Posts with tag: first time buyers

Good news for first-time buyers

Published On: May 5, 2015 at 10:05 am

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First-time buyers have been buoyed by the announcement of a new initiative from the Halifax.

The banking chain has revealed that it is to offer 1% cashback to first time buyers across their product range. Therefore, all would-be homeowners taking out a approved mortgage from the Halifax will receive 1% of their loan back into their bank account within 30 days of opening their account.

More good news came with the news that the cashback will be available in conjunction with all Help to Buy products. This means that lenders can buy a property with a 5% deposit and still receive 1% cashback on the total mortgage cost.

Commitment

Craig McKinlay, mortgages director at the Halifax, believes that the announcement shows the organisations support for first-time buyers. McKinlay commented that, ‘giving first-time buyers 1% of their loan amount back when their mortgage completes further underlines our ongoing commitment to first-time buyers and gives practical help with things like moving costs.’[1]

Good news for first-time buyers

Good news for first-time buyers

Mr McKinlay continued by saying that, ‘one of Halifax’s key priorities for 2015 is to help more first-time buyers get on the housing ladder and with this offer Halifax is giving extra cash to help them out at what is an expensive time.’[2]

 

[1-2] http://www.propertyreporter.co.uk/finance/halifax-offers-ftbs-1-cashback.html

 

 

Those in Their 30s Might Never Move House Again

Published On: April 10, 2015 at 4:13 pm

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Those in their 20s and 30s in the UK will own half as many properties in their lives as their parents, research has found.

This age group will own an average of 1.7 houses in their lifetime, compared to 3.2 for the over-50s. These figures were revealed by a study from LV= home insurance, who also discovered that a third of homeowners are living in homes that are too small for them but they cannot upsize.1

Around a quarter of survey respondents said that they are unable to save up for a deposit on a bigger house, and a sixth are waiting for property prices to fall before even considering moving.1

Experts say that rising prices, which have caused higher Stamp Duty, legal fees and estate agent costs, as well as a housing shortage and harsher mortgage lending are to blame.

Lots of families are staying in their homes, but deciding to extend. Moving house has become so difficult that many respondents say they are in their forever home, including one in five of those in their 30s.1

Those in Their 30s Might Never Move House Again

Those in Their 30s Might Never Move House Again

A different report revealed that the affordability of properties in UK cities has worsened over the past year and is currently at levels last found in 2009. The typical price is now over six times the average annual income.

LV=’s Selwyn Fernandes says: “While owning your own home was achievable for the previous generation, it is an impossible dream for many today. Rising house prices and strict lending criteria are now not only preventing people from buying their own home, but they are also stopping many homeowners from moving, forcing them to modify their homes instead.”1

Paula Higgins from the HomeOwners Alliance, also comments: “This survey suggests many are stuck in homes which may be unsuitable because they cannot afford to move.

“In different stages of your lives, you have different needs. You may need to move closer to your place of work, or to good schools, or nearer to family. You may want more green space or a more adaptable home. But lots of people are finding they are stuck in their first homes, which they struggled to afford in the first place.

“Transaction costs, changes to mortgage lending criteria and, critically, a woeful lack of new homes being built puts homeownership, and moving up the ladder, out of the reach of many.”1

The average property price in cities has increased from £182,000 to £195,000 between 2014-2015.1

Lloyds Bank found that Oxford is the least affordable city in the UK, followed by Winchester, Cambridge, Chichester, Brighton and Hove, Bath, and London.

The most affordable is Stirling in Scotland, with Londonderry in Northern Ireland closely following. Just behind are Lancaster, Bradford, and Hereford.

The highest house price growth since 2005 is in Aberdeen, due to their sharp property boom. London has experienced the largest growth since 2010.

Lloyds Bank’s Andy Hulme concludes: “House price rises in the past two years have resulted in a deterioration in home affordability in the majority of UK cities, and generally widened the north-south affordability divide.”1

1 http://www.dailymail.co.uk/news/article-3013955/Young-never-buying-home-Survey-suggests-Britons-twenties-thirties-average-1-7-properties-lifetime.html

 

Mortgage Approvals Reveal Further Drop in Sales

Published On: January 30, 2015 at 3:16 pm

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The recent slowdown in house sales may remain for the next few months at least, according to new research.

The amount of new mortgage approvals to house buyers in December, which have not yet been lent, increased marginally to 60,275 revealed the Bank of England (BoE).1

Despite the approvals figures being slightly higher than in November, they were down by 17% on December 2013.

