Posts with tag: housing market

Young struggling to get onto property ladder

Published On: February 22, 2016 at 12:49 pm

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Another report has underlined the notion that young people are becoming trapped in the rental market, due to spiralling house prices.

An investigation by the independent Social Market Foundation think tank has revealed that an extra 1.8 million people have been unable to get their foot on the property ladder since 2001.

Young struggle

The report shows that if home ownership levels among 25-34 year olds during 2016 remained the same as 2001, an additional 1.8 million people in this age group would now be owner-occupiers. Despite this, they are being faced with barriers in getting onto the ladder due to high property values, tighter lending criteria and difficulties in saving for a deposit.

Data from the investigation underlines a lack of housing supply as the most prominent factor in the lack of young homeowners. Results indicate that Britan will see a shortfall of nearly 1.3 million homes by 2026, if current supply levels and lack of growth remain constant over the same period.

In addition, the report looks at how the market could grow over the next decade and warns that supply could continue to come up short in the face of rising demand.

Young struggling to get onto property ladder

Young struggling to get onto property ladder

Boosts

This follows results from a different survey released last week by the independent Resolution Foundation body, which indicated that home-ownership for young, working class households could slip to just one-in-ten by 2025.

Claiming crowdfunding could be used to boost savings of young, would-be buyers, the report also suggests that the supply of new homes could be increased by providing crowdfunded equity to small and medium-sized constructers.

Social Market Foundation economist Katie Evans, also the author of the report, said, ‘getting onto the housing ladder is becoming harder and harder for young people. Our failure to build enough homes means this problem threatens to stretch into the future. Property crowdfunding could be the means to tackle both demand and supply.’[1]

[1] https://www.lettingagenttoday.co.uk/breaking-news/2016/2/another-report-shows-younger-people-locked-out-and-forced-to-rent

 

 

Where are Buyers and Tenants Moving to? (So Where Should You Invest?)

Published On: February 18, 2016 at 11:27 am

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reform of leasehold

New research from Urban.co.uk has revealed the top places that people in different age groups are moving to in the UK. By analysing the data, landlords may be able to work out where they can buy a profitable investment.

Online estate agent Urban.co.uk has evaluated Office for National Statistics (ONS) internal migration statistics to find out which cities in England and Wales are the most popular to move to.

Birmingham was the only area included in the top ten destinations for all age groups – 18-21, 22-29, 30-64 and over-65s.

Alongside Birmingham, Manchester, Nottingham and Leeds are all becoming increasingly attractive locations compared to London for those aged 18-21.

The 22-29 age group is also heading north, with many favouring Birmingham, Manchester and Leeds over the more traditionally popular London boroughs of Islington and Hackney.

Birmingham was the most popular area to move to for those aged 30-64, while the over-65s prefer greener regions, such as Wiltshire and Cornwall.

The main finding from the study is that young people are increasingly leaving the capital.

The figures found that Birmingham is London’s biggest rival for all of those aged under 65. In the over-30 category, 12,500 home movers relocated to Birmingham during the past year.

For 22-29-year olds, Birmingham was the third most popular city to move to, coming in ahead of previously popular London boroughs such as Tower Hamlets and Southwark.

Birmingham was also in the top five cities for 18-21s, with Leeds, Nottingham and Manchester making up the top three. Over 45,000 youngsters moved to these areas in the last 12 months, indicating affordability pressures and a definite trend of migration towards the north. This may be due to the quality of educational facilities and the student populations of these cities.

The co-founder of Urban.co.uk, Adam Male, says: “The range and quality of educational institutions north of London, in places such as Leeds, Nottingham and Birmingham, have undoubtedly played a large part in attracting more and more young people away from London and its surrounding regions.

Where are buyers and tenants moving to?

Where are buyers and tenants moving to? (So where should you invest?)

“The interesting trend here is that young people appear to be staying in these regions after university and this is something we can expect to see more of in the coming years, due to their lively culture, increasing job opportunities and a competitive property market.”1 

Older generations are choosing more peaceful and greener spots, such as Wiltshire, Cornwall and the East Riding of Yorkshire over London. Birmingham was also included in the top ten for over-65s.

Visit Birmingham’s Emma Gray believes: “People are increasingly seeing our region as an obvious choice to build a career and raise a family, thanks to excellent schools, outstanding connectivity and affordable homes and amenities.”1 

Indeed, compared with London, Birmingham offers a competitive property market.

As first time buyers continue to struggle getting onto the property ladder, house hunters in Birmingham will find that the average house price is a huge £300,000 cheaper than in the capital.

The Birmingham suburb of Moseley Village was even named the best place to live in the UK by the Sunday Times, beating Mayfair in London.

