Property Market Trends & Stats for June 2023
In this monthly feature, Daren looks at various trends and statistics that can affect both the property market and the decisions that we make as sellers, buyers, investors and tenants. Some of the data is quite surprising an d we're sure you will find yourself thinking..."Well I didn't know that!" You can watch the video or read the blog...
The Bank of Mum and Dad
Firstly, we’re going to look at what is commonly known as the ‘Bank of Mum and Dad’ and how parents help their children when it comes to property.
According to The Institute of Fiscal Studies, £17 billion is gifted, or informally loaned each year, of which over half is used for property purchase or improvement.
Virtually all of this gifted money comes from parents aged over 50 to children in their late 20s and early 30s. The average gift for a property purchase or improvement is over £20,000.
Today, the age children leave home is generally between 25 and 27 years, and the average age to purchase a first property is 33. Over 22.4% of families in the UK include one or more adult children.
Research by Legal and General indicates that without the financial help of family and friends, over 70% of prospective home buyers would have to delay their property purchase plans, by an average of 4 years.
Which Home Upgrades are the Best Value?
Usually, upgrading your home does add value to the property and this is a key consideration for many homeowners. But what improvements add the most value compared to the cost incurred?
Of the popular large-scale projects, research shows that a garage conversion or garden office may well provide the best return on your investment, especially with 44% of people now working from home – this from the Office of National Statistics.
With the cost of living at the forefront of minds, upgrades to energy efficiency can actually provide a better return on investment than a kitchen or bathroom renovation that may or may not suit a buyer's taste when you come to sell.
Smaller investments, such as redecorating and adding an electric vehicle charge point, can also add value.
These projects also help your property appeal to a wider variety of prospective buyers.
The First Step on the Property Ladder
So, we touched on first time buyers earlier on and I want to look at some interesting figures on those taking their first step onto the property ladder.
5.5 million households are currently living in their first-time buyer home, the equivalent of around 35% of all owner occupiers.
36% of first-time buyer households are single person households. Over 60% are couples with or without dependent children. One in five of those who live in the first home they bought are aged 65 or more.
Two-thirds of first-time buyers expect to be in their property for less than 10 years. However, 18% expect to live in their property for 20 years or more, rising to 33% of first-time buyers who are aged 45 and over.
Each year, on average over 350,000 first-time buyers step onto the property ladder and the average age is now 34.
The Halifax report that first-time buyers accounted for 52% of all home purchase loans in 2022.
Why is the Property Data in the Media Always Different?
Finally, I want to touch on property prices. But not actual figures, about how these figures are reported in the media and by agents like me.
Average UK property prices and annual price growth are published by various organisations. However, the figures are different for each and can really confuse the public. This is because the data is calculated in slightly different ways.
For example, the leading property portal, Rightmove tend to show the highest average prices, however, their index is based on the asking prices of newly listed properties, of which there are around 100,000 each month, and not on actual sales prices.
In comparison, the Office of National Statistics index uses final sales prices, including for cash and mortgage sales, recorded by the Land Registry. It includes around 80,000-100,000 sales per month.
The Halifax and Nationwide use their own mortgage applications at approval stage - around 12,000-15,000 per month. The average price quoted by Nationwide is usually the lowest.
The differences in the source of the data, as well as the statistical calculations that make up each index, explains their variations.
Comparing the indexes against each other is like comparing night and day. However, despite the variation in the methods, the overall trend is very similar.
So if you are an avid stats person then it is this overall trend which is important when considering what is happening in the current market and not the actual figures themselves.
