Tag Archives: crisis
More first time buyers entering the UK housing market
First time buyers in the UK have increased their dominance of the housing market but other buyers have fallen in number, according to estate agents. The latest Housing Market Report from the National Association of Estate Agents (NAEA) also reveals that the supply of homes has reached a near decade low. The average number of properties available per member branch in February fell from 45 in January to 43 in February, the fifth consecutive drop experienced in supply of properties coming on to the market. The NAEA says that the supply of properties are now at similar levels seen in May 2004 but despite the lack of properties in the market, the average number of sales agreed per branch continued to improve, up from an average of eight sales per branch in January to nine in February. The number of first time buyers entering the market has also continued to improve with 29% of all homes sold by NAEA member agents being sold to them in February. However, these figures were recorded alongside a decrease in the in the total number of house hunters, with the average number registering with member agents down 6.2%. This resulted in the average number of buyers per property remaining the same at eight, as both supply and house hunter numbers contract. NAEA agents also reported that the percentage of properties sold to people purchasing a house using the Help to Buy equity loan scheme remained the same month on month at an average 4%. The most popular group buying was those aged 31 to 40 years old, making up half of the buyers seen in February. NAEA agents also reported 22% home buyers were looking to re-locate, while the average length of time it takes to buy a property in the UK is 11 weeks from sale agreed through to completion. ‘The housing market remained strong in February with first time buyers continuing to turn out in force. As confidence in the housing market continues to rise, NAEA agents expect the number of first time buyers to remain strong,’ said NAEA president Jan Hÿtch. ‘This confidence may be increasing, but the lack of properties entering the market has slowed considerably and is a real concern that needs to be addressed now, particularly for those already on the housing ladder who want to move onwards. With Help to Buy making it easier for new purchasers with low deposits to buy a home, the appetite for buying in this price range, combined with the diminishing supply of first time buyer properties, could drive property prices up further in this sector,’ Hÿtch added. Continue reading
UK property prices forecast to grow by over 30% in next five years
The Office for Budget Responsibility (OBR) as revised its forecast for house price growth in the UK in the next five years from 27% to 30.8%. According to the OBR, growth of 8.6% is expected in 2014/2015, 7.4% in 2015/2016, 4.3% in 2016/2017, 3.7% in 2017/2018 and 3.7% again in 2018/2019. It says in its latest forecast report that by the end of the forecast period, house prices are expected to be 0.5% below their pre-crisis peak in real terms and the house price to income ratio to be 2.3% below its pre-crisis peak. The OBR also expects transaction volumes will rise at a faster pace than originally forecast over the coming five years. The independent fiscal body estimates that housing transactions in 2014/2015 will be 1.28 million, some 6% higher than it forecast in December. According to Grainne Gilmore, head of UK Residential Research at Knight Frank, this bump up in the forecasts for price growth and activity, especially over the next year, reflects the additional stimulus in the market via Government policies as well as the underpinning of record low interest rates. She also pointed out that several different measures have been announced to help boost housing supply. The Chancellor of the Exchequer George Osborne had already announced a £6 billion four year extension to the Help to Buy Equity loan, which has been welcomed by house builders. ‘The extra longevity of the support to the market will allow house builders to commit to achieving planning on and building out much larger schemes, something that is crucial to deliver the step up in housing supply that is desperately needed,’ she added. Also, Osborne’s announcements on additional funding support for smaller developers through the £500 million Builders Finance Fund is also welcome, as smaller developers are still being hit by an effective funding crunch, finding it hard to secure funding or finding that they are being charged higher premiums for loans. The consultation on Right to Build measures to encourage self build could also help boost the numbers of people developing their own homes if they come to fruition. Self build accounts for just 8% of all new build development in the UK, compared to 40% in the US and an even higher proportion in Europe. Opening up the Equity Loan to mortgage borrowers who are building their own home will also be welcomed. The Federation of Master Builders (FMB) said the announcements are a major boost for housing supply which is so lacking at present. ‘Access to finance is a major stumbling block for viable small house builders so this government intervention is much needed as many major banks are still reluctant to lend for small residential developments. This additional support will provide the necessary finance to small house builders and help increase the overall supply of new housing,’ said Brian Berry, chief executive of the FMB. Michael Holmes, spokesperson for The Homebuilding, Renovating and Home Improvement Shows and editor in chief of Homebuilding and Renovating magazine, said… Continue reading
Estate agents see signs of improved property supply in the UK
A sharp rise in home owner equity in the UK is set to increase the property supply as even first time buyers in London seem undeterred by property price increases, it is claimed. Indeed, the latest data from haart estate agents shows that first time buyers in London reached a new annual high with registration up 55.3%. This comes at a time when UK property prices have increased 7.9% annually to £191,375, while in London prices are up year on year by 23.6% to £474,359. The firm also says that the national property market is buoyant with a 21.3% increase in property sales. ‘Home owners across the UK, who have on average accumulated equity of over £14,000 in their property over the past year, are expected to take advantage of their growing assets by remortgaging or downsizing this spring,’ said Paul Smith, chief executive officer of haart. ‘The downsizers will ease the current shortage of supply which will help to quell rising house prices. The increase in equity is now more than £90,000 annually in London. First time buyers are undeterred by property price rises and are now at their highest level in London over the past 12 months as banks continue to support lending to this group of buyers,’ he explained. He also said that a lack of reform for the much criticised Stamp Duty property tax means the continuation of a dysfunctional housing market. ‘In one fell swoop the Chancellor George Osborne could have increased the supply of homes for sale and capped rising house prices helping every level of the housing ladder,’ Smith pointed out. ‘Instead he’s turned a blind eye and given nothing to the majority of home buyers and sellers rather than throwing them a lifebelt,’ he added. Continue reading
