Category: first time buyer (2)

Flat winners

The average price of a flat in the UK has risen from £150,749 at the end of 2008 to £237,223, according to the latest research, outperforming all other types of property. On average, people are now paying almost £20,000 more for a flat than for a semi-detached home. A major factor is the rapid increase in flat prices in London – if London is excluded, then terraced homes top the price rise list, followed by semi-detached, then flats, and finally detached.

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Leaving London

Around four in 10 first-time buyers in London say they are willing to move to a more affordable part of the UK if it means they would be able to buy their first property, which is good news especially for the market in the South East and in towns and cities on the edges of the commuter belt, such as Brighton.

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A separate report from Generation Rent says that housing costs are forcing young families out of London, with net migration from the city among thirtysomethings and children under 10 up by a quarter since 2012. It shows two thirds moved to the South East and East of England commuter belt, 12 per cent went to the Midlands, and a similar figure to the North of England.

Home improvement hotspots

People living in Kensington and Chelsea lead the nation in home improvement planning applications with 7.3 for every 100 homes in 2015. The fewest applications were made in Blackpool (0.4 for every 100 homes). Cambridge saw the biggest increase in home improvement planning applications in 2015 compared to 2013 and 2014, up 119 per cent. Overall, the report shows that rural areas are far more likely to be hotspots of home improvement activity than more urban locations. A separate report from Sainsbury’s Bank shows that just over one in ten UK adults has carried out home improvements costing more than £25,000 in the past two years.
First time buyers

The number of home sales to first-time buyers jumped seven per cent between February 2015 and February 2016 to 21,100. The figures show that in February the average deposit put down by a first-time buyer was £29,451, an increase of nearly 15 per cent year-on-year. Unsurprisingly, London remains the most expensive spot for first-time buyers with the average value of a first-time buyer property £314,626, followed by the South East (£211,638). The North East £114,163) and Northern Ireland £99,294) are the two cheapest areas.

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New build

Latest figures from the Office for National Statistics show that detached homes in England and Wales were the most commonly sold type of newly built property between September 2014 and September 2015. They account for a third of all new property sales, overtaking sales of new flats. The ONS report shows that a newly-built property was just as likely as an existing property to sell for £1 million or more last year, a big change from five years ago, when new properties were less than half as likely to sell for over £1 million as other ones. In total, the number of homes sold for £1 million or more in England and Wales has increased to over 70 times the level of 1995 – last year, 1.6 per cent of all property sales were for £1 million or more.
Living at home

The most popular reason why young adults say they still live at home is that they want to be with their family. In second place was saving for house deposit, but overall a third had not fled the nest because they simply could not afford to rent by themselves. Indeed, one in five had no fixed rental arrangements, simply helping out when possible and 15 per cent paid no rent at all.

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In case you were visiting another planet this week and missed it, the 2016 Spring Budget popped out of George Osborne’s little red briefcase like a bouncy Easter bunny. Sadly, not bringing chocolate with it…but some good news for the property sector.

1. First-time buyers saving for a deposit given a boost

The Chancellor announced a new Lifetime ISA, which will be available from April 2017 for savers who are aged under 40. Holders of the Help to Buy ISA, which launched last December, will be able to roll up any savings into the Lifetime ISA without losing their tax-free benefits.

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Total savings into ISAs each tax year – whether used to buy your first home, move up the property ladder or other purposes – will leap from £15,240 to £20,000 from April 2017.
2. Osborne’s 3% Stamp Duty surcharge pressing ahead from April

The Chancellor stuck to his guns on implementing a 3% Stamp Duty surcharge on the purchase of additional properties – the loading will come into effect from 1 April as planned. Based on the £290,902 current average value of a UK home, the new 3% loading will see prospective landlords and second homeowners see their Stamp Duty bill soar from £4,545 to £13,272.
Did you know? The 3% surcharge won’t apply to property priced under £40,000
The Chancellor confirmed in his Budget that larger residential property investors will be liable for the 3% surcharge – in the Government’s initial consultation, investors ‘bulk buying’ 15 or more residential homes had been earmarked for exemption.
The 18-month window during which time those buying a new main residence but unable to sell their previous one, could claim a refund of the 3% surcharge, will be doubled to 36 months. The same grace period will apply if a main residence is sold but there is a delay on the purchase of a new one.
Osborne said he will use the additional tax raised to support community-led housing developments, such as a £20m project to help young families onto the housing ladder in the South West of England.
He also announced a major new package of support worth over £115 million to support those who are homeless and reduce rough sleeping.
3. Stamp Duty slashed on commercial property

Buyers of commercial property will benefit from a cut in Stamp Duty rates. This includes a zero band on purchase prices of up to £150,000; a 2% rate on the next £100,000; and a 5% top rate above £250,000.

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4. High speed rail links are full steam ahead

The Chancellor gave the green light to the High Speed 3 rail service between Leeds and Manchester. This will reduce journey times by 40% and will allow people to live easily in one northern city and work in another, a pivotal factor when it comes to where to buy a home.
Osborne is taking recommendations from the National Infrastructure Commission on northern connectivity and committing £300m towards High Speed 3 and road upgrades. This includes a new Trans-Pennine tunnel under the Peak District, running between Sheffield and Manchester.
He also commissioned Crossrail 2, which will connect south west and north east London, while reducing congestion on the Tube network and pressure on Victoria and Waterloo stations. The government will be putting £80m towards the project.
The first Crossrail – or the Elizabeth Line as it’s now known – has already had a dramatic impact on the property prices along the route (see below for our infographic) and Crossrail 2 could have a similar effect.

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5. Capital Gains Tax reductions – but not for residential property

The Chancellor slashed the rate of Capital Gains Tax from 28% to 20% for higher-rate taxpayers, and 18% to 10% for basic-rate taxpayers. But buy-to-let investors won’t benefit, as the reduced rate will not apply to residential property.

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