Uk
Buying cheaper than renting across whole of UK
Buying is cheaper than renting in every area of the UK, especially in London where rent prices are 56% higher than the average, new research shows. Indeed, potential first time buyers would have lower monthly outgoings if they bought a property than they do renting with average monthly rental prices now surpassing those for the average mortgage repayment. According to the research from Santander Mortgages would be buyers could save themselves £2,300 a year if they were able to purchase their own property. The average monthly rent in the UK is currently £995 per household compared to monthly repayments of £805 for the average first-time buyer household, meaning homeowners could save an average of £190 a month or £2,300 a year. Prospective first time buyers in the South West could make the biggest monthly savings by making the switch from renting to property ownership as average monthly rents exceed mortgage payments by over £192. First time buyers in London would see themselves £179 better off per month. At the other end of the scale are those living in the East of England, where typical first time buyer monthly mortgage payments exceed average rents by only £2. A further breakdown of the figures shows that in Scotland buyers would be £157 better off, in Wales £127, in the North West £121, in Yorkshire and the Humber £113, and in the West Midlands £102. But elsewhere they would be less than £100 better off. In the East Midlands the difference between rent and mortgage was £88, in the North East £83 and in the South East just £28. The research found the average price across the country to be £212,610. This means that a buyer with a 21% deposit, the average deposit size for a UK first time buyer would require £44,648 in order to get on to the property ladder. ‘People assume that buying a property will put them under greater financial pressure, but often the reverse is true. With annual savings averaging well over £2,000, this can really mount up over time and of course once the mortgage is paid off you have a valuable asset to show for it,’ said Miguel Sard, managing director of mortgages at Santander UK. ‘Many prospective first time buyers see the cost of saving for a deposit as prohibitive, but there are many deals available for smaller deposits. Buying a property is a big financial commitment and there are upfront costs to consider, but over the long term the financial benefits can be very significant. Getting independent advice and looking for competitive rates either online or through a mortgage advisor is crucial to get the best mortgage to meet potential home owners individual needs,’ he added. Continue reading
Bling could be back in Dubai property market
Some of the bling that once characterised the Dubai real estate market is set to return with celebrities seeking to build a new breed of luxury villas and over 50 shelved projects being resurrected. From the ordinary buyer and seller perspective some 51 real estate projects valued at AED12 billion are being revived with government backed funding initiatives which means that developers registered with the Dubai Land Department can get building again. Some 12 projects worth AED2 billion are underway and along with others set for starts in 2016 the initiative will see developers like Emaar Properties, Al Wasl and ICD-Brookfield working on projects. To get the funding the projects need to have adequate infrastructure planned or already in place, a properly managed escrow trust account for off plan sales under Dubai real estate law, a technical report showing that at least 60% of the construction is completed and at least 60% of the project has been sold. Meanwhile, the famous Palm Jumeirah is set to be rejuvenated with reports that leading celebrities and wealthy individuals are looking to build luxury villas on the manmade island. This could see a series of lavish Los Angeles style super villas being built, according to property agent Anne Ogilvie, Palm luxury sales specialist at Luxhabitat. She believes that wealthy investors are set to return to Dubai. ‘These end users look to buy plots on the remaining unbuilt fronds in order to build super villas, akin to those in California or Miami. We expect a sizeable number of them to build and then introduce them to the secondary market,’ she said. However, there are a number of issues associated with development on Palm Jumeirah. Some owners are not happy that fees for extensions to their existing villas have increased by 233%. Under the terms and conditions laid out in developer Nakheel’s Guidelines and Procedures for Villa Extension Applications, residents are required to pay an application fee as part of the approval process before they can start construction. According to property experts this means that for an extension of 1,000 square foot an owner would end up paying over $100,000 to Nakheel but on Palm Jumeirah the fee for a 1,000 square foot extension could be over half a million dollars. Continue reading
North West of England named as most lucrative region for PRS landlords
The North West of England is the most lucrative region in the UK for private rented sector landlords with Manchester and Liverpool coming out top for rental yields. The latest quarterly report from online property marketplace LendInvest also shows that Cardiff, Coventry and Oldham come next, followed closely by Sunderland, Blackburn and Durham The report, which tracks changes in trends in rental yields, capital gains and landlords’ total return on investment, also shows that London and the South East lead house price growth. Indeed, all of the top 15 performing postcode areas for capital gains are located in London and the surrounding area. However, inner London takes only 18th place for rental yield, but is top for capital gains Overall, capital gains continue to track average house price and 80% of the 15 best postcode areas for capital gains also feature in the top 15 for average house prices. However, the report points out that rental yields are no indication of average house price. Only one of the top 15 postcode areas for rental yield also features in the top 15 for house prices. Christian Faes, chief executive officer of LendInvest, believes that tax changes could impact the market next year. ‘There could be some weakening in London’s dominance of capital gains tables if house price growth does soften slightly as forecast, and as new buy to let stamp duty hikes take effect,’ he said. ‘Inner London margins may narrow slightly, creating opportunities for house prices in other postcode areas, particularly those in the south of England, to better compete,’ he added. But he also explained that changes to mortgage interest tax relief and stamp duty for landlords will help to professionalise the buy to let market and this would benefit tenants and aspiring home owners. ‘Landlords whose tax payments under the new regime make letting their properties unsustainable, may make arrangements to leave the market. In turn, we will see fewer highly geared rental properties that push up prices and take stock out of the housing supply for aspiring owner occupiers and first time buyers drawn to densely populated urban area for work,’ explained Faes, He also said that across the country there is still no one place for market leading yields and capital gains and 2016 could be the year of the ‘cross country landlords’, professional landlords who live in one city and rent out houses in another. ‘We could expect to see more landlords letting property in the North and Midland’s major urban areas for more immediate upside, without moving from their family homes in which gains can be longer to materialise,’ he added. Continue reading
