Total number of £1m homes now nearly 400,000

Nearly 93,000 more home-owners have become “property millionaires” in Britain over the last year, research from a website has found.

The total number of homes valued at £1 million plus by Zoopla.co.uk this month has grown by almost one third (31%) compared with a year ago to reach 393,127.

Zoopla said that continued strong demand for prime residential property throughout 2013 has created 92,985 more property millionaires in Britain over the past 12 months.

Three-fifths (61%) of million pound plus properties were found to be in London. Property prices in the English capital have consistently surged ahead of the rest of the country this year, prompting some concerns that the market there is overheating.

The Government recently announced plans for non-UK residents to pay capital gains tax (CGT) on property sales from April 2015. Much of the strong demand in the London market has been put down to wealthy overseas buyers looking for a safe haven to put their cash.

The exclusive borough of Kensington and Chelsea was named by Zoopla as home to the highest number of property millionaires totalling 41,393. 

Outside London, 21,028 more property millionaires were created in the South East during the past year, bringing the total to 82,614. The highest proportion of property millionaires outside the capital can be found in the Surrey postcode area of GU25 covering Virginia Water, where almost one third (32%) of homes were found to be worth over £1 million.

On a regional level, Wales was found to be home to the fewest property millionaires in Britain, numbering just over 1,000 in total but still up by one quarter (24%) on 2012.

Lawrence Hall of Zoopla.co.uk said: “While Government schemes such as Help to Buy have concentrated popular attention on the lower rungs of the property ladder this year, there’s been a hive of activity propelling house price gro03 wth at the top-end of the market.”

 

:: Here is the number of property millionaires by region, according to Zoopla.co.uk:

1. London, 239,703

2. South East England, 82,614 

3. East of England, 28,128 

4. South West England, 13,960 

5. North West England, 7,043 

6. West Midlands, 5,418 

7. Scotland, 8,161 

8. East Midlands, 2,667 

9. North East England, 2,574 

10. Yorkshire and the Humber, 1,814 

11. Wales, 1,043 

:: Total 393,127 

House prices rose by £1,394 in November

LSL’s latest index shows that house prices have risen by £1,394 in November alone, taking the average home value to a record £238,839 - 4.9 per cent up from November 2012. The price increase, though, is not just limited to London: on a year-on-year basis, values have climbed in all regions for the second month in a row.

The recovery applies to transactions too, with sales set to be 16 per cent higher in 2013 than in 2012.

David Brown, commercial director of LSL Property Services, comments: “The housing market is almost unrecognisable from twelve months ago... Competition is strong as a result of rising demand and supply of new instructions not growing, a factor that will continue to prop up prices in the long term. 
"Confidence is higher throughout the market, with the Help to Buy scheme and record low interest rates contributing to the positivity. Over the second part of this year, consumer confidence has snowballed as the economic picture improves, leading to a significant rise in sales. 
"The increased availability of mortgages - in part thanks to the government’s schemes - along with the greater range of mortgage deals on offer has opened the door to a new host of first-time buyers, making the dream of homeownership now a reality for thousands."

“Strong headway is finally being made towards a universal recovery," adds Brown, but cautions that there is "still uneven growth in property values across the country".

Indeed, London prices continue to race ahead with 9.2% annual growth in the capital vastly outshining the rest of the UK. 

"Between August and October, sales in London were up 27% on the same three months in 2012, reflecting intense demand for properties in that city, both from domestic and overseas buyers," continues Brown. 

“In his Autumn Statement the Chancellor unveiled plans to unleash a further £1 billion to unblock housing development, to address the critical shortage in supply. This will play a role in preventing prices rising too far too fast. But this is only the beginning, and it’s vital that house building is given greater attention in 2014 and beyond, in order to ensure the recovery rolls forward at a sustainable level.”

One third of tenants in the UK are planning to buy in 2014

ONE third (32%) of private tenants in the UK are planning to buy their first home in 2014, Rightmove reported this morning.

Nearly a quarter (24%) of those say they are looking to buy as a direct result of phase two of Help to Buy or have brought forward their plans to buy because of it.

One in five people (18%) currently living with their parents but planning to make the move to home ownership have also been influenced by the scheme.

But, said Rightmove, the shortages underpinning the housing market will not fundamentally change because of “a few months of Help to Buy”. The scheme is due to have a shelf life of three years, or 36 months.

The Rightmove report is published as new data from the ONS shows that the number of households in rented accommodation is now 34% of the total, up from 29%.

According to Rightmove, tenants in London and the south-east are keenest to buy, while those in the north-east and Scotland are the least likely, according to today’s Rightmove Consumer Confidence Survey, which questioned nearly 17,500 people.

Of those renting, over half (58%) are ‘trapped renters’ who would like to buy but cannot afford to. Only a small number (13%) are renting for lifestyle reasons, saying that it suits them, while 28% would like to buy eventually.

