Wednesday, 28 September 2011

‘HOME IS PENSION’ FOR 2 MILLION RETIREES


New research has revealed that one-third of over 50’s will use their home as pension. Insurance group LV recently indicated that 2 million intend to use equity in their home to help fund their retirement, an increase of 500,000 since 2010.

Dubbed the ‘HIPpie’ (Home is Pension) generation, one-half intend to downsize, one-fifth plan to use an equity release scheme, and a further fifth would consider moving to a less expensive area.

This comes in spite of news that over a third of home owners in this age group estimate that the value of their property has dropped by an average of £24,651 in the last three years.

Of those surveyed, only one-fifth felt that their finances were secure enough to allow them to retire as planned. 36% felt that they would have to delay their retirement for financial reasons, while 16% would rather not think about their retirement finances at all.

In fact, 45% of people approaching retirement age are considering alternative sources of income once they stop work, owing to an uncertain economic future.


Home is pension for a third of retirees despite falling home prices - WalletPop UK

Third 'plan to use home as pension' - The Press Association

Third of over-50s 'will use home as pension' - Herald Scotland

Home is pension for a third of retirees - Mortgage Introducer


RECORD INCREASE IN RENTAL COSTS

August saw a record increase of 1.2% in the cost of UK property rentals. Per month, the average rent now stands at an all-time high of £713. This marks the largest rental increase since August 2010.

It appear likely that rental costs will rise even further, with the number of successful mortgage applicants remaining low and competition for rental accommodation staying high. The total annual returns on a rental property rose during August to 2.6%.

As a result of higher prices, rental arrears, which stood at 9% in July, jumped to 10.7% in August, indicating the mounting financial pressure that tenants are currently facing. Some predict that arrears will become an increasing financial concern for landlords, in light of growing inflation and an uncertain economic future.


Rent rise is fastest for a year, says LSL - BBC News

RAPID RISE IN TERRACE VALUE


Over the past ten years, the price of terraced houses has grown more rapidly than any other kind of property, according to a recent survey.

The Halifax has concluded that since 2001, the value of terraced properties has risen by £118 per week on average. Since that time, the typical price of a terraced house has increased by 68.4% to £151,332. By comparison, the average UK home has seen an increase of 52.8%, while bungalows have risen by 67.9%. Flats have recorded the smallest price growth at 49%.

However, in spite of their unmistakeable rise in value, terraced properties have remained the most affordable. Significant price increases across the upper end of the housing market have attracted many potential homebuyers to the relative affordability of terraced homes.

On average, terraced prices are 45% lower than detached homes and 15% lower than the UK average, increasing their appeal to first-time buyers in particular, in addition to their obvious value as a proven long-term investment.


Terraced house prices up £118 a week in ten years - myfinances.co.uk

House Prices surge by 68% - Express.co.uk

Terraced houses see biggest price rise in a decade - Mortgage Finance Gazette

Terraced houses top the price rise league shooting up £118 a week over last decade - Daily Mail

PROPERTY SALES LOWEST FOR TWO YEARS


Recent figures have shown that during the past 3 months up to August, only 14 homes per estate agent were sold in the UK, the lowest numbers for over two years. Factors such as a lack of mortgage lending and overall economic uncertainty have been widely blamed for the current state of the housing market.

Surveyors have reported that August saw a greater number of price falls than price rises, and some expect prices to drop even further within the next three months.

Concerned developers and potential home sellers have been affected increasingly by sales fallen through and a general lack of interest. Some estate agents have noted a sharp drop in the number of first time buyers coming through, while those have taken their first step onto the property ladder often have significant long-term savings. As a result, first-time buyers are becoming older, owing partly to an increase in the deposit of the purchase price required to get a home loan.

Northern Ireland has seen the sharpest price fall in the last year according to the house price survey carried out by the government, reporting a decline of 4.1%.


Sellers' gloom over property market inactivity - BBC News