Tag Archives: finance
Spanish home prices up 4.5% year on year in third quarter of 2015, rents also up
Residential property prices increased by 4.5% in the third quarter of 2015 compared to the same period in 2014, according to the latest data from the National Statistics Institute. The details from the housing price index means that prices have now increased for six quarters annually in a row following six years of decline and it is the highest quarterly rise since the last quarter of 2007 when growth was 5.7%, just before the global economic downturn. House prices then started falling in the second quarter of 2008 with a decline of 0.3% and continued to fall until the second quarter of 2014. A breakdown of the figures show that the price of new homes fell by 4.3% and other homes were up by 4.5% while quarter on quarter prices overall increased 0.7% which followed a strong rise of 4.1% in the second quarter of the year. In what is a sign of the universal nature of the recovery in the Spanish property market the figures show a rise in prices in almost every region in the country. Asturias and Extremadura recorded the greatest annual rates of increase, up by 2.6% and 2.4%, to 3.5% and 3.3%, respectively, while the greatest annual fall was in the Basque Country and Valencia, down by 0.9% and 0.6% to 1% and 2.1%, respectively. Quarter on quarter nine regions saw prices rise, seven recorded declines and prices remained stable in the Basque Country. The largest quarterly increase was in the Balearic Islands with growth of 3.1% and Asturias up 1.8%, while the biggest fall was in Navarra with a decline of 1.1% and Aragón down 1%. Residential rents are also rising and increased year on year in all regions in November, the first time this has happened for eight years. The data from property porta Fotocasa shows this was led by Catalonia with an annual rise of 10.6%, followed by the Balearic Islands up 7.8%, Madrid up 6.3% and La Rioja up 6%. In Castilla-La Mancha average rents increased by 0.7%, Cantabria was up 1%, the Basque Country up 1.1% and Navarra up 1.3%. Month on month rents increased by 0.5% to €7.02 per square meter per month with 11 regions seeing rises. The Balearic Islands saw a monthly rise of 1.9% and Catalonia up 1.3% while La Rioja, the Canary Islands and Cantabria all saw growth of 0.6%. But average rental prices fell by 1.2% month on month in Galicia, fell by 0.9% in the Basque Country and by 0.8% in Murcia. The data also shows that since the peak of the market in May 2007 when rents were €10.12 per square meter per month rental values have fallen by 30.7% and five regions have seen accumulated declines over 30%. The steepest decline since peak has been in Aragón where rental prices have fallen by 41.6%, followed by Cantabria down 36.1%, Castilla-La Mancha down 35.2%, Valencia down 34.5% and Murcia down 32.3%. The smallest declines from peak are in Castilla… Continue reading
Lending to first time buyers with small deposits in UK falling
First time buyers in the UK are still finding themselves left out in the cold as lending to small deposit borrowers is falling as a proportion of all home lending, a new report shows. The Autumn Statement from the Chancellor of the Exchequer accompanied a house purchase jump in November with approvals up 1.3% to 70,511, according to the latest Mortgage Monitor from chartered surveyors e.surv. However, it explained that while the Autumn Statement focused on helping more people get on the housing ladder, first time buyers are yet to see the same benefits as other areas of the market. Despite the rise, lending to small deposit borrowers, that is buyers with a deposit worth 15% or less of their property’s total value, totalled just 11,493 in November, showing no improvement on 11,489 in October. Small deposit borrowers are falling as a proportion of overall house purchase lending, accounting for just 16.3% of approvals granted, down from 16.5% in October. The latest First Time Buyer Tracker report from Your Move and Reeds Rains reveals a similar picture. First time buyer sales dipped by 1.7% month on month from 28,600 in September 2015 to 28,100 in October 2015. ‘The Chancellor’s proposals coincided with a climb in November’s mortgage market. More prospective home buyers are find their applications successful as we near winter,’ said Richard Sexton, director of e.surv. ‘However, for first-time buyers it’s a different story. For those struggling to get their foot in the front door, promises of starter homes are of little consolation. Theoretically, first time buyers should be benefitting from measures such as the extended Help to Buy Scheme and the Help to Buy ISA which has finally come into force but home ownership still remains a distant dream to many,’ he explained. ‘Mortgages may be available, inflation low and wages rising but whether there are enough homes is another question. Supply must be addressed if aspirational home owners are to see a real difference and only time will tell if words can translate into real benefits for first time buyers,’ he added. November saw over 10,000 more mortgages approved to home buyers than a year ago, with 70,511 loans, jumping a fifth since 59,262 in November 2014. This was the highest year on year rise seen since March 2014, as the lending market went from strength to strength amid rising confidence. On an annual basis, this jump in overall home purchase lending has allowed an improvement in small-deposit lending. Home purchase lending to borrowers with smaller deposits grew 44% year on year from November 2014 to 8,000 approvals. However, the current total for small deposit loans, which stands at 11,493 this November, is crucially much smaller compared to the unsustainable pre-recession heights of November 2007, when 16,227 were granted. ‘When compared to last year, mortgage lending is in a much healthier place. Some 12 months ago, home buyers were still suffering from the impact of Mortgage Market Review changes,… Continue reading
Owning a home is still part of the American Dream, new research shows
The majority of young people renting their home still believe in the American Dream of owning their own home, according to new research from the National Association of Realtors (NAR). Although only half of surveyed households believe the economy is currently improving, nearly all young renters eventually want to buy a home and compared to earlier this year an increasing share believes their personal financial situation will improve in the months ahead. The survey data reveals that an overwhelming majority, some 94%, of current renters who are 34 years of age or younger want to own a home in the future. Overall, 83% of polled renters have a desire to own and 77% believe homeownership is part of their American Dream. Lawrence Yun, NAR chief economist, said that the survey's findings debunk the notion that young adults aren't interested in buying a home. ‘Despite entering the workforce during or immediately after the worst of the financial and housing crisis, the desire to become a homeowner appears to be a personal goal for a convincing majority of young renters,’ he pointed out. ‘Furthermore, there appears to be sizeable, pent-up demand for buying that currently remains untapped because of a variety of economic and personal reasons impacting many households,’ he added. The top two reasons given by renters for not currently owning was the inability to afford to buy and needing the flexibility of renting rather than owning at 53% and 19% respectively. When asked what would likely be the main reason for buying in the future, renters cited lifestyle considerations such as getting married, starting a family or retiring and an improvement in their financial situation at 33% and 26%. ‘A combination of factors such as rising rents and home prices, limited supply, repaying student debt, and getting married and having children later in life has more to do with the currently underperforming share of first time buyers than the idea that buying a home is not as desirable as it used to be,’ Yun explained. Despite uncertainty about the economy's current performance, at least 84% of all households within all surveyed age groups and education levels believe owning a home is a good financial decision. When asked if they believe this strongly or moderately some 76% who believe it's a good decision feel strongly about it. Additionally, at least 85% of surveyed households in each age category as well as across all education levels believe home ownership is part of their personal American Dream. The most appealing aspects of homeownership cited by those with this feeling include a place to raise a family, owning their own place and a nest egg for retirement at 36%, 26% and 14% respectively. NAR's survey found that more home owners than renters during the polling period believe that it's a good time to buy a home at 82% compared to 68%. Furthermore, of those who thought it was a good time to buy, 645 felt strongly about buying. Among… Continue reading
