Real Estate Curve

Saturday 9th February could be the day when first-time buyers looking for a home in or close to Chelmsford receive the extra boost they need to get a foot on the property ladder.

Barratt Eastern Counties is holding a ‘Dream Start Day’ at its developments The Tower, in the centre of Chelmsford, and at The Hawthorns, close to Witham, just nine miles away.

These days are being held to tell first-time buyers about the amazing Dream Start offer that allows them to buy a new home for just 75% of the price. An independent financial adviser will also be on hand to give guidance on money matters.

Rebecca Littler, Sales and Marketing Director for Barratt Eastern Counties comments” “Dream Start is our best ever offer for first-time buyers. It’s a really fantastic deal that is only available on selected homes for a short period of time. I strongly recommend that anyone interested should come along to our Dream Start days to find out more.”

Dream Start buyers pay only 75% of the purchase price; the remaining 25% is deferred, without interest or rent, for up to ten years or until the house is resold.

As an extra incentive, if anyone reserves a home at The Tower or The Hawthorns on Saturday 9th or Sunday 10th February, Barratt will even pay the stamp duty and legal fees up to £1,000.

Barratt’s The Tower is in a superb position, close to the Chelmsford town centre and adjacent to the railway station; trains to London’s Liverpool Street take just 35 minutes.

The one and two-bedroom apartments have a contemporary open-plan layout and are fitted to a very high standard. With a three-storey sky-lighted atrium in the heart of the development, roof terrace, private gym and concierge service, The Tower is setting new standards for homes in Chelmsford.

Dream Start prices (75% of the full selling price) at The Tower start at just £150,000 for a one-bedroom apartment.

The Hawthorns, just off the A12, combines a lovely location, opposite open fields and surrounded by countryside, with great accessibility. Barratt is building a wide selection of apartments and houses and is offering two-bedroom apartments under the Dream Start scheme, priced from £130,495 (75% of the price).

Some homes at both developments are ready for immediate occupation.

For more information, visit Barratthomes.co.uk.

The 2007 year-end edition of the permanent tsb House Price Index - compiled in association with the ESRI - reveals that house prices nationally declined by 7.3% in 2007 - compared to an increase in average national prices of 11.8% during 2006…

The average price paid for a house by a First Time Buyer stood at euro260,786 at the end of December 2007. This was a decrease of over euro18,000 compared to December 2006.

The index reveals that prices declined more in the second half of the year than in the first with falls in average national prices of 4.7% [second half of year] and 2.6% [first half of year] respectively.

This pattern is in keeping with the trend established in 2006 when the rate of house price growth declined as the year progressed. In that year, average national prices rose 8% in the first half (2006) and by 3.8% in the second half (2006). A year ago it was noted that the rate of growth in the first half of 2006 represented an exceptional outperformance.

The index for 2007 also reveals that the national average cost of houses for First Time Buyers declined by 6.5% during 2007. This was somewhat less of a decline that experienced for the Second Time Buyer market where the national price average declined by 7.9%.

• Prices nationally declined by 7.3% compared to growth of 11.8% in 2006
• Price reduction in second half stronger than that in first half
• Price reduction highest in Dublin (-7%) compared to Outside Dublin (- 6.4%)
• Prices for existing houses (- 9.0%) decline more than prices for new house (- 4.1%).

December Figures:

Looking specifically at December, the price of houses nationally declined by 1.5% during the month, compared to a decline of 1.1% in November.The average price paid for a house nationally in December 2007 was euro287,887, compared to €310,632 recorded in December 2006.

Commenting on the results, Niall O’Grady, Head of Marketing at permanent tsb bank:

“After a decade of phenomenal growth, the market finally came off the boil in 2007. However prices today are pretty close to where they were at the start of 2006 and the fundamentals behind the market remain strong - as evidenced by rising rents. There is clearly demand for new houses albeit at reduced levels. The question is at what point buyers will take confidence that we’re at the top of the interest rate cycle and return to buy.”

Dublin V Rest of Country:

Dublin house prices fell by 1.4% in December while there was a reduction in prices of 1.0% for houses bought outside Dublin. In November 2007 the relative price changes were -0.1% and -0.8%.

House prices fell by 7.0% and 6.4% in the twelve months to December 2007 in Dublin and Outside Dublin respectively. The equivalent rates in 2006 were growth of 15.9% and 10.9% respectively.

