Tag Archives: finance
Home lending in UK fell in August but experts say it is a normal seasonal trend
Lending to first time buyers, home movers, home owner remortgage and buy to let borrowers in the UK in August but levels are still higher than a year ago, the latest data from the Council of Mortgage Lenders shows. Bob Pannell, CML chief economist said that this is a normal seasonal trend, with August typically less strong for mortgage completions and the underlying picture is of improvement in lending levels on a year by year basis. ‘Seasonal factors pushed all categories of lending lower in August compared to July. However, the mortgage market continues to see year on year growth, and we expect this to continue over the coming months,’ he added. A breakdown of the figures shows that lending fell by volume and by value for the first time since April this year. However, this was the third consecutive month that lending for house purchase increased year on year by volume and by value. Pannell pointed out that it was the highest house purchase lending activity level for the month of August since August 2007. However, volume levels this month were still only 60% of what they were in August 2007. Overall in August, home owner loans for house purchase accounted for 57% of gross lending, the same as in July, while remortgage activity accounted for 21% compared to 24% in July. Home owner loans as a share of gross lending have increased since the New Year while remortgage activity has edged down. Buy to let lending as a proportion of total gross lending remained at 17%, a consistent level since the beginning of the year, but up from 13% in the same period last year. First time buyers accounted for 44% of total house purchase lending volumes, a much higher proportion than pre-crisis levels of 30% of the number of loans for house purchase and it was the highest monthly first time buyer lending level by volume and by value in the month of August since 2007, but the number of loans was only 78% of the August 2007 levels. The proportion of first time buyer gross household monthly income in August to service capital and interest payments stayed the same month on month at 18.5%, but remained considerably lower than 19.7% in August last year, and much lower than the most recent high of 24.8% in December 2007. This was the highest home mover lending level by volume and by value in the month of August since 2007, although this month's volume levels are still only 51% of the volume levels in August 2007. Home movers spent 18.1% of their monthly gross household income to pay capital and interest repayments, up slightly on last month but down on the same period last year. Like first time buyers, this is still much lower than the most recent peak of 23.8% in December 2007. Remortgage activity dropped month on month in August 17% by volume and 18% by… Continue reading
UK house prices up 5.2% year on year, says latest ONS index
UK house prices increased by 5.2% in the year to August 2015, unchanged from the previous month but excluding London and the South East the increase was 4.8%, the latest official figures show. House prices increased by 5.6% in England, 0.8% in Wales, 2.9% in Northern Ireland and fell 0.9% in Scotland, according to the figures from the Office of National Statistics (ONS). The data also shows that annual house price increases in England were driven by an annual increase in the East of 8.8% and the South East at 7.4% while month on month they increased by 0.7% nationwide. In August 2015, prices paid by first time buyers were 3.8% higher on average than in August 2014 and for existing owners prices increased by 5.8% for the same period. The North East recovered from an annual fall in house prices in the year to July 2015 of 0.7% to show annual growth of 2.9% in the year to August and London prices increased by 4.2% over the year to August 2015, down from 5.5% in the year to July 2015. Average mix-adjusted house prices in August 2015 stood at £298,000 in England, £174,000 in Wales, £151,000 in Northern Ireland and £198,000 in Scotland. Excluding London and the South East, the average UK mix-adjusted house price was £217,000. London continued to be the English region with the highest average house price at £522,000 and the North East had the lowest average house price at £160,000. London, the South East and the East all had prices higher than the UK average price of £284,000. According to Adrian Gill, director of Reeds Rains and Your Move estate agents, growth is primarily being underpinned by sturdy demand and solid activity at the bottom of the property ladder. ‘The cheaper northern regions are experiencing the fastest growth in property sales, while a shortage of property stock on the market in the south is slowing activity,’ he said. ‘The most frequently paid property price across England and Wales is just £125,000, mirroring the level at which stamp duty becomes payable, and reflecting the impetus that has been injected in the first-time buyer market recently,’ he pointed out. ‘It is also the lower to mid-range properties priced between £180,000 and £360,000 which are seeing the fastest increases in value, while the shift in stamp duty bands continues to slow growth at the higher end of the market, and prices above £600,000 are largely stationary,’ he explained. ‘Despite this, London is firmly back in the driving seat of property price rises, following a slight pit stop, and is having a much greater influence on national measures of price growth on an annual basis. As in the rest of the country, it’s the more affordably priced London boroughs which are behind this renaissance, as the strengthening of sterling, rising stamp duty rates and moves against non-doms take their toll on the high end market,’ he added. Lora Roberts, portfolio manager at estate agent Ascend… Continue reading
UK residential housing market sees highest activity for six months
UK housing market activity has climbed to its highest level in six months and the second highest monthly level on record, new data shows. September saw just 0.5% fewer valuations carried out than in March 2015 which was the highest on record, according to the latest research from Connells Survey & Valuation. On an annual basis, total valuation activity is up 29% compared to September 2014, after a 23% month on month rebound since August 2015. ‘Britain’s housing market is going from strength to strength. Against a brightening economic background, players in all parts of the market are feeling more confident about their prospects. Valuation activity is growing beyond the seasonal pick-up at the end of August, with year-on-year growth gathering momentum,’ said John Bagshaw, the firm’s corporate services director. The data also shows that the number of valuations carried out specifically for first time buyers rose by 25% in September compared to the previous month and an 18% increase compared to September 2014. Valuation activity among established home movers performed even better. The number of valuations carried out for those moving house rose 26% when compared to last month and 23% since September 2014. ‘First time buyers aren’t just feeling more confident, they are now following this up with real action and contributing a good portion of growth in the UK housing market. There are no signs yet that schemes such as Help to Buy are going to be phased out, helping to suppress the barriers to setting a first foot on the ladder,’ Bagshaw explained. 'Meanwhile, wages are growing faster than inflation and purchase prices have cooled a little in recent months, all contributing to an acceleration in numbers of first time buyers. Moreover, the latest focus from the government on starter homes is a promising sign there is at least a strong intention to maintain support at the bottom of the ladder,’ he pointed out. ‘Home movers have also been buoyed by the same trends. Rising real term wages combined with steadily increasing property values mean that many of those who are already fortunate enough to have a place of their own feel it’s a great time to buy,’ he added. The data also shows that remortgaging experienced another stand out month. The number of valuations for those thinking of taking a fresh mortgage out against the value of their current home rose 16% on August of this year and 49% since September 2014. Meanwhile the buy to let sector has seen steadier growth, with the number of valuations growing 13% since September last year. On a monthly basis, valuations activity carried out on behalf of buy to let investors grew by 21% compared to August. ‘The remortgaging sector is continuing to power ahead with plenty of people still opting to improve rather than move. High demand in this sector is still being driven by the large number of good mortgage deals out there, as homeowners rush to capitalise on the value of… Continue reading