The increased number of tenants hoping to get their first step on the housing ladder could see rental prices staying flat next year, Rightmove predicts.

Miles Shipside, Rightmove director and housing market analyst, said: “More tenants look set to buy in 2014, but saving a deposit still requires time and commitment, meaning that overall tenant demand is unlikely to change much.

“It could ease a little in 2015, but the reality is that many first-time buyers will still be priced out of buying, especially with increased competition from buy-to-let investors attracted by solid rental returns and the possibility of increasing capital values.

“With there being an increase in supply of property to rent, it’s important that landlords improve the standard of their stock to attract the best tenants as there is more choice of property to rent in some parts of the country.

“In the past three years rental prices have increased by a total of 7.6%, and the fact it has slowed to 1.4% within the past year is an indication that landlords will have to try harder to get the best returns.

“More landlords and the increase in supply due to buy-to-let mortgage availability is likely to keep rental price growth in check in 2014.

“However, it could be that we see buoyant rental and sales markets at the same time as a result of the housing shortage of the last ten years, which won’t be solved by a few months of Help to Buy.”

The latest ONS data shows a sharp increase in the number of households in the private rented sector.

Matt Hutchinson, director of SpareRoom.co.uk, said: “The number of households renting has risen from 29% to 34%. While other household spend has stayed the same or increased, for most people rent is their biggest monthly outgoing. The ONS data tallies with our findings that not only are more people renting, but more are returning to shared accommodation, including couples and the over 40s. Flat and house sharing is no longer the preserve of young professionals and students.

“Soaring living costs means it’s a struggle for many renting households just to keep their heads above water, let along have enough spare cash to put aside towards deposits. It’s clear that the aspiration to own our own homes one day is fast becoming out of reach for British households.”

Supply of homes at lowest level in history

The UK’s housing inventory has hit an all-time low, according to Home.co.uk’s latest report.

The number of properties for sale in the UK has plummeted 38 per cent since December 2007, Home.co.uk reveals, taking the available housing supply to the lowest levels in history.

With buyer demand increasing, the low supply is driving up prices.

In London, where the shortage and demand are most severe, prices have bucked the seasonal slowdown trend, with values leaping 0.8 per cent in the last month alone.

Across England and Wales, prices slipped by only 0.1 per cent, although prices in the North East of England fell 0.7 per cent over the last year and are down 2.2 per cent in Scotland.

On an annual level, though, average prices in England and Wales have shown a post-crisis record rise of 6.1 per cent.

Doug Shephard, Director at Home.co.uk comments: "With such a low volume of properties for sale, there are concerns about how the market will cope with the impending upturn in buyer interest in early 2014.

"On the demand side, individuals and investors have access to relatively cheap credit and yet, due to the sheer lack of choice, the number of transactions that can actually be realised is very much restricted. Growing demand and diminishing supply will no doubt place further pressure on prices in the coming months, especially in London and the South East."

London house prices driving people to move away – but only 26 miles

Rising house prices have sparked a jump in the number of people looking to leave London but on average they only move 26 miles away, according to research published on Monday.

  Estate agent Hamptons International also found that throughout England and Wales people were generally reluctant to move far, with the average distance just 2.5 miles. 

  Its analysis of who is moving where found that 32 is the average age that Londoners move away, often because they have young families and want to settle somewhere outside the capital before their children start school. It forecasts central London prices will rise by 32% over five years and said that was a key driver in families moving out while staying close enough to commute back. 

  "In the last three months the number of London buyers registering with our country offices has increased by 12%. As house prices increase at a faster rate in London than anywhere else, Londoners are increasingly waking up to the idea that they can get more value for money outside the capital," said the group's head of sales, Marc Goldberg. 

  The south-east and west are the biggest draws, taking half the 250,000 Londoners who left the capital in 2012, the agent said.

  People aged between 19 and 25 are most likely of all age groups to move to the capital, largely reflecting students moving there and young graduates taking jobs in London. It also found that people moving into London move furthest – on average 34 miles. 

  While the average distance home buyers in England and Wales move was just 2.5 miles, that masked a wide range: two thirds moved within five miles but 14% moved more than 50 miles. People moving within London went an average of 1.3 miles.

Rightmove Infographic for November

Rightmove’s November House Price Index reported that the average asking price of property coming to market fell by 2.4% (-£6,181) in November, in line with the usual pre-Christmas slowdown.

Their infographic provides a breakdown of how prices are performing across each region and property type.

Welsh house prices rise over last 12 months

WELSH house prices have beaten expectations and increased for the first time in almost a year.

In the past seven months the nation’s house prices have gone up by an average of £1,563. The average house price in Wales is now £157,779.

A flood of first-time buyers coming into the market is credited with driving the spike.

But experts have warned that the rally could lose steam if more houses are not built soon.

