Property Rescue Blog

The rate of inflation has risen to 4.7%; new unemployment figures released this week show 5.5% of the working population were without a job during the three months ending July 2008; those claiming Job Seekers’ Allowance have increased, the number of redundancies is on the rise, and the world financial markets continue to be jittery. 

As economic gloom deepens, it feels as if we are all at the mercy of the government, world monetary forces and powers far beyond our control.  There is little we can do to control inflation it’s true, but there are a few simple measures that can help stretch the household budget, especially as summer turns to autumn and we switch on the heating:

• The government has announced help – via the energy companies – for  homeowners to insulate their homes.  Your energy supplier will know more  and should be contacting you with details of how you might benefit.
• If you haven’t already shopped around for gas and electricity, now’s the time  to do so.  A surprisingly large amount of money can be saved by switching  provider.  Cost comparison sites are available, such as uSwitch.com. 
• Think about where you shop and what you buy, but remember to take  account of all the factors involved.  If you buy mainly in a cheap supermarket,  but ‘top up’ with luxuries from two others, you’re likely to spend more in petrol  than you save at the till. Use the facilities you already have – like your freezer  – and plan ahead when you’re grocery shopping so that the number of trips  you make is reduced.  Planning and making a list will help you buy only what  you need and avoid throwing out food past its sell by date.
• Don’t dismiss second hand stuff!  If you have growing kids or are expecting a  baby, look out for second hand shops, charity shops and car boot sales,  where new or nearly new clothes and toys can be picked up for just a few  pounds.
• Watch the interest on your credit cards.  If you have a big credit card bill, look  at transferring the balance to a company who offers a balance transfer  deal.  A little surfing on the net could save you a lot of money!
• Use comparison sites to check that you’re getting best possible deals on  insurance for your car, home and contents.  It’s tempting to ignore home  contents insurance when you’re strapped for cash, but if you change your  existing arrangements, you could save a significant sum without having to  relinquish it.

At Property Rescue we hope these tips come in handy.  They’re all simple things that are easy to do but very worthwhile.  Remember, if budgeting becomes impossible and you can no longer afford your mortgage repayments, always talk to your lender.  They will be keen to help you if at all possible.  If you need to sell to avoid repossession or simply to cancel out debt, then contact Property Rescue.  Even in such a dire housing market, they still guarantee to make an offer for your home.

This week the government has announced a £1bn package of measures designed to help homeowners through the current financial crisis.  Whilst everyone must surely welcome this news, the question as to whether it will go any way towards resolving the stagnant housing market remains unanswered.

In brief, the measures include:

• raising the threshold at which stamp duty becomes payable on property     purchase from £125,000 to £175,000 – effective immediately
• more government help with mortgage interest payments for those on income support or claiming job seekers allowance, plus a reduction in the length of time such people have to wait before they’re entitled to this help (a reduction from 39 weeks to 13 weeks)
• raising the threshold of the loan value on which people on income support and job seekers allowance can get help with interest payments – up by £75,000 to £175,000
• £200m into a scheme whereby ‘social landlords’, such as councils and housing associations, will help homeowners who get into difficulties – perhaps through part ownership or additional lending

Some first time buyers who have been putting off the purchase of their first home may be persuaded that this is now a good time to enter the market.  If this happens it could provide a kick start to the bottom property tier and help those in existing chains to complete.  However, there is scepticism over the effectiveness of these measures because none of them address the issue of money supply, which has been at the heart of the credit crunch  The number of mortgages being approved has fallen by more than 70% over the past year – a trend that is expected to continue.  Without funds available for first time buyers and others, the housing market seems doomed to remain in its current state of malaise.

Interest rates were held at 5% by the Bank of England at its meeting on 4 September – the fifth month in a row that rates have remained static as the Bank struggle to contain rising inflation.  The threat of a recession could, however, mean that the Monetary Policy Committee elect to reduce interest rates very soon in an attempt to buoy up a flagging economy.

Homeowners in debt should study these new measures carefully.  Some could find that the help on offer from the government is enough to see them through current difficulties, but inevitably there will be those for whom the situation is too dire or the financial problems too deep.  If you are facing the possibility of losing your home, talk to Property Rescue about their guarantee to buy your property.  Their service could allow you to stay in your home, rescue your credit rating and get through the hard times ahead.  Contact them for an informal chat without any obligation.

Homeowners struggling to pay their mortgages should be able to sell part of the equity in their homes to avoid repossession, the Liberal Democrats have said.

James Kirkup, Political Correspondent, The Guardian

The equity sale scheme is part of a package of measures drawn up by Vince Cable, the party's Treasury spokesman, to meet what he says is the urgent need to avoid thousands of families losing their homes.

A slowing economy and rising mortgage costs are putting growing pressure on millions of homeowners.

Figures earlier this month showed that the number of repossession orders made by courts in the second quarter of 2008 jumped by 24 per cent. A total of 28,658 orders were made in England and Wales between April and June.

Mortgage-holders struggling with their repayments should be able to sell all or part of the equity in their house and rent it back from housing associations or even private companies, Dr Cable has proposed.

