Written By Em

Em

Em Morley

Many househunters unaware of mortgage changes

Published On: September 22, 2015 at 4:51 pm

Author:

Categories: Landlord News

Tags: ,,

Alarming new research has found that two thirds of potential house buyers in Britain are unaware of new mortgage rules, which were introduced last year.

An investigation by mortgage lender and broker Ocean Finance indicates that some 31% of people who are looking to buy a property in the next two years are unaware of the changes. Another 35% said that they were aware of the changes, but said that they felt confused by the new regulations.[1]

Changes

In April 2014, the largest piece of mortgage regulation in a decade came into force. The changes, brought into force by the Financial Conduct Authority, means that lenders have to take further steps to make sure borrowers can only get a mortgage that they can realistically afford.

These new rules mean that borrowers will face greater scrutiny from lenders on features such as their incomes and their expenditure. This includes spending on things like childcare, holidays and entertainment.

However, 70% of people questioned said they did not know that lenders are permitted to look more closely at their spending. As a result, 25% said they have not made changes to their habits in order to qualify for a mortgage.[1]

Of those that are aware of the changes, over a fifth have cut their spending on treats, alongside stopping contributing to life insurance and pensions to keep a larger proportion of their income in their bank accounts.

Only 24% of aspiring home buyers questioned were aware that the new legislations test their ability to afford a mortgage should interest rates rise. Just 16% knew that the rules would also test their resolve should there be a change to their personal circumstances.[1]

Clarification

In order to ensure they were up to speed on the new regulations, over one-fifth of would-be buyers have sought advice from an independent mortgage broker. 30% looked online for their information on the rules, with 14% relying on friends and family for advice. Cause for concern came with the news that over one-third of potential buyers have not sought any advice on applying for a mortgage.[1]

Many househunters unaware of mortgage changes

Many househunters unaware of mortgage changes

Further data from the research shows that another third of buyers are that concerned about the more hardline mortgage rules that they expect to have to delay purchasing a property in order to save for a larger deposit.

‘More than a year after the new mortgage rules were introduced, potential buyers are still in a state of confusion about what they mean in reality,’ said Gareth Shilton, spokesperson for Ocean Finance. ‘Even more worrying is that a large chunk of people who are gearing up to apply for a home loan are not even aware that the mortgage rules have changed,’ he continued.[1]

He feels that, ‘as an industry, we need to do more to educate buyers and to guide them through a process which many people are finding understandably daunting. For anyone who plans to apply for a mortgage in the next, it’s key that their finances are in order, including checking their credit file and gathering all their paperwork early to show as evidence.’[1]

‘They would also be wise to cut-back on non-essential spending such as takeaways and subscriptions, and to ensure that bills are paid on time so they demonstrate that they can consistently live within their means and stick to a budget,’ he concluded.[1]

[1] http://www.propertywire.com/news/europe/uk-mortgage-change-research-2015092211009.html

 

 

The Best Places in England to Raise a Family

Published On: September 22, 2015 at 4:20 pm

Author:

Categories: Landlord News

Tags: ,,,,

With house prices and family necessities rising, it is more important than ever for parents to pick the right place to raise their children. OneFamily has compiled a list of the top 20 areas in England and Wales for families to live.

The Family Hotspots Report takes into account 71 sets of data, under the categories of education, property, safety, childcare, amenities and population.

If you’re looking to buy/rent a home, or purchase an investment property to let to families, here are the postcodes you should consider:

  1. Burscough, Lancashire – L40

This is the first year Burscough has been included in the top 20. The large village in west Lancashire houses around 18,000 people. The average two-bedroom home here costs below average, at £159,311 and the average salary is high, at £22,662. There is also a low crime rate in the town.

  1. Driffield, Yorkshire – YO25

The rural market town of Driffield is home to 33,000 people. It is known as the birthplace of Mick Woodmansey, the drummer from David Bowie’s The Spider from Mars. House prices are around £128,354.

  1. Shotley Gate, Suffolk – IP9

A coastal village with a population of 11,000, Shotley Gate has a strong Viking heritage and is a popular destination for tourists and walkers. The average two-bed house here costs £191,178.

  1. Bury, Lancashire – BL8 Bury, LancashireBury, Lancashire


On the outskirts of Manchester, this market town has an average property price of £115,044. Bury was the home of Sir Robert Peel, a Victorian prime minister and founder of the Metropolitan Police.

