Tag Archives: london
Over half of UK buyers spend more than intended on a new home
More than half of British people spend at least 10% more than they intended when buying a new home and many end up with an extra bedroom, research has found. In a poll they confessed that they are influenced by their emotions over practical needs which results in spending more, according to the survey by Online Mortgage Advisor. When asked if they changed or widened their original budget some 64% said they did and 89% took into account properties that were more expensive than they originally planned to. Some 51% said they went at least 10% over budget, 18% stayed within 10% of their original budget, 13% were exactly on budget and 11% were within 10% or less. Only 7% bought a house for more than 10% less than they originally intended. Of those who spent more 68% said it was because they fell in love with a specific house and had to have it, 47% paid extra for the right location, 33% said their partner encouraged them to spend more, 25% bought a bigger house as it was better value for money and 29% said they were encouraged by an estate agent while 6% said it was down to their children. ‘Buying the right house within budget can be a really difficult task, especially in a growing market where property prices are still increasing in most parts of the UK. Often people will set out to buy based on price, but then check to see what they could get if “they just spent a bit more,’ said Pete Mugleston, director of Online Mortgage Advisor. ‘From then the decision becomes less about price and more emotionally driven, and often people will either come across their dream home or find it hard to go push the budget down again after seeing what they can purchase with a small increase,’ he pointed out. Continue reading
UK housing market activity robust despite looming EU referendum
Housing market activity in the UK is robust despite the forthcoming referendum on the future of the country in the European Union, according to new research. Valuation activity in May rose by nearly a fifth on an annual basis with the total number of housing valuations carried out in May 2016 some 18% higher than in May 2015. The data from the latest monthly report from Connells Survey & Valuation also shows that month on month valuation activity in May decreased by 1% compared to April this year. John Bagshaw, corporate services director of Connells Survey & Valuation, believes the market is looking remarkably resilient ahead of June’s vote and he believes that the slight month on month cooling could still be a result of stamp duty changes that came into effect at the start of April. ‘However once that stamp duty related instability has passed, there appears to be a steadier annual growth and a more positive outlook for the housing market. Even if the EU referendum does have a measureable impact, one thing is clear, any slump hasn’t happened yet,’ he said. The report also shows that the first time buyer and remortgaging sectors continue to be stand out areas of activity, as the key driver of annual growth in May’s valuation market, up by 37% and 42% respectively, when compared to May 2015. However, on a monthly basis, May’s first time buyer valuation activity fell back 8% compared with April, whereas remortgaging activity increased by 3% over the same period. The buy to let sector experienced the sharpest year on year decline compared to other sections of the market, down by 38%. However when compared to May 2015, the number of valuations for buy to let purposes has also seen the greatest percentage growth compared to April, up by 8%. ‘Remortgagors are leading the market, underpinned by lenders offering a new set of favourable interest rates for existing homeowners. But first time buyers are also on the up. Factors such as low inflation, rising wages and government schemes are all helping new owners onto the property ladder,’ Bagshaw explained. ‘Even for the much downplayed buy to let industry, May was a good month. Valuations on behalf of landlords have been leading the housing market since April. Annual growth is likely to stay negative for buy to let activity, but the most recent signs are positive,’ he added. The report shows that there has been a relative steadiness of activity among home movers. The number of valuations for existing owner occupiers seeking to move home in May grew by 9% over the 12 months since May 2015 and contracted by just 1% compared to April 2016, in line with figures for total valuations activity. ‘Home movers have had a stable month and appear confident in the strength of the housing… Continue reading
Latest mortgage research shows shift in investors’ choice of property type in UK
Real estate investors in the UK looking to expand their property portfolios are looking to do so with the purchase of more complex property types, new research has found. In particular 28% of those looking to expand said they were considering purchasing HMOs, up from just 10% six months ago, according to the latest report from Mortgages for Business. Commercial and semi-commercial property are also interesting of investors but those looking to purchase vanilla property has fallen slightly to 79% from 83% in November. David Whittaker, managing director at Mortgages for Business, pointed out that with higher yields it is no surprise that there has been a sizeable shift towards the more complex property types. ‘The interest in commercial and semi-commercial property may have also grown as these asset classes do not incur the Stamp Duty Surcharge imposed on residential property,’ he explained. The report also shows that the number of investors looking to expand their portfolio has dipped slightly to 41% from 46% in November 2015, probably due to the tax change announcement and the introduction of the 3% stamp duty surcharge. However, the good news is that an even smaller proportion, some 14%, plan to shrink their portfolios, down from 18% in November 2015. Despite an increase in investors keeping their portfolio size as it is now, 39% still plan to remortgage some of their properties in the next six months. ‘It is positive to see that fewer landlords are looking to sell property and shrink their portfolios and that a large proportion are still seeing the benefits of remortgaging,’ said Whittaker. ‘After the government’s tax crackdown on private landlords I can understand why investors are being more cautious about expansion. It will be interesting to see how long this cautious approach will last,’ he added. The research also shows that 30% of respondents said they owned a property in a limited company vehicle up from just 22% a year before. ‘We expect this figure to continue to rise in light of the pending tax changes which will peg relief on finance costs, including mortgage interest, to the basic rate of 20% to individual tax payers. Since the tax relief announcement we have seen a notable rise in limited company applications, which doesn’t show any sign of slowing down,’ Whittaker said. The survey found that 59% of those looking to expand their portfolios will need to refinance to raise the necessary funds, up marginally from 58% in November 2015. There was also a fall in the number of respondents who felt that lenders were not doing enough to support investors. The most common gripes felt by landlords were extremely similar to the responses given in November’s survey including wanting more lending options for limited companies, wanting the removal of upper age restrictions and wanting more of a human/common sense approach to underwriting. Continue reading
