Property Rescue Blog

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.

The latest unemployment figures show 1.92 million people were out of work at the end of November last year.  Bearing in mind that almost two months have passed since this time and further redundancies are being announced on an almost daily basis, this figure cannot reflect the true number of those without a job.  One substantial employer not included in these statistics is Woolworths, which closed stores up and down the country in the lead up to Christmas and early in the New Year. 

The TUC has reported that women are first in the firing line when it comes to redundancies, currently being twice as likely as their male counterparts to lose their jobs.  Perhaps this is because more women work as shop assistants in a hard hit retail sector but whatever the reason, women’s wages make up an essential part of many household incomes and their loss will have a severe impact on family budgets.

Every job loss represents a family or an individual who is suffering loss of income, often loss of self esteem, and sometimes the loss of a home.  Mervyn King, the Governor of the Bank of England, has made it clear that the recession is unlikely to end soon.  In fact, his predictions as to when the economy is likely to start growing again are so uncertain that he has been accused of making the money markets more nervous than they are already.  A deepening recession inevitably leads to more job losses.  Employers are looking for ways to reduce their wages bill by cutting jobs, freezing headcount and reducing work outsourced to agency or temporary personnel.  To forecast a bleak outlook may be pessimistic but to do otherwise would be unrealistic.

The threat to homeowners is significant.  Interest rates are low but mortgage repayments remain the biggest financial commitment for many households.  Without a regular income, defaults on loans are sure to rise.

If you are struggling to pay your mortgage you should talk to your lender or approach one of the free independent debt advice agencies who will help you tackle the problems.  When debts and loss of income are short term the threat of repossession can usually be avoided.  But a different solution will need to be found for those who are without work long term and simply cannot meet their financial commitments. 

Property Rescue has strong financial backing that means they can make an offer for your home, regardless of its condition or location.  They will present you with a free valuation, which – if you accept – can be followed up with a sale within a matter of days, thus avoiding repossession and allowing you to re-build your lives in a cheaper property or rented accommodation.  There is even a ‘buy and rent back’ scheme that means you can stay in your home as a tenant after the sale.  To find out more, contact Property Rescue for a free, confidential discussion.

As we approach Christmas and the New Year it’s a good time to reflect on what has happened in our economy during the past 12 months and where we are likely to go as the recession bites in 2009. 

2008 has been a traumatic year for the world’s financial markets.  One could be forgiven for being rather gloomy about the current situation and no one would argue that there is plenty to be gloomy about!  However, there are one or two chinks of sunshine and perhaps we should – especially at this time of year – try to look at the more positive aspects of recent events.  After all, the banks could have gone bankrupt and they didn’t, housing prices could have crashed beyond all expectations and they haven’t, and now, as we head towards 2009, there is just a glimmer of hope that property is starting to pick up again, albeit very slowly.

Another fact is low interest rates – bad news for savers but good news for mortgage holders because whilst lenders haven’t passed on the full interest rate decrease, the majority of loans cost substantially less to service than they did this time last year.  Oil prices are about a third of their peak and this is reflected in fuel prices on the forecourt.  Food prices have stabilised but with competition strong, the supermarkets have some exceptionally good promotions that are likely to benefit most shoppers.

Nevertheless, thousands of people have already lost their jobs and more will do so over the coming months.  Some pundits say that the total jobless will reach 2.5 million by April next year.  Let’s hope they’re wrong but if those predictions are anywhere near correct there are many who will be struggling with their mortgage repayments, even should bank rates fall further.  

Christmas is a time when we expect to be in our homes with our family and loved ones, feeling secure about the future.  Unfortunately, there are many who will not be able to do that this year, and will be very fearful about their job security as they start back at work in 2009.  Remaining in your home is a top priority for many, no matter what their financial circumstances, but as income reduces it’s an objective that can sometimes seem impossible.

