Posts tagged ‘property market’

Average first-time buyer spends £81,321 on rent before they buy

This is a legacy post from the blog which is now maintained as an archive within the Zoopla blog. Links have been preserved.

Have you noticed how many of your friends, colleagues and family members now rent their homes?  FindaProperty has seen it too and also taken note of the fact that difficulties getting a mortgage and saving for a deposit mean renters tend to stay renters for longer.  All this  made us wonder how the long-term cost of renting was diminishing our bank balances in the long run.

With that in mind, decided to do some investigation into how much the average first-time buyer around the country spends on rent before they’re in a position to buy.

The National Housing Federation has calculated the average age of a first-time buyer around the country. The  national figure is 37, while in London it’s an eye watering 52 and in the north east it’s a still substantial 35. We then worked out how much an average wannabe first-time buyer spent on rent before they reached the age at which they could buy.

And, as you might guess, it’s a hefty wodge of cash . An unassisted first-time buyer in England will typically spend £81,321 over a period of 16 years on rent by the time they buy their first home at the age of 37.

The property game is changing – we’re renting for longer and spending more on rent than ever before

The analysis shows that even those lucky enough to receive financial support when buying their first home – for example from ‘the bank of Mum and Dad’ – will still be renting for an average of nine years and spend £36,413 on rent in the process. This is £44,908 less than the average lifetime rental spend of an unassisted buyer, who doesn’t get a financial leg up from their parents.

And there’s a regional picture here too with those in the south paying substantially more over a longer period of time before they are able to buy their first home.

It’s no surprise that London has the country’s highest rental costs, and today’s unassisted first-time buyers in the capital will spend an average 31 years renting before they are able to buy their first property at the age of 52, spending more in the process than they would on their first property.

The picture isn’t quite as shocking further north where buyers can expect to pay a lot less on their rental costs, due to lower rents and less time spent saving for a deposit. An unassisted first-time buyer in the North East can expect to spend £32,181 renting in their lifetime, almost a tenth of that spent by their counterparts in the capital, while in the East Midlands, the life time rental spend is £32, 850 over 14 years before the average first-time buyer can afford to buy their first home at the age of 35.

Unassisted first-time buyers in Yorkshire and Humberside spend 15 years and £33,402 on rent before buying their first home; while those in the North West spend 14 years and £34,703 and those in the West Midlands spend £44,261 over 17 years.

In the south of the country it’s more expensive. A typical unassisted first-time buyer in the East of England rents for 22 years and spends £66,175 before buying their first home at the age of 43; those in the South West spend 27 years and £88,473; while those in the South East spend 24 years and £110,079 before they buy their first home at the age of 45.

We’ve traditionally considered money spent on rent as money down the drain. But now, growing numbers of us, are coming around to the idea of being lifetime renters. We’re choosing to focus instead on the upsides of renting, for example the greater freedom that comes with not being tied to a mortgage for years, not to mention the benefits of having someone to turn to when the boiler breaks down.

What do you think about these figures? And are we turning into a nation of renters?

June 8, 2011 at 9:25 AM 2 comments

Housing market confidence hits low at end of 2010

Before you read the key results below, it’s worth us pointing out the following:

  • This survey was fielded from 29th November to 4th December 2010
  • There were 5,932 total respondents. 5,287 of these were homeowners
  • 2011 appears to have got off to a solid start indicating possible increase in confidence since the end of 2010
  • We are reporting record levels of traffic, searches and leads in early January across

The uncertainty around the impact on the overall economy in 2011 of the austerity measures and the continuing drought in mortgage finance availability created a toxic combination for housing market confidence in late 2010. However there is every reason to expect confidence to grow as this year progresses providing the economic outlook doesn’t worsen and banks start to loosen their lending criteria.

Here are the main results from the survey:

• 54% of homeowners expect house prices to rise, down from 81% one year ago

• 1 in 3 expect property prices to fall in 1H 2011, up from 1 in 4 three months ago

• Fewer owners plan doing any home improvements and will spend less in 2011

• 92% see mortgage financing as no easier to obtain now than 3 months ago

• Scottish most upbeat over housing outlook for 2011, N Irish far less optimistic

Homeowner confidence in the property market outlook fell to its lowest level in more than two years in December, amid concerns over the government’s austerity measures and the availability of mortgage finance. According to our latest Housing Market Sentiment Survey, only 54% of homeowners surveyed expected house prices to rise over the coming six months, down sharply from 63% three months ago and 81% a year ago.

