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Number of tenants wanting to move onto housing ladder rises in Britain

The number of people in Britain renting a home who want to buy their own property has increased significantly, doubling from 24% to 58% this year, according to new research.

The figures from AA Financial Services are revealed at a time when the Government is waking up to the pressing need to help more people get on the property ladder and to increase housing supply.

The AA’s latest home buyer research indicates that whilst the proportion planning to move house has remained largely unchanged at around 12% over 12 months, the percentage of movers that want to switch from renting to buying their next home has risen.

Additionally, the amount of money people plan to spend on their next home has gone up, reaching a 12 month high of £332,000 this month, a 9% rise over sixth months and the first significant quarter on quarter rise since January 2018.

The research also suggests that this rise has been driven by movers in London and the South East. Planned house spend in London has risen from £410,840 to £544,957 since the start of 2018, with the figure rising in the south East from £396,571 to £406,478.

But this contrasts with figures for property in the North East, which sees planned spend fall from £319,490 to £263,264 over 12 months. Overall, planned spend figures on a new home suggest a widening of a north-south property divide.

London and the South East emerge as two of the most popular places to move to for next year although they are also the regions where the fewest people want to stay. For example, only 48% of London movers want to stay within the capital and only 61% of movers in the South East plan a local move.

The North East and East Anglia were the regions fewest people said they wanted to move to.

‘The economic uncertainty surrounding Brexit has not seriously dampened people’s plans to move home. The simple reason is that, for most people, decisions on when to move are dictated by job change, being closer to family or the needs of children,’ said David Searle, the AA’s director of financial services.

‘Unlike many studies that look back at historic data on property transactions, our study looks forward and focuses on the demand for property. Movers are preparing to spend more on buying a home and it doesn’t end there,’ he pointed out.

‘With our research suggesting home improvement projects are also on the up, it looks like home owners are set to borrow £12 billion to do up their homes up in the countdown to Christmas,’ he added.

Original source: Property Wire https://www.propertywire.com/news/uk/number-of-tenants-wanting-to-move-onto-housing-ladder-rises-in-britain/

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Research reveals how first time buyers benefit from Help to Buy

Young people in Britain saving for their first home can get on the property ladder two years earlier thanks to the Government’s flagship Help to Buy scheme, new research has found.

Getting on the housing ladder faster helps them save £10,000 on average in rent costs, according to the study from Compare My Move which examined how long it takes young renters in 50 British towns and cities to save a deposit for their first home.

The average British renter can save enough for the 5% deposit needed for the Help to Buy Equity Loan in only 12 months, compared to the three years it would take to save for a 15% deposit,

The reality is widely different across towns and cities in Britain. In only 14 of the largest British towns and cities can the average renter save up for a 5% deposit in less than a year.

The best location is Burnley where it takes seven months to save a 5% deposit while Oxford is worst at over five years.

Young renters in London, Reading, and Cambridge take more than a decade to save up a 15% deposit on their first home but in London they can cut off seven years of saving through the Help to Buy scheme, taking it to three years and seven months to save up a 5% deposit.

The average first time buyer in Britain pays £15,000 in rent while saving up a 15% deposit, and £5,000 while saving up for a 5% deposit.

In London, the higher annual salary helps discount the high rent and living costs, but the sheer expense of houses in the capital means that renters will take more than a decade to save the £63,000 needed for a 15% deposit.

However, with London Help to Buy Scheme, savers can get to the £21,000 needed for the average 5% deposit in three years and seven months, though in that time will pay more than £26,000 in rent.

A further analysis shows that first time buyers in Burnley can save up the £10,436 needed for a 15% deposit in one year and nine months. This means that with Help to Buy savers get on the ladder one year and two months faster.

Next is Dundee in Scotland and Hull in Yorkshire, where renters can save for a 5% deposit in eight and nine months respectively while renters in Sunderland, Blackpool, Liverpool and Glasgow can save up a 5% deposit in 10 months.

‘Our research reveals the struggle many young renters face in getting together a deposit for their first home. In many cities it’s a race against rent to save a deposit as a prospective first time buyer. In cities and towns where rent greatly outstrips the national average, it can take more than a decade for renters in their 20’s to save up a 15% deposit,’ said Compare My Move co-founder Dave Sayce.

