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US home prices growth set to send first time buyers into the suburbs, says new research
Deteriorating housing affordability will the main drive factor of residential property trends in the United States in 2016, according to a new analysis report. A lack of affordable homes near city centres will push new and first time buyers to suburbs that feel like walkable, amenity rich mini-cities, says the study from real estate form Zillow. It also explains that rising rents will force more young renters to wait longer before buying a home. And the looming threat of rising mortgage interest rates will slowly erode some of the terrific mortgage affordability the market has enjoyed for the past few years. Zillow's 2016 Housing Market Predictions report says that the median age of first time buyers will reach new highs in 2016 as millennials put off home ownership and other major life decisions. Growth in home values will outpace incomes, especially for low income Americans. In 2016, those whose incomes fall in the bottom third of all incomes will be priced out of home ownership and unable to afford even the least expensive homes on the market, it suggests. Rising rents won't let up in 2016, and will continue to set new records. The next year will bring the least affordable median rents ever, the report also predicts. As affordable housing close to city centres grows increasingly scarce, people will move farther out. Dense, walkable suburbs with an urban feel, especially those that offer good access to the city will be 2016's new hot spots. The median expectation of more than 100 economic and housing experts surveyed in the latest Zillow Home Price Expectations Survey suggests that home values are set to grow about 3.5% in 2016. ‘Rents will continue to increase at a brisk rate in 2016, but many potential first-time buyers are living in hot markets where buying a home is really expensive,’ said Zillow chief economist Svenja Gudell. ‘In 2016, we'll start to see more people in hot coastal markets forced to move farther from the core of the city to find housing. When they get there, they'll be looking for amenity rich suburbs like mini cities, with walkable cores and an urban feel,’ she explained. ‘As renters gradually transition into homeowners, the historically low home ownership rate should stop falling quite as quickly as it has been. However, the median age of first time buyers, already the highest it has ever been at about 33, will climb higher. Millennials want to buy, but they are waiting longer than previous generations,’ she pointed out. ‘All of this will happen against a backdrop of slowly increasing interest rates. That will make some homeowners think twice about selling, and many of them will decide to remodel their current homes instead,’ she concluded. Continue reading
New housing commission launched in UK
A new Housing Commission has been launched in the UK to explore new routes to house building so councils can enable the construction of more desperately needed homes. Councils built nine times more homes between 2010 and 2015 than between 2000 and 2005 and are desperate to dramatically increase the availability of new homes in their local areas, according to the Local Government Association. The LGA said this is vital to building the 230,000 new homes the country needs each year as private developers have not built more than 150,000 homes a year for more than three decades. The Housing Commission will also explore the importance of effective housing in boosting jobs and growth, helping meeting needs of an ageing population, saving social care and the NHS money, and helping people into work. It will look at new ways that councils can enable investment in new homes, the role of councils in shaping homes within prosperous places and communities, the role of housing in supporting tenants to find and progress in sustained employment and the role of housing in adapting to an ageing population and preventing onward costs onto social care and health services. Evidence is sought on the key issues for communities, partners and councils, on good practice that has successfully addressed those issues, and what is needed to build on those successes. Councils, partners, organisations and individuals are invited to contribute their issues, evidence, and examples of effective housing and ideas to the Commission's Advisory Panel, made up of experts and academics. The Commission will take a medium term view incorporating current housing reforms but will look beyond them in making the case for councils to be able to deliver the homes our communities and places need. Findings will be brought together in a report in Spring 2016 and presented at the LGA Annual Conference in June 2016. ‘We're working with government to ensure housing and planning reforms support council efforts to build more homes and the Housing Commission we are launching today will investigate how the government and councils can help deliver houses to solve our housing shortage,’ said Peter Box, LGA housing spokesman. ‘Councils must be able to play a lead role in building the homes we desperately need, and building the homes in a way that create prosperous places and growth, help people into work and positively adapt to an ageing population,’ he explained. ‘This is the best way to meet local and central government ambitions for our communities, to reduce waiting lists and housing benefit, keep rents low and help more people live long and happy lives,’ he added. Continue reading
New tax free savings vehicles launched for first time UK buyers
Would be first time buyers in the UK can now take advantage of a new financial product that allows them to save for a deposit on a home tax free. The government’s Help to Buy ISA launched today and means that people can save £200 each month, up to a maximum of £12,000, and the government will provide a 25% bonus on the interest and contributions, up to a maximum of £3,000, when the saver purchases a property. According to Mark Hayward, managing director of the National Association of Estate Agents (NAEA), it will provide a boost to first time buyers hoping to make the climb onto the property ladder. ‘It seems as though first time buyers are at the top of the government’s agenda following the further helpful initiatives announced during last week’s Autumn Statement which means that we might finally begin to see first time buyers cutting through the market. But he pointed out that although the Help to Buy ISA is a starting point for first time buyers and it will help them on the way to raising a deposit, there’s another major reason why they are feeling pushed out of the market and that is not enough homes to buy. ‘This is the lack of housing, specifically affordable housing available to all house buyers whether that be first time buyers, all the way to last time buyers. In order to help first time buyers find their feet in the market in the long term, the issue of supply needs to be addressed,’ explained Hayward. ‘Chancellor George Osborne’s announcement that he’ll be building 200,000 new starter homes is a good place to start, but until the wheels are put into motion, we just won’t see a substantial change for first time buyers,’ he added. Dave Bexon, Group sales and marketing director for Redrow Homes, welcomed the launch as raising a deposit is regularly cited as one of the biggest barriers to home ownership for young people. ‘This pioneering scheme should encourage a generation of renters to save for a down payment on a home, with the knowledge that the hard earned money they set aside will be topped up with a contribution from the Government,’ he said. ‘We're confident this assistance will encourage more would be home owners into the market which, longer term, is also key to helping to stimulate movement at all levels of the market,’ he added. He also pointed out that the existing Help to Buy equity loans continue to provide a valuable boost to purchasers of new build homes, enabling people to buy with just a 5% deposit with an equity loan of 20% from the Government, which is interest free for five years. Mortgage advisor Andrew Mannion, of RSC New Homes, one of several mortgage experts who offer advice to Redrow purchasers, also welcomed the introduction. ‘We feel that this scheme will be useful as it will boost a customer's deposit which,… Continue reading
