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Price of a home for first time buyers in England up 28% in last four years
First time buyers in England are now paying out an average of just over £196,000 for their home, a rise of £42,451 or 28% over the last four years, new research shows. Over the same period the average house price has increased by 26%, highlighting the ever growing obstacle many first time buyers face getting onto the housing ladder, according to the report from hybrid estate agent eMoov. The situation is harder in London where the current price paid on average by first time buyers is £462,602, by £54% since up 2012 while at £86,116, County Durham in the north east of England offers the best value for those looking to get on the property ladder. Durham has struggled in recent times where the property market is concerned, with low demand seeing prices drop, although this has at least benefited first time buyers in the area, the report says. But prices have increased by just 3% or £2,600 since 2012, the lowest across England. In London even the top five most affordable boroughs have average house prices for first time buyers well above the UK average. The most affordable at £254,600 is Barking and Dagenham, followed by Havering at £281,836, Bexley at £285,464, Croydon at £301,001 and Sutton at £312,978. In 2012 the average first time buyer price for each borough was below £200,000, but since then first time buyers in each of these five boroughs seen an increase of between £95,000 and £118,000. Kensington and Chelsea at £1.1 million is the most expensive borough in the capital for first time buyers, followed by Westminster at £906,882, the City of London at £711,009, Camden at £669,020 and Hammersmith and Fulham at £690,296. The highest prices for first time buyers outside of London are Surrey with an average of £323,973, Hertfordshire at £305,043, Berkshire at £292,227, Oxfordshire at 286,962 and Buckinghamshire at £286,511. These areas have seen first time buyer prices rise by between £80,000 and £96,000 since 2012. ‘First time buyers are paying almost as much as second and third steppers in actual price terms yet the percentage increase in first time buyer properties is tracking at even greater than regular house prices. It really does highlight the issue facing the nation's next generation of aspirational home owners,’ said Russel Quirk, chief executive officer of eMoov. ‘How the government expect anyone to get on in life when the first hurdle they face is all but unobtainable, to begin with, is beyond me, especially in London. Over 90% of the capital’s boroughs have seen the price paid by first time buyers increase by more than £100,000 in just four or so short years,’ he pointed out. ‘We must address this issue and find a way to bring home ownership back in reach of the average home buyer, not just in London, or the surrounding commuter counties, but to the whole of England,’ he added. Continue reading
New analysis argues that the UK needs 300,000 new homes a year
The UK needs 300,000 new homes to be built every year rather than the target 200,000 proposed by the current government, it is claimed. Land brokers Aston Mead says that the 200,000 is evidently too low and its analysis of the situation comes as others have also pointed out that the number of new homes being built will not meet demand. For example, last week a new report from the cross-party House of Lords Economic Affairs Committee, also said that the current 200,000 target is not high enough. According to Charles Hesse, Aston Mead land and planning director, the figure is evidently too low but last year it was not met with only 160,000 new homes completed. ‘The last time the UK built more than 200,000 homes a year it was post-war, and there was a massive council housing programme under way. So we need radical changes in the way that we approach house-building, to enable construction to take place at a much faster rate,’ he said. He has drawn up a three point plan that would help to fund construction and free-up available land so that companies can start building with the minimum of delay. Firstly this involves the creation of a National Housebuilding Fund to finance public sector commissioning. ‘Borrowing costs are at rock-bottom, and something in the region of £20 billion would cover the cost of constructing 100,000 homes, which could be sold direct into owner occupation,’ he explained. Secondly, he suggests developers and planners should be braver about building on the less desirable areas of greenbelt. ‘Whilst some of it should be preserved at all costs, other areas would actually be improved by being built on. There are 514,000 hectares of green belt surrounding London. You only need a tiny fraction of that to more than satisfy housing supply,’ he pointed out. Finally, he suggests that local authorities should be encouraged to release land they themselves own as in London alone there is enough public sector land to build at least 130,000 homes. ‘A lot of authorities are not planning for enough houses, and they are not getting enough challenges from the planning inspectors about how to do it. And if that means an intervention from central Government, then so be it. Ultimately, we need to double the current rate of construction,’ he added. He believes that ‘tinkering at the edges’, providing a dozen homes here and there is no longer enough. ‘House building needs a radical overhaul, and without it we will never get close to the target of 300,000 new homes a year that this country so desperately needs,’ he concluded. Continue reading
Buy to let mortgage arrears in UK set to keep falling
Buy to let mortgage arrears in the UK are set to fall below 7,000 by the end of the year as landlords are confident and lenders have no reason to feel differently due to Brexit. The forecast from complex buy to let, commercial mortgage and short term finance lender Keystone, based on official data from the Council of Mortgage Lenders (CML), points out there has been no let-up in demand. Latest official estimates show 9,300 cases of buy to let mortgage arrears as of the first quarter of 2016, down from 10,300 the previous quarter and 11,300 in the first quarter of 2015. Keystone’s projections estimate that as of the second quarter of 2016 some 8,500 buy to let mortgages stand more than three months in arrears across the UK. This is expected to drop to 6,600 by the fourth quarter of 2016. ‘The referendum result was unexpected, the precise impact is unknown, and it is still rather early to tell what will happen. But we have seen no let-up in demand for buy to let mortgages and we don’t expect to see any change in the downward trend in buy to let arrears as a result. Landlords are confident and lenders have no reason to feel any differently,’ said David Whittaker, managing director of Keystone Property Finance. He pointed out that there are many landlords out there who still need finance, particularly professionals who are in the process of remortgaging to secure a solid five year fixed rate or selling their personally owned portfolios to their limited companies. ‘We have ensured Keystone has the funding lines in place to provide landlords with the solutions they need and in the four weeks since the vote we have forged ahead with our lending. We are increasing traction with brokers and investors. Optimism is the keyword here,’ he explained. In response to CP11/16, the consultation paper from the Prudential Regulation Authority (PRA) which proposed stricter underwriting standards for buy to let, Keystone has introduced separate stress tests for individual and limited company borrowers applying for products in the Classic Range. For individuals the new formula of 145% at pay rate or notional rate of 5.25%, whichever is higher, will be applied to term trackers and three year fixed rates. For borrowers choosing a five year fixed rate, the pay rate will be used. Stress tests for limited companies are to remain at 125% of pay rate or notional rate of 5.25%, whichever is higher, for term trackers and three year fixed rates. For limited company borrowers choosing five year fixed rates, the pay rate will be used. ‘We’ve also improved our criteria for landlords looking to finance larger multi-units. We’re accepting six flats in a block as standard and we’ll consider up to eight on a case by case basis. Keystone is tackling market changes head on,’ Whittaker added. Continue reading
