Latest news with #FirstTimeBuyers
The Guardian
4 days ago
- Business
- The Guardian
Australian property investors squeezing out first-time buyers as record borrowing and rate cuts drive purchases
Property investors borrowed a record sum, nearly $130bn, to buy homes over the year to June, supported by interest rate cuts but squeezing out first-time buyers. Banks made almost 200,000 new loans to landlords over the year, the most since 2022, while the number of new first-home mortgages slipped to 116,000. Cameron Kusher, an independent property expert, said falling interest rates have made borrowing easier for mortgage-holding homeowners and investors than for first home buyers. 'They're going to get relief on those mortgages in terms of their repayments, and they're going to be the ones that are probably going to capitalise on this most,' Kusher said. More than $340bn was lent for new home loans in the year to June, according to Australian Bureau of Statistics data, released Wednesday. Annual lending flows have risen $70bn since June 2023, more than half from new investor loans. Property investors borrowed $33bn in the June quarter, while first-time buyers borrowed less than half that much. Sign up: AU Breaking News email Pressure on first-time buyers has heightened as investors target lower-priced homes and more affordable regions. The average new investor loan was $100,000 smaller in June than in March, at under $640,000. Landlord borrowing grew steadily in Tasmania and the Northern Territory. Interest rate cuts have boosted incomes and wealth for landlords and existing homeowners by lowering their mortgage repayments and driving up their property prices, Kusher said. 'It's increasingly getting harder for first-time buyers to compete with investors and non-first home buyers [who] have already got equity … as opposed to a first-time buyer, who's been out of the market and is paying a lot more for rent,' he said. A rise in competition and prices has resulted in the number and value of new first-time buyer loans plateauing in recent years. Sign up to Breaking News Australia Get the most important news as it breaks after newsletter promotion Credit bureau Equifax in July found first home buyers' mortgage demand had slumped over the previous 12 months and would not recover by December. Richard Brown, a Sydney mortgage broker, said some of his renter clients were waiting until 2026 to try to buy a home, after the Albanese government announced in April it would broaden access to its mortgage guarantee. 'They were gearing towards purchase, but now, since that announcement, they may delay for six months,' he said. Investor clients were buying much faster, seeking income boosts as rent prices continued to rise and loan repayments fell, Brown said. The Reserve Bank of Australia's rate cuts have also helped owner-occupiers take out increasingly expensive loans, though the number of new borrowers hardly budged, as house prices raced upwards. Accelerating increases in property values and expectations for more interest rate cuts have led to growing number of analysts hike their price predictions, with ANZ in August calling a 5% rise nationwide in 2025 and nearly 6% in 2026.
Yahoo
01-08-2025
- Business
- Yahoo
The Real Cost of Buying a Home (Beyond the Down Payment)
Housing unaffordability is near record highs in America, making it essential that you understand the full cost of buying a home. Unfortunately, most 'unaffordability indexes' usually don't incorporate the total cost of buying a home, instead focusing on how much money you'd have to earn to comfortably afford your mortgage payment. As these costs can easily run tens of thousands of dollars, or even more, it's critical that potential homebuyers incorporate them into their planning. Here are the major expenses that you shouldn't overlook. Check Out: Read Next: Closing Costs Closing costs are the biggest immediate cost of buying a home, after your down payment. Closing costs typically include a long list of various fees for licenses, documentation and other paperwork-related expenses. Here's a list of what you're commonly expected to pay as a buyer, according to Application fee Appraisal fee Attorney fees Buyer's agent commission Credit report fee Escrow fees Inspection fee Loan origination fee Prepaid property taxes and homeowners insurance Processing fee Recording fees Title search and insurance Underwriting fee As a buyer, says you can expect to pay roughly 2% to 7% of the cost of your home for closing costs. This means that if you're buying a $450,000 home, you should expect your closing costs to tack on another $9,000 to $31,500. Property Tax Property tax is a large, ongoing expense that many homebuyers — especially first-timers — fail to consider when looking at the price of a home. According to Business Insider, property taxes in 2024 ranged from a low of 0.32% in Hawaii to a high of 2.23% in New Jersey. If you use 1% as an estimate of your annual property tax, that means you'll pay an extra $4,500 per year on a $450,000 home. If you buy a $3 million mansion in New Jersey, you'll owe closer to $67,000, or more than $5,000 per month. This is in addition to your monthly mortgage and all of your other housing expenses. Insurance Although homeowners insurance isn't mandatory, you'd be foolish to own a home and not insure it. Most lenders feel the same way, meaning it's all but impossible to get a home loan without having homeowners insurance as well. This typically adds between about $1,000 and $3,300 per year to your home expenses, according to