Approvals had been at a monthly average of 67,203 for the first half of 2014, however the second half of the year saw that average drop to 61,669.1

Property sales in the UK rose by 14% for the whole of last year to 1.22m; the highest figure since 2007.1 However, these numbers steadied in the last few months of the year, slowing house price growth.

Recent studies found that property prices around the UK have plateaued since last summer.

Future progression

Economy experts have predicted improvements in the housing market.

Mortgage Approvals Reveal Further Drop in Sales

Mortgage Approvals Reveal Further Drop in Sales

IHS Global Insight’s Howard Archer says: “The first rise in mortgage approvals for six months in December reported by the BoE supports our suspicion that the weakening in housing market activity may be drawing to a close.

“Of course, not too much should be read into one month’s data and mortgage approvals are still at a low level.”1

Consultancy firm Capital Economics believes that the slight increase in approvals reflects several influences: “Housing demand is being supported by further falls in interest rates. Indeed, data on mortgage rates also released this morning showed that the effective rate on new loans dropped for the third consecutive month to just 3% in December, down from 3.2% in the summer.

“Meanwhile, rising real earnings and the reform to Stamp Duty have boosted prospective buyers’ purchasing power.”1

Help to Buy

The Government’s Help to Buy scheme was introduced in April 2013, aiding the purchase of 41,533 properties in England, says the Department for Communities and Local Government (DCLG).1

This system is designed to help people who cannot afford a high deposit, by offering them a loan towards the purchase price of a home.

In the 21 months to December 2014, a total of £1.75 billion value of loans were offered, at an average value of £42,239 each.1

Of the total purchases, 34,419 (83%) were made by first time buyers.1

Figures from the Office for National Statistics (ONS) reveal that the average rent paid in the private rental sector increased by 1.7% last year. They rose fastest in London, by 2.4%, followed by the South East at 2.1%, and Scotland by 2%.1

1 http://www.bbc.co.uk/news/business-31055557

 

First Time Buyers at Seven-Year High

Published On: January 6, 2015 at 3:45 pm

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The amount of first time buyers stepping onto the property ladder rose by more than a fifth last year, rising to a seven-year high.

The Halifax First Time Buyer Review revealed that the number of buyers joining the UK housing market for the first time increased by 22%, to 326,500 in 2014, adding to the 23% rise the previous year.1

First Time Buyers at Seven-Year High

First Time Buyers at Seven-Year High

The average price of a home bought by a first time buyer also increased, by 9% to £171,870 compared to a year ago. However, the average deposit for first time buyers dropped by 7% over the same period, to £29,218.1

House prices rose in the first half of 2014, stimulated by initiatives such as the Government’s Help to Buy scheme. The second half of the year saw fears of another housing bubble cause the Bank of England (BoE) to enforce stricter lending limits on borrowers, in an attempt to calm the market.

Mortgages Director at the Halifax, Craig McKinlay, says: “First time buyers are vital for a properly functioning housing market.

“Improving economic conditions and rising employment levels have boosted confidence among those thinking about getting on to the housing ladder for the first time, contributing to the significant increase in the number of first time buyers in the past two years.”1

The report also revealed that Chancellor Osborne’s changes to Stamp Duty last month have cut the average first time buyer’s tax bill by £781.1

The average deposit dropped to 17% of the purchase price last year, down from 20% in 2013. This is still considerably higher than the 10% in 2007, when the average deposit was £17,499.1

The study also found that the most affordable local authority in the UK is Larne in Northern Ireland, where the average property price is £80,793, which is 2.8 times the local average gross annual earnings.1

The highest local authority is Camden in London, where the average first time buyer’s house price is £614,315; 11.4 times the gross average annual earnings of the area.1

The average age of a first time buyer was 30, up from 29 in 2011. The region with the oldest average first time buyer was London, at 32.1

Housing minister Brandon Lewis says: “It is good to see that our efforts to help aspiring homeowners are reaping results. Already, our Help to Buy schemes have supported more than 71,000 homebuyers, the vast majority of whom are first time buyers and we have kept interest rates low.

“We have also got Britain building again with house building at its highest level since 2007, and planning permissions have been granted for 240,000 new homes in the year to September.”1

1 http://www.theargus.co.uk/uk_national_news/11703182.print/

Government Offers New Homes with 20% Discount

Published On: December 16, 2014 at 2:11 pm

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Some first time buyers may receive a new home at a 20% discount, as the Government aim to get more people into the property market.

The Starter Homes scheme will offer new houses to 100,000 first time buyers with a 20% discount, and will be launched by David Cameron.

Available to those under 40 years old who have never owned a house, buyers can register for the scheme via the Starter Home Initiative from the beginning of 2015. This has been moved forward six months.

