When it comes to buying a property, UK homebuyers may rely predominately on mortgages and cash payments, but their knowledge towards other financial products is limited, new research by Market Financial Solutions (MFS) has revealed.

The bridging lender commissioned an independent, nationally representative survey among more than 2,000 UK adults to uncover just how Brits have been financing their property purchases. Of those who have bought a property since 2007, 42% identified as cash buyers while a further 52% said they had used a mortgage or re-mortgage.

Taking into account the rise of the UK’s alternative finance industry – currently worth over £4.6 billion – the research also revealed a noticeable uptake in products outside of mainstream loans. Nearly one in five (19%) homeowners said they had used a form of alternative finance, ranging from crowdfunding to mezzanine finance and unregulated loans, with this figure rising to 29% among respondents aged between 18 and 34. Meanwhile, 13% of homebuyers said they had used a bridging loan – this number increased to 21% for those who were investing in a second home.

Deciding on how to finance a property purchase can seem overwhelming given the number of loans and products currently available in the UK. As a result, 37% of homebuyers have relied on a broker to help them find a financial product best suited to their needs.

However, MFS’s research also showed that the reliance on mortgages and cash payments was partly due to a lack of knowledge surrounding other available finance options. Reflecting the competitive nature of the country’s property market, nearly a quarter (24%) of buyers said they would have liked to have considered other financial products but feared they would lose out on their property purchase if they delayed their credit decision. Delving into awareness of specific alternative finance products, nearly half (49%) did not have a strong enough understanding of bridging loans or the situations in which they can be used.

Paresh Raja, CEO of MFS, commented on the findings: “Mortgages have long been the go-to method for financing a house purchase in the UK. But over the past decade, a range of new alternative finance products has arisen to give buyers different options that might be better suited to their needs. However, today’s research demonstrates that there remains a lack of understanding about what these options are and how to use them.

“From crowdfunding platforms to raise a deposit, through to bridging loans to buy a property at auction, there are many opportunities now accessible for those needing to access credit, and to remain reliant on the mortgage market could restrict an individual’s ability to get the funds they need. Indeed, in the UK’s competitive property market, it is essential that buyers are aware of the financial products they can choose from, in turn putting themselves in the best position to progress with a purchase quickly and efficiently.”

(Source: Market Financial Solutions)

Barclays has announced that it has teamed up with the UK Government to provide £1bn of development finance to help build thousands of new homes across England to help increase the pace and volume of housing provision.

Loans ranging from £5 million to £100 million, which will be competitively priced, are available for developers and house builders who are able to demonstrate the necessary experience and track record to undertake and complete their proposed project.   Funding is open to new clients as well as existing Barclays clients, and will put greater emphasis on diversifying the housing market, as at present, almost two-thirds of homes are built by just ten companies.

A key priority of The Housing Delivery Fund is to support small and medium sized businesses to develop homes for rent or sale including social housing, retirement living and the private rented sector, whilst also supporting innovation in the model of delivery such as brownfield land and urban regeneration projects.

Launching the fund, John McFarlane, Barclays’ Chairman, said: “There is a vital need to build more good quality homes across the country.  This £1bn fund is about helping to do exactly that by showing firms in the business of house building that the right finance is available for projects that help meet this urgent need.

“We are very pleased to be working with government to get the country building more homes, more quickly.”

Housing Secretary Rt Hon James Brokenshire MP, said: “My priority as Housing Secretary is to get Britain building the homes our country needs.  This new fund - partnering Homes England with Barclays - is a further important step by giving smaller builders access to the finance they need to get housing developments off the ground.

“This is a fantastic opportunity to not only get more homes built but also promote new and innovative approaches to construction and design that exist across the housing market.”

Chairman of Homes England, Sir Ed Lister, said: “Homes England has been established to play a more active role in the housing market and do things differently to increase the pace, scale and quality of delivering new homes.

“The Housing Delivery Fund demonstrates Barclays’ commitment to the residential sector and will provide a new funding stream for SME developers to help progress sites and deliver more affordable homes across England.”

Today’s agreement with Barclays forms part of the Government’s wider commitment to increase the pace of housing delivery in England. Ministers have been clear on their ambition to achieve 300,000 new homes a year by the mid-2020s, which follows 217,000 homes built last year, the biggest increase in housing supply in England for almost a decade.

(Source: Barclays)

Owning a home is one of the biggest dreams for many, yet the process of buying any property can be laborious and flooded with additional fees, delays and disappointments. Blockchain may just be able to chain that. Below Finance Monthly benefits from expert insight from Kai Peeters, the Founder and CEO of HiP, on the implementation of blockchain in the real estate sector.

We are now bearing witness to blockchain based technology coming out of its infancy, and showing how it can be applied to vastly improve multiple markets - including the archaic property market. With a few established businesses and technology giants warming to blockchain, we have to start asking more profound questions about/around how it could improve the situation for a buyer/ buyers and the real estate market as a whole.

The current housing market simply does not work for the majority of first-time buyers. Working exclusively with traditional financial institutions, real estate markets around the globe confine first-time buyers in long-term unmovable loans that put enormous pressure on young people looking to buy a home. This is why, despite interest rates being reasonably low, the number of new mortgages has been declining since the 1990s. Meanwhile, the minimum deposit is largely unaffordable for people who earn average wages, and without help from their family it is virtually impossible for them to get on the property ladder. Technology can transform the way we buy and sell real estate by eliminating additional costs and disorganization of our housing market, Smart contracts that can handle that aspect more efficiently.

