Housing Demand Soaring - Surveyors

This article by Cambridge News on November 12th, 2013 tells us the increase of price houses surge to an 11 year high.

The number of surveyors reporting house prices lifting across the country has surged to an 11-year high as the Government's new Help to Buy scheme fuels "soaring" demand from buyers.

The Royal Institution of Chartered Surveyors (Rics), which released the findings for October, said urgent action must be taken to tackle the problem of demand outstripping the supply of homes for sale, which is "nowhere near" the levels needed to cope. 

Sales volumes are running at their highest levels in more than five and a half years as more people flood into the market to snap up properties, its latest UK survey found.

Rics said that nearly three-fifths (57%) of surveyors reported price rises during the month, the highest percentage since June 2002, reflecting the imbalance between supply and demand.

Over the three months to October, surveyors sold just over 20 homes typically, the highest average since February 2008.

Looking ahead, surveyors said they expect house prices and sales volumes to edge higher in the next three months.

Meanwhile, demand for rented property is increasing at its slowest pace in over a decade as more people make the jump on or up the property ladder, Rics reported.

A balance of 11% of those surveyed reported rises in interest from potential tenants in October, the lowest proportion in more than 10 years.

But Rics said that while the new phase of Help to Buy - to give borrowers with deposits as low as 5% a helping hand to buy a new-build or existing home - is "widening the net" of people who can get mortgage access, surveyors across the UK are reporting a "problematic" lack of new instructions from sellers.

Rics said that as "soaring demand" pushes prices higher, almost every region is reporting an increase in sales, demonstrating that recovery is "spreading beyond the traditional economic powerhouses of London and the South East".

The new phase of the Government's Help to Buy scheme, which offers state-backed mortgages to people with deposits as low as 5%, was fired into action last month after the start date was brought forward from January.

State-backed lenders Royal Bank of Scotland (RBS), NatWest, Halifax and Bank of Scotland are already offering mortgages under the scheme and other major lenders including HSBC and Santander have confirmed plans to come on board at a later date.

Simon Rubinsohn, Rics chief economist, said: "A greater willingness by lenders to increase loan to values on mortgage products allied to the Help to Buy scheme has meant that more and more first-time buyers are in a position to enter the market.

"In spite of this, the amount of homes currently up for sale is still nowhere near enough to keep up with demand and, in order for the market to function correctly, this imbalance urgently needs to be addressed.

"House building starts have picked up recently but we are still well behind in terms of the amount of properties needed."

Fears have been raised that the upward pressure on house prices could lead to a "bubble", with borrowers over-stretching themselves. Ultra-low interest rates and a string of Government schemes are currently helping to keep mortgage payments relatively affordable.

Rics recently suggested that the Bank of England should use its powers to limit house price increases to 5% a year to remove the "froth" from price booms.

It said that an annual increase of around 5% could trigger caps on how much people could borrow relative to their incomes or the value of the property.

Recent figures from the Department for Communities and Local Government (DCLG) showed that house builders in England are starting more new properties than at any other time in the past three years.

But housing charity Shelter has previously warned that the country is still building less than half the number of new houses it needs each year to tackle the ''chronic shortage''.

Council of Mortgage Lenders chairman Nigel Terrington warned last week that the housing market risks becoming "addicted" to the Help to Buy scheme unless a clear exit strategy is set out. Mr Terrington said that Help to Buy must not "morph" into the UK's version of United States mortgage giant Fannie Mae.

Mr Terrington said of Help to Buy: "It should be a time-limited intervention to correct what is seen by the Government as a temporary failure in the market to provide high loan-to-value mortgages in quantity. It must be a temporary fix - not a permanent feature."

Housing minister Kris Hopkins said: "We are pulling out all the stops to get Britain building."

He continued: "Already, we're well on track to deliver 170,000 new affordable homes by 2015, and our plans to invest £19.5 billion public and private funding over this spending review, and £23 billion in the three years after that, will help towards the fastest rate of affordable house building for two decades.

"Housing starts are now a third higher than at the same time last year and it is clear house building will remain a critical part of our economic recovery.

"In addition, our Help to Buy schemes will help thousands of aspiring homeowners buy new homes with a fraction of the deposit they would normally require - helping to boost the housebuilding industry even further as well as supporting responsible lending.

"On average households have asked to borrow around £155,000 for houses worth about £163,000, which is below the UK average price of £247,000."

Roger Harding, director of communications, policy and campaigns for Shelter, said: "Despite Government rhetoric, Help to Buy simply isn't affordable for the vast majority of people on average incomes in large swathes of the country, while city economists are warning that it risks raising house prices further.

"Apart from high earners and those lucky enough to access hefty help from the bank of mum and dad, the chance of a home of their own continues to slip further and further out of reach for many young people and families.

"If the Government is really serious about meeting people half way and helping them to realise their aspirations, it needs to take decisive action to tackle our shortage of affordable homes."

Article Source: http://www.cambridge-news.co.uk/National-News/Housing-demand-soaring-surveyors-2-7972640.xnf

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Strong Start for Help to Buy, say Lenders

This article by BBC News Business on November 11th, 2013 reveals that house prices in the UK have returned to their pre-crisis levels.

 

House prices in the UK have returned to their pre-crisis levels according to some figures

 

Two major lenders have reported a strong uptake in the first month of the government's extended Help to Buy mortgage guarantee scheme.

Royal Bank of Scotland (RBS) and Halifax said they had received a total of 2,384 applications, potentially worth £365m in mortgages.

The scheme is designed to encourage lenders to offer mortgages with deposits as low as 5%.

But critics are concerned it could help to create a UK housing bubble.

RBS and its subsidiary NatWest, and Halifax - owned by Lloyds Banking Group - are among the few lenders to offer mortgages under the government's extended scheme.

The first phase of Help to Buy was launched in April, but only provided help to first-time buyers buying new-build homes. The extended scheme applies to all buyers and all types of homes.

RBS said it had so-far approved 169 of its 1,075 applications, and five customers had already completed their purchases.

It said the majority of applications had come from young couples with a joint salary of less than £50,000. The average price of the property being bought was £167,565.

Halifax said more than 80% of its applications under the scheme were from first-time buyers.

It said the majority of applications had come from outside London and the south-east of England, where property prices are rising fastest.

It also said that five purchases had so-far been completed.

Bubble worries

  The government welcomed the figures, saying that the scheme was supporting "responsible lending", helping borrowers would can afford mortgage repayments, but not a large deposit.

"Four weeks in and its clear that Help to Buy is already delivering," said Prime Minister David Cameron.

