Tag Archives: crisis
UK Building Societies providing bigger share of new mortgage lending
Building societies in the UK lent £12.7 billion of gross new mortgages in the first three months of the year, some 29% of all new lending across the market, the latest data shows. Societies also approved over 91,000 mortgages in the first quarter while net lending by all lenders totalled £3 billion, according to the figures from the Building Societies Association. Paul Broadhead, head of mortgage policy at the BSA, lending by building societies has been strong and without the contribution of this section of the market the stock of mortgage loans across the UK would have shrunk in the first three months of the year. ‘Societies hold a 20% share of mortgage balances, but have had a much greater share of the flow of new lending for some time. In the first quarter they delivered 29% of all new mortgages,’ he explained. ‘This is partly because of competitive products and partly due to the more personal approach they take to underwriting. The trend looks set to continue in the second quarter as around a third of mortgage approvals in the first quarter were from building societies,’ he added. Meanwhile, the latest research by specialist lender Paragon Mortgages shows the majority of intermediaries are seeing stable or growing levels of demand from landlord clients. The Financial Advisor Confidence Tracking survey for the first quarter, shows 91% of intermediaries view landlord demand as growing or stable and just 7% saying demand was weak. In terms of intermediaries’ views on levels of buy to let mortgage business, 53% said in the second quarter they expect the number of cases to remain stable. However, 45% are more optimistic saying they expect to write more buy to let business. Survey results for the first three months of the year also revealed that 23% of intermediaries’ business was buy to let, 18% was for first time buyers and 35% were remortgages. The quarterly survey has also, for the past 20 years, kept an intermediary confidence index taking the average number of mortgage cases completed in the current quarter, measured against expected business levels in the next quarter. Confidence for the first quarter of 2015 has increased with a score of 105.2 from 102.9 the previous quarter. The index recovered throughout 2013 and 2014, after it fell from 2008 onwards and reached its lowest level in the third quarter of 2010 of 63. ‘There were no great movements in this quarter’s survey findings, what is evident though, is intermediaries are feeling optimistic about the buy to let market. Following the results of the general election, it will be interesting to see whether we see an increase in intermediaries’ case load as confidence increases in the wider housing market,’ said John Heron, director of Paragon Mortgages. Continue reading
New home sales in Australia up every month so far this year
New homes sales in Australia have increased in each of the first four months of 2015, according to the latest survey of the country’s largest volume builders. However, the increase of 0.6% in April was the slowest growth pace of the four months, the new homes sales report from the Housing Industry Association shows. But HIA chief economist Harley Dale said that this is still a strong result off the back of a healthy March quarter. The April result for total seasonally adjusted new home sales comprised of two small gains, a 0.4% rise for detached house sales and 0.9% growth for multi-unit sales. ‘The profile for new home sales in 2015 is consistent with a new home building cycle where further upward momentum resides largely in the multi-unit sector and where the eastern seaboard states are driving the further growth,’ Dale explained. In terms of detached house sales, both New South Wales, Victoria and Western Australia posted monthly gains in April but Queensland recorded a disappointing decline, according to Dale. Sales in South Australia continued to weaken and are at an 18 month low. A breakdown of the figures show that in April 2015 private detached house sales increased by 7.2% in New South Wales, by 2.7% in Victoria, and by 0.9% in Western Australia. Private detached house sales dropped by 9% in Queensland and were down by 1.9% in South Australia. In the April 2015 quarter detached house sales increased in by 0.5% in New South Wales and by 7.4% in Victoria but declined by 4.7% in South Australia, by 4.4% in Queensland and by 1.6% in Western Australia. ‘This profile is broadly consistent with our forecasts for detached house commencements, with the exception of Queensland which is looking weaker than we were expecting,’ said Dale. Continue reading
Rents in UK set to rise in next five years, according to lettings agents
A third of lettings agents in the UK reported that rents increased in April, the latest data shows, and many believe they will continue rising over the next five years. The latest monthly private rental sector report from the Association of Residential Letting Agents (ARLA) shows that in the North West some 46% of landlords reported an increase in the region. Overall nine in 10 agents reported that they were happy with the general election result and with Labour’s rent cap proposals thrown out, 79% of ARLA agents predicted that rents will increase over the next five years. The report also shows that in the last month, the number of landlords selling their buy to let properties has increased, particularly in London. ARLA agents in London saw the number of landlords selling their buy-to-let properties double between March and April, rising from three to six properties on average per branch. Scottish agents saw an increase from four to seven buy to let properties going up for sale in the last month, whilst the national average increased from three to four buy to let properties up for sale on average per branch. ‘It is interesting that we have seen an increase in the amount of landlords selling their buy to let properties in the last month, which is likely to have been a result of political uncertainty,’ said David Cox, ARLA managing director. ‘We know that Labour’s plans were unpopular for many landlords and agents, so this increase in those selling their buy to let properties may have been a knee jerk reaction to the possibility of Labour’s proposals coming in to practice,’ he added. Following the general election result earlier this month 90% ARLA letting agents were happy with the outcome of a majority Conservative government with 95% believing the result is good news for the private rented sector. Some 13% of those agents said it was good news because the Conservatives will interfere less with the industry and 11% believe the result will provide certainty and stability to the market In April, supply and demand remained similar to last month. On average, ARLA member branches managed 193 properties, compared to 192 in March. In April, ARLA agents reported an average of 36 prospective tenants per branch, which remains exactly the same as March. ‘It is going to be interesting to see what happens in the market in the next few months following the election result and whether we see an increase in supply of rented accommodation as a result of the Conservative’s promise to build 200,000 new starter homes offered at 20% discount to first time buyers. This policy will help first time buyers make that leap onto the housing ladder and as a result this will hopefully free up rental property,’ Cox pointed out. ‘Hopefully, now the country is under less political… Continue reading
