Tag Archives: economy
Owning a home is still part of the American Dream, new research shows
The majority of young people renting their home still believe in the American Dream of owning their own home, according to new research from the National Association of Realtors (NAR). Although only half of surveyed households believe the economy is currently improving, nearly all young renters eventually want to buy a home and compared to earlier this year an increasing share believes their personal financial situation will improve in the months ahead. The survey data reveals that an overwhelming majority, some 94%, of current renters who are 34 years of age or younger want to own a home in the future. Overall, 83% of polled renters have a desire to own and 77% believe homeownership is part of their American Dream. Lawrence Yun, NAR chief economist, said that the survey's findings debunk the notion that young adults aren't interested in buying a home. ‘Despite entering the workforce during or immediately after the worst of the financial and housing crisis, the desire to become a homeowner appears to be a personal goal for a convincing majority of young renters,’ he pointed out. ‘Furthermore, there appears to be sizeable, pent-up demand for buying that currently remains untapped because of a variety of economic and personal reasons impacting many households,’ he added. The top two reasons given by renters for not currently owning was the inability to afford to buy and needing the flexibility of renting rather than owning at 53% and 19% respectively. When asked what would likely be the main reason for buying in the future, renters cited lifestyle considerations such as getting married, starting a family or retiring and an improvement in their financial situation at 33% and 26%. ‘A combination of factors such as rising rents and home prices, limited supply, repaying student debt, and getting married and having children later in life has more to do with the currently underperforming share of first time buyers than the idea that buying a home is not as desirable as it used to be,’ Yun explained. Despite uncertainty about the economy's current performance, at least 84% of all households within all surveyed age groups and education levels believe owning a home is a good financial decision. When asked if they believe this strongly or moderately some 76% who believe it's a good decision feel strongly about it. Additionally, at least 85% of surveyed households in each age category as well as across all education levels believe home ownership is part of their personal American Dream. The most appealing aspects of homeownership cited by those with this feeling include a place to raise a family, owning their own place and a nest egg for retirement at 36%, 26% and 14% respectively. NAR's survey found that more home owners than renters during the polling period believe that it's a good time to buy a home at 82% compared to 68%. Furthermore, of those who thought it was a good time to buy, 645 felt strongly about buying. Among… Continue reading
Prime property values in London could see 3% growth in 2016
Prime property values in London are set to see modest 3% growth throughout 2016 but the fringes of the capital are expected to see much faster price rises of 5% or higher, a new forecast suggests. The market below £1.5 million is predicted o be the main driver of price growth in the coming year, as Stamp Duty continues to take the shine off the wealthiest segment of the London property market, according to the report from agents Marsh & Parson. Tooting and Queen’s Park are named in the report as the locations to watch in the coming year and agents are expecting an influx of buyers in January as the new year markets gets up to speed quickly. As a result, the popularity of more affordable and emerging locations is boosting activity and prices in these areas above levels seen elsewhere across the capital, the report explains. It points out that with direct transport links into Bank on the Northern line, and a leafy common on the doorstep, buyer demand has quickly spread from Balham to neighbouring Tooting. And in the North West, Queen’s Park is providing a credible ‘next step’ for those priced out of North Kensington and Little Venice, and is well serviced by the underground and over ground rail connections directly into Euston. With a top rate of Stamp Duty of 12% now in place, the highest tiers of the London property market have been severely tempered in recent months as buyers struggle to absorb the additional transaction levy. The report also shows that total prime London property sales dropped between the second half of 2014 and the first six months of 2015 and it is sales above £937,000, the threshold at which the higher Stamp Duty charges apply, which have seen the sharpest fall of all. In 2015, some 59% of London property sales have been for homes below the £937,000 marker, while purchases above this price threshold account for 41%, as the top of the market slows. In 2016 sellers will have to adjust their price expectations to make their properties more competitive and attractive. But properties that are priced realistically will still sell well, and quickly. At the start of this year, London homes for sale were typically achieving 95% of their asking prices, but this has climbed throughout the year to stand at 97% as of November 2015. ‘The Chancellor’s Stamp Duty changes have certainly dulled the London housing market of late, and whilst 2016 will see a return to growth it will be rather lacklustre. There now exists a fundamental unevenness between sellers who want to sell their properties at the prices they were at six months ago and buyers, who are seeking recompense for the increased Stamp Duty levelled at them,’ said Peter Rollings, chief executive officer of Marsh & Parsons. ‘It’s already started but it’s going to take a while… Continue reading
UK house prices up 7% year on year, latest index shows
UK house prices increased by 7% in the year to October 2015, up from 6.1% in the year to September 2015, according to the latest official statistics. The data from the Office of National Statistics also shows growth of 7.4% in England, 1% in Wales, 0.9% in Scotland and 10.3% in Northern Ireland. Average mix-adjusted house prices in October 2015 reached £300,000 in England and stood at £174,000 in Wales, £196,000 in Scotland and £158,000 in Northern Ireland. Excluding London and the South East, UK house prices increased by 5.6% in the 12 months to October 2015 and month on month on a seasonally adjusted basis, average house prices increased by 0.8%. A breakdown of the figures show that the pace of annual house price growth was again varied across the nine English regions in October 2015. The largest annual increase was in the East at 10.4% followed by the South East at 9.5%. The North East had the lowest annual growth of the nine regions, with prices increasing 2.9% in the year to October 2015 but up from 1.8% in the year to September. London prices increased by 7.7% over the year to October 2015, up from 7.2% in the year to September 2015. Prices paid by first time buyers were 5.9% higher on average than in October 2014 while for existing owners prices increased by 7.4% for the same period. Rishi Passi, chief executive officer of Oblix Capital, believes that prices are set to continue growing in 2016. ‘As the economy stabilises, driven by improving job prospects, rising wages and recurring delays in interest rate rises, for the meantime at least, it’s likely this surge in house sales and price inflation will continue,’ he said. ‘Warnings that growth on this scale is unsustainable may ring true in the long term, especially in crowded London and the South East, as affordability issues become too significant a barrier to entry for first time buyers and low income families. Developers should take heed and look to other regions for their next opportunity,’ he added. Continue reading
