Top stories this week House prices have risen four times faster than pay...... read Bank of England maintains Bank Rate at 5.75%.....read
Top stories this week
House prices have risen four times faster than pay...... read
Bank of England maintains Bank Rate at 5.75%.....read
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Housing Market NewsTUC report shows house prices have risen four times faster than payThe cost of buying the average home in England has gone up more than four times faster than the wage of the average employee over the last decade, according to a new TUC analysis of official statistics.
The report shows that in 1997 the average house could be bought for £60,000, equivalent to three years and six months of the then average wage of £17,000. But since then house prices have risen by 180 per cent taking the average house to £168,000, while the average wage has gone up by only 43 per cent, to just over £24,000. This means that it now takes nearly seven years of an average employee's wage to buy an average house.
View regional breakdowns and full report
Access to housing market is 350% worse than 1996, according to RICsThe latest Access and Affordability Index from RICS has found that the cost of becoming a home purchaser in Great Britain deteriorated by 8.4% in the year to 2007 Q2 and has worsened by around 350% since the most accessible point in 1996.
The Index suggests that a first time buyer couple, both on lower quartile earnings (£26 667), will now have to save up to the equivalent of 96% of joint take-home pay, to build up the £25,600 needed for up front buying costs on a typical home, deposit and stamp duty. This equates to a substantial rise from the low point of 21% required in 1996.
Affordability has deteriorated to almost record levels, according to RICS. A couple on lower quartile income now has to spend 44% (up from 38% in Q1 2007) of their combined take home pay to service their mortgage, only 4% below the all-time high of 48% in Q1 1990.
View the full report
The number of residential properties offered at auction rose by 32 percent in Q2 2007 according to research released by RICS this week. They say this increase was pushed by repossessions, as affordability conditions deteriorated following interest rate hikes.
In the second quarter of 2007 there were 5,120 residential properties sold at auction, the highest number of sales in over two years and a 22 percent rise on the previous quarter.
RICS estimates that repossessions could rise to in excess of 45,000 in 2008, amounting to 124 repossessions per day.
More information from the RICs site
Renovation generation will not be moved says surveyStandard Life Bank has published results of a new survey which shows that thirty and forty-something homeowners are staying put rather than moving.
The survey shows that the cost and hassle is putting off three quarters from moving, three out of five want to stay in the same area and a third believe they can add more value to their property by doing it up. The "renovation generation" is upgrading and extending its property rather than moving home according to Standard Life.
They say the activity of this generation is set to transform the housing market as second and third homes are extended to house growing families rather than those families buying bigger properties; one in 10 of the renovators say they have added extra rooms. And by creating new bathrooms, bedrooms, loft conversions and extensions, they are building an average of 150 square feet onto their properties.
to topHalifax house price indexThe latest Halifax house price index for August shows:
House prices increased by 0.4% in August. This is the third month in the last four that house prices have grown by less than 0.5%, confirming that house price inflation is slowing.The three monthly increase in house prices - a good indicator of the underlying trend - has fallen from 4.5% in March to 1.6% in August.
Although the annual rate edged higher to 11.4% in August from 11.2% in July. It should decline over the coming months as the strong monthly house price gains last summer and autumn drop out of the year-on-year comparisons.
Mortgage approvals to fund house purchase in the three months to July were 9% lower than during the recent three month peak during September to November 2006. The level of new buyer interest in purchasing a house fell for the eighth successive month in July.
A healthy economy and strong labour market continue to underpin housing demand. Gross domestic product (GDP) increased by 0.8% between Q1 and Q2, above its long-term average pace (0.7%). Employment continued to rise against the background of healthy economic growth in the three months to June with the total number 93,000 higher than in the previous quarter.
House price inflation is expected to ease over the rest of 2007. Mortgage rate rises since last summer are having an effect on housing affordability and will bite further during coming months. Negative real earnings growth so far this year - average earnings increased by 3.3% over the year to June 2007 against a 4.4% rise in the Retail Price Index - and rising food prices will also reduce the income households have available for housing.
View the full House Price Index results
International housing trendsHouse prices in the UK have outperformed every country in the eurozone except Spain over the past five years, according to new research by Halifax.