Having a decentralized real estate platform addresses current market issues, and introduces the individual investors who can fill the void left by traditional financial institutions and inject more life into the market. This can also allow property to become a more valuable asset in itself, where each buyer is able to release equity without losing ownership, and raise money free of debt. Being able to turn equity into currency and have control over debt levels brings the choice back to the buyers, owners and investors.

The upcoming platform HiP was designed with all those benefits in mind, especially for first time buyers, who can use an inbuilt calculator to enter the price of the property they want to purchase as well as the down payment and monthly payments they can afford. HiP will then calculate the remaining amount needed to buy the property and this outstanding amount is offered out to investors. This means that the first-time buyer will own a percentage of the property whilst also being entitled to a proportional percentage of profit and capitals gains when sold. Investors on the HiP Exchange who have co-financed the property will also receive return on their percentage of the real estate equity they own.

This is a new world of opportunity for first time buyers who now have access to other financing options that were previously unattainable to them. With HiP focusing on the way we fund properties, and other innovative minds using blockchain based technology in other areas of the real estate sector, it is only a matter of time until the array of problems within the real estate markets becomes a thing of the past.

Like the digitisation of all things, challenges will be faced and there are benefits to reap, but often such progress doesn’t take place because the correlation between the two isn’t a positive or favourable one. Below Gemma Young, CEO and Co-Founder of Settled, discusses with Finance Monthly the future of digital in the property sector.

Property is our most important asset class, it's also our most emotional asset. Therefore, getting our home sale or purchase right is not just a big deal for consumers, it's a big deal for the wider UK economy.

Unlike other industries (travel, music, taxi services to name but a few), the real estate model has clung to its traditional roots. Even with the advent of “online” estate agents now in existence for the majority of this past decade, the industry has been slow to adopt the opportunities a digital revolution presents. It’s therefore unsurprising that we're still seeing the same issues; typical property transactions take over 3 months with 1 in 3 transactions breaking. This drives consumer losses in excess of £250m each year.

Looking forward, is 2018 going to be the year for true transformation? Will ‘proper’ property technology companies make a dent in the things that matter?

What drives transformation?

Technology

The emergence of truly disruptive technologies including artificial intelligence, virtual reality, blockchain and drones all hold their potential disruptive keys to a more progressive future. Not only are technologies proliferating, consumers also have easy access to them from their smartphones.

Empowered individuals

Tech-enabled consumers search for greater transparency, more control and ultimately more progressive solutions to age-old problems. Their quests for modern, digital solutions provide exciting opportunities for change.

Investment

2017 saw the most significant investment in ‘proper’ proptech to date, with a new and forward-focused collective attracting financial backing from VCs and traditional property players.

Regulation

Central and regulatory initiatives represent a particularly exciting shift. The latest Government call for evidence “Improving the home buying and selling process” and the HM Land Registry’s Digital Street scheme look towards a future where technology (including blockchain) will make the transfer of property ownership much more fluid. Such initiatives shine a light on the underlying problems apparent in the UK property market and signal a commitment to a more open and less guarded future.

How does this future look?

As we see this convergence in consumer, regulatory and technology worlds, this more futuristic property market is well within reach. So who wins? The opportunity to embrace and adopt new technology is open to all, however, historically, traditional incumbents have been slow to move in many sectors. They, therefore, get left behind or quite simply, left out. We don’t have to look far to see examples; Blockbuster and HMV are businesses which didn’t, in time, connect to the opportunities of the next generation. As a result, nimble and forward-focused entrants Netflix and Spotify won the respective leading positions in the new world. Much like in the movie and music sectors, forward-focused businesses tend to win in other worlds.

Settled.co.uk is one example of a real estate business that is connecting across these converging elements at quite a unique time in real estate history. Settled’s unique technology has significantly increased the likelihood of completing on a home and has cut the time it takes to sell and buy in half. It presents the hope that, in the future, its technology will enable people to buy and sell properties in moments, not months. This is the kind transformation this sector needs.

Entering the property market has become an increasingly daunting task for many young people in today’s economic climate. As a result, many have looked to government-backed help in the form of help-to-buy schemes and ISAs to turn the dream of joining the property ladder into a reality.

The required deposit can then be saved with the help of high-interest ISAs.

Though purchasing through help-to-buy has become an increasingly feasible option, not all areas of the UK have equal opportunity. Credit experts TotallyMoney have investigated Britain’s best and worst districts, cities and regions to lay down roots utilising help-to-buy schemes.

We researched a number of factors in each district across the UK to determine a ranking, including the number of equity loans utilised in each region (per capita), the number of help-to-buy ISA property completions and the average amount left to pay after government help (based on average property prices). The research uses government data to compare every district of the UK, including Scotland, Wales and Northern Ireland, to generate the complete ordered list of help-to-buy hotspots.

Desirable Districts

Considering the ranking factors mentioned above, of the 388 government-defined regions in the UK, the top help-to buy hotspots were revealed to be:

1. Central Bedfordshire – The Eastern district came up trumps, with a high level of equity loans (1710) per capita, and 245 properties successfully bought using a help-to-buy ISA. The district beat out all competitors as the best place to purchase a property utilising help-to-buy in the UK.

