House prices up 6.8% since January 2014

Properties are exchanging hands for 6.8 per cent more this month than a year ago.
House prices are now 2.4 per cent higher than before the 2008 economic crash - with the average home worth £188,446.


Separate Land Registry figures said prices in England and Wales in the year to December rose 7 per cent, down from 7.2 per cent in November and the fourth month in a row that the annual rate has fallen.

Both sets of figures show that average house prices have remained static since last summer.

The Nationwide said the reasons for the slowdown in the housing market since then 'remain unclear', as the economic background has in fact continued to improve.

But it predicted that house prices would take off again once people started to feel the benfit of pay rises.

Nationwide's chief economist Robert Gardner said the number of mortgages approved had been about 20 per cent below last year - and surveyors continued to report subdued levels of new buyer enquiries.

But Mr Gardner said the reasons for the continued slowdown were unclear given the fall in unemployment, wages that have started to rise faster than inflation and high levels of consumer confidence which have helped fuel strong retail sales growth.

'If the economic backdrop continues to improve as we and most forecasters expect, activity in the housing market is likely to regain momentum in the months ahead,' he said.

Prices were also likely to be supported by the long-term shortage of new houses coming onto the market.

'It is encouraging that the number of new homes built in England was up 8 percent in the year to the third quarter of 2014. However, this is still 34 percent below pre-crisis levels and little over half the expected rate of household formation in the years ahead,' Gardner said.

The Land Registry data showed that London house prices ended the year up by 16.3 per cent, at an average of £464,936.

In nine boroughs prices were up by more than a fifth over the year, and in every part of the capital rises were in double digits.

The biggest leap in prices was in the north-east borough of Waltham Forest, which includes Walthamstow, which saw prices increase by 25.1 per cent to an average of £368,000.

Kensington & Chelsea recorded the lowest level of growth within London, at 11.5 per cent over the year, but the average price was still a lofty £1.3million.

Source: www.dailymail.co.uk

UK property sales hit seven year high in 2014

 

 

Property sales across the UK rose by 14% last year to 1.22 million, the highest number since 2007. Figures from HM Revenue and Customs (HMRC) show that sales went up in every region of the UK.

In the last few months of 2014 the number of homes being sold eased off as the market cooled, and price increases also slowed.

Mortgage lenders recently forecast that sales this coming year may drop back slightly, to about 1.18 million.

The UK property market slumped in the wake of the 2008 banking crisis as lenders turned off the "mortgage tap". Sales fell to a low of 858,000 in 2009.

But since then they have risen each year, boosted by government initiatives like Funding for Lending, and helped by a gentle revival in the economy along with rising employment.

"Since December 2008, there has been a slow but steady upward trend in the seasonally adjusted count," commented HMRC.

"This trend grew at a faster rate between April 2013 and February 2014; however since then the rate has declined slightly." Further drop?

The possibility of the recent slowdown in sales extending into this year has been indicated by the trend in mortgage approvals, the number of mortgages approved by lenders but not yet lent.

The figures, published each month by the Bank of England, show that approvals have been falling slowly since last June.

As further evidence, the Royal Institution of Chartered Surveyors (Rics) said earlier this month that the number of new properties being listed for sale by its members had fallen for 10 of the last 12 months.

It added that the number of potential buyers entering the market had now fallen for six months in a row.

Source: www.bbc.com

UK house price sentiment moderates

 

  Almost 20% of households in the UK perceived that the value of their home rose in January, according to the latest House Price Sentiment Index which reveals a downward trend in 2014.

 

Some 19.5% of the 1,500 households surveyed across the UK said that the value of their home had risen over the last month, while 3.1% reported a fall, the data from Knight Frank and Markit Economics shows.

This gave the HPSI a reading of 58.2, the twenty second consecutive month that the reading has been above 50. The index report points out that the HPSI was on a general downward trend for most of the second half of 2014. January’s reading of 58.2, the lowest in 14 months, was a continuation of this trend and well below the average reading for last year of 61.

In spite of the month on month fall, households in all 11 regions covered by the index reported that prices rose in January, led by Londoners at 65.3 and households in the South East at 63, while, households in the North West at 53 and Wales at 53.9 perceived the slowest rates of price growth over the course of the month.

In London, perceptions of house price growth moderated compared to the previous month and stand well below the previous high of 74.9 in April last year, suggesting that households are less confident that the value of their property has risen than previously.

The future HPSI, which measures what households think will happen to the value of their property over the next year, fell in January to 69.5, down from 70.5 the previous month. This was the second consecutive monthly fall in house price expectations across the UK. The future HPSI stands well below its record high of 75.1, which was seen in May 2014.

Households in London at 75.3 are the most likely to expect price rises over the next 12 months, followed by those in the South West at 75.1 and the South East at 74.9, the index shows.

Expectations of price growth are highest among mortgage borrowers and those who own their home outright with readings of 75.8 and 71.3 respectively, followed by those living rent free at 66.8.

‘House price sentiment has slowed across the country despite the cut in stamp duty introduced by the Chancellor in December. Households in London and the South East signal slower annual rises in house prices this month than last month, an important development as these areas have been the engines of high house price growth over the last year,’ said Grainne Gilmore, head of UK residential research at Knight Frank.

‘Even the prospect of record-low interest rates being in place for longer than anticipated has not been enough to lift expectations for house price growth on a monthly basis in January, however this, coupled with an expected rise in wage growth will likely result in modest price uplifts over 2015,’ she added.

Tim Moore, senior economist at Markit, explained that as UK house price sentiment cooled again in January, the survey’s gauge of current property values is the least positive for over a year.

‘All regions have seen a sharp moderation in house price sentiment from its highest point in 2014, with London and the South West experiencing the greatest slowdown from recent peaks. January’s gradual drift in UK house price sentiment hints at slower trends for property values over the coming months, reinforced by stretched affordability and slow wage growth,’ he said.

‘That said, the balance of households forecasting a rise in their property value this year is still high by the survey’s historical levels, suggesting that subdued interest rate expectations and falling consumer price inflation could limit the scale of any retreat in UK house price sentiment during 2015,’ he added.

