Mobile home log cabins Rising trade in 'take-away' homes

Mobile home log cabins Rising trade in 'take-away' homes

 

Rising trade in 'take-away' homes


How to be a first-time home buyer
Will house prices fall in 2011?
Dark art of obtaining a mortgage
Making a tidy profit from clutter
People looking for a new house are being told they could save thousands of pounds by buying one that is made in a factory.

A new report says prefabricated homes are very different to those of 60 years ago.

They last longer, buyers can get a mortgage on them and they are 10% cheaper to buy, the report says.

The Royal Institution of Chartered Surveyors said buyers could also save hundreds of pounds a year on heating.

Take-away
"We do any height, any length, any width," said Tony Fox, on a tour of the Future Form factory near Northampton.

Here they make what are, in effect, take-away homes.

They come complete with shower units, beds, and even the kitchen sink.

"You can have a house, student accommodation, or even a hotel suite," Mr Fox said.

Semi-complete units, looking a little like shipping containers, stand ready for collection in the car park.

Overnight, these are lifted onto the backs of lorries and taken to a site in north-west London, where they are assembled into the second-highest modular building in Britain.

In the space of half an hour, the electricity, water, gas and drainage can be connected up, and after walls and a roof have been added, the unit is ready to move into.

'Cheaper'
According to the Royal Institution of Chartered Surveyors (Rics), such units can cost far less than conventional houses.


Chris Goodier has completed a report about the market
In a report out this week, it said that a basic home unit could now be purchased for as little as £30,000, plus the land.

"For an equivalent house on the same site, you are talking about 10% cheaper," said the report's author, Chris Goodier, from Loughborough University.

"But the quality and specification is very much higher on these types of building, because they are built in a factory environment."

Unlike post-war prefabs, it is now also possible to get a mortgage on the modern-day equivalent.

After all, they are designed to last for between 60 and 80 years.

Among the lenders which are offering such an option is Spanish bank Santander.

"We fully support the initiative and as a lender we are already involved in a pilot to assess a number of properties and offer lending upon them," a spokesman said.

Heating costs
Ben Taylor and his wife Marlene were among the first to move into an estate in Harlow, Essex.

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This is well-insulated. It does not require much heating”

Ben Taylor
Prefab homeowner
They may not have any neighbours yet, but they are already loving the cost of living here.

It was cheaper to buy, and cheaper to heat as well, Mr Taylor said of his new modular home.

"This is well-insulated. It does not require much heating. It is easy to keep clean and easy to maintain," he said.

"Overall, we are very happy with it."

One other maker of modular homes, Cub, said that such units could be supplied with heat and electricity for as little as £56 for a year.

Built to last
The units being created at the factory in Northampton are now arriving at a building site next to Wembley stadium, where a new tower is under construction.

Along with another, it is said to be the second-highest such building in Britain.

"The kitchen units are so big, we are having difficulty getting the space to lift them," the foreman said.

Nevertheless the units are being rapidly stacked, one on top of the other, and are soon connected up.

On this sort of scale, the Rics report says modern-day units could help solve the nation's housing crisis, as unlike the old prefabs, these ones are built to last.

 

How to be a first-time home buyer

Will house prices fall in 2011?
Dark art of obtaining a mortgage
Making a tidy profit from clutter
Renting tips when demand is high
If you are only buying your own home to "invest" in property you may find the next couple of years a little disappointing.

Most predictions for house prices for 2011 are that they will be lower by the end of the year than the beginning.

I do not see any sustained house price growth re-emerging until 2013.

If you are buying a home to make money over the short term then do not buy at the moment.

If, on the other hand, you are buying a home to keep you warm and dry, and to give you privacy and self determination, then any time is a good time.

How much to borrow?
In the past this was an easy issue - lenders simply offered a multiple of your income, for instance two and a half times your salary.

Now, because of the level of unsecured debt many of us carry, and the information available from credit agencies, most lenders use credit scoring and affordability techniques that make this calculation more opaque.

If you have little debt then up to four times your salary might be available.

As a first step, look at a lender' s website and search out their affordability calculators and see how you fare.

This simple task might remove all hope of buying at the moment, or confirm that you can make the sums work.

Getting help
If your income does not appear high enough to buy the sort of home you want, you could consider involving a parent.

They may be as keen as you are to help you move out and could become a joint borrower or a guarantor for your mortgage.

Alternatively you could pool resources and buy with a friend or partner, which could help you move or get a property of an appropriate size.

Make sure you have a robust legal agreement in place to cover what happens if you go your separate ways.

This can be difficult to negotiate when you end on less than friendly terms.

How much deposit?
Clearly this will depend on the price of the property you find, but for the most attractive rates you would need to put down 30% of the purchase price.

The monthly charge will not be the only expense involved”

The higher a loan as a percentage of the purchase price, the higher the interest rates will be.

For instance, today a 70% two-year fixed interest rate loan would carry interest charges ranging from 2.8% to 4.5%.

Whereas, if you could qualify for a 90% loan - which are few and far between - the interest rate would range from 5% to 7%.

So, based on a typical UK mortgage of £150,000, the monthly cost could vary from £700 to £1,070 depending on the deposit you have available.

Other costs
Do not forget that the monthly charge will not be the only expense involved.

Stamp duty is normally charged on purchases above £125,000 at 1% of the purchase price.

This is currently suspended until 24 March 2012.

If you buy for more than £250,000 you will need to fund a 3% stamp duty payment.

You will also need to pay for a valuation, and ideally a survey, for the property you buy as well as paying for legal fees and removal costs.

All this can add up to thousands, or even tens of thousands, of pounds.

So you must have access to funds beyond the deposit itself.

Shared ownership
What if you simply do not have access to that kind of deposit?


Many buyers need financial help from their parents to buy a home for the first time
You have a choice - wait to build up a larger one or considered a "shared ownership" purchase.

Typically under such schemes, housing associations allow you to buy 25% of a property and rent the balance until you can afford to buy the rest of it in stages.

The level of deposit required will come down and be closer to 5% of a full purchase price.

Repayment or interest only mortgage?
Assuming you can afford it, the safest way ahead would be to take a repayment mortgage in which you steadily pay off both the interest and a small chunk of the loan each month.

Most lenders of high percentage loans will insist that you take such a route.

For lower percentage borrowers, lenders might offer you the choice of an interest-only loan.

This will be easier on your cash flow and has been favoured by many buyers in the past but is also a riskier choice.

It is also one that is generally frowned upon by the Financial Services Authority (FSA) so it is becoming more difficult to obtain.

Overall, buying a home for the first time will be a fraught and stressful process, as will future moves.

So do not lose sight of your original motivation and do not expect to make a profit on buying in the short term.