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First time buyers and parents investing in property for their offspring going to university are among the factors boosting the residential housing market in Wales, a new report suggests. Across Wales first time buyer numbers are up, particularly in the new build markets in Cardiff and Newport, according to the latest spotlight report from real estate firm Savills which covers the South of Wales. Savills deal book data for South Wales shows 49% of buyers were aged under 40 in 2014 and other sources confirm the trend, with the Council of Mortgage Lenders (CML) data for Wales covering the final quarter of 2014 showing a 14% year on year increase in loans to first time buyers compared to a 4% rise in home mover loans over the same period. Official data also shows that the Help to Buy Wales scheme has assisted almost 1,400 completions since it was launched in January 2014 of which 74% were sales to first time buyers. Indeed, the average age of buyers in the scheme is 30, with an average sale price of £178,000. Some £48.7 million of the available £170 million funding has been spent so far, and a Government announcement on the possible extension of the scheme beyond the scheduled March 2016 closing date is expected later this year. The report explains that along with the boost provided by Help to Buy, the wider economic recovery has led to an improvement in market sentiment, with potential buyers more confident and finding mortgage availability much improved. ‘Help to Buy can also be credited with opening up the idea of purchasing a new build for younger buyers who may not have considered it previously,’ the report added. According to the report flats are the most popular new build product in Cardiff, due to first time buyers and downsizers both being key markets. In Cardiff flats make up over 70% of the new property sales recorded by the Land Registry in the year to February 2015 compared to 15% across Wales as a whole. Even in the cities of Swansea and Newport less than a quarter of new homes are flats, reflecting the unique nature of Cardiff’s market. The report also says that in Cardiff it is the city’s universities that are a key driver of activity, with parents buying property for their student children. ‘Good yields and strong demand for rental property around the university sites mean that these are often kept as investments following graduation,’ the report says. It also points out that Cardiff is expected to have the fastest growing population in Wales, according to the official projections, adding over 20,000 households a year on average over the next 25 years. ‘Our projections show a majority of these will be added in the private rented sector. The number of households in the private rented sector in the city doubled between 2001 and 2011, and we expect that further increases are likely,’ the report added. Indeed, Cardiff is… Continue reading →
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