Taylor Wimpey CEO Peter Redfern suggests there is scope to increase prices of new homes even in a falling market!

Posted on 13/11/2014 by New Home Expert | Comments Off

The Daily Telegraph recently published a story featuring Taylor Wimpey CEO Peter Redfern claiming that new regulations following the Mortgage Market Review, which have restricted borrowing for second-hand homes, have not adversely impacted the business and Help to Buy is still being used by their first time buyers. The company also announced that it is fully sold for 2014 and has confirmed a profit upgrade.

Peter Redfern

Mr Redfern, in a somewhat blatant attempt to talk up the prospect of further new home price increases, is claiming that housebuilders have more room to adjust prices upward since they were starting from a lower base, having fallen behind valuations for existing homes after the great recession. So are we to interpret that, housebuilders such as Taylor Wimpey have not increased their prices in line with the general local market since 2008?

He said:

“Housebuilders have to keep liquidity in the business and have more room for price adjustment sellers of existing homes by contrast may take their property off the market if they are not getting the right offer. Big houses in the country market are also proving harder to sell, where housebuilders are not that prevalent. This is having a negative impact on the outlook for the market for existing homes.”

Schemes, in particular Help to Buy, continue to give the new home industry a taxpayer-subsidised helping hand. “………..attractive products that help credit availability and affordability – whereas stricter mortgage rules have started to affect sales in the second-hand market. After the downturn mortgage lenders penalised new build specifically apartments as they felt young buyers posed a greater risk with good incomes but low deposits, but these differences are starting to unwind.”

If new homes were penalised, it was because there is always a 10-20% price premium. Lenders required higher deposits to give more of a buffer to account for the premium and added risk of steeper falls in valauations should the market turn.

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Posted in New Homes

Tagged help to buy, house builders, house prices, new homes, pete redfern, taylor wimpey

Flood victims are still waiting for insurers to pay their claims

Posted on 16/10/2014 by New Home Expert | Comments Off

Is insurance just for peace of mind?

Most people realise how important it is to insure their home and possessions as a safeguard against their worst nightmares becoming a reality. Be it burglary, storm damage, fire or flooding, virtually everyone has insurance which enables them to sleep at night, not worrying about being left out of pocket or with nothing after a major disaster.

Or so you would think. But as keen as the industry is to collect premiums from you, things are quite different when an insurer has to pay a claim. Even a simple small claim such as a handbag loss can result in a disputed claim requiring proof of original costs (receipts) and police crime number etc. Even when the claim is eventually paid (ours took over a month) the following years premium increased by over 30%.

So it is hardly a surprise that this grubby industry is dragging its heels in settling claims from those flooded in January. This, despite the Prime Minister David Cameron saying on national television that he was “putting insurers on notice that they needed to pay up the money fast” So how can it be that, according to the Association of British Insurers, 7,480 householders, that is 40% of those who made a claim for flood damage this year, are still waiting to be compensated by their insurer? The ABI figures also highlight that 2,600 will still be waiting at Christmas! Around a 100 families on the Somerset Levels are still in temporary accommodation, often living in caravans.

The ABI says it does not know the exact number of people living in temporary accommodation and insurers say not all outstanding claims are disputed and think that 85% of the flood claims submitted will be settled before the New Year. That would still leave 15% (nearly a sixth) who are still waiting!

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Posted in Home owner information

Tagged flooding, home insurance, insurance

Stamp Duty is not a fair tax but have Scotland got it right?

Posted on 15/10/2014 by New Home Expert | Comments Off

There are few who could argue that stamp duty land tax is as unfair as it is unpopular and well past its ‘reform by’ date! With the current thresholds and the excessive tax incurred, it is hardly surprising that more and more people are staying put. A report in The Times highlighted that in the 1980’s, around 12% of all houses changed ownership every year. Last year the figure was just 4%.

