First-time buyers leading the way to recovery
First-time buyers are playing an increasingly important part in the recovery of the housing market, accounting for around 44% of activity.This figure, according to the Nationwide house price index, is close to an all-time high. 73,700 of loans approved in the third quarter of 2013 were for those entering the housing market for the first time. This is up 32% compared to the same period in 2012.Commenting on the figures, Robert Gardner, Nationwide’s chief economist said: “First-time buyers are the lifeblood of the housing market. As well as accounting for a significant proportion of housing transactions – historically around 40% of transactions involving a mortgage – they also play an important role in the wider market, for example in helping to complete chains, enabling those that already own a property to move.”Affordability can be difficult for first-time buyers, with the typical first home costing 4.6 times average earnings, but this figure is still well below the 5.4 recorded in 2007. The typical mortgage now accounts for 19% of borrowers’ average monthly earnings. The help-to-buy scheme and the general increased availability of mortgages have helped buyers get on the ladder – although the typical first-time buyer is still putting down a 20% deposit.
Low interest rates have encouraged activity too. Whilst the increase in employment is thought to be helping markedly, with unemployment falling much faster than expected – rapidly approaching the 7% trigger for raising base rate. This combination of factors has helped house prices record their thirteenth successive monthly increase in January, rising by 0.7%, according to the Index. Prices currently stand at £176,491, 8.8% higher than a year ago, although this is still 4% below their peak in 2007.
Government challenge to housing shortage
A multi-billion pound housing programme that could result in 165,000 new affordable homes being built between 2015 and 2018 has been launched, delivering a welcome boost to the housing sector.
The government has committed £2.9bn to the scheme, whilst the remaining £20bn is set to come from the private sector. Housing associations, house builders and councils are now able to bid for government funding – £1.7bn of which is available for projects outside London. However, the funds are only available to affordable rent (where rent is 80% of the market rate) and shared ownership schemes. Additionally, the programme dictates that any bid needs to focus on building new homes that are in short supply in the local area.
Housing minister Kris Hopkins commented on the launch: “House building is an essential part of this government’s long-term economic plan. That’s why we have designed an ambitious new scheme to build affordable homes at the fastest rate for 20 years. Our programme will support 165,000 jobs in construction, sustain thousands of small businesses and provide homes where future generations can live and raise their own families.”
He added that UK house building was at its highest level since 2007 while construction orders are increasing at their fastest rate for 10 years. Although 135,000 new homes were built in the year 2012-13, it is still a long way from the 250,000 homes that experts suggest are needed each year, to meet demand and help ease the issue of rising house prices.
A bit more in retirement
A top-up scheme that will give retirees the chance to increase their income has been on the cards for several months now. The finalised plans are due to be unveiled this week giving pensioners the opportunity to increase their state pension by up to £25 per week.
The scheme will be open to those who have already reached state pension age or who will do so by April 2016 (before the new higher flat rate state pension comes in). It will allow them to make additional top-up payments to boost their contributions, and therefore the amount of retirement income they’ll receive for the rest of their lives.
Under the plan, individuals will be able to pay in from £900 up to a maximum of £25,000 (although this figure is yet to be confirmed). In doing so will increase their weekly state pension by some £1 for every £900 paid in. The measures have been designed to help women and the self-employed in particular. Women historically receive less state pension than men, largely because of reduced earnings and career breaks which lead to gaps in National Insurance contributions, while the self-employed are currently only entitled to a basic state pension.
Approved – are you sure?
The number of mortgages approved for house purchases rose by 20% in 2013 compared with the market doldrums of the previous year. According to the Bank of England data there were 734,969 home loans approved in during the year, with the numbers accelerating towards the end of the year.
This was up from 612,654 the previous year, when many first-time buyers were locked out of the mortgage market. Lending remains well below the peak of the housing boom. The Bank of England figures show that total lending to individuals has been pushed to record highs in recent months, by the revival in the housing market.
By the end of December it stood at a new peak, with outstanding loans, including mortgages and consumer debt – such as credit cards and overdrafts, reaching £1.435 trillion.
Cost of motoring down as whiplash costs reduce
During 2013 comprehensive motor insurance premiums fell by an average of £36, or 8.9%, according to insurers. The average annual policy bought during the final three months of the year cost £370, compared with £406 a year earlier, the Association of British Insurers (ABI) said.
Insurers’ predictions of falling claims for whiplash have helped lower prices. However, the cost rose by £5, or 1.4%, in the final quarter of the year compared with the previous three months.
The figures are based on data that records the amount people pay when actually taking out or renewing policies, rather than quoted prices. However, it only covers comprehensive policies – the most popular type of insurance among drivers. ABI research also showed that 8 in 10 people buying motor insurance spent time comparing prices before buying.