  1. Colyton, Devon – EX24

Less than 4,000 people live in this coastal town, which is famous for being the most rebellious town in Devon, due to the amount of locals that took part in the Monmouth Rebellion in 1685, an attempt to overthrow King James II. House prices are above average, at £216,962.

  1. Fleet, Hampshire – GU51

Fleet railway station is on the Southampton to Waterloo route and with high average salaries of £30,020, this Hampshire town is an affordable option for those looking to commute the 36 miles to London. Homes are slightly more expensive, at an average of £262,553, but the town has a beer festival, food festival and half marathon.

  1. Crediton, Devon – EX17 

Families are attracted to this town of 19,000 inhabitants due to its low crime rates and above average school results. A two-bed home costs just £170,678 and charming countryside and the fishing area around Creedy Lakes surround the town.

  1. Clitheroe, Lancashire – BB7 

This market town, of 14,000 people, has annual spring, food and jazz festivals as well as a local castle and a famous sausage shop, selling over 70 varieties. Homes cost around £140,000 and the town has three secondary schools.

  1. Cullompton, Devon – EX15 

    Cullompton, DevonCullompton, Devon


A short commute to Exeter and Bristol, Cullompton was mentioned in King Alfred’s will and hosts the oldest farmers’ market in the South West. Children will love the local Diggerland and the average two-bed house costs £160,271.

  1. Carterton, Oxfordshire – OX18

Above average wages of £23,447 make up for the higher average house price in this town of £234,146. The west Oxfordshire town has a population of 25,000 and is just 14 miles from Oxford.

  1. Cheadle, Staffordshire – ST10 Cheadle, StaffordshireCheadle, Staffordshire


This commuter town is halfway between Manchester and Birmingham, attracting 25,000 people to the area. A two-bed property costs just £125,695.

  1. Middlewich, Cheshire – CW10

Located on the Shropshire Union Canal, this town has a population of 14,000 and is 19 miles from Chester.

  1. St Bees, Cumbria – CA27

St Bees was the top of last year’s list due to its high average salary of £26,140 and affordable property price of £141,204. Just 1,800 people live in this village, but the local school educated actor Rowan Atkinson. The village also has an annual fete, flower show and tractor procession.

  1. Shebbear, Devon – EX21

Growing house prices knocked this rural village of 5,000 people out of the top 20 in the last few years, but Shebbear and its outstanding early years childcare facilities, and the lowest crime rate in the top 20, is back on the list.

  1. Longridge, Lancashire – PR8 

Longridge was originally a quarry town and is now home to 38,000 people. The Ribble Valley location draws locals in with its nine pubs, a choice of schools, a public library and a monthly farmers’ market.

  1. Lower Earley, Berkshire – RG6 

    Lower Earley, BerkshireLower Earley, Berkshire


House prices in this town are higher than the average, at £253,683 for a two-bed. This is caused by its close proximity to Reading and Windsor. Lower Earley is down from last year’s ranking.

  1. Oakham, Rutland – LE15

Oakham is set around the 14th century All Saints Church. Its school was the training ground of England cricketer Stuart Broad. A two-bed house here costs £166,947.

  1. Faringdon, Oxfordshire – SN7 

Faringdon is the alleged death-place of Alfred the Great. It was also the South East’s first Fairtrade town and hosts an annual arts festival every summer. The average house in the market town costs £202,845.

  1. Winscombe, Somerset – BS25 Winscombe, SomersetWinscombe, Somerset


Winscombe residents have the Mendip Hills on their doorstep – the setting for several Thomas Hardy novels. It is appealing to families, due to its village square, local businesses, good childcare and schools, and low crime rates.

  1. Wokingham, Berkshire – RG41

Wokingham is the best place in England and Wales to raise a family. Around 28,000 people live in the historic market town, which is just 33 miles west of central London. It is the location of the Vicar of Dibley and the birthplace of Will Young. It has a high average salary of £27,362 and very low crime rates.

London Second Steppers in Strong Position, Claims Lloyds

Published On: September 22, 2015 at 3:24 pm

Author:

Categories: Landlord News

Tags: ,,,,

Many Londoners living in their starter homes are no longer trapped in negative equity, reveals a new report by Lloyds Bank.

