Tag Archives: europe
Research reveals chromic shortage of first time buyers in UK housing market
The UK housing market is experiencing a potentially serious shortage of first time buyers, particular in the South East and North West, new research has found. First time buyer activity in the North East and Yorkshire and Humberside is less than half of what it was pre-recession while London is the least affected, according to the report from private mortgage insurer Genworth based on an analysis of government and industry data. The South East averaged 86,733 first time buyers a year from 1974, when records began, up until 2006. But since 2007 when the financial crash hit, this has fallen to just 47,863 a year. As a result, this has created a total shortfall of 310,967, the biggest of any English region. The North West has also seen first time buyer numbers drop from 46,461 a year between 1974 and2006 to 23,875 between 2007 and 2014. This has created a shortfall of 180,685 first-time buyers. The North East’s first time buyer market is less than half of its pre-recession size as the data analysis shows that the average number of first time buyers between 2007 and 2014 at 10,575 is just 46% of the pre-2007 average of 23,191, the lowest percentage of any region. In contrast, London is the least affected in relative terms and has lost just a quarter of its first time buyers in percentage terms. Its average of 39,175 between 2007 and 2014 is equal to 73% of the pre-recession average, despite the continued house price increases London has seen in recent years. The report says that comparing these shortfalls to the regional populations of 18 to 45 year olds who are traditionally first time buyers, suggests a significant percentage are potentially ‘denied home owners’ as a result of the fall in first time buyer numbers. For example, a shortfall of 100,927 first time buyers in the North East compared to an 18 to 45 population of 1.3 million means as many as 21% could be classed as ‘denied home owners’. In the South East a shortfall of 310,967 compared with an 18 to 45 population of 1.6 million means 19% are in the same position. ‘Tougher regulation and higher capital requirements for lenders as a result of the recession have accelerated the fall in homeownership and dramatically reduced the number of people, especially younger households, who are able to buy their first home,’ said Simon Crone, vice president for mortgage insurance Europe at Genworth. ‘A dual crisis has emerged with the shortage of new homes exacerbated by a shortage of loans traditionally used to help first time buyers get on the property ladder with 5% or 10% deposits. Our analysis shows that all regions have felt the impact of the squeeze on first time buyers, regardless of the so-called ‘North/South’ divide,’ he explained. ‘While London and the South East face the biggest pressure of high house prices, a lack of housing… Continue reading
Ireland needs 21,000 new houses a year, but smaller homes are required
Demand for new housing In Ireland will continue to increase in accordance with population trends and a reduction in household sizes with 21,000 new homes needed per year for the next three years. Details from the National Housing Statement by the Housing Agency points out that the population is currently at its highest for 150 years at 4.5 million and demand for homes is high as a result. It also shows that affordability is an issue for those looking to buy in the greater Dublin area. Overall house prices have increased across the country with the median price nationally at €152,000, up from €140,000 in 2013. In Dublin it is €260,000, up from €220,000 in 2013. Rental prices have also increased, particularly for apartments. Nationally rents were 6.9% higher in the first quarter of 2015 compared with the same period in 2014 with growth of 9.6% in Dublin and 5.3% outside Dublin. Mortgage arrears and negative equity remain a serious concern, the report says, with a total of 110,366 mortgages in arrears at the end of 2014 but it adds that changes mean that smaller homes will be needed because household requirements have changed and the average household size has fallen dramatically. ‘Proportional household composition has changed and we see an increase in smaller households and a corresponding decrease in larger households. The average household size in the country has fallen significantly over the last nine years from an average of 3.04 in 2002 to 2.77 in 2011. Based on an assessment of regional trends, it has been calculated that it will fall further to 2.67 by 2018 so the majority of new housing will now accommodate fewer people,’ it says. Minister for State with responsibility for Housing, Paudie Coffey, said that the report provides a much needed analysis of the true picture of housing supply and demand in Ireland along with future projections, allowing for emerging imbalances to be identified and rectified at an early stage. ‘It contributes greatly to an overall understanding of housing needs in Ireland, ensuring that the most up to date and comprehensive data is available relating to current housing supply and emerging needs. Importantly, this data will help ensure policy responses are evidence based and needs led, as we endeavour to build sustainable communities for the present and future generations,’ he added. According to Conor Skehan, chairman of the Housing Agency, the data is now in place to ensure housing needs are met through a whole suite of initiatives which are underway including those addressing issues such as housing supply, housing land availability, and provision of social housing ‘Keeping those initiatives on target requires accurate data and progress reports on extent to which these needs are being met. This is the first of a series of annual reports to deliver a state of the nation picture of what housing needs are and how we are addressing housing supply,’ he explained. Continue reading
US home prices up 6.5% year on year, latest index shows
Home prices across the United States, including distressed sales, increased by 6.5% in June 2015 compared with the same month in 2014, according to the latest index. It is the 40th month in a row of year on year price increases and values were also up month on month with growth of 1.7% in June compared to May, the CoreLogic home price index also shows. Excluding distressed sales, home prices increased by 6.4% in June 2015 compared with June 2014 and increased by 1.4% month on month with only Massachusetts (-1.5 percent) and Louisiana with an annual price fall of 1.5% and 0.1% respectively. Including distressed sales, that is short sales and real estate owned sales (REO), some 35 states were at or within 10% of their peak prices in June 2015 and 15 reached new price peaks. The firm’s latest house price forecast indicates that home prices, including distressed sales, are projected to increase by 0.6% month on month from June 2015 to July 2015 and by 4.5% on a year on year basis from June 2015 to June 2016. Excluding distressed sales, home prices are projected to increase by 0.5% month on month from June 2015 to July 2015 and by 4.2% year on year from June 2015 to June 2016. The index report also shows across the country there was 4.8 months supply but the measure varied greatly across cities. In San Jose and Denver, there was only 1.6 months’ supply of homes on the market, whereas Philadelphia had a seven months’ supply and Providence had a 6.6 months’ supply. Frank Nothaft, chief economist for CoreLogic, explained that the stronger appreciation was registered in cities with limited inventory and strong homebuyer activity, such as San Jose and Denver. According to Anand Nallathambi, president and chief executive officer of CoreLogic pent-up buying demand and affordability, together with higher consumer confidence buoyed by a more robust labour market, are a potent mix fuelling the 6.5% jump in home prices with more increases likely to come. Including distressed sales, the five states with the highest home price appreciation were Colorado with growth of 9.8%, Washington up 8.9%, New York up 8.3%, South Carolina up 8% and Nevada also up 8%. Excluding distressed sales, the five states with the highest home price appreciation were Colorado up 9.3%, New York up 8.5%, Washington up 8.3%, Oregon up 8.2% and Nevada up 7.9%. Including distressed sales, only four states experienced home price depreciation with the biggest fall of 5% in Massachusetts, while Connecticut was down 0.6%, Louisiana down 0.4% and Mississippi with a fall of 0.3. The five states with the largest peak to current declines, including distressed transactions, were Nevada with a fall of 32.2%, Florida at 28.7%, Rhode Island at 26.5%, Arizona at 25.8% and Maryland down 21.2%. Of the top 100 Core Based Statistical Areas (CBSAs) measured by population, some 93 showed year on year increases while seven showed year on year declines… Continue reading
