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Home repossession in UK down 26% in 2014, year on year
The number of home repossessions in the UK fell 26% in 2014 compared to the previous year, the lowest since 2006, according to the latest data from the Council of Mortgage Lenders (CML). Out of the 21,000 total number of repossessions, 16,100 were on owner occupied properties, and 4,900 were on buy to let properties, the data also shows. At 0.3%, the repossession rate on buy to let mortgages was higher than the 0.17% on owner occupier loans, despite the fact that the underlying arrears rate was lower on buy to let lending than on home owner lending. The CML said that this is unsurprising, as lenders offer extended forbearance to owner occupiers to help them get through periods of financial difficulty without losing their home. Some 1.05% of all mortgages were in arrears equivalent to 2.5% or more of the mortgage balance, down from 1.29% at the end of 2013 and 1.12% at the end of the third quarter of 2014. In numerical terms, this equates to 116,800 loans, down from 124,400 at the end of the third quarter, and 144,600 at the end of 2013. Within the total number of mortgages in arrears, there was also a decline in all of the individual arrears bands. Even among the heaviest arrears band, more than 10%, there was a 14% decline year on year to 24,700 cases at the end of 2014, some 5% lower than at the end of the third quarter. The two main traditional drivers of mortgage difficulty are income shocks such as unemployment and interest rates. The CML report points out that both factors are relatively benign at present, assisting the decline in both arrears and repossessions, supported by effective lender practices. Looking ahead, the CML and lenders are very aware that, at some future point, interest rates will rise, and that this will put increased pressure on some household finances. The CML and lenders urge customers to plan ahead for this, to reduce the risk of shocks whenever interest rates do eventually rise. ‘The relatively low rate of repossession among owner occupiers at around one in 600 mortgages last year, should help to reassure borrowers that, if they do face payment difficulties, lenders will work with them to try to resolve their problems. Repossession is only ever a last resort,’ said CML director general Paul Smee. No one should be lulled into a false sense of security that the current low interest rates we are experiencing will last forever, though. Rules are in place to ensure lenders assess future affordability, but these are not a substitute for careful borrowing,’ he explained. ‘It's essential for borrowers themselves to have one eye on the future. Think through any borrowing taken on now to ensure it will still be affordable if and when rates rise,’ he added. Continue reading
London mayor reveals plans for 26,500 new homes along the Thames
A blueprint for creating thousands of new homes along the River Thames has been published by the Mayor of London, Boris Johnson. The draft London Riverside Opportunity Area Planning Framework (OAPF) sets out the planning, regeneration and design guidance that will lead to the creation of 26,500 new homes and up to 16,000 jobs across the boroughs of Barking and Dagenham and Havering, and a small part of Newham. The Mayor has identified 38 Opportunity Areas across the capital. Opportunity Areas are London's major source of brownfield land with significant capacity for new housing, commercial and other development linked to existing or potential improvements to public transport accessibility. By establishing Opportunity Areas, and working closely with London boroughs and partner agencies, the Mayor will be best able to deliver significant social and economic regeneration. The London Riverside Opportunity Area stretches from the Royal Docks to Rainham Marshes, a total distance of 12 kilometres. The document, which is now open for consultation, sets out the Mayor's strategic priorities and long term vision for the area over the next 20 years, how the area should evolve into a sustainable and successful part of the city and how it relates to the wider south east of the UK. In order to transform the London Riverside into a thriving new part of London, the planning framework discusses the importance of improved transport connections. This includes the potential extension of the Gospel Oak London Overground line, a new railway station at Beam Park, improvements to the A13 and new river crossings. ‘The capital is now home to a record number of people and we are working tirelessly to ensure we have the homes, jobs and transport infrastructure to support the city's unprecedented growth. London Riverside can deliver genuinely affordable high quality housing for Londoners in a fantastic Thameside setting,’ said Sir Edward Lister, Deputy Mayor for Planning. Much of the land in the London Riverside is already in the Mayor's ownership and the framework also recommends speeding up the development of publicly owned land assets to deliver the jobs and homes the city needs. Continue reading
Prime central London rental market set for a boost in 2015
Rental prices in the prime central London property market are set to grow 2.5% this year with the overall sector remaining robust despite uncertainty in the sales market, it is claimed. The latest data from Strutt & Parker and its retained economic advisors Volterra, show that there were 2,093 lets agreed in the sector in the final quarter of 2014, which although 18% below the five year quarterly average, is far above the level of lets seen in the 2007 peak. ‘In 2015, we hope to see a boost of activity levels and slow but steady growth in prime London lettings. The rental market is calling out for an injection of fresh stock which has started to come to the market, in particular refurbished lateral apartments,’ said Zoë Rose, head of London lettings at Strutt & Parker. ‘As investors continue to convert their assets into properties, we anticipate supply easing, with more properties coming to the rental market and the early signs are that this is already happening. We believe that this trend will continue all year as prime property owners place greater focus towards the rental option,’ she explained. She pointed that rentals were often seen as the last choice, simply a back-up option, which is why there was such a shortage of prime rental stock that came to the market last year. The next few months will determine whether this change is set to continue, with the bonus of giving the niche tenant greater choice in this elite rental sector of the market. She added that there were 12,000 rental transactions in prime central London in 2014, up from just over 10,000 five years ago. ‘So the market is in good shape when you look at historic figures. The number of people out there that enjoy the flexibility of renting at the high end definitely seems to be growing,’ she said. In the sales market, headwinds look set to continue into the first half of 2015, according to the firm. Whilst UK assets remain an attractive position at present, and this looks set to continue as the UK economy continues to grow, uncertainty over taxation change due to the looming election are placing considerable uncertainty on this market. ‘The prime central London sales market is feeling the full impact of buyer caution ahead of the Election, with the strongest activity at the very top end of the market above £5 million and at the other end below £2 million, where the financial impact of a potential mansion tax is less relevant, or indeed irrelevant,’ said Andrew Scott, head of London residential at Strutt & Parker. Continue reading
