Property Solutions

Renting is more cost-effective than buying across more of London, index shows

Posted on February 27, 2014 at 3:45 pm

Image Renting is now cheaper than buying in most of London with the monthly rental cost at the least 10% less, new research shows

Overall it’s cheaper to hire in 31 of the 32 London boroughs and it’s at the very least 10% cheaper in 23 of the 32 boroughs, up from 19 in November 2012, says the index report from Countrywide.

The analysis also shows that rents rose 1.8% inside the UK in the course of the year to October 2013 and this increase was almost entirely driven by areas outside central London.

The report says that increases in house prices during the last year have made renting significantly cheaper than buying inside the majority of inner London boroughs and more and more outer boroughs too.

Between the fourth quarter of 2012 and the fourth quarter of 2013 Ealing, Southwark, Lewisham and Greenwich joined the list of London boroughs where it’s 10% plus cheaper to hire than buy.

It signifies that the typical tenant in London is now 16% or £4,200 a year than a buyer who’s capable of put down a comparatively healthy 10% deposit to buy a house. This represents a further saving of £600 during the last twelve months.

‘In London, the price of renting relative to shopping for has fallen substantially as house prices have increased, particularly within the most costly Inner London boroughs. Renting is more cost-effective than buying in all 12 Inner London boroughs and all but one of many 21 outer London boroughs, where renting is on average £2,600 per year less,’ said Nick Dunning, group commercial director at Countrywide.

Although average monthly rents increased by 1.8% the performance of regional rental markets varies significantly. The report says that a 5.1% year on year increase in rents in Greater London means that demand could be driven by new job creation and a rise in tenants seeking to pay lower rents.
 
The average growth in wages for personal sector employees has disproportionately been enjoyed by Londoners. Within the North and the Midlands where a bigger proportion of workers are employed inside the public sector and where wages have fallen, rental growth was constrained.

While the common yield has decreased marginally from 6.2% to six.1% over the year, the most important decreases was within the South East and the South West where increases in house prices haven’t been matched by increases in rents. Yields in London and the North have remained stable, with both rents and house prices increasing in London but remaining stable or declining in real terms inside the North.

The analysis also found that more families are renting. Inside the East Midlands and the East of britain, 33% of all new tenancies include children, up from 30% a year earlier. In London, the figure rose from 26% to 29% over the year, a marked increase at the levels reported in both the 2001 and 1991 Census, where just 18% of tenancies within the capital contained children.

Areas around the South and East of britain have seen one of the largest increases in tenancy lengths. In London and the South East, the common tenancy length increased by 5.9% which equates to an extra month.

‘Whilst outside London demand for rental accommodation has increased 5% above the speed of supply, increases in rents have closely tracked wage growth. Maintaining this link has meant that arrears have fallen to record low levels. During the last yr, rent arrears within the South East and the South West have fallen by a fifth,’ explained Dunning.

‘However, in London the mixture of a rise in new private sector jobs and rapid levels of inward migration both national and international have continued to drive the sale and rental markets. With house price growth outstripping the rise in average monthly rents across London, renting is more cost-effective than buying within the majority of London boroughs. Only in Barking and Dagenham does renting remain less affordable,’ he spoke of.

‘The cost of shopping for increased more quickly than the price of renting in all but three London boroughs making renting more financially attractive to tenants. Between 2012 and 2013 it was only in Tower Hamlets, Newham and Waltham Forest where the financial good thing about renting diminished. All three are amongst the fastest growing boroughs when it comes to population which, combined with institutional investment inside the private rented sector post Olympics, has served to drive rents instead of house prices,’ he added.

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Posted in Property Solutions

Housing recovery means UK properties selling faster, research shows

Posted on February 25, 2014 at 11:02 am

Image The typical time it takes to sell a property within the UK is becoming shorter, currently 58 days, some 11 days lower than a year ago, in line with new research which also means that the north south property divide is dissolving.

Properties in Liverpool and Southend-on-Sea spend the smallest amount of time for sale, beating London, with Hull and Leicester being the slowest performers, in accordance with the research by Post Office mortgages.

Whilst some regions, similar to Plymouth, Brighton, Bristol and Derby, will not be yet seeing robust growth in house prices, falling average times to sell a property points to improving market conditions in these areas, its report says.

On average it now takes just over eight weeks to sell a house within the and although London remains the perfect performing property market, its performance overshadows a powerful recovery occurring in lots of other areas, particularly cities outside the South East of britain.

Property owners in Birmingham especially were profiting from improved market conditions. Over the past year they’ve experienced on average a 16% fall within the time it takes to sell their home and a 2.6% rise in price.

Some Northern cities along with Liverpool, Sheffield and Manchester also are showing signs of improvement despite slow price growth. The typical time a property spends available on the market within the North West for instance has fallen from 90 days to 62 days during the last three hundred and sixty five days, indicating that demand for homes on this region is firming.