"Most Help to Buy applicants are first-time buyers, young and have a roughly average household income. This is all about helping hardworking people get on the first rung of the property ladder."

But critics have expressed concern that the scheme could create a bubble in the housing market, making home affordability an even bigger problem.


The latest figures from the Office for National Statistics suggest average house prices in the UK have now recovered from the slump seen during the recession.


Figures from Halifax suggest house prices have yet to hit their 2007 peak, but have risen steadily for the last nine consecutive months.

Nationwide Building Society says prices are currently 5.8% higher than a year ago.

But estate agents argue that much of those price rises are seen in London and the south-east of England, while prices in other parts of the country are rising more slowly, or in some cases actually falling.

Article Source: http://www.bbc.co.uk/news/business-24892649

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House Prices: 'South-East Set to Outpace London' for First Time in a Decade

This article by Jennifer Rankin  of theguardian on November 6th, 2013 reveals that house prices in London are at its highest compared with the house prices in UK.

London house prices are at an all-time high compared with the rest of the UK, but 'affordability constraints' could soon bite. Photograph: Alex Segre/Rex

 

House prices in the south-east are set to outpace those in London over the next five years for the first time in more than a decade, as buyers priced out of the capital turn increasingly to commuter-land.

 

Upmarket estate agent Savills said its research showed the era of rising home ownership is over and predicted that more than a million people will move into rented accommodation by 2018, with renters also facing higher prices.

But prices for house purchase are forecast to rise even faster, with Bournemouth, Brighton, Windsor among the towns across the south expected to see average prices soar by 32% in the next five years. Surging prices will also be seen in affluent parts of the south-west and the Midlands, such as Bristol, Bath and Solihull.

In contrast, house prices in London will rise more slowly, making gains of 24.4%, just behind the national average of 25%, with rises across the UK but more slowly in Scotland, Wales and the north of England.

This compares to 9% growth in UK house prices from 2008-13, although, adjusting for inflation, house prices remain below their pre-crash peak and will barely have recovered in real terms by 2018.

News of accelerating house prices beyond London is bad news for people struggling to get on the housing ladder and find affordable places to rent: in a recent Mori poll for Inside Housing, 57% of people did not believe rising house prices were good for the country.

Lucian Cook, head of UK residential research at Savills, said London prices were at an all-time high compared with the rest of the UK, but predicted they would grow more slowly after 2015 as "affordability constraints" in the capital begin to bite. "As confidence improves, buyers are likely to look to markets beyond London that offer better relative value, though it will be later in the cycle before the north feels this benefit."

If the London property market drops down a gear, this would be a significant shift in the UK housing economy, as the capital is the only part of the country where house prices have fully recovered since the crash. London prices are around 10% higher than their pre-crash value but prices remain 10% below their pre-crash peak in the south-east and almost 25% below in the north-east.

"It is not just about a north-south divide. The gap between London and the south-east is incredibly high at the moment," said Cook.

The housing recovery will be slowest in the north of England, with Barnsley, Hartlepool and Middlesbrough among the towns set to see the smallest price rises. The government has been trying to haul the housing market out of recession, creating the £130bn Help to Buy mortgage guarantee scheme, which critics have warned is in danger of inflating a bubble.

Dismissing talk of an overheating market, Savills said Help to Buy would play a minimal role, predicting it would increase transactions by 12% over the scheme's three-year life.

"Help to Buy will allow some trapped renters to access home ownership even though the costs of home ownership will exceed those of renting," said Cook, but he said the majority of beneficiaries were likely to those who already own a home, rather than first-time buyers.

By 2018, 5.8m households will be in rented accommodation, a million more than today, while the number of home owners will continue to decline. "The age of growing home ownership is well and truly over," said Cook.

Average rents are set to go up by 21% in the next five years and by 26% in London. Roger Harding at Shelter said the statistics highlighted "the dramatic and ongoing impact of our housing shortage on ordinary families. The current rental market is already unstable enough – families now make up a third of all renting households, with many forced to jump from one short tenancy to the next and cope with rising rents. The situation is only going to get worse if the number of private renters rises as steeply as this research predicts.

"This doesn't have to be the future, but unless the government commits to building the affordable homes that we desperately need, house prices will continue to rise and the already overheated private rental market will struggle to cope with the added pressure from a priced-out generation."

Galloping prices in the capital have turned the spotlight on wealthy foreign buyers, but the estate agent insisted they were not driving house price inflation. "Much more important than individual buyers is the state of the economy," said Yolande Barnes of Savills.

"London's economy has behaved fundamentally differently to the rest of the UK, because of the strength of the financial services industry." She also said any Treasury plans for charging capital gains tax on foreign buyers were unlikely to dampen foreign demand in the long-term.

But Savills is predicting a temporary slowdown in demand in "the tiny rarified markets" of Kensington and Westminster, as buyers delay purchases ahead of the election, fearing a future government could introduce a mansion tax. Property prices in the most expensive central London zones are set to fall 1% in the 2015 election year, but could rebound 8% afterwards if a mansion tax is not introduced.

Article Source: http://www.theguardian.com/business/2013/nov/06/house-prices-south-east-london-savills

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Survey Reveals Confusion Over UK’s Flagship Help to Buy Scheme

This article by the Property Wire on November 5th, 2013 reveals the confusion about the benefits the Help to Buy scheme can give to first time buyers and home owners.

There is confusion over the UK government’s flagship Help to Buy mortgage guarantee scheme, with 43% of active first time buyers and other home movers confused about the benefit the scheme will give them.
 
A survey found that 31% of consumers who are looking to buy or move admit they do not know whether there is a difference between a 95% mortgage offered by a lender which has signed up to the scheme and a 95% mortgage from a lender which hasn’t.

Results from an independent consumer survey commissioned by the Building Societies Association (BSA), also shows that 18% of first time buyers and 17% of home movers believe that they can borrow more through this scheme than with a standard 95% and 12% of both first time buyers and home movers believe that their monthly repayments will be lower as a result of taking a Help to Buy mortgage guarantee loan.

One in 10 first time buyers but just 5% of home movers believe that the scheme will protect them if they cannot keep up their monthly payments while 12% of first time buyers and 6% of home movers say that Help to Buy mortgage guarantee will protect them if their house price falls.

But not one of these suppositions is true. The Help to Buy: Mortgage Guarantee Scheme has been designed to encourage more lenders to lend to borrowers with small deposits, increasing the availability of this type of loan. The mortgage that an individual consumer receives and the approval process they go through, are subject to the same lending rules whether a mortgage is inside the Help to Buy scheme or not.