Progressive. Additionally, if you don't put up 20% of your home's cost as a down payment, you'll have to pay private mortgage insurance, or PMI. This is to protect the lender in the event of your default. PMI typically adds 0.58% to 1.85% of your loan amount to your monthly mortgage payment, according to Zillow. If you have a $400,000 mortgage and you're subject to PMI, for example, expect to pay $2,320 to $7,400 for PMI annually. This tacks on roughly $193 to $617 to your monthly mortgage payment. HOA Fees HOA fees are more common with condominium complexes or townhouses, but many single-family houses have them as well, especially in planned communities. HOA fees may run from a few hundred to a few thousand dollars per month. Moving Expenses Many new homebuyers overlook the cost of actually moving into a new home. Although this is a one-time cost, it could run anywhere from $500 to $9,000 or more, according to This Old House. The wide price range is due to there being so many variables in moving, from your distance to the size of your new home and the amount of possessions you have. Upgrades Even if you buy your dream home, you're likely going to want to make some changes once you move in. These could range from small items like updating electrical outlets and fixtures to complete renovations of floors, bathrooms or kitchens. Upgrading expenses can run from a few hundred to tens of thousands of dollars, or perhaps even more. Maintenance According to State Farm Insurance, you should expect to pay between 1% and 4% of your home's value for maintenance every year. Obviously, some years are going to cost more than others, and newer homes typically have lower maintenance costs than older ones. But if you have a $400,000 home, you should plan on spending between $4,000 and $16,000 annually to keep it in good shape. The Bottom Line The true cost of owning a home involves a lot more than just a down payment and a monthly mortgage payment. If you're looking to buy, factor in both the upfront costs and the ongoing expenses. Always look deeper than just the sales price when shopping for how much home you can truly afford. More From GOBankingRates 3 Luxury SUVs That Will Have Massive Price Drops in Summer 2025 10 Cars That Outlast the Average Vehicle 5 Cities You Need To Consider If You're Retiring in 2025 This article originally appeared on The Real Cost of Buying a Home (Beyond the Down Payment)
Daily Mirror
30-07-2025
- Business
- Daily Mirror
Nationwide making 'bold' change to bank accounts which comes into force today
Nationwide has announced mortgage rate cuts from tomorrow of up to 0.21 per cent for those buying a home or looking to remortgage. It could A "bold" shake-up in Nationwide's mortgage offerings has taken effect. The building society has declared reductions in mortgage rates slashing up to 0.21 per cent for homebuyers and those looking to remortgage. A broker highlighted that Nationwide "is clearly positioning itself to capture market share ahead of a potential Bank of England base rate cut" next week, while a conveyancer noted "the property market needed an injection of life and this could prove to be it". Nationwide's senior manager – mortgages, Carlo Pileggi, said: "As the country's second largest lender, we always strive to support all parts of the market with competitive rates." It comes after a major broadband provider introduced a new £60 charge and issued a deadline to act. This latest round of cuts across our range move even more of our rates below four per cent and should put Nationwide front of mind of first-time buyers, those moving on to their next home and those looking for a new mortgage deal." Shaun Sturgess, director at Swansea-based Sturgess Mortgage Solutions, told Birmingham Live: "Nationwide's decision to cut rates by up to 0.21% is a bold but calculated move. "While other lenders like Barclays are increasing rates, Nationwide is clearly positioning itself to capture market share ahead of a potential Bank of England base rate cut. "With affordability slowly improving-especially thanks to recent lending rule changes-these lower rates give buyers and remortgagers a real chance to act. "For many, this is the first window of opportunity in over two years to secure a competitive fixed rate below 4%. But timing is crucial-products are changing daily. "As brokers, we're monitoring this constantly to help clients secure the right deal, not just the cheapest rate. Nationwide's move isn't odd-it's a sign of growing confidence and smart competition." Meanwhile, Chris Barry, director at Thomas Legal, said: "Nationwide's deep cut could be the spark needed to light the dormant kindling that is the UK buyer right now. Stock has been building but the complete absence of buyers in recent weeks has meant many in the industry have been running around like busy fools. The property market needed an injection of life and this could prove to be it." Justin Moy, managing director at EHF Mortgages, said: "This is a somewhat surprising move from Nationwide, given that both Santander and Barclays have announced a mixed bag of rate changes in the last few days. "Either way, it will be welcomed by those moving home and looking to remortgage. It's interesting to see that rates are somewhat higher for First Time Buyers compared to equivalent Home Movers, and in particular, those using the Helping Hands scheme will see no benefit from the announcement today. "With other lenders now offering a similar option to those First Time Buyers, Nationwide needs to watch how attractive this scheme is to new borrowers."
