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Annual savings of £742 for those getting on the UK housing ladder
First time buyers in the UK are £742 or 9% a year better off with their own home compared to those who rent, according to new research by the Halifax. The average monthly buying cost, including mortgage payments, associated with a first time buyer buying a three bedroom house stood at £658 in December 2014, some £62 lower than the typical monthly rent of £720 paid on the same property type. With the price of a typical first time buyer home rising by 8% in 2014, the difference has narrowed from £80 or 12% to £62 since 2013 as the average monthly buying costs grew by £46 while average monthly rents increased by £28. However, at the same time, the number of first-time buyers increased by an estimated 22% in 2014, with 326,500 first time buyers getting on the ladder, the highest annual total since 2007 when it was 359,900. In 2014, first time buyers in London had, in cash terms, experienced the largest benefit from buying rather than renting a home. The average monthly cost of £1,275 for those who have bought compares to an average monthly rental price of £1,387, a saving of £112 a month or £1,338 over the year. The second largest difference is found in the North West where first time buyers were paying 17% less a month, £109 a month or £1,304 annually, than the typical private tenant in the region. The smallest differences between the monthly cost of buying and renting are in the East Midlands at £6 or 1%, and the South East at £15 or 2%. The research shows that the gap between cost of buying and renting still substantially higher than in 2009. Five years ago the average monthly cost of buying was £15 higher than the typical rent paid at £576 versus £561. Since 2009 the substantial improvement in the affordability of buying relative to renting largely reflects a 28% or £159 rise in average monthly rental costs over the past five years. This increase was twice as fast as the 14% or £83 rise in average monthly buying costs. ‘Average home buying costs are significantly lower than average rental costs, providing first-time buyers with a large financial saving if they can get on the housing ladder,’ said Craig McKinlay, Halifax mortgage director. ‘While the timescales associated with raising a sufficient deposit to buy a home present a hurdle to many potential first time buyers, the significant difference in costs between buying and renting, combined with still low mortgage rates, increased consumer confidence and the Help to Buy scheme, have all been factors driving the substantial rise in first-time buyers over the past two years,’ he added. Continue reading
Miami saw record demand for property in 2014
The Miami real estate market continued to perform robustly in the fourth quarter of 2014 due to renewed consumer confidence and increasing demand from both domestic and international buyers, according to the latest monthly index report. The median sales price for single family homes increased to $246,140 in the fourth quarter, a 4.7% jump compared to the same period last year, the data from the Miami Association of Realtors shows. The median sale price for condominiums increased 8.6% to $190,000 in the fourth quarter compared to a year earlier. Miami-Dade County has now seen 12 consecutive quarters of growth for both single family homes and condominiums. ‘We expect Miami home prices to continue to increase in 2015 but at a more moderate rate. Limited supply and strong demand for single family homes is still reflective of a seller’s market,’ said Christopher Zoller, the association’s residential president. ‘There is also strong demand for both new construction and existing condominiums, so we will continue to see price growth for residential properties in Miami-Dade,’ he added. Compared to the fourth quarter of 2013, the average sales prices for condominiums in Miami-Dade County increased 18.5% to $375,269. The average sales price for single family homes decreased 2% to $394,095. Sales of single family homes, which set an all-time record for all of 2014, increased 7.7% to 3,426, while condominiums decreased 3.3% to 3,981 compared with the same period in 2013. ‘Much of the increase in single-family home sales activity is due to consumer confidence. Many buyers who were staying on the side lines are now buying. Huge gains in job growth and more solid economic indicators are resulting in more consumers returning to the housing market,’ explained Carlos Gutierrez, the 2015 president-elect of the association. Home and condominium listings also increased in the fourth quarter of 2014, up 3% in the fourth quarter of 2014 compared to the same period last year. New condominium listings increased by 4.2%. At the current sales pace, the number of active listings represents 5.6 months of inventory for single family homes and 8.4 for condominiums. Compared to the fourth quarter of 2013, the month’s supply of inventory for condominiums increased 19.7%. The inventory for single family homes decreased 0.2%. A balanced market between buyers and sellers offers between six and nine months of supply inventory. The median days on the market of single family home listings during the fourth quarter was 45 days compared to 40 days during the same period last year, an increase of 12.5%. Similarly, the median days on the market for condominium listings were 58 days compared to 47 last year, an increase of 23.4%. In the fourth quarter of 2014, some 55% of closed sales were all cash compared to 60% a year ago. All cash sales were 41.4% of single family home closings and 66.9% of all condominium sales. Since nearly 90% of foreign buyers pay cash, this reflects Miami’s top position as a prime… Continue reading
Property markets varying across the UK, latest RICS survey shows
Supply and demand varied across the UK residential property market in January and 49% more London surveyors saw prices fall in January 2015 according to the latest monthly index. Scotland and Northern Ireland’s housing market outperformed the rest of the UK in January, with more buyer enquiries, stronger price growth and higher confidence in the outlook, the survey from the Royal Institution of Chartered Surveyors (RICS) shows. While nationally, the number of potential new buyer enquiries fell for the seventh consecutive month, Scotland saw the greatest buyer interest with several respondents suggesting the new Land and Buildings Transaction Tax (LBTT) will prompt more first time buyers to get on the property ladder. Meanwhile, Northern Ireland’s housing market witnessed the strongest price momentum for the fifth consecutive month, with 47% more respondents reporting increases in prices. However, RICS says that the national results, which are based on England and Wales only, continue to signal a cooling market and price growth has all but levelled off with just 2% more surveyors expecting prices to increase over the next three months, its slowest pace since May 2013. The survey shows that within England, London market conditions continue to deteriorate with prices, buyer enquiries and sales falling. Some 49% more respondents saw prices in the capital decline and the short-term confidence outlook is negative, despite the longer terms sales outlook being more upbeat. In the lettings market 19% more respondents reported a further rise in tenant demand during the three months to January and while supply appears to be dipping once again, there is anecdotal evidence to suggest that some new build rental properties are coming to market and surveyors’ rental growth expectations now stand at 4.6% per annum over the course of the next five years. Despite a month in which mortgage approvals fall to their one of their lowest levels, the number of agreed sales showed a slight increase in January, up from 19.1 to 19.7, and the 12 month member forecast is more optimistic around activity levels with 48% of surveyors still expecting sales to rise. ‘The changes to stamp duty and pending introduction of LBTT in Scotland are, to varying degrees, providing an incentive to first time buyers, but there remain a number of challenges to market, such as ongoing affordability constraints, lack of stock and an air of caution in the run-up to the general election,’ said Simon Rubinsohn, RICS chief economist. ‘Overall, while the RICS lead indicators suggest the level of house building looks set to increase over the course of 2015, the volume of home starts will still fall considerably short of the number of new households being formed, let alone making a dent in the historic shortfall of housing across all tenures,’ he added. Continue reading