‘It’s clear from our research that the Help to Buy scheme acts as an important catalyst for getting renters on the property ladder, and its extension to 2023 in the recent budget will act as a lifeline to generation rent,’ he added.

Original Source: Property Wire https://www.propertywire.com/news/uk/research-reveals-how-first-time-buyers-benefit-from-help-to-buy/

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Virgin announce maximum age and LTV rises on Buy-to-let range

Virgin Money has announced that it has increased both the maximum age and maximum LTV available on its buy-to-let range.

According to the lender, the maximum age has been extended from 75 to 85 years across all buy-to-let lending and Virgin has also increased its maximum LTV to 80%. New 80% LTV products include a two-year fix starting from 3.45% and a five-year fixed rate from 3.61%, both with a £1,995 fee.

For loans greater than 75% LTV, the maximum loan size is £350,000.

All buy-to-let purchase applications are available with £500 cashback. Free basic valuations are available on all buy-to-let remortgage applications with a choice of either free standard legal work or £300 cashback.

Andrew Asaam, director of mortgages at Virgin Money, said: “It’s great news for landlords with smaller deposits that a well-known and trusted lender is entering this segment of the market. By extending our maximum lending age on buy-to-let, we’re giving our landlords greater flexibility with how they manage their investments. These improvements demonstrate our commitment to improving choice for customers in the buy-to-let market.”

Original Source: Property Reporter

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Renting a home becomes more affordable as wage growth outpaces rent growth

Tenants in the UK spend a third of their pay on rent but wage growth is outstripping rental growth in all regions, the latest rental index shows.

It means that wage growth is improving affordability for renters in all regions with tenants, excluding London, earning a typical monthly salary of £2,317 before tax, and paying rent of £769, according to the Landbay index.

However, tenants in London are paying the highest proportion of their earnings at 61% on rent while those in the North East are paying the lowest amount of their salary on rent at 25%.

The index data also shows that year on year rents have increased by 1.2%, excluding London, meaning tenants are paying £120 per year more. However, monthly gross pay has improved by £768 per year, leaving tenants £648 better off.

A breakdown of the figures shows that regions with tenants with higher than average rent as a proportion of their pay are the South East and East England, which pay 42% and 38% respectively of their gross salary on rent.

Regions with lowest proportion of money being spent on rent include the North East at 25%, Yorkshire and Humberside at 26% and the North West at 27%. Despite this the North East has also seen the lowest earnings growth and with rental growth largely remaining unchanged during the year at 0.04%, tenants are only £132 better off a year.

When it comes to average rents, overall they increased by 1.03% in the UK year on year and by 0.08% month on month to £1,212. Excluding London rents increased by 1.25% year on year and 0.09% month on month to £769.

In England rents increased by 0.99% year on year and by 0.07% month on month to an average of £1,243, but when London is excluded they increased by 1.2% year on year and 0.08% month on month to £774.

In Scotland average rents increased by 1.54% year on year and by 0.14% month on month to £742, in Wales they increased by 1.71% year on year and 0.14% month on month to £655 and in Northern Ireland they increased by 1.01% year on year and by 0.13% month on month to £574.

‘Improved affordability is welcome news for renters. For tenants looking to save up for a house, the prospect of having more money in their pocket each month will help them get one step closer to owning their own home,’ said John Goodall, CEO and founder of Landbay.

‘Wage growth is continuing to improve across the UK so the outlook for tenants can only get better. Brokers can use this data to help clients to look for opportunities across the UK where higher wage growth will boost demand for properties,’ he added.

Original source: Property Wire https://www.propertywire.com/news/uk/renting-a-home-becomes-more-affordable-as-wage-growth-outpaces-rent-growth/

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The latest UK yield hotspots for landlords revealed

Shawbrook Bank has released new data that shows exactly where the current best investment opportunities for landlords are in 2018.

In spite of a barrage of tax changes making it harder to make money on buy-to-let, there are still pockets of the market where investors can achieve an average yield of 5.4%, according to Shawbrook’s ‘UK Buy to Let’ report.

Looking at house prices, the research from Shawbrook Bank predicts annual property price inflation to be more subdued in the five years up to 2023 than over the last few years. The report forecasts average annual house price predictions for the years 2017 to 2023 to be at 4.5%, compared to an average of 7.0% for the high-growth years of 2014 to 2016. Stretched affordability ratios, years of weak wage growth and the prospect of further interest rate rises all weigh in on the outlook for house prices in the UK for the next few years.