2. Chorley – The Lancashire market town came in second position with a low average property cost (£182,818) making entering the property ladder through help-to-buy schemes more achievable. The district also boasts the lowest average minimum deposit from the top 5 districts (£9,141) and relatively high number of equity loans given out by the government per capita making property ownership more achievable for residents.

3. Cheshire West and Cheshire – The second area in the North West to appear among the top scoring districts, Cheshire West and Cheshire scored particularly highly in terms of the number of help-to-buy ISA property completions per capita where it came out top in the whole of the UK, with 495 residents purchasing homes utilising this scheme.

Help-To-Buy Cities

The research also accounts for the most populated UK cities and which of those offer the best options for buyers looking to utilise help-to-buy options. Of these, the most buyer-friendly cities were revealed to be:

1. Wakefield – Located in a prime spot between Leeds and York, Wakefield tops the UK’s most populated cities for help-to-buy hotspots. The city has one of the highest levels of help-to-buy ISA property completions, helping 610 residents purchase new homes between December 2015 and March 2017.

2. Hull – In second place, and securing Yorkshire as a true hotspot hotshot, the port city scored highly in equity loans per capita. Hull’s low average property cost (£134,452) means that the 5% deposit required is the cheapest of any city at just £6,722.

3. Salford – Home to MediaCityUK, Salford sits in bronze position with 437 residents successfully purchasing homes utilising the help-to-buy ISAs in recent times and a good level of equity loans per capita boosting its ranking.

Joe Gardiner, Head of Brand and Communications at TotallyMoney, said: “Today, entering the property ladder is increasingly being seen as a pipedream for many young people. But with the introduction of government help-to-buy schemes, this dream can become a realistic option. For those thinking of utilising these schemes, knowing where in the UK is the most help-to-buy friendly, and whether your local area is one of these hotspots, is of particular importance to allow buyers to make a responsible financial decision.”

The full ranked map of the UK’s help-to-buy hotspots can be explored here, or the infographic covering the best help-to-buy cities can be viewed here.

(Source: TotallyMoney)

This month, Finance Monthly had the privilege to interview one of the most prominent thought leaders within the fields of architecture, urbanism and design today – Patrik Schumacher, who has been leading Zaha Hadid Architects since Zaha Hadid’s passing in March 2016. He joined Zaha Hadid in 1988 and was seminal in developing the firm to become a 400-strong global architecture and design brand.

 Patrik Schumacher studied philosophy, mathematics and architecture in Bonn, Stuttgart and London. He received his Diploma in architecture in 1990. He has been a partner at Zaha Hahdid Architects and a co-author on all projects since 2003. In 2010 Patrik Schumacher won the Royal Institute of British Architects’ Stirling Prize for excellence in architecture together with Zaha Hadid, for MAXXI, the National Italian Museum for Art and Architecture of the 21^st century in Rome. He is an academician of the Berlin Academy of Arts.

 In 1996 he founded the Design Research Laboratory at the Architectural Association in London, where he continues to teach. A few years later, in 1999, he completed his PHD at the Institute for Cultural Science, Klagenfurt University. Today Patrik Schumacher is lecturing worldwide and recently held the John Portman Chair in Architecture at Harvard’s GSD. Over the last 20 years, he has contributed over 100 articles to architectural journals and anthologies. In 2008 he coined the phrase ‘Parametricism’ and has since published a series of manifestos promoting Parametricism as the new epochal style for the 21^st century. In 2010/2012 he published his two-volume theoretical opus magnum, titles “The Autopoiesis of Architecture”.

What attracted you to the architecture sector?

 As a high-school boy, I encountered the work of Mies van der Rohe in my History of Art class. I was struck by its cool beauty. Images of Oscar Niemeyer’s Brasilia were another striking inspiration I saw in a movie with Jean-Paul Belmondo, called ‘L'homme de Rio’, 1964. These were my first mediated encounters with modern architecture. Later, I decided to study architecture after I had studied philosophy and mathematics, because it seemed to me to be a versatile field where creativity intersects with a future-oriented, transformative societal agenda.

How has technology changed the architecture sector in recent years?

We are living in a new technological era brought on by the convergence of computation and telecommunication. This technological empowerment is triggering a radical restructuring of the whole reproduction and life process of society. We are now living and working in what I would like to call the Postfordist Network Society, where the most advanced arenas of the world economy focus on R&D, finance, and marketing and where production is more and more automated, relegated to the periphery and subject to continuous reprogramming according to the innovations produced in the R&D hubs. These hubs are the mega cities like London, New York, Tokyo, Seoul, Shanghai etc., where urban concentration continues relentlessly. This has consequences for the complexity, dynamism and degree of integration of the built environment. Cities become intensely networked with urban webs garnering the productive synergies of co-location. These challenges can be met by an architectural design discipline that is upgrading its tools, methodologies and repertoires along the line of the new style I have called ‘Parametricism’.

What are some of the key issues that you and your clients frequently face in relation to UK regulations?

 Regulations are too prescriptive. There are rigid land use prescriptions, and density prescriptions. There are further far too many regulations prescribing the way buildings should be designed and prescriptions about occupation, i.e. the density of occupation in office environments. In the residential sector, the detailed prescriptions of unit mixes, unit sizes, room sizes, number of units per core, balconies, facilities etc. border on the absurd. Urban entrepreneurs and their architects have no room for innovation at all. It’s a scandal that makes all of our lives so much poorer by taking away vital choice and by killing the discovery process of the market.

