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UK first time buyers now buy almost half of all homes with a mortgage
First time buyers in the UK account for almost half of all homes bought with a mortgage, a rise of 38% since 2011, new research shows. They make up 47% and are having to find a 6% higher deposit than a year ago but save when it comes to Stamp Duty, especially when buying in London, the study from the Halifax shows. Overall there were an estimated 139,500 first time buyers in the first six months of 2015, a 7% fall compared with the same period in 2014 and although this is the first annual decrease on this basis since the first half of 2011, it is still the highest total for the first six months of the year since 2007 and was 92% higher than the market low recorded in the first half of 2009. And despite the decline in purchases by first time buyers this year as a proportion of all mortgage financed house purchasers the proportion remains steady. Indeed, the number of FTBs has increased more rapidly than the number of subsequent buyers over the past few years, from 38% in 2011 to 47% in 2015. The average first time deposit in May 2015 was £29,894, 6% higher than in May 2014 and the report explains that this largely reflects the increase in house prices over the past year. The average first time deposit is now 82% or £13,494 higher than in 2007. Recent changes to stamp duty have saved the average first time buyer £716, reducing the tax bill for someone buying the average priced of £178,370 from £1,783 to £1,067. Savings for the average first time in London are much bigger than this with a reduction in the stamp duty bill for the average first property in the capital of £3,154. ‘There was a modest decline in the number of first time buyers in the first half of the year following the substantial increases recorded in 2013 and 2014. This fall has been in line with the general softening in market activity,’ said Craig McKinlay, Halifax mortgages director. ‘However, there are now signs of a pick-up in mortgage activity as the economy continues to recover and mortgage interest rates remain at very low levels. These factors could boost the number of first time buyers during the second half of the year,’ he added. The research also shows that the average price paid by first time buyers increased by 8% over the past year from £165,829 to £178,370, some 9% higher than in 2007 while in Greater London it is £342,313, more than £100,000 higher than the next most expensive region, the South East at £225,383. Northern Ireland is the least expensive region in the UK for a first time buyer with an average price of £104,240. The average deposit, as a proportion of the purchase price, has fallen from 20% in 2013 to 17% in 2015. It, nonetheless, remains significantly higher than in 2007 when it was 10%. First time… Continue reading
Australian city property prices up almost 10% year on year
Property prices in Australian cities increased by 2% in the second quarter of 2015 and are now 9.8% higher compared to a year ago, the latest index data shows. The figures from CoreLogic RP Data reveal that the growth has gained momentum as the year has progressed and the firm’s head of research, Tim Lawless, believes interest rates cuts in February and May have contributed in pushing capital gains higher. ‘Growth conditions had been moderating from April last year through to the end of January 2015. With the RBA cutting the cash rate in February, there was an instant buyer reaction across the Sydney and Melbourne housing markets where auction clearance rates surged back to levels not seen since 2009, capital gains once again accelerated,’ he explained. He pointed out that Sydney and Melbourne homes are selling in record time, some 26 days and 32 days respectively. But growth is not even. While Sydney and Melbourne have seen dwelling values increase by 16.2% and 10.2% over the financial year respectively, every other capital city has seen growth of less than 5% and values are down over the year in Darwin by 2.9% and Perth by 0.9%. According to Lawless, the current housing growth cycle clearly highlights a divergence in capital gains across the capital cities. Since values started rising in May 2012, Sydney homes have seen a 43.1% surge in values and Melbourne values are up by 25.9%. Despite softer market conditions in Perth, property values are currently up 12.8%, the third highest growth rate across the capitals. Simultaneously, Brisbane's property market has shown the fourth highest rate of growth at 12.4% followed by Adelaide at 10.4%, Hobart at 9.6%, Darwin at 8.9% and Canberra at 8.8%. ‘The three tiers of housing market performance can be best explained by economic and demographic factors where it's no coincidence that New South Wales and Victoria are recording the strongest economic conditions coupled with the strongest rates of migration which is fuelling housing demand. These states are more sheltered from the mining sector downturn and have benefited from the strong multiplier effect of housing construction as well as a vibrant financial services sector,’ said Lawless. ‘The Perth and Darwin markets are weakening in line with the downturn in the resources sector and an associated weakening in infrastructure investment and a marked slowdown in migration. Brisbane, Adelaide, Canberra and Hobart are seeing softer economic conditions and population growth compared with Sydney and Melbourne, however housing markets have shown some level of growth over the year,’ he added. Looking at the performance of detached housing versus apartments over the financial year, houses are clearly outperforming units in the capital gains stakes. Over the financial year, house values were 10.4% higher across the combined capitals index while unit values increased by a much lower 5.6%. The same trend where houses are showing a higher capital gain than units is evident across each of the capital cities except Hobart… Continue reading
Demand for homes in UK up by 9% in second quarter of 2015
Demand for homes in the UK has increased by 9% in the last three months with London commuter areas seeing a surge and some parts of the north also on the up. Locations including Watford, Reading, Aylesbury and Guildford now dominate the top 10 in demand spots, according to the second quarter data from online estate agent eMoov. While the north of the country has 60% of the coldest spots, some have seen demand rise, most notably North Tyneside up by 62%, Sunderland and Dudley both up by 32%, and South and North Lanarkshire in Scotland up by 29% and 26% respectively. The data also shows that Bristol is one of the hottest demand spots outside the south east with demand up 10% since the first quarter of the year. Durham at 12% has seen demand fall by 30% over the course of a year, making it the second coldest spot in the nation. Rochdale and Northumberland, both at 17%, have also continued to cool, moving both locations up the table of coldest spots in June. In Scotland as well as North and South Lanarkshire seeing a rise in demand, Fife is up 22% and Highland is also up 22% since the first three months of the year. Westminster in London has also continued to decline, dropping a further 10% in demand and two places, making it the third coolest whilst Ealing has witnessed the largest fall in the last three months, with demand down by 36%. Brent and Hounslow also fell by 4% and Oxford is the only commuter zone to see a decrease, as demand fell by 8%. Since the second quarter of Medway has seen the biggest increase with a rise of 70% in demand. Scotland has also performed strongly over the course of the year with Fife up 42%, South Lanarkshire up 22% and North Lanarkshire up 15%. The annual top 10 also includes Wiltshire up 48%, Sefton up 45%, Bedfordshire up 38%, Tameside up 25%, Bolton up 18% and Bradford up 16% while at the bottom are Calderdale and Westminster both with a fall of 58%, Ealing down 47% and Aberdeenshire down 40%. ‘The UK property market definitely seems to have experienced a post-election bounce. With demand up 9% nationally, people are clearly more confident about buying now that the next five years of government has been decided,’ said the firm’s chief executive officer Russell Quirk. ‘It’s interesting to see the demand for commuter zone property continuing to grow. With London demand falling, property owners wanting to see an increase in their property price, might want to sell up and head a few miles out of the capital,’ he added. Continue reading
