Can you guess how much these houses cost?
How Much Is That House? is a marvellous little game for those interested in property prices – it offers up 10 homes on Google Street View then simply asks you to guess how much they sold for. You get points depending on how close you were and then a final summing up of your score at the end.
First time buyers expect mortgage borrowing to increase by £30,000
Those looking to buy their first home expect to have to borrow £30,000 more than people who have got onto the property ladder in the past two years, new research from YouGov suggests.
Its “First Time Buyers” report shows that the average expected mortgage for people looking to buy their first home is £155,852. This compares to the average mortgage of £121,987 for people who have bought their first house since 2011.
Potential entrants into the property market expect to pay 25% deposits, the same as those who have recently bought their first homes. However, due to the increase in house prices, the average amount of equity needed has increased from £31,954 for existing first time buyers to £51,802 for those currently looking to purchase. Given that their average gross household income of £50,640, this implies a mortgage to household income multiple of three, this figure was 2.2 when existing first time buyers took out their mortgages.
YouGov’s report suggests that people who have recently bought their first house are more pragmatic than those currently looking to do so, implying that potential first time buyers have unrealistic expectations of purchasing a property.
Three in ten people looking to buy their first home are choosing the location based on where they can afford compared to almost half of recent first time buyers. About a fifth of people looking for their first home want to buy because they feel they belong to a neighbourhood compared to just 8% of recent first time buyers.
James McCoy, Research Director at YouGov, said: “The recent surge in house prices have made deposits difficult for first time buyers. While the percentage remains the same the amount of money it represents is increasing month by month. Part of the problem is that a lot of first time buyers have unrealistic expectations about how and where to purchase a house. While the government’s Help to Buy scheme will help on the financial side of things, it will not change the fact that many potential buyers need to adopt a more pragmatic approach to how they go about buying a house. Instead of breaking the bank trying to stay where they are familiar with they may be able to get better deals by going for locations to fit their budget.”
Rental returns in Northwest England outstrip central London
Figures from the Association of Residential Letting Agents (ARLA) suggests that houses in North West England are delivering the highest rental returns in England.
Conversely, the data shows that rental returns on houses in central London have been falling for the past six months. Returns have fallen from 4% to 3.5% over this time period, while levels in the North West have stayed relatively steady at 6% or above. Outside England, houses in Scotland, Wales and Northern Ireland have also recorded broadly rising return values.
Rental figures for flats followed a broadly similar geographical pattern, with central London properties offering an average return of 4.1%, compared with returns of 5.2% and 5.8% in the North East and North West respectively.
The survey also showed the average void period – the time that a rental property remains vacant between tenants – remained steady at three weeks across the UK.
Ian Potter, Managing Director of ARLA, said: “Our data clearly shows that landlords around the UK must choose their rental property wisely to ensure they receive the returns they expect. It may be that rental returns in a particular area come as a surprise to those not directly involved in the local market. As void periods have stabilised, landlords may have an easier job of forecasting returns once an indicative figure has been received. However, some untenanted time should always be factored in to any landlord’s investment calculations.”Tagged in: first time buyer, game, mortgage, renting
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