Posts with tag: London

Average UK House Price 6.05 Times Typical Earnings

Published On: May 12, 2017 at 8:15 am

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The average UK house price is currently 6.05 times the typical earnings in the country, according to the latest research by leading hybrid estate agent eMoov.co.uk.

The agent also found that there is an average gap of £6,111 between the current typical wage and the wage required for a general mortgage approval of 4.5 times the borrower’s salary.

eMoov compared the latest Land Registry house price figures with the recently updated Office for National Statistics wage data, to highlight where across the UK presents the greatest obstacle for aspiring homebuyers, both in terms of the wage to house price ratio, and the reality gap between the average wage available and the wage required to secure a mortgage in each area.

The average property price was divided by the typical earnings to find the wage to house price ratio for each area. eMoov then calculated the mortgage deficit by deducting a 10% deposit from the average house price, before dividing it by 4.5 – the standard multiple of a salary required for mortgage approval. The agent then worked out the difference between the average salary in each area and the salary required to purchase a property at the average house price for that location.

The full data is available here.

The worst locations by average wage to average property price

With London house prices continuing to spiral out of control it is no surprise that – with the exception of Purbeck in Dorset – the areas for the worst house price to earnings ratios are in the capital. It is by far the worst region in the UK, with the average house price standing at 12.05 times the typical wage.

Hackney is the worst borough, with the average house price of £575,511 a huge 17.03 times the average wage of £33,800. Brent (16.37) and Haringey (16.21) are also home to an average property price over 16 times the typical wage in the area.

Average UK House Price 6.05 Times Typical Earnings

Average UK House Price 6.05 Times Typical Earnings

Waltham Forest (15.69), Ealing (14.77), Harrow (14.73) and Barnet (14.18) are amongst the other worst offenders, while Purbeck is the only non-London entry in the top ten, at 14.12.

Hammersmith & Fulham (14.06) and Newham (13.18) complete the top ten worst locations.

Outside of London, the gap closes slightly, although all of the areas in the top ten are home to house prices of more than 12 times the average earnings.

After Purbeck, the worst area is Oxford, where the average house price of £408,488 is 13.18 times the typical salary of £31,000. South Bucks (13.08), Hertsmere (12.95), Three Rivers (12.81), South Hames (12.65), Broxbourne (12.53), Christchurch (12.47), Epsom and Ewell (12.44), and Brighton and Hove (12.43) complete the top ten worst areas outside the capital.

The worst locations by gap in earnings for mortgage requirements 

As with the wage to house price ratios, the top ten worst locations where the gap in earnings for mortgage requirements is concerned are all in London, with the exception of one.

Despite having some of the largest wages on offer in the capital, the high price of property in Kensington and Chelsea, Westminster and Camden means that the gap between the average wage on offer and the wage needed to secure a mortgage is over £100,000 – £162,086, £131,126 and £106,138 respectively.

Hammersmith & Fulham (£99,476) and Hackney (£81,302) are also home to some of the largest deficits in London, while South Bucks is the only entry in the top ten outside of the capital, with a gap of £79,314 between the average salary and the salary needed for a typical mortgage approval.

Haringey (£77,813), Richmond (£74,924), Islington (£74,530) and Wandsworth (£71,190) complete the top ten.

The best locations by average wage to average property price

At the other end of the spectrum, the ten best areas are home to an average house price under five times the typical wage – although they are, for the large part, located in the north, Wales and Scotland, so not much hope for southern homebuyers.

With the average house price of £80,605 just 3.43 times the average wage (£23,500), Burnley is home to the smallest gap between the cost of buying a home and the available earnings on offer.

East Ayrshire (3.66), Inverclyde (3.67), Blaenau Gwent (3.74), West Dunbartonshire (3.76), North Ayrshire (3.85), Copeland (3.86), North Lanarkshire (3.91), Rhondda Cynon Taf (4.03) and County Durham (4.04) complete the top ten.

The best locations by gap in earnings for mortgage requirements

Burnley again takes the top spot where financial requirements for a mortgage are concerned. The average wage of £23,500 is £7,379 more than the 4.5 times requirement (£16,121) on the average house price of £80,605.

All of the top ten locations exceed the financial mortgage requirements by more than £4,000, but, again, are for the largest part in the north and Scotland.

They are: Copeland (£7,055), Inverclyde (£7,016), East Ayrshire (£6,262), West Dunbartonshire (£6,265), North Ayrshire (£5,819), Blaenau Gwent (£5,305), County Durham (£4,731) and Hartlepool (£4,700).

