Tag Archives: crisis
UK residential mortgage market becoming too restrictive, study suggests
Renewed optimism in the UK mortgage industry for growth in 2015 is being overshadowed by the view that the market has become too conservative, it is claimed. Post financial crisis regulation is hampering the market and brokers are reporting difficulties in meeting customer needs, according to the latest research from the Intermediary Mortgage Lenders Association. While optimism is returning some 84% of brokers were unable to help at least one customer in the last six months, up from 78% in July 2014, the report points out. Products for the self-employed or those seeking to borrow into retirement are among those in short supply and people with low incomes or dependents have been most affected by reduced access to finance. Overall 74% of brokers took the view that market conditions are worsening, which is backed by 65% of lenders. It comes despite improving sentiment towards market conditions following a period of changes to lending criteria. IMLA’s previous research in July 2014 found 45% of brokers and 33% of lenders reporting that market conditions were worsening. This followed the implementation of the Mortgage Market Review (MMR) in April and with new macro-prudential controls on the horizon. Their pessimism has since softened with just 23% of brokers and 21% of lenders feeling the same way in January 2015. Some 51% of brokers, up from 41% in July, and 53% of lenders, up from 44% in July, now feel market conditions are currently improving. However, IMLA’s research reveals 84% of brokers were unable to source a mortgage for at least one client during the last six months, up from 78% who said the same in July 2014. A breakdown of the figures shows that 53% of brokers were unable to help a client with adverse credit, 53% were unable to help an interest-only borrower, 50% were unable to help a customer seeking to borrow into retirement and 46% were unable to help a client who was self-employed or had an irregular income. Overall, brokers and lenders both identify low income borrowers and those with dependents as the two consumer groups who have been most impacted by reduced access to finance following the MMR. Among the new rules, interest rate stress tests are seen to have had the biggest effect in reducing the amount people can borrow. More brokers and lenders report that the new rules are having an impact than was the case in July. Some 39% of brokers feel product availability has increased following the MMR, while just 18% feel it has reduced. Yet opinion is more evenly split on product flexibility with 27% of brokers feeling this has improved but 23% that it has not. ‘Regulation is vital to ensure that mortgage lending is safe and in proportion to consumer needs and the wider economy. But when families with dependents are among those who find themselves at a disadvantage, there are legitimate concerns that the pendulum has swung too far as a result of successive, incremental measures,’ said… Continue reading
Estate agents under more pressure to sell in some parts of the UK, it is claimed
Estate agents in some parts of the country are facing increased pressure from vendors over the length of time it is taking to sell property, according to new research. According to Part Exchange Register, agents are under increased pressure in areas were the sales process is much slower and are at a higher risk of losing their vendors to another agent. The research points out that there are enormous regional variations in the country’s housing market. It can take up to three months longer to sell a home in some parts of the UK than others, with certain areas taking ‘more than a year’ to find a buyer. In fact, Wales and the North West dominate Rightmove’s list of the most difficult places to sell a home. Of the bottom 10, three are in Wales, namely Powys, Gwynedd and Conwy, and four are in the North West, Sefton, Fylde, Rochdale and Allerdale, as well as Workington in Cumbria. Properties sell the quickest in the university town of Cambridge than they do anywhere else in the country, typically taking just 27 days to find a buyer, compared to a national average of 65 days. ‘The recent housing boom has not reached many parts of the UK and the good times experienced by agents in the South East is certainly not reflected in Wales and the North West,’ said Joanne McClarence, operations director of Part Exchange Register. ‘In some parts if the UK, it can be very challenging for agents to find buyers and at the same time, assure vendors that everything possible is being done to sell their property. Agents often face aggressive marketing from their competitors, who target their vendors who have not sold in a given period,’ she explained. The firm has developed a new ‘matching’ service, which enables agents to generate additional property sales, by bringing vendors and buyers together, in a more targeted and effective way. ‘Part Exchange Register creates property matches between an agent’s vendors and those of other Agents, as well as matching vendors to new homes from a national network of property developers. The fact is that many vendors are really keen to move, but can’t do so until they find a buyer for their property. The problem is that many home movers wait around until their property is sold before they start to view other houses,’ McClarence pointed out. The aim is to give agents the opportunity to offer a unique, added value service to vendors and provides another sales channel and is described at ideal for agents who are looking to secure new sales opportunities. Continue reading
UK house prices up 2% in first month of 2015, latest index sho
House prices in the UK increased by 2% between December and January, the biggest rise for January since 2009, according to the latest property index figures. The data from the Halifax also shows that in the three months from November to January prices were 1.9% higher than in the previous three months and the quarterly rate of change increased for the first time since July 2014. But it remains below the rates recorded between June and September last year and overall the Halifax expects a moderation in house price growth during 2015. It predicts that house prices nationally will increase by 3% to 5% compared with 8% in 2014. Prices in the three months to January were 8.5% higher than in the same three months a year earlier. This was an increase from 7.8% in December. This measure of annual house price growth was at its highest since October 2014 when it was 8.8%, but remains significantly below the peak of 10.2% in July 2014. It points out that sales increased by 15% in 2014 but despite this annual rise, sales peaked in the first quarter before steadily declining during the course of the year with sales in the final quarter 5% lower than in the first quarter and 1% lower than in the third quarter. ‘This bounce-back in house price growth in January coincides with reports of the first rise in mortgage approvals for six months in December. These improvements may indicate that the recent declines in mortgage rates, the reform of stamp duty and the first increases in real earnings for several years are providing a modest boost to the market,’ said Martin Ellis, Halifax housing economist. ‘It is, however, too early to draw any firm conclusions. The monthly figures in January can be particularly volatile due to the lower volumes of activity at this time of year and there have been unusually large rises on occasion in the past, such as in 2007 when it was 2.3% and 2.4% in 2009,’ he explained. ‘Housing demand should continue to be supported by an expanding economy, continuing low mortgage rates and a boost to households’ spending power resulting from lower consumer price inflation and reduced fuel bills. Nonetheless, we expect the overall downward trend in house price growth seen since last summer to continue over the coming months. Nationally, house prices are predicted to increase in a range of 3 to 5% in 2015 compared with 8% last year,’ he added. According to Rob Weaver, director of investments at property crowdfunding platform Property Partner, the figures confirm that the property has still got some punch. ‘A strong January and the first quarterly rise for six months could suggest another buoyant year but I suspect we are more likely to see a period of gentle and sustained growth,’ he said. ‘It's hard to see how the property market could under-perform in 2015. Undershoot 2014, yes, but under-perform, no. Economic conditions at home… Continue reading
