strange one... the tale of a Duke of Westminster-owned £6m Mayfair property - just down the road from the US Embassy - taken over by squatters with double-barrel names in a coup that saw them dressed as painters and decorators. Not even the Daily Mail seems convinced by the story ("Members of the group don't appear to be typical squatters, one appears to be wearing designer glasses and another has expensive looking headphones"), although temporarily distracted by an imperfect shave:
Yeah, right... the Rat and Mouse can tell a toff from a hundred paces. Our own theory... these kids will turn out to be related to the Duke. The Daily Mail will probably like them, then.
Property search company Garrington is closing its recently-opened Knutsford (leafy Cheshire) office, and downscaling (with, apparently, other closures likely). Before all the cries of schadenfraude, it's worth noting that the north west operation will now be run out of the Altrincham office, which is little more than a D&G handbag's glint from Knutsford. Crisis? Not exactly.
And if they're going to pay depositors this kind of interest, they're in no hurry to reduce rates for borrowers, whether individual or business... is the reasoning. (Got to say, though, I'm a bit annoyed with Robert for relaying what was supposed to be a private conversation.)
We expected a cut, but not like this. Interest rates: down 1.5%, in what looks like a sign of just how perilous the Bank of England considers the economy. All eyes, now, are on the lenders...
Yes, we're going to get a rate cut today. No, we probably shouldn't get too excited. The response, yesterday, from Woolwich, Lloyds TSB and Northern Rock was pretty unambiguous.
I like this one. According to this, the unused wasted space on London's flat roofs - the equivalent of Richmond Park, apparently - will be put to work as a giant market garden, producing fresh fruit and veg for the 2012 Olympic athletes. This has an attractive sci-fi-meets-1940s-austerity feel that really captures the current mood. Great. It's all part of this; expect some kind of announcement tomorrow.
Current events might be making the housing market look a little rough around the edges, but it's having no such effect on Kirstie Allsopp, who's looking particularly zesty in her Sun photo. She's there for a Q&A about the current crisis, answering a series of questions that include Will prices ever go up? and Is now a good time to buy? She describes living in Battersea, in negative equity, during the beginning of the 90s and not being able to afford to visit her friends in west London. I'm assuming she means her friends were inveterate champagne-swiggers, rather than she couldn't afford the bus fare, but others in the Rat and Mouse office disagree. Her advice is sensible and conservative, including:
According to the Standard, even the fabulous Candy boys are feeling the crunch. The story goes that they're pulling out of their Noho redevelopment plans, and they've defaulted on a $365m loan on a Beverley Hills project. However, the facts aren't at all clear, given a recent report in the FT, claiming that the brothers had taken advantage of falling land values and Icelandic chaos, to buy out their Kaupthing partners on the cheap. Back then, Nick Candy was quoted as saying he expected to extend the terms of the loan. Now, it's a different picture.
UPDATE, OCTOBER 31, SOME CLARITY, PERHAPS, FROM THE LA TIMES
We've written before about the dangers of the property lottery, as private vendors have turned to ticket sales to shift bricks and mortar. Now it's the turn of the developers, and they're going to some extreme lengths to disguise what (were it deemed to be a lottery for private gain) would be illegal. Step up... buy an MP3 player, get a free lottery ticket... proceeds (minus expenses, ie, the flat) go to charity. More here.
That's it... I'm going to grab myself a cup of tragedy and get myself some of that homeless action. Where could I expect to end up? According to the piece, there's a family in a £1.5m Kensington mews house, rented from a dentist for £1,125 a week.
Now it's legal fees, on the table and being dissected. Currently, two-thirds of mortgages come with a free valuation and legal fees covered. Woolwich were first out of the traps to stop paying the solicitors. Soon - according to this - others will follow, as lenders recoup costs.
Figures by The Tax Man show UK residential sales for September at 59,000, the lowest figure since they began keeping records in 2005, and down from 126,000 in September 2007. More here.
The Rat and Mouse has taken a fairly consistent view of property raffles over the years. To sum up. Don't organise them. Don't buy into them. Don't go near them. Don't believe them. Recently - a small rash of raffles led the mainstream media to assume they were a new thing, crunch-related and caused by the tough property market conditions. One particular raffle - of a nice country house in Devon - got a lot of publicity, even an appearance on Radio 4's Today programme, and so seemed like the first property raffle in the Rat and Mouse's experience to achieve successful enough sales for some deeds to change hands. (Normally, too few tickets are sold, and the prize reverts to a share of takings... after generous "expenses".) But wait... the draw was meant to take place yesterday, and yet...
Here we go. The problem is that - under British gaming law - lotteries for private gain are illegal. Organisers have tried to get around the rule by setting entrants very simple questions... but it appears the questions might be so simple they're not performing their function... to turn the competition into a game of skill and, thus, not a private lottery.
Statement, here.
Northern Rock - recently nationalised - is coming under scrutiny for its aggressive repo-policy. It poses a wider a problem for the Government, which has even more recently negotiated a 60% stake in RBS and a 43.5% in the new Lloyds/HBOS. Now, there'll be a direct chain of responsibility from the single parent kicked to the curb and Gordon, fat and (increasingly) happy in Downing Street.
Sales are their lowest levels in 30 years, according to the Royal Institution of Chartered Surveyors, who said that, in the three months to September, the average agent saw less than one completion a week. It is - of course - all about the mortgage market.
