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Given the difficulties that many people have getting on to the property ladder, it is no surprise to learn that there is an increasing array of support and options for first-time buyers.
There are various Help To Buy schemes aimed at assisting first-time buyers and some mortgage lenders offer specialist mortgages that are aimed at assisting first-time buyers purchase property.
Support has also been provided by the removal of stamp duty for first-time buyers purchasing property priced at less than £300,000.
That last move may not be of benefit to people looking to buy in London but at Oaks Estate Agents, we believe that 2017 was a good year for first-time buyers.
This thinking has been borne out by figures provided by UK Finance. Their figures suggest that 2017 saw the highest volume of first-time property buyers since 2006, with 365,000 people or households making their way on to the property ladder. This is a positive sign because there have been fears that many first-time buyers have been priced out of the market. The importance of building a sizable mortgage should not be overstated in getting on to the property ladder but if more first-time buyers can make their way on to the property ladder, it should provide confidence to others.
First-time buyers were active in 2017
This was the highest number of first-time buyers since 2006 and with there being 340,000 first-time buyers in 2016, there was an increase of 7.4% in 2017. The stamp duty cut was implemented to late to state that this change was a factor in getting more first-time buyers into the market, although some sources may claim that it was a factor. Overall though, there is an awareness that more needs to be done to help first-time buyers, and the figures suggest that help is being offered and accepted.
If you are interested in some of the average figures for first-time buyers, the average age of someone buying their first home is 30 years old and they hold an average income of £41,000. The age of first-time buyers is rising as the process becomes more expensive and more difficult.
Some warning signs exist in UK property market
Of course, it would be wrong to say that this is an indicator that everything is operating well within the property market. For December of 2017, the number of mortgages that were completed for first-time buyers stands at 30,800. This represents a fall of 5.2% on the previous month but many people will state that December can be a difficult month for mortgage applications and may not be indicative of a trend.
With respect to the number of new home mover mortgages which were completed in December, there were 30,700 completed mortgages and this represents a fall of 4.7%.
Whether you are a first-time buyer, a seller or just looking for your next move, you will find that Oaks Estate Agents is the Streatham based estate agent to call on. We care about the local community and we look forward to helping you, so whatever move you want to make, come and speak to the property experts.
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It is accepted that buying a home is expensive with many people struggling to get on to the property ladder. This is the case across the UK but with London property prices being higher, it can be very difficult for prospective buyers to save the money they require to buy a home. Therefore, it is good news that there is a stronger level of assistance for first-time buyers.
An example of the level of support provided to first-time buyers is the removal of stamp duty when the price of property is less than £300,000. There is debate as to whether this is of benefit or not, with some sources saying this move will lead to property prices rising; but overall, there is positivity surrounding this support being offered to first-time buyers.
Saving for a house deposit can be difficult
However, what about existing home-owners who must save for a deposit to be able to buy their next home. There is an assumption that when someone steps on to the property ladder, they can progress upwards by selling their home and obtaining a new mortgage. This isn’t always the case, and it seems a growing number of property owners require assistance to move up the property ladder.
There has been a study undertaken by My House which found that 25% of people owning their first home are looking for a gifted deposit in order to move up the property ladder. The “Bank of Mum and Dad” is commonly cited as a way for first-time buyers to get on to the property ladder, but it may be that second-steppers require this level of assistance too. The same study suggests that 14% of homeowners, who after buying their first home, have no intention of moving again until they retire. Around a third of respondents stated that they have no intention of moving unless they require a larger home.
The bigger the deposit, the easier it is to obtain a mortgage
There is no denying that the deposit is an essential component of buying property, and this now seems to be becoming more crucial for all buyers, not just first-time buyers. This means there will likely be an increased level of focus on how to save money to raise funds for a deposit.
Some of the most common tips offered to help people save for a deposit include:
- Stop renting and move back with your parents to save money
- Downsize your current property option
- Review your spending and look to save money wherever you can
- Review Help To Buy schemes to see if they can help
Of course, if you already own your home and you need to save for the deposit for your next purchase, many of these tips are unsuitable. When you own a home, you don’t have the option of going back to a parents’ home or a sibling, you need to make savings while paying off your current mortgage.