Source: www.propertywire.com

Estate agents launch new property website

A group of estate agents has launched a new property website to rival Rightmove and Zoopla, which dominate the market.

Called Onthemarket.com, it has been set up by a consortium of estate agency firms from around the UK.

All agents that use the new site to advertise their properties for sale will automatically become part owners of the new business.

But to join, they must agree not to advertise with one of the big two established websites.

Onthemarket.com's chief executive, Ian Springett, spelled out the new site's aggressive approach.

"In order to enter a market where two major players are so dominant, Onthemarket.com member agents commit only to advertise their properties on one other portal," he said.

"In practice, this means in most cases removing their properties from either Rightmove or Zoopla.

"The result is that... as well as losing large amounts of property stock, Rightmove and Zoopla will also suffer a substantial hit to their income," he added.

In response to the start of the new website, Lawrence Hall of Zoopla was scathing.

"This new portal, owned by about one in four High Street estate agents, is a regressive business model trying to stifle innovation at the expense of home sellers up and down the country," he said.

"It creates the single biggest conflict of interest we have ever seen between an agent and their client where the agent is now trying to limit exactly what the seller is paying for - maximum exposure of their property."

The new site says it already has 2,200 estate agents signed up, operating more than 4,600 branches between them.

Many, the new business said, have also agreed to advertise their properties only on the new site for the first 48 hours, before advertising them elsewhere.

Property commentator Henry Pryor said the new website would cause confusion.

"This will make life harder rather than easier in the short term," he said.

"It will make things more frustrating because it won't make it easier or cheaper to find properties to buy or rent." Profitable

There seems little doubt that the dominant position of Rightmove and Zoopla is ripe for a challenge.

Their businesses are enormously profitable with Rightmove making annual profits of £104m on a turnover of £140m, and Zoopla making annual profits of £39m on a turnover of £80m.

A big attraction for estate agents who join Onthemarket should be lower fees for advertising properties for sale to to let.

Rightmove said its basic fees were £720 a month for each branch of a sales agency, and £395 ar month for each branch of a lettings agency.

Zoopla said its average fee per agent was £323.

By contrast, Onthemarket said its typical fees for a selling agent might range from £177 a month to £655 a month depending on its location, with central London branches attracting the highest fees.

Its fees for a letting agent will be half that of a selling agent. 'Cynical'

Online-only estate agents, with about 2% of the market, will not be allowed to join the new business.

One of them, Alex Gosling of House Simple, denounced the new initiative as a purely protectionist measure by traditional estate agency businesses.

"Onthemarket is the High Street agents' cynical, anti-competitive and desperate reaction to a market that is changing," he said.

"Homeowners are fed up paying the exorbitant fees High Street agents charge for a poor and inflexible service."

Source: www.bbc.com

Buy-to-let: which types of property give the biggest returns?

In charts: rental yields on mainstream buy-to-let compared with those from 'HMOs' and small blocks of flats 

The controversial but lucrative tactic of chopping up family homes into bedsits or “houses of multiple occupation” (HMO) is no longer the biggest earner in buy-to-let.

So-called "multi-unit freehold blocks", which involve buying a block of flats or a converting a building into apartments, earnt investors 9.3pc in gross rental yields between October and December 2014.

By contrast, HMOs, the buy-to-let formula of millionaire property investors like developer Jim "HMO Daddy" Haliburton, earned 9pc in the same period.

These yield figures, based on thousands of actual transactions made since 2011 through leading buy-to-let broker Mortgages for Business, are “gross”. That means they don’t take into account costs such as servicing a mortgage, maintenance costs, ground rent – or add-ons such as letting agent fees and income tax.

The chart (below) compares rental yields across buy-to-let investment in blocks of flats, HMOs, and mainstream buy-to-let which usually involves a two or three-bedroom house or flat.

Investing in blocks of flats doesn’t come cheap. Prices start at around £500,000 for an eight-apartment building in a city outside London and £4m for the same size building in central London.

However, the average buyer’s budget for a block of flats has fallen in recent years. In early 2011, the average property price was £932,148 with a 44pc deposit. Now, investors pay £497,644 on average with a 36pc deposit.

Typically, landlords rent out the flats to individual tenants, charging rent for the individual flats and a ground rent.

Currently, investors can buy a converted Victorian home with eight flats in Nottingham, on the market for £475,000, which currently yields 7pc, according to online property portal Rightmove. A luxury development of 20 apartments in Canary Wharf, London, recently sold for £33m.

HMO will continue strong performance, experts say

HMO rental yields are higher than more traditional buy-to-lets, but returns have slipped over the past year. Slicing up properties for multiple occupants, where tenants share a living space but hold separate rental agreements, yields 1.4 fewer percentage points than at the same point last year.

For the year ahead, buy-to-let investors are confident that HMOs will produce the best income.

"The fact that yields on multi-units have overtaken HMOs is surprising but can be attributed to a larger proportion of transactions for larger multi-units in the quarter," said David Whittaker of broker Mortgages for Business.

Multi-unit flats are lucrative because of "economies of scale" and therefore may only benefit high value investors.

Meanwhile HMO remains popular with high demand from tenants. "For a multitude of reasons, not least stagnant wage growth for half a decade, many tenants simply can’t afford an enormous flat with a spare bedroom," Mr Whittaker said.

"As such, the attraction for many of renting a room rather than whole property will ensure that there is a steady yield-boosting demand for HMOs over 2015."

The average residential rent across England and Wales is now £767 per month, up from £745 in December last year, according to estate agent chains Your Move and Reeds Rains.

The gross yield on a typical rental property in England & Wales is 5.1pc, while the average capital gain amounts to £10,546.

Source: www.telegraph.co.uk

How do the property tax systems add up?

The Scottish Finance Secretary John Swinney has revised his planned property tax changes, due to come into effect on 1 April.

His original scheme, announced in October last year, proposed new bands, plus a gradual tax, similar to income tax.

Two months later, UK Chancellor George Osborne adopted the same gradual approach to stamp duty, but with different bands and rates.

That move prompted a re-think by Mr Swinney who has now changed his proposal.

Here are some random purchase prices showing what the tax was under the old stamp duty system; the new UK property tax system; the draft Scottish system and the revised Scottish system......

