Posts with tag: housing market

First-time buyer optimism in Europe low

Published On: September 7, 2015 at 12:58 pm

Tags: buying proper,first time buyers,homeowners,housing market

A large survey of more than 15,000 people from over 15 countries has indicated that first-time buyers in the UK are faced with some of the most difficult conditions in Europe, when trying to get onto the first-rung of the property ladder.

In addition, the survey revealed that Europe as a whole is becoming more pessimistic about the chances of first-time purchasers, with a majority believing than the housing crisis is becoming more acute.

Bullish

The investigation found that 56% of people in Europe are bullish about the possibility of property prices rising in the coming year. However, 79% of Europeans acknowledge that is becoming harder to purchase an initial home.[1]

British first-time buyers were found to have the toughest task of making it onto the ladder, with 89% questioning just how they will be able to buy a property. Data from the report shows that house prices rose by an average of 8% in the UK between Q1 of 2014 to 2015, eight times more than the European average.[1]

88% of people in Spain and 87% in Belgium are also worried about entering the housing market. Spain is still recording high levels of unemployment, while in Belgium, tougher lending conditions and a lack of wage growth are thought to be reasons for the lack of optimism.[1]

Germany was found to be the country that was least concerned about the conditions facing first-time buyers, but 59% still replied that it is getting harder to get into the property market.[1]

Affordability concerns

Concern for first-time buyers is being driven by the widening affordability gap, with 72% of European renters believing that society would benefit from a fall in house prices. This was found to be most common in renters, with 93% of tenants in Spain, 75% in Britain and 74% in France believing that soaring housing prices are the main cause to their struggle for home ownership.[1]

First-time buyer optimism in Europe low

69% of European home-owners also agreed that a fall in property prices would be a real benefit. In Turkey, where prices rose sharply over the last twelve months, 90% of homeowners believed this would be the case. In Spain, where property prices have fallen by over 25% in the last five years, 83% of homeowners still feel a further drop would be beneficial.[1]

However, just 47% of German homeowners feel that a reduction in property prices would be beneficial. It must be taken into account that homeownership in the country is the lowest in the European Union at 43%.[1]

Struggles

Across the continent and in the US and Australia, consumers hold the view the first-time buyers are at risk of having the door to home ownership slammed in their face,’ said Ian Bright, Senior Economist at ING. ‘Even homeowners would consider it a good thing if house prices fell, which may indicate people are not only worried about the high level of house prices, but also realise that house prices cannot keep rising forever.’[1]

‘The burgeoning economic recovery across the continent comes into play here. This will improve people’s lives in many ways but the ING International Survey shows something needs to be done if the next generation is to benefit from bricks and mortar,’ Bright added.[1]

[1] http://www.propertyreporter.co.uk/property/uk-ftb-sentiment-lowest-in-europe.html

UK mortgage approvals at highest rate since 2014

Published On: September 2, 2015 at 4:13 pm

Author: Em Morley

Categories: Finance News

Tags: housing market,Mortgage lending,mortgages

Mortgage approvals in Britain during July hit their greatest level since February 2014, according to new figures released by the Bank of England.

Data from the report shows that there were 68,764 mortgage approvals during the month, a rise of 16,4% since November’s low of 59,100.[1]

Rising

Experts suggest that these figures show that the housing market is beginning to return to its pre-recession rates, with mortgage approvals rising in five of the last seven months. House prices are also rising.

In addition, net mortgage lending was up by £2,709bn during July, which represents the greatest increase since July 2008.[1]

Chairman of the Intermediary Mortgage Lenders Association, Charles Haresnape, also noted that this total is the largest since the introduction of the Mortgage Market Review. ‘With 7% more approvals compared with the six month average, it is a clear indication that health is returning to a market that has been under significant pressure to perform while adjusting to new working practices,’ Haresnape noted.[1]

UK mortgage approvals at highest rate since 2014

Uncertainty

Mr Haresnape went on to warn that with European Mortgage Credit Directive rules starting to come in effect this month, there is likely to be extra uncertainty ahead for the market.

‘With more regulation on the way and a potential rise in the cost of borrowing on the cards, the six month window to implement the MCD rules will be a challenge for all concerned,’ he said.

‘On the positive side, rising approvals suggest consumer appetite is strong and lenders will also be striving to meet their end of year targets, which should support some competitive deals. We must hope that the impacts of change do not weigh down too heavily on what otherwise looks like a strengthening market recovery,’ Haresnape added.[1]

Howard Archer, chief economist at IHS Global Insight, said that it was possible that July’s performance was raised by house buyers looking to lock in low mortgage rates, before interest rates rise.

