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UK reinvigorated Right to Buy programme hailed a success
A reinvigorated Right to Buy programme in the UK has created nearly 40,000 new home owners in the last three years, according to new figures published by the government. Housing Minister Brandon Lewis said it is further evidence of how government-led efforts to help aspiring home owners are working, adding that there were 3,644 new starts and acquisitions since the Right to Buy was reinvigorated in 2012. He explained that this means that the 3,054 additional homes sold in the first year of the scheme are already being replaced on a one for one basis nationally. ‘For years, the discounts available under the Right to Buy were left to dwindle, denying thousands of people the opportunity to own their own home,’ he explained. ‘This reinvigorated scheme has turned that around, and means nearly 40,000 people have been able to buy the home they love, many of whom might otherwise never have had the chance to become homeowners. On top of that, it’s getting homes built, with councils replacing the additional homes sold on a one for one basis,’ he added. The data also shows that since the reinvigoration of the Right to Buy scheme, nearly £964 million in sales receipts are being re-invested into building new homes, levering a further £2.2 billion of investment over the next three years. This means that in total, over £3.2 billion will be raised to invest in affordable house building as a result of Right to Buy. A breakdown of the figures shows that in the three months to June, some 2,779 households bought their homes under Right to Buy. Local authorities received approximately £223 million from Right to Buy sales, 5% higher than the £212 million in the same quarter of 2014 to 2015. Lewis also pointed out that since 2010 the government has introduced a range of measures to support aspiring homeowners to buy their own home. In addition to reinvigorating the Right to Buy, this includes the Help to Buy scheme, which has enabled nearly 120,000 people to buy with a fraction of the deposit they would normally require. Overall, since 2010 232,000 households have been helped to purchase a home through government backed schemes including Help to Buy and Right to Buy. On top of this, the government has also pledged to build 200,000 new Starter Homes, which will be available to young first time buyers under 40 at a 20% discount, while a new Help to Buy ISA will help aspiring home owners to save up a deposit for a new home. Continue reading
Households across the UK positive about property price growth
UK house price sentiment remains positive with households in all regions believing that property prices increased in September, the latest index shows. Some 22.5% of households surveyed across the UK said that the value of their home had risen over the last month, while 3.8% said that prices had fallen, according to the index from Knight Frank and Markit Economics. The index, which is a bellwether for house price movements across the country, recorded a reading of 59.3 and has now had a reading above 50 for 30 months in a row. 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. However there is a north-south divide with the average reading for the north of England in September at 54.9 and the south of England at 64.1. This is the second widest gap between the two readings this year. While households in all UK regions perceive that property prices rose in September, Londoners perceived the highest rate of house price growth over the course of the month, followed by those in the East of England. However, in Yorkshire and the Humber perceptions of house price growth eased notably in September after rising for the previous three months to reach 60.4 in August. While households in the region still perceive that prices are rising, they are reporting that the pace of increases has slowed, with a reading of 54 this month. The index also shows that households in all UK regions expect house prices to rise over the next 12 months, led by households in the East and South East of England while some 5.9% of households expect to buy a property over the next 12 months, while a further 6.4% said that they would purchase a house within one to two years. The future HPSI, which measures what households think will happen to the value of their property over the next year, rose in September to 70 from 69.5 the previous month. However, the future HPSI remains well below its peak of 75.1 achieved in May last year, the report points out. ‘UK price sentiment remains in positive territory, and has stayed broadly stable since the election in May. However the north-south divide is evident, with the average reading for the north of England in September at 54.9 and the south of England at 64.1,’ said Gráinne Gilmore, head of UK residential research at Knight Frank. ‘This is the second widest gap between the two readings this year. Overall, households expect prices to rise over the next 12 months, with eight times as many households anticipating a rise in the value of their home as anticipating a decline,’ she explained. ‘Sentiment is being underpinned by the improving economy, with positive employment data as well as wage growth boosting buyer confidence. At the same time a shortage of stock on the market is serving, in some cases,… Continue reading
Debt is not holding back graduates in the US buying a home, new research shows
Having a lot of student debt doesn't greatly reduce young people's chances of home ownership in the United States, as long as they graduate, a new analysis has found. The findings challenge a popular concern that giant student loan payments are holding back people from home ownership. As it turns out, graduates' debt loads don't materially hurt their chances of buying a home, especially if they get at least a four year degree. Overall student debt has only a small negative effect on the odds of home ownership for a person with a bachelor's degree or higher, according to the research from real estate firm Zillow. The chances of a married couple with no student debt owning a home are about 69.8% if at least one of them has a bachelor's degree. If the same couple has $30,000 in student debt, their homeownership chances drop slightly, to 67.7%. ‘The income advantage of getting a degree pays off in terms of being able to buy a home in the long run. Student debt isn't the evil-doer it's made out to be, at least not when it comes to homeownership,’ said Zillow chief economist Svenja Gudell. ‘As long as students stay in school and get a degree, student debt doesn't deter them from homeownership, although it is possible that student debt could delay home ownership. People in their 20s and 30s are renting longer because they're delaying marriage, paying a lot in rent, and struggling to qualify for a mortgage when they finally find an affordable home. Add to that list that they are paying off student debt,’ she explained. The research also found that the least likely to own homes are people who have student debt, but no degree. In fact, a couple who borrowed more than$30,000 for school but never graduated has a less than 40 percent chance of home ownership. Graduates with advanced degrees are the most likely to own a home, even if they racked up a lot of student debt. For example, if a couple owes $50,000 in student loans, but one of them has a master's degree, they have a 75% chance of home ownership. A similar household with just $10,000 in loans and only a bachelor's degree has just a 69% chance of home ownership. Student debt has the greatest impact on the home ownership rate of people with two year associate's degrees. A couple with AA degrees and no debt has a 70% chance of owning their home. That declines significantly as debt grows. If the same couple has $50,000 in student debt, they own their home only 57% of the time. Getting an associate's degree improves chances of home ownership until a person has borrowed $70,000. After that, their chances of home ownership would have been better without a degree and no student loan debt. Getting a bachelor's, master's or doctorate degree, regardless of debt, increases the chances that people will… Continue reading
