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A third of people in UK renting a home have put buying plans on hold
One in three people in the UK renting have put their plans to buy a home on hold and remained in rented accommodation longer than planned, according to new research. It suggests that 1.66 million tenants in the private rented sector are actually frustrated first time buyers and the research from credit check firm Experian also gives an insight into why. Some 18% don’t believe they would be accepted for a mortgage so feel renting is their only option, while 10% have struggled to raise a deposit and consequently been forced to delay their plans to buy. A further 5% have had to prolong their time renting as they’ve been held up in securing a mortgage. Despite making regular payments for their housing, private renters don’t see this reflected on their credit report in the same way mortgage payers do, the firm explains. ‘Many would be first time buyers face the challenge of saving for a deposit on a home while paying rent each month,’ said Jonathan Westley of Experian. He pointed out that the research also shows that a significant amount of people are happy to rent in the long term, whether it’s because they enjoy a good relationship with their landlord or the flexibility of rented accommodation. Indeed, a third are content to rent and have no plans to buy a home of their own in the next five years. Some 25% of those surveyed intend to buy a place of their own sooner rather than later and the results show that 9% are currently saving for a deposit and believe they will be able to buy within the next 18 months, while 16% reckon they will need between two and five years to build up the required deposit. Would be first time buyers who have been frustrated in their attempts to get onto the housing ladder are more likely to be single parents or couples with children. These tenants either doubt they would get a mortgage or have had difficulty securing one, or have struggled to get a deposit together. The research also found that 74% would like to see rental payments contribute to their credit report. The greatest appetite for including rental payment data on credit reports is among people who are looking to buy in the next five years with 91% in this group recognising the importance of a good credit report and 83% would like to see rental payment data added to it. People who are happy to rent tend to live alone or only with other adults and are less likely to see rent as ‘dead money’ than private tenants as a whole and 26% of satisfied renters disagree when asked if renting is a waste of money compared to 16% of all private renters. Continue reading
Property prices in New Zealand outside of Auckland reach new record
Property prices and sales in New Zealand increased in December with median home values, excluding Auckland, reaching a new record. Sales were up 3.5% year on year but fell 9.1% compared with November, according to the latest index from the Real Estate Institute of New Zealand. The median prices of a home nationwide increased by 1.2% month on month and 3.3% year on year to $465,000, a rise of $15,000. Excluding Auckland the rise was 8%, taking the median to $379,000. It is the fourth consecutive record median in 2015 and there was also a new record median prices also Waikato/Bay of Plenty, Hawke’s Bay, Wellington, Nelson/Marlborough and Otago. In Auckland median prices increased by 13.6% year on year to $770,000, and increased by 0.7% month on month. REINZ chief executive Colleen Milne pointed out that regional markets, particularly Northland, Waikato/Bay of Plenty, Hawkes Bay and Central Otago Lakes, are now setting the pace for the New Zealand real estate market, with Auckland, in a relative sense, now in the middle of the pack. ‘The decline in sales volume in Auckland, while noticeable, is likely transitory as the region gets to grips with the new LVR rules for investors, although the median price continues to firm,’ she said. ‘Over the past six months regional markets have demonstrated large declines in the levels of inventory, a significant decline in the number of days to sell, and noticeable increases in the median price, with a number of regions setting new median price records more than once over 2015,’ she added. In addition, Wellington, Manawatu /Wanganui and Otago are also seeing positive movements in days to sell and median prices. ‘This breadth of the improvement across New Zealand suggests that there is more is at play than just an Auckland halo effect, although that has contributed in the northern regions,’ Milne explained. Sales volumes excluding Auckland were down 8.1% from November but up 17.5% on December 2014. On a seasonally adjusted basis, Auckland’s sales volumes were up 8.3% compared to November, indicating that while the headline number showed a sharp drop in sales compared to November, after taking into account seasonal effects, sales were in fact stronger than would have been expected. Northland, Waikato/Bay of Plenty and Hawke’s Bay continued to see the most robust sales growth. Aside from Auckland, Hawke’s Bay was the only region to record increased sales volumes compared to November, with volumes growing 0.4%. Year on year nine regions recorded increases in sales volume, with Northland recording the largest increase of 39%, followed by Waikato/Bay of Plenty with 30% and Taranaki with 27%. Continue reading
Farmland values in England down almost 2% in final quarter of 2015
English farmland values fell by almost 2% in the final quarter of 2015 to end the year at £8,165 an acre, according to the latest index report. The data from the Knight Frank Farmland Index shows that it was the first quarterly fall since December 2012. However, the average value of bare agricultural land still rose 4% in the first half of the year and 3% overall during 2015. This compares with a rise of 1% for prime London residential property and falls for the FTSE 100 of 5% and gold down 7%. Looking over a wider period of time farmland in England has increased in price by 41% over five years, by 196% over 10 years and by 5,089% over 50 years. The Knight Frank report suggests that there are a number of reasons why values have come back. ‘The continuing run of low commodity prices had to have an impact on buyer confidence at some point. Feed wheat is worth just half of what it was fetching just a few years ago and many dairy and livestock businesses are struggling to remain profitable,’ said Andrew Shirley, head of rural research at Knight Frank. ‘The fact that land values have held up so well indicates that commodity prices are far from the most important driver of the land market,’ he explained, adding that uncertainty about the outcome of the European Union referendum, likely to be held this year, will also be holding back some potential buyers concerned about the potential impact of a Brexit. The delayed payment of agricultural subsidies to some farmers and a potential hike in interest rates will also have dampened spirits. Currently Knight Frank is not predicting that the fourth quarter fall presages a long run of prices drops. ‘Indeed, assuming the UK votes to remain in the EU, it is entirely possible that 2016 could see prices rise slightly,’ said Shirley. ‘Many farming businesses, particularly those with profitable renewable energy schemes, remain cash generative and are looking to expand. There are also a significant number of farmers who have sold land for development or via compulsory purchase and are looking for agricultural property to reinvest into,’ he pointed out. ‘The market will continue to be extremely localised. Large blocks of investment grade land which were achieving prices of over £13,000 an acre last year may see values come off as investors await the outcome of the EU referendum, but where there is competitive bidding from local farmers, values will remain firm,’ he added. Continue reading