According to the survey, those surveyed now expect average house prices to rise by only 1.9% over the next six months, down from a predicted 3% rise three months ago and reflecting the drop in confidence. And the number of homeowners who expect property prices to fall over the first half of 2011 now stands at 1 in 3 (33%) up from 1 in 4 (25%) only three months ago.

UK homeowners, however, curiously remain more confident about the prospects for the value of their own homes compared to those of their neighbours, with those surveyed expecting average growth in property values in their local area of only 1.9% over the next six months versus 2.5% for their own homes.

The survey also highlighted that fewer homeowners plan to carry out home improvements over the next six months, with only 37% of respondents stating an intention to do any works, down from 42% three months ago and 48% at the start of 2010. And the percentage of homeowners who plan to spend at least as much this year as they did last year on improving their properties now stands at only 68%, down from 77% at the beginning of 2010.

The survey results show just how severely the lack of access to mortgage finance is impacting the health of the property market and confidence in it. Only 8% of those surveyed believe that it is now easier to get financing than it was three months ago, with more than 9 out of 10 seeing no improvement in the availability of financing over the past three months.

Confidence in Scotland appears higher than the rest of the UK, with 63% of Scots expecting house prices in their area to rise over the next six months, although this is still down from 71% three months ago. England is some way behind at 54% whilst less than half of homeowners in both Wales (49%) and N Ireland (42%) expect house prices to rise in the next six months.

Follow this link to download the Q4 2010 Zoopla Sentiment Survey press release and graphs.

January 13, 2011 at 10:01 AM 3 comments

Was 2010 a good year for you on the property market?

This is a legacy post from the blog which is now maintained as an archive within the Zoopla blog. Links have been preserved.

I’ve just had a very interesting conversation with Russell Winterburn, one of our research boffins here at FindaProperty. He’s put together this rather excellent graphic showing what’s been going on in the housing market over the past year. It also might go some of the way to explain why your home is probably worth less now than it was in January.

He picks out some of the main influencers on property searcher confidence over the past year. As you’ll see below, the year began with a little boost to consumer confidence coinciding with the UK crawling out of recession. Confidence dipped, Russell says, in February as house prices dropped for the first time since 2009. March and April saw consumer confidence hold steady as the stamp duty threshold is raised to £250,000 to stimulate the market.


Consumer confidence graphThere’s a dip again in May, with the election of the new Coalition Government as they promise to cut public sector debt and reel in spending, but by June, the removal of HIPs drives new vendors back to the market and we get a fillip.



consumer confidence graphIn July there’s a dip in consumer concerns as falling house prices begin to bite, but August sees a three month rise and then levelling off as the market picks up a little and several letting agents report their busiest September in over three years. Ongoing financial constraints continue to hit potential home buyers in November and research from the MyHomeLife panel shows 71 per cent of people think obtaining a mortgage is more difficult now than it was a year ago.


Irrespective of movements in the property sector, Russell tells me that consumers are likely to remember 2010 as a year of public sector spending cuts and one of restrained optimism.

December 16, 2010 at 4:20 PM 5 comments

2011 is seen as a good time to buy

This is a legacy post from the blog which is now maintained as an archive within the Zoopla blog. Links have been preserved.

A little ray of sunshine about the property market comes courtesy of the Building Societies Association.

The latest poll I’ve seen from the BSA says the public considers the best time to buy a new home  to be within the next year.

Most people would not wait long to enter the market, if they were able to, according to the BSA’s Property Tracker poll of 2047 people – a barometer for how the market is viewed.  Fifty nine per cent would buy immediately or within the next year, given sufficient resources, and a further 11 per cent would buy in the following twelve months. Only 12 per cent would wait for two years or more.

The BSA’s Paul Broadhead says although the housing market remains uncertain, the public does not expect house prices to fall as dramatically as they did two years ago. “As such, many expect that the best time to enter the market will be in the next year or so.”

He does concede that barriers remain that might prevent potential buyers from acting on these perceived opportunities. “ Worries persist about job security, the ability to raise a deposit, and obtaining a mortgage from lenders. These factors might inhibit demand for house purchase from growing as strongly as it might,” Broadhead says.

