Posts with tag: first time buyers

First Time Buyers at Lowest Level for Three Years

Published On: July 17, 2015 at 9:57 am

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The property market is already struggling to welcome first time buyers. But new data reveals that things aren’t getting any better.

Latest research shows that the amount of first time buyers has fallen to its lowest level for three years.

Numbers decreased by around 20% during May, compared to May 2014, found estate agents Your Move and Reeds Rains.

First Time Buyers at Lowest Level for Three Years

First Time Buyers at Lowest Level for Three Years

The data also indicates that first time buyers have larger deposits to save for, at an average of £25,134. This figure has increased by 4.2% in 12 months.

Additionally, the proportion of a first time buyer’s income spent on the average deposit is rising for the first time in four months, up 1% to 64.4% of earnings compared to the previous month.

These findings arrive as the Bank of England (BoE) warns that homebuyers are committing to “bigger and bigger mortgages” because house prices are growing faster than wages.

In its latest financial stability report, the BoE cautioned that property debt relative to salaries “remains high compared with historical and international norms.”1

The Bank put new restrictions on borrowers last year, stating that most mortgages will only be approved if the buyer hopes to borrow 4.5 times their income or less.

Your Move and Reeds Rains’ Adrian Gill, says: “Many first time buyers are still on tight monthly incomes, struggling to save while savings rates stay so low.

“Meanwhile, deposits are rising primarily as property prices continue their seemingly unstoppable upwards march. This is wholly due to a lack of housing supply versus a stack of housing demand.

“If we want to see property prices stabilise and deposits fall as proportions of income, the Government must address the housing supply problem, for which there is only one solution: build more homes.”

The average first time buyer home is worth £154,000, up almost 7% on last year. This compares to the average house price in the UK of £214,000, according to Zoopla.

Gill continues: “While buyers may grumble, rising property prices are a positive sign. They demonstrate that the continuing fall in the average mortgage rate combined with the brightening economic outlook has left plenty of demand in the first time buyer housing market.

“This is despite May’s threat of a highly uncertain election outcome. Schemes such as the Help to Buy ISA have encouraged all sorts of buyers to overlook temporary political uncertainties and save up to make the dream of home-owning a reality.”1 

The Help to Buy ISA is due to launch this autumn. It will give first time buyers a £50 top up for every £200 they save towards a deposit. The Government payments are limited to £3,000 on £12,000 of savings and a prospective buyer can only open one account.

It will be introduced after the Help to Buy scheme helped buyers with a small deposit purchase a home.

1 http://www.zoopla.co.uk/discover/property-news/first-time-buyers/?utm_content=bufferb248d&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer#dJGmiABBQ5tDYiBp.97

Buy-to-Let Boom Continues as First Time Buyer Levels Drop

Published On: July 16, 2015 at 11:47 am

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Mortgage lending to buy-to-let landlords has increased significantly in the past year, but approvals for first time buyers has dropped substantially, as young people struggle to break into the housing market due to rising prices, reveals new data.

The Council of Mortgage Lenders (CML) has found that there were 22,7000 mortgages worth a total of £3.4 billion lent to first time buyers in May, a 16% fall on last year. However, this is 1% higher than in April this year.

Additionally, it discovered that lending to property investors rose 22% in the last 12 months. This increase predominantly reflects a jump in remortgaging since the start of the year, with 19,100 buy-to-let loans advanced in

Buy-to-Let Boom Continues as First Time Buyer Levels Drop

Buy-to-Let Boom Continues as First Time Buyer Levels Drop

May, worth a total £2.7 billion.

The buy-to-let sector has attracted new investors in the last few years, as savers attempt to maximise their funds rather than investing in low interest savings accounts.

Experts have cautioned that new pension rules, which allow pensioners to take as much money out of their retirement funds as they like, could cause the buy-to-let market to grow even further, pushing up prices and making it even more difficult for first time buyers to purchase a property.

The CML also found that lending to home movers was also lower than a year ago, with 26,300 mortgages worth a total £5 billion granted in May. This is 15% down on May 2014, but 2% higher than April this year.

The CML represents banks, building societies and other lenders, which together account for 95% of all residential mortgage lending in the UK. It suggests that the slight monthly improvement mirrors an awakening market after a quiet previous quarter.

House prices grew by 5.7% in May to an average of £274,000, separate data from the Office for National Statistics (ONS) shows.

This is £57,000 higher than the peak recorded in May 2008, just before the financial crash caused a dramatic collapse in the housing market.

The average first time buyer property price has risen by 5.1% to £211,000, the ONS also found.

However, although these prices are higher, competitive mortgage rates mean that first time buyers spend a record low proportion of their monthly income on the capital and interest payments of their mortgages. The CML revealed that this is the lowest level since they began recording in 2005.

Altogether, capital and interest repayments on a mortgage account for 18.2% of a first time buyer’s earnings, while home movers spend 17.7% on the same payments.

Both of these figures are the lowest since the CML began tracking the data ten years ago.

These numbers arrive as the Bank of England (BoE) reports higher demand for mortgages, as rates continue to drop to record lows.

Demand has grown significantly in the three months to May, say lenders, after a substantial drop in the previous three quarters. Lenders claim that demand is at its strongest level since the end of 2013.

Banks have also said that there has been a huge increase in the demand for lending for prime properties and buy-to-lets in the three months to June.

Market Isn’t Bright for First Time Buyers

Published On: July 16, 2015 at 10:45 am

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Market Isn't Bright for First Time Buyers

Market Isn’t Bright for First Time Buyers

First time buyers have faced difficulty getting onto the property ladder for some time, but the market doesn’t look to be getting any brighter.

