The recent economic crisis in Russia has sparked a spree of panic buying in London. Wealthy Russians are trying to get their money out of Russia and into a safe haven – the London property market.
Some high-end estate agents have seen a rise of 10% in luxury homes being sold in the last 12 months. It’s all because of the fall in rouble price on the stock markets.
The Bank of England has recently announced home owners can afford a rise in interest rates. Only 4 % would need to take any action if the interest rates were to rise from 0.5% to 2.5%, says the Bank’s annual survey of household incomes. This is based on a 10% rise in household income. However, it also said if incomes did not rise then 37% would need to take action.
The Bank of England have kept interest rates at 0.5% for yet another month. Interest rates have remained at this level since March 2009. It was thought interest rates would increase at the start of 2015. However, it is believed this planned increase has been put back until nearer spring time 2015.
Turmoil in the stock market has led to fixed rate mortgages falling to record lows. The five year fixed rate mortgage is already at 2.59% and is predicted to eclipse the previous low of 2.48% in the coming months. The rate of 2.48% was last seen two years ago. High street lenders such as Nationwide, Halifax and Leeds building society have all recently cut their rates with many more to follow.
London house prices are now seeing a rise of 20% per year according to the Office for National Statistics (ONS). This rate is five times higher than the increase seen in the North East England. As an average, England saw an increase of 12.2% in August 2014, which is the highest increase in ten years.
Research has suggested house buyers are paying over the odds for property located in scenic areas. House buyers will pay an average of £125,000 extra to live in these sought after properties. The New Forest, Hampshire, has the largest premium for anybody who wants to live there. To buy a house in the New Forest you will need to pay an average of £259,796 over the odds. If that is a little out of your comfort zone there is always Snowdonia which comes in at a 5% premium of £179,779.
The Bank of England has announced mortgage approvals were down in the third quarter of this year, which is the first drop in two years. The drop is thought to be due to a bottleneck caused by new affordability rules and regulations. However, lenders are confident mortgage approvals will soon pick up again, at least for the next 12 months.
The government’s Help to Buy scheme has been used by 48,000 house buyers to purchase their properties since it started. However, there is evidence to suggest that is may have peaked. There was a decrease in terms of the number of using the scheme between May 2014 (4,026) and June 2014 (3,892). Whilst one large house builder in UK has announced it is less popular now compared to last year. Since April 2014 lenders are now asking more questions around whether or not borrowers can afford a mortgage, keeping in mind interest rates are likely to rise soon.
Nationwide have announced house prices are on the up. House prices increased by 0.8% in the month of August, compared to 0.2% in July. The average house price in the UK now stands at £189,306, according to Nationwide. June recorded the highest house price growth of 11.8%. These increases continue to outstrip earnings significantly, where average wage growth has been less than 1% in recent months.
The biggest buy-to-let investors in the UK are set to sell their entire property portfolio. It is estimated their property portfolio of 1,000 homes will sell for at least £100 million. The two investors, Fergus and Judith Wilson have decided to withdraw from the property business, which is a decision thought to be based on property prices peaking – indicating the property market has recovered since pre 2007.
The two investors unsettled as many as 200 tenants earlier this year who were all on housing benefit, requesting them to be evicted. The Wilson’s preferred European immigrants as tenants rather than single mums and welfare who they believe missed more rent payments. The Wilson’s have also offered to assist the Government on housing policy in the future.
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The OECD warns the Government on rising house prices and suggests implementing some control measures. House prices are soaring compared to household incomes and rent.
There are two elements of the Help to Buy Scheme:
The first allows buyers to put down a deposit of only 5% on newly built houses. This was launched in April 2013 in England, September 2013 in Scotland, and January 2014 in Wales. This allows house buyers to take out a 75% mortgage, and the remaining 20% is provided by the Government. The system has been extended in England until 2020.
The second element offers a government guarantee against losses for lenders, but only when a small deposits are applied. This applies to second hand homes and ends in December 2016.
The two combined systems have caused the average house price in the UK to rise sharply. According to Nationwide this now stands at £183,577.
The Government’s Help to Buy scheme has enabled 17,000 houses to be purchased within the first nine months of its operation. Furthermore, 88% of the house buyers were first-time buyers. The Help to Buy scheme plays a vital role in David Cameron’s long term economic plan.
The Help to Buy Scheme consists of two parts:
the equity loan, and
the mortgage guarantee
The equity loan enables house buyers to put down a deposit of only 5%. This must be on a new build property. The Government provides the equity loan, up to 20%, which means the house buyer can buy a house with a 75% mortgage. This is on offer to house buyers until the end of 2016.
At the moment the only concern is the shortage of new build houses.
Stewart Property Buyers Team
The Halifax have announced house prices increased by 1.1% in November 2013, and are up 7.7% for the year. This increase is due to a strong demand for houses whilst at the same time there is a shortage of properties on the market. The average home in the UK now stands at £174,910, according to the Halifax. The average price is still 12% lower than the boom of 2007. Nationwide have recorded similar data of an annual house price rise of 6.5%.
Stewart Property Buyers Team
According to Land registry the recent news about house prices rising is only ‘modest’. House prices increased by 3.4% in the year up to September 2013, which is slightly quicker than inflation. The average house price in the UK is now £167,063 compared to £181,839 in November 2007.
