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Em Morley

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

House Prices Showing Steady Growth

Published On: July 9, 2015 at 9:54 am

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House prices in the UK rose by 3.3% in the second quarter (Q2) of 2015 compared to Q1, making the average price now £200,280, according to the latest property price index.

This indicates that the quarterly rate of change has picked up after two consecutive drops and prices in Q2 were 9.6% higher than the same quarter last year, revealed the Halifax data.

This was greater than May’s 8.6% growth and the highest quarterly increase since September 2014 when it was also 9.6%. On a monthly basis, prices rose by 1.7% between May and June, the fourth continuously monthly increase.

The steady growth in prices arrives as home sales remain stable. Data from HM Revenue & Customs (HMRC) shows that UK home sales rose by 1% between April and May and sales in the period from March to May were 0.5% higher than in the three months before, but were 4.2% lower than in the same period in 2014.

House Prices Showing Steady Growth

House Prices Showing Steady Growth

Halifax Housing Economist, Martin Ellis, says that supply remains very short, with the stock of homes for sale currently at record low levels: “This shortage has been a key factor maintaining house price growth at a robust pace so far in 2015.

“Economic growth, higher employment, increasing real earnings growth and very low mortgage rates are all supporting housing demand with signs of a recent modest pick-up in demand.”1

CEO of Dragonfly Property Finance, Jonathan Samuels, adds that there are mixed signals in the property market as the latest index from Nationwide indicates that prices have dropped slightly.

He also reveals that although prices in London have slowed, house prices per square metre have increased by 45% since 2010, emphasising demand in the capital.

He says: “With economic growth stronger than expected during the first quarter, a buoyant jobs market and people generally better off, you would expect the market to continue to improve throughout the rest of 2015, if at a more moderate rate compared to recent years.”

He also says that the current Euro crisis in Greece could affect the UK property market: “We could see a flight away from equities into bricks and mortar, but at the same time if Europe as a whole is adversely affected, then the UK economy will almost certainly suffer too.”1 

London prime property agency, VanHan’s Thomas van Straubenzee is predicting an influx of enquiries from wealthy Europeans hoping to move their assets from the continent into London, as they seek to avoid the Euro crisis.

He states: “We have seen interest from the Middle East and India pick up again, which is not surprising as we had noticed that these buyers were particularly affronted by the idea of a mansion tax.

“We do not see London house prices slowing down anytime soon, as demand continues to outstrip supply, particularly at the top end of the market.”1

Jonathan Hopper, Managing Director of Garrington Property Finders, claims that vendor expectations have been surpassing what buyers are willing to pay in several parts of the UK, but this over-optimism is being put in check.

“Despite mortgages being at their cheapest level for years and the supply of homes for sale being tight in many price brackets, buyers are still intensely value sensitive,” he says. “Buyer demand is strong but sensible and buyers are being much more sober in their offering behaviour than in the last boom.”

Hopper continues: “Though confidence among both buyers and sellers remains high, as the summer slowdown begins, sellers must be wary of letting their pricing ambitions run away from what the market will tolerate.”1

1 http://www.propertywire.com/news/europe/uk-house-price-index-2015070810723.html

Nationwide says property prices fell in June

Published On: July 9, 2015 at 9:15 am

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Property prices in the UK fell by 0.2% and as a result, brought the annual growth rate to its lowest level for two years, according to new research from the Nationwide.

Nationwide’s report suggests that despite a 3.3% increase from June 2014, house value increases were down from the 4.6% recorded last month. Despite a different survey from the Halifax suggesting that average UK home values had shot through the £200,000 barrier, Nationwide’s data suggests that this price is £195,055.[1]

Prices

Price growth and overall activity in the market have slowed since last summer, following an extremely busy start to 2014. However, Nationwide says that the slowdown in prices has not applied to the capital, where affordability has spiralled out of reach for many would-be buyers.

‘House price growth continues to outpace earnings, but the gap is closing, helped by a pickup in annual wage growth, which moved up to 2.7% in the three months to April from 1.9% at the start of the year,’ said Robert Gardner, Nationwide’s chief economist.[1]

Mr Gardner went on to say state that, ‘the slowdown in house price growth is not confined to, nor does it appear to be driven primarily by, developments in London. In quarter on quarter terms, London has continued to see price growth a or above the rate in the UK overall over the past three quarters.’[1]

Nationwide says property prices fell in June

Nationwide says property prices fell in June

Irish smiles

Nationwide’s figures are based on mortgages that the firm has approved during the month and shows that Northern Ireland has overtaken the English capital to record the largest yearly house price growth.

Figures assessing the second quarter of the year show that prices in Northern Ireland have increased by 8% during the last twelve months, in comparison to 7.3% in London. It was not such good news for Wales and Scotland, where prices fell by 0.8% and 1% respectively.[1]

Howard Archer, chief UK economist at IHS Global Insight commented that he was, ‘slightly surprised,’ by the figures but said that the price fall recorded in June, ‘does not fundamentally change our view that house prices are likely to be firmer over the second half of the year amid improving activity.’[1]

‘A current shortage of properties on the market is also likely to provide support to house prices,’ Archer added.[1]

[1] http://www.theguardian.com/money/2015/jul/02/uk-house-prices-slip-in-june-says-nationwide

 

 

Landlord Jailed for Breaching Fire Safety Regulations

Published On: July 9, 2015 at 8:50 am

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Landlord Jailed for Breaching Fire Safety Regulations

Landlord Jailed for Breaching Fire Safety Regulations

A landlord has been sentenced to six months in prison and ordered to pay over £12,400 after he pleaded guilty to three charges of breaching fire safety regulations regarding a student property in Bristol.

