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Almost half of UK renters will never get on the property ladder, poll suggests
Some 44% of renters in the UK believe they will never own their own home with not being able to afford a deposit the most common reason for not getting on the property ladder. Just 2% of renters plan on getting on the property ladder this year, according to an independent survey for construction and regeneration company Keepmoat. The average house price in England and Wales now stands at £178,000, according to the latest Land Registry figures, although significant regional variations exist. The average price of property in the capital is currently £462,799. Despite houses in the North generally being more affordable, non-homeowners in Liverpool at 62% were the most likely to say they never expect to purchase a property. This was followed by 60% in both Newcastle and Glasgow and 41% in London. Not being able to afford a deposit was by far the most common reason for not getting on the property ladder, cited by 56% of respondents. The pressure of saving a deposit was also the top concern for those hoping to buy a home at 58%, with 61% of this group saying they will be saving their own deposit. Some 38% of home owners polled said it took between two and five years to save for a deposit although it took 13% of those polled up to 10 years to save their deposit. The research also suggests low awareness of the government’s Help to Buy scheme, an initiative that helps people take their first steps on the property ladder. Less than one in three prospective buyers polled said they will be using the scheme, with 38% claiming they don’t know what the scheme is. ‘It’s clear that the amount of money first time buyers need to raise for a deposit continues to stop many from getting on the property ladder. However, we were surprised that the results show Londoners are more confident about owning a home than those in other cities, particularly in the North,’ said Dave Sheridan, chief executive of Keepmoat. ‘There is plenty of assistance available for buyers in the form of the Help to Buy scheme and help is available when saving for a deposit with the Help to Buy ISA,’ he added. Continue reading
UK govt and mortgage industry to work to make home lending process more transparent
The UK government and the country’s mortgage industry have pledged to work together to make sure home lending is available for every stage of life from first time buyers to retirees. Following a meeting between the Economic Secretary to the Treasury, other government ministers and mortgage industry representatives, work is to be done to make lending more transparent. The meeting also discussed the measures that have already been taken to boost help for first time buyers such as Help to Buy and ISAs and how they can be taken forward. It comes at a time when advice given by lenders to borrowers has been found to be mixed in the aftermath of changes brought in last year. In particular there has been criticism of the new questionnaire that all applicants have to fill in so that lenders can ascertain that they can afford repayments with instances of people not revealing all their spending plans for fear of being rejected. A lot of older people and self-employed have also found it harder to get a mortgage. The Economic Secretary to the Treasury, Harriett Baldwin, revealed that since 2010 some 2.8 million mortgages have been advanced, worth a total of £444.5 billion, and by backing the government’s flagship Help to Buy schemes, the industry has helped nearly 100,000 people get onto or move up the housing ladder. ‘The government’s Help to Buy ISA which is due to launch later in the year will get young people on to the housing ladder, while our work on supporting lending to older people will make sure the mortgage market delivers for those who have worked hard all their life,’ she said. We are pleased that the real effect which the mortgage market can have on people’s lives is recognised within government. We take the industry’s responsibilities to borrowers very seriously,’ said Paul Smee, director general of the CML. ‘We hope the improvements we are making to the transparency of fees and charges will help make it easier for people to understand mortgage costs more easily, and will support the many benefits that a wide choice of mortgages brings to consumers,’ he added. Meanwhile, the CML is working with its members, who make up over 90% of lending business for homes in the UK, to improve the advice given to mortgage clients after a review by the financial watchdog, the Financial Conduct Authority (FCA) said that there is room for improvement. Smee pointed out that lenders have had a huge workload implementing comprehensive rule changes in April last year as a result of the mortgage market review (MMR). ‘Those changes have been introduced with little disruption for consumers or to the market more generally. But there was more to be done to refine the ways in which firms operate,’ he said. The FCA found that the quality of advice in the mortgage market was mixed. Some firms were engaging customers in focused and relevant discussions, leading to suitable recommendations based on… Continue reading
London leads eight year high in European corporate real estate sales
Some €14.6 billion in European corporate real estate assets were sold in Europe in 2014, the highest number for eight years, with London leading the growth, new research shows. Over 350 deals were recorded thanks to a continued low interest rate environment and exceptional levels of equity pouring into real estate, according to a new report from JLL. Since 2012 the number of companies raising capital from real estate assets in Europe has been on the increase, coinciding with a period of rising real estate values, the report points out. Indeed, in a separate recent survey from JLL some 40% of respondents reported increasing demands from senior leadership to raise capital through the real estate portfolio. JLL expects this market momentum to continue as businesses take advantage of opportunities to create a property portfolio that better meets their needs whether it’s reusing capital to support business growth, obtaining greater flexibility to aid downsizing or removing unwanted surplus property. ‘Companies are now faced with a once in a cycle opportunity to exploit the best market conditions since 2007. Last year global real estate investment volumes stood at US$710 billion, a level only ever exceeded in the peak of 2007,’ said Michael Evans, head of Corporate Capital Markets at JLL. ‘This momentum has continued into 2015, with an abundance of equity targeting real estate. This presents opportunities for companies with owned real estate to raise capital via sale and leasebacks. Activity has been widespread across Europe involving a range of companies with appetite across a variety of sectors and asset types,’ he added. The report has identified that traditional office and industrial occupiers across pharmaceuticals, energy, manufacturing, IT and telecoms dominated European corporate sales last year, accounting for 38% of activity. Meanwhile hotel operators made up 27% of the sales market followed by retail at 16%. The most notable sales were seen in the media and telecoms sector which included the largest corporate property sale of 2014, sold for €680 million in Paris. In terms of locations, the UK, Germany and France continued to govern the volume of corporate real estate sales, representing 60% of European activity in 2014. This was driven predominantly by the UK, with an 18% year on year increase and almost double the volume achieved in 2008. Spain and the Nordics also featured strongly with 18% of total corporate sales last year. According to Karen Williamson, associate director for EMEA research, with such a compelling market now is the time for companies to rethink their own versus lease decisions. ‘There are a range of solutions available to companies considering raising capital from their owned real estate. Sales can benefit the wider business by allowing capital to be recycled back into the organisation to support growth and expansion,’ she explained. ‘It can also be used to enable financial flexibility and unlock value from assets as part of a planned… Continue reading
