Uk
Report highlights low number of first time buyers in UK housing market
First time buyer numbers in the UK remain 2.2 million behind where they should be given demographic trends despite significant government investment in home ownership, according to a new report. The report from the Intermediary Mortgage Lenders Association (IMLS) suggests that it means that current policy behind interventions in the housing market is missing the mark but they are likely to remain priorities for any new government that emerges in the post-Brexit political environment. The report finds that government investment in home ownership, including through the 15 different Own Your Own Home schemes currently on offer, is yet to have the desired upward effect on home ownership levels. Schemes including the Help to Buy ISA and the Starter Homes Scheme are designed to boost home ownership. They will also expand a demographic that has traditionally voted for the Conservative party, the report points out. At the 2015 General Election, 46% of outright owners and 39% of mortgaged home owners voted Conservative against 28% of private tenants and only 18% of social tenants, meaning homeowners remain a vital demographic for the Conservatives. This approach of extending support to help first timers get on the property ladder is partly being funded by the Conservatives’ second major intervention in the housing market, managing demand through the introduction of extra tax on buy to let and second home purchases. The report explains that the Exchequer is set to raise around £1.7 billion a year from these new taxes, although spending on home ownership far exceeds these costs and the latest UK Housing Review research from the Centre for Housing Policy estimates Government spending on home ownership in England through grants, guarantees and loans will total £40 billion over 2015 to 2021, equivalent to over £6.6 billion a year. But despite Government efforts to bolster home ownership, first time buyer numbers are still tracking lower than expected. The IMLA report finds that between 2007 and 2015 the number of first time buyers in the UK was some 2.2 million lower than past demographic trends suggested it should have been. The report also points out that so far some 90,000 new home sales have been made under the Help to Buy equity loan, NewBuy and FirstBuy schemes and a further 74,000 mortgages have been completed with the support of the Help to Buy mortgage guarantee scheme but the government has failed to reverse the decline in home ownership. Indeed, between 2010 and 201, the latest year for which data is available, the number of owner occupied homes in the UK fell by 270,000. This decline may now be stalling as the latest English Housing Survey showed no change in owner occupation rates between 2013/2014 and 2014/2015, but there is yet to be any increase in home ownership levels. The IMLA’s analysis of data from the Building Societies Association (BSA) suggests more people worry about accessing a mortgage than affording one. In research conducted in March 2016… Continue reading
Property prices up modestly in UK in May but now likely to see fall due to Brexit
Residential property prices in the UK saw modest growth in May but central London experienced a fall in values, according to the latest market survey report. UK house prices are now expected to experience a short term drop for the first time since 2012, according to the monthly report from the Royal Institution of Chartered Surveyors (RICS). House prices in central London are already falling, according to the survey with 35% more property professionals reporting that prices had fallen rather than risen over the past month. While prices are continuing to climb modestly across the rest of the UK, this trend looks set to fade, with 10% more respondents predicting that prices would fall rather than rise over the coming three months. This is the first time that a fall in prices has been predicted since 2012. London and East Anglia are expected to be worst hit with 43% and 33% of respondents saying that prices will fall over the next quarter. ‘Sadly, for the many young people looking to enter the property market, it is unlikely that we are seeing the emergence of a more affordable market,’ said Simon Rubinsohn, RICS chief economist. ‘Instead, it appears to me that what we are looking at is a short term drop caused by the uncertainty resulting from the EU referendum coupled by a slowdown following the rush to get into the market ahead of the tax change on the purchase of investment properties,’ he explained. ‘Certainly, that’s the story we are hearing from our members. There is not at this point a sense that a fundamental shift is taking place in the market,’ he added. The market report also shows that buyer demand fell across the UK for the second consecutive month and at the fastest pace since 2008, with 33% more property professionals saying that demand decreased last month. The survey revealed that in the longer term, while house prices are thought likely to regain momentum, rents look set to outpace them, with UK rents predicted to increase by 4.7% year on year for the next five years, compared to house price increases of 4.1%. The number of agreed sales also fell for the second consecutive month with a net balance of 22% of respondents reporting a fall rather than a rise in activity. Continue reading
Housing market demand rises in UK, but falls in London
Demand for homes in the UK has increased by 3% since the first quarter of the year but in London it is a different picture with demand falling by 2%, the latest research shows. Overall, national demand now stands at 40% but it 39% in London but excluding London the demand has grown by 8% since the first three months of the year, according to the hot spot index from eMoov. Despite demand cooling in London the borough of Bexley remains the hottest spot in the UK for property demand at 71%, but this has fallen by 7% since the start of the year. Bristol remains the hottest spot outside of London with demand at 69%, followed by Bedford at 67%, Aylesbury and Medway both at 64%, and Ipswich, Sutton and Watford all at 61%. Both Cambridge and Milton Keynes are no longer in the top 10, replace by Northampton and Coventry at 64% and 58% respectively. While in Scotland Edinburgh is top with 54% and Glasgow at 48%. In Wales Cardiff is at 48% and Swansea 27%. In London some locations are seeing growth with Kingston Upon Thames seeing demand rise to 59% and Southwark 47%, the first and second largest increases across the UK respectively. There has also been a resurgence for property demand across the North East. Stockton-on-Tees at 47%, North Tyneside at 46%, Gateshead at 42%, Durham at 37% and Newcastle at 32% have recorded some of the biggest increases in property demand since the first quarter of 2016. The coldest spot for demand is the London borough of Westminster at 12% along with Kensington and Chelsea, with Hammersmith and Fulham at 17% and Camden at 20%. Aberdeen is also in the bottom group at 13%. ‘The changes to stamp duty tax brackets for those looking to secure a second home or buy-to-let property seem to have hit the London market harder than the rest of the UK. Despite London tending to drive the UK market as a whole, it would seem for once, it has taken a back seat whilst the rest of the UK has enjoyed upward growth on the first quarter of this year,’ said Russell Quirk, chief executive of eMoov. ‘That said national demand is still lower than the levels seen at the back end of last year and the big decider on which way it goes now will be Britain's choice to leave the European Union. There has been a lot of talk about the consequence of this vote on the UK property market with many forecasting a detrimental impact on house prices. We don't believe this to be the case and I'm certain that our third quarter index will show a further increase in property demand across the nation,’ he added. Continue reading
