Alarming number of Welsh adults struggling to pay mortgage

Shelter Cymru and Citizens Advice Cymru revealed that alarming numbers of Welsh adults are struggling to cope  with mortgage or rent payments.

 Jonathan Edwards MP announced the worrying results of the joint research at the National Eisteddfod in Denbigh.

The research, carried out by YouGov, asked how people were coping with rent and mortgage payments, how secure they felt financially compared to last year, how long they would be able to afford to pay their rent or mortgage if they lost their job and whether they had taken out one or more payday loans in the last year.

Shockingly, nearly half (48%) of Welsh adults who paid rent or a mortgage said they struggle or fall behind at least some of the time to keep up with their payments, with 12 per cent saying that they struggle constantly.

For those who are currently in employment, when asked about how they would manage if they lost their job, one in six mortgage or rent payers in Wales would not be able to keep up with payments because they do not have a financial safety net, such as insurance, or savings.

John Puzey, Director of Shelter Cymru, said: “These figures paint a very worrying picture. It’s clear that many people are only just holding things together financially – just one piece of bad luck such as losing their job or being unable to work could be enough to tip them over the edge into serious difficulties.

“It’s bad enough that nearly half the people surveyed who paid rent or a mortgage said that they were struggling at least some of the time, but we also need to consider that many people are on interest-only mortgages and that interest levels are still relatively low. If this changes or people’s mortgage deals come to an end, then this situation could escalate significantly.”

Mr Puzey pointed to the widespread benefit changes as a likely reason why tenants in council and social housing are particularly affected - 11 per cent of council and housing association tenants said that they had taken out more than one payday loan in the last year to help meet living expenses, compared to two per cent of the population overall.

“It seems fair to assume that the higher level of financial difficulties and insecurity reported by council and social housing tenants are a direct result of the sweeping changes to benefits, in particular cuts to housing benefit and the introduction of the bedroom tax,” he said.

Fran Targett, Director Citizens Advice Cymru said: “The number of people turning to payday lenders to meet everyday living expenses is thankfully relatively low, but we are concerned that this is just a small part of the picture.

“Our bureaux in Wales have seen a 555 per cent increase in issues linked to payday loans in the first quarter of 2013 compared with the same quarter of the previous year, and this is something that is very worrying as it will only increase with the changes to the benefit system.

“Together with the dramatic increase in the use of foodbanks as reported recently by the Trussell Trust, this gives a very clear impression of a lot of people who are running out of options to keep their heads above water.”

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Quarter of homebuyers now paying higher rate of stamp duty

More than a quarter of home buyers in England and Wales are now paying stamp duty at the higher rates of 3% or more and facing bills of over £7,500.

The data was released as pressure group the TaxPayers’ Alliance launched a Stamp Out Stamp Duty campaign calling for a cut in the “punitive” levy, which raised £4 billion for the Treasury in 2012/13 - some £3.6 billion of which was collected at rates of 3% or more.

Sales of residential properties are free of stamp duty up to the value of £125,000 and attract a 1% tax between £125,000 and £250,000. 

But rising house prices mean that more and more purchasers are paying at the higher rates of 3% applied to homes worth between £250,000 and £500,000,  4% on those valued at up to £1 million, 5% on those between £1-£2 million and 7% beyond that point.

While home-buyers in London and the South East are hardest hit, an increasing number of people in other parts of the country are being hit by stamp duty at the 3% rate, which the TPA argues acts as a barrier both for an increasing number of first-time buyers and existing home-owners wanting to move house to get a new job, be near to relatives or accommodate a growing family.

Because stamp duty is imposed on the total value of the property, and not just the portion of the price which is above the threshold, families buying a home for between £250,000 and £500,000 pay between £7,500 and £15,000. Purchases between £500,000 and £1 million attract a levy of between £20,000 and £40,000.

Some 723,829 homes were bought in 2012/13, with more than 25% (182,692) being liable for stamp duty at a rate of 3% or more.

Stamp duty rates of 3% or more were imposed on 65% of all residential transactions in London, 39% in the rest of the South-East, 27% in the East of England, 24% in the South-West, 12% in the West Midlands, 10% in the East Midlands, 9% in the North-West, Yorkshire and the Humber, 8% in Wales and 6% in the North-East, according to the TPA research.

TPA chief executive Matthew Sinclair said: “Owning your own home is an important milestone, but for many families it seems harder and harder to reach.

 “Ministers have done nothing to ease the burden imposed by stamp duty, which is an unfair double tax that gets in the way of would-be first-time buyers and others thinking about moving. Instead they have made things worse with new thresholds and new, higher rates. The Government needs to act on ministers’ rhetoric about getting people onto the property ladder and cut this unfair tax.”