House price growth has slowed in the capital particularly, with Brexit and the resulting uncertainty regarding the future of the financial services sector in the City of London looming over activity in the prime end of the market as have higher SDLT rates. The Shawbrook Bank report expects price growth in London to continue to trail behind the rest of the country for the next two years, with new figures from estate agent Aston Chase already showing the percentage of high-end purchases from overseas in London’s most expensive postcodes dropping from 44% in 2016 to 35% last year.

With landlord investment in London slowing, this improves the attractiveness of other regions for BTL investors. Shawbrook Bank’s research shows the North-West region and the city of Manchester in particular, to be the top new investments hotspots due to higher rental yields. Lower property prices mean it is easier to achieve better rental yields and the city is attracting students and employees from all around the country. The average UK house price is currently £228,000, which is 43% higher than the average house price in the North West – £159,000. The North West leads the ranking with an average yield of 5.4%, followed by Scotland with 5.3% and Yorkshire and the Humber with 4.9%.

Emma Cox, ‎sales director for Commercial Mortgages comments: “Landlords have had a rough ride over the past few years with multiple tax changes, but our research shows that it’s not all doom and gloom for potential investors in 2018. Lower rental yields in London and affordability constraints for investors has driven interest North, where borrowers are chasing the yield and heading to locations with lower average house prices.

There are still interesting times ahead for savvy investors and good investment opportunities remain. However, when landlords invest far away from their home turf, they can run the risk of falling foul to local knowledge. Smarter local investors may be seeing an opportunity to divest themselves of their less desirable housing stock, so it’s important for buyers to do their research to make sure they understand the local supply and demand before investing.”

Original source: Property Reporter

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How can landlords be so optimistic during such a supposedly challenging time?

A recent survey that was picked up by quite a few of the property trades brought, I would imagine, some much needed light relief for landlords in the UK.

After months of reading headlines about a mass exodus of landlords with thousands of landlords said to be fleeing the sector, the survey by investor forum and advice website The Property Hub painted a very different story.

It revealed that almost 80% of landlords actually planned to buy more property in 2019 while 70% said that even if the UK leaves the European Union without a deal this would not affect their plans to increase their portfolio. In a direct contradiction to the Armageddon headlines of landlords selling up and running for the hills, the study found a massive 84% of landlords actually have no plans to sell any properties whatsoever.

So how can landlords be so optimistic during such a supposedly challenging time? The answer is this market actually provides plenty of opportunity – for those landlords who have grown and adapted with the changes. Those landlords that are selling up are freeing up properties, often in areas of high rental demand, which those investors sticking around can snap up.

It’s clear that demand for rental property remains very high. Indeed, according to the Association of Residential Lettings Agents (ARLA) Propertymark rental demand has increased 13% annually.

Yes, measures are being taken to improve the housing market and make more affordable housing available to would-be first time buyers. And rightly so, of course. But, as we’re all well aware, government measures on issues of this scale can take an awfully long time to come to fruition and even longer to have an impact. In the meantime, those people will need good quality rental properties and professional landlords.

And, of course, there will always be people who, for one reason or another can’t or don’t want to own a property. For these people, a healthy rental market will always be essential.

Furthermore, while the government is indeed focused on the housing market, it has also signalled that it recognises the importance of the rental market, not least in last year’s Housing White Paper.

And finally, responding to the challenges facing landlords, lenders in the field have gone out of their way to help landlords by slashing rates and making their product ranges more attractive.

So while some may look at this recent survey with surprise that a mass exodus isn’t taking place, I’d say really it just tells us what most of us already know.

Original source: Property Reporter

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Vast majority of agents shrug off possibility of 2019 housing market slowdown

A new research report, The State of the Property Nation, has been launched by Zoopla and reveals that the outlook for the economy is the top concern for agents, replacing a lack of stock for sale.

According to the data released, an overwhelming 81% of estate agents expect revenues to grow or stay the same in 2019 despite growing concerns over the economic outlook.

