Tag Archives: investment
Help to Buy helps over 130,000 home buyers in UK
The UK government’s flagship Help to Buy scheme has helped over 130,000 people achieve their aspiration of buying their own home since it was launched, the latest official figures reveal. Some 80% of scheme completions have been made by first time buyers, with more expected following the launch of the government’s Help to Buy ISA scheme at the beginning of this month. Help to Buy was created in 2013 to ensure that working people who saving for a deposit could achieve their aspiration of buying their own home through government support. Home ownership is a key part of the government’s long term plan to provide economic security for working people across the UK. The scheme continues to benefit first time buyers overwhelmingly, with the vast majority of sales outside of London and at prices well below the national average. According to officials Help to Buy is also ensuring the long term health of the housing market by increasing housing supply and stimulating home building. Almost half of the homes bought through Help to Buy are new build properties, helping to contribute to the 38% rise in private house building since the launch of Help to Buy. First time buyers will have a further boost from the Help to Buy: ISA, which banks and building societies across the UK are offering as of last week. Under this scheme, first time buyers can save up to £200 a month towards their first home and the government will boost their savings by 25%, or £50 for every £200, up to a £3,000 bonus. Some 14 banks and building societies have already signed up to offer Help to Buy: ISAs. These lenders are: Aldermore, Bank of Scotland, Barclays, Clydesdale Bank, Halifax, HSBC, Lloyds Bank, Nationwide, NatWest, Newcastle Building Society, Santander, Ulster Bank, Virgin Money and Yorkshire Bank. With almost all completions outside London, the highest number of homes through the mortgage guarantee scheme have been in the North West region. The equity loan, a scheme for new build properties, is particularly prevalent in the South East region. Figures for the mortgage guarantee scheme also show completions have been least concentrated in regions where house price growth is highest. In London the scheme makes up just 1% of all mortgage lending compared to an average of 3% across the country. The average house price for both parts of the scheme, at £185,972 at £155,573 for the mortgage guarantee and £217,999 for the equity loan scheme, remains significantly below the national average house price of £286,000. ‘This government is committed to helping people achieve the aspiration of buying their own home, and our Help to Buy schemes have now helped 130,000 across the UK do just that,’ said Chancellor of the Exchequer, George Osborne. He also pointed out that the stronger economy and financial system means that the government now expect banks to start to exit the Help to Buy Mortgage Guarantee scheme, which was introduced in times of financial distress… Continue reading
Negative equity still preventing the full recovery of the US housing market
Despite improvements in the negative equity rate, underwater mortgages are holding back the housing market in the United States from full recovery, especially in hard hit areas, a new report suggests. The rate of negative equity among home owners dropped a full percentage point in the third quarter of 2015, from 14.4% to 13.4%, and down 16.9% from a year ago, according to the latest research from real estate firm Zillow. It said that declining negative equity will allow almost a million newly freed home owners who have not yet refinanced or have been waiting to sell to do so before mortgage rates rise, which will likely happen in coming weeks. It also pointed out that negative equity affects not just the home owners who are underwater, but entire markets where high rates of negative equity are slowing recovery. Negative equity is one of the most persistent reminders of the housing market crash. Home owners who owe more on their mortgage than their homes are worth cannot sell, which holds back markets from recovering. So, some eight years after the housing crash, it remains a major barrier to a full recovery in certain markets. In Las Vegas, for example, 22% of home owners remain underwater, and another 19% are effectively underwater, meaning they have less than 20% equity in their home and therefore can't cover the cost of selling their home and buying another. Las Vegas has had the highest negative equity rate in the country for the past four and a half years, and Kansas City and Cleveland, with 16.6% and 16.8% negative equity respectively, are not far behind. San Francisco and San Jose are the only large markets where less than 5% of home owners are underwater. Almost a million home owners were freed from negative equity in the third quarter of 2015. The improving rate means those people may be able to sell or refinance their homes before mortgage interest rates rise, as they are expected to do in the coming weeks. ‘Negative equity has become almost an afterthought in a handful of the nation's hottest markets, but is holding back the recovery in dozens of large markets nationwide,’ said Zillow chief economist Svenja Gudell. ‘Despite steady declines in negative equity, many cities are still facing tight inventory, especially among entry level homes. Those homes that are available are often not in demand and stay on the market for a long time. This can be extremely frustrating for buyers and sellers alike, as they come face to face with the difficult side effects of negative equity,’ she explained. She also pointed out that negative equity affects individual home owners, but markets with high negative equity rates tend to have fewer homes for sale, especially lower priced homes favoured by first time home buyers. In markets with a lot of negative equity, homes generally take longer to sell than in other places. The top five large metros with the smallest share of underwater… Continue reading
New research reveals what UK residential tenants want
Nearly half of tenants in the UK would be prepared to travel for between 15 and 30 minutes, or between 30 and 45 minutes door to door to reach their office or place of work each morning, according to a new survey. In Wales, some 44% of tenants would prefer to commute for less than half an hour, while in the North East, the proportion is 37%. But in London the majority of tenants, 43%, are happy to travel for between 45 minutes and an hour to the office each day. The survey by YouGov for real estate firm Knight Frank also shows that the majority of tenants outside London commute by car, while in the capital 52% use the London underground for part or all of their journey. Two fifths of respondents said that the ability to store their bike in their rental property was important to them, although this rises to 46% of those aged 35 to 44 across the country. A third of respondents said they would be willing to pay extra in rent to keep a pet in their property as sometimes landlords charge more to cover the cost of the extra refurbishment needed after a tenant who has had a cat or dog vacates the property. Indeed, 4% of those in the private rented sector already pay extra to have their pet live with them, and this rises to 7% for those aged over 55. The results of the Tenant Survey also show that, for the majority of respondents, their ideal length of tenure is up to one year, and this is particularly true of younger tenants, highlighting a preference for increased flexibility in the sector. breakdown of the figures shows that 69%) of tenants aged between 18 and 24 said they would prefer a tenancy agreement of up to a year, with 61% of 25 to 34 year olds saying the same. Respondents said that their preferred timeframe for a break clause, which would allow tenant or landlord to end the lease early, is six months. Some 38% of tenants have lived in five or more rental properties. While the majority of respondents had moved within a mile of their previous property, 19% had moved more than 60 miles, indicating a relocation for work or study, highlighting the flexibility of the private rented sector a tenure. The survey also found that 24% of Londoners are prepared to pay 50% as a maximum amount of their gross annual income on rent, up from 22% last year. A quarter of tenants do not want to, or don’t know if they want to buy a home in the future. Of those that express a desire to eventually buy a home using a mortgage, less than half are currently saving towards a deposit. The research found that a quarter of those living in the private rented sector live alone, while 34% live as a couple without children. Some 43% of 18… Continue reading
