Tag Archives: european
Mortgage lending in UK up 9% month on month
Gross mortgage lending in the UK reached £22 billion in July, some 9% higher than June when it was £20.1 billion, according to the latest data to be published. The figures from the Council of Mortgage Lenders, which represents over 90% of home lenders, also shows that it was 14% higher than July last year and the highest monthly figure since gross lending reached £23.6 billion in July 2008. Mohammad Jamei, CML economist, explained that although it is the highest monthly total for seven years, it is in line with the CML’s expectation that lending would strengthen in the second half following subdued activity earlier in the year. ‘We expect lending activity in the rest of the year to be underpinned by improving economic fundamentals, but kept in check as any upward pressure on house prices further stretches affordability for some buyers,’ he said. ‘Today’s data is in line with our forecast that gross lending will rise to £209 billion this year, 3% higher than in 2014,’ he added. John Eastgate, sales and marketing director of OneSavings Bank, believes that fears that the Bank of England was gearing up for an interest rate rise caused an uplift in re-mortgaging in July, as home owners raced to refinance before the cost of borrowing rises. ‘We’ve seen continued resilience in the buy to let market in spite of the tax changes announced in the Budget, and this has underpinned wider lending growth. However both last week’s Monetary Policy Committee minutes and the current weight of low inflation seem to have pushed back rate rise expectations into next year, so mortgage rates should remain historically attractive for longer,’ he pointed out. He warned that it is not all plain sailing. ‘House prices are still on upward trajectory, which is doing nothing to take the sting out of entering the market for buyers. Unless serious commitments are made to build more homes, the supply deficit will continue to move the property ladder out of reach of those struggling to find a firm footing, causing greater long term reliance on the private rental sector,’ he said. Henry Woodcock, principal mortgage consultant at IRESS, also believes that increased fears of an imminent base rate hike have boosted the remortgage market, causing many borrowers to consider moving onto fixed rates mortgages, and therefore buoying activity. ‘While total lending is unlikely to hit the CML’s initial full year forecast of £222 billion, we expect a strong level of lending in the final part of the year. Now that the prospect of an imminent base rate hike has receded somewhat, historically attractive rates will be available for longer, supporting buyer demand,’ he said. According to Peter Williams, executive director of the Intermediary Mortgage Lenders Association (IMLA), affordability checks designed to promote responsible lending are set to bite harder as the market grows and this suggests there is little prospect of activity growing unchecked, especially as the… Continue reading
Portugal’s golden visa scheme reduces real estate investment for certain locations
The Portuguese government has reduced the minimum required amount for its golden visa for those investing real estate from €500,000 to €350,000 for certain locations. But the new lower amount only applies to property located in districts designated for urban renewal and is designed to reinvigorate interest in the popular visa scheme and provide a boost to Lisbon's regeneration programme. The scheme is also getting a boost after it was suspended earlier this year as a result of a legal void created by a piece of new legislation which did not address certain aspects of the existing golden visa laws. It is one of several so called golden visa schemes that allows property investors from outside of the European Union to get a visa to live in the country by investing in real estate. Others are available in Spain and Greece. ‘It was already the most popular scheme of its kind in Europe, but the government wants to cast the net wider. Spain and Greece launched similar visa systems in 2013 and have taken some of the market share, so the authorities are using properties in regeneration areas across cities like Lisbon to inject more interest in the scheme,’ said Nicholas Leach at Athena Advisors. According to the latest figures from the Serviço de Estrangeiros e Fronteiras (SEF) 2014 was a record year for Portugal with 1,526 successful golden visa applicants in total. However this year there has been less, with only 398 successful applicants in the first six months of 2015. ‘After the initial surge of investment into the scheme, there was bound to be a let up in demand. The demand of immigration incentives peaks and troughs, and this is why the government has shaken up the terms, to try and keep the rhythm going,’ explained Leach. Between its launch in October 2012 and the end of June 2015 the Portuguese Golden Visa scheme attracted €1.47 billion of investment, of which €1.33 billion or 90% was through the purchase of real estate, accounting for 2,289 golden visas. By comparison, the Spanish equivalent of the scheme generated around €700 million, granting 530 foreign buyers with a visa between its launch in September 2013 and March 2015. According to Leach some golden visa investors have looked to the Algarve and Silver Coast north of Lisbon, but Lisbon's city centre has been the main target due to the value and potential uplift. ‘Prime properties in Lisbon are a third of the price of their London and Paris equivalents, and if you look towards central regeneration areas like Mouraria there is even more value,’ added Leach. Following the recession of 2008, much of Lisbon's city centre fell into disrepair as both businesses and people left the city. Developers have targeted these areas over the last few years, renovating historic properties and even entire districts, upgrading real estate to international standards, thus enticing golden visa investors. Most of the city centre's sought after districts fall within the boundaries… Continue reading
Rent controls not best way forward for young people to access housing in Europe
A group of over 30 private housing and property bodies from across Europe have come together to find solutions on how to improve younger people’s participation in the housing market. The International Union of Property Owners (UIPI), which represents more than five million property owners around Europe, says that there enormous challenges for young people accessing housing and rent controls are not necessarily the best way forward. At its Annual Congress, UIPI committed to continuing to discuss solutions on how to improve young generations’ participation in the housing market, by fostering home ownership and promoting access to affordable housing. ‘Young generations’ access to the housing market is a major issue of the running decade and it needs to be tackled. UIPI has a clear role to play in this debate and we have to promote solutions that stimulate the inclusion of young Europeans in the European housing market,’ said UIPI president Stratos Paradias. He pointed out that the new generation faces higher unemployment which is reaching some worrying rates in a number of European Union countries, and many have low and unstable incomes. ‘This is the harsh reality owed to the financial crisis making difficult for them to access home ownership market through mortgage loans despite current low interest rates,’ he explained. ‘Even our own children, who should inherit our own home and properties, are reluctant to do so, because they might be unable to cope with the payment of the transfer and inheritance taxes, not to mention the annual property taxation imposed in more and more countries, at ever increasing and alarming levels,’ he pointed out. ‘This situation forces an increased number of young Europeans to live with their parents, or to be financially dependent on them, postponing their family plans. It also puts additional pressures on the residential rental market,’ he added. He also explained that the burden on both the private and social housing sectors is amplified by population migration, notably of young EU citizens leaving their country of origin in search of suitable jobs, in already densified areas of the European centres of economic activities. ‘Low incomes, tightened lending and demand pressure on rental housing is a combination that generates political demands for stricter rent regulation, rent control or further investment in public housing and/or housing allowances. Rather than imposing rent control and high taxation, we believe that we have to correct the damages of the crisis in a way that does not endanger financial as well as macroeconomic stability,’ Paradias concluded. Richard Price, director of operations at the UK’s National Landlords Association (NLA) and executive director at the Association of Letting Agents (ALA) explained that younger generations are finding it much harder to enter the housing market across Europe. ‘Increasing the supply of affordable housing is the most likely factor to improve the situation in the UK, but this needs to go hand in hand with a stable economy and confidence in employment prospects,’ he said. The meeting… Continue reading
