UK First-time buyers’ chances evaporate

Only 11.5% can afford a property in their own area without relying on their family, research shows, and stamp duty change will make it harder

Barely one in ten potential first-time buyers could afford to get on the property ladder without relying on their family for financial help. Only 11.5 per cent of all those trying to buy their first home can do so in their local area under their own means, according to Skipton Group, the owner of Connells Group, the estate agency.

Having analysed an area’s average incomes and house prices, it found that Ceredigion in west Wales was the least affordable part of the UK for locals to buy their first home.

Fewer than 3 per cent of local people wanting to stay in Ceredigion could afford to buy a typical first home in the county, Skipton calculated. The four least affordable places for first-time buyers were all in Wales, a reflection more of “very low” average incomes than house prices.

In the City of London, 3.2 per cent of first-time buyers could afford to buy without tapping the Bank of Mum and Dad, with much higher house prices somewhat offset by higher incomes. All but one of the most affordable areas were in Scotland. In Aberdeen, close to 33 per cent of locals could buy a home independently.

In Manchester, the only place in England in the top ten, the proportion was about 23 per cent. With house prices having risen much faster than wages over the past decade, younger people trying to buy their first home increasingly rely on help from their families.

Legal & General estimates parents gave £9.2 billion last year to help their children get on the ladder. Stuart Haire, chief executive of Skipton Group, owner of Skipton Building Society, said the “chronic lack of affordability is about to get even worse”, in reference to looming changes to stamp duty.

From April the threshold at which first-time buyers pay stamp duty will drop from £425,000 to the previous level of £300,000, adding up to £6,250 to the overall purchase cost.

The typical first-time buyer home will now be liable for stamp duty in 32 per cent of local authorities, up from 8 per cent at present, Skipton said.

“We know the public finances are tight, but we urge the government not to move the goalposts and exacerbate the pain already being felt by first-time buyers,” Haire said.

“We are calling on the government to maintain the nil rate stamp duty threshold of £425,000 for people buying their first home and to uprate this threshold in line with inflation each year.”

Source: The Times

Developers unable to adjust condo prices as costs remain high

Property Developers in Metro Manila are unable to adjust condominium prices as inflation and supply chain issues keep costs high, according to real estate services firm Cushman & Wakefield.

“Developers are grappling with increased input costs due to persistent global inflation and supply chain issues, exacerbated by geopolitical tensions. These factors hinder their ability to adjust prices quickly, leading to slower sales and impacting revenues,” Claro dG. Cordero, Jr., director and head of research, said in a statement.

The mid-end segment faces a supply-demand mismatch, mainly driven by elevated condominium prices. Buyers also prefer larger units, while available studio types are often less than 25 square meters (sq.m).

Condominium prices dropped by 9.4% year on year, reversing the 8.3% increase recorded last year and the 10.6% rise in the previous quarter, according to the latest data from the Philippine central bank.

“Until a balance is achieved between buyers’ expectations and developers’ pricing, excess inventory in the mid-end residential condominium sector will persist,” Mr. Cordero said.

The Metro Manila market has a total supply of 450,000 mid- and high-end condominium units, with around 8% remaining unsold.

Before the pandemic, the annual average completion rate for residential condominiums was 35,000 units. Over the past five years, it has declined to 25,000 units.

Outside Metro Manila, unsold inventory is lower at 5%, with about 250,000 completed units.

Dominant locations include Metro Cebu at 54%, followed by the Cavite-Laguna-Batangas corridor (24%), Metro Davao (13%), and Metro Iloilo (3%).

In the Metro Manila office market, vacancy rates are expected to stabilize at around 17–18% in 2025, Cushman & Wakefield said.

“Despite the return of office space from POGO (Philippine offshore gaming operators) companies, absorption rates have improved from pandemic lows but remain influenced by flexible work trends and corporate policies. On the other hand, some companies mandating a return to the office are positively impacting demand growth,” it said.

