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Powys house prices jump 11 per cent in a year

Average house prices in Powys have jumped 11 per cent since 2017, new figures have revealed.

According to the UK House Price Index published by the Land Registry, the average sale price is now £197,226 after a 3.3% jump in October.

First time buyers would pay on average £173,357 for their first home while the average price for a current owner-occupier is £219,764.

The vast majority of houses sold are existing properties, with just 61 new builds purchased for the first time over the past 12 months. In total 1,858 homes were sold in Powys.

Frances Clacy, research analyst at estate agents Savills, said: “House prices across the UK increased by an average of 2.7 per cent in the 12 months to October 2018, according to the latest ONS house price index.

“We are continuing to see house price growth slow because of the uncertainty surrounding the UK’s negotiations for leaving the EU, as well as tighter lending criteria and increases to mortgage regulation which mean it’s harder for buyers to borrow against their incomes.”

Source: Shropshire Star

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Young couples losing out on family life as house prices soar

Millennial couples are delaying having children and “putting their lives on hold” because of the sky-high cost of housing, “shocking” figures show.

Young couples are two times more likely than 35-54-year-olds to delay having children in a bid to get onto the property ladder, according to numbers crunched by mortgage broker Trussle.

The analysis also revealed that since 1978, the average house price has risen by 1382% from £14,236 to £211,000, meanwhile the average annual UK salary has risen from £3,269 to just £26,500 – pricing many families out of the housing market.

Ishaan Malhi, founder and chief executive of Trussle, said that young people are “being forced to put their lives on hold in a bid to join the property ladder”, while Labour’s shadow secretary for housing John Healey described the situation as “shocking”.

As part of the study, more than 2,000, participants were asked what sacrifices they had made in order to buy their first home.

A total of 15% of buyers aged 18-34 years old admitted to delaying having children, compared to 7% of 35 to 54-year-olds and 5% of over 55s.

Mr Healey added: “It’s shocking that the number of under-45 home-owners has fallen by a million since 2010, with young people on ordinary incomes increasingly having to make big sacrifices to buy that special first home.”

The new findings support previous research into the relationship between family planning and the decline of affordable housing.

In 2016, a Shelter and YouGov study revealed that due to the housing crisis, 22% of couples were either already delaying parenthood or planning to in the future.

Hannah Slater, policy manager at Generation Rent, said: “With renting the norm for millennials, starting a family is becoming a much harder choice.

“Housing costs are driving rising child poverty rates, so many families are forced to make a choice between delaying or not having children, or having children but living in poverty in insecure homes.”

The survey also highlighted that 15% of millennials delayed getting married, compared to 5% of “Generation X”, meanwhile 13% put off entering into a romantic relationship in comparison to 5% of 35 to 54-year-olds.

According to Dr Kim McKee, co-author of the report titled The Frustrated Housing aspirations of Generation Rent, such housing pressures are felt by millennial women in particular.

She said: “For young women, the decision to start their own family forces them to reflect on their own living situation.

“They worry about being able to give their child a safe and secure home; somewhere they could settle and put down roots.”

Source: Express and Star

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First-time buyers save £426m in stamp duty

The government is facing calls to extend first-time buyer stamp duty relief and increase access to the housing market as figures showed £426m was relieved since the exemption was introduced.

Statistics released by HM Revenue & Customs today (21 November) showed that in the most recent quarter 58,800 transactions claimed first-time buyers’ relief, bringing the total number of claims since the relief’s introduction to 180,500 – a monetary value of £426m.

The relief was introduced in November 2017 to purchases of residential property by first-time buyers for £500,000 or less and then extended in last month’s Budget to first-time buyers buying through shared ownership schemes.

The HMRC figures showed stamp duty transactions increased by 11 percentage points to 307,100 between the second quarter and third quarter of this year.

The latest transaction figures are 8 percentage points lower than those recorded in the third quarter of 2017 but this data was not directly comparable due to the devolution of stamp duty to Wales in April 2018.

But there were concerns stamp duty remained a “financial barrier” to those higher up the housing ladder.

Kevin Roberts, director at Legal & General Mortgage Club, said this was particularly the case for growing families looking to upsize or last-time buyers looking to downsize.

