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Discounted Starter Homes in UK will not help many families, research has found
Discounted starter homes could be out of reach for the majority of families in need of an affordable home in many parts of the UK, it is claimed. First time buyers will be able to buy 200,000 new starter homes over the next five years at a minimum discount of 20% of the market value with discounted prices capped at £450,000 in London and £250,000 elsewhere. However, according to an analysis by the Local Government Association while the national starter homes scheme could help some people onto the housing ladder it won’t help everyone who wants one of these homes. The LGA pointed out that crucial details of the scheme are yet to be confirmed but it is concerned it will help the fewest numbers of people in areas where the housing affordability crisis is most acute and will be out of reach for many people in need of an affordable home in the majority of local areas. Although house builders will be able to build and sell starter homes below the price caps, councils are concerned that this could be difficult for developers to achieve without compromising on quality, particularly in areas with higher house prices. Town hall leaders are calling for the system to be flexible regarding the number, type and quality of starter homes so that they meet the needs of local communities. Councils also need powers to provide affordable rented homes that are crucial for enabling people to save money towards a deposit, and the means to secure investment in vital infrastructure that new home buyers will expect and will rely on. The analysis by real estate services firm Savills for the LGA reveals that discounted Starter homes prices will be out of reach for all people in need of affordable housing in 67% or 220 council areas and are out of reach for more than 90% of people in need of affordable housing in a further 80 council areas. People in need of affordable housing are defined as those who would have to spend 30% of their household income to rent or buy a home. The research says that for the average earner with a minimal deposit of 5% looking to buy an average priced house, a 20% discount would make it possible to borrow enough to buy a starter home in just 45% of all council areas in England. This includes all average priced homes in the North East of England, 95% in the North West and 90% in the East Midlands. Being able to save a 20% deposit would make an average priced home with a 20% discount affordable to buy in a further 29% of local areas. This includes a third of council areas in Yorkshire and Humber and the West Midlands. The average earner living in 85% of London boroughs, 49% of council areas… Continue reading
Positive start to 2016 for Spanish prices with two indices showing growth all round
The residential property market in Spain has started 2016 positively with the latest figures showing that the average value of housing increased in January. The latest data from property appraisal company Tinsa, shows that the Balearic and Canary Islands have seen prices rise the most, up 5.4% month on month and 3.2% year on year. While overall prices increased by 2.9% compared to December 2015 and are up 1.1% year on year. Prices in large cities increased by 2.9% year on year while priced on the Mediterranean Coast rose by 1% and in Metropolitan areas they increased by 0.8%. But in smaller towns the market is not doing as well, with average prices falling by 2.2% year on year although there was a small rise month on month. It also shows that since the peak of the market in 2007, the average property prices is still down by 41% but there are regional variations. For example, since the peak prices are down 48% on the Mediterranean Coast, down 44.2% in large cities and down 43.5% in Metropolitan areas. The gap is less in the Balearic and Canary Islands, with an accumulated decline of 29.1% from peak while in smaller town they are down 37.3%. Property portal Fotocasa’s latest data is also positive. It shows that the average price of second hand housing in Spain increased by 0.3% month on month in January, taking the average price to €1,623 per square meter. However, year on year this index is still showing an average decline in prices of 0.3%. It also shows that since the peak in 2007 average prices are down 45% and 12 of Spain’s 17 regions have registered price declines in excess of 40% since the peak. In a Rioja prices are down 54.7% since 2007, in Castilla-La Mancha by 52.2%, in Navarra by 52.1%, in Aragón by 51.4%, in Murcia by 50.1%, in Valencia by 47.8%, in Catalonia by 46.6%, in Asturias by 45.6%, in Madrid by 44.7%, in Andalucía by 42.7%, in Extremadura by 41.6% and in Cantabria by 40.1%. In January average prices increased in 10 regions. The biggest rise was in the Canary Islands with growth of 2.1%, followed by Aragón up 1.2%, Valencia up 1%, Andalucía and Catalonia both up 0.9%, Castilla-La Mancha, Navarra and La Rioja all up 0.8%, the Balearic Islands up 0.2% and Asturias up 0.1%. In contrast, Extremadura recorded the biggest fall in prices with a decline of 1% in January, followed by the Basque Country down 0.9%, Galicia down 0.6%, Cantabria down 0.5%, Castilla y León and Murcia both down 0.4%, and Madrid down 0.2%. The Basque Country remains the most expensive of Spain’s regions, with an average price of €2,730 per square meter, followed by Madrid at €2,197 and Catalonia at €2,064. The regions with the most economical second hand housing prices are Castilla-La Mancha at €1,058 per square meter, Extremadura at €1,100 and Murcia at €1,145. The index also shows that 30 of the 50… Continue reading
UK property asking prices up almost 3% month on month
The price of property coming to the market in the UK increases by a substantial 2.9% or £8,324 in January, hitting a new record of £299,287 and surpassing the record set in October 2015 by over £2,700. Housing demand is higher than ever as the latest Rightmove report records that traffic to the property portal hits record levels, with visits up nearly 20% year on year in January. It says that there has been an encouraging 5% uplift in new properties coming to the market compared to same time last year resulting in the highest total number of newly listed properties at this time of year since the 2008 credit crunch. The firm is also predicting that 2016 will be the year of the first time buyer as Government initiatives and a low interest rate outlook are now aligning when there is more property choice for first time buyers, with a 10% year on year jump in the number of two beds or fewer coming to the market. ‘The new year’s market has hit the ground running in many locations, continuing last year’s momentum and resulting in the price of property coming to the market hitting a new high. Many agents reported high numbers of sales in November and December and properties selling more quickly, so it’s encouraging to see signs of replenishment of property, especially in the first time buyer sector,’ said Miles Shipside, Rightmove director and housing market analyst. ‘However, in spite of the apparent veneer of market buoyancy, those thinking of putting their property up for sale need to avoid being too optimistic with their initial asking price, as most buyers are still understandably being very selective about their future home,’ he added. The previous record price high was set in October 2015 but this has now been exceeded by £2,738, pushing the average new seller asking price to £299,287. Shipside pointed out that a continuing feature of the recovering market over the past few years has been the supply of property coming to market failing to keep pace with demand. There are now signs of fresh supply increasing with the volume of new properties coming to the market is at the highest level since the credit crunch of 2008. However, he added that it should be noted that this is patchy by region with only four regions above the 5% year on year average uplift, namely London, South East, South West and Yorkshire and the Humber. In the West Midlands new stock is actually down by 0.3% and Wales and the North West have seen an uplift of 1% or less, restricting fresh choice for buyers in these regions. ‘While more properties are coming to market there is little anecdotal evidence of tax shy landlords selling up. It is more likely made up of additional first-time sellers who are either hoping to bag a buy to let investor before the April stamp duty hike, or joining others who… Continue reading
