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First time buyers lending in Scotland up 23% last year
Lending for homes in Scotland fell in the final quarter of 2014 but there were more mortgages going to first time buyers compared to the same period the year before. The latest data from the Council of Mortgage Lenders shows that overall lending was up 23% last year but mortgages fell at the end of the year. Scotland accounted for 6.6% of UK wide annual house purchase activity, down from 6.9% in 2013. Lenders advanced 27,700 loans to first time buyers in Scotland totaling £2.9 billion, 16% up in volume compared to 2013, and 23% up in value. A breakdown of the figures show that there were 7,000 first time buyer loans in Scotland, worth £750m. This was down compared to the third quarter 5% by value and 4% by volume. Compared to the fourth quarter of 2013, the number of loans increased by 3% and the amount borrowed by 9%. There were 8,000 loans to home movers, valued at, £1.2 billion, down 8% in volume and down 9% in value compared to the third quarter. Compared to the fourth quarter of 2013, there was a decrease of 8% in volume and a decrease of 5% in value. The total number of remortgage loans declined in the fourth quarter to 5,700 loans at £650 million, which was down 3% in volume but unchanged in value on the third quarter. Compared to the fourth quarter of 2013, activity was down 17% in volume and 13% in value. First time buyer affordability changed slightly in Scotland quarter on quarter with first time buyers typically borrowing 2.90 times their gross income, less than the 2.94 income multiple in the third quarter and less than the UK average of 3.38. The typical loan size for first time buyers was £97,200 in the fourth quarter, down from £98,600 in the previous quarter. The typical gross income of a first time buyer household was £33,965 compared to £33,520 in the third quarter. The relatively low level of interest rates saw first time buyers' payment burden remaining relatively low in the third quarter at 16.8% of gross income being spent to cover capital and interest payments, higher than the third quarter's 17.3%. Home mover affordability changed fractionally, with home movers typically borrowing 2.64 times their gross income compared 2.62 in the third quarter and to 3.03 for the UK overall. The typical loan size for home movers was £128,244 in fourth quarter, down from £130,000 in the previous quarter. The typical gross household income of a home mover was £50,773 in fourth quarter compared to £50,971 in the third quarter. Home movers' payment burden remained relatively low in Scotland at 16.5% of gross income being spent to cover monthly capital and interest payments, less than the 16.9% in the third quarter and considerably less than the 18.4% UK average. Overall for 2014, remortgage lending in Scotland was 23,400 loans reflecting a value of £2.6 billion. This was 14% down in volume compared to 2013,… Continue reading
Apartment and villa prices fall in Dubai at beginning of 2015
Residential property prices in Dubai fell by almost 4% in the first six weeks of this year with both apartments and villas seeing declines, the latest research shows. Prices for apartments fell by 3.7% and villas by 3% respectively, the latest report from Phidar Advisory shows. Sales increased by 1.7% in January, the data also shows. Price falls are outpacing rent declines, pushing yields up to 7% for apartments, the report shows, with the report pointing out that residential investment potential is at a five year low. However, the report notes that within this overall figure, apartment volumes were up almost 8% in January, while single family home volumes halved in January compared to the same period in 2014. Apartment lease rates remained stable with a nominal decrease of 0.5% while lease rates for single family homes decreased by 2.4%. ‘Our index indicates that the propensity for investing in Dubai real estate is at a five year low point. This is a first draft and we are developing more complex iterations integrating additional variables that influence capital flows,’ said Jesse Downs, managing director of Phidar Advisory. The report downgrades rent projections to softening and says that sale price declines will continue to outpace rent declines, allowing yields to gradually expand through 2015. ‘As long as general price deflation is averted, rent stability or softening can help control labour costs, which can facilitate business and economic growth. Ideally, this is paired with countercyclical monetary and fiscal policies to the real estate industry that facilitate economic diversification,’ explained Downs. The report also points out that, while the US dollar remains strong, demand for Dubai real estate will likely remain low and yields should continue to guide market trends. ‘Recent transaction volume contraction was caused by dwindling domestic and foreign demand,’ added Downs. Meanwhile, figures from the Dubai Land Department shows that Indians continue to top the list of expat property buyers in Dubai. Total investment by Indians in the realty market increased marginally to Dh18.123 billion from Dh18 billion in 2013. Br British expat buyers were next but the amount investment fell from Dh10.4 billion in 2013 to Dh9.318 billion in 2014. Pakistanis coming third on the list with property purchases worth Dh7.588 billion, down from Dh8.6 billion in 2013. Citizens of Gulf Cooperation Council (GCC) states bought property worth Dh32 billion through 7,186 investors in 2014. Overall there are more than 140 nationalities investing in the property market in Dubai with total real estate transactions amounting to Dh218 billion in 2014. Continue reading
Londoners set to cash in on short term rental law change
With the Deregulation Bill currently working its way through the UK parliamentary system, a new analysis shows that London homeowners could earn thousands by renting out spare rooms in their homes. The bill, first announced in 2013, would end rental rules imposed in 1973 but now largely viewed as outdated. These currently prevent Londoners from renting out their homes, or rooms within their homes, on a short term of three months to visitors. Unlike other residents across the UK, Londoners require planning permission if they let a room or home on this basis. When it becomes law, probably in a few months’ time, it will allow London home owners to rent out rooms or their entire property, for up to three months of the year. According to central London lettings agency E J Harris, a home owner renting out their two bedroom apartment in prime central London could potentially earn anything from £2,000 per month up to over £5,000 per month, depending on location, netting themselves a potential additional income over three months of anything from £6,000 up to £15,000 or more. At the very top of the luxury housing market in locations such as Knightsbridge or Mayfair an owner of a penthouse could earn themselves £10,000 per week, or up to £120,000 over a three month period. E J Harris adds that if a home owner decided just to rent out a room in their apartment, then at the top end of the market, rental income for an en-suite bedroom in Knightsbridge could earn them up to £6,600 over a three month period. Renting out a room in a two bedroom Mayfair apartment could potentially earn £500 a week or £6,000 for a three month let. In St John’s Wood a room in a two bedroom property could earn £250 a week, or up to £3,000 over three months. However, it is not only home owners in luxury addresses who could benefit significantly. E J Harris, estimate that renting out a room without an en-suite bathroom in a typical apartment in inner London could earn the owner around £100 per week, allowing the owner to bring in an extra £1,200 over three months. Despite the huge sums of money that a wealthy owner in Knightsbridge or Mayfair could earn from a very short term apartment let or room share, Elizabeth Harris, the firm’s managing director, thinks it is unlikely that anyone at this end of the market will choose to enter the short let or room share marketplace. ‘For a super wealthy oil Sheikh or Russian Oligarch an extra £120,000 is pocket change and people who live in addresses such as One Hyde Park or The Knightsbridge really don’t need to room share,’ she said. ‘However, I do forecast that there is a strong potential market from young professionals aged in their late 20s to late 30s who… Continue reading
