Marlborough News May 2014 UK Rur al Property Returns The IPD Rural Property Index demonstrates that rural property (tenanted farmland) continued to generate impressive returns for investors in 2013. Indeed, the sector has performed well throughout the recession, producing a 10.9% total return during the last five years, outperforming all other property types and reinforcing its reputation as a valuable element of an investment portfolio. There has been a considerable increase in activity in the investment market this year with purchasers chasing quality holdings. For the last few years we have become used to a steady trickle of investments coming to the market, with most of the difference in values related to the expectations about the reversion and tax status. This year we saw some better quality investment farmland coming to the market, of primarily arable holdings on fully repairing terms, which sold for prices well in excess of the guide prices.
More pensioners still paying off a mortgage
IT’S NOT THE START THAT MATTERS, IT’S THE FINISH! The number of new houses being started by builders in England has risen by 31% over the last year, according to new government figures.
Official figures reveal that there are more than 320,000 people aged over 65 who are not living mortgage-free. The number has risen by 20% in two years. A combination of soaring house prices, lower wages and poor pensions returns mean more people are still paying off a mortgage well after they have retired. The figures, from the latest English Housing Survey, show that in 2012-13 a total of 326,000 families where the head of the household is over 65 were still paying off a mortgage. At the same time the number of under-35s buying with a mortgage has fallen from 1.38m in 2010-11 to 1.27m last year.
However the number of new homes actually being completed only rose by 4% over the year. In the year to the end of March 2014, builders started 133,650 new homes, the highest number for six years. Earlier this week the governor of the Bank of England, Mark Carney, suggested that building more homes was the best way to curb surging house prices.
In the Editor’s View Some analysts had thought the recent strength of the UK economy might force the Bank of England to raise rates before the second quarter of next year, but this now appears less likely with Bank of England governor Mark Carney saying they may remain low “for some time”. Mr Carney said any increases in interest rates would be “gradual” and that rates “may stay at historically low levels for some time”. “Securing the recovery is like making it through the qualifying rounds of the World Cup - it’s a real achievement, but not the end goal. The prize in the economy is sustained and prolonged growth,” Mr Carney said. The Editor welcomes the forward guidance of the Bank of England, which makes the strength and growth of the current property market look sustainable for the longer term. However, the new Mortgage Market Review regulations and the possible review of the Help to Buy Scheme, attributed with the injection of confidence into the market, are likely to put the brakes on any soaring values nationally, which will alleviate worries about a possible housing bubble. This makes for a healthy market.
What Rightmove knows about us! In a survey they found out: • • • •
79% of us expect prices to be higher in 12 months only one in 10 prospective buyers are willing to compromise on their chosen location a third (32%) say they have found a home in their ideal location, 58% are still looking or waiting downsizers are the least willing to settle for second best in relation to location (92%) while first-time buyers are more willing to compromise, 85% still wouldn’t look elsewhere.
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