TSI
Home numbers in England up by less than 1% in a year
There were 23.5 million homes in England at the end of March 2015, an increase of 171,000 dwellings or just 0.73% on the same point the previous year, according to official figures. Some 14.7 million were owner occupied, 4.7 million rented in the private sector and four million social and affordable rented homes, the data from the Department for Communities and Local Government shows. The figures could be regarded as a disappointment at a time when the UK government has highlighted a number of flagship policies aimed at building more homes. But an increase of 171,000 in a year is well below targets set by the government. Between March 2014 and March 2015, the private rented stock increased by 125,000 and the owner occupied stock increased by 37,000. The social and affordable rented stock increased by 19,000 and the other public sector stock decreased by 9,000. There were 600,179 empty homes in England on 05 October 2015, a decrease of 9,944 or 1.6% from October 2014 while long term empty homes numbered 203,596 on 05 October 2015, a fall of 2,225 or 1.1% from October 2014. Stephen Wasserman, director of West One Loans, pointed out that the government pledges do not seem to be having much of an impact on the number of homes in the country. ‘Despite the Government’s pledge to address England’s housing shortage by committing to a number of large-scale projects including building starter homes, these policies aren’t improving the housing situation here and now,’ he pointed out. ‘These disappointing DCLG statistics represent the current shortage of places to live in England which is why we are seeing hikes in house prices and rising rents. While the number of dwellings has increased by 0.73% year on year, it’s important to remember we have a growing population which overshadows this progress,’ he said. ‘If we are going this fix this worsening problem, more will need to be done to bring empty homes back into circulation. Banks often won’t lend against these properties due to their state of disrepair, so developers should consider short term finance as a way to fund the renovation of these potential homes. Bringing these properties back into the housing supply would be a major step in conquering the crisis,’ he added. However, Housing and Planning Minister Brandon Lewis said that the government has got the country building again and pointed out that the number of new homes being built is up by a quarter in the last year alone, the highest annual percentage increase in net additional homes for 28 years. ‘We are turning around the housing market and making sure the best use is made of all housing including empty homes. We are very clear that a house should be a home which is why we have taken action to stop homes being bought up and left as an empty investment,’ he explained. ‘And we’ve taking forward the boldest ambition for housing in… Continue reading
Dubai becoming increasingly popular with British property investors
Dubai is proving to be increasingly popular among British property investors with figures from the land department showing they put £1.9 million into the emirate’s real estate market in 2015. This made them the second largest group of foreign investors behind Indians with UK investment almost doubling in three years. Apartments are the top buy for British buyers, followed by residential and commercial land and then villas with low interest rates, good rental yields and tax free returns on investments behind the rise in investment. According to Sultan Butti Bin Mejren, director general of the Dubai Land Department, the infrastructure in Dubai and the high return on investment makes property in the emirate attractive to buyers from overseas. British investors are looking for a good capital return on their investment, according to Sultan Al Suwaidi, a partner of Sumansa Exhibitions, the company running next month’s Dubai Property Show in London. ‘Dubai is a dynamic global investment hub and has always had attraction for international investors. The property market continues to mature and stabilise as a result of strategically implemented government regulations,’ he pointed out. ‘Returns for both small and large apartments in Dubai are delivering between 7% and 10% yield which is higher than Hong Kong, Singapore and London. Many British people investing in Dubai properties are seeking capital appreciation more than using them as primary or secondary homes,’ he explained. The areas where British investors are buying include Dubai Marina, Palm Jumeirah, Jumeirah Lake Towers and Downtown Dubai. According to figures from the property website Bayut affordable locations such as Dubai Sports City are also becoming more popular. Dubai’s zero taxation on rental income and capital gains is one of the biggest factors that appeal to British buyers and foreign investors in general are inclined to build their portfolios in Dubai to avoid the high taxes in their respective countries. It is also expected that the forthcoming Expo 2020 will boost Dubai’s real estate sector. Last year alone, Dubai attracted 12 million tourists and it is estimated that by 2020 the number of visitors will increase to 20 million, offering holiday rental opportunities for real estate investors. According to international real estate firm JLL, residential prices in Dubai increased by 56% in the last two years and rents by an average of 41% while data from Knight Frank shows that prices have recovered from the downturn and are now close to their peak levels of 2008. Yield returns reached 7.42% in Dubai’s mainstream market in July 2015. Property brokers in Dubai estimate that yields in the cheaper areas of the city such as Sports City are around 6% to 8%. Financing is usually arranged through local banks which will loan foreign buyers up to 50% of the purchase price depending upon their terms and conditions. The buying process is different to the UK. There are no conveyancing solicitors as the Dubai Land Department does the checks and it normally takes about a month to complete… Continue reading
First time buyers increased in the UK in March and paid less for their home
The number of first time buyers in the UK increased in March to a total of 32,500, the highest figure since June 2014, according to the latest tracker report. Overall first time buyer volumes grew by 47.7% on a monthly basis and as well as cheaper prices the burden of deposit costs and mortgage payments dipped, the data from the Your Move and Reeds Rains report shows. This means that, between February and March, the total flow of buyers managing to step foot on the ladder for the first time grew by 10,500 and on an annual basis, the total number of first time buyers in March grew by 34.9% compared to March 2015. Adrian Gill, director of estate agents Your Move and Reeds Rains, pointed out that while much was made of March being the month of the buy to let landlord and the second home buyer due to the April deadline for additional stamp duty, the surge was not at the expense of the bottom rungs of the ladder. He believes that a continuation of the broadly positive economic climate has likely been a factor spurring would-be first time buyers. ‘However, what’s really getting those numbers up is the fact that the range of support options available to first time buyers is at last beginning to be recognised and utilised,’ he said. ‘The Help to Buy scheme is assisting those with limited capital recognise their dreams, while the Government’s offer of cut price homes for first time buyers is easing supply in a part of the market that typically struggles to match roaring demand with constrained supply,’ he added. The data also shows that March has seen a lightening of home ownership costs and the charges associated with it. The average purchase price paid by first time buyers in March stood at £166,559, down 1.2% in absolute terms compared with February which previously marked the highest average price on record. But on an annual basis, the average purchase value of a first time buyer property rose by 9.2%. Deposit and monthly mortgage payment costs also declined. First time buyer deposits averaged £28,233 in March, down 4.1% compared with the previous month. In addition, the proportion of an average first time buyer’s monthly income that is consumed by deposit costs fell 3.1% between February and March from 74.9% to 71.8%. Meanwhile, over the same period, monthly mortgage payments accounted for a steadily decreasing amount of average first time buyer income, falling from 20.4% of monthly income in February to 20.3% as of March. Besides the falling costs of home ownership, lending conditions for firs time buyers have remained favourable. The average loan to value (LTV) ratio reached 83% in March, marking a 0.5% uptick on the previous month, meaning first time buyers will be able to borrow more against the value of the home they wish to purchase. The average first time buyer mortgage rate continues to fall, dropping from 3.14% in February to… Continue reading
