Posts with tag: first time buyers

UK first-time buyer sales at post-recession high

Published On: September 2, 2015 at 9:15 am

Tags: deposits,first time buyers,mortgage lenders

First-time buyer levels in Britain hit their highest number since the recession in July, according to a new report.

Data from research conducted by Your Move and Reeds Rains shows that the average first-time buyer paid £161,985 for their home last month, 8.9% more than one year ago.[1]

Buyer boost

During July, there were 29,700 purchases of property by first-time buyers, 4.9% more than in June. The average deposit required by a first-time buyer looking to secure a home was £27,975.[1]

In addition, the sales figures in July represented a 28% rise from April 2015, meaning there has been an increase of £6,5000 rise during the last three months alone. Average deposits have risen by 10% in comparison to June 2014, where a figure of £25,429 was recorded, meaning there has been a rise of £2,546.[1]

The cost of a deposit as a proportion of a first-time buyer’s typical income hit 71.6%, up by 3.1% in one month and by 5.4% annually. Moreover, the average first-time buyer’s LTV is slowly dropping, meaning initial buyers are having to stump up more cash up front with larger deposits.[1]

July’s rate of 82.7% showed a 0.5% decrease in LTV from June and a 0.2% year-on-year decrease.[1]

Optimism

Adrian Gill, director of estate agents Your Move and Reeds Rains, believes that the post-election surge in activity has receded, giving way to more consistent optimism. He feels that first-time buyers are beginning to realise that there is no immediate risk to the property market from the Government.

‘Incentives attractive to first time buyers such as the Help to Buy schemes are running along steadily, while further low cost housing development is being encouraged to entice more people onto the ladder,’ Gill noted. ‘This month’s particularly high transaction rate is also partially due to expectations that the Bank of England may announce a rate rise sooner rather than later. The thought of months of rock-bottom mortgage rates being brought to an end is encouraging many wavering first time buyers to jump on the property ladder before repayment costs shoot up,’ he added.[1]

UK first-time buyer sales at post-recession high

Mr Gill went on to say that some first-time purchasers, ‘may have held back briefly when considering the rising deposit costs.’ He notes however that, ‘real wages have been growing too and first-time buyers are able to shoulder the short term burden of a slightly higher deposit to spare the risk of losing out on a good mortgage deal.’[1]

Mortgage rate falls

In spite of some lenders beginning to take away their cheapest deals, the average first-time buyer mortgage rates continue to fall, albeit at a slow pace. The typical rate fell by 0.75% in the year to July 2015. Moreover, the rate fell by 0.12% during the last three months and by just 0.02% between June and July.

‘So long as the economy continues on its upward trajectory and the aspiration for home ownership remains strong, property prices can only increase,’ observed Gill. ‘While the higher deposit and mortgage costs this brings may be a bother for some, taking a longer view, it’s a sign of a vibrant and dynamic property market,’ he continued.[1]

Gill also said that, ‘What may be more concerning for first time buyers is that average mortgage rates may be on the verge of climbing back up. But first time buyers shouldn’t worry. When a rate rise does come it is likely to be slight and gradual so home ownership will by no means suddenly become a costly dream. Instead, it will remain an affordable reality for those first time buyers with the drive and determination to make it so.’[1]

Regional divides

Unsurprisingly, London was the most expensive place for first-time buyers, with the average property for initial purchasers here costing £274,868 in the three months to July. Second on the list was the South East, where prices cost £201,652 on average. Nationally, the average cost of a first-time buyer property was £149,713 during the same three-month period.[1]

The least expensive places in which first-time buyers can purchase a property were found to be the North East and Northern Ireland, where prices stand at £109,240 and £106,176 respectively.[1]

[1] http://www.propertywire.com/news/europe/uk-first-time-buyers-2015083110923.html

Highest Number of First Time Buyers Since Financial Crash

Published On: August 28, 2015 at 1:42 pm

Author: Em Morley

Categories: Finance News

Tags: average first time buyer house price,first time buyer mortgages,first time buyer property prices,first time buyers

First time buyers are back, as the highest number has been reported since before the financial crash.

Estate agents Your Move and Reeds Rains stated that in July, there were 29,700 first time buyers, the highest level since 35,300 in August 2007.

Highest Number of First Time Buyers Since Financial Crash

The companies’ post-recession record contrasts with the National Association of Estate Agents’ (NAEA) report that the number of first time buyers dropped in July.

Your Move and Reeds Rains insist that the amount of first time buyers has been rising, up 5% on June.

Additionally, the firms released data revealing how low first time buyer levels were in the last four years, at just 12,300 in April 2012 after a Stamp Duty holiday ended.

This year began with around 19,000 first time buyers.