In fact, when considering the affordability of the Help to buy: mortgage guarantee loan, until the new FCA rules related to the Mortgage Market Review come into force in April 2014 borrowers may well be subject to stricter requirements then they would be otherwise.
The introduction of and the publicity surrounding the two Help to Buy schemes has had a positive effect on consumer confidence and is likely to increase the overall volume of higher loan to value ratio lending, as some banks get back into this market, says the BSA.
 
Indeed, some lenders, particularly many building societies, have consistently offered loans requiring deposits of five or 10% and continue to do so outside the Help to Buy Scheme. So borrowers may find that they have a wider choice than they expected when shopping around for a low deposit loan.

‘It is unsurprising that some consumers are finding the Help to Buy Mortgage Guarantee Scheme difficult to get their heads round. The situation has been complicated by the launch of two very different schemes both called Help to Buy,’ said Paul Broadhead, BSA head of mortgage policy.

‘It is essential that providers offering loans under the scheme leave applicants in no doubt about the terms of their mortgage loan. I am particularly concerned that a reasonable minority of active first time buyers believe that they can borrow more than normal and that they are in some way protected yet neither assumption is true,’ he explained.

‘In fact a 95% mortgage through the Help to Buy mortgage guarantee is exactly the same as a standard 95% mortgage. It is vital that these myths are dispelled at application to prevent the possibility of consumers misunderstanding their mortgage loan and later feeling misled,’ he added.   

Article Source: http://www.propertywire.com/news/europe/uk-help-buy-confusion-201311058424.html

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UK Looks Set to Impose New Tax on Foreign Property Owners

This article by Property Wire on October 4th, 2013 tells us the growing speculation that George Osborne is set to impose capital gain tax to non-UK residents.

Speculation is increasing that UK Chancellor George Osborne is set to impose Capital Gains Tax on people who are non resident but sell property they own in the country.
 
It is expected that he will make the announcement as part of his Autumn Statement due at the beginning of next month.

Currently home owners living in the UK pay 18% CGT when they sell their home and 28% if it not classified as their main home. People who own properties in the UK but are not residents are currently exempt from CGT.

The idea to start charging CGT to foreign owners is due to a surge in the number buying homes in London which has become a favourite safe haven for overseas property investors.
According to many real estate analysts the move should be welcomed as it deals with an anomaly between the tax treatment of domestic and overseas buyers and levels the playing field between local and overseas investors.

But the big question is whether it will deter overseas buyers of new properties in London and affect the current boom in the market place which is largely credited to demand from overseas buyers.

According to Yolande Barnes, director of residential research at Savills, the plan will not make London look expensive on the international stage. ‘Our analysis of four major world cities: London, New York, Hong Kong and Singapore has shown London to be particularly good value for overseas purchasers in the past,’ she said.

‘For those holding a residence for five years, total buying, selling and occupation/ownership costs have amounted to 8.5% of selling price in London. Under the proposed new CGT regime, this will increase to just under 12%,’ she explained.

‘This is still substantially less than it would be for the same value property in any of the other cities, except in cases where property is held in a special purpose vehicle or company in which case the new SDLT regime makes it more comparable,’ she added.

She does not believe that a new CGT would deter overseas investors, but pointed out that it will increase the tax take from London properties for the exchequer and the proposed measure puts London more in line with other world cities and addresses an inequity in the tax system.

‘Most importantly, it is unlikely to deter overseas inward investors who are attracted to the capital as a place in which to live and invest. London is a cosmopolitan city which stands out on the world stage as being particularly welcoming to foreigners. Most overseas home buyers are an important part of the London economy and are not depriving Londoners of homes,  they are Londoners themselves,’ she said.

Grainne Gilmore, Knight Frank's head of UK residential research, said it was hard to gauge how demand would be affected without knowing the details of what is planned but she pointed out that tax is not the primary reason why global property investors come to London, but a change would have an impact.

Stephanie McMahon, head of research for Strutt & Parker, said that if the thinking behind the move is to cool the prime property market in London then imposing CGT on foreign owners across the board might not be the best move.

‘There is no doubt that London has seen huge price growth. However, it has to be acknowledged that this has been curbed by other government interventions through various tax measures including Stamp Duty Land Tax. Whilst it is clear that the government are proposing this new measure to take the heat out of London one must ask whether the idea of the ‘bubble’ has been sensationalised. London, Greater London and the country as a whole have very specific dynamics and markets and one cannot talk so generally,’ she explained.

‘There can be no doubt that further taxing will have an impact on transaction levels in the prime area where between 50 to 70% of buyers are foreign. The initial response might be almost opposite to the intention, however, as talk around the issue could cause a flurry of activity but it is likely that it will then slow the transaction levels down dramatically as it did following previous interventions,’ she added.

She gave as an example the situation in New York where the CGT tax has increased from 15% to 23.8% and causes a huge rush in sales during 2012 adding further heat before sales then dropped off this year. Singapore has an additional overseas stamp duty of 15% to cool their market too.

‘Without knowing the full details of how this tax will be enacted and the figures involved it is hard to predict the full repercussions. One thing that is very clear is that governments around the world are looking very seriously at how they can raise revenue and control their markets. I cannot see these conversations going away, and as each government does this, the money moves to the next prime city further increasing the heat,’ she explained.

According to Ed Tryon, director at Lichfields buying agency, Britain’s current taxes on foreign property ownership are considered pretty generous by international standards. ‘Few other asset sectors have performed as well as the prime central London residential market since the economic downturn. Revenue from SDLT and other property taxes have risen significantly, investment and development is apparent on just about every street in the capital,’ he said.

He added that this has created significant additional revenue for the construction industry, retail, hospitality, finance and those who rely directly on this market for their livelihood, so a change could have affects beyond buying and selling.

‘Balancing the countries books should remain a priority but additional taxation stifles growth. The world is a complex multi national market place and the international dollars, rubbles and remnimbi could just as readily flow elsewhere if London loses its competitive advantage,’ he explained.

‘The market has absorbed significant SDLT rises from just 1% in 1997 to 7% in 2013, for £2 million plus purchases, changes to ownership structures, the financial crisis and a lending drought in recent times, its resilience is a testament to London’s attractiveness but there is a balance, tip it too far and the consequences for the whole economy could be catastrophic,’ he warned.

He also believes there are other revenue raising options such as a further increase to the SDLT bands or an additional band in excess of the one at £2 million, the much talked about Mansion Tax for all properties with a value over a certain level and an overhaul of the rather outdated Council Tax bands, although this is unlikely to be popular.

