Posts tagged ‘House Prices’

Housing minister insists affordable homes are available in London

Hardworking families in London are being provided with ‘tens of thousands’ of new homes, the Government’s housing minster has exclusively told Zoopla.

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Brandon Lewis, who was appointed to the Government post earlier this year, insisted affordable homes are being provided for those wanting to live and work in the capital.

His comments come in the same week that the Government’s flagship Help to Buy scheme was deemed ‘a flop’ by the opposition – particularly for those hoping to buy in London.

Brandon LewisHousing Minister Brandon Lewis said: “Everyone has the right to live in a safe and affordable home. This Government has worked tirelessly to make that possible and fix the broken housing market we inherited from the last Government.

“Our current affordable homes programmes is on track to deliver 170,000 new homes by 2015, to be followed by a further 165,000 by 2018, which will be the fastest rate of affordable house building for 20 years.

He claimed the Government’s Help to Buy scheme, which helps those with a small deposit to buy a home, was a key element in helping people onto the property ladder.

“Our Help to Buy scheme has enabled over 40,000 aspiring households to buy their first home with a fraction of the deposit they would normally require, and our action to cut the deficit has kept interest rates low and mortgages more affordable,” he said.

“And in London Help to Buy equity loans have allowed over 1,400 people to get a foot on the housing ladder. We have also increased discounts for council tenants looking to exercise their Right to Buy and have introduced new housing zones to boost house building and create tens of thousands of new homes for hardworking families across the capital.

However, he admitted that more need to be done to improve the property market. As well as struggling to save for a deposit, many home buyers are unable to keep up with the sharp rise in house prices, particularly in London.

The typical value of a home in Britain has increased almost £18,000 in the past year to £275,721, while in London they have risen by more than £60,000, according to Zoopla.

Lewis said: “The sector is clearly moving in the right direction, but there is still more to do, and improving the housing market will continue to be a vital part of our long-term economic plan,” he said.

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August 22, 2014 at 2:23 PM Leave a comment

House prices: how much will your child pay for their first property?

A baby born today faces the prospect of paying £3.4m for their first property, new research has suggested.

20.08.14 Baby

The alarming statistic comes on the back of recent double digit house price rises that have forced first time buyers to turn to the Bank of Mum and Dad to help with a deposit.

The calculation is based on the average house rising in value by 8.6 per cent during the past 60 years.

If this pattern continues, a typical house worth just over £200,000 today is expected to reach £3,391,474 in the year 2048, the year when a child born today reaches a typical first time buyer age of 35.

The research by online estate agents eMoov also suggested that even a child who is 10 years old today faces paying more than £1.6m for a property, requiring a deposit of more than £320,000.

And if you have a child who is currently 4 years old, they will most likely need £2.4m.

By 2032, the average deposit of 20 per cent will be the equivalent of the price of the average price of a property today.

Russell Quirk, eMoov’s chief executive, said: “Our research shows the staggering truth about the rise of property prices within Britain in recent times. Property prices are always on the move, but viewed over decades our research shows an annual rise of 8.6 per cent since 1954.

“If the trend continues then the bank of Mum and Dad will become even more important for the next generation of home owners”

Mortgage experts agree that parents will play a more pivotal role in helping their children onto the property ladder.

Mark HarrisMark Harris, of mortgage brokers SPF Private Clients, said: “Already the Bank of Mum and Dad has become essential in helping first-time buyers onto the housing ladder and this research suggests that their role will become even more crucial.

“With wages failing to keep pace with property prices, home ownership is only going to become more unaffordable unless Mum and Dad come to the rescue with a hefty deposit.”

August 20, 2014 at 1:54 PM Leave a comment

UPDATED: Highest amount of mortgage cash issued in six years

Mortgage lending jumped to a six-year high in July as the market remained resilient in the face of regulatory change, figures showed today.

Mortgage 4

A total of £19.1bn was advanced during the month, 7 per cent more than in June and the highest figure since August 2008, according to the Council of Mortgage Lenders.

