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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
UK landlords advised not to be swayed by misinterpretation of legionella testing
Some consultants and letting agents in the UK are misinterpreting landlord’s responsibilities regarding legionella risks to their tenants, it is claimed. According to the Health and Safety Executive (HSE) they are using the revised L8 ACOP to suggest that new legislation has been imposed on landlords of domestic rented properties in relation to assessing and controlling the risks of exposure to Legionella bacteria of their tenants. ‘This is wrong, the legislation has not been changed and any misinterpretation or misunderstanding can impose unnecessary financial burdens on landlords where they are being charged for legionella testing and certificates they don’t actually need,’ said a HSE spokesman. He pointed out that whilst there is a legal duty for landlords to assess and control the risk of exposure to legionella bacteria, Health and Safety law does not require landlords to produce a Legionnaires testing certificate. ‘Legionella testing or sampling is generally not required in domestic hot and cold water systems and then only in exceptional circumstances,’ the spokesman pointed out. ‘Misinterpretation of the legal requirements by some consultants and letting agents about landlords responsibilities to manage and control legionella in domestic premises may result in unnecessary financial burdens being placed on landlords and tenants,’ he added. The HSE has produced free practical guidance for landlords available to on its website on how to manage and control the risks in your system. The spokesman said that following the guidance is not compulsory and landlords are free to take other action, but if they do follow the guidance they will normally be doing enough to comply with the law. The guidance says that simple control measures can help control the risk of exposure to legionella such as flushing out the system prior to letting the property and avoiding debris getting into the system by making sure that cold water tanks, where fitted, have a tight fitting lid. It also says that tenants should be advised of any control measures put in place that should be maintained, for example not to adjust the temperature setting of the calorifier, to regularly clean showerheads and to inform the landlord if the hot water is not heating properly or there are any other problems with the system so that appropriate action can be taken. When it comes to showers in most domestic settings the risks are reduced by regular use but in any case, tenants should be advised to regularly clean and disinfect showerheads. Instant electric showers pose less of a risk as they are generally cold water fed and heat only small volumes of water during operation. The guidance points out that it is important that water is not allowed to stagnate within the water system and so there should be careful management of dwellings that are vacant for extended periods such as student accommodation left empty over the summer. As a general principle, outlets on hot and cold water systems should be used at least once a week to maintain a… Continue reading
Home prices and sales up in Scotland after property tax blip
House prices in Scotland increased by 2.6% in June, taking the average price to £169,227, according to the latest index figures, with sales up 25% month on month. It means that year on year prices have increased by 1.2% over a period that have seen a number of changes in the property market including the introduction of the new Land and Buildings Transaction Tax (LBTT) tax earlier this year in April. There was a flurry of sales at the upper end of the market before the tax was introduced and a dearth of sales in this sector afterwards but the Your Move index shows that June’s price growth was driven by a revival in million pound plus sales. The data also shows that home sales surged 25% in June compared with May, reaching the highest monthly total since July 2014. Glasgow saw the strongest jump in sales activity in the second quarter, up 18% in the past year on back of increased demand for flats. ‘The calm annual house price change of 1.2% recorded in June 2015 belies tumultuous currents of activity beneath the surface. The Scottish housing market has been buffeted around by taxation,’ said Christine Campbell, Your Move managing director in Scotland. She pointed out that on average in 2014, there were 12 £1million plus properties sold in Scotland during a month, but in June 2015 there were six, signalling an improvement in this sector of the market in just one month. On the mainland the biggest monthly rises were recorded by the two most expensive local authorities across Scotland with properties in East Renfrewshire and East Dunbartonshire experiencing price jumps of 26% and 21% respectively in June. ‘More generally, the LBTT front loaded sales into the start of the year, and activity dragged its heels throughout April and May, with the general election adding to the dampening effect,’ added Campbell. In Aberdeen, for example, sales of detached homes fell 39% between March and April. But June saw a 25% month on month leap in home sales, higher than what would typically be expected for this time of year, and 5% up on June 2014. Overall, Scotland saw 9,265 home sales during the month, the most activity since July 2014 and during the second quarter of 2015 flats have seen the most significant year on year increase in sales, up 7%. ‘This stems from the stamina of the first time buyer market, as this property type tends to be the most affordable for those getting their first footing on the property ladder. This is especially the case in cities, and Glasgow and Edinburgh accounted for 45% of all Scottish flat sales during the second quarter of 2015,’ said Campbell. ‘But affordability is the biggest steer to Scottish housing market at the moment. At £200,000, the average price of a flat in Edinburgh is more than one and half times as much as the cost of the… Continue reading
