Tag Archives: income
Confidence in US housing market rises, latest index shows
Confidence in the US residential property market is on the rise, especially among those renting homes, new research shows. More than five million renters say they're likely to buy a home in the next year, according to the latest Zillow Housing Confidence Index (ZHCI) and overall both renters and home owners expressed more confidence in the housing market this year than last year. Americans are most confident in the housing market in San Jose, Miami and San Francisco while over the last year, confidence rose the most in Dallas, Detroit and St. Louis. Home owners remain more confident than renters, but renter confidence is growing faster than homeowner confidence in 14 of 20 metro areas surveyed. A breakdown of the figures show that more than 12% of current renters nationwide, roughly 5.2 million, said they plan to buy in the next year, an almost 25% jump from the same time last year, when 4.2 million renters said they had plans to buy within 12 months. The ZHCI, sponsored by Zillow and developed by Pulsenomics LLC, polls homeowners and renters about housing market conditions, expectations for the future and their attitudes toward homeownership in general, across 20 of the large metro areas in the United States. Thanks to historically low mortgage interest rates and home values below peak levels, buyers can expect to spend about 15% of their monthly income on a mortgage payment, compared to 22% historically, according to Zillow research. Typical renters should expect to pay 30% of their income to rent, compared to 25% a generation ago. ‘As home affordability continues to look great and rental affordability looks abysmal, many current renters clearly seem to be re-thinking their attitudes toward homeownership, and are expressing more confidence in the overall housing market as a result,’ said Zillow chief economist Stan Humphries. ‘But while this confidence is heartening, it's important to inject a note of reality as not all renters who want to buy this year will be successful. Saving a down payment, qualifying for a mortgage and finding an affordable home to buy all remain formidable challenges for many,’ he explained. ‘Among all renters surveyed nationwide, 59.7% said they think buying a home is the best long term investment a person can make, compared to 56.9% at the same time last year. This improved long term outlook was especially evident among younger renters. Among all 18 to 34 year old renters, 66.2% said owning a home was the best long term investment, compared to 61.4% last year. The index is measured on a 100 point scale, with readings more than 50 indicating general confidence. Overall, housing market confidence is rising more quickly among renters than home owners. Among only home owners, headline confidence rose 3.7 points year on year, to 70.6 in January. Among renters only, overall confidence rose 4.4 points in the past year, to 62.4. Confidence among all owners and renters rose 3.6 points, to 67.4. Although survey respondents in most… Continue reading
Over 55s boost property equity release in UK to record high
The total value of equity release lending in the UK reached almost £1.38 billion in 2014, the highest since records began in 1992, according to the latest industry figures. The 2014 total was up 29% from 2013, bringing the equity release market back above pre-recession levels, the data from the Equity Release Council also shows. It points out that home owners aged 55 and over are increasingly use their housing wealth to boost their finances and help with living costs in later life. On a quarterly basis the value of equity release lending totalled £365.7 million in the final quarter of 2014, an increase of 18% year on year and it reached £741 million for the second half of the year. There was also a six year high in new customer numbers with more than 5,700 over 55s releasing equity from their homes in the last three months of 2014 and there were 5,712 new customers in the final quarter of the year, the largest amount in a single quarter since the fourth quarter of 2008. It pushed the total number of new equity release customers in 2014 to 21,336, a 13% increase from 2013 and the largest yearly figure since 2008. Customer numbers have now grown for four consecutive years since the recession. The average value of equity release lending also hit a new milestone in 2014, reaching £64,787, up 14% from the previous year and exceeds the previous record of £60,504 in 1998 by 7%. Some 66% of new equity release customers chose drawdown products in 2014, in contrast to just 25% of customers in 2006. Lump sum products now account for 34% of new plans while home reversion account for less than 1%. However, drawdown products account for a smaller share of the market by value at 60% or £825 million during 2014, as these products allow retirees to take smaller sums as and when they need them, often allowing more of their housing wealth to be preserved. ‘These lending figures show that 2014 was truly a record breaking year for the industry. Equity release is proving to be a crucial tool for financial planning in retirement, and is allowing retirees to improve their standard of living and give them more flexibility to support themselves or family members,’ said Nigel Waterson, chairman of the Equity Release Council. ‘Many retirees have more wealth tied up in property than anywhere else, so it is only logical that this forms part of their plan to enjoy a comfortable retirement. The new pension freedoms won't change the fact that many people do not have enough savings for later life. There is a danger that people's pension pots will be here today, gone tomorrow, but housing wealth is the one constant that many in this generation can rely on for support,’ he explained. ‘Increasing awareness of the available products and their benefits means that equity release will continue to thrive in 2015… Continue reading
Rent increases likely to be muted in the UK in 2015, it is predicted
Market conditions, combined with the likelihood of interest rate rises and uncertainty over the general election is likely to result in static or low rental increases in the UK in 2015, it is claimed. Rental rises are likely to be restricted by factors such as continued low disposable income, anticipated interest rate rises and a forecast of economic development in 2015 that is expected to be lower than this year, according to the forecast analysis from Belvoir Lettings. A review of the year shows that rents have not changed much since 2008. When the firm first started tracking rents in March 2008 they were £698 per month, fell to £678 in 2009 and fluctuated around this level until 2014 when they reached £691 per month. ‘On average, after seven years, Belvoir offices that have traded consistently have seen little or no growth in rents, albeit there have been falls and rises during this time. For the Belvoir group however, average rents have risen due to an increase in the number of new offices joining Belvoir in higher rental areas south of the Midlands,’ said Dorian Gonsalves, Belvoir's director of commercial and franchising. Rents for the whole group, including new offices, were £707 per month in 2008, recovering to £715 per month in 2012 and 2013, seeing an annual average of £735 per month year to date, a 4% rise for the group over the last seven years. Regionally, in England, rents vary from £570 in the East Midlands to nearly £1,500 per month in London. The majority of Belvoir offices in Scotland are either seeing rents flat or slightly falling outside of Edinburgh and Aberdeen, with rents ranging from £500 to just over £600. In Wales, rents have been relatively static since offices opened, with average rents varying from just over £500 to £700 per month. Belvoir's research shows that over the last seven years London rents are up around 20%, while the South East is up 7%, West Midlands 6% and Yorkshire up 3%. Rents in the South West are on a par and rents in East Anglia have nearly recovered. In contrast, rents in the East Midlands are still 5% lower while in the North West they are down by 4% versus 2008. Year on year, rents are up in most areas, reflecting the tightening of stock levels versus high demand and better economic performance, which helps tenants to afford to pay more rent. However, areas such as Yorkshire, the North West and East Midlands have seen a fall year on year, suggesting the North/South divide in England is impacting on rental performance. ‘From a sales and property price perspective, this year saw a continued recovery of the property market. However, price rises and recovery were driven largely by activity in the London and the South East, said Gonsalves. ‘After 18 months of rapid growth, the rise in London seems to have… Continue reading