London Second Steppers in Strong Position, Claims Lloyds

London Second Steppers in Strong Position, Claims Lloyds

These homeowners looking to buy their next house – known as second steppers – are in their strongest position for five years, according to the study. Rising property prices and an increase in first time buyers is making it easier to sell starter homes and move on.

The current price of the average starter home in the capital is 51% higher than in 2009, meaning that second steppers who bought when prices were still dropping could now make a profit of £190,000.

However, the report does state that first time vendors must find an extra £330,230 if they are hoping to move onto the next traditional property, a detached, family house.

Mortgages Director at Lloyds Bank, Andy Hulme, says: “Over the past few years, second steppers have faced some tough challenges and many have been stuck in their first homes.

“We are now finally seeing a much-needed boost to this vital part of the housing market, enabling more second steppers to make the next move on the housing ladder.”

Raising a deposit is still one of the biggest difficulties to moving house, according to 45% of second steppers surveyed. A similar amount are concerned about their mortgage approval eligibility. However, a third are eager to move home soon, to take advantage of London’s steady property market.

Hulme continues: “While challenges remain as second steppers try to bridge the gap to the next rung on the ladder, a steady rise in property values this year should further ease the constraint on many, and this will have a positive knock-on effect for the whole of the housing market.”1 

Housing market activity will come to a standstill if second steppers remain in their starter homes, preventing aspiring first timers from buying a property.

Despite prices continuing to rise, last year experienced the highest number of first time buyers in seven years.

Even those that bought as recently as last year have seen the amount of equity in their homes grow by up to £77,000, caused by a rise in the prices paid for starter homes.

1 http://www.homesandproperty.co.uk/property-news/news/climbing-property-ladder-second-steppers-are-great-shape-upsize-bigger-homes-says-new-report

Planning and land needed to satisfy demand

Published On: September 22, 2015 at 2:58 pm

Author:

Categories: Landlord News

Tags: ,,

House builders in Britain have called for policy makers to increase resources for local authority planning departments alongside giving further training for the construction sector and quickening the delivery of public sector land, in order to increase supply of new homes.

The House Builder Survey from international real estate firm Knight Frank is built around the views of builders and developers across the country. The most recent report indicates that two-thirds believe the maximum number of new homes that can be built is year is 180,000. Worryingly, just 9% believe that the Government’s target of 200,000 is achievable.

Demands

Activity in the house building sector has increased over the previous twelve months, but the supply of new homes is still falling well short of satisfying demand.

60% of respondents to the survey believe that house completions will rise in the coming year, with 18% saying this could be anywhere between a 10-25% increase.[1]

A large majority of 90% said that construction costs will rise in next year, with another two-thirds expecting development land prices to also increase.

What’s more, the report found that labour and building costs are thought to pose the largest risk to the sector during the next twelve months. Respondents to the survey believe that the greatest policy change would be to recruit more people to Local Authority planning departments.

Imbalance

‘The imbalance between the demand for new homes and the number of units being built is well-recognised, by the industry and political parties alike,’ commented Grainne Gilmore, head of UK residential research at Knight Frank. ‘In the 12 months to April 2014, some 141,000 homes were built in the UK, up by 4% on the previous year,’ she continued.[1]

Gilmore went on to say that, ‘official household growth projections suggest an additional 230,000 potential households a year in the UK. Below these headline figures, there is a recognition that the right type of homes must be built in areas where there is the most housing need, typically adjacent to existing urban areas.’[1]

‘This has led to tensions about the greenbelt, with a lack of consensus on how to expand accommodation in some of the UK’s most thriving towns and cities. Nearly one half of the respondents to the housebuilder survey said that rules around developing on greenbelt land should be loosened,’ Gilmore added.[1]

Political support

Data from the report shows that policy markers across all the major political parties are keen to promote further development on brownfield land. The Royal Institution for Chartered Surveyors has published research that suggests there is adequate brownfield land available in England to build 226,000 homes by 2019.

‘Brownfield development is more costly than that on greenfield and there must be some recognition of this,’ said Gilmore. ‘In addition, there must also be some recognition that brownfield sites are not always ideally situated to provide the right type of units where they are needed. In terms of housing delivery, nearly 60% of respondents to our survey expect to increase their housing completions in the next 12 months, with a fifth expecting to increase by up to 10% compared to the previous 12 months,’ she added.[1]

Gilmore acknowledges that, ‘while any uplift in development volumes will be welcome,’ she feels, ‘it will be a worry for policymakers that, when asked the maximum level of housing supply that could be delivered to the market under current conditions, more than two-thirds said it was 180,000 units or less.’[1]

Planning and land needed to satisfy demand

Planning and land needed to satisfy demand

Deadlines

Additionally, the report shows that since the deadline for the changes to the use of Section 106 payments to fund infrastructure passed on the 6th April, less than a third of local councils have adopted a new Community Infrastructure Levy structure instead. This means that development could be stalled as these different structures are organised.

