Tag Archives: europe
Negative equity rates down in the US but still affecting one in 10 owners
Negative equity is still affecting more than one in 10 home owners in the United States five years after the nation’s housing market recovery began, new research shows. Home owners who owe more than their homes are worth are nearly equally dispersed among urban and suburban communities in most metros across the country, says the latest report from real estate firm Zillow. But the numbers are falling. Nationally, some 12.1% of mortgaged home owners were underwater in the second quarter of 2016, down from 12.7% in the first three months of the year and below the 14.4% recorded a year ago. A breakdown of the figures show that 13.7% of owners in urban regions are underwater and 11.2% of those in suburban regions while Cleveland and Detroit have the greatest difference between urban and suburban negative equity rates. After the housing bubble burst, nearly a third of home owners in the United States were underwater on their mortgages. As the market recovered, many home owners have gained back the lost value on their homes, freeing them to sell or refinance. In most areas of the country, negative equity is nearly equally spread across urban and suburban areas. In 13 of the nation's largest metros, the share of urban and suburban homeowners who are underwater is within two percentage points. But some metros are seeing notable gaps in the share of underwater homeowners between urban and suburban areas. Cleveland and Detroit have the biggest difference between negative equity rates in urban and suburban neighbourhoods at 13.6% and 10.8% respectively. In these metros, home values in the main urban centres are trailing behind the overall region's recovery, and are still well off from their peak levels. By contrast, negative equity is equally common among urban and suburban areas in the Seattle area, where a more balanced recovery and strong economic growth have led to home values near or exceeding their bubble peak levels in urban and suburban areas alike. ‘At its worst, negative equity touched all kinds of home owners in all kinds of markets. The type of community a given home was in, urban or suburban, mattered little. Fast forward a few years, and the relative vibrancy of a given community and how it has performed over the past few years, and not necessarily its location in the city or suburbs, matters a great deal,’ said Zillow chief economist Svenja Gudell. For the first time, all of the largest markets in the country now have negative equity rates below 20% and the data shows that Western metros with strong job and housing markets have the lowest rates of negative equity. Less than 5% of mortgaged home owners in San Jose, San Francisco, Portland, Denver, and Dallas are underwater. 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
UK residential sales drop just 0.9% post Brexit vote
Residential property sales in the UK fell slightly by 0.9% between June 2016 and July 2016 and were down 8.3% lower compared with the same period in 2015, according to the latest data from HMRC. For July 2016 the number of non-adjusted residential transactions was about 0.7% higher compared with June 2016 and 13.6% lower than in July 2015. The seasonally adjusted estimate of the number of non-residential property transactions decreased by 7.5% between June 2016 and July 2016 and was 1.7% lower compared with the same month last year. The report points out that there was a large increase in transactions in March 2016 followed by a substantial reduction in April which was associated with the introduction of the higher stamp duty rates on additional properties in April 2016. However, whilst April and May 2016 are lower than the corresponding months in 2015, it should be noted that the total for March to May 2016 is still substantially higher than the corresponding period last year. Non-tax factors may have played a role as well, for example the Bank of England's plans to curb buy to let mortgages resulting in a rush to purchase before April 2016, and the European Union referendum affecting transactions in recent months. According to Andy Sommerville, director of Search Acumen, the statistics suggest the market is stabilising, as the month on month change sits at under 1%. ‘Many would have expected a sharp fall in transaction activity in what was the first full month in our post-referendum economy, yet an underwhelming change suggests the darkness in our market shows little sign of worsening,’ he said. ‘Despite the encouraging resilience the market has shown in the short term, the bigger picture reveals an 8.3% decrease in transactions since July last year, demonstrating the true hit we’ve taken from Brexit, combined with the underlying issue of affordability,’ he pointed out. ‘As our economy absorbs the shock of the past three months, it is positive that home buyers are being given a leg-up into the property market to reignite demand and boost our industry,’ he added. Doug Crawford, chief executive officer of My Home Move, believes the data shows that the property market largely shook off the short term uncertainty of the Brexit vote. ‘Following the referendum there was talk that the market would be quickly affected by the outcome, but these fears have been allayed with residential transactions falling by just 0.9% month on month. While transaction levels remain lower than a year ago, this is in the context of a market that is still feeling the effects of changes to stamp duty, which led to a frontloaded first quarter,’ he explained. ‘The figures reflect our own experiences of the market. Following the referendum the vast majority of purchases went ahead without any issue, and chains were largely unaffected. In the medium term the market will remain stable, and our view is that it is strong enough to weather… Continue reading