In July, the average first time buyer home cost £161,985, 8.9% higher than last year. The average mortgage had an 83% loan-to-value (LTV) ratio, but the required deposit was still £27,975, up 10% on last year.

The agents believe that first time buyers are rushing to get onto the property ladder before interest rates rise and the best mortgage deals are withdrawn.

Director of Your Move and Reeds Rains, Adrian Gill, says that many uncertain first time buyers are hurrying the process before costs increase.

He adds: “Some may have held back briefly when considering the rising deposit costs. But real wages have been growing too and first time buyers are able to shoulder the short-term burden of a slightly higher deposit to spare the risk of losing out on a good mortgage deal.”¹

The average price of a first time buyer property varies massively across the UK, from £109,000 in the North East to £275,000 in London.

This causes the size of deposits required to differ greatly also, from £17,659 in the North East to £66,879 in the capital.

¹http://www.propertyindustryeye.com/theyre-back-first-time-buyers-at-highest-number-since-crash/

Housing Demand Increases 5% in July

Published On: August 24, 2015 at 4:55 pm

Author: Em Morley

Categories: Landlord News

Tags: first time buyers,homes on the market,housing demand,property for sale

The amount of aspiring homebuyers registered per estate agent branch is now at the highest level recorded for 11 years and available property has also increased by 25%, according to the National Association of Estate Agents (NAEA).

Housing Demand Increases 5% in July

The NAEA’s June Housing Market Report revealed that demand was at an 11-year high, and July experienced a further 5% rise in the amount of house hunters, an average of 462 per branch, compared to 439 the previous month. This is the highest reported since August 2004, when an average of 582 hopeful buyers were recorded per NAEA member branch.

Available homes also grew in July, rising 25% from an average of 44 properties in June to 55 in July. Figures like these have not been seen in around two years, when an average of 57 houses per branch were recorded in September 2013.

However, the amount of sales in July remained stable from May and June, with just nine per branch. This suggests that although housing stock is picking up, completing a purchase is still difficult.

The NAEA’s report also shows that the number of sales to first time buyers continued to drop in July, with this type of buyer accounting for just 23% of sales. This is down from 24% in June and 29% in May. However, it is up on last year’s figure of 20% of total sales in July 2014.

Managing Director of the NAEA, Mark Hayward, says: “Typically, we’d expect to see sales taking longer to complete during the summer months, as buyers and sellers are on holiday. It is alarming, however, that the number of sales being made to first time buyers is steadily falling.

“Having said that, the fact that there is more housing coming onto the market means that hopefully over the next few months we’ll see activity in the market increasing and more sales completing, to respond to the growing army of house hunters we’ve seen emerging over the last few months.

“The truth of the matter is though, there simply aren’t enough houses to meet growing demand and until we see more physical bricks and mortar, there may be no hope in solving the housing crisis.

“It’s also alarming that the number of sales being made to first time buyers is steadily falling; with reports of house prices increasing and expectations of rising in the future, first time buyers will continue to be pushed out of the market.”¹

¹http://www.propertyreporter.co.uk/property/housing-demand-jumps-further-5-in-july.html

Scottish house prices and sales up in June

Published On: August 19, 2015 at 12:24 pm

Author: Em Morley

Categories: Property News

Tags: first time buyers,Property sales in Scotland,Scottish property prices

Scottish house prices rose in June, with the average price of a property north of the border now £169,227, according to new index figures.

Data from the report by Your Move shows that sales rose by 25% month on month, with year-on-year prices increasing by 1.2%.[1]

Changes

There have been a number of changes in the property market during the last twelve months, including the introduction of the new Land and Buildings Transaction Tax in April.

After a surge in sales in the upper end of the market before the tax was introduced, sales tailed off soon afterwards. However, the latest figures show that the price revival in June was driven by a resurgence of sales for million pound plus properties.

A rise of 25% in home sales in comparison to May was the highest month-on-month growth since July 2014. By region, Glasgow saw the greatest increase in sales activity during the second quarter of the year, recording an increase of 18% year-on-year.

