:00:00. > :00:00.house`buying. It is still complicated, and buyers are always
:00:00. > :00:08.under Russia to borrow as much as they can. We have got some tips to
:00:09. > :00:18.guide you through that. `` buyers are always under pressure.
:00:19. > :00:26.Hello and welcome to Your Money, taking a special look this week at
:00:27. > :00:30.how to buy a house, and how much you can afford to pay.
:00:31. > :00:37.Stressful, confusing and more than a little bit jacket. The whole
:00:38. > :00:43.business of buying a home can be baffling, but we have some simple
:00:44. > :00:48.tips to get you started. And, how much can you really afford to
:00:49. > :00:53.borrow? Interest rates would stay this low for ever. The experts are
:00:54. > :00:55.here to tell us how to protect yourself from rising borrowing
:00:56. > :00:59.costs. And, thousands lost their money when
:01:00. > :01:02.high`street shops went bust and stopped taking gift vouchers. Can we
:01:03. > :01:07.trust them this Christmas? The help for home buyers from the
:01:08. > :01:12.government, plus tea money from the bank of England have perked up the
:01:13. > :01:17.housing market. On Friday, one house`builder said its order book
:01:18. > :01:21.was the best in years. Earlier in the week, a rival builder said its
:01:22. > :01:31.private sales had jumped 45%. Two housing market experts are with me.
:01:32. > :01:38.Welcome to both of you. Jane, has there been a rush of sales spurred
:01:39. > :01:41.on by the cheap money and the government guarantee? Yes,
:01:42. > :01:46.definitely. We have had buyers ringing us for all sorts of
:01:47. > :01:52.reasons. People are getting these two schemes confused, but also
:01:53. > :01:58.because they are worried that prices will start to rise to do next year,
:01:59. > :02:03.and if they don't jump on the wagon now, they will lose the chance. Not
:02:04. > :02:07.for nothing is this help to bite scheme nicknamed the hindrance to
:02:08. > :02:14.buy. Kate, the chartered surveyors trade body this week said some
:02:15. > :02:22.things never change. One in three people who want to buy a home for
:02:23. > :02:27.the first time have no idea where to start. The first base to start is
:02:28. > :02:31.that you have got to understand that, although we talk about
:02:32. > :02:36.averages and house prices going up on average, the whole market is now
:02:37. > :02:42.made up of these tiny pockets. You could take one postcode and have
:02:43. > :02:46.prices going up for two bedroomed flats, prices going down 43`bedroom
:02:47. > :02:50.homes, and so on. The first thing you have got to do is understand
:02:51. > :02:56.what is happening to the local market for the specific property you
:02:57. > :03:01.want to buy. Secondly, advertise a property. So you advertise it for
:03:02. > :03:06.?200,000, in my be overpriced. Really, you should look to see how
:03:07. > :03:12.much those houses are actually selling for. You can go on all the
:03:13. > :03:20.portals and find sold prices. If you find a house you really like, you
:03:21. > :03:27.can pretty much find out what that vendor paid for it, and that it's
:03:28. > :03:34.fantastic information. Understand the difference between the asking
:03:35. > :03:39.price and what you might actually have to pay. Is there really much
:03:40. > :03:45.leeway for negotiation? I know people going through this process
:03:46. > :03:49.right now, looking at the price, thinking that price is ridiculous,
:03:50. > :03:53.but they really wanted and there are so many other people chasing it.
:03:54. > :03:59.With property, there is always the emotional side of really wanting to
:04:00. > :04:04.live in that side, and the sensible head, if you are not sure about
:04:05. > :04:11.paying that price. I have to say, I have always backed off if I think
:04:12. > :04:15.the house is too much money. Never paid too much. There is a house
:04:16. > :04:21.price ceiling on every road. Rarely is that ever broken over a period of
:04:22. > :04:26.time. Check to see what the highest price achieved for a house on the
:04:27. > :04:33.road, and try hard not to go over that. If you do, you need to be in
:04:34. > :04:37.that house for some period of time to make sure you can always afford
:04:38. > :04:42.to stay there. Up to ?125,000, you don't have to pay any stamp duty at
:04:43. > :04:48.all. You would be looking at costs of 1% ` 2% of the value of the
:04:49. > :04:53.property. From there up to ?250,000, you are paying 1% in stamp duty.
:04:54. > :04:59.Above that, you are looking at about 6% of the value of the property.