By region 

As mentioned, London is by far the worst region, with the South West (9.55) surprisingly the second worst. The South East (9.50) and the East of England (9.33) are more predictably the next largest ratios. The North East is the best, despite its lower wage, with the average house price of £123,749 just 4.95 times the typical earnings.

London is also home to the largest gap between average wage and the wage needed for mortgage approval, at £55,541, while the North East is the only region with a positive difference, of £250.

The Founder and CEO of eMoov, Russell Quirk, comments on the data: “When London is thrown into the spotlight in terms of the unaffordability of its property market, many are quick to highlight that the wages on offer are higher in the capital. However, this research shows that, despite this, the gap between what hopeful London buyers are earning and what they are having to pay for a property is still way out of kilter and climbing. Not only this, but the reality gap between the average wage and wage required for mortgage approval is staggering. Of course, many of us buy with a partner or friend in order to get on the ladder, but even when sharing this burden, there is still a considerable financial mountain to climb.

“It also shows that, elsewhere around the nation, there is almost a direct correlation between what a property goes for and the earnings on offer. But regardless of where you live and what you earn, there has been a serious unbalance between the escalating price of property and the stagnating wages available to UK buyers. This really needs to be addressed to help current and future UK buyers get a foot on the ladder and continue climbing it.”

Where to Buy Property in London’s Zones 3 and 4

Published On: May 9, 2017 at 10:11 am

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Thanks to Crossrail and improving transport links, property in London’s Zones 3 and 4 is proving more lucrative than ever.

Property investors and homebuyers are beginning to look beyond central London in favour of Zones 3 and 4, which will benefit from the capital’s forthcoming improving transport links.

Portico London estate agent’s resident property expert, Mark Lawrinson, highlights the latest hotspots in Zones 3 and 4 that offer affordability, improving transport links and potential for capital gains.

So where should you buy?

Tottenham Hale – Zone 3

Average house price: £492,070

Value change in the last 12 months: +£30,040 (6.5%)

Lawrinson explains Tottenham Hale’s appeal: “With pride of place on the proposed Crossrail 2 map, Tottenham Hale has the potential to be the next big transport hub. It already offers its residents affordable housing, a newly improved train and Tube station on the Victoria Line, plus the Stansted Express, which runs every half hour and kicks off from 3.40am.

“According to Haringey council: ‘Tottenham is the next chapter of London’s regeneration story,’ and we’re already seeing new builds popping up left right and centre. According to Zoopla data, prices have increased by 0.75% from January 2017. If Crossrail 2 is given the green light, investors are going to be racing to purchase property here.”

Wood Green – Zone 3

Average house price: £504,104

Value change in the last 12 months: +£23,494 (4.9%)

What’s the appeal of Wood Green?

“Wood Green, just west of Tottenham, is another hotspot on the projected Crossrail 2 map and the target of substantial regeneration. The high-speed line will connect the north London district to Highbury and Islington, the popular Haringey Ladder (an area between Green Lanes and Wightman Road formed of Victorian streets and family homes), and Finsbury Park.

“Prices here are very reasonable compared to neighbouring areas like Crouch End, plus the council is doing a lot to transform the area into a desirable first buyer hotspot. Work is already underway to build 4,500 new homes and a thriving town centre, plus create up to 4,000 new jobs, which will undoubtedly bring new people to the area.”

Where to Buy Property in London's Zones 3 and 4

Where to Buy Property in London’s Zones 3 and 4

Forest Gate – Zone 3

Average house price: £406,385

Value change in the last 12 months: +£8,115 (2.0%)

Lawrinson looks at Forest Gate: “Forest Gate is an area with fantastic investment potential. House prices here are continuing to rise and defy gloomy Brexit market conditions, but the area remains affordable, with the average price still well under the £500,000 mark.

“For years, it’s been an undervalued area, so prices here still have room to go up – unlike many areas in the capital. And as we tiptoe closer to 2018, when services on the Elizabeth Line will start the run, demand for property in the area will soar.”

Crystal Palace – Zone 3/4

Average house price: £409,796

Value change in the last 12 months: +£8,196 (2.0%)

Why should you invest here?

“Dubbed the new Brixton, Crystal Palace is climbing up the property ranks, thanks to good value, period property, trendy local haunts and the Overground, which goes direct to Victoria, Highbury and Islington, and a range other destinations.

“The Crystal Palace Park Regeneration Plan, which is currently under development, will restore the historic park, adding a new café and skatepark, and renewing the park’s infrastructure.”

Forest Hill – Zone 3

Average house price: £537,018

Value change in the last 12 months: +£14,184 (2.7%)

Lawrinson explains its appeal: “We’re seeing a huge number of homeowners being priced out of other trendy parts of south London, like Brixton and Peckham, and settling in more affordable patches of southeast London.

