Posts with tag: house prices

Surge of Buy-to-Let Investors in the Market Pushes Property Prices Up

Published On: February 11, 2016 at 9:26 am

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A shortage of properties for sale and a surge in buy-to-let landlords rushing into the market are pushing up house prices, according to the Royal Institution of Chartered Surveyors (RICS).

The RICS reports that while supply has increased slightly, it is not enough to meet a sharp rise in demand from buy-to-let investors, who are seeking to beat the 1st April deadline for a 3% Stamp Duty surcharge.

Housing stock grew over January, from 44.5 properties per branch in December to 46 at the start of the year. However, this is still down 21% compared to January last year.

The Chief Economist at the RICS, Simon Rubinsohn, explains the figures: “The rise in new instructions in January, although modest, is very welcome.

Surge of Buy-to-Let Investors in the Market Pushes Property Prices Up

Surge of Buy-to-Let Investors in the Market Pushes Property Prices Up

“However, with buy-to-let investors rushing to get into the market ahead of the Stamp Duty hike, the near term pressure on prices is, if anything, intensifying despite a higher level of supply.”

He continues: “How the tax changes planned for the buy-to-let sector over the next few years play out remains to be seen, but there are concerns raised in the survey that some existing landlords will look to either gradually scale back on their portfolios or exit the market altogether as the more penal regime begins to bite.

“Against this backdrop, it is perhaps not surprising that the key RICS indicators point to further rent, as well as house price, increases.”1

As this news arrives, as does the latest data from LSL Acadata, which states that the average house price in England and Wales is now £290,642 – up 0.2%, or £700, over January.

Valuations firm e.surv expects there were 85,432 house purchase mortgage approvals in January, up by more than 20% from the 70,837 recorded in December. It predicts that January’s approvals will be the highest for almost nine years, since October 2007. It names the cause of the rise on a surge in buy-to-let mortgages.

Yesterday, we reported that rent price growth for new tenancies in London is at its slowest rate for around two years, announced by HomeLet. Find out more: /london-rent-price-growth-slowing/

SpareRoom has also seen price growth slowing in London, with rent increases in commuter towns such as Swindon and Luton rising by up to four times faster than in the capital. The most expensive room rents in the country are in Reading, at an average of £548 per month.

Another index has also launched, a buy-to-let study by Property Partners, which combines rental income and capital growth. It believes that the best returns for buy-to-let landlords are in the East of England, at 13.2%, with the lowest in the North East, at 4.1%.

London-based estate agent Marsh & Parsons has experienced a 24% increase in applicants over January compared to January 2015. It believes the significant rise is from a surge in first time buyers. The CEO of the firm, Peter Rollings, reports that first time buyers now account for 66% of sales, up from 49% last year. It is believed that this will rise further, as a huge 15,000 prospective buyers have already shown interest in the Help to Buy London scheme. Read more: /over-15000-hopeful-buyers-interested-in-help-to-buy-london/

1 http://www.telegraph.co.uk/finance/property/news/12150353/Rare-rise-in-number-of-homes-for-sale-but-its-not-enough-to-satisfy-huge-demand.html

Average House Price to Surpass £1m by 2032, Believes Lib Dems

Published On: February 9, 2016 at 10:21 am

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The average house price in Britain could surpass £1m in just 16 years’ time, according to the Liberal Democrats.

Research from the political party suggests that property prices will increase from a current average of £290,000 to £1.017m in 2032.

The prediction is based on trends recorded by the Office for National Statistics (ONS), which show house price inflation for the past three years.

Average House Price to Surpass £1m by 2032, Believes Lib Dems

Average House Price to Surpass £1m by 2032, Believes Lib Dems

The Liberal Democrats’ research found that the average property price would hit £650,000 within a decade – a rise of £360,000 on today’s typical value.

The party is backing a debate in the House of Commons today, which is calling on the Government to provide more new homes for young people.

Measures include allowing councils to build more homes through lifting the current arbitrary cap on council borrowing, and building ten new garden cities, including five in the South East of England.

Leader of the Liberal Democrats, Tim Farron, comments: “A child born on the day of the debate faces the prospect of paying at least a million for a home to call their own.