The report points out that  Liverpool mainly is recovering well, with properties on this portion of the rustic currently only needing an ordinary of 18 days to be sold, down 63% from last year and a complete two weeks lower than London.

Elsewhere in England, cities including Plymouth, Brighton, Bristol and Derby, have seen falls more than 15% of their rate of sale. Even supposing these types of markets haven’t yet seen robust price growth, the falling average time to sell a property in these markets points to improving conditions.

However quite a few cities haven’t begun to expose signs of a rebound of their housing markets. Swansea and Leicester for example are both experiencing the double whammy of negative price growth and a lengthening of time it takes to sell a property.

The outlook for Hull is especially gloomy. Over the past year householders within the city have experienced a 2% decrease in property prices and a staggering 240% rise within the time it takes to sell. It now takes homeowners in Hull an entire 80 days more to sell a property than homeowners in London, nearly 1 / 4 of a year.

‘2013 have been a true turning point within the UK housing market with annual house price growth currently 3.4%, the very best level it’s been since November 2010,’ said John Willcock, head of Post Office Mortgages.

‘But house price data alone often hides a broader picture of recovery. This encouraging fall within the time it now takes to sell a property, especially in areas where house prices have long remained sluggish, shows that real confidence is returning to housing markets in lots of cities around the UK,’ he added.

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Posted in Property Solutions

Some 63% of first time buyers within the UK help saving for a deposit, survey finds

Posted on February 23, 2014 at 7:34 pm

Image Parents within the UK have a great role to play in helping their offspring onto the housing ladder with almost two thirds of first time buyers receiving help to save lots of a deposit for his or her first property.

The Annual First Time Buyers research report from Clydesdale and Yorkshire Banks shows that 63% take advantage of financial support when buying their first home.

The Bank of Mother and father was key for fifty% of respondents with 28% receiving a loan and 22% benefitting from the gift of a deposit from their parents or another member of the family.

Potential house owners inside the Midlands are profiting from the very best levels of support with 67% receiving help, closely followed by London and the South East, both at 66%.

The lowest levels of help are within the East with 52% getting support in saving a deposit, followed by 58% within the South West and 59% in Scotland.

Some 30% of these surveyed had received between 10 and 20% of the cost in their new home with an additional 37% benefitting from between 5% and 10%.

For 25% of first time buyers it took between one and two years to save lots of a deposit, however for nearly one in five, or 18%, it took between four and five years to administer to lay aside the necessary deposit for his or her first property.

‘This research underlines the challenges that first time buyers can face when attempting to take their first steps onto the valuables ladder. Plenty of people can struggle to save lots of a deposit and our survey highlights that an important proportion turn to friends and family for financial support,’ said Andrew Pearce, retail director for Clydesdale and Yorkshire Banks.

‘Clydesdale and Yorkshire Banks have continuously supported first time buyers and feature now offered 95% mortgages for greater than 10 years and we are hoping our new lower rates may even help more customers to purchase their first home,’ he added.

He also said that Clydesdale and Yorkshire Banks aim to continue to stay supportive of first time buyers. Recent deals include lowering the rates on their first time buyer mortgages. Those wanting to buy their first home can now have the benefit of a 95% LTV mortgage with a rate of four.99%. a brand new LTV tier at 90% has also been introduced at 3.99%.

First time buyers taking the hot three year fixed rate deals also will enjoy the banks’ current offer of no arrangement fee, saving £999, free standard valuation and £250 cashback on completion.

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Posted in Property Solutions

Private property rents within the UK rise as supply, especially in London, falls

Posted on February 21, 2014 at 5:58 pm

Image National rents showed no sign of a decelerate in October with a shortage of rental properties, especially in London, in accordance with the newest index from the Sequence Group.

They were up 1% on month and 11% annually to £785 per 30 days, amounting to 41% of the monthly national average wage of £1,937, said the firm which included Barnard Marcus, William H Brown and Fox & Sons.

London rents were £1,484, up 2% on month and up 9% compared with October 2012 which amounts to 44% of the typical London monthly wage of £3,338.50.

The index also shows that the provision of latest rental property has fallen 4% on month nationally. However it is more acute in London where supplies dropped a record 11% month on month whilst demand increased by 2%.

‘We have seen an unprecedented rise in rents over the past month, with tenants now giving up 41% in their monthly pay packet in rent,’ said Stephen Nation, head of lettings on the Sequence Group.

He pointed our that the quick tracked introduction of Help to purchase has done nothing to dampen the strength and rate of growth of the rental market and with the collection of properties available to hire still falling wanting demand, rents will only continue to rise.

‘The shortage of rental property is especially acute in London with a record 11% monthly decrease in supply coupled with a 2% increase in rental applications. For this reason, rents now represent 44% of the common Londoners monthly salary, putting further pressure at the budgets of these inside the capital,’ he explained.

He also brought up that despite a 55% increase in buy to let mortgage applications, prospective investors are facing stiff competition for property from private buyers and are frequently unable to secure their investment property.
 