The report, which surveyed 6,000 consumers and 660 estate and letting agents, covers a wide range of important insights into the factors that impact the world of property professionals. When asked about the greatest challenge facing their business, almost two thirds (64%) of agents cited the current economic and political situation, followed by a pressure to lower fees (51%) and then insufficient stock (49%)..

The ongoing uncertainty surrounding Brexit has led to a slowdown in house price growth and 39% of agents expect prices to fall over the next 12 to 18 months.

Hometrack, which is a part of Zoopla, predicts an average UK house price inflation of 2-3% in 2019 on flat sales volumes, while the lettings market continues to register more new lets than housing sales. Despite the economic uncertainty, the majority of agents remain optimistic that they will grow or sustain revenues across all business lines next year, with the exception of letting fees..

With a tenant fee ban on the horizon, almost four in ten (38%) letting agents expect revenue from lettings to decrease in 2019 while only 56% think they will rise or stay the same. However, agents are more confident over growing revenue from property management services.

Zoopla asked agents how they plan to respond to the challenges ahead.

The top three areas that agents are planning to focus on in 2019 are:

1. increase their use of technology and marketing
2. increase their advice to and engagement with sellers and landlords
3. look to expand their service offering

Charlie Bryant, Managing Director of Zoopla’s property division said: “The annual State of the Property Nation report has captured the sentiment of thousands of consumers and estate agents over the last three years and provides an in-depth snapshot on the property market and the business of estate agencies.

The political and economic uncertainty surrounding Brexit is understandably influencing consumer behaviour which is having a knock-on effect for agents in parts of the country. However, despite the obvious challenges, the majority are well-positioned to grow their business.

From this year’s research we’ve seen strong alignment between our offering and how agents plan to improve the quality and volume of their leads and, ultimately, their instructions. The priorities for 2019 include increasing their use of technology and marketing, providing more advice to landlords as well as vendors on price and rent, and also broadening their range of services to help offset any downward pressure on fees.”

Bryant concludes: “Whether it’s better data and market insight, improved technology for back-office efficiency, smarter portal and software tools to boost vendor leads and generate additional revenue streams, Zoopla has a breadth of solutions agents need to succeed and keep ahead in a dynamic market environment.

We’re 100% agent focused and investing more than ever. It matters to us that every agent performs and we remain intent on offering the best value property solutions to help them stay ahead of consumer demand.”

Original source: Property Reporter

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Stamp duty reforms prompt first time buyer mortgage uptake

The latest research by MoneySuperMarket has shown that first-time buyers are taking full advantage of the changes made to stamp duty laws in the 2017 Budget.

The new changes now mean that properties worth up to £500,000 pay no stamp duty on the first £300,000. However, data from MoneySuperMarket – taken from over 460,000 mortgages across 2017 and 2018 – reveals an initial slump in new homeowners in the first few months under the new law, with an average of 581 first-time buyer mortgages taken out per day from December 2017 – February 2018, compared to the 2017 full year average of 680 per day.

However, from March-October 2018, there was a sudden uptake in the number of first-time buyers, suggesting the stamp duty reforms started to catch on with the public. During this period, a first-time buyer mortgage was purchased at an average of 732 per day, compared to 669 per day during the same period in 2017 – a nine per cent increase of first-time buyers during that period year-on-year.

Despite this boost following last year’s stamp duty reforms, the take-up of first-time buyer products year-to-date for 2018 (218,891) is currently sitting at a similar level compared to the same time last year (220,228). This is thanks to a bumper January and February 2017 – possibly spurred by 2016’s Autumn Statement that pledged to build more affordable homes. However, with further stamp duty changes laid out in last week’s Budget, it is yet to be seen how the figures will compare at the end of the year.

Sally Francis-Miles, money spokesperson at MoneySuperMarket, commented: “It is great to see that first-time buyers are taking advantage of the 2017 changes to stamp duty laws to get on the housing ladder. Hopefully the changes for shared ownership properties outlined last week have a positive impact too.

However, it is imperative that those looking to buy their first home really do their mortgage homework and look at what they can afford. Rushing into buying and going for a mortgage or Help to Buy scheme that doesn’t suit could result in first-time buyers paying a lot more than necessary for their first home.”

Original source: Property Reporter

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Where will 2019’s housing hotspots be?

Specialist property investment agency, Surrenden Invest, has fired up the crystal ball and peered into the future to see if the UK housing market is as prepared as it can be to ensure that property investment continues as business as usual.

