Buy To Let Housing News
HOUSING DEFICIT
It is thought that unless more houses are built to reduce the supply and demand gap many 30 year old couples will be unable to buy property. At the moment around 50% achieve this but the figure could drop to 30%.
The government are under pressure to release land so that up to 100,000 extra new homes could be built during the next ten years. About forty-five cities and towns have been earmarked for this new building work and these areas include Birmingham, Derby, Grantham, Ipswich, Leicester, Manchester, Nottingham, Reading, Swindon, and Thetford. They have already received a share in the £40m of initial funds to help obtain sites for much needed new housing.
It is also advised that developers do their research and contact authorities now so that they get the opportunities that are there for the taking.
RISING RESIDENTIAL RENTS
Rents rose for the fourth consecutive quarter across all types of property. Around 70% of Central London agents reported rises and 50% of those in the remainder of the South East.
Approximately two thirds of agents say there are more people wishing to rent than there are properties. This is the largest since surveys began six years ago.
Average capital asset values of houses rose in the last three months by 2.2% in central London and 0.3% in the South East but they fell by 3.9% against the rest of the country. Rented flats were down l.3%.
The average weighted returns are down 0.2% for houses and 0.1% for flats, which are believed to have been caused by the continual rise of house prices.
PARENTS AND THE BUY TO LET MARKET
Parents count for a quarter of the investors planning to invest in the buy to let market during the next six months.
A report states that over 30% of those aged over 55yrs said they intended to become developers.
The new laws for fire and safety and licences needed for multiple occupancy plus deposits needing a third party are raising the costs incurred by landlords.
The buy to let market has only been in existence for around 10 years but this year has seen many more regulations being imposed. Parents must think carefully before deciding whether to go ahead and buy property to rent.
FIXED RATE LOANS
Fixed rate mortgages for both first time buyers and home movers are still the most popular choice. A survey reported that nearly 90% of first time buyers and almost 75% of home movers chose fixed term loans.
Affording a new or even current mortgages is becoming a problem and with rises is May and July it is likely to soon be more of an issue.
First time buyers took out mortgages at an average of 3.37 times income in May that is up 0.04% from April. Mortgage interest payments are at their highest since 1992.
Added to these costs more buyers are having to pay stamp duty.
It is considered that the government should be reducing the tax burden to offset higher mortgage costs.
SALES OF COMMERCIAL PROPERTY DOWN AT AUCTIONS
The number of commercial properties sold at auctions was down in the 1st
quarter of 2007.
There were around 26% less properties sold at the beginning of 2007 compared to end of 2006.
It seems that the commercial property market has arrived at or is close to its peak. This seems due to the rise in bond yields and a strong equity market.
STEADY DEMAND FOR COMMERCIAL PROPERTY
It appears that the market for commercial property has remained stable over the last six months.
The next six months are expected to improve growth demands bringing it back to its long-term average.
The demand for office space is likely to rise but retail properties should expect things to slow as the recent interest rises will reduce consumer spending.
PROPERTY PRICES TO FALL BY 18%
Between the end of 2007 and end of 2010 commercial property prices are expected to drop by 12% or 18% in real terms.
Although nominal property prices could fall by cumulative 50% it is unlikely to be as devastating as the fall in 1973-1976 and probably not even as bad as the early l990’s.
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