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UK buyers better off than renters after five years, new study has found
Buyers in the UK are better off than renters within five years on average as a result of equity outstripping the value of savings, new research has found. While home owners with mortgages pay £316 more on average per month compared to those renting equivalent properties, they become better off after a few years, according to the study from property website Zoopla. The research also shows that the average monthly rental across the UK currently stands at £865 per month versus an average monthly mortgage repayment of £1,181. But while renters may pay less each month, owners recoup their initial costs and become better off than renters within five years on average as a result of the value of equity outstripping the value of savings. And after seven years, the average owner is £13,850 better off compared to an equivalent tenant. Aberdeen, Dundee and Glasgow are currently the most cost effective towns for buying versus renting, as the average monthly mortgage repayment is less than the average rent. At the other end of the scale, Bournemouth, London and Huddersfield are the most cost-effective places for renters due to higher property prices relative to rents for equivalent properties. London owners pay nearly £1,790 more a month than the average renter in the capital. ‘People who invest in property are playing the long game. While buyers have to swallow the initial upfront costs of purchasing a property, they ultimately reap the benefits over renters down the line,’ said Lawrence Hall of Zoopla. He explained this is due to building up equity in an asset that they will own by the end of the mortgage term. ‘With the strong house price growth we’ve experienced this year and interest rates still low, saving for even a 10% deposit takes its time,’ he added. Continue reading
Sharjah to allow expats to buy property for the first time
Foreigners are to be able to buy in Sharjah for the first time after the government passed a law enabling expats from anywhere in the world to invest in the real estate market. Leases of up to 100 years will be granted to overseas buyers provided they hold a United Arab Emirates residency visa, officials have confirmed One reason behind the decision is the huge demand for homes from people working in neighbouring Dubai. But there will be restrictions on locations with only property in new investment areas on the edge of the city centre being available. The first new development to offer the long leases will be Tilal City, a 25 million square feet development on Emirates Road close to the Al Dhaid Interchange which is being developed by Sharjah Asset Management and Eskan Real Estate Development. The project comprises 1,800 land plots. Officials said the new rules would create ‘new cluster cities’ outside central Sharjah which would reduce traffic and congestion in the main city centre. The move is also aimed at outlawing the number of disputes caused by foreigners attempting to get around the previous rules which prevented anyone other than GCC Arabs, and a few non-GCC Arabs and Asians with special permission, from owning real estate in the emirate. ‘There are over 220 nationalities here in Sharjah. But we think the biggest demand will come from Arab and Asian Muslims living here who want their families to live in a stable and safe environment,’ said Hamad Salem Al Mazrooa, director general of the Sharjah Real Estate Registration Department. ‘The only restriction is that they must have a residence visa at the time of purchase. If for some reason after the purchase their residence visa expires, they are free to hold the property, lease or sell it as they wish,’ he explained. Officials are keen to prevent developers selling hundreds of off-plan apartments to speculators who would then flip them on at a higher price, something that contributed to the recent boom and bust in house prices in Dubai. ‘We want to avoid off-plan speculative flipping, as in the past in the UAE before the crisis where developers were marketing the project and didn’t finish building, took the money and left the country,’ Salem explained. The Sharjah Real Estate Registration Department is to open a small registration office at the Tilal City site where foreign investors could start to register their properties. Faisal Durrani, international research and business development manager at Cluttons, described it as an historic milestone for Sharjah. ‘Traditionally, international investors have focused their attention on Dubai and Abu Dhabi, but the move will open up a new market, to investors residing in the UAE,’ he said. ‘The success of Tilal City is likely to determine whether a number of similar schemes are brought forward in Sharjah. However, based on the number of gated community feasibility studies that Cluttons has been commissioned to undertake, in close proximity to Sharjah International Airport, we expect to see similar developments launched… Continue reading
Annual sales up 15% in Scotland but prices down 0.4%, latest index shows
Annual home sales in Scotland jumped 15% in September but prices slipped by 0.4%, slowing the annual change to 5.1%, according to the latest index. That taxes the average price of a house in Scotland to £163,630, the data from the LSL Property Services/Acadata report shows. Prices dropped at the top end of the market in two of the most expensive areas in the country, Edinburgh and Aberdeenshire, down 1.3% and 1.2% respectively. ‘Following almost a year of fair winds and steadfast price rises, this is the second month in succession to muddy the waters. Edinburgh and Aberdeenshire saw the tide turn, reflecting the ripples in evidence in prime central areas of London, as the top tier of the housing market experiences the keenest downturn,’ said Christine Campbell, regional managing director of Your Move. The report says that while Scottish house prices have increased by nearly £8,000 in the last 12 months overall, the rate of annual growth has eased back to 5.1% in September from 5.8% in August. Since June, the monthly pace of house price growth has slowed and this is put down to the referendum vote on independence which put the brakes on activity in the housing market. ‘However, these shifts we’re seeing on the surface haven’t uprooted the solid foundations of the recovery, with average house prices across 81% of Scotland higher than a year previously,’ explained Campbell. East Renfrewshire led the way in terms of annual price growth, with property values soaring 13.4% in the year to September 2014, and new price peaks were reached in East Lothian and Aberdeen. Indeed, the price of a detached home in Aberdeen has risen by an average £15,000 over the last three months, to total £410,000. ‘September also saw sales snap back after the vote put the lid on uncertainty, and transactions were up 15% year on year, compared to only 7% growth over the 12 months to August. After the ground that was lost in August, renewed demand saw more vigorous activity buck the usual seasonal pattern, and this was the strongest September for house sales in seven years,’ Campbell pointed out. Continue reading
