Tag Archives: house
Value of UK housing up 57% in last decade, new research shows
The current value of the UK's private housing stock is estimated at £5.06 trillion, up from £3.22 trillion in 2004, a rise of 57% over the past decade. New research from the Halifax says that the increase of £1.83 trillion is equivalent to £79,262 per household in the owner occupied and private rented sectors since 2004. It means that the increase in the value of the UK private residential housing stock has outstripped rises in consumer prices, with the retail price index up by 37% in the past decade. The data also shows that in the past year, the value of the UK's private housing stock has grown 14% or £630 billion, the fastest annual growth since 2002 when it was 21%. Regionally, over the last 12 months the value of housing stock in London is estimated to have grown by £217 billion and by £123 billion in the South East with the two regions accounting for more than half of the total growth of the value of housing stock across the UK. An increase in average property values combined with a rise in the number of private new build homes coming on to the market have been the main contributing drivers. The value of the housing stock has grown in all 12 UK regions over the past year, and all regions have also seen a significant increase in the value of their private housing stock during the last 10 years. The largest increase was in London where the value of housing stock has more than doubled at 109% from £545 billion in 2004 to £1.14 trillion in 2014. The capital is closely followed by Scotland, which has seen a rise of 96% from £170 billion to £333 billion. However, there have been much smaller increases elsewhere with the smallest rises in the West Midlands at 32% and the North East at 33%. The research also found that the value of mortgage debt has risen by 47% since 2004 from £877 billion to £1.29 trillion, but at the same time the value of the private housing stock has grown by more than four times as much as outstanding mortgage debt. As such, housing equity has increased by £1.42 trillion or 61% over the decade from £2.34 trillion in 2002 to £3.76 trillion. Regionally, there is a wide variation in the level of housing equity, with a higher balance in the south compared to northern areas. On average, the highest amounts of equity are in London where housing equity is estimated at £820 billion, which is equivalent to £313,466 per household. The capital is followed by the South East at £726 billion or £219,163 per household, and the East at £447 billion or £203,462 per household. Outside southern England, the highest average equity levels are in Scotland at £249 billion or £126,930 per household, the North West with £278 billion or £106,011 per household and the West Midlands at £248 billion or £125,532 per household. The lowest housing equity is… Continue reading
Equity release from UK homes going on improvements, study finds
The main reason home owners in the UK are choosing to unlock money from their property is to fund home improvements, new research suggests. Equity release lending has reached £1 billion so far this year and the need to renovate is the reason almost half ,48%, of all LV= equity release customers have taken out a loan. However customers are more likely to be making essential modifications such as widening doorways for wheelchair access or installing a stair lift than adding a conservatory or loft extension. The research also shows that people are using equity release to relieve pressure on the purse strings. The figures for the year to date reveal that 15% of the firm’s equity release customers wanted to use the money to top up their retirement income, with a further 9% wanting to clear an outstanding mortgage and other existing debts and loans. Financial necessity has driven much of the demand for equity release. However, treating or helping out family also remains a common reason for choosing equity release, with 10% stating this as their motivation. Whilst using the freed up equity for a holiday accounted for 6% of applications. ‘Whilst home improvements continues to be the most popular reason for using equity release, market growth is also being driven by the need to meet and reduce financial commitments,’ said Vanessa Owen, head of annuities and equity release at LV=. ‘With the reality of living on a low pension income hitting home for many retirees, it makes sense that many wish to unlock the cash tied up in their properties. At retirement, someone’s largest asset is usually their house and for those retirees who wish to stay in the home that they love, then equity release is a solution worth considering,’ she explained. She pointed out that this year’s Budget announcement gives new retirees more flexibility as to how they take their pension, but they will still see their income drop when making the transition from working to retirement. ‘As a result we are likely to see demand for equity release grow as those with small pots look to fund their later years. It is essential that retirees consider all their options and that equity release is considered alongside other retirement income solutions so that they are able to effectively plan for the future,’ she added. Continue reading
Rural homes more expensive to buy than urban homes in UK
Countryside properties continue to command a substantial price premium over urban homes and are 26% higher in price, new research shows. On average, homes in rural areas in Great Britain are £46,575 higher in price and this is true of all regions although it differs significantly across the country, according to a new report from the Halifax. The rural premium is greatest in the West Midlands at £88,781 or 57% compared to £17,570 in the North East or 13% and the research also shows that prices in urban areas have been rising faster over the past five years. Between 2009 and 2014, the average price of a home in the countryside rose by 12% compared with an average increase of 18% in urban areas. Between 2013 and 2014, the average price of a home in the countryside has risen by 8% compared with an average 10% increase in urban areas, excluding Greater London. There are also fewer firs time buyers in rural areas. They account for 42% of all mortgage financed purchases in rural areas, compared to 54% in urban areas. The report says that recent outperformance of house prices in urban areas partly reflects the relative strengthening of the first-time buyer market in the last few years. Since 2010 there has been a significant increase in the number of first-time buyers, and this group typically represents a larger proportion of the market in urban areas. ‘It typically costs significantly more to buy in rural areas with a substantial premium existing in all the regions of Great Britain. This reflects the aspiration of many to own a property in the countryside, said Martin Ellis, housing economist at the Halifax. ‘The relatively high prices, however, put rural homes out of the reach for many, particularly the young. This is reflected in first time buyers accounting for a smaller proportion of home buyers in the countryside than in urban areas,’ he added. The research also shows that affordability is a bigger issue in many rural areas. The average house price in the countryside is equivalent to 6.8 times gross annual average earnings. This significantly exceeds the comparable ratio for urban areas of 5.6. Social housing provision is typically lower in rural areas of England and Wales, with 12% of the housing stock accounted for by social housing compared with 19% in urban areas. There are only three rural areas where the ratio of prices to earnings is below the historical long term average of four; Copeland in Cumbria and East Ayrshire both at 3.8 and North Lincolnshire at 3.9 which are the most affordable rural areas in the country. Chiltern is the most expensive rural area in Britain with an average house price of £477,526, making it the least affordable rural area in Britain as measured by the house price to earnings ratio, with an average house price that is 9.5 times local gross annual average earnings. Six of the 10 least affordable rural areas in the country are in the South East with… Continue reading
