Most of the western world, if not the entire first world, seems to be reporting that property market price inflation is decreasing or stalled. In the worst-hit areas we even hear tales of a lowering of house prices and negative equity for some unfortunate new homeowners who jumped on to the property bandwagon at the peak of the recent property boom. High Street inflation never lets up, so it’s natural for property investors large and small to feel that the end of the world is nigh.

 

This state of mind is undoubtedly an over-reaction. The human psyche drives modern man to ensure he has a place he can call home in the shortest possible time after leaving his childhood days behind in the former family house. Fair enough – but does this man of our times actually have to own his home outright, in theory at best? And more tellingly, does this man have a god-given right to expect that with home ownership comes enough lifetime’s wealth to be able to retire from working for an income at his chosen time? The latter scenario is a common desire, and it is based upon the premise that property values will always rise faster than other commodities.

 

We are now finding in Ireland and elsewhere that we have come to the end of a period where property value inflation was outstripping general living cost rises. But we should not be surprised because we have had these ups and downs before. The general trend though is that property prices commonly rise again fairly rapidly after periods of stagnation. It’s all about supply and demand.

 

The demand for new homes or at least of people looking to move house will never cease. Why? Because many old homes become dilapidated for a start. Then we have the new young families who need their own space and cannot expand into the limited environs of parental homes. On top of that, the modern world economy relies upon many workers who must be mobile throughout most of their working lives, thereby prompting housing development and property transactions countrywide and often internationally. And don’t forget those that opt to upgrade or downsize by choice due to family or personal needs.

 

What about the supply side? The builders can’t build fast enough in boom times because handsome returns on their property investments are almost guaranteed. If landbanks are purchased just prior to a stalling of property sales prices, then naturally there is no rush to build and sell at reduced profit margins. So any oversupply rate reduces until it balances demand. This is the period being experienced in many parts of the US and Europe at present.

 

In Ireland currently, un-named property commentators repeatedly get column inches reporting that house prices have dropped by nearly 10% in just 12 months. This type of statement is more than likely associated with party politics prompted by the Irish government’s opposition rather than informed economic commentary.

 

Let’s take a quick look at what the “Irish House Prices in Freefall” sensational headlines really mean when based on the 10% drop in a year statistic. The house price index is based on sales closure prices, not size of property or land acreage; these latter factors generally tend to grow on average at a moderate rate over each decade because we all want bigger and better homes regardless of our individual domestic needs. So bear in mind that the average price of a house per country tends to grow because the asset is getting bigger as well as reflecting local general economy inflation.

 

In Ireland last year, the average price of a house had risen incredibly to over €300,000 from nearer to €200k a decade earlier. That statistic is part of the local Celtic Tiger boom folklore which lending institutions rammed down our throats when selling home loans and risk-laden mortgage deals up until just a few months ago. The 2007 €300k average home was a bit bigger and better than houses available in the year 2000, but it was obviously grossly over-valued in real terms. It didn’t cost that much more to build than the average house completed and sold in 2000, evidenced by the great numbers of new self-builders who wanted a share of the money-spinning action.

 

In mid-2008, the average price of a house in Ireland is €275,000. This seems to be getting closer to a sustainable valuation (if you seriously want to sell, that is) for the average property size available which is typically 3 bedrooms, multiple bathrooms and all the latest mod-cons. A bonus in rural Ireland is that you might even get a generous half-acre of land thrown in.

 

So the “sensational” loss of over €25,000 on average off every Irish homeowner’s wealth is not a true loss as such at all. It is just a realisation of long-term property asset value. Anyone who spent their invisible extra €25k in less than 12 months was a greedy fool, and we shouldn’t have any sympathy for them if they don’t display the caution and prudence of serious property investors.

 

Anyway, it will not be long before the local property market detects the first signs of increased demand again. Sellers will start hiking up prices and the whole cycle will slowly start to revolve again in our favourite upwards direction.

