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Mom and Dad’s Housing Support Increasing

[ Posted October 15th, 2010 ]

A recent survey conducted by Halifax indicates that roughly one in every three parents are supporting their children financially in the purchase of their first home with at least £10,000. In fact, roughly 35% of all respondents to the survey with children ages 18 to 24 said they would provide up to £10,000 while an additional 18% said they would raise the amount even higher up to £15,000. In fact, roughly eight out of every ten people looking to get into the property market reported that they required support from their family in order to purchase a home of their own initially as of late.

This comes at the same time that many parents themselves felt that the mortgage market has proven more difficult to enter now than when they first entered into the market, with 79% of families reporting a more difficult experience now than they themselves had. While this is particularly true for first-time buyers at the same time it has proven the same for investors as well – especially for those looking for buy-to-let mortgages as lending institutions make obtaining financing for a home purchase increasingly difficult.

Mortgage lending criteria changes have also created a large number of differences in the property market developing over the past few years with purchasers now being required to make roughly a 21% deposit to secure the purchase of their home. Three years ago this number was a mere 10%. As the demands increase the need for financial support from family increases as well, thus generating a significant amount of additional pressure placed on families as a whole to support purchases.

A Generation Excluded

[ Posted October 14th, 2010 ]

With mortgages still maintaining a strong negative streak on the market figures are beginning to show particularly bad news for many first-time buyers looking for homes. This conclusion is primarily based on the fact that mortgages asking for roughly 90% of the total home cost – a mortgage type generally associated with first-time buyers looking to get into the market – have experienced a significant reduction in application and approvals as of late. In fact, latest figures show roughly an 89% reduction in overall mortgages of this type being offered between now and 2006, coming in at a total of 28,000 in 2009 verses a high of 245,000 in 2006.

 

These figures hold true for all mortgages offers in the 90% loan-to-value (LTV) range, including both tracker and fixed-rate deals. When combined with the growing social trend of accepting rentals or living with family or friends over purchasing a home of their own many feel that virtually an entire generation of first-time buyers has been effectively excluded from the real estate market. In fact, recent surveys even show that approximately one in ever four Britons still live with their family due to the various costs and other issues associated with obtaining a home of their own.

For property investors and various purchasers from earlier generations looking to expand their portfolios this may not be a major blow in the immediate future though many economic experts feel that this is overall a strong negative sign of the economic recovery and could work to heavily dampen any recovery processes underway. This is especially true in many rural areas that have been hit particularly hard by the economic recession and subsequent real estate flux where many local families can not afford to purchase homes of their own, even putting off marriage in many cases until couples are able to afford a house.

Prime Market Failing

[ Posted October 11th, 2010 ]

Top end homes throughout the country have reportedly been declining in value over recent months, with a year-on-year assessment showing a steady decline as well. Since 2009 prices have reported fallen a total of 1.5% for high-end homes valued at over £1 million throughout the country, with a 2.4% drop in value being registered for prime real estate in London. Wales is facing difficulties in particular with a reported 5.8% drop in its own prime property values over the past year – a major blow to those seeking financial refuge in wealthy realty.

While this may not seen like much of an issue to most individuals keeping an eye on the property market for personal purchases or investments it is an indicator that the economy as a whole is weakening significantly. This is particularly true for London where most have generally considered the top-end property market to be relatively untouchable given the level of overseas property interest in prime London locations. As of late, however, a combination of both declining economic stability as well as higher tax rates along with fluctuating residential and commercial mortgages throughout all of the UK property market have played a major negative role as a whole.

While it may still remain true that the majority of the prime property market will retain significant value and fluctuate less than the general market as a whole it is to be expected that the market will, indeed, face a downturn much like the rest of the country. For those interested in high-end markets London will still be the safest bet, however overall value cannot be expected to be retained in the coming quarters.

New Record Price Drops in September

[ Posted October 8th, 2010 ]

House prices in September dropped at the fastest rates seen since 1983, plummeting roughly 3.6 percent and engendering greater fears of what may be in store in the coming months. Lowering the average house price throughout the UK from its August height of £168,124 to £162,092 home owners can expect to see an average drop of roughly £6,000 on their overall home price.

While this slide has been anticipated by many going into the latter months of the year the severity of the shift has been somewhat unprecedented and caught many people off guard. This is particularly true for many who have recently sought out a re-mortgage for a secondary home purchase to lock-in a decent fixed-rate loan while they could for future months.

While as short as one month ago this may have been an effective buying scheme the sliding housing costs now mean that the majority of purchases even on fixed-rate mortgages may lose their favourable interest rate obtained through a substantial deposit and still stick property owners with higher monthly payments that would have been avoided should the market have continued developing,

Many experts agree that given this among other indicators further dips in property value are likely, especially going into winter months where property selling tends to hit a low point. Additionally this is being seen by many as a strong indicator that the dreaded double-dip has begun and many speculators in the UK property market as a whole should remain cautious when considering properties to invest in as even many higher-end real estate is not immune to the price fluctuations.

Proximity to Family a Primary Purchasing Factor

[ Posted October 1st, 2010 ]

Recent surveys conducted by Santander have revealed some insight into many house buying trends throughout the UK. Namely the primary motivating factor behind choosing the location of a home is not work or other economic factors but instead the proximity of friends or family (though for those living within London’s city limits economic and transportation factors play a much more important role). Of those surveyed roughly 39% of all Britons stated that friends and family being nearby is their primary concern with purchasing a home, followed by 29% preferring easy access to work and 20% choosing homes primarily based upon costs.

Contrary to what many people have thought in the past the presence of a reliable hospital or decent education institution nearby plays a relatively small part in the location consideration process. In fact, homeowners surveyed stated that each of those are rank roughly in the 2% and 9% range, respectively.

While these figures may not be too surprising to some people (such as those in London who regularly consider proximity to public transport and work to be the primary factors) they do offer some insight into the UK property market for some consumers – particularly for many first-time buyers looking to enter into the real estate sector. This even holds true for many overseas investors looking to invest in the country and is the primary factor behind why London is the location of interest for many investors abroad due to family interest in the city.

While individuals are not advised to change their purchasing habits for the sake of owning a new home at the same time purchasers are being recommend to consider the primary motivation factors for owning homes when looking at areas for personal use or investment. These can easily influence overall property demand in some areas and can have a major impact upon future value depending upon specific consumer trends in your area, so be advised and look ahead toward future developments as well.

 
 
 
 
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