Tag Archives: finance
Well over half of UK home buyers rent before they can buy a property
Some 64% of aspiring home owners in the UK rent a property before they pick up the keys to their very own home, new research has found. Saving a deposit is one of the biggest financial hurdles facing potential first time buyers and the survey found that renters are less likely to benefit from help from family, with only 41% receiving any financial assistance, compared to 62% of those who are living with their parents or family members. Building up the necessary deposit is also challenging for those who are paying rent as the research revealed an average monthly rent in the UK of £681.70, according to the research from Clydesdale and Yorkshire Banks. Of those who live with their parents before buying their own property some 21% don’t pay rent with a third of these potential home buyers putting this money towards their deposit instead. However 52% do pay a fixed amount every month to their family landlords while 22% contribute towards food and bills and others simply pay what they can afford on a monthly basis. The research also found that those in rented accommodation find getting on the property ladder more stressful as 28% admit to putting themselves under pressure compared to just 16% of those who are still living with their parents and are in less of a rush to flee the nest. ‘Buying a first home is one of life’s most significant financial milestones and the banks can work with the individual needs and circumstances of potential first time buyers to help make their dreams of becoming a homeowner a reality,’ said Steve Fletcher, head of customer banking networks at Clydesdale and Yorkshire Banks. Meanwhile, separate research commissioned by Royal London shows that almost five million renters in the UK have no plans in place to cover their rent if they became too ill to earn for three months or more, even though recent cuts to housing benefits could leave them at risk. This is despite the fact that some 27% of renters in paid employment said they knew someone who had struggled in this situation and the survey found 34% admit they don’t know how long they could survive. The research also found that 60% of those who had some idea said that they could only survive on their savings for three months or less. Some 53% said their first move would be to apply for state benefits, some 47% would reduce their household expenses and 39% start using their savings. Only 7% of renters in paid employment have ever consulted a financial adviser. The most common place people turn to for financial advice is their family and friends. ‘Renters who assume that housing benefit will be there when they need it could find the reality is very different. A series of cuts to housing benefit means that more people would not get their rent paid in full if their income fell unexpectedly,’ said… Continue reading
UK asking prices up just 0.4% but first time buyers paying much more
Property asking prices in the UK increased by the modest amount of just 0.4% in May, taking the average price to £308,151, according to the latest index figures. But it is first time buyers who have faced the highest rises, with the data from property portal Rightmove showing that for this segment of the market asking prices increased by 6.2% month on month and 11.4% year on year. In some areas first time buyers have seen prices rise even more with Croydon, Dartford and Luton recording an annual price surge of 18%. Those moving up the housing ladder have fared better with second steppers seeing prices fall 0.8% month on month, but they are still paying some 8.1% more than a year ago. The report points out that it was speculated that the investor activity drop-off after the April additional home stamp duty deadline would act as a brake on prices at the lower end of the market. However, intense investor activity, with March transaction numbers up a massive 80% on last year, exacerbated the property drought in this sector and is now causing upwards price pressure. This resulted in prices for properties with two bedrooms or less, typical first time buyer homes, increasing. ‘If you were expecting a long period of price doldrums at the lower end of the market following the mass exit of the buy to let brigade, this month’s 6.2% price rise will come as a big surprise,’ said Miles Shipside, Rightmove director and housing market analyst. ‘Properties at the lower end of the market were the most common target for the investor community, and the immediate aftermath of the tax deadline saw new seller asking prices drop in this sector for just one month. The 1.4% fall reported in April’s index appears to have been a very short lived knee jerk, with an average price surge of £11,298 this month for properties coming to market with two bedrooms or fewer,’ he explained. ‘It remains to be seen if these prices can be achieved and there may be some over pricing in the market; it is also a reflection of better quality property coming to market in this sector which is now targeting owner-occupiers rather than landlords,’ he added. He pointed out that since November when it was announced that an extra 3% stamp duty would be charged on additional homes and its implementation at the end of March, the price of property coming to market in this first time buyer/investor sector increased by 3%. In just four weeks it has now risen by 6.2%, the highest monthly rise recorded for this sector since February 2012. The report also show that demand for typical entry level property remains high, with searches on Rightmove specifying two bedrooms or fewer being up by 47% in April compared to April 2015 in spite of waning investor interest. In contrast, fresh supply for this sector is down by 1.5% in the last four… Continue reading
UK farmland values down 3% in first quarter of 2016
As uncertainty around the UK referendum on the country’s future in the European Union grows, values for farmland fell by 3% in the first quarter of 2016, dropping back below £8,000 an acre. The drop was the largest quarterly since the 5% decrease that occurred following the collapse of Lehman Brothers in the fourth quarter of 2008, according to the latest analysis report from real estate firm Knight Frank. It shows that around 25% fewer acres of farmland had been advertised by the end of March, compared with the same period in 2015. However, despite the uncertainty and value drop, a recent survey by Farmers Weekly shows that 60% of farmers will be voting to leave the EU on 23 June. The report also looks at what has happened to farmland prices since the UK joined what was known as the European Economic Community (EEC) in 1973. Data from the Ministry of Agriculture/DEFRA shows land values increased sharply around the time, even managing to beat the hyper-inflation of the 1970s. Over the long term that trend has continued with land values outpacing inflation. But the sobering trend for farmers is how agricultural commodity prices have failed to keep up. The report also points out that investors’ priorities have changed dramatically over the past year, as they are now looking much further afield and for value-add opportunities such as diversified income streams or development potential And it also shows that prime country house prices rose by 0.3% on average in the first quarter of 2016, taking annual growth to 2.4%, down from 5.2% in 2014 but there was a notable rise in activity in the first quarter of the year with Knight Frank figures showing a 24% rise in sales volumes across the prime country market, compared with the same period in 2015. Activity was focused on the sub-£1 million market, which showed strongest price growth of 4% across the last 12 months. Homes worth £5 million or more saw values fall by 2.7% in the same period. ‘From weighing up the hugely complex issues surrounding the EU referendum, to coping with a slump in agricultural commodity prices and working out what the implications of the latest changes to the planning system could be for them, estates, farms and other rural businesses are having to take some extremely big decisions,’ said Andrew Shirley, head of rural research at Knight Frank. ‘Long term strategic planning can be extremely helpful when it comes to coping with such challenges and there are also exciting opportunities to be grasped and the level of innovation and entrepreneurship in the countryside has never been greater,’ he added. According to James Del Mar, Knight Frank’s head of rural consultancy, the tax environment for the rural landowner in the UK is becoming more challenging, particularly for those who are domiciled elsewhere. ‘At the same time, the pent up demand for new housing and infrastructure, combined with changes to the planning system, presents what some… Continue reading