 

So the conclusion is “don’t panic” and take some time to reflect on why existing homeowners feel uneasy every time this cycle reaches its low point.

 

Property is a reasonably sound investment, and it gives the buyer the obvious immediate attraction of having somewhere to live (or work in the case of commercial premises). However there are other ways to exist comfortably which don’t involve organising your life around the demands of meeting hefty monthly mortgage repayments and fretting about why the value of your property doesn’t always rise at a consistent rate.

 

Many young people are opting to rent property. The so-called home-owning critics immediately shout that house rent is “dead money”. To a degree, yes, but if renting frees up income to invest in markets which don’t fluctuate in boom & bust cycles, then isn’t the oft-struggling mortgage payer something of a hypocrite? And who actually owns the majority of private domestic homes anyway? If a homeowner misses a mortgage payment you soon find out that the big financial institutions cold-heartedly treat lenders as no better than tenants of real estate upon which their businesses are founded. And furthermore, as tenants with much less rights than conventional renters of property who have fair and equitable rental agreements with their landlords to rely upon in times of hardship.

 

It’s interesting to note that in previous generations the majority of house dwellers were tenants, particularly in towns and cities. Most homeowners can probably quote that their parents or grandparents lived in rented accommodation, and that is a reason why they strive to ensure that they and their dependants have the security of home ownership. What security, if you worry about why your investment and lifestyle is not always as good as you dreamt? Our ancestors survived, without the disposable income levels of today, so perhaps the property rental option should not be dismissed so readily.

 

Maybe the biggest lesson to be learned by property investors when global economy growth recedes is that only a few property types are guaranteed to grow in value (in the longer term) at a rate generally in excess of other inflationary factors. These are the well-maintained properties in desirable locations whether they be urban or rural. Funnily enough, my experience tells me that these properties are likely to fall into the cheaper price category or the other extreme, the high-end luxury home. The middle range property, by its very nature, forms the bulk of property sale listings, so the seller struggles to promote his property above the multitudes of similar priced homes or sites.

 

I suppose it can be summed up as follows:

 



First-time buyers, transient workers, students and 2nd home buyers will always provide a ready market for low-end “affordable” property, particularly in urban settings.

High earners will always want to upgrade to luxury properties in secure and private surroundings, particularly in established districts of like-minded people.

The rest of us, by far the majority, continue to buy or rent in the mid-price range through necessity of location or finance limitations and a natural desire to match or slightly better our neighbours’ lifestyles.



 

Property buyers, renters or vendors in all three of these categories can benefit greatly from registering with web-based property advertising portals such as my own site (www.Propertysteps.ie). The exclusive luxury homes and the lower-end smaller properties are instantly brought to the fore from hundreds of listings by easy-to-use search functions which detect price range and/or location. The more attractive middle range properties also benefit in that household features and property type listings enable the website browser to easily compare the best value for money of numerous properties in a chosen location.

 

In Ireland, where we are based, I can report that Property Agents say that websites such as ours have contributed greatly to stability in the mid-price range domestic property market. Sale closures in this category, for sensibly priced houses, are regular and commonplace, thereby propping up the market in general. This contradicts the doom & gloom reported in the media, no doubt created by “worried” homeowners who aren’t even active in the buying and selling of property. The lazy expectation that easy money can be made simply by buying and living in a home for life smacks of greed, not reality. These merchants of doom should be ignored.

 

We also read in the press about the owners of expensive houses for sale having to dramatically slash prices to arouse interest. Probably, not maybe, the asking price was unrealistic and based upon outdated market value. The eventual selling price of a luxury home will still have made the purchase a sound investment if it was bought at any time except the very peak of the recent boom. Again, I can report in Ireland that Agents say that there is still a waiting list for desirable upmarket properties. The best of these homes are sold via website mailing lists or by the uploading of the property brochure to Propertysteps.ie and similar internet property portals.