Despite Government money and a big interest rate cut, the number of available mortgage deals continues to shrink, to 3,281, according to Moneyfacts.co.uk, it's lowest figure since credit crunched. And according to Chase de Vere Mortgage Management's Aaron Strutt, quoted in a BBC news piece, borrowers approaching the end of their current deals might want to check the small print pretty carefully.
It's become apparent that some UK councils have been banking Iceland-side. Hundreds of millions of pounds are potentially missing. In London... so far the damage looks limited to:
We were expecting an announcement tomorrow (Thursday's are traditional for interest rate fun), but news is out that seven central banks - including Canada's, China's, Switzerland's, Sweden's and the Bank of England - are cutting rates by 0.5%. That leaves our own rate at 4.5%... and, with inflation still way above target, it's another sign of how seriously close to a shattering recession we must be.
The BBC has a live page, filling up with responses, interviews, comments and questions as they happen, from across the BBC network. You don't need to refresh, it updates itself... It's worth seeing.
I wonder if any Rat and Mouse readers are heading to the Excel this weekend for... Property Magic Live? If - like me - you thought the days of these get-rich-quick-from-property conferences were kind of, well, over, think again. PML - organised by Simon Zutshi and featuring Dolf de Roos (heard of him!) - will be about seeing the crunch as an opportunity and buying at the bottom, and will cost around £500 a pop. Which is what I call seeing the crunch as an opportunity. For a preview of what's likely to go on, go here (potential freakout warning: Simon will also pop up at the bottom right of your browser, like a strange property-addicted ghost). Don't be surprised to discover weirder stuff at the conference itself. This, from Simon's entry on the Aha! Academy of High Achievers (I swear I'm not making this up):
Simon opened the 5th Annual European Speaker Convention by producing an 8ft metal step ladder out of a briefcase!
If you are going this weekend, we'd love to hear your thoughts afterwards.
Inman News founder and publisher Brad Inman will be in London on October 16, and will be attending an informal event, from 6pm, at Mayfair's Windmill Pub. Inman News is the US's number one news source for the real estate industry... a powerful brand, respected voice, and, of course, the organisation behind the twice-yearly Real Estate Connect conference. Any industry professionals interested in meeting Brad (and others from the world of property online) for a beer and a chat should put October 16 in the diary right now. For more about Brad and Inman News, read Nestoria's interview here.
According to research by mortgage advisers Impartial.co.uk, baby boomers are far from debt-free as they approach retirement. More than a million 55s and over have more than ten years left on their mortgages, and even those with a shorter term still have an average outstanding debt of more than £55,000.
(Offer good in selected regions only.) The story is that City analysts Dresdner Kleinwort have seen documents traced back to Barratt's Yorkshire East offices offering discounts of up to 43%. More here.
According to MoneyFacts.co.uk the number of residential mortgages on offer shrunk from 3,252 to 2,988, while buy-to-let mortgages fell from 662 to 481 in a single day yesterday. More here.
Incredible figures from the Bank of England, with net lending (new loans) in August dropping by 95% from July. There was just £143m of new business, compared to £3bn the month before. And that was before Broken & Busted was finally laid to rest. What next? Needless to say, after last night's events, we're in uncharted territories. All predictions, welcome.
... and the Council of Mortgage Lenders wants to dispel a few myths regarding the Bradford & Bingley news, as it's being reported by the mainstream media. They're taking particular umbrage with the idea that B&B's buy-to-let lending is, in particular, what's got it into trouble. No, they say, and have released three-month figures showing a lower level of arrears (1.1%) in btl products than residential (1.33%) ones.
Meanwhile, and also as a response to the B&B news, Mortgage Express (B&B's brokerage arm) have not only removed the express from their offerings, they've also just removed the mortgage.
My own deal comes to an end shortly, so I took the opportunity yesterday to reserve a new one before the lenders respond to the interbank lending rate hikes. When it came to organising the valuation, I was told to call back after I'd received the documents and was happy with them. I asked how quickly we could expect to wait before seeing a surveyor. They've not much on at the moment, I was informed. And she told me the story of one customer who phoned in to arrange a survey and - while they were still on the phone to the bank - were called on their mobile by the surveyor and asked if it was okay to drop by. Sign of the times...
I need to ask you to support an urgent secret business relationship with a transfer of funds of great magnitude.
I am Ministry of the Treasury of the Republic of America. My country has had crisis that has caused the need for large transfer of funds of 800 billion dollars US. If you would assist me in this transfer, it would be most profitable to you.
I am working with Mr. Phil Gram, lobbyist for UBS, who will be my replacement as Ministry of the Treasury in January. As a Senator, you may know him as the leader of the American banking deregulation movement in the 1990s. This transaction is 100% safe.
This is a matter of great urgency. We need a blank check. We need the funds as quickly as possible. We cannot directly transfer these funds in the names of our close friends because we are constantly under surveillance. My family lawyer advised me that I should look for a reliable and trustworthy person who will act as a next of kin so the funds can be transferred.
Please reply with all of your bank account, IRA and college fund account numbers and those of your children and grandchildren to wallstreetbailout@treasury.gov so that we may transfer your commission for this transaction. After I receive that information, I will respond with detailed information about safeguards that will be used to protect the funds.
Yours Faithfully Minister of Treasury
Henry Paulson
The FT reports some bad news for developers letting out new builds they've been unable to sell. According to the rules, the VAT advantages enjoyed by builders only apply to properties built for sale, rather than for rent. The tax man is wise to the issue, and may be knocking on doors, reclaiming VAT, soon. More here.
