Tag Archives: london
UK buy to let lenders adopt new practice statement
Buy to let lenders in the UK who are members of the Council of Mortgage Lenders are adopting a new statement of practice, designed to provide clarity about how responsible lenders operate. The statement reflects existing good practice and aims to ensure that there is a clear explanation of the obligations of buy to let borrowers on their mortgages and is a sign that buy to let lending is growing. It signposts additional information from other organisations about the responsibilities of being a landlord, and is endorsed by the Residential Landlords Association, the Association of Residential Letting Agents (ARLA), the Association of Mortgage Intermediaries, the Intermediary Mortgage Lenders Association, and the British Bankers Association (BBA). Some 31 lenders representing an estimated 90% of the buy to let market have already adopted the statement of practice. All CML members who offer buy to let mortgages are expected to adopt it over the course of 2015. The statement sets out the overarching principles that individual lenders use in determining their own lending strategy and practice in relation to lending principles, information given to customers, customer responsibilities, lender responsibilities on affordability, handling financial difficulties, fraud prevention and complaint handling. Next year when the consumer buy to let lending framework is established under the Financial Conduct Authority, the UK’s financial watchdog, to comply with the Mortgage Credit Directive, buy to let lending will fall into one of three types. These are mortgages regulated by the FCA like residential mortgages when the property is either partly occupied by the borrower or let to an immediate family member; mortgages regulated by the FCA under the Mortgage Credit Directive Order 2015 defined as ‘consumer’; and mortgages not regulated by the FCA which are those predominantly for a business purpose. The statement of practice will cover any residential buy to let lending not otherwise covered by FCA regulation. ‘Lenders know how important it is to have a transparent mortgage market, in which borrowers can have confidence, and where lending policy is both responsible and clearly understood,’ said CML director general Paul Smee. ‘The new buy to let statement of practice reflects what responsible lenders already do and offers a clear explanation of how buy to let lenders operate. We hope it will make a valuable contribution to understanding the buy to let lending environment,’ he added. Continue reading
Demand for homes in central London property market picks up
Buyer demand in the residential real estate market in central London picked up during the early months of 2015, according to a new report. The market is still busy below £1 million but has quietened between £1.5 million and £5 million as Stamp Duty changes and the possibility of a mansion tax take their toll, says the analysis from real estate firm JLL. However, underlying demand is still strong and the fundamentals remain the same and an excess of demand over available supply, which continues to support the market. The report also points out that development activity continues to rise with 26,500 units now under construction, a 23% increase during the second half of last year and a 41% rise throughout the course of 2014. The majority of units underway are in outer core locations where there was a 34% increase in the second half of last year with core markets seeing a more modest increment of 8%. The number of units starts during the second half of last year, at 8,700, was a 45% increase compared with the first half of 2014. According to JLL although the general election is now just a month away it has been impacting the central London sales market since 2014. For example, Labour's mansion tax proposal is affecting the market above £1.5 million as people adopt a wait and see attitude. ‘The general election does not seem to have deterred London's developers. The number of units underway has increased significantly over the past couple of years and the election is not halting this,’ said Neil Chegwidden, director in the residential research team at JLL. ‘It is also interesting to see that London's developers believe that the outcome of the general election is more important to their businesses than the Mayoral election next year. So it is good news that new supply is on the rise, but we continue to fall short of London's targets and it will be intriguing to see what impact a new government might have on this vital issue,’ he added. The report also looks at the legacy of the 2012 Olympic Games on the east of London and says that 10 years on from the successful bid the East Village already has its first residents and construction is underway at Chobham Manor, one of five neighbourhoods within the Park. It also says that this part of London has a wealth of development and regeneration potential that reaches far beyond the sphere of influence of the Olympic Park and the raised profile of the area is encouraging developers to bring schemes to the market. Construction levels have escalated in recent years. At the end of 2013 there were just 2,900 private residential units under construction, now there are 6,600, a 125% increase. A quarter of all new residential units under construction are in East London led by the 6,800 units at Queen Elizabeth Park and the close to 6,500 units at Stratford City… Continue reading
US pending home sales reach highest level since June 2013
Pending home sales in the United States in February increased to their highest level since June 2013, according to the latest figures from the National Association of Realtors. Sizeable gains in the Midwest and West offset smaller declines in the Northeast and South and overall demand is increasing as the residential real estate market moves into the spring buying seasons. The NAR pending homes sales index, which is a forward looking indicator based on contract signings, rose 3.1% to 106.9 in February from a slight downward revision of 103.7 in January and is now 12% above February 2014. Indeed, the index is at its highest level since June 2013 when it was 109.4, and has increased year on year for six consecutive months and. It is also above 100, considered an average level of activity, for the tenth consecutive month. ‘Pending sales showed solid gains last month, driven by a steadily improving labour market, mortgage rates hovering around 4% and the likelihood of more renters looking to hedge against increasing rents,’ said NAR chief economist Lawrence Yun. ‘These factors bode well for the prospect of an uptick in sales in coming months. However, the underlying obstacle, especially for first time buyers, continues to be the depressed level of homes available for sale,’ he added. According to NAR’s monthly confidence index the percent share of first time buyers increased slightly for the first time in February since November 2014, up to 29% from 28% in January. ‘Several markets remain highly-competitive due to supply pressures, and real estate agents are reporting severe shortages of move-in ready and available properties in lower price ranges. The return of first time buyers this year will depend on how quickly inventory shows up in the market,’ Yun explained. The PHSI in the Northeast fell 2.3% in February, but is 4.1% above a year ago. In the Midwest the index leaped 11.6% and is now 13.8% above February 2014. Pending home sales in the South decreased 1.4% but is still 10.8% above last February. The index in the West climbed 6.6%, the highest since June 2013, and is now 18.3% above a year ago. Total existing homes sales in 2015 are forecast to be around 5.25 million, an increase of 6.4% from 2014. The national median existing home price for all of this year is expected to increase around 5.6%. In 2014 existing home sales declined 2.9% and prices rose 5.7%. Continue reading