[1] http://www.propertywire.com/news/europe/uk-mortgage-approvals-rise-2015090110929.html

Actual Property Transactions Higher than HMRC Reports

Published On: August 24, 2015 at 9:52 am

Author: Em Morley

Categories: Landlord News

Tags: house sales,housing market,property sales,residential property transactions

Actual Property Transactions Higher than HMRC Reports

HM Revenue & Customs (HMRC) has reported that there were 100,720 residential property transactions in July.

This provisional seasonally adjusted figure is 4.4% lower than June’s total, but almost the same as July 2014’s figure, just 0.2% higher.

However, the non-seasonally adjusted figure – the actual number – reveals that there were 119,080 transactions in July, up from 116,270 in June and significantly higher than last July’s 110,280.

Despite seasonally adjusted figures being favoured by economists, they do not paint a clear picture of the actual market.

House Prices to Rise as Demand Peaks

Published On: August 13, 2015 at 2:51 pm

Author: Em Morley

Categories: Finance News

Tags: buying a home,house buyer demand,housing market,property market,selling your home

House Prices to Rise as Demand Peaks

House prices increased faster in July as demand from buyers rose, but the amount of homes on the market dropped to a record low, revealed a report from the Royal Institution of Chartered Surveyors (RICS).

The number of properties for sale has now declined for the sixth consecutive month, while the amount of new buyer inquiries has been rising for four months.

The average number of homes for sale through each RICS member decreased to 47 and new listings were down in nine out of 12 UK regions. Surveyors in East Anglia experienced the sharpest fall.

RICS says that its members agree that the shortage of homes on the market is causing a “vicious cycle, as the limited choice on offer is deterring would-be movers and therefore further restricting new instructions.”

The difference in supply and demand has caused surveyors to predict huge house prices rises over the next year, with the highest gains expected in East Anglia and Northern Ireland.

Rents are also forecast to increase, as demand is again surpassing supply.

Chief Economist at RICS, Simon Rubinsohn, says that with prices rising but sales remaining flat, the housing market has serious problems.

He adds: “More worrying still is the suspicion that the imbalance between supply and demand will lead to even stronger price gains over the next 12 months. This is also visible in the firmer pattern in the buyer inquiries series, which has now risen for four months in succession, reflecting in part a further modest easing in credit conditions.”¹

¹http://www.theguardian.com/money/2015/aug/13/house-prices-rents-rise-rics-surveyors

Less people moved home in Q1 of 2015

Published On: August 10, 2015 at 12:30 pm

Author: Em Morley

Categories: Landlord News

Tags: homemovers,housing market,Stamp Duty

Fewer people moved house in the first half of 2015 than in the same period last year, suggests a new survey by Lloyds Bank.

The banks’ latest Homemovers Review shows that 155,000 people moved property during the first six months of the year, which was 9% down on the opening period of 2014.[1]

Decline

Despite the year-on-year decline, the number of homemovers in the opening six months of 2015 was 32% more than in the same timeframe in 2009. However, the total was way down than in the first six months of 2007, where there were 327,600 movers.[1]

As the total number of homemovers fell between the opening halves of 2014 and 2015, first-time buyers also fell by 10% during the same period. The number of first-time buyers has however risen significantly more sharply than the number of homemovers during recent history.[1]

Andrew Mason, Mortgages Director at Lloyds Bank, commented, ‘there was a modest decline in the number of homemovers in the first half of the year compared with 2014, which was in line with the general softening in housing market activity. Whilst the number of homemovers has risen significantly since 2009, it remains well below previous levels and has recovered less strongly than first-time buyer numbers. This is likely to partly reflect the high costs associated with moving home, as well as highlighting the difficulties that homeowners can face in finding somewhere suitable to move to due to the shortage of properties available for sale.’[1]

Prices

Data from the report also shows that the typical price paid by a homemover has risen by 25.2% over the last five years, from £208,654 to £261,524, an increase of £52,869. In addition, the average deposit put down by someone moving house in 2015 was £87,954-8% greater than last year. This equates to 34% of the typical price paid in total by homemovers.[1]

By regional, the data shows that unsurprisingly, movers in the capital put down the largest deposit of £175,273, which amounts to 36% of the average property value in the region of £492,882.[1]

Less people moved home in Q1 of 2015

Stamp Duty joy

Alterations to Stamp Duty charges have also saved the average homemover £4,769, which has reduced the tax bill for someone buying the average priced property of £261,524 from £7,845 to £3,076.[1]

