Tag Archives: real-estate
Studies show more people in UK planning to downsize to fund retirement
Some 12% of the UK’s retired population are planning to downsize their property within the next five years, potentially unlocking an estimated £136.5 billion of housing equity in the process. This equates to 1.36 million people planning to move to help fund their retirement, according to the data from retirement income specialists MGM Advantage. The data also shows 18%, or 1.99 million retired people, have already downsized. By analysing house price data, calculating the amount of cash released through moving from a detached property to a bungalow, allowing for stamp duty and moving costs, MGM Advantage has worked out the UK average is £102,851. This figure represents an 18% increase in cash released compared to just a year ago when the average was £84,776, and is due to the relative increase in the value of a detached property compared to a bungalow. The data shows there are significant regional variations, with Greater London releasing the most cash at £295,593, while Wales didn’t fare anywhere near as well with a figure of £54,301 released after moving costs. ‘People often refer to their property as their pension, and these numbers show that many are considering downsizing to provide an income boost in retirement. However, the downsizing dream could turn into a retirement nightmare, as some areas of the country fare much better than others. This is simply a reflection of the housing market in the UK,’ said Andrew Tully of MGM Advantage. ‘Banking on your own home to provide an income in retirement does not come without risk. The old adage of all your eggs in one basket still holds true. Careful planning and consideration should be given before making the move, and with returns available from the cash released still very low, it is likely the capital will also be consumed over time,’ he pointed out. ‘If people want to stay in their homes to avoid the upheaval of moving, then solutions like equity release can provide an alternative route. A professional financial adviser will be able to help you navigate the retirement income maze and decide what is best for your personal circumstances,’ he added. Meanwhile, separate research from Baring Asset Management shows that 7% of non-retired people, the equivalent of around 2.5 million individuals, admit they are planning on selling their primary residence to fund their retirement. This is up 2% from last year. In total, 16% of people, nearly six million, say they are planning to rent or sell property to fund their retirement, up from 13% last year and the highest such figure since 2009. The survey found that the economic climate continues to have an impact on people looking to use property to fund some or all of their retirement: the number saying they now plan to sell or downsize a property to fund all of their retirement has risen to 4% from 2% in 2012. While the research found that a third (33%) of people that last year said they are planning on either… Continue reading
Referendum waiting game pushes rents to all-time peak in Scotland
The Scottish independence referendum contributed to the recent rise in rents to a new record high of £537 per month, up 2.7% in the last 12 months, the latest index shows. Rent growth accelerated on a monthly basis over the past three months as polling day approached, according to the Scotland Buy to Let Index from Your Move, one of Scotland’s largest lettings agents network. The data shows that rents have increased in every region of Scotland over the past year with new records in Edinburgh and Glasgow. Cumulatively, average residential rents have risen 1.3% in the three months to August 2014. Doubt over the outcome of the referendum and lack of clarity over the mortgage and taxation consequences of a possible ‘Yes’ vote, prompted people to delay purchase decisions, and consequently heightened demand in the private rented sector. The average residential rent across Scotland is now 2.7% higher than in August 2013, currently standing at £537 per month. In cash terms, this represents a rise of £14 from a year ago. This is the highest level of average residential rent in Scotland on record, and is up 0.5% since July. ‘While the independence debate has been raging, many households have been battening down the hatches and waiting to see which way the wind blows before buying property. This has boosted demand in the private rental sector, which has acted as a safe harbour and stop-gap on the journey to home ownership,’ said Gordon Fowlis, regional managing director of Your Move. A breakdown of the figures shows that rents have risen on an annual basis across all five regions of Scotland and have climbed to new record peaks in both Glasgow and Clyde, and Edinburgh and the Lothians in August. Glasgow and Clyde saw the fastest annual increase, with average monthly rents up 5.5% or £30 on August 2013, and now standing at £575. This is followed by 3.8% annual growth in Edinburgh and the Lothians, where rents rose by £22 over the past year to an average £602 per month. In three out of five regions, rents are higher than the previous month. The steepest month on month increase is in Glasgow and Clyde, with rents increasing 4.2% between July and August 2014. In Edinburgh and the Lothians, rents have risen 0.2% over the past month, and rents in the East are up 0.1% from July. Two regions have seen rents dip on a monthly basis. The South witnessed the biggest fall in average rents, down 2.2% in the month to August, while in the Highlands and Islands rents were 0.2% lower than in July. As of August the gross yield on a typical rental property in Scotland stands at 4%. This represents a fall of 0.2 percentage points since August 2013 when the gross yield on a rental property averaged 4.2%. However, yields are holding steady on a monthly basis, at 4% over the past four months. Taking into… Continue reading
UK continues to see average property prices grow, but biggest rise still in London
Average UK property price growth remains strong across the country, up 8.9% annually to £206,578, according to the latest monthly index. House price growth in London continues to storm ahead, up 23.6% on August 2013 and 2.4% on last month, the data from independent estate agent haart also shows. The number of new buyer registrations has fallen by 5.5% annually across the UK but there are 9.5 buyers on average chasing every property. Overall the report says that the UK market remains buoyant with sales transactions also up 8.9% on last year although in London the supply of homes is up by much more, with the city seeing growth of 26.6% annually and 15.7 buyers registering for every new property for sale. ‘The property market is currently recalibrating. Our data shows an easing of demand as new buyer registrations across the UK decrease 5.5% annually, in contrast to the uplift in homeowners looking to sell which is up 4.1%,’ said Paul Smith, chief executive officer of haart which has a network of over 200 branches. ‘Despite this influx of stock the market remains competitive with an average 9.5 buyers registering interest in every new home that comes to market, which is the driver behind property price growth. This gradual return to normality should now dispel fears about property bubbles which we have always dismissed as hype,’ he explained. ‘People now see the reality that interest rates will rise early next year but are keen to take advantage of current market conditions. Our message to people thinking about selling is that autumn is crunch time,’ he pointed out. ‘Good mortgage deals are still plentiful but won’t last forever. Buyers do have increased choice right now but the strong competition that remains in the market will ensure that those selling now have the best chance at the best price,’ he added. The index also shows that the average first time buyer property price dipped marginally by 1.1% on the month to £153,967 but increased 6.7% annually. First time-buyers now make up 45.9% of all mortgages written which is up from 42.2% in August last year. The average mortgage extended to a first time buyer is now £120,933 which represents an increase of 9.5% on last year and the average loan to value is now 80.2%, which is up from 78.6% last year. The average property price in London is now £494,026, an increase of 23.6% annually and 2.4% on the month. The firm says that the reason behind this growth is the high ratio of demand to the supply of homes with an average 15.7 prospective buyers registering for every available property. The west London postcode is the most expensive area in which to buy with the average price now at £551,711, an increase of 13.3% annually. The east of the city remains the cheapest postcode with the average property price currently at £421,166. The number of properties for sale in London is… Continue reading
