In 2008 and the first few months of 2009, UK house prices fell following continuing increases of during 2006 and 2007. Average house prices fell by between 10 and 18% in 2008 depending which house price index results you look at. But by the second half of 2009 average prices were increasing again. The big mortgage lenders Halifax and Nationwide both report average prices based on mortgage lending in the period. The Land Registry reports prices based on actual registrations during the period and are therefore more comprehensive but the data is not available until the sale is registered so is less up to date than the other indexes. We report on the latest house price index findings as they are published on our Blog.

Some economists point to demand outstripping supply continuing to support high house prices, others point to the credit crunch, unemployment fewer fixed rate mortgages and increases in fuel and food prices driving demand down.

As with any investment though nothing is certain but prices may now have dropped to the point where the time is right for fisrt time buyers to look to get on to the housing ladder.

Click here for our advice to first time home buyers

Stamp duty is payable on the purchase of a home costing £125,000 or more. As one of its measures to stimulate the housing market the government temporarily raised the threshold to £175,000 but that ends on 31st December, 2009. The current rates of stamp duty are 1% of sale price of properties above the threshold but less than £250,000 and 3% of sale value for properties costing £250,000 or more.

On 2nd September 2008 the Government announced a package of measures designed to help first time buyers struggling to get onto the housing ladder, support vulnerable homeowners at risk of repossession, and support the house-building industry.


In more detail the package comprises:

1. Mortgage Rescue

A £200 million mortgage rescue scheme is aimed at helping up to 6,000 of the most vulnerable families avoid repossession. This will not help those who have acted recklessly or irresponsibly. It is firmly targeted on those families who can no longer afford their repayments, and who would be eligible for homelessness assistance.

Local authorities will have a major role in this scheme assessing applications. Depending on their specific circumstances, eligible home owners will be offered one of three options:

Shared ownership: a registered social landlord buys a share (enabling the purchaser to pay off some of their mortgage) and coverts the property to shared ownership by issuing a shared ownership lease.

Shared equity: a registered social landlord provides an equity loan enabling the householders mortgage payments to be reduced.

Sale and rent back: a registered social landlord (RSL) clears the secured debt completely and the applicant pays rent to the RSL at a level they can afford.

The level of support the RSL will offer depends on the assessment of the individual's circumstances, which will include a review by a money adviser.

2. HomeBuy Direct

A £300 million scheme which will help up to 10 000 first time buyers into affordable homeownership over the next two years.

HomeBuy Direct will give eligible first time buyers keen to own a place of their own the chance to buy some newly built properties. Buyers will be offered an equity loan of up to thirty per cent of the value, co-funded by the government and the developer, free of charge for five years. As with other HomeBuy schemes, any first-time buyers whose household income is under £60 000 will be able to apply.

Not only will this help first time buyers, but it will also support the industry by identifying buyers for their new homes. This will help the housebuilding industry weather difficult conditions, so that, when the market recovers, they are ready to expand and get back on with building the new homes the country needs for the long term.

For more see the Communities and Local Government website

In a further announcement, the Chancellor announced that stamp duty land tax will not apply to purchases of residential property of £175,000 or less.

Currently the stamp duty is 1% for properties costing from £175,000 up to £250,000 and 3% on properties with a sale price of over £250,000.

There are many things for the prospective home buyer to consider …the message as always is do your research!

It is now easy to research property prices yourself via the Internet. Look at the Land Registry website to see what is happening to house prices in your area - the housing market varies a great deal from region to region and from one town to another. Some types of property may face bigger price falls than others for example where thousands of two bed apartments have been built many snapped up by Buy to Let investors you may find prices down substantially on what they sold for originally.  Try to establish how long a property has been on the market and what similar properties have sold for recently.

You can easily find details of what houses have sold for in the past at www.hometrack.co.uk.

It is always worth making an offer and do be prepared to walk away if you think the seller is asking too much - this is definitely a buyers market.

We regularly report house price trends from various sources in the Money Jungle Blog or subscribe to My Money Jungle and get regular reports in your email box.

If someone is looking to buy a home, they will be looking around at or thinking about mortgages.

When someone applies for a mortgage, their credit report is searched by the mortgage provider. It’s essential for consumers to check their credit report. Inaccurate or out of date information may lead to customers receiving a higher interest rate (APR) or even being rejected by the provider.

CreditExpert from Experian, the UK’s largest credit reference agency, enables consumers to check their own credit report online FREE for a trial period.

Choosing a mortgage is a key decision. At a time when interest rates are rising it is worth looking for fixed rate deals but do looks at tie in periods and penalties for early redemption as well as set up fees. See the Mortgages page for more information. Whether you are a first time buyer or looking to remortgage, we recommend seeking expert advice in selecting the most appropriate mortgage for your circumstances. moneyjungle.net does not offer financial advice but we can connect you with an impartial, FSA qualified adviser. Click here and complete a simple form and an adviser will call you back to discuss mortgage options tailored to your needs.

You can minimise the risk with the right knowledge and experience and there are many people who can help to advise you further. Visit the business directory for a list of Money Jungle approved advisors and specialists.

Home Information Packs

A Home Information Pack (HIP) provides information about a property to help you decide to whether to make an offer. From 6 April 2009, the HIP must be available on the first day a property is marketed for sale in England or Wales and must include the new Property Information Questionnaire (PIQ) .

The PIQ provides buyers with a checklist of simple information about a property to help them decide whether to view a property or to make an offer.

It includes:

* gas and electricity safety information
* flood risk information
* details of previous structural damage
* information about parking arrangements
* a leasehold summary

To get a copy of the HIP for a property you are interested in ask whoever is advertising the property for sale for a copy. This is usually an estate agent, but could be another business or an individual seller.

They must give you a copy of the HIP free of charge if you ask for it. However, they may make a reasonable charge to cover the costs of copying and posting it.

For details of what the HIP must include see DirectGov.

Home Energy Performance Certificates

See DirectGov for more

See also Investing in Real Estate and Investing in Overseas Property.

Useful Links and Articles:

The Land Registry

UK House Prices
http://www.home.co.uk/

Home Information Packs are required for all UK home put on the market from 1st June 2007
www.homeinformationpacks.gov.uk

Buying a Property at Auction
http://news.bbc.co.uk/1/hi/business/5042378.stm

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