Although a great deal of hardship has been suffered, this market has also generated some real opportunities for those just coming into the housing arena. With home prices as low as they are, it is not surprising to come across homes that are selling below their value. But that news is no good to you if you can’t get the finance to take advantage.

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Such is the shortage of country houses coming to the market that some buyers are copying the tactics of the Minutemen in the American Revolutionary War. Like the highly mobile forces that were able to be rapidly deployed to counter bellicose threats, those frustrated in their search for their ideal country house are choosing to wait in the wings and rent, poised to pounce once a suitable house emerges from the mists of the recession.

Particularly in the case of ‘expatriate’ Londoners moving to the country for the first time, the rent-before-you-buy approach is by no means a second-best option: it affords an opportunity to get to know an area better before settling permanently. With judicious use of time spent in the appropriate places (the local garage, pub or shop), it allows would-be buyers to plug into the local network, which should alert them to a house coming to the market before the official launch and if, as usually is the case, there’s a pressure on to decamp before a child starts at prep school, it removes the temptation of committing the expensive error of settling for the wrong house in the right place.

‘We’re definitely seeing this happen more and more,’ says Alison Bird of Savills’ lettings office in Henley (01491 843022). ‘People have made their decision to let out or sell the house in London and they just thought it was going to be easier to find the country house, so have had to resort to renting.’ What was once the great unspoken option has, over the past few years, become much more accepted. ‘The attitude to renting has really changed,’ adds Miss Bird. ‘Some are asking why they’d want to saddle themselves with a new mortgage, especially during these uncertain economic times. Renting gives you the flexibility to bail out or move elsewhere as the job demands.’

When compared to London prices, it’s also comparatively cheaper to rent a large family house in the countryside. ‘The differential between renting in London and renting in the countryside is great so, if they keep their place in London, it’s extra money in the pocket,’ explains Jonathan Bramwell of Prime Purchase (01608 810662). ‘Some of our clients are choosing to rent out the family house in Chelsea or Fulham, which can bring in £1,000 to £2,000 a week, and test the country water with a five-bedroom house in Hampshire or Oxfordshire that costs between £3,000 and £4,000 a month.’

International buyers who are putting their children through the public-school system and planned to find a base close to the school are now also opting to rent. ‘We’ve seen this happen more and more,’ says Mr Bram-well. ‘Instead, they take a five-year lease on a house (the length of time to put a child through private school), which gives them the flexibility to up sticks to a new school or another country-when term’s over. Taking on a longer-than-average tenancy sometimes allows us room to negotiate a small discount on the rent, too.’

There is a snag, however. The balance between supply and demand of country-house rentals is incredibly delicate and the recent promising signs of a returning market have encouraged plenty of so-called ‘accidental landlords’ to put their houses back on the market. ‘The balance of power has shifted back to landlords, who are dictating terms and aren’t as willing to negotiate as they were this time last year,’ says Sarah Daly of Property Vision’s rental search service (01344 651700). In areas that are popular, such as the Cotswolds, houses are receiving multiple bids from would-be tenants.

‘There’s also a problem with expectations from clients when it comes to country-house rentals,’ explains Jane Russum from Strutt & Parker’s letting office in Banbury (01295 672095). ‘They have a certain image in their head-a period house with an Aga in the sticks-and the reality is that the choice is limited. We could do with a lot of people who own large country houses being offered jobs in Hong Kong or the Middle East and choosing to rent out their house in the meantime.’

Furthermore, by its very nature, renting is only a temporary solution, which has an expiry date. ‘We’re beginning to sense that, now that there’s a little more confidence coming out of the City, some wives are putting pressure on their husbands to put their bonuses to good use and settle somewhere more permanent,’ says Mr Bramwell.

Renting tips

* Keep expectations low: this is a temporary option

* Contracts tend to before one year

* Small discounts are possible when taking on long-term contracts

* About halfway through the contract period, an option to end it may be offered

* Negotiate over any alterations/improvements made to a property

Source: Country Life

In a typical, healthy market, those buying for the first-time would constitute around 40% of all buyers and so this emerging trend is some cause for concern says Rightmove.

Miles Shipside, commercial director at Rightmove, says first-time buyers play a crucial role in keeping the market moving by helping to complete chains and their continued absence delays any prospect of a meaningful market recovery.

He says: “Even more concerning is this comes as part of an emerging trend showing the percentage of projected first-time buyers has been decreasing over the last three quarters.”

