Posts with tag: Second steppers

Almost Half of Buyers are First Timers

Published On: July 9, 2015 at 10:50 am

Tags: first time buyer homes,first time buyers,house purchases,Second steppers

First time buyers account for almost half (47%) of all mortgage-financed home purchases, significantly higher than 38% in 2011, revealed data from Halifax.

The latest Halifax First Time Buyer Review discovered that there were 139,500 first time buyers in the first six months of 2015.

Almost Half of Buyers are First Timers

Compared to the same period in 2014, there has been a 7% drop in first time buyer purchases (from 149,500). This is the first annual decline since the first half of 2011.

However, with the exception of 2014, it was the highest total for the first half of a year since 2007 and was 92% higher than the record low recorded in the first six months of 2009 (72,700).

And although there has been a fall in first time buyer purchases, the proportion of these buyers of all mortgage-financed house purchases has remained stable, also down 7%.

The amount of first time buyers has risen more rapidly than the number of second-steppers in the last few years.

The average first time buyer deposit in May 2015 was £29,894, 6% higher than May 2014 (£28,191). This increase mirrors house price growth over the last 12 months. The average first time buyer deposit is now 82% higher (£13,494) than in 2007 (£16,400).

The Stamp Duty changes of December 2014 have saved the average first time buyer £716 when buying a home, cutting the tax bill for those buying the average first time buyer property – priced at £178,370 – from £1,783 to £1,067.

For first timers in London, the reduction in Stamp Duty is £3,154, from £10,269 to £7,115 on the average first time buyer home in the capital, worth £342,313.

Mortgages Director at Halifax, Craig McKinlay, says: “There was a modest decline in the number of first time buyers in the first half of the year following the substantial increases recorded in 2013 and 2014. This fall has been in line with the general softening in market activity.

“However, there are now signs of a pick-up in mortgage activity as the economy continues to recover and mortgage interest rates remain at very low levels. These factors could boost the number of first time buyers during the second half of the year.”¹

¹http://www.propertyreporter.co.uk/property/how-many-new-first-time-buyers-so-far-in-2015.html

Third of Homeowners Can’t Move Up Property Ladder

Published On: July 6, 2015 at 8:56 am

Author: Em Morley

Categories: Landlord News

Tags: mortgage rates,moving home,moving up the property ladder,Second steppers

34% of homeowners in the UK looking to move up the property ladder think that it is too difficult for them to move, according to new research by MoneySuperMarket.

On average, current mortgage holders say they need to save £10,549 before they can move. High house prices and the expense of moving are named as the two main reasons people have not yet moved house.

MoneySuperMarket found that 26% of respondents think it will be difficult to move up the ladder and a further 9% believe it is very difficult.

Among those aged between 35-54-years-old, this rises to 41% who would struggle to upscale and 28% of 18-34-year-olds would find it tough.

Third of Homeowners Can’t Move Up Property Ladder

Head of Banking at MoneySuperMarket, Kevin Mountford, says: “There was a time when those in the 35-54 age group would have been looking to downsize, but now this is the age group where people are starting a family in some cases or still housing grown up children who are struggling to find their own way.

“Although they might have the earning potential to make that next step, there is the constraint of mortgage terms that comes with their age. Lenders will tend to fix the term of repayments to retirement age, so for those movers aged over 34, the repayments on increased value mortgages will be much higher, as they’re paying it back over a shorter time.

“For example, a £250,000 mortgage on the leading two-year fixed at 1.05% could be taken out by a 30-year-old with a 30-year term and the monthly repayments would be £810. However, for someone aged 45, the same mortgage over a 20-year term would have monthly repayments of £1,155; that’s £345 extra to find each month to make that next move.”

Generally, money is the main reason property owners cannot move, with 47% saying that house prices restrict their movement up the ladder. 43% say they cannot afford the cost of moving.

Current homeowners believe they must save an average of £10,549 to move house, with Londoners expecting to need £12,946. In the North East, this drops to £6,772.

Mountford continues: “Getting a foot on the property ladder in the first place can be hard work, but for many homeowners, it’s just as difficult to take the next step. House prices have rocketed in recent years and tougher borrowing rules have made the search for a mortgage slightly harder.

“It is vital for a healthy housing market that people are able to move up the property ladder, otherwise the whole system can come to a grinding halt, leading to a shortage of property. As a result, second steppers can’t afford to be complacent when it comes to deciding whether to upsize their home. Planning a budget will be crucial, and really taking the time to sit down and work out exactly what costs will be involved is essential.”

Mountford adds: “The good news for those looking to move is that there’s a great deal of competition in the mortgage market at the moment. We’ve seen a huge drop in fixed mortgage rates over the past few years, some with manageable fees. Perks such as free legal costs and free valuations on properties are also offered by some lenders in order to get customers through their doors. As such, there really hasn’t been a better time to get a mortgage.”

Mountford explains that it is important to look at the bigger picture when looking for a new mortgage: “Don’t get lured in by a headline rate, and work out the total cost you have to repay over the term of the offer before agreeing to a deal.

“Also, think about whether you want a fixed or variable rate deal. If you opt for a variable rate mortgage, you need to ensure that you will be able to afford your monthly repayments if and when interest rates do rise, as they won’t stay at this level forever.”¹

¹http://www.propertywire.com/news/europe/uk-home-movers-afford-2015063010687.html

‘Second steppers’ getting market encouragement

Published On: June 8, 2015 at 12:25 pm

Author: Em Morley

Categories: Landlord News

Tags: house prices,property ladder,Second steppers

New research has suggested that a number of so-called ‘second steppers’ in the UK housing market are now in a comfortable financial position.

A survey from Lloyds Bank indicates that a number of people looking to make the next step up the property ladder are being boosted by rising property prices and a steady increase in first-time buyers. The positive report comes despite the fact that additional figures suggest that many second steppers face a rise of £128,000 to move up the housing scale.[1]

Positivity

Lloyds’ report shows that 33% of second steppers believe that it will be easier to sell their property during the coming year. 37% said that they want to move soon to take advantage of the buoyant housing market.[1]

Undoubtedly, first time sellers are in a stronger position than they were five years ago. The rise in house prices have seen the equity of those living in their first homes, with 71% of respondents to the survey saying that they felt their position had improved in the last twelve months.

With prices at their lowest in 2009, many current second steppers would have purchased their homes in this troubled period. The average price of a first time buyer home is now 31% than it was in 2009. This means that the average second stepper has an average equity level of £87,096, which equates to 29% of the typical price of a second step home value of £304,963.[1]

The average estimated equity level has increased by in excess of £36,000 during the last year from £50,655, due to a rise in prices paid for first time buyer properties.[1]

‘Second steppers’ getting market encouragement

Affordable

The research from Lloyds also shows that the average cost of a standard second stepper home is more affordable than one year ago, in comparison with earnings. Housing affordability has grown substantially in the last year from 7.1% times the UK gross annual average earnings in 2014 compared with 6.4% in 2015.[1]

Despite growing house prices giving equity levels a boost, findings from the report also show that people living in their first property must find an average of £128,390 to fill the gap between the sale price of their home and the cost of their next desired property. This desired property was found to commonly be a detached home. The monetary gap drops to just £17,864 if the second-stepper wishes to move to a semi-detached house.[1]

[1] http://www.propertywire.com/news/europe/uk-second-step-property-2015060810599.html