With the UK set to part ways with the EU at the end of March, it’s going to be an interesting year for any number of sectors, housing included.

Jonathan Stephens, MD, Surrenden Invest, says: “Nobody can ever see what the future holds – that’s the case regardless of Brexit. As such, looking ahead to likely investment hotspots is a case of examining the underlying market fundamentals. For 2019, that means cities with youthful populations and strong trends for city centre living. The UK’s rental sector is still growing, so 2019’s hotspots will be those areas in which populations are expanding rapidly, and where employment prospects are sound.”

The UK is in the midst of a housing crisis and is falling further and further behind each year in terms of delivering the number of homes that our population needs. The 13,000 new homes mentioned in this week’s Budget are a mere drop in the ocean. Combined with the rapid rise in popularity of city centre living, the shortage of housing is creating pockets of extreme demand in some of the UK’s regional metropolises. As such, the Surrenden Invest team has done some number crunching (with a little help from data from the Office for National Statistics and Zoopla) to see which hotspots are worth keeping a close eye on over the year ahead.

2019 property investment hotspots

Birmingham

2018 population: 1,147,300
2041 projected population: 1,313,300
Property price growth over past five years: 29.46%
Housing development to watch: Westminster Works

With a 14.5% population increase on the cards between now and 2041, Birmingham tops the list of 2019 hotspots. The city has a young population compared to the country as a whole, with its five university campuses attracting young people with a thirst for knowledge. The city has the sixth highest graduate retention rate of any UK city, and the third largest inflow of graduates with no prior connection to the city.

This 65,000-strong student talent pool provides Birmingham with a vast pipeline of future workers and entrepreneurs. It also means that stylish homes in city centre locations are, and will continue to be, in hot demand.

Manchester

2018 population: 553,500
2041 projected population: 631,500
Property price growth over past five years: 30.60%
Housing development to watch: Ancoats Gardens

Manchester is on track to experience a 14.1% population increase between 2018 and 2041, meaning it will be snapping at Birmingham’s heels in terms of growth. The city has already risen up the ranks in recent years, making it onto IBM’s list of top ten global destinations for foreign direct investment in 2017 (as part of the Manchester-Liverpool metropolitan region).

Manchester benefits from a steady influx of bright, enthusiastic young people. The city is second only to London in terms of its graduate returners (at 58%), as well as its inflow of graduates with no prior connection to the city. Businesses are doing much to harness this talent; Amazon, for example, chose Manchester as the site of its first Amazon Academy, running a series of programmes and events designed to help hundreds of small, local businesses. Future residential developments in the city centre will need to serve these entrepreneurial young professionals.

London

2018 population: 8,965,600
2041 projected population: 10,346,000
Property price growth over past five years: 32.36%
Housing development to watch: Brook House

London leads the UK in many respects, as a world-renowned centre for finance, business, education, tourism and more. Over the next 25 years or so, its population is projected to increase by 15.4%, driving demand for housing across the capital. From sleek, centrally located apartments to sprawling houses in the suburbs, London offers every kind of property imaginable, providing homes for workers from across the UK and the globe.

More than 300 languages are currently spoken in London’s schools, highlighting the diversity of the capital’s future workforce. The city attracts some of the best and brightest as a result of its vast range of employment opportunities and is home to a huge rental population. According to PWC, 60% of Londoners will rent their homes by 2025, as the city’s young (and not so young) professionals rent in ever greater numbers.

Liverpool

2018 population: 495,300
2041 projected population: 554,500
Property price growth over past five years: 24.67%
Housing development to watch: The Tannery

Liverpool is on track to experience a population increase of 12.0% between now and 2014, as the city continues to attract talented young people as a result of its thriving service sector, healthcare sector and knowledge economy. The city’s extensive cultural offering is also a draw, from its plentiful museums and art galleries to its excellent restaurants and lively music scene.

42% of Liverpool’s population is below the age of 30, compared with 37% nationally. This youthful population is driving forward Liverpool’s reputation as an innovative, entrepreneurial city. It is also one of the main forces behind the extensive regeneration that the city is experiencing, while the growing trend for city centre living is creating new hotspots close to key attractions and amenities.