 What's the tax for a £135,000 house?

1. Stamp duty system (now abolished) - £1,300 tax
2. New system (UK) - £200 tax
3. Draft Scottish system - No tax to pay
4. Revised Scottish system - No tax to pay 

What's the tax for a £233,000 house?

1. Stamp duty system (now abolished) - £2,330 tax
2. New system (UK) - £2,160 tax
3. Draft Scottish system - £1,960 tax
4. Revised Scottish system - £1,760 tax

What's the tax for a £325,000 house?

1. Stamp duty system (now abolished) - £9,750 tax
2. New system (UK) - £4,000 tax
3. Draft Scottish system - £9,800 tax
4. Revised Scottish system - £5,850 tax

 What's the tax for a £1m house?
 

1. Stamp duty system (now abolished) - £50,000 tax
2. New system (UK) - £43,750 tax
3. Draft Scottish system - £77,300 tax
4. Revised Scottish system - £78,350 tax

Source: www.bbc.com

UK asking prices up 1.4% this month, latest index shows

The price of property coming to the market in the UK increased by 1.4% in January at a time of year when prices usually fall, according to the latest index from Rightmove.


It takes the average national asking price to £273,275 and means prices have increased by 8.2% in the last 12 months.

But it points out that even although the number of properties on sale has increased by 2% this if failing to replenish agents’ historically low stock and currently levels are 10% below the same period last year.

Sales activity has been boosted by Stamp Duty savings of up to £1,250 for some first time buyers and average property prices in this sector are down by £1,132 this month.

However the firm reckons that despite continued low mortgage and inflation rates, sellers will have to work harder in 2015 than in 2014 due to election jitters and mortgage restrictions. It believes that lenders are selecting buyers who are good risks to lend to, and in turn buyers are very selective with the properties they choose.

A closer look at the figures show that prices and activity both cooled in the second half of 2014, though there are signs of a New Year bounce back. More people are looking for property than last year, and more sellers are putting their property up for sale.

‘Early 2015 statistics currently point in the right direction for home movers, with the Chancellor’s Stamp Duty reform perhaps being the spur for people to get on with moving. There are more positive signs of early bird activity rather than pre-election jitters or economic worries deterring prospective movers,’ said Miles Shipside, Rightmove director and housing market analyst.

‘The unseasonably high 1.4% jump in new sellers’ asking prices suggests that there are more rises in the pipeline for the next few months. Early-bird buyers, including trader-uppers, can potentially catch a good deal by getting off the mark quickly in 2015, and get a better pick of the housing crop,’ he explained.

Rightmove’s updated House Price Index now tracks typical property prices and supply for the main market sectors, including first time buyers, second steppers and the top of the housing ladder.

It says that with the average first time buyer property coming to the market at £163,251, the reform to Stamp Duty announced in the Autumn Statement could mean potential savings of up to £1,250.

‘Should prices rise, as they look set to over the next few months, potential Stamp Duty savings will diminish, but they will still be helpful to first time buyers struggling to save enough to cover the Stamp Duty bill as well as the mortgage deposit,’ said Shipside.

‘First time buyers are in a potential win-win savings window this month with the price of property coming to market in this sector being over £1,100 cheaper, coupled with up to £1,250 in Stamp Duty savings. This is a welcome boost given that the price of property coming to market in the first time buyer sector has increased by 10.5% in the last year,’ he added.

The index also shows that visits to the Rightmove website were up over 10% in the first 13 days of January versus last year. In addition Rightmove set a new record for pages viewed on the website on Sunday 11th January. Shipside believes that these early indicators of increased property interest, combined with estate agents reporting low stocks of appealing property in popular locations, should give encouragement to prospective sellers.

However, Rightmove still cautions sellers that it will be harder to sell in 2015 than in 2014. ‘Election jitters could lower the number of property transactions rather than lower prices, resulting in a moderate reduction from the high volumes seen in 2014, but with average prices driven up by the more resilient activity in popular locations,’ said Shipside.

‘In addition, we predict that many buyers who have jumped the hurdle of lenders’ selective criteria to secure a mortgage will be fussier about the home they buy. The lack of the right quality property situated where people want to live may cause some to postpone their move,’ he pointed out.

Shipside predicts that the popular properties that most people want will remain sought after and will remain both highly prized and priced. Less attractive property is available in many locations but has often been on the market for some time, though it could be an option for choosier buyers if the seller is more negotiable on price.

‘Buyers deemed mortgage worthy will value their hard won purchase pots and want to spend them wisely. That might mean stretching themselves to afford a property that ticks all the boxes, but wanting a heavy discount on one that falls short,’ he said.

‘A property that offers longevity of stay by having adaptable accommodation and scope for increase of floor area will be especially appealing given the costs and upheaval of moving more regularly,’ he added.

Rightmove believes that 2015 will be the ‘Year of the Selective Mover’ on two counts, firstly because lenders have selected them as a good risk to lend to, and secondly because they will be very selective about which properties they choose.

‘The high traffic volumes on Rightmove not only indicate underlying demand, but also people regularly searching for a property that suits their needs. With insufficient new build over the last few decades and a systemic change in the makeup of our current housing stock, buyers are dissatisfied with, and therefore dismissive of, some of what is up for sale,’ said Shipside.

‘While you cannot change the location of a property, sellers can improve the appeal of their home in other ways to persuade today’s choosier buyers that the positives outweigh the negatives. Getting advice from estate agents about how to prepare or adapt your property ready for sale, pricing correctly to attract value-conscious buyers, and then getting it in front of as many of them as possible will be very important in 2015,’ he concluded.

Simon Gerrard, president of National Association of Estate Agents (NAEA) said that the start of the year has been a strong one. ‘More people seem to be putting their property on the market early this year, one explanation for this is that they are doing so rather than waiting for the normal seasonally busy time of Spring,’ he explained.

‘This is most probably because spring 2015 will coincide with the General Election that could lead to uncertainty in the market at that time. There is still more demand than supply, and sellers with property values near the old Stamp Duty thresholds are now able to market their property for its true worth, both of which are contributing to higher asking prices,’ he pointed out.