Article Source: http://www.propertywire.com/news/europe/uk-property-tax-sellers-201311048421.html

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Steady Increase in UK property Prices Continues with 1% Growth in October

This article by the Property Wire on October 31st, 2013 reveals that house prices in UK continue to rise at 1% in October.

UK house prices increased by 1% in October and are now 5.8% higher than October 2012 but remain some 7% below the peak of 2007, according to the latest monthly index from the Nationwide Building Society.
 
The rise takes the average property price to £173,678 and according to Robert Gardner, Nationwide's chief economist, the UK housing market appears to be following the more resilient upward trend evident in the wider economy in recent quarters.

He said that the 1% increased over the month in October means that prices are maintaining the momentum that has been building in the second half of 2013. After averaging less than 1% in the first half of the year, the annual pace of house price growth accelerated to 5.8% in October from 5% the previous month.

‘The ability and willingness of potential buyers to transact has been steadily increasing. The ability to buy has been supported by continued gains in employment and policy measures such as the Help to Buy and Funding for Lending schemes, which have improved the availability and lowered the cost of credit. Mortgage rates are close to all time lows,’ he explained.

‘The willingness of potential buyers to step into the market has also been increasing. While employment has been rising steadily for some time, it is only in the last few quarters that consumer sentiment has improved markedly. This may in part be the result of the improved performance of the wider economy. The UK economy expanded at a healthy 0.8% quarter on quarter pace in the third quarter, the third consecutive increase and the fastest pace of growth for three years,’ he added.

Gardner also pointed out that house price growth has accelerated as buyer demand has picked up more quickly than the supply of new homes. But the risk is that if demand continues to strengthen while the supply of property remains constrained affordability could become stretched. Indeed, average wages have continued to decline in real terms even though employment growth has been fairly robust in recent years.

‘Nevertheless, while house price growth has picked up, at a national level prices remain around 7% below their 2007 peak. Moreover, typical mortgage servicing costs remain modest by historic standards thanks to the ultra-low level of interest rates. A typical mortgage payment for a first time buyer is currently equal to around 29% of take home pay, in line with the long term average,’ said Gardner.

Brian Murphy, head of lending at the Mortgage Advice Bureau (MAB), beleives that driving this steady procession is an increased sense of consumer confidence and willingness to enter the market, as Help to Buy and Funding for Lending schemes make mortgage finance more accessible.

But he does not think this will lead to a house price bubble. 'House prices are rising from a low starting point and the national average is still 7% lower than the 2007 peak. Regional variations mean that the dizzying heights of London house prices do not necessarily apply to the rest of the country, painting a far less fatalistic picture than many would suggest,' he said.

'With mortgage rates at historic lows, it’s unsurprising that consumers are grabbing the opportunity to jump on the property ladder with both hands. However, we must ensure that those with low deposits are not left behind at the starting line and that mortgage finance remains accessible and affordable,' he added.

According to Peter Williams, executive director of the Intermediary Mortgage Lenders Association (IMLA), there is renewed vigour in the market, as illustrated in the continuing upward trajectory in the Nationwide index. 'Although there are concerns that a bubble is being formed around London and the South East, other indices confirm that growth is now being experienced in the majority of regions,' he explained.

'Although it will take a while to come into full effect, the Help to Buy mortgage guarantee will provide the market with further impetus, so we expect to see house prices continue to rise until some limiting factors emerge,' he added.

Article Source: http://www.propertywire.com/news/europe/nationwide-house-prices-index-201310318407.html

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ISG Lands £20m High-End London Resi Scheme

This article by Iain Withers of building.co.uk on October 30th, 2013 speaks about contractor that will restore the three grade ll-listed buildings into luxury homes.

ISG has won a £20m job to restore three 19^th century London buildings into luxury homes.
The Grade II-listed buildings – 92-96 Portland Place, 98 Portland Place and 10-12 Park Crescent – are part of London’s Nash Terrace overlooking Regent’s Park, designed by architect John Nash.

The project is ISG’s fifth development for Amazon Property in 12 months, including luxury apartment schemes at the former Paramount Studios in Soho, as well as in Bayswater and Westminster.

The three buildings were originally constructed as upmarket London residences, but have been used as commercial office space in recent years.

They will be converted into 15 luxury apartments.

Alan McCarthy-Wyper, managing director of ISG’s construction business, said: “Amazon Property has built an enviable reputation for acquiring prestige properties in landmark London locations and refurbishing them to the very highest standards that appeal to a global residential market.

“I am delighted to be able to support Amazon Property return these buildings back to the use originally intended by John Nash in the early 1800s.”

Article Source: http://www.building.co.uk/news/isg-lands-%C2%A320m-high-end-london-resi-scheme/5062871.article







 
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UK Mortgage Approvals Highest Since February 2008

This article by Katie Allen of theguardian on October 29th, 2013 tells us the argument about Help to Buy scheme risks may create another bubble according to figures.

The Bank of England mortgage lending figures are at their highest for more than five years. Photograph: Yui Mok/PA

 

Mortgages approved by British lenders jumped to their highest level for more than five years in September, fanning fears the housing market was already heating up even before the latest government support kicked in.

Banks, building societies and other lenders approved 66,735 mortgages in September, the biggest monthly total since February 2008, before the global financial crisis took hold.

The figures, from the Bank of England, were just ahead of City forecasts of 66,000 and compared with an upwardly revised 63,396 in August. Mortgage approvals are seen by economists as a good early indicator of where the housing market is headed.

They follow government data on Monday showing house prices rose in every English region in September and are likely to be seized on by those who argue that the government's Help to Buy scheme risks creating a new bubble.

"All the stimulus thrown at the housing market risks starting another dangerous boom-bust cycle," said Rob Wood, chief UK economist at Berenberg Bank.

"The key issue is not where prices are today, rather it is where they will be in a couple of years. Prices and activity are rising fast now. We expect house prices to rise 10% year on year next year … The measures that selectively boost the housing market, like the Help to Buy scheme, should be scrapped."

The plan to kickstart the property market and help homebuyers struggling to get on the property ladder gives a taxpayer-backed guarantee to lenders offering 95% mortgages that are open to first-time buyers and home movers on newbuild homes worth up to £600,000. Despite criticism from the International Monetary Fund and many economists, the scheme was expanded this month.

In an attempt to quell criticism of his scheme, the chancellor, George Osborne, recently asked the Bank of England to monitor its impact and report back in a year. Howard Archer, economist at IHS Global Insight, said the latest numbers underlined the need for policymakers to be ready to act "quickly and decisively if signs of the housing market overheating become increasingly widespread and pronounced".