Investment in the city, including HS2 and the Curzon Street regeneration, has also boosted Birmingham’s reputation as a business centre, making it a hotspot for start-ups and small businesses, in turn creating more job opportunities and investment potential. The city has been named, for the second time, the most investable city, above prime spots like Madrid, London and Paris, in an annual survey by the Urban Land Institute and PwC.

If you are seeking to invest in buy-to-let and beat the 1st April deadline for an added 3% Stamp Duty, could Birmingham be the best place to do it?

1 http://www.propertyreporter.co.uk/property/where-is-currently-the-most-popular-place-to-move-to-in-the-uk.html

House price growth rises again

Published On: February 5, 2016 at 10:38 am

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The January Index from the Halifax indicates that house price growth continued to accelerate in Britain during the last three months.

Data from the report shows that house values rose by 2.2% in the period, taking the average value to £212,430. Prices were also found to be up 9.7% year-on-year and by 1.7% compared to December 2015.

Upward pressure

Martin Ellis, Housing Economist at the Halifax, said that the quarterly increase followed two months of below 2% rises.

‘The imbalance between supply and demand continues to exert significant upward pressure on house prices,’ Ellis noted. ‘This situation looks set to persist over the coming months. Further ahead, increasing affordability issues, as price increases continue to exceed wage growth, are likely to curb housing demand and cause price growth to ease.’[1]

Mr Ellis went on to say that confidence in market remains strong, according to the most recent Halifax Housing Market Confidence Tracker. The final quarter of 2015 showed that a majority of people believe that typical property values will be higher in twelve months time.

Supply shortage

An increase in price growth is being driven by a lack of supply, according to Randeesh Sandhu, Chief Executive Officer of finance provider Urban Exposure. Sandhu also noted that the lack of housing supply is due to developers having a lack of skills and key materials.

‘Far more needs to be done to boost development, particularly in London where average house prices in over half of London neighbourhoods are now £500,000 or more,’ he observed.[1]

Rob Weaver, director of Investments at property crowdfunding platform Property Patner, agrees with Sandhu’s observation. He also said that sales in central London continue to drop off, but those in the outer boroughs are thriving.

‘Potential buyers are hunting for more affordable housing, attracted by regeneration in places like Thamesmead and Woolwich and of course, Crossrail,’ Weaver said. ‘We’re also seeing a spike in activity in the market as buy to let landlords rush to seal deals before the stamp duty 3% hike in April.’[1]

House price growth rises again

House price growth rises again

Rush

‘Britain simply can’t build homes fast enough to keep up with demand,’ observed Jonathan Hopper, Managing Director of Garrington Property Finders. ‘With demand likely to be boosted even further by the Bank of England’s admission that an interest rate rise could remain firmly off the table for the rest of the year, 2016’s strong start is unlikely to be a blip.’[1]

Mark Posniak, MD of Dragonfly Property Finance, believes that further house price growth is almost inevitable. He said, ‘with interest rates unlikely to move for some time and people generally confident about their jobs and the economy, demand is also very strong. People’s fear of being priced out of the market is tangible at present. This is especially the case in London and the South East.’[1]

‘While logic suggests house price growth will ease as affordability issues increase, our relationship with the property market is nothing if not emotive. Prices rise in this way only adds to demand and so the growth continues,’ he added.[1]

[1] http://www.propertywire.com/news/europe/uk-house-price-index-2016020411522.html

 

Location still important to homebuyers

Published On: February 3, 2016 at 10:02 am

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New research has underlined the importance of location (location, location) to would-be homebuyers.

An investigation conducted by My Home Move shows that over half of UK people make an offer on a home as they are smitten by its location. The property’s price and size of garden made up the top three features likely to sway potential buyers.

Homely

My Home Move’s report shows that 58% of respondents cited location as the top feature for making an offer. 37% said it was down to price and 29% said it was the garden.

Just 9% said that moving closer to friends was their main consideration when making a bid for a new home.

In terms of location, 40% said living near transport links was important, while 35% wanted a green area nearby. 32% said they wanted a property near to cafes, shops, bars and restaurants.

Characteristics

Women were found to be most likely to base their decision on being close to family, with 32% stating this was the case, in comparison to 26% of men.

Those in their 20’s said having a school in close proximity, and being in an up and coming area were important, both accounting for 34% of replies. This would suggest that the younger age group are looking to plan ahead.

However, location was also found to be the factor that puts most people off purchasing a home. 43% said a property in a poor location would put them off, with 40% deterred by price and 34% by the appearance of a property.

Homebuyers between the ages of 21-30 were less likely to be put off by location, with 37% citing that it would stop them from buying.

