Tag Archives: crisis
Survey confirms certain groups facing difficulties due to UK mortgage reforms
Mortgage Market Reforms (MMR) in the UK are making it more difficult for certain customers to get a mortgage including over 40s and the self-employed, new research has confirmed. When the rules changed in April there were warnings that they could impact adversely on the home lending market and now research from buy to let lender Paragon Mortgages shows there was a 3% reduction in average mortgages introduced by intermediaries in the third quarter of the year. Intermediaries thought it was more difficult for certain customer groups to get a mortgage in the third quarter compared to the previous quarter and this comes after other firms have reported difficulties for people aged over 40 trying to secure a mortgage. The specialist lender’s quarterly Financial Advisers Confidence Tracking (FACT) survey highlights intermediaries’ views on the performance of the mortgage market, also revealed that people borrowing into retirement, people wanting interest only mortgages and people with irregular incomes have experienced difficulties. Indeed, the stark figures show that more than 90% of the 186 respondents in each case reported these difficulties. During the third quarter the average number of mortgages introduced by intermediaries was 22, which was down 3% on the second quarter. Nevertheless, compared with the third quarter of 2013, this shows a 12% increase in the average number of mortgages introduced. This, however, was significantly lower than the 30% year on year increase seen in the second quarter. Intermediaries appeared more positive about the buy to let market with 24% of all mortgages introduced being buy to let mortgages, a modest increase from 23% in the second quarter of the year. In particular, 43% of intermediaries surveyed thought the availability of buy to let finance had improved since the second quarter, a significant increase of 7% over the period from 36%. In addition, only 8% of intermediaries stated the availability of buy to let finance had deteriorated, compared with 12% in the previous quarter. ‘The market has seen significant structural changes following the Mortgage Market Review. This is a result of both the regulations themselves and the way the lending industry has responded to them,’ said John Heron, managing director of Paragon Mortgages. ‘This could be one factor behind the softer levels of business that intermediaries are reporting in the third quarter. Indeed CML data shows us that buy to let lending was up 14% in quarter three compared with quarter two, and up 24% on the third quarter of 2013, which could suggest that the buy to let market is proportionally more important for lenders in the current market,’ he explained. ‘A healthy availability of buy to let finance is significant to maintaining a competitive and high quality Private Rented Sector, so it is pleasing to see increased confidence amongst intermediaries, for this type of business,’ he added. Continue reading
International demand for prime central London property remains strong
While much has been written about the UK 2015 general election causing uncertainty in the central London prime property market, international demand remains strong, it is claimed. Independent property buying agency Black Brick says it has completed on a dozen separate transactions for investment clients in recent weeks, all with budgets below £2 million and in the past month it has also signed new clients from Brazil, Egypt, and Qatar with budgets from £2 million to £4 million. ‘We continue to see interest from a range of buyers, including both investors and owner occupiers. Other developments of note include a significant rise in Russian interest across both the rental and sales markets in recent weeks,’ said Camilla Dell, Black Brick managing partner. ‘The return of the Russians comes despite the collapse of the rouble against the pound. And while the sharp drop in the price of oil clearly has its own implications for net wealth in the Middle East, West Africa and Russia, the strength of the dollar does at least offer some compensation for potential buyers of prime central London property with US dollar assets,’ she explained. She also pointed out that Sterling's 9% drop against the so called 'greenback' and a fall of similar magnitude against the Chinese yuan since the middle of the year is giving buyers in these increasingly significant asset pools a welcome currency discount. ‘We expect Chinese buyers in particular to dominate the high end of the prime property market in central London in 2015. We also expect political concerns to continue to be a driver of overseas demand in 2015 and beyond,’ she added. However, for the domestic market, 2015 is likely to be a year of two very clearly defined halves split by the general election. ‘Should the Conservative party win the May 2015 election, we expect an extremely active London property market and the opportunity to drive a hard bargain with vendors will be significantly reduced if not lost all together. We believe the period between now and the general election may prove an attractive entry point to this property sector over the long term,’ said Dell. She does not expect a Labour victory to have a dramatic impact on London house prices, though some short term weakness in prices is likely. Hot spots for 2015 include Marylebone with its mix of high quality independent retailers and restaurants. Dell said that Marylebone has one of the best high streets in London and is conveniently located with elegant period housing stock and new developments. For investors the firm is tipping Maida Vale as one of the best areas in London to focus on in 2015. Overlooked by buyers in favour of neighbouring St John's Wood, Maida Vale looks extremely good value compared to its more expensive neighbours, according to Dell. She also pointed out that prices are still well below £1,500 per square foot and this is rare for an area with such excellent shops and transport links to central… Continue reading
Research reveals high number of UK tenants don’t have contents insurance
With both the cost of renting and the number of renters increasing in the UK new research has found that a third of tenants don’t have any form of home insurance to protect their contents. This proportion is almost six times larger than the comparative figure for those who own their own homes which is 6%, according to the research by Co-operative Insurance. The research reveals the most common reason that those renting have no contents cover is a belief that they can’t afford it with this affecting 44%. This is in spite of recent industry data, which reveals that the average home contents policy costs just £2.44 per week. Furthermore, the findings highlight that 29% of those without insurance feel that they don’t need contents cover as they don’t have expensive belongings whilst 26% believe they don’t need insurance as they rent rather than own a property and 16% are happy to take the risk of not insuring their contents. Some 7% said that they don’t have contents insurance as there are too many things excluded from the cover, 6% will just pay for damage from savings, 5% have not got round to it yet, 3% believe this is covered under landlords insurance, 2% think insurance is too complicated and 1% didn’t renew last time their policy finished. The research also revealed that the average value of contents estimated by renters is £16,644, for home owners this doubles to £31,651. Industry findings highlight that the average theft claim for contents now costs £1,700 whilst this rises to £11,000 in the event of a fire. The average claim for accidental damage is now £550. ‘This research uncovers a worrying insurance gap, amongst a growing proportion of the UK population,’ said Anthony Lewis, Head of Insurance for The Co-operative Insurance. ‘Prized possessions and home contents are worth protecting whether people own or rent their property, and our research suggests that many millions of people are taking a risk without any cover in place in the event of theft, or other perils such as flooding and fire,’ he added. The research also shows that 10% of those who rent, have stopped insuring their home over the last five years. This compares to just 6% of those who own their own homes. Overall the figures reveal the main factor behind people stopping insuring their homes, is a desire to save money with 47% saying so, while 20% say they have moved to an area with a lower crime rate, the same number have moved from owning a home into rented accommodation, 19% lost their job and 14% have installed extra security. Continue reading
