Property Rescue Blog

The annual growth in take home pay has dropped to an all time low of 1.8% and saw an unprecedented fall of 0.2 per cent during January as employers make drastic cuts to save their businesses from collapse. 

Honda is just one of the companies that has stopped or cut back on car production as the recession hits the motor manufacturing and subsidiary industries.  Reduced hours, cuts in overtime or a shorter working week are becoming common place across many business sectors leaving workers with less cash in their pockets. 

Jobless totals just announced reveal that there are now more than 2 million people out of work in the UK and redundancies have reached a record high.  From November 2008 to January this year 165,000 joined the ranks of the unemployed.  Not all of the 6.5% of the British working age population without a job are entitled to benefits but those on Jobseeker’s allowance rose during February by a staggering 138,400, putting yet more strain on an already over-stretched government purse.  Job vacancies are down too, so getting another job is not easy – at least in the short term.  The UK’s recession is unlikely to be over during 2009 and some doubt that 2010 will see much of a recovery.  More optimistic economic experts predict that next year will bring some signs of growth but it will be slow, holding to the generally accepted principle that unemployment figures remain high even after recovery has begun. 

The net result is that many household budgets are close to breaking point.  Mortgage payments have dropped but not to the same extent as bank rates.  Interest on savings is negligible and whilst this might not be of particular importance to the young family who has little in the way of a ‘rainy day’ fund, it has a real impact on the retired who rely on a decent rate of interest to bolster pensions.  Households that went into the recession in a healthy financial state and remain employed are, in general, coping well; it is those who were already paying off debts and have been further hit by reduced working hours or job losses who are faring the worst.

If debts spiral out of control your home can eventually come under threat.  Repossession has repercussions that last many years, affecting your credit rating and your ability to get future finance.  These factors, as well as the significant stress and upheaval involved, mean that repossession should be viewed as an absolute last resort.
 
With help from Property Rescue it is possible to beat repossession, keep your home and live in it as a tenant.  The scheme works by selling your home to Property Rescue and then paying rent under a tenancy agreement whereby your rights are safeguarded.  But if you want to remain a homeowner you may decide it is best to sell up and move on, paying off your debts and buying a cheaper property.  In a declining market selling in a hurry is nigh on impossible but again, Property Rescue can help.  They guarantee to value your home and, if you accept that valuation, you can sell up and move within a matter of weeks or even days.

If you are facing what seems to be a financial dead end, contact Property Rescue.  You can talk to one of their advisers in complete confidence and without obligation.

Today the Bank of England releases the first tranch of cash into the economy under its new policy called quantitative easing, whereby it is buying up government assets and debts so that it can inject more money into the economy. 

The Bank plans to raise an additional £75 billion of new money this way over the next few months.  Although today is only the start of that massive cashflow relief, it has been hailed as a kick start to the British economy in a time of recession.  We have been promised several ‘kick starts’ before but in all honesty most of them seem more like a gentle nudge than a kick; the VAT rate reduction springs to mind as one example. 

The theory behind quantitative easing is that as cash starts to flow back into the economy it will stimulate business and spending, thereby helping the country climb out of recession.  The raft of interest rate cuts by the Bank of England have done little to stimulate growth or improve confidence within business, as reflected by the Federation of Small Businesses (FSB), who recently said that most of its members didn’t want to see Bank rates cut to the half of one per cent announced last week, and most felt improved access to capital would be of greater benefit.

It is only through increased help to businesses that all of us will see light at the end of the tunnel.  Whilst businesses lack confidence they fail to grow; failure to grow means stagnation, which in turn means loss of market share and poorer profits.  All that adds up to one thing for the man and woman in the street – redundancy and unemployment.  Therefore businesses are a key focus of the government, and rightly so.

We must all hope that the latest fiscal policy turns out to be a success but it is likely that it will take until at least the end of this year before the recessionary tide starts to turn.  For some, that will be too late.  If you are facing redundancy, a long period of unemployment, or have had to take a pay cut in order to keep your job, you will be concerned about more imminent problems such as how to pay your mortgage.

Meeting household expenditure at a time like this can be very difficult.  Many people have had to economise but the few that are already at breaking point are finding their difficulties cannot be overcome by measures as simple as buying less expensive groceries or cutting down on the entertainment budget.  For these people more drastic action is required.  

If you are facing the possibility of losing your home because you cannot pay the mortgage contact Property Rescue to find out about their guaranteed offer to buy your home and their ‘buy and rent back’ option, which allows you to sell your home to Property Rescue but stay in it as a tenant.  Both these schemes will prevent repossession and all that entails.  Phone for more details and an informal, friendly chat with one of the experts on Property Rescue’s team.