Land Registry says its data is far more accurate than others such as ONS (Office for National Statistics) and Halifax, who claim house prices are rising at a much higher rate, resulting in the recent talk of another housing bubble. Land Registry data includes cash purchases and houses purchased with mortgages, whereas Halifax will use mortgage applications. When using data from Land Registry it is clear we are a long way from any housing bubble.
The Bank of England warns that many people will be in financial difficulty when interested rates start to rise. They explain a rise of 1% will mean 9% of mortgage holders will need to take action to keep up with mortgage payments. This action could mean an extra job or working longer hours to bring in more cash, as well as cutting current spending. A rise of 2% would cause significant problems for 20% of mortgage holders.
On the plus side Bank of England governor Sir Mervin King announced interest rate would be very unlikely to rise anytime soon. Whilst City economists predict an interest rate rise in 2 years time in 2015. This interest rate rise is expected to increase by 0.25% to 0.75%.
Nationwide has announced the average house price in the UK increased by 0.4% in May 2013. The news means the average cost of a house in the UK now stands at £167,912.
The small rise is due to the increased availability of credit, combined with a decreasing cost of credit. Both of these are largely due to the Governments Funding for Lending Scheme which allows banks to borrow cash from the Bank of England at a discounted rate. The bank must be able to prove the discount has been passed onto the buyer through their mortgage or loan.
However, this news is not consistent across the UK where some areas are down and some are up. Many property gurus still believe London upsets the UK average and should not be considered in such surveys. Indeed food for thought.
The demand for flats and houses in the UK has increased to its highest level since 2009 according to The Royal Institute of Chartered Surveyors (RICS). The majority of its members also reported rising house prices for the first time since 2010. The increased demand is said to be a result of the Governments new housing initiative known as Help to Buy, combined with Funding for Lending. RICS said the number of first time buyers is also increasing.
Help to Buy started last month where new borrowers can get a loan from the Government for up to 20% of the property value. In January 2014 the Government will guarantee these mortgage payments.
The UK's most expensive house is up for sale. 18 Carlton House Terrace recently went on sale at £250 million. If sold at this price it will be the most expensive house ever recorded in UK.
Facts about the UK's most expensive house:
It is massive! A whopping 50,000 square feet.
The Queen will be one of your close neighbours.
Council tax will only cost £1,361.48, the same as much much cheaper properties in the area.
The buyer will have to pay an additional £17.5 million for stamp duty.
It is currently registered to a company in the British Virgin Islands but the owner is thought to be a member of the Saudi Royal Family.
It is 1,537 times more expensive than the UK's average house price.
House sales increased in March this year but were down on the same month in 2012 according to HMRC. The drop in property sales is thought to be caused by the adverse weather experienced where record low temperatures were recorded for the time of year. Total sales for March 2013 amounted to 81,140 which is 5,580 fewer sales than March last year. On a more positive note house sales are up month on month this year, where January and February property sales were 61,940 and 65,300 respectively.
This trend has sparked many property experts into predicting a 'pick up' in property sales over the summer months.
If you need a quick house sale due to personal circumstances Stewart Property Buyers can help you immediately. Whether you need to sell a house fast or just really want a quick house sale we have the experience to let you move on. We can buy houses quickly in a matter of weeks not months, and can help house sellers in Scotland, England and Wales. Sell house fast today by filling in our enquiry form and we will give you an instant call back.
Stewart Property Buyers Team City house prices have risen to an average of £172, 556, which is over 5.5 times the average salary. The recent study by Lloyds shows how city prices in urban areas in UK are creeping up since the decline in 2008.
Northern Ireland holds the top 3 in a list that shows the 10 most affordable cities, in terms of house price v’s salary. Scotland has 2 and the rest are in the ‘North’.
Most Affordable Cities – Ratio House Price v’s Salary
|
1 |
Londonderry, Northern Ireland |
3.38 |
|
2 |
Lisburn, Northern Ireland |
3.50 |
|
3 |
Belfast, Northern Ireland |
3.67 |
|
4 |
Stirling, Scotland |
3.81 |
|
5 |
Bradford, Yorkshire |
3.98 |
|
6 |
Salford, North West |
4.11 |
|
7 |
Glasgow, Scotland |
4.23 |
|
8 |
Lancaster, North |
4.28 |
|
9 |
Hull, Yorkshire |
4.32 |
|
10 |
Sunderland, North |
4.43 |
Least Affordable Cities – Ratio House Price v’s Salary
|
1 |
Oxford, South East |
3.38 |
|
2 |
Salisbury, South West |
3.50 |
|
3 |
Bath, South West |
3.67 |
|
4 |
Truro, South West |
3.81 |
|
5 |
Winchester, South East |
3.98 |
|
6 |
Brighton and Hove, South East |
4.11 |
|
7 |
Cambridge, East Anglia |
4.23 |
|
8 |
Chichester, South East |
4.28 |
|
9 |
Exeter, South West |
4.32 |
|
10 |
St Albans, South East |
4.43 |
Despite these recent figures they are still significantly lower than those experienced in 2008 when the average home was 7.2 times the average salary.
According to Nationwide house prices increased by 0.2% in February 2013. This means the average house price in UK has increased for five successive months in a row and now stands at £162,638, up over £1,500 on the previous month. This positive news is largely due to the Funding for Lending Scheme which was introduced in August 2012 by the Bank of England and HM Treasury, designed to increase bank lending for households and businesses. Over the past 12 months the property market has been up and down resulting in mixed views and predictions, during this time the average house price has increased by 0.6%.
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