Landlords switching their interest away from the expensive south-east and towards lower-value homes is threatening to make it even harder for young first-time buyers to get on the property ladder.<\/p>\n
Data from brokerage the Mortgage Advice Bureau reveals that the ever increasing number of private landlords in Britain are now searching for homes outside of the south of England and in core first-time buyer value ranges, The Times reports<\/a>.<\/p>\n It says in particular that 70 per cent of searches by those looking to secure a buy-to-let mortgage were for homes worth less than \u00a3250,000, with half of these for homes worth less than \u00a3150,000. Searches under these thresholds are up around 50 per cent year on year, meaning that most landlords are likely to be looking for homes worth less than the UK average.<\/p>\n Buy-to-let investing has grown in recent years as the number of prospective tenants soars, with more and more people being priced out of owning for longer. Banks will also often lend more readily to landlords as the loans are lower risk \u2013 and the rapid growth rates in house prices make the option attractive to investors starved of yield elsewhere.<\/p>\n But the situation risks fuelling further price increases in core areas of the market and leaving even fewer opportunities for young people to buy their own home. Studies have claimed that more than half of under 40s will be renting within the next decade.<\/p>\n Today’s data come follow the latest figures on house price growth, which revealed the average asking price has reached another record high. City AM says<\/a>\u00a0figures from estate agent group Haart showed prices surged 10.5 per cent year on year in October, meaning the average house is now worth \u00a3224,242.<\/p>\n Again, the estate agency found the focus is now on areas outside of London, which is falling behind in growth terms with a year on year increase of a little more than four per cent. The average price of a house in the capital is the highest in the country at \u00a3510,925.<\/p>\n 20 November<\/p>\n Mortgage lending has risen by nearly 20 per cent in the past year, according to industry experts.<\/p>\n The Council of Mortgage Lenders says that a total of \u00a321.8bn was lent in October, the highest amount since before the financial crisis in 2008. “The rise was partly triggered by competition in the mortgage market as lenders cut rates to meet their end-of-year targets by Christmas,” says the\u00a0Daily Mail<\/a>.<\/p>\n With interest rates at historic lows, many people have been re-mortgaging their properties or seeking to move home in order to lock themselves into the low interest rates before they start to rise. But the\u00a0small number of houses being offered for sale has caused an overall slowdown in the housing market in recent months \u2013 and this supply imbalance is widely cited as a key reason that house prices are surging.<\/p>\n Further evidence of the general upward trend comes from the Hometrack index of 20 UK cities, which says the pace of inflation will return to double-digits by the end of the year. The Times<\/a> reports that prices in the UK’s urban centres “leapt by 9.4 per cent in the year to November to an average of \u00a3229,300, up from 8.4 per cent in October and 6.6 per cent in May”.<\/p>\n While the Hometrack index confirms that London and the university cities of Oxford and Cambridge are still out in front, national growth is also being driven by cities outside southern England that have recovered more slowly from the post-crisis slump. “Glasgow, for example, was up by 8.3 per cent at \u00a3110,500, while in Manchester it was seven per cent higher at \u00a3141,200, both the highest rates of annual house price growth since 2007,” the Times notes.<\/p>\n The plight of younger buyers hoping to get onto the property ladder remains a serious concern. Third-quarter mortgage data suggests that mortgages for private landlords are growing at more than four times the pace of first-time buyer mortgages. Separate statistics published by the\u00a0House of Commons<\/a>library found that a first-time buyer needs an average deposit of \u00a347,000 and an income of \u00a355,000 to afford one of the government’s new starter homes across the country \u2013 a financial position that effectively locks most young people out of the housing market.<\/p>\n In total there are 11.1m mortgages in the UK, amounting to a debt of around $1.3tn.<\/p>\n 18 November<\/p>\n House prices have risen by 6.1 per cent in the past year – with the average cost of a home in London inching beyond the half-million mark to \u00a3531,000.<\/p>\n The increase recorded in the year to September marked an acceleration, after a rise of 5.5 per cent rise in the year to August, according to the Office for National Statistics. It was, however, well below the 12 per cent increase that was seen last year.