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UK mortgage lending off to slow start in 2015
Gross mortgage lending in the UK reached £13.4 billion in February, 9% down on both January and on last February, the latest figures from the Council of Mortgage Lenders show. This is the lowest monthly estimate for gross mortgage lending since April 2013 when lending totalled £12.4 billion. The weaker lending figures have not come as a surprise to the industry. ‘Seasonal factors tend to weigh on activity at the start of the year, but looking through these, the underlying picture appears to be stabilising,’ said CML chief economist Bob Pannell. ‘We expect lending to improve in the coming months, as employment and earnings continue to pick up and the impact of recent stamp duty reforms start to feed through,’ he added. Peter Rollings, chief executive officer of Marsh & Parsons, believes that too much should not be read into the data as 2014 was an exceptional year and a formative one with major changes to the borrowing process. He said that 2015 marks a return to more normal patterns of behaviour as the new affordability measures introduced last year become part of the normal market. ‘Lending is only just getting into its stride at the beginning of the year, and it’s also a much longer process from start to finish now, so we’ll see more approvals race through as the market heats up later in the spring,’ he pointed out. ‘Buyer finances emerge much healthier for going through a more rigorous obstacle course. First time buyers have great cause for celebration with the new Help to Buy ISAs, whittled down stamp duty, generous mortgage rates, and plenty of supply on the market. All the elements are at work to up the ante in the housing market in the coming months,’ he added. Continue reading
UK house price growth pauses, latest index shows
Average UK property prices have increased by 6.8% year on year but the growth has paused with values obtained flat lining so far this year. The latest index from haart estate agents also shows that the average price of a starter home has fallen by 2.2%, good news for first time buyers. Overall the index reveals that in February average prices fell by 0.2% to £204,355 compared with the previous month but are still up by 6.8% compared with a year ago. But in London prices are down 1% month on month to an average of £466,990 and down 4.6% compared to February 2014. However, demand is still high with 21 buyers chasing each home for sale in London and 12 potential buyers for each new property nationwide. Paul Smith, chief executive officer of haart, pointed out that new housing stock across the UK materialised in February with supply up almost 11% in a single month which is matched by a similar uplift in buyer registrations, a sign of consumer confidence in the market. ‘So far this year average house prices are showing no significant fluctuations, which is good news for affordability. First time buyers are now benefiting from a dip in the average price of a starter home by 2% annually and from broader economic factors such as low interest rates and Help to Buy incentives,’ he said. ‘Despite this promising start to 2015, the number of new home starts promised post general election by the main political parties falls well short of what is needed and we still lack a strategic long term policy to address supply,’ he explained. He believes that London’s average property prices declining is no bad thing for affordability and sentiment. ‘This is no boom and bust but the beginning of a return to normality following the peak of the market in Spring 2014. The capital’s property market is still bustling with 21 potential buyers chasing each property for sale,’ he added. Continue reading
Seven out of 12 UK regions see rental growth, but not London
After a period of rent price rises in London outstripping the rest of the UK, the disparity between the growth rate of the London and nationwide rental markets is beginning to narrow, the latest index shows. The average rent in the UK is now £899, compared to £889 at the end of January 2015, and £873 in December 2014, according to the HomeLet rental index. It also shows that average rent prices in London have remained static in the three months to February 2015, versus the wider picture of predominantly rising prices. Indeed, seven out of 12 regions in the UK have seen rent prices rise in the three months to February 2015, with the North East and South West of England leading the way at 3.1% and 2.5% price growth respectively. There was also growth in East Anglia, the North West of England, Northern Ireland, the South East of England and Yorkshire and Humber while rental prices have not increased in Greater London and the West Midlands, and have fallen in Wales, the East Midlands and Scotland. Looking solely at new tenancies commencing in the month of February 2015, prices have increased in the month since January 2015 in several regions, with Northern Ireland rising 7.2%, the North East of England 6.2%, the South West of England 4.5% and East Anglia 3.7%. In contrast, rents agreed on new tenancies in London in February 2015 have fallen by 2.5% compared to the previous month. Scotland, the East Midlands and Wales have also seen prices agreed on new tenancies fall in February 2015 compared to January 2015. ‘Last year saw the London rental market outstrip the rest of the UK in terms of rent price growth but what we are seeing so far in 2015 is the private rental market becoming much more broad based with the strongest rent price growth occurring outside of the capital. Other regions of the UK such as the South West of England and East Anglia are maintaining the rises achieved in 2014 and continuing to grow,’ said Martin Totty, chief executive officer of Barbon Insurance Group, parent company of HomeLet. ‘The rent price growth seen in London during much of 2014 now appears to be slowing. However a recent survey we conducted with London letting agents has shown that demand for private rental property remains high and still outstrips supply, with 80% of agents saying there are more tenants than properties available,’ he added. Continue reading
