Tag Archives: crisis
UK first time buyers deposit saving scheme criticised
Concerns have been raised about the UK’s Help to Buy Isa which is aimed at first time buyers saving towards a deposit for their first home. When the scheme was announced last year by then Chancellor George Osborne it was assumed that young people would receive the extra money put in by the Government towards the purchase of a home as part of their deposit. With the average deposit on a first home around £15,000 the Chancellor announced that if first time buyers saved £12,000 they would get the next £3,000 paid for them. But now it has emerged that the scheme will no pay out before a home is actually purchased, leaving first time buyers needing to save the whole £15,000 before they can actually complete a home purchase. The small print of the Government's flagship Isa states that the bonus will not be paid out until the sale is complete and a spokesman suggested that it was never designed as a deposit saving scheme but to be put towards the cost of a home overall. It is thought around 500,000 would be home owners have already taken out Help to Buy Isas and they now need to discuss with their banks what will happen when they are ready to receive the promised bonus from the government. Mark Hayward, managing director of the National Association of Estate Agents, said that it has changed the goal posts for first time buyers who have saved in a Help to Buy Isa. ‘Consumers have been putting money aside on the basis that they believed it would be applied to their deposit on a new home,’ he pointed out. ‘To now clarify that it is not actually available until completion is the perfect example of a painful lack of transparency and frankly nothing short of deception. First time buyers are already struggling with getting on to the housing ladder and this much hyped initiative was welcomed at the time as a way of helping them, but in fact could have ended up costing buyers if they have gone ahead with a purchase believing that the bonus counted towards the deposit,’ he added. Continue reading
Research suggests DIY can be a false economy for UK home owners
Home owners undertaking DIY to improve their home may find it is a false economy with research suggesting that it is likely to be botched and end up costing the owner more. Some 72% of home owners in the UK take on a DIY job to save money but more than a quarter, 27%, admitted they have botched the work and 34% left it unfinished, according to research from Halifax Home Insurance. The study also found that among those jobs they were willing to do themselves, some 77% would be confident to tackle painting, 75% gardening, just under half would attempt to put up shelves and just under 40% would put up wallpaper. The research shows a continuing decline in home improvement skills for young home owners. Only 62% of 18 to 24 year olds said they felt confident changing a lightbulb compared to 93% of over 55s. This was also true when it came to tiling, with 32% of over 55s feeling confident compared to only 13% of 18 to 24s. The North East of England topped the tables for confidence in DIY tasks with 82% confident about painting, 51% wallpapering and 55% putting up shelves while Yorkshire and Humberside were the most green fingered with 86% feeling confident at gardening. ‘Most people will take on DIY jobs at some point, so it’s important they make sure they are adequately prepared beforehand. They should check they have the right tools for the job, consider taking out accidental damage cover in case things go wrong, and avoid taking on too much. It’s essential to call in the qualified experts when it comes to jobs such as gas, electrics and plumbing, as home owners can risk invalidating their home insurance policy if things go awry,’ said Martyn Foulds, senior claims manager at Halifax Home Insurance. Last year alone, Halifax Home Insurance recorded over 16,000 accidental damage claims, including DIY related incidents. In total the insurer paid out more than £11 million for accidental damage, costing an average of almost £700 per claim. Meanwhile, a separate piece of research has found that first time buyers are paying a hefty price for snapping up cheaper properties that need renovating and undertaking the work themselves. According to specialist insurance broker Towergate over a fifth of first time buyers who are eager to get on the property ladder are turning to lower priced properties that need doing up and cutting costs by carrying out the work themselves, spending £4,600 in the process. However on top of the initial cost of the work, some 27% of new home owners have had to fork out extra cash for a professional contractor to fix their mistakes, costing an average £2,358. And separate research among members of electrical contracting industry body NICEIC has shown a summer spike in callouts to fix DIY mistakes, with 17% of contractors reporting an increase in requests during this time of year. ‘Given the… Continue reading
Brexit having more of an effect on Greater London property than rest of UK
Asking prices in the Greater London property market fell by 1.2% between July and August with analysis suggesting Brexit is having more of an impact on the city than other parts of the UK. This is the third monthly fall in a row, with Greater London's average asking prices falling by 1.1% between June and July and by 0.4% the previous month, according to the date from Home.co.uk. The annual rate of price inflation for Greater London property now stands at just 2.5% and falling. The firm is predicting this will fall to 0% within a mere two months, highlighting the very real danger that negative equity is just around the corner. Foreign buyers who purchased a property in London within the last 12 months are probably already in negative equity, the analysis suggests and it points out that in terms of Euros, Greater London home prices have shown a dismal performance over the last year, with values in the region dropping 11% since May and 17% since November last year. However, there is a potential upside that European buyers may be attracted back to the market but house prices and sterling will need to stabilise for that to occur. Housing supply figures from Home.co.uk strongly suggest further price falls are inevitable in the capital as Greater London vendors overload the property market in the aftermath of June's Brexit vote. Between July 2016 and July 2015 new listings in London increased by 27%, compared to a year on year rise of 6% the month before. The typical time on the market has also risen sharply from 68 days in July to 73 days in August, forcing vendors to further cut prices in a property market that was already in a precarious position through buy to let taxation changes and warnings about overvaluation. The South East of England, where in August asking prices fell by 0.2% for the second month in a row, is showing signs of becoming the next property price slump hot spot, as panic selling in the capital spreads out into the capital's commuter belt and beyond, the report also suggests. Between July 2015 and July 2016 the supply of property for sale in this region rose by 19% and the firm is predicting that the South East's typical time on the market of 63 days is likely to rise markedly due to the boost in supply in this region. ‘It is clear that the referendum result certainly unnerved many investors. We will be keeping a particularly close eye on the London market over the next month, watching whether or not the surge in new listings becomes a stampede,’ said Doug Shephard, director at Home.co.uk. ‘This would inevitably lead to a home price crash in the region and stress mortgage lenders to the limit or beyond. Property investors would be well advised to weather the storm and not join a rush to market,’ he added. Continue reading