He said: “The changes in the Chancellor’s recent Budget were certainly welcome, however, if we are to create a housing market that is accessible to all we must do more for older homeowners by extending the stamp duty exemption.

“After all, encouraging movement higher up the ladder allows properties further down the ladder to be freed up, which could help lift the stagnated transaction market we have been seeing.”

Shaun Church, director at Private Finance, said the stamp duty exemption had arguably been one of the most successful initiatives at getting more buyers onto the housing ladder but he said it should not end there.

He said: “We urge the government to turn its attention to last-time buyers as too many would-be downsizers remain in their family homes unwilling to move due to the hefty tax bill they would incur.

“Encouraging these homeowners to move to smaller and more suitable homes would unglue the housing market, and unlock a supply of properties for prospective buyers further down the chain, helping to rebalance the supply of UK property in relation to demand.”

Source: FT Adviser

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RICS: House prices, demand and supply all in decline

There has been a fall in interest from new house buyers leading to a more negative trend in house prices, according to the latest RICS UK Residential Market Survey.

While the regional picture remains varied, surveyors are doubtful that house sales momentum will pick-up over the coming months.

In the October survey, 10% more respondents saw a fall in house prices at the headline level. (-2% net balance previously). This is the weakest reading since September 2012, and mostly stems from London and the South East.

East Anglia, the South West and the North East also saw negative price balances, but prices continue to rise in other parts of the UK, with the strongest growth in Northern Ireland and Scotland.

Looking ahead, three-month price expectations are also slightly negative at a national level, and the national outlook for the year ahead is broadly flat.

First-time buyers

For those looking for their first properties, the market is relatively steady price wise. Reporting on properties listed at up to £500k and below, a slim majority of survey participants reported that sales prices have been at least level with ask prices.

However a third (34%) stated sales prices were coming in up to 5% below. Homes in the highest price brackets are noticeably below asking price.

New buyers

RICS says the weaker trend in prices is being driven by the lack of demand from new buyers, which is in part a result of heightened political uncertainty, ongoing affordability pressures, a modest upward move in interest rates and a lack of fresh stock coming onto the market.

In October, 14% more respondents reported a fall in buyer interest, which is the third report in a row in which demand has deteriorated.

Simon Rubinsohn, chief economist of RICS, commented: “Although the tone of much of the newsflow surrounding the housing market remains downbeat, this continues to disproportionately reflect developments in the south and east of England with the picture remaining rather more resilient in many other parts of the country.

“Uncertainty about the economic outlook on the back of the never-ending Brexit negotiations appears a key drag on sentiment according to respondents to the survey.”

Slowdown in new instructions

In terms of new instructions, and the supply pipeline, virtually all UK regions saw a further decline as average stock remains very close to an all-time low.

Furthermore, there appears little chance of any meaningful turnaround, as a net balance of 30% of respondents reported the number of appraisals to be down year on year.

October saw the third consecutive monthly decline in housing transactions and sales were reported to be either flat or negative across eleven of the twelve UK regions/countries.

Rents set to rise

In the lettings market, the quarterly (seasonally adjusted) data points to an improvement in tenant demand during the three months to October.

Alongside this however, landlord instructions continued to fall, remaining negative for a tenth straight quarter (the longest negative stretch since this series was formed in 1999). On the back of this, rents are expected to rise over the coming months albeit only modestly.

Source: Mortgage Finance Gazette

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Third of homebuyers ineligible for new Help to Buy

More than a third of homebuyers who would have previously qualified for the government’s Help to Buy scheme, will be ineligible in 2021, under rules outlined in this week’s Budget.

In his speech on Monday (29 October) the chancellor announced Help to Buy will be extended until 2023 but revised rules mean only first time buyers and homes within new regional price caps will be eligible.

This means 38 per cent of homebuyers who used Help to Buy to buy a home in 2018 would no longer be eligible to use the scheme, research from a home moving quotes provider has found.

In London, assistance will be limited to homes worth up to £600,000, while in the north east of England, homes beyond £186,100 will be ineligible.