Community Infrastructure Levy was found to be the biggest risk to the sector, with three-quarters of respondents highlighting it as a threat. 56% said it was acting as a drag on development as a whole.

‘In terms of planning, the verdict on the National Planning Policy Framework three years on from its introduction is mixed, but overall house builders say it has contributed to a rise in development values,’ noted Gilmore. ‘While there may be some issues with the NPPF, only 26% said that moving back to a more regional approach to planning was a key priority for policy makers as shown.’[1]

‘While many in the industry believe there are issues that need to be ironed out with the NPPF, there is little appetite for policymakers to launch a new form of planning legislation. However, it is notable that only a quarter of respondents said that under the NPPF the speed of securing planning permissions had fallen. This may underpin the feeling that more resources should be allocation to local planning departments,’ she also stated.[1]

Additional resources

Making more resources available to local authority planning departments was highlighted as the feature for boosting development volumes by respondents. Gilmore observed that, ‘many planning departments have been affected by public sector cuts and a result are now overstretched.’ She continued by saying, ‘while it may on the surface seem counter intuitive, house builders and developers are in favour of robust local planning departments, it follows that developers not only want speedier decision times, but also more robust discussions around planning decisions, resulting in fewer appeals and planning permissions granted subject to long lists on conditions.’[1]

Improvements and encouraging more skills training for the construction industry was found to be the second most important measure for respondents to the investigation. ‘The need for more skilled labour is underlined further in our survey, with 94% of respondents saying that the current cost and availability of labour was a risk to the industry. Some 40% of respondents said the risk was significant, while 42% said the risk was moderate. A further 12% said the risk was modest. Those working in the industry also report that lack of available labour is hampering activity,’ Gilmore noted.[1]

‘The effective release of public sector land continues to be a key concern of the industry. Last year, the government announced that from this year, the HCA would become the default disposer of centrally held government land. In last year’s Autumn Statement, it was pledged that land with the capacity for up to 150,000 homes would be released between 2015 and 2020,’ she added.[1]

Capital gains

Gilmore believes that, ‘there is a need for local councils to also get involved in disposing of land or using it as part of joint venture developments.’ She notes that, ‘in London, the pressing need to deliver more homes has been addressed by setting up a London Land Commission to help speed up the process. It is estimated that 100,000 homes could be built in the capital if all surplus land held by the GLA alone was used for development.’[1]

‘The need for more homes built where they are needed most is pressing. Ultimately it is a step change in supply which will help ameliorate affordability issues faced by some buyers, creating a sustainable long term housing market,’ Gilmore concluded.[1]

[1] http://www.propertywire.com/news/europe/uk-building-developers-planning-2015092211008.html

 

 

Average House Price to Reach £300,000 in the Next Three Months

Published On: September 22, 2015 at 2:21 pm

Author:

Categories: Property News

Tags: ,,,

The average UK house price could reach £300,000 in the next three months, according to Rightmove.

Low interest rates and a lack of supply have driven property prices to a new record high.

House prices rose by an average of £2,550 in September, the greatest September increase since 2002.

The property portal reported that the 15 most expensive counties, including Surrey, Hertfordshire and Oxfordshire, have experienced price growth double the national average, at 1.8% in September. Fewer homeowners in these places are deciding to sell their homes.

House price growth in the most expensive counties

Position County Average house price September 2015

Average house price August 2015
1 Surrey £545,841 £537,270
2 Hertfordshire £460,074 £460,956
3 Oxfordshire £437,042 £431,701
4 Buckinghamshire £432,692 £425,163
5 Berkshire £430,486 £422,546
6 West Sussex £375,155 £364,007
7 East Sussex £354,284 £352,730
8 Kent £341,585 £334,050
9 Essex £334,472 £324,220
10 Dorset £324,841 £320,529
11 Hampshire £321,589 £313,535
12 Cambridgeshire £291,636 £281,270
13 Avon £291,326 £285,419
14 Gloucestershire £290,478 £288,080
15 Somerset £288,413 £283,557

In the north, new vendors were down 4.9% and 7.1% in the south, adds Rightmove.

