Tag Archives: financial
First time buyers increased in the UK in March and paid less for their home
The number of first time buyers in the UK increased in March to a total of 32,500, the highest figure since June 2014, according to the latest tracker report. Overall first time buyer volumes grew by 47.7% on a monthly basis and as well as cheaper prices the burden of deposit costs and mortgage payments dipped, the data from the Your Move and Reeds Rains report shows. This means that, between February and March, the total flow of buyers managing to step foot on the ladder for the first time grew by 10,500 and on an annual basis, the total number of first time buyers in March grew by 34.9% compared to March 2015. Adrian Gill, director of estate agents Your Move and Reeds Rains, pointed out that while much was made of March being the month of the buy to let landlord and the second home buyer due to the April deadline for additional stamp duty, the surge was not at the expense of the bottom rungs of the ladder. He believes that a continuation of the broadly positive economic climate has likely been a factor spurring would-be first time buyers. ‘However, what’s really getting those numbers up is the fact that the range of support options available to first time buyers is at last beginning to be recognised and utilised,’ he said. ‘The Help to Buy scheme is assisting those with limited capital recognise their dreams, while the Government’s offer of cut price homes for first time buyers is easing supply in a part of the market that typically struggles to match roaring demand with constrained supply,’ he added. The data also shows that March has seen a lightening of home ownership costs and the charges associated with it. The average purchase price paid by first time buyers in March stood at £166,559, down 1.2% in absolute terms compared with February which previously marked the highest average price on record. But on an annual basis, the average purchase value of a first time buyer property rose by 9.2%. Deposit and monthly mortgage payment costs also declined. First time buyer deposits averaged £28,233 in March, down 4.1% compared with the previous month. In addition, the proportion of an average first time buyer’s monthly income that is consumed by deposit costs fell 3.1% between February and March from 74.9% to 71.8%. Meanwhile, over the same period, monthly mortgage payments accounted for a steadily decreasing amount of average first time buyer income, falling from 20.4% of monthly income in February to 20.3% as of March. Besides the falling costs of home ownership, lending conditions for firs time buyers have remained favourable. The average loan to value (LTV) ratio reached 83% in March, marking a 0.5% uptick on the previous month, meaning first time buyers will be able to borrow more against the value of the home they wish to purchase. The average first time buyer mortgage rate continues to fall, dropping from 3.14% in February to… Continue reading
UK housing market slows after buy let rush in March, latest index shows
UK house prices increased by 0.2% in April but annual house price growth has slowed to 4.9%, down from 5.7% the month before, the latest index figures show. This takes the average price of a home to £202,436 with the slowing of activity not a surprise due to increased market growth in March due to stamp duty changes, according to the index report from the Nationwide. Robert Gardner, Nationwide's chief economist, said that the slowdown returns the annual pace of house price growth to the fairly narrow range between 3% and 5% that had been prevailing since the summer of 2015. ‘It may be that the surge in house purchase activity resulting from the increase in stamp duty on second homes provided a temporary boost to prices in March. However, it is possible that the recent pattern of strong employment growth, rising real earnings, low borrowing costs and constrained supply will tilt the demand/supply balance in favour of sellers and exert upward pressure on price growth once again in the quarters ahead,’ he explained. He pointed out that there were 165,400 transactions in March, an all-time high, some 11% higher than the previous peak of 149,000 recorded in January 2007 and estimates from the Council of Mortgage Lenders suggests that mortgage lending also rose sharply, to almost £26 billion in March, up 43% from the £18 billion recorded in February. ‘If confirmed by Bank of England data later this week, this would suggest a strong outcome, up nearly 60% year on year and also well above recent highs of £22 billion per month recorded in early 2015, though still well below the all-time high of £34.9 billion recorded in June 2007,’ Gardner said. ‘The increase in mortgage lending is likely to have been driven by a sharp increase in buy to let investors bringing forward their purchases before the stamp duty changes took effect. Buy to let has accounted for an unusually high share of lending in recent months, at around 19% of lending in the three months to February, but the strength of activity suggests its share could surpass 25% in March,’ he explained. ‘Viewing the transactions and mortgage lending data together suggests that, while buy to let lending is likely to have risen strongly in March, a large proportion of the boost to house purchase activity came from cash buyers,’ he added. Gardner also pointed out that cash purchasers have become a more significant part of the market since the financial crisis, accounting for around 35% of all transactions since 2008 compared with around 25% in 2006/20007. ‘Cash investors would have also been better placed to buy properties in the relatively short period of time between the stamp duty announcement at the November Autumn Statement and the implementation on 01 April,’ he added. But a continued limited supply of properties could mean that the market could still be lively in the coming months, according to Michelle Grant, investment director of Grant… Continue reading
US holiday home market cooled in 2016, but still second best sales in a decade
Holiday home sales in the United States cooled off in 2015 but remained at the second highest amount in nearly a decade, new research shows. The survey report from the National Association of Realtors also shows that investment purchases increased for the first time in five years. And mirroring the strong price growth seen throughout the US, the median sales price of both holiday and investment homes surged in 2015. They Investment and Vacation Home Buyers Survey, covering existing and new home transactions in 2015, found that holiday home sales last year declined to an estimated 920,000, down 18.5% from their most recent peak level of 1.13 million in 2014. Investment home sales in 2015 jumped 7% to an estimated 1.09 million from 1.02 million in 2014. Owner occupied purchases jumped 15.9% to 3.74 million last year from 3.23 million in 2014, the highest level since 2007. According to Lawrence Yun, NAR chief economist, while holiday homes sales took a sizeable step back in 2015 they still came in at the second highest amount since 2006. ‘Baby boomers at or near retirement continue to propel the demand for second homes, although headwinds softened the overall volume of vacation sales last year,’ he said. ‘The expanding pool of buyers amidst a dwindling number of bargain priced properties led to tighter supply and fewer sales and caused the price of vacation homes to rise. Furthermore, the turbulence that hit the financial markets the second half of the year likely seized some would-be buyers' available cash,’ he added. The median sales price of both vacation and investment homes soared in 2015. For holiday homes at $192,000 it was up 28% from $150,000 in 2014. The median investment home sales price was $143,500, up 15.3% from $124,500 a year ago. According to Yun, many of the metro areas with the strongest price appreciation in 2015 were in the South, the most popular destination for vacation buyers, and particularly in several Florida markets. While increased buyer demand contributed to the run-up in prices, it also likely squeezed less affluent households looking to purchase vacation properties. Holiday home sales accounted for 16% of all transactions in 2015, down from 21% in 2014 but still the second highest share since the survey was first conducted in 2003. The portion of investment sales remained unchanged from a year ago at 19% and owner occupied purchases increased to 65% from 60% in 2014. ‘Despite a smaller share of distressed properties coming onto the market, investment purchases reversed course in 2015 after declining for four straight years. Steadily increasing home prices and strong rental demand appear to be giving more individual investors assurance that purchasing real estate will diversify their portfolios and generate additional income if they decide to rent out the home,’ Yun said. The survey found that in addition to longer term rentals, investors are most likely to attempt to and rent their properties for less than… Continue reading