The group said mortgage activity appeared to have remained robust, despite the tough new affordability criteria introduced under the Mortgage Market Review earlier this year.

But it cautioned that the eventual impact of the regulatory change remained uncertain.

July was the third consecutive month during which lending levels have increased, following a slight dip in March ahead of the introduction of the MMR.

Caroline Offord, CML market and data analyst, said: “Property transactions in the first half of the year showed a 25 per cent increase compared to the same period a year ago, but we expect that intensifying affordability pressures could start to dampen this upwards trend.”

The figures came as minutes from the Bank of England’s Monetary Policy Committee suggested a hike in interest rates could be closer than previously expected.

The minutes showed that two members of the committee vote to raise the Bank Rate from its current record low of 0.5 per cent to 0.75 per cent in August.

It was the first time that the MPC has been split on what the official cost of borrowing should be since July 2011.

External MPC members Martin Weale and Ian McCafferty argued that although wage growth remained weak, it was a lagging indicator of the amount of slack there was in the economy, and rates should begin rising before that slack had been used up.

News of the vote prompted speculation that interest rates could start rising before the end of the year.

But Samuel Tombs, senior UK economist at Capital Economics, pointed out that data released since the MPC’s meeting showing a fall in inflation to 1.6 per cent in July and slower growth in employment, eased the pressure on the Committee to raise rates quickly.

He said: “We still expect the first hike to come in February 2015.

“But, even if the Committee decides to get on the front foot and raise interest rates before the end of the year, low inflation should ensure that the pace at which they rise is extremely gradual by historical standards.”

A 0.25 per cent increase in interest rates would add just over £20 a month to repayments on a £150,000 variable rate mortgage, which moves up and down in line with changes to the Bank Rate.

Meanwhile, the Bank of England’s Agent’s Summary of Business Conditions, also released today, built on previous indications that the housing market is beginning to slow down.

The report said housing transactions had eased in recent months due to a shortage of homes on the market and the introduction of the MMR, which had lengthened the mortgage application process.

It added that there were also signs of an easing in house price inflation, concentrated in the South, with some prices lower than they had been a year earlier, while there were also fewer cases of sealed bids and offers being made over the asking price.

Strong house price gains have left the typical British property costing £263,705, according to Zoopla.

But recent survey data has pointed to a slowdown in growth as more homes have been put on the market and buyers have started to bulk at high asking prices.

Nationwide Building Society said property values inched ahead by just 0.1 per cent in July, while surveyors questioned by the Royal Institution of Chartered Surveyors predicted prices in London, which has been the driving force of the market recovery, would rise by just 1.9 per cent during the coming 12 months.

 

August 20, 2014 at 10:37 AM Leave a comment

UPDATED: Average house price rises £100 a day

Property values hit a new record high in June as prices jumped by £100 a day during the month, Government figures showed today.

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The typical cost of a British home rose to £265,000 during the month to stand 10.2 per cent higher than a year earlier, according to the Office for National Statistics.

People getting on to the property ladder faced the steepest house price inflation, with the cost of a typical first time buyer home rising by 12 per cent during the year to £204,000.

The increase, which was the biggest since April 2010, means someone taking out a 75 per cent loan-to-value mortgage would need to put down a £51,000 deposit and have household earnings of around £50,000.

But despite the strong year-on-year rise in house prices, there were further signs that the market is beginning to slow.

The average cost of a home rose by only 0.5 per cent during June itself, down from a jump of 0.8 per cent in May and a 2 per cent gain in April.

The annual rate of growth also slowed slightly to 10.2 per cent, down from 10.4 per cent in May.

London continued to drive the rest of the market, with the typical cost of a home in the capital soaring by 19.3 per cent in the 12 months to the end of June to stand at £499,000.

But no other region in Britain recorded double-digit growth, with the South East posting the next strongest gain at 9.7 per cent, followed by the East at 7.9 per cent.