“The market will hit a roadblock if the lack of housing supply in Wales is not addressed,” said chartered surveyor Richard Sexton.

Average September house prices went up 0.5% on the same period a year earlier – the first such increase since February.

Stronger than expected economic growth is also credited with lifting house prices.

“The economy is racing along and the rise in confidence, underpinned by better access to mortgages, is fuelling the property market in Wales,” said Mr Sexton.

Alongside robust growth figures, the Westminster Government’s New Buy mortgage guarantee scheme is expected to propel the Welsh housing market further into the black.

House prices rise in every region of England

House prices in every region of England rose in September, according to official data published on Monday which reignited the debate about the prospects of a new house price bubble.

The Land Registry data showed that even before the government accelerated the second phase of its Help to Buy mortgage guarantee scheme, prices had increased 3.4% in a year on average, and were higher than in September 2012 in all English regions. However, prices in Wales were down by 1.7% year on year and fell by 0.4% in September.

Howard Archer, chief UK economist at IHS Global Insight, said: "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, which will take full effect in January."

Overall house prices in England and Wales continued to rise in September, increasing by 1.5% over the month to an average of £167,063, according to the Land Registry. This remained below the peak reached in November 2007, when average prices hit £181,839. There was also a jump in the number of homes sold for more than £1m.

The data, which does not include newbuild homes or those which have not changed hands since 1995 – but unlike other indices does include cash sales – covers the period before the launch of the second part of the government's controversial Help to Buy scheme earlier this month. The scheme 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. Critics have argued it will further fuel an already rising market.

UK's 10 most and least affordable rural areas

Here are the 10 most affordable rural local authority districts according to Halifax's findings, with the average house price and the house price to annual local earnings ratio:

1. Copeland, North West, £ 100,791, 2.7

2. Stirling, Scotland, £ 149,838, 3.4

3. East Ayrshire, Scotland, £ 100,382, 3.5

4. Western Isles, Scotland, £ 102,592, 3.7

5. Pendle, North West, £ 101,296, 3.9

6. North Lincolnshire, Yorkshire and the Humber, £ 125,276, 4.0

7. Shetland Islands, Scotland, £ 140,610, 4.3

8. West Lindsey, East Midlands, £ 135,343, 4.4

9. Selby, Yorkshire and the Humber, £ 158,055, 4.4

10. Allerdale, North West, £ 133,364, 4.4

Here are the 10 least affordable rural local authority districts according to Halifax's findings, with the average house price and the house price to annual local earnings ratio:

1. Cotswolds, West Midlands, £ 318,128, 9.4

2. Torridge, South West, £201,076, 8.2

3. North Dorset, South West £215,906, 8.0

4. Chiltern, South East, £407,012, 7.6

5. East Devon, South West, £213,677, 7.5

6. Vale of White Horse, South East, £288,522, 7.4

7. Teignbridge, South West, £202,566, 7.4

8. North Devon, South West, £194,000, 7.4

9. East Dorset, South West, £281,760, 7.3

10. East Hampshire, South East, £291,990, 7.3

Rural retreat still costs £24,000 more than city home

The recent wave of first-time buyers into Britain's property market is helping to close the house price gap between urban and rural properties, a study has suggested.

But people buying a home in a rural retreat still pay nearly £24,000 more typically than those purchasing a property in a city, Halifax found.

In the past four years, the gap has been narrowing, with the average price of a home in an urban area rising at five times the rate of one in the countryside, at 10% compared with just 2%.

Halifax said this could reflect a recent increase in first-time buyers coming into the market to snap up properties. First-time buyers account for two-fifths (40%) of house purchases using a mortgage in rural areas, but in towns and cities they make up more than half (52%) of such transactions.

The Government has introduced a string of schemes to improve mortgage access. A mortgage price war was sparked after its Funding for Lending scheme was introduced last year and from this month people with deposits as low as 5% have been able to apply for state-backed mortgages under the Government's flagship Help to Buy scheme.

Lenders have been handing out more mortgages in recent months to first-time buyers than in any other period since the credit crunch started.

Halifax found that a house in a rural area costs £206,423 on average, which is 13% more than the typical cost of a property in an urban area at £182,710.

While a "rural premium" exists in every region across Britain, it ranges from £86,218 in the South East to £11,570 in the North East.

In percentage terms, people living in the West Midlands pay the biggest premium to live in a rural area, at 59%, while those living in the North East pay the least at 9%.

The average house price in the countryside is equivalent to 6.3 times gross annual average earnings, while in urban areas it is lower and therefore potentially more affordable, at 4.9.

Halifax found only five rural areas in Britain where house prices cost less than four times local annual earnings typically, which is the long-term average.

Copeland in Cumbria was named as the most affordable rural area, where the house price-to-earnings ratio was 2.7. This was followed by the Scottish regions of Stirling, where the ratio is 3.4, East Ayrshire where it is 3.5 and the Western Isles, with a ratio of 3.7. Pendle in Lancashire completed the list, with a ratio of 3.9.

