Tag Archives: industry
A mortgage in the US is generally more affordable than renting, new report says
Paying for a mortgage is still more affordable than renting in the United States but saving enough money for a down payment has become increasingly difficult for first time buyers. According to the latest analysis report from real estate firm Zillow this is particularly the case in markets where home values are rising rapidly. With the majority of renters in the largest metros putting about 30% of their monthly income toward a rental payment, saving money for a 20% or 10% down payment is extremely difficult. The report suggests that first time buyers and millennials are left trying to find other ways to break into the housing market, turning to friends and family for financial help. In 2014 alone, 13% of home purchases were bought using a loan or gift from friends or family for the down payment. Rental affordability has worsened in 28 of the 35 largest metros over the past year, and mortgage affordability worsened in just 18 of them, according to the report covering the third quarter of 2015. Residents of the Denver metro can expect to spend about 21% of their income on a mortgage, compared to 34% on rent. In the US as a whole home owners can expect to spend 15% of their income on a mortgage and 30% on rent. But getting that mortgage payment requires a home buyer to have saved $62,760 for a 20% down payment, the industry standard, on a median valued Denver home, which is $313,800. In the Boston and Miami markets, the median monthly mortgage payment requires just 22% and 20% of monthly income, respectively. Renting is substantially more expensive, influencing many renters to start thinking about purchasing a home. Some 35% of the median income pays the median rent in Boston and 44% in Miami. However, to purchase a home in Boston a 20% down payment is $76,220 while in Miami, buyers need to have saved $44,680. The report also shows that breaking into the housing market is less of a challenge in more affordable markets, like Cleveland. A 20 % down payment on a median home there is $25,000, or $12,500 for a 10% deposit. Residents of Cleveland can expect to spend 11% of their monthly income on a mortgage while for renters it is 27% of their monthly income. ‘In general, paying a mortgage is more affordable than renting, and has been for some time. Unfortunately, many current renters aren't able to realize the savings that come with homeownership because as home values and rents keep rising, it's getting increasingly difficult to clear the down payment hurdle,’ said Zillow chief economist Svenja Gudell. ‘It's not uncommon for a 20% down payment on even a modest home to represent savings of $50,000 or more in some areas. And that number itself is a moving target, rising as home values escalate and harder to achieve as more money goes to landlords and less goes to savings,’… Continue reading
UK building industry facing severe shortages, says RICS survey
The UK’s construction industry is facing its greatest skills crisis since 1998, with bricklayers and quantity surveyors in shortest supply, a new survey shows. These highest skills shortage on record are set to limit sector growth potential but despite this a sharp growth in construction is reported across UK, according to the report from the Royal Institution of Chartered Surveyors (RICS). Over half of respondents, 53%, reported difficulty sourcing labour, with 71% saying they had particular difficulty sourcing bricklayers and 64% highlighting a shortage of quantity surveyors. During the same period in 2011, just 1% of respondents were struggling to find bricklayers and only 15% noted a shortage of quantity surveyors. In addition to labour supply, 69% of firms said that financial constraints, such as access to credit, were among the biggest constraints to growth, while 60% said that regulatory and planning issues were potent constraints. However, despite these challenges, the survey shows significant areas of growth, with the number of new construction projects increasing, particularly in private housing and commercial sectors. While official figures, which are often subject to revision, highlighted a slight contraction in output over the three months to August, a substantial proportion of respondents in the RICS survey reported an increase in their workloads, a net balance +39%, with 29% of firms saying that they were operating at full capacity. The private housing and commercial sectors continue to lead the growth in workloads with net balances of 47% and 46% respectively reporting an increase. However, momentum was least firm in the public sector with net balances of 12% and 21% reporting growth in workloads in the housing and non-housing segments respectively. Meanwhile, in the infrastructure sector, growth accelerated somewhat with a balance of 34% seeing workloads rise, up from 25% in the previous quarter. ‘While it’s exciting to see that the UK is experiencing growth across the construction sectors, future growth will only be sustainable if the growing skills crisis is addressed. The availability of both blue collar and white collar construction workers is reaching crisis point,’ said Simon Rubinsohn, RICS chief economist. ‘We haven’t witnessed a labour shortage of its kind in nearly 20 years. Without the relevant skills, we will not be able to grow many of the Government’s priority construction sectors such as infrastructure,’ he pointed out. ‘Currently, while we know that there is a serious shortage of skills, we don’t yet know why we have seen such a dramatic drop in the labour market over the past five years. Part of the problem is the legacy of the collapse in the sector following the onset of the Global Financial Crisis,’ he explained. ‘Many professionals and other skilled workers chose to leave the industry and quite simply have not returned or been replaced. A real focus on attracting more young people into the industry is critical alongside an expansion of apprenticeship opportunities,’ he added. Continue reading
Landlords immigration checks to be rolled out UK wide next year
The UK government has confirmed that all landlords in England will have to check new tenants have the right to live in the UK before renting out their property from February next year. It means that the pilot study on immigration checks which has been ongoing in the West Midlands will now be rolled out across England from February and in other parts of the country at a date yet to be announced. Under the new rules, landlords who fail to check a potential tenant’s Right to Rent will face penalties of up to £3,000 per tenant. According to Immigration Minister James Brokenshire right to rent checks are quick and simple. ‘Many responsible landlords already do them as a matter of routine. We are providing landlords with all the advice and support they need before the checks go live on 01 February 2016,’ he said. He explained that the rules are part of the Immigration Act 2014 which introduced measures to reform the immigration system. ‘Right to rent is about deterring those who are illegally resident from remaining in the UK. Those with a legitimate right to be here will be able to prove this easily and will not be adversely affected,’ he added. Richard Lambert, chief executive officer of the National Landlords Association said that the policy has been causing great concern among landlords so a date for the roll out is welcome. ‘The Home Office’s evaluation of the scheme so far seems to show that landlords’ experience of carrying out right to rent checks is not as bad as the perception of the problems they will cause,’ he pointed out. ‘However, with just over three months to go it’s vital landlords familiarise themselves with what they will need to do to properly check their tenants and steer clear of breaking the law come February, especially because those who fail to do so could wind up in jail,’ he added. It is also hoped that the new rules that anyone renting a property in the UK has to see and make a copy of a passport or residence permit will act as a deterrent to rogue landlords who rent substandard properties and to more people that the building can adequately house. ‘Hopefully this will assist with the regulation of rental property standards and help clamp down on some of the landlords who believe it is acceptable to rent sub-standard properties. If this happens, the industry will be more regulated for both landlords and tenants and, in turn, a better environment for all,’ said Adam Male, found of online estate agent Urban. ‘It is also good news that any landlords who are not making the appropriate checks on immigration status will now face a penalty of up to £3,000 per tenant if they are found to be renting out a property to someone who is in the UK illegally,’ he pointed out. ‘Anyone found to be abusing the system should be punished, it… Continue reading
