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Average residential tenancy deposit in England and Wales up 11% year on year
The value of deposits for the average home tenancy in England and Wales has increased by 11% over the last year, according to the latest published data. They average amount protected by mydeposits now stands at £1,210 up £121 from this time last year and up 1% from the second quarter of 2014, the firm’s latest tenancy deposit digest shows. The figures also show a difference of £1,266 between the average cost of deposits in the most expensive and cheapest regions in England and Wales. London stays at the top of the most expensive average deposit paid by tenants around the UK in the third quarter of the year with £1,859 on average being spent in the capital, a 9.8% increase from this time last year. The research also shows a 5.6% quarterly increase in London while the cheapest region for average deposit is the same as the second quarter with Yorkshire and The Humber on average spending £593. The South East saw the greatest monetary increase in deposit values quarter on quarter with a rise of 20.3%, however the North East has witnessed a growth in average deposit of 37.7% which is the biggest proportional growth across England and Wales. The East Midlands and the North West are the only two regions not to have seen a quarterly rise while the East Midlands saw the biggest fall of 9.3% which is subsequently more than double the amount in the North West where deposits fell by 3.7%. Deposits in the South West have risen similar to that of London year on year at 19.3% which is the biggest proportional growth across all the regions over the 12 months. The East of England saw the only drop in deposit value and growth with a fall of 0.3%. Despite deposits in the East Midlands growing at a similar rate to London over the last 12 months, the average value of deposits is three times more in the capital reflecting the higher overall cost of living in London. ‘Since the start of Tenancy Deposit Protection in 2007 the cost of the average deposit has risen by around 40%, and much like the cost of rents, deposits continue to rise year on year,’ said Eddie Hooker, chief executive officer of mydeposits. ‘The deposit value is usually tagged to the rental cost of the property, typically between four to six weeks’ worth of rent, so the only real way to relieve some of the pressures on the rental market is to tackle the huge issue of undersupply of housing in the UK at present,’ he explained. ‘It will be one of the biggest challenges for the next elected government, so it’s concerning to see that not all political parties have ironed out the details of their housing manifesto pledges in build-up to next May’s general election,’ he added. Continue reading
Rural homes more expensive to buy than urban homes in UK
Countryside properties continue to command a substantial price premium over urban homes and are 26% higher in price, new research shows. On average, homes in rural areas in Great Britain are £46,575 higher in price and this is true of all regions although it differs significantly across the country, according to a new report from the Halifax. The rural premium is greatest in the West Midlands at £88,781 or 57% compared to £17,570 in the North East or 13% and the research also shows that prices in urban areas have been rising faster over the past five years. Between 2009 and 2014, the average price of a home in the countryside rose by 12% compared with an average increase of 18% in urban areas. Between 2013 and 2014, the average price of a home in the countryside has risen by 8% compared with an average 10% increase in urban areas, excluding Greater London. There are also fewer firs time buyers in rural areas. They account for 42% of all mortgage financed purchases in rural areas, compared to 54% in urban areas. The report says that recent outperformance of house prices in urban areas partly reflects the relative strengthening of the first-time buyer market in the last few years. Since 2010 there has been a significant increase in the number of first-time buyers, and this group typically represents a larger proportion of the market in urban areas. ‘It typically costs significantly more to buy in rural areas with a substantial premium existing in all the regions of Great Britain. This reflects the aspiration of many to own a property in the countryside, said Martin Ellis, housing economist at the Halifax. ‘The relatively high prices, however, put rural homes out of the reach for many, particularly the young. This is reflected in first time buyers accounting for a smaller proportion of home buyers in the countryside than in urban areas,’ he added. The research also shows that affordability is a bigger issue in many rural areas. The average house price in the countryside is equivalent to 6.8 times gross annual average earnings. This significantly exceeds the comparable ratio for urban areas of 5.6. Social housing provision is typically lower in rural areas of England and Wales, with 12% of the housing stock accounted for by social housing compared with 19% in urban areas. There are only three rural areas where the ratio of prices to earnings is below the historical long term average of four; Copeland in Cumbria and East Ayrshire both at 3.8 and North Lincolnshire at 3.9 which are the most affordable rural areas in the country. Chiltern is the most expensive rural area in Britain with an average house price of £477,526, making it the least affordable rural area in Britain as measured by the house price to earnings ratio, with an average house price that is 9.5 times local gross annual average earnings. Six of the 10 least affordable rural areas in the country are in the South East with… Continue reading
Home lending in UK reaches highest quarterly level for seven years
Lending for home buying in the UK has reached its highest quarterly level since 2007, according to the latest data from the Council of Mortgage Lenders (CML). However, first time buyers saw a month on month lending decline for the second month in a row, down 3% compared to August, but still 16% up on September 2013. By value, there was £4 billion advanced to first time buyers in September, 2% down on August but 25% higher than September last year. Lending to home movers also weakened month on month for the second month in a row. In September, the number of loans advanced to movers was 31,700, a 10% fall on the previous month but up 11% on September last year. By value, lending to movers totalled £6 billion, 12% down on August but up 18% on September last year. Remortgage lending activity saw an increase month on month in September, with the number of remortgage loans totalling 28,300. This was 20% up on August but 12% down on September last year. The value of these loans at £4.4 billion was up 22% on the previous month but down 6% on September last year. There were 18,100 buy to let loans in September, representing lending of £2.5 billion. Following the August low of 15,700 loans worth £2.2 billion, this returned buy to let lending to levels very similar to July, up 24% by volume and 32% by value on September last year. The data also shows that first time buyer affordability changed fractionally, with first time buyers typically borrowing 3.4 times their gross income, compared to 3.42 in August and the typical loan size for first time buyers rose month on month to £125,999 in September, up from £125,375 in August. Home movers typically borrowed 3.06 times their gross income in September, compared to 3.05 in August. The typical loan size for home movers was £154,800 in September, down from £155,995 in August. The typical gross household income of a home mover was £53,291 in September compared to £54,150 in August. ‘We are approaching the end of 12 months of change, transition and growth. This has been a year when lenders and intermediaries have been put under increased spotlight from regulatory, political and media spheres and have risen to meet the challenges,’ said Paul Smee, director general of the CML. ‘The lending market is healthier than it was a year ago, and set to remain so. Remortgaging has returned as a driver of lending volume in the buy to let sector. But any fears of overheating in the housing market are now dissipating as house purchase lending activity seems to be softening,’ he added. Continue reading