This time, Asim Hussain, of Lifestyle Mortgages (Ealing), whom the Financial Services Authority have banned for making fraudulent loan applications on his behalf and on the behalf of clients. More here.
This is an extraordinary story in the Times's City Diary. Anybody else would be taking the Savills agents out for a well-earned slap-up lunch after sealing the £2.9m deal. Barry McKay is apparently less than delighted, and accuses Savills of misleading him over the identity of the buyer... a property developer called John Morris, who appears to have some history with Mr McKay.
McKay claims that he explicitly did not want his family home sold to Morris, who now has planning permission to build on it. He says that if he had known the identity of the ultimate owner, he would have demanded a higher price.
The house in question is in Sunningdale... a posh enclave of Berkshire, close to London.
The Council of Mortgage Lenders report a 12% monthly fall, leaving the annual figure down 86%. It's the lowest monthly total of new lending since April 2005.
The Telegraph takes a moment to remind us... it's not all about the south east. Hazel Davis dons her pith helmet and ventures north, where she finds 75% of sales in the year to June coming in under £175,000. Get out of the south east, and there's a choice of stamp duty-free purchases (including a rather sharp conversion in a former Sheffield cutlery factory, pictured). Few believe the stamp duty fiddling will kick-start the property market, but the point Davis is making is that it will reach people, and a £1,750 saving is something to add to the deposit.
Ebay's currently awash with Lehman Brothers memorabilia, as (presumably) ex-staff set about a little micro-asset stripping. My favourite? This Employee Operating Principles Cube... "Demonstrating smart risk management". So if you want to buy the Rat and Mouse a present... you know where to go....
We've heard rumours of this before, never been able to substantiate the story, but here's the Observer talking to RICS spokesman Jeremy Leaf, who tells them he's encouraging some clients to consider offering compensation to buyers if the property's value falls by more than 15%. Jeez, there are so many problems with this kind of deal it's hard to know where to begin. Technically, is there a house price index that's meaningful when volume is at such a low level? The truth is, nobody knows what a house is worth from one week to the next when houses aren't being bought and sold in reasonable quantities. This kind of scenario just exacerbates differences between one location and the next, one price bracket and the next. Practically, should the price drop (and I'm presuming there's a time limit on this kind of agreement) beyond the agreed amount, how worthwhile (expensive) will it be to enforce such an agreement? Philosophically, is this kind of nanny-ing even right? Will this buyer agree to an uplift clause as well, or is it all one-way traffic? Let's hope so. I don't like this at all...
Head over to the Telegraph for a few pictures illustrating a Slough tenant's offbeat lifestyle. "Britain's dirtiest flat"... reads the headline. What about "Britain's unhealthiest tenant"? When he vacated the flat, the landlord found £5,000-worth of discarded burger cartons, a cigarette butt mountain on the side of the sink and nicotine dripping from the walls. Guess what? Single male.
This is a bit of a regular item, with owners of relevant data (property portals, search engines, Land Registry subscribers) extrapolating figures purporting to reveal the catchment area premium paid by desperate London parents. Why's this one different? This one's a YouGov poll, targeting London parents, and it comes at a time of falling house prices and rising private education costs. According to the results, 19% would pay between a premium of between £5,000 and £100,000 for access to a good state school. Two per cent would consider paying more than £100,000.
Glen Haysman wasn't expecting destruction, apparently. He rented Rickmansworth four-bedroom home to the production company behind the new Bond caper, who shot a few scenes there. And, he alleges, trashed his driveway and the interior of his property. The film company disputed the extent of the loss. Mr Haysman has taken to using sleeping pills. More here.
There was a time when it wasn't a trivial affair to find the bank repossessed properties at auction. Now, there's MustBeSold, a new repo-only auction house, holding ten auctions a year, and promising to sell around 200 lots on its first auction (September 30, Cafe Royal, Regent Street), some without reserve.
The MPC stick, at 5% for the fifth consecutive month. Meanwhile, lenders continue to drop rates on fixed-rate mortgages. According to MoneyFacts.co.uk, the average interest rate is now back at pre-crunch 2007 levels.
Now that the dust's settling... it's a strange collection of measures, isn't it? The Stamp Duty suspension's been getting all the coverage, but it's virtually meaningless, and particularly for the south east of England. A maximum of £1,750 barely covers the cost of the paperwork on many of the mortgages currently available. Expect a flurry of activity in August 2009. Also expect a flurry of gazundering on properties in the £175,000 to £200,000 region, right away. Despite the headlines, this was really about the Government doing something, no matter how meaningless, in order to quell rumours of a more significant tax break that have been circulating and killing sales ever since they irresponsibly allowed the story to circulate earlier in the summer. Meanwhile, I can't see any circumstance in which Home Buy Direct isn't an encouragement to risk negative equity.
From Wednesday, the 1% band threshold will rise from £125,000 to £175,000, offering (clearly) a maximum saving of £1,750. As more details of the Governments plans (below) emerge, we also know that first-time buyers in households earning less than £60,000 will be offered "free" five-year loans of up to 30%. What happens after the five years are up remains unclear, although Hazel Blears used the word "fee" when talking to the BBC this morning. She didn't, however, elaborate.
It's scheduled for an official announcement later today, but the details appear to be out there:
Home Buy Direct... a shared-equity scheme for ftbs, with loans of up to 30% offered by the Government and new-build developers.
Mortgage rescue packages for families facing the repo man. Details here are less than clear but there's talk of a Government-backed sale-and-rent-back scheme, involving accredited housing associations, as well as various shared-ownership or shared-equity solutions, again involving housing associations.