‘Overall I think we’ll see a strong first quarter to the year, especially as potential buyers are now getting used to what is expected of them with the stricter lending criteria,’ he added.

Source: www.propertywire.com

UK Mortgage price war starts in 2015

UK house prices have certainly slowed down and according to popular tracking websites like Zoopla, they have dropped in many areas across England. The situation isn’t all bad, especially when you consider there’s a UK mortgage price war started in 2015 that will benefit consumers.

Building societies will be one of those not benefiting from the price war. This is due to trading being squeezed after restrictions on home loans and cheap wholesale funding adding to the pressure building societies are under.

Thanks to mortgage interest rates dropping over the past three months, mutually-owned lenders are losing new business and this has been confirmed by a new survey. Building societies cannot tap into wholesale markets like banks can and they are financed with deposits, so this has led to really low-rates for funding.

The mortgage price war in the UK is seen with bank rates down to 2.08% and this is improved on the 2.6% that we saw in summer 2014. Confidence in banks is increasing and has been for eighth quarters, also the business volumes are getting close to so-called “normal” levels.

Source: www.100mortgages.org

U.K. Property Asking Prices Rebound on Tax Cut, Rightmove Says

The housing market is showing signs of a "new year bounce" in activity, with new sellers hiking their asking prices by nearly £4,000 in January, property search website Rightmove has reported.



The price of property coming on the market increased by 1.4% or £3,798 compared with December - despite January usually being a month when asking prices fall, the website said.

Across England and Wales, the average asking price for a property this month is £273,275, which is 8.2% higher than a year ago.

Rightmove said that while it is still early days, "there are signs of a new year bounce-back", with visits to the website this year so far running at 10% higher than a year ago.

Meanwhile, people looking to take their first step on the property ladder have the opportunity to grab a cheaper deal this month, the website's findings suggest. Sellers of typical first-time buyer homes are asking for around £1,132 less than they were in December.

The average asking price on a first-time buyer property is now £163,251, although this is still a significant 10.5% increase on a year ago.

Rightmove also said that the recent reforms to stamp duty, which have made the tax less expensive for the vast majority of home buyers, could mean potential savings of as much as £1,250 for a first-time buyer.

Miles Shipside, director of Rightmove, said: "First-time buyers are in a potential win win savings window this month, with the price of property coming to market in this sector being over £1,100 cheaper, coupled with up to £1,250 in stamp duty savings."

In further signs that the wider market is showing an early pick-up in 2015, Rightmove said it had more than 52 million page views on Sunday, January 11, marking a new record for the website.

It said that the signs of increased interest in homes for sale, combined with estate agents reporting low stocks of property on the market in popular locations, is likely to create a further upward pressure on prices in desirable areas.

Mr Shipside said these signs of "early bird activity" in 2015 could be a result of the stamp duty changes which were unveiled in December and are expected to encourage more people to move home.

But he continued: "Rightmove still cautions sellers that it will be harder to sell in 2015 than in 2014."

He said that the looming general election could cause some disruption to the market. Meanwhile, mortgage lenders are showing signs of introducing more selective criteria - and this could mean that buyers who are able to pass the criteria and secure a mortgage will be more "fussy" about the home they buy, he said.

Mr Shipside said: "Buyers deemed mortgage-worthy will value their hard-won purchase pots and want to spend them wisely.

"That might mean stretching themselves to afford a property that ticks all the boxes, but wanting a heavy discount on one that falls short."

Rightmove's figures show that asking prices in London have seen the highest year-on-year increase, at 12.8%, pushing the average price to £566,404. The South West of England has recorded the biggest month-on-month jump in asking prices, with a 3% increase taking the typical price to £267,623.

The North East of England recorded both the lowest year-on-year increase in sellers' asking prices and the biggest month-on-month dip. Prices in the North East stand at £135,055, on average, marking a 0.8% increase on a year ago and a 1.7% month-on-month decrease.

In Wales, asking prices have typically increased by 6% annually and by 2.7% month-on-month to reach £166,833.

Mike Woods, a building surveyor at RK Lucas and Son in Pembrokeshire, Wales, said: "We've had some vendors who want to wait until March to put their property on the market as there is a perception that homes will sell better in the springtime, but in reality getting their home on and marketed to a wide audience now could make it easier for them to sell and complete before the election."

Simon Gerrard, president of the National Association of Estate Agents (NAEA) and managing director of Martyn Gerrard Estate Agents with 11 branches in London, said: "Overall, I think we'll see a strong first quarter to the year, especially as potential buyers are now getting used to what is expected of them with the stricter lending criteria."

Source: www.expressandstar.com

'Pitiful' interest rates for savers fuelling £12billion buy-to-let boom with mortgage lending to landlords up 9% in a year

Pitiful interest rates for savers are fuelling a £12billion buy-to-let boom, new figures revealed today.

Thousands of middle-class families fed up with rock-bottom interest rates on savings and investments are making their first foray into the buy-to-let market.

The value of buy-to-let mortgages on new purchases rose by 34 per cent to £11.6billion between January and November last year – £3billion more than the same period in 2013.

Lending to landlords soared by 9 per cent in November compared with the year before, while mortgages for ordinary home-buyers fell by 7 per cent.




The number of landlords taking out mortgages on new purchases in the UK also grew by 21 per cent to 93,970 between January and November 2014 – with 8,500 handed out every month.

This compares to a modest rise of 13 per cent among home movers and first-time buyers as they faced tougher lending regulations – while the buy-to-let market remains unregulated.

The number of first-time buyers securing a mortgage fell sharply to a seven-month low.

Some 17,700 buy-to-let loans worth £2.4 billion were handed out in November as desperate savers turned to the housing market for a return on their money.


It comes after figures revealed just under 26,000 first time buyers got a loan to get on to the property ladder in November, down 11 per cent compared with October, and 3 per cent lower than in November 2013.

Buy-to-let mortgages are more expensive than normal owner-occupier mortgages. Providers charge a higher rate of interest and also levy an initial fee, which can be as much as £2,000.

The cheapest buy-to-let mortgage is charging 2.29 per cent interest, while traditional mortgages are from as little as 1.29 per cent.