Selling and renting back your own property is a popular and imminent trend in UK. Countless people find it very helpful in generating some fast cash to overcome financial crisis. Selling and renting back your own property is a wonderful option that allows you to release the equity in your house without remortgaging or moving from your dwelling place.

While selling and renting back your own property, an agreement is to be signed that states that you have sold the property to a company or an individual and the same company or individual is renting the property back to you at the end of the sale. The best part of selling and renting back your own property is that there is no need for you to move out of the house during the entire process. This even helps in keeping the matter discrete and completely confidential without others knowing about the details of your financial jams. The monthly rent is worked out before you finally decide on selling and renting back your own property. In most of the cases this rent comes out to be cheaper than any mortgage monthly repayments.

Selling and renting back your own property is in fact a very vital decision and should not be taken under any pressure. You have full right to know and ask about the details of the entire process. Before finalizing the deal make sure to check the “Guaranteed Rental Period”. This allows you to stay in your own house for as long as you wish to be there. The rent that you agree to pay must be in accord with your paying capacity as the irregular monthly rent payments can make things difficult for you. In such case the owner can even ask you to leave your house.

In the process of selling and renting back your own property, it becomes important for you to be aware of the “Rent reviews”. You must have a proper understanding about the calculations associated with rent increases. To be on the safer side, make sure to get everything on papers. Everything should be written including the offer, the rent reviews, the tenancy length and details and of course the buy back option. In fact you must opt for a reputable and trustworthy rent back company as by selling and renting back your own property you may have a long-lasting relationship with this company.

Selling and renting back your own property helps you in dealing with financial uncertainties and mounting debts in a quick and easy way.

The Bank of England has announced a further reduction in interest rates to 0.5% in an attempt to get the High Street banks lending again and ease the flow of money, especially to businesses. 

The Council of Mortgage Lenders is warning that all time low interest rates leave lenders unable to attract savers, which has a direct impact on their ability to fund new mortgage lending.  Like many, their faith in the effectiveness of interest rate reductions is faltering.  Current restrictions on overdrafts and lending are stifling many businesses, not least small companies.  With over 90% of this country’s output coming from the small business sector, redundancies and company bankruptcies are leaving in their wake a rising number of unemployed. 

In order to address this the Bank of England has, as expected, announced that it will implement quantitative easing, which in simple terms means that it will buy government assets and debts thus putting more money back into the economy.  It’s like easing the cash flow in a business but on a massive scale – £75 billion to be precise.  Many commentators believe this strategy will work but over what time scale is open to debate.

It seems that the recession has not yet bottomed out so we have to expect it to get worse before it gets better.  One source of frustration is the feeling of helplessness that we all share.  Financial problems on such a gigantic scale are difficult to understand, let alone relate to or influence.  Of course, we can do little to alter the overall financial situation but there are some sensible actions that can we should take if we can.

Over the past few years we in the UK have not been saving enough and today’s low interest rates are doing nothing to encourage us to put money away.  Despite that, it makes sense to have savings equivalent to approximately 6 months net salary so that if the worse happens there is a ‘rainy day fund’ to fall back on.  It’s worth shopping around for the best interest rates although be aware of penalty clauses for withdrawals should you need to access your cash.  It’s a good time to look at your household budget and plan how you could make cuts if you needed to.  As for the job market, keep your eyes open and your ears to the ground; opportunities are few and far between but if you’re prepared to adapt and compromise you stand a better chance of getting back into work.  Finding out what’s happening in the local or regional business scene will mean you’re one step ahead if you should become unemployed.

If you are already in debt and struggling to pay your mortgage, budgeting and planning are even more important.  Making a note of everything you spend may be tedious but it’s the only way to find out exactly where your money goes.  If you are receiving final demands and letters from your mortgage lender don’t ignore them.  They will not go away and, unless you take action, the situation will get worse.

Home repossession is growing substantially.  Don’t become one of those people who lose everything, especially if your financial problems are likely to be short-term.  Repossession will affect your credit rating and make it far more difficult to borrow in the future.  Property Rescue provides a guaranteed way to sell your home and avoid repossession – even at the eleventh hour.  Contact them to talk through the options and to ask for a free, no obligation, valuation of your home.

