Posts with tag: property

One-third of tenants frustrated by home buying barriers

Published On: January 31, 2016 at 9:42 am

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33% of private tenants in Britain have been thwarted in their attempts to purchase their own property and have stayed in rented accommodation longer than they had originally planned, according to new research.

Frustration

Experian’s latest analysis of 1,500 renters in the UK suggests that many are frustrated first-time buyers.

18% of private tenants said they believed they wouldn’t be accepted for a mortgage with 10% saying they faced struggles in raising a deposit, thus delaying their plans to purchase. A further 5% said they had been held up with a mortgage agreement, prolonging their time in the private rented sector.

In spite of making regular payments as part of their tenancy agreement, many renters do not see this reflected on their credit score in the same way as mortgage holders.

‘Many would-be first time buyers face the challenge of saving for a deposit on a home while paying rent each month,’ observed Jonathan Westley from Experian. ‘While our research also shows that a significant amount of people are happy to rent in the long-term, whether it’s because they enjoy a good relationship with their landlord or the flexibility of rented accommodation.’[1]

One-third of tenants frustrated by home buying barriers

One-third of tenants frustrated by home buying barriers

 

Plans

25% of tenants surveyed intend to purchase a place of their own in the near future. 9% said that they were currently saving for a deposit, believing that this will be achievable within 18 months. 16% said they would need between two and five years to gain the necessary deposit.

On the other hand, one-third of renters said that they were content in the sector and had no plans to own a home of their own.

Would-be first time buyers that have been thwarted in their attempts to get a foot on the housing ladder are most-likely to be single parents or couples with young children. Three-quarters of this group said they would like be see rental payments contribute to their credit report.

Those who are happy to rent or live alone or with other adults are less likely to see rent as ‘dead money.’ 26% of happy renters disagree when asked if renting is a waste of money, in comparison to 16% of private renters.

[1] http://www.propertyreporter.co.uk/property/17m-tenants-frustrated-by-home-buying-hurdles.html

 

 

Average property prices in England and Wales up 6%

Published On: January 29, 2016 at 2:32 pm

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The average property value in England and Wales increased year-on-year by 6.4% in December, according to the latest monthly index report from the Land Registry.

This took the typical house price to £188,270 as month-on month, values rose by 1.2%.

Rise and fall

London recorded the largest increase in average house prices, with an annual growth of 12.4, coupled with a monthly rise of 2.1%, taking the typical price in the capital to £514,097.

The North East saw the lowest annual price growth, with a rise of just 0.8%. This took the average price in the region to £99,069. Wales was the region with the largest month-on-month fall, with a decrease of 0.8%, taking the average price of a property in the country to £121,780.

However, the number of completed house sales in England and Wales dropped by 8% to 79,960. In addition, the number of £1m plus properties sold fell by 2%.

Repossessions also fell by 51%, with London recording a 71% decline.

Average property prices in England and Wales up 6%

Average property prices in England and Wales up 6%

Activity

Mark Posniak, managing director of Dragonfly Property Finance, pointed out that with high demand and weak supply continuing in December, the usual seasonal slowdown was more muted.

‘On a more positive note, we are seeing noticeably more construction activity at the moment, particularly by smaller developers. But this will take time to trickle through into the market,’ he noted. ‘Looking into 2016, it’s hard to see anything other than a continuation of the current trend of steadily rising prices, especially with interest rates unlikely to rise in the near future and a robust jobs market.’[1]

John Eastgate, sales and marketing director of OneSavings Bank feels, sustained demand is driving the growth in values. He said, ‘a strengthening labour market, robust consumer sentiment and a supportive mortgage market all played their part, despite the obstacles provided by the festive period. This strength of demand has been compounded by the record low levels of property on the market at present.’[1]

Caution

‘Uncertainty around economic growth in 2016 provides a reason for caution. The good news however, is that house building starts appear to be at their highest level since 2007,’ he continued. ‘It is not yet strong enough to counterbalance demand. However, if this trend of improvement is maintained, it should lead to a healthier property market for investors and buyers alike.’[1]

Jonathan Hooper, managing director of buying agents Garrington Property, also believes a lack of supply is the issue. He pointed out that, ‘even though the NHBC this week announced that house building in 2015 hit its highest level since 2007, the supply of homes is still falling far short of demand.’[1]

[1] http://www.propertywire.com/news/europe/england-wales-property-prices-2016012911497.html

 

 

Property market confidence is still high

Published On: January 29, 2016 at 11:55 am

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A new report is sure to please those in the property market, as it indicates that confidence in the sector is continuing to rise.

Research conducted by Clydesdale and Yorkshire Banks suggests that around half of British homeowners feel their property will increase in value during the next year.

