TSI
UK housing trends survey finds more people living alone and renting
The housing market in the UK is experiencing a number of key trend changes which mean the more people are living along and more are renting a home for the long term, new research has found. Of the 43% of those taking part in the Housing Futures Survey by Strutt & Parker who are single and planning to move in the next five years, some 75% expect to be living along and 45% of those aged 18 to 29 indicated they would consider living in a professionally managed private rental unit. The research suggests that future housing types and location decisions are being altered by access to technology. Nearly 36% of the respondents who were intending to move listed broadband connectivity as important or very important in their motivations for moving, and nearly 20% listed mobile coverage. It also suggests that alternative family structures are becoming more common, with 15% of respondents who intend to move anticipating living with more than one generation under the same roof compared with 10% in the previous survey. There is little sign of home owners planning to raise capital for pensions and their children’s housing needs by selling their property. Only 9% of those aged 40 to 59, and 0.4% of those aged 60 or older, rated financial support for children or relatives as important or very important when asked about motivations for moving, and 8% and 16% respectively for pension support or top-up. ‘The trends identify that single occupied households and alternative family households are growing, the younger generation is more open to the idea of renting and those moving into retirement are seeking more interactive environments. The impact of these trends inevitably means that in the future the homes we plan, design, build and live in must be different,’ said Stephanie McMahon, head of research at Strutt & Parker. ‘Lifestyle change remained the dominant motivation for moving, but in light of pension challenges and parents seeking to help their children onto the housing ladder, we were surprised to see that so few respondents ranked release of equity, pension top up and financial support for relatives as their reasons for moving home,’ she added. Continue reading
Election uncertainty and higher taxes affecting prime London property market
Higher taxes and election uncertainty have put the brakes on prime London house prices which fell by 0.5% in the first quarter of 2015, new research shows. This follows an average 2.6% downward price adjustment in the final quarter of 2014 that was triggered by the stamp duty reform announced in December’s Autumn Statement, according to the analysis by real estate firm Savills. It means that the 12 month rolling average for house price growth in the prime London market has now slipped into negative territory. ‘As we forecast in November, uncertainty regarding the general election and the potential for further taxation of high value property have contributed to a subdued market in the first part of 2015,’ the report explains. ‘The prime central London housing markets, that have been most affected by increased stamp duty charges, are looking fully taxed. This has meant sellers are typically having to factor in price adjustments equivalent to the stamp duty increase. Consequently, in central London values are down 4.3% year on year,’ it adds. The study shows that the markets of prime south west London have been similarly, but less significantly, affected. Buyers have become increasingly aware of the high cost of moving, which has tempered demand in the higher value parts of that market. By contrast, the markets of Islington, Wapping and Canary Wharf continue to show positive annual growth, despite a general sentiment-led easing in values in the past six months. ‘In part, this reflects the fact that lower tiers of the prime market have remained the most robust, with the market below £1 million generally benefiting from the stamp duty changes and unaffected by the political focus on taxation,’ Savills says. ‘Interestingly, the softening in the London markets has corresponded with a pick-up in the number of Londoners circling the country market. Prices of homes below the £2 million threshold in the prime regional markets beyond London continue to show year-on-year price growth, and rose by 1.1% in the first quarter of the year. However, market activity beyond London is still partly constrained by pre-election caution,’ it points out. ‘While the fundamentals of demand and supply remain sound, the short term outlook for the prime property market is heavily dependent on the extent to which the election brings political certainty and whether the sector is subject to further taxation. Certainty will, at least, allow buyers and sellers alike to take account of the impact of any fiscal change, as the all-important autumn market approaches,’ it adds. Savills is forecasting that prices in the prime London market will rise by 22.7% over the five years to the end of 2019 assuming no further taxation of high value property. In this case there would be a relatively swift bounce back in values as was seen in 1998 and 2002, when price falls in central London were contained to less than 5% and recovered lost ground very quickly thereafter. In the event of a mansion tax, Savills… Continue reading
UK mortgage brokers report impact of rules change a year ago
A quarter of mortgage brokers in the UK say they have experienced a decrease in volumes since new mortgage rules came into being almost a year ago, a new survey shows. The self-employed and retirees are the most difficult to find a mortgage for and mortgage intermediaries are very much divided on the impact of the Mortgage Market Review (MMR) on business volumes. The research by Paragon Mortgages that covers the first quarter of sought to establish the impact of MMR in terms of intermediaries’ business levels as we reach the one year anniversary of the changes coming into force. Of the 200 intermediaries who took part in the survey, 43% said that in their view there had been no change to their business volumes as a result of MMR and 24% said that business had increased. However, some 25% of those surveyed said they had experienced a decrease and only 3% said there has been no change in business. The majority of intermediaries who said they had experienced a decrease reported this had been up to 30% and only 14% said the decrease in business had been any higher. Looking ahead, 15% of intermediaries said they did not know what the long term impacts of the new regulations would be. Intermediaries were also asked which of their customers are now the most difficult to find a mortgage for. Top of the list were the self-employed at 75%, followed by retired customers at 52% and 51% said it was those customers with complex incomes. ‘The research shows is there is still some uncertainty in the market about the long term impact the MMR changes will have on business volumes. This isn’t unexpected, as with any significant change in regulation there will always be a period of adjustment, but it is important the industry monitors this carefully,’ said John Heron, director of Paragon Mortgages. ‘Looking at the feedback from intermediaries on the underserved areas of the market also provides a valuable insight into what lenders could be doing better. We need to recognise that there is no such thing as the average mortgage customer anymore, people have a greater variety of circumstances and we need to be more innovative in order to meet increasingly varied demand from customers,’ he added. Continue reading
