Knock Knock News: First time buyers, market on the rise, stamp duty revenue, 'forever home' by 44, EU lending legistation

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Lending

Mortgage Lenders worried by EU regulations

Research conducted by Intermediary Mortgage Lenders Association shows that 74% of mortgage lenders are worried about the impact of the incoming European Mortgage Credit Directive will have on lending. Unlike last year’s review many of the changes are of a technical nature which include such things as approaches of disclosure and documentation rather than bigger issues such as changes to advice and affordability or lending criteria. The UK government has questioned the benefits of the MCD to UK borrowers. Few lenders expect the MCD to benefit the UK mortgage market overall.

Source: Property Reporter

First time buyer prices rocket

The cost of first-time buyer homes has risen by almost 19% since the Government introduced the Help To Buy scheme in 2013. Findings from the Office of National Statistics shows that in April 2013 a typical buyer would pay on average £179,000 for their first home. But by June 2015 this price had soared to a staggering £213,000. That represents an 18.52% increase in just 26 months. The government have revealed that the Help To Buy Scheme has helped 120,000 buy their new homes since its launch but on the same day housebuilder Barratt said it had seen profits jump by 45% thanks in no small part to the Help To Buy Scheme. Property buying agent Henry Pryor stated "The sight of house builders making huge profits from taxpayer money is obscene and must stop. Turn the Help to Buy tap off and concentrate on providing more builders to build more homes."

Source: Express And Star

Reluctant sellers push house prices up further

It seems rarely a day goes by without news that house prices are ever on the rise. Latest figures show that house prices in the three months leading up to August were 9% higher than the same time last year. That being said Halifax are reporting that buying is still cheaper than renting with the average price per month to buy a three bedroom house being £666 over the £722 per month of renting the same property. Part of the jump in price rises is due to renewed faith in the property market garnered from the Conservative general election victory but also the turbulent market keeping interest rates low meaning mortgage borrowers are able to secure lower rates. Add to this the shortage of houses being built and going on the market and it all points towards putting sellers in a prime position. Halifax housing economist Martin Ellis said “Strengthening demand and highly constrained supply are likely to mean that house price growth continues to be robust in the short-term.”

Source: City AM

Government has no interest in reforming London property

The average house price in London now stands at a staggering £513,000 compared to the rest of the country that is £277,000. Right-wing think-tank Civitas and left-wing paper The Guardian have both suggested reforms which include preventing foreign investors buying property in the capital. But there is a huge incentive for the government not to look to reform the market and that is Stamp Duty. Property Consultancy Knight Frank have discovered that despite London property sales accounting for only 13% of all transactions in the first quarter of the year those 13% accounted for 46.9% of the revenue gained by stamp duty. Chancellor George Osborne reformed stamp duty last year making it cheaper for people buying prices under £937,500 but more expensive to those buying higher than that. In some ways that has curtailed some foreign investment with Knight Frank reporting a drop of 21% of properties in the higher bracket of over £1 million. The result is that there is little incentive for the government to want to reform the London housing market given the revenue it achieves from it.

Source: UK Business Insider

Brits want to own ‘forever’ home by 44 and willing to pay more

Research conducted by Tepilo indicates that most Brits expect to be living in their ‘forever home’ by the age of 44 and are willing to pay an extra £30,000 to obtain it. Of the 2,001 people surveyed 65% of people said they location was the most important factor in choosing their dream home. Areas with good transport links, low crime rates and close to supermarkets all ranked high with those surveyed as key priorities. After location the number of bedrooms was second top of the list of requirements with 56% of people sighting it as key and 41% looking to the size of the garden playing a part. One in ten people said they would pay up to £30,000 above asking price to secure their dream home while 28% of Londoners said they’d pay £10,000 over asking to secure their move. 32% of those surveyed said they had brought a property as a form of investment while more than half had bought a property for their child while at university.

Source: The Daily Mail

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