Uk
Property equity release to older home owners in UK up 17%
Retired home owners in the UK cashed in more than £750 million of property wealth in the first six months of the year as the equity release market continued to expand, an new analysis shows. The average amount released nearly was almost £68,500, an increase of £3,500 on the same period last year, according to the half year equity release report from over 55s finance specialist Key Retirement. The total released £753 million, an increase of 17%. The firm said that the increase highlights pensioners’ confidence in using property wealth for retirement planning. A breakdown of the data shows there are, however, wide regional variances ranging from average releases in the North West of over £53,000 to over £142,000 in London. Across the country eight out of 12 regions saw growth in the value of property wealth released with the North East recording a 50% rise, the South East 35% and London a 30% increase. The value released dropped 13% in the North West. Eight out of 12 regions recorded rises in plan sales with three virtually unchanged. London saw a 28% rise and the North East a 31% increase The money is being used to boost standards of living in retirement with 58% of customers using some or all of their cash to improve their home or garden while 28% have used their property wealth to pay for holidays. Family and friends are also benefiting from retired homeowners’ property wealth with 25% of over 55s handing out cash to relatives, according to the report. However mortgage debt, including interest only loans, is emerging as a major issue with 23% of customers paying off home loans with some or all of the money, compared to 20% for the same period of 2014. Around 29% also used the cash to pay off credit cards or loans. The research also reveals that equity release customers are getting older. The average age rose to 71 in 2015, from 69 previously, but they are also wealthier thanks to house price rises with average property values rising 9% to £271,248 from £249,108. ‘Property wealth is making a massive contribution to retirement planning and the equity release market is growing rapidly in response with double digit growth. The average amounts released at £68,500 are more than 50% bigger than the average pension pot and are also tax-free highlighting the advantages of using property wealth in retirement,’ said Dean Mirfin, technical director at Key Retirement. ‘Cuts in pension allowances and contribution levels plus the review of pension tax treatment underlines that property investments are major assets which should be considered as part of anyone’s retirement planning,’ he added. Continue reading
US sees fall in overseas buyers due to stronger dollar, analysis suggests
Fewer overseas buyers are purchasing property in the United States with currency exchange playing its part in the drop off, a new analysis report suggests. In general home sales during the first four months of 2015 have been the best in eight years with year on year growth of 9% helped by a drop in fixed mortgage rates of almost 0.5%. But the National Association of Realtors reports that the number of international buyers dropped to 2% during the first four months of 2015 from 2.5% a year earlier, a 19% decline. About three fourths of real estate agents who work with international clients report that changes in foreign exchange rates have a moderate to very significant effect on foreign buying. Indeed, the US dollar has strengthened against currencies used by many foreigners who buy homes in the country. For example, from the beginning of 2014 o April 2015, the US dollar appreciated 10% relative to the UK pound, 13% relative to the Canadian dollar and 26% relative to the euro. Notable exceptions to these large swings in foreign exchange values were the Chinese yuan and Hong Kong dollar, which have closely tracked the value of the US dollar. A new analysis report from real estate firm CoreLogic points out that a stronger US dollar makes property more expensive for foreign buyers whose currencies have weakened. Consequently, purchases by foreign buyers have dropped, especially for those whose currency was most affected by the foreign exchange swing. Between the first four months of 2014 and the same four months of 2015, the number of homes sold to foreign buyers drastically declined. Foreign purchases were down between one quarter to one third during this period for buyers whose currencies depreciated significantly relative to the US dollar, even though domestic purchases rose. ‘In addition to the shock caused by the stronger US dollar, the markets where foreigners tend to buy have had strong home price appreciation in the last few years. For example, many Canadians, Europeans and South Americans prefer to buy along the Southeast coast of the US for the beaches, cultural amenities, warm winter temperatures and accessibility,’ the report says. Canadians made roughly two thirds of their US home purchases during the first four months of both 2014 and 2015 in Florida. Of these purchases in 2015, nearly a half were located in the Miami-Fort Lauderdale-Palm Beach area where home prices rose about 8% from April 2014 to April 2015. ‘Couple that with the effect of a stronger US currency, and the average Canadian considering a home purchase in south Florida saw a jump in purchase cost of 20% to 25% in the past year,’ it explains. The report suggests that foreign buying could continue to decline, level off or increase in 2016 depending on the value of the US dollar relative to most foreign currencies, but the uncertainties surrounding how the Eurozone will resolve the debt crisis in Greece has made it… Continue reading
UK house prices up 5.7% year on year, slight annual rise, ONS data shows
UK house prices increased by 5.7% in the year to May 2015, up from 5.5% in the year to April 2015, the latest official property market data shows. House price annual inflation was 5.8% in England, 2.5% in Wales, 2.9% in Scotland and 10.5% in Northern Ireland, according to the index from the Office of National Statistics (ONS). The pace of annual house price growth increased slightly across the majority of the UK in May 2015 taking he average mix-adjusted house price to £274,000 and was driven by an annual increase of 9.3% in the East of England and 8.2% in the South East. Excluding London and the South East, UK house prices increased by 5.2% in the 12 months to May 2015 and on a seasonally adjusted basis, average house prices increased by 0.9% between April and May 2015. In May 2015, prices paid by first time buyers were 5.1% higher on average than in May 2014 and for existing owners prices increased by 5.9% for the same period. The data shows that the regional disparities of the property market are steadily shrinking as price growth becomes more broad based, according to Jonathan Hopper, managing director of Garrington Property Finders. ‘London and South East England remain strong hotspots, but as the rates of price rises there return to more sober levels, five of the nine English regions saw their rate of price growth rise and the East of England, powered in part by an extraordinary surge in activity in Cambridge, has the fastest growing property values,’ he said. ‘Even North East England, which was hit hardest by the slump, is now seeing price growth of nearly 2% a year. Demand exceeds supply for all but the most expensive prime property, and this is steadily forcing prices up across the board,’ he explained. ‘Despite mortgages being at their cheapest level for years, buyers are still intensely value sensitive and in some regions seller expectations have been outstripping what buyers are willing to pay. Though confidence among both buyers and sellers remains high, as the summer slowdown begins, sellers must be wary of letting their pricing ambitions run away from what the market will tolerate,’ he added. Alex Gosling, chief executive officer of online estate agents HouseSimple, pointed out that despite the rate of price growth slightly decelerating, demand has remained constant. ‘A shortage of stock during the pre-election uncertainty stilted the market, however the flurry of properties which have come on since the election's clear result have coincided with a strong return to confidence,’ he said. ‘Both sellers and buyers are trusting the market more, prompted by steady economic growth, better employment prospects and a boost in earnings. But it is worth noting that vendors may consider it to be a sellers' market, but buyers are not making the same mistakes of the last boom, as they remain sensitive to both price and affordability,’ he added. With house price growth… Continue reading
