31% Pay 'Unaffordable' Rent or Mortgage Costs

This article by Adam Shaw of BBC News UK on November 11th, 2013 reveals how people think property prices are too high in their area.

Thirty one per cent of people paying a mortgage or rent spend more than a third of their disposable income each month doing so, a survey for BBC Panorama suggests.

Housing charity Shelter said that makes mortgage or rent costs "unaffordable".

It said family budgets are being put under "enormous pressure" because of a "shortage of affordable homes".

The survey of 1,003 people also suggests 46% of people think property prices are too high in their area.

According to Shelter and the Joseph Rowntree Foundation, spending more than a third of your disposable income on rent or a mortgage means you may not be able to afford other basic needs.

'Impossible choices'

Shelter chief executive Campbell Robb said: "The widely accepted test of affordability is that housing costs should take up no more than a third of your income."

"But in reality, many families don't have any option but to pay out much more," he said.

"This sees some faced with impossible choices every day - including between putting enough food on the table or paying for the roof over their head."

Among those affected by rising property prices is Abi Reilly, a 33-year-old special needs school teacher.

She lives in a terraced house in Reading with her husband, Chris, and two children, five-year-old Daniel and four-month-old Elsie.

They spend around 40% of their disposable income on rent.

Having rented 13 different properties over the past 10 years, Mrs Reilly said homeownership does not feel realistic.

"It feels too far away," she said. "How can we save for a deposit when our rents are going up, energy's going up, everything's going up, wages stay the same, house prices go up? Mathematically it doesn't work."

The Ipsos MORI survey commissioned by Panorama questioned a total of 1,003 adults - of whom 697 pay a mortgage or renting a property. Mrs Reilly would belong to the 31% of people in this latter group who pay more than a third of their disposable income on their mortgage or rent.

The survey also suggested that 46% of people think property prices are too high in their area and 39% would like to see property prices fall.

In August, the Office for National Statistics said the average price of a property had reached a record high of £247,000.

ONS figures also show that home ownership peaked at 69% of households 12 years ago. Since then it has been falling and is now at 64%.

'Risk of overheating'

Panorama has also looked at the Help to Buy scheme set up by the government in April to assist people who could afford mortgage repayments but were struggling to raise a deposit.

It allows buyers of new-build homes to put down a 5% deposit and take out a government loan for up to 20% of the value of the property. Help to Buy was extended to existing homes in October, under which the government partially guarantees mortgages.

Since it began, there has been a 6% rise in the number of new homes being built.

Merryn Somerset Webb, editor-in-chief of MoneyWeek magazine, said Help to Buy risks inflating prices and overheating the housing market.

"It's like pouring petrol over the car and setting fire to the whole thing," she said.

"You know you might get a little heat in the short-term but the end result is not actually what you wanted."

But the government has dismissed concerns about a property price bubble.

Housing Minister Kris Hopkins said: "In Yorkshire, the North East and Scotland, house prices have moved very little or in some cases have actually gone backwards."

"And that's reflecting where wages are and what money people have actually got to spend. "

He also told Panorama: "We've seen nothing yet to suggest there is anything, going anywhere near a bubble at this moment in time."

Article Source: http://www.bbc.co.uk/news/uk-24856594

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Rents in Private Sector Hit Record High

This article by BBC News Business on October 17th, 2013 is about the average cost of renting a home has now rise according to a survey by LSL Property Services.

 

The rental market has been affected by young adults' ability to buy

The average cost of renting a home privately across England and Wales has reached a record high of £757 a month, according to a survey.

Average rents rose by 2.1% in September compared with the same month a year earlier, LSL Property Services said.

This was a 1.8% increase on August, driven by a 3.3% rise in the south east of England.
The lettings group said that greater demand from tenants was pushing up prices.

"Higher rents in almost every region show that, despite government schemes, buying a first home is still a difficult aspiration," said David Newnes, director of LSL, which owns estate agents Reeds Rains and Your Move.

