Relocating from London to Yorkshire and East Anglia
Until two months ago, Caroline and Patrick Clark, and their two children, Lola Rose, 3, and Brody, 1, spent their evenings in a cramped two-bedroom flat in Crouch End, north London. Now they enjoy a spacious three-storey, five-bedroom townhouse with a large garden. How did they do it? By selling up in the capital and moving to York.
“We definitely got more for our money here than we would have done in London,” says Caroline, 36, a primary-school teacher, who grew up in York. She and Patrick, a 37-year-old civil servant, sold their flat for £365,000 at the end of last year. In January, they paid £493,000 for their new home, which was originally on the market for £525,000. They are delighted with the house and the resulting improvement in their lifestyle. “My husband now works part of the time from home and the rest of the time in London, which means he’s here to have tea with the family four days a week,” she adds. “Previously, he wouldn’t be home until seven each night.”
As the Clarks have discovered, now is one of the best times in years for those with property in the capital to sell up and realise that dream of starting a new life somewhere quieter – and cheaper. Research carried out by Savills estate agency for The Sunday Times shows that themarket in London has fallenless sharply than elsewhere in the country, pushing the gulf between prices in the capital and those in other parts of Britain to its highest level in a quarter of a century.
Average prices in Yorkshire, for example, are 52% of those in London, compared to a 25-year average of 57%. The same is true, to varying degrees, elsewhere in the country – even, to a limited extent, in the southeast, where prices tend to track those in the capital most closely. The biggest margin is in East Anglia, where prices stand at 59% of London levels, against the long-term average of 68%.
East Anglia is your classic example of it being as cheap as it’s ever been compared to London prices,” says Lucian Cook, head of residential research at Savills. “There’s enough of a differential to buy there now at a reduced price.” This margin, he believes, looks likely to widen further if, as expected, the market in the capital recovers before that in the rest of the country – but it may not pay to wait. “The regions will look cheaper later, but not significantly so,” Cook adds. “And there is more supply in the market now. Thus, even though it may be cheaper in a year, the lack of stock will mean you won’t get the house you wanted.”
Like the Clarks, a large number of those who decide to relocate out of London have young families and want the space they cannot afford in the capital. Schools often play an important part, as does the desire for a quieter way of life. “People usually move because of their children’s future or for investment purposes, rather than the commuting aspect,” says Bob Bickersteth, managing director of The London Office, which provides a shop window for 34 out-of-town estate agents.
Redundancy can also encourage people to reevaluate their lives. “There has been a growing number of people who’ve been sparked into thinking about it because they’ve lost their job in banking and don’t reckon that they will find another in the foreseeable future,” Bickersteth says. “Those who have redundancy money are now paying off their mortgage, moving their children to a new school and setting up in a different place.”
Some are attracted by the possibility of obtaining a secondary income from a new, larger country home, by setting up a small leisure business or shop, using it for holiday rentals or, in some cases, letting out fishing rights. Agents report that traditional buyers – those with small children – have been increasingly joined in the past few months by new categories of client.
“We have been getting inquiries from young couples who are selling two flats, and instead of buying their first house in London, doing it in the country,” says George Franks, head of southwest sales at Douglas & Gordon, a London estate agency. “This is mostly because a standard nice four-bedroom country cottage with an acre of garden, and commutable, is not as expensive as it once was.
“There are also the slightly older couples who have decided that if their house is going to be worth nothing following the market downturn, they would rather it was worth nothing in the country,” he says.
As a result, agents have reported that viewings across the country have picked up since the start of the year. Some have even started to see the return of competitive bidding. “People moving out of London are likely to be the most serious bidders, because if you have to be in an area by a certain time, you’ve got to get on with it,” says Mark Parkinson, a partner at Middleton Advisors, a top-end country buying agency. “But the majority are happy to rent and wait, which puts them in the strongest negotiating position.”
The clients that Parkinson has seen benefit most from the situation are those who managed to sell their London house about six months ago and have been renting since while deciding where to settle. “They would have seen a 25% reduction in prices since they sold up,” he says.
Not everyone is in such a fortunate position: this may be the best time to buy that dream home in the country, but what if you can’t find a buyer for your London property? For some, such as Richard Stacy, 45, the solution has been to let it out.