At the other end of the scale, the Cotswolds were the least affordable area in rural Britain, with average house prices standing at £318,128 which is 9.4 times the local average income.

First-time buyers account for less than one quarter (23%) of house purchases in the Cotswolds, according to Halifax, marking the smallest proportion in Britain, while Copeland was found to have the biggest percentage share of people taking their first step on the ladder, at 58%.

Martin Ellis, housing economist at Halifax, said: "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. Potential first-time buyers are particularly affected by high property prices, and consequently they account for a smaller proportion of homebuyers in the countryside than in urban areas."

Halifax used official figures and its own house price database to make its findings.

Here are average house prices by region, with the typical price of a rural property in 2013 followed by that of an urban property, and the percentage difference or "premium" in monetary and percentage terms:

:: North East, £137,010, £125,440, £11,570, 9%

:: North West, £ 200,997, £131,938, £69,059, 52%

:: Yorkshire and The Humber, £ 175,466, £127,452, £48,014, 38%

:: East Midlands, £ 179,692, £134,412, £45,280, 34%

:: West Midlands, £ 231,996, £145,801, £86,196, 59%

:: East of England, £ 235,876, £204,863, £31,013, 15%

:: South East, £318,185, £231,968, £86,218, 37%

:: South West, £232,630, £183,048, £49,583, 27%

:: Scotland, £ 160,374, £137,352, £23,022, 17%

:: Wales, £ 154,270, £131,184, £23,086, 18%

:: London (urban only), £ 316,293 n/a

:: Britain, £ 206,423, £182,710, £23,712

Mortgage lending at highest level since 2008

Mortgage lenders said on Friday that they were financing the largest house-buying spree for five years, in the latest sign of an accelerating housing market.

The Council of Mortgage Lenders (CML) described house prices in London as "resurgent", though it acknowledged that they had risen only modestly elsewhere in the country.

Amid continuing debate about the impact of government-sponsored schemes designed to make credit more easily available, research by the Liberal Democrat peer Lord Oakeshott showed, however, that the house price revival was not just a London phenomenon. 

Houses in more than 50 local authority districts were revealed as less affordable than at the peak of the 2007 credit crunch. Oakeshott's analysis of local authorities in England found the ratio between local house prices and local earnings was higher than it was in 2007 in districts as diverse as Rutland, the Cotswolds and the Suffolk coast.

According to the CML, almost £50bn was advanced to home buyers in the third quarter of 2013, a 17% increase on the previous three months and the highest figure since the third quarter of 2008. Despite a slight dip in September, lending for that month was up 41% on the same month last year, at £16bn.

"Indicators suggest we are witnessing the strongest house purchase performance in five years," said the CML's chief economist, Bob Pannell. "House prices too have revived, but modestly, aside from a resurgent London market."

The earlier than expected introduction of the second stage of Help to Buy, designed to help buyers with deposits as low as 5% of the value of a property has sparked a debate about the potential for a boom in house prices.

One third of tenants allege they have suffered a ‘retaliatory’ eviction

One third of tenants allege they have suffered a ‘retaliatory’ eviction or been threatened with one after making a complaint to their landlords about the condition of a property, or after asking for repairs to be carried out.

The claim comes from a survey carried out by online community The Tenants’ Voice.

While the figure seems very high, it is not clear whether it is disaffected tenants who have had bad experiences and who are drawn to the organisation and its website.

Nor is it clear whether these are tenants of landlords who by and large do not use managing agents: the survey says that 61% of tenants would prefer to talk to the agent through whom they found the property.

The site, which says 2,000 tenants took part in the survey, also claims that 61% of tenants are wary about complaining to their landlords and that damp is the number one complaint from 59% of tenants.

Seven in ten (71%) tenants in the survey claim to have paid for repairs to a rental property out of their own pocket rather than report the problem to their landlords.

Six in ten (61%) tenants polled said they had asked their landlords in the past to make repairs and that the landlords had been difficult or flatly refused to sort the problem out.

As well as damp, tenants said they had complained to their landlords about the general disrepair of the properties, while boilers and electrics were also a common focus for complaints.

Glenn Nickols, director of The Tenants’ Voice, said: “While 86% of tenants have never heard of retaliatory evictions according to our poll, a third of the tenants we surveyed who have been evicted or threatened with eviction have actually fallen foul of this practice.

“If tenants are not comfortable about approaching their landlords, then a good letting agent can be extremely helpful in resolving any problems.” 

House prices rise in Scotland say surveyors

A lack of available properties and "burgeoning" demand among buyers has forced house prices up in Scotland, according to a monthly survey.

The Royal Institute of Chartered Surveyors (Rics) found house prices increased in September.

Last month, 32% more respondents reported prices rises rather than falls in the Rics survey.

