House building hits 8 year high

The number of new homes earmarked for construction rose by 7% in 2015 to hit an eight-year high.

According to the National House Building Council (NHBC), house builders registered 156,140 new homes in the UK last year – that’s 75% more than during the 2009 housing crash when just 88,993 new homes were built.

Research revealed that the majority of regions saw an uplift in new housing registrations, with Northern Ireland, east and north west England growing by 30%, 23% and 16% respectively.

Why is this ?

Confidence in new-build is returning following the last recession when many developments ran out of funding and were left unfinished. And the introduction of government schemes, such as Help to Buy and Starter Homes, has underpinned the recovery.

Who is this going to affect?

It’s good for the nation’s buyers who will benefit from a wider choice of properties. The supply of homes on the market – both new and resale – had been in decline since the middle of 2014, according to the Royal Institution of Chartered Surveyors (RICS).

Young buyers are also being attracted back to the market, according to the NHBC. At 39%, the majority of new home buyers are under 34 years old, which is a 6% increase on 2014. Meanwhile, the numbers of buyers aged between 35 and 54 dipped.

Sounds interesting? What’s the background?

“There is still a way to go before we are building the levels of new homes that were seen before the economic downturn, but 2015 represents consolidation on the growth seen over the last three years.” 

London still topped the table for the highest number of new home registrations in the UK last year. Although this activity in the capital was down 9% on 2014, it was still the third highest number of registrations on record.

Meanwhile, Yorkshire and the Humber saw a drop of 13% and Wales fell marginally by 2%.

With the exception of London, where 90% of registrations were flats, there was also a move towards family housing in 2015. In fact, the construction of detached houses reached its highest level for more than a decade. And the number of semi-detached house registrations also reached its highest level since 1994.

Since 2012, when registrations stood at 105,174, the new-build homes market has continued to improve. And the NHBC, the warranty provider for 80% of all new-build homes in the UK, believes the increase in registrations will continue this year.

NHBC chief executive, Mike Quinton, said: “There is still a way to go before we are building the levels of new homes that were seen before the economic downturn, but 2015 represents consolidation on the growth seen over the last three years.”

 Year                Number of registrations Percentage on year before
 2012 105,174 -10%
 2013 135,257 +29%
 2014 146,359 +8%
 2015 156,140 +7%

You can read more at : http://www.zoopla.co.uk/discover/property-news/house-building-hits-8-year-high-says-nhbc/#9eX10JswYxqOpVWo.99

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Are you stepping onto the property ladder ?

Here are 5 simple tips to help first time buyers get their foot firmly onto the property ladder this year…
  • Make your savings work harder
    If you’ve been saving away for a deposit, it’s hopefully sitting in a savings account earning interest. Make sure you check the interest rate you are earning and move the money to a different account if there’s a better rate available.A new account to look into – whether you’ve already got a savings account or not – is the Help to Buy ISA. You can make a £1,200 initial payment then save up to £200 a month and get a 25% bonus payment when you buy. There’s a limit of £12,000 that can be saved in one Help to Buy ISA and that would net you a £3,000 bonus, though it would take you 4 years to save that much.There are other restrictions you can read about on the Money Advice Service website.

 

  • Check your credit rating
    When you apply for a mortgage, the lenders will be looking at your credit history, so the more you can do to improve it the better.It’s important to try to avoid applying for any new major borrowing such as credit cards or loans in the six months before making the application. If you can avoid it for longer that’s even better.Don’t miss any payments on credit cards or other borrowings as these would negatively impact your score. You should also check your credit report is correct. Any errors or inconsistencies such as different addresses can damage your rating but are easy to correct. Finally, make sure you are registered on the electoral roll as this helps prove your identity.

 

  • Work out what you can afford to buy
    Saving for a deposit is one thing, but that’s not the only indicator used to see if you can afford to buy a home. You’ll generally only be able to borrow up to four and a half times your income. Lenders will also look at your monthly expenses and day-to-day spending.They could reject you or limit how much they will lend you if they think you don’t manage your money well enough, and they’ll also “stress test” your ability to repay a mortgage if interest rates were to rise, or there is a big change planned for your life, such as having a baby.

 

  • See if schemes can help you
    There are schemes such as Help to Buy and shared ownership designed to make it easier for first-time buyers and home movers to purchase a home.They’re often a good option if you are struggling to get a deposit or can’t afford to buy a full property on your own.You can read about these and other housing schemes on the Money Advice Service website.

 

  • Watch out for additional costs
    Lastly, don’t forget there will be a raft of extra things you need to pay for. From solicitor fees and stamp duty to moving costs and decorating, it’s easy to get caught out. It is also a good idea to consider any ongoing expenses that will go up, for example, maintenance on a bigger property or moving up a Council Tax band.