But thanks to low interest rates, the cost of buy-to-let loans have plummeted in recent months, making it an affordable option for many Britons for the first time.

24,000 remortgage loans were handed out in November with a total value of £3.6 billion, which was 10 per cent down on the previous month

Investors are capitalising on bumper rental returns fuelled by people forced to rent for longer by escalating house prices and stricter lending rules.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said it was 'no real surprise' that buy-to-lending was growing, with the attractive potential returns on offer for investors compared with savings accounts - which are paying 'pitiful' rates of interest.

He said: 'Of course, the resurgence of buy-to-let does have an impact on first-time buyers, with many competing for the same entry-level properties.'

The trend for ‘amateur’ landlords is expected to accelerate in April, when radical pension reforms will allow people to withdraw their retirement savings for the first time.

According to the Council of Mortgage Lenders (CML), its latest November figures showed ‘a decline in lending to first-time buyers, home movers and remortgaging from the heights of November 2013, but a year-on-year increase in buy-to-let lending.’

Brian Murphy, at the Mortgage Advice Bureau, said the buy-to-let market had been ‘reinvigorated’ after being crushed by the financial crisis.

But the figures will reignite fears that buy-to-let landlords are pushing up prices for families struggling to take their first step on the property ladder.

With the average age of first-time buyers now 30, they needed a mortgage worth almost £125,000 to get the keys to their first home.

Some 25,900 home loans with a total value of £3.8 billion were advanced to people taking their first step on the property ladder.

This is the lowest number of loans handed out to this sector since last April, figures from the Council of Mortgage Lenders (CML) show.

The CML's new figures also show that first-time buyers typically needed to put down a deposit of 17 per cent of the property's value in November.



This is an increase on the 16 per cent average deposit they put down the previous month - but still less than the 20 per cent deposit they needed a year earlier.

The typical size of a first-time buyer loan has also fallen for the second month in a row, reaching £124,822 in November, which is almost £1,000 less than the average loan of £125,800 handed out to a first-time buyer the previous month.

Remortgaging for buy-to-let borrowers rose almost ten times faster compared to house movers, with the number of loans soaring by 24 per cent between January and November, compared to just 2.4 per cent for ordinary buyers, CML figures show.

This dip in ordinary home loans was blamed on the introduction in April of strict affordability checks.

Earlier this month, a Bank of England survey found that while mortgage availability has seen a slight increase generally in recent months, lenders became less willing to hand out mortgages to people with deposits of less than 10 per cent towards the end of last year.

The CML's figures also show that mortgage lending to existing home owners who were moving into a different property also fell back in November, as did lending to people who were remortgaging.

But buy-to-let lending has increased year-on-year.

Some 29,700 loans collectively worth £5.4 billion were advanced to home movers in November, marking a 13 per cent fall on the previous month and down by 10 per cent on November 2013.

Meanwhile, 24,000 remortgage loans were handed out in November with a total value of £3.6 billion, which was 10 per cent down on the previous month and a 14 per cent fall on November the previous year.

Yesterday, figures from the Office for National Statistics (ONS) showed that the typical price paid by a first-time buyer for a house was £208,000 last November, which is 11 per cent more than it was in November 2013.

Graham Davidson, of Sequre Property Investment, said: ‘Many people are turning away from the more traditional but volatile investments, and poor interest rates on their savings, in favour of the tried and tested route of bricks and mortar. The buy-to-let market has never been healthier.’

Source: www.dailymail.co.uk

Buy-to-let property investments appreciated 17% over the year

Property investments bought with the UK’s growing rental sector in mind proved to be very fruitful during 2014.

Although capital appreciation is perhaps secondary to the long-term income provided by rental yields, property investors have seen their assets grow in value by an incredible 17% over 2014 and by more than £180 billion over the past five years, according to research by Savills.

This is in part due to the wider grow of the UK’s housing market over the period but also because investors are starting to realise the country’s private rented sector shows no sign of slowing down.

The reason many investors want to secure buy-to-let property investments is that demand for rental properties is soaring. There are two reasons why this is happening. Firstly, many would-be first-time buyers are unable to meet mortgage requirements, but also the millennial generation is more likely to choose rental accommodation over purchasing than any other past generation.

As such Savills highlights the total number of private rented homes has increased by almost 1.2 million since 2009, with the current total somewhere around the 5.4 million mark, compared to 4.7 million in the social rented sector. Homes owned via the aid of a mortgage have fallen by almost 800,000 over the past five years, reflecting the two trends highlighted above.

It is an old adage in the UK that you can’t go wrong with bricks and mortar and while that’s broadly true, bricks and mortar that appeal to Britain’s growing core of renters will most likely be the best investment over the coming years.

Source: www.selectproperty.com

House prices boom continues: Properties up 10% across the UK

House prices soared by 10 per cent over the past year - driven 'in large part' by runaway prices in London, official figures revealed this morning. Homes in the capital were £65,000 more expensive in November than at the same time last year – a 15.3 per cent increase in 12 months. Excluding London and the wider South East, house prices increased by 7.1 per cent across the rest of the country, the Office for National Statistics said.

 

House prices in the UK were up 10% in the 12 months to November, the Office for National Statistics said. The boom was driven 'in large part' by the runaway prices in London - with properties up 15.3 per cent.

But there were some signs that the great house price boom was easing off.

In the month between October and November last year, house prices grew 0.2% - compared to an increase of 0.6% during the same period a year earlier.

London homes are also slightly down compared to August - falling 2.5 per cent in three months. However, this is still 36.1 per cent higher than in January 2008.

Housing charity Shelter said the booming housing market was making it impossible for an increasing number of families to get on the property ladder.

Chief executive Campbell Robb, said: 'With house prices still sky-high, it's no surprise that homeownership in the UK is now below the European average.

'Shelter hears from people every day who are desperate to put down roots for their family, but have lost hope of ever having a home of their own. Something's just not right when millions of people are stuck in a "rent-trap", with barely enough money left over each month to make ends meet, let alone save up for a deposit.'

In the year to November, prices grew 10.4 per cent in England, 3.1 per cent in Wales, 4.4 per cent in Scotland and 11.7 per cent in Northern Ireland.

Every region in England recorded higher house price growth more than Scotland and Wales.