A net balance of 78% more surveyors also reported an increase in new-buyer inquiries.

However, Rics said the lack of homes coming onto the market resulted in the number of new instructions failing to keep pace with the "burgeoning" level of demand.

Looking ahead, more than half of those surveyed expected prices to continue to rise in the next three months.

'Big concern'

Responding to the latest survey, Rics director Sarah Speirs said: "It's encouraging that the market is starting to improve in all parts of the country, with more buyers looking to make a move and more sales going through.

"Even so, it's a big concern that the supply of property coming to the market is lagging so far behind demand, particularly with the recent launch of Help to Buy in Scotland.

"This imbalance is likely to result in further upward pressure in prices over the coming months, particularly in popular areas."

The report comes as it was revealed that house prices in and around Aberdeen have more than doubled in the last decade.

Data from the Nationwide Building Society showed that the increase is only matched by Islington and Westminster in London.

The growth in the north east has been largely put down to the expanding oil and gas industry and the workers it attracts to the area.

UK house sales at four year high

The number of homes sold in the UK hit an almost four-year high last month as the housing market recovery continues to gather pace, according to the September RICS Residential Market Survey.

The average amount of properties sold per chartered surveyor in the three months to September reached 18.7. Although still historically low, this is the highest figure since November 2009 and demonstrates the extent to which the market is now picking up across the country.

In tandem with increasing numbers of sales, prices continued to grow, with 54% more respondents reporting rises rather than falls. 

Prices have now steadily increased since Easter and, significantly, this growth was seen right across the UK. Last month, every part of the country saw prices go up, with the exception of the North East where prices fell modestly for the second successive month.

Unsurprisingly, with Government schemes such as Help to Buy enabling more buyers to access the market, demand rose steadily during September as a net balance of 49% more surveyors reported rises in new buyer enquiries. While the amount of homes coming onto the market also rose, it was not enough to keep pace with the burgeoning level of demand.

Looking ahead, predictions for future growth are equally upbeat. A net balance of 56% more respondents expect the number of transactions to increase further over the coming three months, while 48% more predict prices to continue their push upwards.

Peter Bolton King, RICS' global residential director, says: “It’s encouraging that the market is starting to improve in all parts of the country, with more buyers looking to make a move and more sales going through. Even so, it’s a big concern that the supply of property coming to the market is lagging so far behind demand. This imbalance is likely to result in further upward pressure in prices over the coming months, particularly in the nation’s hotspots.”

Help to Buy: Your questions answered.

Miles Shipside, Rightmove director and housing market analyst, tackles some of the most commonly occurring questions – including some common misconceptions.

Q. Is the scheme for new-build homes only?

A. No. The new Mortgage Guarantee scheme is for new build and existing property up to £600,000. The Equity Loan scheme, which has been running since April, is for new-build properties only.

Q. Is it just for first-time buyers?

A. No, the Mortgage Guarantee scheme is for any buyer as long as it is a residential repayment mortgage, not a buy-to-let.

Q. Is the scheme for the whole of the UK?

A. Yes, the Mortgage Guarantee phase of Help to Buy is available across the UK. The equity loan phase of Help to Buy is available in England and is for new-build properties only up to £600,000. Scotland has just launched a new build-only Equity Loan scheme called Help to Buy (Scotland), for properties up to £400,000. Wales has yet to formally announce an Equity Loan scheme but is expected to do so soon.

Q. Are we creating an artificial market or a ‘price bubble’? E.g. will I be in negative equity in 5 years’ time if I take up the scheme?

A. The property market is exactly that – a market. Property prices can go up and down depending on a number of factors, including the balance between supply and demand. It is worth remembering that prices are lower today in some parts of the country compared to five years ago, part influenced by the difficulty of buyers obtaining mortgages. Help to Buy will increase demand for property, though crucially, it is not just for first-time buyers and so as existing home owners move they will have to sell helping to increase property supply. Help to Buy is scheduled to last for three years, the thinking being the mortgage market will be functioning better when it finishes, enabling a smooth transition.

Q. I don’t need or want a government-backed mortgage, how will this affect me?

A. It is likely that many of the mortgage products for those with a deposit of 10% or more will not be assisted by the governments’ Help to Buy scheme. However, the improved lending environment should mean more competitive rates for those with 10% to 20% deposit benefitting all buyers, whether in the scheme or not. For those with 5% deposit this government underwritten scheme is the only real option.

Q. Will I be dependent on the state if I take out a Help to Buy mortgage? Can they change the rules?

A. A Help to Buy Mortgage Guarantee is essentially the same as a traditional 95% repayment mortgage, with all the usual terms and conditions between you and the lender. However, as part of the Mortgage Guarantee agreement between the government and the lender, the lender is not able to offer a Help to Buy assisted mortgage in some circumstances, such as buy-to-let mortgages. In reality you may not even spot it is a Help to Buy mortgage, other than being a 95% loan to value. Equity Loan Help to Buy mortgages on new build properties obviously have more rules.

