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Low interest rates helping to keep repossessions and mortgage arrears down says CML
The UK is seeing a continuing reduction in the number of both repossessions and mortgages in arrears, across all categories, according to the latest figures from the Council of Mortgage Lenders for the third quarter of 2014. At the end of the third quarter, the proportion of mortgages with arrears equivalent to 2.5% or more of the total mortgage value was 1.12%, down from 1.18% in the second quarter and 1.33% in the third quarter of last year. This is the lowest proportion since the first quarter of 2008 when it was 1.08%. In numerical terms, this equates to 125,100 mortgages, down from 131,400 in the second quarter and 149,400 in the third quarter of 2013. The data also shows that the proportion of all mortgaged properties taken into possession by lenders was 0.04% (5,000 properties), the lowest quarterly proportion and number since quarterly records began in 2008. It compares with 0.05% (5,400 properties) in the second quarter, and 0.06% (7,200 properties) in the third quarter of 2013. Within the overall reported totals, both the owner occupier sector and the buy to let sector have experienced reductions in both arrears and repossessions. Out of the total 5,000 repossessions, 1,100 were on buy to let mortgages, unsurprisingly representing a slightly higher repossession rate of 0.07% in buy to let than the overall and owner occupier rate of 0.04%. ‘Low interest rates, supported by intelligent communication and forbearance, mean that mortgage arrears and repossessions continue to decline,’ said CML director general Paul Smee. ‘Encouragingly, recent research also suggests that many households are preparing themselves for the prospect of higher interest rates, so we expect any uptick in payment difficulties to be relatively muted if and when rates do begin rising,’ he pointed out. ‘But a key activity for lenders now is considering how best to support their borrowers in planning ahead for a time when debt servicing costs are higher than they are now,’ he added. Meanwhile, separate statistics on England and Wales from the Ministry of Justice shows that the number of mortgage possession claims in County Courts increased from 62,862 in 2002 to a peak of 142,741 in 2008. Since then it has fallen 62% to 53,659 in 2013. The third quarter of 2014 (July to September), recorded 9,731 claims, representing the lowest quarterly figure recorded in over a decade. The fall in the number of mortgage possession claims since 2008 coincides with lower interest rates, a proactive approach from lenders in managing consumers in financial difficulties and other interventions from the government, such as the Mortgage Rescue Scheme, which was in place from January 2009 to March 2014. At the same time as the number of claims rose (between 2002 and 2008), the estimated proportion of claims which progressed to an order, warrant or repossession by county court bailiffs also increased. However, the trend in more recent years has been one of decline while the estimated percentage of claims progressing to an order, warrant or repossession in 2008 was… Continue reading
Drones allowing estate agents to give an extra dimension to property marketing
Estate agents are known for going that extra mile to get a sale and now they are set to embrace the very latest technology to make sure a property looks its very best. Savills is one real estate company that is leading the way in their use of drones and have explained how they are increasingly helping estate agents to market properties. It enables them to take airborne photographs and videos to help market properties. The firm says that drones, or unmanned aerial vehicles (UAVs), present a number of advantages over traditional aerial photography techniques. They’re are measurably much cheaper and can produce better quality video than helicopters. Also, with the necessary consents they can be flown almost anywhere unlike aerial masts which must be set up and positioned, and are limited in height. Additionally, many commercial drones are based on the open source Arduino platform, which allows savvy users to customise them to a specific purpose. Savills began using UAVs to market homes on a wider scale in 2012, having seen their potential to convey properties in 3D, and thereby bringing the property to life for potential buyers. To date, the company has used drones on many occasions, including for Donhead House in Wiltshire, and Lasborough Park and Bell’s Castle also in Gloucestershire. They have found that drone-captured video and photography can offer not only the dramatic details of a property, but a sense of place, something that can be difficult to capture using traditional techniques. ‘It’s not just about selling the house, it’s also about selling lifestyle and the wider area. A brochure would normally lead with images of the house and formal gardens, whereas a video can capture the whole,’ said Ed Sugden, director of Savills Country House Department. ‘It allows a potential buyer to look beyond the brochure, and allows us to convey a lot of information far more quickly and efficiently,’ he added. However, it is not as simple as letting the drone do all the work. There is an art to using drones as well as a science, and one common mistake is showing too much of the property’s roof. Savills advises taking video and photography from a 45 degree angle, which allows the property’s best attributes, including its grounds and architecture, to be captured in the most aesthetic way. The novelty of drone photography itself can also help to capture buyer interest, and encourage people to take it forward with a viewing. So far, this strategy has been working for Savills and their clients. For example, one property’s video has had over 7,000 visits from around the world, which must lead to more viewings and interest. However, as useful as they are, drones aren’t suitable for every situation. ‘If a particular house has a pig farm on one side, a pylon and a motorway on the other then an aerial overview is not the… Continue reading
UK house price growth slows as demand slips for fourth month in row says RICS
House price momentum in the UK continued to slow and new buyer demand tailed off in October, according to the latest Residential Market Survey from the Royal Institution of Chartered Surveyors. Nationally, new buyer demand slipped for the fourth consecutive month with London bearing the brunt of the decline, as 62% more surveyors reported a fall in new buyer demand across the capital. Meanwhile across the rest of the UK dipped to a net balance of -18%. As a result of the weaker trend in buyer interest, sales expectations are now at their lowest point since the beginning of the year and the picture regarding near term price expectations is not dissimilar. But Scotland and Northern Ireland have the most optimistic view on house prices in the run up to Christmas with net balances of 36% and 37% respectively. Meanwhile, stock coming onto the market remained virtually unchanged in October with a net balance of -2%, continuing the trend which has been in place for much of the past year. As a result, even with the dip in demand, much anecdotal evidence from surveyors points to an ongoing challenge in securing adequate new instructions. At a national level, the slowdown in buyer activity in the sales market stands in marked contrast to the lettings market, where tenant demand continues to grow strongly. Over the last quarter, this has particularly been the case in East Anglia, the north of England and Scotland and rent expectation remain generally firm with respondents' anticipating an increase of around 2.5% over the next twelve months across the whole of the country. ‘The flatter trend in the market is partly a reflection of potential buyers becoming a little more cautious about making a purchase as more stringent lending criteria has made it harder to access mortgage finance,’ said Simon Rubinsohn, RICS chief economist. ‘An increasing awareness of the approaching general election also appears to be contributing to the softer market if the responses to the latest survey are anything to go by. However, with new instructions still flat at a headline level as has been the case for most of the last year it seems implausible that the dip in demand will result in very much of a decline in house prices,’ he explained. ‘Meanwhile, demand to rent property is growing as the sales market slows and this, coupled with a drop in supply of new stock to let, is helping to underpin the rental outlook for landlords pretty much across the whole of the country,’ he added. Continue reading
