Tag Archives: europe
First time US buyers rent an average of six years before buying a home
Americans are renting more than twice as long before buying their first home as they did in the 1970s, new research has found. Aspiring home buyers are now renting for six years compared to an average of 2.6 years compared to 40 years ago, according to an analysis from real estate firm Zillow. The analysis report also shows that first time buyers are older and less likely to be married than they were in the past and overall Americans are buying increasingly expensive first homes and spending more relative to their incomes than any time in the past 40 years. In the 1970s, first time buyers bought homes that cost about 1.7 times their annual income. Now they're buying homes that cost 2.6 times their annual income. The firm says that part of this can be attributed to the housing markets where people are moving which are more expensive cities on the coasts, where there are growing job markets. The average first time buyer is about 33 with a median income of $54,340, which is about the same as what first time buyers made in the 1970s, when adjusted for inflation. In the late 1980s, some 52% of first time buyers were married but today that has fallen to 40% married, the research also shows. ‘Millennials are delaying all kinds of major life decisions, like getting married and having kids, so it makes sense that they would also delay buying a home,’ said Zillow chief economist Svenja Gudell. ‘We know millennials value home ownership and want to buy. The next challenge will be figuring out how they can save for a down payment and qualify for a mortgage, especially while the rental market is so unaffordable all over the country. The last hurdle will be finding a home they like amidst very tight inventory, especially among starter homes,’ added Gudell. Continue reading
Annual house price growth varies across the UK, latest ONS index shows
Annual house price growth in the UK is going up and down according to region, varying between a fall of 0.6% to a rise of 9% year on year, according to the latest property index. Overall UK house prices increased by 5.7% in the year to June 2015, up from 5.6% in the year to May 2015, the data from the Office of National Statistics (ONS) shows. A breakdown of the figures shows the strongest annual growth was in Northern Ireland at 9% while the weakest was on Scotland with a dip of 0.6%. In England growth was 6.1% and in Wales it was 0.8%. It is the first annual fall in prices in Scotland since September 2013, down from 2.2%, and prices were also down from 2.7% in Wales, and down from 11% in Northern Ireland while in England the annual rise was up from 5.8%. Annual house price increases in England were driven by a 9.2% increase in the East and a 7.7% increase in the South East. But excluding London and the South East, UK house prices increased by 5.2% in the 12 months to June 2015. The ONS data also shows that on a seasonally adjusted basis, average house prices increased by 0.4% between May and June 2015. In June 2015, prices paid by first time buyers were 5.1% higher on average than in June 2014 while for existing owners, prices increased by 6% for the same period. Peter Rollings, chief executive officer of Marsh & Parsons, pointed out that price rises in London continue to be overpowered by the East and South East for the moment. ‘Costlier property taxes at the highest rungs of the market have forced London off the boil, and dampened the appetite in the market momentarily,’ he said. But he pointed out that there are signs that London buyers are starting to take on board increased stamp duty costs, and during the second quarter of the year the firm saw buyer registrations increase by 17% up against a supply boost of just 10%. ‘This fundamental imbalance will ensure price growth simmers on into the autumn, and in the Prime market we’ve already seen property values start to solidify again, recording the first quarterly rise since September 2014,’ he added. Rob Weaver, director of property for residential investment platform Property Partner, believes that prices will keep going upward due to the imbalance in the market. ‘Demand continues to outstrip supply and this, with the odd blip or dip aside, can only mean one thing for property values,’ he said. He also pointed out that average price growth on new builds has been almost double that of pre-owned properties over the past year. ‘It’s a worry as this implies people are paying more of a premium on new builds, which could be a symptom of foreign investors tending to do less market research. It’s rather like buying a new car, once you put the keys in and drive… Continue reading
Less prominent locations in Scotland seeing home sales grow
Secondary Scottish locations have come to the forefront of the property market in the year to June with saes in Glasgow, Dunbartonshire and Argyll and Bute increasing, the latest research shows. Sales in these areas were higher than in Scotland as a whole, with buyers now looking beyond primary locations in search of more affordable and attainable property, according to a new report from Savills. These secondary locations have benefitted from the UK government’s Help to Buy mortgage guarantee scheme and the Scottish government’s new build scheme, with its £250,000 price limit applicable to greater numbers of properties than in more expensive core areas, the report suggests. Both Glasgow City and West Dunbartonshire have enjoyed a significant increase in supply, with private sector house building completions up by 44% and 75% respectively, driving up transaction levels. In contrast, traditional primary locations such as East Renfrewshire, and Aberdeen City have suffered from a lack of supply and are subsequently lagging in terms of activity, although prices have remained stable. In Argyll and Bute, for example, Helensburgh has seen a resurgence of interest following the referendum, with interest in holiday destinations regaining momentum, according to Faisal Choudhry of Savills. However, across the board, sales above £500,000 have fallen slightly in Scotland due to short term uncertainty following the introduction of Land and Building Transaction Tax (LBTT) in April. ‘We’re confident sales will pick up as the market adjusts to the new system. Below this threshold, the property market is strong and there is still a great deal of activity up to £500,000,’ explained Choudhry. ‘The Help to Buy mortgage guarantee scheme has assisted more first time buyers in Scotland and across the UK to get on the housing ladder with 78% of users purchasing their first home,’ he added. Looking ahead, the scaling back of government initiatives and continued lending constraints could prevent significant growth in Scottish sales levels, according to Savills. ‘The discontinuation of the Help to Buy new build scheme combined with the stricter lending criteria introduced by the Mortgage Market Review (MMR) will limit the number of buyers who can access sufficient lending to purchase property,’ said Choudhry. ‘Anticipated rises in mortgage rates could also dampen activity among those with lower deposits. Consequently, transaction levels are not likely to show double digit growth in the year to June 2016, but we would expect to see a small rise, he added. Continue reading
