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First-time buyers hit by UK house price hikes

First-time buyers now make up more than half the market in their highest numbers for a decade, but rising prices are keeping them reliant on help from Mum and Dad. Data from Halifax revealed this year's first-time property buyers are getting hit by a 21 per cent hike in house prices over the last ten years, with the average price in the UK rising from £172,659 to £208,741. This is more than double the price increase faced by other types of buyers over the same period, with the average asking price for properties suitable for first-time buyers often outperforming the UK housing market. London has been the worst offender, with prices on first-time properties soaring 48 per cent since 2008 to an average of £419,608. Additionally, deposits have risen three-fold over that time to hit an all-time high of £114,952, 27 per cent of the average purchase price. Read more: Affordability gap deepens as London prices push away first-time buyers The UK's capital was followed by properties in the South East of England which have risen 37 per cent to £275,632, and East Anglia raking in a 30 per cent increase to £210,639. Respectively, prices in the North and Wales have only risen a maximum of nine per cent over the last ten years, and in Northern Ireland prices have actually decreased by 33 per cent to reach the lowest average in the UK at £124,035. The news comes as it was revealed in ONS figures earlier this month that first-time buyers are now heavily reliant on the Bank of Mum and Dad to buy their first house, with more than a third receiving financial help from parents either as a gift or a loan. Read more: First-time home buyers struggle much more than mum and dad did "First-time buyers are having to dig deeper than ever to get onto the property ladder," said Halifax managing director Russell Galley. "With the average price now over £200,000 and deposits at £33,000 it’s not surprising that the average age of a first-time buyer has crept up to 31." In London, that number rises to the age of 33, the oldest in the UK.

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Price of land for home building rising in the UK

The price of development land for homes in the UK is increasing across much of the country but has fallen in certain parts of London, new research shows. Average greenfield development land prices rose by 2.1% in the second quarter of 2018, taking the annual growth to 4.6%, the strongest rise since the second quarter of 2014. The data from Knight Frank’s residential development land index also shows that urban brownfield development land prices edged up 0.4%, unchanged from the previous quarter, taking annual growth to 5.5%. However, the figures also shows that prime central London development land prices fell by 1.4% in the second quarter, a fall of 3.5% on an annual basis. A breakdown of sites within the Knight Frank index shows that growth has been propelled by markets in the Midlands and the South West, and the firm’s recent national house building report showed that developers saw the South West and Midlands as areas of opportunity for development over the next three years. ‘Timing is playing a part in the market. Sites which can be delivered up to 2021, and which will benefit from Help to Buy, are most attractive. Beyond this timeframe, policy uncertainty is causing a level of hesitance,’ said Justin Gaze, head of residential development land at Knight Frank. ‘At the same time, demand in regional cities, especially where land prices are coming from a low base, is also picking up. However the cost of materials and labour continues to weigh on pricing in all parts of the market,’ he added. According to David Fenton, head of regional land at Knight Frank, house builders continue to be inquisitive in the right areas, predominantly judged on factors such as employment and transport connections. ‘The M1 corridor is one such example, with exceptional links into London allowing people to commute with ease and bring up their families in a desirable environment,’ he pointed out.

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Annual house prices growth in the UK slows to 3.5%, falls in London and South East

Average house prices growth in the UK has slowed to 3.5% but there are stark regional differences with falls in London and the South East and stronger growth in the Midlands and the North. The latest housing market analysis from Carter Jonas reveals that Northampton experienced the highest rate of annual house price growth of 6.5% in the 12 months to May 2018 while there was a fall of 2.8% in Oxford and a fall of 6.7% in the prime central London market. Overall, national house price growth is on an upward trajectory, but continues to slow with rates ranging between 1.5% and 3.5% for much of 2018 to date, compared to an annual average of between 7% and 9% in the four years prior to 2017. The report says that while the UK average house price growth indicates a positive picture for the market, further analysis reveals an ongoing juxtaposition between house prices in the north and south. While there has been notable growth in the Midlands, the North, Scotland and Wales, this is buoying overall market trends but hiding the regional differences. It explains that with fall in price central London and Oxford, there is a distinct tale of price moderation in some of the traditionally affluent regions. After almost a decade of consistent growth, a disparity has emerged between house prices and affordability and as wages fail to keep pace with house price rises, buyers inevitably move elsewhere in search of better value. By contrast, values in the North West rose by 5.3%, by 3.6% in the North East, by 3.2% in Yorkshire and the Humber and by 3.1% in the West Midlands. As well as strong growth in Northampton, Leeds also saw a significant rise of 5.7%. The polarity between values in the North and South of the UK is also reflected in sales volumes. Comparing average monthly sales volumes in the periods January 2014 to February 2016 and April 2016 to February 2018, Wales saw growth of 7.2%, there was a rise of 5.3% in the North West and a rise of 5.2% in Scotland. However in London and the South East sales fell by 21% and 10.2% respectively. Overall, the UK has experienced a marginal decline of 3.3% in transaction volumes, attributable in part to taxation changes and protracted Brexit negotiations, the report adds. It points out that a reduction in transaction volumes is commensurate with a slowdown in house price growth, it largely derives from the second home and investor market. Indeed, buy to let mortgages have declined on average by 35% since April 2016, and by 10% in the 12 months to March 2018 alone. While there has been a 2% increase in first time buyer mortgages over the same period, the increase isn’t significant enough to counterbalance the recession of landlords from the market. ‘After a period of rapid house price growth in London and the South East, a slowdown was always inevitable, and arguably essential, to allow wages to catch-up and buyers to be able to finance their move,’ said Rory O’Neill, head of residential at Carter Jonas. ‘The correlation between areas of affordability and an uptick in transaction volumes is a trend we should expect, particularly given that buyers are increasingly price conscious and brilliantly savvy about how best to make their budget work for them,’ he explained. ‘Perhaps what is most shocking is the 35% decline in buy to let mortgages since the taxation levy was introduced in April 2016. The implication is that rental stock levels will fall into decline, placing greater pressure on a property market already constrained by lack of supply. For that reason alone, the Chancellor needs to consider whether stamp duty penalties are truly the right solution to resolving the housing crisis,’ he added.

