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Detached house prices stagnate finds Land Registry

Detached homes have seen the smallest rise in prices of all property types in England and Wales in the last year official figures suggest.Detached house prices stagnate finds Land RegistryThe typical home rose in value by 1.1% in the year to the end of October, according to the Land Registry.

But the typical detached house only increased by 0.1%, the latest data suggests.

The typical detached home was valued at £254,378 compared with an average of £161,605 overall.

In the 12 months to the end of October, terraced homes increased in value by 0.6%, prices of semi-detached homes went up by 1.5%, and flats and maisonettes rose by 2.8%. Commentators say this is partially driven by demand.

The Land Registry figures, which suggested prices fell by 0.3% in October compared with September, again showed the regional differences of house price changes.

In London, there was a 7% annual increase in prices, compared with a fall of 5.8% in north-east England.

In a separate report, the Council of Mortgage Lenders (CML) said that London was affected by factors that were unique to the property market in the capital.

“Part of the resilience of London property prices is explained by the city’s global status,” the CML said.

“The political stability of the UK, combined with a 20% depreciation in the value of sterling since the credit crunch, has made the capital an attractive destination for international investors in central London property.

“Another important characteristic of the capital’s housing market is the significant variation in property prices within London. This presents flexibility for those wishing to buy but who find themselves priced out of expensive areas.

“There are often options to buy in other districts, which contributes to the process of gentrification of areas of the capital.”

The lenders’ group said first-time buyers in London were generally a couple of years older than their counterparts in the rest of the UK, they had a higher income, but the vast majority needed financial help from family members to get on the property ladder.

About 28% of first-time buyers were unassisted, compared with 34% in the rest of the UK, the CML said.

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UK home owners to fund green energy investments

Details of the new energy bill were announced by the government to comply with EU green policies and it seems that UK home owners will be the ones picking up the bill.UK home owners to fund green energy investments

Although full details have yet to be released preliminary poitns include:

  • Households will have to pay an estimated £20 next year to fund clean energy investment, rising to £95 in 2020
  • Energy companies to get £7.6 billion from this to invest in low-carbon power
  • There is no target for carbon emission levels by 2030
  • Longer-term emission levels to be discussed – but not necessarily set – in 2016

Crudely speaking, the bill has been a battleground between Chancellor George Osborne, who favours gas-powered generation, and the Liberal Democrats, who want clean energy.

What the chancellor wants, the chancellor normally gets – and that’s mostly what’s happened in the Energy Bill.

In this case he was willing to concede that householders should pay around £100 a year extra on bills by 2020 to fund clean energy.

DECC argues that in the long term clean energy will save money because renewables and nuclear are dear to build but relatively cheap to run.

But beyond 2020 Mr Osborne has refused to commit. He doesn’t think the UK should be taking a global lead on cutting emissions while competitor economies are not following. And he thinks gas may be a cheap power source in future.

So he has rejected the plan for a 2030 target for cleaning up the electricity sector. This 2030 goal is not legally binding, but it is said to be needed if the UK has a reasonable chance of meeting long-term emission targets under the Climate Change Act.

The compromises made in the battle have increased certainty for investors to create new energy infrastructure until 2020, but they have increased uncertainty beyond 2030.

Prices won’t be certain either. There’s a popular notion that gas will be a cheap source of power. The truth is, it’s impossible to predict whether volatile gas prices in the 2020s will be cheap or expensive.

All parties will breathe a sigh of relief that this seemingly endless feud is resolved – until it comes next year to setting specific subsidies for nuclear and renewables, that is.

The chancellor is adamant that gas will help keep down power bills in the future.

There are many more fragments to come in the energy jigsaw.

Decisions on the way subsidies from bills will be shared between nuclear and various renewable technologies will be made next year.

Key decisions on how to ensure there are enough gas power stations to keep the lights on when the wind is not blowing will be announced alongside the chancellor’s Autumn Statement.

