Tag Archives: finance
UK annual property price growth dips slightly, latest official data shows
UK house prices increased by 5.2% in the year to July 2015, taking the mix adjusted price of a home to £282,000, according to the latest data from the Office of National Statistics (ONS). This mean annual growth was down slightly from 5.7% in the year to June 2015 and excluding London and the South East, which tend to have higher prices, the average annual growth was 4.4%. A breakdown of the figures show that the average mix-adjusted house prices in July 2015 stood at £295,000 in England, £173,000 in Wales, £154,000 in Northern Ireland and £196,000 in Scotland. London continued to be the English region with the highest average house price at £525,000 and the North East had the lowest average house price at £156,000. London, the South East and the East all had prices higher than the UK average price of £282,000. House price annual inflation was 5.6% in England, 0.3% in Wales, 7.4% in Northern Ireland and down 1.3% in Scotland. Annual house price increases in England were driven by an annual increase in the East of 8.3% and the South East at 6.7%. The data also shows that in July 2015, prices paid by first time buyers were 4.4% higher on average than in July 2014. For owner occupiers (existing owners), prices increased by 5.5% for the same period. Overall average house prices in seven of the nine 9 English regions are at record levels, with prices in the North West surpassing the pre-economic downturn peak of January 2008 for the first time. The only English regions not now at record levels are the North East and Yorkshire and The Humber. It is weak supply that is driving up prices, according to Rob Weaver, director of property at residential investment platform Property Partner. ‘The supply issue is nothing less than an enigma. Given that properties overall are commanding decent prices, you would expect to see more people selling. Something in the market is broken. Even though employment levels are strong, consumer confidence may not be as robust as surveys suggest,’ he said. ‘Many households are almost certainly wary of not being able to secure a mortgage under the new lending rules, and that could be impacting their intent to move. Households have almost certainly become more conservative in the wake of the global financial crisis. Paying debt down has become more appealing than racking it up,’ he pointed out. ‘Many are doubtless sitting on their hands until the economic picture gets clearer because the recovery has become less definitive during the first half of the year. This latest data shows that the property market has become a lot more balanced, with sustainable levels of price growth across a number of regions. It is almost a relief to see prices in the capital growing at 5.5%, compared to the high double digit growth rates of a two years ago,’ he added. Peter Rollings, chief executive officer of Marsh & Parsons, comments pointed… Continue reading
Poll suggests UK first time buyers see peer to peer lending as way to fund deposit
Over half of first time buyers in the UK expect to reduce the wait to own their home by at least six months by using peer to peer lending, it is claimed. A poll of customers by peer to peer lending service Zopa, found that two thirds aged 18 to 40 who don't own a home are using it to help raise a deposit and over half expect it to reduce the time it will take to reach buy a home. Some 34% of those surveyed said it will shave more than a year off the time until they can buy and a further 21% say it will reduce their waiting time by six months. The poll also found that 22% are hoping to buy in less than a year, whereas 47% hope to purchase a home between one and three years’ time. Of those looking to buy, over half are cutting back on clothes and other purchases and more than two out of three people are eating out less, going on fewer or cheaper holidays and choosing cheaper options for household essentials to boost their savings. In contrast, one in four people are making no lifestyle changes at all. Of those who weren’t saving for a deposit, 33.8% said it was because house prices are too high and almost a quarter said they have other savings priorities at present. The firm said it is alarmingly that over 40% of people are aiming to save a deposit of over £40,000, but this rises to 55% of people in London who are waiting to buy. This stands in stark contrast to those who brought 10 years ago, when only 2% of savers aimed for a deposit of £40,000 or above. The survey also found that 18% are receiving help from government schemes, such as Help to Buy but 55% expect to receive no financial assistance from their families in reaching their deposit target. For those first time buyers that have had financial assistance, the size of parental contributions is actually getting larger as deposit amounts increase. For those who brought their houses more than 10 years ago, only 8% of parental contributions were over £45,000. This percentage rises to 28% for people who brought less than a year ago. ‘Buying a home is a major milestone in many people’s lives and saving a deposit is getting harder each year as prices and the amount required increases,’ said Zopa’s executive chairman Giles Andrews. Continue reading
Scottish university cities offer best buy to let yields in the UK
University cities in Scotland offer the best areas for profit for buy to let investors in the UK, with the overall best average rental yield in Edinburgh, new research has found. The 6.11% yield in Edinburgh came out top in the report from property website Zoopla as Scottish cities took third, fourth and fifth places with 5.66% in Aberdeen, 5.11% in Dundee and 5.07% in Glasgow. The only English university city in the top five was Coventry with an average buy to let rental yield of 6.03% giving the Midlands city second place. University cities in the North of England were found to be among the worst investment opportunities for buy to let landlords. Middlesbrough, where the main Teesside University campus is located, recorded the lowest average rental yield in the UK at 1.47%. The North Western city of Lancaster, home to Lancaster University, was the second worst performer with a 1.87% yield, while Lincoln, posted an average yield of 2.14%, the third lowest in the league table. The research shows the cities hosting the very best universities are not necessarily the very best options for buy to let investors. Cambridge, for example, failed to make it into the top 10 with a below par average yield of 3.65%. Even London, with its world famous London School of Economics and Imperial College London, registered an underwhelming 3.97% average yield while Oxford only managed eighth place in the league table with an average 4.61% yield. ‘Scottish university cities are currently offering fantastic returns for UK landlords. Many Scottish universities are now internationally renowned, with thriving undergraduate and graduate environments,’ said Lawrence Hall of Zoopla. ‘This means demand for rental accommodation in university areas is very high, as throngs of students compete to live near their campuses. Combined with Scottish house prices still remaining relatively low, this equates to excellent yields,’ he pointed out. ‘Some may be surprised that the golden triangle of London, Oxford and Cambridge are not producing higher yields. However, given those areas have a pedigree of high property prices, buy-to-let investors there would likely spend a higher proportion of rental income paying off their properties’ mortgages than their counterparts north of the border,’ he added. Continue reading