An injection of money into old-fashioned social housing.
There's likely to be (a lot) more commentary from the usual sources throughout the day, and at this point - before an official announcement - I feel reluctant to comment much... other than to express a certain skepticism about the idea of helping first-time buyers into buying new-build apartments that otherwise can't be shifted, exactly at a time when there's considerable uncertainty regarding how far the market has yet to fall. Who's receiving the benefit? The purchaser or the developer?
Two interesting theories. Data from Savills suggests that divorce rates are falling in time with house prices. The theory is that squabbling couples are deciding not to divorce at a time when selling and splitting the family home might not net the kind of figure they've been taking for granted. According to Savills, the numbers suggest a clear correlation... Brits will lie back and think of the Halifax House Price Index rather than split and take the hit. Meanwhile, Building Societies Association director-general Adrian Coles is quoted, here, claiming that building society receipts (savings in other words) doubled in July 2008 compared to the same month a year ago. Building societies received £1.4bn, profiting from fears about the stock market and other riskier investments.
You can always count on Bradford & Bingley for some extraordinary news. The latest... they've moved into the rent-collecting racket... picking up the cash directly from tenants, in order to combat arrears in its buy-to-let mortgage business. So if you're late on your rent, and there's a couple of guys outside in bowler hats...
Bradford & Bingley have posted a £26.7m first-half pretax loss, with bad debts continuing to rise. That's down from a £180.4m profit, the same time last year.
In the States, This American Life is a radio institution... an hour of intelligent, theme-based documentary with a liberal slant. Here, it's less well known, although it's possible to subscribe to the free weekly podcast via iTunes. For a good introduction, check out this streaming 60 minutes focussing on the credit crunch... what happened, how, why.
According to a Financial Services Authority statement, quoted here, "a third of the sampled firms have terms in their mortgage contracts that allow them to vary their charges which, in our view, does not comply with the law and principles set out in the statement and so may be unfair." (The "statement" is January 2007 statement of good practice, which is supposed to have put an end to lenders improvising on the fees front.) The FSA is writing to the lenders concerned, but doesn't rule out legal action in instances of serious breaches.
The British Bankers' Association's latest figures show approvals down 65% on this time last year for July, a tiny improvement on June's figures. Total lending was unchanged. More here.
The average annual savings rate in America is now a paltry £200, not much more than the value of the coins that fall yearly into the cracks of the average sofa.
I don't know where she gets her figures... but, personally, I'd suggest investing in a purse or something.
But that's neither here nor there. The thrust of the piece is a well-reasoned attack on, first, the [il]logic of equity release...
You were a fool, so went the new wisdom, to sit on all the equity that your ever-more-valuable house had accrued, and should, as many banks advertised, "put that money to work". But "put that money to work" really meant "spend it".
... and, secondly, on the idea that debt or bankruptcy are lifestyle choices, devoid of an ethical component. Although the piece is unlikely to win her many friends - for a novelist, her style is peculiarly charmless; and the idea of a media-artist-mid-Atlantic gadfly ("... in Brookly, where I spend summer") lecturing those forced into debt by, perhaps, the loss of a McJob isn't going to her endear her to everyone - it's based on good sense, and says something worth saying. Read it here.
According to research by GE Money, 3.4m people have been turned down by mortgage lenders in the last 18 months, many of them repeatedly. One in eight have had more than three refusals.
Not much to smile about, especially if you're working in the property industry, you'd think. And yet, over the past month, the media has been peppered with some surprising, some outrageous, examples of bullishness in the face of adversity.
There’s a neurological function – a release of endorphins – that causes a person otherwise under stress and pain to experience a kind of euphoria. Long distance runners know it. They call it “runner’s high”. Japanese Kamikaze pilots knew it. It was what got them out of bed on the morning of a raid, helped them eat their breakfasts and (somewhat illogically) put on their crash helmets. Call me a cynic, but I see a correlation, here.
What was it... a moment of madness? Something induced Brixton Estates to attempt to inject a little humour into a largely un-funny situation by illustrating the front cover of its interim report with an image of the four horsemen, and quoting Bob Dylan inside its pages:
There must be some way out of here
Said the joker to the thief
There's too much confusion
I can't get no relief
The report likened cash-rich opportunist buyers to thieves, and reluctant vendors to jokers. The other news was that Brixton Estates - which specialises in commercial property - showed a loss for the first six months of the year. More here.
The vendor's step-father's refusing to move out, so when the flat goes to auction, on August 26, it will sell with all its contents, including a 52-year-old man. Viewings are apparently difficult, since the man's refusing to let anyone in.
Seven people - aged 18-25 - have moved into east London apartments that they built themselves, as part of an initiative by Havering Council, Family Mosaic Housing Association and the Community Self Build Agency. The project began at the very beginning, sending the first-time builders to a local college to pick up construction qualifications. More here.
As you're probably aware, traffic costs, and right here is where the Rat and Mouse continues paying. Which is why we're encouraging advertisers who feel they might have something to gain from seeing their brand served up to homeowners, renters, landlords, movers, media shakers on around 4,000 pages a day. As part of the deal, you'll get a heartfelt thank you each and every week, which is why, tonight, we're saying thanks to...
