Tag Archives: housing
UK mortgage lending off to slow start in 2015
Gross mortgage lending in the UK reached £13.4 billion in February, 9% down on both January and on last February, the latest figures from the Council of Mortgage Lenders show. This is the lowest monthly estimate for gross mortgage lending since April 2013 when lending totalled £12.4 billion. The weaker lending figures have not come as a surprise to the industry. ‘Seasonal factors tend to weigh on activity at the start of the year, but looking through these, the underlying picture appears to be stabilising,’ said CML chief economist Bob Pannell. ‘We expect lending to improve in the coming months, as employment and earnings continue to pick up and the impact of recent stamp duty reforms start to feed through,’ he added. Peter Rollings, chief executive officer of Marsh & Parsons, believes that too much should not be read into the data as 2014 was an exceptional year and a formative one with major changes to the borrowing process. He said that 2015 marks a return to more normal patterns of behaviour as the new affordability measures introduced last year become part of the normal market. ‘Lending is only just getting into its stride at the beginning of the year, and it’s also a much longer process from start to finish now, so we’ll see more approvals race through as the market heats up later in the spring,’ he pointed out. ‘Buyer finances emerge much healthier for going through a more rigorous obstacle course. First time buyers have great cause for celebration with the new Help to Buy ISAs, whittled down stamp duty, generous mortgage rates, and plenty of supply on the market. All the elements are at work to up the ante in the housing market in the coming months,’ he added. Continue reading
Younger home owners looking towards equity release in UK
A surge in equity release activity in the UK in the second half of 2014 saw younger borrowers turning to lifetime mortgages in the wake of the Mortgage Market Review (MMR) and the 2014 Budget pension announcement. The Spring 2015 edition of the Equity Release Market Report from the Equity Release Council shows that as the market has grown, the proportion of new equity release customers aged 55 to 64 dropped from 24% in 2011 to 21% in 2013, pushing up the average customer's age towards 71. This trend continued in the second half of 2014 when just 17% of new customers fell into the 55 to 64 age bracket. However, following the March 2014 Budget and MMR implementation on 26 April, this age group made up 20% of new equity release customers during the second half of the year. Compared with the first half of 2014, the number of new equity release customers aged 55 to 64 was 32% higher in the second half of the year, which was also the busiest half year since 2008 for total new plans agreed. The average age of customers choosing drawdown products was unchanged at 71.6 from the first half of the year to the second half but the average age of those choosing lump sums fell from 68.8 in the first six months of 2014 to 67.6 in the second. The data suggests that changes in the residential mortgage and pensions markets are having an impact on the profile of equity release customers. Reports have surfaced that people are finding it increasingly difficult to access residential mortgage finance later in life under the MMR rules, particularly if the desired term may stretch beyond their normal retirement age. At the same time, many borrowers with interest mortgages are approaching their final repayment date. For those who have no or limited resources for a repayment vehicle, using equity release to pay off their existing mortgage is a common solution. Some younger borrowers may also have used equity release in the second half of last year to meet an immediate need for extra funds, rather than accessing their pension savings ahead of 6th April 2015 when the new pension flexibilities will take effect. ‘Equity release is helping people respond to a host of financial challenges at various points in later life, or simply enhance their standard of living so they can enjoy a more comfortable retirement. Part of the appeal lies in the option to cover off large one off expenses,’ said Nigel Waterson, chairman of the Equity Release Council. ‘Paying off the last of an existing mortgage is often one of the biggest financial deadlines people have to face beyond the age of 55. The flexibility of equity release enables them to wipe the slate clean while also using their housing wealth to meet a range of other needs,’ he explained. ‘The money they have put into property often proves a good investment over time. Releasing equity… Continue reading
Confidence in US housing market rises, latest index shows
Confidence in the US residential property market is on the rise, especially among those renting homes, new research shows. More than five million renters say they're likely to buy a home in the next year, according to the latest Zillow Housing Confidence Index (ZHCI) and overall both renters and home owners expressed more confidence in the housing market this year than last year. Americans are most confident in the housing market in San Jose, Miami and San Francisco while over the last year, confidence rose the most in Dallas, Detroit and St. Louis. Home owners remain more confident than renters, but renter confidence is growing faster than homeowner confidence in 14 of 20 metro areas surveyed. A breakdown of the figures show that more than 12% of current renters nationwide, roughly 5.2 million, said they plan to buy in the next year, an almost 25% jump from the same time last year, when 4.2 million renters said they had plans to buy within 12 months. The ZHCI, sponsored by Zillow and developed by Pulsenomics LLC, polls homeowners and renters about housing market conditions, expectations for the future and their attitudes toward homeownership in general, across 20 of the large metro areas in the United States. Thanks to historically low mortgage interest rates and home values below peak levels, buyers can expect to spend about 15% of their monthly income on a mortgage payment, compared to 22% historically, according to Zillow research. Typical renters should expect to pay 30% of their income to rent, compared to 25% a generation ago. ‘As home affordability continues to look great and rental affordability looks abysmal, many current renters clearly seem to be re-thinking their attitudes toward homeownership, and are expressing more confidence in the overall housing market as a result,’ said Zillow chief economist Stan Humphries. ‘But while this confidence is heartening, it's important to inject a note of reality as not all renters who want to buy this year will be successful. Saving a down payment, qualifying for a mortgage and finding an affordable home to buy all remain formidable challenges for many,’ he explained. ‘Among all renters surveyed nationwide, 59.7% said they think buying a home is the best long term investment a person can make, compared to 56.9% at the same time last year. This improved long term outlook was especially evident among younger renters. Among all 18 to 34 year old renters, 66.2% said owning a home was the best long term investment, compared to 61.4% last year. The index is measured on a 100 point scale, with readings more than 50 indicating general confidence. Overall, housing market confidence is rising more quickly among renters than home owners. Among only home owners, headline confidence rose 3.7 points year on year, to 70.6 in January. Among renters only, overall confidence rose 4.4 points in the past year, to 62.4. Confidence among all owners and renters rose 3.6 points, to 67.4. Although survey respondents in most… Continue reading