Archer said it appeared a number of factors were supporting the property market even before the latest phase of Help to Buy was launched: improved consumer confidence, higher employment and extended low mortgage interest rates, the first stage of Help to Buy and the Funding for Lending scheme – a Bank of England initiative to increase the flow of cheap finance to credit-starved businesses.

"We are currently a long way off from an overall housing market bubble emerging. Nevertheless, there is a mounting danger that house prices could really take off over the coming months, especially if already significantly improving housing market activity and rising buyer interest is lifted appreciably further by the Help to Buy mortgage guarantee scheme," Archer added.

Others argued the housing market was still well below its peak and there were few warning signs of a bubble forming.

Samuel Tombs, UK economist at the thinktank Capital Economics, emphasised that mortgage lending, at £1bn, was only "a touch" above the average of £0.7bn over the previous two years. Mortgage approvals were still close to 40% down on their typical pre-recession levels, he added.

"Given that interest rates on Help to Buy mortgage products look expensive and lending criteria are strict, we doubt the scheme will boost mortgage demand much. Note too that banks appear to have little appetite to substantially increase the size of their mortgage books," Tombs said.

"For now, then, there remains little evidence that a renewed boom in the housing market is developing."

The Bank data contained some evidence that businesses found it easier to get finance in September. After dropping sharply in August, lending to non-financial businesses rose by £720m, the biggest increase since January.

"While it is important not to read too much into one month's figures, the size of the September increase in business lending reported by the Bank of England provides a significant boost to hopes that banks are now becoming more prepared to lend to businesses, given the improved economic situation and outlook," said Archer.

The Bank's data showed, however, that within the overall rise, lending to small businesses fell in September.

The British Chambers of Commerce said small businesses needed more help to get funds.
"It's good to see overall business lending rise, as this has an impact on business confidence. Yet these new figures show that while large firms have little difficulty tapping debt markets, SMEs – and particular young, fast-growing firms – continue to struggle to access growth capital," said Adam Marshall, its director of policy and external affairs.

"Both policymakers and financial institutions need to do more to help fast-growing SMEs access finance."

Article Source: http://www.theguardian.com/business/2013/oct/29/mortgage-approvals-february-2008-help-to-buy

 

House Prices Near Top 30 State Schools are '12% Higher'

This article by Harriet Meyer of theguardian on October 27th, 2013 reveals that third of properties close to the top state schools command a premium of more than £80,000 according to the survey by Lloyds.

House prices near the best state schools, such as King Edward VI School Handsworth, attract a premium of more than £30,000, says Lloyds. Photograph: Andrew Fox/Alamy

 

Parents are paying "premiums" of on average £31,500 for a home in an area with one of the UK's leading state schools, according to resarch from Lloyds.

The findings are are likely to reignite the controversy surrounding schools selecting by parents' ability to afford to live somewhere.

Property prices within postcodes with the top 30 sought-after secondary state schools are 12% higher than the average price in the rest of the county, at an average of £295,972, or almost nine times average annual earnings for a full-time male employee at £33,740.

Properties close to the top state schools command a housing premium of more than £80,000 in almost a third of cases.

The north-west has the largest premium, with average house prices in the postcode of the top 10 state schools in the region trading 28% – or £43,142 – above the average house price in their county.

This is followed by Yorkshire and the Humber, with a premium of 18%, and London at 15%. In contrast, house prices in the East Midlands that are close to the best performing state schools are on average 6% lower than in neighbouring locations.

The most expensive catchment area of a state school in Britain is that of the Henrietta Barnett all-girls grammar school in Barnet, north-west London, where the average house price trades at a premium of 87% or an average of £402,600.

Homes within the postal district of Tiffin girls' school and Tiffin school in Kingston-upon-Thames commanded the second highest premium, with house prices in the KT2 postcode trading at more than double the average for the borough at £207,591.

However, more than a third of England's top 30 state schools are in locations where the average property price is less than the average of those in neighbouring areas. With an average price of £94,843, properties in the catchment of King Edward VI Handsworth school in Birmingham, B21, for instance, are 42% or £67,738 below the county average.

Meanwhile, prices in the surrounding area to Kendrick school and Reading school were £108,033 lower than the county average.

The research is based on average asking prices in June 2013 and GCSE results taken from 2012.

Nitesh Patel, housing economist for Lloyds Bank, said: "All parents want to ensure their children have access to the best schools, so it is not surprising that homes in areas close to the top performing state schools typically command a significant premium over neighbouring areas.

"However, with the availability of suitable homes in short supply, high demand has led to average prices in many of these areas being out of reach for many buyers on average earnings."

Article Source: http://www.theguardian.com/money/2013/oct/27/house-prices-state-schools-higher

Surveyor Report a Strong Month for UK Housing Market

This article by the Property Wire on October 24th, 2013 tells us the another strong month for the housing market in the UK with the volume of residential valuation going up compared to August, according to Connells Survey & Valuation.

The UK housing market experienced another strong month in September, with the volume of residential valuations 55% higher than August, according to chartered surveyors Connells Survey & Valuation.
 
The firm says in its latest report that strong growth in every sector of the market brought the total number of residential valuations conducted in September 2013 to 65% higher than the same point last year.

Particularly strong growth was recorded in the areas of buy to let and remortgages, which saw increased of 66% and 64% respectively month on month. This equates to much higher annual rates of growth, following a comparatively slow month in September 2012.

‘September has felt like a tipping point. A year since the first real effects of Funding for Lending, and five years since the collapse of Lehman Brothers, the financial world appears to be at the start of a much sunnier period. In just 12 months, the situation has shifted unrecognisably with last quarter’s economic growth likely to come in above 1%,’ said John Bagshaw, corporate services director of Connells Survey & Valuation.

‘However, many borrowers have been reliant on remortgaging to fuel a good proportion of their new found optimism. If not for record low product rates, many families could now be struggling to pay their mortgage while keeping the lights on at the same time. The real question now is how long these excellent new deals can last before the Bank of England decides to raise interest rates,’ he explained.

The report also shows that improvements in total levels of activity have also translated into more new buyers, as first time buyer activity in September grew by 52% compared to August. This leaves the number of valuations on behalf of first time buyers in September 54% higher than in the same month a year ago.

Meanwhile valuations further up the property chain, on behalf of existing home owners wishing to move, have grown almost as quickly as those for first time buyers, up 46% since August, bringing home moving activity to levels 52% ahead of September 2012.

