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UK home lending weaker than a year ago, latest data shows
Lending for homes in the UK in April was weaker compared to a year ago but remained steady month on month, according to the latest data from the Council of Mortgage Lenders. verall gross lending in April was £15.8 billion, down from £16.1 billion in March and £16.8 billion in April last year. First time buyers saw a decline in lending compared to March and April last year although loan sizes for this sector have increased since a year ago. The CML says that competitive mortgage rates mean first time buyers are paying less to service their mortgage than any time since it began tracking this in 2005. Home mover lending volumes went up slightly month on month but there was a decline compared to April last year. The average home mover loan size decreased in April compared to March, but increased compared to the same period last year. Home owner remortgage activity also declined compared to last year and on a month to month basis. It has remained relatively subdued since around 2009. Lending for buy to let in April saw a decline compared to March, but there was substantial growth compared to levels in April last year. The CML says this was largely due to the increased levels of remortgage activity in the buy to let sector seen since the beginning of the year. The composition of lending for buy to let is different compared to that of home owner lending. While over the past year about 30% of lending to home owners was for remortgage, in the buy to let market 52% of lending was for remortgage. ‘House purchase lending in April was relatively subdued compared to last year, but similar to activity in March,’ said Paul Smee, director general of the CML, ‘The economy is recovering, with employment up, earnings growing, and competitive mortgage rates, so we expect activity to continue building as the year progresses. Buy to let is showing stronger growth than home-owner lending, buoyed significantly by remortgaging, which continues to remain more subdued in the home owner market,’ he added. Continue reading
Pay an extra 25% to buy a house in a popular London garden square
The average price of a home located on one of central London’s popular garden squares now costs above £2 million and commands a sales premium of 25% over a similar home nearby, new research shows. The study by residential estate agent Hamptons International analysed house prices in and around 64 of central London’s garden squares. The 25% premium for 2015 remains unchanged from 2014, although the average price of a home in a garden square rose 7% to £2,040,713, breaking the £2 million mark for the first time. In order to derive the premium, the analysis compared sales prices, taken over a five year period, of properties located on a garden square, compared to those within a 200 meter radius of a square. All prices were indexed forward to January 2015 values, to account for house price inflation. In 2015 a property situated on a central London garden square sells on average for £2,040,713 compared to £1,643,907 for a similar property within a 200 meter radius of the square. For houses the price differential is even greater. The average price for a house located on a garden square in 2015 is £5,022,221, compared to £3,320,582 for a house within a 200 meters radius of a square. ‘Growing house prices have seen the average home on a central London garden square break the £2 million mark for the first time. As well as the view of and access to shared resident only gardens, many of these homes are in the capital’s most desirable locations, with names such as Eaton Square or Chester Square recognised the world over,’ said Johnny Morris, head of research at Hamptons International. ‘While in part it is the address that purchasers are paying for, the size and quality of the property is also important and London’s garden squares are home to some of the finest examples of British architecture in the capital,’ he explained. ‘Overall it’s a combination of factors that accounts for the price premium buyers are prepared to pay for a home on a London garden square; namely setting, prestigious address and exceptional architecture,’ he added. Continue reading
UK buyers with pension pots favouring property as an investment, it is claimed
Pensioners in the UK have more investment opportunities than ever before due to pension rule changes and many are looking to property as an alternative to annuities, shares and bonds, it is claimed. Since pensioners were granted full control of their retirement savings in April, some 70% have opted to drawdown all or part of their retirement wealth and domestic and international property is topping the investment stakes. Compared to investments in the stock market, property remains a far more predictable and stable option in the longer term according to the latest Global Real Estate Outlook report from property investment company, IP Global. IP Global’s findings show a clear price surge in cities like Berlin, which saw a 10.01%rise, and the central wards of Tokyo, where investors have achieved a 13% return so far this year. In addition, growing rental demand in cities like Brisbane means that investors can expect a yield of 5.4% per year. Supported by the strong British pound against the Euro and Japanese Yen, UK investors can not only obtain far more favourable purchase prices but also secure a continued income. Domestically, London and most recently, Manchester, are leading the way, according to the report, with prices in Greater London increasing by 12% in the last year. In Manchester, a new property is still valued at less than half the average seen in London, however, prices are expected to rise to close this gap, with new projections putting Manchester price growth at a strong 26.4% up to 2019. With these new found freedoms, there has been a sharp rise in demand from pensioners for experienced and qualified advice on what retirees can do with their savings as they decide how to make use of their pension pot. Continue reading