In December 2007, he put his four-bedroom house in Stockwell, south London, on the market for £925,000, intending to move to Suffolk. By June last year, it had still not sold, despite a price cut to £850,000. He and his wife, Rachel, 42, had already found a 16th-century farmhouse near where she grew up, priced at £630,000. So, keen to bring up their sons, Finn, 4, and Jake, 3, in quieter surroundings, the couple decided to move anyway, mortgaging the Stockwell home and using the proceeds from the rent to cover the payments.
“We were quite unfortunate, in that we were just a few months too late in putting the house on the market,” says Stacy, who works in public relations. “We had a lot of people express interest, but they were stuck, too, because they could not sell their old homes to pay for it.” It was easy to let out the house, however, and Stacy intends to continue doing so, although he will probably test the sales market again once things pick up.
“We found a property we liked and we are becoming used to the lifestyle here,” he says. “It is not as busy and cosmopolitan as London, and we don’t see some friends as often as we’d like, but they visit us for the weekend. That way, we spend two whole days with them, instead of an hour-long coffee.”
No doubt having an eight-acre garden instead of their old 50ft one helps them to miss the capital less, too.
House Prices in London Plunge Again
House prices in England and Wales lost a further 2 per cent of their value during February, pushing the annual rate of decline up to a new record of 16.5 per cent, figures showed today.
The latest fall pushed property values back down to a level last seen in September 2004, at an average of £153,862, according to the Land Registry.
The group said February was the 18th month in a row in which the annual rate of growth fell, contrasting with the 21 months of uninterrupted gains in annual house price inflation between December 2005 and August 2007.
Other major players have also slashed the cost of their fixed-rate deals recently, with Lloyds TSB now offering a two-year deal starting at 3.29% and Nationwide cutting its fixed-rate loans by up to 0.58% for people buying a home.
But mortgage brokers warned today the cost of fixed-rate loans are unlikely to fall any further, and they could even go up in the weeks ahead.
The Office for National Statistics said today that bank surpluses jumped by more than a third to £19.6 billion in the final quarter of 2008 as companies failed to pass on rate cuts to borrowers.
‘In the latest quarter there has been a widening in the gap between the interest rates charged on loans and those paid on deposits,’ the ONS said in data released with public accounts figures.
The overall operating surplus of banks and other financial institutions jumped 36% in the last three months of 2008, the figures showed, with the gap between interest charged and paid out soaring to £6.2 billion.
The financial crisis in the wake of Lehman Brothers’ collapse last September caused ultra-cautious banks to keep lending costs high despite official interest rates falling from 5% to 2% during the period.
‘As the Bank rate has fallen, rates on deposits have fallen faster than on loans. Consequently, financial institutions have earned more… from loans than deposits over the quarter,’ the ONS added.
The trend has continued during 2009 as interest rates have fallen to a record low of just 0.5% in March.
But less than a quarter of lenders have passed on this the latest rate cut to their variable-rate mortgage customers, Moneyfacts said this week.
The financial information service said only 22 out of 92 lenders with a standard variable rate (SVR) mortgage had so far announced plans to reduce their rates following the Bank of England’s latest cuts.
And among those who have said they will reduce their SVR, only a handful are passing on the full 0.5%.
Mortgage brokers have said that now would be a good time to consider locking into a fixed-rate deal for people on higher standard variable rates of between 4% and 6% or uncompetitive tracker deals that do not have early redemption charges
Ray Boulger, senior technical manager at John Charcol, said: ‘It looks as if the recent trend of fixed-rate reductions is about to be turned on its head.
‘After this month’s fall in the best fixed rates, now looks like a good time to lock into one, ideally one for at least five years.’
He said although gilt yields fell dramatically earlier this month following the Bank of England’s announcement they were going to embark on quantitative easing, a change of mood in the market this week had pushed them back up again.
He added only some of the fall in gilt yields had been reflected in swap rates, upon which fixed-rate mortgages are based, and in general swap rates had now gone back up to the level they were at before quantitative easing was announced, with some slightly higher.
Mr Boulger said: ‘This is bad news for fixed-rate mortgage pricing and hence my expectation that we will see some lenders start to re-price upwards as early as next week.’
He said people on competitively-priced tracker deals or low SVRs, such Nationwide and Cheltenham & Gloucester’s 2.5% ones, could afford to wait before they switched.
But he added homeowners should keep an eye on their loan-to-value ratio, as falling house prices would mean they would have to borrow a larger proportion of their property’s value, and most of the competitive deals were for people borrowing less than 75%.
Louise Cuming, head of mortgages at moneysupermarket.com, agreed fixed-rate mortgages were unlikely to full further.
She said: ‘From a profitability point of view there is no need for lenders to put fixed rates any lower. This is a decent time to fix.’