Location still important to homebuyers

Location still important to homebuyers

Key Ingredient

‘For most people, location is the secret ingredient that makes them fall in or out of love with their home,’ observed Doug Crawford, chief executive officer of My Home Move. ‘People also love a bargain, which explains why cost was the second most important factor in making someone fall in love with their home.’[1]

‘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,’ he continued.[1]

Concluding, Mr Crawford said, ‘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 propert

[1] http://www.propertywire.com/news/europe/uk-home-buying-location-2016020211512.html

 

 

 

UK housebuilding delayed due to lack of skilled workers-RICS

Published On: January 14, 2016 at 2:30 pm

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The hold up in construction of new homes is being driven by a shortage of skilled workers in the sector, according to the Royal Institution of Chartered Surveyors (RICS).

It fears that a lack of construction skills is threatening work on new homes and infrastructure projects.

Short

In a survey conducted by RICS, six in ten respondents said that they had difficulty locating bricklayers and quantity surveyors for specific tasks.

Wages for construction workers increased by in excess of 6% in the year to October, which was more than three times the average wage increase for UK workers. However, RICS’ latest market survey, assessing the final quarter of 2015, suggests labour shortages were considered to be the largest barrier to growth by almost two-thirds of industry professionals.

UK housebuilding delayed due to lack of skilled workers-RICS

UK housebuilding delayed due to lack of skilled workers-RICS

This will come as a blow to the Government, which has pledged to increase housebuilding in an attempt to tackle the growing housing shortage. Despite the number of homes being constructed rising from lows after the financial crisis, they are well below their 2007 highs. In addition, they are well short of the 250,000 that many experts feel are required to satisfy unwilting demand.

Further research from the Guardian suggests that major firms have secured land for 600,000 homes, all of which have yet to built. The Local Government Association said that the total number of unbuilt homes that have already been given planning permission are at record highs.

Just last week, the LGA called for tougher sanctions on slow building.

Unattractive

RICS noted that the building industry lost many skilled workers on the back of the economic crisis, many of who cannot be tempted back into the sector. The orgnaisation believes there is not enough being done to attract new trainees, despite the recent wage increases.

‘While workloads are still growing at a relatively healthy pace, labour shortages in the construction sector are causing delays at different stages in the development process and leading to significant problems with project planning,’ noted Simon Rubinsohn, chief economist at RICS. ‘More than 60% of our survey respondents said that these resulting planning delays were an impediment to growth.’[1]

‘That said, industry wages are becoming increasingly attractive, and I would hope that over time this will encourage skilled workers to return to the sector, as well as drawing school leavers and graduates towards construction-industry careers, he added.[1]

[1] http://www.theguardian.com/business/2016/jan/14/uk-housebuilding-held-up-lack-bricklayers-report-rics

 

Government to deliver 13,000 new homes on public land

Published On: January 4, 2016 at 10:22 am

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David Cameron is due to announce that the Government is to, ‘directly commission,’ the construction of up to 13,000 additional homes on public land.

This announcement will make the Government accountable for developments, alongside assisting smaller firms and speeding up house building, the Prime Minister stated.

‘Rolling up sleeves’

Mr Cameron said that the cabinet was now, ‘rolling its sleeves up,’ and ‘getting homes built.’

However, shadow housing minister John Healey believes that the Prime Minister was, ‘laying on the rhetoric to hide his failure on new homes.’[1]

Downing Street has called the move a, ‘radical new policy shift,’ with 13,000 homes due to be built on 5 publicly-owned sites in 2016. Up to 40% of these will be affordable starter homes. In addition, there is a target of 200,000 starter homes, to be made available for first-time buyers under 40 at discounted prices-by the year 2020.

The pilot for the scheme will begin on five primary sites, namely:

  • Brownfield land at Old Oak Common, north-west London
  • Former Connaught Barracks, Dover
  • Old MOD land in Northstowe, Cambridgeshire
  • Ex-hospital land in Lower Graylingwell, Chichester
  • MoD site at Daedlus Waterfront, Gosport
Government to deliver 13,000 new homes on public land

Government to deliver 13,000 new homes on public land

Shift

The Prime Minister believes that the announcement signals, ‘a huge shift in Government policy.’ He said that, ‘nothing like this has been done on this scale in three decades-Government rolling its sleeves up and directly getting homes built.’[1]

Communities Secretary Grey Clark said that the Government was, ‘pulling out all the stops to keep the country building.’

‘Today’s radical new approach will mean the Government will directly commission small and up-and-coming companies to build thousands of new homes on sites right across the country. This, and the £1.2bn new starter homes fund will help thousands of people to realise their dream of owning their own homes,’ he added.[1]

Low

With this said, Labour’s shadow housing minister Mr Healy said that home ownership was at its lowest level in a generation. Healy stated, ‘in the Autumn Statement a few weeks ago, George Osborne tried to spin his halving of public housing investment as an increase. Now David Cameron is laying on the rhetoric to hide his failure on new homes.’[1]

‘Today’s statement promises no new starter homes beyond those already announced. David Cameron needs to do much more to fix his five years of failure on housing,’ Healy concluded.[1]

[1] http://www.bbc.co.uk/news/uk-politics-35217418