Tag Archives: finance
Over a year on from new UK mortgage rules, many are still unaware of the change
Two thirds of potential house buyers in the UK been left in the dark about the new mortgage rules which were introduced last year, new research has found. The survey by mortgage lender and broker Ocean Finance shows that some 31% of people who plan to buy a property within the next two years are unaware that mortgage rules were overhauled more than a year ago. A further 35% of potential buyers did know that mortgage regulations had changed, but said they felt confused by the new rules. In April 2014, the biggest piece of mortgage regulation in a decade came into force. The changes, brought in by the Financial Conduct Authority, mean lenders must take additional steps to ensure borrowers only get a mortgage they can afford. In practice, the new mortgage rules mean that borrowers will face increased scrutiny from lenders about their incomes and their expenditure including spending on things such as childcare, holidays and entertainment. Yet 70% of those questioned were unaware that lenders are required to look closely at their spending. Consequently, a quarter said they haven’t changed their spending habits to help them qualify for a mortgage. Of those who do know that lenders are required to examine spending, more than a fifth have reduced their spending on treats and have stopped contributing to life assurance and pensions to keep a greater proportion of their income in their bank accounts. Just 24% of aspiring home buyers questioned were aware that the new rules also test their ability to afford a mortgage if interest rates rise. And even fewer people, 16%, knew that the rules would also test their ability to withstand changes to their personal circumstances. To help demystify the new rules and ensure they are prepared to apply for a mortgage, almost a fifth of potential buyers have sought advice from an independent mortgage broker. Almost 30% have looked online for information about the rules and 14% have relied on their friends or family for advice. Worryingly, a third have not sought any advice on applying for a mortgage. The research shows that a third of potential home buyers are so concerned about the tougher mortgage rules that they expect to have to delay buying a house so they can save for a bigger deposit and get into a stronger position to obtain a mortgage. ‘More than a year after the new mortgage rules were introduced, potential buyers are still in a state of confusion about what they mean in reality. Even more worrying is that a large chunk of people who are gearing up to apply for a home loan are not even aware that the mortgage rules have changed,’ said Gareth Shilton, Ocean’s spokesperson. ‘As an industry, we need to do more to educate buyers and to guide them through a process which many people are finding understandably daunting. For anyone who plans to apply for a mortgage in the next year,… Continue reading
UK lettings agents report fewer rent rises and new homes on market also falls
The number of letting agents reporting rent increases for tenants has fallen month on month while the number of homes for rent is also down, according to the latest UK rental sector report. The analysis from the Association of Residential Letting Agents (ARLA) shows that for the first time this year, the number of ARLA agents seeing rent hikes for tenants has decreased from the previous month. The report reveals only three in 10, some 33%, of agents reported an increase in August, the lowest since April this year and a drop from 37% last month. Tenants in the South West however are not benefiting from this. Some 42% of agents in the region are continuing to see rent prices hiked, up four percentage points from last month. This is compared to only 12% of agents in the North West who have witnessed a rent increase. In Wales, tenants are worse off too. The number of landlords putting rents up for their tenants has increased threefold from July. This month 36% of letting agents in Wales saw increases, up 25% from July when just 11% agents reported rent hikes. The data in the report also shows that after a spike in the number of houses available to rent last month, supply has fallen back down to levels seen in June 2015. ARLA letting agents managed an average 178 properties per branch in August, compared to 189 in July. The report found that the number of house hunters in the rental sector increased marginally in August. Letting agents reported an average 36 prospective tenants registered per branch, compared to 35 in July. The number of properties available to rent in London continued to fall in August, pushing demand for housing even harder in the capital and putting further pressure on house hunters. With 110 properties registered per branch, compared to 117 in July, the task of finding a property in the capital’s rental sector is becoming increasingly difficult. ‘Our findings this month are good news for the majority of tenants, as less are experiencing rent hikes. However, a third of agents are still seeing landlords pushing rents up, which reflects the sorry state of affairs in the market,’ said David Cox, ARLA managing director. ‘With increasing pressure on the dwindling supply of housing, and the number of house hunters growing, rent increases are unfortunately very common as one in three tenants are experiencing,’ he pointed out. ‘Despite the fact they have fallen this month, it’s likely they will go back up again over the next few months,’ he added. Continue reading
Rents in England and Wales fall for first time since March
Residential rents across England and Wales have fallen on a monthly basis for the first time since March, despite fresh records in three regions, according to the latest index. Average rents fell by 0.1% on a monthly basis, down from £804 in July to stand at an average of £803 in August, the data from the Your Move and Reeds Rains index shows. However, on an annual basis rents are now 5.5% higher than in August 2014, representing a slowdown since July when annual rent rises stood at an all-time record of 6.8%. ‘August has witnessed a break in a series of blistering rent rises. Yet this mild correction comes on the back of a whole year of acceleration. Rents are rising rapidly on an annual basis, underpinned by an improving economic picture for many potential tenants and the peak lettings season is only just about to start this autumn,’ said Adrian Gill, director of estate agents Reeds Rains and Your Move. ‘There is also no major change to the fundamentals of supply and demand. This means that in the longer term, faster rent rises may become a semi-permanent feature of the British property market. Alongside purchase prices, rents will continue to rise rapidly until something happens to address a drastic shortage of homes in the UK,’ he added. A regional breakdown show that despite a slower picture across the board, three individual regions of England and Wales saw rents hit fresh records in August. In the West Midlands average rents of £586 per month represent the highest levels on record, while rents in the East Midlands have set their own record at £596. As the third region to see record rents, the East of England has also overtaken London to see the fastest annual growth of 11.5%, ahead of 10.2% annual increases in the capital. This takes average rents in the East of England to £843 per month. Meanwhile, while relegated to second place in terms of annual rent rises, London’s tenants still pay by far the most in absolute terms, with average rents of £1,278 in August. Annual rent rises in the West and East Midlands were also particularly strong, standing at 4.6% and 5.9% respectively. At the other end of the spectrum, Welsh rents are 3.1% lower than a year ago and the only region to see an annual fall. This comes as Wales has also seen the most negative trend on a monthly basis, with rents in the principality dropping 4% since July. In total five out of 10 regions have seen rents fall on a monthly basis. After Wales this is led by the South East, with rents 1.4% lower than in July, and the North East with a 1.1% monthly decrease. In London rents have seen a rapid reversal with a 0.3% fall following a 3.3% increase over the previous month. Leading the field on a monthly basis, South Western rents rose 3.2% between July and August,… Continue reading