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Have you been trying to sell your home for months, or even years?

According to property experts a property is never more desirable than when it first goes onto the market.

If you have been trying to sell your home for months here are some helpful tips for keeping your property marketing fresh, and avoid it becoming forgotten:

  • Don’t dismiss out of hand any offer you receive in those crucial early weeks of marketing. It will probably be the best offer you will ever receive on your home.
  • If you’re several months (or years) down the line, you need to break the vicious cycle that is no one wants a house that no one wants. Take it off the market completely for at least two months, and preferably up to six months.
  • Re-launch at the right time of year for your property, ie at the time of year when your buyer is most likely to be searching.
  • Don’t scrimp on your re-­launch: engage a professional home stager, commission a professional photographer, and choose a proactive agent who believes in quality marketing.
  • If you get an early offer when you go back to market, take it! Within reason of course…. As a general rule of thumb, anything in excess of 90% Of your asking price is definitely worthy of consideration in this market, and over 95% is a terrific offer.

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Rightmove reports an active start to 2016 and surprisingly good news for first-time buyers

  • Price of property coming to market up 0.5% (+£1,509), the second highest Christmas/New Year period rise since 2007
  • First snapshot of 2016 sees demand surge with Rightmove visits up 21% in first working week of 2016 compared to same period in 2015
  • Welcome and unexpected surprise for first-time buyers with more fresh property choice and price standstill:
  • 6% year-on-year jump in number of newly-marketed properties in their favoured market sector to highest New Year level since 2007
  • First-time buyer prices have hardly risen (+0.1%, +£209) suggesting impending stamp duty levy could be having a calming influence sooner than expected

The first snapshot of prices, demand and supply in 2016 shows that all have increased over the period, indicating an active year ahead. The price of property coming to market is up by 0.5% (+£1,509) on last month, the second highest rise at this time of year since 2007. Demand as measured by visits to the Rightmove website in the first working week of 2016 is up by 21% on the same period in 2015. There is welcome and unexpected news for first-time buyers with a 6.6% year-on-year increase in the number of fresh-to-the-market homes in their target sector of two bedrooms or fewer, the highest since 2007. With the monthly price increase in this sector at a near standstill (+0.1%, +£209) this suggests that some of the dynamics of the changing tax regime for buy-to-let investors are starting to play out sooner than expected.

 

Miles Shipside, Rightmove director and housing market analyst comments:

“Upwards price pressure remains, with the second-highest rise seen at this time of year for nine years. The early snapshot of home-hunter visits in the first week of 2016 is up by 21% on the same period last year to 27.8 million visits, showing demand is not letting up either. Encouragingly for first-time buyers there’s more fresh choice with more property coming to market in their target sector. With their asking prices pretty much the same as a month ago, perhaps the knock-on effects of the more punitive landlord tax regime have arrived early and they now face a dilemma over whether to buy now or wait to see if prices drop in this sector over the next few months.”

While the 0.5% rise in new seller asking prices is lower than the 1.4% recorded in last January’s report, it is higher than every other January since 2007, before the credit crunch began. A lack of property coming to market has been an upwards driver of both prices and unfulfilled demand, though encouragingly there has been a slight 1.8% year-on-year uplift in the number of newly-marketed properties. However, the only sector that has increased is that of two bedrooms or fewer, so the only beneficiaries of this are likely to be first-time buyers or investors looking to buy and complete before the April stamp duty hike. Some of this increase could be due to some landlords selling up or more first-time sellers marketing to take advantage of any first quarter surge in investor activity and guard against a post-April slump.

Shipside advises first-time buyers:

“Perhaps because of the increased competition among sellers and a keenness to attract buy-to-let investors before the April deadline, prices have hardly increased month-on-month for properties with two bedrooms or fewer. In this stock-starved era it will come as a relief to first-time buyers that their negotiating power may already be improving because the forthcoming tax changes, and there is a window of greater choice as more owners of smaller properties try to sell. Rather than waiting until later in the year, having a good look around now while choice is up and interest rates remain unchanged could get you onto the ladder sooner and at an acceptable price. For several years buy-to-let investors have been enticed by high tenant demand and attractive returns, but as their window of opportunity starts to close it already appears to be opening wider for first-time buyers.”

 

 

 

 

 

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Online Agents ‘v’ High Street Agents

Using an online estate agent could save you thousands of pounds in estate agent fees. The services offered by online estate agents are quite similar to those offered by high street agents. At the moment, online estate agents only account for about 5% of property sales, but this is likely to increase.