For a fraction of the cost of press advertising, our best value for money website gets quick results. Often you never even see a For Sale sign being erected for property in the more exclusive address category, yet new occupiers appear and everyone involved in the transaction is delighted. You don’t read about these everyday success stories in the media; it appears to me that only boom, doom or gloom stories sell newspapers when the local economy is discussed.



Passive Income

More than one million households in England could face repossession in the coming year, warns the homelessness charity Shelter. The organisation has seen a steep rise in people seeking help for not being able to repay their mortgages. In 2007 there were 80,000 people seeking help, an increase of 10,000 from the year before.

Adam Sampson, chief executive at Shelter said, “Shelter has seen a massive increase in people coming to us with mortgage problems, and with repossessions set to rise throughout this year, we simply haven’t got the resources to help everyone.”

According to the new report from Shelter, called Mortgages and repossessions, there has been an overall increase in repossessions since 2004. One of the reasons for this is the increase in house prices. The rise has made the houses too expensive for many people to buy. Many are therefore looking to engage in more risky borrowing, such as adverse mortgages, to be able to afford a home. When they cannot pay back the high interest rates on the mortgages it then leads to repossessions. Both arrears and repossessions are higher among sub-prime mortgage customers than among customers of mainstream, or prime, mortgage lenders, according to the report.

Although the numbers look depressing the level of repossession is, however, still not as high as in the early 1990s. But Shelter claims that there are contributory factors now that are much more significant than they were back then. One example is that the way in which debts are managed by lenders has changed. Now, it is more common for non-housing debts to be secured on the borrower’s home.

Shelter is now calling on the government to do something about the problem. It suggests that it should set up a free, confidential advice service, together with the mortgage lenders, to support those affected by the crisis. The service should give people advice in an early stage of their problems and should work both through a telephone helpline and online support.

Adam Sampson said, “A free and impartial advice service is a much needed first step on the way to stop mortgage arrears and repossessions escalating. It also helps thousands of ordinary people to keep a roof over their heads.”

Shelter is also criticizing the safety net for people getting into trouble, saying that both state welfare and private insurances are inadequate. Borrowers who have troubles are instead forced into further borrowing, which only leads to more problems.

“Instead of helping struggling homeowners to get back on their feet, the actions of some lenders, combined with a lack of government support, simply exacerbates their problems and condemns them to the despair and misery of losing their home.”

To help struggling borrowers the organization suggests, except from the helpline, that the Financial Service Authority should be harder on lenders who sell customers unaffordable products. It also suggests that county court judges should take a tougher line against unfair mortgage lenders and that a national mortgage rescue scheme should be set up to allow homeowners to remain in their homes, even tough they have difficulties, without the drawbacks of privately run schemes.

“The government, mortgage lenders and the Financial Services Authority must take responsibility and start repairing the broken state safety net to ensure that if people face difficulty, there is protection in place and somewhere to turn for advice,” said Adam Sampson.

It is not only Shelter who points out the risks on the market, the Financial Services Authority has also warned that one million homeowners could loose their homes in 2008 as the economy slows down, and the Council Mortgage Lenders has predicted a 50 per cent increase in repossessions this year. A recent Financial Service Authority investigation in the sub-prime lending market showed that there was a serious cause for concern about the lending practices in the sector.



Rent Back

When you need to sell your home quickly, for any number of reasons, a very good idea would be to contact a specialist online company rather than a traditional real estate agent. The online company can offer you a quick return in just a couple of weeks with no hidden fees attached. When you compare this to an estate agent, the hidden fees for solicitors and agents can total up quickly. These are usually taken out of the bottom line from the sale. This leaves you with less money than you might expect and wondering exactly what happened. With the traditional housing market there is always the possibility that you may need to reduce your asking price for your home, with an online company this will not happen. You will usually end up with the amount of money you expected making your life much easier.

Applying is such a simple task anyone can do it. All that is needed is to leave a verbal quote on the form provided online. Add just a few simple details about the home and your expectations, then you are done. The company will get back to you with a 24 hour window unlike traditional real estate agents which could take up to a week.

