Tag Archives: middle-east
Most UK borrowers reach mortgage freedom day
Home borrowers in the UK have reached the time of year when they will have earned enough to pay off the annual cost of their mortgage, research shows. Based on the average annual mortgage repayment cost of £7,584 and the average net annual income of £26,023, lender the Halifax has calculated that home owners with a mortgage will have today earned enough on average to cover their mortgage payments for the rest of 2016. Mortgage Freedom Day this year occurs just a day later than in 2015 and is the result of average annual mortgage repayment edging up by £17 during the year. Rental Freedom Day, on the other hand, comes 16 days later on the 05 May, again a day later than in 2015. However, there is a wide variation in Mortgage Freedom Day across the country, with home owners in Scotland and Northern Ireland achieving this on 12 March, followed by Yorkshire and the Humber on 25 March, the North West 26th and the North the 27th. Mortgage Freedom Day for Londoners doesn't arrive until 26 June, three months later than in northern England. Regionally, the North was the first to achieve Rental Freedom Day on 05 April this year, just ahead of Yorkshire and the Humber on 09 April and the East Midlands on the 13th April. Tenants in London have to wait until 13 July. ‘For most home owners mortgage payments are the biggest outgoing every month. Knowing they’ve earned enough to pay off their mortgage for another year should be a reassuring thought. On the other hand, those who rent will need to work a further couple of weeks to have earned enough to cover their annual rental cost,’ said Craig McKinlay, Halifax mortgage director. At local authority district level, new borrowers in West Dunbartonshire recorded the earliest Mortgage Freedom Day in 2016, on 21 February. Eight of the 10 earliest Mortgage Freedom Days this year take place in Scotland, including Inverclyde and East Ayrshire, both 23rd February, and North Lanarkshire on the 25th February. The remaining two local areas are Copeland in Cumbria on the 27th February and Blaenau Gwent on 02 March. Home owners in South Bucks have to wait until the autumn for Mortgage Freedom Day which will be the 12 September, followed by Hammersmith and Fulham on 21 August, Brent in North West London on 19 August and Ealing on 08 August. Continue reading
Poll reveals pensioners with buy to let worried about tax change
Almost three quarters of pensioners in the UK who have an investment property said they would struggle to make ends meet if they didn’t have the income from their buy to let, new research shows. Overall 72% would struggle and 81% of those aged over 65 said that their properties provide an important, even vital, boost to their retirement income, according to a poll carried out by Responsible Equity Release. The poll also found that 92% are worried about the changes to mortgage interest tax relief and the impact on the profit they make from their investment property. The buy to let tax changes coming into force have left many pensioner landlords considering whether it’s worth holding onto their property and 41% said although their buy to let property was a valuable income generator, they are now thinking seriously about selling it. ‘For many pensioners, having a buy to let property has been a life saver in this low interest environment. While their savings have languished, earning very little interest, and pension income has been hit hard by falling share prices, property income has remained strong,’ said Steve Wilkie, managing director at Responsible Equity Release. ‘Without the income boost from their buy to let, many would really be struggling to make ends meet. But the Chancellor has yet again ignored UK’s retirees when he announced changes to the way buy to let would be taxed,’ he pointed out. ‘George Osborne was so focused on taxing the rich, he forgot that a new tax on buy to let won’t just hit the wealthy, it will also hit those honest, hardworking people, who may have a single buy to let property and were just hoping it would earn them a little extra income in retirement,’ he added. Continue reading
Research reveals deposit gap between Greater London and rest of UK
The average deposit for a Greater London property is nearly three times or 170% more that of the rest of the UK, at £127,000, new research shows. Average deposit has increased by nearly £30,000 or 30% for London home movers in the last three years, the report from My Home Move also shows. However, overall, the average UK deposit size as a proportion of purchase prices has decreased by 1.8% since 2013, but home movers’ deposits remain high as house prices increase. The figures show that national the average property price in 2013 was £162,040 with a deposit of £44,690, rising to £173,202 and £45,534 in 2014 and £182,293 and 46,976 in 2015. In Greater London the average property price was £377,855 in 2013 requiring a deposit of £99,375, rising to 439,399 in 2014 with a deposit of £112,266 and £482,512 in 2015 with a deposit of £127,141. So in the UK as a whole the deposit needed in 2013 was 27.58 of the purchase price, falling to 26.29% in 2014 and then falling again to 25.77% in 2015. But in Greater London in 2013 a buyer needed an average deposit of £26.3% in 2013, falling to 25.55% in 2014 but rising again to 26.35% in 2015. ‘The London property market has always commanded greater prices than anywhere else in the UK but our research has shown just how extreme the situation is becoming,’ said Doug Crawford, chief executive officer of My Home Move. He pointed out that London property prices have risen by 27% in the last three years and while the rest of the UK has seen a small decrease in the average deposit size, those looking for a London home are depositing 170% more than their UK counterparts. ‘This situation is unsustainable and has been driven by rising house prices. For some, their deposit will come from the equity in the property they are selling. However, for many, they will still need to save tens of thousands of pounds to make the move onto and up the property ladder,’ he explained. ‘Ultimately, it still begs the question – who is going to help those looking to enter the capital’s housing market and those on the lower rungs of the ladder, first time buyers and second steppers?’ he pointed out. He also pointed out that earlier this year the firm predicted that 100,000 properties would be purchased in 2016 using gifted deposits courtesy of the Bank of Mum and Dad and based on these figures, it looks like a very large portion of these could be based in the Greater London area. Having analysed over 60,000 purchase records to determine the average deposit size paid by home buyers between 2013 and 2015, My Home Move compared these findings to the average property prices held by the Land Registry for the same period. Continue reading
