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Fewer loans for first time buyers and home movers in UK
First time buyers in the UK saw a drop in lending in January compared to the previous month and the same month in 2014, according to the Council of Mortgage Lenders. There were 19,000 loans advanced to first time buyers January, down 27% on December and 14% compared to January 2014. These loans by value were £2.8 billion, which was down 26% on December and 10% down on January last year. The data also shows that home movers were advanced 22,400 loans, a decline of 24% compared to December and 17% down year on year. These loans totalled in value £4.2 billion, 24% down on December and 14% down compared to January 2014. However, remortgage lending increased month on month with 25,600 loans advanced, up 15% on December but 12% down on January 2014. The value of these loans at £4.1 billion also increased month on month by 21% but was down 5% year on year compared to January 2014. There were 18,200 buy to let loans in January, up 6% on the previous month and up 12% on the same period in 2014. These loans came to £2.5 billion in value, unchanged compared to December but up 14% on January 2014. ‘The traditional beginning of year seasonal lull in lending is slightly more prominent in house purchase lending than in previous years, especially in comparison to the particularly strong levels at the start of 2014,’ said Paul Smee, director general of the CML. ‘Affordability constraints remain a factor for would-be borrowers, but we are still projecting lending to pick up over the next few months. Increases month on month in remortgaging, both for home owners and in the buy to let market, are welcome given the recent static nature of remortgage activity. Interest rates are looking unlikely to go up in the very near future and the greater availability of good mortgage rates has probably motivated people to look at a change,’ he explained. As previously reported, gross mortgage lending reached £14.8 billion in January. This represents an 11% decrease from December’s gross lending total and is 8% lower than lending in January 2014. The CML also pointed out that the data on which the results are based on the Financial Conduct Authority's statutory reporting, which is currently in a transition phase following the implementation of the Mortgage Market Review. As a result this month's data may be subject to greater revisions than usual reflecting the transition arrangements. According to Adrian Gill, director of Your Move and Reeds Rains estate agents, the data shows how the mortgage market has changed its’ spots in the last year. 'Lending has been tamed as new regulations and affordability checks have strengthened the borrowing process. Mortgage brokers are doing a more robust job and buyers are get sturdier solutions at the end of it. Although mortgage approvals are now running at more manageable levels than they were this time last year, the first time buyer market… Continue reading
Property price growth in some rural areas catching up with cities
Property price growth in the English countryside is almost neck and neck with price rises in cities, according to the latest research. Overall home values in towns and cities across the UK have increased by 5.7% over the last year, but rural England has seen 5.1% annual property price growth in countryside areas over the same period. The research from Zoopla also shows that the average value of a rural home in England now stands at £264,338, some £51,737 or 24% higher than the typical urban property outside of London. Rural homes in the East of England have seen the biggest uplift in value over the past year, with prices up 6.5% or £17,098. This is closely followed by country properties in the South East, which have climbed in value by 6% or £22,157 in the last 12 months, meaning that home buyers in the region can expect to pay £66,100 more to live in a rural part of the South East, as opposed to a bustling town or city. The premium buyers pay to live in a rural location is highest in the West Midlands, with countryside properties costing £73,982 more than homes in a town or city while Gerrards Cross in Buckinghamshire is the most expensive rural area in England, with average homes currently worth £817,376, up from £773,726 a year ago. City properties ads in the East of England and South East experienced the strongest annual growth of 7.5% and 6.7% respectively, outpacing rises in London. But the most expensive urban location across the country is Kensington and Chelsea, with the typical pied-a-terre in W8 now valued at £2,654,512. ‘Urban areas had a head start in the housing recovery with demand propped up predominantly by employment opportunities. This drove price growth in these economic hubs and left countryside markets by the wayside,’ said Lawrence Hall of Zoopla. ‘Over the past year house price growth has spread and rural retreats which are commutable to the amenities and jobs of urban centres have become highly sought after. But they come with a significant premium to have the best of both worlds, with the extra outdoor space and seclusion that rural living gives you. Those looking for the good life in the country might want to escape the rat race sooner rather than later,’ he added. Continue reading
UK govt moves to end blanket licensing of landlords by councils
Local councils in England will no longer be able to licence landlords across a whole area without government approval, it has been confirmed. Housing and planning minister Brandon Lewis has taken action after a rush of complaints about councils introducing compulsory licensing for landlords costing hundreds of pounds per property. Reforms to the Selective Licensing scheme will now restrict local decision making powers from 01 April. Councils will need government approval before implementing a licensing scheme if they plan to license a large area or proportion of the market, likely to be above 20% of either the geographical area covered by the council or the local private rented sector (PRS). The decision comes after sustained lobbying efforts by the National Landlord Association (NLA) since 2010 and after the NLA published its report on the state of landlord licensing across the country, in February. The report revealed a boom in the number of blanket licensing schemes since 2010 but highlighted a lack of enforcement actions being taken by local councils. It also showed a correlation between the political control of a council and their tendency to license landlords. ‘We’ve argued solidly since 2010 that councils have been abusing their power to push through blanket licensing schemes,’ said Richard Lambert, NLA chief executive officer. He explained that the announcement means that if a council intends to licence a large proportion of its housing it will first need to show the case stands up to independent scrutiny. ‘The government was the first to see a copy of our licensing report, and we’re delighted they have listened to our case because at present the driving force behind licensing landlords seems to be the political will of a given local council, regardless of the evidence,’ he pointed out. ‘Many local councils won’t like this decision one bit because until now they’ve been their own judges, and the only way for landlords to challenge them has been through the difficult and complex route of judicial review,’ he said. ‘Landlords are getting fed up with being unfairly targeted and made responsible for problems such as anti-social behaviour when in reality they have little effective control over the issue, except by eviction. Hopefully this now means that councils who are serious about tackling poor property standards and anti-social behaviour will first look to the extensive existing legal powers they already have to combat the issues,’ he added. Continue reading
