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Huge boost to first time buyers in UK with new deposit savings plan
Thousands of would be home buyers in the UK will be able to fulfil their dream of owning a property after the government announced a new savings plan to help them get a deposit. Chancellor George Osborne is introducing a new Help to Buy ISA which will allow them to save up to £200 a month towards their first home whereby the government will add a £50 bonus for every £200 saved up to a maximum of £3,000 per person. In his Budget Day speech he pointed out that the government has already helped tens of thousands of people to buy a home with Help to Buy, which allows people to purchase a home with just a 5% deposit. Effectively a tax cut for first time buyers, it will be introduced in the autumn and this, coupled with the news that inflation rates will remain low, is good news for those struggling to afford to get onto the housing ladder. It will provide a significant boost to the ability of a first time buyer to save speedily and effectively, according to Mark Hayward, managing director of the National Association of Estate Agents (NAEA). ‘This is exactly what is needed to engage the first time buyer market, particularly as we have seen the current criteria under the Mortgage Market Reform constraining aspirations to buy a home,’ he said. He pointed out that it especially benefits couples who are buying for the first time as both are eligible to open a Help to Buy ISA and it is also timely, considering house price inflation out paces wage inflation, so this additional boost to first time buyers savings pots will help them at least keep apace rather than fall behind the inflationary curve. The move has been widely welcomed by the property industry at a time when first time buyers overcoming the constraints of saving for a deposit has been one of the biggest barriers to home ownership. First time buyers are needed to keep the housing ladder moving. Lucian Cook, Savills UK head of residential research, also explained that limiting the ISA to a £12,000 savings plan with a £3,000 government contribution should prevent a surge in house prices. ‘It is more likely to help get buyers over the deposit hurdle in the lower value, lower growth markets of the Midlands and the North than say London and the South East, where significant constraints remain,’ he said. ‘ It is also likely to be welcomed by parents and grandparents by making first time buyers less dependent on the bank of Mum and Dad and more inclined to contribute some top up savings when children come looking for assistance to get on the housing ladder. However, those first time buyers who are keen to lock into low interest rates and who have access to parental support are unlikely to commit to what is effectively a five year savings plan,’ he added. According to Adrian… Continue reading
Average house prices in Scotland reach new peak with 1% monthly rise
Average house prices in Scotland increased by 1% or £1,600 in January, surpassing the May 2008 peak, according to the latest index data. Year on year prices are up 4.5%, taking the average home price to £166,771, a new record, but sales were down 44% compared to December, double the typical seasonal downturn. It means that the average home in Scotland is now worth £1,238 more than at the peak of the housing boom in May 2008, following the most significant monthly upswing for seven months, says the report from Your Move. Dundee saw the biggest prices jump with property prices increasing 6.7% or £8,161, while Fife and West Lothian set new peak house prices with growth of 9.5% and 10.9% respectively. North Ayrshire has experienced the biggest rise in house prices on the mainland over the last year, up 11.6% with the typical price of a detached home growing from £180,000 to £210,000 in the past 12 months. However, average prices have fallen in seven local authorities of Scotland during the past year. West Dunbartonshire has seen the steepest drop in values in the last 12 months, with prices falling 7.2% on average, and flats in the area are now worth £20,000 less than a year ago. In addition, completed house sales in January 2015 were down 44% on December levels, double the usual seasonal downturn, and a 14% fall on a year ago, as home sales drop to the lowest level for 23 months. ‘This shouldn’t be viewed as a bad omen though, as the start of the year is always the slowest time for house purchases in Scotland, and it will only get busier, as the sustained flow of front-end demand flooding into the market starts to translate into end results,’ said Christine Campbell, regional managing director of Your Move. The Scottish housing market is benefitting from the economy moving in the right direction, and employment on the up, while mortgage rates are at rock bottom, according to Campbell. She pointed out that next month’s Land and Buildings Transaction Tax will offer some extra relief to those clambering onto the bottom rungs of the ladder, lowering the stamp duty paid on purchases even further. ‘Greater policy clarity that will emerge after the general election will unleash a new wave of confidence that will outweigh any hesitancy in the market at the moment,’ she added. Continue reading
Property price growth in some rural areas catching up with cities
Property price growth in the English countryside is almost neck and neck with price rises in cities, according to the latest research. Overall home values in towns and cities across the UK have increased by 5.7% over the last year, but rural England has seen 5.1% annual property price growth in countryside areas over the same period. The research from Zoopla also shows that the average value of a rural home in England now stands at £264,338, some £51,737 or 24% higher than the typical urban property outside of London. Rural homes in the East of England have seen the biggest uplift in value over the past year, with prices up 6.5% or £17,098. This is closely followed by country properties in the South East, which have climbed in value by 6% or £22,157 in the last 12 months, meaning that home buyers in the region can expect to pay £66,100 more to live in a rural part of the South East, as opposed to a bustling town or city. The premium buyers pay to live in a rural location is highest in the West Midlands, with countryside properties costing £73,982 more than homes in a town or city while Gerrards Cross in Buckinghamshire is the most expensive rural area in England, with average homes currently worth £817,376, up from £773,726 a year ago. City properties ads in the East of England and South East experienced the strongest annual growth of 7.5% and 6.7% respectively, outpacing rises in London. But the most expensive urban location across the country is Kensington and Chelsea, with the typical pied-a-terre in W8 now valued at £2,654,512. ‘Urban areas had a head start in the housing recovery with demand propped up predominantly by employment opportunities. This drove price growth in these economic hubs and left countryside markets by the wayside,’ said Lawrence Hall of Zoopla. ‘Over the past year house price growth has spread and rural retreats which are commutable to the amenities and jobs of urban centres have become highly sought after. But they come with a significant premium to have the best of both worlds, with the extra outdoor space and seclusion that rural living gives you. Those looking for the good life in the country might want to escape the rat race sooner rather than later,’ he added. Continue reading
