Posts with tag: house prices

First Time Buyers Will Need to Earn £64,000 to Afford a Home by 2020

Published On: April 14, 2016 at 11:21 am

Tags: first time buyers,Generation Rent,house prices,Housing and Planning Bill,housing crisis

Prospective first time buyers will need to earn £64,000 a year to be able to afford a home by 2020, according to housing charity Shelter.

The organisation believes that generation rent will be stuck in a life of expensive renting, as the average house price grows far beyond the average salary.

The £64,000 annual salary needed to buy a house is an increase of almost a fifth on the £52,000 needed for a typical first time buyer mortgage in 2015, the research found.

On top of the £64,000 salary to cover monthly mortgage payments, a first time buyer will also need a deposit of £46,000 to purchase a home, with the average house price expected to rise to £270,000 over the next four years.

First Time Buyers Will Need to Earn £64,000 to Afford a Home by 2020

These figures are based on forecasts by Paul Cheshire, a professor of economic geography at the London School of Economics. He believes that UK house prices will increase by 23% by 2020.

The Chief Executive of Shelter, Campbell Robb, says the research comes as no surprise, given that over the past five years, the country’s housing crisis has seen house prices rise six times faster than the average salary.

“It’s no wonder people on ordinary incomes are being locked out of a home of their own,” he states. “With the situation only set to get worse, generation rent will be forced to resign themselves to a life of unstable private renting, and wave goodbye to their dreams of a home to put down roots in.”¹

In March, thousands of people marched through London to protest against the Government’s proposed Housing and Planning Bill.

The Government insists that the plans will turn generation rent into generation buy, but campaigners believe that it will make it more difficult for people to access genuinely affordable housing.

Lobby group Generation Rent believes that the legislation will only help landlords.

A spokesperson for the Department for Communities and Local Government says: “The housing bill makes sure we make the best use of social housing based on need and income, while reinvesting in building new homes.

“Furthermore, we have set out the biggest, boldest and most ambitious plan for housing in a generation, including £8 billion to deliver over 400,000 affordable homes.”¹

Separate research highlights the struggle that first time buyers in London are set to face.

The average London house price is currently ten times the average salary. By 2025, just 26% of people aged 20-39 expect to own their own home in London – the opposite of what was seen in 2000, when 60% of people owned their own homes.

What do you think needs to be done to resolve the housing crisis and help young people get onto the property ladder?

¹http://www.independent.co.uk/news/business/news/housing-crisis-first-time-buyers-will-need-64000-salary-to-afford-an-average-home-by-2020-shelter-a6982386.html

House Prices Lower than Previously Thought After ONS Revises Figures

Published On: April 13, 2016 at 10:09 am

Author: Em Morley

Categories: Property News

Tags: average house price,house prices,London,property market

Homeowners may be surprised to learn that their properties aren’t worth as much as they previously thought, after the Office for National Statistics (ONS) revises its January house prices.

Londoners will be especially surprised to find out that their property price has fallen by an average of £27,000 – much different to the previous figures released by the ONS.

It appears that the ONS massively overestimated the rate of house price growth, however, the Government department denies this suggestion and reports that it has merely updated its index.

House Prices Lower than Previously Thought After ONS Revises Figures

The original data, released last month, led homeowners to believe that property prices in London were rising by around £500 per day. However, it now seems that that was not the case.

The ONS claimed that the average price of a UK property soared by almost £4,000 in January to hit £291,500. However, the latest data shows that the average house price actually dropped by £1,700 at the start of the year.

A further decline of just over £2,000 in February puts the average house price at £283,700. This is the lowest figure recorded since July 2015.

Property owners in London will be surprised to know that the value of their homes has plunged.

In March, the ONS reported that the average London house price hit a record high of £551,000 in January. This was up £15,000 on December’s figure of £536,000, suggesting that the capital was powering ahead.

However, the latest figures dispel this data. The ONS now claims that the average London property in February was worth £524,000, down £12,000 on December and £27,000 lower than the figure reported for January.

