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Remortgaging in UK hits seven year high of £6.4 billion in April
The value of remortgage lending in the UK has increased 48% year on year and is the largest amount recorded since November 2008, the latest data shows. The figures from LMS also show that the number of borrowers remortgaging exceeded 39,300 and is the highest since July 2009 while affordably improved markedly with typical remortgage repayments falling to a record low. This represents a 36% increase from the £4.7 billion n recorded in March and a 48% uplift from April 2015’s figure of £4.3 billion. The number of remortgage loans also increased by 41% from 28,000 in March to 39,353 in April. This is 47% more than April 2015 when 26,700 borrowers remortgaged. This is the greatest number since July 2009 when 39,500 remortgaged. Low interest rate has resulted in mortgage affordability improving sharply. Now remortgage payments as a percentage of income are at 16.79%, a record low, down from 18.4% the previous month. Andy Knee, chief executive of LMS, pointed out that March saw the market overwhelmed by second home owners and buy to let investors looking to push through transactions before changes to stamp duty came in, but as April arrived, existing home owners were able to remortgage and capitalise on the great rates currently available. ‘The average amount people are withdrawing through remortgaging fell to a 13 month low, suggesting household budgets are not as constrained as previously. Home owners can also celebrate that as a result of such low mortgage rates and rising incomes repayments as a percentage of income have fallen to a record low, boosting family finances,’ he said. But he also pointed out that the forthcoming referendum on the UK’s place in the European Union will continue to dominate headlines until the vote on 23 June which could have an impact on the mortgage rates that banks offer as well as household finances if the result is to leave. The data also shows that mortgage interest rates fell to 2.49% in March, down from 2.51% in February and the sum of annual remortgage repayments fell from £8,593 in February to £8,344 in March as a result of lower interest rates, while average household income rose by 7% from £46,605 to £50,000 in the same period. This meant that annual remortgage repayments as a percentage of income fell from 18.4% to 16.7% month on month, a record low. Average mortgage payments as a percentage of income also fell, from 21.2% to 19.7% between February and March, but this remains 3% more than remortgage costs. Continue reading
New research reveals lack of affordable homes in London
With the average price for a property in London now exceeding £500,000 new research shows that just 46% of home listed matches this price or less. The analysis from fixed fee estate agent eMoov examined current stock levels across all of the major portals, recording the total levels listed for each London borough, before comparing this to the level of stock listed for £550,000 or less. The research then took the total stock under £550,000 and recorded it as a percentage of the total level of stock across the capital. The worst location for affordability was Kensington and Chelsea with just 6% of properties for sale at £550,000 or less, followed by Westminster at 7%, Hammersmith and Fulham at 14%, Camden also at 14%, Wandsworth at 22% and Islington at 25%. A further 13 of London’s boroughs had just 50% or less of its stock listed for the average price of £550,000 or under. The boroughs that did offer more for those with a budget of half a million were Hounslow at 57%, Bromley at 61%, Waltham Forest at 64%, Enfield at 65%, Hillingdon at 65%, Lewisham at 66%, Redbridge at 72%, Greenwich at 72%, Newham at 78%, Croydon and Sutton both at 79%, Havering at 84%, Bexley at 91% and Barking and Dagenham at 97%. ‘It’s no surprise to anyone that the majority of London is unobtainable to many from a property point of view. However, this research highlights just how out of reach the capital actually is for UK home buyers, even for those with the sizable budget of £550,000,’ said eMoov chief executive officer Russell Quirk. ‘For many the average house price is a benchmark, a mile stone, on just what they need to have in the bank to live in a certain area. But this average price masks the true cost of living in the capital or even where in the capital you can live for that matter,’ he pointed out. ‘When you consider that even with that sort of healthy budget, you would have to restrict your property search by removing more than half of the properties currently for sale in the capital, it really highlights how little £550,000 can get you in the London market,’ he added. Continue reading
Official data shows home building starts falling in England in first quarter of 2016
The UK government has pledged to build a million new homes in the next five years but the latest construction figures show that in the first quarter of 2016 building starts were down. The data from the Department of Communities and Local Government (DGLC), shows that there were 35,530 house building starts in England, down 3% when compared to the final quarter of 2015. Completions were estimated at 32,950, some 9% lower than the previous quarter and 3% lower than a year ago while annual housing starts totalled 139,680 in 2015/2016, up by 12% compared with 2014/2015. This highlights that the first three months of 2016 saw a slowdown’ A breakdown of the figures show that private enterprise housing starts were 3% lower in the March quarter of 2016 compared to the previous quarter whereas completions were 7% lower. Starts by housing associations were 9% lower compared to the last quarter and completions 24% lower. Overall starts are now 107% above the trough in the March quarter of 2009 but 27% below the March quarter 2007 peak. Completions are 33% above the trough in the March quarter 2013 and 32% below their March quarter 2007 peak. Starts were broadly steady from 2003/2004, averaging around 44,000 units each quarter until late 2007. Starts were strongly affected by the economic downturn from the start of 2008 when there was a period of rapid decline to a trough in the March quarter of 2009. Completions increased gradually from 2003/2004 reaching a similar level to starts by 2007. Completions fell more slowly than starts during the downturn, but over a longer period. The data reveals that from 2009 starts began to recover and during the next two years both series converged and levelled out. More recently, despite fluctuations, starts and completions have started to grow again gradually. The slower start to the year is echoed in figures from the National House Building Council (NHBC) which show a fall of 8% in new home registrations with the NHBC over the past three months compared with the previous three. During the quarter there were 25,133 new home plots registered in the private sector, a 10% decrease compared to last year’s 27,809. In the public sector there were 8,118 new homes registered, which is a 3% decrease compared to last year’s 8,402. However, there was an increase in February. The 12,181 new homes registered in February 2016 was 4% higher than in February 2015. February’s total was made up of 9,632 private sector homes and 2,549 from the public sector. Growth came entirely from the private sector which saw an increase of 6% compared to the same period last year. There were 33,251 new home registrations in the rolling quarter December 2015 to February 2016, fall of 8% on the same period 12 months ago. By contrast, the number of completions continues to rise, up 6% on the same period 12 months ago. As the leading warranty and insurance provider for new… Continue reading