:05:00. > :05:04.Always remember, you has to pay your deposit at exchange to make sure
:05:05. > :05:09.that goes ahead. A lot of people forget that, and it might be ?40,000
:05:10. > :05:14.you have to put into the bank account of the solicitors. Just a
:05:15. > :05:19.quick thought on where to get a mortgage will stop some estate
:05:20. > :05:23.agents will offer a mortgage through the agency, but often that is not
:05:24. > :05:28.the best deal. Estate agents that work with mortgage advisory firms
:05:29. > :05:33.come they often own them. Estate agents are often on commission, and
:05:34. > :05:39.you will find that often they are not wholly independent. They will
:05:40. > :05:44.miss out on a lot of the smaller building societies that can perhaps
:05:45. > :05:48.do the niche deals that some first`time buyers need.
:05:49. > :05:55.With house prices going up, you might feel under pressure to get as
:05:56. > :05:58.big a mortgage as possible. It might feel affordable now because
:05:59. > :06:02.borrowing costs are relatively low, but what happens when, and it is
:06:03. > :06:06.when not if, interest rates go back up again? Higher gas and electricity
:06:07. > :06:10.bills, the cost of running the car, higher food rises, they have all
:06:11. > :06:14.stretched many family budgets. Even a small rise in Bank of England
:06:15. > :06:16.interest rate could leave 30,000 households seriously behind with
:06:17. > :06:23.their mortgage payments. That means those who had fallen behind would
:06:24. > :06:31.owe an average of ?700. How much is too much when you are
:06:32. > :06:36.taking on a mortgage? Most first`time buyers want to know how
:06:37. > :06:43.much they can borrow, not what they can comfortably afford. The best
:06:44. > :06:49.thing to do is look at how much you can borrow, look at your budget,
:06:50. > :06:54.find out what is comfortable and affordable, and then say this is how
:06:55. > :06:59.much you can borrow, not just spend the maximum that you can. It is all
:07:00. > :07:03.about affordability. Absolutely. The BBC have got a great mortgage
:07:04. > :07:08.calculator. I checked at the moment whether people can afford the
:07:09. > :07:12.mortgage levels at 7%. That is the kind of long`term rates we have seen
:07:13. > :07:19.in the past. 3% is not a standard rate. It feels strange to be talking
:07:20. > :07:26.about the possibility of the Bank of England putting up England ``
:07:27. > :07:31.interest rates. It probably won't happen for a couple of years, and
:07:32. > :07:35.mortgage rates have not been influenced by the Bank of England
:07:36. > :07:41.rate for some time. Fixed`rate money comes from sources other than the
:07:42. > :07:46.Bank of England. That is why your mortgage may not be affected by the
:07:47. > :07:56.base rate. Any movement in bank base rates will be relevant for sum. Is
:07:57. > :08:01.there a danger in fixing your rate now that may become too expensive in
:08:02. > :08:07.a couple of years time? For most people who want to avoid
:08:08. > :08:12.full ability in the market, fixed rates are still a good idea. It is
:08:13. > :08:17.unlikely they will fall a lot further. If they did, we can
:08:18. > :08:23.calculate if it is worth paying the early redemption penalty. Fixed
:08:24. > :08:30.rates are still the best way forward if you want to set this out. All
:08:31. > :08:34.this talk about people falling into debt with their mortgage, just
:08:35. > :08:40.because you are behind with your payments does not necessarily mean
:08:41. > :08:44.you will lose your home. A lender is obliged to sit down with their
:08:45. > :08:49.customer and work out a plan. It is not in any one's interest to have a
:08:50. > :08:55.glut of repossessions hit the market. So the best advice seems to
:08:56. > :08:59.be that if you are in debt with your mortgage, you must talk to your
:09:00. > :09:03.mortgage lender. The first rule is talk to your mortgage defend Klay
:09:04. > :09:09.lender before you default. You could always rent out a room tax`free.
:09:10. > :09:12.There are lots of ways that you can help yourself through difficult
:09:13. > :09:17.times if you are having trouble with affordability. And it is in the
:09:18. > :09:27.mortgage lender's interest to keep you. Yes, and there are rescued
:09:28. > :09:35.steams available `` rescued schemes. The Thames water demand for higher
:09:36. > :09:43.bills has been flushed down the toilet. They had wanted an extra 8%
:09:44. > :09:51.on bills next year. ?29 in real money. The cost of running its
:09:52. > :09:58.business has gone up. The watchdog said Thames Water had to stick to an
:09:59. > :10:05.earlier smaller price rise. If you look at `` live outside London, the
:10:06. > :10:10.next round of price rises for all the water companies comes in in
:10:11. > :10:15.2015. If you have lived abroad in the last three years, you won't be
:10:16. > :10:18.able to get a mortgage from the nationwide.