What incentives are in place to encourage foreign participation in the construction sector in the UK? What else needs to be done?

Unfortunately, the overregulation in the UK comes along with too much discretion on the part of the planners. This introduces paralyzing uncertainty and delays the planning process as developers must engage in lengthy negotiations with planners to gain competitive advantage. Clear rules would be better than overburdening rules plus discretionary powers for planners. This implies that foreign developers have a hard time navigating the system and work in the UK, as intricate knowledge of the processes and personas is required to succeed competitively. This reduces competition and consumers lose out once more.

In your opinion, how could the London's housing crisis be resolved?

 The most important step here is to ease the political supply restrictions, both with respect to the overall quantum of development, and with respect to the programme types and typologies that can be developed. We must allow the housing market to work. In fact, I would hardly call the housing provision in the UK to be a proper market at all. Sadiq Khan seems intent on ramping up “affordable housing”, i.e. housing rationed according to political prerogatives, to 50% of all housing provision. With all the other restrictions mentioned above we can hardly speak of a proper market. In proper markets, we never witness supply crises. There is no car crisis, is there? Or a crisis in food provision. Housing must be de-politicized. Let the market work and affordability will return. Some in central government seem to understand this sometimes, but the forces of local political nimbyism seem to push us further and further in the opposite direction.

What are the top 3 achievements in your career thus far that you are most proud of?

 I have been involved in the design and execution of some beautiful and innovative buildings, I helped to forge a great creative enterprise with a promising future, and I am proud to contribute to the discourse of my discipline via research, writing and teaching.

Your MAXXI Centre of Contemporary Art and Architecture project won the Sterling prize in 2010 – could you tell us a bit more about the project? What were some of the challenges that you were faced with?

MAXXI was our breakthrough project, and it remains one of my most cherished buildings. I am going back rather often and we recently opened our own exhibition within the building. The challenges here were first of all, winning an international competition with a formidable line up of competitors, then to translate the radical design intent into a feasible proposition without losing its power in the process. And then, there was the challenge of navigating the project through the unpredictable political waters of Italy; many governments came and went during the process. MAXXI is a national project.

Can you detail any current projects that you are working on?

 There are too many to list. There are about 25 projects on site, including e.g. a brand new Beijing airport, a large cultural complex in Changsha, an office tower in Beijing, a residential tower in Miami, a residential block in Manhattan, an opera house in Rabat, a mixed use block in Dubai, to name just a few. There are also many more new projects on our drawing boards: Corporate headquarters, railway stations, bridges, mixed-use complexes, and masterplans. We are a global design brand with an interior architecture department, corporate space planning department, and a furniture and product design department. We can deliver an all-round design service and are expanding our global reach with offices in Beijing, Hong Kong, New York, Mexico City and Dubai.

What would be your top three tips for young architects willing to ‘go the extra step’?

Divest yourself of all your nostalgic sensibilities, invest in computational skills, know the history of the field, including its contemporary scene, and read my books to gain an overview about architecture’s societal role.

“Let us all risk a bit more freedom to unleash the incredible potentials of our time.”

Website: http://www.zaha-hadid.com

The Government estimates that between 225,000 and 275,000 homes need to be built per year to keep up with the rate of demand, however only 147,960 have been built for 2016/17 so far.

Many believe that this is because there is not enough money to buy the houses once they are built, as people cannot afford to get on the housing ladder due to the difficulty in saving enough deposit in order to get a mortgage, but this is not really the case as property priced at the more affordable end of the market, tends to be snapped up pretty quickly. In addition, the mortgage market has improved significantly and higher loan to value mortgages are once again available, although not at 100% loan to value as they were before the credit crunch.

There has been criticism over the government’s promise of a £2bn injection to help with funding to build social housing, as Downing Street aides have stated that this will only fund 5,000 of the 60,000 extra new houses needed to be built each year.  Funding is certainly not the major issue and we look at the main problems surrounding building more houses:

Loss of workers thanks to credit crunch and Brexit

When the credit crunch first hit in late 2007, 100% and high loan-to-value mortgages literally disappeared overnight. It happened so fast that even mortgage offers already in place were not honoured as lenders’ funds disappeared. The difficulty obtaining a mortgage made the desire of buying a house nearly impossible for a lot of people. Less people to buy houses impacted builders and property developers very quickly and left them with a lack of work. The demand for tradespeople such as carpenters, plumbers, electricians, bricklayers, etc. was decimated. It is important to realise that this was not a gradual decline over a number of years, it was a massive decline that happened over a matter of months.

The industry shrunk quickly and many people lost their jobs. As so many people skilled in the same trades lost their jobs and were unable to find more work doing the same thing, they were forced to find work outside the building industry and re-train in different sectors.

Over the last ten years, less people have entered the building industry due to lack of job prospects. Now the demand is back and prices are high again, more people will be needed in order to build more houses. Unemployment figures across the country are low so not many workers will be looking for jobs and to add to this problem, many European workers who filled lower paid roles have returned to their home countries due to the stronger Euro and concerns about Brexit. To get more workers, the roles offered will have to be more attractive which will push the cost of building the new houses up further.

Is there longevity in the building industry with the uncertainty of Brexit looming?