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Is your rent set to ROCKET? Private landlords ditch rental properties after tax changes

AS HAS been widely predicted for some time, landlords are beginning to leave the private rental sector in significant numbers, but a report this morning from the Royal Institution of Chartered Surveyors (RICS) has now further identified the scale of the problem. In their monthly report, RICS point to 22 per cent of their membership observing a drop-off in landlords advertising rental properties to let in their area, and highlight that reducing numbers of private rental stock is a direct result of taxation changes for buy to let investors, leading to smaller scale landlords exiting the sector. Meanwhile, tenant demand continues to increase in most of the UK, leading to upwards pressure on rents. In fact, RICS anticipate that this shortage could create a rise of two per cent on the average rent in the next twelve months, and suggest that average rents in the UK could increase by as much as 15 per cent by 2023, with East Anglia and the South West potentially likely to see the steepest levels of growth. Simon Rubinsohn, RICS Chief Economist, commented on the findings of today’s report: “The impact of recent and ongoing tax changes is clearly having a material impact on the Buy to Let sector as intended. In terms of residential sales, however, life appears to be a little more stable, with the RICS survey pointing to a solid market in many regions in July, although the level of properties available for sale remain close to historic lows, which is of course a key factor in property values remaining at their current levels. Whilst the current political turbulence continues, it seems that many buyers and sellers have concluded that life goes on, which has led to the market ticking over at a reasonable level in many areas. Russell Quirk, the founder of online estate agency Emoov suggested: “There are plenty of positive signs for the UK property market and while the number of sales being agreed has remained fairly flat, things are starting to pick up and this is filtering through to an uplift in price growth. “While this confidence is more abundant in regions such as the Midlands and Scotland where seller expectation is more aligned with wider market conditions, it’s only a matter of time before this momentum builds across the entirety of the UK.” Brian Murphy, the Head of Lending for Mortgage Advice Bureau added: “On the residential sales side, today’s RICS report supports other recent House Price Indices in that it suggests the market has broadly remained stable over the last month, although some regions continue to perform above expectations, whilst London and the South East continue to lag. Interestingly, East Anglia now seems to have been added to the list of ‘amber warning’ areas where prices, which had previously seen exceptional levels of growth, appear to be softening. However, whether this is a monthly aberration or the start of a longer-term trend isn’t as yet visible.” Brian continued: “Today’s findings also point to the fact that there is a continuation at the upper end of the market, for example properties of over a million, that vendor ambitions aren’t being met in terms of sold prices, with a notable one in ten properties subject to offers of 10 per cent or more under asking price. “The mainstream market however, appears to be fairing far better, with asking prices in most cases achieved – subject to regional variances, of course – which yet again supports the lack of properties available and ongoing consumer demand for homes.” Of course, the conundrum around the rental sector isn’t just a short to medium term issue, but one that could fundamentally impact the housing ecosystem in the UK for decades. Unless steps are taken soon in order to redress the balance of the reducing number of properties available to let, whilst at the same time ensuring that rents don’t spiral out of the range of affordability for tenants, the current levels of investors divesting their portfolios is likely to increase as further taxation changes come into force next year. In the meantime, however, for those landlords who are able to restructure their portfolios in a tax efficient manner, the rewards – and continuing profits – are there for the taking.