Q. Is this phase of Help to Buy (Mortgage Guarantee) just an extension of the Equity Loan scheme to existing properties?

A. No. Phase two is a Mortgage Guarantee scheme. It involves a traditional repayment mortgage with a loan to value of up to 95% and is available on both new build and existing property. There is no equity loan. A buyer with a 5% deposit should ask a mortgage advisor to explore the possibility of a Help to Buy backed mortgage for the remaining 95%. Phase one (Equity Loan) is available on new build properties only and will run alongside the Mortgage Guarantee scheme. A. No. The new Mortgage Guarantee scheme is for new build and existing property up to £600,000. The Equity Loan scheme, which has been running since April, is for new-build properties only.

Q. Is it just for first-time buyers?

A. No, the Mortgage Guarantee scheme is for any buyer as long as it is a residential repayment mortgage, not a buy-to-let.

Q. Is the scheme for the whole of the UK?

A. Yes, the Mortgage Guarantee phase of Help to Buy is available across the UK. The equity loan phase of Help to Buy is available in England and is for new-build properties only up to £600,000. Scotland has just launched a new build-only Equity Loan scheme called Help to Buy (Scotland), for properties up to £400,000. Wales has yet to formally announce an Equity Loan scheme but is expected to do so soon.

Q. Are we creating an artificial market or a ‘price bubble’? E.g. will I be in negative equity in 5 years’ time if I take up the scheme?

A. The property market is exactly that – a market. Property prices can go up and down depending on a number of factors, including the balance between supply and demand. It is worth remembering that prices are lower today in some parts of the country compared to five years ago, part influenced by the difficulty of buyers obtaining mortgages. Help to Buy will increase demand for property, though crucially, it is not just for first-time buyers and so as existing home owners move they will have to sell helping to increase property supply. Help to Buy is scheduled to last for three years, the thinking being the mortgage market will be functioning better when it finishes, enabling a smooth transition.

Q. I don’t need or want a government-backed mortgage, how will this affect me?

A. It is likely that many of the mortgage products for those with a deposit of 10% or more will not be assisted by the governments’ Help to Buy scheme. However, the improved lending environment should mean more competitive rates for those with 10% to 20% deposit benefitting all buyers, whether in the scheme or not. For those with 5% deposit this government underwritten scheme is the only real option.

Q. Will I be dependent on the state if I take out a Help to Buy mortgage? Can they change the rules?

A. A Help to Buy Mortgage Guarantee is essentially the same as a traditional 95% repayment mortgage, with all the usual terms and conditions between you and the lender. However, as part of the Mortgage Guarantee agreement between the government and the lender, the lender is not able to offer a Help to Buy assisted mortgage in some circumstances, such as buy-to-let mortgages. In reality you may not even spot it is a Help to Buy mortgage, other than being a 95% loan to value. Equity Loan Help to Buy mortgages on new build properties obviously have more rules.

Q. Is this phase of Help to Buy (Mortgage Guarantee) just an extension of the Equity Loan scheme to existing properties?

A. No. Phase two is a Mortgage Guarantee scheme. It involves a traditional repayment mortgage with a loan to value of up to 95% and is available on both new build and existing property. There is no equity loan. A buyer with a 5% deposit should ask a mortgage advisor to explore the possibility of a Help to Buy backed mortgage for the remaining 95%. Phase one (Equity Loan) is available on new build properties only and will run alongside the Mortgage Guarantee scheme.

House prices in biggest month-on-month rise for six years

HOUSE prices in England and Wales posted their biggest month-on-month gain in more than six years in September, but talk of a price bubble is overdone, property analysis firm Hometrack said in a survey on Monday.

House prices rose 0.5 percent from August, the biggest increase since May 2007, Hometrack said. Prices were up 2.4 percent from the same month last year, the biggest annual increase since December 2007.

British house prices have picked up over the past 12 months, and some are concerned about an unsustainable price boom. But Richard Donnell, director of research at Hometrack, played down these fears.

"Prices are rising off a low base and talk of a housing bubble in relation to the national market is overdone," he said.

"We are seeing continued house price growth in London combining with modest gains across other regions and creating a picture of a broadening market recovery," he added.

Hometrack said it expected prices to continue to rise in the short term but cautioned that the market remained very sensitive to changes in demand and especially changing expectations over the outlook for mortgage rates.

Separate data from lender Nationwide released on Friday showed that British house prices shot up at their fastest annual pace in more than three years in September

September house price infographic from Rightmove

South West London house prices surge

Prime central London house prices continue to show steady year on year growth, while the predominantly domestic markets of southwest London have recorded double digit rises as a wave of equity pushes out from the core central zone, says international real estate adviser, Savills.
 
