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Homes in good school areas in UK command over £30,000 more
Parents in parts of the UK are willing to pay a premium of £32,000 premiums to move to a property within a desirable school catchment area, new research has found. Almost a third of these parents had to change jobs in order to get their children into the desired school and one in four were forced to ditch their dream home and downsize, according to the study from Santander Mortgages. Overall some 26% of parents with children of a school age have either bought or rented a new property in order to secure an address within their desired school catchment area and paid on average an 18% premium or £32,127 to do so. Some 31% admitted that as a result they ended up moving to an area they did not like, a further 26% said they overstretched themselves, paying more for the property than they could realistically afford and 33% moved to a location that was far away from family or friends. However, the study suggests that the moves made by many of these families are only temporary, with just 22% planning to continue living in the area. Some 45% of those who moved to be within a particular catchment area said they had, or would, move straight back out once their child had secured a place, whilst a further 30% planned to wait until their child finished school. Amongst families who have moved to be within their desired catchment area, 40% said they had sold their previous property and purchased a new one within their chosen area, 41% said they purchased a second home in the catchment area, while 20% secured their desired address by renting a property. This trend looks set to continue as 61% of parents who expect to move home before their children leave school, said that catchment areas will have an impact on where they choose to live. A regional breakdown shows that there are significant variations in the overall proportion of parents moving to be within a catchment area and also in their decision as to whether they buy, rent or look to secure a second property. Overall the North East and London see the highest proportion of parents moving to secure an address within a specific catchment area at 46% whilst Wales has the lowest at 11%. The average premium paid by parents for a property in their desired school catchment area ranges from 8% in Yorkshire and Humberside, to 21% in Scotland and the North East. As a result of higher property prices, London has the highest value premium at £77,113 or 16%. Younger parents are the most likely to purchase or rent a new property to be within a certain catchment area with 46% of those aged 18 to 34 having done so, compared to just 18% of 35 to 54 year-olds. The age of the child also appears to have an impact as 33% of parents who have children aged between four… Continue reading
UK mortgage approvals highest since beginning of 2014
Approvals for mortgages in the UK increased in July to their highest level since February 2014, according to the latest figures published by the Bank of England. The data shows that there were 68,764 mortgages approved in July, up 16.4% from last November’s 17 month low of 59,100. Experts said that it shows that the housing market is heating up again and point out that mortgage approvals have risen in five of the past seven months at a time when house prices are also rising. Net mortgage lending, which lags approvals, also increased, up by £2.709 billion in July, the biggest increase since July 2008. Charles Haresnape, chairman of the Intermediary Mortgage Lenders Association (IMLA), pointed out that it is also the highest number of approvals since the introduction of the Mortgage Market Review (MMR) last year which cooled the market. ‘With 7% more approvals compared with the six month average, it is a clear indication that health is returning to a market that has been under significantly pressure to perform while adjusting to new working practices,’ he explained. However, he also pointed out that the European Mortgage Credit Directive (MCD) rules begin to come into effect this month and there is likely to be an extra element of uncertainty and instability ahead for the market. ‘With more regulation on the way and a potential rise in the cost of borrowing on the cards, the six month window to implement the MCD rules will be a challenge for all concerned,’ he warned. ‘On the positive side, rising approvals suggest consumer appetite is strong and lenders will also be striving to meet their end of year targets, which should support some competitive deals. We must hope that the impacts of change do not weigh down too heavily on what otherwise looks like a strengthening market recovery,’ he added. Howard Archer, chief economist at IHS Global Insight, said it was possible July’s performance was lifted by some house buyers looking to lock in a low mortgage interest rate before they start rising. ‘While we currently expect the Bank of England to first hike interest rates in February 2016, there is now a very real prospect that they could act before the end of 2015. However, the Bank of England is stressing that interest rates will only rise gradually and to a limited extent,’ he explained. Continue reading
Largest monthly rise for England and Wales house prices for a year
Property prices in England and Wales increased by 4.6% in July year on year, taking the average property value to £183,861, according to the latest data from the Land Registry. Month on month they increased by 1.7% with the East of England seeing the largest monthly rise of 2.8% and the biggest annual price increase with a rise of 8.9%, the data also shows. The North East saw the lowest annual price increase of 0.4% and Wales saw the only monthly price decrease with a fall of 0.3%. But transactions are down. The number of completed house sales in England and Wales decreased by 15% to 65,619 compared with 77,488 in May 2014. From February 2014 to May 2014 there was an average of 70,029 sales per month. In the same months a year later, the figure was 61,283. The Land Registry figures also shows that the number of properties sold in England and Wales for over £1 million decreased by 21% to 878 from 1,113 a year earlier. John Eastgate, sales and marketing director of OneSavings Bank, pointed out that it is the biggest monthly rise in house prices for a year and he believes it is driven by positive sentiment continuing after the general election and also by the lack of houses on the market for sale. ‘The simple fact that demand exceeds supply will continue to push house prices upwards and as long as that is the case, it’s hard to see prices moderating. The mortgage market remains supportive, and low rates aren’t going anywhere,’ he explained. ‘If economic turbulence from China pushes back a base rate rise until late 2016, as it appears to be doing, we may well see even more people capitalise on low mortgage rates to take their first step on the ladder,’ he added. Adrian Gill, director of Your Move and Reeds Rains estate agents, pointed out that there is still a considerable gulf between the rates of growth in the East, South East and London and other regions, but this hasn’t knocked confidence nationwide. What happens in London is being affected by outside factors, according to Peter Rollings, chief executive officer of Marsh & Parsons. ‘As the first port of call for international investors and prime property purchases, the housing market in London is more exposed to regulatory and stock market turbulence than the rest of the country,’ he said. ‘We’re still experiencing tremors from the new Stamp Duty banding, and as demand for million pound homes has eased, the harsher taxes at the top end may continue to rock the boat in London for the coming months. But this all needs to be kept in perspective. London is still achieving significantly above average house price growth, and retains its position at the top table,’ he explained. ‘In addition, the Chinese stock market slump may present more of an opportunity than a threat to the London property market as while it’s made property more… Continue reading
