Conservative victory housing market views

In the light of the election Enable’s IFA’s in Bishop’s Stortford are keen to help clients understand what the housing landscape may look like.  If Labour had won they had pledged to scrap stamp duty for first-time buyers purchasing homes worth less than £300,000, which many suggested would result in boosting demand but not increasing supply, leaving borrowers “worse off” because house prices are still likely to rise. 

The Tories however have promised to expand Right to Buy to 1.3 million housing association tenants as well as introducing a Help to Buy Isa to help borrowers save for a deposit, as revealed in the last Budget. They have also pledged to build 200,000 homes for first-time buyers aged under 40 at 20 per cent discount and create a £1bn brownfield regeneration fund to unlock sites for 400,000 homes.

 “There are clearly a number of positives for the housing and mortgage market from this Conservative party victory,” says Fleet Mortgages chief executive Bob Young “not least the fact that the Tories tend to be far less interventionist than the Labour party which means they are unlikely to meddle in the housing market.”

Countrywide chief executive Alison Platt says “We anticipate this Conservative led Government to turn its attention from implementing policies that stimulated demand in the housing market to addressing the lack of housing supply. Sticking to its pledge to boost housebuilding through the provision of more affordable housing and more garden cities should prove welcome.”

Issued by: Enable Independent Financial Life Planners 
25c North Street, Bishops Stortford, Herts CM23 2LD 
Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
 It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE

House prices 2014

The housing market began 2013 treading water, with average prices up by 0.2% in the first quarter, having fallen by 1.1% in Q4 2012. With the Help to Buy scheme for purchases below £600,000, house price growth has picked up to the extent of concerns being raised about another bubble.

For Q2 2013, year on year growth was 1.4%, with prices up by 5.2% in London. The fact that sales were up against Q2 2012 is not surprising as this was the period when stamp duty exemption for first time buyers ended which had encouraged new entrants into the market. Other schemes, such as Home Buy, Right to Buy, and Funding for Lending started to have impact

While interest rates remain at historically low levels, affordability should remain good for existing mortgage-holders and those first-time buyers who can get mortgage finance by having enough capital for a deposit. On the supply side, house-building has also started to recover after the rapid fall in the level of development in 2007. Although there are positive signs of growth, the on-going lack of traditional finance for large-scale development and inertia caused by planning reforms continue to act as a drag on the building of new homes. While the level of starts has begun to marginally rise again, it will take some time for output to increase significantly and is anticipated the level of development completions will remain suppressed over the next two years.


News today predicted that growth in East Anglia could be as much as 10% over 2014, as more and more people are pushed out of London due to house price increases.

Unfortunately with rising demand and the on-going shortage of housing, we could see rising prices over the short and medium term, leading to continued affordability problems.  If you want to talk through your options for owning your own home in 2014 Enables IFA’s are happy to talk you through your options.

Issued by: Enable Independent Financial Life Planners
25c North Street, Bishops Stortford, Herts CM23 2LD
Telephone: 01279 755950 - Fax: 01279 657339
Enable Independent Financial Life Planners is a trading style of Enable Independent Limited is authorised and regulated by the Financial Conduct Authority.
It is important always to seek independent financial advice before making any decision regarding your finances. If you would like any assistance, please contact us.
NOTHING CONTAINED IN THE ARTICLES SHOULD BE CONSIDERED AS GIVING INDIVIDUAL FINANCIAL ADVICE

RICS says housing market shows ‘early signs’ of growth...

Whilst overall growth remained slow, The Royal Institution of Chartered Surveyors (RICS) reported in April that interest by potential buyers of new homes in England and Wales rose in March.

At the same time, HM Revenue and Customs (HMRC) reported that UK house sales in February were 10% higher than the corresponding month in 2012.

This interest has been attributed to the ‘Help to Buy‘ initiative announced in the recent Budget and an improvement in mortgage availability due to the Government’s ‘Funding for Lending’ scheme. The former offering a 20% equity share for new-build buyers who can raise an initial 5% deposit and the latter giving lenders – both banks and other mortgage providers – access to cheap funds, on the proviso that they then pass this rate reduction on in loans and mortgages to small businesses and home buyers.

RICS reported that sales per surveyor reached a three-year high in March; however, more members reported a fall in house prices generally, rather than a rise in the first quarter of the year.

Peter Bolton King, of RICS, was quoted as saying: “A buoyant, healthy property market is central to economic recovery and, whilst these are still very much early signs, it is encouraging that sales are beginning to pick up.”

These were all encouraging signs for the housing market; particularly with mortgage rates sitting at historical lows. However, concern was raised at the level of charges being made for them; with one market commentator estimating that average fees for mortgage approvals has risen by 8% since January, with an average of £1,522 being reported in April.

As a final caveat, the National Association of Estate Agents (NAEA) cautioned that first-time buyers should very carefully research, not only the location of any intended house purchase, but also the options available to them to finance the home on the most advantageous terms.