Britain's housing boom continued in the 12 months to November, but was showing signs of slowing down with house price growth falling from 10.4 per cent to 10 per cent

Prices grew fastest in the South East and East Anglia – up 10.8 per cent and 11.9 per cent respectively.

House price growth was weakest in the West Midlands - with properties up 5.1 per cent - followed by Yorkshire & The Humber and the North East, recording 5.3 per cent and 5.9 per cent.

The booming property market is making it increasingly difficult for first-time buyers to get on their foot on the housing ladder.

In November, prices paid by first-time buyers were 11 per cent higher on average than at the same time the year before - with the average price paid hitting £208,000.

The average UK house price in October was £271,000 – with properties in England the most expensive at £283,000.

Homes in Wales cost £171,000 on average, £194,000 in Scotland and £147,000 in Northern Ireland.

In London meanwhile the average house costs £501,000 – almost three and a half times more than in the North East which has the lowest average house prices at £155,000.

London, the South East and the East all had prices higher than the UK average price of £271,000.

Source: www.dailymail.co.uk

UK landlords make £177bn from rising house prices over 5 years

 

Landlords have made £177bn profit from capital growth over the past five years according to research which adds fuel to the political debate about rising house prices in the UK.

There has been growing demand for rental property in Britain as high prices and a lack of new housebuilding have made it harder for first time buyers to get on the property ladder.

As well as a rise in the number of tenants this has led to more buy-to-let landlords, and they have been the biggest beneficiaries of rising house prices according to the figures from property adviser Savills.

Alex Hilton, director of Generation Rent, a group that campaigns for the rights of tenants, said Savills’ figures were “stomach-wrenching”.



It was wrong that landlords were able to “cream generous tax breaks” at a time when tenants were enduring the effects of government spending cuts, he said.

The total value of privately rented housing in Britain has grown 57 per cent since the financial crisis, topping £1tn this year for the first time, although some of that growth reflects the increasing number of people buying homes to let.

The profit figure of £177bn is an estimate of capital growth alone and excludes income from tenants’ rents — another source of wealth for landlords.

By contrast the total value of UK housing held by owner-occupiers with mortgages rose just 5 per cent in the past five years, Savills found.

Lucian Cook, director of residential research at Savills, said the data showed that “the benefit of recent house price growth has become increasingly concentrated in the hands of private investors”.

He added: “In a housing market that is expensive, relative to people’s income, it is difficult to see how this will change, particularly given increased mortgage regulation.”

The findings showed that the rental market was “fundamentally unsupplied”, Mr Cook said. In order to mitigate the situation the government should do more to encourage professional investors to build more new homes for rent, he argued.

Rising house prices are also fuelling Britain’s housing benefit bill, as landlords raise rents in order to pay off their own borrowings. In the 2013-14 financial year the country paid £9.3bn to private landlords to subsidise tenants’ rents — more than a third of the total spent on housing benefit that year.

Private sector tenants live in the country’s poorest quality accommodation and have the highest housing costs, with rents taking up an average 40 per cent of gross income, according to data published in the summer.

Mr Hilton said the figures showed “how landlords have profiteered from the undersupply of housing while tenants struggle with ever higher rents.

“Despite these huge returns, private sector tenants get the worst living conditions, the worst security of tenure and the least affordable housing, often cutting back on food or heating to meet the rent.”

Labour has proposed cracking down on landlords by capping rents and banning buy-to-let investors from purchasing newly built properties in some new “housing growth areas”.

The Savills figures are likely to prompt closer scrutiny in Westminster of the tax breaks enjoyed by landlords — and not only by leftwing politicians.

Charlie Elphicke, Conservative MP for Dover, said there was a strong case for ministers to call a halt to relief on mortgage interest, for example, and look at other perks such as wear and tear allocations.

“Most people would say that is money which could have gone to people owning their own homes rather than investors,” he said. “It underlines that tax breaks that buy-to-let investors get would be better off used to help first time buyers to own their own homes.”

Clive Betts, who chairs parliament’s communities committee, said the figures demonstrated the need for more homes to be built. “In the end you can take away tax breaks and other aspects of housing finance but you will never combat the problem of rising rents and rising prices without building more homes,” he said.

Source: www.ft.com

UK house prices: Total value of UK residential property hits £5.8tn 

 

The combined cost of all the homes in the UK has increased by almost a trillion in the last five years, according to data from the estate agent Savills.

Adding the values of all the homes in Britain makes a heady total of £5.75 trillion, or 2.7 times the UK’s GDP. The region with by far the most value was, unsurprisingly, London.

The biggest increases were in London, where prices have jumped by 61 per cent in the last five years and 20 per cent in the last year. Only in the north west, north east and Northern Ireland are prices lower today than they were five years ago.
 

Apart from the regional trends, there were some interesting changes in the type of tenure, too. According to the report, the  number of homes owned without a mortgage rose 437,471 in the past five years, to over 8.3 million, with values rising £325 billion to almost £2 trillion.
As a result of the credit crunch, however, the number of homes owned with a mortgage fell by around 800,000 over five years. Reflecting this drop, the value of private rented stock has soared by 59 per cent in the last five years and 17 per cent in the last 12 months. It now stands at over £1tn.

Source: www.cityam.com

 

Lonely Planet name Leicester the 9th top place to visit in the world

Spain's most dangerous mountain path, a yellow submarine tour and Richard III's burial site: 2015's hottest new travel experiences revealed

The new King Richard III Visitor Centre in Leicester has been chosen as one of the world's hottest new attractions for 2015 by travel guide company Lonely Planet.

The £4million centre has opened following the unearthing of the remains of Richard, who died in the Battle of Bosworth in 1485.

It features in a list of 26 of the 'World's Hottest New Experiences for 2015' featuring the most exciting experiences around the world from the observation desk at One World Trade Center in New York to a yellow submarine tour to explore the sealife in Argentina.

Topping Lonely Planet's list is a visit to One World Observatory at the top of One World Trade Center in New York City

A visit to the visitor centre at King Richard's final resting place is high on the list of the hottest new travel experiences for 2015

Lonely Planet's destination editor for Great Britain, James Smart, said: 'The discovery of the remains of Richard III captured the world's attention in 2013 and the recently opened state-of-the-art visitor centre is a must-visit for history fans.

