Tag Archives: budget
UK buyers choose renovation properties to try to save money, research suggests
Some 35% of home owners in the UK who bought a property that needed renovation had to as it was the only way that could afford to buy a home, according to new research. Some 8% bought a home needing renovation but found that in reality they could not afford to do the work and 10% ended up living on a ‘building site’ for a year or more before starting the work. The research from price comparison site Confused.com also found that for those who persevere the hard work can be worth it 19% made a profit of between £25,000 and £50,000 from a successful renovation project. The sale prices of properties that need renovation are normally much lower than the prevailing market price in that particular locality. On average, home owners who have bought a renovation property have saved themselves £44,037. Home renovators are paying on average £152,792 for a property that needed some work done to it, compared to the average UK house price which is valued at £196, 829. Some 38% admitted to buying a property that needed some work as it saved them thousands of pounds compared to buying a home that needed no work. In fact, 40% of home owners admit they would buy a property that needed renovation if it saved them money. On average, home owners spent £33,089 on doing up their properties with 12% spending more than £50,000 renovating their home. Some 62% did work on the kitchen and 61% on the bathroom. However, renovating a property can often be more expensive than first anticipated with 45% of home owners saying they spent more than intended, with many spending £2,886 over their budget. Indeed, some 26% ended up going over their budget by more than £5,000 and 22% said that they would never buy a renovation project again. And the research also found that 41% who have carried out renovation work on their property have not let their insurer know. ‘As house prices seem to be continuing to rise, it would appear that more and more people are resorting to buying properties that need renovation. Deciding to renovate a property is a big decision and often more expensive than first anticipated,’ said Gareth Lane, head of home insurance at the firm. Continue reading
Home ownership still out of reach for many in UK due to buying costs
Home ownership in UK is still out of reach for many would be buyers as new research shows that the average first time buyers will have paid over £52,000 in rent. Indeed, a first time buyer purchasing their first house this year will have spent £52,900 on rent by the time they get on the first rung of the ladder, and future first time buyer can expect to spend 22%. The data compiled by the Centre for Economics and Business Research (Cebr) for the Association of Residential Letting Agents (ARLA) also shows that the average first time buyer in England in 2016 will have spent 16.4% of their total lifetime earnings on rent for all the years they were a tenant. Those buying a property for the first time this year in the North East will have spent £31,300 on rent, the lowest amount in England. Whereas in London, the average amount spent is more than double that, at £68,300. The South East is the only region other than London where the total lifetime rent spent is above the English average with the total rent expenditure equating to £55,900. Last year alone on average people in the UK spent 22% of their wages on rent, increasing to 30% in London. Those living in the East enjoyed the most affordable rents due to relatively high earnings in the region, yet rent still accounted for 18.9% of their disposable income. People that move out of their family home at the age of 18, will typically rent for 13 years before buying their first property. The report found those leaving home and starting to rent this year, will spend an average of £64,400 before they are able to buy their first property, some 22% more than current first time buyers getting on the housing ladder this year will be spending. Those leaving home and starting to live independently in London will continue to be worse off, as they will spend an average of £91,500 on rent before they can buy their first home, some £23,100 more than those buying in the capital this year. ‘The rising cost of rent in this country is a huge issue, and is preventing tenants from being able to save to buy a home. Our Cost of Renting report reveals that tenants are already spending a significant proportion of their income on rent, and therefore struggling to save any money,’ said David Cox, ARLA managing director. ‘However, as house price affordability worsens and interest rates start rising, more pressure will be put on renting with weekly rent likely to rise, so home ownership will remain out of reach for many,’ he pointed out. ‘Rents are becoming alarmingly unaffordable due to the lack of available housing; the North-South divide we’re currently seeing in the UK is a clear illustration of this. The London rental market is… Continue reading
Sales of affordable homes in London fall substantially, new data shows
Sales of affordable homes in London more than halved in the first eight months of 2015 compared to the same period last year, according to a new analysis. The lowest value segment of the market, homes under £250,000, saw a 51% decline in sales, the steepest of any price point across London, the report from Cushman & Wakefield also shows. The data shows that just 10,449 homes in this band were sold in the first eight months of this year compared to 21,337 in the same period in 2014 as the supply of homes coming to market below £250,000 dries up. Total sales of London residential properties fell from 79,226 to 58,322 with volumes in the first eight months declining across the board. A range of factors have contributed to the decline including mortgage availability, the General Election and changes to Stamp Duty which have made buying property over £1 million more expensive. However, the contrast in the rates of decline between price bands is stark. Sales of homes over £250,000 declined by an average of 17%, far less than the 51% drop off below the quarter of a million mark. ‘While Stamp Duty’s impact on sales is undeniable, the rate of decline for homes below £250,000 is far more severe than above the much talked about million pound threshold. Even sales of London’s most expensive homes, above £10 million, where Stamp Duty costs are highest haven’t dropped off to the same extent,’ said Candice Matthews, a director in Cushman & Wakefield’s London residential team. ‘The biggest problem at the value end of the market in London is lack of supply and our analysis is a clear indictment of London’s increasing unaffordability. Rising prices have steadily eroded the number of homes coming to market for less than £250,000. Londoners with this budget are instead being locked into renting where they often face much higher monthly outgoings as a result,’ she added. Since December 2014, stamp duty has been applied like income tax: 0% up to £125,000 of the purchase price, at 2% between £125,000 and £250,000, at 5% over £250,000 to £925,000, at 10% over £925,000 to £1.5 million and at 12% for everything above. David Ramsdale, research analyst at Cushman & Wakefield, believes that the Government is likely to look at revising the tax over the next 12 months, particularly once the Stamp Duty revenue figures for the financial year are released next summer. ‘We believe the greatest focus needs to be on homes below £250,000. One thing that would help affordability in London would be to adjust the Starter Homes Initiative. This helps first time buyers under 40 years old get on the property ladder by making homes available at 80% of the market value up to a limit of £450,000 in the capital,’ he explained. ‘The transaction figures suggest this should be lowered to the national figure of £250,000 in order to have a significant impact,’ he added. Continue reading