<\/p>\n House prices are said to be rising at different rates according to the various indices, but all show that they are still accelerating ahead of wage increases and are hitting new records across the country as a whole.<\/p>\n But the national average masks wide variations across the UK. Property prices rose by 10.2 per cent in Northern Ireland, but just 1.1 per cent in Wales and Scotland. England recorded a rise of 6.4 per cent.<\/p>\n Howard Archer of IHS Global Insight told the Daily Mail<\/a> he predicts further “solid” house price increases in the coming months. “We expect house prices to rise by around six per cent to seven per cent in 2016,” he says.<\/p>\n The latest official statistics come after a Rightmove report warned this week that at least 350,000 households will be locked out of the housing market by 2020 because of a lack of affordable homes (see below).<\/p>\n Yesterday a separate report from PricewaterhouseCoopers projected that by 2025 only around a quarter of 20-39 year olds in England would be owner occupiers, compared to around three quarters of over-55 year olds, the BBC<\/a>reports.<\/p>\n 16 November<\/p>\n Estate agent Savills has published research highlighting the scale of the looming affordability crisis in UK housing, claiming 350,000 people will need help to rent or buy property by 2020.<\/p>\n According to the figures, around 70,000 new households a year will be unable to afford the market rate for rental or mortgages each year for the next five years. The Guardian<\/a> reports this is based on the assumption that a household can ‘afford’ to spend 30 per cent of its income on housing.<\/p>\n The claims come as concern builds over a lack of affordable housing, as supply remains scant and private providers consider scaling back development amid cuts to maximum rents they can charge.<\/p>\n Some existing social houses may also be sold at a discount under a revamped ‘right to buy’ scheme, although the government claims these will be replaced.<\/p>\n Those being forced to spend more of their income on housing could struggle to pay other bills, especially if they are subject to the benefits cap. The spiralling rental market in particular will almost certainly also increase the government’s housing benefits bill, as the local housing allowance rates are forced higher.<\/p>\n The news comes as Rightmove data published today suggests the fall in valuations for houses being sold in November has dropped relative to October by the lowest amount since 2011.<\/p>\n Houses for sale in the run up to Christmas are typically priced lower to attract buyers in a quieter market, but with low mortgage rates holding up demand at a time when supply remains low, asking prices have fallen by just 1.3 per cent,The Times <\/a>says.<\/p>\n Miles Shipside, Rightmove’s director and housing market analyst, said: “Buoyant market conditions and a confident outlook for 2016 mean that the reduction, while no doubt welcome to hard-pressed buyers, is the most Scrooge-like since 2011.<\/p>\n “It’s likely to be a short-lived respite, as the combination of high confidence and low interest rates is a recipe for higher prices next year.”<\/p>\n 12 November<\/p>\n In the ongoing debate on how house prices will evolve over the next few years, the Royal Institute for Chartered Surveyors (Rics) has expressed concerns over the affordability of UK property.<\/p>\n The results of Rics’s latest monthly survey found that its members were predicting overall rises of around 4.5 per cent a year for the next five years, an increase that will add around \u00a342,000 to the average cost of a home in England and Wales, according to The Guardian<\/a>. With wages for most workers currently rising by around 2.5 per cent, property is only becoming more expensive while saving for a deposit is only getting harder.<\/p>\n Rics found evidence that the shortage of housing that’s now endemic in the property market is continuing. “The supply of properties coming on to the market fell for a ninth month running in October,” it noted, with 10 per cent more members seeing a rise in new instructions than a fall. “At the same time, inquiries from would-be buyers rose.”<\/p>\n “It is hard to get away from the issue of supply when it comes to the current state of the housing market,” said Rics’s chief economist, Simon Rubinsohn. “The legacy of the drop in new build, following the onset of the global financial crisis, is now really hitting home, with both the sales and letting markets continuing to show demand outstripping supply on a month-by-month basis.”<\/p>\nHouse prices: mortgage lending reaches pre-crisis levels<\/h3>\n
House prices reach another record high after 6% rise<\/h3>\n
House prices: 350,000 more unable to afford homes by 2020<\/h3>\n
House prices: will demand continue to outstrip supply?<\/h3>\n