Values in prime central London rose by 1.9 per cent in the three months to the end of September, according to the Savills prime central London index.  This takes annual growth to a relatively modest  5.6 per cent, but continues a record-breaking period of steady, single digit annual price growth.   
 
There are now clear signs of outer prime London playing catch-up, with average prices across the wider markets of prime London rising 3.3 per cent in the quarter and 9.2 per cent year on year.
 
The standout performer is prime southwest London – a largely domestic market that stretches from Fulham to Wimbledon – where prices rose 4.0 per cent in the last quarter and 11.8 per cent year on year.    These markets are now on average 28.1 per cent above their 2007 peak, just behind prime central London at 30.1 per cent. 
 
Less accentuated but nonetheless robust price growth  has also been seen in other locations that have historically lagged central London, such as Islington and Wapping.
 
Properties valued up to £1million have performed particularly strongly, while year on year growth in the £10million+ central London sub-market is just 1.8 per cent as prices appearing to have broadly plateaued at 38 per cent above their 2007 levels.

See which university cities are the top for buy-to-let investors

UNIVERSITY cities Glasgow, Hull and Manchester have been named as the country’s top buy-to-let hot spots for landlords looking to invest in student properties.
Low house prices in Glasgow combined with an average rent of more than £1,000 a month on a typical four-bedroom student property mean that landlords there can expect the best rental yields in the UK at around 4.95%, according to property search website Zoopla, which used its own database for the findings.
The rental yield on a property is the annual return an investor can expect to make. It is worked out by calculating a year’s rental income as a percentage of how much the rental property cost in the first place. Zoopla’s findings were for made for gross yields, before the deduction of tax and expenses.Hull had the second best rental yield at 4.80%, followed by Manchester at 4.59%.
Many of the cities offering better potential returns for landlords are outside the more expensive areas of the South where property prices are relatively high. The size of the profit a landlord can expect to make also depends on the strength of demand from potential tenants.
Despite having the largest student population in the UK, London was only the 10th most attractive place to invest in student accommodation. 
Zoopla said this is because London house prices are rising faster than rents, which is reducing the potential returns for landlords. .
The average yield on a student property in London was found to be 4.20%, putting the English capital behind places including Cheltenham, Cambridge, Bristol and Luton.
Oxford did not make the top 10, despite its worldwide reputation. Ranked at number 14, with a typical potential rental yield of 4.02%, Oxford came behind Sunderland and Coventry.
Belfast was in 18th place with a potential yield of 3.96%, while Swansea was in 24th and Cardiff was at 30.
Carlisle, Middlesbrough and Bournemouth were found to offer the lowest potential returns to landlords. The typical potential rental yield in Carlisle was found to be 2.58%, putting it well below the UK average of 3.79%.In terms of the best value for students, Middlesbrough was found to have the cheapest digs. The average rent for a four-bedroom property in Middlesbrough was £562 a month.
At the other end of the scale, the average rent on a four-bedroom property in London costs more than six times that of Middlesbrough, at £3,485 a month.
Lawrence Hall, Zoopla.co.uk spokesman, said: "The largest number of students or the most prestigious university clearly isn’t necessarily best for investment returns.
"Landlords need to do their research and take into account the student demand, property supply, average property values and average monthly rents.
"There is no apparent North/South divide when it comes to student buy-to-let investments and a number of towns in the North are showing higher gross yields than the South as a result of property values having remained lower over the past few years whilst rental demand has increased."Best-performing student buy-to-let cities and towns for landlords, according to Zoopla, with the average monthly rent on a four-bedroom house, the average house price and the gross yield:1. Glasgow, £1,083, £262,888, 4.95%
2. Hull, £737, £184,440, 4.80%
3. Manchester, £1,053, £275,132, 4.59%
4. Cheltenham, £1,631, £429,585, 4.56%
5. Cambridge, £1,628, £429,976, 4.54%
6. Buckingham, £1,502, £405,017, 4.45%
7. Luton, £1,076, £291,454, 4.43%
8. Bristol, £1,224, £342,699, 4.29%
9. Lincoln, £877, £248,980, 4.23%
10. London, £3,485, £995,104, 4.20%

Homeowners expect UK house prices to rise

Households expect the sharpest increase in prices over next 12 months than at any time since January 2010

Households perceive that the value of their property rose over the last month at the fastest rate since the index began in early 2009

Price expectations rise to record in London, while households in Wales and North East expect the most modest rise in prices

Those aged between 45 and 54 are most optimistic that prices will rise over the year

Change in current house prices

Households perceived that the value of their homes rose in September, for the sixth consecutive month, according to the House Price Sentiment Index (HPSI) from Knight Frank and Markit.

More than 21% of the 1,500 households surveyed across the UK said that the value of their home had risen over the last month, while 5.7% said the value had fallen, giving a HPSI reading of 57.9 (see figure 1).