When demand for new houses disappeared and jobs were lost, the production of building materials slowed, and for some manufactures, ceased altogether. To build more houses we will need more materials – but the factories have not been waiting on standby for all of this time. To increase the supply of materials, manufactures will have to commit to more production, meaning costs of finding new premises and employing workers.

As specialist bridging loan brokers, many of our customers are business owners and property developers. They tell us that they are reluctant to commit to any new ventures that could be risky at the moment due to the uncertainty for the future, mainly caused by Brexit. Until the country faces a more stable future, many individuals responsible for making decisions needed in order for us to move forwards and build more houses will be remaining cautious and unlikely to spend huge sums of money opening factories or training new workers as they just do not know if it will be profitable, or indeed if it could actually prove very costly.

(Source: Key Loans and Mortgages Ltd)

People are paying more for their homes around the world, with average house prices up 6.5% in the last 12 months.

But, where have house prices grown faster than the average income?

Assured Removalists have combined data on average annual salary, income tax and house prices to produce a ratio that shows the measure of housing affordability around the world. The higher the ratio is, the less affordable the houses are.

How does your country compare? You can view the full data set here.

Below Rob Moore Co-founder at Progressive Property discusses with Finance Monthly how to buy property the correct way, how to get a bang for your buck, and how to avoid risk.

There are two types of BMV properties: those that can make you money, and those that have been ignored because they are money-draining duds. This second kind are the BMV properties that you should never buy, of course, but it’s easy to get drawn into buying something cheap which will in fact cost you far more of your time, money and effort than it is worth.

The below market value properties you want to find are those that other investors haven’t ignored, but have missed. These are the properties that have fallen under other less observant investors’ radars, and which are ready for you to swoop in, sweep up, and make huge profits on.

First off, what does “Below Market Value” actually mean?

“BMV” properties and the valuation process

According to the Royal Institute of Chartered Surveyors (RICS), market value is “the estimated amount for which a property should exchange on the date of valuation between a willing buyer and a willing seller in arm’s-length transaction after property marketing wherein the parties had each acted knowledgeably, prudently and without compulsion.”

Now that’s a hell of a mouthful!

In principle, a valuer will compare the property to other similar properties in the area, alongside its estimated level of demand, transferability, scarcity, and whether it can fulfil its duties as a comfortable environment in which to live, and come up with a price estimate using this combined evidence.

Investor Peter Jones hosted a recent Progressive Property podcast on the subject, and during the episode he suggested that the current valuation system in the UK may be flawed. Peter said that the properties which valuers will compare the property they are valuing to have often been sold “with compulsion”. Distressed sellers who have a property on the market for reasons such as divorce, job loss or financial difficulties are among the reasons as to why a property may be sold through compulsion – which contradicts the RICS’s definition.

For this reason, consider the market value alongside the questions, “What price am I willing to pay for this property?” and “How much money will this property make me?”

1.  Make sure that it is a cash-flowing property

Not all properties on sale or that are buyable at a value below the market price are going to be great investments. Some of them are cheap as chips for a reason!

For example, it is very possible to pick up cheap, high-quality properties in rural villages in isolated parts of the UK. These could have the most enchanting views and most beautiful designs, but the likelihood of you selling them on or renting them out easily is unlikely. Even properties in apparently desirable areas can cause unexpected selling problems, such as a lack of hungry tenants or low rent prices in the area failing to cover the mortgage.

A good investment property needs to pay its own way, so make sure that any property you consider purchasing is going to be cash-flowing – or have a very good reason if you don’t.

2. Do your due diligence

Without evidence for a property’s profitable potential, you’re basing your purchases on your gut and hearsay.

Risky business.

To find evidence of a property’s potential, put in your due diligence by visiting the property and checking out the nearby area – or at the very least, send a business partner, colleague or peer you trust. Use a property app to check the price of properties that have been sold in the same postcode over the past year. You can also check rental prices in the same area, and consider employing a solicitor before committing to a contract.

3. Make sure there isrental demand

No rental demand, no tenants.

No tenants, no rent.

No rent, no money, and a big black hole where the cash you invested used to be.

To give you an idea if there is rental demand in the area for properties such as the one you are considering buying, monitor websites and apps such as Zoopla and Rightmove to check, a) how many properties are currently available to rent, and b) how often the adverts disappear and new ones appear. Too many available properties can suggest oversaturation, and not enough change in the listings can suggest a lack of demand.

4. Seek out motivated sellers

Property that has been on the market a long time is likely to have a motivated seller.

On an app, such as Zoopla, check the “most recent” listing, but backwards. 

If you combine evidence that similar properties are being successfully rented in the local area with the fact that the property on sale has been listed for a long time, you are likely to find a motivated seller. Any property that has not been viewed on a property website or app for a month or more suggests that the seller is going to be more open to lower offers, because the longer their property is on sale for, the more it will cost the seller.

A seller’s keenness – or even desperation – to sell their property offers you plenty of leverage.

5. Advertise locally

Another way to find below market value properties is also another way to find motivated sellers, but includes the potential for finding properties that haven’t been marketed yet too, thereby accessing them before other property investors in the area.

A targeted advert can appear online, in newspapers, in newsagent windows, or even leaflets if you want to go old-school. Ideally, any adverts should appear in an area that you have already identified as a potentially lucrative spot for buying properties. If you let local property owners know that you are looking to buy properties in the area in this way, generating leads should be simple and turn you into the first point of contact for any property owner who is even tempted to sell, let alone those who suddenly find themselves pressured by unforeseen circumstances.