Property Rescue has a scheme whereby people can stay in their own homes even if they can no longer afford their mortgage repayments.  This is called a ‘sell and rent back’ scheme, where you, as a property owner, sell your home to Property Rescue but can stay in it as a tenant.  Rent is agreed in advance and you have the normal protection under the law that any tenant has.  Although you will no longer own your home, you don’t have the disruption of moving house nor the trauma of repossession.

Property Rescue has helped hundreds of families over 2008.  If you are in a situation where you face the possibility of repossession or your debts are threatening to overwhelm you, call Property Rescue for an informal chat.  Their consultants will talk to you without obligation and give you a free valuation for your home.

For the first time this decade the number of people without jobs has risen to more than one million. 

In an economic downturn this announcement was very much on the cards but of greater concern over the long term is the fall in job vacancies coming on to the market.  The Office for National Statistics (ONC) reports that employment amongst people of working age fell by 0.4% in the quarter ended October 2008, a similar fall to that seen in the previous quarter.  This percentage may not seem large, but what is worth noting is that the number of available jobs fell by 134,000 over the same quarter – the biggest fall for 16 years. 

Over one million people are now claiming unemployment benefit, an increase of some 75,000 over the previous month’s figures and up more than a quarter of a million during 2008 as a whole.  Redundancies are also on the increase with 41,000 more people losing their jobs than in the quarter ended July 2008.

At present, the ONS reports that average earnings for those in employment is unchanged.  With bargains on the high street, petrol prices coming down and the promise of massive January sales, those who are still in work can make significant savings by shopping carefully.  However, there is a huge feeling of nervousness amongst the employed, not helped by analysts’ predictions that three million will be unemployed by 2010.

To present a balanced view, not every commentator shares this pessimistic approach and it is only as the recession plays out its next act that we will see more clearly how the global and UK downturn is likely to affect us all.  In the meantime, the people who cannot find jobs are the ones who are suffering, especially in the lead up to Christmas.  Some of those worst affected will be facing a very real possibility of losing their homes as a result of failing to keep up their mortgage repayments.  For these, Property Rescue offers a solution by buying their home and allowing them to stay there as tenants.  This can mean that people in seemingly impossible situations can rebuild their lives without the stress of moving or, worse, becoming homeless.

Property Rescue deals with every client individually and makes sure all aspects of the transaction are explained in full before a decision is made.  There is no obligation to proceed if, after initial discussions, you feel their offer isn’t right for you.  No salesmen will call and you won’t be pestered by phone. 

Call Property Rescue today to find out more about their buy and rent back scheme.  Remember, the advice of their consultants is without charge and in complete confidence.

The Bank of England announced on Thursday 4 December that another one per cent would come off the base rate, bringing rates down to two per cent, the lowest ever in the Bank’s history.

Whilst borrowers will undoubtedly be delighted at this news, savers and those with pensions are understandably less enthusiastic.  In real terms, they are seeing a reduction in their savings as the interest rate drops below the rate of inflation, leaving them with a deficit.  Shopping around for the best savings rates is more important than ever, but if your money is tied up in a bond or fixed term investment you could be looking at the value of your fund with horror, especially if your money cannot be moved without penalties.  If you are lucky enough to have an investment where interest rates are fixed then there is no problem, but where returns are linked to stock market performance you will see the value of your investment seriously impacted.

Lenders are certain to pass on the rate cut to borrowers but in varying degrees due to the need to balance the demands of mortgage holders with the need to attract and retain savers.  There will be differences between standard variable rate mortgages and other types of deals.  Some people are finding out for the first time that their tracker mortgage has a clause that allows lenders to stop reducing the rate when the bank rate falls below a certain level; in other words, the tracker stops tracking!  Check the wording of your mortgage agreement to see if this applies to you. 

House price falls have slowed slightly, whilst continuing their downward trend.  More worrying is a report by the Council of Mortgage Lenders that indicates a rise in evictions due to repossessions.  At the end of November the Council reported a 15 year high with figures that equate to 120 people being evicted from their homes every day.  The CML predicts that the situation will deteriorate further during 2009, even if lenders take a more understanding approach to their customers’ needs.

