Tag Archives: guides
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
US home owners wary as housing market slows
Home owners in the United States are wary of where the housing market is going, while rising prices in some markets are driving renters away from home ownership aspirations, a new report has found. Overall, home owners are confident about the current state of the housing market, but they are less exuberant about future market performance, according to the mid-year results of the Zillow Housing Confidence Index (ZHCI). Millennials are ready to buy in slowing housing markets, but they are dialling back their plans to buy in red hot tech markets like Denver, Seattle, and San Francisco, the index report points out. Also, some 4.9 million renters say they plan to buy in the next year, down from 5.2 million in January, the survey of 10,000 renters and home owners also shows. That is down from 12.1% to 11.4% in the first six months of this year. A smaller percentage of those surveyed said it was a good time to buy. The percentage of those surveyed who believe people who have recently bought a home will be better off in 10 years fell from 61% to 59%, the data also shows. ‘The housing market is slowing down, and Americans' confidence in the future of the market is understandably fading a bit, too. Despite remaining quite confident overall, homeowners are less confident about the future than they are about the present,’ said Zillow chief economist Svenja Gudell. ‘Seeing still stronger than normal home value appreciation in markets like San Francisco and Seattle might remind them of the last housing bubble. But the good news is things are levelling off with no crash in sight. If incomes rise to keep up with home values people can count on home ownership in their future, even in hot markets,’ added Gudell. The report says that home value growth has slowed in almost all housing markets this year, giving homebuyers some breathing room. In those markets with marked slowdowns, many more buyers are looking to buy their first home. For example, 8% of Philadelphia renters said they planned to buy within a year in the January survey, when home values were rising at a 3.1%. In July, when Philadelphia home values were flat, 18% said they planned to buy within a year. And many of those new potential buyers are millennials. Just 1% of 18 to 34 year old Philadelphia renters surveyed in January planned to buy within a year, but that had increased to 23% in the July survey. The opposite occurred in markets where home value growth, despite having slowed overall, is still well above national norms. Here, renters are less optimistic about their buying prospects. In San Francisco some 18% of 18 to 34 year old renters planned to buy a home within a year when asked in January. At that point, San Francisco home values were rising at a 7.9% annual rate. In July, home values were up 11% year on year, and only 5%… 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