'This attraction, dedicated to one of our most legendary monarchs, truly puts Leicester on the map for anyone interested in England's dramatic past.'

The childhood home of Johnny Cash in Arkansas is also opening to the public, showcasing the Dyess Colony created as part of Franklin D Roosevelt's New Deal to aid in the nation’s economic recovery from the Great Depression.

The agricultural resettlement community shows how the singer grew up as part of the community and his house is furnished as it would have been when he lived there.

1. One World Observatory, New York, USA

2. Cape Canopy Tour, Elgin, South Africa

3. The Yellow Submarine, Península Valdés, Argentina

4. The Smithwick's Experience, Kilkenny, Ireland

5. Caminito del Rey Footpath, Garganta del Chorro, El Chorro, Spain 

6. BioMuseo, Panama City, Panama

7. Rimutaka Cycle Trail, Wellington/Wairarapa, New Zealand

8. Hong Kong Observation Wheel, Victoria Harbour, Hong Kong

9. King Richard III Visitor Centre, Leicester, England

10. Ice Cave, Langjökull ice cap, West Iceland

11. Three Capes Track, Tasman Peninsula, Tasmania, Australia

12. The Guayusa Trail, Napo Province, Ecuador 

13. National Gallery Singapore, Singapore

14. The Wizarding World of Harry Potter, Universal Orlando, USA

15. Diquís Spheres, Sitio Arqueológico Finca 6, Palmar Sur, Costa Rica

16. Outback Astronomy, Broken Hill, New South Wales, Australia

17. Museo Novecento, Florence, Italy

18. Bombay Sapphire Distillery, England (+ other breweries around Britain)

19. Highlights of Haiti, Haiti

20. Dyess Colony, Arkansas, USA

21. National ANZAC Centre, Albany, Western Australia

22. Flyway Taiwan, New Taipei City, Taiwan

23. Musée Picasso, Paris, France 

24. Tufi Tribal Homestays, Oro Province, Papua New Guinea

25. Chocolate Village, Brussels, Belgium

26. Whitney Museum of American Art, New York, USA 

Source: www.dailymail.co.uk

The cities and towns with good value property

The lure of the country might be as strong as ever, but not everyone wants to join the welly brigade full-time.


Research by NFU Mutual insurance shows seven out of ten of today’s rural residents moved from urban areas, with many of them still working in the hustle and bustle while choosing to live outside it.

So which cities — and their surrounds — offer the best value for your money?


Oxford

Fantastic schools, good road and rail links, lots of overseas students and a strong local economy mean house prices here are sky high.

The average home costs £340,700 after a 10.2 per cent rise in 2014, says property consultancy Hometrack, although in prime areas — North Oxford, Summertown or areas by the River Thames — typical prices can be twice that amount and exceptional homes are valued at more than £1 million.




Nearby: Banbury is a 20-minute train journey from Oxford


Birmingham

Even homes near the city centre are good value in Britain’s second city — at least until the HS2 rail line arrives in 2026, if it ever gets the green light.

An average home here costs £163,536, according to Zoopla, with some apartments under £75,000.

‘Relatively low entry costs into the housing market in the city and resulting higher yields make Birmingham an attractive alternative for first-time buyers, home-movers and investors alike,’ says the head of research at Knight Frank, Grainne Gilmore.



Cambridge

This is another case where it can be cheaper to buy inside the city than outside, because several major new developments are keeping city house prices under control.

‘There’s lots of demand here but also a good pipeline of developments,’ says Savills’ Toby Greenhow. The figures back him up — 1,270 new homes were built in 2013-14 and 3,800 apartments and houses are today under construction inside or near the city boundaries.



Varsity: In contrast to Oxford, prices near Cambridge centre have been dampened slightly by new developments whereas outlying villages tend to be expensive.


Surrounding villages, however, can be pricier because homes tend to be large and Londoners and overseas consultants are arriving in significant numbers to work at the university and the city’s growing science park, particularly in its pharmaceutical companies.

Manchester

The typical price in the city is £154,541 says Zoopla but values in desirable areas — the city centre, Hale and Wilmslow, for example — hit £400,000 on average. Even Salford Quays, once a modest area, is soaring in value thanks to the arrival of BBC and ITV employees working at the new Media City.

Source: www.thisismoney.co.uk

UK’s buy-to-let sector repays £21.9 billion in 2014

 











The UK’s army of buy-to-let landlords forked out £21.9 billion in mortgage repayments in 2014, research has revealed.

 According to the National Landlords Association’s (NLA) study, approximately one million landlords in the UK have some form of BTL borrowing, with the average cost of their mortgage repayments over the last year £20,950.


The figure, which excludes upfront deposits of typically 25% of property value, emerges shortly after the Bank of England announced a high of £8bn of BTL lending in quarter three of 2014.

The NLA’s findings show that landlords with smaller portfolios (1-4 properties) spent an average of £10,335 on repayments last year, compared to £55,285 spent by those with larger portfolios (11 or more properties).

On average it takes six weeks for a landlord to secure a BTL mortgage, with one in five (19%) landlords waiting over two months to complete their BTL application.

Carolyn Uphill, NLA chairman NLA, said: “These figures really hammer home just how much money private landlords put into providing much needed homes for the UK’s estimated nine million renters, especially if we consider that such a large proportion are single-property or smaller portfolio landlords.

“The majority of private individual investors are keeping a supply of well-maintained homes on the market when previous governments have failed to incentivise or stimulate more housing and social housing has been in long term decline.

“There’s no sign of either of these issues letting up anytime soon so is it any wonder that BTL lending is at an all-time high? It’s hard to imagine exactly where all this investment would come from if landlords weren’t financing housing to such an extent.”

Source: www.24dash.com

Number of first-time UK homebuyers hits 7-year high, says Halifax

The number of first-time buyers increased by more than a fifth in 2014, reaching the highest level in seven years, according to data from the mortgage lender Halifax, illustrating the impact of the state-funded Help to Buy scheme on the UK property market.