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Self build is the way to develop UK housing market

The dream of owning your own home may not be as far-fetched as one think, because around 15,000 people a year are now building their own homes.Self build is the way to develop UK housing marketBy avoiding the large profit margins of developers, they can save tens of thousands of pounds.

And it does not need to be a grand design. Most self-built houses are perfectly ordinary homes, which would not be out of place on a modern housing estate.

Most self builders say that the most noticeable benefit has been the cost.

By cutting out the developers, they estimate that they are saving between 20% and 30% compared to building in the conventional way.

It can also be cheaper to buy your own materials than do it through a builder, with good deals said by some to be available on the internet.

One conventional supplier even offers a 25% discount to anyone who is building their own home.

Some of those who decide to take the plunge are being helped by a community-owned advice centre in Swindon, Wiltshire, which offers advice on everything from finding a building plot to insulation or timber frames.But some lenders, particularly the banks, see self-build houses as a huge risk.

The main downside is that lenders want to be certain that the foundations have been properly laid, for example, before giving out the next tranche of cash.

However with the need to pass building regulations, the lenders can now be fairly certain that if you have had stages passed by the local building inspectors from your local council that your construction is sound.

You will also need to take out an insurance policy to cover the theft of building materials or machinery from the site, which could prove very expensive.

And that is before you start looking at the structural warranties you will need on the building itself.

But it is not only budgeting skills you will need.

Self-builders have to manage a team of surveyors, architects, builders and suppliers, not to mention being a diplomat with the new neighbours.

Despite cheaper land and lower labour costs during the recession, the number of people building their own houses has not increased dramatically- at between 15,000 and 20,000 every year.

However given the issues of mortgage affordability and building costs- the self build option could be the way ahead for people to get on to the property ladder.

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UK households to fund £7.6 billion green investment

The government has published details of its long awaited Energy Bill which is designed to keep the UK’s lights on and emissions down.UK households to fund £7.6 billion green investmentIt will allow energy firms to charge households an extra £7.6 billion until 2020, which will go towards the development of low-carbon electricity generation.

A decision about setting carbon emission targets for 2030 has been delayed until 2016, after the election.

Fears have been expressed about the impact on bills and whether this delay will put off investors in new plants.

Announcing the Bill, the government said: “With a fifth of the UK’s electricity generating capacity due to close this decade, reforms are needed to provide certainty to investors to bring forward £110 billion investment in new infrastructure to keep the lights on and continue the shift to a diverse, low carbon economy as cheaply as possible”.

The independent advisory committee on climate change estimates the £7.6 billion the plan allows for will add about £110 to the average household energy bill in 2020.

The Department for Energy and Climate Change (DECC) has a lower estimate of £95 – or a rise of 7% – although some analysts think it would be more.

DECC believes the clean energy and efficiency measures will save on bills in the long run. The Energy and Climate Change Secretary, Ed Davey, told the BBC that the measures would eventually save about the same amount.

Environmentalists condemned the bill, saying the lack of a 2030 emissions target would make it very hard to meet the UK’s law on climate change.

But business groups said more needed to be done to mitigate the impact on firms of these extra costs, pointing to the loss of 900 jobs at a major energy user such as Tata Steel, as it cut back its operations in the UK.

The Energy Intensive Users Group said it supported the government’s efforts to shift to cleaner energy generation “but we need to ensure that in doing so we don’t undermine competitiveness of UK manufacturing internationally”.

Consumer groups also expressed concern about the prospect of higher bills.

“The Treasury has generously agreed to stick the entire cost of de-carbonising UK power on to consumer bills. At the same time, they are pocketing all the money they are raising in carbon taxes,” said Ed Matthew, the director of the Energy Bill Revolution campaign, arguing that this revenue should go into a major energy-efficiency programme to reduce bills.

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Regulation of letting agents call by surveyors

A surveyors’ organisation has called for further regulation of letting agents- following recent moves to crack down on the charging of unlawful fees.Regulation of letting agents call by surveyorsThe Royal Institution of Chartered Surveyors (Rics) said current rules meant anyone could set up an agency without appropriate qualifications or understanding of housing law.

