Tag Archives: homes
Second steppers in UK housing market get boost, new research shows
Most second steppers in the UK housing market are no longer trapped in negative equity as their position is boosted by rising house prices and an influx of first time buyers, new research has found. This is despite the fact that many face a £128,000 price gap to jump up the housing latter, according to a study published by Lloyds Bank. The research also shows that 33% of second steppers think it will be easier to sell this year, almost treble that of 2012 and 37% are keen to make the move now to take advantage of the more buoyant housing market. Overall first time sellers are in a much better position than they were five years ago which is good news for the housing market as they are the link between first time buyers and the rest of the housing ladder. They are living in the homes that the first time buyers need to buy to keep the market moving. Without movement from Second Steppers, movement on the ladder comes to a standstill on the second rung. Many had previously found themselves stuck in their starter home with little or no equity as the economic downturn took hold. Higher house prices have increased the equity of those still living in their first homes, with 71% feeling that their equity position has improved over the last year. The current crop of second steppers typically would have bought at the bottom of the market in 2009 when prices were at their lowest, with the average price of a typical first time buyer home in 2015 now 31% higher than in 2009. This has led to second steppers now having an average equity level of £87,096, equivalent to 29% of the average price of a typical second stepper home price of £304,963. The estimated average equity level has risen by over £36,000 in the past year from £50,655 due to an increase in the prices paid for first time buyer homes. The research also says that the price paid for a home by a typical second stepper is more affordable now than it was a year ago, when compared with earnings. Their housing affordability has improved significantly in the past year from 7.1 times UK gross annual average earnings in 2014 compared with 6.4 in 2015. Despite increasing house prices boosting equity levels for second steppers, the findings show people living in their first home still have to find an extra £128,390 to plug the gap between the sale price of their current property and the cost of the house they would ideally move to which is typically a detached property. This gap reduces to £17,864 if the second stepper moves to a semi-detached home. Continue reading
UK house price expectations remains positive, latest index suggests
House price expectations in the UK remain positive, but signs of a post-election bounce are largely confined to London, according to the latest property sentiment index. Some 20.2% of the 1,500 households surveyed across the UK for the Knight Frank and Markit Economics house price sentiment index said that the value of their home had risen over the last month, while 4.1% reported a fall. This gave the HPSI a reading of 58, the twenty-sixth consecutive month that the reading has been above 50. But it was a slight decrease on last month’s reading of 58.2, indicating that households may have factored in the uncertainty caused by the general election to perceived price growth. ‘There is little evidence yet of an election bounce in house price expectations, reflecting current market conditions. Activity is certainly picking up following the election of a majority government, and the certainty this has provided in the housing market,’ said Grainne Gilmore, head of UK residential research at Knight Frank. Demand is rising, but an increasing number of vendors are putting their homes on the market, and this is set to create more balance in terms of pricing. Londoners expectations for future price rises reached their highest level since November last year, perhaps reflecting the increased certainty in the outlook for property taxes in the capital,’ she added. The future HPSI, which measures what households think will happen to the value of their property over the next year, fell in May to 70, slightly down from 70.2 in April. In spite of the monthly decline, the proportion of households expecting prices to fall over the next 12 months at 5.2% was the lowest ever recorded since the survey began in 2009. Meanwhile, 45.1% anticipate a rise in the value of their property and 49.7% forecast no change over the year ahead. Households in the East of England at 77.8 were most confident about price rises, followed by those in London at 77.7 and the South East at 73.5. The data also shows that some 6.4% of UK households said they planned to buy a property in the next 12 months, down from 6.5% a year previously. On a regional basis, nearly one in 10 households in the North East is planning a purchase in the next 12 months, followed by those living in London where 8.4% of households said they would be buying a property in 2015. ‘May’s survey highlights positive house price expectations across the UK, although households are still much less bullish than was seen at the post-recession peak exactly one year ago,’ said Tim Moore, senior economist at Markit. ‘Tighter lending criteria and stretched affordability continue to restrain house price sentiment, while improving labour market conditions and continued low mortgage rates remain two key drivers of positive property price trends,’ he explained. ‘The most likely area of the property market to experience an appreciable post-election bounce is the house building sector, as decision making should reaccelerate after several months… Continue reading
Home owners in Scotland’s Shetland Isles see top value growth since 2009
Home owners in the Shetland Isles in the far north of Scotland have seen the value of their property increase by £39,311 or 31% since the trough of the last housing market cycle in 2009, new research shows. The situation has been helped by the islands having the highest employment rate in Scotland, according to the research by the Bank of Scotland. Aberdeen City has the second highest house price increase in Scotland since 2009, with property prices going up 21% or £38,275, followed by Aberdeenshire with a 16% increase of £33,022. The report notes that both are amongst the five areas in Scotland with the highest levels of employment over recent years and says that there is a clear link between levels of employment and house price performance in recent years. Those areas with the highest average levels of employment since 2009 have, on average, recorded bigger house price gains. For example, the five local authority districts (LADs) with the highest employment have experienced average house price rises of 14% or £23,462, since 2009, compared with an increase of 2% for Scotland as a whole. The average house price in the 10 LADs that recorded the highest employment rate between 2009 and 2015 rose by £9,554 or 6%. However, looking further afield to the top 20 LADs, they have seen an average increase of only 2% or £2,617, which is in line with the average for Scotland. In stark contrast, those areas with the highest levels of unemployment, as measured by the claimant count, have typically underperformed the Scottish average. The 20 areas with the highest levels of unemployment have recorded an average house price fall of 8% or £11,252. The five areas with the highest unemployment rate have seen a 7% drop in the value of their homes. ‘There has been a very clear relationship between conditions in the Scottish jobs market and house price performance during the period since the housing market downturn between 2007 and 2009. Those areas with high levels of employment have tended to record above average house price growth. Areas with high unemployment levels have, on the other hand, typically underperformed,’ said Nitesh Patel, economist at the Bank of Scotland. ‘The past few years have underlined the importance of local economic health in determining house price behaviour. Other factors, however, are also key drivers of house price trends including the strength, or otherwise, of housing supply,’ added Patel. Continue reading