In London, the average house price is expected to hit £1m by 2020.

The average asking price in the capital was £620,003 in September, a 0.8% increase on the previous record set in July. The annual rate of growth is now 9.5%, or £53,923 per year, due to a shortage of supply and rising demand from international investors. If this pace continues, the average London home will cost £1m in 2020.

Director and Housing Market Analyst at Rightmove, Miles Shipside, says that this rate is not sustainable.

He explains: “While we are not suggesting that this level of growth can or will be maintained, this extrapolation illustrates the desperate need for more building and more affordable housing in and around the capital.”1

1 http://www.independent.co.uk/news/business/news/average-uk-house-price-to-hit-300000-in-the-next-three-months-10511047.html

FCA Says it’s Not Policy to Get Older People to Move Home

Published On: September 22, 2015 at 1:25 pm

Author:

Categories: Landlord News

Tags: ,,,,

The Financial Conduct Authority (FCA) has stated that it is not its policy to encourage older people to move home, after a member of its mortgages team said the UK has a “real issue with the last time buyer” at a recent conference.

Lynda Blackwell, from the City regulator, said that the Government’s focus on first time buyers might be misdirected.

She explained: “We’ve got a big supply issue in this country. There’s a lot of questions about whether it is right that the Government should focus on the first time buyer when we’ve got a real issue with the last time buyer.

“There’s older borrowers who basically pay off their mortgage and sit quite happily in a very big house.”1 

Her statement was made during a panel discussion on the housing shortage. It provoked a strong reaction from Saga, which described the comments as unhelpful and insulting.

FCA Says it's Not Policy to Get Older People to Move Home

FCA Says it’s Not Policy to Get Older People to Move Home

An FCA spokesperson said: “These comments, which were made as part of a panel discussion at a trade body event, do not represent FCA policy.

“Last week, we published a range of materials as part of a conference on the mortgage market organised by the FCA. That conference covered a wide range of issues concerning the mortgage market, including older homeowners.”1 

Director of Communications at Saga, which represents older people’s interests, Paul Green, responded to the remarks: “If people have saved and paid for their house over their working lives, it’s down to them if they want to fill it with family or live on their own, but setting the generations against each other or talking about ‘tackling older homeowners’ is not just unhelpful, it’s insulting.”

However, he did acknowledge that looking across the market could help first time buyers.

“First time buyer scheme for the young are a good start, but we need to consider incentives to help encourage those that would like to move, to take that step,” he said. “The FCA are right, we definitely need to do more and do it better, but using divisive language will only alienate the very people we need to help and encourage.”1 

Although the shortage of new homes is the main cause of the affordability crisis, which is pricing first time buyers out of the market, the lack of existing properties being put up for sale is also an issue.

Recent data from the Royal Institution of Chartered Surveyors (RICS) shows that the number of homes for sale is at a record low, contrasting to a rise in the amount of hopeful buyers.

At an event on the London rental sector, Christine Whitehead, Professor of Housing at the London School of Economics, said the ageing population is one of the key issues in the capital’s housing market.

“We are now housing four generations rather than three and we have not addressed that right across the board,” she stated. “The result is that those who have to get into the market are being excluded by people like me who live too long.”1

Chief Economist at the Council of Mortgage Lenders (CML), Bob Pannell, says that the UK has “an ageing population that holds a disproportionately large amount of national housing assets.”

Statistics show that older people are more likely to under-occupy homes, but Pannell adds that they are also often “reluctant or unable to move to homes that might better suit their needs”2.

He adds that encouraging more activity across the whole market could cause better use of existing properties and the marketability of new homes.

A CML spokesperson insists: “No one is suggesting that anyone should be forced to do anything they don’t want to do, however, there may be ways to remove the barriers that people who wish to move face.”1

She says some homeowners who would like to move have found that after Stamp Duty and other costs, they would end up out of pocket by selling up.

Saga’s research reveals that two-thirds of older homeowners would consider moving house for retirement, but they are prevented by the lack of suitable properties or the cost.

1 http://www.theguardian.com/money/2015/sep/18/its-not-policy-to-get-older-people-to-move-house-says-fca

2 http://www.cml.org.uk/news/when-building-more-homes-isnt-enough/