She said the harder question was for people who took out a fixed-rate mortgage 18 months ago, who were paying rates of 5% to 5.5%, but who still faced early redemption charges if they remortgaged.
She said people in this situation needed to weigh up how much they would save by switching, against how much it would cost them in fees and charges.
Melanie Bien, director of Savills Private Finance, also thinks fixed rates are unlikely to get any cheaper.
She said: ‘People are saying that with base rate so cheap a fixed rate of 4% looks expensive, but that is reasonable for a fixed-rate deal.’
But she added people who were thinking of fixing should do so for at least five years as rates were likely to be rising again in 18 months to two years’ time, and if you only fixed for two years you would have to remortgage just as this was happening.
Compound Mortgage Services
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Franklyn James
Franklyn James is one of the leading estate agents for London Docklands and the Olympics zone. Please use our online services for all your property needs – buying, selling, renting or investing. Or contact us by phone if you would prefer to speak directly to one of our staff. Our offices are ideally located on Westferry Road minutes from Canary Wharf, on Narrow Street in historic Limehouse. We pride ourselves on our local area knowledge and depth of experience. Franklyn James handles a complete range of property: marina and warehouse apartments, riverside penthouses, studios, lofts and family houses. We cover resales, new developments and off-plan opportunities. You can rely on our integrity, professionalism and discretion. We are a customer-friendly agency and our bespoke approach avoids time-wasting.
Franklyn James Docklands Office,
60 Westferry Road
Docklands
London E14 8JE
| Tel: | 020 7005 6080 – Sales & Lettings |
| Fax: | 020 7005 0935 |
House Price Increase but increase in repossessions
House prices rose slightly last month with the average cost of a home rising by 0.2 per cent in January, new figures have shown.
The surprise increase in house prices was driven by a 4.9 per cent jump in the average price of a detached property during January.
The average cost of a home in the UK now stands at £195,724, according to the Department of Communities and Local Government.
The figures come as the City watchdog said that a total of 46,750 homes were repossessed during 2008, 68 per cent more than during the previous year.
But there was some positive news in the quarterly rate at which houses lost their value.
Properties lost 3.9 per cent of their value during the three months to the end of January, compared with a drop of 5.2 per cent in the three months to the end of October.
The value of terraced houses fell by 2.3 per cent and there was a 1.8 per cent drop in the price of flats.
The average price paid for a home by a first-time buyer fell by 2 per cent during January, to be 15.4 per cent lower than a year ago.
By contrast, there was a 1 per cent rise in the value of properties bought by owner occupiers, although prices were still 10 per cent lower than they were in January 2008.
The cost of bungalows and semi-detached properties also eased by 0.9 per cent and 0.4 per cent respectively.
A total of 46,750 properties were repossessed by lenders during the year, up from 27,900 in 2007, the Financial Services Authority said.
Around 68,000 people got into arrears during the period, a 13 per cent jump compared with the previous quarter, which had seen a 10 per cent rise.
There was also a steep jump in the number of people who fell behind with their mortgage repayments during the final quarter of the year.
Halifax reported a surprise 1.9 per cent jump in house prices during January, but this was more than wiped out by a 2.3 per cent slide the following month.
The majority of data on the housing market since January has remained negative, as consumers continue to struggle to raise the finance they need to buy a home, while potential buyers also hold off in the hope of further house price falls.
But Howard Archer, chief UK and European economist at IHS Global Insight, said: ‘The [CLG] data is not seasonally adjusted and house prices always tend to rise in January after falling over the Christmas period when activity is particularly muted.
‘Significantly, this January’s marginal edging up in house prices was substantially less than the 1.6 per cent month-on-month rise seen in January 2008, hence the marked widening in the year-on-year drop.’
He said that while estate agents were reporting a pick-up in inquiries from potential buyers, there were few signs that this interest was translating into sales.
He said: ‘We suspect that any pick-up in housing market activity will be limited for some considerable time to come and that further significant house price drops are in the offing.’
Annual house price inflation remained deep in negative territory in all regions of the UK during January.
House Prices to Drop by half
House prices could slump by another 55 per cent, a respected City forecaster warns.
It also predicts a deep recession lasting throughout next year and a ‘very real probability’ that Britain will go bankrupt.
The report leaked yesterday from financial analysts Numis Securities says that the collapse in house prices is not ‘anywhere near over’.
They have already fallen 21 per cent from their peak, but the report says they will slump further by up to 55 per cent if the over-correction in prices is as bad as in the early 1990s.