Repossession, and the threat of repossession, is stressful and difficult to manage.  The effects can be far reaching, lasting for many years after the repossession has taken place.  Anyone who faces the possibility of having their home repossessed should explore all the options before making any decisions.  It is tempting to feel helpless at such a time and be carried along by the tide of events, but always ask for advice from the agencies that are there to assist.  Unlike other less reputation organisations, Property Rescue recommends that you do this before you take the important step of allowing your home to be repossessed or selling up.  Property Rescue gives you a guarantee that they will buy your home, but also provide you with all the facts so that you can make an informed, independent, decision, without pressure.

For information and a free, no obligation valuation of your home, call Property Rescue today.

The Treasury has announced big spending plans to reinvigorate the economy.  A total of £12.5 billion is said to be on its way to consumers but the question on everyone’s lips is, will it work?

The Chancellor, Alistair Darling, has announced that VAT will fall from 17.5% to 15% with effect from 1 December 2008.  This short notice has sent politicians and businesses into a spin (and doubtless caused a few headaches at HM Revenue & Customs too!) due to the changes that will need to be put in place when the new rate comes into force next Monday.  The 15% rate will mean that we can buy goods that would have cost £550 for just over £538.  Remember, this applies only to goods that are subject to VAT in the first place.  Goods that are zero VAT rated or rated in a lower band will remain unaffected by these changes.

There is no question that shoppers are feeling the pinch.  In fact ‘pinch’ may be an appropriate word as media reports show a rise in shop-lifting.  Some towns and cities are claiming that theft from stores is up by a quarter and it’s not the luxury goods that are disappearing; it’s everyday basics that people need but feel they can’t afford.  So will an approximate £12 reduction in a bill of £550 make much difference?  That’s just £2.50 in every £100 spent on goods carrying full rate VAT – hardly enough to get excited about.

There is also to be a new higher rate tax band for big earners, whilst those earning less than £20,000 will see National Insurance contributions cut.  However, the vast majority of people earning an average wage will have to pay 0.5% more NI in the next financial year – enough to cancel out the VAT decrease one would have assumed!  There are some other measures that will make life easier for a minority of the population but for the average ‘man on the street’ it is hard to find much cheer in the pre-budget speech, especially after such a big build-up. 

Bank lending restrictions, the short supply of mortgages and falling house prices seem much more significant in the current climate.  Mervyn King, Governor of the Bank of England, has this week hinted that the government may need to force banks to start lending again if the situation is to get any better.  Many lenders are demanding 25% deposits before they will grant mortgages and although property prices are dropping, that’s a level well beyond the reach of many first time buyers.

The VAT reduction may be welcome news in so far as it goes, but whilst house prices are coming down and the recession starts to bite, people will feel worse off and that will affect their spending patterns on the High Street. 

For families who are struggling, the pre-budget report is unlikely to bring about substantial changes to their circumstances.  If you are in danger of losing your home through repossession, talk to Property Rescue about their sell and rent back scheme.  Selling to Property Rescue would allow you to stay in your home as a tenant and get rid of the repossession threat hanging over you. 

There are many people trying hard to balance the books and stay on the right side of their bank and/or lender, but sometimes that simply isn’t possible.  Don’t let repossession ruin your life – talk to Property Rescue in complete confidence and without any obligation.

The dramatic 1.5% cut to base rates announced by the Bank of England last week has been welcomed by business, industry and homeowners.  Yet despite this fall in interest rates and the money that has been pumped into the banking system by the government, there is still a shortage of mortgages for first time buyers.

The approval rate for new mortgages has slowed substantially over past months.  Around 57% less mortgages are being approved than at this time last year.  The figures hit rock bottom in August when just £2.1 billion was put into new loans – the lowest amount since 2001.

