Tag Archives: crisis
Bank of England figures show home buying lending has gained ground this year
Overall lending for buying homes in the UK gained much ground in the third quarter of 2014 compared to last year as the residential property market continued its recovery. The latest figures from the Bank of England shows that the proportion of lending for house purchase was 71.8% of total residential loans to individuals, approximately 1.7% higher than in the second quarter of the year. The figures also show that the amount of gross advances for house purchase was 20% higher compared with the third quarter of 2013 at £40.1 billion. However, the proportion of lending to first time buyers decreased by 0.4% to 21.7% after reaching a peak in the second quarter of 2014. But the value of residential loans advanced to first time buyers increased over the quarter to £12.1 billion, the highest quarterly amount since the third quarter of 2007. The proportion of gross advances at a loan to valuation (LTV) of over 90% decreased by 0.3% over the quarter to 4.3% while the proportion of gross advances to borrowers with a single income multiple of more than four times decreased by 1.1% to 10.8% after having increased for five quarters in succession. The proportion of gross advances to borrowers with joint income multiple of more than three times decreased slightly by 0.2% quarter on quarter to 28.6%. The proportion of gross advances that is a combination of an LTV over 90% and loan to income multiple of over 3.5 times for single income borrowers or 2.75 times for joint income borrowers, decreased over the quarter by 0.3% to 3.1%, having increased for the previous three successive quarters. According to David Newnes, director of Your Move and Reeds Rains estate agents, initiatives like Help to Buy and higher LTV lending provided welcome relief for potential first time buyers combatting stagnant interest rates on their savings and underwhelming wage growth in their quest for a deposit. But he warned that the loan to income caps could become a potential sticking point for first time buyers, and layers of mortgage regulation are threatening to further dampen demand for homes. ‘However, the government has extended an outstretched hand to aspiring buyers with last week’s stamp duty reform, which is a welcome gesture for the lower rungs of the housing ladder,’ he added. Continue reading
Major new development announced for London’s Canary Wharf
Plans to create a new waterside community on the eastern edge of Canary Wharf in London with up to 3,610 homes and more than 17,000 jobs have been approved by the Mayor of London. Major new development announced for London’s Canary Wharf Plans to create a new waterside community on the eastern edge of Canary Wharf in London with up to 3,610 homes and more than 17,000 jobs have been approved by the Mayor of London. It is the latest in a series of new developments that Mayor Boris Johnson hopes will help tackle the severe shortage of homes in the capital city, especially affordable homes. The new development, on land formerly known as Wood Wharf, will transform a vast 13.6 hectare site that has been semi derelict and underused for decades. In addition to new housing, including affordable housing options, the scheme will include a variety of business and retail units, hotel, leisure facilities, a new primary school and a doctor's surgery. There will also be up to 35,000 square meters of retail floor space, a community centre and a network of parks and public squares and the centrepiece will be a 57 storey cylindrical residential skyscraper facing the waters of South Dock, designed by Herzog & de Meuron, the Swiss architects behind the Tate Modern and the Bird's Nest Olympic stadium in Beijing. Developer Canary Wharf Group will also be contributing in excess of £60 million towards Crossrail and an additional £27.5 million for other infrastructure needs. This will include over £10 million for local transport improvements, some of which will be used to improve the nearby Preston's Road roundabout. At least 25% of the new homes will be affordable but a review mechanism has been put in place that could see the number of affordable homes rise to 40% and 80% of the affordable homes will be affordable rent and the remainder will be intermediate housing. ‘This vast development will transform a currently derelict brownfield site beyond all comprehension into a thriving new community with thousands of new homes and jobs. This is exactly the kind of scheme that we need to accommodate London's booming population that is set to break through the nine million mark within the next decade,’ said Johnson. According to Sir George Iacobescu, chairman and chief executive officer of Canary Wharf, the new development will reinforce Canary Wharf's position into the future as one of the most exciting and vibrant places to live and work in London. ‘The new phase of Canary Wharf will include up to 3,610 new homes, and 1.9m square feet of office buildings designed to accommodate the fast growing technology media and telecoms sector as well as financial and professional services firms,’ he explained. ‘It will offer high street retail units to complement Canary Wharf's existing retail offer, as well as affordable housing on site. It will also include substantial new green parks and dockside walks, a library, a large GP surgery, a school for 420 children, a community sports hall… Continue reading
Large group of UK first home owners can’t afford to move up the housing ladder
Over four million young home owners in the UK are frustrated middle movers who cannot afford to move up the property ladder, new research reveals. Some 68% of home owners aged 18 to 34 are still in their first property and 63% said that the main barrier is the need for property prices at the lower end of the market to increase so that they can afford a bigger home. The research from Santander Mortgages also shows that 89% have made compromises on their first home such as location or size, at 63% and 55% respectively. Some 47% bought a home with fewer bedrooms that they would have liked. Of the home owners aged 18 to 34 who would like to buy their next home within the coming 24 months some 71% think it is unrealistic that they will be able to do so. Overall 50% of home owners in this age group expected to live in their first property for more than five years, but 59% have already had to do so. ‘There are a lot of frustrated middle movers who made compromises on their first homes and have now been stuck with these for longer than they wanted, as they are finding it difficult to move up the property ladder,’ said Miguel Sard, head of mortgages at Santander. ‘There are a lot of great deals to be had for buyers at the moment, however, both in terms of properties and mortgages, so it’s worth looking around,’ he added. Of those homeowners aged 18 to 34 who would like to purchase a new home in the next two years, the average time they think they will realistically have to wait until they can do so is over three years, the research also found. Whilst the main barrier is the need for property prices to increase, as cited by 63% of those surveyed, 28% blame a lack of suitable properties on the market and 51% say they need to do work on their current home to increase its value before putting it on the market while 34% say they are waiting for property prices to fall further. Others see wider economic issues as barriers to purchasing a new home, with 53% citing personal fears about the state of the economy as an obstacle, while 38% are concerned about the stability of their own or their partner’s job. Upfront costs are also a big issue, with 58% saying they need to save for a bigger deposit. Continue reading
