Tag Archives: crisis
UK mortgage lending off to slow start in 2015
Gross mortgage lending in the UK reached £13.4 billion in February, 9% down on both January and on last February, the latest figures from the Council of Mortgage Lenders show. This is the lowest monthly estimate for gross mortgage lending since April 2013 when lending totalled £12.4 billion. The weaker lending figures have not come as a surprise to the industry. ‘Seasonal factors tend to weigh on activity at the start of the year, but looking through these, the underlying picture appears to be stabilising,’ said CML chief economist Bob Pannell. ‘We expect lending to improve in the coming months, as employment and earnings continue to pick up and the impact of recent stamp duty reforms start to feed through,’ he added. Peter Rollings, chief executive officer of Marsh & Parsons, believes that too much should not be read into the data as 2014 was an exceptional year and a formative one with major changes to the borrowing process. He said that 2015 marks a return to more normal patterns of behaviour as the new affordability measures introduced last year become part of the normal market. ‘Lending is only just getting into its stride at the beginning of the year, and it’s also a much longer process from start to finish now, so we’ll see more approvals race through as the market heats up later in the spring,’ he pointed out. ‘Buyer finances emerge much healthier for going through a more rigorous obstacle course. First time buyers have great cause for celebration with the new Help to Buy ISAs, whittled down stamp duty, generous mortgage rates, and plenty of supply on the market. All the elements are at work to up the ante in the housing market in the coming months,’ he added. Continue reading
UK set to see more transparency on mortgage fees and charges
The Council of Mortgage Lenders and consumer organisation Which? have published a joint progress report on how to help people understand mortgage fees and charges. The aim is to improve the information given to consumers so that they can also compare the overall cost of borrowing. It says that organisations have made good progress, and most of the industry will have made the necessary changes by the end of the year. Meanwhile in July the CML and Which? will publish firm proposals and a timeline for implementation. The report calls for the introduction of a common approach by lenders to make their tariff of fees and charges available to customers to avoid confusion and make it easier to find information about mortgage costs. It also wants to see a wider use of consistent terms to describe the same types of fees and charges that currently have an array of different names and better explanations of whether fees are compulsory or avoidable and when they will be charged. It says there needs to be clearer ways of presenting information to help borrowers compare the cost of particular mortgage deals over specific periods, not just the upfront costs. ‘This collaboration with Which? has helped lenders focus on practical and simple ways to help customers by making information more transparent and consistent. We hope customers themselves will find it easier and less daunting to make informed choices about their mortgages as a result,’ said CML director general Paul Smee. Which? executive director Richard Lloyd said it is good news for thousands of consumers who supported the organisation’s call for an end to the confusion about the full cost of taking out a mortgage. ‘Which? has been working with the CML to simplify the wide range of complicated fees and charges in the market so people don't pay over the odds on their loan. We look forward to all mortgage providers making these changes so that people can get the best deals more easily,’ he added. Continue reading
UK property markets likely to see more capital growth in 2015, but at slower rate
UK property markets are likely to see continued capital value growth in 2015, especially in prime sectors, but perhaps at a slower late, according to an outlook analysis report. Strong capital value growth was undoubtedly the key theme of 2014 and growth across all sectors was stronger than forecast at the beginning of the year, according to the spotlight report from Savills. Growth could be slower in 2015 and the general election in May will definitely have some effect on sentiment, though in the agricultural and commercial sectors the firm expects the effects to be relatively muted. In the residential markets the threat of a mansion tax, combined with the Mortgage Market Review introduced in 2014 could lead to a more sustained hiatus in capital value growth in 2015. ‘Generally we expect that the macroeconomic story for the UK will remain benign, with base rates remaining unchanged until early 2016, and the combination of low oil prices and recovering incomes giving a boost to the UK consumer,’ the report says. ‘The high returns that will be thrown off by all property sectors in the UK will continue to attract attention, and we expect that UK real estate will continue to deliver high returns in comparison to other asset classes,’ it explains. ‘This will mean that domestic and international demand for prime and good secondary assets will be strong, though we expect to see more focus on supply and demand fundamentals in 2015, rather than just the potential for yield shift,’ it adds. As far as the residential outlook is concerned the report suggests that returns will be less driven by yield shift in 2015, with the best performance coming from understanding where local markets and sectors are in the rental cycle. Following a year of strong mainstream house price growth in 2014 that ran well ahead of the economic recovery, Savills expects much more subdued price growth in 2015. This is particularly the case in London, which has now outperformed the rest of the UK for over nine years and where correspondingly, affordability is likely to look increasingly stretched as interest rates rise. ‘In addition, the mortgage market review is likely to restrict the amount which people are able to borrow. In turn, this is likely to restrict mortgaged buyers' ability to get on or trade up the housing ladder, thereby continuing to drive demand into the private rented sector and underpinning rental growth,’ the report says. ‘The ongoing debate around the taxation of high value property is likely to mean a relatively muted prime market in the run up to the election. While the mainstream market may receive a one off fillip from the stamp duty changes in the 2014 Autumn Statement, prime markets that are bearing an increased tax burden will also have to contend with political rhetoric regarding a potential mansion tax, even though the medium term prospects remain positive,’ the report adds. In the agricultural perspective, Savills expects further growth in UK… Continue reading
