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More needs to be done to boost UK’s new Help to Buy ISAs
The UK’s new Help to Buy ISAs are a step in the right direction, but much more must be done to help people renting taking their first step on the property ladder, it is claimed. According to Kevin White, head of financial planning at independent financial advisory group deVere, it is effectively free cash from the government and anyone who wants to buy their first home should take advantage. The new ISAs are available from 01 December and will enable first time buyers can save up to £200 per month and the government will add 25% on top of the savings. Savers need to save at least £1,600 to get the minimum bonus of £400. The most savers will receive the bonus on is £12,000, meaning £3,000 for five years of saving. ‘The overwhelming majority of Britons dream of owning their own home and this is a hugely positive step in the right direction to help people get on the property ladder,’ said White. ‘However, even with the maximum HISA saving plus the government bonus, meaning a total of £15,000, most first time buyers will still find that they’re £15,000 short for the average deposit,’ he explained. ‘With this in mind, much more must be done to help Generation Rent achieve their financial goals. Too many people in their 20s and 30s are desperately keen to leave their rented accommodation and/or their parents’ home and to buy a place of their own but simply can’t afford to do so,’ he added. He believes that the government, the financial services industry and consumer groups must unite to reignite the savings culture so that saving once again becomes Britain’s social norm. ‘It is our experience that many people do indeed want to save but are not in a financial position to put money aside. We believe this could be helped to be turned around with a three-pronged approach,’ said White. ‘First, we would urge the government to create a comprehensive savings charter. Government needs to make saving worthwhile by, for instance, offering more proper incentives, such as the HISA, and reversing existing and planned tax raids on pensions,’ he pointed out. ‘Second, the financial services sector could do more to help people get more from their savings. For example, it could make it easier to switch bank accounts, and also develop new, accessible and simple-to-use financial products and solutions to give today’s young people more options. ‘And third, we need the government, the industry and consumer to work more cohesively to educate people on the real importance of saving. We need to highlight the value of long-term security over short-term gratification,’ he added. He also pointed out that savings give people a buffer when things go wrong, they act as protection, and they also give people more life opportunities. ‘On a wider scale, a society that… Continue reading
NZ prices up year on year but down month on month, latest index shows
Residential property sales in New Zealand increase by 18.6% year on year in October but where down 4.1% compared to the previous month, according to the latest index figures. The national median price was $460,000, up $30,000 or 7% on October 2014 and down 5.1% on September, the data from the Real Estate Institute of New Zealand shows. Excluding the impact of the Auckland region, the national median price rose $28,500 to $370,000 compared to October 2014 to reach a new record high and rose 1.4% on September. There was a new record national median price excluding Auckland of $370,000, up 8.4% compared to October 2014 and up 1.4% on September and new record median prices for Northland, Manawatu/Wanganui, Wellington and Nelson/Marlborough. But the market paused in Auckland with a year on year rise of 16.8% with month on month median prices down by 3%. The data also show that there was a 57% rise nationwide in the number of sales over $1 million year on year and a 47% rise in the number of properties sold by auction. ‘The drop in the number of sales in Auckland in October is the result of a softening of demand over the past few months and the new IRD and bank account rules introduced at the start of October,’ said REINZ chief executive Colleen Milne. ‘However, the fundamental supply and demand drivers of the Auckland market remain in place, and the result for October is indicative of the market adjustment phase as it adapts to these new requirements,’ she explained. ‘Elsewhere across the country we are seeing increasing demand and rising prices as buyers of all types emerge to take advantage of low interest rates. It is further evidence of the halo effect of Auckland based buyers searching for value in regional markets,’ she pointed out. ‘During winter and into early spring, the property markets in a number of regions have been far more active than would normally be expected, thus a slowdown or pause is not surprising following this burst of activity,’ she added. Overall 10 regions recorded increased sales volumes compared to September, with Central Otago Lakes volumes growing 31%, followed by Southland with 21% and Canterbury/Westland, 15%. Compared to October 2014, all regions recorded increases in sales volume, with Waikato/Bay of Plenty recording the largest increase of 54%, followed by Hawke’s Bay with 52% and Central Otago Lakes with 50%. On a seasonally adjusted basis, the national median house price fell 5.5%, indicating that prices fell slightly more in October than would normally be expected at this time of year. Northland, Manawatu/Wanganui, Wellington and Nelson/Marlborough all reached new record median prices in October. Northland recorded the largest percentage increase in median price compared to October 2014, at 18%, followed by Auckland at 17% and Taranaki at 12%. Hawke’s Bay recorded the largest percentage increase in median price compared to September, with a 9% increase, followed by Northland with 7% and Nelson/Marlborough with 5%. Continue reading
Price growth in the UK’s prime country house market slowed in 2015
The annual change in prime property values in the UK over the year to September was 2.7% on average, down from a high of 5.2% last year, according to a new analysis report. Stamp duty reform, announced in December 2014, continues to weigh on activity and price growth at the top end of the market in England and Wales while in Scotland the new Land and Buildings Transaction Tax (LBTT) is also affecting the market. Indeed, the level of LBTT for sales between £750,000 and £2 million is on average 55% higher than the equivalent Stamp Duty payable across the rest of the UK, the Prime Country Winter Review from real estate firm Knight Frank says. Meanwhile, price growth in prime town and city markets including Oxford, Bath and Bristol has been relatively robust and farmland values remained steady in the third quarter of 2015 as the market enters a period of equilibrium. According to Knight Frank indices, prime property values for homes located in town and city markets have risen by 26% since 2005 and are now 3% above their 2007 peak. In comparison, more rural properties have risen in value by 7% since 2005 and remain 13% below peak levels. Over the past year this outperformance has continued. This has been particularly evident in prime cities with strong commuting links to London, notably locations such as Oxford, Bath, Bristol and Winchester, the report explains. ‘In recent years, a return to economic growth has given a number of these towns and cities an additional lift with an improving business environment helping contribute towards higher demand for housing as people relocate to an area for work, or look to move up the ladder locally,’ said senior analysts Oliver Knight. He pointed out that a recent report from the British Bankers’ Association noted that banking jobs are shifting from London to some smaller regional locations, with particularly strong growth in Tunbridge Wells, South Gloucestershire, Chelmsford and North Tyneside, all of which outperformed London in terms of employment growth over the last year. The report explains how in 2005 there was quite an equal distribution of prime sales across the country, but by 2014 there had been changes across the Midlands, North West and Yorkshire as transactions clustered more around urban centres. A closer look at the data shows that while the volume of sales fell by 13% across the country between 2005 and 2014, in key town and city markets sales volumes at the top end of the market increased by an average of 25%. Looking ahead, the trend for urban living is expected to continue. ‘As the economy continues to recover and house prices outside of London show further growth, the trend for more London buyers to move will gain more traction and this will boost the ripple effect of house price growth from the capital,’ said Knight. ‘Infrastructure improvements, such as faster road or rail connections or the creation of new transport hubs will enhance… Continue reading
