Posts with tag: first time buyer homes

London Second Steppers in Strong Position, Claims Lloyds

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

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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

Help to Buy Has Pushed Up Prices

Published On: September 10, 2015 at 5:20 pm

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The price of the average starter home has risen by almost 19%, to £213,000, since the Government’s Help to Buy scheme launched around two years ago.

More first time buyers are now competing for a limited number of homes, insists property expert Henry Pryor. He says there is “little doubt” that it’s the scheme pushing up prices, and urges the Government to end the incentive.

He adds: “Turn the Help to Buy tap off and concentrate on providing more builders to build more homes.”1

1 Hedges, L. (2015) ‘Help to Buy ‘has driven up prices’’, Metro, 10 September, p.6

 

 

Buyers Save £670 Per Year More Than Renters

Published On: August 24, 2015 at 3:54 pm

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Renting a home is £670 more expensive than the cost of buying a home for a first time buyer, according to the Halifax.

Buyers Save £670 Per Year More Than Renters

Buyers Save £670 Per Year More Than Renters

The typical monthly costs of buying a three-bedroom house in the UK for a first time buyer was £666 in June, 8% lower than the average monthly rent on the same property, at £722 per month.

This contrasts to figures recorded in June 2009, during the financial crisis, when the average cost of buying was 16% more a year, or £1,154, than the average rent paid.

Despite the average price paid by a first time buyer for a three-bed home being 25% higher than six years ago, the monthly cost of owning has dropped, as the average mortgage rate has declined from 4.92% to 2.91%.

Over the same period, the average rent grew by 23%.

However, in the last year, average monthly mortgage costs rose by £40, while average monthly rents increased by just £8.

In cash terms, first time buyers in London have experienced the greatest benefits from buying rather than renting in the past year.

The average monthly cost of buying in the capital in 2015 is £1,338 compared to an average monthly rent of £1,419. This is a 6% saving worth £81 per month or £973 over the year.

Mortgage Director at the Halifax, Craig McKinlay, says: “Looking at monthly costs, the combination of lower mortgage rates and declining rental value over the past six years has made it cheaper to buy than to rent.

“While numbers of first time buyers getting onto the housing ladder in the first six months of both 2014 and 2015 has been over 135,000 – almost double the lows seen in 2009 – the issue of building more new homes in the right places needs to be addressed if we are to see sustainable growth.”1 

1 http://www.readyrentals.co.uk/news/article/2121/buying-now-670-cheaper-than-renting

 

Government Reserves £36m for Starter Homes

Published On: August 11, 2015 at 9:50 am

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The Government has reserved a total of £36m to help developers build starter homes for first time buyers on brownfield sites.

Government Reserves £36m for Starter Homes

Government Reserves £36m for Starter Homes

Greg Clark, the Communities Secretary, announced details about the £26m fund yesterday, which will support architects, developers, councils and housing associations to acquire brownfield land to build starter homes on. These properties will be offered exclusively to first time buyers under 40-years-old with a 20% discount on market values.

Clark has also set aside a further £10m for local authorities to prepare identified brownfield sites for development.

Yesterday, the British Property Federation (BPF) welcome the announcement, but warns that more funding is needed to deliver the 200,000 homes the Government has pledged by 2020.

Chief Executive of the BPF, Melanie Leech, says: “Brownfield sites often prove to be extremely lengthy and complex to develop, and if the Government wants to see a significant amount of housing delivered on them, then developers and house builders are going to need some help.

“The funds show welcome recognition of this fact, but we will need to see more from Government if it is to reach its starter homes targets.”1 

Clark states: “This competitive fund will build homes that will clearly show the wide range of new properties that will be available for first time buyers as they take their first step on the housing ladder.

“We are also helping bring back into use more brownfield land for development, keeping the country building and delivering the homes our communities need.”1 

Chief Executive of the Homes and Communities Agency (HCA), Andy Rose, comments: “The HCA is ready to support the Government in delivering this key priority, which aims to set the standard for starter homes. By using our land and development expertise, we will help even more first time buyers into affordable homeownership.

“We look forward to working with our key delivery partners including councils, developers, housing associations, small builders and architects in taking this forward, through the identification and purchase of land suitable for exemplar starter home sites.”1 

1 http://www.propertyindustryeye.com/government-pledges-36m-for-new-homes/

First Time Buyer Sales Down 27% in a Year

Published On: July 31, 2015 at 10:58 am

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First Time Buyer Sales Down 27% in a Year

First Time Buyer Sales Down 27% in a Year

First time buyer property sales fell by over a quarter in the year to June, according to agents Reeds Rains and Your Move.

According to the research, the agents estimate that in June there were 21,000 first time buyer transactions at an average price of £154,910.

This figure has decreased by 7% since May, by 8.3% quarterly and by 27.2% over the year.

However, the average purchase price was unchanged from June 2014.

The average deposit of just under £26,000 was also almost unchanged from last June.

In London, the average first time buyer home cost £277,871, with a deposit of £70,374.

The single greatest reason for tenants not being able to buy a property was a lack of savings for a deposit.

The two agents asked renters if they plan to get onto the property ladder by the end of this year, with only 8% saying yes, down from 16% last year.

Regarding the sacrifices they may have to make to afford a home, the aspiring buyers said they could live with dated décor and bathrooms, and some even said they could go without basic utilities, such as electricity and plumbing.

Around half (45%) said they would accept a home of any condition if it were in their budget.

 

First Time Buyer House Prices Rise by £138 Per Day

Published On: July 28, 2015 at 10:58 am

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The average first time buyer house price rose by £4,150 in June, according to haart estate agent.

First Time Buyer House Prices Rise by £138 Per Day

First Time Buyer House Prices Rise by £138 Per Day

This is equivalent to a huge £138 per day, or £12,000 annually.

haart also revealed that the amount of first time buyer registrations dropped by 13.6% in the year to June 2015, with a decrease in London of 17.3%.

haart’s research also found that housing supply was down 13.9% in June compared to June 2014, with property prices up 6.1%, to an average of £216,951.

The agent has analysed data from its 200 branches nationwide, discovering that the number of exchanges in June was 15.8% lower than in the same month last year.

CEO of haart, Paul Smith, says: “First time buyer house prices climbed £138 every day in June.

“A potential first time buyer on an average salary of £27,000 must be prepared to spend 42% of their take-home salary on mortgage repayments, showing that the traditional rule of spending no more than 30% of income on housing is no longer reality for many.

“As a result, we’ve seen a knock-on effect on first time buyer registrations. The only solution to this is to unlock the market and free up supply.

“Efficient use of space is a must and we need to dispel fears that downsizing indicates older homeowners have lost their zest for life.

“Movement in the upper echelons of the market will free up stock at all levels and put the brakes slightly on property price growth.”1 

1 http://www.propertyindustryeye.com/first-time-buyer-property-prices-shoot-up-by-138-per-day/