UK house price increases take a summer holiday Written by Richard Green
Property website Rightmove has released its latest house price index announcing a “Summer sale” for house buyers. The report shows that on average, house prices fell by 1% over four weeks leading up to 9th July, indicating that “affordability gap” between house prices and buyers ability to purchase, is at last starting to close. The price fall has been heralded as a great boost for house buyers and an indication that fears of an expected imminent price crash may be premature.
The statistics show that asking price demanded by sellers over report period fell by an average of £1,993 implying that; "Sellers are now realising they have to compromise some degree of their gains in order to sell their properties," said Miles Shipside, Commercial Director of Rightmove.
The Rightmove conclusions correspond with other reports from Halifax and Nationwide Building Society. Halifax reported that annual house price inflation had fallen behind average earnings growth for first time since 2001.
The new figures have lead to UK firms becoming more optimistic about economy than they were three months ago, with companies such as Lloyds TSB expecting interest rates to be cut next month, leading to a general increase in economic confidence. However indicators show that there is a long way to go to attract many first-time-buyers (FTB).
Figures, based on mortgage value requests, released by financial comparison site Moneynet prior to last months slow down, gave average value of a property purchase for an FTB as £206,250, up from £194,961 two months earlier, a massive jump which could not possibly have been matched by equivalent wage increases. The recent slight price drop follows a long period of huge price increases, and with house price inflation a year ago topping 18%, equivalent to an average of £29,991, it may be some time before many FTBs feel able to enter market. A recent survey by Abbey highlights trepidation felt by FTBs with just over a third indicating that they wanted to buy a home within next year, but only 5% of these were actually confident that they would be able to.
National Savings and Investments (NS&I) Senior Savings Strategist Dax Harkins said: "Despite a recent cooling house market, house prices have continued to outstrip both savings rates and incomes over last year which means potential first-time buyers need to start saving sooner and harder to get into market."
Rightmove believes housing market is in for a summer where competing sellers are more likely to be flexible on prices, further improving situation for buyers. They postulate that sellers and estate agents appear to have been brought to their senses by a painful 12 months and have belatedly taken matters into their own hands by reducing prices to a level at which increasing numbers of buyers are able to proceed. The report sounds a note of caution however, stating that, “Rises in interest rates or sellers over-optimistic expectations on price could choke off any recovery however.”
Moneynet tackles funding university with new student finance guideWritten by Rachel Lane
Consumer research site, moneynet, has published its seventh online brochure in series of personal finance product guides. The student finance guide, collated by two graduates at moneynet, was generated in response to requests moneynet received from parents, students and prospective students who had serious financial concerns about how to fund university.
Graduates are reportedly leaving university with debts of over £13,000. With advent of Child Trust Funds as a long term measure to assist with costs of higher education, there is pressure on financial providers to not only consider type of financial product they offer students, but to additionally review how they communicate complex terms to this young market and to ensure students have a solid understanding of personal finance market.
In response to widespread public concern and letters from its customers who have families, moneynet has published a comprehensive guide to those factors which affect student finance and university budgets, including realistic expectations and practical suggestions. Key recommendations include:
* Gathering as many savings as possible before university, through birthday and Christmas presents, summer jobs, part-time jobs and any other savings accounts * Shopping around for best deals on household insurance, current accounts and savings accounts * Bulk buying weekly groceries and being strict about spending, borrowing and lending
Richard Brown, Chief Executive of Moneynet said “We all understand importance of budgeting, but for students this can be especially difficult. Our Guide to Student Finance is designed to provide some simple help and advice aimed at making those years in higher education a bit more bearable.”
Moneynet also provides an online banking management tool called AccountStore, which is a fast, simple and secure way to manage money. AccountStore would allow students to manage all their online accounts in one place under a single login, making it easy to keep track of credit card bills, overdraft spending, savings and standing orders.