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Home loans fall in Australia month on month
Home loans to owner occupiers in Australia fell 7.3% in January but those approved to investors increased by 1.6%, according to the latest data from the Australian Bureau of Statistics. The number of loans to owner occupiers for the construction and purchase of new homes declined by 5.3% and the number of loans to owner occupiers buying established homes, excluding refinancing, fell by 7.9%. ‘Lending figures indicate that the investor market performed a little stronger. Lending to investors building or constructing new homes, however, was slightly weaker during the month but remained markedly stronger than this time a year ago,’ said Housing Industry Association economist, Geordan Murray. He pointed out that these results follow the Australian Prudential Regulatory Authority’s December letter to lending institutions outlining their intention to increase the level of supervisory oversight of mortgage lending. The letter detailed some specific areas of concern noting high LVR loans, fast growth in lending to investors, and mortgage affordability in a (future) higher interest rate environment. ‘It is too early to determine whether APRA’s communication has had an impact in January. It will be interesting to observe the lending figures over the next few months to see how lenders respond,’ explained Murray. ‘It is important that the new home building sector is not pushed back into a credit squeeze whereby a lack of readily available finance becomes an industry wide problem,’ he added. A breakdown of the figures show that on an annual basis the total number of owner occupier loans for new housing in January 2015 increased only in Tasmania which saw a 67.3% year on year rise. In New South Wales the number of loans fell by 3%, in Queensland by 6.9T, in the Australian Capital Territory by 9.9%, in Western Australia by 12.3%, in Victoria by 12.4%, in the Northern Territory by 17.6% and in South Australia by 23.5%. Continue reading
Asking prices up across UK led by Scotland and East Anglia
Asking prices have risen across all regions in England, Scotland and Wales over the last month, reflecting widespread positive sentiment across the UK, the latest index suggests. However, higher prices are also tempting vendors to put their properties on the market and the supply of property for sale in London, for example, has overtaken demand, according to the latest index from Home.co.uk. This is shown by a steep rise in the typical time on market which is currently 71 days, some 24 days longer than in March 2014, the report points out, although supply rises in other regions are much more muted. Asking price rises are led by East Anglia and Scotland, both with a monthly rise of 1.4%, and annual rises of 6.2% and 8% respectively. The report also says that an optimism abounds as even in the least well performing areas of the North East and Wales, prices have risen 0.4% and 0.3% respectively since February. A breakdown of the figures show that asking prices in London prices increased a further 2.1% despite rising supply and are up 31% year on year. While asking prices have increased by 1.1% overall in England and Wales during the last month but the average annual appreciation has fallen to 6.8%. Overall, the current mix-adjusted average asking price for England and Wales shows that properties on the market are valued 6.8% higher than they were in March 2014. The typical time on market for England and Wales is now 119 days, which is eight days less than this time last year, and shows that the market continues to gain momentum overall. ‘House prices are surging again, over and above seasonal expectations. The key market drivers of low mortgage interest rates and low supply remain very much in place,’ said Doug Shephard, Home.co.uk director. He pointed out that so far, the market correction in prime central London has not affected sentiment elsewhere in the country, and the flow of mortgage credit to homebuyers and property investors alike continues unabated. ‘We maintain that the best prospects for stable growth this year and next probably lie in regions such as East Anglia, East Midlands, the South West, West Midlands and perhaps Yorkshire. It may be argued that these regions are still in the throes of the recovery phase, as supply remains low and prices have not yet risen out of reach,’ he explained. ‘There are also further indicators that the recovery will, at last, lift the northern regions out of the misery of price stagnation. Those markets are gaining momentum and above inflation price rises look highly likely over the coming months,’ he added. He also pointed out that while prospects for price growth are poor for prime central London this year as an abundance of unsold stock has been whittling away at property values, for the time being, prices do appear to be stabilising. ‘The investment outlook for Greater London remains mixed but will slowly turn… Continue reading
Smoke and carbon monoxide alarms to be legal requirement in rental properties
Landlords in the UK will be required by law to install working smoke and carbon monoxide alarms in their properties from October 2015, it has been announced. According to Housing Minister Brandon Lewis the move will help prevent up to 36 deaths and 1,375 injuries a year after a consultation showed strong support for the measure. Fire and rescue authorities are expected to support private landlords in their own areas to meet their new responsibilities with the provision of free alarms, with grant funding from the government. Lewis explained that it is part of wider government moves to ensure there are sufficient measures in place to protect public safety, while at the same time avoiding regulation which would push up rents and restrict the supply of homes, limiting choice for tenants. ‘In 1988 just 8% of homes had a smoke alarm installed but now it’s over 90%. The vast majority of landlords offer a good service and have installed smoke alarms in their homes, but I’m changing the law to ensure every tenant can be given this important protection,’ said Lewis. ‘But with working smoke alarms providing the vital seconds needed to escape a fire, I urge all tenants to make sure they regularly test their alarms to ensure they work when it counts. Testing regularly remains the tenant’s responsibility,’ he added. According to Communities Minister Stephen Williams it will help to create a bigger, better and safer private rented sector. ‘A key part of that is to ensure the safety of tenants with fire prevention and carbon monoxide warning. People are at least four times more likely to die in a fire in the home if there’s no working smoke alarm,’ he said. ‘That’s why we are proposing changes to the law that would require landlords to install working smoke alarms in their properties so tenants can give their families and those they care about a better chance of escaping a fire,’ he added. The proposed changes to the law would require landlords to install smoke alarms on every floor of their property, and test them at the start of every tenancy. Landlords would also need to install carbon monoxide alarms in high risk rooms such as those where a solid fuel heating system is installed. Those who fail to install smoke and carbon monoxide alarms would face sanctions and could face up to a £5,000 civil penalty. This would bring private rented properties into line with existing building regulations that already require newly built homes to have hard wired smoke alarms installed. New regulations will be laid in Parliament to require landlords to install smoke and carbon monoxide alarms in their properties, and are expected to come into force, subject to Parliamentary approval, on 10 October 2015. The allocation of funding to fire and rescue authorities to offer free smoke and carbon monoxide alarms to local landlords will be announced shortly. The British Property Federation said the crackdown was necessary to force the small number… Continue reading
