Housing market

Mother and daughter

Brian Milligan

Personal Finance reporter

A million more young people are likely to find themselves living with their parents over the next decade, according to the insurance company Aviva.

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Persimmon profits slip on customer investment

Persimmon sign

First half profits at house builder Persimmon have dipped by 1.4% to £509.3m.

Dave Jenkinson - who took over as chief executive when Jeff Fairburn was forced out in a row over his £75m pay award - said there was now more of a focus on customer service after criticism of its homes.

"First, customer service spend increased by [around] 40% year on year and these additional initiatives are anticipated to increase our annual customer care costs by an estimated £15m. Second, and as noted earlier in the year, our decision to invest an additional £140m in work in progress as we held back some sites for later sales release to give customers more accurate moving-in dates reduced the group's overall sales volumes," he said.

Some 7,584 new homes were sold, compared with 8,072 a year earlier.

First-time buyers fell in June

People looking at house for sale ads at an estate agency
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New figures from UK Finance show that the number of first-time house buyers fell in June by 1.5%, compared to the same month in 2018.

In June, 32,760 first-time buyer mortgages were completed in June, and 31,000 home mover mortgages were handed out - a 3.6% decrease like-for-like.

As for buy-to-let purchase mortgages, there were 5,300 fewer completed in June, a 3.6% decrease from the same period in the previous year.

However, the stats showed that more people were borrowing additional funds in order to renovate their homes, as the number of remortgages with additional borrowing rose 8.3% year-on-year.

'It's important a decision is made'

Houses in West London
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Commenting on the latest inflation figures, Tomer Aboody, director of property lender MT Finance, says that house sales volumes are unlikely to change until a decision is made about what kind of Brexit the UK will have. Once there is a decision, the "pent-up" demand will be released.

"Whether it is hard, soft, or no Brexit, the important thing is that a decision is made so people can get on with things," he said.

He said that although on average, prices have fallen only slightly in London, if you look at the bigger picture, house prices at the top end of the market have come off by between 10-15%.

"If we have a hard Brexit and the pound is badly affected, foreign buyers will come back into the market as they will be buying 20 or 30% off market value with a much stronger euro, dollar or yen against the pound. This is likely to push volumes and values up."