“Relying on the bank of mum and dad isn’t an option for everyone and adds pressure to millions of families who have worked hard and done the right thing.

“The continuing upward spiral of house prices threatens the very idea of a family home.”1

The Government has already pledged changes to the housing market, including:

  • £2 billion – Chancellor George Osborne has doubled the housing budget to £2 billion to fund the building of more homes.
  • 400,000 new homes – The Government vows to build 400,000 new homes by 2020.
  • 5 housing associations – The Right to Buy scheme is being extended to housing association tenants, starting with a pilot in five housing associations.
  • 3% Stamp Duty – From 1st April, buy-to-let investors and second homebuyers will be charged an extra 3% in Stamp Duty when they purchase a property worth more than £40,000. The Chancellor believes this will raise around £1 billion by 2020. Find out how this is already affecting the market: /landlords-rushing-to-avoid-buy-to-let-tax-changes/

For the latest property market updates, remember to check LandlordNews.co.uk.

1 http://www.telegraph.co.uk/finance/property/12147282/Average-home-in-Britain-to-cost-over-1million-by-2032.html

Buying a Property Depends on Whether You Fall in Love With It

Published On: February 6, 2016 at 12:11 pm

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Buying a Home Depends on Whether You Fall in Love With It

Buying a Property Depends on Whether You Fall in Love With It

Love is in the air… At least it is for property buyers.

We’re often told that when choosing a property, it’s all about location, location, location, but recent research indicates that it’s a little more emotional than that.

More than half of homebuyers purchase a property because they’ve fallen in love with it, and the top three reasons for such amorous feelings are location, price and the garden.

Property expert Kirstie Allsopp suggests that it could be about even more: “It is a given that it is about location. Location is everything. But once you have got the location, what often makes people choose one property over another is perhaps something people don’t even acknowledge themselves, and that’s aspiration.”

She explains: “Potential buyers look around a house and it could be a holiday picture or a book, something they want to do or be, and that often seals the deal, especially when choosing between two houses.”1 

The study by conveyancing firm My Home Move found that 56% of buyers purchased their home or a previous property simply because they fell in love with it.

Respondents were asked to choose up to three reasons why they fell in love with the property. The most common reason is the location, followed by the home’s price and thirdly by its garden.

What made buyers fall in love with their home?

Position

 Reason

Number of respondents
1 Location 58%
2 Price 37%
3 Garden 29%
4 Interior 15%
5 Living area 13%
6 Kitchen 8%
7 Master bedroom 7%
8 Exterior 7%
9 Natural light 7%
10 Architecturally interesting 5%
11 Beautifully decorated 3%
12 Fireplace 2%
13 Flooring 1%
14 Walls 1%
15 Street name 1%

The Chief Executive of My Home Move, Doug Crawford, comments on the findings: “Britain’s love affair with property is built on location. For most people, location is the secret ingredient that makes them fall in or out of love with their home. Brits also love a bargain, which explains why cost was the second most important factor in making someone fall in love with their home.

“As house prices continue to climb and many first time buyers struggle to take their first step onto the property ladder, younger buyers are more willing to scout out up-and-coming areas to try and find a bargain to fall in love with.

“Unfortunately, not all of those buying a home have the flexibility to pick and choose their ideal location or perfect interiors, especially as demand continues to outstrip supply. Compromise may have to become the buzz word of 2016, as there is little to suggest the situation is likely to ease any time soon, as more and more homeowners chase after one property.”1 

Location was also a key reason for buyers not choosing a property, along with its appearance inside and out.

What put buyers off purchasing other properties?

Position

 Reason

Number of respondents
1 Location 43%
2 Price (too expensive) 40%
3 Appearance (interior) 34%
4 Too small 30%
5 Appearance (exterior) 26%
6 None/don’t know 20%
7 Price (under budget and felt they could get more) 9%
8 Too big 7%
9 Worried about the neighbours 7%
10 Didn’t feel safe 5%

Andrew Montlake, of mortgage brokers Coreco, says: “The vast majority of our clients are fixated on having a home in their perfect location, whether this be for transport links, schools or even a romantic notion about the area itself, and are willing to compromise on other aspects, often paying a bit more to get it.

