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Help to Buy deposit saving financial product proving popular in UK
The UK Government’s new Help to Buy ISAs savings scheme for first time buyers is proving popular with a quarter of a million opening one of the financial products since it was launched in December 2015. Some 250,000 first time buyers, more than half of whom are aged 30 and under, have opened a Help to Buy ISA which helps them to save for a deposit for their first home. The first home buyers have also claimed their Help to Buy government bonus this week, which means the new Help to Buy ISA is already helping first time buyers onto the housing ladder. Chancellor of the Exchequer, George Osborne, said he was pleased with the figures. ‘It is all part of our plan to back working people who are doing the right thing and saving for their first home,’ he said. The scheme gives first time buyers the opportunity to save up to £200 a month in a dedicated ISA that the government will top up by 25%, up to a maximum of £3,000. First time buyers eager to make the most of the scheme can also open their account with a one-off lump sum of up to £1,000 in addition to the monthly maximum. And couples buying together will be able to combine their bonuses, meaning a potential boost of up to £6,000 towards a deposit for a first home. The government’s other schemes, the Help to Buy mortgage guarantee and Help to Buy equity loan, have also been popular with over 100,000 buyers involved. A special Help to Buy scheme has also been launched for first time buyers in London who face paying far more for a home than elsewhere in the country. It gives first time buyers and second steppers the opportunity to own a new build home in the city with a deposit backed by a 40% equity loan from the government that is interest free for the first five years. Rohan Sivajoti, advisory services director at eVestor, believes that the Help to Buy ISA is vital for those struggling to get a foot on the housing ladder. ‘The upcoming increase in Stamp Duty on second home purchases signals another small victory for those looking to buy their first home, but it is important to take a step back and access how much impact these schemes will actually have,’ he said. ‘With an annual increase of 9% on average house prices across the UK, the worry is that not enough is being done. It's a simple supply and demand market and supply needs to increase significantly to stop first time buyers being priced out of the market,’ he added. Continue reading
UK prime property prices up by an average of 0.3% in final quarter of 2015
Prime property prices in the UK increased by an average of 0.3% in the final quarter of 2015 despite a strengthening economy and low interest rates, according to the latest report. Beyond London prices of prime residential property saw muted price growth of 2.4% on average across 2015, but this was much lower than the 4.5% seen across the wider UK mainstream housing market. The situation reflects a general absence of urgency among buyers in the prime property market, says the report from international property services firm Savills. It explains that the resulting lack of upward pressure on prices was fairly uniform across the regions though markets in the London commuter zone performed marginally better, boosted in particular by the performance of prime property in high value towns and cities where annual growth averaged 5.4%. By contrast prime country property in London’s hinterland only saw annual growth of 1.9%. Across the country the performance of larger country houses has been most constrained with values of larger rectories and manor houses seeing little if any growth over 2015, reflecting a thinner stream of demand for the most expensive prime properties. The report also explains that higher value homes have been most affected by successive increases in stamp duty that culminated in the changes introduced in December 2014, which have also held back the prime property market in London. This has had a knock-on effect on demand flowing out of the capital, interrupting the ripple effect which we would otherwise expect at this point in the housing market cycle. The impact of taxation has also been noticeable in the prime housing markets in Scotland where the introduction of LBTT has meant that average price growth of just 0.4% in the past 12 months, though prime property in Edinburgh and Glasgow has performed more strongly. Across all areas smaller prime properties have performed best with those below £1 million showing annual price growth of 3.7%, much more in line with the wider housing market. Generally these markets have been the most buoyant, with greater levels of transactional activity. Looking ahead, in the short term Savills says that the demand for good quality family homes is likely to continue to underpin modest price growth across the prime regional markets, with appetite for larger higher value homes remaining more price sensitive. The firm is expecting price growth of 2.0% to 3% in 2016, which means sellers will need to remain realistic in their asking price, but which presents an opportunity for committed buyers. However, thereafter Savills expects the ripple effect to be restored as the market adjusts to higher transactional costs and buyers more actively seek to exploit the price differentials both between London and the commuter zone and the commuter zone and beyond, which have widened significantly over the past 10 years. The report also points out that Chancellor announced further changes to stamp duty in the 2015 Autumn Statement introducing a 3% surcharge on additional homes, the sales of… Continue reading
UK self-builders set to benefit from new register for plots of land
Self-builders in the UK should find it much easier to kick start their dreams of building a home with the launch of new registers to support eager builders find plots. From 01 April councils will have to keep a register of aspiring self and custom house builders when planning for future housing and land use, it was announced by Housing and Planning Minister Brandon Lewis. He explained that as part of government plans to provide more homes, new measures and guidance have been put in place to clearly set out the procedure local authorities will have to take when people wish to register their interest for a plot of land. The aim is that as more and more people want to build their own home this move will help unlock the massive potential the custom build industry has to expand and help meet the country’s future housing needs. ‘Many other countries have a track record of delivering large numbers of local homes through self-build and we’re determined to ensure self and custom housebuilding grows significantly,’ said Lewis. ‘The new registers are a fantastic example of our commitment to double the number of custom and self-build homes by 2020 so anyone who wishes to design their dream house can do so,’ he pointed out. ‘This government is committed to increasing housing supply and helping more people achieve their aspiration of home ownership whether that’s buying on the open market through schemes like Help to Buy, or by building or commissioning their own home,’ he added. The registers are in addition to the measure in the Housing and Planning Bill which will require authorities to ensure they have sufficient shovel ready plots to match the local demand on their register. The Self-build and Custom Housebuilding Bill has placed a duty on local authorities to keep a register of those seeking an interest in bringing forward self and custom build projects. The Housing Development Fund has been set up to provide access to £1 billion of loan finance for up to five years supporting the provision of over 25,000 homes through to 2024 to 2025. It is for custom build, small and medium builders and innovative new building methods. Continue reading