"This is not only down to low salary growth, but also a general shortage of supply - which is the underlying reason why homes are getting more expensive. The long-term trend to renting therefore looks unlikely to change significantly in the near future."

The government has brought forward its Help to Buy scheme, which aims to assist those who can afford mortgage payments, but struggle to raise the necessary deposit to secure a mortgage and purchase a home.

However, critics have said that the scheme could create a housing market bubble, with official statistics suggesting UK house prices are already at a record high.

The LSL survey suggested that tenants' finances were stretched. Some 8.5% of all rent across England and Wales was late in September, up from 7.8% in August.

Article Source: http://www.bbc.co.uk/news/business-24566849

Help To Buy Lending Scheme Launch Sparks Homes Frenzy

This article by Sarah O'Grady of the Express on October 9th, 2013 tells us the launching of the 2nd version of the Help to Buy scheme swept up Britain's housing market in frenzy.

Borrowers leapt on the new Government initiative which will allow them to buy homes with 95 per mortgages and slash average deposit amounts.

As details emerged of the deals available from lenders, David Cameron said the project would unlock the housing market and help young people without rich parents get their own home.

HSBC became the first major bank outside state-backed Royal Bank of Scotland and Lloyds to announce it was joining the £12billion scheme.

Britain’s biggest mortgage lender Halifax also ann­ounced details of the home loans it would be offering.

Homes valued at up to £600,000 will be eligible with some estimates suggesting 180,000 loans could be taken out – despite fears that the scheme could spark a housing price bubble.

Taxpayers will guarantee up to 15 per cent of a property’s value, in return for a fee charged to lenders, allowing homebuyers to purchase with deposits as low as five per cent.

As the scheme was laun­ched, Mr Cameron visited a three-bedroom show home in Weston Favell, Northampton and met first-time buyers Kayleigh Groom, 28, and her partner Chris Day, 29, from Kettering.

The couple, who have been renting for five years, told him that Help To Buy would enable them to get on the property ladder.

Mr Cameron said: “What we’re doing is making sure that the typical family can buy the typical home.

“The couple I’ve just been with. They’ve both got good jobs. They’ve both got good prospects. They can afford mortgage payments but because they haven’t got a rich mum and dad they can’t get a mortgage. That isn’t fair. That isn’t right.

“So the Help To Buy scheme will help them to get a mortgage and make them homeowners.”

RBS and its NatWest subsidiary said they expect to sign up 25,500 first and next-time buyers over the three-year scheme. The two lenders are extending opening hours at 740 branches to cope with the demand.

Paul Smith, of haart estate agent, predicted Help To Buy will boost property deals by 10-15 per cent in the next 12 months and cut first-time buyers’ average deposit from £33,948 to £7,218.

He said: “We have seen a frenzy of activity with our branches overwhelmed by enquiries in the wake of the launch of Help To Buy.

“We have had the best first week of October for nine years. Last year we had 3,800 buyers registering in that first week, this year it was 7,281 – that’s a staggering 92 per cent increase.”

Article Source: http://www.express.co.uk/news/property/435438/Help-To-Buy-lending-scheme-launch-sparks-homes-frenzy

 

A Quarter of All Homes Sold to First Time Buyers

According to this latest article by Alex Johnson of The Independent on September 10th, 2013 NAEA figures show around 26% home sales were sold to first-time buyers.

Around 26% of home sales in August were by first time buyers, according to figures from the National Association of Estate Agents (NAEA), the highest proportion since July 2010 and up from 22% in July.

NAEA members also reported an increase of 29% in the average number of house hunters per branch, up from 250 in July to 322 in August, as well as a slight increase in the average sales agreed per branch in August (nine) compared with July (eight). However, supply levels dropped slightly over the month – the number of available properties per branch decreased from 53 in July to 52 in August.

Around 40% of home buyers last month were aged between 41 and 55 years old, followed by 31 to 40 year olds at 36 per cent. Nearly eight out of ten properties were sold to couples.

