Entries Tagged 'housing market' ↓
May 15th, 2008 — house prices, housing market
Rising demand for second houses has caused higher prices, especially in local property hotspots such as tourist areas like the Lake District.
This can cause economic problems. In particular, local first time buyers may be forced out of the market. Therefore, they will either have to rent, or they may be encouraged to leave the area. This can cause a shortage of labour and damage local economies e.g. shops can’t get people to work. In addition, it can change the nature of local areas because it is populated by ‘visitors’ as opposed to people who live there throughout the year.
On the other hand, people who buy second homes may bring wealth and spending power into the area. It depends how long they spend in their second house. If it is only 2 or 3 weeks a year then the area will not benefit. If they rent the house cheaply to local people in the intervening years it will be less damaging.
It also depends whether supply can increase to meet the demand for second houses. The problem in the UK is that it is often difficult to build new houses, especially in these tourist areas most affected by people buying second houses.
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April 23rd, 2008 — house prices, housing market
House prices are determined by a number of different factors. Firstly there are ‘economic fundamentals’ these are factors such as economic growth and the level of average incomes. However, in addition to the basic economic reasons, house prices are often quite volatile because other factors influence the level of house prices. In the UK and US we have seen the importance of speculation and investment in the housing market. This has caused house prices to rise more rapidly than incomes.
Also in recent years, the availability of mortgage finance has played an increasing role in influencing house prices. When mortgage companies are keen to lend a range of unconventional mortgages demand for housing will rise. But, in a credit crunch mortgage products are withdrawn leading to lower demand.
For more detailed analysis see: Factors that determine house prices
April 3rd, 2008 — housing market
The North of England used to be a good place for first time buyers to get on the property ladder. However, in recent years the price of houses in the north has increased significantly, reducing the gap between north and south. The result is that many areas in the north are becoming as expensive as areas in the South.
However, the price of houses in the north has an increasing variance between different regions. For example within a city like Manchester or Leeds, house prices can vary by upto 80% between different areas of the city. Continue reading →
March 4th, 2008 — housing market
Homeowners pay
0% stamp duty on houses upto the value of £125,000
1% on homes priced between £125,000 and £250,000
3% for homes between £250,000 and £500,000
4% for homes valued at more than £500,000
However, the average first time buyer is still paying a lot more stamp duty because of rising house prices. It is estimated that the average first time buyer pays over £1,670 extra duty since 1997, when Labour came to power.
The number of houses valued at £250,000 or more has tripled over the past three years from 1.8million to 5.5 million in 2007. Therefore, many people are having to pay the extra costs of stamp duty, in addition to the extra mortgage costs.
Furthermore, house buyers are also faced with the cost of HIPS, which has been criticised for adding red tape and unnecessary costs to buying a house.
November 29th, 2007 — housing market
For latest news on UK house prices, UK mortgages and the general state of the housing market, visit our Housing Market Blog.
Recent articles include:
July 12th, 2007 — housing market
Gordon Brown promises 3 million New Homes will be built by 2020. At the moment the UK has one of the lowest house building rates since the second world war. To increase the rate by 40,000 a year may cost the Chancellor upto £10 billion in social housing costs.
The increase in housing supply is in response to the concerns over difficulties facing the younger generation in getting a foot on the property ladder. The tripling of house prices in the past 12 years, is in large part, due to a chronic shortage of supply.
However, although he has promised an extra 3 million homes building them may not be so easy. Often local councils are keen to protect greenbelt land and avoid extra environmental pollution.
In other news the US dollar fell again in response to concerns over the US housing market. Falling house prices were now feeding through into lower consumer spending. Their are fears that this will soon pass onto Wall Street. Despite a massive increase in home repossesions and mortgage defaults, there is no sign that the Federal reserve are looking to cut interest rates at the moment.
Dollar falls again – Guardian
July 10th, 2007 — housing market
The new UK Prime Minister Gordon Brown has pledged that increasing the amount of affordable housing will be a prime target of the UK government.
Affordable housing has become an important political issue, in recent years. It stems from the rapid rise in house prices, making it increasingly difficult for first time buyers to get on the property ladder. Affordable housing is often targetted at certain key workers in the public sector. However, there are concerns that some low paid workers, not in these key public sectors will loose out.
Difficulties in making affordable Housing a reality
Many ministers and politicians have agreed on the importance of more affordable housing; however, to make this a reality is not as easy as they would like us to believe.
1. Local Authorities.
Planning permission for most housing plans are still under the discretion of local authorities. Therefore, they are in a position to block new housing schemes.
2. Scale of the problem.
At the moment new housing is been built on a small scale. To adress the balance it will require a huge investment in building new housing
3. Difficulty of finding space in the South of England
There is already a shortage of land in certain areas. It is not easy to find land in the south of England that is OK to build on.
4. Time Delays
The process of applying for planning permission, getting it approved and then building houses is very time consuming. The government may need to find a new procedure to cut red tape
Understanding the affordable housing situation in the UK at BBC