The cost of starter homes is continuing to increase, alongside UK properties in general. First time buyers still face being priced out of the market.

Buyers are paying 5.1% more than they did last year for their first home. The average price reached £211,000 in May, according to the Office for National Statistics (ONS).

House prices rose 0.9% nationwide in May, after a 1.4% decrease in April.

Annually, property values have grown by 5.7% to an average of £274,000.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Huge Increase in Property Valuations in June

Published On: July 9, 2015 at 2:52 pm

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A strengthening property market resulted in a huge increase in home valuations in June, with activity rising 23% annually, recent data reveals.

Huge Increase in Property Valuations in June

Huge Increase in Property Valuations in June

The research from Connells Survey & Valuation found that June’s total of property valuations was also up 42% on a monthly basis. Valuations for established owner-occupiers moving house were particularly high, up 34% in June compared with June 2014 and 51% compared to May 2015.

Home movers in June surpassed those looking for a property in the buy-to-let sector, with demand growing in the residential market.

According to the data, valuations for first time buyers in June were up 16% annually and 42% compared to May’s figures.

The amount of valuations in the buy-to-let market increased by 24% compared with 12 months previously and 22% on May 2015.

The number of valuations for those remortgaging rose by 17% in June compared to June 2014 and 44% on the previous month.

Connells Survey & Valuation’s Corporate Services Director, John Bagshaw, explains: “First time buyers haven’t benefitted from higher house prices in the same way as those already on the property ladder.

“An era-defining shortage of suitable first time homes, combined with still rapid rises in average prices, are keeping many would-be homeowners renting for the time being. Yet despite this, numbers of valuations for new buyers have shown double digit growth.”

However, he says that annual growth in the remortgaging market is still behind most other sectors: “This could also be a sign that the numbers remortgaging to access a better mortgage rate may have reached a plateau.”1

1 http://www.propertywire.com/news/europe/uk-residenital-property-valuations-2015070810722.html

 

 

 

Almost Half of Buyers are First Timers

Published On: July 9, 2015 at 10:50 am

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First time buyers account for almost half (47%) of all mortgage-financed home purchases, significantly higher than 38% in 2011, revealed data from Halifax.

The latest Halifax First Time Buyer Review discovered that there were 139,500 first time buyers in the first six months of 2015.

Almost Half of Buyers are First Timers

Almost Half of Buyers are First Timers

Compared to the same period in 2014, there has been a 7% drop in first time buyer purchases (from 149,500). This is the first annual decline since the first half of 2011.

However, with the exception of 2014, it was the highest total for the first half of a year since 2007 and was 92% higher than the record low recorded in the first six months of 2009 (72,700).

And although there has been a fall in first time buyer purchases, the proportion of these buyers of all mortgage-financed house purchases has remained stable, also down 7%.

The amount of first time buyers has risen more rapidly than the number of second-steppers in the last few years.

The average first time buyer deposit in May 2015 was £29,894, 6% higher than May 2014 (£28,191). This increase mirrors house price growth over the last 12 months. The average first time buyer deposit is now 82% higher (£13,494) than in 2007 (£16,400).

The Stamp Duty changes of December 2014 have saved the average first time buyer £716 when buying a home, cutting the tax bill for those buying the average first time buyer property – priced at £178,370 – from £1,783 to £1,067.

For first timers in London, the reduction in Stamp Duty is £3,154, from £10,269 to £7,115 on the average first time buyer home in the capital, worth £342,313.

Mortgages Director at Halifax, Craig McKinlay, says: “There was a modest decline in the number of first time buyers in the first half of the year following the substantial increases recorded in 2013 and 2014. This fall has been in line with the general softening in market activity.

“However, there are now signs of a pick-up in mortgage activity as the economy continues to recover and mortgage interest rates remain at very low levels. These factors could boost the number of first time buyers during the second half of the year.”1 

1 http://www.propertyreporter.co.uk/property/how-many-new-first-time-buyers-so-far-in-2015.html

Valuations in residential sector up in June

Published On: July 8, 2015 at 11:44 am

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A substantial growth in the UK property market has seen a surge in residential property valuations, according to a new report.

Increases

Data from an investigation by Connells Survey and Valuation shows that property valuations in June were up by 42% month and month and 23% year on year.

Valuations for current owners occupiers looking to move home were particularly strong, up by 34% June in comparison to the same month last year and 51% in comparison to May.[1]

The report suggests that home movers especially are showing different trends to those seen in April and the beginning of May. Demand is growing faster than in the market as a whole, even more quickly than the surging buy-to-let sector.

Additionally, the data indicates that valuations for first-time buyers during June were up by 16% annually and by a large 42% on last month. For the buy to let sector as a whole, valuations increased by 24% year on year and by 22% in comparison to May. For those looking to remortgage their home, valuations rose by 17% annually and by 44% month on month.[1]

Valuations in residential sector up in June

Valuations in residential sector up in June

Double-digit growth

John Bagshaw, corporate services director at Connells Survey and Valuation, commented that, ‘first-time buyers haven’t benefitted from higher house prices in the same way as those already on the property ladder. An era defining shortage of suitable first time homes, combined with still rapid rises in average prices are keeping many would be home owners renting for the time being.’ Despite this, Bagshaw observes, ‘numbers of valuations for new buyers have shown double digit growth.’[1]

However, he went on to say that remortgaging valuations fall behind many other sectors in terms of yearly growth. He feels that, ‘this could also be a sign that the numbers remortgaging to access a better mortgage rate may have reached a plateau.’[1]

[1] http://www.propertywire.com/news/europe/uk-residenital-property-valuations-2015070810722.html