Gareth Wilson was found guilty of failing to conduct a suitable and sufficient fire risk assessment, failing to ensure that escape routes and exits lead as directly as possible to a safe place as self-closers had not been fitted to kitchen or living room doors and failing to ensure that the fire alarm system was maintained to a good standard as there was a missing fire detector in the basement kitchen.

In June 2014, Wilson was given a four-month custodial sentence, suspended for 12 months and ordered to pay costs for similar breaches of fire safety. This was due to a fire at a property in January 2012, when two tenants had to be rescued from the roof by firefighters.

The latest sentence includes three months for each of the charges, which will run consecutively, and a further three-month sentence to be served alongside, for breaching the previous suspended sentence.

Wilson breached the Regulatory Reform (Fire Safety) Order 2005, which concerns all non-domestic premises in England and Wales. It details that a responsible person must undertake a fire risk assessment and maintain a fire management plan.

From October 2015, new legislation is due to be introduced that will extend these regulations, requiring all private sector landlords to install smoke alarms on each storey of their rental property and ensure they are working at the start of a tenancy. Landlords will also be obliged to install carbon monoxide alarms in properties that burn solid fuel.

 

 

 

 

 

Mortgage Expert is Against BoE Warnings about BTL

Published On: July 8, 2015 at 5:56 pm

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Mortgage Expert is Against BoE Warnings about BTL

Mortgage Expert is Against BoE Warnings about BTL

The director of the Intermediary Mortgage Lenders Association (IMLA) is against the Bank of England’s (BoE) warnings about the risk of the booming buy-to-let market.

In its Financial Stability Report, the BoE cautioned that buy-to-let could pose a threat to the UK economy, as many more pensioners are expected to use the new pension rules to enter the private rental sector.

However, the IMLA’s John Heron says that buy-to-let lending was at a record high of £45.7 billion in 2007, but even after the recent recovery in the housing and financial markets, it is only forecast to reach £30 billion this year.

Heron states: “The BoE’s comments on buy-to-let are based on their observation of strong growth in lending in recent years. It should be understood, however, that while there has been substantial growth, this has been from a low base post-crisis, and lending today is still no greater than it was ten years ago and is well below the levels achieved before the crisis in 2007.

“The rising cost of homeownership is among many factors driving demand for rental properties, including the fall in social housing, changing work patterns, growing numbers of students, high levels of immigration, later marriage and rising separation rates.”

He concludes: “Housing needs are changing and, in fact, the IMLA analysis shows fewer than one in three extra properties to enter the private rental sector since 2007 have been backed by a buy-to-let mortgage. Lending has therefore been responding to, rather than leading, demand.”1 

1 https://www.lettingagenttoday.co.uk/breaking-news/2015/7/mortgage-chief-tells-bank-of-england-to-back-off-buy-to-let

Emerging Prime Hotspots in London Lead Growth

Published On: July 8, 2015 at 4:53 pm

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Property prices in the emerging prime hotspots of London recorded a slight increase of 1.3% in the second quarter (Q2) of 2015, down by 0.84% compared to Q2 2014, revealed new data.

Emerging Prime Hotspots in London Lead Growth

Emerging Prime Hotspots in London Lead Growth

Demand in South West London has continued to be fuelled by sales, particularly of flats under £937,500, following Stamp Duty changes at the end of 2014, according to the latest quarterly report by real estate company Douglas and Gordon.

Contrastingly, larger houses priced over £1.3m in emerging prime markets were less promising, due to Stamp Duty issues and concerns over the mortgage market. In some areas, such as Battersea and Battersea Park, prices were down 10% annually.

In the sector, Clapham and Southfields experienced the strongest price growth, of 3.5% and 3.9% respectively. A weak second-half of 2014 has led prices in these areas to catch up to where they were a year ago.

Rental growth is also strong, up 1.7% in Q2, continuing this market’s strong performance during a difficult year in the sales sector. However, this is expected to slow once sales pick up.

Total returns, capital and rental growth remain attractive to professional investors in emerging prime areas. Capital values are also forecast to increase by 10% in the next 12 months.

Douglas and Gordon’s Executive Director, Ed Mead, says: “Whereas there is some evidence of a post-election bounce, unsurprisingly, many are taking their time to make decisions and a continuation of the anticipated bounce needs to be tempered with a dose of realism.”1

His predictions for the next 12 months regarding family homes is that the market will remain firm, due to there no longer being a threat of mansion tax.

However, he also notes that there is a lack of supply and the firm’s emerging prime index is only back to levels seen a year ago.

He expects fringe areas to perform best, as buyers look for new areas to purchase a property in.

1 http://www.propertywire.com/news/europe/london-prime-emerging-markets-2015070710717.html