Five thousand Lanarkshire homes set to receive green energy

Muirhall Energy has secured a £9million finance package from Santander to expand the Muirhall Windfarm in South Lanarkshire. It is adding two new turbines to the site, the tallest in the UK, to increase production to 60,800 MWh per year, enough to power over 14,300 homes each year. This will prevent 26,144 tonnes of carbon dioxide emissions each year.

Chris Walker, Managing Director of Muirhall Energy, said: “As demand for power increases and fossil fuel reserves deplete it is important we continue make the most of alternative sources of energy and wind power continues to be one of the most cost effective and green solutions.”

Lack of rental homes for families on the market

Figures from Countrywide show that two and three bedroom rental properties saw an increase in average monthly rents in August, up 0.6% and 0.9% respectively. One and four-plus bedroom properties saw a drop of 0.1% and 1.6% respectively. Nick Dunning, Group Commercial Director at Countrywide, said: “August is traditionally a busy period for the rental market with tenants, particularly families, wanting to move into their new rented accommodation before the start of the school term in September. However, demand is not being met by supply and currently there is a particular lack of family-sized properties available to rent, especially in the South of England. Improved conditions in the sales market are attracting reluctant landlords to sell these types of properties specifically in the catchment areas for good schools.”

Property prices in Surrey

According to Zoopla the property prices in Surrey are up 7.35% from five years ago and 4.12% from a year ago. James Wyatt, Partner of Barton Wyatt and Chairman of NAEA Surrey, said: “These figures point to the change in attitude of the money lenders in the last there months. Yet again financial institutions are driving the market and the recent decisions which enables UK buyers to borrow money more easily again has positively turned the market. This has aided sales in the small to medium sized end of the market as most of these properties are purchased with mortgages and in turn we have seen a 33% increase in domestic buyers over the past year in north Surrey.”

Article Source:  http://blogs.independent.co.uk/2013/09/10/a-quarter-of-all-homes-sold-to-first-time-buyers/

UK Gets its First Residential Institutional Property Deal for Rental Development

Finally, a ground breaking property deal has been agreed which sees institutional investment a large scale residential development first time in the UK as revealed by this article by the Property Wire on August 6, 2013.

London Mayor Boris Johnson said that the development at Newington Butts, Elephant and Castle, has set the stage for further institutional investment in the capital's residential property market, accelerating delivery and boosting the economy.

Under the deal the site, which is owned by the Greater London Authority, will see preferred developers, Mace and Essential Living, using institutional investment to deliver one of the largest professional rental developments seen in the capital for decades, containing 462 units, 188 of which will be affordable, and creating hundreds of new jobs.

In the first deal of its kind in the UK the developers have, at a pre-development stage, secured institutional backing via M3 Capital Partners working with Essential Living. The Mayor has actively sought to encourage institutional investors, such as pension funds and insurance companies, to invest in residential construction and take development risk in order to increase and accelerate the number of homes being built.

Johnson said that the deal represents a major step forward in this work and it is hoped will encourage other institutions to invest in developments across the capital.

In a major milestone for the London's property market the tower will also contain one of the largest number of homes for long term private rental in the country when complete. Over the last decade the number of households in the UK in rental accommodation has increased by 77%, with over a quarter of London households renting.

The Mayor, who wants to speed up supply of purpose built private rented homes that will give tenants greater security via longer leases, was particularly keen that this prime site, close to the heart of London, had a substantial private rented offer.

The homes, when complete, will offer a unique high quality bespoke rental design, professional management services and attractive communal areas including a seven storey terrace area. Homes in the tower, designed by Rogers Stirk and Harbour architects, will also be available on long leases and will mirror similar style longer term rental apartments in large cities in the United States.

As well as these residential units the site will also include a new theatre space for the Southwark Playhouse and a café as well as retail and marketing space.

The development of the Newington Butts site is a key part in the on-going regeneration of the Elephant and Castle opportunity area, helping to create a town centre that will provide employment, better homes, improved transport links and community facilities for residents.
‘Housing, like roads and railways, are a vital part of the capital's infrastructure. We need to build more homes in London if we want to secure the capital's economic future and the importance of institutional investors in making this happen cannot be ignored,’ said Johnson.