The average price paid for a house in Dublin and outside Dublin in December 2007 was EUR 397,507 and EUR249,359 respectively. The equivalent prices in December 2006 were EUR427,343 and EUR266,339 respectively.

Commuter Counties: - Louth, Meath, Kildare & Wicklow

House prices in the commuter counties of Dublin fell by 0.8% in December 2007, compared to a fall of 0.5% in November. The annual fall in prices in 2007 in the Commuter counties at 6.6% was just below Dublin levels (7.0%). The comparable figure in 2006 was growth of 15.2% for Commuter counties.

The price of a house in the commuter counties in December 2007 was euro321,403. This compared to euro344,186 in December 2006.

3 Bedroom Semi-detached Houses

3 bed semi-detached house prices fell by 1.4% in December, while in December 2006 they rose by 0.4%.

House prices in this category fell by 4.0% in 2007 compared with a rise of 13.5% in 2006 . The price of a 3 bedroom semi in December 2007 was euro299,412 - down from euro311,906 recorded in December 2006.

First time buyers V. Second time buyers:

House prices for first-time and second-time buyers were reduced by 0.3% and 1.6% respectively in December 2007. In November 2007 the equivalent decreases were 0.1% and 1.4%.

House prices fell by 6.5% and 7.9% in 2007 for first-time (FTB) and second-time buyers (STB) respectively. The equivalent price movements in 2006 were + 11.8% and + 12.2% respectively.

The average price paid by a first-time buyer and a second-time buyer in December 2007 was EUR260,786 and EUR321,498 respectively. The equivalent prices in December 2006 were EUR279,003 and EUR349,213.

New V. Existing Houses

House prices for new and second-hand houses fell by 0.2% each in December 2007. In November the relative price changes were down 0.7% and 1.2% respectively for new and second hand houses.

New and existing house prices declined by 4.1% and 9.0% respectively in 2007. The equivalent movements in 2006 were price increases of 9.6% and 10.2% respectively.

The average price paid for a new house in December 2007 was EUR290,296 while that paid for a second hand house was EUR284,608. The equivalent levels in December 2006 were EUR302,645 and EUR312,709.

ByKay Murchie:

A new scheme is to be introduced that will help first-time buyers in Hillingdon get onto the property ladder. The scheme forms part of Hillingdon Borough council’s policy to maximise the opportunities for Hillingdon residents to become homeowners

Young professionals, who live in the borough, and are on a middle-income will be offered nearly £16,000 of taxpayers money.

They will be given the cash to pay a 7.5% deposit on their home. The grants will be offered on a first-come, first-served basis and will rarely have to be paid back.

At least 60 people have applied and 6 are being considered for the first round of payments which has a budget of £100,000.

However, the grants will not be available to key workers such as teachers or health workers or for those on low incomes.

The scheme has been launched by Conservative-run Hillingdon Borough Council, aspiring property owners can apply for the grant if they have secured a mortgage and whose potential home is not worth more than £210,000.

Furthermore, applicants must have lived in the borough for 10 years and provide a 7.5% deposit of their own. They will only have to pay back the grant if they sell the house within 3 years.

Head of housing, Neil Stubbings, said the scheme is targeted at helping young, reasonably well-off people to stay in the area and keep adding to the economy. Mr Stubbings added we want to attract those people who are thinking ‘I’m not even able to get in sight of the bottom rung of the property ladder’.

However, Labour councillors have branded the scheme a ‘gimmick’ and claimed it is out of reach for the average earner in Hillingdon.

Average mortgage costs to income for first time buyers are now higher than they were in the 1990s at the peak of the last housing boom, while increasing numbers of households are moving into private rented housing, according to the newly published UK Housing Review…

First time buyers were devoting nearly 35% of their income to mortgage costs by the third quarter of 2007, compared with the previous high of nearly 34% in 1990. The sharp rise in house prices and mortgage costs over the last decade contrasts with the pattern of private rents, which have merely kept pace with earnings, resulting in substantially lower rents than mortgage costs (around 64% of the cost) on equivalent properties.

The Review, published by the Chartered Institute of Housing (CIH) and the Building Societies Association (BSA), attributes the rapid growth in the private rented sector to the relative competitiveness of private renting as opposed to owner-occupation and the greater choice available to households seeking such housing.