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House prices bounce £3,250 to rise at fastest pace since November, despite property sales remaining lacklustre

House prices rebounded in July as growth accelerated to the fastest pace in eight months - but sales activity in the market remains flat, new figures have showed. The average price of a UK home rose by 3.3 per cent to a new record £230,280 in the year to July, according to Britain's biggest mortgage lender Halifax. A bounce in volatile monthly figures added £3,253, or 1.4 per cent, to the cost of the average home and saw annual house price inflation accelerate from the 1.8 per cent seen in June. House price inflation has now hit its highest level since last November, despite reports that of lacklustre sales and a buyers' market in many areas. Halifax managing director Russell Galley said that while the quarterly and annual rates of house price growth had improved, housing activity remained 'soft'. 'Despite the recent modest improvement in mortgage approvals, the latest survey data for new buyer enquiries and agreed sales suggest that approvals will remain broadly flat until the end of the year,' he added. He also said they did not expect the recent hike in interest rates to 0.75 per cent to have a 'significant' impact on either mortgage affordability or transaction volumes. UK home sales fell by 3 per cent in June, with the figure for the three months to June unchanged compared to the previous quarter, Halifax said. Brian Murphy, Head of Lending for Mortgage Advice Bureau, said: 'Despite the rise in Bank Rate announced last week by the Bank of England, many lenders haven't changed their rates as they had priced in for the increase previously, which is good news for buyers and those remortgaging alike. 'As with growth in house prices, an interest rate increase is actually the sign of a robust economy, therefore coupled with today's news, one might suggest that whilst the market isn't fizzing away at top speed, it's ticking over nicely through the summer months.' The Halifax data follows last week's figures by Nationwide, which showed a more modest 2.5 per cent annual rise and 0.6 per cent monthly rise. Mike Scott, chief property analyst at estate agent Yopa, said the increase in prices does not reflect an increase in market activity, with both buyer and seller numbers remaining subdued. ADVERTISEMENT 'The economic fundamentals underpinning the housing market remain strong, with high rates of employment, average wages rising faster than inflation and low interest rates. The Bank of England's recent base rate increase was already largely priced into mortgage interest rates, and is unlikely to dampen the market significantly.' Jeremy Leaf, north London estate agent and a former RICS residential chairman, also said July's rebound in prices was mainly due to a shortage of homes on the market and continuing low mortgage rates. 'It is almost as if the north/south divide is working in reverse with more activity outside rather than inside the capital,' he added. 'Soft' activity: UK home sales have been falling 'Soft' activity: UK home sales have been falling Howard Archer, chief economic adviser at the EY ITEM Club, was cautious and said: 'We remain dubious that the housing market is seeing a sustainable shifting up of a gear. 'Housing market activity is still relatively lacklustre and we expect it to remain so as the extended squeeze on consumer purchasing power only gradually eases, consumer confidence is relatively fragile and appreciable caution persists over engaging in major transactions. 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Halifax house price index: House prices hit new record - but activity remains 'soft'

House prices rose by 3.3 per cent in the second quarter of the year, hitting a new record of £230,280 - but caution still reins over the property market. Prices rose 1.4 per cent in July, according to the Halifax house price index, up 1.3 per cent on a quarterly basis. Russell Galley, managing director of Halifax, welcomed these figures as the largest increase since last November. But he noted that "housing activity remains soft". "Despite the recent modest improvement in mortgage approvals, the latest survey data for new buyer enquiries and agreed sales suggest that approvals will remain broadly flat until the end of the year," Galley added. “In contrast, the labour market remains robust, with the numbers of people in employment rising by 137,000 in the three months to May with much of the job creation driven by a rise in full-time employment. Pressures on household finances are also easing as growth in average earnings continues to rise at a faster rate than consumer prices." He noted that the recent Bank of England rate rise, from 0.5 per cent to 0.75 per cent, was unlikely to have a significant effect "on either mortgage affordability or transaction volumes". Jeremy Leaf, north London estate agent and a former RICS residential chairman, echoed his views on the impact of a rate rise, but was less bullish overall. "House prices experienced a rebound in July but this was mainly due to shortage of stock and continuing low mortgage rates, as we have found on the high street that many buyers have already factored in the increase in interest rates. It is almost as if the north/south divide is working in reverse with more activity outside rather than inside the capital. "There is still no clear pattern to the market after June saw the slowest growth for five years. Viewings are up but it is hard to obtain commitment as political and economic uncertainty remain. "We are looking forward to a reasonably active summer and autumn period as fewer but more serious buyers come to terms with changed market conditions."

