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First time buyers increased in the UK in March and paid less for their home
The number of first time buyers in the UK increased in March to a total of 32,500, the highest figure since June 2014, according to the latest tracker report. Overall first time buyer volumes grew by 47.7% on a monthly basis and as well as cheaper prices the burden of deposit costs and mortgage payments dipped, the data from the Your Move and Reeds Rains report shows. This means that, between February and March, the total flow of buyers managing to step foot on the ladder for the first time grew by 10,500 and on an annual basis, the total number of first time buyers in March grew by 34.9% compared to March 2015. Adrian Gill, director of estate agents Your Move and Reeds Rains, pointed out that while much was made of March being the month of the buy to let landlord and the second home buyer due to the April deadline for additional stamp duty, the surge was not at the expense of the bottom rungs of the ladder. He believes that a continuation of the broadly positive economic climate has likely been a factor spurring would-be first time buyers. ‘However, what’s really getting those numbers up is the fact that the range of support options available to first time buyers is at last beginning to be recognised and utilised,’ he said. ‘The Help to Buy scheme is assisting those with limited capital recognise their dreams, while the Government’s offer of cut price homes for first time buyers is easing supply in a part of the market that typically struggles to match roaring demand with constrained supply,’ he added. The data also shows that March has seen a lightening of home ownership costs and the charges associated with it. The average purchase price paid by first time buyers in March stood at £166,559, down 1.2% in absolute terms compared with February which previously marked the highest average price on record. But on an annual basis, the average purchase value of a first time buyer property rose by 9.2%. Deposit and monthly mortgage payment costs also declined. First time buyer deposits averaged £28,233 in March, down 4.1% compared with the previous month. In addition, the proportion of an average first time buyer’s monthly income that is consumed by deposit costs fell 3.1% between February and March from 74.9% to 71.8%. Meanwhile, over the same period, monthly mortgage payments accounted for a steadily decreasing amount of average first time buyer income, falling from 20.4% of monthly income in February to 20.3% as of March. Besides the falling costs of home ownership, lending conditions for firs time buyers have remained favourable. The average loan to value (LTV) ratio reached 83% in March, marking a 0.5% uptick on the previous month, meaning first time buyers will be able to borrow more against the value of the home they wish to purchase. The average first time buyer mortgage rate continues to fall, dropping from 3.14% in February to… Continue reading
Global business putting investment in UK commercial property on hold due to Brexit concerns
International businesses are postponing investment in the UK in the wake of uncertainty about the country’s membership of the European Union ahead of a referendum in June. The latest UK Commercial Market Survey from the Royal Institution of Chartered Surveyors (RICS) indicates that demand for UK commercial property among international investors has stalled. It says that short term uncertainty has contributed particularly to falling international investment demand in central London and rental and capital value projections have been scaled back since the announcement last year that a referendum would be held. On top of this only 6% of the RICS survey respondents believe that Brexit, the term given to a UK decision to leave, will have positive impact on the country’s commercial property sector The demand indicator among international investors for UK commercial property is now at its lowest level since RICS records began in 2014 with just 5% of members surveyed reporting increased interest from overseas companies over the last three months. This is a considerable drop from 36% in the second quarter of 2015 Uncertainty caused by the EU referendum has been cited by 38% of RICS members working within the sector as the reason why major international retailers and other businesses have been nervous of investing in Britain. Should Britain leave the EU, some 43% of respondents feel that it would have a negative impact on the commercial property sector and only 6% said a Brexit scenario would have a positive impact on the commercial property sector. RICS says that some international firms are drawing up contingency plans to shift their headquarters in the event of Brexit. Overseas firms based in the UK occupy large swathes of real estate, and their departure could harm office occupancy rates, and the local economy. Likely beneficiaries of a Brexit are Paris, Frankfurt and Dublin, although the report said London was likely to remain a magnet for investment. The report points out that while investment rates have eased, they are not frozen. ‘There is no doubt that since the EU referendum became a certainty following the general election last May we have seen a decline in interest from overseas investors in UK commercial property,’ said RICS chief economist Simon Rubinsohn. ‘At least in the short term, we know that international retailer and service providers are finding the UK market less attractive,’ he added. The report also suggested that British farmers, many of which rely on payments from the EU’s Common Agricultural Policy to pay their rents, would take a big hit if the UK leaves the EU. The RICS EU Referendum Paper shows that a range of key industries from residential housing to construction and rural have been hit by short term uncertainty. However, across the board, in the longer term steady growth is still predicted across rural, land and built environment sectors. It suggests that in the event of Brexit, farmers will most likely lose access to the EU single market and CAP. The question… Continue reading
Official figures show fewer residential properties are lying empty in the UK
The number of empty homes in the UK is now at its lowest level since records began with a drop of over a third from 318,642 in 2004 to 203,596 in 2015. Figures also show an increase in the number of owner occupied homes in the past year, after seven years of decline, starting in 2007. The downward trend in ownership is continuing to level out after a fall from a peak of 69.5% in 2002 to 62.5% in 2015 and 62.8% in 2014. Data from the government also shows that the number of new homes up by a quarter in the last year alone, the highest annual percentage increase in net additional homes for 28 years. ‘We are turning around the housing market and making sure the best use is made of all housing including empty homes. We are very clear that a house should be a home which is why we have taken action to stop homes being bought up and left as an empty investment,’ said Housing and Planning Minister Brandon Lewis. ‘And we’ve taking forward the boldest ambition for housing in a generation, doubling the budget so we can help a million more people into home ownership, while delivering a bigger, and better private rental sector,’ he added. He pointed out that the government has introduced a number of measures to get homes back into use that have stood empty for years including rewarding councils for bringing empty homes back in to use through the New Homes Bonus and since April 2011, councils have been allocated over £4.846 billion for providing new homes. Other measures are providing over 704,000 additional homes, bringing over 106,000 empty homes will be back into use and providing 271,000 affordable homes and giving councils the power to increase Council Tax on empty properties. Alongside this charges have been introduce on certain ownership to prevent residential property being held through companies left empty and move to ensure that Capital Gains Tax is due on gains made by foreign owners who sell residential property in the UK, much of which is left empty. This means the same rules apply to residents and non-residents. Lewis added that the government is determined to provide more homes and has committed more than £20 billion over the next five years to help meet its ambition to provide a million new homes. He also pointed out that Right to Buy is being extended to 1.3 million people, shared ownership properties are being made available to a much larger number of people and 200,000 Starter Homes are being provided at a minimum 20% discount for first time buyers. Continue reading
