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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
Asking prices in England and Wales up 0.4% in last month
Residential property asking prices in England and Wales increased by 0.4% overall in the last month and by 5.7% compared with a year ago, the latest index data shows. Monthly asking price growth was led by the East of England, up 0.7% since June, according to the Asking Price Index from Home.co.uk The data also shows that property is selling faster. The average time on the market for England and Wales dropped to 177 days, the lowest figure since November 2008 and the South East remains the fastest regional market, with a typical time on market of 59 days. Overall the supply of property for sale remains low, down by 6% in June 2015 compared to June 2014. However there are signs of oversupply in the North East and as a result asking prices are down by 0.8% The index report says that a resurgence of buyer demand continues to drive prices higher, predominantly in London and the South of England, bolstering confidence amongst vendors. ‘The UK property market is in good shape overall. Property supply remains behind buyer demand in most regions as evidenced by falling time on market figures. In Greater London, where marketing times showed a worrying increase earlier in the year, a post-election buyer resurgence has taken up the slack. Only in the North East region, where the recovery is still in its infancy, do we see a significant rise in supply and this has served to make prices dip this month,’ said the firm’s director Doug Shephard. The index also suggests that the prime central London market is showing signs of renewed momentum. After a prolonged period in the doldrums, prices there have indicated a new upward trend since May and time on market figures are beginning to fall. Time on market data for the regions shows that the northern markets of Yorkshire and the North East are the most improved over the last 12 months, recording decreases in typical time on market of 9% and 6% respectively. However, they remain among the slowest markets when compared to the rest of the UK. It is only London and the southern regions that show marketing times indicating a similar vigour to the property market pre-crisis. ‘With the recent political uncertainty now consigned to history, UK property has a clear path forward. Consequently, buyers are back in force but hampered by a lack of supply in most regions. We expect only minor price rises towards the end of this year,’ explained Shephard. ‘Demand, on the other hand, looks set to remain high, with indications from the Bank of England that interest rates will stay at their record low until at least next year, perhaps later. Hence, we expect that further competition between aspirant homeowners and landlords will continue to drive prices higher in a growing number of areas, especially in the South,’ he pointed out. ‘Contrarily, despite clear improvements in marketing times, prices remain stagnant in the North of England… Continue reading
Mayor of London announces Domesday Book of public land for building homes
The Mayor of London Boris Johnson is to publish the UK’s first database or Domesday Book of all brownfield public land that could be freed up for house building. Johnson said it will the first ever coordinated effort between City Hall, government and London boroughs to free up surplus public land to build the homes that the city so desperately needs. The London Land Commission has appointed real estate research firm Savills to compile the preliminary stages of public land data base which will be completed by the end of 2015. Once collected, City Hall will use the data to map the spread of sites across the city. It is thought to be the first time such a comprehensive set of data has ever been collected for London. The creation of the commission follows announcements from Chancellor George Osborne last week on major planning reforms designed to speed up development of brownfield land in London and increase capacity to build more homes in the areas they are most needed. The commission will build on work already begun by the Mayor in disposing of his own land holdings for development. At present 98% of all land previously in his ownership has been released, within touching distance of the 100% target for the end of his term in 2016. The commission will also work across layers of government and public bodies to develop strategies for unlocking public land for development and thus identify priority areas for future growth and co-ordinate efforts to fast track the process, whilst ensuring a good return for the taxpayer and better regeneration sites across London. The inaugural meeting was attended by London councils, NHS England, Transport for London and Network Rail with participation at the highest levels from other bodies such as the Department of Health. ‘The London Land Commission will build on the great efforts we've already made at City Hall to ensure brownfield land that has laid empty for years is put to productive use in providing much needed housing for Londoners,’ said Johnson. ‘In a city like ours, with its burgeoning population, it is simply madness not to act as quickly as we can to unlock more of these kinds of sites. The Commission's work will be vital in co-ordinating the efforts of a whole raft of public bodies to achieve this important goal, helping to cut through the red tape that has kept valuable land tied up for too long,’ he added. Housing Minister Brandon Lewis said there is clear demand to release land and provide more homes for Londoners. ‘The London Land Commission will bring a joined up approach to land release in the capital, regenerating brownfield land and providing more homes, whilst continuing to protect the green belt around our Capital,’ he explained. London Councils executive member for housing and Mayor of Lewisham Sir Steve Bullock said it is vital is that our overall strategy to tackle the housing crisis delivers an increase in… Continue reading