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What Documents You Need to Sell a House

What do I Need to Sell My House? If you’re looking to sell your home, there are a set of documents that will need completing. Some of these are straight forward, some less so. Unless you’re going to sell your house online, you will need to complete a set list of documents aimed at describing exactly what is on offer when you sell your home. Here’s a list of documents that you’ll need to complete or provide: Proof of identity Your solicitor will need proof of address such as a bank statement or a utility bill as well as a photo ID such as a copy of your driving licence or passport. Shared freehold / leasehold documents Relevant documents will be required if your property retains a share of the freehold. If there has been a company set up to manage this, they should have provided you with the Share Certificate that you’d require. If the property is leasehold then you’ll need to provide copy of the lease. Energy Performance Certificate (EPC) When a house sells, an EPC will need to be included. The EPC certificate shows assessments on the energy use and CO2 impact of the property. If you’re looking to sell your house and don’t currently have an EPC certificate, you should be able to contact a qualified assessor through your estate agent. Property Title Deeds You might already have these, if not then you might be able to get these from the solicitor you used when you bought your house or your mortgage lender. Additionally, Your solicitor will also need to request official copies of your title deeds from the Land Registry. Management Information Pack This can often take several weeks to arrive, so it’s crucial that you get this paid for and ordered as soon as you can when you begin selling your home. Either you or your solicitor can obtain this from the freeholder or managing agent, if your home is leasehold. Fittings and contents form (TA10) the TA10 form is used to plainly specify what will be incorporated in the sale of your house. This can, if relevant, it also cover items in outdoor areas, like sheds, greenhouses, washing lines and trees. This form breaks down the property on a room-by-room basis, and will specify any included item, such as appliances or curtains. It is important to ensure all parties involved are clear what will be included in the sale of the property, as you don’t want any unnecessary setbacks later on in the process. Property information form (TA6) All sellers are required to fill in this form, which gives more a more detailed account of the property. There’s a more detailed explanation of the form here. This form covers areas such as: Complaints and Disputes: Include any continuing disagreements with neighbours Boundaries: this will include the location of borders and who would be responsible for upkeep hedges or fences Planning, alterations and building control: Including any substantial building work completed or ongoing on the property, this could mean having new windows put in or an extension to the property. If relevant, it should also contain the building’s listed status Warrantees and guarantees: This could be applicable of the building or any parts of it are particularly new. An example of this could be new solar panels having been fitted Proposals and notices: including letters from local authorities, or neighbours concerning future development in the area Environmental matters: This will need to make reference to the EPC, but also cover other things such as the presence of Japanese knotweed or any flooding risks Informal arrangements and rights: this may include, among other things, chancel repair and shared access Insurance: this is to give any potential buyer a rough idea of whether there are any irregularities and how much it is likely to cost to insure your home Parking: This is one fairly straight forward, potential buyers will want to know if your property has a garage or offers any off road parking like a driveway Occupiers: this is to clarify with the buyer whether there are people living in the property that will remain doing so after completion Services: this relates to, among other things, the condition of the electrical wiring and central heating Connection to services and utilities: this section is to specify the location of the relevant meters for the suppliers of electricity, water and gas to the property Any other charges: this might include maintenance fees for flats or gated communities, and lease costs for leasehold properties Transaction information: this is where you should clarify if you are also intending to buy another house. This is also where you can include any special necessities around moving dates Any documents referenced in the property information form will require copies being provided, such as FENSA certificates for replacement windows or a Building Regulations sign off.

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Banks turn to equity release providers to bail out problem interest-only customers

st-only mortgage holders with no way of paying off their loan could be handed a lifeline, as major banks look to get these troublesome customers off their books. Virgin Money has signed a deal with one of the biggest equity release providers, insurer Legal & General. It offers customers the opportunity to switch from an existing interest-only loan to a lifetime mortgage with the insurer. Interest-only mortgages were commonplace before the financial crisis but these customers have since provided a major headache for banks. Borrowers were required to pay off only the interest on their loan each month, rather than paying down the capital. While this was an easy way to lower monthly payments, many borrowers are now reaching the end of their term with no way of paying back the original debt. The City watchdog, the Financial Conduct Authority, has expressed concerns about many of the 1.7 million mortgage customers with outstanding interest-only loans. The situation is particularly acute for the 200,000 people who have a loan maturing in the next year or two. These loans are also an issue for lenders who could be forced to repossess properties in the most serious cases. The regulator called on lenders to do more to support these borrowers. Deals between high street lenders and lifetime mortgage providers could be one way of resolving the crisis. Virgin Money has announced its interest-only customers aged 55 and over will be referred to Legal & General, where they will receive advice on whether a lifetime mortgage could offer a solution. A lifetime mortgage pays a lump sum to a borrower, which can be used to pay off the interest-only loan. However, borrowers should be aware that interest charged on these loans is usually “rolled up”, meaning interest is charged on the interest previously accrued. This can make it an expensive option for those yet to reach old age. Lifetime mortgage customers can eliminate this problem if they choose to pay the interest on a monthly basis, as they have done with their interest-only loan. The debt itself is recouped when the homeowner dies or moves into long-term care, when the provider takes their share of the sales price.

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