‘Over the last year first time buyers have witnessed a reversal of fortunes. Every part of the home-buying industry is straining to keep up with a rejuvenated lending system. After five years of relative inactivity, the only danger now could be the pace of improvement,’ Bagshaw pointed out.

‘What’s certain is that more people are able to buy a home. And the next rungs on the property ladder are looking far more solid than even a few months ago,’ he added.

The data also shows that after a minor seasonal slow down in August, buy to let activity has bounced back strongly in September. The number of valuations on behalf of buy to let investors increased by 66% between August and September. This leaves buy to let activity up by 77% since September 2012.

‘September and early October are the very peak season of the rental market. But valuations for landlords hoping to expand their property portfolios now will only bring new homes onto the lettings market by around the end of the year. That’s why this is such positive news for the buy to let sector, because landlords are clearly confident that demand will still be there in several months,’ said Bagshaw.

‘Progress on the supply of rental homes will remain vital for tenants who haven’t yet joined the ranks of first time buyers. Luckily, there has never been a better time for landlords to expand portfolios, with buy to let mortgage rates the lowest they are likely to be for years,’ he added.

Article Source: http://www.propertywire.com/news/europe/uk-housing-market-surveyors-201310248383.html

Lack of Protection Leaves Generation Rent Vulnerable

This article by Gregor Watt of Money Marketing on October 24th, 2013 discusses the importance of having protection for people in the rental property.

Gregor Watt looks at the plight of people stuck in rental property and the importance of having protection.

Despite the launch of Help to Buy 2 and the general pick-up in the mortgage market, many people are either stuck in rental property or are choosing to rent rather than buy.

The strong historical link between house purchases and protection sales means that this section of the population is harder to reach for protection sales, leaving many renters financially vulnerable if they are unable to work.

LV= head of protection Mark Jones says: “It’s important to realise that renting does come with certain pitfalls that often aren’t signposted. When buying a property, you are encouraged to take out an insurance policy to guarantee repayments in the event that something happens to the mortgage payer. No such prompt exists in the rental market.”

With the cost of rent increasing and general price inflation continuing to outstrip wage inflation, renters are under similar financial pressures as homeowners.

Although Help to Buy will help people borrow more money, the lack of new property being built means the supply of new homes is still far short of demand. The Council of Mortgage Lenders says the number of new properties being built is currently around 110,000 a year but this is some way short of the 232,000 new households the Government says are looking for housing every year.

This shortage has caused a rise in the cost of renting in recent years.

According to LSL Property Services, the cost of renting in the UK hit an all-time high last month, with the average monthly rent hitting £757 a month, up by 2 per cent since this time last year.

This figure disguises some sharp regional variations, with rents in London up by 4.4 per cent on a year ago, while the East of England has seen an increase of only 0.8 per cent.
LSL Property Services commercial director David Brown says: “A new peak in tenant demand has driven rents to new heights, well above all previous records. Higher rents in almost every region show that, despite Government schemes, buying a first home is still a difficult aspiration. 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.”

Housing is the single biggest monthly expenditure for many people. LV= says rent accounts for 39 per cent of monthly expenditure on average, rising to 44 per cent in London and the South-east.

Jones says: “We know that one-third of Brits currently rent and that 65 per cent of these people have no insurance in place. This would leave a huge number of people in the UK in a vulnerable position if they found themselves unable to cover their rent and living expenses.”

The high cost of buying a house is also changing people’s attitudes to buying property. Figures from the Office of National Statistics show that the percentage of people who own their own home has fallen back to 64 per cent from a peak of 69 per cent in 2001.

Earlier this year, the Halifax reported that 21 per cent of 20 to 45-year-olds had given up on owning their own homes, rising to 45 per cent of over- 45s but this drop in home ownership does not mean that this growing section of the public do not have the same protection needs as homeowners.

Expert view: We must do more to persuade renters of their protection needs

 

Ian Smart, head of product development & technical support, Bright Grey

With all the activity around the increase in first-time buyers, it would be easy to forget about generation rent – those people who will continue to rent for years to come, either through choice, because they enjoy the flexibility of renting or because they are struggling to afford a first-time buyer deposit.

According to research from Castle Trust, more than six out of 10 tenants believe they will never get on the property ladder. High property prices and stagnated earnings mean that many young people will spend their twenties and thirties in the rental market. It also means that the need to have protection insurance may not occur to them until they are much older.

But not having a mortgage does not mean protection needs should be ignored. Tenants have monthly rental payments. They have to pay for food, gas, electricity and council tax. If they lost their job due to an accident or serious illness, how would they survive financially?

The need to protect themselves against unforeseen circumstances such as these is just as important for people renting as it is for homeowners. While life insurance may not be appropriate for someone who does not have a mortgage or dependents, income protection is.

The recent focus on income protection has seen more providers improve their proposition to cover as many people as possible under an own-occupation definition. This will make it easier for consumers to claim and will ultimately increase consumer confidence in the product and make the case for taking out income protection an even stronger one.

However, more work needs to be done to persuade those people who are renting, that protection insurance is not something to be taken out only when they have
a mortgage.

Many renters will be saving hard for a deposit to buy their own home and this means money will be tight. But ironically this is all the more reason to take out
a protection product.

It would be awful to see the deposit they had worked so hard to save for disappear because they had to use the deposit money as a financial buffer.

Posing pertinent questions, albeit uncomfortable ones, will open people’s eyes to the potential consequences of not having a financial safety net in place. It is natural that clients will want a cost-effective option and taking into account all the solutions such as deferred periods or shorter payout terms can get around the issue of price.

Ultimately, individuals need to be responsible for protecting their incomes against illness or disability. It is unrealistic to rely on the state, especially with all the changes and cuts to welfare spending by the government.

Taking out a mortgage may be the number one trigger for people to sort out their protection needs but we need to switch people on to the need for protection well before then.

Article Source: http://www.moneymarketing.co.uk/news-and-analysis/protection/lack-of-protection-leaves-generation-rent-vulnerable/2001906.article

Countryside Living Means Paying a Premium for Property in the UK

This article by Property Wire on October 22nd, 2013 reveals a new research country homes command a significant price premium compared to those in towns and cities.

Homes in the country command a significant price premium compared to properties in towns and cities across the UK, according to new research.
 
This premium ranges from £86,218 in the South East of England to £11,570 in the North East of the country, the research from the Halifax has found.

But when it comes to value rural house prices have underperformed those in urban areas since 2009. In the past four years, the average price of a home in the countryside has risen by 2% compared with an average 10% increase in urban areas.