“Forest Hill has a huge amount to offer its residents: it’s leafy, full of Victorian property stock and you can get into trendy East Dulwich on the bus in five minutes.”

Leyton – Zone 3

Average house price: £417,365

Value change in the last 12 months: +£10,973 (2.7%)

“Leyton is another east London pocket with investment potential; here, Londoners can buy a spacious house with a garden for the space price they could buy a small flat more centrally, and they’ll also benefit from green space and good schools,” says Lawrinson. “Leyton has also piggy backed on nearby Olympic town Stratford’s regeneration, and we’re starting to see the area smarten up.”

Woolwich Arsenal – Zone 4

Average house price: £345,219

Value change in the last 12 months: +£5,625 (1.6%)

Why should you invest in Woolwich Arsenal?

“Your money will stretch quite far in Woolwich, with the average house price standing at a reasonable – for London – price of £345,219. There have been a spate of new developments pop up in the area over the past decade, but, unfortunately, Woolwich hasn’t had the infrastructure in place to really cement itself as a hotspot for homebuyers.

“Crossrail has completely changed this. The new Elizabeth Line station at Woolwich Arsenal will help transform the area, supporting regeneration, reducing journey times, and creating a link between Woolwich and Canary Wharf, central London and Heathrow.

“On top of this, there is a £40m proposal for a major arts hub near the new station, which will be a fantastic addition to the area and a great reason to buy here.”

Will you buy in any of these up-and-coming areas?

Rents in London fall for first time since 2009

Published On: May 8, 2017 at 8:38 am

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Categories: Landlord News

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The most recent report from Homelet has revealed that rents in London fell for the first time since 2009 during April. This was a direct result of rental price inflation across the UK sliding to its lowest level for more than seven years.

Capital Falls

Homelet’s report found that rents in the capital were down by 1.2% in April, in comparison to the same period in 2016. This is the first time typical rents have fallen year-on-year since December 2009.

This decline in London, alongside marginal decline across the wider South-East region, drove rental price inflation down across the country as a whole.

Rents for new tenancies in Britain during April were 0.4% greater than in the same month in 2016- the lowest figure since February 2010.

This rental price inflation means that tenants signing for a new tenancy over the last month paid an average rent of £904 per month across the UK. When the greater London region is removed from the analysis, the average rent agreed falls to £754.

Rents in London fall for first time since 2009

Rents in London fall for first time since 2009

Inflation

In addition, the data showed that areas of the country where rents are rising more quickly are those that saw less profound rental price inflation during the first six months of 2016.

Wales for example saw rents 2.2% greater in April compared to the same month last year.

Martin Totty, Chief Executive Officer at HomeLet, observed: ‘Rents have been rising at a more modest pace across the whole of the UK in recent months, with lower levels of rental price inflation and even falling rents in areas of the country where prices were previously rising most quickly. We continue to see landlords’ and letting agents weighing tenant affordability considerations very seriously.’[1]

 

[1] http://www.propertyreporter.co.uk/landlords/london-rents-are-falling-down.html

 

 

Paragon Bank Finance Delivers Much Needed Housing in London

Published On: April 28, 2017 at 8:38 am

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Categories: Finance News

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Paragon Bank is celebrating the delivery of much needed housing in Catford, southeast London through its development finance loans.

Paragon Bank Finance Delivers Much Needed Housing in London

Paragon Bank Finance Delivers Much Needed Housing in London

The housing scheme in London is the result of the first loan the development finance team approved over a year ago.

Since launching in November 2015 with an initial focus on residential projects across London and the South East, Paragon Bank is now funding schemes elsewhere in the country.

The homes in Catford are a result of a 16-month development worth over £1.7m, which has seen a disused office building converted into five mews houses. The terraced properties are aimed at families, and come with three bedrooms and two bathrooms.

Since launching, the development finance team has expanded beyond the South East, and now has sales representatives in both the Midlands and the north of England. The team offers competitive loans ranging from £500,000 to £10m.

The Development Finance Director at Paragon Bank, Fintan O’Riordan, says: “Progress on this development has been excellent and it is great to see the first loan we approved now delivering homes. Small-scale builders and developers have an increasing role to play in helping deliver the housing the country needs, and development finance is key to facilitating this.

“It has also been fantastic to assist a highly experienced developer on this project. Our business is based upon developing meaningful relationships with experienced developers.”