Due to changes in the planning system, underused or impracticable brownfield land will be unbound from certain fees, in return for low sale prices on properties built on the site.

Councils and developers are being encouraged to make sure that these changes release a range of sites around the UK.

Mr. Cameron says: “Hard-working young people want to plan for the future and enjoy the security of being able to own their own home. I want to help them do just that.

“Under this scheme, first time buyers will be offered the chance of a 20% discount, unlocking home ownership for a generation.

“This is all part of our long-term economic plan to secure a better future for Britain, making sure we are backing those who work hard and get on in life.”1

Eric Pickles, Communities Secretary, comments: “The 2008 housing crash blocked millions of hard-working, creditworthy people from becoming homeowners, at a time in their lives when they should have been able to expect to get on the property ladder.

“We’re turning that around with Help to Buy, but today’s new Starter Homes scheme will offer a further boost, giving young people, under 40, the opportunity to buy low-cost, high quality new homes for significantly less than they would normally expect.”1

Executive Chairman of the Home Builders Federation, Steward Baseley, believes that the scheme is “another positive step” in fighting the shortage of housing.1

Government Offers New Homes with 20% Discount

Government Offers New Homes with 20% Discount

Currently, developers can experience bills of around £15,000 per home under Section 106 affordable housing contributions and tariffs.

However, the scheme would ensure that developers providing Starter Homes would not have to pay certain fees.

These savings will also be passed onto buyers, by the houses being unavailable for sale at market value for a fixed timeframe.

Over 30 builders have already supported the scheme, and are considering putting forward land to be developed next year.

A design panel will be involved to provide cheap, and high quality properties.

Panel member Sir Terry Farrell, a celebrated architect, said this could make a real difference.

He also said that the homes would be built on the recommendations of the Farrell Review, who encourage proactive planning.

Sir Terry says: “Only by planning and designing our villages, towns, and cities together with local communities can we create the kind of built environment we all aspire to and should be demanding.”1

Emma Reynolds, shadow housing minister thinks that no one will believe David Cameron’s promises. She says: “The only way to restore the dream of home ownership is to build more homes, and Labour has a plan to get at least 200,000 homes built a year by 2020.

“We are in favour of building starter homes, but it is not clear how the Government is going to deliver these homes 20% cheaper than market price.”1

1 http://news.sky.com/story/1391931/david-cameron-launches-home-discount-scheme

 

 

First Time Buyers Competing with Landlords

Published On: September 3, 2012 at 3:39 pm

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Foreign investors have begun investing in the residential lettings market within London. They have expanded from commercial property investments in the capital.

This flow of financiers has boosted Britain’s buy-to-let market. As a result, house prices are remaining steady whilst rents are being pushed up, and first time buyers are priced out.

Ray Boulger is a mortgage specialist at John Charcol and comments that landlords are swarming out first time buyers. He also states that if buyers weren’t challenging landlords, then prices could be affordable.

First Time Buyers Competing with Landlords

First Time Buyers Competing with Landlords

The revival of the buy-to-let market and a shortage in housing has led to a sharp increase in rents. The growth of lenders making more buy-to-let deals available has stemmed from this rise in rents.

Rents reached a record high this year with the average price per month at £725 in July.

Discouraged first time buyers in the private rented sector, alongside a lack of lending to those without substantial deposits, has forced a drive in rents. Competition for properties is also allowing landlords to increase their rental prices.

As a consequence of this situation, rents are rising notably quicker than overall inflation. Wage growth was at 2.6% in July while house prices fell 0.6%. These figures have attracted buy-to-let landlords into the market.

Buy-to-let is also tempting to lenders as well. Low interest rates are helping in keeping arrears and repossession rates below those in the owner-occupier market. Greater availability of buy-to-let deals is enabling landlords to out-compete first time buyers.

Arrears rates are 1.56%, below the average of 2% for the whole market. With these rates down, lenders are more confident in this sector and are meeting the need for finance from investors.

In 2011, lending grew by 40% to £14bn and rose by 20% from March to June this year based on the same period last year.

Yields were at 5.3% in July, and with rents still on the rise, buy-to-let generates greater returns than lots of standard investments. As a result, private landlords hold 12.8% of the UK housing stock, compared to 10.5% before the recession. In 1999, this figure was at just 1%.

It is expected that the owner-occupier market will fall further as the responsible lending requirements of the Financial Services Authority will force more people into rented accommodation.

The idyllic property-owning democracy is now loosening, as just 66% of houses are owner-occupied, compared with 71% in 2003.