In its new report, the ONS does not address the revisions directly, although it does say that London is one of the regions that has fallen back “from the record levels witnessed in previous months”.

When asked to explain the data, a spokesperson for the ONS explains that every January, the index weights are updated to ensure the index keeps up to date with changes in the types of properties being purchased, therefore reflecting the price of the average home.

They add: “In updating the weights for 2016, there have been small decreases in weight for London and the South East, with increases seen in other areas. This shift in weight towards areas with lower average prices has brought down the UK average.

“Similarly, there has been a shift in weight from existing owners and existing properties to first time buyers and new builds, which has also contributed to reducing the UK average.”

Regarding London, the spokesperson says that a decrease in the average price between January and February is not unusual: “Between 2008 and 2015, there have been seven falls in average price between January and February and one increase… So it seems this is a seasonal observation. This isn’t an effect isolated to London: seasonal falls between January and February can also be seen in the South East.”¹

We will continue to keep you updated with changes in the property market at LandlordNews.co.uk.

¹http://www.theguardian.com/money/2016/apr/12/london-property-values-plummet-after-office-national-statistics-revises-figures

Where is the Best Place to Live in the UK and Why?

Published On: March 23, 2016 at 2:46 pm

Author: Em Morley

Categories: Property News

Tags: best place to live,house prices,Winchester

A recent study by the Sunday Times has named Winchester as the best place to live in the UK.

The Hampshire city was praised for its “food, festivals and feel-good factor” and was described as “a tasty slide of authentic history”¹.

For the last three years, Visit Winchester has been promoting the area as the perfect English city, thanks to its good schools, low crime rate and a range of tourist attractions.

The city’s population of 45,000 people may also find Winchester a desirable place to live as it is only an hour from London by train and has an unemployment rate of just 0.6%.

However, if you’re on a budget, moving to Winchester may not be the best idea, as some people are completely priced out of renting or buying there.

Where is the Best Place to Live in the UK and Why?

Zoopla reports that the average house price in the city is £520,314, while the rent on a typical one-bedroom home is £821 per month.

Over the past year, house prices in Winchester have increased by 10% and by a huge 30% in the last five years. Zoopla names Sleepers Hill as the city’s most expensive street, where the average home costs a whopping £1,530,938.

Sue McKenna, the General Manager of homelessness charity Trinity Winchester, says that rising house prices have caused problems for anyone on a low income looking to rent or buy in the city.

She believes that the city being named the best in Britain will not help her clients: “The people we work with are completely priced out of the market, even renting a private house is out of reach.

“For our clients, this is not going to help, it is going to make it much more difficult for them.”¹

She insists that Winchester needs more social housing, as house prices and rents continue to soar.

The city dates back to 150BC and was chosen as England’s capital by King Alfred the Great. It is also suggested that it could have been the real site of King Arthur’s legendary Camelot.

Winchester is also home to the UK’s largest farmers’ market, one of Europe’s biggest cathedrals, the restored Edwardian Theatre Royal Winchester, and a stream of upmarket shops and restaurants.

The Mayor of Winchester, Angela Clear, says the city’s history and lively modern atmosphere make it special.

“It has so much tradition and that is what people love,” she claims. “We have the lovely cathedral and fantastic restaurants.”

She adds: “All the year round, there is something going on for people to take an interest in, with markets and festivals and all sorts of lovely things. And of course the people are so nice and friendly.”¹

However, the city hasn’t always been regarded quite so highly – it made a surprise appearance in the first Crap Towns book in 2003, placing fifth behind Hythe and ahead of Liverpool.

¹http://www.bbc.co.uk/news/uk-england-35861938

Annual House Price Growth at 7.9%, According to ONS

Published On: March 23, 2016 at 12:30 pm

Author: Em Morley

Categories: Property News

Tags: average house price,house price growth,house prices,London

UK house price growth rose to 7.9% in the year to January, up from 6.7% in the 12 months to December 2015, according to the latest house price index from the Office for National Statistics (ONS).

Annual house price inflation was 8.6% in England in January, -0.3% in Wales, 0.1% in Scotland and 0.8% in Northern Ireland.