Any figure over 50 indicates that prices are rising. The higher the figure, the stronger the increase. Any figure under 50 indicates that prices are falling.

This is up from August’s reading of 55.3, and marks the highest reading since the index began in early 2009. On the smoother three-month rolling average, the reading has risen to 56.7 in the three months to September, up from 52 in the previous quarter.

A lead indicator

Since the inception of the HPSI, the index has been a clear lead indicator for house price trends. Figure 3 shows that the index moves ahead of mainstream house price indices, confirming the advantage of an opinion‐based survey which provides a current view on household sentiment, rather than historic evidence from transactions or mortgage market evidence.

While households in every region perceived that the value of their home had increased, the rate of the increases varied. Households in the North East, who in August reported that the value of their home had fallen, are now reporting only modest rises (53.9). In contrast, households in London (67.0) and the South East (61.0) reported the biggest increases.

Outlook for house prices

The future HPSI, which measures what households think will happen to the value of their property over the next year, rose again in September to a its highest since January 2010, reversing the slight dip seen in August.
On the smoother three-month average basis, the future HPSI reading was 68.2, the highest level since the index began, up from 63.1 in the previous three-month period.

Regional outlook

Respondents in all regions expect the value of their property to rise over the next 12 months, but there are significant differences between many regions in the North and South. Those in London (80.1) and the South East (71.4) expect the biggest rise in prices, while households in Wales (64.3) and the North East (64.4) anticipate the most modest increase in values.

Mortgage borrowers are the most confident that prices will rise over the next year (75.8), followed by those who own their home outright (74.6). Those who are renting are the more downbeat about the future movement in house prices (55.6).

Those aged between 45 and 54 (75.7) expect the biggest increase in the value of their home over the next year, followed by those aged over 55 (73.1). In contrast, those aged 18-24 (59.1) are expecting more moderate price rises.

This ‘age-gap’ is also mirrored in earnings data, with the highest earners (earning more than £57,800 a year) expecting the largest increases in prices over the next 12 months, with a reading of 79.9, although this is down from the record high of 81.1 seen in July.

Scrap bedroom tax say majority of UK public

New research has revealed the groundswell of public opinion is growing against the bedroom tax with almost three in five people (59%) saying that the Government should abandon the policy entirely.

A ComRes poll of more than 2,000 adults, conducted on behalf of the National Housing Federation this month, shows public opinion is shifting further against the policy as new evidence reveals the bedroom tax is pushing many vulnerable and disabled people into debt. Released on the last day of the National Housing Federation’s annual conference, the poll reveals that the bedroom tax has the potential to alienate a significant proportion of the electorate:

·         Four fifths (79%) of people who intend to vote Labour in the next election believe the Government should abandon the bedroom tax, while five in six (83%) potential Labour voters say the policy shows the Government is out of touch.

·         Two thirds (65%) of potential Liberal Democrat voters and more than a third (34%) of people who intend to vote Conservative in the next election say that David Cameron should abandon the bedroom tax entirely and think of other ways to save money.

·         Opposition to the bedroom tax has grown over the last few months, with 59% of the general public now agreeing the bedroom tax should be abandoned – up from 51% of the public in April.

The polling results come just two days after new data by the Federation suggested that half of families hit by the bedroom tax were pushed into debt in the first three months of the policy. The survey of 51 housing associations around England, carried out by the National Housing Federation, found that 51% of households affected by the bedroom tax (32,432 households) were pushed into rent arrears in the first three months of the controversial policy.²

National Housing Federation Chief Executive David Orr said:

“This public opinion poll must act as a wake-up call to both the Government and the Opposition. The general public see that the bedroom tax is a disastrous policy which is causing real hardship for people up and down the country. Families are spiralling into debt and with winter just around the corner they are facing terrible decisions of whether to pay the bedroom tax or cut back on essentials such as food and heating. It’s hitting the most vulnerable in our society the hardest – two-thirds of those facing the cut are disabled. And on top of that the majority have no option of moving because there is a chronic shortage of smaller homes for them to move in to.

“Potential Labour voters in particular believe the bedroom tax shows the Government is out of touch with the lives of real people. We need a commitment to repeal the bedroom tax before yet more damage is done and tens of thousands more people spiral into debt as a result of this ill-conceived policy risk the roofs over their heads.”

Meanwhile, nearly nine out of ten (87%) members of the public agree that people who need a spare room for sick or disabled family members should be exempt from the bedroom tax. According to the Government’s own estimates, 420,000 disabled people across the country are being hit by the bedroom tax.

More than two thirds (68%) of the general public say no-one should lose Housing Benefit unless they refuse to move into suitable smaller accommodation. Research by the National Housing Federation indicates that there is a huge shortage of smaller homes for people affected by the bedroom tax to downsize into. In March, the Federation estimated that although 180,000 households were under-occupying two bedroom social homes, only 85,000 one-bed social homes became available in 2011-12.²