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UK buyers choose renovation properties to try to save money, research suggests
Some 35% of home owners in the UK who bought a property that needed renovation had to as it was the only way that could afford to buy a home, according to new research. Some 8% bought a home needing renovation but found that in reality they could not afford to do the work and 10% ended up living on a ‘building site’ for a year or more before starting the work. The research from price comparison site Confused.com also found that for those who persevere the hard work can be worth it 19% made a profit of between £25,000 and £50,000 from a successful renovation project. The sale prices of properties that need renovation are normally much lower than the prevailing market price in that particular locality. On average, home owners who have bought a renovation property have saved themselves £44,037. Home renovators are paying on average £152,792 for a property that needed some work done to it, compared to the average UK house price which is valued at £196, 829. Some 38% admitted to buying a property that needed some work as it saved them thousands of pounds compared to buying a home that needed no work. In fact, 40% of home owners admit they would buy a property that needed renovation if it saved them money. On average, home owners spent £33,089 on doing up their properties with 12% spending more than £50,000 renovating their home. Some 62% did work on the kitchen and 61% on the bathroom. However, renovating a property can often be more expensive than first anticipated with 45% of home owners saying they spent more than intended, with many spending £2,886 over their budget. Indeed, some 26% ended up going over their budget by more than £5,000 and 22% said that they would never buy a renovation project again. And the research also found that 41% who have carried out renovation work on their property have not let their insurer know. ‘As house prices seem to be continuing to rise, it would appear that more and more people are resorting to buying properties that need renovation. Deciding to renovate a property is a big decision and often more expensive than first anticipated,’ said Gareth Lane, head of home insurance at the firm. Continue reading
UK mortgage lending expected to see steady growth in next two years
The value of home lending in the UK increased across all residential sectors in December but there is a mixed picture in terms of growth and decline, according to the latest data from the Council of Mortgage Lenders. New data from the Council of Mortgage Lenders reveals a mixed picture on lending in December to November. However, on an annual basis, the value of lending grew across all lending types and the CML expects steady growth in the next two years. First time buyers borrowed £4.5 billion for home owner house purchase, up 7% on November and 18% on December last year. This totalled 29,300 loans, up 6% month on month and 11% year on year. Home movers borrowed £6.6 billion, up 2% on November and 20% year on year. This totalled 33,400 loans, up 3% month on month and 12% compared to December 2014. However, home owner remortgage activity was down 16% by volume and 16% by value compared to November. Compared to December 2014, remortgage lending was up 14% by volume and up 24% by value. Gross buy to let saw month on month decreases, down 3% by volume and 3% by value, but the growth year on year continued. The data also shows that first time buyers took out 87,100 loans totalling £13.3 billion to purchase homes. This was up by volume 3% on the third quarter and 14% on the fourth quarter 2014 and by value it was up 3% quarter on quarter and 8% year on year. Home movers took out 101,900 loans, down 1% quarter on quarter but up 9% compared to the fourth quarter 2014. This totalled £20.3 billion, down 3% on quarter three but up 18% year on year. Home owner remortgage activity was up 4% by volume and 6% by value compared to the third quarter. Compared to the fourth quarter 2014, remortgage lending was up 21% by volume and up 35% by value. Gross buy to let saw a slight quarter on quarter decrease, down 1% by volume and 1% by value, but year on year growth continues. First time buyers borrowed £46.7 billion for home owner house purchase in 2015, which was up 4% on 2014. This totalled 311,700 loans, unchanged from the previous year. First time buyer lending was at its highest since 2007. Home movers took out 365,800 loans, down 0.2% on 2014, but the amount borrowed totalled £72.1 billion was up 7% on 2014. Lending was at its annual highest since 2007. Home owner remortgage activity was up 11% by volume and 20% by value compared to 2014. The value of remortgage lending was at its highest since 2008. Gross buy to let also saw year on year increases, up 28% by volume and 39% by value. Buy to let lending was at its highest since 2007. ‘Improving economic conditions, boosted by government schemes like… Continue reading
Number of million pound properties in UK expected to triple by 2030
The number of million pound properties in the UK will more than triple by 2030 and one in four London homes will cost £1 million or more by 2030, new research shows. Yet less than 1% of properties in the North East, Yorkshire and Humber, the North West, Scotland and the East Midlands will be in this price bracket, according to the study from Santander Mortgages. Also, by 2030 the average property price in the UK expected to double, surpassing the half a million pound mark with prices set to soar to as much as 16.5 times average incomes. Today, less than half a million homes in the UK are valued at £1 million or more, says the research done partnership with economist and London School of Economics professor of economic geography Paul Cheshire. It says that 25% of housing stock in London is expected to be valued at £1 million or more, rising to 70% in two London boroughs, highlighting a stark geographical divide. Overall, the average UK property price, which currently stands at £283,565 is expected to increase 23% by 2020 to £349,3000. Fifteen years from now in 2030, the average UK property price will have almost doubled with a 97% increase, surpassing the half a million pound mark at £557,444. While property prices are expected to soar, predictions suggest that incomes will not keep pace, resulting in an overall decline in affordability. At present in the UK, the average property price is 7.9 times the average income, but by 2030, this is expected to hit a multiple of 9.7. Again, this trend is elevated in London, where prices are currently 11.5 times incomes and predicted to rise to an eye-watering 16.5 by 2030. ‘Property price inflation will tip many existing home owners into the million pound price bracket but could also price some aspiring buyers out of the market if they don’t have the right support. The current property market is buoyant and the deals available to new and existing owners are extremely competitive, so those wishing to buy or move shouldn’t be put off,’ said Miguel Sard, managing director of mortgages, Santander UK. ‘Regardless of the price point a buyer is considering, our advice remains the same; do your research, find a mortgage provider that offers competitive rates and a range of products to ensure that the right deal is secured, and above all, ensure the repayments are affordable,’ he added. Cheshire pointed out that by 2030 the divide between housing haves at the top and the have nots at the bottom will be even wider than it is now. ‘More owners will enjoy millionaire status, as homes that many would consider modest fetch seven figure prices in the most sought after areas,’ he said. ‘Property price inflation is beneficial for existing owners who will see their net-wealth increase, but it will make entering the market more difficult still for new buyers, further highlighting the importance of… Continue reading