No matter what situation you are in, the online company can help. If a property has been left in a will and the proceeds need to be split among many people, it is not a problem. The online company can provide a solution. Instead of letting the house sit on the traditional housing market for months, why not take advantage of an online company? They can make a quick turn around on the home.

If you are needing to move promptly because of a promotion or job change why wait around on the traditional market? Use the online company to get cash now. They will pay you for your home, so you can move immediately. Then there are no worries about any loose ends that need to be dealt with. Your new life can begin sooner than what you expect.

Divorce is another common reason people might have to make a quick home sale. It is already a stressful time in life but if you have a court order to sell the home and split the proceeds, it could become doubly so. The last thing you want is to drag out the process. Packing up a family home is hard enough, why not try to make it a little easier on everyone. The online company can give you cash now from a quick sale. If the situation arises that one partner wants to remain in the home during this time, an online company can help out. You could choose to rent back the property to him or her with an option of buying back. In that case you could still have cash immediately and be ready to move on with your life. Even though the sting of divorce is still with you, this solution will hopefully make this part of the process a little bit easier.



Quick Property Sale

With property values scaling unprecedented heights in the cyber city of Hyderabad, investment in real estate has become the most preferred investment instrument in the city.

In the past 7-years, property values in Hyderabad have risen like a phoenix. Recently, an acre of land at Kukatpally was sold at a staggering cost of Rs 22 crore. In terms of square feet, that comes about Rs 5,050 per square foot!

“Investing in Hyderabad properties is an excellent idea. I’ve been working in the city for the past 5-years, and seen that investment in property can bring you returns anywhere from 10 to 200 per cent a year,” says RajShekhar, a software professional.

He informed that many of his colleagues are investing in residential properties of Hyderabad to make money. In fact, a large number of people are buying home loans and renting property, in order to invest in property. This way, they are able to pay their EMI (Equated Monthly Instalments) out of rent and later earn huge margins as the property values grow by the lapse of time.

IT Boost

Smelling the business opportunities in this area, real estate developers have already launched large projects in and around. Undoubtedly, we cannot ignore role of IT and ITeS industry in the development of commercial properties in Hyderabad. K Raheja has launched an Information Technology Park in Shamshabad while Indu Projects have also launched IT Zone in the area.

Similar are the developments at Madhapur, which is home land for Hyderabad’s famous HITEC City. This peripheral location is witnessing enormous interest from the technology giants from all across the world. Recently, global technology major CISCO hired some 17,000 sq. ft of space at Madhapur.

Hyderabad Properties – Outlook

Nevertheless, the strong foothold of IT industry in Hyderabad has positioned the city among the top per capita income cities of India. Professionals in the software and allied industries are paid handsome salaries, and their purchasing power thus is quite good.

“If I make Rs 10-12 lakh a year, I can easily invest in Rs 50-lakh property by paying an EMI of Rs 55,000-R 60,000 per month, on home loan. The only thing is striking the right kind of property,” said a project manager of a leading software company.



Sell House Quick

It is sad see that there are many property investors and home owners that can’t pay their bonds due to the recent interest rate increases. To add to the trauma, many have refinanced properties to the extent that getting a quick sale in the open market is close to impossible as there is no equity left to make the deal attractive to another investor.

This makes the situation very unpleasant and dangerous for the credit records of such persons. These incidents seem to leave the property investor or homeowner stuck, panicked and very emotional about the situation.

There are however a few solutions that come from the most unexpected place – the banks.

Even though the banks are harsh and procedural and have deep pockets to easily and swiftly take legal action, they are also interested in solving problems. It is costing the bank money to take legal action and repossess a property, not to mention the time, which in corporate terms equals money.

Though more properties in execution are on the banks lists and some people have not found solutions, we are hoping that this article will give some ideas on how to go about getting help from the lenders themselves.