Confidence

The report seems to suggest that the market is certainly levelling out, showing that confidence has more than doubled since 2013. In addition, the findings show that just 2% of the population are worried that their home will decrease in value. 48% said that they expected no change.

The table below indicates have confidence has changed in the past few years:

Jan 2016 Jan 2015 Jan 2014 Jan 2013
Increase 50% 54% 48% 25%
Stay the Same 48% 44% 49% 66%
Decrease 2% 2% 3% 9%

[1]

Property market confidence is still high

Property market confidence is still high

‘There have been great changes within our property market and our latest research shows a sustained level of confidence in property values over the past three years,’ notes Steve Fletcher, Director of Retail Banking at Clydesdale and Yorkshire Banks.’[1]

Capital Gains

London is still the region with the most confidence in property prices, with 73% predicting higher prices in the coming year. No-one in the capital is predicting a decrease in property values.

In contrast to this, the North West saw 33% of respondents indicate that their property will rise in value in the next twelve months. 65% said there will be no change, while just 2% said there will be a fall.

By region, the predictions for property growth in 2016 were found to be:

Region Increase Stay the Same Decrease
London 73% 27% 0%
South East 64% 34% 2%
East 60% 38% 2%
South West 52% 44% 4%
UK average 50% 48% 2%
Midlands 43% 56% 1%
Yorkshire 43% 54% 3%
Scotland 43% 51% 6%
North East 42% 49% 9%
Wales 36% 64% 0%
North West 33% 65% 2%

[1]

Mr Fletcher added, ‘there are a number of different factors which have played their part in the ongoing recovery of the property market. The bank of England base rate has remained low and there has been steady growth in property prices and this has been reflected with sustained confidence of UK ho

[1] http://www.propertyreporter.co.uk/property/confidence-in-the-property-market-is-booming.html

 

 

Average House Purchase Deposits Pass £80,000

Published On: January 28, 2016 at 9:00 am

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The latest report from the Mortgage Advice Bureau indicates that the average house purchase deposit increased to over £80,000 during December. This is the highest figure recorded by MAB’s Mortgage Index since it started in January 2009.

Rises

A typical purchase deposit rose by 15% yearly to reach £81,721 in December. Similarly, the average purchase price for a property in December increased to £252,990 from £231,487 a year previously. This represented an increase of 9.3% annually.

Borrower traits also played a key role in rising deposits. The average buyers LTV dipped to 68.2% in December, an annual decline of 1.1% and the lowest level seen since 2010.

‘An inevitable repercussion of rising house prices is that higher deposits are required,’ observed Brian Murphy, head of lending at Mortgage Advice Bureau. ‘Those who cannot afford to put up more may find their choice of properties limited. However, those who were able to make a house purchase in December opted to pay a larger amount upfront by taking out a loan with a lower LTV. There are significant benefits to borrowing a smaller proportion of the purchase price, as rates and monthly repayments will be lower.’[1]

‘Demand in the housing market is yet to come off the boil, despite the current dearth in property supply. As a result house prices are likely to continue rising this year, bringing about affordability concerns which will particularly affect first-time buyers.  A significant boost to the construction of new homes is needed to prevent some buyers being priced out of the property market,’ he added.[1]

Average House Price Passes £80,000 barrier

Average House Price Passes £80,000 barrier

Worsening affordability

With deposit sizes rising, December was the third consecutive month of lesser affordability based on a typical purchase buyer’s income as a percentage of property prices.

This proportion stood at 15.3% in December, after a 2% yearly decline from the 17.3% seen in December 2014, with house prices overtaking salary increases.

In addition, the Mortgage Advice Bureau recorded a 2.9% slip in the average salary of homebuyers, from £39,983 in December 2014 to £38,820 in the last month. On the flip side, house values rocketed by 9.3% from £231,487 to £252,990 over the same period.

Access

Mr Murphy added that, ‘the fall in average salaries over the past year suggests those with slightly lower incomes are still able to access the housing market, despite the significant rise in house prices. This has been helped by rock bottom mortgage rates, which have fallen steadily over the past year. However, these low rates won’t last forever and if prices continue to rise faster than wages those with lower incomes may find it more of a challenge to become homeowners.’[1]

‘Government initiatives such as more affordable housing and the Help to Buy schemes go some way in helping those who are finding it difficult to fund a house purchase. However, income and house price growth needs to be more aligned to make homeownership a more realistic dream,’ Murphy concluded.[1]

[1] http://www.propertyreporter.co.uk/hero/average-house-deposit-passes-%C3%A3%C3%A2%C2%A280k.html

 

Fall in construction ‘will raise property prices’

Published On: January 27, 2016 at 11:33 am

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A fall in construction activity will serve to increase house prices still further, according to Nationwide.

The building society noted that prices continue to increase during January, but that any rises will be modest.

