News
Increase in lending for new homes across the board in Australia
There has been an increase in lending for new homes in Australia to both owner occupiers and investors, according to the latest housing figures from the Australian Bureau of Statistics. The data shows that there was a 4.3% increase in the number of owner occupier loans for construction, while the equivalent number of loans for the purchase of a new property rose by 1.6% in April. The figures include an increase in lending for investment in new residential dwellings which took the annual value to in excess of $9 billion for the first time ever. Harley Dale, chief economist of the Housing Industry Association, said the number of first home buyer loans for owner occupiers remains low, but is running at its highest annual level in a year, although that of course excludes those first time buyers entering the investment market. He also pointed out that the number of trade-up buyer loans reached its highest level since prior to the global financial crisis and described the data as a positive update for the new home building industry. A regional breakdown of the figures, however, shows wide disparities in new housing conditions. The total number of owner occupier loans for new housing increased in six out of eight states and territories. Over the three months to April this year the seasonally adjusted estimate of new loans increased by 4.9% in New South Wales, by 4.7% in Victoria, by 3.4% in Queensland, by 1.6% in South Australia and by 20.6% in the Northern Territory. The number of loans fell over the same period by 4.4% in Western Australia, by 10.3% in Tasmania and by 8.7% in the Australian Capital Territory. Continue reading
Buy to let surges in UK as first time buyer activity retreats
May has seen an acceleration in property valuations for buy to let landlords, while first time buyer activity has retreated, according to the latest research. There were 33% more buy to let valuations conducted in May than at the same time last year. Conversely, valuations for first time buyers declined by 4% over the same period, the data from Connells Survey and Valuation shows. On a monthly basis, May’s buy to let valuations were up 3% on April, while valuations for first time buyers fell 2% between the two months and the buy to let market is booming, according to John Bagshaw, corporate services director of Connells Survey and Valuation. ‘Would be landlords are eager to enter the sector and current landlords look to expand. However for first time buyers, May was not just less positive than the rest of the housing market, but also disappointing in comparison to the previous month. Previously, valuations for new buyers had proved resilient in April, even with uncertainty about the impact of the election result on home buyers,’ he said. He explained that fewer people are looking to buy their first home means more tenants sticking to the rental sector. ‘As such, new landlords enter the market and those already in the sector grow their business to capitalise on the increased demand. Yet what remains unclear is how long this contrast in fortunes will continue,’ he added. May’s remortgaging figures also outperformed the overall housing market, with these valuations up 9% on April’s figures. This equates to a 31% increase on the number of remortgaging valuations since May 2014. Meanwhile, valuations for those existing home-owners looking not to remortgage but to move to a new property posted a 4% increase since April. This has contributed to an 8% increase in the number of home-owner valuations since May 2014. ‘Remortgaging is going from strength to strength right now. Record low mortgage rates are the main reason for this, and with inflation still near zero and flirting with a negative reading, the Bank of England is likely to play it safe and keep rates at bargain-basement levels for the foreseeable future,’ said Bagshaw. ‘Yet the recent cooling in home mover activity points at another cause for the remortgage rush. Increasingly, home owners are opting to upgrade the property they already have, be it through a loft conversion, conservatory or major face lift, rather than sell up and get a new one. In short, people are improving not moving,’ he pointed out. He believes that people feel financially secure enough to use their home as a guarantee against which to raise big capital, a sentiment that was absent for some time immediately after the economic crash. ‘However, they still don’t feel the property market overall is safe enough to risk trading up what they already have. For a government reliant on movement… Continue reading
Call for new housing to match demand for homes in Wales
The Building Societies Association (BSA) has called on all parts of the Welsh housing market to work together to ensure the supply of new housing in Wales keeps up with rising demand. The trade body, which represents all 44 building societies in the UK including the Principality, Swansea and Monmouthshire, made the call as part of its Housing for All conference in Cardiff. Delegates to the conference included local authority representatives, estate agents, developers, housing associations and building societies to discuss the problems and opportunities facing the Welsh housing market. The opening speech at the conference was given by Paul Broadhead, head of mortgage policy at the BSA, who called on the different parts of the market to identify the barriers and opportunities to ensure sufficient housing was provided for future generations within Wales. ‘In Wales there are encouraging signs but the ultimate goal has to be a significant increase in the number of new homes completed each year,’ he said. ‘As mortgage lenders, building societies play their part in fulfilling borrowers’ housing aspirations and as the Help to Buy Wales scheme shows can have a positive effect. But we need action to be taken now to ensure we have sufficient homes for the population of tomorrow,’ he added. The headline speech of the event was made by Lesley Griffiths, Minister for Communities and Tackling Poverty, who pointed out that the government is committed to increasing the supply of homes of all tenures across Wales. ‘We are on track to meet our target of providing 10,000 additional affordable homes, while good progress is also being made on our ambition of supporting the construction and sale of 5,000 homes through Help to Buy Wales,’ Griffiths explained. ‘The sector plays a key role in helping us fulfil our vision for housing in Wales. Through continued partnership working between private, public and third sectors organisations, I am confident we can meet the challenges we face and deliver the additional,’ added Griffiths. Continue reading