‘Across the board if it is within the sales or rental market there’s a universal need for more properties.
Competition for houses will continue to affect on affordability and squeeze household budgets around the country for the foreseeable future,’ he added.

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Posted in Property Solutions

House prices in parts of Asia-Pacific continue to defy cooling measures

Posted on February 19, 2014 at 3:02 pm

Image Regardless of the introduction of further cooling measures aimed to halt the surge in residential property markets across Asia-Pacific, mainstream house prices within the region increased by a normal of 8% inside the third quarter of 2013.

But the impact has varied, in accordance with the newest Asia-Pacific Residential Review from international real estate consultants Knight Frank. In some markets the cooling measures haven’t only slowed price growth but in addition provide policy makers with the chance to take a look at and re-inflate demand if market corrections prove an excessive amount of.

A reversal of lots of these temporary policies may be a very real possibility, in keeping with Nicolas Holt, head of study for Asia-Pacific. He predicts that Singapore and Hong Kong are inclined to see sales volumes further compromised as new purchasers see mortgage rates rise, and the attraction of property recedes slightly.

He identified that pricing is tougher to foretell as house prices usually are not influenced by rates of interest only, but more by fundamentals. ‘Other factors like economic performance have an even bigger impact on house prices than changes in rates of interest. If the delicate global economic recovery continues, hard, income yielding assets along with property will continue to do well, then again if the worldwide recovery gains pace, property will again make the most of growth,’ he explained.

‘In emerging Asia, except China, although less impacted directly by rising rates of interest inside the US, further capital outflows could put pressure on domestic residential property prices. Again domestic economic performance may be the key set of indicators to watch. China meanwhile is a separate market altogether, with the inability of market set rates of interest mitigating the impact of rising US rates of interest, together with the quantity of pure equity buyers,’ he added.

The review shows that during Australia, the sale of the 1st release of Barangaroo, a flagship harbour-side project in Sydney’s CBD sold out within hours, with some of units being sold to Asian investors. The relative shelter status for foreign capital and lower Australian dollar has encouraged a rise in interest from offshore buyers with Melbourne and Sydney continuing to draw the most important variety of foreign purchasers, particularly from China, Malaysia and Singapore.

New Zealand and Malaysia have seen significant price increases. In Malaysia house prices have increased by 44.2% because the fourth quarter of 2008. numerous cooling measures had been introduced. These include the Bank Negara reducing the utmost tenure of house loans to 35 years.

In October the government doubled capital gains tax to 30% for real estate sold within three years and doubled the minimum purchase price for foreign property buyers to 1 million ringgit.

Long mooted measures were eventually introduced by the Reserve Bank of latest Zealand on the end of September, with banks subject to restrictions on high loan to worth ratio (LVR) housing mortgage loans from 01 October. The rustic remained the most robust performers inside the region, with growth of one.5% over the second one quarter of 2013, with Auckland and Christchurch seeing the foremost significant price increases.

In Singapore the whole debt servicing ratio (TDSR) of 60%, introduced on the end of June saw sales activity slow in August and September. Volumes and pricing within the Core Central Region (CCR) and Remainder of Central Region (RCR) was more impacted because of the higher price quantums. Despite this slowdown, quite a lot of new launches saw fairly healthy sales rates beforehand month, the review points out.

In China, the implementation of the five new measures which aimed to chill the residential market continues to change significantly around the country. Prices have continued to extend across most regions, although volumes came off in quite a few cities. Knight Frank’s composite price index of Beijing and Shanghai remained stable over the second one quarter of 2013.

Market sentiment continued to weaken in Hong Kong, because the numerous rounds of cooling measures and the primary hand sales ordinance, effective from the 29th April, saw price growth suppressed. Developers have reacted by redefining their strategies and postponing project launches.

India saw its average house prices turn negative for the 1st time in five quarters, dropping 1.7% inside the second quarter of 2013, because the deteriorating economic situation began to influence the city’s residential markets. Only four of 26 cities tracked by NHB saw positive price growth.

Effective from 30th September, the loan-to price ratio for the acquisition of a second property was reduced to 60% in Indonesia and to 50% for purchases beyond the second one property. The move by the central bank follows an identical intervention last year as policy makers attempt to control a booming market in Jakarta. Prime condominium prices increased by 10.8% over the primary 1/2 2013.

The Japanese market continues to determine polarised performance in its residential market, with centrally located condominiums and apartments outperforming landed property and single family dwellings. The weakening of the currency has stimulated further interest from foreign buyers, with Taiwanese and Singaporean buyers heading the list.

Thailand, Southeast Asia’s second largest economy, slipped right into a technical recession as GDP contracted for 2 consecutive quarters for the primary time for the reason that global financial crisis. The condominium market, especially in Bangkok however has not been adversely affected, as strong domestic and foreign demand continue to push prices higher.

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