Housing & mortgage round upA relatively quiet week, with none of the major house price surveys reporting this over the past seven days, but fear not, we’ve managed to dig up some interesting stories for those of you who need your weekly fix of housing and mortgage news.

More retirees look to downsize

Are you planning on downsizing in retirement? You are not alone if you are. Downsizing is becoming a key part of many people’s retirement planning and a new survey has revealed just how many retirees are considering moving to a smaller home in retirement.

Are you looking for mortgage advice?

Linda Wood, Investment Sense mortgage adviser in Nottingham

Contact Linda Wood today:

0115 933 8433


Online enquiry form

Research from mortgage provider, Castle Trust, has estimated that over three million households plan to downsize to help meet the costs of retirement. The survey also revealed that the retirees plan to buy a property worth on average 36% less than their current home, releasing on average £57,400. Although 11% of people plan to buy a property worth less than half of their current home, whilst 4% plan to sell their property without buying a replacement.

Downsizing can be an effective way of releasing capital, which can then be invested to produce an income to supplement a retiree’s pension. It can also be an option for older people with interest-only mortgages, who have no repayment vehicle in place.

However, relying on a single property to help fund retirement can be risky, property prices have fallen significantly since the peak of the last property boom and selling a property is not always easy.

Sean Oldfield, Chief Executive Officer at Castle Trust, said: “We know that many people regard property as a good way to save for retirement, in fact the ONS Wealth and Assets Survey has shown that 60pc of people under retirement age think that it is the best way to do so.”

Oldfield continued: “However, your home is not an investment unless you are willing to permanently downsize, which only 13% of the population plan to do. This means only about 1 in 8 people plan to access the value in their home to fund retirement and the remainder will be generally heavily underweight housing as an investment.”

“This is extraordinary when you consider that residential property is the UK’s largest asset class, at over £4 trillion it is greater than equities, gilts and bonds combined. It has also historically had the highest risk-adjusted returns of any of the major asset classes.”

Sellers cuts asking prices

New figures from the estate agent, Right Move, have revealed that sellers dropped their asking prices by 2.6% in November, presumably in an effort to sell before Christmas.

November is traditionally a quiet time for the housing market and the fall reported this year is slightly less than in the previous two years when November saw drops of 3.2% and 3.1% respectively.

According to Right Move the average asking price in the UK is now £236,761, 2% higher than this time last year, and significantly higher than the three main house price surveys, produced by the Halifax, Nationwide and Land Registry, who all put the average house price at around £160,000.

Miles Shipside, Director of Right Move, said: “Outside the capital, agents report prices are broadly flat in many parts of the country compared to a year ago. This stability may indicate a sounder springboard for 2013 as the wait goes on for a sustainable recovery in transaction numbers.”

Clamp down on rogue buy to let landlords?

It seems as though each month we report than the average cost of renting has risen, with buy to let landlords benefiting from ever increasing incomes. However, it now seems that some of the less scrupulous landlords and letting agents may be facing a clamp down on some of their practices.

The Royal Institution of Chartered Surveyors (RICS) has said that greater regulation is needed in the face of “worryingly low standards”.

There are currently no controls over who can become a landlord or indeed set up a letting agent, with no compulsory code of conduct which agents must follow.

Evidence of unscrupulous practices was revealed by Shelter, the housing charity, who found in a recent survey that 23% of tenants believed that they had been subject to unfair fees when renting a property. For example, some tenants were being charged £150 each year for credit checks, which in reality, cost a fraction of that price.

Despite the Shelter housing figures, a survey by RICS, showed that 90% of tenants were in fact happy with their letting agent.

Peter Bolton King, of RICS, said: “There are too many corrupt agents that do not belong to any professional body who are taking advantage of the current gap in regulation, putting consumers at risk.”

He concluded: “Choosing the wrong agent can result in tenants encountering all sorts of problems such as lost deposits, broken agreements and excessive charges.”

“What we would like to see is the Government taking direct action on this and introducing a single regulatory and redress system for both sales and lettings agents to make sure they are fully accountable.”

Our mortgage adviser, Linda Wood, is here to help you.

If you would like advice on your options or you are affected by any of the stories in this week’s housing round up, please call  Linda today on 0115 933 8433, alternatively enquire online or email linda.wood@investmentsense.co.uk

Your home may be repossessed if you do not keep up repayments on your mortgage.

For providing mortgage advice we will charge an application fee of £300 and we may also be paid a fee from the lender, any fee paid by the lender will be disclosed to you. Alternatively we will charge an arrangement fee of 0.5% of the loan and refund to you any payment received by us from the lender.

Leave a Reply