It argued many of the 500-plus letting agents in Scotland were unregulated.

The body added regulation was necessary to “provide long-term security”.

Earlier this year, the Scottish government said rent laws would be clarified to ensure letting agents did not charge private tenants unlawful fees.

Ministers argued existing legislation had not been explicit enough about additional charges such as reference checks, credit checks and inventory fees.

But Rics said more regulation was needed in the private rented sector.

Rics Scotland director Sarah Speirs said: “The private rented sector is growing in Scotland as people struggle to buy property and it is imperative that we regulate the sector to provide long-term security.

“The Scottish government has taken welcome action introducing mandatory tenancy deposit schemes to protect individuals’ deposits.  However, despite the significant regulation in place for landlords, there is a gap in regulation for letting agents.”

“At present lettings agents are not required to abide by a government, ombudsman or regulatory body code of practice – demonstrating a lack of legal responsibility. ”

Solicitors who run letting agencies are regulated by the Law Society of Scotland and some letting agents are members of Rics or accreditation agencies such as Landlord Accreditation Scotland (LAS) or the Association of Residential Letting Agents (ARLA), which has a code of conduct for members.

Rics uses mandatory external auditing to ensure that member letting agents are following the code of conduct.

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Investigation launched into UK gas prices

An investigated by the Financial Services Authority (FSA) and Ofgem has been launched into UK gas prices.Investigation launched into UK gas pricesThe investigations by the FSA-  the UK’s financial watchdog and energy regulator Ofgem follow claims by a whistleblower.

Energy Secretary Edward Davey said he was “extremely concerned about the allegations”.

“The government takes alleged abuse in our markets very seriously,” he added.

The alleged manipulation is said to have lowered the wholesale price, and as such does not imply any knock-on impact on the retail price paid by customers.

The wholesale gas price is the cost to the energy providers of the gas they buy from the wholesale gas market.

This market includes everything from the UK’s own North Sea gas supplies, to gas piped into the UK from continental Europe, and gas arriving in the UK by ship as liquefied natural gas.

The FSA said: “We can confirm that we have received information in relation to the physical gas market and will be analysing the information.”

Ofgem also said it had “received information” and was looking into the issue. It added that it would “consider carefully any evidence of market abuse that is brought to our attention as well as scope for action under all our other powers”.

Mr Davey said he would keep in close contact with the two investigations.

The whistleblower, Seth Freedman, worked at ICIS Heron, a financial information company that publishes energy price reports.

ICIS Heron said it “detected some unusual trading activity on the British wholesale gas market on 28 September 2012, which it reported to energy regulator Ofgem in October”.

It added: “The cause of the trading pattern, which involved a series of deals done below the prevailing market trend, has not yet been established.  If anyone was to benefit from this it would have been derivatives traders.”

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Mortgage lending increases home loans

Mortgage lending in the UK housing market has continued to increase despite some monthly fluctuations in the figures, a lenders’ group has said.Mortgage lending increases home loansThere were 146,500 mortgages advanced for house purchases in the third quarter of the year the Council of Mortgage Lenders (CML) has said.

This was 13% higher than the previous quarter and similar to the same period a year earlier.

However, the number of loans advanced in September dropped sharply.

Some 44,400 loans were advanced during the month, a 17.6% drop from a “strong” August, the CML said, and 9% down on September 2011.

“While lending in September was slow after a particularly strong August, quarterly figures suggest that the underlying picture is more positive,” said CML director general Paul Smee.

Previously published figures from HM Revenue and Customs have shown that the number of home sales in the UK has risen by 9% in the first nine months of the year, compared with the same period in 2011.

Many commentators have suggested that lending could pick up further as the Funding for Lending scheme gathers pace.

This makes £60 billion available for banks to borrow in the first phase of the scheme, which began on 1 August, which in turn can be lent to householders and small businesses.

So far this appears to have been heavily concentrated on cheap mortgage deals for people with very large deposits to put down.

The CML figures show that, on average, first time buyers still need to provide a deposit of 20% of a home’s value.

