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Over half of UK buyers spend more than intended on a new home
More than half of British people spend at least 10% more than they intended when buying a new home and many end up with an extra bedroom, research has found. In a poll they confessed that they are influenced by their emotions over practical needs which results in spending more, according to the survey by Online Mortgage Advisor. When asked if they changed or widened their original budget some 64% said they did and 89% took into account properties that were more expensive than they originally planned to. Some 51% said they went at least 10% over budget, 18% stayed within 10% of their original budget, 13% were exactly on budget and 11% were within 10% or less. Only 7% bought a house for more than 10% less than they originally intended. Of those who spent more 68% said it was because they fell in love with a specific house and had to have it, 47% paid extra for the right location, 33% said their partner encouraged them to spend more, 25% bought a bigger house as it was better value for money and 29% said they were encouraged by an estate agent while 6% said it was down to their children. ‘Buying the right house within budget can be a really difficult task, especially in a growing market where property prices are still increasing in most parts of the UK. Often people will set out to buy based on price, but then check to see what they could get if “they just spent a bit more,’ said Pete Mugleston, director of Online Mortgage Advisor. ‘From then the decision becomes less about price and more emotionally driven, and often people will either come across their dream home or find it hard to go push the budget down again after seeing what they can purchase with a small increase,’ he pointed out. Continue reading
EU future uncertainty hitting prime central London sales and lettings
Sales and lettings in the prime central London property market have been hit by uncertainty over the UK’s position in the European Union ahead of the referendum vote on 23 June. After a period of increased activity, as buyers rushed to beat the April stamp duty deadline, the prime central London area is experiencing a subdued time, according to a new report from estate agency WA Ellis. ‘April saw the government collect a record of nearly £1.2 billion in stamp duty, as landlords rushed to beat higher stamp duty rates on second properties. These national figures are reflected by transaction levels within prime central London which have halved since March,’ said Richard Barber, director at WA Ellis. He believes that various apocalyptic visions of what may or may not happen if the UK voted to leave the EU have continued to confound the electorate over the last two months. ‘As a result, it would appear that buying a new property has been put on hold by the majority of potential purchasers until the future of the UK is determined,’ he added. Landlords in prime central London are being hit hard by the uncertainty, according to Lucy Morton, head of agency at WA Ellis and JLL, with rents being adversely affected. ‘There are reports of recruitment freezes across the city and firms delaying relocating staff to London to see what awaits the UK post referendum. This, of course, has had an impact on prices, and the unprecedented surplus of stock has put further downward pressure on the rental market,’ she explained. ‘With this in mind, we have been advising landlords to reduce rents, and this has yielded positive results with enquiry levels up, and a substantial increase in lettings being agreed. In this sort of market, minimising vacant periods is more important than waiting for a slightly premium rental offer,’ she pointed out. ‘For example, over the course of a year, a 5% higher rental offer is negated if it means that a property stays vacant for an extra two and half weeks. As always our message is clear: accurate pricing and pristine presentation should be a landlord’s main consideration in volatile market conditions,’ she added. Continue reading
UK house prices up in May but annual growth is slowing
House prices in the UK increased by 0.6% in May as a steady upward trend in values continued but there are signs that growth is slowing. Quarter on quarter prices were up 1.4%, slightly below April’s 1.5% but this was the lowest since November 2015 when it was also 1.4%, according to the latest index from lender the Halifax. Also, the May rise of 0.6% largely offset Aprils fall of 0.8% and Martin Ellis, Halifax housing economist pointed out that the quarterly figure is a more reliable indicator of the underlying trend in the housing market. Prices in the three months to May 2016 were 9.2% higher than the same three months in 2015 so the annual movement was the lowest it has been since last autumn. The index shows the average price now reaching £213,472. According to separate research from the Halifax property prices per square metre have risen by 432% in Greater London against a national average increase of 251% over the past two decades. Although London dominates the country's list of most expensive property locations on a per square metre basis several areas outside southern England fetch a higher property price per square metre than the national average of £2,216. These are Solihull, Leamington Spa, Altrincham Edinburgh and Harrogate. ‘Low interest rates, increasing employment and rising real earnings, continue to support housing demand. The strength of demand, combined with very low supply, is causing house prices to rise at a brisk pace in quarterly and annual terms,’ Ellis explained. ‘Increasing affordability issues, caused by a sustained period of higher than earnings house price growth, should curb housing demand and result in some slowdown in house price growth as the year progresses,’ he added. The figures are published at a time when demand is still outpacing supply, according to Ian Thomas, director of online property investment company LendInvest. ‘The resilience of house price growth is remarkable. Even now that the stamp duty stampede of the first quarter is behind us, and with the uncertainty of the European Union referendum result dampening activity, house prices are still holding up,’ he said. ‘There simply aren't enough houses being built. The latest disappointing house building data make this abundantly clear. The Government’s dream of one million new homes by 2020 simply isn’t realistic without a fundamental change of approach,’ he pointed out. ‘As a result, house prices will continue to rise. Investors will continue to enjoy great returns from putting their money into property, while aspiring home buyers face a tricky time getting the sums to add up in order to move up the housing ladder,’ he added. However, Rob Weaver, director of investments at property crowdfunding platform Property Partner, believes the slowdown in growth is quite dramatic. ‘The house price volatility around April’s stamp duty hike has made 2016 a difficult year to predict. But the yoyo effect looks like it’ll settle, at least until all the uncertainty over the EU referendum ends,’ he said. ‘Activity in… Continue reading