... LandlordNanny, an innovative, hi-tech, but simple-to-use, drag-and-drop online organiser for everything a landlord needs to remember, whether managing a single property or a giant portfolio. As well as providing a useful directory of recommended letting-sector professionals (accountants, mortgage providers, HIPs providers etc), they're a registered letting agent, which means that customers get to advertise properties on the large property portals, including Primelocation.com and Propertyfinder.com. Use of the basic service is free. Upgrade to a premium account (£99.95, but £49.95 during the current introductory offer) and you get access to legal documents, automated invoicing, web-based accounting software and more. In other words, the kind of things that would cost a great deal more than £99.95 if you handed them over to a lettings agent.
According to Tory think tank - the Policy Exchange - the way to finally tackle north-south geographical inequality and regenerate ailing cities is to move them... to London. Half a million new homes should apparently do it, and there'll be plenty of time to build them while the northerners load up their jalopies with mattresses, chickens and banjoes. The Standard claims David Cameron is distancing himself from the report, assuming when Cameron uses the word "balmy" he means "extremely foolish", rather than "pleasant or comforting". We're not so sure. You can download the actual PE report by clicking this.
That's according to research by the National Association of Estate Agents. Two-thirds of agents claim buyers have "expressed doubts" about going ahead; a quarter have actually seen deals fall through, overtly as a result of fears about buying before a Stamp Duty break. More here.
Bake bread, said the Traditionalists. The aroma of warm dough will subconsciously remind them that this is a home, not just a house, and homes sell at a premium. The Developers advised neutral colours; a blank canvas on which a buyer could paint their own picture, because there's nothing more disastrous than trying to impose your taste on somebody else. The Theatricals disagreed. The fine art of home staging demanded character, darling; you should see your house as a theatre set, where a supreme lifestyle performance will so move the audience they'll turn immediately to the agent and make an extravagant offer. They were, back then, all correct. In a frenzied bull market, you could hang a portrait of Hitler above the fireplace and - if the property were in the right location and south-facing - you'd get an offer.
Our publisher tackles the fine art of selling a home in a bear market, in his weekly guest column for Citywire, here.
I'm back... lovely fortnight at the coast, thanks to those who asked. Wifi was non-existent, 3G dongle-connection blew with the wind, and TV/radio was outlawed. I did read the papers, however, and was as shocked as (presumably) you to watch the Stamp Duty "story". So... somebody nudges the Government and tells them the property market's ailing. Great... a chance to, not just damage something but, utterly destroy it, really slam the last nail in the coffin lid and walk away with a stupid smirk. Darling and Brown step up the mark... why not have a public argument about Stamp Duty? Why not hint that you're about to completely repeal it - and so stall the few sales about to exchange - and then do nothing? Even better, why not put it about that:
Although work is under way on a range of options involving possible changes to stamp duty and other measures to help buyers, there is deep scepticism about the idea in the Treasury.
Will the last Labour-voting estate agent switch off the lights before leaving the room...
Instant Access Properties and sister company Inside Track come under the spotlight in BBC Radio 4's Face The Facts, at 12.30pm (UK time). According to this, the BBC will accuse Instant Access - which sells investment properties off-plan, claiming impressive discounts - of being dishonest in its valuations. Undercover reporters have appointed independent surveyors who have claimed even IA's "discounted" values have been "optimistic". Personally, I think we all need to grow up a little about this kind of thing. Valuations of new builds are notoriously difficult at the best of times... the room for disagreement will be even greater when employing surveyors to retrospectively value properties in the middle of the credit crunch. But - more importantly - if all it takes is a phone call to a local estate agent to learn that a discounted price is, in fact, in line with or above market value, doesn't the responsibility for a bad deal have to be faced by the buyer?
According to NOAONOAHNEAONAAE the National Association of Estate Agents, first-time buyer sales are up, from 10.6% in May to 11.8% in June. Not much, but considerably more than 9.8% in June 2007. Is this a sign that ftbs are calling the bottom of the market, that there are bargains to be had? Some would like us to think so. But, personally, I doubt it. If you consider how far transactions have dropped off in a year, it seems certain that ftb purchases are way, way down in real terms.
Eleven, tomorrow morning is the final deadline for HBOS shareholders to decide whether they want to exercise the privilege of buying more shares at the price of 275p each. It's a decision surely helped by the fact that as of writing HBOS shares are trading at 267.5p (yesterday, you could pick them up for 225p). In the current climate, these rights issues are a complete joke. RBS shares are currently trading at 180.9p, after a June issue at 200p. And let's not even mention Broken & Busted. I suppose HBOS shareholders can at least comfort themselves that the institution has the dignity to accept the inevitable, and the underwriters to pick up the shortfall, rather than go the B&B route and scurry around re-setting the rights issue price like a street corner trader flogging knock-off perfumes before the rozzers arrive. More here.
A Guardian reader asks... should she sell up, pay off the mortgage, rent for a while and buy back in when the market's slipped further? Virginia Wallis's answer show just how high interest rates need to climb and property needs to fall before this becomes a sensible tactic. Read it here.
We're hearing from Building Design that Boris Johnson is issuing a thumbs down to plans to pedestrianise Parliament Square in time for the London Olympics, citing congestion issues. The plan would have sealed the road in front of Westminster Abbey off from traffic, creating a public space and new tourist attraction.
The words of Allsop auctioneer Duncan Moir, describing how it feels encouraging people to bid in its June property auctions. It achieved its lowest success rate since 1995... 60% (its long term average is 80%), and raised just a third of its May total. More here.