There have long been calls for stamp duty to be made marginal, the same as income tax, so that the percentage paid relates to the amount above each particular threshold, rather than on the whole amount.

This is precisely what Scotland are introducing from April 2015 with their Land and Building Transaction Tax announced last week.

For a start no tax is due on properties sold for less than £135,000 – £10,000 higher than the rest of the UK. Then between £135001 and £250,000 a 2% tax is charged but only on the proportion above the nil-rate threshold. After that it gets a bit silly! A 10% tax is due on the proportion between £250,000 to £1 million and 12% on anything above £1million.

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Posted in Buying and selling property

Tagged house prices, stamp duty

Persimmon fail to fix defect in new home for 9 months

Posted on 13/10/2014 by New Home Expert | Comments Off

Buyer Cara Waligura reported a nasty smell emanating from the bathroom of her new Persimmon home soon after she moved into her new home on the South Shore estate opposite Blyth beach. But Persimmon failed to resolve the drainage problem until recently – nine months after it was first reported!

She told “Mr Justice” of the Evening Chronicle how Persimmon’s contractors left a “gaping hole” in the bathroom whilst trying to identify the source of the stench. She said: “Our new home stinks and so does Persimmon!”

Defective “Durgo” was the cause

“Since moving into our newly-built home in January we have had to endure a horrible drainage smell in the bathroom. We are now nine months into complaining but we are getting no joy. After many calls and tears we still have a hole in the bathroom wall and an awful stink in all of the upstairs.”

Apparently even the NHBC issued three warnings to Persimmon to carry out work that is required under their Buildmark warranty.

John Eynon, deputy managing director for Persimmon Homes North East, told the Evening Chronicle: “This issue has been on-going for some time but time-scales have been agreed for it to be resolved. I would stress that the design complied with building regulations and NHBC technical guidance at the time of occupation and was accepted by the NHBC. Subsequent investigations and works to try and remove the smell have been ongoing and the final solution was agreed with the NHBC to vent the soil pipe to the atmosphere, in lieu of the durgo valve that had been fitted. Unfortunately, there was a delay in completing the works due to organising suitable sub-contractors to minimise disruption. We apologise that the problem was not quickly identifiable but the solution should resolve the matter now. I have personally made several attempts to contact the customer whilst my customer care team have been dealing with the issue.”

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Tagged customer care, persimmon

First-time buyers under the age of 40 are to be offered 20% discounts on 100,000 new homes.

Posted on 29/09/2014 by New Home Expert | Comments Off

Ho Ho Ho! – Christmas comes early for house builders as David Cameron is set to announce another extension of the Help to Buy scheme at his party’s conference in Birmingham this week.

Under the latest proposals, David Cameron anticipates that up to 100,000 houses would be built on so-called ‘brownfield’ land and offered for sale only to young people buying their first home in England. The new homes would be offered at discounted prices of 20% less than their market value. Exactly who will be valuing the new homes and “comparable” homes has yet to be clarified, but it should be expected that the house builders would set the “market prices” and then “discount” them by 20%. So, in theory at least, a new house worth £200,000 could be bought by a first-time buyer under 40 for £160,000 with a potential saving of £40,000.

To make the discount possible, the Conservatives are proposing to exempt house builders from certain taxes and requirements such as the Section 106 provision of affordable and social housing, the Community Infrastructure Levy and the Zero Carbon Homes Standard on these sites. In addition, brownfield sites – land previously used for commercial or industrial purposes – and surplus public sector land will be released to house builders at knock-down prices to fund the discounting – savings which house builders will be “obliged” to pass on to buyers.

House builders will be required to demonstrate, before planning approval is given, that the homes they are proposing to build will be at least a 20% cheaper than comparable houses in order to qualify for the discounted land and tax exemptions. That could mean that at the outset, the homes would have a price set before planning and could perhaps discourage house builders from land banking these sites. Brownfield land can be notoriously costly to develop. Previous industrial and commercial sites are often contaminated and the demolition and clean up of toxins can be as time-consuming as it is expensive. Factor in that it will also be necessary to bring in clean topsoil and that costly foundation designs may also be required, it is not surprising that the house builder’s preference is always going to be Greenfield land.

