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Indianapolis named as best US market for first time buyers
Indianapolis, Pittsburgh, and Memphis are the best markets for first time buyers in the United right now, according to new research. Cleveland, Chicago, Houston, and Birmingham, Alabama, also made the top 10 first time buyer market ranking list put together by real estate firm Zillow. To determine which markets are best for those looking to buy their first home, Zillow looked for places where it's more affordable to make a monthly mortgage payment than a monthly rental payment. The research also looked at median home values and competition, including how many homes the first time buyer has to choose from and whether they are likely to be up against all-cash offers. It found that San Jose, Seattle and Austin are among the hardest places for first time buyers to get on the housing market, a conundrum for many young people who move to those cities because of their hot job markets, only to find a limited and unaffordable selection of starter homes to choose from. ‘Buying your first home is a big decision that takes a lot of planning. First time buyers across the US are up against high prices and low inventory,’ said Zillow chief economist Svenja Gudell. ‘But these are the places where the availability of affordable, entry level homes and the presence of cash buyers are less of an issue. First time buyers in these markets won't have to deal with as many bidding wars or runaway price as they'll be able to find a first home that fits their needs with less stress. With record low mortgage rates, it's a good time to buy a home and certainly worth considering,’ she pointed out. In Indianapolis, home buyers can expect to spend 11% of their income on a monthly mortgage payment, some 4% less than the US average. Renters, on the other hand, can expect to spend 26% of their income on monthly rent, an incentive for renters in Indianapolis to become home owners. Continue reading
UK property market boosted by buy to let rush in march, official figures show
UK house prices increased by 9% in the year to March 2016, up from 7.6% in the year to February 2016, according to the latest official figures. House price annual inflation was 10.1% in England, 2.1% in Wales, 6.4% in Northern Ireland but fell by 6.1% in Scotland, taking the average price to £292,000, the data from the Office of National Statistics shows. Annual house price increases in England were driven by growth in London of 13%, followed by 12.2% in the South East and 12.1% in the East of England. However, excluding London and the South East, UK house prices increased by 5.9% in the 12 months to March 2016. The data also shows that on a seasonally adjusted basis, average house prices increased by 2.5% between February 2016 and March 2016 and prices paid by first time buyers were 9.7% higher on average than in March 2015. For owner-occupiers prices increased by 8.7% for the same period. This is the final release of the ONS House Price Index (HPI) which will be replaced by the new UK House Price Index from June 2016. Richard Snook, senior economist at PwC, explained that buy to let investors rushing to complete purchases before the 3% stamp duty charge on additional properties came into effect at the beginning of April has affected the figures. ‘This move undoubtedly drove up demand and prices in March and we would expect demand to soften over the next few months as a result. There are no signs of any Brexit related slowdown in this month’s figures, although the underlying trends are masked by the effects of the stamp duty change,’ he said. According to Rob Weaver, director of Investments at property crowdfunding platform Property Partner, the figures also show that the divide between north and south is widening while in London and the south east first time buyers are finding it harder to get on the housing ladder. ‘But with niggling doubts over the imminent EU referendum, we’re likely to see a short term dip in prices until the end of June. Then the fundamentals of strong demand and scant supply, rock bottom interest rates and healthy jobs market should reassert themselves,’ he added. Randeesh Sandhu, chief executive officer of Urban Exposure, the residential development finance provider, also believes that activity is likely to slow down in the coming months following these changes and also in the run up the EU referendum with consumers remaining cautious against the backdrop of a potential Brexit. ‘However, it is clear that demand for housing remains strong and any impact of a Brexit is likely to be a short term trend with activity returning to normal soon after any decision. Therefore a real focus needs to be given to the housing shortages the UK faces,’ he said. ‘In London, the new Mayor, Sadiq Khan, has the opportunity to inject some fresh policies to the London housing market where house prices are particularly steep. However, Sadiq’s plan… Continue reading
Average rental period in UK is 18 months, new research shows
People renting a home in the UK spend an average of 18 months in the property before moving on with vacant properties being filled most quickly in Birmingham, new research has found. Birmingham has the lowest tenant turnover, with renters staying an average of two years and four months in the same property. Cardiff on the other hand, has the highest turnover, with the average property being vacated less than a year after being filled, according to the study by landlord insurance provider Direct Line for Business. Leeds at 12 months and Bristol at 14 months also have a high turnover of tenants, which could prove problematic for local landlords, the report says. The analysis also looked at the average time it takes to fill a vacated property revealing that on average, it takes a landlord 22 days to find a new tenant. This could result in an average loss of £547 in uncollected rent. When calculating the yield for a property, landlords need to take into account this void period and ensure they have sufficient resources to meet any mortgage, ground rent or other charges. Vacant properties in Birmingham are filled the quickest, with a landlord finding a tenant in just 11 days. However, in Liverpool and Aberdeen landlords struggle the most to fill their properties, taking an average of 33 days, to find a suitable candidate. Direct Line for Business's analysis estimates that this gap in rent could cost landlords as much as £761 in Liverpool and £913 in Aberdeen. Even with such a competitive rental market in London, letting agents in the capital claim that it takes 20 days on average to fill a property. With average monthly rents in central London surpassing £2,000 this could amount to a loss of £1,869 in income. The research also found that landlords can't always rely on occupants remaining in a property for the duration of their tenancy agreement, with 9% moving out early. The highest rate of tenancy turnover is in Aberdeen where 19% of tenants leave a property before the end of the tenancy agreement with Leeds and Sheffield both close behind at 13%. ‘This research highlights the pressure landlords are under to replace outgoing tenants in their properties. Vacant properties are obviously a worry for landlords but it's vitally important that they take into account void periods when calculating the affordability of owning a rental property,’ said Nick Breton, head of Direct Line for Business. ‘Staying on top of the on-going changes within the industry can be time-consuming and a battle for landlords and we fully appreciate the challenges they face when it comes to managing their rental properties,’ he added. The business has developed a Mobile Landlord app which can manage up to five properties aimed at alleviating some of the stress. The app can track income, calculate yields, set handy reminders such as when a tenancy agreement may be coming to an end and also keep landlords up to… Continue reading
