Tag Archives: london
Report suggests shared ownership is misunderstood and under used
Shared ownership could help thousands more home buyers in the UK to get onto the housing ladder but research has found that this growing lending sector is under used and misunderstood. With house prices rising at a faster rate than most salaries and people continuing to struggle to get onto the property ladder, shared ownership is a potential solution for many, yet is often overlooked despite having been introduced 30 years ago. The research from the Leeds Building Society has identified a number of key myths around shared ownership including the belief that a shared ownership mortgage is more difficult to place than an ordinary mortgage. It also found that people think that shared ownership properties are in less desirable areas, that it’s more expensive than renting, that it’s difficult to qualify unless you’re on a very low wage, or a key worker and that it is like a consolation prize and not real ownership. ‘In a nutshell, the lack of understanding around shared ownership boils down to these five distinct points,’ said Louisa Sedgwick, head of intermediary distribution for Leeds Building Society. ‘In reality, these beliefs are inaccurate and there is an abundance of information for intermediaries, and the borrowers they serve, available from housing associations, the Government and lenders to help them understand how shared ownership could work for them,’ she added. She pointed out that while many housing developers or associations are linked to specific intermediaries in certain areas, there’s nothing to stop individuals approaching their own broker about shared ownership. ‘At this stage, many clients will have been assessed, certainly in terms of eligibility for shared ownership, by the relevant Housing Association before going to consult an intermediary, meaning the process for the broker can actually be fairly straightforward since they only need to place the mortgage,’ explained Sedgwick. ‘A mistaken public perception exists that shared ownership homes may be badly maintained, poor quality properties in poor, or less desirable, areas. Again, this is far from the truth. London provides an interesting example and showcases the fact many shared ownership properties offer a desirable home and community environment to live in,’ she pointed out. ‘Properties available through the scheme can be found in prestigious and sought after areas such as Notting Hill. What’s more, the availability of shared ownership properties extends far beyond London to desirable areas across the UK including Harrogate, Chester and York. ‘Shared ownership schemes are found across the UK as housebuilders are often obliged to include a proportion of affordable housing, some of which will be for shared ownership, regardless of where they are developing,’ she added. In terms of cost she explained that while many believe the monthly payments required to live in a shared ownership property hover somewhere between those paid for a full mortgage and rent, in reality, monthly payments for shared ownership properties could be lower than either full ownership or private renting. Indeed, a report published by the National Housing Federation in 2013… Continue reading
Uncertainty in financial services sector affecting prime London rental values
Rental values in prime central London declined for the second month in a row in November against the background of continued uncertainty in the financial services sector and a seasonal end of year decline in demand. Values fell 0.3%, which meant annual rental value growth dipped to 1.2%, which is the lowest level since August 2014, while rental yields were flat at 2.95%, according to the latest report from real estate firm Knight Frank. It follows a peak of 4.2% in May this year as a degree of demand moved across from the sales market due to uncertainty over taxation and the general election. ‘Since then, nervousness surrounding global economic events including the slowdown in China means that many companies have reigned in relocation budgets and many banks continue to cut headcount as part of restructuring plans,’ said Tom Bill, head of London residential research at Knight Frank. ‘Furthermore, stock levels have risen as more owners adopt a wait and see approach to pricing trends in the sales market, which has tipped the balance in the favour of tenants and put downwards pressure on rents,’ he pointed out. ‘The result is that the number of tenancies started has dropped since 2014, though remains above the level two years ago. Demand, in the shape of new prospective tenants and viewings, is also down compared to what was a relatively strong 2014, though both remain above 2013 levels,’ he added. He also pointed out that demand remains strong in lower price brackets and at the super prime level of above £5,000 per week amid uncertainty around taxation including recent changes for buy to let investors and second home purchases. ‘The result is a three speed market where demand is stronger in higher and lower price brackets than it is in the middle,’ Bill explained. ‘The changes announced by Chancellor George Osborne mean that buy to let investors and those purchasing second homes will be subject to an extra 3% on the rate of stamp duty from April 2016, which could lead to fewer rental properties, which would put upwards pressure on rental values,’ he added. Continue reading
UK house price growth set to slow in 2016, latest outlook report suggests
House prices in the UK are expected to see growth slow to 4% to 6% due to the increasing difficulty in getting on the housing ladder, together with the prospect of an interest rate rise, according to a new report. The forecast from lender the Halifax comes after a year when activity levels have remained modest by historical standards. A shortage of supply is likely to continue to act as a significant constraint on activity in 2016, it says in its outlook report. Price growth is expected to slow more sharply in London than elsewhere but all regions are expected to experience price rises in 2016 which will be broadly in line with income growth. The report points out that levels of house building remain low, but improvements are expected over the medium term and this would help to bring demand and supply into better balance, helping to constrain upward pressure on house prices. ‘There is little reason to expect any fundamental shift in the key market drivers in the immediate future. As a result, the substantial imbalance between supply and demand is likely to persist, maintaining upward pressure on house prices in 2016,’ said Halifax’s housing economist, Martin Ellis. ‘On average, UK house prices look expensive compared to incomes but valuations are supported by the low levels of property for sale, low levels of house building, and exceptionally low interest rates,’ he explained. ‘Nonetheless, with house prices continuing to increase more quickly than average earnings, it is increasingly difficult to get on the housing ladder. This ongoing development, combined with the growing prospect of an interest rate rise, should start to put the brakes on house price growth during the course of 2016,’ he pointed out. ‘A continuing shortage of supply is likely to continue to act as a significant constraint on activity over the coming year. Sales in 2016 are expected to be modestly higher than this year, but to remain well below the peak of 1.6 million in 2006,’ he added. The report points out that house price growth has been robust throughout 2015. The quarterly rate of increase was 2.8% in October, according to the latest figures, a little above the 2.5% average over the first nine months of the year. The annual rate stood at 9.7% in October, the highest annual rate since August 2014 when it was 9.7%, with the annual rate in a narrow band between 8% and 10% all year. ‘Improving economic conditions with continuing growth and rising employment and strengthening household finances, assisted by increasing real earnings for the first time for several years, have boosted housing demand during 2015. This has been supported further by very low mortgage rates which have fallen over the year,’ Ellis explained. ‘Strengthening demand has combined with very low supply, both in terms of new build and second hand properties for sale, to drive strong underlying house price growth. New instructions by home sellers declined in October for the ninth… Continue reading
