Tag Archives: crisis
House purchases rather than remortgages driving UK home lending market
The mortgage market in the UK remains driven primarily by lending for house purchase, rather than remortgage, according to the latest data from the Council of Mortgage Lenders. There were 30,200 first time buyer loans in July, up 3% from June and 25% up on July 2013. By value, there was £4.6 billion of lending to first time buyers in July, some 10% up on June and 39% higher than July last year. Lending to home movers also grew. In July, the number of loans advanced to movers was 37,500, 15% up on the previous month and 19% on July last year. By value, lending to movers totalled £7.2 billion, 20% up on June and 31% up on July last year. Remortgage lending remains muted compared with both first-time buyer and home mover lending. The number of remortgages in July was 4% up on June but 15% down on July last year. The value of these loans at £3.9 billion was up 3% on the previous month and down 5% on July last year. Buy to let lending grew 9% over the month to £2.4 billion in July, and an increase of 26% from £1.9 billion in July last year. House purchase lending to home buyers increased month on month in July totalling 67,700 loans, up 10% compared to June and the value of these loans totalled £11.8 billion, a rise of 15% on June. Compared to July 2013, the number of loans increased by 21% and the value of lending by 33%. The typical loan size for first time buyers continued to rise to £127,500 in July, up from £123,750 in June and the highest average loan size for a first time buyer on record. The typical gross income of a first time buyer household also grew to £38,900 in July compared to £37,095 in June. First time buyers' in July paid 19.6% of gross income towards covering capital and interest payments, up from 19.3% in June, but still significantly less than the recent peak of 24.8% in December 2007. Home movers typically borrowed 3.03 times their gross income in July, compared to 3.08 in June. The typical loan size for home movers was £156,000 in July, up from £153,800 in June. The typical gross household income of a home mover was £54,400 in July compared to £52,000 in June. ‘The market has shown steady growth in house purchase and buy to let over the past few months with general improvements in economic factors across the UK allowing for more people to enter the property market,’ said Paul Smee, director general of the CML. ‘There have been many factors over the past year that could have caused disruption but the market has remained resilient and lenders have shown themselves adaptable to all this change. The CML will continue working towards making sure future initiatives affecting the market, such as the European Mortgage Credit Directive, are introduced with equally minimal disturbance to borrowers and lenders,’ he added. Continue reading
New controls on the UK’s private rental market hailed is a flawed idea
Home seekers would face higher rents and restricted choice if tenancy rent controls were introduced in the UK, it is claimed. The Labour Party’s proposal to bring down the cost of renting and improving tenant security through the introduction of rental controls would actually result in higher rents initially, according to new research In the report, The Flaws in Rent Ceilings by Ryan Bourne for the Institute of Economic Affairs, argues that policymakers should instead look to radically shake up planning laws in order to facilitate more private rented accommodation and improve individual wellbeing through increased affordability. The study also claims that the Labour plan would lead to a misallocation of housing and a reduction in the supply of homes to rent without improving affordability and it questions claims that individuals suffer from a lack of security of tenure in the private rented sector. Secure tenancies are provided by the market for those willing to pay for them. The report says that the private rented sector’s share of the total housing stock has rebounded from a severe collapse having been subject to draconian rent controls between 1915 and 1989. Only since its liberalisation has the industry improved, with private rental accounting for over 16% of the housing stock in 2013, up from 10% in the late 1980s and early 90s. It argues that the success of the German rental market, where similar restrictions exist, cannot be used to justify the implementation of tenancy rent controls in the UK as while Germany’s ability to meet rising demand through the building of new homes has meant rents have become increasingly affordable since 1980, the same cannot be said for the UK. ‘With 1.3 million households in the UK renting from private landlords, the sector is in desperate need of policies that will stimulate desirable rentable accommodation at an affordable price. A lack of new property development continues to push up the cost of rent and Labour’s plans will only make things worse. Liberalising planning laws, in contrast, would enable the supply of rentable property to catch up with increasing demand, bringing down the cost of rent,’ said Bourne. ‘Despite claims from politicians, controls such as these will not improve the affordability of renting, other than in the very short term. These controls are likely to push up rents, due to greater uncertainty over future regulation and the risk to landlords associated with increased security of tenure. New tenants would face high initial rents as landlords insure against within-tenancy risks and compensate for future losses,’ he explained. He also pointed out that security of tenure is not a major consideration for the majority of those groups dominating the private rental market, namely young people, students and more mobile households.’ Over 35% of private renters remained in residencies for less than a year in 2013. Because rents will be initially higher, fixed term tenancies would allow less mobile households to enjoy low rents at the expense of the more mobile, harming labour… Continue reading
Strong real estate market in Miami with properties selling near asking price
The performance of the Miami real estate market remained strong in February, as prices continue to rise while properties are selling rapidly and near asking price, according to the latest report from the Miami Association of Realtors. Miami is one of the most popular parts of the United States for foreign property buyers and attracts enquiries particularly from Europeans and South Americans seeking to buy property for investment in Florida. The data shows that median sale prices again increased significantly for both single family homes and condominiums in February. The median sales price for single family homes jumped 17% to $227,000, marking 27 straight months of growth. The average sale price for single family homes increased 6.7% to $415,312 last month. ‘Despite the recent increase in inventory, sales activity remains at historically strong levels, resulting in rising prices,’ said Liza Mendez, chairman of the board of the Miami Association of Realtors. 'While additional inventory is creating a more balanced market, the fact that homes continue to sell fast and almost at asking price is still indicative of a seller’s market,’ she added. The median sales price for condominiums has increased for 32 consecutive months, up 7.3% to $177,000 compared to February 2013. The average sale price for condominiums increased 10.8% to $337,382 from a year ago. The report points out that Miami real estate continues to sell at a rapid pace and nearly at asking price, indicating properties are being priced right and buyers realize they need to be competitive in the current market. The median number of days on the market for single family homes sold in February was just 47 days, a decrease of 2.1% from February 2013. The average percent of original list price received was 95.2%, up 1.4% from February 2013. The median number of days on the market for condominiums sold in February was 57 days, an increase of 18.8% compared to the same period in 2013. The average sales price was 95% of the asking price, a negligible decrease of 0.8%. In February, residential real estate sales in Miami-Dade County decreased a negligible 1.9% compared to 2,075 in February of last year. Single family home sales increased 1.3% relative to February 2013. Compared to February 2013, condominium sales declined 4.1%. ‘The Miami real estate market also offers great opportunities for buyers. Prices are still low, comparable to what they were more than 10 years ago,’ said Francisco Angulo, residential president of the association. ‘And, interest rates are still at historical lows, making buying a home more affordable. Consumers considering buying a home should take advantage of all of the current favourable market conditions,’ Angulo added. The data also shows that active listings at the end of February increased 26.8% compared with a year ago. Inventory of single family homes increased 18.3% and condominium inventory increased 32.2%. At the current sales pace, there is a 5.6 month supply of single family homes, an increase of 6% from 5.3 months in February 2013, and a 7.5 month supply… Continue reading
