Broken rung on the property ladder

A new report has shown that the UK’s property ladder has a serious broken rung, which is namely the first rung that so many first time buyers are anxious to get their foot onto. A new report entitled ‘Broken Ladder’ has been released by the Home Builders’ Federation, and its contents show just how serious a problem it has become for potential first time buyers to realise their dreams of homeownership.

Shockingly the report suggests that in the current climate someone looking to get onto the property ladder would have to spend every penny of their income saving for two years simply to raise the deposit that most lenders were demanding, and in London this figure increased to three years. This would mean having no money for rent, food, clothes, or living expenses.

Over a five year period first time buyers would still have to save 50 percent of their income to put aside towards a deposit in order to raise the amount that lenders wanted, and again this would be even higher in areas such as London. The Home Builders’ Federation has said that the situation has now become critical at a time when the property market is already in turmoil.

A spokesperson for the Home Builders’ Federation said: “These figures reveal the extent of our housing crisis. First-time buyers – the life-blood of the housing market – are almost entirely shut out. The lack of mortgage availability is further strangling a market already choking on a lack of supply. We desperately need an increase in lending and a properly functioning and sustainable mortgage market. At the same time, the Government must ensure that the new planning policy and incentives they are basing the success of their housing plans on are put in place immediately. Without more houses and more mortgages, young families will be unable to have the security of a roof over their heads and the housing crisis will very quickly reach the point of no return.”

 

Tags: Real estate economics, food, situation, income, realise, incentives, Home Builders, young families

93 percent of asking price being achieved for properties

Recently released data has suggested that the property market is once more swinging in favour of sellers, as an increased number of homes are achieving almost the full asking price when they are sold. Read more

Tags: swinging, Home.co.uk, Real estate economics, Real estate broker, property market

House price bubble formed due to higher demand for property in UK

Recent reports have indicated that s house price bubble is being formed in the UK, with the main cause of this being the high demand for properties compared to the low supply from sellers. Read more

Tags: Real estate bubble, Estate agent, Real estate, Danish property bubble of 2000s, Real estate economics, National Association of Estate Agents

Banks still turning down thousands of mortgage applications

It has been revealed that whilst many reports have claimed that restrictions on mortgage and general lending have started to ease off recently banks are still turning down thousands of mortgage applications every month, further hindering the recovery of the housing market. Read more

Tags: stringent regulations, Labour, reasons why, mortgage applications, Mortgages

House prices plummet at a faster pace than in the 1990s

Many people that are in their thirties and over will still clearly remember the dark days of the 1990s recession and house prices crash, where many people were left in negative equity after property prices plunged. Many are seeing the same patterns for again now, with the global credit crunch leading to plunging property prices and the year finishing with a recession where many businesses are going into administration. Read more

Tags: Real estate economics, Economic history, IHS, economics, faster pace, finance, house price fall

Low deposit mortgage numbers fall

Industry officials have reported that there has been a fall in the number of low deposit mortgages that are still on the market. This could cause huge problems for potential first time buyers, many of whom do not have much in the way of savings to put towards a deposit and none of whom have a previous property from which to take equity to put towards a deposit. Read more

Tags: credit, substantial deposit, Deposit account, none, Mortgages

House price falls worse than last crash

In the 1990s, many people will remember that there was a house price crash that plunged many homeowners into negative equity, and a lot of people will have concerned memories of this time following the past year, when house prices have been tumbling month on month. However, according to officials from the Halifax, its records show that based on a peak to trough bases the current situation has already outstripped the 1990s crash. Read more

Tags: Real estate economics, past year, halifax, situation, house prices, finance, prices, negative equity

Government suspends stamp duty on homes up to £175,000

Early last week the government announced that it was suspending stamp duty for twelve months on homes up to the value of £175,000. Stamp duty is not applicable on homes up to £125,000 anyway, but the recent move increased the threshold by £50,000 for twelve months in order to try and ease affordability issues for potential buyers. The announcement came after several weeks of speculation with regards to whether any action would be taken over stamp duty. Read more

Tags: certain value, stamp duty, number, Taxation in Hong Kong, money, government, affordability problems

A quarter of home refit projects go over budget say experts

Up to one in four of home makeover projects end up going over budget, according to figures from Halifax Home Insurance.

An estimated million under-budgeters have to find an extra £4,690 to afford £10,000 which is the average cost of completing a home improvement project.

This works out at a total annual budgeting shortfall of approximately £4.7 billion.

Martyn Foulds, senior claims manager at Halifax Home Insurance, said: “It’s interesting to see that the major reason for spiraling costs is often due to homeowners adding extras to a project half way through.”

He added: “Clearly it is all too easy to get carried away with adding more expensive fixtures and fittings as the project unfolds.”