While prices have risen more rapidly in urban areas in most regions since 2009, a key factor behind the bigger increase in urban house prices has been the relative strength of prices in Greater London.  Excluding London, urban prices have risen by 6%.

The research report says that the recent outperformance of house prices in urban areas may also partly reflect the overall increase in the number of first time buyers since 2010 as they represent a larger proportion of the market in urban areas.

Over the same period, there has been a modest decline in the number of those moving home; a group that is more important in rural property markets.

‘There is a significant premium on property in the countryside across Great Britain. Country living remains a widespread aspiration, but relatively high prices put rural homes out of the reach for many,’ said Martin Ellis, housing economist at the Halifax.

‘Potential first time buyers are particularly affected by high property prices, and consequently they account for a smaller proportion of home buyers in the countryside than in urban areas,’ he explained.

The research also found that the average house price in the countryside is equivalent to 6.3 times gross annual average earnings. The comparable ratio for urban areas is 4.9.

There are only five rural areas where the ratio of prices to earnings is below the historical long-term average of 4.0; Copeland in Cumbria at 2.7, Stirling at 3.4, East Ayrshire at 3.5, the Western Isles at 3.7, and Pendle in Lancashire at 3.9, so are the most affordable rural areas in the country.

The Cotswold is the least affordable rural area in Britain measured by the house price to earnings ratio with an average house price that is 9.4 times local gross annual average earnings. Six of the 10 least affordable rural areas in the country are in the South West.

Chiltern is the most expensive rural area in Britain with an average house price of £407,012. This is more than four times higher than in the least expensive rural area of East Ayrshire where the average price is £100,119.

First time buyers account for 40% of all mortgage financed purchases in rural areas, significantly lower than in urban areas where first time buyers account for 52% of such purchases.

Getting on the rural property ladder is at its most challenging for first time buyers in southern England. First time buyers account for only a quarter of all purchases in Cotswold and East Hampshire. In contrast, first time buyers account for over half of all purchases in Copeland, St Edmundsbury, Pendle, the Western Isles, Fenland, Moray, North Warwickshire and Carmarthenshire.

Article Source: http://www.propertywire.com/news/europe/uk-rural-property-premium-201310228374.html

Property Taxation Changes Could Threaten UK Housing Recovery

This article by Robyn Wilson of cnplus.co.uk on October 18th, 2013 reveals that UK housing recovery can be threatened by property taxation according to a report.

Erratic changes to property taxation could threaten the UK’s housing recovery, according to a new report commissioned by the Berkeley Group.

In a 45-page report co-authored by the London School of Economics, experts challenged current government policies hindering developer confidence in the housing market, which they said risked future investment in the sector.

Creating the Conditions for Growth identified levies such as the mansion tax as “real issues that could stop the market in its tracks” and called for a complete review of property taxation.

Berkeley managing director Rob Perrins said: “We have had years of reactive changes and deliberate inaction.

“The idea of a mansion tax is just the latest example of a political response rather than a coherent approach to creating a fair and predictable system.

“What we need is a comprehensive review of property taxation, looking at stamp duty, council tax, inheritance tax and the annual charge all at the same time.”

Berkeley highlighted three main reasons to address taxation immediately, placing housing as a core contributor to economic growth.

Meeting the housing requirements of population growth was another main factor for the group, as was London’s increasing need to build more affordable housing across an ever-differing income scale.

If effectively addressed, the report concludes that the UK could benefit from much-needed, stable investment.

Article Source: http://www.cnplus.co.uk/news/sectors/housing/property-taxation-changes-could-threaten-uk-housing-recovery/8654465.article

House Prices Soar by £7,000 in Past Four Weeks

This article by Sarah O'Grady of Express on October 21, 2013 reveals the figures that market burts back into life while house prices have soared in the a month.

The £6,923 jump in the past four weeks is confirmation that Britain is enjoying a housing boom.

The £1,750 weekly uplift puts the price of a typical three-bedroom semi at £252,418, according to ­analysts Rightmove.

The biggest leap was recorded in London where new sellers added an extra £50,484 to their average asking prices this month. Experts said the rise was being driven by renewed interest from buyers following the introduction of the Government’s Help To Buy mortgage scheme.

Fears of a housing bubble were also eased as the number of new sellers coming to market was up eight per cent – although shortages were ­driving up prices in some regions.

James Hall, director of estate agents Fishneedwater, said: “Wow, the property market is back, and then some. We’re seeing a huge amount of pent-up demand hit the market at the same time.

“People feel a lot more confident about the economy and, due to the introduction of Government schemes, are finally able to get mortgage finance.

“Even mortgage rates at higher loan-to-values are exceptional.

“People are piling back into property. Owners and sellers will be pinching themselves. 

Bidding wars are becoming an everyday occurrence in some areas of the UK. There’s just not enough property going round and this is sending prices ever higher and creating levels of interest for individual properties not seen for many years.”

 
Bidding wars are becoming more regular as there is not enough property to fuel demand [GETTY]

Government initiatives like the £80billion Funding For Lending Scheme and the £12billion Help To Buy plan have helped push mortgage lending to a five-year high, figures showed last week.

Buyers taking advantage of record low interest rates and easier borrowing criteria meant total home loans hit an estimated £49.3billion in the three months to September, the Council of Mortgage Lenders said.

That was a third higher than the same period last year and the greatest quarterly total since autumn 2008.

Average house prices are now higher than the previous peak seen in January 2008, according to the Office for National Statistics which also revealed first-time buyer house price inflation is just under five per cent.

Miles Shipside, Rightmove director and housing market analyst, said: “Some agents currently report that there is a buying frenzy in parts of the UK with available stock so low that their shelves are now bare.”

The Rightmove research to mid-October showed that across England and Wales asking prices rose by 2.8 per cent month-on-month, following two months of falls, to reach £252,418 on average.

Prices across the country are 3.8 per cent higher than they were a year ago.

Alexander Gosling, director of online estate agents Housesimple.co.uk, said: “The property market really is gathering a head of steam and not just in London.”

Article Source: http://www.express.co.uk/news/uk/438168/House-prices-soar-by-7-000-in-past-four-weeks

Property Asking Prices Continue to Rise in Most of the UK

This article by Property Wire on October 17th, 2013 tells us that UK's residential property asking prices continue to rise according to the latest sector index.

Residential property asking prices in the UK are continuing to rise, up another 2% on last month and now 12% higher than a year ago, according to the latest sector index.
 
The prices in England and Wales are now up 5.5% on last year and the North East, North West and Scotland were the only parts of the UK not to record price rises in the last month.

