Tag Archives: finance
Older home owners in UK still planning to move, new research shows variety of reasons
Many home owners in the UK over the age of 55 are not intending to stay put with 37% planning at least one more move, new research has found. Indeed, overall they are planning more than three million future property purchases worth a total of more than £775 billion, the data from insurance firm Prudential shows. However, contrary to some predictions, this does not seem to signal an explosion in property deals fuelled directly by the new pension freedoms. Only 14% say their plans have come about as a result of the pension rule changes and just one in 10 think the changes make them more likely to buy a property in the future. The research results show that investing in property is something that remains popular with the over 55s with 18% of those planning a property deal say they will not be buying a home to live in, but will be buying second homes, buy to let properties, development properties or homes for their relatives. Prudential’s research also reveals the scale of the property deals being considered by the over 55s. The average maximum purchase price for their next property is over £250,000 while 20% say they are willing to spend £350,000 or more. Some 83% who are planning a property deal, say that their planned purchase is likely to be their last. However, not all of the older property dealers will be last time buyers as 11% say they will probably buy again in the future. ‘There was a lot of speculation that the pension freedoms would spark a rush of over 55s investing in buy to let property as a means of generating income in retirement. However our research suggests that this hasn’t yet been the case,’ said Stan Russell, retirement expert at Prudential. ‘In fact the process of withdrawing cash from a pension fund to purchase property and potentially generate an income is complex and could result in a large tax bill. Anyone aged 50 or over with a defined contribution pension is entitled to free and impartial guidance from the Government’s Pension Wise service, and many of those considering accessing their retirement savings under the new freedoms would benefit from a consultation with a financial adviser,’ he explained. The results of Prudential’s research also show that the biggest motivation for over 55s planning a property deal is to downsize with 43% giving this as a reason. ‘Using money raised from a property sale could prove to be a helpful boost to retirement income for some. But it’s no substitute for starting to save as early as possible to prepare for eventual retirement,’ said Russell. There is an almost equal split between those who expect to buy a property that’s more expensive than their current home, and those who plan to buy a cheaper property and bank some cash. Around 29% expect to spend more on their next property while 27% say they’ll spend less. The research shows… Continue reading
High speed broadband becoming more important for UK home movers
House buyers might have a dream kitchen on their wanted list or an extra bathroom but an increasing number want fast broadband and they are willing to pay extra for it. Some would pay an extra 8% or £14,000 for their property if it was guaranteed to have broadband with a speed of at least 100Mbps, a new survey has found. Research carried out by ultrafast broadband provider Hyperoptic polled prospective home buyers on the importance of a quality internet connection, and found that this is valued more strongly than many other factors when moving house. Two thirds of those questioned said that having a good broadband connection was just as or more important than living next door to nice neighbours and a third would give up an extra bedroom if it meant having a quality broadband service. According to Hyperoptic vice president for products Steve Holford, the poll results ‘categorically proves’ that broadband has become a key deciding factor when moving home. ‘Ultrafast broadband makes a property more marketable; people are increasingly reliant on their connection and need it to cope with their current and future bandwidth demands,’ he said. Holford pointed out that an increasing number of consumers are now checking average broadband speeds in areas before moving there, and that this will only continue as data demands and reliance on technology increase. The survey found that 61% of UK house buyers currently check their potential broadband speeds before renting or buying a property, with anything less than 6Mbps being a deal breaker, while 31% do not officially move house until broadband is up and running in the new home. Respondents said 14Mbps would be the bare minimum speed, but something closer to 100Mbps would be far more attractive, with a connection of this quality preferable to a swimming pool for half of consumers. Holford said one of the best ways to check the broadband speed in an area is to contact the provider directly, adding that online speed tests also offer an indication of whether internet speeds are up to par before people buy their new property. Continue reading
UK mortgage approvals highest since beginning of 2014
Approvals for mortgages in the UK increased in July to their highest level since February 2014, according to the latest figures published by the Bank of England. The data shows that there were 68,764 mortgages approved in July, up 16.4% from last November’s 17 month low of 59,100. Experts said that it shows that the housing market is heating up again and point out that mortgage approvals have risen in five of the past seven months at a time when house prices are also rising. Net mortgage lending, which lags approvals, also increased, up by £2.709 billion in July, the biggest increase since July 2008. Charles Haresnape, chairman of the Intermediary Mortgage Lenders Association (IMLA), pointed out that it is also the highest number of approvals since the introduction of the Mortgage Market Review (MMR) last year which cooled the market. ‘With 7% more approvals compared with the six month average, it is a clear indication that health is returning to a market that has been under significantly pressure to perform while adjusting to new working practices,’ he explained. However, he also pointed out that the European Mortgage Credit Directive (MCD) rules begin to come into effect this month and there is likely to be an extra element of uncertainty and instability ahead for the market. ‘With more regulation on the way and a potential rise in the cost of borrowing on the cards, the six month window to implement the MCD rules will be a challenge for all concerned,’ he warned. ‘On the positive side, rising approvals suggest consumer appetite is strong and lenders will also be striving to meet their end of year targets, which should support some competitive deals. We must hope that the impacts of change do not weigh down too heavily on what otherwise looks like a strengthening market recovery,’ he added. Howard Archer, chief economist at IHS Global Insight, said it was possible July’s performance was lifted by some house buyers looking to lock in a low mortgage interest rate before they start rising. ‘While we currently expect the Bank of England to first hike interest rates in February 2016, there is now a very real prospect that they could act before the end of 2015. However, the Bank of England is stressing that interest rates will only rise gradually and to a limited extent,’ he explained. Continue reading