As the recent property slump has caused havoc among the UK markets, there are people who are gearing up to buy what may be the best time in recent years to cash on an otherwise, the worst of times. Despite the reluctance of home owners to sell their properties during crisis time, there are still a large number of homes which are waiting for a long time to meet a potential buyer.

Availability of Good Property

Experts have also suggested an over supply of newly built apartment blocks. According to a recent survey by Globrix, five percent of sellers were unable to sell their properties in the last 12 months. Such figures suggest that there are good properties available in the market but the unwillingness of banks to provide loans and unrealistic high demands by sellers are the major cause of such a stagnant house market.

A Bounce in the Making

Industry professionals agree that anyone with a reasonable credit history should not have any trouble in financing a property. To them, it might be the best time to buy a home since a few experts see the present property values as bottomed out and likely to bounce back in coming months. Such predictions are not without merits. The National Association of estate agents is even counting on a huge regain. According to one of their senior executives, the bounce back can be as strong as the weakening of the house prices.

Better still, it is just not a prediction but in the limelight of the government efforts to release money to the banks and the banks reacting to provide the much needed loans, the boom might just be around the corner. Furthermore, if these banks pass on the interest rate cuts to the consumer and the consumer sentiment on the property prices gets a little more credibility, this may well the best tie to buy a property in the UK. A closer look into a struggling UK property market will provide further evidence to a stable market that is still strong in its foundations. Considering the recent cuts in interest rates and the mortgage products getting stronger along with reasonably well balanced credit lines, buyers of new homes can find themselves a jackpot.

Evidence

One thing is for sure that the ups and downs in the global markets have made it very difficult to predict the future. Still, it should be noted that nearly all the nation’s premier sources are predicting a price hike in the next five years. If common sense prevails, it is the big fellows that change the consumer sentiments and not the other way around. The evidence provided for such a boost is nearly four million UK households, who are in the waiting list for a social home, the temporary credit crunch and the continuous demand for housing for many years to come.

The Future

Expert recommendation from the National Housing Federation is evidence strong enough to buy the property, now. They see the house prices rising by 25 percent in the next five years to reach £274,700, despite the recent crash. Forecasts for other regions are even better as the Nationwide predicts that the sales in Scotland will increase by 4% in the coming year while Hometrack has predicted a 3 percent rise in the Northern Ireland for 2009.

The UK housing market has once again receded to reach the same levels as it stood in February 2006. It is still to be seen if the recent slump in the sales of UK property is just another cycle of recession that goes naturally with any economy or it is a fall that will even dwarf the crash of 1990. According to the recent figures released by the Land Registry, this is a consecutive fifteen month decline where the property value has seen a downward trend to shed almost 50% of its earlier gains, at its peak.

The Facts

The average price of a UK home is now £161,883 and almost all regions of the UK housing market have seen significant drops. Add to the woes the number of sales of houses and the picture looks even grimmer. The HM Revenue & Customs revealed that the sales of houses more than £40,000 decreased to just over 59,000, a stark contrast to the last year when 126,000 homes were sold during the same period.

Pessimists

Experts believe that the UK government is doing its part to overcome the future decline by cutting on the interest rates, suspension of stamp duty on houses less than £175,000 in value and releasing a huge bailout package. Despite such efforts, the UK property sales have yet to register a monthly gain. There are even those experts who are predicting a continuous decline until the mid of 2010. Almost 44% of the homeowners surveyed by the Conservatives say that they fear that they will not be able to pay their mortgage in the coming 12 months.

The Mortgage Lending Council has even stopped issuing a future prediction and potential buyers are not listening to the Nationwide and Halifax pundits. What everyone is waiting for is the actual figure that would suggest a rise in the sales of house or an increase in the current prices. There are approximately 5.7 million people who have become house owners since 2002 and if figures are of any real value then almost 90 percent of the home owners would have already gone in negative equity.

Optimists

Even in these challenging times, there are many experts who believe that it is just a matter of time before the UK housing market sees an increase in the number of housing sold. They point out to a very logical fact; the recession of the early 90’s that eventually turned to become one of the most lucrative decade in the housing industry. All is not lost for the home owners, a few of which are glad to pay the reduced variable interest rates. Similarly, there are many house owners who had borrowed their properties at a long term fixed interest rates. They are happy to pay their mortgages and wait for a turnaround to sell the properties at a reasonable price.

Experts believe that the lack of first time buyers and stiff mortgage regulations are the primary factors to blame for the decline in the UK property sales. What does the future holds is anyone’s guess but there are still a large proportion of experts and consumers who are optimistic about an impending turnaround. And this is what really counts….