That would leave 6million Britons in negative equity - when their house is worth less than their mortgage.
Yesterday also saw Alistair Darling warn that there could be ‘no instant remedy or overnight solution’ to the economic crisis.
The Chancellor used a speech to prepare the ground for slashing growth forecasts that now appear wildly optimistic.
In November, he had predicted that the economy would shrink by about 1 per cent this year, before growing by about 1.75 per cent in 2010.
He is expected to tear up those predictions in next month’s Budget.
Mr Darling said: ‘It is crucial to remember that we are dealing with a constantly evolving problem - making life difficult for every country.
‘Since November, we have witnessed a collapse in world trade not seen in generations and a much deeper and more widespread global recession, with every country affected,
He added: ‘When it comes to economic forecasts, even the International Monetary Fund finds it difficult to hit this moving target.’
But the Numis report is scathing about the Government’s response to the recession and warns it may end up needing a 1970s-style bailout from the IMF.
‘The bankruptcy of the UK is a very real probability as the UK government is trying to stimulate a greater debt burden in a grossly over-indebted economy,’ it says.
‘We believe the scale of the imbalances in the UK means there is no prospect of a recovery in 2009 and we expect the UK to be mired in a deep recession through all of 2010.’
It calls the Government’s aim to get banks to lend again at 2007 levels ‘crazy’ and warns against anyone borrowing now to enter the property market.
Numis predicts house price falls will accelerate in coming months as amateur buy-to-let investors begin to ‘panic sell’ their portfolios.
The biggest collapse will be in the glut of city centre flats and executive homes built in the past decade, it claims.
Numis suggests that the average house price - around £160,000 even after recent falls - is over-valued by between 17 per cent and 39 per cent.
It calculates that the average house price should be just £96,000, based on average earnings and the old lending limit of three times salary plus a 25 per cent deposit.
Tory housing spokesman Grant Shapps said: ‘We all have to hope that what this report predicts doesn’t happen. Clearly if house price falls of this scale did occur, it would mean disaster for untold millions of people.
‘Ministers bear direct responsibility for fuelling buy-to-let speculation, partly as a consequence of Gordon Brown’s taxes on pensions leading people to seek other investments.
‘The glut of flats we have seen is a result of John Prescott’s planning policies, which have created distortions in the market.
‘The Government’s fingerprints are all over this economic wreckage.’
A Treasury spokesman said: ‘2009 is going to be a difficult year, but most economic forecasters are expecting the economy to recover next year.
‘The UK goes into this recession with low debt by international standards.’
Lend Go
Finding a cheap remortgage deal is a difficult task, as all lenders are not alike and rates between loan programs vary from lender to lender. Mortgage lenders each specialize in a certain loan programs and borrower types – Some cater to adverse remortgage borrowers while others cater to prime credit borrowers. Some lenders have low rates for lower LTV mortgages, while others do not offer discounts for lower LTV home loans. This makes shopping around for your remortgage loan and comparing lenders very important. At Lendgo we have over 6,000 FSA licensed mortgage advisors in our network, when you use Lendgo to compare remortgage rates, our system will search through our vast network of advisors and find you the best mortgage advisor given your unique circumstance.
Bradford and Bingley Mortgage Scam
A group of housing developers, solicitors and surveyors are alleged to have defrauded the now-nationalised high street bank Bradford & Bingley out of £40m in a buy-to-let mortgage scam.
Yesterday, nine people were arrested in dawn raids by more than 50 fraud squad officers from the City of London Police. And more arrests are expected to follow as the investigation, which focuses on mortgages taken out on more than 500 properties in the south of England between 2005 and 2007, continues.
It is one of 615 investigations run by City of London officers – the UK’s lead force on economic crime – into alleged mortgage fraud. The inquiries are said to involve 10,000 victims and losses run into hundreds of millions of pounds.
Yesterday’s arrests were of eight men and one woman aged between 29 and 73. They were held at six homes in Sussex and north London and searches were carried out at three business premises. All were arrested on suspicion of conspiracy to defraud and money laundering. They are said to include surveyors, solicitors, developers and a bank official.
The City of London Police also revealed that the inquiry centres on Eastbourne Financial Services Limited (EFS), a mortgage broker based in East Sussex, which applied for mortgages from Bradford & Bingley.
EFS was a business regulated by the Financial Services Authority but is now in liquidation and is no longer authorised by the FSA. Bradford and Bingley was nationalised by the Government last year after coming close to collapse following overexposure to the sub-prime mortgage market.
