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Workers Struggle To Afford To Live In London

London workers pay up to 60% more on housing in order to live in the city they work than those living 1 hours travel away.

Research by Lloyds Bank has found that for Londoners, living in the most central areas of the city adds 60% or a total of £447,015 to average property prices. This is compared to the average property prices in established commuter areas, where good transport links allow access to central London through 1 hours travel.

Wellingborough, Southend, Sittingbourne and Rugby, all around 1 hours travel away from the heart of London have an average house price of £294,903, compared to the £741,919 necessary to buy the average property in central London.

Cost Of Commuting Far Cheaper Than Buying In London

The cost of commuting an hour each way is a sizeable £4,989 annually but when compared to the £447,015 difference in house prices, it would take a massive 89 years to even out.

For those living 40 minutes of travel away from central London, namely Hatfield, Billericay, Orpington and Reading, average house prices are £389,000. It would take almost 100 years of £3,534 annual train fares to make up the £353,000 difference.

Other Reasons People Commute

Director of mortgage products at Lloyds Bank, Andrew Mason says that people also consider other issues when deciding where to live. In their findings, “quality of life is also a major factor: family circumstances, better schools, physical environment and homes that offer better value for money also come into the equation.”

Mr Mason states that “commuters are often prepared to pay a premium to commute when they could be better off in purely financial terms living closer to their place of work.” This is the case in cities such as Birmingham and Manchester.

For Independent Mortgage advice please contact us at Hoskin Mortgages for more information.

Clare Allen.

Hoskin Financial Planning Ltd is authorised and regulated by the Financial Conduct Authority number 613005. The guidance and/or advice contained in this website is subject to UK regulatory regime and is therefore restricted to consumers based in the UK. Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.

15% Fewer Rental Properties Put On The Market In August

Number of properties newly listed for renting falls throughout the country.

The crowdfunding platform Property Partner have compared the number of rental properties being put on the market between the 1st and the 28th of August to the number that entered during the same time frame in July. The results showed a drop of 15% between the months.

Dan Gandesha, C.E.O. of Property Partner points out part of this fall is due to normal seasonal changes in activity as the busier summer period comes to an end. Mr Gandesha adds that July saw unusually high activity with “the highest numbers of buy-to-lets being advertised since the stamp duty hike in April whereas last month experienced some dramatic falls in most parts of the U.K..”

Tough Environment For Traditional Landlords

Mr Gandesha sees an environment in which “traditional landlords have had it hard of late. Alongside the stamp duty surcharge, the banks have imposed tougher lending criteria, and cuts to mortgage interest tax relief will begin to take effect next year.”

Difficulties faced by landlords could translate to tenants having to pay more as Mr Gandesha explains, “profits have been hit and this could force many landlords to sell up. If September fails to pick up and there’s a shortage of available rental properties, rents could be pushed up. Hopefully for tenants, this won’t be the case.”

Breakdown By Region

Falls were seen across the country with new buy-to-lets in Canterbury, in the South East down 30%. Wakefield in the North of England and Loughborough in Central England also made the list of the most affected. Overall, the North East that saw the greatest drop with Hartlepool leading the trend.

Further down the list of those affected, Manchester saw a fall of 18.4%. London 16.4% and Birmingham 16%.

For Independent Mortgage advice please contact us at Hoskin Mortgages for more information.

Clare Allen.

Hoskin Financial Planning Ltd is authorised and regulated by the Financial Conduct Authority number 613005. The guidance and/or advice contained in this website is subject to UK regulatory regime and is therefore restricted to consumers based in the UK. Think carefully before securing other debts against your home. Your home may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.

Help to Buy ISA announced

Chancellor George Osborne was about to close his Budget address, when he announced a new scheme to help would-be first-time buyers to save for a deposit.

The Help to Buy ISA allows would be buyers to save up to £200 a month, with the Government adding a further £50. This means that if the person saves the maximum allowed in a Help to Buy ISA – £12,000 – the Government will top it up to a maximum of £3,000 tax-free.

Another benefit is, the accounts are assigned to each person, rather than per house, meaning a couple buying together could receive up to £6,000 from the Government.

The product will be available for four years from the Autumn, but there is no time limit on filling up the ISA – this is ideal if you cannot set aside the maximum amount each month.

This initiative has been received warmly by the industry, and it is thought that the new product could boost demand among would-be homeowners.

As with most things, the true effects are likely to be determined by where home seekers are looking to buy – for example the £3,000 bonus will not go as far if the buyer is purchasing in London as it would if purchasing elsewhere in the country.

While the benefits of the scheme are obvious, without a substantial increase in the production of new homes, this is likely to act as another factor pushing up house prices.

The Government has promised an additional 275,000 homes by 2020, but this will still not be enough to stem price rises.

For more help and advice please do not hesitate to contact us at Hoskin Mortgages.