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UK mortgage lending hits highest October level since 2008
Gross mortgage lending in the UK reached £19 billion in October, some 5% higher than September and 8% higher than October last year, according to figures from the Council of Mortgage Lenders. This is the highest lending total for an October since 2008 when it was £18.6 billion and CML economist Mohammad Jamei said that the market is in a steadier state than it was earlier in the year. ‘As the temporary impact of implementing the mortgage market review fades, a clearer picture of the mortgage and housing market is emerging. Nearly all indicators in the housing market align with our view of a gentle easing in market conditions,’ he explained. ‘While the housing market has cooled in recent months, mortgage lending continues to be underpinned by positive factors. With expectations of the first interest rate rise moving to the fourth quarter of next year, as well as positive forecasts for growth, pay and unemployment, there is potential for market activity to gain traction in the new year,’ he added. ‘These new figures show that lending is alive and well and breaking records despite stricter borrowing criteria, according to Paul Smith, chief executive officer at haart. ‘Lenders are keen to grow market share so first time buyers and ladder steppers alike are currently benefiting from a new range of excellent mortgage deals. Pre-election calm has descended on the market but savvy buyers and sellers will run with the window of opportunity that this creates,’ he said. Peter Rollings, chief executive officer of Marsh & Parsons, believe that there is a renewed spring in the step of mortgage lending this October. He pointed out that the introduction of the Mortgage Market Review and stricter affordability regulations in April have not clouded the overall progress that has been made over the past year. ‘With an interest rate rise not expected before late next year, spurring on a host of attractive mortgage products, buyers and sellers still have a lot to be feeling confident about,’ he explained. ‘Calmer trading conditions, more choice on the market, and less fierce competition will ensure activity finishes on a strong note at the end of the year,’ added Rollings. Continue reading
UK buyers better off than renters after five years, new study has found
Buyers in the UK are better off than renters within five years on average as a result of equity outstripping the value of savings, new research has found. While home owners with mortgages pay £316 more on average per month compared to those renting equivalent properties, they become better off after a few years, according to the study from property website Zoopla. The research also shows that the average monthly rental across the UK currently stands at £865 per month versus an average monthly mortgage repayment of £1,181. But while renters may pay less each month, owners recoup their initial costs and become better off than renters within five years on average as a result of the value of equity outstripping the value of savings. And after seven years, the average owner is £13,850 better off compared to an equivalent tenant. Aberdeen, Dundee and Glasgow are currently the most cost effective towns for buying versus renting, as the average monthly mortgage repayment is less than the average rent. At the other end of the scale, Bournemouth, London and Huddersfield are the most cost-effective places for renters due to higher property prices relative to rents for equivalent properties. London owners pay nearly £1,790 more a month than the average renter in the capital. ‘People who invest in property are playing the long game. While buyers have to swallow the initial upfront costs of purchasing a property, they ultimately reap the benefits over renters down the line,’ said Lawrence Hall of Zoopla. He explained this is due to building up equity in an asset that they will own by the end of the mortgage term. ‘With the strong house price growth we’ve experienced this year and interest rates still low, saving for even a 10% deposit takes its time,’ he added. Continue reading
Annual sales up 15% in Scotland but prices down 0.4%, latest index shows
Annual home sales in Scotland jumped 15% in September but prices slipped by 0.4%, slowing the annual change to 5.1%, according to the latest index. That taxes the average price of a house in Scotland to £163,630, the data from the LSL Property Services/Acadata report shows. Prices dropped at the top end of the market in two of the most expensive areas in the country, Edinburgh and Aberdeenshire, down 1.3% and 1.2% respectively. ‘Following almost a year of fair winds and steadfast price rises, this is the second month in succession to muddy the waters. Edinburgh and Aberdeenshire saw the tide turn, reflecting the ripples in evidence in prime central areas of London, as the top tier of the housing market experiences the keenest downturn,’ said Christine Campbell, regional managing director of Your Move. The report says that while Scottish house prices have increased by nearly £8,000 in the last 12 months overall, the rate of annual growth has eased back to 5.1% in September from 5.8% in August. Since June, the monthly pace of house price growth has slowed and this is put down to the referendum vote on independence which put the brakes on activity in the housing market. ‘However, these shifts we’re seeing on the surface haven’t uprooted the solid foundations of the recovery, with average house prices across 81% of Scotland higher than a year previously,’ explained Campbell. East Renfrewshire led the way in terms of annual price growth, with property values soaring 13.4% in the year to September 2014, and new price peaks were reached in East Lothian and Aberdeen. Indeed, the price of a detached home in Aberdeen has risen by an average £15,000 over the last three months, to total £410,000. ‘September also saw sales snap back after the vote put the lid on uncertainty, and transactions were up 15% year on year, compared to only 7% growth over the 12 months to August. After the ground that was lost in August, renewed demand saw more vigorous activity buck the usual seasonal pattern, and this was the strongest September for house sales in seven years,’ Campbell pointed out. Continue reading