While the bottom drops out of the residential property market in what might or might not turn out to be the most ugly and undignified economic prolapse ever suffered by the great middle classes' hearthside economy, the self-builders, the frontiers-people of the housing market, the men and the women with a dream... these people are finding themselves in an uncharacteristically privileged position. After decades of being treated like wacky longhairs, suddenly they're getting the best tables and being offered the specials. Why? They don't need to turn a profit. Their profit's built into the build.
The ongoing war with mortgage fraud has claimed a twelfth victim... Sadia Nasir, of House of Finance, banned and fined £129,000. She apparently used her own bank details on four of her clients' mortgage applications; she fabricated payslips and financial statements on her own behalf; and she withheld information from the investigators. Apart from that, she was completely honest.
To combat the crunch, Bovey’s arm of the business plans to launch a service whereby it will guarantee to a vendor that it will pay a buyer’s mortgage for five years as long as they stump up 20% equity.
Guarantee to a vendor? Is anyone else having trouble understanding this? While I go away and try to puzzle it out, you have a great weekend. And remember, things really could be worse.
Wouldn't normally make a post, but in the current circumstances... from July 9, 2-year fix from 6.58% (£599 fee) or 6.98% (no fee); 2-year tracker from 5.98% (£599 fee) or 5.78% (£1,499 fee). More here.
If you're unsure whether your MP represented your wishes and best interests by voting to keep an unrealistic and discredited expenses system that would keep them in luxuries at your expense, go here.
According to a survey by Moneysupermarket.com, four million Brits meeting mortgage payments with the help of a high interest credit card or personal loan. Which is sad, and stupid. A Moneysupermarket representative tells the Times:
A two-tier system, and marginal... like income tax (if your house costs £200,000, the 2.5% would apply to the £50,000 falling into that band).
to £150,000 - 0%
£150,001 to £250,000 - 2.5%
from £250,001 - 5%
Clearly, almost everyone would gain from a reduction if the system was replaced in the way RICS suggests... except the Treasury, which would lose 24% of its current Stamp Duty haul. Given the Government's huge Stamp Duty cash grab in recent years, pleading poverty would leave the Treasury on rocky ground.
In the States, the FBI is getting tough on mortgage fraud, with 406 arrests, including developers, estate agents and mortgage brokers. Interestingly, the other credit crunch-related scam currently capturing the attention of law enforcement is the foreclosure rescue scam... the angel of mercy who promises to rid you of the risk of repo, before ripping you off for everything you have. As has been the pattern with the whole crisis, watch it in America first, and then expect expect arrests to follow shortly here. More.
And I thought they were a nicer bunch than this. Graham Norwood's piece on the practicalities of the gazunder ends with a reader poll. Clearly, option three - that gazundering might be more or less ethical depending on which side of the deal you're on - is there to find out how many 'tards read the paper. Regarding the yes/no crowd, I'm surprised to see the voting so close.
Mervyn King's comments at yesterday's Mansion House dinner make interest rate rises sooner or later almost inevitable. Inflation is clearly the Bank's foremost concern (as, technically, it should be), and King seemed to ready to take on the property sector with the warning that out-of-control inflation would be as bad for house prices as higher interest rates. In other words... how do you take your coffee? Without cream? Or without cream? More here.
Regular Rat and Mouse readers might remember me busting a blood vessel over the details of Tory man-and-wife MPs Sir Nicholas and Ann Winterton's London living arrangements... the £700,000 property they own outright, the "family trust" they moved the property into in order to avoid inheritance tax, the £165,000 of public money they've managed to get their trotters on, paid as rent to themselves. Let's go back and revisit Sir Nicholas's indignant repost to the Standard when challenged regarding the arrangement:
According to a very interesting piece in the Daily Mail, those of us scoffing at the Lance-Corporal Joneses queuing for their money outside Northern Rock branches last autumn might have been too cool for our own good. The bank apparently had detailed plans to freeze accounts, disable cash machines, shut down the website and empty branches, all within hours of what the documents describe as "D-Day".
Mervyn King, Governor of the Bank of England, will, as predicted, be writing to the Chancellor to explain why inflation has hit 3.3% in May, 1.3% above the Government's target, and what it's planning to do about it. The first bit will fairly easy, but expect King to do a bit of pencil-chewing when it comes to the second. He has a choice. Kill the housing market and the wider economy with interest rate rises. Or let rampant inflation out of the bottle by keeping interest rates low. Best of luck. More here.
Just a fortnight ago, Nationwide's Fionnuala Earley was predicting rate cuts. Not from the Nationwide, clearly. Today's news is that their own rates are up, by as much as half a percent, from tomorrow. Hmmm.
Thanks to the Rat and Mouse reader who spotted this:
Over to our reader:
It's not even a new development. Its not London. It's somewhere "Up north". It's in County Durham, and if your geography is not up to much thats about 20ish miles south-west of Newcastle. I know Howden as I used to live near by for a few years and it's not the nicest village in the world, bit chavtastic in my opinion...
The property's on the market for £249,950. The particulars are here.
I know, it's not really about property, but it's about London, and the Rat and Mouse has an ongoing interest in the Olympic story. Today, we know more about how exactly the Olympic flag will be handed to the Brits at the closing of the Beijing games. From today's Guardian:
With Gordon Brown and the Chinese leadership due to attend the event on 24 August, the prospect of diplomatic embarrassment looms.
