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Survey finds home owners think peer to peer lending is risky
Almost half of home owners in the UK who have not invested in peer to peer finance are put off by a perceived risk, new research has found. Some 42% who took part in a new survey feared it was too risky, 22% had never heard of it, 17% do not understand how it works but 5% had invested on at least one peer to peer platform. Younger generations however are more open to risk, with just 28% of those aged 25 to 34 citing risk as a factor for not investing in peer to peer, compared to 46% of 55 and overs, according to the YouGov poll commissioned by buy to let peer to peer platform Landbay. Some 30% of those home owners who do use peer to peer platforms invested moderate amounts of £1,000 or less. However at the opposite end of the spectrum, 18% invested larger sums of over £5,000. Investment in peer to peer finance appears to be divided into consumers trying out platforms with small amounts of cash invested, and those who regularly invest larger sums. ‘We’ve gone out of our way to be open and up front about the risks involved on our platform, but we’re equally open about the unique range of protections our model offers. We’ve based our proposition around creating the most risk proof peer to peer platform, in an industry sometimes reluctant to mention the risk,’ said John Goodall, cofounder and chief executive officer of Landbay. ‘These research findings highlight the need to debate the merits of risk more in financial planning. We need an open and proper discussion on whether more people should consider moving a small proportion of their savings into an investment,’ he pointed out. ‘Of course risk is not for everyone, but it appears too many hoard large amounts of money in cash savings when it might be wise to consider putting a small amount of those savings at risk in exchange for better returns as part of a balanced approach,’ he explained. ‘The question is whether too many people see it as a binary choice between keeping all their money safe in the bank or putting it all at risk. Instead it should be about finding the right balance to achieve what you want to with your hard earned cash,’ he concluded. Continue reading
Asking prices rise across the UK apart from in Scotland
Asking prices have increased across England and Wales but not in Scotland, according to the latest index to be published. Prices rises increased by 0.9% overall in England and Wales during the last month but the average annual appreciation for England and Wales is down to 6.5%, the Home.co.uk index shows. The firm says that this reflects increasing demand across most of the UK and although Scottish prices nudged down slightly they remain 4.1% higher than last year. The data also shows that the typical time on market for England and Wales has improved considerably. At 88 days, this already matches last year's post-crisis low and looks set to fall further despite the slower Greater London market. Supply of property for sale in London has risen considerably over the course of the last year, up19%. Correspondingly, marketing times have increased and the typical marketing time is now 60 days which is 13 days longer than in April 2014. Despite this, prices continue to rise at a rate of 13% per annum. Supply rises in other regions are either small or negligible and this is stimulating great price growth, the index report says. Prices are higher in East England, where the typical time on market has fallen to a new post-crisis low of 64 days. East England, the South East, West Midlands and the South West all showed higher monthly price rises than Greater London this month. Further north, marketing times are also improving and prices are nudging up as spring increases the market momentum. Overall, the current mix-adjusted average asking price for England and Wales shows that properties on the market are valued 6.5% higher than they were in April 2014. Homes might be taking longer to sell this year than last, but London’s property values have soared to new all-time highs and this month’s rise takes the average home to over £500,000. Also, the mix adjusted average price has risen by 44% in just three years, which equates to an increase of around £150,000. However, the market dynamic in London is changing and the same vigour that yielded such price growth is moving out to the regions via the Home Counties, according to Doug Shephard, Home.co.uk director. ‘The immediate future looks rosy for all of the UK, but much of this growth is based on debt at historic low rates of interest. And the music won’t stop until it appears that the debt cannot be repaid, although that moment seems a long way off,’ he said. ‘Leveraged property investors can take comfort in the fact that the Bank of England doesn’t look keen on increasing interest rates any time soon. In fact, inflation is falling to new lows and the Bank ‘stands ready’ to cut IRs should this deflationary trend continue for too long. So, for the time being, the sky’s the limit,’ he added. Continue reading
Scottish country house prices moderate in first quarter of 2015
Prime country house prices in Scotland rose by 0.2% between January and March, a slightly more modest increase than the 1% growth seen in the final quarter of 2014, the latest data shows. Annual growth also slowed, to 1.2%. This compares to average growth of 2.1% in 2014, according to the latest index report from Knight Frank. Average prices remain 22% below the market peak in 2007 so a property valued at £1 million in 2007 would now be worth £780,000. However, there are regional variations in price growth across the prime market. Edinburgh leads from the front with a year on year price rise of 4.1%, followed by Central and Northern Scotland. However, while price growth at the top end of the market has slowed in the approach to the UK General Election, prime sales volumes in the first quarter of 2015 have increased. The firm says this can be attributed to the introduction of the new Land and Building Transaction Tax (LBTT) this month as both buyers and vendors in the prime market have looked to complete deals ahead of the introduction of the new levy. Under the new rules, 50% of buyers will not be liable to pay any tax on the purchase of a home. However, for homes valued above £333,000 the up-front cost of moving will increase. Knight Frank sales data shows the number of prime country homes changing hands between January and March, ahead of the implementation of the new levy, was 11% higher than during the first three months of 2014. The report suggests that the introduction of LBTT is likely to have a knock-on impact on sales at the top end of the market in the second quarter of the year. ‘However, we expect that in the medium term the market will adjust to the new system, underpinned by current favourable economic conditions,’ said Ran Morgan, head of Scottish residential sales. ‘In spite of higher levels of property tax, Scottish property continues to offer good value, especially when compared with London and southern England,’ he added. The data also shows that more than half of buyers in this property sector are from outside of Scotland. ‘Over the last year 57% of our buyers were from outside of Scotland, highlighting the global appeal of the country. This trend has continued in 2015, with individuals from Hong Kong, the United Arab Emirates and London all purchasing properties during the first three months of the year,’ explained Morgan. A breakdown of the figures shows that 31% were from other parts of the UK, on top of that 12% were from London, 5% were from the Middle East and 5% from Asia. Some 2% were from Europe and 2% from North America. Continue reading
