Tag Archives: housing
Second steppers finding it hard financially to move up housing ladder
Second Steppers in the UK need to find an extra £58,400 to fund the move to their second home, over double the average first time buyer deposit, according to new research. This gap is around £15,000 bigger than in 2013 and £18,000 bigger than in 2012, the fourth annual second steppers report from Lloyds Banks shows. Almost half, 46%, say the costs and fees associated with moving house is the biggest barrier to moving up the ladder. However, 40% of second steppers think it will be easier to sell this year, almost double the figure of 2013 and treble that of 2012. The report points out that growing house prices mean there is an ever widening gap for those making the move to the second step on the housing ladder. Yet despite this, many have increased confidence in the housing market and as a result, more confidence in being able to make the jump to the next step. Second steppers are the link between first time buyers and the rest of the housing ladder. They are living in the homes that the first time buyers need to buy to keep the market moving. Without movement from second steppers, movement on the ladder comes to a standstill on the second rung. Despite increasing house prices boosting equity levels for second steppers, the findings show people living in their first home have to find an extra £58,400 to plug the gap between the sale price of their current property and the cost of the house they would ideally move to. This figure is over double the amount of the average first time buyer deposit of £25,848, meaning it is far more expensive to move up the ladder than to get on it in the first place. Year on year, this figure has significantly increased. Nationally, the figure of £58,400 has risen by £14,900 since 2013 and £17,900 in 2012, when the figure was £40,500. However, across the country, there are significant regional variations in the perceived size of this gap. In the West Midlands, people will need to find just £21,000 extra to make the step to their desired second home. At the other end of the scale, people in East Anglia say they need £80,800 to make the jump. The report also points out that despite the growing financial gap between first and second properties, confidence in the market is improving. Just a quarter of second steppers see economic uncertainty as a key challenge, reducing by 10% in a year. Unsurprisingly, the number seeing negative equity as a challenge also reduced by 11 percentage points to just 14% of respondents. The Help to Buy Mortgage Guarantee scheme has had an impact on the mortgage market, with Treasury data showing that 79% of purchases with a mortgage guarantee were completed by first time buyers. This has contributed to second steppers being more confident that there is the demand coming through allowing them to sell. Just 29% see a lack of first time… Continue reading
Review of UK housing and planning policies widely welcomed
Changes need to be made to housing and planning policies in the UK to ensure enough new homes are being built, according to a property market review. The Lyons Housing Review, commissioned by the Labour party, identifies the changes which need to be made to increase the number of new homes to 200,000 a year. It says there must be new powers for local communities to build homes in places people want to live, that councils must produce a home building plan and allocate sufficient land for development and first time buyers should get priority access to new homes. The review says local communities should have the power to build the homes in places people want to live. Councils will be able to designate ‘housing growth areas’ and will have powers to assemble land and give certainty that building will take place. They will also ensure on larger developments the planning gain that results will in part be used to invest in the schools, roads, green spaces and GP surgeries that make developments possible. It also says councils should be compelled to produce a home building plan and allocate sufficient land for development. Labour says if it wins the general election next year it will make it mandatory for local authorities to produce a local plan to meet the housing needs of the community. If they do not allocate sufficient land or present a plan, the planning inspectorate will have powers to step-in to ensure the housing need is not ignored. The third main recommendation is that first time buyers from an area should get priority access to new homes. Councils would be given the power to reserve a proportion of homes built in ‘housing growth areas’ for first time buyers from the area for a period of two months. In addition, local authorities will be able to restrict the sale of homes in these areas so they cannot be sold for buy to let or buy to leave empty properties. The changes identified have been widely welcomed. According to Susan Emmett, residential research director of Savills the recommendations should help boost housing numbers regardless of who is in government next year. ‘The report clearly recognises the need for a long term, more strategic approach to planning for homes, integrating housing with infrastructure and increasing the number of players operating in the market,’ she said. ‘While we expect that large house builders will continue to provide the bulk of new homes, Lyons’ recommendations for supporting smaller builders and helping Local Authorities to build more is crucial if we are to increase overall housing numbers,’ she explained. ‘We also welcome the report’s recognition that we need to be delivering homes across all tenures including homes for rent. We expect to see the number of people renting continue to grow and supporting institutional investors to build to rent is essential to provide the good quality homes needed,’ she added. The British… Continue reading
Confidence in UK housing market falls to lowest level for a year
After staying high and steady for the last year consumer confidence in the UK housing market has fallen to its lowest level in 12 months. According to the latest quarterly Halifax Housing Market Confidence Tracker, this dip mirrors a small fall in confidence over the outlook for the economy in the coming year. However the overall picture for house prices remains relatively robust as the difference between those who think it is a good time to buy and those who think it is a good time to sell has converged, which points to a period of fairly stable house prices. ‘In the last three years consumer confidence in the outlook for the housing market has increased significantly,’ said Craig McKinlay, mortgages director at the Halifax. ‘For the last year however, it seems to have reached a ceiling and, with speculation as the strength of the economy increasing in the last few months, confidence has fallen to its lowest level in 12 months,’ he explained. ‘However, the national figures mask big regional differences, and more than half of people in London, 55%, think the next 12 months will be a bad time to buy compared to compared to 37% of Britons overall,’ he added. A breakdown shows that regionally, those in London have the most positive outlook for the average UK property price, with 79% expecting a rise in compared to 68% overall. This is no doubt a contributing factor for London also being the only region where a greater proportion think it’ll be a bad time to buy, than those who think it’ll be a good time to buy at 55% and 33% respectively. This is the second consecutive quarter there has been a net negative figure for Londoners’ buying sentiment. The most frequently mentioned perceived barrier to buying is being able to raise enough deposit, with 57% saying this is an issue. However, this has fallen from the 63% who said this one year ago, in the third quarter of 2014. In the last three months, the proportion citing household finances as a barrier has risen eleven percentage points from 28% to 39%. Meanwhile, 19% mention concerns about interest rate rises as a barrier to buying. This is in line with the second quarter of 2014 when this figure was 18%, but higher than this time last year when it was 11%. Since the last quarter there has been a significant decrease in the proportion expecting the average UK property price to rise over the next 12 months, from 71% in the second quarter of 2014 to 68% in the third quarter. While the proportions expecting a small rise of up to 10% higher have remained stable, the proportion expecting an increase of 10% or more but less than 15% has fallen from 11% in the second quarter of the year to 9%. Continue reading
