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UK home owners waiting longer than expected to move up housing ladder
Some 33% of home owners in the UK expected to be further along the housing ladder than they are now, according to new research, rising to 44% for first time buyers. The survey from Lloyds Bank also found that 83% believe home owners have to wait a lot longer to reach their long term family home than a decade ago while 36% of first time buyers hope to achieve their housing aspirations by the time they are 45. Despite recent improvements in the housing market, 40% still consider the housing market to be having an impact on aspirations, although this figure has fallen since 2013 when it was 47% and 2012 when it was 53%. Almost half, 48%, of first time buyers think that the housing market will have an impact on how long it takes them to reach their family home. Even with anticipated delays in moving up the housing ladder, 44% expect not to make any compromises and believe their long term home is a realistic achievement and 18% expect it to be a better property than their childhood home. ‘Many current home owners clearly still feel that they are not progressing up the ladder as quickly as they would like, with higher house prices in some regions meaning people are waiting longer to move into to their long term family home,’ said Andy Hulme, mortgages director at Lloyds Bank. ‘Despite this, almost two thirds still believe they’ll be in their long term home in less than five years, with the vast majority thinking this will only require one more move,’ he added. The research also shows that despite an increase in the number of people feeling they need a bigger property, the house that the majority of home owners in the UK aspire to own has three bedrooms with 43% seeking this kind of property. Some 24% want four bedrooms, with many people aspiring to have nice gardens, conservatories and high quality kitchens and bathrooms. Some 63% of home owners believe they will reach their long term family home in less than five years while 64% of those who are still waiting to be in their long term home think they will only have to make one more move to achieve their housing aspirations. Applicants for three bed properties, which are seen by many as long term homes, are on average 35 years old in London and the South East. This is a year older than the national average. These regions remain the least affordable in the UK for three bed houses, as a result of the high house prices. In contrast, long term family homes in the North and Wales are more affordable with the average three bed property costing £129,447 in the North and £135,070 in Wales. Average incomes of the applicants are lower at £38,606 and £36,390 respectively, but long term homes are still more affordable in both regions. Continue reading
Property prices in England and Wales up 0.5% month on month, latest index shows
Residential property prices in England and Wales are £34,000 above their pre-crisis high of February 2008, according to the latest house price index to be published. With a monthly rise of 0.5% the average prices stands at £273,528 with the annual rate of growth at 6.8% but sales have fallen, down 9% compared to a year ago, the data from Your Move and Reeds Rains shows. When London and the South East are excluded from the calculation then the average annual change is 4.6% with London still boosting overall averages, the data also shows. Adrian Gill, director of Reeds Rains and Your Move estate agents, pointed out that while average house prices are currently 6.8% or £17,340 higher than they were last year, this is the smallest annual increase witnessed for 14 months. He also said that while home sales are down 9% year on year, there is still plenty of demand and February still marks a 4% improvement on January activity levels, and in recent weeks agreed sales have climbed above 2014 levels. He also explained that market conditions have calmed in London and the South East. Their combined lead on the rest of the UK hit a summer peak in July 2014 when these areas increased the wider England and Wales annual change to 5.4% higher than it would have been otherwise. But in February this growth gap has fallen to less than half at 2.2%. ‘London has already had the first taste of added pressure placed on prime property in the form of revised Stamp Duty, and the £1.5 million to £5 million sector of the market has also been hit by cold feet in the run up to the general election with the threat of a potential mansion tax,’ said Gill. ‘This let up of high end activity has brought down the average London house price, but beneath the surface, the lower rungs of the ladder are thriving. For instance, the borough of Newham, where the typical property value currently stands at £273,727, saw an enviable 2.1% monthly price rise, more than double the overall 1% average London price jump,’ he explained. He also pointed out that in terms of annual growth, more affordable areas like Barking and Dagenham with growth of 16.5%, Bexley up 15.6% and Waltham Forest up 16.8%, are doing well, coming in ahead of the year on year improvements seen in high end areas like Kensington and Chelsea, where prices have fallen 7.4% in the past 12 months. ‘In the south of the country overall we’re seeing a very orderly market, with buyers and sellers on more of an even keel. Rates of annual growth have slowed across the board in England and Wales, but it is regions with the lowest average property prices which are dragging their feet,’ Gill added. The North saw the smallest annual uplift in January, with home values just 1.9% higher year on year, while in Yorkshire and The… Continue reading
Home lending in the UK rebounds in February, latest data suggests
Home lending rebounded in February for borrowers in the UK requiring smaller deposits and total home purchase approvals increased for the third month in a row, according to the latest figures. Higher LTV lending represents 16.9% of February house purchase approvals, the largest proportion since September 2014 and there were 10,300 higher LTV loans, a 10.7% month on month increase compared to January. The mortgage monitor report from e.surv chartered surveyors suggests that the lending market is regaining its momentum. A breakdown of the figures shows that higher LTV house purchase approvals, that is loans to borrowers with a deposit of up to 15% of the total value of their property, made up 16.9% of house purchase approvals in February, a significant proportional increase from 15.3% in January and just 13.9% in December. Higher LTV approvals formed the largest proportion of total house purchase lending since September 2014 and as a result, the absolute number of higher LTV approvals has bounced back. There were 10,298 higher LTV loans in February, 10.7% more than 9,300 in January. February also marks the third consecutive month of growth in higher LTV approvals. The report says that the rise was partly driven by rising property prices. The average purchase price for first time buyer homes climbed to a new record of £160,304 in January, 12% higher than January 2014, according to the latest First Time Buyer Tracker from Your Move and Reeds Rains. ‘Lending to lower deposit borrowers is back on track, which is encouraging as the mortgage market moves into spring. Higher LTV borrowers took a nosedive in October as a proportion of the market after the introduction of loan to income caps became a challenge for first time buyers,’ said Richard Sexton, director of e.surv chartered surveyors. ‘But these buyers are evidently returning to the market to take advantage of low mortgage rates and cheaper stamp duty charges. And after the tricky bedding in phase that accompanied new mortgage legislation, first time buyers are now once again accessing a market restructured for long term viability,’ he added. He pointed out that the Mortgage Market Review has ensured that all future borrowers are subject to comprehensive affordability checks and given plenty of advice, and so the danger of them defaulting has been reduced. ‘Many prospective borrowers are unable to save up a massive sum for a deposit but they often still have strong monthly incomes and make attractive customers for lenders. Low deposits do not necessarily need to mean high risk,’ he said. House purchase approvals grew 0.2% month on month in February, with 60,935 approvals, compared to 60,786 in January and 60,349 in December. This improvement comes after a series of drops stretching from July to November 2014, suggesting the market is settling back into sustainable growth. ‘The mortgage market is beginning to warm up, with three months of improvements under… Continue reading