The fact that existing homeowners must save for a deposit is something that isn’t really being addressed in the industry, but it is something that more and more property owners are experiencing. There will not be the same sort of clamour to assist second-steppers as there is first-time buyers, but this is an area of the mortgage market that is likely to come under closer scrutiny in the near future.
At Oaks Estate Agents, we know the challenges people face in the property market, regardless of what their current home ownership status is. If you are looking for a home in or around Streatham, you will find that we are the local estate agents who are here to help you make your next move.
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The removal of stamp duty for first-time buyers purchasing property priced at less than £300,000 was always going to have an impact on the property market. The announcement during the November of 2017 Budget was a slight surprise, so it was unlikely that it would lead to a flock of buyers rushing out to purchase a home immediately, but such is the nature of the property market, industry professionals and onlookers are keen to see if there has been any impact on the housing market.
Countrywide are a well-known name in the estate agent sector and they have said that they have noticed an increase in first-time buyers taking an interest in buying property. The company has cited a 10% increase, with respect to year on year comparisons, for walk-ins from first time buyers. This is reportedly the largest increase since 2013, so you can see why the company believes that the cut in stamp duty has had a positive impact on them.
Some people are keen to see stamp duty impact on the property market
There has also been support for this school of thought from the Chancellor of the Exchequer. Philip Hammond has stated that he believes first-time buyers are showing a stronger level of interest in the property market already. These are positive signs but of course, interest doesn’t necessarily lead to a purchase, so it would be wrong for people to get too excited just yet at the prospect of many first-time buyers clambering on to the property ladder.
It will not come as a surprise to learn that not everyone is as positive about the impact of the stamp duty cut as the Chancellor or Countrywide. A survey undertaken by the Royal Institute for Chartered Surveyors, Rics, shows that as of December 2017, 86% of surveyors had failed to see an increase in interest from first-time buyers. Rics also asked surveyors if they believed that the stamp duty cut would have an impact on the property market. 66% of surveyors responded that they didn’t believe the market would be positively impacted on by this change while 12% of respondents stated they believed that this cut would help first-time buyers to make their way on to the market.
It is clearly too soon to make a judgment call on this matter but Rics don’t believe that the cut will have any sort of noticeable impact on the market, certainly not in the way that the Government would hope for.
Not every first-time buyer will benefit from cut in stamp duty
There is a need to remember that not all first-time buyers will be able to benefit from the stamp duty cut. In some parts of the country, with the north east of England being a fantastic example, many first-time buyers will purchase property at a price lower than £125,000. This means they wouldn’t pay any stamp duty in the first place.
There will also be buyers who are only eligible for a reduction in stamp duty, those buying property between £300,000 and £500,000; and of course, there will be buyers who purchase property at a price higher than £500,000; which entitles them to no discount at all. According to Zoopla, the average price of property in Streatham, as of February 2018, stands at £528,363; a price higher than the stamp-duty benefit cut-off price.
The impact of the stamp duty cut is one of the issues that will remain relevant in 2018, and at Oaks Estate Agents, we will keep in touch with this matter. If you are keen to follow the latest developments in the property market, make sure you stay in touch with us.
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Given the level of demand for property in London and the UK these days, and online property portals, there is never an inconvenient time to buy or sell a home. The traditional time of year for the property market to come alive in the UK is spring, and it would be correct to say that many people, and some professionals, prefer to be active at this time of year. Spring is undoubtedly a busy time in the UK property market and if you are keen to sell your property, now is the time to get ready.
A key reason why so many homeowners look to sell their property at this time of year is down to the volume of buyers. Even though savvy buyers look at homes in winter, many buyers prefer to wait until the weather has improved before they start arranging viewings. Spring offers more pleasant temperatures and increased daylight hours, which brings out more buyers.