6. Don’t take “BMV” at face value

It is hard to prove that a property is “BMV” from a technical standpoint, which is why you must consider other investment fundamentals. It doesn’t matter how cheaply you purchase a property if it isn’t going to make you a profit.

Getting price blinkers can cost you dearly, so make sure to consider your profit expectations, whether it is a short-term or a long-term commitment, how much work needs doing to the property, and so on, before getting fixated on how much cheaper the place is than others nearby.

7. Don’t buy in the Bronx

Buying in the wrong area is one of the most common mistakes that first-time property investors are likely to make. Many areas may have a reputation for being “up and coming”, with plans for better transport, a new shopping centre, greater funding, and many other exciting possibilities. However, unless plans such as these become concrete – and sometimes, even if they are – they can easily fall through.

Every investment carries risks, of course, but it is your role to minimise the likelihood of loss and increase the likelihood of profits. For that reason, avoid buying property in the reputed “bad” areas of town simply because of their low price tag, unless you have some serious evidence that it is going to make a worthy investment.

8. Don’t buy properties that need too much work done

Some property investors are so excited by the price that they neglect to consider how much extra work a property is going to take before it can be rented or re-sold.

If you have great builder contacts, then a property that requires some TLC can be a great way to create extra profit. However, there are risks involved when buying a run-down property, so make sure to hire a reliable surveyor to inspect the place and detail any major repairs or alterations needed.

9. Don’t go through “middle men”

There are often companies and entrepreneurs that claim to be able to provide you with a range of below market value properties. In general, if you allow someone else to source your property for you, you are going to have to pay for the property itself and this person or company’s commission. There is also a question you should be asking yourself: why isn’t this company snatching up this deal-of-a-lifetime for themselves? Is it because there is a catch, and the deal isn’t as fantastic as it is being made out to be? Are there unseen structural problems that even surveyors will find difficult to identify?

For these reasons, try to avoid being taken for a ride by intermediaries and, in the process, maximise your profits.

10. Don’t be afraid to haggle

The owner of any property being advertised for a price that seems surprisingly low is likely to be keen on a quick sale – otherwise, they would bump the price to a more reasonable level and wait until they found someone to pay it. This offers you some leverage that you should utilise.

Even with low prices, if you are keen to make as much profit as you can – and you should be – then make an offer that’s even lower. If they don’t accept it, you can always take them up on their original offer if the deal is hot enough.

Final thoughts

While some argue that there is technically no way to buy BMV, because as soon as a property is sold then the market price becomes whatever it was sold for, this is splitting hairs and an unhelpful way of viewing the property market.

Buying below market value is finding a property for a lower price than other property owners are selling their own similar properties for. If you can find a distressed seller, or any property that has been overlooked by other buyers due to lack of advertising or some other neglect on the seller’s part, keep the knowledge to yourself, do your due diligence, and get ready to make some serious money.

ONS figures show that the typical home in the UK cost £220,100 in April, with a rise of £3,500 on the previous month.

This equates to a £12,000 increase from the same month a year ago, the Office for National Statistics (ONS) says, despite banks and lenders reporting a stagnant property market period.

This does however oppose figures from Nationwide Building Society and Halifax Bank, which have proved a stalling housing market over the past few months.

This week Finance Monthly has heard Your Thoughts on the housing market and gathered some insight from the experts below.

John Eastgate, Sales and Marketing Director, OneSavings Bank:

House prices have been galloping upwards for the past five years, but it seems that softening demand might be starting to rein-in the pace of that growth. Mortgage approvals fell once again in April, reflecting falling consumer confidence that will hardly have been helped by the election outcome.

Until we get some clarity around how the political landscape will unfold, it is difficult to envisage a material change in consumer confidence, so we should expect the pattern of reducing house price growth to continue.  Falling real incomes will remain a challenge for affordability although we should expect to see mortgage rates remaining at record lows for some time to come and this will no doubt support a core level of demand and ensure a modest level of house price growth in the medium term.

Luke Somerset, Business Development Director, Contractor Mortgages Made Easy:

Whist housing sales are reported to have dropped by 19% across the UK since this time last year, there remains an overwhelming sentiment that we remain in a sellers’ market.  House prices remain incredibly resilient despite of Brexit uncertainty and the stamp duty levy introduced in April 2016. This has led to a substantial increase in the cost of an average house in the UK putting further pressure on first time buyers and next time movers. However, it is not all doom and gloom.

The number of mortgages that require just a 5% deposit have increased by 14% over the last 12 months and there are now 287 mortgage products available to these borrowers with minimal deposit. With increased competition amongst lenders, interest rates for younger borrowers are starting to fall, so in spite of an increase in house prices, the actual cost of funding a mortgage hasn’t increased proportionally, thanks to the drop in mortgage rates. This doesn’t however help young borrowers when it comes to saving a deposit and more should be done to assist young borrowers onto the property ladder.

Mark Noble, Managing Director, Castles Residential Sales and Lettings:

If you listen to media coverage, believe everything you read in the papers and listen to some local estate agents, you could be fooled into thinking that the housing market is in the doldrums and there seems to be surprise that house prices have risen fairly dramatically over the last 24 months.

