Tag Archives: london
UK mortgage seekers set to change spending to deal with tougher lending rules
A fifth of mortgage borrowers in the UK will use cash more frequently to avoid lenders seeing exactly what items they are spending on due to tougher lending regulations brought in a year ago. Some 25% plan to rein in their spending by £159 a month in a bid to present themselves as sensible with money and a fifth plan to spend on credit cards to maintain a healthier balance in their current accounts and pay off the balance each month. The research by comparison site MoneySuperMarket shows that 20% of those looking to apply for a mortgage in the next three years are planning to use cash more frequently to hide exactly what they spend their money on from a prospective lender. Some 21% will pay for more items on their credit card and then clear the balance at the end of each month so they can maintain a healthier balance in their current account. Spend-conscious borrowers also plan to rein in their monthly spend by an average of £159 by cutting back on non-essential items so as not to appear frivolous with their money. And 29% intend to pay off all debts in the lead up to their mortgage application. However, some 8% had never even heard of the new mortgage market review rules. ‘Since the new mortgage lending rules came into play a year ago, those looking to remortgage, existing borrowers who are moving home and looking for a new deal and first time buyers will have been subject to their lender looking more closely, almost forensically, at their monthly outgoings,’ said Kevin Mountford, head of banking at the site. ‘While the rules were introduced for the right reasons, in some cases borrowers who can easily afford a mortgage are being turned down for arbitrary reasons, despite them being able to easily afford mortgage repayments,’ he pointed out. ‘We wouldn’t want to see the ease of approval going back to the pre-credit crunch levels, it is clear than some consumers have changed their spending habits in order to pass the tests, so may be trying to paint a picture that is far from the reality just to satisfy the requirements,’ he added. He explained that paying off debts is always a good way to start when it comes to applying for a mortgage as existing borrowing will be taken into account by a lender when it comes to your application. Reducing the amount you spend each month could also help when it comes to the amount a lender thinks you can afford to borrow. ‘But those trying to ‘play’ the system should exercise caution as lenders may still require you to prove where your cash goes. Using a credit card to hide your spending may also count against you as lenders have access to your credit report, so will be able to see a real-time snapshot of your credit card balance at any time within the month,’ Mountford added. ‘Research… Continue reading
UK regional cities house price growth outperforms central London, says latest index
House prices in larger regional cities in the UK have outperformed central London for the first time since 2005, the latest property index shows. Although central London recorded year on year house price growth of 3% in the first quarter of 2015 the capital’s most expensive boroughs are being eclipsed by growth in large regional cities, according to the UK Cities House Price Index from residential analysts Hometrack. Some 12 of the UK’s largest regional cities have registered higher price rises year on year than Central London including Glasgow with growth of 7.6%, Manchester 6.8% and Leeds 6.6%. Indeed, Kensington and Chelsea and Hammersmith and Fulham have seen price declines of 3.4% and 5.1% respectively amidst uncertainty due to the threat of mansion tax and affordability pressures in the run up to the general election. Newcastle, Sheffield, Manchester, Leeds and Glasgow registered the strongest pick up in house price growth in the first quarter of 2015 as households gain in confidence over the economic outlook and attracted by record low mortgage rates. Together these cities account for 30% of housing stock covered by the Hometrack index and this pick-up in growth is supporting the headline rate of house price growth which was 0.8% in the first three months of the year. Average house prices across the 20 cities included in the index registered growth of 3.8% in the first quarter compared to 3% over the same period in 2014. While the UK picture is polarised by a North/South reversal in house price growth, the London market is divided by its East/West compass points. The balance of house price growth across the index for London has shifted from high value markets driven by international capital to the lower value markets favoured by owner occupiers. Newham, Barking and Dagenham, Greenwich, and Croydon registered 14.2%, 12.5%, 12.4%, and 12.1% growth respectively in the last quarter compared to the same period 12 months ago. The index report says that these boroughs are sustaining the capital’s growth, despite house prices in the affluent central London areas falling. The report also suggests that areas of London that are still undergoing regeneration or are benefiting from new investment have proved popular with owner occupiers priced out of the boroughs favoured by international buyers and investors. The highest year on year growth rate was recorded in Newham and Barking and Dagenham, where average house prices are £275,000 and £215,000 respectively, and track 33% and 50% below the London average of £417,000. ‘House price growth is holding up better than expected as a result of a lack of new supply of homes for sale and record low mortgage rates attracting buyers into the market,’ said Richard Donnell, director of research at Hometrack. ‘Growth in London is still running in double digits and high capital growth rates in recent years have pushed down average loan to values in London, creating further capacity for additional borrowing for households that can pass tighter affordability… Continue reading
Cornwall is top spot for holiday homes in England and Wales
Some 165,000 people in England and Wales have holiday homes with Cornwall the most popular location for this type of second property, new research shows. Indeed, the county in the south west of England has over 10,000 holiday properties, according to a new analysis from Direct Line’s SELECT Premier Insurance. That means Cornwall has 6% of the nation’s holiday homes and according to estate agents its 300 mile coastline makes it the top holiday home hotspot. In second place is Gwynedd in Wales with 7,784 or 4.7% of holiday homes with its proximity to Snowdonia National Park adding to its attraction, followed by North Norfolk with its sandy beaches and salt marshes, which has 4,842 or 2.9% of holiday homes. South Lakeland with 4,684 holiday homes, East Lindsey with 4,472, Pembrokeshire with 4,310, the East Rising of Yorkshire with 4,059, South Hams with 3,738, Scarborough with 3,687 and Kings’ Lynn and West Norfolk with 3,539 complete the top 10. Across England and Wales there are almost 1.6 million people who have a second property in a different area to where they live permanently and 11% of these are used as holiday homes with the remainder being used for purposes such as work, or accommodation for student children. According to Nick Brabham, head of SELECT Premier Insurance, holiday homes are very valuable to owners as they are often a place to relax and spend quality time with loved ones. ‘This time is often limited, which means it is essential to keep the property and its contents in top condition all year round,’ he added. Peter Olivey a partner at Cornish based estate agents Cole, Rayment & White in Padstow, explained that Cornwall ticks a number of important boxes for second home owners with its coastal location and abundance of activities. ‘It’s a true holiday haven without the hassle or cost of going abroad. The local property market here is competitive but with a number of new developments springing up and mortgage rates much lower than they have been, there’s still plenty of opportunity for prospective buyers,’ he said. Continue reading
