Tag Archives: crisis
Scotland sees strongest first quarter for home lending since 2008
Home lending in Scotland increased by 7% in the first quarter of 2016, the strongest first three months of a year since 2008, new figures show. A breakdown of the data from the Council of Mortgage Lenders shows that on an unadjusted basis home owners borrowed £1.8 billion, down 22% quarter on quarter but up 1% year on year. They took out 13,500 loans, down 22% on the previous quarter but up 7% compared to the first quarter 2015. First time buyers borrowed £660 million, down 24% on the fourth quarter 2015 but up 10% on the first quarter last year. This totalled 6,200 loans, down 23% quarter on quarter but up 11% year on year. Home movers borrowed £1.1 billion, down 21% quarter on quarter and down 4% compared to a year ago. This totalled 7,300 loans, down 22% quarter on quarter but up 4% on the first quarter of 2015. Remortgage activity totalled £780 million, down 1% on the fourth quarter 2015 but up 13% compared to a year ago. This came to 6,400 loans, down 5% quarter on quarter but 5% up compared to a year ago. ‘Seasonal factors often affect lending levels in the first quarter of the year, but there are encouraging indicators in Scotland, as all lending types showed growth year on year,’ said Carol Anderson, CML Scotland chair. She pointed out that 2016 saw the strongest first quarter in a year for house purchase lending since 200. ‘With affordability conditions continuing to be favourable, we would expect gradual year on year growth in Scotland to continue throughout 2016,’ she added. While the figures show that it was the highest total borrowed for house purchases in the first quarter of a year since 2010 in Scotland, it was also the highest total borrowed for remortgage in the first period of a year since 2011. The CML report says that this was mainly driven by home movers who took out the highest amount of loans for house purchase in a first quarter of the year since the first quarter of 2008. Affordability metrics for first time buyers in Scotland remains better than for the UK overall. The amount borrowed this quarter compared to the previous was £97,795 compared to £130,500 in the UK overall, from £100,000. The average household income of a first time buyers was £33,381 compared to £40,000 in the UK overall, from £34,066 meaning income multiple in Scotland was 2.97 down compared to 3.01 the previous quarter and the UK average of 3.46. Affordability metrics for home movers in Scotland also remains better than for the UK overall. The amount borrowed this quarter was £136,000 compared to £172,295 in the UK overall, from £135,789 the previous quarter. The average household income of a home mover was £51,149 compared to £56,104 in the UK overall, from £50,815 meaning income multiple in Scotland was 2.68 down compared to 2.73 the previous quarter and the UK average of 3.2. Continue reading
Remortgaging in UK hits seven year high of £6.4 billion in April
The value of remortgage lending in the UK has increased 48% year on year and is the largest amount recorded since November 2008, the latest data shows. The figures from LMS also show that the number of borrowers remortgaging exceeded 39,300 and is the highest since July 2009 while affordably improved markedly with typical remortgage repayments falling to a record low. This represents a 36% increase from the £4.7 billion n recorded in March and a 48% uplift from April 2015’s figure of £4.3 billion. The number of remortgage loans also increased by 41% from 28,000 in March to 39,353 in April. This is 47% more than April 2015 when 26,700 borrowers remortgaged. This is the greatest number since July 2009 when 39,500 remortgaged. Low interest rate has resulted in mortgage affordability improving sharply. Now remortgage payments as a percentage of income are at 16.79%, a record low, down from 18.4% the previous month. Andy Knee, chief executive of LMS, pointed out that March saw the market overwhelmed by second home owners and buy to let investors looking to push through transactions before changes to stamp duty came in, but as April arrived, existing home owners were able to remortgage and capitalise on the great rates currently available. ‘The average amount people are withdrawing through remortgaging fell to a 13 month low, suggesting household budgets are not as constrained as previously. Home owners can also celebrate that as a result of such low mortgage rates and rising incomes repayments as a percentage of income have fallen to a record low, boosting family finances,’ he said. But he also pointed out that the forthcoming referendum on the UK’s place in the European Union will continue to dominate headlines until the vote on 23 June which could have an impact on the mortgage rates that banks offer as well as household finances if the result is to leave. The data also shows that mortgage interest rates fell to 2.49% in March, down from 2.51% in February and the sum of annual remortgage repayments fell from £8,593 in February to £8,344 in March as a result of lower interest rates, while average household income rose by 7% from £46,605 to £50,000 in the same period. This meant that annual remortgage repayments as a percentage of income fell from 18.4% to 16.7% month on month, a record low. Average mortgage payments as a percentage of income also fell, from 21.2% to 19.7% between February and March, but this remains 3% more than remortgage costs. Continue reading
Research reveals UK house hunters like a more personal service from estate agents
Some 58% of UK house hunters want life long, personal relationships with estate agents with an accumulative understanding of their property needs, new research suggests. The study from cloud based estate agency software provider Dezrez, looks at the attitudes, perceptions and expectations that UK home buyers have towards estate agents and online tools. It found that the majority of respondents, 93%, search for properties online, while 54% said that they would use a mixture of online tools and estate agents to deal with the entire property buying process. Some of home buyers said they would actually prefer to have a personal agent who can deal with the whole management of the home buying process. Those surveyed also admitted to relying heavily on estate agents’ expertise for key parts of the home buying process including with 72% for conveyancing, 62% to arrange viewings and inspect properties, 53% to make an offer and 42% for financial negotiations. ‘Buying or selling a home can be an extremely stressful and daunting process and good quality customer service still carries a huge amount of weight. Estate agents are well placed to offer sound, expert advice. They can help to alleviate some of the pressures and concerns that consumers have with managing the process themselves,’ said Justin Morris, chief executive officer of Dezrez. ‘What we are experiencing in the property market is some interesting trends that are mirroring consumer activity on the high street. Whilst many people like to be able to search online, they clearly value the customer experience and human touch of face to face interactions. However, without the personal touch online only services aren’t necessarily going to be in the position to replace traditional agents,’ he explained. The research also highlights consumer frustration with agents who are slower to adopt newer digital technologies. Some 67% of respondents believe that estate agents are not fully using technology to their advantage and 44% strongly agree that estate agents need to adopt, and embrace technology, in order to survive in the future. ‘There is a real appetite for change from both estate agents and consumers, especially when it comes to the use of technology. Advancements in technology, from mobile devices to cloud based software offer some amazing opportunities for the estate agent of the future. It gives them greater accessibility and freedom, and helps them to alleviate some of the pressures experienced by home buyers and sellers,’ Dezrez pointed out. ‘ There’s a breadth of technology that can help transform the property industry and enable agents to deliver a professional and personal service across human and digital touchpoints. In order to survive, and thrive, estate agents must recognise and remain confident, that they too have the tools available to remain competitive and keep customers satisfied,’ he added. Continue reading
