Tag Archives: asia
Lending to first time buyers with small deposits in UK falling
First time buyers in the UK are still finding themselves left out in the cold as lending to small deposit borrowers is falling as a proportion of all home lending, a new report shows. The Autumn Statement from the Chancellor of the Exchequer accompanied a house purchase jump in November with approvals up 1.3% to 70,511, according to the latest Mortgage Monitor from chartered surveyors e.surv. However, it explained that while the Autumn Statement focused on helping more people get on the housing ladder, first time buyers are yet to see the same benefits as other areas of the market. Despite the rise, lending to small deposit borrowers, that is buyers with a deposit worth 15% or less of their property’s total value, totalled just 11,493 in November, showing no improvement on 11,489 in October. Small deposit borrowers are falling as a proportion of overall house purchase lending, accounting for just 16.3% of approvals granted, down from 16.5% in October. The latest First Time Buyer Tracker report from Your Move and Reeds Rains reveals a similar picture. First time buyer sales dipped by 1.7% month on month from 28,600 in September 2015 to 28,100 in October 2015. ‘The Chancellor’s proposals coincided with a climb in November’s mortgage market. More prospective home buyers are find their applications successful as we near winter,’ said Richard Sexton, director of e.surv. ‘However, for first-time buyers it’s a different story. For those struggling to get their foot in the front door, promises of starter homes are of little consolation. Theoretically, first time buyers should be benefitting from measures such as the extended Help to Buy Scheme and the Help to Buy ISA which has finally come into force but home ownership still remains a distant dream to many,’ he explained. ‘Mortgages may be available, inflation low and wages rising but whether there are enough homes is another question. Supply must be addressed if aspirational home owners are to see a real difference and only time will tell if words can translate into real benefits for first time buyers,’ he added. November saw over 10,000 more mortgages approved to home buyers than a year ago, with 70,511 loans, jumping a fifth since 59,262 in November 2014. This was the highest year on year rise seen since March 2014, as the lending market went from strength to strength amid rising confidence. On an annual basis, this jump in overall home purchase lending has allowed an improvement in small-deposit lending. Home purchase lending to borrowers with smaller deposits grew 44% year on year from November 2014 to 8,000 approvals. However, the current total for small deposit loans, which stands at 11,493 this November, is crucially much smaller compared to the unsustainable pre-recession heights of November 2007, when 16,227 were granted. ‘When compared to last year, mortgage lending is in a much healthier place. Some 12 months ago, home buyers were still suffering from the impact of Mortgage Market Review changes,… Continue reading
Home owners in London most confident about house price growth
Households across the UK perceived that the value of their home rose in December, led by those in London while households in the North East reported no change in prices. Some 11.1% of individuals said they plan to buy a house within the next two years, but this was down from a 12 month average of 12.8% according to the House Price Sentiment Index (HPSI) from Knight Frank and Markit Economics. December’s reading was a slight increase from the 58.7 recorded in November and was higher than the average reading of 58.5 recorded across 2015. However, it remained below the peak of 63.2 achieved in May last year, reflecting the more modest house price growth seen across the country over the last 12 months. The future HPSI, which measures what households think will happen to the value of their property over the next year, was unchanged in December compared to the previous month. An index reading of 70.3 was the joint second highest of the year. Households in 10 of the eleven regions covered by the index reported that prices rose in December, led by households in London at 68.7. In the North East a reading of 50 and households perceived no change in prices over the course of the month. This is only the third time that a region within Great Britain has reported no change or a fall in prices since August 2013. There are a number of regional differences in expectations for price growth with households in London at 77.9, the South East at 76.7 and the East of England at 74.5 the most confident that prices will rise over the next 12 months. Mortgage borrowers were the most confident that prices will rise over the next year at 76.1, followed by those who own their home outright at 74.9. ‘The localised nature of the housing market is highlighted in the index, with the regional difference between households’ perceptions of house price changes in December at its greatest for nearly 18 months. This regionalised picture is expected to continue next year, with households’ in London expecting the strongest growth in prices in 2016,’ said Gráinne Gilmore, head of UK residential research at Knight Frank. ‘The supply of housing coming onto the market has dipped to record lows in recent months – affecting the ability of families to move up and down the housing ladder. The survey suggests this trend is also set to continue, with a lack of available housing also likely to continue to underpin pricing in many areas,’ she added. According to Tim Moore, a senior economist at Markit, UK households seem to anticipate little fundamental change in prevailing supply and demand dynamics over the course of 2016. He pointed out that buoyant forecasts were reported for property values over the next 12 months, with expectations at a remarkably similar level to those seen at the end of 2013 and 2014. ‘At the same time, the proportion of UK… Continue reading
Aberdeen property market set for declines unless oil price picks up
Aberdeen has seen some of the strongest growth in the residential real estate market in recent years but now it is under a period of adjustment after seven years of phenomenal growth, according to a new analysis. The residential market across the Aberdeen area is being affected by uncertainty within the oil dependent local economy and prices have started falling, data for the third quarter of 2015 shows. According to the report from real estate firm Savills in the 12 months to the end of September 2015 the overall average sale price in Aberdeenshire was the second highest in Scotland, behind Edinburgh. The average price in Aberdeen City was the fourth highest, behind East Renfrewshire, over the same period. Indeed, data for the 10 year average for the overall residential market, values are 24% higher in Aberdeen City and 19% higher in Aberdeenshire, compared to 11% for Scotland as a whole. Furthermore, prime values in the Aberdeen area are 34% higher than they were in 2007, the peak of the Scottish market. This compares to a drop of 22% for Scotland as a whole. Despite the recent turmoil, monthly residential rental prices in Aberdeen remain the highest in Scotland. However, there was a fall of 2% in Aberdeen City and 4% in Aberdeenshire in mainstream prices during the third quarter of 2015, compared to the same period last year. Prime values in the Aberdeen area have dropped by 9% over the same period, with properties in rural locations most affected compared to city locations. Rental values in Aberdeen City dropped by 7% over the same period. The biggest impact has been felt in the volume of sales. During the year ending September 2015, the number of residential sales in Aberdeen City and Aberdeenshire fell by 5% and 11% respectively, compared to the same period last year. However, Faisal Choudhry, director of Savills Scottish research, pointed out that despite these drops, there are some sections of the market that have bucked the trend. These include properties between £300,000 to £400,000, which have seen a slight annual increase in sales of 5%. ‘Our analysis of new build developments shows an increase in the number of properties currently available between £200,000 and £300,000. This includes first time buyers, professionals and young families who are continuing to benefit from the comparatively lower rates of taxation and mortgages,’ he said. He also pointed out that while as a whole the introduction of the new Land and Buildings Transaction Tax (LBBT) in April pushed the number of prime property sales up by 10% but this was not the case in the Aberdeen area, where the number of prime sales fell slightly to 669 during the year ending September 2015, compared to 678 during the previous 12 month period. ‘This suggests the market was further constrained by uncertainty within the oil sector. Prime activity has been further compounded by higher levels of taxation as a result of LBTT, with the… Continue reading