Newcastle upon Tyne

2018 population: 297,400
2041 projected population: 318,100
Property price growth over past five years: 23.70%
Housing development to watch: Hadrian’s Tower

Newcastle’s city centre population has grown rapidly since the turn of the century. According to Centre for Cities, Newcastle city centre enjoyed population growth of 112% between 2002 and 2015. The massive jump in demand for city centre living is creating a hotbed of innovation within the housing sector, as developments seek to woo the bright young things who have flocked to the city for work and want prime accommodation in the heart of Newcastle.

With a superb social scene and a thriving urban renaissance well underway, Newcastle’s attractions to ambitious young professionals are plenty. It also has a rapidly growing student body as a result of its superb universities. Student numbers at Newcastle University have shot up by over 70% since 2000, while Northumbria University has enjoyed a student body increase in excess of 114% over the same period. With nearly 50,000 students in total, a full sixth of the city’s population is engaged in study, creating a uniquely youthful atmosphere as Newcastle grows its own talent for the future.

Jonathan concludes: “Each of these cities has its own distinctive culture, which is drawing in young people who will ultimately contribute to the future success of that city. Those working in the housing sector need to respond accordingly, delivering high quality homes in central areas, in order to meet the demand that these young people are driving.”

Original source: Property Reporter

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7 Things Potential Buyers Don’t Want to See in Your Living Room

Living rooms can go a long way towards persuading people to take the plunge on a house purchase. So if you’re selling up, check out how to show your house to potential buyers, and see if there are any changes you can make to your living space to get the offers flowing in.

 

An oversized TV

A very large television can be dominating in a small room, so if yours is an eyesore rather than a feature, try to soften its visual impact before you let visitors into your home.

In this smartly designed living room, the TV slots neatly into the alcove storage units and the dark paint colour allows the screen to blend into the background when it isn’t in use.

Try to tuck yours out of sight, or place a plant or colourful vase of flowers nearby to draw the eye away.

Other people looking in

If your living room faces a busy street or has an ugly view, draw a pretty veil over it with a window solution that allows light in while hiding an unattractive scene (or nosy neighbours).

Window film or a café-style blind can screen the lower portion of a window, allowing light to come in through the top section. As shown here, it can create a feeling of calm in a ground floor living room.

Ugly radiators

Dated radiators, peeling paint or scruffy pipes can really bring down the tone of a room, so it’s worth casting a critical eye over your rads before opening up your home for a viewing.

If yours have seen better days but updating them is out of budget, radiator covers can go a long way to making a room feel cohesive and well-considered.

A dingy room

Space and light are top of most people’s wish lists when it comes to choosing a home, so a small, dark living room is likely to detract buyers.

Make yours as light and bright as possible by flinging open the curtains, polishing the windows and opening doors to allow in as much light as possible.

Mirrors are a good quick fix to increase the feeling of space in a small room. If you position one opposite a light source, it will bounce rays into the room, doubling the effect.

Clutter

This is no-brainer, but getting rid of clutter and streamlining your living space will make your home instantly more appealing to potential buyers.

Cast an objective eye over your living space (it can help to take photos and view it that way) and get rid of any piles of magazines and papers, tidy away toys, mugs and stray items, and limit the number of ornaments and objects on shelves.

Potential new homeowners need to imagine moving their things into your space, so try to empty it of personal family items in particular.

Make sure windowsills are clutter-free, then give all surfaces a dust and polish.

Uncomfortable sofas

Even though new buyers will probably bring their own furniture with them, a house viewing is the one opportunity they’ll have to visualise themselves living in your home, so creating a welcoming space with a comfy sofa or armchair will help them to settle in mentally.

If your sofa is less than appealing, add a cosy throw and a couple of squishy cushions as a quick fix to make it look soft and inviting.

Harsh lighting

A living room is a place to unwind, so harsh overhead lighting can ruin the mood.

Floor and table lamps are a softer option, so invest in a couple, or bring them in from other rooms, and build up cosy layers of light to envelop your viewers as they walk through.

Even if viewings are held in daylight hours, it will still help to set the scene and make potential buyers feel the space is somewhere for rest and relaxation.

 

Original Source:Houzz  https://www.houzz.co.uk/ideabooks/111029191/list/7-things-buyers-dont-want-to-see-in-your-living-room