Tag Archives: africa
Majority of home owners aged 55 and over in UK don’t want to downsize
Most people in the UK aged 55 and over have no intention of downsizing to a smaller property and it lack of suitable homes available that is putting them off, according to new research. Some 58% don’t want to move despite calls from the property and construction industry for more to be done to free up homes for first time buyers and second steppers, according to the research from My Home Move. For those that would consider downsizing a the lack of suitable properties and the costs involved in moving, including Stamp Duty, represent barriers to doing so. Some 46% of would-be downsizers want to move into a bungalow, while 20% are looking for a detached property while 52% want a property that is easier to manage and 21% want to release equity to help loved ones and enjoy life’s luxuries ‘The housing market has been suffering from a lack of stock for over 12 months, causing demand to outstrip supply time and time again. This has resulted in sky high house prices, instances of gazumping increasing and the Bank of Mum and Dad being called upon regularly to help first time buyers with their deposit,’ said Doug Crawford, chief executive officer of My Home Move. ‘Unfortunately, the findings from our survey suggest the situation is unlikely to ease; especially as 58% of those questioned have no intention of downsizing to release more top end properties onto the market anytime soon,’ he added. The survey also discovered that for the 25% who would like to downsize real and urgent barriers were stopping them from putting their homes on the market. Some 39% said there are not enough of the right kind of properties available to move into, 40% saw the costs involved in moving, including Stamp Duty Land Tax, as too prohibitive to consider moving now. ‘Despite the changes to Stamp Duty in 2014, the costs involved in moving can still tally into the thousands. This is especially true since the introduction of the 3% surcharge for additional properties. For those on a fixed income or heading towards retirement, it is not surprising that the financial reality is a stumbling block,’ Crawford explained. ‘We have seen stamp duty holidays for first time buyers in the past, so there is no reason the government couldn’t extend a similar scheme to downsizers, to help free up the market and get transactions moving,’ he pointed out. Continue reading
Steady rise of equity release in UK housing market continues
Some £8.2 million of housing wealth was withdrawn in the UK every working day in the second quarter of 2016 as equity release lending passed £0.5 billion for the first quarter on record. Overall there was £514.4 million of lending in quarter two, up 34% year on year and 58% higher than in the second quarter of 2014, according to the latest figures from the Equity Release Council. The council report points out that the three busiest quarters for equity release lending have all come within the last 12 months and the annual rise in the number of new plans agreed is the fastest seen in 13 years. Common uses for equity release include paying off existing mortgages and loans, providing extra retirement income, funding home improvements or care related adaptations, paying for travel or other one off expenses, and gifting money to family members as a ‘living inheritance’. The council also says that over 55s increased appetite to use housing wealthy has been supported by market developments which include new providers and increasing choice of products and features emerging. In addition, the market received support from the regulator in April when they amended the legislation to allow optional interest repayments to be exempt from mortgage affordability rules. Year on year, the council’s figures show the biggest percentage growth in the value of lending in the second quarter of the year was for lump sum lifetime mortgages, typically involving a larger release of housing wealth in a single payment, up 37% or £56.8 million compared to the second quarter of 2015. However, lending via drawdown lifetime mortgages, allowing consumers to make multiple withdrawals of equity as and when needed, continued to account for the larger share of the market, growing 31% or £72.4 million to £304 million compared to the second quarter of 2015. Home reversion plans also experienced a rise in the second quarter of 2016 with the total value of activity more than doubling year on year from £623,647 in the second quarter of 2015 to £1.5 million. Looking at new customers’ product choices, some 67% opted for drawdown products in the second quarter, up from 65% a year earlier, while the share of lump sum products dipped slightly from 35% to 33%. With market activity having grown significantly during that time, the number of new drawdown plans agreed was up 27% year on year compared with 16% for lump sum plans. Overall, it meant the total volume of new plans agreed across the whole market was up 23% year on year, the highest annual growth rate in nearly 13 years since the third quarter of 2003. The 6,671 new plans agreed was the largest quarterly total since the fourth quarter of 2008. ‘These figures are the latest sign that UK home owners increasingly see housing wealth as a fundamental part of their retirement funding plans. The long term rise of house prices… Continue reading
Rents up across most of UK, but down in Wales, latest index shows
Rents in the British private rental sector increased by 2.4% in the 12 months to June 2016, down from 2.5% when compared with the year to May 2016, the latest index shows. Rents increased by 2.5% in England and by 0.1% in Scotland but fell by 0.1% in Wales, according to the data from the Office of National Statistics (ONS). Rental prices increased in all the English regions over the year to June 2016, with rental prices increasing the most in the South East at 3.4%, but overall when London is excluded rents grew by 2%. The index report reveals that since January 2011 England rental prices have increased more than those of Wales and Scotland. The annual rate of change in Wales continues to be well below that of England and the Great Britain average. Meanwhile, rental growth in Scotland has gradually slowed to 0.1% in the year to June 2016, from a high of 2.1% in the year to June 2015. Rental prices in England show three distinct periods; increasing from January 2005 until February 2009, decreasing from July 2009 to February 2010, and increasing from May 2010 onwards. When London is excluded, England shows a similar pattern but with slower rental price increases from around the end of 2010 and since the beginning of 2012, English rental prices have shown annual increases ranging between 1.4% and 3% year on year. The largest annual rental price increases were in the South East with growth of 3.4%, unchanged from May 2016, followed by the East of England up 3.1%, down from 3.2% in May 2016 and London up 3%, down from 3.3%. The lowest annual rental price increases were in the North East at 0.8% and the North West at 1.2%, both unchanged when compared with May 2016 and Yorkshire and The Humber at 1.3%, up from 1.2% over the same period. Looking at data from the UK House Price Index over a longer period shows residential house price growth has typically been stronger than rental price growth for a number of years, with an average 12 month rate of house price inflation between January 2013 and May 2016 of 5.9%, compared with 2.1% for rental prices. The report suggests that inflation in the rental market is likely to have been caused by demand in the market outpacing supply. On the demand side, the Royal Institute of Chartered Surveyors (RICS) reported an increase in demand in June in their residential market survey, however, demand from prospective tenants decreased marginally in May according to the Association of Residential Letting Agents (ARLA). On the supply side, RICS reported that new landlord instructions fell slightly in June and ARLA reported that the supply of rental stock fell in May 2016 and was lower than in May last year. The report also suggest that with the UK economy… Continue reading