You call that embarrassment? That's nothing compared to how the same committee responsible for choosing what looks like a middle-class 8-year-old's vision of gang graffiti as the London 2012 logo is planning to mark the hand-over. Continuing the London-as-Europe's-capital-of-gang-culture theme, the event will be celebrated with a performance by Zoo Nation, a street dance troupe best known for their Into The Hoods show, set on the fictional Ruff Endz Estate. Now, the Rat and Mouse is as interested in keeping it real as the next property blog, but since when did keeping it real involve the uber-privileged white, middle-class deciding it was appropriate to welcome the world's sporting communities to London by celebrating under-privelege, and doing so by borrowing the visual, dance and musical language of America? Wonder how these guys feel about that?
You can tell right away it's a Daily Mail story. Purbeck is apparently a place in Dorset (which is apparently a place south of London), and its local council is testing a planning strategy which involves charging homeowners £1,000 to grant planning permission for any work on the house which is likely to result in an extra bedroom. The justification? The maintenance of public transport and roads. Because an extra bedroom means an extra person? An extra car? Anyway, homeowners are less than happy with a situation in which they can't get a loan to move, if they do they're charged stamp duty, and now if they "improve" they're taxed £1,000 before they can even receive planning permission. More here,
If you've managed to get over the outrage of a proven CV liar being rewarded with a win on The Apprentice last night, you might be ready to hear about last year's runner up, Kristina Grimes, who is now - apparently - investing in new builds in Manchester.
According to the Association of Residential Letting Agents (ARLA), 39% of agents are reporting tenant demand outstripping supply, and 77% of landlords are holding property with the intention of neither buying nor selling in the immediate future. A surplus of new-build two-bedroom flats is keeping rents stable in that particular area. In general, continuing demand looks likely, while it remains difficult to get a loan. More here. On the subject of loans, it's more difficult than it was to get one from Egg, the online bank owned by Citi, which - according to this - is pulling out of the mortgage market. It's also more expensive to get one from Busted & Broken, which is hiking rates across its offerings by as much as 0.55%. No doubt partly as a result, nobody's buying. According to figures from the Royal Institution of Chartered Surveyors (RICS) estate agents sold an average of 17.4 properties each in the three months to May. That's the lowest since records began in 1978. And they might be right to be wary. Data from the Council of Mortgage Lenders (CML) points to 23,000 potential negative equity cases in homeowners who took out 100% mortgages in the year to March 31. More on both those stories here. Finally, the other piece in the jigsaw, also supplied by the RICS, might surprise you. Sentiment - the estate agent/surveyor swellness quotient - improved marginally in May on less bad than expected sales figures. So, technically, what the figures reveal is marginally less rates of unswellness. More here.
According to a Haart agent, quoted here. And here's business consultant and previous gazump-victim, James:
So, for example, if the property purchase took six months and I felt that house values had slumped during that time, I wouldn't have a problem gazundering the vendor.
Fair enough, and another reason why vendors shouldn't take homes off the market without evidence that the buyers has a mortgage offer in place and without a deadline for exchange.
And I'm not surprised. There's news here of a growing revolt, with City analysts advising Bradford & Bingley shareholders to vote against the current cash call, after the board cut the price from 82p to 55p in an ill-considered scramble to protect underwriters' (UBS and Citigroup) interests at the expense of shareholders. The decision to sell almost 30% of the company to private equity group Texas Pacific "for a song" is doing little to calm frayed nerves either. The vote will take place in the first week of July.
Figures, today, from the Bank of England show mortgage approvals down to 58,000 in April from 68,000 in March, a new and significant low, bringing the figures into the territory associated with the last house price crash of the 1990s. More here.
existing investors asked to stump up further £258m
shares suspended, then slump 20% after trading restored
chief executive steps down with heart problems
Texas Pacific Group (private equity house) to take 23% stake and inject further £179m
bank suffers significant problems from arrears-heavy buy-to-let sector
So the good news... bank to receive £440m. The bad news... bank needs £440m. In other news... first significant sign of buy-to-let market woe. We'll be back later with further developments and with commentary from across the media.
New Land Registry figures reveal the extent of the property market inaction... transactions down by a third in the November-to-February period, compared to the same period a year ago. In the £150,000 to £200,000 bracket, sales were down 40%. More here. Meanwhile, Land Registry house price data... a less-than-significant fall of 0.2% in April, bringing the annual change down from 3.6% to 2.7%... still in the black. Specifically in London, annual growth is still up at 6.8%, although that's a significant drop from March-to-March's 10.5%, and prices fell in April by 0.5%.
Before you get too excited, it's (like free prescriptions) Scotland-only. It's provided by a firm of Scottish solicitors (who won't be charging advice fees) and the Bank of Ireland. There are no arrangement fees, but a parent or other close relative needs to stand as guarantor. And it's not just recommended for first-time buyers, but anybody who needs to experience negative equity in a hurry. More here.
Just days after The Abbey cut mortgage rates and rampant bulls declared the crisis over, the news is that they're to put them up again, by between 0.15% and 0.56%, from May 29. More here.
Truckers will bring parts of London and parts of Wales to a standstill over the cost of fuel. But reports that MPs earning more than £61,000 a year might be planning to award themselves no-questions-asked annual expenses of £23,000 - to pay for £90-a-time window cleaning, £6,500 gardening, a £3,000 shower, and (unbelievably) their bloody life insurance payments - is received with a kind of what can you do? shrug. At a time when families are facing increasing mortgage and rental costs, there are only two things more hideous than our so-called "right honourable" elected representatives' wholesale and cavalier greed. 1 - their undignified and ultimately unsuccessful attempt to conceal the truth from the taxpayers (which costs the said taxpayers a further £200,000 in legal bills). 2 - this latest arrogant, unreconstructed response... a shameless attempt to ensure their future ability to thieve from the people without the embarrassment of getting caught.