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Posted in Help To Buy, New Homes

Tagged first time buyers, help to buy, house builders, planning

The ‘Buy to Let’ boom ends as new rules come into force

Posted on 08/09/2014 by New Home Expert | Comments Off

‘Buy to Regret’ as Landlords face even more red tape

The popularity of Buy to Let may be coming to an end as new rules and regulations come in force and rental yields and property prices stagnate. Add in the increasing numbers of tenants “misbehaving” and many landlords may soon decide enough is enough.

Landlords are being forced to delay rent increases: Until recently, rents were rising by as much as 8% a year in London. But now across most parts of the country rent increases are being either reduced or postponed as achievable affordable rents have now reached a peak. However, attractive homes in areas of high demand do still command high rental yields.

Property prices rises levelling out: Recent monthly reports of property prices show that rises are slowing down. This means landlords’ easy paper profits on their property portfolios are coming to an end and may even go into reverse when (not if) the property market falls.

Large fines for not checking tenants are legally allowed to be in the country: The Immigration Bill 2014 which comes into force next month, means landlords must check that their tenants have a legal right to be in the country before giving them the keys. If they do not, landlords can face fines of up to £3,000.

Problem tenants on the increase: The number of “tenants behaving badly” is on the increase. Insurer AXA reports that a number of tenants are making life difficult for landlords. Nearly 20% of tenants admit they have kept pets in the property and broken the terms of their leases. A third regularly pay their rent late and one in ten do a moonlight flit at the end of their tenancy to skip paying any final bills. Nearly one in six tenants has had noise complaints made against them, with 10% of tenants having had the police called to the property. Landlords can even face prosecution if their tenants are producing cannabis or any other banned substances in their property under the Misuse of Drugs Act 1971.

Other regulations and red tape landlords are now required to do:

Comply with fire prevention rules on the type and standard of furniture.
Carry out Annual gas safety checks on boilers and gas appliances.
Test electrical appliances.
Supply an Energy Performance Certificate if a tenant requests one.
Landlords must use a government-backed deposit protection scheme within 30 days of receiving it from the tenant. Failure to do so could result in a fine of up to three times the value of the deposit.

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Posted in Letting and renting

Tagged landlord, letting, renting

Redrow’s Steve Morgan – always moaning!

Posted on 06/09/2014 by New Home Expert | Comments Off

Hardly a person to let an opportunity slip to gripe about the perceived failings of the planning process and other woes of the house building industry, Redrow’s CEO Steve Morgan, is becoming a regular whinger whenever his company release results or issue interim statements to the City. His latest tirade this week concerned the release of greenbelt land for house building, capacity issues relating to labour and materials shortages and his perceived restrictive planning policies.

Reasons to be cheerful?

Morgan’s company Redrow released a record set of results and doubled the dividend paid to its shareholders on the back of a 91% increase in profits to £132.6 million for the year to the end of June. The average selling price of a Redrow home is also up 13% to £239,500 – the fifth highest of the large house builders. The number of new homes built was also 27% higher, up 727 to 3,597. All of this thanks to the government’s Help to Buy scheme, acknowledged by Redrow and facilitating over a third of their private sales (35%).

You would think this would make for a very happy bunny – especially when you consider that Morgan will be £3million richer as he owns 150 million shares in his company – but not apparently so.

On brick shortages:

According to Morgan, there are just not enough bricks being made to go round. Strange, as his competitors Barratt managed to build 13,663 new homes, nearly four times more than Redrow and Taylor Wimpey also managed to get bricks for the 11,600 new homes they built last year, again over three times the number Redrow built!