The development at Colbeck Mews, Catford is here on Rightmove: http://www.rightmove.co.uk/property-for-sale/property-58154038.html

Other features of Paragon Bank’s development finance product include:

  • Interest and fees defined at the outset, with no additional fees for achieving a higher sales figure on final development
  • Finance for up to 80% of development costs for the strongest propositions
  • Competitively priced senior debt funding solutions

Are you looking to get involved in a similar project? Perhaps you could deliver much needed housing in parts of the country that are suffering!

London Property Sales at Lowest Ever Pre-Election Level

Published On: April 27, 2017 at 8:25 am

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London property sales are at the lowest ever levels recorded pre-election, according to analysis of the latest Land Registry data by Portico London estate agent.

London Property Sales at Lowest Ever Pre-Election Level

London Property Sales at Lowest Ever Pre-Election Level

The data shows that there were just 55 property sales in the whole of the Westminster borough in February this year – the lowest ever number recorded by Land Registry, and 60% lower than in February 2009, immediately after the market crash.

Portico’s study shows that there is a clear correlation between general elections and property sales; hence, the agent is predicting a further decline in sales volumes until the snap General Election on Thursday 8th June.

Historically, low levels of property sales in central London have pushed people further out of the capital, but Portico’s data shows that falling volumes are now a problem across the whole of London.

There were just 105 property sales in the south London Borough of Wandsworth this February, compared with 370 last year – a huge 72% decline year-on-year.

Likewise, the Land Registry figures show that there were just 82 property sales in the east London Borough of Redbridge in February, compared with 260 the year before – a 68% decrease on an annual basis.

According to Portico’s research, the market will likely experience a spike of activity post-election, when certainty in the market is restored. After the last general election in 2015, Wandsworth and Westminster experienced a 28% increase in property sales in the three months post-election, and Redbridge saw an even greater 34% jump in activity.

The Managing Director of Portico, Robert Nichols, comments: “Currently, transaction volumes, or the number of homes being bought and sold in the capital, are at an all-time low. The drop in transactions is in part explained by a big jump in sales in the run-up to April last year, when the change to Stamp Duty taxes came into effect, followed by an immediate fall. Since then, volumes have dropped to historic lows, and Theresa May’s decision for a snap General Election will further subdue the market.

“We are expecting to see some improvement in volume post-election, but, at best, we expect volume to track at -5% year-on-year to summer 2016, when volumes failed to recover after the Stamp Duty changes.”

However, he adds: “We cannot say for certain what impact a boost in market activity will have on property prices, but, historically, there has always been a slight increase. If we look at the last election, house prices rose by 2.4% in Wandsworth in the three months following the vote, 4.6% in Redbridge and 1.7% in Westminster. Similarly, in the election before that in 2010, property prices rose by 1.8% in Wandsworth, 2.5% in Redbridge and a staggering 19% in Westminster in the three months after the election.”

The London Marathon House Price Map for 2017

Published On: April 21, 2017 at 8:10 am

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Ahead of this Sunday’s London Marathon, online estate agent eMoov.co.uk has updated its London Marathon Property Price Map for 2017.

The map looks at the difference in average house prices across some of the 26-mile markers in this weekend’s London Marathon.

Across the 16 locations, the average house price is £695,255 – up significantly from last year’s £530,368.

The cheapest option for property buyers this year is at mile four in Woolwich, at an average of £328,866. The most expensive, unsurprisingly, is the final mile market at St James’s Park, with an average house price of £1.6m.

If you’re not too keen on running this Sunday’s race, you can instead take a look through the London Marathon Property Price Map for 2017:

The London Marathon House Price Map for 2017

The London Marathon House Price Map for 2017

The race starts in Blackheath, where the average house price is £559,107. It then drops to £450,958 in Charlton, before dropping further to £328,866 in Woolwich. At mile seven, in Greenwich, the average property value rises to £544,899, but falls to £418,949 in Deptford.

It stays just below £500,000 in Rotherhithe and Bermondsey (£496,099 and £497,560 respectively), before soaring to £842,687 in Wapping, at mile 13. However, prices come down to £506,343 in the Isle of Dogs, £526,781 in Canary Wharf, £528,694 in Limehouse and £418,475 in Shadwell.

Towards the end of the route, prices really start to pick up. At Monument, mile 23, average prices are a hefty £949,720. In the City of London, however, they drop to £844,356, before soaring to £1,546,448 in Embankment, at the end of the course.

The Founder and CEO of eMoov, Russell Quirk, says: “The London Marathon is a celebration of London itself and, with the route spanning far and wide across the capital, runners will take in the very best of what the city has to offer. This includes the type of property on the market, and our research shows how the price of London homeownership varies across the route, as well as where aspiring buyers can still find a bargain that offers a good view of Sunday’s race.”