The arrests come less than a week after The Independent revealed that the City of London Police and the Serious Fraud Office were investigating a series of major frauds in the City.
Mortgage fraud typically involves corrupt surveyors and developers colluding to inflate the price of newly-built properties and then taking out a mortgage against its manufactured value at the expense of buyers and lenders. In a rising housing market such fraud is rarely detected, but with house repossessions increasing due to the recession, it is more easily spotted. Police sources say many more of these frauds are expected to be uncovered as the country’s economic situation worsens.
Some experts have suggested that banks are making the job of investigating mortgage fraud more difficult by not alerting the authorities, instead burying losses in toxic debt to beat adverse publicity and avoid the risk of undermining confidence in the industry.
A spokeswoman for Bradford & Bingley said that the firm has co-operated with the investigation. She added: “We are working with the police and are very pleased with the arrests and with the progress the investigation is making.”
Detective Superintendent Bob Wishart from the City of London Police said: “The scale of today’s operation shows City of London Police’s commitment to investigate frauds and bring those behind them to justice.
“We know fraud has the potential to impact on local communities. We are determined not only to work with colleagues across the UK to investigate such frauds but to liaise with other agencies to mitigate impact on innocent people affected by the criminal greed of others.”
Meanwhile, in a separate investigation, three men were yesterday arrested in connection with an alleged mortgage fraud, money laundering and tax evasion scam worth £3m. The men were arrested in Coleraine, Co Londonderry, and Ballymoney, Co Antrim, in Northern Ireland, by detectives from the organised crime branch. The investigation involves 25 properties, income tax and capital gains tax evasion
About Marylebone London
Here are some details about Marylebone. I would love to live here someday and own a property, well its a dream, but hei everyone has to have one 
I stayed in this area for many years when I was a student but as it become ultra affluent I too had to move out. There is something magical etched in my mind about this wonderful place. I tell my wife, someday we will go home. This is where we had a our 1st child and the fondest of memories remain here, this is where I developed great many ideas, this is where Music for London was born.
- Tube stations: Marylebone, Edgeware Road, Marble Arch, Oxford Circus, Baker Street, Regent’s Park, Great Portland Street
- Rail stations: Marylebone
- Location: bordered by St. John’s Wood in the northwest, Edgeware Road in the southwest, Oxford Street in the south,Great Portland Street in the east and Regent’s Park in the north
- Borough: Westminster (www.westminster.gov.uk)
- Postcode: W1
Landmarks:
BBC’s Broadcasting House headquarters on Portland Street is currently undergoing renovation – while impressive now, there’s no doubt that once it’s complete it’ll be an even bigger landmark.
Known for:
Marylebone is a strange neighbourhood – it envelopes several enclaves that have their own distinct feel. Edgware Road is London’s Little Middle East, Oxford Street is filled with open-mouthed tourists and harried Christmas shoppers and Marylebone High Street is home to trendy boutiques.
Who’s there?
A mix of varying ethnicities and categories of wealth, although in general Marylebone is definitely one of London’s less affordable areas.
Making history:
Marylebone gets its name from a local church called St. Mary by the Bourne. It grew as a residential district thanks to its location between relaxing Regent’s Park and bustling Oxford Street, and it soon attracted legions of London’s wealthy. The railway station was built in 1899, and although much of the area was bombed during World War II it still retained its classy reputation.
Pub quiz facts:
When Madame Tussaud’s was bombed in 1940, the Hitler wax figure was one of the few that weren’t destroyed.
Famous faces:
Madonna has tried to fool the world over into thinking she’s British by transplanting herself to Marylebone, where she lives with Guy Ritchie.
When it’s hot:
Stop and smell the roses at Queen Mary’s Gardens – there’s also an open air theatre from May to September if you fancy some outdoor culture.
When it’s not:
There’s loads to do around Marylebone if you don’t feel like shopping or laying in the park. See a show at Wigmore Hall (www.wigmore-hall.org.uk), view 18th- and 19th-century paintings at the Wallace Collection (www.wallacecollection.org) or try your hand at mystery-solving at the Sherlock Holmes Museum (www.sherlock-holmes.co.uk).
Chesterton
Welcome to Chesterton, Chartered Surveyors and global property consultants. Specialists in residential sales and lettings across London, the UK and International markets, we provide expert advice in professional valuation, residential lettings management, commercial sales, leasing, block management and many other property surveying spheres.
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