The large increase in house prices in England was fuelled by an 11.7% rise in the South East and 10.8% growth in London, shows the data.

Excluding London and the South East, UK house prices rose by 5.1%.

On a seasonally adjusted basis, average house prices grew by 0.9% between December and January.

The average UK house price is now £292,000, according to the ONS. Earlier this week, Rightmove reported that the average property is now worth over £300,000.

Many industry experts have commented on the new figures:

Stephen Smith, the Director of Legal & General Housing Partnerships, says: “House prices continue their steady upwards march, as they are likely to do for some time, unless Britain can address the lack of housing supply in this country.

“With the cost of owning a home continuing to rise well above both earnings and inflation, the gap between supply and demand is pumping up prices and making affordability an impossible dream for many – especially in London and the South East.”¹

More and more young people believe that they will never get on the property ladder, as it is believed that it takes the average single first time buyer 13-and-a-half years to save a deposit.

Annual House Price Growth at 7.9%, According to ONS

Worryingly, three quarters of young Britons expect to stay in the private rental sector forever.

The Sales Director at New Street Mortgages, Adrian Whittaker, continues: “The ONS figures show a market that’s continuing the strong annual growth that characterised much of 2015. Competition for property is still fierce, and in this sellers’ market, the speed at which a buyer can secure a mortgage can be the difference between first and last place in the race to buy property.”¹

Mark Posniak, the Managing Director of Dragonfly Property Finance, adds: “This latest annual house price data once again throws into sharp relief the contrast between the housing markets of England, Wales, Scotland and Northern Ireland. They may be geographical neighbours but they could be thousands of miles apart in terms of house prices.

“For annual prices in the South East to have outperformed London underlines an ongoing shift in demand away from the capital as people look for more value elsewhere. London will remain a formidable bastion of the UK’s property market, but for many its prices are an insurmountable obstacle.

“However, the strength of demand in the months ahead may well be reduced by worries about the impact of a potential Brexit, causing many would-be buyers to sit on their hands.

“The Government’s move against landlords, which officially starts next month, is a fundamental shift and has the potential to reshape the property market in the years ahead.”¹

From 1^st April, landlords will face changes to their taxes, notably the 3% Stamp Duty surcharge, which was confirmed in last week’s Budget.

Finance expert Paul Mahoney of Nova Financial has explained how the Budget announcements will affect landlords: /budget-reasonably-positive-believes-finance-expert/

Jan Crosby, the Head of Housing at KPMG, explains the ONS data: “Today’s ONS figures show a record high, with England outpacing the other areas of the UK for house price growth. When you look further into the facts, the rise is driven by ever by the South East of England, London and the East of England, with the percentage increase in the capital over the past 12 months more than double the rest of England when London and the South East’s rises are excluded.

“Of course, this comes as no surprise, and highlights both the broken and atypical nature of the market in those areas. As ever, the issue is down to supply versus demand, and while last week’s Budget did have measures, such as the Lifetime ISA, which are in part designed to help buyers onto the property ladder, the record didn’t change when it came to generating supply, with announcements effectively repeating or slightly extending previous reforms.”

He adds: “However, one particular Budget announcement could have an underlying effect on house prices; it will be interesting in a year’s time to see how much prices in the north have inflated, specifically around areas like Manchester and Liverpool, which are set to benefit following the Chancellor’s renewed commitment to infrastructure projects, including HS3, the trans-Pennine tunnel and improvements to the M62.

“It is certainly likely that property investment, especially from abroad, will increase in the north, and this will include housing projects – while this might be good for the economy, it could be bad news for those hoping to buy a home.”¹

We continue to provide you with the latest landlord updates on all issues regarding the sector.

¹ http://www.financialreporter.co.uk/finance-news/ons-annual-house-price-growth-rises-to-79.html

Three Quarters of Young Brits Believe They’ll Live in the Private Rental Sector Forever

Published On: March 22, 2016 at 3:28 pm

Author: Em Morley

Categories: Landlord News

Tags: Generation Rent,house prices,housing crisis,private rental sector

Around three quarters of young Britons believe that they will live in the private rental sector for the rest of their lives, as it is unlikely they will ever own their own home.

