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Home owners in London more confident about house price increases than rest of UK
Households across the UK believe that the value of their home increased this month with people in London more so than the rest of the country, says the latest house price sentiment index. Households in all of the 11 regions covered by the index reported that prices rose in February, led by households in London at 68.1 and the East of England at 62.3. Households in Scotland reported the most modest rate of growth at 51.7 followed by the North East at 53. The data from the Knight Frank/Markit index also shows that households expect house prices to rise over the next 12 months, with the strongest growth expected by households in the South East. However, the rate of growth expected over the next year eased compared to January and while 23.2% of the 1,500 households surveyed said that the value of their home had risen some 4.1% said that prices had fallen. This resulted in a HPSI reading of 59.6, the 35th month in a row that the reading has been above 50. Any figure over 50 indicates that prices are rising, and the higher the figure, the stronger the increase. Any figure below 50 indicates that prices are falling. Indeed, February’s reading was the highest recorded by the index since October 2014, indicating that households perceive that the value of their home rose at its strongest rate since then. However, February’s reading remains well below the peak of 63.2 reached in May 2014, reflecting the easing in average UK house price growth seen since then. The future House Price Sentiment Index (HPSI), which measures what households think will happen to the value of their property over the next year, fell in February to 69.8, from 70.5 in January. While still indicating that households across the UK expect the value of their home to rise over the next 12 months, the future HPSI remains below its peak of 75.1 reached in May 2014. There remains a clear north-south divide in terms of the outlook for house prices, with households in Southern England more confident about future growth over the coming 12 months. Indeed, households in the South East were the most confident that prices will rise at 78.7, followed by Londoners at 77.8 and those in the South West at 74.1. In Scotland, the North East and Wales expectations for future price growth remain positive, but are more subdued at 62, 60.6 and 62.5 respectively and the data also show that those who own their home outright are the most confident that prices will rise over the next year at 75.4, followed by mortgage borrowers at 75.2. ‘The HPSI indicates that house prices are set to continue to tick up modestly in the coming months. The market is being underpinned by the solid economic recovery and ultra-low interest rates which now look as if they will stay put for some time to come,’ said Gráinne Gilmore, head of UK residential research at… Continue reading
Latest survey shows decline in home ownership in England has halted
A decade long decline in home ownership in England has been halted with the latest figures showing that more than 14 million people owned their home in 2015. The data from the English Housing Survey reveals that out of the 22.5 million households in England in 2014 to 2015, the number of people owning their own home in the past year has remained static the first time this has happened since 2003. It also shows that more than half of local authority tenants and a third of housing association tenants expect to buy their current home and there has been an increase in better homes with the number of properties failing to meet the government’s Decent Homes Standard continuing to fall and down by 3.1 million on 2006. ‘In 2010 there was a housing market where buyers couldn’t buy, builders couldn’t build and lenders couldn’t lend. Our efforts are turning that around with more than 270,000 families helped into home ownership through government backed schemes since 2010, while the number of new homes is up 25% over the last year,’ said Housing Minister Brandon Lewis. ‘And we’ve set out the boldest ambition for housing in a generation, doubling the budget so we can help a million more people into home ownership, while delivering a bigger, and better private rental sector,’ he added. Lewis said that the survey also provides evidence that the government’s decision to reinvigorate and extend its flagship Right to Buy scheme has boosted the aspiration of social housing tenants with those expecting to buy their current home rising from 35% in 2010/2011 to 42% in 2014/2015. More than 46,000 people have taken up the chance to buy their home through the reinvigorated scheme since 2012 with councils delivering replacement properties on a one to one basis ahead of schedule. Lewis added that house building is at the heart of the government’s long term economic plan with more than £20 billion committed over the next five years to help meet its ambition to deliver one million new homes. Details from the survey show that among owner occupiers, the proportion of households who owned outright remained larger than the proportion buying with a mortgage, although not in London. In 2014/2015, there were more outright owners at 33% than ‘mortgagors’ at 30%, a continuation of the trend first identified in 2013/2014. This was not the case in London where there were more mortgagors at 27% than outright owners at 23%, which the report says is most likely as a result of the younger age profile of the population in London. The private rented sector remained larger than the social rented sector. In 2014/2015 some 19% or 4.3 million of households were renting privately, while 17% or 3.9 million of households lived in the social rented sector. There was no change in the size of either sector between 2013/2014 and 2014/2015. There has been an increase in the number of families with dependent children… Continue reading
Buying is cheaper than renting across most of the UK, new research shows
People looking for their first home in the UK are better off buying than renting with the gap more than doubling over the last five years, new research shows. Indeed, first time buyers are on average £865 or 10% a year better off with their own home compared to those who rent, according to the research by Lloyds Bank. The South East of England is the only region where renting is the cheaper option with average monthly buying costs at £965, some £65 higher than average monthly rental costs of £900. The calculations show that the average monthly buying cost, including mortgage payments, associated with a first time buyer purchasing a three bedroom house stood at £672 in December 2015, some £72 or 10% lower than the typical monthly rent of £744 paid on the same property type. This represents an increase of £105 over the past year compared with the annual saving associated with buying a home instead of renting of £760 in 2014. The difference has grown as average monthly rents have increased more steeply by £24 or 3% compared to a £15 or 2% increase in monthly buying costs. The current financial gap between buying and renting of £865 is more than double the annual saving of £397 in 2010. Over this period, the average rent has grown by 23% or £139 a month from £605 whilst average buying costs have increased by 17% or £100 a month from £572. The research report says that buying has consistently been the cheaper option since 2009, when the average monthly payment was £561 for renting compared with £575 for buying. While buying is more expensive in the South East, the data shows that buying is most affordable compared to renting in cash terms in the North West, where the typical first time buyer is paying £133 a month less than the average renter at £525 against £658. The next most affordable is Scotland where a buyer pays £525 against £645, a saving of £120, and then Wales at £471 against £574, a saving of £103. The number of first-time buyers is estimated to have totalled 310,000 in 2015, largely unchanged from 311,700 in 2014. This represents an increase of 60% since the number of first time buyers fell to a recent low of 193,700 in 2011. The number of first time buyers accounted for 46% of all house purchases made with a mortgage in 2015. This share has grown from 36% at the start of the housing downturn in 2007. ‘We’ve seen a significant shift over the past five years, with people consistently paying less on average per month when owning their property as opposed to renting. In 2015 this gap widened by over £100 to an annual saving of £865,’ said Mike Songer, mortgage director at Lloyds Bank. ‘This has been helped by record low mortgage rates and rising private rents, making owning a home a much more attractive proposition than renting,’… Continue reading