The Q1 Consumer Confidence Survey asked first-time buyers for their opinions on all areas of the housing market. The proportion of those who believed that now was a good time to buy fell for the fourth consecutive quarter to 58%, though the fact that those expressing this view remains in the majority provides some encouragement.

This can perhaps be explained by the fact that a majority of potential first-time buyers are also expecting prices to increase over the next year, with 1 in 10 believing prices will go up by over 10%.

Shipside adds: “Deposits are the greatest hurdle for first-time buyers to get over. In

the aftermath of the banking crisis, lenders have increased the deposits required but by doing so have severely restricted the number of first-time buyers. This in turn affects total sales volumes as first-time buyers are typically responsible for around two in five of all property transactions.”

However, when the new tax year starts on April 6th, a few changes are coming with it that could have more of an impact on your finances than you might think.

Read on for a rundown of the most significant tax changes and an interview with John Whiting of the Chartered Institute of Taxation.

Increase in the tax-free ISA savings allowance

This is one tax change that’s definitely good news – the new ISA allowance is £10,200, £5,100 of which can be saved in a cash ISA.

This means you can save an additional £3000 each year, without paying any tax on the interest, which could put quite a bit more money in your pocket in the form of interest.

Personal allowance stays the same – unless you’re a high earner

The personal allowance is the amount of money you can earn before you start to pay Income Tax. The personal allowance is being held at £6475 for those aged under 65, £9490 for those aged 65-74 and £9640 for those over 75.

In effect, this will mean slightly less money in your pocket – usually the personal allowance increases to allow for the effect of inflation and the higher cost of living.

There have been changes to personal allowances for very high earners however – they have been reduced for those earning over £100,000 and scrapped all together on incomes above £112,950 – meaning if you’re in this wage bracket you’ll pay more tax.

New 50% top rate tax for those earning over £150,000

The new tax year also see the introduction of a new top rate of Income Tax – 50% for those earning over £150,000. This will affect around 350,000 people.

The Income Tax brackets have otherwise stayed the same – 20% on earnings of up to £37,400 and 40% on earning of £37,401 to £150,000

Changes to the age at which you can retire and/or draw your pension

The current retirement age for women is 60, but this is set to gradually increase to 65 by 2020. So, if you’re a woman and you’re turning 60 after the 6th April this year, the date at which you can retire and draw your state pension will not be the day of your 60th birthday – you can use the DirectGov pensions calculator to work out exactly when it will be.

There are also changes regarding personal pensions – from April the age at which you can access your personal pension will increase from 50 to 55.

One positive change is that from April 6th, you will only have to have paid National Insurance for 30 years to qualify for the full basic state pension, while currently men have to have worked for 44 years and women for 39 years.

We spoke to John Whiting, Tax Policy Director at the Chartered Institute of Taxation, to find out more.

Q. Who are the losers in the tax changes that come into play on April 6th?

A. The short answer is: everyone (well, almost everyone). The main changes (50% tax rate, personal allowances phased out for incomes above £100,000, pensions tax relief restricted – already in hand) affect the better-off. But the fact that the basic personal allowance – i.e. the amount of income before income tax starts to bite – is to remain at £6,475, and all the other tax allowances and bands remain as they are, mean that more income is being dragged into the tax system and a greater proportion into the higher rates. The previously-announced increase in the Inheritance Tax threshold has been cancelled as well, so that stays at £325,000.

Q. Is there anyone who stands to gain from the changes?

A. There are some modest increases in Working and Child Tax Credits from April so that does mean some people on low incomes will be better off.

Q. Is it still important for people to make the most of their increased tax-free ISA savings allowance, despite low interest rates?

A. Arguably it’s even more important. If interest rates are low, making sure that as far as possible that the interest you do get isn’t cut into by the taxman must be key.

Q. Recently, there have been reports of tax code errors, how can people spot if they have an incorrect tax code and what can they do if they have?

A. The main thing to do is to take a look at the coding notice that you receive. It should show in the middle the personal allowance of £6,475 (or £9,490 if you are 65 or over, £9,640 for 75+). For many people that will be that: the amount of tax free income (which is what the personal allowance is) is translated to a tax code by dropping the last digit and adding a letter – so, typically, 647L.

