Recent statistics issued by the Land Registry confirm that the average price of a property in the UK is up 7.7% over a 12 month period to September 2016 - the average being £217,888.
Regionally this varies, with the averages across Armstrong Watson’s offices as follows:
North East £125,213
North West £150,845
Yorkshire and the Humber £151,399
Scotland £143,006
Interestingly, the number of completed sales is down on the previous 12 month period and across England sales are down 28%, compared to Scotland where they are down just 9%.
Rightmove recently reported that they expect property prices to rise by 2% this year, except in London where they expect prices to continue to fall.
Generally speaking, there is a greater demand for housing across the UK, with more buyers than available property, but like pricing there are regional differences and some areas of the country are experiencing significantly more development than others. The Land Registry data highlights that sales of new builds is up 20% from 12 months previously, compared to just 6.7% for existing property that has been resold.
Lenders remain very cautious and affordability is key to be able to secure long term borrowing. Mortgage rates may be at all-time lows, but consideration needs to be given to future affordability in case rates rise, as is expected in the foreseeable future.
Locking into a fixed rate deal could be worthy of consideration whilst mortgage rates are low, offering borrowers some certainty over monthly repayments for the term they fix in - up to 10 years on some deals.
Rates are significantly lower the more deposit a buyer can put towards the cost of their home, but at an average purchase price of £183,385 for first time buyers, even a 10% deposit will require savings in excess of £18,000. This isn’t unachievable, but will take some time to save, particularly for those currently renting and without other sources of funds to call upon.
First time buyers have the option of saving via the new Help to Buy ISA, which was introduced in December 2015. Up to £200 per month can be saved and the Government will add to your savings with a 25% bonus (capped at £3,000). All can be used towards purchase of a home valued up to £250,000 outside of London and £450,000 in London.
When locking into a fixed term mortgage it’s always worth checking repayment terms, as if you’re considering moving before the end of the fixed term then you could be hit with a large redemption penalty and this is quite common in many longer term deals.
Armstrong Watson Financial Planning is an independent financial planning firm and source solutions following an assessment of your needs and requirements and after performing a comprehensive analysis of the marketplace.
For more information and to organise a review, please call 0808 144 5575 or visit our website for more details.