In central business districts (CBDs), average office rentals have declined by 2.9% annually, while rental rates in non-CBDs fell by 4.2%.

“This trend reflects a continued flight to quality, with CBD office developments benefiting from their superior finishes, amenities, and tenant mix,” Cushman & Wakefield said.

It also noted the rise of office spaces in non-CBDs, with 2.9 million sq.m. added outside Makati and Bonifacio Global City in the past decade. This was driven by flexible work trends and developments outside CBDs.

For retail, the property consultant noted an increase in redevelopments of existing spaces, incorporating additional features to enhance the shopping experience. Mid-end and high-end shopping malls have an average annual supply of about 376,000 sq.m., Cushman & Wakefield reported.

In the hotel segment, Cushman & Wakefield cited uneven regional recovery due to the untapped potential of many tourist destinations. It expects 1,600 additional keys in the mid-end and higher-end hotel and serviced residence segments this year.

However, it may take five years to reach the projected 70,000 keys due to construction delays.

Meanwhile, Cushman & Wakefield highlighted rising demand in the logistics and industrial sub-sector, driven by the growth of the digital economy.

However, it emphasized the need to improve the quality of logistics facilities to meet the demands of new occupiers. Challenges in the sector include achieving sustainability targets, clarifying restrictions related to data privacy laws, and addressing the high costs, availability, and viability of support utilities.

“Across all key Philippine real estate sub-sectors, the increased demand for higher-quality, well-located, and resilient developments is significantly shaping the future real estate landscape,” Mr. Cordero said. “Investors and tenants prioritize properties in prime locations with superior amenities and robust infrastructure.”

Source: Manila Times

Trump's tariffs will raise the roof on US home prices

Homes – the most expensive item most Americans ever buy – are about to get even pricier if the Trump administration’s proposed tariffs take effect.

An analysis from John Burns Research and Consulting, which focuses on the housing industry, estimates the cost of a newly constructed home will increase by nearly 5% if the White House’s proposed tariffs are implemented. That’s about $21,000 on the median-priced new home.

While the Trump administration paused proposed 25% levies on Canada and Mexico for at least a month, a 10% tariff on goods imported from China took effect Monday.

Tariffs "are going to be an affordability shock if they come through,” said Matthew Saunders, senior vice president of building products research at the company.

Residential construction requires many ingredients. In most categories, the vast majority of the import supplies come from the trading partners targeted this month.

Roughly 60% of all hardware imports come from China, Canada and Mexico, according to Saunders’ analysis. Nearly three-quarters of imported sawmill wood products come from Canada. And perhaps surprisingly, the U.S. imports more major household appliances from Mexico, by dollar amount, than from China.

Though 5% may not sound like a lot, some context is crucial. The median price of a new home in December 2024 was $427,000, according to the Census Bureau. That’s up 30% in five years – and mortgage rates now are roughly double what they were just before the COVID-19 pandemic.

And tariffs may also have some knock-on effects, Saunders noted. For example, domestic suppliers of materials are likely to raise their prices in line with those from tariff-affected countries simply because they can.

The simmering trade war with Canada is also likely to affect the supply of lumber in the longer run, said Stinson Dean, an investor who runs Deacon Lumber.

“The bigger problem is the long-term effect of making sawmill operations in Canada unviable because of their increased cost to do business in the U.S.,” Dean said. “We don't need that much lumber right now because of the state of the housing market, but eventually that'll change, and we'll need all the lumber we can get.”

When consumer demand for new homes perks up – likely when mortgage rates fall significantly – the production capacity won’t be there, he said.  

“You don't even have to implement the tariff. The threat of the tariff has already done the damage to potential increases in supply.”

Higher costs for building materials also exacerbate severe labor shortages in the construction industry, Saunders said. Many homebuilders won’t be able to swallow all of the additional costs, and at some point consumers won’t be able to afford to buy.

“In terms of immigration, potential deportations, tariffs, these are all adding to what's already an unsupportable environment.”

Source: USA Today