The Asking Price Index from Home.co.uk also shows that the supply of property for sale across England and Wales is down 18% on last year.

On a monthly basis prices in England and Wales have risen 1%, the largest monthly rise since May 2011. London and the South East still continue to show strong growth and more areas of the UK are contributing to the recovery.

Scotland is now the only area of the UK that is still recording house price deflation, down 1.4% over the last 12 months.

The index  report says that the imbalance between demand and supply continues to dominate the market dynamic. The supply of fresh property stock across England and Wales has contracted by a further 18%, and in London new stock is down by 31% compared to last year.

Growing demand from buyers chasing ever fewer properties has driven down the typical time on market by an average of 8% over the last 12 months.

However, the recent price rises being recorded across the majority of the UK still conceal the bipolar nature of the market. Over the last five years, prices across England and Wales have risen 3.4%, whereas four out of nine English regions, plus Scotland and Wales, have shown price falls over the same time period.

Annual price growth is largely driven by London with a rise of 11.7% with prices in the South East up7%. The South West is vying to become another high performance region, with price rises of 4.6% over the last 12 months. Annual house price rises of 4% in the East Midlands and 3.5% in the West Midlands means that capital invested in those regions is now keeping up with inflation.

A growing concern is that regional house price bubbles are beginning to emerge where demand for housing continues to far outstrip supply. A lack of attractive non-property investment opportunities coupled with the widely reported surge in home prices is making potential vendors hold back, the report suggests.

As a consequence, the flow of new property stock across England and Wales is down 18% on this time last year. Three of the nine English regions are recording even tighter supply figures. Sales stock entering the market is now down 21% in the East and South East, and may well approach the 31% drop seen in Greater London. The flow of new supply in Wales and Yorkshire is relatively strong, with only a 5% fall in stock. Subsequently, average prices in these regions are being kept in check, with rises of 1.5% and 0.6% respectively over the last 12 months.

According to Doug Shephard, the firm’s director, London's property investment bubble continues to expand at an alarming rate. He describes the 2% jump in average prices in the last month alone as ‘simply astonishing’, and pointed out that the increasingly severe shortage of new stock is fuelling the accelerating rate of growth.

The average price of a house in London has broken through the £400,000 barrier for the first time and is 15.3% higher than five years ago. The growth is not showing any signs of slowing down and even the South East, with annual price growth of 7%, doesn't come close the capital's performance. Currently, only 60% of the properties for sale within a 10 mile radius of the centre of London are priced below the Help to Buy scheme threshold of £600,000.

‘House price growth is now sweeping north and west from the capital. Welcome news for home owners, but troubling for potential buyers whose salaries are not increasing anywhere near as fast,’ said Shephard.

‘Price rises in London and its surrounding regions have now established a solid two year trend, and one may well conclude that these property markets have fully recovered.

However, a true recovery cannot be complete without considerable improvement in the underlying economy, which is currently looking like a one horse race. Until real wage growth matches house price inflation, housing affordability will become increasingly difficult and a distant dream for many,’ he explained.

‘The ongoing availability of government backed cheap lending is already encouraging overall price rises over and above inflation. A key concern is that the impending Help to Buy scheme will only exacerbate affordability problems. Further market stimulus may be justified in selected areas such as the North, but certainly not across the whole UK, as that would significantly raise the risk of another property crash,’ he added.

Article Source: http://www.propertywire.com/news/europe/uk-property-asking-prices-201310178359.html

Jump in Residential Buy-to-Let Property Investment

This article by Adam Williams of Mortgage Solutions on October 16th, 2013 tells us that buy-to-let market sustained its growth because landlords continue to expand their portfolios.

Landlords continued to expand their portfolios in the third quarter of the year as the buy-to-let market sustained recent growth.

The Mortgages for Business index found that all areas of the buy-to-let market barring semi-commercial investments grew during the July to September period.

The number of buy-to-let products available rose by 4% compared to the previous three months and the survey highlighted a strong acceleration in residential buy-to-let purchases.

Despite this growth remortgaging figures remained high during the quarter, making up 62% of the total market. Mortgages for Business said this showed a demand from landlords for extra leverage.

The number of buy-to-let products on the market jumped from 465 to 484 quarter-on-quarter. The number of lenders operating in the sector remained flat at 27.

David Whittaker, managing director of Mortgages for Business, said: "It's encouraging to see a sustained improvement in the choice of different mortgage products for landlords - and that competition should help drive cheaper deals too.

"Rates remain low, and yields are consistently high, which is encouraging landlords to increase activity. Confidence is generally high - among both lenders and investors - which is sparking even more growth in the sector. There are some other factors driving landlords to remortgage - for example the continued turning away from the property market by some Irish banks and RBS.

"However, for the most part there's such a huge amount of interest in buy to let because of the potential returns on investment. Yields are even higher just as landlords are starting to see prices rise more seriously too, so we're expecting this surge of interest to continue. Fundamentally, demand from tenants is as healthy as ever, and will remain so for the foreseeable future."

Article Source: http://www.mortgagesolutions.co.uk/mortgage-solutions/news/2300883/jump-in-residential-buy-to-let-property-investment

Housing Market Confidence Continues to Improve

This article by What House? on October 15th, 2013 reveals the rapid growth of potential home buyers.

Confidence among prospective homebuyers is rapidly improving with some 10% of Britons, equivalent to 5.1m people, planning to buy a home over the next 12 months, up from 8%, or 3.7m people, in January 2012, according to research conducted by Santander Mortgages.

Improving consumer sentiment is being fuelled partly by the government's Help to Buy scheme which is helping more people acquire a new home with a deposit from just 5%.

The research reveals that younger people are the most likely to purchase property, with 18% of those aged 18 to 34 saying they are likely to purchase a new home. This compares with 9% of 35- to 54-year-olds and 5% of those aged 55 or over.

Phil Cliff, director of Santander Mortgages, says: "The UK has seen a number of encouraging economic statistics emerging in recent weeks and months and our findings suggest a significant increase in confidence in the housing market. Help to Buy is certainly stimulating the market and the extension of the scheme from January 2014 should see existing homeowners who have been unable to move entering the market again."

By region, Londoners are the most confident about their chances of purchasing a home in the next 12 months, with one in five believing it is likely they will do so.
 
Those in London are also most confident that the value of their home will rise over the next year, with 79% of respondents to the survey believing it will do so compared to just 2% who believe it will fall.

Article Source: http://www.whathouse.co.uk/news/housing-market-confidence-continues-to-improve-329#.Ul38XhB360Q