Tag Archives: news
First UK house price estimates published ahead of new national index in June
The first estimates for the new single official UK House Price Index which will be first published in its entirety in June 2016, have been published. The new improved index has been developed jointly with other official producers of house price statistics following a review by the National Statistician, uses data from, amongst others, the Land Registry and Council of Mortgage Lenders. By using these comprehensive datasets together, as well as by employing the best internationally agreed methods, the new UK HPI aims to give the best and most detailed picture of the UK housing market. For the most recent period, December 2011, the new UK HPI shows an average price level of £185,000 for England and Wales. This is lower than the price recorded by the current Office of National Statistics index for England at £222,000 for the same period. But it is above the equivalent price levels recorded by the Land Registry for England and Wales at £157,000, the Halifax for the UK at £157,000 and Nationwide for the UK at £163,000. The main reason for the decrease in price levels from the ONS index to the new UK index is the use of the geometric mean, which reduces the impact of very high value properties on the headline data. Over the period from 2003 to 2011, which is the longest comparable period available, the average annual growth is 5.2% for the ONS index for England, 4.6% for the Land Registry index for England and Wales, 4.7% for the Halifax for the UK, 5.3% for Nationwide for the UK and 6.1% for the new UK index for England and Wales. The inclusion of cash sales and improved weights are both contributing to the increased growth seen in the new UK index, according to ONS statistician Chris Jenkins. ‘By combing different data sets and using the best internationally agreed methods, the new UK HPI will give the best possible picture of the changing UK property market,’ he explained. ‘For the first time, consistent high quality data will be available for both national and local areas, helping policy makers to make better decisions,’ he added. Continue reading
New scheme launches to help UK home owners susceptible to flooding
A scheme has been launched in the UK to help people with properties in areas susceptible to flooding to get affordable home insurance. Flood Re is described by the Association of British Insurers (ABI) as a word first. It is not a home insurer but will work behind the scenes with existing insurance companies so that people with home in are most likely to flood can shop around to find policies with affordable premiums and excesses. ‘It’s great to see so many insurers ready to make use of Flood Re from launch. The launch is just the start of a process and we know more providers will join them over time, bringing even more choice for people with homes at risk of flooding,’ said James Dalton. Director of general insurance policy as the ABI. ‘Insurance is an essential safeguard for your home and belongings. People in flood risk areas not being able to access affordable cover was a major concern, and why the insurance industry went to great lengths to design and create this world-first solution along with Government,’ he added. But research by home insurance expert Admiral suggests more needs to be done to educate those affected as only one in seven of have heard of the Flood Re scheme. It found that despite 67% believing severe flooding events will become more frequent in coming years, just 15% said they worry about their own home flooding. Relatively few people surveyed, just 7% said they have suffered a flood in the past, but it’s clear that for those that were, it was devastating. Admiral asked them the worst thing about their own flooding experience and 21% said the destruction of their furniture and carpets while 16% said it was the emotional stress that the flood caused. ‘Although Flood Re won’t prevent flooding, it is good news for home owners who have been previously flooded or who have had difficulty getting insurance because their home is at risk of flooding. However our research shows only 15% have heard of the scheme,’ said Noel Summerfield, head of household at Admiral. Flood Re works by charging all home insurers a fee and it’s this fee along with other charges to insurers using the scheme that pays for any associated flood claims. It is launched at a time when the Environment Agency estimates that one in six homes are at risk of flood in England alone. Most experts agree that incidents of flooding are likely to become more commonplace. Not everyone Admiral surveyed would be put off buying a house if there was a risk it might flood, only 62% said they would never consider buying a home that was at risk of flooding, no matter its price. Some 12% said they would consider buying a home if the price it was up to 30% below its true cost. While 29% would do it if they could get up to 50% off its true cost. However a house that is prone to… Continue reading
Many UK landlords unaware of new mortgage legislation, research suggests
Accidental landlords in the UK are most at risk of being caught out by new European Union mortgage legislation, new research suggests. Some 55% buy to let mortgage applicants are unaware of the impending changes to mortgage law and accidental landlords, those who did not intentionally set out to rent out a property, are least likely to know about these regulatory changes. The research by landlord insurance provider Direct Line for Business amongst mortgage brokers also reveals that 62%of applicants were unaware of either the changes to mortgage tax relief or the EU's Mortgage Credit Directive (MCD) and therefore changes which could impact their ability to secure a mortgage. This lack of awareness rises to 71% amongst 'accidental landlords', namely those who rent out property due to unforeseen circumstances such as being unable to sell, or inheriting a home. Mortgage advisers estimate that accidental landlords account for 17% of new mortgage applications, with overall buy to let mortgage applications growing by 29% in the past year. The research also shows that only 7% of mortgage advisers believe that the MCD will have a positive impact on approvals of buy to let mortgage applications while 59% expect it to have a negative impact. The EU's MCD could see circumstances where landlord mortgage lending will be viewed as ‘consumer’ lending and therefore could be subject to more stringent lending criteria. Accidental landlords with one or two rental properties may not be able to pass the expected new affordability tests. Changes to the mortgage tax relief are set to be phased in from April 2017 with landlords no longer able to deduct mortgage interest payments before calculating their tax bill. They will instead get a tax credit equivalent to 20% basic rate tax on this amount. Landlords are also now paying a 3% surcharge on stamp duty. ‘The new EU legislation on mortgages coupled with the Government's increase in buy to let taxation could significantly alter the buy to let market, so we would encourage any mortgage applicants to think carefully about the new law and how this could impact them as a landlord,’ said Nick Breton, head of Direct Line for Business . ‘With house prices in the UK rising by 7% in the year leading to October 20152, and with the estimated average deposit standing at more than £61,000, it is imperative that landlords are able to maintain a suitable amount of property to house the population of young people saving up to buy their first property, or those seeking a temporary stay in a town or city,’ he added. With the new legislation set to be phased in between 2017 and 2020, Direct Line for Business is providing landlords looking to protect their income with suggestions. It says that as letting and management agents currently charge between 10% and 15% of the monthly rent in fees those with the time and who are prepared to take on the… Continue reading
