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Americans more confident about the nation’s housing market, new research shows
Overall Americans are more confident about the housing market than at the start of the year, according to the latest Zillow Housing Confidence Index. The index increased to 64.2 over the summer, up from 63.7 in January, and housing confidence increased among residents in 11 of the 20 major metro areas surveyed. The ZHCI, sponsored by Zillow and developed by Pulsenomics, is measured on a 0 to 100 scale, with readings above 50 indicating positive sentiment. The headline index is comprised of sub-indices which measure prevailing market trends and buying/selling conditions, expected changes in home values, home affordability, the value of home ownership and, household home buying plans and attitudes toward the social value of home ownership. But the analysis also reveals that consumers’ expectation is for more modest home value growth going forward are this is in line with Zillow's predictions for slower home value growth over the next year. The Zillow Home Value Forecast, which predicts home value growth of 3.1% through next August, is down from 6.6% over the past year. The report also shows that overall, housing confidence is higher among home owners than renters, likely owing to historically high rents and favourable home buying conditions. An analysis of data within the 10,000 completed survey questionnaires used to calculate the ZHCI reveals that younger renters are upbeat about their future home buying prospects. Among renters aged 18 to 34 some 82% said they were confident or somewhat confident that they will be able to afford to own a home someday, compared to 64% of those aged 35 to 49 and 48% of those aged 50 to 64. Then younger age group were also far more optimistic about future home value appreciation with 33% saying that they expected home values to rise more than 6% per year over the next decade, compared to 21% of the middle age group and 15% of the older age group. ‘It's heartening to see younger renters express so much confidence in their ability to buy a home in coming years, because today's renters by necessity are tomorrow's buyers,’ said Zillow chief economist Stan Humphries. ‘Cynics might argue that these results represent no more than youthful exuberance, or perhaps some naiveté, but that's missing the point. We need this generation to be confident and wanting to buy, regardless of the difficulties they face,’ he explained. ‘And there are difficulties, including saving for down payments in the face of high rents and high student debt burdens, uncertain job prospects among younger workers and limited entry-level home inventory. But optimism is a necessary first step, and indicates a desire among a very creative generation to find creative solutions that will enable them to achieve home ownership,’ he added. The report suggests that in some respects, younger potential buyer’ views toward housing may be more conventional than older generations. Some 65% said they agreed with the statement that owning a home is necessary to living a good life and is central to the American dream, compared… Continue reading
Survey suggests being a landlord is more stressful than it used to be
Being a landlord in the UK is becoming an increasingly stressful business with over half using their holidays to sort out issues, new research shows. Some 25% have found being a landlord more stressful than they had expected and 67% said they were more stressed than 12 months ago, according to a survey by UK Landlord Tax. The survey showed that 53% of landlords use up to 20% of their annual leave sorting out issues with their properties. Also 46% of landlords spent up to 20 hours a year on phone calls, negotiating with agents and tenants as well as sorting out insurances, house repairs and maintenance. Other contributing factors included late rent payments (58%), funding property maintenance and repairs (40%) and tax worries (38%). Expat landlords feel under the most pressure with 86% worried about the potential changes to personal allowance entitlement. However, those who had been landlords for 10 years or more felt under least pressure. Other issues and worries for all landlords included properties lying empty with no tenants in place (35%), not having enough time to deal with issues at the property due to work constraints (28%) and expensive agency fees (15%). Four legged friends were another ‘pet hate’ landlords had to tackle. While 60% of those surveyed said they don’t currently allow pets in their property, 5% discovered at the end of the tenancy that their tenants had been keeping pets without consent, and experienced some level of damage to the property. While 74% of those surveyed said they had no plans to stop letting out their property in the next 12 months, 51% said they didn’t expect to make any money in that time either. This ties in with figures from the National Landlords Association which revealed that 27% of landlords who let out a single property break even or run at a loss, meaning just a few unexpected expenses can leave them struggling. ‘Following the dramatic increase in landlords in the UK it’s not surprising that they are becoming more stressed. Letting properties is a serious business and with the number of so-called ‘accidental landlords’ increasing significantly it’s no surprise that landlords are feeling the pressure,’ said Simon Thandi, director at UK Landlord Tax. Continue reading
New powers for Bank of England regarding Help to Buy scheme welcomed
The Royal Institution of Chartered Surveyors (RICS) has welcomed a move to give further powers to the Bank of England to manage property’s role in the country’s economy. It said that the decision announced this week by the Chancellor of the Exchequer George Osborne is a responsible step when housing development is being heavily stimulated. But it warns that a ‘permanent’ Help to Buy scheme needs to be carefully considered. Whilst there is a commitment to annual scrutiny by the Financial Policy Committee, RICS has called for a concise and clear exit strategy for Help to Buy and believes existing schemes should be focused on those regions which are seeing least activity and development, and have the greatest housing need. Under the change the Bank's Financial Policy Committee (FPC) will make annual reviews of the scheme, starting next September. The committee had been due to make an assessment of Help to Buy only after its first three years of operation. Osborne believes that the recent recovery in parts of the housing market has raised questions about the impact of the scheme so he has given the Bank more control. The FPC will be able to modify parts of the scheme to keep it in check. The FPC will also be allowed to review the scheme and could reduce the £600,000 cap, so fewer homes are affected. The FPC could also make loans less attractive by recommending that the Treasury raises the fees paid by lenders for the guarantees. Help to Buy was originally launched to help buyers of new properties in England, with other schemes operating in Wales and Scotland. A second, potentially much bigger phase of the scheme is due to begin in January to assist buyers who might otherwise be unable to afford a down payment on a home. The scheme provides taxpayer insurance for up to 15% of a mortgage on houses worth up to £600,000, allowing banks to provide up to 95% mortgages at a reduced risk. The plan has been criticised by opposition politicians and private sector economists for risking pushing up house prices, which have since risen by around 10%. However, in its first assessment this week the Bank of England has given a clean bill of health to the Help to Buy mortgage guarantee scheme, saying it does not pose material risks to financial stability. It also said it was not to blame for prices risesas it only accounted for around 5% of mortgages and was most used in regions where house prices had risen least. 'The scheme does not appear to have been a material driver of (house price) growth. For example, take up of the scheme has been weak in London where house price growth has been strongest,' the FPC said, adding that mortgage lending standards had not deteriorated since the launch of Help to Buy, and house prices appeared to be cooling sooner than the FPC had expected when it last met in June and imposed caps on general… Continue reading
