Tag Archives: british
Research reveals UK landlords experience difficulties accessing buy to let finance
Three in 10 landlords in the UK plan to look for additional buy to let lending or to re-mortgage in the next three months, yet many may not gain access to finance, it is claimed. According to the latest report from the National Landlords Association (NLA) some 67% of landlords rely on a buy to let mortgage to fund their portfolio, but one in five, or approximately 300,000, landlords have not been able to expand due to difficulties in accessing buy to let finance over the last year. Furthermore, 59% say that lenders fail to consider their individual circumstances, and 56% that current buy to let lending criteria is too conservative. There are two ways a landlord can obtain a buy to let mortgage, either by going direct to a lender or by using the services of a broker, and the NLA believes it is vital that landlords have access to a wide range of products in order to find the one most appropriate solution for them. ‘A significant number of landlords are having trouble accessing finance and expanding, which is a major concern because the private sector is vital in meeting the ever increasing demand on housing at the moment,’ said Carolyn Uphill, NLA chairman. ‘Many landlords are frustrated as lending criteria is too prescriptive. There’s no one size fits all mortgage, and as the leading landlord association in the UK we understand that landlords need access to a range of products that meet their specific individual circumstances,’ she explained. She pointed out that NLA Mortgages provides a free online buy to let mortgage search facility which sources from over 600 mortgage products to help landlords find the best product to suit their needs. Mortgage schemes that are not available in the general marketplace are also available through NLA Mortgages, all via the NLA website. ‘We urge any landlords who are having difficulty in finding a mortgage that meets their needs to get in touch to see how NLA Mortgages can help,’ she added. The NLA’s research also asked landlords what they would say to lenders if given the opportunity. ‘Mortgage lenders are becoming increasingly difficult to work with. The requirement to produce further information on income is causing delays and becoming problematic…if your income does not fit their box on criteria they say no, which wastes time and slows the process,’ said one. ‘Mortgage lenders should consider each borrower on their own merits, and not impose a blanket ban on lending to individuals earning less than £25,000, regardless of their personal circumstances. Someone who is lucky enough to have no outgoings, servicing a mortgage with personal income of £25,000 a year is more than adequate,’ said another. Continue reading
Distressed properties in the US selling 37% below market value, latest data suggests
Distressed residential properties in the United States sold for a median 37% below market prices in September, according to the latest foreclosure report. This was $130,000 nationwide compared to the median price of $205,000 for non-distressed homes during the month, according to the data from RealtyTrac’s report covering the third quarter of the year. ‘Even as the share of distressed sales decreases, the average discount on distressed properties continues to be substantial because the primary factors driving that discount are still in place,’ said Daren Blomquist, RealtyTrac vice president. ‘Distressed properties are typically in poor condition and have a highly motivated seller whether that seller is the distressed homeowner in foreclosure or the bank that has repossessed the property through foreclosure,’ he explained. The major metropolitan areas were distressed homes were most heavily discounted were Pittsburgh and Milwaukee both at 67%, Cleveland at 64% and Memphis at 59%, a breakdown of the data shows. Overall, the median sales price of US residential properties, both distressed and non-distressed combined, was $195,000 in September, an increase of 1% from August and 15% from September 2013, the largest year on year increase since October 2005. September 2014 was also the 30th consecutive month in which the median home price increased annually. ‘Median home prices nationally in September were boosted by a new low in the share of distressed sales during the third quarter, resulting in fewer home sales on the lower end,’ Blomquist pointed out. ‘The share of homes selling above $200,000 is up 7% from a year ago, and the share of homes selling above $500,000 is up 15% from a year ago,’ he added. Continue reading
General election set to slow UK prime property market
The UK’s prime housing market is expected to slow in the run up to next year’s election and resume steady growth thereafter, but a mansion tax could change the outlook dramatically. According to international real estate adviser Savills in its five year forecast report a mansion tax could negatively impact five year growth by an average of five percentage points. The high value prime markets, that is the top five to 10% of homes by value, have already been impacted by increased stamp duty, the introduction of an annual tax on enveloped dwellings (ATED) and the closure of certain tax loopholes. The rate of price growth has begun to slow, particularly in London. After five and half years of price growth and having absorbed a number of tax rises, London looks fully valued, particularly given the uncertainties surrounding the mansion tax as election year approaches. On this basis, Savills has issued two forecast scenarios: a central scenario and a second based on its estimates of the number of properties in different price bands over £2 million and the scale of possible mansion tax charges given current Labour party proposals. ‘Two out of the main political parties still favour some form of mansion tax so owners and buyers will be rightly factoring it into their decisions as the election approaches,’ said Sophie Chick, senior research analyst as Savills. ‘It would take some time for the markets to accurately price in the impact of a mansion tax, but the threat of it has already slowed the market. If it becomes clear that a mansion tax is to be introduced after May 2015, we would expect an immediate price adjustment before the market more rationally finds its level,’ she added. Without a mansion tax the Savills central forecast would see average prime UK house prices slipping 0.5% in 2015, assuming no further increases in the taxation of high value properties. Growth would be expected to resume post election, averaging 22.7% over the next five years across all prime London markets. Regionally, the recovery is yet to become fully established and the market has capacity for price growth to continue through next year, albeit averaging just 1%, the report says. Five year growth is forecast to average 23.9% across the UK, outperforming prime London, with prime commuter and lead city locations expected to show the strongest growth. Savills believes that a mansion tax, if implemented in the form most recently discussed, would trigger average price falls of 5% across prime London in 2015 and a fall of 3% across the prime regions. In a worst case scenario, the value of prime London properties over £10 million could fall by 10% and homes worth over £3 million regionally would fall 7%. Homes below the mansion tax threshold would not escape its effect, but the proposed progressive structure of the tax would limit the trickledown effect, with small falls of 2% anticipated. By 2017, the top end… Continue reading