In the main, banks and building societies appear to be passing on last week’s bank rate cut to its borrowers – at least in part.  But mortgages that benefit from falling rates, such as tracker deals, are in short supply, and new borrowers are expected to find a hefty deposit before lenders will consider their mortgage application.  The nervousness and uncertainty that overshadows the housing market makes it difficult to be optimistic.  Many analysts predict that the next two years will produce further falls in property prices with only a slow recovery in market activity.

Estate agents have borne the brunt of many a sarcastic comment during the rich pickings of recent good times, but they are suffering more than most at present.  The RICS (Royal institution of Chartered Surveyors) reports that on average estate agents sold under 11 homes during the quarter August to October this year – the lowest level since the RICS began keeping statistics back in 1978.  Agencies that expanded to meet the demand of a bullish market are now having to lay off staff or close branches to cope with the sudden downturn.

Anyone wanting to sell their home is at the mercy of what has become a global economic crisis.  An all pervading feeling of helplessness has engulfed vendors as they simply wait, hands tied, to see what the future will bring. 

Property Rescue provides a way of selling up and moving on despite current economic uncertainty.  The offer is simple and straightforward with no hidden extras to pay and no obligation to proceed.  Advice is free and confidential, and you can talk to an expert about your circumstances and your property.  If you accept Property Rescue’s offer for your home, the sale can proceed swiftly without the possibility of collapsing at a later date.  You can be assured that your sale will go through, leaving you free to start planning for the future.

For details and a free, no obligation chat, contact Property Rescue today.

With the property boom having come to a grinding halt, there has been a continual decline in inflated prices. From Newcastle to Manchester, and Birmingham to London, it seems no-one is clear from this slump.

Rumours have been circulating for a while now over the prospect of either selling your property to rent it back, or selling to move in to rented accommodation.

With the property market fluctuating, it seems smart to sell when the market is riding a wave, and buy once this boom has crashed. However, this takes serious knowledge of the property market and strong forecasting. Something perhaps better left to the experts.

This is because; you have to take in to account, the cost of moving (transportation / fees, etc) and the monthly rental fee. It is normally the case that a mortgage payment is lower than a rental payment, not to mention the fact that property prices will have to drop a reported 4% to make selling and renting worthwhile.

The gains from selling to rent can be huge, and have proven to save buyers around 30%. How? As the market has begun to fall, house owners have sold their property, moved in to rented accommodation, only to emerge back on the property ladder a few months later at a ‘discounted’ rate of around 30%.

Genius. Well it can be. The market can be futile, and unpredictable. For all the ups and downs we are subject to, property is genuinely a sound investment in the long term. Sit there long enough and you should be seeing a handsome profit. Nonetheless, I think we would all be happier if there were a way to lower our mortgage, move in to a bigger property, or simply increase the figure in the bank.

Selling and renting is building up quite a reputation for itself, and rightly so. There are however, some pitfalls of which you must be aware. Renting normally requires signing a minimum 6-month contract. If the market does suddenly rise, you may be a few months behind watching prices rise whilst you are contracted to rented accommodation. Naturally if you have the means to support both payments, then you could always rent whilst looking for a ‘bargain’ knowing that once one comes along, the deposit is happily waiting for you in your bank account.

Not only this, but we never truly know how long the slump will last, or whether it is actually a slump or just a slow down. As a result of this, it is important to understand the elements before subjecting yourself to them.

Buying and selling property involves a major decision, and for many of us it will be the biggest decision we ever make. If you see moving as an annoyance, and are not particularly optimistic about property prices, then perhaps think of other solutions – if you can find one. But, if you don’t mind the thought of moving twice, and have a view about where the property market will go, then perhaps selling and renting is for you.

In recent times, it seems as though we cannot turn on the news or open a newspaper without being further reminded about the dire situation our country finds itself in.