Telegraph
17-07-2025
- Business
- Telegraph
The unexpected Northern towns where house prices are booming
House prices in the North have surged by up to £86,200 in the past five years, outpacing the rest of the country for growth, figures show. Homeowners in Rochdale, Oldham and Bolton are more likely to have seen their property's value soar by at least 50pc since 2020, property website Zoopla found. It said the area's proximity to Manchester and cheaper house prices had made it an 'increasingly desirable' option for first-time buyers looking to move away from expensive rent. On average, eight in 10 UK homes have increased in value by 5pc or more – an average increase of £60,800 – with house values seeing a gradual increase since the pandemic, Zoopla said. But the North beat every other part of the country for house price growth. In the North West, homeowners saw an average increase of £77,100. This rose to £86,200 in Yorkshire and the Humber. Over half of the homes that had seen their value increase by 50pc or more in the past five years were in the North West, Wales and Yorkshire and the Humber. Properties in Rochdale and Bolton rose in value by £64,300, and homeowners in Oldham saw an average £62,900 increase. Alistair Stevens, of Alistair Stevens estate agency in Oldham, said rental prices had 'shot up' during a 'big uptick in first-time buyer interest'. 'It's cheaper to buy than to rent,' he said. Business for the firm has soared, and Mr Stevens predicts the number of completions will have tripled since 2023, from 40 to 120 this year. Oldham has quick links to Manchester – via the train, metro or by car – as well as offering access to the countryside, he added. House prices are generally lower in the North, with the average home in the North East selling for £222,530 in the past 12 months. In the South East, this jumps to £453,937. Nathan Emerson, of trade body Propertymark, said: 'This region is becoming increasingly desirable for people to move to. There are potentially attractive levels of affordability across the North West, and places like Manchester and Liverpool have seen vast enhancements over the last 25 years making them very appealing to relocate towards for work purposes. 'With regions like London and the South East remaining so expensive, it is understandable why many people are finding it attractive to relocate to areas like the North West.' Meanwhile, a combination of 'high prices and higher mortgage rates have reduced buying power', which has led to flat prices in London, experts said. The capital's property market has struggled as a result, with 13pc of homes losing an average value of £34,000, Zoopla said. Boroughs such as Westminster and Kensington and Chelsea have been particularly hit, with nearly half of all homes valued below their 2020 estimates. The pandemic also saw families move out of London in search of more outdoor space, as working from home boomed. Richard Donnell, of Zoopla, said: 'Our latest analysis clearly shows there is no single housing market and that house price trends vary widely across the UK. 'Home value growth has been weaker across southern England and particularly in London. A combination of high prices and higher mortgage rates have reduced buying power and this has been reflected in flat prices and modest price falls in inner London. 'The UK currently has the most homes for sale in seven years. Its critically important serious sellers fully understand the local market dynamics impacting the value of their home and seek the advice of agents on where to set the asking price for their home in order to achieve a sale.'
Irish Times
16-07-2025
- Business
- Irish Times
The Irish Times view on house prices: heading ever higher
House prices continue to head higher, with the latest figures from the Central Statistics Office showing a 7.9 per cent annual increase in May, up from 7.6 per cent the previous month. While there are some regional variations, prices for both houses and apartments are increasing across the State. Those who want to buy are having to pay up. Nor is there any sign in the short term that the trend is going to change. Demand remains strong with wages and employment on the rise. Also, as well as new buyers, there are a large number of people with mortgage approvals who have yet to find a property to buy and are continuing to search. Supply, meanwhile, remains inadequate. The result is higher prices and a scramble for properties that are coming on to the market. In terms of transactions, the biggest growth by far is in the first-time buyers market and much of this is concentrated in Dublin and the commuter counties. These borrowers are taking on ever larger mortgages – supported by higher earnings and also, in many cases, by financial support from their families. One concern must be that at least some of these borrowers are taking on very large mortgages and a significant amount of financial exposure, notwithstanding the Central Bank borrowing rules. In turn Government demand supports – the Help-to-Buy and First Home schemes – are allowing buyers to take on more expensive properties. Such is the state of the rental market that despite large mortgage bills, outgoings are in many cases less than would be required in the rental market. READ MORE That new borrowers are having to take on this scale of loans is of concern at a time when the economic outlook is uncertain. A trade war between the US and EU would certainly hit employment and earnings growth. The difficulty for both borrowers and lenders is that the scale of this threat is impossible to calibrate. So, for now at least, property prices continue to head upwards. Whether their current level is justified by economic conditions is, however, now very much open to question.