“However, an increasing number are now more constrained by price and have shown more willing to investigate other areas, where the features of the property itself become more important once more. While different buyers all have very different opinions on what will make their perfect home, the phrase I hear more often than not is, ‘I have found a property I have fallen in love with’.”

He adds: “Once buyers picture themselves in an area and a particular property where they can build a home, love does the rest.”1 

1 http://www.dailymail.co.uk/property/article-3420607/The-three-real-reasons-people-buy-property.html

The Most Expensive and Cheapest Road Names in the UK

Published On: January 31, 2016 at 4:47 pm

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Ever wondered where the most valuable homes are found? On roads with the word Warren in their name apparently!

These properties cost an average of £607,267 – more than double the typical house price in the UK of £282,978, according to Zoopla.

The Most Expensive and Cheapest Road Names in the UK

The Most Expensive and Cheapest Road Names in the UK

Other pricey homes can be found on roads including the words King, Queen, Prince or Princess.

Zoopla has analysed more than 28m properties in the UK to find the most expensive and cheapest road names.

The cheapest properties have Street in their address and are worth an average of £184,722, followed by homes on roads with Court or Terrace in their name.

The majority of homes – around 2.1m – have the word Road in their address, while more than one million properties are in roads with Street in their name.

The property portal’s Lawrence Hall comments: “The saying goes that the three most important factors in buying a house are location, location, location; our research shows that even the road name you choose can make a difference to how much you can expect to pay when finding a property.”1

Here are the most expensive and the cheapest property prices, based on road name:

  1. Warren – £607,267
  2. Chase – £482,867
  3. Mount – £390,500
  4. Path – £389,732
  5. Park – £384,809
  6. End – £381,933
  7. Green – £363,348
  8. Way – £358,981
  9. Hill – £354,301
  10. Lane – £342,059
  11. Gardens – £340,461
  12. Paddock – £320,984
  13. Walk – £319,926
  14. Rise – £307,965
  15. Lawns – £302,760
  16. Place – £293,403
  17. Road – £292,403
  18. Grove – £289,385
  19. Drive – £286,098
  20. Parade – £275,766
  21. Square – £272,614
  22. Nook – £270,511
  23. Close – £268,957
  24. Crescent – £265,055
  25. Pastures – £262,060
  26. Avenue – £261,850
  27. Meadows – £252,000
  28. Row – £233,778
  29. View – £207,641
  30. Terrace – £194,403
  31. Court – £194,172
  32. Street – £184,722

1 http://www.independent.co.uk/property/house-and-home/property/the-uks-most-expensive-and-cheapest-road-names-revealed-a6836771.html

Half of All Homebuyers Move Just Nine Miles or Less

Published On: January 29, 2016 at 12:47 pm

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Those moving house appear to like where they live, with a half of all homebuyers moving just nine miles or less from a previous address.

Half of All Homebuyers Move Just Nine Miles or Less

Half of All Homebuyers Move Just Nine Miles or Less

The figures arrive from home removals website Reallymoving.com, based on 200,000 quotes.

The average distance moved by Reallymoving.com customers was 52 miles last year, down from 55 miles in 2014.

According to the site, over two-fifths of all movers were first time buyers, up from 37% in 2014.

However, the amount that first time buyers have been paying for a property, as a proportion of the average house price, has been in decline.

In 2014, the average first timer paid 79% of the price paid by other buyers. But in 2015, the typical first time buyer property cost £202,000 – three-quarters of the average house price paid by other buyers, says Reallymoving.com.

The Chief Executive of Reallymoving.com, Rob Houghton, comments on the data: “It’s good to see the increase in first time buyers, although large areas of the country remain prohibitively expensive for many.

“Until planning regulations are changed to allow more properties to be built, we don’t see much prospect of a significant change in this.

“We’re also encouraged to see the average distance of home movers continue to drop. Our belief is that as the jobs market improves, people are not having to move as far to find work.”1 

Have you moved home recently? If so, how far away did you move?

1 http://www.propertyindustryeye.com/half-of-all-home-movers-go-just-nine-miles-or-less/

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