News
UK landlords prefer intermediaries and brokers for buy to let finance
UK landlords tend to use an intermediary or broker when it comes to arranging buy to let mortgages, new research has found. Some 69% chose this route while 13% arranged their most recent loan directly with a lender face to face, 12 with a lender over the telephone and 5% with a lender online, according to the report from the National Landlords Association (NLA). The research found the main reason given by 51% of landlords for using a broker was that they felt they were better placed to review products in the marketplace while 42% said that they had established a longstanding relationship with their broker. Of those who arranged their buy to let mortgage directly through a lender, 35% did so because they had an existing loan with them, and 27% did so because they already bank with them. ‘Brokers will be please to know that a large proportion of landlords chose to use them when arranging a buy to let mortgage and it shows that a good relationship goes a long way in business,’ said NLA chairman Carolyn Uphill. ‘These findings are interesting because, unlike most other products and services, completing transactions online is becoming more and more common. However, the variety of avenues to take when getting a buy to let mortgage can be time consuming and overwhelming and it’s difficult to know whether or not you have covered all bases, especially for those landlords that are new to the market,’ she explained. ‘This is why many put their faith in a broker and it reinforces that they are happy with the service they get,’ she added. Continue reading
Surge in house equity release in UK as over 55s cash in on property wealth
Equity release lending to UK home owners over the age of 55 totalled £384.3 million in the second quarter of 2015, the largest amount for any quarter since records began. The latest data from the Equity Release Council show that this surpasses the previous high of £375.4 million reached in the third quarter of 2014 and that the over 55s withdrew £4.2 million of housing wealth every day from April to June. This uplift comes despite savers gaining greater access to their pension pots under the freedoms launched on 06 April. With house prices rising again, it shows the growing appeal of using property wealth as an extra source of retirement income in later life, according to the report. Also, record lending in the second quarter meant the total value of equity released in the first six months of 2015 hit £710 million, the largest sum on record for the first half of the year and an 11% increase on the first half of 2014. There were 5,414 new equity release customers in the second quarter of 2015, an 11% increase on the last quarter, pushing the total number of new customers past 10,000 for the first six months of 2015. The value of lending, via lump sum lifetime mortgages, increased by 10% year on year in the first half of 2015 to reach £285.3 million, the highest total for lump sum activity in the first half of any year since the first half of 2007 when the value hit £355.9 million. However, the value of lending via drawdown lifetime mortgages surpassed this rate of growth, rising 12% year on year from £379.2 million in the first half of 2014) to £423.5 million in the first half of 2015. The data shows it also rose faster from the first to second quarter, at 21% compared with 14% for lump sum products. The Council says this was as customers took advantage of the flexibility to withdraw their housing wealth in regular instalments rather than as a one off amount. Home reversion plans account for less than 1% of the overall equity release market, yet these too saw an increase of 18% in lending from £534,765 in the first quarter of 2015 to £632,647 in the second quarter. ‘The last three months have been a landmark period for UK retirees and those approaching retirement, and equity release activity continues to grow amid a sea of change. There is no doubt the pension freedoms have created more options for people to consider, but the appeal of tapping into housing wealth is on the rise as older consumers seek to make use of all the assets at their disposal,’ said Nigel Waterson, chairman of the Equity Release Council. ‘Doom and gloom often surrounds discussions on retirement income, but while contributions to pension pots remain low, an entire generation of home owners have been paying into property their whole lives… Continue reading
Revamped parliamentary group to make recommendations on UK housing
The Royal Institution of Chartered Surveyors (RICS) is to take a lead role in supporting a new All-Party Parliamentary Group (APPG) for Housing and Planning to address the national housing emergency in the UK. The APPG for Housing and Planning, previously chaired by MP Tim Yeo, will now be chaired by James Cartlidge, Conservative MP for South Suffolk, and tasked with recommending wide ranging, innovative solutions to reshape the housing market. It will also look at ways of increasing the housing stock for both rental and private ownership, and speeding up building of sustainable housing in the UK, which now faces an annual shortfall of 130,000 homes. The APPG will consist of MPs from a range of urban and rural constituencies. RICS, which comprises over 90,000 professionals in the UK working across the construction, land and property markets, will support the group as Secretariat. ‘Housing is increasingly becoming one of the most critical policy challenges facing local and national government, and with a Housing Bill pending, it is likely to become more political and controversial,’ said Cartlidge. ‘In this context, a cross party Parliamentary group focused objectively on the national policy challenge of housing offers a vehicle for taking the debate forward in a way that is both positive and constructive,’ he explained. ‘Having spent my working life in the shared ownership housing sector, I am acutely aware of the challenges facing first time buyers, particularly in London. Equally, as a rural MP, I recognise the need for development to be sustainable. Ultimately, there are a whole raft of complex issues in housing and planning today but I hope that our APPG can make a real contribution to the debate,’ he added. RICS chief executive Sean Tompkins pointed out that in the region of 245,000 homes need to be built every year to address the UK's housing crisis. ‘The solutions we need must be innovative and wide ranging, but also grounded within a political framework which allows them to be implemented,’ he said. ‘A coherent housing strategy is also central to many other key issues for the country. For example, a decent roof over your head can enhance your health, academic achievement, job success and social inclusion,’ he added. He also pointed out that the organisation’s Royal Charter and public interest mandate makes it well placed to provide the framework for the constructive debates and broad conversations that must happen across the political spheres in order to develop the solutions. ‘Our expertise, research and market data will all be made available to the Group. The RICS believes there are solutions to be found and we look forward to assisting this new APPG with its valuable agenda,’ Tompkins concluded. Originally formed under the last Parliament, the APPG for Housing and Planning will look to deliver its first set of recommendations later this year. Continue reading