A study by Ipsos MORI, commissioned by Shelter and British Gas, revealed that it is much more difficult for young people today to buy a home than it was for their parents’ generation.

Three Quarters of Young Brits Believe They’ll Live in the Private Rental Sector Forever

Yesterday, we revealed that it takes a single person 13-and-a-half years to save a 15% deposit for a home, while Londoners face a whopping 46 years of saving.

Of 1,906 people aged between 25-34, a large majority wish to live in a home for the long-term, but realise that this is unlikely as they are renting. The average 25 to 34-year-old has moved more than twice as frequently per year as pensioners.

The Chief Executive of Shelter, Campbell Robb, comments on the findings: “The fact that vast numbers of people fear their grandchildren will never have a home to put down roots in highlights the sad truth that this country is once again at the mercy of a housing crisis.

“While we have made progress over the last 50 years, our current housing shortage means millions are facing a lifetime of instability and, understandably, people are giving up hope. But if our history tells us anything, it’s that together we can make things change.”

He adds: “You have graduates starting on £40,000 to £45,000 in London, and they don’t take the jobs because they can’t afford to live in London or can’t afford to buy because it is so expensive.

“We are seeing a generation of people now in their 50s or 60s who are looking at their children, and their children will be worse off than they are. That is the first generation since the Second World War that we seeing that happen to, and that is primarily because of the housing market.”¹

These statistics arrive as the cost of housing goes up even more; Rightmove recently reported that the average house price is now over £300,000, with house price inflation standing at 50% for the past ten years, while wages have only risen by 22%.

¹http://www.theguardian.com/society/2016/mar/21/majority-fears-future-generations-never-buy-home-uk-house-price

Average House Price Breaks Through £300,000 Mark

Published On: March 21, 2016 at 11:16 am

Author: Em Morley

Categories: Property News

Tags: average house price,house price growth,house prices,Rightmove

The average asking price of a property new to the market in England and Wales has broken through the £300,000 mark for the first time, according to new data.

The average house price is now £303,190, says Rightmove.

The news arrives exactly ten years since new asking prices passed the £200,000 barrier. This means that house prices have soared by 50% in a decade.

Average House Price Breaks Through £300,000 Mark

Despite the housing market crash occurring during this period, new asking prices did not go back down below the £200,980 reported in 2006 when prices fell.

Figures also show that average wage growth has been significantly lower than house price inflation over the last ten years, rising by just 22%.

Rightmove has found that new asking prices increased by 1.3% on February’s figure – the second highest monthly rise seen at this time of year.

The director of Rightmove, Miles Shipside, comments: “On average, 30,000 properties have come to market each week over the past month, up by 3% on this time last year. But there are insufficient numbers of newly listed properties in many parts of the country to meet demand.

“Visits to Rightmove are up by 14% in early March compared to the same period in 2015, so it’s no surprise that those buyers who can borrow more or can find some extra cash are keeping the price merry-go-round spinning, even though increasing numbers of aspiring home movers cannot afford the ride.”¹

Surprisingly, the rise in new asking prices is not being driven by London, where the market is stagnant.

Six out of ten regions have experienced house price growth, while three of the top four are northern regions – the West Midlands, North West and Yorkshire and the Humber came after the South West, and ahead of all other southern regions.

Although new asking prices in the capital have remained steady month-on-month, homes in London are still worth more than double the average, at a huge £644,045 – an annual increase of 11%. This is the greatest rate of annual house price growth of anywhere in England and Wales.

Rightmove’s research also shows that the average time to sell a property last month was 68 days, down from 79 in the same month last year. In London, the typical time a house is on the market is 47 days, lower than at any point last year.

Average stock per agent – including properties under offer or sold subject to contract – was 54 in February, down from 59 last year.

Last month, Rightmove reported that the average house price was almost at £300,000, and expected the barrier to be broken soon. It will be interesting to see how prices move on from the current record high.

¹http://www.rightmove.co.uk/news/300000-milestone-hits-new-high