Gradual

Prices are up 0.3% during this month, in comparison to a sharper increase of 0.8% recorded in December. Annual growth is more stable, standing at 4.4%, in comparison to 4.5% in the previous month.

In fact, the average property value is currently £196,829, slightly down on that recorded in December.

However, Nationwide warns that the demand for property is likely to increase over the coming months. The firm believes that a strong labour market, in conjunction with wages rising at a steady pace and interest rates remaining static, will drive the upturn.

Fall in construction 'will raise property prices'

Fall in construction ‘will raise property prices’

Concerns

‘As we look ahead, the risks are skewed towards a modest acceleration in house price growth, at least at the national level,’ said Robert Gardner, chief economist at Nationwide. ‘The labour market appears to have significant forward momentum. Employment has continued to rise at a robust rate in recent months and, while the pace of earnings growth has slowed somewhat, in inflation-adjusted terms regular wages continue to rise at a healthy pace.’[1]

‘The concern remains that construction activity will lag behind strengthening demand, putting upward pressure on house prices and eventually reducing affordability,’ he continued. ‘Indeed, the market is already characterised by a shortage of stock, with the Royal Institute of Chartered Surveyors reporting that the number of properties on estate agents’ books remains close to all-time lows.’[1]

Adrian Whittaker, Sales Director at New Street Mortgages, also noted, ‘these figures show an unseasonal increase in house prices resulting from a market that is characterised by rising demand and limited supply. The mortgage industry has been slow to keep up with a new technology and if we are to satisfy the demand for faster mortgage applications and adapt to the rising competitiveness of the market, it is crucial that as an industry, we look to keep systems and processes up to date.’[1]

[1] http://www.propertyreporter.co.uk/property/nationwide-predicts-modest-acceleration-in-house-price-growth.html

 

House prices up 7.7% in November-ONS

Published On: January 19, 2016 at 12:13 pm

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Figures released today from the Office for National Statistics (ONS) reveal that average property prices in the UK rose by 7.7% in the year to November 2015. This figure was up from the 7.0% recorded in the year to October.

Rises

Property price annual inflation was found to be 8.3% in England, 1.3% in Wales, 0.4% in Scotland and 4.6% in Northern Ireland. Annual house price increases in England were propelled by a yearly increase of 10.2% in the East, 9.8% in the South East and 9.8% in London.

With the exception of the capital and the South East, UK property prices rose by 5.8% in the twelve months to November of last year.

In November 2015, property prices paid by first-time buyers were 7.4% greater on average than those recorded one year previously. For existing owner-occupiers, values increased by 7.8% over the same period.

‘House prices in November saw the biggest annual increase in eight months, despite traditionally being a quieter time in the housing market,’ observed Brian Murphy, head of lending at the Mortgage Advice Bureau. ‘Those lucky enough to already be on the property ladder are the clear winners of this boom, as homeowners trading up to the next rung take advantage of improving property values. Increased equity means even those not looking to sell can benefit by switching to a more affordable mortgage deal.’[1]

House prices up 7.7% in November-ONS

House prices up 7.7% in November-ONS

Rush

Murphy feels that, ‘the heat is set to rise in the buy-to-let and second home market in the short-term, as buyers rush to complete before the changes to Stamp Duty kick in in April.’ Continuing, he said, ‘in the long-term, the dearth of properties available combined with rampant demand means house price growth isn’t likely to slow any time soon. This creates clear affordability concerns for first-time buyers.’[1]

‘Government schemes to increase affordable housing will put a bandage over the wound: but without a significant and sustained increase in the construction of new homes, the current housing crisis isn’t likely to be cured any time soon,’ he concluded.[1]

Adrian Whittaker, Sales Director at New Street Mortgages, noted, ‘these figures from the ONS are typical of the strong growth that the housing market experienced last year, as house prices rose well above the level of inflation. A supply deficit and rising demand as more people looked to purchase property is squeezing the market and this puts vendors in a position where the can select the most appropriate buyer.’[1]

‘Increasing gulf ‘

Stephen Smith, Director of Legal and General Housing Partnerships, also said, ‘house prices are continuing to rise well above inflation which is pricing many prospective buyers out of the market. Prices have also risen significantly on an annual basis, exposing the increasing gulf between supply and demand.’[1]

‘Suitably sized housing needs to become more readily available at both ends of the market, to enable first time buyers to take their first steps onto the housing ladder and help last time buyers to ‘rightsize’, making life better for all. The Government needs to build  around 250,000 extra houses this year to give potential buyers any hope of finding their dream home. There are currently a number of constraints which elongate the house building process and the country should consider exploring alternative avenues to help speed up construction, such as modular housing,’ he added.[1]

[1] http://www.propertyreporter.co.uk/property/november-house-prices-gained-77.html