Steve Wilcox, Professor of Housing Policy at the University of York, and author of the Review:

“Private renting has become far more competitive as an option for households compared to the cost of buying; the sector has grown by 21% in the last five years across the UK and is fulfilling a significant role in the housing market. With the rates of population and household growth outstripping current and planned new house building we are likely to see continuing growth of the private rented sector.”

Adrian Coles, Director-General of the Building Societies Association, commented:

“With first time buyers finding it increasingly difficult to get a foot on the housing ladder, the private rented sector is providing good quality accommodation to increasing numbers of people. Through the provision of loans to landlords, building societies are helping to ensure the success of the private rental sector. Even with present market conditions it is still possible for both astute landlords and lenders to serve this sector successfully.

“However, building societies have not forgotten the first time buyer, and the recent BSA report ‘Stepping up to the Mark’ demonstrated the wide range of innovative products that societies have developed for this market.”

Recent research has shown that demand for first-time buyer mortgages is set to rise in the coming months.

The data, from National Association of Estate Agents (NAEA), shows that first-time buyers represented around 13 per cent of the market in December 2007 as opposed to 10.1 per cent in November, according to Mortgage Warehouse.

The NAEA also stressed the importance of further properties being put on the market before the implementation of home improvement packs (Hips) in December, the report continues.

Commenting on the increase of first time buyers in the market, NAEA president Stewart Lilly, said: “They have been able to take advantage of lower prices in some areas and the influx of one and two bedroom properties specifically prior to the Hips roll out.”

He added that they hoped this increase would continue and that a further interest cut would help this as well as boosting consumer confidence on a wider scale.

The NAEA was founded in 1962 by estate agent and entrepreneur Raymond Andrews with the goal of upholding good practice and high professional standards in UK estate agency.

Feb 4 2008 by Sion Barry, Western Mail

ACCESS to the housing market in Wales has deteriorated for the fourth consecutive quarter, according to latest research from the Royal Institution of Chartered Surveyors.

With one of the effects of the credit crunch being greater deposits being requested by mortgage lenders, the up-front costs of buying a home also increased to more than 86% of a couple’s combined take-home pay.

However, while accessibility in Wales is declining, for the first time since 2006 housing affordability actually improved, with mortgage payments falling from 38.3 to 33.3% of take-home pay.

In general, the cost of becoming a home purchaser in the UK has worsened by 351% since its most accessible point in 1996.

Cathy McLean, director of RICS Wales, said, “At the start of 2008, first-time buyers are finding it even harder to get a foothold on the housing ladder and the signs are that conditions are unlikely to get better in the short term. Mortgage lenders are demanding ever higher deposits as the credit crunch continues to take effect.

“Those who are struggling with mortgage repayments are still faced with paying a large percentage of take-home pay but there may be some release of pressure as earnings continue to rise. If the Bank of England cuts interest rates next week, many will breathe a sigh of relief.”

According to the RICS’s affordability and accessibility index, covering the fourth quarter (Q4) of 2007, an average first-time buyer couple, both on lower quartile earnings (totalling £26,595 after taxes), will now have to save up to the equivalent of 104% of joint take-home pay, to build up the £27,729 needed for up-front buying costs on a typical home – including the deposit, fees and stamp duty. This equates to a substantial rise from the low point of 23% required in 1996.

The key drivers of the worsening accessibility picture were the slight reductions in loan-to-value ratios lenders were offering first-time buyers, as well as the continued burden of stamp duty and the costs of buying a home.

Affordability problems are still close to record levels. A couple on lower quartile income now has to spend 40.3% (down slightly from 40.8% in Q3, 2007) of their combined take-home pay to service their mortgage, 8% below the all time high of 47.8% in Q1 1990. The slight improvement in affordability can be attributed to stable interest rates in Q4 and rising earnings which reduced these mortgage payments as a proportion of combined take-home pay. Repossession levels are set to continue to rise with the RICS estimating 123 houses will be repossessed each day in 2008.

London is still the most difficult place for a couple on lower quartile income earnings to access the housing market. In London, the South East and South West of England, couples have to save more than 100% of their combined take-home pay to reach the levels necessary to get a foothold on the property ladder.

London is also the region with the worst affordability levels, first-time buyer households have to spend the highest proportion (51%) of their after tax income on mortgage payments compared with 29% in the North East region.