One may find that the banks are willing to help some bond holders experiencing temporary financial problems. Above all, property investors and homeowners must remember that the banks are smart and fully aware of the fact that rising interest rates have a negative impact on repayments.

But it is not that easy to get help from the bank. May factors needs to be taken into consideration, including factors that are part of the willingness profile of the borrower. The banks job is to keep the bank in business and will not extend help to just anyone asking for help, instead they would rather evaluate each case on its’ merits.

Before we dive into some solutions that the banks may provide, lets look at some guidelines that one needs to remember if approaching the bank for help.

The borrower should contact the bank as soon as they see a problem on the horizon. The issue here is simple. Most borrowers wait far too long before acting on a problem or even informing the bank that a problem exists. This is true for all credit forms not only mortgage bonds.

There are two main reasons for this that are purely emotional:

1) Borrowers are afraid to approach the bank. The bank is big and powerful and seems non-emotional and very threatening. When faced with this fear, one always must remember that humans work in the banks, not monsters or aliens. When talking to a bank, one is actually talking to a person. Though not all people are nice, most can be understanding, as they are also human.

2) Living in denial. This reason is the worst possible as no one can help a person that does not believe a problem exists. In this case, it is very likely that the borrower may be repossessed and never know what hit them.

The borrower should show willingness to find solutions to their problem. In other words, when calling the bank, screaming and yelling doesn’t help. It is not their fault you are in this situation. If you are frustrated, you must be emotionally intelligent enough to be nice and polite and kick your punching bag afterwards to let your frustrations out.

It is very important to remember the points above before even looking at the solutions that the banks may be able to extend. If the borrower manages to upset people at the bank, they won’t even get to a person willing to help, which could make things even worse.

Now we will discuss some ways in which you may find that a bank may be willing to help a financially struggling property investor or homeowner, if the case merits such help.

When falling behind on payments, each bank has certain procedures, however most of them are similar in nature and each case will be evaluated on merit.

All the banks have something called a Collection and Recoveries Department and a Customer Debt Managing Department some also call these Voluntary Restructuring or Loan Modification or Moratorium.

Here are the procedures of what will happen if a borrower falls in arrears:

Pre Legal Section: 0 – +/- 6 payments in arrears. The borrower will get a call whereby they will try and get a promise to pay and arrangements can be made. If these arrangements are broken 3 times in a row, it will be handed to another dept, some call it ICU. Yes, like in hospital. The borrower will be called again and be given +/- 30 days to rectify his/her promises. If nothing happens, its over to the Legal department.

Legal Dept: This is where the borrower will get the option to sign a Power of Attorney to the bank to market/sell his property through listed agents or he or she can arrange to list the property independently.

Depending on each bank these departments may have the following options for arrangements to help a struggling borrowers:

Extension of loan term, 20 to 30 years. Not favourable for homeowners at all, because the savings are not really that much compared to the additional interest. The opposite may be true for a property investor that receives rental income. This option can spell “heaven” as the interest is paid by the income received and the cash flow improves. Many investors choose this option regardless of any financial difficulties, just to boost the cash flow.

The borrower must ask or apply for a Breather Period (this is often called “Holiday”) and it entails no payment for a period of 3 to 6 months. The period would depend on the borrowers profile.

The borrower also has the option of asking for a reduction in payment, usually not less than 50% but it is negotiable.

To conclude, the borrower has to call the bank, and explain the situation in detail and they will offer some options based on personal profile. But remember, the borrower has to call the bank; not any other 3rd party.

This whole process can take quite a bit of time, and by the time, all avenues have been tried and exhausted, one can be sure that once a property is being sold on auction the bank has tried everything.

As a last word for closing. Many people listen to hear say. They have either heard or been close to person that has had a run in with a bank and lost their home. As a result of this they have already judged the bank and hold a perception that the bank is the problem and the enemy. For such people, one can only ask that they put such stories and perceptions aside. Each case is judged individually upon its’ merits, it is worthwhile to giving the bank the benefit of the doubt and working with them. Your case always stands a good chance of having a completely different and perhaps better outcome than those you have heard of.