The most commonly cited reason for escalating costs, from over half of the survey’s respondents, was upgrading to higher specification fixtures and fittings.

A further 20 per cent said costs had risen after building works had unearthed problems with their house that needed urgent attention.

Meanwhile, more research from Halifax has found that over two thirds of respondents believe the government could be doing more about the number of vacant properties in the UK.

Tags: home makeover projects, specification, expensive fixtures, house, home insurance, respondents, Real estate economics, Financial services

Average house prices approach £200,000

The average price of a house has almost reached the £200,000 mark, according to new figures, but the rate of growth has shown further signs of slowing.

According to the Halifax House Price Index, house prices increase by 0.4 per cent during the month of August, with the average cost now £199,770.

This is the third month out of four that house price inflation has dropped below 0.5 per cent and the Halifax report claims this is indicative of a slowdown in the market.

In addition, the three-monthly rate of growth fell from 4.5 per cent in March to 1.6 per cent in August.

“The downward trend in house price growth is expected to continue over the remainder of 2007 as the five interest rate rises since last summer have an increasing impact on household spending and housing demand,” said chief economist Martin Ellis.

“Sound economic fundamentals, high levels of employment and a shortage in the number of properties available for sale will, however, continue to support house prices.”

The figures also showed that mortgage approvals in the three months to July of this year were nine per cent lower than those recorded during the peak September to November 2006 period.

Oliver Gilmartin, senior economist at the Royal Institution of Chartered Surveyors, said the figures meant speculation of an imminent interest rate cut was “premature”.

Tags: month, house price, Average house prices, Real estate economics, cent, institution of chartered surveyors, United States Department of Housing and Urban Development, housing

BTL “stabilises” prices

Although borrowing costs are rising due to the five separate interest rate rises in the past year – which some say could lead to house market turbulence – the continuing strength of the buy-to-let market is providing much-needed stability.

That is the contention of Paragon, whose Buy-to-Let index for July was released today.

According to the index, rents have risen by just over three per cent over the past three months, boosting the annualised growth rate to 12 per cent.

This comes at a time in which the general housing market is widely recognised by analysts to be slowing.

Chief executive of Paragon Group Nigel Terrington, commenting on the new index, said: “Buy-to-let provides housing for young people, who otherwise would be forced to buy and be stretched beyond their means. It would result in dramatically higher levels of repossessions in the housing market.

“As owner occupiers are increasingly struggling under the weight of higher borrowing costs, buy-to-let landlords can provide accommodation for the growing number of young people who want a flexible lifestyle or who aren’t yet ready to step on the property ladder.”

Figures covering the first half of the year from the Council of Mortgage Lenders (CML) have also recently revealed that the buy-to-let market took up 12 per cent of total mortgages in Britain – a record amount.

Tags: property ladder, investment, Nigel Terrington, landlords, Youth

FTBs saving longer for their deposits

First-time buyers (FTBs) are saving for “around five years” to put down a deposit for their home, Your Mortgage said yesterday.

FTBs are also relying on loans from parents more and more, as house prices increase and interest rates rise.

Editor of Your Mortgage Paula John said that the average savings time had increased by a full 11 months in the past year alone.

“Of course, in the light of recent interest rate increases houses are even less affordable for first-time buyers so they are being kicked out of the market altogether”, she said.

Ms John also stated that house prices in London, which have increased by 15 per cent on average in the last year alone, have led FTBs to “lower their sights” and “buy a lot further out”.

According to HousePriceCrash.co.uk, in the last decade numbers of FTBs have shrunk from 55 to 29 per cent of the market.

The Office of National Statistics has also stated that the average price paid by FTBs in the UK has risen by 204 per cent over the same period.

Tags: house, Ms John, first time buyer, market, average savings time, Real estate economics, National, uk

Average house price £100k+

House prices have continued to grow, with new research showing that every county in the UK has an average house price above £100,000.

The data, collated by Halifax, signals the first time ever that this has been the case and demonstrates a massive growth in average prices.

In 2001 there were 63 out of 101 counties with an average price below £100,000. In addition, only Surrey had an average price of £200,000 back then.

The latest survey shows that 19 counties had an average house price of at least £200,000.

Scotland and Wales saw the biggest growth in house prices, with the top ten fastest growing counties being in these regions.

“Wales, Scotland and, to a lesser extent, Northern Ireland, have dominated the UK county league table for house price growth over the past five years,” said Martin Ellis, chief economist at Halifax.

“Southern England, by contrast, has lagged behind. Much of the out performance by these parts of the UK has been part of a catch-up process with the greater availability of more affordable property stimulating demand and therefore allowing prices to rise more quickly.”

Tags: Real estate economics, business, house price, martin ellis, addition