However, if you are in the housing sector or scratch under the surface, you will quickly realise that the lack of good property inventory coming to the market in the right numbers has created a huge supply and demand problem, creating a situation of more buyers than property and ultimately, pushing house prices upwards.

At Castles we have sold 2 properties in the last few weeks at over the asking price, one came to the market at £189,995 and sold (stc) for £197,000 and the other came to the market at £200,000 and eventually sold (stc) at £212,000, this was as a result of mini open houses and best and final offers.

The simple facts remain, if you put your house on the market with the wrong agent, at the wrong price the property will remain on the market for weeks, if not months, creating the false impression of a stagnant market place.

Should you decide to employ the services of an agent with a proven track record in selling property in your area and price your home correctly, then a sale can be achieved in a reasonable timescale, some properties are still selling within days and before reaching the internet.

There is always a period of reflection before and after events like the recent election but we envisage the market will continue in the same vein for the foreseeable future, so if you are thinking of selling, chose your agent wisely as they really can make the difference to the price you achieve for your property and in some cases, whether your property sells at all.

Mark Homer, Co-Founder, Progressive Property:

Despite stories of a recent cooling in the UK property market the longer-term trend for U.K. Property prices is rosier. As the typical house price has increased by £12,000 in a year (ONS) it is clear that a lack of supply and continued population increases are still pushing prices higher.

As 2017 has developed it has become clear that a 2-step market has materialised as a result of government policy.

Coming off the back of seeds that were Sewn in 2016 when the government increased stamp duty on more expensive and buy to let properties sales of these types of properties have stalled. Many properties over £937k (on which stamp duty has increased with some now attracting 12%) are now sitting on the market and sellers are having to reduce the prices by up to 20% to get a sale. As interest rates are low however many are choosing to just sit on them hoping for a buyer to come along making this part of the market “gummed up”.

At the same time big incentives for first time buyers through the help to buy scheme coupled with low interest rates is fuelling demand from those looking to get on the first rung of the ladder. Small new build houses and flats are selling well because of this and have provided support to the lower end of the market. As these types of purchases are making up an increasing large proportion of sales they are contributing increasingly to transaction volumes which have faltered in many other parts of the market.

We expect once Britain’s place in Europe becomes clearer and uncertainty around a lack of government majority subsides the market will grow around 5% per annum overall once again.

David Martin, Chief Operating Officer, Hatched.co.uk:

Understandably, people casting an eye over the UK property market in recent months would be forgiven for being somewhat confused. Conflicting news stories are released on what seems like a daily basis. The difficulties start when we all compare house prices around the UK. When you look at a regional level, many parts of the north of England are still showing steady growth – Rightmove reported in their June 2017 House Price Index a 3% annual price change in Yorkshire and the Humber, compared with a 1.8% increase in the South East and an overall decline in London of -1.4%.

Here at Hatched, we cover the whole of England and Wales and we’ve seen recent figures more comparative with the banks and building societies, rather than many of the ONS. For year-on-year activity to the end of May, we’ve seen a 18.5% increase in viewings booked, a 27.4% increase in the number of offers made and our average house price at point of sale-agreed is up 3% to £271,632.

Our number of house completions is up by 19.7% for the same period, with the average house price of those completions being £236,801 in 2016. Interestingly our average sale-agreed price in the same time period this year is £271,632, an increase of nearly 15%.

In June, we’ve continued to see a steady stream of viewing requests, in-line with the year so far. Ultimately if a property is priced correctly, presented in the best way possible and shown to as many buyers as possible, the best price for the client will be achieved more often than not.

We would also love to hear more of Your Thoughts on this, so feel free to comment below and tell us what you think!

With wage inflation stagnating below the rate of increased property prices, it has become very difficult to get a firm foothold on the London property ladder. Many people have therefore been forced into the private rental sector; signified by nearly one in three London household’s renting privately.

Despite the tremendous growth for the sector itself, the increased demand has driven up private rental values. Especially in London, where the average rent for a one bedroom property is a substantial £1,329 per month.

Sellhousefast.uk analysed data from the Office of National Statistics (ONS), revealing that single tenant’s in 25 of London’s 32 boroughs are sacrificing more than 50% of their monthly salary (after income and council tax deductions) on rent for their one bedroom property.

Single tenants living in a one bedroom property in Kensington and Chelsea are sacrificing an astonishing 85% of their monthly salary on rent – the highest out of all the London boroughs.

Single tenants in Kensington and Chelsea are then closely followed by those in Hackney – who give up 81% of their monthly salary to pay for rent on their one bedroom property. In third place is Westminster, where single tenants use up 79% of their monthly salary to pay rent for their one bedroom property.

Single tenants in Bromley as well as Havering, sacrifice the joint lowest percentage of their monthly salary on renting their one bedroom properties in London at 42%. Redbridge (49%), Merton (49%) Richmond upon Thames (48%) and Bexley (43%) are the other London boroughs where single tenants sacrifice less than 50% of their monthly salary on a one bedroom property.

Sellhousefast.uk asked a couple of single tenants living in a one bedroom property in London about their experience of renting.

Jessica, 26, has been renting a one bedroom property in Southwark for the last two years: ‘I am giving up a lot of my monthly income on renting a one bedroom in Southwark. It’s frustrating but I only tolerate it due to the convenience of living a short distance away from my workplace. It’s ideal as I start early and finish late most days. The biggest benefit is that it eradicates any time that I would lose through commuting if I lived outside the area. A lot of my colleagues are also currently doing the same thing as me. Whilst most are unhappy about giving up such a huge proportion of their salary on rent each month, it’s ok for the short-term. But in the long-run, it isn’t sustainable, as I wouldn’t be able to secure a deposit for a property of my own.’