Repossession

It’s time to fly the nest and start a new life. This can be a very exciting time, but it can be very frightening. Take a little time to think about what you really want. Read all contracts carefully with someone more knowledgeable before signing and check thoroughly your finances.

Prior to the actual day of your move thoroughly inspect the property, preferably with the letting agent. Take along a camera and photograph any damage already present. Check out any existing damage, such as stains on carpets, marks on the walls or damage to furniture, appliances etc. and burns of any description. When these photo’s are developed keep one set and give the other set to the letting agency, this will protect your deposit when you decide to leave and avoids any argument over who was responsible for the damage.

Check all appliances are in working order. If within a couple of days after moving in something decides not to work properly, IMMEDIATELY contact the letting agent, to minimise the risk of being accused of having damaged the item yourself.

All properties will vary, from totally furnished including almost everything, to a completely empty unfurnished property. Take time to consider before you start looking for a property what your preference is. Totally furnished is great, you’ll have little outlay, but rents usually reflect this and deposits can be higher, with of course more items that could accidentally get broken or worn, then you’ll lose a percentage of the deposit. Whereas if you choose an unfurnished home, this will be cheaper and you can customise the furnishing to your budget and taste. Just remember though, when you vacate an unfurnished property, you’ll have to take everything with you.

There will be several items you may require for your new property, as explained earlier, this will depend on the type of property you choose. Most of the items you will require can be purchased quite cheaply from your local supermarket. There are also lots of second-hand furniture dealers, auctions houses and on line auction sites for the larger items. Just remember it’s not vital to have everything at once, take your time and purchase wisely. Keep a VERY close watch on your finances for the 1st couple of months and the month before the move, expenses have a habit of running away with themselves especially if you have no experience with household budgeting. I hope shortly to continue this theme with an article on household budgeting for the beginner.



Quick House Sale

It appears to be a widely-held view that one of our biggest financial commitments in life, if not THE biggest, is the mortgage we take on to buy our home. And though it is vital for someone to take advice on such a major expense, why can you still be left feeling confused AFTER having sought mortgage advice?

Well, before giving the very simple answer to this question, let’s briefly consider what “advising” means and if that matches our everyday experience.

According to the Collins English Dictionary, the word “advise” comes from the latin words “visere” and “videre” which, respectively, mean “to view” and “to see”. So, when someone is advising you or me, their primary objective should be to give us a “view” into the subject we are unclear about. They should be helping us “to see” more easily what we struggled to see before. These definitions of advising rather remind me of the 1970s pop-classic by Ken Boothe that chorused “I can see clearly now the rain has gone. I can see all obstacles in my way”.

But how exactly can this happen? What precisely can an adviser do, and in this specific instance what can a Mortgage Adviser do, to give someone a clearer view into their potential mortgage commitment?

TEACH.

“What, is that it … teach ?” you may ask.

Yes. That’s it. We have found from our own experience that clients make more confident decisions when we first teach them about mortgages. One key question that we ask consumers very early on is:

“Do you know the different types of mortgage payment methods?”

We are not surprised when consumers then tell us about things such as Fixed-Rate mortgages, Offset mortgages, Tracker, Discounted and Variable-Rate mortgages. However, When we help them to understand that it’s actually far simpler than that and, in reality, there are only TWO mortgage payment methods (“Capital and Interest” and “Interest Only”), they do appear to be genuinely surprised. Careful listening and teaching, leads to understanding. This, in turn, leads to confidence in both the advice and the adviser, which finally leads to a more strongly informed decision and, hopefully, the adviser winning your business.

Listen. Teach. Understand. Confidence. Business. It’s a potential Win-Win process for both you as a consumer and the Mortgage Adviser.

