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Home lending in UK fell in August but experts say it is a normal seasonal trend
Lending to first time buyers, home movers, home owner remortgage and buy to let borrowers in the UK in August but levels are still higher than a year ago, the latest data from the Council of Mortgage Lenders shows. Bob Pannell, CML chief economist said that this is a normal seasonal trend, with August typically less strong for mortgage completions and the underlying picture is of improvement in lending levels on a year by year basis. ‘Seasonal factors pushed all categories of lending lower in August compared to July. However, the mortgage market continues to see year on year growth, and we expect this to continue over the coming months,’ he added. A breakdown of the figures shows that lending fell by volume and by value for the first time since April this year. However, this was the third consecutive month that lending for house purchase increased year on year by volume and by value. Pannell pointed out that it was the highest house purchase lending activity level for the month of August since August 2007. However, volume levels this month were still only 60% of what they were in August 2007. Overall in August, home owner loans for house purchase accounted for 57% of gross lending, the same as in July, while remortgage activity accounted for 21% compared to 24% in July. Home owner loans as a share of gross lending have increased since the New Year while remortgage activity has edged down. Buy to let lending as a proportion of total gross lending remained at 17%, a consistent level since the beginning of the year, but up from 13% in the same period last year. First time buyers accounted for 44% of total house purchase lending volumes, a much higher proportion than pre-crisis levels of 30% of the number of loans for house purchase and it was the highest monthly first time buyer lending level by volume and by value in the month of August since 2007, but the number of loans was only 78% of the August 2007 levels. The proportion of first time buyer gross household monthly income in August to service capital and interest payments stayed the same month on month at 18.5%, but remained considerably lower than 19.7% in August last year, and much lower than the most recent high of 24.8% in December 2007. This was the highest home mover lending level by volume and by value in the month of August since 2007, although this month's volume levels are still only 51% of the volume levels in August 2007. Home movers spent 18.1% of their monthly gross household income to pay capital and interest repayments, up slightly on last month but down on the same period last year. Like first time buyers, this is still much lower than the most recent peak of 23.8% in December 2007. Remortgage activity dropped month on month in August 17% by volume and 18% by… Continue reading
Asking prices till rising across most of the UK, latest data shows
Asking prices in England and Wales increased by 1% in September, led by the East of England, according to the latest index figures, while in Scotland they increased by 0.8%. Prices increased the most in the East of the country, up 2.3% month on month, but the South East continues to be the UK's fastest moving regional market with prices up 7% over the last six months. The data from the Home.co,uk index also shows that year on year asking prices in England and Wales have increased by 6.9% overall. While in Scotland asking prices are up 0.8% month on month and 3.8% year on year. Pries rises are being fuelled by lack of supply in many parts and this index shows that overall the supply of property for sale fell to a new record low in September, down 65% compared to the same month in 2007 before the economic downturn. ‘Surging demand coupled with lack of supply is driving home prices to new extremes in the East of England and the South East. Indeed, the uplift from these regions continues to drive the national average higher, thereby obscuring the poorer performance of several northern regions,’ said Doug Shephard, the firm’s director. He pointed out that the London and South East centred supply crisis is worsening, and September recorded the lowest number of properties entering these markets for that month since the onset of the financial crisis. Indeed, the data shows that the number of properties coming on to the market in Greater London, the East of England and the South East is down by 74%, 74% and 67% respectively vs. September 2007. However, home prices in the northern regions continue to stagnate. Annualised price changes for the North East, North West and Yorkshire of just 0.0%, 0.8% and 1.3% respectively indicate that the long awaited market recovery is still not apparent, according to Shephard. The Welsh property market also shows a distinct lack of vigour. Home prices there have risen by a mere 1.9% over the last year, a long way behind the mix-adjusted average price rise for England and Wales of 6.9%. Overall, the current mix-adjusted average asking price for England and Wales is now 20% higher than it was in September 2008. ‘We expect further upward pressure on this headline figure to be applied by London and its surrounding regions,’ said Shephard. The index also shows that the South East has been the fastest moving property market in the UK since February with the typical time on market for unsold property just 63 days, the same as it was towards the end of the last property boom in December 2007. This is much less than the national median of 96 days and the typical time on market in the North East of 136 days. In December 2007, the typical time on market in the North East was just 93 days. Continue reading
Swimming pool is top extra for prime properties, research suggests
People buying prime property in the UK want top notch sport and home leisure facilities with a swimming pool the most popular of such facilities, new research shows. Overall some 17% of high end estate agents have seen an increase in demand for swimming pools that can add up to 15% to a property’s sale price, according to the study from Direct Line’s Select Premier Insurance. In joint second place is tennis courts and home gyms with 9% of agents reporting demand for these kind of facilities, followed by 8% for a home spa, 6% for land, 5% for a home cinema, 4% for stables, and 3% for a luxury kitchen, a wine cellar and secure parking facilities. But the down side to a swimming pool is that potential buyers either love them or hate them and the upkeep and cost of maintenance can put them off even although they add 15% to the potential sale price. Designer kitchens can also add up to 15% to the purchase price, while dedicated home gyms and games rooms can add around 5% to the value of a home, the research also shows. However, some 17% of those surveyed said these sporting and home leisure facilities do not add value to a home, but they do increase its saleability, or attractiveness to potential buyers. Land was reported as a key selling point by estate agents, who stated customers would often prefer to have the space to build their own chosen facilities. The view from a property can have huge implications for the sale price, with one estate agent estimating when combined with a good location and road reputation, a beautiful view could double the value of a property. According to Nick Brabham, head of Select Premier Insurance, more home owners now want to embrace their favourite pastimes in the comfort of their own properties, including golf greens, squash courts and fully equipped gyms. ‘However, these high end facilities can be costly to install and maintain, so property owners should ensure they have sufficient cover in their home insurance policies to protect the items they value most,’ he said. Continue reading