A lot of people will have other amounts on the coding notice which adjust the tax code: perhaps extra amounts of allowances (e.g. blind person’s allowance) or (more likely) some restrictions to the allowances (e.g. for the state pension or for benefits in kind at work). Anyone with such adjustments needs to look carefully at them – do they make sense and mirror your circumstances? If not, call the HMRC number that is on the notice and ask for an explanation and, if necessary, a correction. Some of the problems we have seen include:

• Wrong state pension amount

• Taxable benefits double counted

• Tax underpayments for a previous year wrongly calculated

Also be suspicious if you get two or more coding notices. Another type of error that has come to light is that the personal allowance is allocated to an old job -so the taxpayer is given the tax free income against a job that they don’t have any more and which doesn’t generate any income. Meanwhile, the real job is allocated a ‘BR’ code (which means tax all the income at the basic rate of tax) or a much-reduced allowance.

Heydar Aliyev, the son of Ilham Aliyev, the oil-rich country’s president, allegedly spent almost £30 million (US$44 million) on nine waterfront mansions in the southern Gulf emirate earlier this year, reports said.

The boy, who was 11 at the time, made the purchase in the Palm Jumeirah development over two weeks, the Washington Post reported on Friday.

Heydar’s name and his date of birth appeared on Dubai Land Department records, which were obtained by the paper.

The details listed on the property records were the same as those of the son of the former Soviet Republic’s president, whose annual salary is about £150,000 ($228,000).

The purchases are about the equivalent to 10,000 years’ worth of salary for the average citizen of the country.

Industry sources with knowledge of the transactions told the paper the purchases were made by a buyer representing Azerbaijan’s ruling family, with the properties paid for “upfront”.

It remains unclear whether the boy was given the property as a gift or how he could have bought into the development, after officials in Baku, the country’s capital, refused to comment on the claims.

“I have no comment on anything. I am stopping this talk. Goodbye,” Azer Gasimov, the president’s spokesman, told the paper when contacted for comment.

He did not respond to repeated further requests for comment.

The luxury real estate scheme is popular with multimillionaires, British footballers and celebrities and is also home to the world’s biggest artificial island.

The island off the coast of Dubai has become a symbol of the emirate’s reputation for luxury and extravagance.

Michael Saunders sent the warning to bankers and traders earlier this week, the free London Metro Newspaper reports.

Saunders says: “Unless we get a Conservative government with a clear majority, we think gilt yields will have to rise to about 4.75% and higher if inflation remains a threat.”

Gilts, or government bonds, are used to price mortgages so mortgage payments tend to rise in line with the cost of gilts.

It describes itself as a “halfway house” between a traditional high street estate agent and an online service and will launch in Bristol before being rolled out across the country.

Customers can also buy their Home Information Pack, conveyancing services, a survey and arrange their mortgage through the service.

iSold.com offers a prime package, combining the HIP and part of the conveyancing to speed up the sale process.

Tesco will market the site to its customers in store, but the commercial arrangements of the deal have not been revealed.

The £999 fixed fee for the iSold.com’s essential package includes free valuation and home consultation, professional property details, advertising on all the major property portals, 24/7 access to the iSold.com website and a  branch team available from 8 a.m. to 10pm weekdays and normal weekend opening.

Sellers register with the site for a free online valuation before a valuer visits to confirm the selling price, take photos and measures the rooms.

iSold.com clients’ properties will be advertised on all the major property portals, including: Rightmove, Primelocation, FindaProperty, Globrix, Mouseprice and Zoopla.

A spokesman for iSold, says: “iSold.com is an innovative new service that gives customers choice about the level of service they require to sell their home. We put buyers and sellers in control of the whole moving process by allowing them to log into their own area of the website, arrange viewings, email each other and view a handy calendar for keeping track of appointments.

“All offers and negotiations are carried out by the expert team from iSold.com to ensure that the customer gets the best price achievable.

“We appreciate that some people will prefer to use the services of a traditional High Street agency. What iSold.com offers is a real alternative.”

Source: Mortgage Strategy

There is no fighting with mean reversion and, bar a few speculators, we all want housing to be affordable. The problem is not with the end result of house price falls – it’s in what happens along the way.

In no other country are house prices so closely linked to economic performance. An OECD study a few years ago showed that, between 1971 and 2002, every 1% change in the value of British housing stock led to a 0.7% change in consumer spending. A strong economy creates higher house prices via rising incomes and falling unemployment. But in Britain, higher house prices themselves make the economy look even stronger.