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UK construction output fell further in September- official figures show

UK construction activity fell 13.1% in September from a year ago, as the sector’s downturn steepened- the Office for National Statistics figures have shown.UK construction output fell further in September- official figures showThe month saw further big drops in new building by the commercial and public sectors (excluding infrastructure projects), both of which were down by a fifth from a year ago.

House building saw a 5% bounce in the month but remains 12% below a year ago.

Separately, the UK’s trade deficit narrowed in September to £2.7bn.

That compared with a £4.3bn deficit in August, and a £3.5bn deficit in September 2011, according to ONS data.

The UK saw improvement in goods exports, with stronger demand in non-EU countries, particularly the US, and chemicals manufacturers doing well.

Goods imports meanwhile saw their biggest monthly drop since December, led by a drop in fuel and manufactured goods imports.

The overall trade deficit in goods narrowed to £8.4bn from £10bn a month earlier, while the UK’s trade surplus in services held steady at £5.7bn.

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Home repossessions drop to five year low lenders say

The number of homes being repossessed has fallen to a five year low, according to mortgage lenders.Home repossessions drop to five year low lenders sayThe Council of Mortgage Lenders (CML) said there were 8,200 repossessions in the third quarter of 2012, the lowest quarterly number since 2007.

The number of borrowers in arrears was stable, at 159,100.

Repossessions have fallen steadily in recent years, due to low interest rates and lenders showing restraint with borrowers in difficulty.

The figure for the three months from July to September was down from 8,500 in the second quarter of this year, and lower than the 9,600 repossessions recorded in the same period a year ago.

“Our figures show that good communication and effective arrears management by borrowers, lenders and money advisers are helping the vast majority of those with mortgage repayment problems,” said the CML’s director general, Paul Smee.

“The rate of repossession has continued to fall and it’s clear that lenders want to keep people in their homes.”

However, only 26,300 properties have been repossessed in the first nine months of this year, 8% fewer than at the same stage of 2011.

The economy has been in recession for much of the past four years, with unemployment rising to its current level of just under 8%, but a number of factors have kept repossessions down.

Among them have been the record low level of interest rates that borrowers have to pay, as a result of the Bank of England’s decision to slash the bank rate to its historically low level of just 0.5%.

Lenders have been under pressure not to repossess properties unless it is genuinely a last resort; they also have to jump through many hoops to successfully obtain court permission to seize a borrower’s home.

Unless there is a dramatic reversal of the current downward trend then repossessions for the whole of 2012 are likely to be about 35,000.

That would be lower than in any year since 2007, which was just before the onset of the international banking crisis and credit crunch.

That year, there were 25,000 repossessions in the UK.

A good indication that repossessions will keep on dropping gently comes from separate statistics published by the Ministry of Justice.  They show that the number of repossession actions started in the courts in England and Wales also fell again in the third quarter of the year.

There were 14,168 such claims started by lenders, which was slightly lower than in the second quarter and a continuation of the general downward trend in these numbers since the first half of 2008.

Court actions for repossession are now running at roughly half the level recorded four years ago.

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House prices- no market momentum warns Nationwide

The UK’s house prices will take time to gain momentum-, despite a rise in prices in October compared with the previous month, the Nationwide has warned.House prices- no market momentum warns NationwideThe building society said prices rose 0.6% last month- more than offsetting the 0.4% drop in September.

However, property values were still 0.9% down on the same month in 2011.

It also said it expected the property market to remain subdued until the economic climate – including wages and employment levels – improved in the UK.

The average home was valued at £164,153 in October, the Nationwide said.

It said that monthly price changes had not settled into a strong trend, with three months of price rises and three months of price falls since May.

The figures are the first to assess the state of the UK housing market in October, but various other surveys have suggested that the market has been relatively static all year.

“Wage growth is still not keeping up with the cost of living and unemployment is still well above normal levels,” said Robert Gardner, Nationwide’s chief economist.

“This helps to explain why housing market activity has remained subdued, with the number of mortgage approvals still running at little more than half their long-run average.”

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