The underlying data show, however, that the rate of growth halved between the first and last quarters of the year, echoing the trend shown in Bank of England mortgage approvals data which hit a 17-month low in November, and providing further signs that the housing market in 2015 may be more subdued.

Based on an extrapolation of its own mortgage data, Halifax estimated a 22 per cent jump in the number of first-time buyers — the third successive annual increase — with 326,500 households getting on the property ladder.

In the first quarter of 2014, sales to first-time buyers were 34 per cent higher than the previous year, but the rate of growth tailed off, falling by more than a half to 16 per cent by the final quarter of 2014.

“The rate of decline ties in with the overall story of a slowdown in the housing market,” said Howard Archer, chief economist at IHS Global Insight, who added that tighter checks on borrowers ushered in by April’s mortgage market review would have contributed to this.

“The fact that activity hasn’t picked up since then suggests there’s more to it than that,” he said. “I don’t think there’s going to be a surge in activity in 2015, but the stamp duty reforms, pick up in earnings growth and feeling that the Bank of England won’t increase interest rates until the end of the year should cause activity to pick up from current levels.”

The Halifax data for 2014 represent a 70 per cent increase in numbers of first-time buyers from 2008, when credit availability dried up in the financial crisis. First-time buyers were behind nearly half of all transactions made with a mortgage last year, the lender said, compared with just over a third in 2007.

Halifax cited the Help to Buy scheme, which has loaned buyers deposits and guaranteed loans, as a positive factor along with a wider improvement in mortgage affordability in recent years.

It calculated that the average size of a first-time buyer deposit had fallen 7 per cent in the past year as a result, now standing at just over £29,000.

However, the average purchase price paid by first-time buyers rose 9 per cent in 2014 to £171,870, just 2 per cent below the average at the market’s peak in 2007.

A comparative analysis of ONS data suggested that mortgage repayments of first-time buyers were now about one-third of disposable income, compared with 50 per cent in 2007.

“Improving economic conditions and rising employment levels have boosted confidence among those thinking about getting on to the housing ladder for the first time, contributing to the significant increase in the number of first-time buyers in the past two years,” said Craig McKinlay, mortgages director at Halifax.

“Record low mortgage rates and government schemes such as Help to Buy have improved affordability, enabling more first-time buyers to buy their own property.”

London was the least affordable market for first-time buyers, with an average price of £323,333. The data show, however, that more than a quarter of local authority districts across the UK are now out of reach for many first-time homebuyers, based on a ratio of average earnings and average house prices. This compares with just 5 per cent of districts being unaffordable in 2007.

Northern Ireland was the most affordable region for first-time buyers, with an average house price of £80,703. Seven out of the top 10 most affordable areas were in Scotland, including East Ayrshire and Inverclyde.

Nationally, the average age of a first-time buyer was 30, the Halifax said, rising to 32 in London.

Source: www.ft.com

UK property prices forecast to rise by 4% in 2015

While some experts believe that UK property prices could rise by as much as 7.4% in 2015 the general consensus seems to be growth of 4% during the next 12 months. This is certainly a dramatic reduction from the 11% trend seen in June 2014 although there are a number of underlying factors which may well impact the market over the next year.




It is also worth noting that while the 4% average increase in UK property prices is higher than inflation and a rise in real terms, the variations across the country could be enormous. During 2014 we saw double-digit growth in London while Wales managed just over 1% growth. So, which factors will be impacting the UK property market in the short to medium term?


The election

The forthcoming general election will have an impact on the UK property market with some investors holding back to see the form of the next government. Alternatively, as we have seen in recent weeks, the current government is very keen to support the UK property market in the short to medium term and will likely use this as an argument for re-election. However, the general consensus seems to be that the first few months of 2015 will be dominated by the election and this could lead to a lacklustre UK real estate market.


Surprisingly, history shows that the government of the day in recent times has had a limited impact upon the medium to long term performance of the UK property market. Aside from a bit of tinkering at the edges all governments seem determined to support the UK property market in the longer term whether by financial incentives or by limiting the number of new builds.


UK base rates

The Bank of England suggested on numerous occasions during 2014 that base rates were on the verge of increasing and this would have an impact on the UK property market. The situation at the moment, with UK base rates at a record low of 0.5%, seems to be that base rates could maintain this level during the bulk of 2015. If the property market were to move forward again then we might see a slight increase in base rates but it will take many years to get back towards the levels seen prior to the worldwide economic crisis.

In many ways cheap finance is funding the UK property market, and other investment markets, but there will be a significant impact as and when UK base rates increase. Whether those looking to invest in the UK property market at this moment in time have considered an increase in base rates in the medium term is certainly debatable.

Source: www.propertyforum.com

UK property prices 'set for further increase in 2015'

 

Estate agents are likely to see the average valuation on properties across the country increase once again in 2015.

This is according to Stuart Law, chief executive of the buy-to-let company Assetz, who told Property Reporter that he expects the UK average house price to increase by around seven per cent in 2015.

Stamp duty changes and annuity legislation updates that are coming into force early next year are likely to help drive interest in further property investment, with the strong momentum seen in London during 2014 likely to spread across the rest of the country in the year ahead.

This is set to happen due to the prevalence of young professionals, who would previously have been based in London, finding themselves are priced out of the property market in the capital, leading them to migrate to regional hubs such as Birmingham, where they will benefit from more affordable costs and a vibrant culture.

Mr Law said: "Although London has led the way through most of 2014, the capital is now cooling and 2015 will see UK regions playing a long-awaited catch up, helping to balance the effect of the London slowdown."

As such, the expert advised buy-to-let investors to seek property in areas with high levels of employment, such as affluent suburbs or city centres, to access a growing market of cash-rich tenants. Scotland is also likely to see a fresh resurgence in property price growth, now that the uncertainty surrounding the country in the run-up to the recent referendum on independence has been dispelled.

Property sector stakeholders were also advised to look to smaller housebuilders to become an increasingly important supply of new homes, particularly in the development of smaller parcels of land that are deemed less attractive to large developers.

This could be an important step towards helping the country address its long-term housing shortfall issue, with a recent National Association of Estate Agents survey suggesting that housing demand will continue to outweigh supply in 2015.

Source: www.rman.co.uk