It takes around 10,000 bricks to build the average UK house. Around 1,560 million bricks were made last year – enough for 156,000 new houses. Nowhere near that number of houses will be built in 2014; in fact, it would be a surprise if a total of 156,000 new homes are built this year! So enough bricks are being made and Redrow’s competitors manage to order sufficient quantities so perhaps Morgan should be looking closer to home!

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Posted in New Homes

Tagged help to buy, house builders, landbank, new homes, planning, redrow

The psychology of selling a home.

Posted on 30/08/2014 by John Jones | Comments Off

More and more people are deciding to save themselves several thousands of pounds by not going down the traditional local estate agent route by choosing to sell for as little as £500 using an online agency. How to do this and why you don’t need an estate agent. As a result most people will need to be aware of the “psychology of selling” when showing potential buyers around their home and follow a few easy tips to help sell their home.

High street estate agencies rely on the fact that most people do not conduct viewings very well and do not know the tell-tale signs that buyers can give out. Even worse, some owners do not even prepare their property to show it at its best and maximise the chances of an early sale at the best possible price. Phil Spencer’s TV programme Secret Agent is based on this.

But by using simple psychology there are many things that sellers can do to virtually double the chance of a successful sale. Even though most are common sense and somewhat obvious, hardly anyone does them, so you can use this to your advantage to give you the edge over similar properties on the market in your area.

Arranging viewings

This will be the first contact you will have with your potential buyer. It is important to be bright and cheerful and try to get into a conversation. If the caller asks specific questions about the home be honest and truthful, but be concise and never give anything extra as this may bias their opinion of your home before they have even set eyes on it.

Try to arrange the viewing some time during the day, at a time perhaps when there will be fewer people at home. Try to find out how many will be viewing and make a definite appointment. Make a note of their name and the time and date of the viewing and be accommodating. Make sure you give the buyer clear directions on how to get to your home, where to park and perhaps landmarks to watch out for on the way. Include your postcode for use with a SatNav.

First impressions count – kerb appeal

If the buyer is not impressed with your home in the first few seconds of walking up to your front door, there will be nothing you can do to convince them to make an offer, no matter how fantastic the inside of your house is, their minds will already be negatively focused. Conversely, if they like what they see you are well on the way to selling your home!

So………

Make sure your front garden is a tidy as possible.
Prune any trees, cut any hedges and make sure the path clean and free of all weeds and mildew.
If possible, plant some bedding plants to provide a bit of colour.
Sprinkle some Sulphate of Ammonia on your lawns. In just a day (after watering in) it will turn your patchy grass into a perfect green lawn. Be sure to cut it regularly to maintain the attractive stripe effect.
Pay particular attention to your front door. Clean it and re paint it if necessary. Polish any brass or chrome to make it look brand new, because buyers can and do judge the house on their initial impression of the front door.
Clean all the windows and wash down external paintwork.
If possible remove your car(s) from driveway.
To make your gardens look bigger, tie back shrubs and hedges, and put away any swings and slides.
Add compost to the flowerbeds. This will show your garden at its best and hide any persistent weeds.

Preparing the home for a viewing

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Posted in Buying and selling property

Tagged estate agents, selling, selling a home

FREE cavity insulation for 9 in 10 homeowners

Posted on 16/08/2014 by New Home Expert | Comments Off

Save energy this winter by getting your home insulated for FREE!

Great news for UK home owners as British Gas says “nine out of ten will be able to get loft and cavity wall insulation for free” as part of the Energy Company Obligation (ECO). No you don’t have to be on benefits, over 60, or have minimal savings to qualify!

Most of the big six energy providers are giving free boilers, plus loft and cavity wall insulation, to some people who get tax credits and have an income of £15,860 or less, or are receiving certain benefits such as pension credit. But British Gas is giving away FREE loft and cavity wall insulation to anyone with a suitable home – you don’t need to meet any benefit criteria – you don’t even have to be a British Gas customer! See British Gas Free Cavity Wall Insulation

That’s right it’s completely free – nothing to pay at all, ever! Unlike the extensively promoted Green Deal, designed to help people make energy efficiency improvements to buildings by allowing them to spread the costs through their lower energy bills over several years, rather than paying 100% in advance of energy savings.