‘The calm annual house price change of 1.2% recorded in June 2015 belies tumultuous currents of activity beneath the surface,’ said Christine Campbell, Your Move managing director in Scotland. ‘The Scottish housing market has been buffeted around by taxation.’[1]

Improvement

Campbell pointed out that in 2014, there were on average 12 £1m plus properties sold north of the border. In June 2015 alone, there were 6, indicating a marked improvement in the sector in just one month.[1]

On the mainland, the largest monthly rises were recorded, unsurprisingly, by the two most expensive local authorities in Scotland. East Renfrewshire and East Dunbartonshire shows jumps of 26% and 21% respectively during the month.[1]

Campbell said that, ‘more generally, the LBTT front loaded sales into the start of the year and activity dragged its heels throughout April and May, with the general election adding to the dampening effect.’[1]

Scottish house prices and sales up in June

For example, in Aberdeen, sales of detached homes fell by 39% between March in April but in June, there was a 25% month-on-month rise. In Scotland overall, there were 9,265 sales during June, the most activity since July 2014 and during the second quarter of 2015, sales of flats saw a significant year-on-year rise of 7%.[1]

Affordable

Campbell feels that the improvement, ‘stems from the stamina of the first time buyer market, as this property type tends to be the most affordable for those getting their first footing on the property ladder. This is especially the case in cities and Glasgow and Edinburgh accounted for 45% of all Scottish flat sales during the second quarter of 2015.’[1]

She went on to say, ‘affordability is the biggest steer to Scottish housing market at the moment. At £200,000, the average price of a flat in Edinburgh is more than one and half times as much as the cost of the typical flat in Glasgow which stands at £120,000.’[1]

‘As a result, Glasgow has experienced the strongest jump in house purchases overall, with sales up 18% in the second quarter compared with the same period in 2014, while Edinburgh sales have seen just a 2% upswing over the same period. Low interest rates, competitive mortgage deals, and higher average earnings have caused a swell of confidence and buyer demand, particularly in cheaper areas,’ she said, adding that a lack of supply will keep the market open to stronger price surges,’ Campbell concluded.[1]

[1] http://www.propertywire.com/news/europe/scotland-property-prices-sales-2015081910880.html

£26m fund to assist new home building

Published On: August 13, 2015 at 9:15 am

Author: Em Morley

Categories: Finance News

Tags: first time buyers,help to buy scheme,starter homes

House builders in the UK have been buoyed with the news that a £26m fund has been set aside, with the intention of introducing the first batch of starter homes for first-time buyers.

Communities Secretary Greg Clark promised that high-quality homes would be made available as a result of the fund and that first-time buyers will have a range of different property types to choose from.

Support

The windfall will be used to support architects, developers, housing associations, councils and small builders to supply properties that will increase quality of design, with the government planning to deliver 200,000 starter homes by 2020. Money from the fund will be used to obtain brownfield sites, with money from the sales of these sites going back to the government, ensuring top value for the taxpayer.

In addition, the government has offered more support to aspiring home owners by making £10m available for authorities to prepare additional brownfield land for the eventual development of future starter homes.

Mr Clark said, ‘we are committed to delivering 200,000 starter homes by the end of this Parliament, providing a real boost to aspiring young first time buyers. The competitive fund will build homes that will clearly show the wide range of new properties that will be available for first-time buyers as they take their first step on the housing ladder.[1]

‘We are also helping bring back into use more brownfield land for development, keeping the country building and delivering the homes our communities need,’ he added.[1]

£26m fund to assist new home building

Dreams

A priority for the government is to assist young people to achieve their dream of buying their own home, according to housing minister Brandon Lewis. He pointed out that in excess of 100,000 households have been assisted in buying a property through the Help to Buy Scheme.

‘This fund will help kick start that change and show young people across the country the quality they can expect when the buy a starter home,’ said Lewis, who went on to say that, ‘it’s further proof that this government’s long term economic plan is on track.’[1]

Meanwhile, the Homes and Communities Agency said that it will support the starter home initiative by offering land and expertise, helping more first time buyers into home ownership.

Chief Executive Andy Rose said, ‘we look forward to working with our key delivery partners including councils, developers, housing associations, small builders and architects in taking this forward, through the identification and purchase of land suitable for exemplar starter home sites.’[1]

[1] http://www.propertywire.com/news/europe/uk-starter-home-fund-2015081210857.html

Homeowners Remortgage to Avoid Interest Rate Rises

Published On: August 12, 2015 at 2:53 pm

Author: Em Morley

Categories: Finance News

Tags: first time buyers,interest rate rise,remortgage deals,remortgaging rates

Homeowners Remortgage to Avoid Interest Rate Rises

The amount of homeowners remortgaging in June rose by a third, as they hope to avoid imminent interest rate rises.

Around 31,600 loans worth £5.1 billion were granted in June, according to the Council of Mortgage Lenders (CML).

Additionally, 28,300 first time buyers had mortgages worth a total of £4.2 billion approved in June. This is a 22% increase on May.

Director General of the CML, Paul Smee, says: “It is likely people are now beginning to feel a rate rise is a realistic prospect and not just a distant theoretical possibility.”¹

¹Binns, D. (2015) ‘Re-mortgages soar to beat interest rate rise’, Metro, 12 August, p.2