As a prospective “mortgagor” (i.e. someone with a mortgage), you will have reduced the potential for problems with your mortgage if your adviser takes the time to teach you the rights and responsibilities of being a mortgage holder … AND you take the time to understand. Funnily enough, this is directly in line with the Number 1 principle of the “Treating Customers Fairly” programme that the Financial Services Authority (FSA) have laid out for all mortgage advisory firms to abide by. This principle states that “consumers are to be confident that they are dealing with firms where the fair treatment of customers is central to the corporate culture”. Now tell me:

How much “fairer” can you get than a business that goes all out to demystify mortgages first, then ensures that you understand as much as possible about mortgages next, and then finally seeks to win your business?

“But how long will all of this take?” you may wonder. “It seems very time-consuming.”

Yes it does seem time-consuming and we can only speak from our own experience as every prospective client is very much an individual. However, we have been pleasantly surprised at just how confident and reassured a client becomes about their potential mortgage commitments after just 20 minutes of being guided through the mortgage maze.

Surely, your biggest financial commitment is worth spending an extra 20 minutes on with a knowledgeable Mortgage Adviser isn’t it?

So, if you want a simple, easy-to-take, approach of reducing problems that may arise with a mortgage, then get your Mortgage Adviser to take the time to teach you about mortgages first. Then you stand a far greater chance of understanding if the mortgage solution that they are advising and recommending is the one for you.



Rent Back Fast

Over the past couple of years the risk of repossession has become a very real one for many homeowners and the UK, and this has been partly fuelled by the series of interest rate hikes applied to the base rate by the Bank of England. Between August 2006 and July 2007 the interest rate rose fives times, each time by 0.25%, taking the base rate to 5.75% by July 2007.

Interest rates were hiked during this time so that the government could try and keep a lid on inflation, which had spiralled out of control and exceeded the government’s 2% target. However, the rate rises inevitably impacted on household finances, with many homeowners facing rocketing mortgage repayments, and this had a knock on effect on the economy as well as on consumer confidence.

In December of last year, and again in February of this year, the base rate was cut, again each time by 0.25%, taking the base rate back down to 5.25%. However, despite these rate cuts many homeowners are still struggling, as any cuts in their mortgage repayments have been counteracted by increases in other costs such as energy bills, food prices, and petrol costs.

Recent figures have shown that in 2007 the level of repossessions in the UK soared by 21%, with around 27,000 homeowners having their properties repossessed over the course of the year because they could not make repayments. A number of industry officials have predicted that this year will see the level of repossessions continue to rise as a result of strained household finances and rising costs.

However, homeowners that are struggling to keep up with repayments on their mortgage loan are advised to seek advice and help as early on as possible, and often the first line of enquiry will be the mortgage lender. Unlike unsecured finance, your mortgage loan is tied to your home, and missing repayments could result in losing your home.

One official from the Council of Mortgage Lenders said that anyone struggling with mortgage repayments should contact their lender as soon as possible with a view to coming to an agreement, at least in the short term. He said: ‘Lenders take their responsibilities to borrowers facing repayment difficulties very seriously, and many go to exceptional lengths to provide debt counselling, reschedule payments, extend loan terms, or in some circumstances even allow payment breaks. They will abandon repossession action right up to the last moment if they can reach a payment solution consistent with both the borrower’s and the lender’s interests.’



Quick Property Sale

Repossession can be a very unpleasant experience for a number of reasons. First of all, you obviously lose your home, a home that you may have worked long and hard for, a home that you and your family hold very dear. Repossession and eviction will affect the lives of everyone in your family, not only financially, but also emotionally and socially. Second of all, repossession affects your credit scores adversely, and leaves you with slim chances of making a fresh start soon. Having said that, I’m sure you’ll agree that, when or if the time comes, you have to do everything in your power to stop repossession.

Most homeowners panic when it comes to stopping repossession because they falsely believe that, if things have come this far, the situation is hopeless. Things are actually quite different. There is always a way out of this kind of situation provided you weigh your options carefully and decide what the best and most convenient course of action is.