Online agents and high street agents have some similarities

  • Online estate agents are governed by the same regulations that cover high street estate agents. You can be assured that like high street agents, online estate agents must be members of one of the two redress schemes approved by the Office of Fair Trading – the Property Ombudsman or Ombudsman Services: Property.
  • Like high street agents, most online agents will visit the property in order to value it and to take professional photos in order to market the property.

 

But there are a few significant differences:

  • Fees: online agencies tend to have lower fees than those charged by high street agents but you often have to pay them upfront – whether or not the company manages to sell your property. However, some companies offer alternative payment options whereby you pay on completion or split the cost reducing the risk of wasting your money. Unlike High street estate agents, who usually charge commission, online estate agents generally charge fixed fees.  For example, if you sold a property worth £200,000 using a high street estate agency that charged 1.5% commission you’d pay £3,000 in fees, whereas online estate agents typically charge a flat fee of between £400 and £1,500 which could significantly cut the costs of selling your property.
  • Viewings: most high street estate agents will conduct viewings for you, but with an online agent the default option is that you do them yourself. For an added fee some online agents do however offer this service
  • Communication: although someone will visit to take professional photographs and do floor plans, all other contact will be usually be via email or phone. Some online estate agents will assign you a personal account manager.
  • Valuations: Although an online estate agent will visit your home to value it, just like a high street agent, you won’t necessarily get an agent with specific knowledge of the local market. That said, you don’t have to use the valuation provided by your online agent – you could always ask a local high street agent for a valuation and use that figure to inform the asking price you set with an online agent.
  • Marketing: High street estate agents market your home until it sells or your contract comes to an end. In practice, the same is true of online estate agents, but always check the package you’ve chosen. Most offer 12 months as standard, although some only offer six months
  • Vetting buyers: good high street agents will know whether potential buyers are quality applicants. All of the online estate agents we’ve spoken to say they take details of names, finances and whether potential buyers are already part of a chain. We’d recommend asking your agent exactly how this works – for example, Purplebricks uses a third party to ensure buyers are able to proceed with the purchase after the offer has been accepted.
  • Flexibility: Online agents offer packages that can be tailored to your specific requirements and you can often track viewings and feedback online (although some high street agents offer this too). Generally, there is no contract period, which means you are free to instruct other estate agents if you wish.

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Buying is now cheaper than renting across Britain

In some areas of Britain it has been found that buying a property may be cheaper than renting. This is a result of rising rental prices and low mortgages. Below is a link to an article from the Telegraph which covers this topic and also incorporates some useful funding calculators.

http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/12062505/Mapped-buying-is-now-cheaper-than-renting-across-Britain.html

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Tenants Face Strain In Property Market Squeeze

House prices are expected to rise 6% next year but the strain will increasingly fall on private tenants, a new report predicts.

Private rents will come under increasing strain from the squeeze in the housing market as the Government focuses on a push for home ownership, a new report warns.

The Royal Institute of Chartered Surveyors (RICS) predicts a 6% rise in house prices next year – outpacing any rise in household income – in its annual forecast amid a squeeze on housing supply.

But it also sees a 3% increase in private rents and that this sector will come under increasing strain.

It appears to suggest that as the ambition of home ownership becomes further out of reach for many, renting will also become increasingly hard to afford.

The Government has rolled out initiatives such as Help To Buy to spur home ownership. It also recently announced plans to see 400,000 homes built in the private sector.

But George Osborne’s Autumn Statement last month saw the announcement of a 3% stamp duty surcharge on buy-to-let property transactions.

RICS chief economist Simon Rubinsohn said: “Our principal concern with the measures announced by the Government is that they are overly focused on promoting home ownership at the expense of other tenures.

“Discouraging buy-to-let could see private rents take even more of the strain.”

A 6% rate of house price growth would represent an increase on the 5.6% pace in the 12 months to October reported by the Land Registry.

RICS expects lack of housing stock to be the main driver for the rise, together with the persistence of cheap credit conditions – with interest rates still at their all-time low of 0.5%.

It forecasts the number of transactions to edge up from 1.22 million this year to between 1.25 million and 1.3 million in 2016.

Mr Rubinsohn said the issue of housing had “clearly leapt up the Government’s agenda”.

But he added: “Despite the raft of initiatives announced over the past year, the lags involved in development mean that prices, and for that matter rents, are likely to rise further over the next 12 months.

“Looking further out, there is some justification for taking a more optimistic view of new build with significant incentives being put in place to deliver starter homes.

“While this may not on its own stem the upward trend in house prices, it could help to slow the rate of growth to something closer to the probable rise in household incomes.”

RICS predicts house price growth in 2016 to be led by East Anglia, up 8%, with the most modest rises in the North East, at 3%. London is forecast to see price growth of 5%.

Source: Sky News

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