‘This holy grail of investment in the riskier pre-development stage is a hugely important milestone but it is just the beginning. I want to entice other institutional investors to come forward and invest in quality homes for Londoners, boosting the economy and creating thousands of new jobs,’ he added.

David Grover, chief operating officer for investment at Mace, said that the firm is committed to helping shape sustainable cities across the UK and overseas through smarter infrastructure and better buildings.

‘This fantastic development will help deliver the Mayor's vision for future living in London, a completely new type of rental offer in the London market, and we are proud to play our part. Mace will be sharing its experiences and expertise from creating high rise residential schemes in both the UK and Middle East to make sure that the Newington Butts scheme is realised in style and recognised as a pioneering development. Following our success on another project at Greenwich Square last year, this new joint venture development company at Newington Butts, is the next logical step in Mace's growing relationship with the GLA,’ he explained.

Darryl Flay, chief executive of Essential Living, praised the Mayor for leading the way and said he had set the scene for the creation of ‘a new, truly professional rental market where tenants are treated like customers with great amenities, longer leases and a home actually designed for renting’.

He also pointed out that with over £100 million being invested the project will support the capital's work force by providing flexible, high quality rental accommodation that will help draw in future investment for the area.

‘With a quarter of Londoners now renting mainly from amateur landlords, it is vital that we create a branded sector that can deliver real quality for the first time. Because we manage the homes we build for rent, it enables us to take a long term approach to development, which differs hugely from traditional house building,’ explained Flay.

‘With its fantastic connectivity, Newington Butts will be one of the capital's landmark developments, showcasing to everyone what new, brand driven rental homes could be. The amazing work being undertaken across Elephant & Castle is a fantastic example of how ambitious place-making and dynamic civic leadership is transforming our capital and we look forward to working with the Mayor on delivering for Londoners,’ he added.

The development will be a welcome addition to the area, according to Southwark councillor Fiona Colley. ‘This is excellent news for an area that is shaping up to be one of central London's most vibrant destinations. I'm really pleased to see the regeneration of Elephant and Castle gaining momentum, with work on new homes and a new leisure centre already underway,’ she said.

‘Over the next few years, the area will continue its transformation into a great place to live, work and visit, with the demolition of the Heygate estate, improvements to transport, and the creation of thousands of jobs, homes and central London's biggest new park,’ she added.
The Peabody Housing Trust have been appointed to manage the affordable housing element with 159 shared ownership and 29 rental units. Work on the tower will begin early next year and it is earmarked for completion in 2017.

Article Source:  http://www.propertywire.com/news/europe/london-development-rental-deal-201308068084.html

Castle to Rent for just £1,750 a month

Are you looking for a place to rent and fancied being king or queen in the castle? This article by Paul Jeeves of the Express might be the deal that you've been looking for.

Northumberland castle for rent at £1,750 per month, a bargain for seven bedrooms (PIC: NORTH NEWS)

And it’s on the rental market for the same price as a two-bedroom terrace in Wimbledon.

Sprawling seven-bedroom 19th century Bellister Castle in Northumberland has just become available for a bargain £1,750 a month.

Legend has it the castle is also home to a “grey man” who, having been unjustly accused of being a spy, was savaged to death by hounds

Local myth

Owned by the National Trust, it stands on a prominent mound in the South Tyne Valley just outside picturesque Haltwhistle and boasts mature grounds, a walled garden, stables and an orchard.

The property is part of the Bellister Estate that was given to the Trust in 1976. It is available to rent for 10 years.

The mansion house, rebuilt in 1826 by architect John Dobson, is attached to the remains of a Grade 1 listed 14th century tower house.

But some tenants might be put off by having to share with a ghost. Legend has it the castle is also home to a “grey man” – a minstrel who, having been unjustly accused of being a spy, was savaged to death by hounds as he fled.

Article Source:  http://www.express.co.uk/news/property/411109/I-m-home-darling-drop-the-drawbridge-castle-to-rent-for-just-1-750-a-month