Property owners will be busy in spring if they wish to sell
If you are planning on selling your home, an increased number of buyers is beneficial. Firstly, the more buyers that are present in the market, the greater the chances of someone seeing your property and taking an interest. Secondly, the greater the level of competition in the market, the more likely you can sell fast and for the best possible price. Some homeowners will be looking for a quick sale but the most pressing issue for many property owners is to maximise the price they receive when selling their home, and this is a factor why spring is an ideal time to place your home on the market.
You will also find that there are practical reasons for selling your home in spring. Any property owner that is keen to be settled into their new property by summer, or who has summer plans in place, will find that selling in spring fits their schedule. If you have a deadline in place, it is best to work backwards from this date to find the most suitable time to sell your property.
Spring fits with some homeowners’ schedule
While some owners may like the fact that a spring sale allows them to enjoy their summer, for other homeowners, a spring sale carries less pressure to sell by a particular time. If you are in no great rush to sell your home, you don’t have to accept the first offer. This freedom may help you to obtain a better price for the property, which would be a fantastic outcome in the long-term.
Another strong reason why homeowners appreciate the springtime when selling their home can be seen in the fact that homes look better at this time of year. Flowers are in bloom and there is an opportunity to spend time in the garden. The exterior of the property is just as important as the inside of a house, and spring allows homeowners the chance to ensure their property looks fantastic.
If you are keen to sell your home in spring, you are not alone, but help is at hand. By calling on Oaks Estate Agents, you will receive support and guidance from an experienced estate agent. The UK property market is a year-round entity, but spring remains special for people buying and selling homes.
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London, as most people will agree, is a fantastic place to live and work. Of course, there is so much diversity and options in London that it sometimes feels wrong to talk about London as a single entity. There are so many areas and towns that have their own characteristic and charm that discussing London in total misses or overlooks many of the best points of the city. At Oaks Estate Agents, we are extremely proud to serve the community in Streatham and surrounding areas, and we look forward to doing so for many years to come.
No one would try and say that London was perfect though. There are problems with various aspects of London life, and the behaviour of the property market is something that will always start a conversation that has strong views and opinions. There is a lack of affordable housing in London but at the same time, you have people worrying that house prices in some parts of the capital are set to fall or rise at a slower rate. Another issue that many people have is that many properties in London lie empty, purchased for the investment benefits as opposed to being a place where someone will stay and set up home.
Would a first dibs policy work in London property market?
Most people will have an opinion on these matters and your own circumstances, aims and background will influence the way that you think. There will be people who believe that the market should be left to its accord, but it does appear as though the Mayor of London, Sadiq Khan, is proposing to get involved with one aspect of the London property market.
It is believed that the mayor is keen to introduce a “first dibs” policy with respect to property purchases in the capital. If this policy is put into place, a three-stage proposal is likely to be introduced to the market:
- Stage one would see properties being made available to Londoners
- Stage two would see properties being made available to UK residents
- Stage three would see properties being made available to the global market
If you believe that it is wrong that foreign investors can buy property and leave them empty, this is a move that will be popular with you. It is also worth pointing out that studies show that foreign investors are not only buying high-end property, they are purchasing more affordable housing in London too.
Foreign investors pose problems in London property market
In an interview with The Times, the Mayor highlighted the fact that over half of the new properties, placed on the market with a price between £200,000 and £500,000 were being bought by foreign investors. The natural assumption is to think that foreign buyers are investing in the expensive end of the London property market, but it stands to reason that there are investors at the more affordable scale of the London property market.
In a survey carried out by the Daily Mail, whether this is a reliable source or not, there was an indication that 70% of foreign buyers indicated that they had no intention of living in the home they purchased in London. This means that a sizable number of London houses are being bought for the investment aspect, which exacerbates the limited supply of housing.
The first dibs policy is a radical idea by Sadiq Khan, but some people believe that there needs to be radical change to allow more people to buy property in London. If you want to make sure you know the latest news and activities in the London property market, stay in touch with Oaks Estate Agents.