Chris, 29, has been renting a one bedroom property in Hounslow for the last four-years: ‘Rent in London is truly extortionate. For the past three years, over half my monthly salary has gone on covering rent. On top of that, I have to pay for my food, utilities and travel every month – so I am not left with much to save, let alone enjoy any leisure activities. With me nearing thirty I want to settle down with my partner and this tiny one bedroom flat is certainly not going to suffice for the both of us. We have started to look at bigger properties in Hounslow, as we both work in the area. With rental prices as they are in London, it might be an uphill struggle for us’.

Robby Du Toit, Managing Director of Sell House Fast commented: “Demand has consistently exceeded supply over the last few years, Londoner’s have unfortunately been caught up in a very competitive property market where prices haven’t always reflected fair value. This notion is demonstrated through this research whereby private rental prices in London are certainly overstretching single tenants; to the extent they must sacrifice over half their monthly salary. For those single tenants with ambitions to climb up the property ladder – their intentions are painfully jeopardised, as they can’t set aside a sufficient amount each month to save up for a deposit or explore better alternatives. It’s not only distressing for them but worrying for the property market as a whole – where the ‘generation rent’ notion is truly continuing too spiral further.”

(Source: Sellhousefast)

Mortgage debt increased by 11%¹ to $201,000 last year and more than half (52%) of Canadian mortgage holders lack the financial flexibility to quickly adjust to unexpected costs, per a new Manulife Bank of Canada survey. This despite 78% of Canadians having made debt freedom a top priority.

The problem is most acute among Millennials, who saw their mortgage debt rise more than any other generation. Millennials are also most likely to have difficulty making a mortgage payment in the event of an emergency or if the primary earner in the household were to become unemployed.

"The truth about debt in Canada is that many homeowners are not prepared to adjust to rising interest rates, unforeseen expenses or interruption in their income," says Rick Lunny, President and Chief Executive Office, Manulife Bank of Canada. "However, building flexibility into how they structure their debt can help ease the burden."

Overall, nearly one quarter (24%) of Canadian homeowners reported they have been caught short in paying bills in the last 12 months. The survey also revealed that 70% of mortgage holders are not able to manage a ten% increase in their payments. Half (51%) have $5,000 or less set aside to deal with a financial emergency while one fifth have nothing.

¹ The percentage change in average mortgage debt controlled for regional, age and income differences between the samples. However, different research providers were used for each wave of the study which may impact trended results.

Millennials not alone

Despite generally having more equity in their homes, many Baby Boomers face the same challenges as Millennial homeowners. Some 41% of Baby Boomers said that home equity accounted for more than 60% of their household wealth and for one in five (21%) it makes up more than 80%.

This indicates Boomers may need to rely on the sale of their primary residence to fund retirement, since much of their household wealth is wrapped up in home equity. However, more than three quarters (77%) of Baby Boomer respondents want to remain in their current homes when they retire.

"Many Boomers approaching retirement share the same lack of financial flexibility as Millennials," said Lunny. "They want to remain in their current homes, but their home makes up a big part of their net worth. Instead of downsizing, or even selling and renting, homeowners in this situation could consider using a flexible mortgage to access their home equity to supplement their retirement income."

Helped into the housing market

Almost half (45%) of Millennial homeowners reported that they received a financial gift or loan from their family when purchasing their first home. By comparison, just 37% of Generation X and 31% of Baby Boomers received help from family members when they purchased their first home. Conversely,  almost two in five (39%) Boomers, many of whom are the parents of Millennials, still have mortgage debt.

The generational increase in new homeowners requiring family support comes despite a long-term trend toward two-income households. The number of Canadian families with two employed parents has doubled in the last 40 years, but housing costs are growing faster than incomes².

"With higher home prices and larger mortgages, it's more important than ever to find the mortgage that's right for you," says Lunny.  "A flexible mortgage that offers the ability to change or skip payments, or even withdraw money if your circumstances change, can help you ride out financial difficulties more easily."

Manulife Bank recommends that Canadians have access to enough money to cover three to six months of expenses.

² Statistics Canada. May 30^th 2016

Quebec homeowners most at risk

In addition, the Manulife Bank survey found that:

• Mortgage holders in Quebec (76%) would have the most difficulty with an increase of 10% to their mortgage payment and are more likely to be impacted should they have a fiscal emergency, as almost 30% have no emergency funds.
• British Columbia had the highest instance of homeowners getting help from family members when they purchased their first home, with almost half (45%) saying they either borrowed or were given money.
• Compared with other regions, homeowners in Manitoba and Saskatchewan (73%) prefer most to own and live in their current home when they retire.

Debt management should begin at an early age

More than two in five (44%) learned "a little" or nothing about debt management from their parents—and were also most likely to have been caught short financially in the past 12 months (28%).

"Kids who learn about money and debt management are more likely to become financially healthy adults," says Lunny. "One of the best lessons we can teach our children is the importance of saving for a rainy day. Being prepared for unexpected expenses is good for our financial health, good for our mental health and gives us the freedom and confidence to deal with the unexpected expenses and opportunities that come our way."

(Source: Manulife Bank)