Tag Archives: london
Property price growth in London now behind five other UK cities
Property growth in London now lags behind five other UK cities as the capital’s house price growth has dropped by two thirds in just three months. Edinburgh, Glasgow, Southampton, Bristol and Birmingham property markets have seen faster growth than London in the last quarter, according to the latest cities house price index from Hometrack. It also shows that while overall UK house prices have risen by 8.9% year on year, the rate of house price growth in the last quarter has slowed across 16 of the 20 cities. The firm is predicting house price growth of 2% in 2015. House price inflation in London at 0.5% was the same average growth as Manchester, Portsmouth. Some key cities saw price growth diminish, most notably Aberdeen down 0.4% and Cambridge down 0.2%. Other cities showed a pronounced slowdown in price growth such as Oxford seeing a quarterly rise of just 0.3%, Cardiff at 0.2% and Bournemouth at 0.1%. But Scottish cities bounced back with Edinburgh at 1.8% growth and Glasgow at 0.9%, both continuing to register above average rates of growth as demand feeds back into the market after the independence. However, house prices are above their 2007 peak in eight cities with London up 30.5%, Cambridge up 28.7% and Oxford up 21.9%, but these are also the markets starting to register the clearest slowdown. This translated to an average annual increase in London property values of £57,000, which is nearly four times the national average of £15,200 and almost twice the UK’s average income. Liverpool recorded the lowest increase in values with just £3,000 added to house prices in the last year. ‘The high growth cities over the last year are now recording the fastest slowdown and this is most pronounced in smaller cities such as Cambridge and Aberdeen. The Aberdeen economy is closely related to the health of the oil industry and a weakening oil price is impacting the housing market,’ said Richard Donnell, research director at Hometrack. ‘The slowdown in London, which we identified in, will act as a drag on the UK rate of house price growth over the next 12 months. The rate of growth in house prices is starting to lose momentum across other cities in southern England, while across the rest of the country modest levels of house price appreciation continue as prices rise off a low base,’ he explained. ‘Overall we expect modest UK house price growth of 2% in 2015, which is more in line with earnings growth. Significant pent-up demand has feed back into the market in the last two years pushing house prices higher in all cities but the underlying rate of growth is now slowing across the majority of markets,’ he pointed out. He also said that the introduction of mortgage market affordability tests in the middle of 2014 has reduced the overall impact of low mortgage rates on house prices. ‘A… Continue reading
Peer to peer lending set to change the UK mortgage industry, it is claimed
Peer to peer finance is set to revolutionise the UK mortgage industry, starting with secured lending to landlords, according to a new independent review of the buy to let mortgage industry. Population growth combined with a weak home building response mean the phenomenon of buy to let would survive a new recession similar to, or even worse than, that experienced in 2008, according to the research conducted by The Wriglesworth Consultancy and commissioned by peer to peer lender Landbay. However despite this, the research also reveals the higher price of buy to let finance, with average new mortgage rates one third more expensive for landlords than for owner occupiers. This leaves a gap for P2P mortgage lenders to disrupt the industry. In the first ever published stress tests for a peer to peer lender, the report also reveals that secured peer to peer lending against buy to let properties has a natural stability against economic shocks. This contrasts with severe uncertainty over other types of riskier peer to peer finance, such as unsecured personal loans to consumers, business credit, or other forms of direct peer to peer property ownership and development finance. Stress tests of Landbay’s loan book also indicate the importance of quality manual underwriting when lending to landlords. More attention to landlords’ personal finances makes loan books less prone to losses than historic examples of mass buy to let lending using automated underwriting systems to approve loans. ‘The mortgage world has changed. Now everyone has access to the sorts of markets that were once the preserve of large financial institutions,’ said John Goodall, chief executive officer of Landbay. ‘A new energy for more inclusive finance, combined with new technology, is revolutionising the world of saving and borrowing. This has only just begun, and over the long term the impact of these fundamental changes will be far greater than was at first envisioned,’ he explained. ‘All peer to peer finance is relatively new, but it would be an enormous mistake to assume that means this broad swathe of lending is in any way uniform. Combining P2P lending with the backstop of income producing property as security can create an entirely different class of investment while shaking up competition in the world of mortgage lending,’ he added. Continue reading
UK mortgage lending falls back to similar level a year ago, latest data shows
Gross mortgage lending in the UK reached £16.9 billion in November, some 9% lower than October when it was £18.6 billion, according to the latest figures from the Council of Mortgage Lenders. It matches the £16.9 billion seen in November last year but shows that the last 12 months has been one of ups and downs for the UK mortgage market. ‘Current activity in the housing market has eased with transactions back down to levels seen almost a year ago,’ said CML economist Mohammad Jamei. ‘The reform in stamp duty is likely to provide a modest short term boost in activity over the next few months, but its impact will fade away in the medium term,’ he added. Reacting to the figures, Peter Rollings, chief executive officer of Marsh & Parsons, said that the contours of the UK housing market have shifted from the start of 2014, with property price rises softening into a more organic upward curve. ‘New configurations of affordability checks and pre-emptive measures in the mortgage market temporarily diverted the route of lending, but overall progress is healthy,’ he explained. He pointed out that mortgage products have never been more attractive. ‘With a plentiful choice of properties and now smaller up-front stamp duty costs, buyers are faced with a very favourable set of conditions,’ said Rollings. ‘This has a knock-on effect for sellers, as durable demand enables them to trade up, and this fluidity of movement at every level of the market will ensure buoyant activity and optimism spills over into the start of next year,’ he added. Continue reading