The caps have been calculated at 1.5 times the average first time buyer price, as estimated by government forecasts.

Rob Houghton, CEO of reallymoving.com., said: “Our data shows that around 38 per cent of people who have used Help to Buy Equity Loans so far this year would no longer qualify after the changes in 2021, indicating that the revised scheme is quite rightly much more targeted towards first time buyers who need help onto the first rung of the property ladder.”

Research released by the home moving quotes provider earlier this month suggested first time buyers using the government’s scheme were paying on average 8 per cent more than those buying new homes without the scheme.

According to data collected from 41,000 of its first time buyer clients, the firm found those purchasing a new build home without Help to Buy paid on average £257,908, compared with £277,968 paid by those using the scheme.

Mr Houghton added: “Despite its improvements, we’re pleased to see the scheme being scaled back, given that our analysis suggests there’s a risk that the Help to Buy Equity Loan scheme encourages higher prices, more than it helps first time buyers get on the ladder or encourages new properties to be built.”

Paul Gibson, a chartered financial planner and managing director of Granite Financial Planning, also said he believes the Help to Buy scheme has not worked as well as it should have and has driven property prices up.

He said: “The scheme has not really worked as intended as evidenced by the fact that those using the scheme are paying more.”

“I don’t think the government should be subsiding house builders but do feel more needs to be done to help first time buyers in general. Perhaps more stringent tax rules for those with second homes would release more capacity on the market as a starter.”

the price caps set by the government are:

Region                                    Price Cap

North East                               £186,100

North West                              £224,400

Yorkshire & The Humber         £228,100

East Midlands                         £261,900

West Midlands                        £255,600

East of England                       £407,400

London                                    £600,000

South East                               £437,600

South West                              £349,000

Source: FT Adviser

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Subdued asking prices provide opportunity for first-time buyers

Average asking prices in the UK rose by just 1% in October, the lowest monthly rate of growth at this time of year since 2010.

The average asking price now stands at £307,245, up from £304,061 in September, according to Rightmove.

The slowest sector was properties with two bedrooms or fewer, with a 0.1% monthly price fall as a result of less buy-to-let investor activity, giving first-time buyers an opportunity this autumn.

Mortgage approvals for new buy-to-let purchases were down by 14% compared to a year ago and down by 53% compared to three years ago as the more punitive tax regime has taken effect.

First-time buyers helped to fill some of the gap left by lower buy-to-let activity with their year-on-year mortgage approvals up by 1%

Miles Shipside, Rightmove director and housing market analyst, said: “With the government using the tax system to try and help first-time buyers while deterring out-of-favour landlords, prices in this sector have been subdued as intended. That gives aspiring first-time buyers an autumn opportunity to negotiate a favourable deal.”

Robert Lazarus, managing director of sales at Paramount Properties in North West London, said: “There’s a better opportunity for first-time buyers coming in to the market at the minute compared to a couple of years ago, especially if they’re looking for a one bed flat.

“Before the additional stamp duty on second homes came in we were selling 20% of these flats to landlords which was driving prices up, and now we’re selling less than 5% of them to landlords, giving first-time buyers the first pick of new stock that comes on.”

Source: Your Money

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Asking prices growing at slowest rate for over six years as investors sit on their hands

Asking prices are now growing at the slowest annual rate for over six years as buy-to-let investors become less active, Rightmove said today.

A second property website, Home, said that the market correction is “well underway”, while Hamptons International said landlords are buying fewer buy-to-let  properties and spending less when they do buy.

According to Hamptons, there were 64,260 buy-to-let purchases in the first half of this year, down 13% on the same period last year, and 31% down on the first half of 2015.

Landlords spent £12.1bn on buying rental properties, down 30% from the £17.3bn spent in 2015.

Separate Rightmove data out this morning shows new asking prices were up just 0.9% annually this month to £307,245, which is the lowest annual rate of growth since February 2012.

Price growth has also hit lows on a monthly basis, at 1%, the lowest rate for October since 2010.

The overall low rates of growth were attributed to asking price falls on smaller homes typically purchased by landlords and first-time buyers.