December 15, 2010 at 3:48 PM 7 comments

The Credit Crunch Effects: House Prices recover by 50%

We have reached an important point in a market seeking direction and despite the most recent 16 months of gains, only half of the value lost in the prior 16 months has been recouped.

This juncture  may well determine the direction of house prices for the months to come. Our data show us  that we have come through two periods of equal length and opposing directions. UK house prices have risen steadily for the past 16 months, bouncing off their lows of March 2009 and recovering half of the value lost during the prior 16 month period of price declines from the November 2007 market peak.

It is entirely possible that we may now have a similar length period of time where the market hovers without a clear direction.

The average UK home is now worth £218,705, up £21,667 (11.02%) since March 2009. However this figure remains more than £20,000 below the November 2007 peak, when average house prices reached £239,063, showing that, despite the rebound over the last 16 months, only half the ground lost over the prior 16-month period has been made up.

England – prices have recovered more ground than elsewhere, having climbed 11.46% since March 2009, with the average home in England now worth £226,342, but still well below the level reached in November 2007 of £246,714.

Wales – prices have been much slower to rebound, up only 7.07% since March 2009 to a current average value of £154,521, a long way short of the £173,388 peak in November 2007.

Scotlandproperty values have climbed 9.12% on average to £156,217 over the past 16 months, having fallen 18.1% in the prior 16-month period when they reached a high of £174,805.

Whilst the dramatic fall in house prices during the 16 months from the November 2007 high to the March 2009 low affected all areas of the country, the rebound in the 16 months since has been far more selective.

South East – property prices have bounced back strongly and have regained most of the value lost during the downturn. House prices in the South East, which peaked at £291,120 in November 2007 had fallen sharply by 18.24% to £238,017 by March 2009, and have since risen by 17.57% to £279,848.

North East – in contrast the North East saw average house prices drop 16.11% from £182,390 in November 2007 to £153,002 in March 2009, and have since only managed to regain 4.98%, standing today at £160,627.

London –  the market has seen the most dramatic turnaround, with average house prices today at new highs and above the levels seen in November 2007. Having fallen by 16.06% from a high of £410,577 in November 2007 to a low of £344,635 in March 2009, London house prices have made up all the ground lost in the downturn and now stand at £418,802. London house prices have risen by a remarkable 21.52% over the past 16 months.

Looking at property type…

The rebound in house prices since March 2009 has been strongest for semi-detached properties, which have risen by 12.83% over the past 16 months. The average semi is now worth £191,019. At the other end of the scale, flats across the UK have been much slower to rebound and have only gained 7.78% in value over the past 16 months, having fallen by 17.34% in the prior 16-month period. The average flat in Britain is now worth £199,573, down from a peak of £224,021 in Nov 2007.

Average house prices by Country

Country Jul 2010 Mar 2009 Last 16 months Nov 2007 Prior 16 months
England £226,342 £203,077 +11.46% £246,714 -17.69%
Scotland £156,217 £143,166 +9.12% £174,805 -18.10%
Wales £154,521 £144,315 +7.07% £173,388 -16.77%


Average house prices by Region

Region Jul 2010 Mar 2009 Last 16 months Nov 2007 Prior 16 months
London £418,802 £344,635 +21.52% £410,577 -16.06%
SE England £279,848 £238,017 +17.57% £291,120 -18.24%
E England £233,776 £208,322 +12.22% £259,967 -19.87%
SW England £225,773 £194,662 +15.98% £238,044 -18.22%
W Midlands £174,269 £165,332 +5.41% £202,139 -18.21%
E Midlands £161,919 £153,204 +5.69% £184,474 -16.95%
NE England £160,627 £153,002 +4.98% £182,390 -16.11%
NW England £160,071 £142,532 +12.31% £170,199 -16.26%
Yorks & Humber £145,783 £134,758 +8.18% £164,654 -18.16%


Average house prices by Property Type

Property type Jul 2010 Mar 2009 Last 16 months Nov 2007 Prior 16 months
Detached £317,957 £291,125 +9.22% £349,528 -16.71%
Semi-detached £191,019 £169,304 +12.83% £204,522 -17.22%
Terraced £171,637 £153,566 +11.77% £186,032 -17.45%
Flats £199,573 £185,170 +7.78% £224,021 -17.34%


July 15, 2010 at 9:29 AM Leave a comment

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