How can you stop repossession? At an early stage, you can try to get back on track with your mortgage payments. Staying up to date with these payments may not always be possible, but you should not let things aggravate. Putting the payments off month after month will only make matters worse. You can try refinancing your existing loan or getting a loan from someone else, a friend or acquaintance maybe. Or, you can try being honest with your lender about your current financial situation and agree on a more convenient way of paying your arrears. You can work together and make your payments easier.  After all, the financial institution is more interested in getting the money that you have to pay them than in getting the property.

If you need to stop repossession and neither of the options presented above is viable, you can still resolve the matter is a very convenient way. Fast house sale is a very good solution to your problem. And when fast house sale comes with the possibility to rent your house back, what could be more convenient?

Fast house sale means that the sale process will be completed in a lot less time than a traditional sale. Furthermore, your investors will pay all expenses, including valuation and legal fees. What’s more, if you accept their offer, which will only be fair considering the circumstances, they will pay cash for your property. This means that you will have the necessary cash to pay your existing debts, and enough money left to spend as you please. As has been said before, you don’t even have to consider leaving your home when you opt for a fast house sale, as the sell and rent back scheme is widely available from cash property buyers.

Fast house sale is the optimal solution in a number of situations. Whether you are preparing to emigrate, or about to get a divorce, or in need to pay extensive debts, or if you just want to avoid all the hassles of selling your house on the open market, fast house sale emerges as a very sound decision. If you want to stop repossession, sell and rent back is by far your best option.



Real Estate Professionals

As house prices have risen and stabilised over the past couple of years it has been very hard for first time buyers to actually ‘buy’ their first property. This has forced most young first time buyers to rent houses as they simply cannot afford property for sale in their affordability range. This maybe because of student debts after coming out of university or just house prices in their area are simply too steep.

But in the past year house prices have slowly steadied and towards the last quarter they have gone down 1.87%. But this does not help the situation for first time buyers because they could not afford to take out a mortgage due to the credit crunch taking effect over Britain at this point in time. The effect on the UK is very large and many figures have been thrown around saying that economic growth in the UK will go down by 1% in 2008 and 2009 compared to recent years.

Overall this means that many young people bidding to buy their first property won’t be able to take out a mortgage or a loan. This is because their will be only limited availability to take out loans from banks for property and the interest rates may be higher. As I am looking to maybe own my first property in the next few years I am very concerned over this plummet. In my opinion I think it may be best to rent your first property rather than buy a property outright as in the long run it will save you money unless the credit crunch somehow starts to stable and house prices go down around the UK.

I think it may be best to rent as costs have not been too affected by all this and rent prices are still in many peoples price ranges. My opinion of all this is that under all circumstances avoid buying first time, as you will not be able to afford all the expenses and your banks may turn you down for a loan or mortgage.

In addition the current portfolio of property for sale in any area is likely to devalue once a purchase is complete, this give a very real danger of negative equity over the early part of a mortgage.

To help simplify the housing market and your price range you could ask some lenders or banks how much they would let you borrow based on your credit history and your salary. This will help secure a property price range that you could afford. If your banks or lenders do turn you down, or the price range you have is not enough to get onto the property ladder, all is not lost.

You can privately rent properties which are still a very cheap option and as long as you keep on top of rent rates then you are in clear skies. This allows you to have experience of having a property and there is no mortgage to worry about. This means when it comes to buying a property you will be better prepared and renting a property may allow you to save some money to put forward when buying your first house outright.

In conclusion, the credit crunch does not look like releasing its grip on the housing and credit market meaning if I was a first time buyer I would really consider renting my first property and then saving a bit of money to contribute to my first house. This guarantees a much safer future rather than getting turned down for a mortgage or a loan for my first property and with house prices steadying and falling it wont be too long before first time buyers can look forward to having an easier future getting on that first step of the property ladder and owning their first house.



Sell House Quick