For two-bedroom or smaller properties, new asking prices fell 0.1% over the month to £190,587, with selling time rising  from 55 to 58 days.

Miles Shipside, housing market analyst for Rightmove, said: “Landlords are clearly buying far fewer properties and that leaves a gap in the market for first-time buyers.

“While landlords were hit with a 3% Stamp Duty surcharge on property purchases back in April 2016, in contrast most first-time buyers were effectively awarded Stamp Duty free status in November 2017.

“The fall in prices at the bottom of the market during what is a traditional busier time means that those keen to sell need to price accordingly, which gives an opportunity for those Stamp Duty free first-time buyers to negotiate harder.

“First-time buyer mortgage approvals are up, albeit by a marginal 1% year-on-year, showing that some first-time buyers are helping to fill the gap in the market left by less competition from investors.

“If the Chancellor’s Budget this month encourages more landlords to sell to long-term tenants via Capital Gains Tax relief, then landlords who are looking to sell and renters who aspire to become first-time buyers could work together for their mutual benefit.”

Meanwhile, Home has claimed price cutting is “the new normal”.

The property information website said 16% of properties currently for sale have had their prices reduced in the past 30 days, a percentage last seen in January 2009.

The total number of properties that had their asking prices reduced in September soared to levels last seen in September 2011 at 83,780 in the UK, Home said.

This put average asking prices at £309,366, up just 0.6% annually.

Overall supply of property for sale in the UK was up by 6% and the total stock for sale has increased by 10.7% year-on-year, while typical time on the market has increased by three days to 92 this month compared with October last year.

Doug Shephard, director of Home, said: “The market correction is now well underway. This month another key region, the east of England, joined the year-on-year negative club, and the south-west is applying for membership.

“Overall, annualised price growth for England and Wales looks set to hit zero by the end of the year and fall into the negative in early 2019.

“This is the hangover after one of the biggest property investment binges in UK history, fuelled, of course, by ultra-low interest rates. How long it will take to play out is unclear but we don’t expect the market to return to overall growth any time soon.”

Hamptons said that lack of new supply has led to rent rises in every region.

Source: Property Industry Eye

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Home ownership doesn’t have to be a distant dream for young people

WE heard headlines recently about house prices in Northern Ireland having fallen in the second quarter of this year. Good news for affordability and first time buyers? In short, unfortunately not.

When we look beneath the headlines, official figures show house prices here continued to rise by more than four percent on an annualised basis. In Q2, we also see that the kind of property first time buyers and those on lower incomes are likely to buy actually continued to see an increase in prices, or were broadly flat. It was only detached properties that recorded a significant fall in prices in the quarter.

The media reaction to rising prices is usually positive. For a house builder and for 66 percent of people lucky enough to own their homes, I guess it is.

But what I think is telling from much of this commentary is a world view that sees property as an investment vehicle rather than a basic need. House prices rising at well above the rate of inflation, with weak economic growth, stagnant wages and increasing interest rates isn’t good news if you are a young person looking for your first home. For you, it feels like that home ownership is getting further away or is simply unattainable.

Many people aspire to home ownership because of the advantages it brings, but more fundamentally people want a home. Somewhere that is affordable, secure, provides modern standards of accommodation and is convenient.

Other recent data which is less publicised, points to the lack of options for young people on low and moderate incomes. Average private rents in Northern Ireland have now risen to £650 per month and over the last 12 months have risen by 4.3 percent – the highest increase in the UK.

A mortgage will cost around £100 a month less on a typical first time buyer property than the current average rent. The longer-term outlook in the private rented sector looks challenging with UK rents expected to climb by 15 percent over the next five years. The cause of the increase in rents is a lack of supply, caused at least in part by small private landlords leaving the market due to tax changes.

This was the intention of the tax changes as the Conservative government saw private landlords competing with first-time buyers. It was intended to support home ownership, but instead has made private renting unaffordable for an increasing number of people. The private rented sector is also increasingly carrying the burden of the lack of social housing. Recent Housing Executive research shows that over 50 percent of people in private rented properties are in receipt of Housing Benefit and 81 percent of those people say that Housing Benefit did not cover the full cost of the rent.

