Tag Archives: cookies
Second steppers in UK housing market get boost, new research shows
Most second steppers in the UK housing market are no longer trapped in negative equity as their position is boosted by rising house prices and an influx of first time buyers, new research has found. This is despite the fact that many face a £128,000 price gap to jump up the housing latter, according to a study published by Lloyds Bank. The research also shows that 33% of second steppers think it will be easier to sell this year, almost treble that of 2012 and 37% are keen to make the move now to take advantage of the more buoyant housing market. Overall first time sellers are in a much better position than they were five years ago which is good news for the housing market as they are the link between first time buyers and the rest of the housing ladder. They are living in the homes that the first time buyers need to buy to keep the market moving. Without movement from Second Steppers, movement on the ladder comes to a standstill on the second rung. Many had previously found themselves stuck in their starter home with little or no equity as the economic downturn took hold. Higher house prices have increased the equity of those still living in their first homes, with 71% feeling that their equity position has improved over the last year. The current crop of second steppers typically would have bought at the bottom of the market in 2009 when prices were at their lowest, with the average price of a typical first time buyer home in 2015 now 31% higher than in 2009. This has led to second steppers now having an average equity level of £87,096, equivalent to 29% of the average price of a typical second stepper home price of £304,963. The estimated average equity level has risen by over £36,000 in the past year from £50,655 due to an increase in the prices paid for first time buyer homes. The research also says that the price paid for a home by a typical second stepper is more affordable now than it was a year ago, when compared with earnings. Their housing affordability has improved significantly in the past year from 7.1 times UK gross annual average earnings in 2014 compared with 6.4 in 2015. Despite increasing house prices boosting equity levels for second steppers, the findings show people living in their first home still have to find an extra £128,390 to plug the gap between the sale price of their current property and the cost of the house they would ideally move to which is typically a detached property. This gap reduces to £17,864 if the second stepper moves to a semi-detached home. Continue reading
Optimism and confidence returns to prime central London property sector
Optimism and confidence are returning to the prime central London property market after a long period of hesitancy amongst both purchasers and potential vendors in the run up to the general election, the latest research suggests. Viewings, offers, and sales have increased since 08 May across all sectors of the market and enquiries from both international and domestic purchasers have increased, particularly from the Middle East, according to W.A. Ellis, part of the JLL Group. The firm reports that in broad terms, capital values within the prime central London market fell during the first quarter of the year as the prospect of a Labour Government slowed the sales market and the level of transactions declined by as much as 30% in some sectors, with the number of house sales declining most significantly. ‘With the election over and a Conservative Government now in place, we believe that the market will revert to its pre-election state. We expect the price falls of recent months to reverse, with some price rises materialising and with five year predicted growth estimated to be in excess of 20%,’ said director Richard Barber. ‘However, we still expect price growth to be quite modest this year, particularly as the market has not yet had time to adapt to the stamp duty reforms of late 2014. This still hangs over the upper end of the market and still restricts transaction levels and potential capital growth,’ he explained. ‘Whether the decision to raise SDLT to 12% on the proportion of a purchase over £1.5 million will be regarded as a masterstroke in defeating mansion tax and cooling central London prices or, as I believe is more likely, an overzealous measure which will reduce HMRC's revenues, is yet to be decided,’ he pointed out. He now hopes that the ‘politicising’ of the market will cease and the Government can address genuine issues. ‘What is most apparent, however, is that mortgage rates will undoubtedly begin to rise as long term swap rates begin to creep upwards and affordability, particularly for first young time buyers, will be strongly affected. My view, and it is one shared with many within the industry, is that a mortgage rate fixed for five years at circa 2%, is as good as it will get, and one should act swiftly to obtain these short term offers,’ said Barber. He also mentioned the shortage of suitable housing for older people that is keeping home owners stuck in properties worth £820 billion and leaving £7.7 million spare bedrooms empty. Recent research suggests that almost a third of home owners over the age of 55 have considered downsizing over the past five years, yet only 7% have actually done so. ‘It would seem obvious that older people are remaining in their homes due to a fear of their children not being able to afford homes of their own, the transactional costs involved in downsizing, including prohibitive stamp… Continue reading
Latest UK house price index shows a slowing of growth in the market
UK house prices in the three months to May were 2% higher than in the preceding three months but they fell 0.1% month on month, according to the latest index figures. The annual growth compared to May last year is 8.6%, taking the average price of a home to £196,067, the monthly index report from lender The Halifax shows. And an analysis of the data shows that the quarterly measure of the underlying rate of house price growth has eased for the second consecutive month, falling to its lowest since January. On top of this annual house price growth only increased marginally from the 8.5% recorded in April and continues to be in the narrow range of 8% to 9% where it has been throughout 2015 so far. ‘Housing supply remains extremely tight with the stock of properties available for sale currently at its lowest level for many years,’ said Martin Ellis, Halifax housing economist. ‘At the same time, ongoing economic recovery, increasing employment, real earnings growth and very low mortgage rates are all supporting housing demand. This combination has kept annual house price inflation well above earnings growth although activity levels are subdued,’ he pointed out. ‘The imbalance between supply and demand is likely to continue to push up house prices over the coming months. Looking further ahead, the increasing level of house prices in relation to earnings is expected to dampen house price growth,’ he added. The report also points out that figures from HMRC show that home sales fell by 3.4% between March and April to 97,020. Nonetheless, sales in the three months from February to April were marginally higher, up 1.3%, than in the preceding three months. Mortgage approvals continue to pick-up. The volume of mortgage approvals for house purchases, a leading indicator of completed house sales, increased by 9.9% in April. Whilst approvals in the three months to April were 6.6% higher than in the preceding three months, they were 4.3% lower than in the same three months a year ago, according to the latest available Bank of England, seasonally adjusted figures. And supply remains tight. The stock of homes available for sale fell further in April and is currently at its lowest level for many years. New instructions declined in April for the eighth month in the last nine, contributing to the very low levels of supply, data from the Royal Institution of Chartered Surveyors shows. But there has been an increase in those thinking it is a good time to buy. The latest Halifax Housing Market Confidence Tracker shows that the net proportion of consumers who believe the next 12 months will be a good time to buy increased from +21 in March to +26 in April. In contrast, the net proportion that thinks that the next year will be a good time to sell fell from +33 to +30. The headline House Price Outlook balance, i.e. the difference between the proportion of people across Britain that… Continue reading