:10:19. > :10:25.It has changed its rules and says you must have been resident in the
:10:26. > :10:31.UK for the last three years to get a home loan. It says it needs the rule
:10:32. > :10:35.to keep its new computers happy. Have you loaned money from the
:10:36. > :10:39.Co`operative Bank? If so, it you will decide its fate. They will give
:10:40. > :10:44.details of the latest rescue plan shortly. If you want to vote on it,
:10:45. > :10:47.you have until the 29th of November to do so.
:10:48. > :10:51.Barclays Bank says it will move four of its branches into the low`tech
:10:52. > :10:56.billing macro local Asda supermarket. Cash and check machines
:10:57. > :10:58.can be used while the supermarket is still open.
:10:59. > :11:02.Just seven shopping weekends left till Christmas. That is the reaction
:11:03. > :11:07.that you want on the day, isn't it? Did anyone ever look that happy when
:11:08. > :11:11.they opened and envelope when they found vouchers inside? Are they ever
:11:12. > :11:17.safe to buy? Like it or not, Christmas shoppers
:11:18. > :11:22.are already out. As they examine those seasonal temptations, there is
:11:23. > :11:27.a reminder that last year delivered one or two less welcome surprises.
:11:28. > :11:30.When HMV, Blockbuster and, it collapsed, for a while at least,
:11:31. > :11:38.their gift vouchers became worthless. In the in the case of
:11:39. > :11:42.Jeffords, thousands of customers who had vouchers were left out of
:11:43. > :11:47.profit. Some did eventually receive compensation in the form of free
:11:48. > :11:53.gifts, but there is still no guarantee that your money is safe.
:11:54. > :11:58.As a result, some campaigners want a change in the law. This lady set up
:11:59. > :12:03.a website to try and get voucher money ring fenced. Any retailer
:12:04. > :12:10.going bust would then have to honour those vouchers. If I give you ?10, I
:12:11. > :12:16.expect to be able to spend ?10. Not be told that actually your voucher
:12:17. > :12:22.has expired, you can't use it, and by the way, we have just gone bust
:12:23. > :12:26.as you definitely can't spend it. Amongst the options now being
:12:27. > :12:30.considered to protect consumers is that idea of ring fencing voucher
:12:31. > :12:36.money, or extending the consumer credit act. Either idea would be
:12:37. > :12:41.painful for retailers. As far as the business is concerned, all these
:12:42. > :12:46.options are quite difficult to administer, and they are also quite
:12:47. > :12:53.costly. Taking cash flow out of a business in the current economic
:12:54. > :12:58.climate is difficult. At the moment, customers with gift cards come near
:12:59. > :13:01.the bottom of the list of creditors. They are amongst the least likely to
:13:02. > :13:03.get their money back. Those representing the industry wanted
:13:04. > :13:08.changed. Consumers are currently at the mercy of administrators. There
:13:09. > :13:13.is no guarantee that consumers can get their money back? No guarantee,
:13:14. > :13:27.but if a retailer goes under, that is down to the administrator. Most
:13:28. > :13:32.customers should be fine, but they are being warned to be careful about
:13:33. > :13:37.where they buy their gift cards. One thing you can guarantee is that
:13:38. > :13:45.we will bring you the gift of news all week long on the Your Money
:13:46. > :13:51.pages of the BBC News website. You can follow us on Twitter. Back again
:13:52. > :14:06.next week, see you then, thanks for watching us today.
:14:07. > :14:12.You are watching BBC News, the headlines this morning: A major
:14:13. > :14:16.relief operation is under way in the Philippines, at least 120 people are
:14:17. > :14:22.confirmed dead following one of the most powerful storms ever recorded.
:14:23. > :14:27.William Hague says progress at talks over Iran's nuclear programme, there
:14:28. > :14:33.is progress, but there are still important issues to be resolved.
:14:34. > :14:37.BT Sport have won the exclusive rights to televise live Champions
:14:38. > :14:38.League and Europa League matches in a deal worth nearly ?1