Affordability in the UK housing market has got worse and worse

Latest market view from not a yes mans economics

Yesterday I watched the UK Prime Minister David Cameron on BBC television as he made various claims about “affordable housing”.  The BBC itself summarised it thus.

“There should be both affordable housing for rent and to buy, Mr Cameron said, but “a shift towards more affordable housing to buy” was needed.

If this is to be the new government policy then it will represent an even larger U-Turn than the recent one on tax credits. This is because as I have covered frequently on here it has been government and Bank of England policy to drive house prices higher for quite some time now. Also along the way the Prime Minister contradicted the speech given by Chancellor George Osborne on Friday and which I analysed then.

I believe we are in the middle of a turnaround decade for Britain.

Mortgage terms are lengthening

This morning has seen a rather awkward development for the Prime Minister and it has been provided by research from the Halifax Building Society today which shows that mortgage terms are lengthening. From the Financial Times.

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Latest report from Kate Faulkner: Housing and Planning Bill: Good, bad and ugly!

Kate Faulkner of Property Checklists

According to the government, the Housing & Planning Bill will “transform generation rent into generation buy”. Is there any truth to this claim? Well, I’ve taken a look at the impact this bill is really going to have – the good, bad and ugly bits!

So you can pretty quickly work out this isn’t something that intends to help tenants at all and, as such, also doesn’t help buy-to-let investors. But developers and first-time buyers can look forward to a steady run over the next few years.

And although more new builds being planned will help boost agents’ business, the likely loss of buy-to-let business and the continued expectation of a lack of stock for buyers and rents means they will continue to take the brunt of the government’s and local authorities’ lack of ability to provide enough homes for population of the UK.

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35 year mortgage repayment terms fast becoming the norm

A 35 year repayment term is fast becoming the norm for a first time buyer taking out a mortgage according to the FT.  This comes after reports that there were more than 300,000 first time buyers last year.  This is the second year on the spin where the 300,000 mark has been passed.

Excerpt of blog kindly shared by mortgagesblogged. Read full article

 

Help to Buy helps more than 60,000 people onto the property ladder

The Help to Buy: Equity Loan scheme helped more than 60,000 people onto the property ladder in Q3 2015, according to the Department for Communities and Local Government (DCLG). Showing an annual increase of 4%, 81% of the purchases were made by first-time buyers, with 50,969 being first properties. Andy Frankish, NewHomes director at Mortgage Advice Bureau, said the scheme continues to reach its target audience of first-time buyers and commented on the new dedicated Help to Buy scheme for first-time buyers London.
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Help to Buy helps more than 60,000 people onto the property ladder

The Help to Buy: Equity Loan scheme helped more than 60,000 people onto the property ladder in Q3 2015, according to the Department for Communities and Local Government (DCLG).

Showing anannual increase of 4%, 81% of the purchases were made by first-time buyers, with 50,969 b eing first properties.

Andy Frankish, NewHomes director at Mortgage Advice Bureau, said the scheme continues to reach its target audience of first-time buyers and commented on the new dedicated Help to Buy scheme for first-time buyers London:

“The introduction next year of a dedicated Help to Buy scheme for London, with an increased 40% equity loan, will be welcome news for first-time buyers struggling to afford to buy in the capital. The scheme will require a maximum 55% mortgage, rather than one at 75% loan to value.”

“While the equity loan scheme is well ingrained in the sales of new homes, and continues to evolve in response to buyer’s needs, more creative solutions that address underlying problems to housing affordability must be developed in addition to targeted schemes.

The greater focus being placed on shared ownership will help, as will the creation of Starter Homes, but these will need the full support of lenders to have the desired effect. Increased housebuilding will eventually deliver more homeownership opportunities.”

Article kindly shared by Ryder & Dutton & Mortgage Advice Bureau