Nationally, the number of people moving home paying Stamp Duty is around 83%, in comparison to 76% in 2005. This number varies by region, with 100% of movers in London paying the tax, in comparison with 66%.[1]

Types of Property

Homemover purchases are relatively evenly spread between the three main property types-semi-detached (30%), detached (27%) and terraced homes (25%). However, first-time buyers prefer to buy flats, with 23% in comparison to 10% of overall homemover purchases of the same property type. [1]

In London, a far higher number of movers favour purchasing flats (32%). Additionally, homemovers in the capital bought a lot smaller proportion of detached homes than the national average, with 8% in comparison to 27%.[1]

[1] http://www.propertyreporter.co.uk/property/h1-2015-sees-a-decline-of-homemovers.html

House prices rise monthly and yearly

Published On: August 4, 2015 at 3:24 pm

Author: Em Morley

Categories: Finance News

Tags: house prices,housing market,supply and demand

The latest residential Index from the Nationwide Building Society suggests that house prices in the UK continue to rise.

Increases

Data from the report shows that property values in Britain rose by 0.4% in July, and by 3.5% year on year. The monthly rise comes after a slight fall of 0.2% in June, taking the average UK property price to £195,621. Annually, growth has gone up from the 3.2% recorded last month.[1]

Robert Gardner, chief economist at the Nationwide, said that there are signs that annual house price growth may be levelling out close to the speed of earnings growth, typically around 4%.

Gardner said that if this were to be the case, ‘this would bode well for a sustainable increase in housing market activity, though whether this will be maintained will depend on whether building activity can keep pace with increasing demand.’[1]

Continuing, he stated that, ‘employment growth has remained relatively robust in recent quarters, and, after a prolonged period of subdued growth, wage growth is also edging up. With consumer confidence buoyant and mortgage rates still close to all-time lows, demand for housing is likely to firm up in the quarters ahead.’[1]

Unclear

Despite the perceived positivity, Gardner conceded that he was unsure whether supply could eventually catch up with demand. He commented, ‘the number of new homes under construction has started to pick up, albeit from historically low levels, and further increases are required if a sustainable recovery in the housing market is to be maintained over the longer term.’[1]

Alex Gosling, chief executive officer of online estate agents HouseSimple, feels that property prices will continue to rise as demand grows faster than supply. Gosling feels that, ‘with strong employment, a rise in wage growth, and mortgage rates sticking at a record low, prices look like they’ll edge up further in the coming months.’[1]

‘The market desperately needs a boost in new homes if supply is ever to come close to catching up with demand,’ he continued. ‘But the spectre of an interest rate rise looms ever closer with expectations that the Bank of England will start raising them by the year end.’[1]

Gosling went on to describe the property market as, ‘an interest rate paradise,’ but feels that, ‘very soon, that will be a paradise lost.’ He went on to say that, ‘the extent of the impact of a rate rise on the market is a huge unknown.’[1]

House prices rise monthly and yearly

Slow supply

Rob Weaver, director of property at residential investment platform Property Partner, believes that poor supply continues to hold back the property market. He noted that, ‘although demand is likely to drop off a little over the summer, easing house price growth, it is shaping up to be a solid Autumn, with prices set to rise more sharply as of September.’[1]

‘Sellers are likely to be in an increasingly strong position as the autumn progresses, although a cloud looms overhead in the form of a possible interest rate rise before the end of the year. Buyer demand and confidence remains strong right now, but an interest rate rise as early as December could see buyer confidence in the market ebb away very quickly. Even a quarter percent rise in the base rate could have a material effect on demand,’ he explained.[]

Weaver went on to say that more positively, ‘it’s encouragingly to see that buyers overall are paying less stamp duty and are shifting away from the traditional thresholds.’ He concluded by saying, ‘the clustering of old made for an artificial and ultimately restrictive market.’[1]

Prime problems

Jonathan Hopper, managing director of buying agents Garrington Property Finders also believes that with buyer demand and confidence remaining high, the rise of home values is being driven by low supply. He observed that, ‘the exception is the prime property market, which is still reeling from the rise in the top rate of stamp duty. While the Nationwide’s calculations show that the stamp duty changes have reduced price bunching and that most buyers are paying less of the tax, the top 2% are paying an average of £28,000 more per purchase.’[1]

‘With nearly half of all the stamp duty paid in England and Wales collected in London, this is having a substantial chilling effect on the capital’s prime property market. The stamp duty hike was supposed to gently apply the brakes to stop the prime property market racing away. But in the event its effect has been more of an emergency stop,’ he added.[1]

[1] http://www.propertywire.com/news/europe/uk-house-price-index-2015080410822.html