Investment
UK house prices up 7% year on year, latest index shows
UK house prices increased by 7% in the year to October 2015, up from 6.1% in the year to September 2015, according to the latest official statistics. The data from the Office of National Statistics also shows growth of 7.4% in England, 1% in Wales, 0.9% in Scotland and 10.3% in Northern Ireland. Average mix-adjusted house prices in October 2015 reached £300,000 in England and stood at £174,000 in Wales, £196,000 in Scotland and £158,000 in Northern Ireland. Excluding London and the South East, UK house prices increased by 5.6% in the 12 months to October 2015 and month on month on a seasonally adjusted basis, average house prices increased by 0.8%. A breakdown of the figures show that the pace of annual house price growth was again varied across the nine English regions in October 2015. The largest annual increase was in the East at 10.4% followed by the South East at 9.5%. The North East had the lowest annual growth of the nine regions, with prices increasing 2.9% in the year to October 2015 but up from 1.8% in the year to September. London prices increased by 7.7% over the year to October 2015, up from 7.2% in the year to September 2015. Prices paid by first time buyers were 5.9% higher on average than in October 2014 while for existing owners prices increased by 7.4% for the same period. Rishi Passi, chief executive officer of Oblix Capital, believes that prices are set to continue growing in 2016. ‘As the economy stabilises, driven by improving job prospects, rising wages and recurring delays in interest rate rises, for the meantime at least, it’s likely this surge in house sales and price inflation will continue,’ he said. ‘Warnings that growth on this scale is unsustainable may ring true in the long term, especially in crowded London and the South East, as affordability issues become too significant a barrier to entry for first time buyers and low income families. Developers should take heed and look to other regions for their next opportunity,’ he added. Continue reading
New campaign launched to help residential landlords in the UK
The National Landlords Association (NLA) has launched its latest campaign in the UK, Reinventing Renting, which identifies opportunities for landlords to enhance their lettings businesses. The campaign is designed to help landlords transform their businesses into more successful profitable enterprises and it contains useful resources, guides and presentations, including how to choose the right investment, improve financial planning and expand portfolios and maximise gains. It also looks at how to reduce exposure to a range of risks associated with letting property, such as impending interest rate rises, rent arrears and rogue tenants. The campaign focuses on supporting landlords who are struggling to turn a profit by exploring different business approaches and tenant markets, while providing assistance for landlords looking to make their business more profitable. It comes as changes announced earlier this year in the Summer Budget and the Autumn Statement a few weeks ago are set to seriously affect profitability within the sector. ‘As the leading landlord association we’re here to provide landlords with all the tools and information needed to make a success of letting,’ said Carolyn Uphill, chairman of the NLA. ‘Over the next few months, Reinventing Renting will look at some of the key issues for landlords and provide support and tips to improve the way they run their business,’ she explained. ‘The campaign has something for both new and experienced landlords and will be particularly useful for those who are struggling to make things work or worried about how the changes to mortgage interest taxation will affect them in the future,’ she added. Continue reading
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