First-time buyers are playing an increasingly important part in the recovery of the housing market, accounting for around 44% of activity.This figure, according to the Nationwide house price index, is close to an all-time high. 73,700 of loans approved in the third quarter of 2013 were for those entering the housing market for the first time. This is up 32% compared to the same period in 2012.Commenting on the figures, Robert Gardner, Nationwide’s chief economist said: “First-time buyers are the lifeblood of the housing market. As well as accounting for a significant proportion of housing transactions – historically around 40% of transactions involving a mortgage – they also play an important role in the wider market, for example in helping to complete chains, enabling those that already own a property to move.”Affordability can be difficult for first-time buyers, with the typical first home costing 4.6 times average earnings, but this figure is still well below the 5.4 recorded in 2007. The typical mortgage now accounts for 19% of borrowers’ average monthly earnings. The help-to-buy scheme and the general increased availability of mortgages have helped buyers get on the ladder – although the typical first-time buyer is still putting down a 20% deposit.
Low interest rates have encouraged activity too. Whilst the increase in employment is thought to be helping markedly, with unemployment falling much faster than expected – rapidly approaching the 7% trigger for raising base rate. This combination of factors has helped house prices record their thirteenth successive monthly increase in January, rising by 0.7%, according to the Index. Prices currently stand at £176,491, 8.8% higher than a year ago, although this is still 4% below their peak in 2007.
Government challenge to housing shortage
A multi-billion pound housing programme that could result in 165,000 new affordable homes being built between 2015 and 2018 has been launched, delivering a welcome boost to the housing sector.
The government has committed £2.9bn to the scheme, whilst the remaining £20bn is set to come from the private sector. Housing associations, house builders and councils are now able to bid for government funding – £1.7bn of which is available for projects outside London. However, the funds are only available to affordable rent (where rent is 80% of the market rate) and shared ownership schemes. Additionally, the programme dictates that any bid needs to focus on building new homes that are in short supply in the local area.
Housing minister Kris Hopkins commented on the launch: “House building is an essential part of this government’s long-term economic plan. That’s why we have designed an ambitious new scheme to build affordable homes at the fastest rate for 20 years. Our programme will support 165,000 jobs in construction, sustain thousands of small businesses and provide homes where future generations can live and raise their own families.”
He added that UK house building was at its highest level since 2007 while construction orders are increasing at their fastest rate for 10 years. Although 135,000 new homes were built in the year 2012-13, it is still a long way from the 250,000 homes that experts suggest are needed each year, to meet demand and help ease the issue of rising house prices.
A bit more in retirement
A top-up scheme that will give retirees the chance to increase their income has been on the cards for several months now. The finalised plans are due to be unveiled this week giving pensioners the opportunity to increase their state pension by up to £25 per week.
The scheme will be open to those who have already reached state pension age or who will do so by April 2016 (before the new higher flat rate state pension comes in). It will allow them to make additional top-up payments to boost their contributions, and therefore the amount of retirement income they’ll receive for the rest of their lives.
Under the plan, individuals will be able to pay in from £900 up to a maximum of £25,000 (although this figure is yet to be confirmed). In doing so will increase their weekly state pension by some £1 for every £900 paid in. The measures have been designed to help women and the self-employed in particular. Women historically receive less state pension than men, largely because of reduced earnings and career breaks which lead to gaps in National Insurance contributions, while the self-employed are currently only entitled to a basic state pension.
Approved – are you sure?
The number of mortgages approved for house purchases rose by 20% in 2013 compared with the market doldrums of the previous year. According to the Bank of England data there were 734,969 home loans approved in during the year, with the numbers accelerating towards the end of the year.
This was up from 612,654 the previous year, when many first-time buyers were locked out of the mortgage market. Lending remains well below the peak of the housing boom. The Bank of England figures show that total lending to individuals has been pushed to record highs in recent months, by the revival in the housing market.
By the end of December it stood at a new peak, with outstanding loans, including mortgages and consumer debt – such as credit cards and overdrafts, reaching £1.435 trillion.
Cost of motoring down as whiplash costs reduce
During 2013 comprehensive motor insurance premiums fell by an average of £36, or 8.9%, according to insurers. The average annual policy bought during the final three months of the year cost £370, compared with £406 a year earlier, the Association of British Insurers (ABI) said.
Insurers’ predictions of falling claims for whiplash have helped lower prices. However, the cost rose by £5, or 1.4%, in the final quarter of the year compared with the previous three months.
The figures are based on data that records the amount people pay when actually taking out or renewing policies, rather than quoted prices. However, it only covers comprehensive policies – the most popular type of insurance among drivers. ABI research also showed that 8 in 10 people buying motor insurance spent time comparing prices before buying.
Best Wishes
Michael
