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Nonstandard UK home borrowers now more likely to get a loan
More mortgage borrowers are seeing their applications for mortgage loans given the green light as new products emerge to support ‘non-standard’ circumstances, according to new research. Some 26% of brokers reported having no problems sourcing a mortgage for any type of borrower in the second half of 2015, the highest proportion in the post Mortgage Market Review (MMR) era, and a clear sign of improving lending conditions. According to the Intermediary Mortgage Lenders Association (IMLA) report it represents a significant jump from the proportion of brokers experiencing no problems both in the first half of 2015 when it was 15% and the second half of 2014 when it was 16%. However, some areas beyond the ‘mainstream’ mortgage market have been less well-served since 2008/2009, with new regulations introduced to govern lending criteria and fewer products on offer tailored to meet the needs of smaller and less mainstream consumer segments. This includes products to support borrowers seeking lending into retirement, products designed for borrowers with past adverse credit records, and those tailored for self-employed borrowers or those with irregular incomes. However, the IMLA’s research shows fewer brokers are now experiencing problems with sourcing a mortgage for clients in all of these areas, with the most significant improvement seen in sourcing loans for interest only borrowers. The proportion of brokers having difficulties helping this type of client has fallen 15 percentage points year on year to 39%. Similarly, the proportion of brokers unable to source a mortgage for ‘lending into retirement’ borrowers has dropped seven percentage points to 43%. The picture has also improved for self-employed borrowers, with just 40% of brokers reporting problems over the last six months, down six percentage points from a year ago. The most common circumstances where brokers were unable to source mortgages in the second half of 2015 continue to be adverse credit at 46%, lending into retirement at 43%, self-employed at 40% and interest only borrowers at 39% although in each case, the picture has improved. The report points out that these product types are becoming increasingly important, in context of the changing UK demographic. More first time buyers are taking out mortgages with longer terms to spread out their repayments, with 60% now opting for terms that last more than 25 years, meaning more borrowers could be left paying off their debt in retirement. Meanwhile the trend towards more working flexibility alongside sluggish wage growth has boosted self-employment levels in the UK, and 15% of the workforce are now self-employed. Looking ahead, both lenders and brokers identify first time buyers as the market area with the best overall growth prospects for 2016, ahead of other segments. However, when asked about the prospects for product availability, IMLA’s research suggests further improvements could be on their way for other borrower types. More than half of lenders forecast an improvement in mortgage availability for retirement borrowers, near prime borrowers, those who are self-employed or with irregular incomes, and interest… Continue reading
Money and stress are biggest concerns of people selling their home
Money, stress and time constraints are still the biggest fears for UK home owners when selling their home, new research has found. Despite home owners currently enjoying a very buoyant UK property market, securing the right price still tops the list of fear factors, according to a survey from online estate agent eMoov. Some 55% of those asked said not getting the price they wanted or needed was their primary fear when selling, with the stress of the selling process the second biggest fear factor for 46% of home owners. Time constraints completed the top three fear factors, with 43% of home owners afraid they wouldn’t be able to sell their home in the time they needed to. The survey also shows that 36% fear paying too much in estate agent fees, 22% finding a new property to live in upon selling, 14% dealing with the buyer, 12% picking the wrong estate agent in the first place, 10% getting a mortgage for their next home and 4% that their new property might drop in value in the future. ‘Price is always going to be the primary concern home owners and it is only natural that securing the best price will weigh heavy on a seller’s mind,’ said the firm’s founder and chief executive Russell Quirk. ‘Generally speaking, our home is the most expensive asset we are ever likely to own and for the majority of us, our home is our nest egg, setting us up for retirement when we do finally sell and downsize. So it’s understandable that it be the biggest fear during the selling process, as that couple of extra thousand gained or lost, can make a big difference in the grand scheme of things,’ he pointed out. ‘Our previous research found that selling your home is more stressful than your wedding day and so it doesn’t surprise me that this also ranks highly amongst UK sellers. When you add time constraints to an already laborious process, you can see why selling a home in the UK can seem a daunting task and evoke such feelings of fear,’ he explained. ‘I have to say I am a little surprised that paying too much in estate agent fees didn’t make the top three. High street estate agent fees have rocketed in line with house prices over the years despite no additional service being offered, some may argue the service has even declined, and so the dated commission fee structure is one of the biggest obstacles to moving home,’ he added. Continue reading
UK construction industry sets out plans to increase training for building new homes
Over 45,000 new home building workers will be trained by 2019 to help tackle the UK’s housing shortage through a £2.7 million initiative announced by the Construction Industry Training Board (CITB) and Home Builders Federation (HBF). The first of its kind, the Home Building Skills Partnership will bring together firms of all sizes to ensure that the industry has the skills it needs to build more homes. This will include initiatives to promote collaboration on skills across the supply chain, so that the industry can better plan for its future needs. The partnership will support over 3,500 construction businesses and, by 2019, train 45,000 new entrants and 1,000 experienced workers with the new home building training qualifications. The housebuilding industry has delivered unprecedented increases in house building over the past two years with the latest figures showing that 181,000 new homes were provided last year, up 25% year on year. The largest companies are increasing their output by 50% since the troughs in the aftermath of the global economic downturn and the industry as a whole is now looking to meet Government ambitions to increase output still further. Experts point out that to maintain high levels of build quality and customer service, it is imperative industry capacity is increased and the new partnership aims to use industry insight to understand skills needs and develop new training and qualifications ideally suited to the modern homebuilding sector. It will create long term skills solutions to meet the government’s target of one million new homes by 2020 and will be overseen by a Board that will be chaired by Redrow chief executive officer John Tutte and include a range of senior industry representatives and CITB. ‘The number of new homes is up 25% in the last year because the country is building again and delivering the homes the nation wants. That’s why the Home Building Skills Partnership is an important initiative and will help deliver the training of skilled workers we need to get the job done and to improve quality across the industry,’ said Housing and Planning Minister Brandon Lewis. ‘Construction offers an exciting and rewarding career and we need to build a new generation of home grown talented, ambitious and highly skilled construction workers,’ he added. Stewart Baseley, HBP executive chairman, pointed out that to enable increased output to deliver the high quality new homes the country needs it is absolutely crucial to build up industry capacity. ‘To allow us to do it is essential we have a clear focus on delivering the training the industry needs. The partnership will enable us to develop targeted training that meets the specific needs of our industry in a structured way so we can grow steadily and sustainably,’ he said. According to Steve Radley, CITB policy director, the major challenges faced by home builders can only be met through new ways of working. ‘Home builders have said they want to work with CITB to anticipate their skill… Continue reading
