Tag Archives: crisis
UK home owners find switching mortgages harder, new study finds
There has been a reduction in the number of home owners in the UK finding that it is easy to switch their mortgage since new rules were brought in under the Mortgage Market Review a year ago. New research has found that mortgages are now the hardest financial product to switch among consumers who have shopped around for financial services in the last 12 months. The research, conducted by comparison site Gocompare.com, shows that just 59% of people who recently switched their mortgage provider described the process as easy, a fall from 70% in July 2014 when the same survey was carried out. The firm says that this reduction suggests the Mortgage Market Review, which was introduced at the end of April 2014, is continuing to frustrate consumers. The new system means that anyone needing a mortgage to buy a home, increase a current mortgage or re-mortgage needs to pass a more stringent affordability test, while interest-only applicants need to be able to demonstrate a credible repayment plan. MMR changes have subsequently been blamed for a fall in mortgage applications and delays in processing approvals. ‘It is clear from our research that consumers have taken issue with the changes to the mortgage application process introduced 12 months ago. To put it into context, the recent improvements in bank account and energy switching have failed to register at all on this survey, yet mortgages have slipped 11 percentage points,’ said Matt Sanders from Gocompare.com. ‘It would be fair to say that mortgages were never the most straightforward product to switch, but MMR has added an extra layer of complexity and in many cases led to delays in the process which just frustrates people further,’ he pointed out. ‘MMR has undoubtedly prolonged the process of applying for a mortgage, but a mortgage is still one of your biggest financial outgoings therefore it’s good to know that the importance of affordability is now at the heart of what they offer, which at the end of the day benefits the customer as well as providers,’ he explained.. ‘Even though applying for a mortgage is more complicated, there has never been a better time to shop around and with record low interest rates, the hassle of going through the checks and balances might be worth it to save some cash every month,’ he added. The research found that 90% of customers who switched home insurance providers in the last 12 months found the process easy, followed by 88% for car insurance, up from 84%, and 82% for credit cards. Changing broadband provider was easy for 72% and mobile phones for 70% with mortgages at the bottom of the table. Continue reading
Sales of new homes in Australia at their highest since 2010
The new homes sector in Australia has seen strong growth in March 2015, taking sales volumes to their highest level since early 2010, according to the latest survey. Overall new home sales were up 4.4%. There was an 11.3% rise in multi-unit sales and a 2.6% rise in detached home sales in March, according to the latest new home sales report covering the largest volume builders by the Housing Industry Association. ‘The monthly rise in both the detached and multi-unit segments of the market is an encouraging result. However, the broader trend is that growth over the past year has been driven by multi-unit sales, while detached house sales have tracked sideways,’ said HIA economist Diwa Hopkins. ‘The residential construction sector continues to be the main bright spot in the broader domestic economy, with updates to the sector showing its ongoing strength. Lower lending rates will provide added support to residential construction activity, which is emerging as a key area of growth mitigating the effects of the downturn in mining investment and construction,’ she added. A breakdown of the figures show that detached house sales increased by 5.9% in Victoria, 4.2% in New South Wales and also 4.2% in Western Australia. They declined by 5.8% in South Australia and by 2.3% in Queensland. In the March 2015 quarter, detached house sales increased by 5.2% in Victoria and by 4.3% in Queensland. In Western Australia they fell by 6.4%, in New South Wales by 3.6% and in South Australia by 1.4%. However, the latest renovations report from the HIA shows that this sector of the property market is struggling. Over the past three years the volume of renovations activity has fallen by 15%. The performance of South Australia typified the national trend. Over the 2012/2013 period, renovations activity the state declined from $2.10 billion to $1.78 billion, a drop of 15.1%. ‘The importance of the home renovations market is often underestimated. Valued at $29.66 billion during 2014, the renovations sector accounts for over one third of all residential construction activity and about 2% of GDP,’ said HIA senior economist Shane Garrett. ‘Big ticket expenditure items like home renovation jobs tend to suffer disproportionately at times when economic growth is slow and when unemployment is drifting upwards. The deceleration of wages growth to its lowest rate in almost two decades has also challenged the renovations sector,’ he explained. The report envisages a further decline of 2.8% in renovations activity during 2015. However, activity will experience an 8.2% uplift between 2015 and 2018, as a result of low interest rates and the gradual recovery of economic activity. Continue reading
RICS develops policy ideas report for next UK government
With property a key issue for voters ahead of this week’s UK general election, the Royal Institution for Chartered Surveyors (RICS) has developed a series of policy blueprints for new ministers. These Property in Politics recommendations provide workable solutions for the next government to implement as priorities and include establishing an independent Housing Observatory and for the next government to issue Property Tax Forward Guidance within its first 100 days A Housing Observatory would draw on expertise from across government, the private sector and academia, taking politics out of the housing debate and ultimately delivering the housing supply the UK needs. RICS says that the observatory would be strictly independent at arm’s length from government and fulfil several functions including as a data hub on housing, accessible to policymakers, academics and the general public. It would review and interpret this data and produce briefing papers on what works, both nationally and internationally and analyse policy statements, identifying long term consequences and macro trends modelled on the tax and spending policy analysis carried out by the Institute for Fiscal Studies. It would also create or facilitate new streams of research. Property Tax Forward Guidance would promote certainty and clarity for the property sector, according to RICS and it added that the new government should publish Forward Guidance of its plans for property taxes within its first 100 days. It would seek a commitment to a comprehensive review of Council Tax, including moves towards a wholesale revaluation of properties and the introduction of higher rate bands and reduce the VAT on improvements to rental properties to 5% to stimulate investment in the private rented sector. It says that the parties should undertake a detailed assessment of the probable impact of a mansion tax proposed by Labour and the Liberal Democrats. The proposals were developed through in-depth consultations with RICS professionals, and to date over 1,000 people have been engaged on the campaign. ‘To take these ideas forward, we convened a series of working groups in early 2015, to develop clear plans for action on a number of the recommendations; principal among these were the establishment of a Housing Observatory, the issuing of Property Tax Forward Guidance within the first 100 days of the next government, and the delivery of a Resource Revolution in planning departments,’ said a spokesman. ‘Across each of these areas, we engaged with partners and stakeholders from the professions, from academia, and from government. Each panel moved beyond the headline recommendations to give concrete proposals on how each can be realised and their findings have been compiled in a series of policy blueprints for new Ministers,’ the spokesman added. Continue reading
