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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
Swimming pool is top extra for prime properties, research suggests
People buying prime property in the UK want top notch sport and home leisure facilities with a swimming pool the most popular of such facilities, new research shows. Overall some 17% of high end estate agents have seen an increase in demand for swimming pools that can add up to 15% to a property’s sale price, according to the study from Direct Line’s Select Premier Insurance. In joint second place is tennis courts and home gyms with 9% of agents reporting demand for these kind of facilities, followed by 8% for a home spa, 6% for land, 5% for a home cinema, 4% for stables, and 3% for a luxury kitchen, a wine cellar and secure parking facilities. But the down side to a swimming pool is that potential buyers either love them or hate them and the upkeep and cost of maintenance can put them off even although they add 15% to the potential sale price. Designer kitchens can also add up to 15% to the purchase price, while dedicated home gyms and games rooms can add around 5% to the value of a home, the research also shows. However, some 17% of those surveyed said these sporting and home leisure facilities do not add value to a home, but they do increase its saleability, or attractiveness to potential buyers. Land was reported as a key selling point by estate agents, who stated customers would often prefer to have the space to build their own chosen facilities. The view from a property can have huge implications for the sale price, with one estate agent estimating when combined with a good location and road reputation, a beautiful view could double the value of a property. According to Nick Brabham, head of Select Premier Insurance, more home owners now want to embrace their favourite pastimes in the comfort of their own properties, including golf greens, squash courts and fully equipped gyms. ‘However, these high end facilities can be costly to install and maintain, so property owners should ensure they have sufficient cover in their home insurance policies to protect the items they value most,’ he said. Continue reading
Residential sales fall in Hong Kong but prices holding up, latest research shows
Residential sales in Hong Kong fell almost 30% in one month as weak demand hit the property market but prices are still going up, the latest data shows. Figures from the Land Registry shows a 27.8% drop in transactions in August from the previous month and according to international real estate firm Knight Frank this was due to weakened demand caused by the slump in both the Mainland and local stock markets. However, home prices still recorded minor growth, due to strong end user demand and Knight Frank expects prices to remain firm for the rest of the year. Indeed the firm is predicting that at the top end luxury property prices are likely to grow between 2% and 5% this year while the rest of the market could see price growth of 5% to 8%. Residential land prices also remained firm, with the asking land premium for Lohas Park phase eight in Tseung Kwan O hitting a record high for a residential project in the area at HK$2.955 billion, or an accommodation value of HK$2,830 per square foot. The latest analysis report from Knight Frank suggest that the primary sector remained the market focus, with developers active in launching new flats and offering beneficial packages, including discounts and second mortgages. For example, discounts of 10% to 20% were offered for the latest batch of units at High Park Grand in Mong Kok. In Aspen Crest in Diamond Hill, meanwhile, second mortgages worth 30% of the total purchase price were offered, meaning homebuyers only needed to pay a 10% down payment. A breakdown of the figures in the Knight Frank report show that in the prime property market prices have held up but rents have fallen in some locations. In The Peak district prices were flat month on month but are 5.2% higher than August 2014. Prices were also flat in Island South month on month but up 2.6% year on year. Mid-Levels saw month on month price growth of 0.3% and year on year of 8.1%, Jardine’s Lookout/Happy Valley also saw month on month growth of 0.3% and annual growth of 9.8% while Pokfulam recorded monthly price growth of 0.1% and year on year growth of 9.5%. In the prime rental market there has been little growth. In The Peak rents fell 0.2% compared to July and are flat compared to August 2014, while in Island South rents are also flat compared to a year ago and down 0.3% month on month. Mid-Levels has seen growth of 0.5% year on year but rental prices were flat month on month, Jardine’s Lookout/Happy Valley has seen rents fall 0.2% month on month but up 0.2% year on year and in Pokfulam rents are flat month on month and up 0.5% year on year. Continue reading