So how can it be free?

Where the heat is lost

The Energy Company Obligation (ECO) is an energy efficiency programme that was introduced in the UK in early 2013, replacing the Carbon Emissions Reduction Target (CERT) and the Community Energy Saving Programme (CESP). ECO places legal obligations on the larger energy suppliers to deliver energy efficiency measures to domestic energy users. It operates alongside the Green Deal and the big energy companies have obligations to spend money to make UK homes more energy efficient, through ECO. If they miss their targets, they face large fines. This is why it is being offered free and why British Gas has changed its criteria for free insulation to include anyone with a suitable home. Homes that are not suitable are those built using timber or steel frame as they already have insulation in the frame. Most new homes built since 2000 will already have cavity wall insulation.

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Posted in Home owner information

Tagged buying, Cavity Insulation, Energy Companies Obligation, energy performance, Insulation

Why are house builders and their agents still deliberately mislead buyers

Posted on 14/08/2014 by New Home Expert | Comments Off

New homes – all sugar and spice and all things nice? That’s what the house builders would have you believe. Slugs and snails and snagging list tales would be closer to the truth!

Included with last weekends Mail on Sunday was a property paper called ‘The Location’ described as – “44 pages of property inspiration.” Within it’s covers were some of the most outrageous superlatives I have ever seen used by house builders and their selling agents to describe not only the new homes being advertised, but also the location of the developments.

Not once were the adjectives used to describe the homes and developments backed up with any tangible statement of explanation. Here is another translation of what the builders say and what it really means.

Of the homes they were described as:

“Bespoke” Implying that they are being built to a buyer’s own specific requirements rather than in all probability, a one-off design forced by the planning process.

“Contemporary” This just means “of the same age; present-day” yet it is frequently used to imply state-of-the-art features, designs or specifications.

“Exclusive” This commonly used to imply the development or properties are one of kind – hardly the case with most new homes.

“Uncompromised quality” Really? How is this substantiated? So there we have it, this development does not “compromise” on quality, implying or more usefully, confirming that others do.

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Posted in Buying and selling property, New Homes

Tagged estate agents, house builders, quality, selling, show homes, specification

New Home Blog

Taylor Wimpey CEO Peter Redfern suggests there is scope to increase prices of new homes even in a falling market!

He said:

Flood victims are still waiting for insurers to pay their claims

Is insurance just for peace of mind?

Stamp Duty is not a fair tax but have Scotland got it right?

Persimmon fail to fix defect in new home for 9 months

First-time buyers under the age of 40 are to be offered 20% discounts on 100,000 new homes.

The ‘Buy to Let’ boom ends as new rules come into force

‘Buy to Regret’ as Landlords face even more red tape

Other regulations and red tape landlords are now required to do:

Redrow’s Steve Morgan – always moaning!

Reasons to be cheerful?

On brick shortages:

The psychology of selling a home.

Arranging viewings

First impressions count – kerb appeal

So………

Preparing the home for a viewing

FREE cavity insulation for 9 in 10 homeowners

Save energy this winter by getting your home insulated for FREE!

So how can it be free?

Why are house builders and their agents still deliberately mislead buyers

Of the homes they were described as:

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He said:

Is insurance just for peace of mind?

‘Buy to Regret’ as Landlords face even more red tape

Other regulations and red tape landlords are now required to do:

Reasons to be cheerful?

On brick shortages:

Arranging viewings

First impressions count – kerb appeal

So………

Preparing the home for a viewing

Save energy this winter by getting your home insulated for FREE!

So how can it be free?

Of the homes they were described as:

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