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Survey reveals many non-home owners in UK think they will never be able to buy
Almost half of non-home owners aged 25 to 34 in the UK don’t think that they will ever be able to buy a property, new research has found, while one in three have no interest in buying. Just 28% of non-home owners questioned for mortgage and home loans broker Ocean Finance say they would like to be able to buy a property one day, and expect to be able to do so. Conversely, 40% of those questioned say that while they would like to be able to buy a home in the future, they do not expect they will ever be able to do so while 32% claimed they are happy to continue renting and have no interest in buying. These findings may suggest that people’s attitude to owning could be changing, whether through opinion or circumstance. And there are numerous reasons why this may be the case, the firm says. These include rising house prices, especially in London and the South East, which mean that even saving for the deposit for a property seems out of reach for many. For example, a 25% deposit on the average house price is now £68,000, more than double the UK average income. Changes to the mortgage market mean it has become harder to access mortgages, with fewer higher loan to value products available and tighter affordability rules. It also says that real income is being squeezed with prices rising faster than income for the past few years meaning that people have had less money to commit both to saving and to thinking about paying a mortgage. In fact, the survey shows that nearly half, 46%, of non-home owners in the key first time buyer bracket of 25 to 34 years old did not think that they would ever be able to afford to buy a house. Perhaps surprisingly, adults aged under 25 remain quite optimistic about their future prospects with 54% of them both wanting to buy a house in the future and believing that they will be able to do so. For people who haven’t got on the housing ladder by the age of 55 the dream of home ownership has faded. Just 4% of non-home owners aged over 55 still expect to be able to buy. ‘Home ownership is already at a 25 year low and our survey suggests that this figure is likely to continue to fall. While four in 10 people still say they’d like to own a property one day, they already seem resigned to not being able to do so,’ said Ian Williams, spokesman for Ocean. Continue reading
Research shows sneaky fees and charges make it hard to get best mortgage deal
UK borrowers could be paying over the odds on their mortgages and with sneaky fees and charges making it harder for people to find the best deal, it is claimed. Research from consumer champion Which? reveals that there are more than 40 fees and charges across the market, including set up fees, arrears fees and final repayment fees. Providers using different names for the same or similar fees. For example, a booking fee can also be called a reservation or application fee. There is also duplication with some lenders charging more than one set up fee. The research reveals increases to the cost of some fees. The average arrangement fees have almost doubled in the last five years, from £878 in 2009 to £1,588 in 2014 and there is a wide variation between lenders in the cost of the same fees, suggesting that fees don't always reflect the true cost the lender incurs. Which? also highlights a lack of clarity which makes it difficult for borrowers to tell if the fees are avoidable. The research shows that consumers borrowing £100,000 over two years could save as much as £1,503 if they took into account the set up fees rather than choosing the product with the lowest interest rate. This vast array of confusing fees and charges, which aren't always reflected in the standard APR (Annual Percentage Rate of Charge), means the total cost is not clear to borrowers leaving them unable to easily find the best deal. The research found just 3% of people could correctly rank the cost of five two year fixed rate mortgage deals when displayed using typical information, including APR. This rose to 36% when presenting the total cost of the mortgages over 24 months. With mortgage repayments the biggest monthly expense for most homeowners, and the prospect of future interest rate rises adding to this, Which? is calling on the Chancellor George Osborne to use his Autumn Statement to make it easier for people to find the best mortgage deal, working with the FCA, industry and consumer groups. ‘Home owners could be paying over the odds for their mortgage because of the complex range of fees and charges that prevent them from finding the best deal,’ said Which? executive director, Richard Lloyd. ‘The Chancellor must act now to stop sneaky fees and charges and end mortgage confusion for consumers. The government and the regulator should also explore better ways of presenting the total cost of mortgages,’ he added. Suggestions for change include making mortgage price comparison easier. Which? says given the limitations with APR, the government and the Financial Conduct Authority should explore other ways to present the total cost of a mortgage. It also suggests making the full cost of a mortgages clearer. For example, all compulsory fees payable throughout the deal period should be expressed as a total of fees and included in the advertised costs. It should also be clear which fees payable over the life of the mortgage are compulsory and which are… Continue reading
Latest data shows UK help to buy schemes attracting strong support
New figures show the UK government’s flagship Help to Buy scheme is helping more people onto the property ladder and getting more homes built. The Help to Buy schemes have created over 54,000 home owners in England with over 39,000 households buying new built properties through the equity loan and NewBuy options, and 15,000 households buying through the mortgage guarantee. A further 3,400 new homeowners have been created in Scotland, Wales and Northern Ireland through the Help to Buy mortgage guarantee scheme, Housing Minister Brandon Lewis has announced. A breakdown of the figures show that around eight out of 10 sales went to first time buyers and as a direct result thousands of new home owners were created and private house building starts rose by a third. House building has climbed to the highest level since 2007, construction output has seen the sharpest expansion for eight months, and companies are now taking on workers at the fastest rate since 1997. ‘The figures clearly demonstrate the continuing success of the Help to Buy in supporting creditworthy, hardworking people who want to buy a home of their own. Over 54,000 new homeowners have now used the schemes as a valuable alternative to the Bank of Mum and Dad, enabling them to buy with a fraction of the deposit they would normally require,’ said Lewis. ‘But it’s also got Britain building and since the scheme’s launch private house building starts has increased by a third,’ he added. Sales of new build homes have been strong across the country. The highest number of equity loan sales were in Wiltshire with 603 sales, Leeds with 559 sales, and Central Bedfordshire with 499 sales and 20 local authorities have all achieved over 300 sales. The average price of a home is below the national average at £210,000 under the equity loan and £153,000 under the mortgage guarantee. Continue reading