Since 2001, house prices in the UK have risen 90%, compared with a 40% increase for the eurozone as a whole over the same period.
Spain is the only country with higher house price growth than the UK in the past five years, with an increase of 100%.
In the past year, Belgium experienced the largest rise in house prices of 18%, followed by France at 15% and Spain at 14%. The UK had the fourth-largest increase of 13%.
The Bank of England's Monetary Policy Committee has voted to maintain the official Bank Rate paid on commercial bank reserves at 5.75%.
NAEA welcomes decision to maintain bank rateStewart Lilly, President at the NAEA, comments: "We are very relieved at the Bank of England's decision to maintain interest rates at their current level. There have been various economic factors, including fluctuations in the stock market, indicating that now is not the right time for an increase.
"It will be beneficial to have this period of stability to help the market adjust to the changes that are taking place at present, not least the controversial introduction of home information packs (HIPs). We are pleased that a ‘wait and see' strategy has been adopted by the Monetary Policy Committee for the time being allowing consumers and the market a time to adjust and take stock.
"We urge the Bank of England to continue to hold interest rates for the foreseeable future."
The Nationwide Consumer Confidence Index fell back in August reflecting the impact of five interest rate rises over the past year. The main Index fell by two points from July, but it was not alone. All indices fell in August, the first time since December 2006 that all four measures of confidence showed a downturn in the same month.
However, despite the fall confidence is up by 13% compared to a year ago.
View the full figures from Nationwide
to topGovernment NewsBidding criteria announced to access £8 billion in Government fundsThe Housing Corporation published the Prospectus for its 2008-11 National Affordable Housing Programme (NAHP). For the first time the Corporation's programme covers a full three-year period.
Publication of the Corporation's Prospectus follows the Housing Green Paper Homes for the Future, which announced investment of at least £8 billion in affordable housing in 2008-11, offering a £3 billion increase over the current funding period.
The prospectus sets out the bidding criteria for the £8 billion Housing Corporation NAHP.
Conservatives outline proposals to eradicate inequalities in housingProposals to eradicate the current inequalities in access to good schools, good health and good housing were outlined this week by the Conservatives' Public Services Improvement Policy Group.
The Group, chaired by Baroness Perry and Stephen Dorrell MP, laid out the recommendations in their final report - entitled 'Restoring Pride in Our Public Services'.
The key recommendations in relation to housing are as follows:
Right to Buy - The right to buy should be more widely available. There should be a reassessment of the level of discount that is currently being offered, with an aim to make RTB an affordable means for social tenants to obtain a foothold on the housing ladder.
Shared Ownership - Flexible Shared Ownership equity stakes should be encouraged to meet the needs of the purchaser. The Private Sector should be encouraged to provide shared ownership schemes.
Community Land Trusts - more attention needs to be paid to problems of affordability in rural communities through the use of the Community Land Trust model which holds the housing and land assets in trust and locks the assets out of the open market so they stay accessible to those on low and moderate
incomes.
Private Sector - There should be fewer regulations and greater incentives for private developers to take greater involvement in community housing. to topHBF NewsHBF briefing on Draft South East Plan EIP Report
HBF has issued a briefing for members summarising the key points raised by the
Panel in its report on the South East Plan EIP, which has implications for the
home building industry.
View HBF briefing (members only)
View HBF press release on this subject
HBF's Midland's office has moved to Bordesley HallThe new address is:
Bordesley Hall, Alvechurch, B48 7QA
http://www.bordesleyhall.com/
Tel: 01527 63428 or 01527 63435
Fax: 01527 63471
Email: midlands@hbf.co.uk
Now in its fourth year, this Exhibition and Conference is a must for those working in the home building Industry. Housing Market Intelligence, the extensive free briefings and conference programme plus the exhibition, bring together key industry figures to highlight all that is new in the home building industry.
Housing Market Intelligence 9 October, Housebuilding 2007, Islington Business Design CentreThe key information initiative for senior figures in the house building industry, HMI comprises an annual report launched at the conference, which this year aims to help delegates and readers 'Develop strategies in the face of rapid change'.
More information and to register
Jo Weston