The Liberal Democrats also say that courts should be given new guidance to ensure that they only order homes to be repossessed "in extreme circumstances".

Councils and housing associations should also be allowed to borrow money from commercial lenders and use it to buy land and empty homes for use as social housing.

Dr Cable outlined his plans as ministers complete their own economic assistance package, expected to be published as early as next week.

The Treasury is known to be considering a stamp duty "holiday" in the hope of stimulating the housing market.

Dr Cable said that showed ministers are missing the point.

He said: "The Government seems obsessed with fighting a losing battle to artificially prop up the housing market, rather than finding ways to deal with its worst effects.

"Ministers must act to help the thousands of families struggling to keep a roof over their heads.

Source of Article: http://www.telegraph.co.uk/news/newstopics/politics/liberaldemocrats/2632080/Struggling-home-owners-should-sell-equity-to-avoid-repossession-say-Lib-Dems.html

The Bank of England released its latest inflation report this week.  All eyes were on the Bank’s governor, Mervyn King, as he delivered the bad news that had been anticipated – that inflation is up (currently at 4.4%) and is likely to go up yet further, peaking at around 5%.

Mr King described the situation as “painful”; no under-statement for the thousands if not millions of people who are just about managing to make ends meet whilst they live in fear of inflation rising yet further.  For these households there were few rays of hope n the bank’s report.

Output growth has slowed in the UK over the first two quarters of the year.  When figures are released for the third and final quarters, the Bank of England expects to see further slowing and little change during 2009.  But there is a caveat: the Bank says that the slowdown may be “more pronounced” with the possibility of negative growth. In fact Mr King comments that the “outlook is unusually uncertain” and points to significant risks that could affect its projected figures.

It is inevitable under such circumstances that pressure is put on every household’s income, even those who have, until recently, considered themselves well off.  There is evidence that up-market suppliers of products – such as organic or farm produced food – are seeing a drop in their sales as people look to the cheaper supermarkets for a bargain.  Oil prices have started to retreat back down the scale but food costs are unlikely to do so.  Spending on credit is restricted and this has an obvious effect on spending in the high street.

Bank rates remain at 5%, despite industry wanting a cut and homeowners feeling the strain.  Although it is often high interest rates that produce a rise in home repossessions, in the present situation it is more likely to be food and energy prices that are turning the knife in the household budget.  Repossessions are rising steadily – perhaps an inevitability in such circumstances.  But anyone who faces the threat of losing their home owes it to themselves and their family to explore all the options before packing the furniture and moving out.

Talking to the lender in question is always the first step.  Voluntary and government funded agencies can help households budget, prepare payment plans and communicate with mortgage companies and banks.  If, despite this type of intervention, mortgage repayments simply cannot be met then there may seem little option.  Property Rescue is a company that buys home for cash.  They have the ability to step in at the last moment to salvage the situation and help avoid repossession taking place.  Their guarantee of a sale allows families to move on with their lives, perhaps buying a lower priced property, living in rented accommodation, or by taking advantage of the Property Rescue sell and rent back scheme.

The economic gloom that has descended on the UK may be out of our control but there are options when it comes to personal finance – even though it may not always seem like it.  For information and a free, no obligation chat, give Property Rescue a call.

The words ‘negative equity’ have not been heard much over the past ten years but back in the early 90s they were on the tip of everyone’s tongue.  Could it be that we’ve had it so good over the past decade that we’ve forgotten what true economic slowdown is all about?

There are reports in the media this week that negative equity is – sadly – coming back into fashion.  The banking giant, Citigroup, announced that 250,000 households in the UK are now facing the fact that their home is valued at a sum which is less than their mortgage.  Citigroup calculate a drop of 7% in house prices over the last 9 months; although not a figure to which all lenders would agree, few would argue that we’re in a downward trend that is bound to affect homeowners in the future.  Estimates show that if house prices continue to fall one million households will be in negative equity by the end of 2009.

Factors other than national economics are starting to take their toll: the rise in oil and petrol prices and the general increase in food prices worldwide.  The Bank of England kept interest rates the same at their meeting last week and show little inclination to reduce them for fear that inflation in the UK will take off.

The big mortgages that were made essential through rising house prices mean that any hike in interest rates, however small, is hard to bear.  Many ‘buy to let’ mortgages are being pulled by lenders and borrowers without substantial deposits are frequently being turned away.  The fact is that mortgages – especially cheap mortgages – are becoming as rare as the proverbial hens teeth, thus hitting the first time buyers and sending ripples upwards through the housing market as a whole.

These factors combine to make a difficult housing market into an impossible one if you are trying to sell your home.  Drive down almost any street and it isn’t difficult to find ‘for sale’ boards, but seeking out those elusive ‘sold’ boards might take you rather longer.

Selling your house may be a nightmare in the current climate, but it is still possible with the service provided by Property Rescue.  The company guarantees to buy property of all types and in all locations, no matter what condition it is in.  Their valuation is given without obligation and in complete confidence; it will be up to you whether you want to proceed and if you decide not to, no one will call nor will you be pressured into going ahead. 

If you are beginning to think you’ll never sell your home, why not talk to Property Rescue.  Their expert advisers are waiting for your call.