With the cost of inflation constantly rising, generally at a faster rate than the interest rate, it seems as though nothing is 'worth' its price any more. Everyday expenses are a becoming a genuine concern to more people than not as the cost of petrol, gas, electricity, food, utilities, and council tax amongst others rise. This is happening at the turn of the property market when house prices are slumping and the economy looks weak. The number of vulnerable people is rising, from first-time buyers and disabled people, to the unemployed and buyers whose fixed interest rate is expiring , or has expired. The ensuring result is expenses being greater than earnings, and without any savings it doesn't take too long for financial trouble to appear over the horizon. The same is for people with savings; how long can you support yourself with your savings; how much of your savings do you want to lose during this market.

The home-owners most at risk are those who have either no equity in their property, or those at risk from becoming unemployed. Unemployment is a serious issue, with unemployment figures gradually rising, and are currently at their highest in over two years.

Is repossession the only result?

Well there is some good news in the offer of some schemes available to home-owners. There is the sell and rent scheme, and the sell and rent back scheme. Both can provide the financial stability we all crave, but with different results.

A sell and rent scheme is an option for home-owners to sell their property, releasing the equity in their home, and move in to the rental market whilst the current property instability corrects itself. If property prices continue to fall, then the home-owner could emerge back in to the market at a lower level, either buying a similar property at a lower price, or simply a smaller less expensive property at a lower price than what the market was at a few months ago. The result is obviously to stop repossession and allow some greater financial freedom.

A sell and rent back scheme is similar in the sense that you sell your house, releasing the equity in your home, and begin renting. The difference here is that you will be renting your own house back. Therefore you do not have to endure any moving costs / time, or any time spent searching for new properties.

Obviously we all aim to control our own finances, whether this is in the form of no debt, and in the more realistic form of controlled debt. Neither are easy, and there are many factors out of our control. However that doesn't mean these are unrealistic targets. No-one wants the prospect of repossession hanging over their heads, nor should anyone have to go through what can be a very confusing and upsetting time. There are ways around repossession, and options to stop repossession occurring. What we must remember is to be smart, i.e. get help if we don't understand, and equally as important, to set realistic targets.

In a speech given on Tuesday 21 October in Leeds, the governor of the Bank of England, Mervyn King, admitted that the likelihood of recession in the UK was real and that the downturn could be ‘prolonged’.  Hot on his heels came the Prime Minister admitting in Parliament that recession was around the corner.

This could hardly have come as a surprise to anyone who has read the papers, watched the news or observed the downward spiralling of global economies over the past few weeks, yet the markets reacted the morning after Mr King’s speech with a tumble.  One does not doubt the validity of his warning but wonders whether spelling out the impending doom was justified.  After all, anyone unaware of impending recession must have been visiting from a far away planet!  It all begs the question of whether those in the know are talking a bad situation into a worse one.

There is just a glimmer of light, however, peeping through the darkness of the very long tunnel of home ownership.  The Bank of England reduced interest rates by half of one per cent earlier this month and some pundits think that that another cut will be necessary if Mr King’s warnings about controlling inflation are to be heeded.  Lenders have already responded to the initial cut and are likely to feel pressure to cut mortgage interest rates further should there be another cut in Bank rates.

Meanwhile, back in the long dark tunnel, the numbers of people entering negative equity are rising fast.  There is no end in sight to the fall in house prices, leaving some of those who have purchased recently in the worrying situation of knowing that their loan is more than the worth of their home.; all a grim reminder of the last property crash in the early 1990s.  Currently it is estimated that around 60,000 home owners are entering negative equity every month. 

If you are in that situation, you may be content to wait for stabilisation of the property market.  If cyclical trends are to be believed, property is likely to recover some, if not all, of its value over time.  For many, sitting tight could be the best option. 

But not everyone has the luxury of choice.  If you need to sell up because of rising debts or inability to meet your mortgage repayments, give Property Rescue a call and ask about their guaranteed valuation service.  Initial consultation with one of their experts is free and entirely without obligation.  They will not pressure you into proceeding and will not pester you with phone calls should you decide not to go ahead.  In a market where almost nothing is moving, it is still possible to sell your home.  Call Property Rescue for an informal chat and more details.