According to a survey by Halifax, homeowners are preparing for a long summer of DIY, in the hope that a spot of tarting up will add the value their properties won't gain from a naturally rising market. Forty-four per cent are apparently looking to add an average of £5,000 to the value of their homes; 12% are more ambitious, with a target of £10,000 to £25,000. Exactly how they intend to achieve this is a lot less ambitious... redecorating (71%), garden improvements (35%), new furnishings (33%), new carpets (25%), a new bathroom (21%).
On Brown's £200 million injection into shared equity:
These are pathetic gestures which will do little to shift the housing market one way or the other. With the average home costing a little under £200,000, £200 million will buy only 1,000 properties — compared with the 167,000 built last year, many of which remain unsold. As with Gordon Brown’s sale of gold reserves at the bottom of the market in 1999, all he will achieve is to make a spectacularly badly timed punt with a bundle of taxpayers’ money.
The government’s previous attempts to encourage social-housing tenants into shared-equity schemes have not proved a huge success. In 2005, it introduced the ‘Social Homebuy’ scheme designed to entice tenants to buy a stake in their homes. By last November only 88 had chosen to do so. There are good reasons why the take-up is low.
In a very interesting piece for the Spectator, Ross Clark argues that half a home isn't worth half a home.
Thanks to the readers who drew my attention to this remarkable piece in the Express:
Stuart Law, of Assetz House Price Index which carried out the research, said: “I am yet to see any firm evidence of a housing market crash. Values in this country have remained extremely robust in spite of the difficulties in the mortgage market. With announcements from some mortgage lenders that they are now reducing their rates, movement should return to the market and we should return to a degree of normality, perhaps as soon as September.”
Surely, the Rat and Mouse might be forgiven for finding these views just a little eccentric? But the Express piece manages to find plenty of people prepared to back Law up... including John Wriglesworth ("There is no sign of a property crash and never has been") and Peter Bolton King ("There is no housing crisis, we have no credit crisis"). The article even manages to start a paragraph with "In further good news...". I suggest you click through to it right away; it might be some time before you see its like again.
Slightly disappointingly, we're talking equivalents. The research, conducted by specialist movers Cadogan Tate, reveals that the average removal man walks the equivalent of London-to-Kathmandu, climbs up and down enough stairs to take them to the peak of Everest and back 150 times, and lifts and carries the weight equivalent of 30,000 yaks.
The Rat and Mouse welcomes news that the OFT is investigating sale and rent back schemes... a practice in which homeowners at risk of repossession sell properties at bargain basement prices to companies and then rent from them. Certainly, there's an argument for avoiding repossession by whatever means... but we've been very interested in some of the marketing methods applied by some of the firms (including the devious suggestion, by one firm, that it's a pressure group acting against repo-happy lenders). More in this in the very near future... and, in the meantime, if you've had experience, good or bad, with any of these firms, we'd be interested to hear from you.
Mervyn King has painted a gloomy picture of the UK economy, effectively scuppering realistic hopes of an interest rate cut with a grim quarterly inflation report. More here.
I don't want reproduce the picture, because it's a scoop and I'll probably get sued, but click this for a nice close-up. It's a picture of "Housing Minister" Caroline Flint's Cabinet briefing notes, caught by a photographer as she waived them around while entering No. 10. "These things happen," she said, afterward. They do - but they shouldn't, especially with economic confidence at an all-time low, the market ruled by sentiment, and fear currently a knife-edge from panic. The notes revealed that Government officials expect house prices to dip 5%-10% "at best" this year, and stated "we can't know how bad it will get" (which - if you think about it - is kind of obvious, but Flint still needed it written down). Really, it's another fumble... another moment of clumsiness that will cost British people, none of whom will have voted for a Government of teenagers led by a damaged class bully. The Rat and Mouse has no party political agenda whatsoever (but rather takes the view that the very act of running for a public position is enough to demonstrate unsuitability). In this instance, though, it's time Gordon Brown and his mediocre but oh-so arrogant cabinet called an election.
"I've just gazundered a 70-year-old lady who is undergoing a hip replacement,'' said Blavier, 39. ``You can't get a scenario to make you feel more guilty. But this is not my hobby. It's what helps me make a living.''
Oh, that's okay then, mate. Except, technically, it's neither an excuse nor the whole truth. (Sports massage therapist Blavier actually makes his living rubbing the thighs of people richer than him.) The quote is from an interesting piece in Bloomberg on the subject of gazundering. As our publisher recently noted, gazundering's ethically complex, the result of a system that applies business transaction rules to home transactions, and trusts both parties to behave like gentlemen. So when you match a poorly geriatric with an avaricious masseur, ugliness is almost certainly guaranteed.
According to Government figures, more than 30% of new London homes are being built on former gardens. Although this isn't about people building mini-homes on their lawns (the majority of cases are developers knocking existing houses down and replacing them developments that extend into the former gardens), it's still not a good trend for quality of life in the Capital. More here.
Business is booming in the repo sector, with new figures showing that home repossession orders increased by a fifth in the first quarter of the year (compared to the same period in 2007). They're also up 9% on the previous quarter. The figures come courtesy of the Ministry of Justice, and they'll be received with much interest, as the first clue to how over-stretched homeowners are coping with the downturn.
Truckers will 