So why do people rent privately if home ownership or indeed social housing is so much more affordable and secure?

The average annual pay of a first time buyer applying to Co-Ownership is just over £20,000, which equates to take home pay of about £1,400 a month. Paying an average rent on that level of income is clearly not affordable even if it is what many are forced to do. But there are few other options available. Social housing is not an option because you are regarded as being adequately housed. Home ownership is probably not an option because you do not have a deposit and because debt and insecure employment mean you cannot get a mortgage. Banks are also rightfully very careful these days that the mortgage payments will not place undue stress on people’s finances. So the private rented sector or staying with friends or family are often the only options.

Clearly part of the solution is building more social housing for a wider range of people. We need to support people into affordable home ownership through building more homes and providing a helping hand. But we also need to focus on increasing the supply of affordable, high-quality rented properties through the private sector. This is something successfully done in many European countries, but which has been given little priority by government here.

Source: Irish News

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Questions raised over impact of Stamp Duty cut in the capital as home buyer mortgage approvals decline

Remortgaging continued to dominate home lending across some of the main UK regions at the expense of first-time buyers and home movers, UK Finance has revealed.

The trade body for the banking sector has released mortgage lending figures for the second quarter of 2018, covering London, Scotland, Wales and Northern Ireland. It doesn’t compile data for England.

Remortgage approvals in the capital hit a nine-year high at 15,200 in the second quarter, up 16.9% annually.

However, home mover approvals fell 8.1% annually to 6,800 in the second quarter, and first-time buyers saw a 3.7% drop in the capital at 10,300 approvals.

Shaun Church, director at mortgage broker Private Finance, said: “After decades of boom, the lack of home-buyer activity and month-on-month decline of house prices London marks unchartered waters for the capital’s property market.

“Even first-time-buyer activity, which has performed encouragingly throughout 2018, has now declined. This suggests that despite easing house price growth, Stamp Duty exemptions and Help to Buy, affordability remains out of reach for London’s Generation Rent.

“This may translate to greater activity in the commuter belt as would-be buyers seek more affordable properties within reaching distance of the capital.

“Lenders are still displaying a strong appetite to lend, resulting in competitive mortgage rates and deals.

“With house prices easing and rates still favourable, now is an opportune moment for first-time-buyers to make their first step on to the housing ladder – though they may wish to look outside of the capital for more affordable deals.”

This trend was reflected in Scotland and Wales where remortgage approvals increased, but home mover mortgages fell 2.1% and 2.6% respectively, and the number of first-time buyer mortgages declined 3.1% and 2.4% in each country.

Northern Ireland did manage to buck the trend, with first-time buyer approvals at their highest level since 2005, up 9.5% annually to 2,300, while home mover mortgages rose 6.7% to 1,600.

Source: Property Industry Eye

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House price freeze wouldn’t help first-time buyers

While property values continue to grow across the UK, averaging 2% a year, areas such as Edinburgh and Manchester are soaring ahead of the UK, while London is showing a modest decline. In Edinburgh, properties are being for sold up to 17% over the asking price. The difficulties first-time buyers face show little, if any, sign of abating.

The IPPR paper recommends disincentivising property investment by freezing house prices for five years to (in their view) stabilise the housing market, devalue an over-inflated pound and increase exports. This would result in property values falling 10% by 2023. According to the paper, this would make it easier for first-time buyers to afford a home.

The Bank of England’s monetary policy committee would be tasked with freezing house prices for five years, then maintaining an annual increase in property values that matched inflation – effectively a zero gain.

The IPPR paper goes on to suggest that this freeze could be achieved through fiscal measures by increasing the controls on access to mortgages. The IPPR paper admits that this, in turn, would make it harder for first-time buyers to borrow. Although this would negate the premise of the price freeze, they offer no solution to their self-inflicted fiscal oxymoron, bar passing it to someone else to advise on and solve. The paper appears to want to have its cake and eat it.

Freezing property prices at a single moment in time implies that the price paid today is the right one. Potentially placing recent purchasers in areas where prices have since declined moderately into negative equity with no possible respite for at least five years.

Is that a solution to aid first-time buyers and exports?

Source: Property Week