Once London and the South East were stripped out, property values across Britain rose by only 6.3 per cent during the year.

London, the South East and the East remained the only regions in which house prices have passed their pre-correction peaks, with the typical home in the capital now 35.6 per cent above the previous high.

In Scotland prices are only 1.6 per cent below their 2008 peak, while in Wales they are 3.2 per cent lower.

But in Northern Ireland the average home still costs 47.4 per cent less than it did in August 2007.

Ray Boulger 2Ray Boulger, senior technical manager at mortgage broker John Charcol, said: “The rate at which property prices are increasing has stabilised.

“One thing that surprised me was that the annual figure for London increased slightly after dropping in the previous month.

“But the ONS figures are based on completions, so they reflect transactions agreed in March or April and lag other indexes such as Nationwide.”

There is growing evidence that the housing market is beginning to slow down following a period of strong price growth.

The Royal Institution of Chartered Surveyors said demand from potential buyers fell for the first time since mid-2013 during July, while the number of homes being put up for sale rose for the second consecutive month, easing the mismatch between supply and demand.

Meanwhile, Nationwide Building Society said property values inched ahead by just 0.1 per cent in July.

There is also anecdotal evidence from estate agents that house prices are falling in some of the prime areas of central London, while surveyors questioned by RICS predicted prices in the capital would rise by just 1.9 per cent during the coming 12 months.

But while the headline figure for house price inflation is easing, growth is starting to accelerate outside of London and the South East as the recovery ripples out across the country.

August 19, 2014 at 10:03 AM Leave a comment

Bungalows for sale could ‘solve Britain’s housing crisis’

Property developers should build more bungalows to help solve Britain’s housing crisis, a Government minister has said.

18.08.14 Bungalow 1

Increasing the supply of bungalows would enable older people to downsize to smaller homes, freeing up larger properties for families, Brandon Lewis claimed.

Britain’s shortage of homes has been one of the key factors driving up house prices during the past year, as the supply of suitable properties has failed to keep up with demand.

Brandon Lewis

Housing minister Brendon Lewis (left) with transport minister Robert Goodwill

Lewis, who was appointed as Minister for Housing and Planning in last month’s reshuffle, said many couples wanted to trade down to smaller properties once their children had left home, but they were reluctant to move into apartments or retirement homes.

He said the “quintessentially British bungalow” was an important part of Britain’s housing mix and developers should build more of them.

But despite the need for bungalows, there has been a sharp drop in the number of these properties being built.

Only around 2 per cent of new homes are bungalows, with just 300 of the properties built in 2009 – the latest year for which figures are available.

Lewis said his own parents-in-law showed why the country needed more bungalows.

“My in-laws are in their 70s, pretty fit, mentally really with it; they live in a normal house which they both struggle with,” he told the Daily Mail.

“They are not ready to move into what they would see as a retirement home, but where they live there is not access to bungalows.

“We should be looking to love bungalows a little bit more. They are an important part of the mix.”

Bungalows not only enable older people to downsize to a more manageable home, but they can also help them to release substantial equity in the process.

For example, a two bedroom bungalow in Southampton is currently on the market for £245,000, according to Zoopla.

But a four bedroom house in the same area is selling for £399,950.

The Government amended planning guidelines earlier this year requiring council planners in England to set aside a certain number of flats or bungalows for older people in a bid to meet the needs of Britain’s ageing population.

But developers are thought to be reluctant to build higher numbers of bungalows, as houses are generally more profitable.

Planning rules that require developers to build at least 30 homes on every hectare of land also make bungalows unappealing to developers.

Lewis’ call echoes the findings of a report by think tank the Policy Exchange that called for the planning system to be reformed to encourage developers to build more bungalows.

The group estimated that there were 25 million unused bedrooms in the homes of older people, which it partly attributed to the fact that many homeowners could not downsize to a bungalow.

August 18, 2014 at 1:46 PM 1 comment

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