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Gross mortgage lending in UK stalled in December, latest CML figures show
Gross mortgage lending in the UK reached £16.5 billion in December, unchanged month on month compared to November but down 1% compared to December 2013, the latest data shows. The figures from the Council of Mortgage Lenders also shows that the gross lending estimate for the fourth quarter of 2014 is £51.6 billion, down 8% on quarter three but up 1% on the fourth quarter of 2013. Overall, for 2014 the gross lending estimate is £205.6 billion, up 17% on 2013's £176 billion gross lending figure. ‘Housing market activity has been cooling and house price growth slowing in recent months, but 2014 was still the strongest year for mortgage lending since 2008,’ said CML chief economist Bob Pannell. ‘First time buyers were a key driver, helped by government initiatives such as Help to Buy. As a result, the number of first time buyers topped the 300,000 mark. While a far cry from the half million that we might regard as normal, this was the highest number of first time buyers since 2007,’ he pointed out. ‘Although lending remained muted in December, the previous monthly pace of decline in approvals appeared to moderate. So, alongside the big picture of a softer market, we are beginning to detect signs that underlying market conditions may be stabilising,’ he added. Adrian Gill, director of Your Move and Reeds Rains estate agents, said that while many places across the country have witnessed a recent lull in house price growth, the underlying sentiment in the market remains strong. ‘It will continue to carry the housing recovery further forwards, with unprecedented fundamentals for growth this year and 2014 will stand out as the best year for new buyers since the recession,’ he explained. ‘Towards the latter end of the year, demand was slightly spooked by the introduction of loan to income caps, but stamp duty reform provided some new comfort for prospective buyers. Along with the continued support of the Help to Buy scheme, aspiring home owners can more easily stomach the upfront costs of buying a home and save up for the necessary deposit,’ he added. Continue reading
New home starts in Australia hit all-time high, latest data shows
More new homes in Australia were started in the September quarter of 2014 than in any quarter since records began in the mid-1980s, the latest figures shows. Building activity figures from the Australian Bureau of Statistics shows that detached dwelling commencements increased by 0.8% in the quarter while ‘other dwelling’, predominantly multi-unit dwellings, rebounded by 30.2%. In aggregate, the total number of dwellings commenced increased by 12.5% in the quarter to reach 52,380, a new record. With New South Wales, Victoria, Queensland and Western Australia, the four largest states, all recording their strongest quarters on record for multi-unit dwelling commencements at the same time, there is little surprise that activity reached a new record, according to the Housing Industry Association. ‘Furthermore, another incremental increase in detached dwelling starts sees this part of the market record the strongest quarterly result since 2010. This result confirms that residential building activity was tracking along at a very strong level during 2014,’ said HIA senior economist Shane Garrett. ‘However, part of the particularly strong September quarter result can be attributed to a catch up after the rather disappointing result in the June quarter when the number of starts fell well short of expectations,’ he pointed out. ‘Following the surge in residential buildings approved in late 2013 and early 2014, there was a substantial accumulation of multi-unit residential building projects that had obtained approval but did not commence construction in the first half of the year. The figures confirm that much of the activity in the pipeline entered the construction phase in the September quarter,’ he added. A breakdown of the figures show that new home starts increased in all states with the exception of South Australia where activity fell by 5.7%. Activity in New South Wales increased by 30.7%, in Victoria by 0.9%, in Queensland by 18.1%, in Western Australia by 5.1%, in Tasmania by 2.9%, in the Northern Territory by 9.6% and by 22.8% in the ACT. Continue reading
Middle market set to benefit from new property tax rates for Scotland
Changes to the rate of property tax payable in Scotland from April have been confirmed with the middle sector of the market benefitting. From 01 April under the Land and Buildings Transaction Tax (LBTT) the zero threshold has been raised to £145,000 and other band adjusted. Some 2% will be paid between £145,000 and £250,000, a new band of 5% will apply to properties between £250,001 and £325,000. There is then a jump to 10% for those buying homes between £325,001 and £750,000 and high value properties over £750,001 will be taxed at 12% under the review by Finance Secretary John Swinney. It is disappointing news for buyers and sellers of Scottish homes, according to estate agency Strutt & Parker. It said that while the changes may well boost the market for first time buyers and the lower end of the sector, they are far from offering the hoped for stimulus to the middle of the property market. ‘While LBTT will help first time buyers, the average price of a house in Scotland is £170,000. It has been widely derided as an unfair attack on families and a punitive tax on aspiration, particularly in the affluent centres of Glasgow, Edinburgh and Aberdeen and the changes announced are no better,’ said Andrew Rettie, head of estate agency for Strutt & Parker in Scotland. ‘Strutt & Parker backed the Scottish Conservatives' proposals for the introduction of a mid-tier rate of 5% between £250,001 and £500,000 and we were hopeful that Swinney would introduce something along those lines but while this review offers a concession to the lower end of the market it is a blow to everyone else and a missed opportunity to provide a fillip to the property,’ he pointed out. ‘If families can't upsize because of the increase in tax, they will not sell, leading to a stalemate in the middle of the market, which is really the engine room of a thriving housing sector,’ he explained. The firm is currently very busy at present with buyers and sellers aiming to complete deals before the April deadline. ‘However, once LBTT comes into effect we anticipate buyers will be more cautious in their offers to take account of the heavier tax burden,’ added Rettie. CKD Galbraith, an independent property consultancy, said the changes may have significant implications for the Scottish housing market. ‘There are winners and losers amongst property buyers and sellers,’ said partner John Bound. ‘While there is good news for first time buyers and those at the lower end of the property market, transactions carried out at the mid to higher end will still trigger a significant tax bill. While there are savings for some on what was originally proposed by the Scottish Government there will be increases on what people have been paying to date,’ he explained. ‘This will affect a large section of houses in the Scottish market and overall we estimate that there… Continue reading