The recent 2020 Tax Commission review by the TPA and the Institute of Directors concluded that stamp duty should be abolished, as did the Mirrlees Review from the Institute for Fiscal Studies.

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How do waterfront locations affect prices around the world?

Waterfront properties in sought-after coastal locations cost 63% more, on average, than similar properties that are landlocked, according to Knight Frank analysis.

To find out what the biggest premiums for coastal views are, they surveyed local agents in 10 popular second-home destinations around the world to find out the premium paid to live on the water.

Across the board, prime waterfront properties in coastal locations around the world are worth an average of 63% more than their inland counterparts.

However, there are regional differences from city to city. Waterfront properties on Italy’s Lake Como and in Barbados have the highest price premium. In both locations coastal homes can command prices 100% higher than equivalent homes inland. They were followed by homes in Phuket in Thailand and the central Algarve along Portugal’s southern coast where values increase by 89% and 75% respectively.

At the other end of the scale prime waterfront properties in coastal locations in Dubai are only worth an average of 10% more than inland homes. In The Hamptons, home to some of the most expensive residential properties in the US, the presence of water only increases the value of a property by an average of 30%.

The full list can be seen below.

Lake Como, Italy: 100%

Barbados: 100%

Piglet, Thailand:89%

Central Algarve, Portugal: 75%

Miami, USA: 60%

Cannes, France: 40-60%

Cape Town, South Africa: 56%

Mallory: 50%

The Hamptons,USA: 30%

Dubai 10%

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Rightmove survey shows 60% of renters can't afford to buy a house

PROPERTY website Rightmove say almost two-thirds of renters feel trapped because they want to buy a home but cannot afford to do so.

The research underlines the frustrations faced by millions locked out of home ownership, dubbed generation rent, as the spiralling cost of letting and a revived property market curb these aspirations.

In the Rightmove survey of 3,000 tenants, 60% say they are unable to get a toehold on the ladder – an 8% rise since 2011 when the annual survey began.

Of these trapped renters, a third had owned a property but decided to sell and return to the rental sector, and now find themselves priced out of the market.

The survey also found that one in six of those expecting to buy for the first time this year will be age 40 or over.

Despite difficulties, Britons' desire to own a home has not diminished, with 96% of renters surveyed aspiring to this, and seven in 10 saying they would not give up on that dream.

Record high rents have made it hard for would-be buyers to build up a big enough deposit to afford a home, despite signs that banks and building societies are becoming more willing to provide higher  loan to value mortgages.

Buying will become increasingly harder if prices continue to rise in 2013, with prices in July already 3.9% higher than in 2012, according to Nationwide. 

Miles Shipside, director of Rightmove, said: "Even though some agents are reporting an increase in those buying and escaping the rental trap, the growing number of new households and former homeowners returned to the rental sector keeps producing new tenants.

"In spite of buying looking increasingly attractive as the costs of renting continue to rise, saving a deposit continues to get harder. For many of those trapped in rented accommodation and dreaming of escape, it's a nightmare scenario."

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Renting a property near to London’s best primary schools will see parents pay 18% more

Renting a property near to London’s best primary schools will see parents pay 18% more for their homes, says a report by Select Property.

Summary:

• It is 18% more expensive to rent a property in areas in London with top performing primary schools
• Kensington is the best location in London for primary schools
• Rents in Kensington can reach £658 per week

The cost of renting close to London’s best primary schools is 18% higher than the capital’s least performing schools.

According to Rentonomy, Kensington is the best area in the city for non-religious state primary schools, followed by Sheen, Richmond, West Norwood and Teddington.

The average score for schools in Kensington is 32.7 – 16% higher than the average level in London, based partially on Key Stage 2 2012 performance tables.

Kensington is also home to the most expensive primary school to rent a property near. Residents residing close to Fox Primary School in the W8 area can expect to pay £658 per week in rent, with the school achieving a rating of 32.7, indicating that price increases may be related to the quality of the education establishment.

The second most expensive school to rent close to is Thomas Jones (31.6) in Notting Hill with properties averaging £497 per week in this area.

However, Londoners do not need to break the bank to send their children to good-quality schools as the two top performing primary schools are in areas with rental charges of £191 per week and £258 per week (Newton Farm in Rayners Lane and Grinling Gibbons in Deptford respectively).

Parents might be tempted to look for a property to rent close to these two less expensive areas after LSL Property Services recently revealed the steep costs of renting in the UK. Last month, it reported that average rents in England and Wales were £737 per month in June, with this figure increasing for properties in the capital.

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