In 2003, we felt so confident in our housing wealth that we took equity out of our homes to the tune of around 9% of our total disposable income. Even in 2007 we were still taking out 6% or so. Then we spent it.

Mortgage equity withdrawal (MEW) was a key driver of economic growth during the Blair years. Rising house prices also fed the wealth effect. If you thought you’d just made £50,000 on your house, you’d happily run up more credit-card debt than you could repay from income alone.

But all this works the other way around too. MEW is now running at the equivalent of -2% of disposable income. People aren’t borrowing money to spend. Instead, they’re saving money and repaying what they can off their mortgages. And as the economy deteriorates and prospects for house prices worsen, the wealth effect is turning negative too.

Much of the stimulus that caused our feeble 0.3% rise in GDP in the last quarter of 2009 has been withdrawn. The stamp duty holiday is over, VAT is back up, hiring freezes are in place – and everyone knows there is more to come. Taxes will rise in April and again when our new government arrives. Public-sector cuts will have to be savage so unemployment will rise. All this will make us feel miserable and less keen to borrow and spend. It’s as nasty a cycle on the way down as it was exciting on the way up.

When the financial crisis first began, pundits (myself included) avoided answering the question of what we would do if we were in charge by telling the old joke about how we “wouldn’t start ­from here”, and desperately hoping our time was up before the polite laughter ended. The joke is more apt than ever when it comes to housing. We all want to end up in the right place – somewhere where property is correctly priced relative to the past – but we really wish we weren’t starting from here. Affordable houses are good. Falling house prices are bad.

Source: Merryn Somerset Webb, Moneyweek

Instead, it will be taking a more personalised approach and introducing a new calculation which will vary from case to case depending on the client’s individual circumstances.

The lender says it never assessed an applicant based solely on its income multiplier.

The new system will take into account the net disposable income, apply further deductions for household costs, and use a calculation that will also take account of factors such as LTV.

It will no longer allow payment holidays and borrow back features on any new Nationwide products reserved from March 4.

Borrowers will still be able to overpay and subsequently underpay, as well as extend the mortgage term to reduce payments if their repayment type is capital and interest.

They will also be able to convert to interest only, as long as a acceptable repayment vehicle is in place.

Nationwide for Intermediaries is also renaming its reservation fee to product fee, which it says is designed to help distinguish the fees when using product sourcing systems.

A spokesman for Nationwide, says: “We have always been a cautious lender where we assess what an individual can afford to repay and we are continuing to be prudent.  Our calculation now takes an even more personalised approach to assessing the amount we will lend.”

The figure nudged up to 45% pre-credit crunch, but has now almost doubled.

The CML says the overall effect is that for those in the formerly typical first-time age bracket of 25-34, the likelihood of buying at the moment is around half its level of a decade ago.

The comments are made in its latest issue of News and Views, where it says a housing shortfall is also hampering the first-time buyer market.

It says the speed and intensity with which the characteristics of the typical first-time buyer have changed are stark.

It says: “What is most striking is that to get into the market, today’s first-time buyer is putting in a deposit of around £34,000, equivalent to more than their total gross annual household income.

“Only three years ago the deposit required to enter the market was a much more manageable – but still hefty – 37% of annual household income, at £12,700.”

It paints a bleak picture and says the effect of this is likely to be that first-time buyers will continue to face significant deposit challenges to enter the market, and that the trend of falling home-ownership that had already begun before the credit crunch will continue.

It adds: “There are very real questions about how to deliver a significant enough flow of housing in general, of whatever tenure, to meet the needs of the growing population.”

The CML believes private sector funding constraints and public sector spending cutbacks are likely to produce a significant shortfall in the supply of both housing finance, and housing itself, relative to the demand for it.

Between 1999 and 2009, the number of new homes built each year has ranged from around 130,000 to around 170,000. By contrast, it is now estimated that a range of 238,000 to 290,000 new homes are needed per year to meet housing needs.

It calls on lenders and the government to try and tackle the current housing shortfall.

The CML says: “The lending industry has a continuing significant role to play, as it always has had, in fostering the creativity and innovation that can devise new solutions to old problems. And there are many examples of this, as lenders continue to lend across the spectrum – to developers, to housing associations, to home-owners and to private landlords.

“But there is also a significant role for government, through both the planning system and other means, to help support conditions that will help the market eventually climb out of the housing shortfall that currently exists.”

Source: Mortgage Strategy