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House purchase lending fell in London in 2015, latest CML data shows
London is often regarded as the powerhouse of the UK property market but new data shows that house purchase lending in the city fell in 2015 in comparison with the previous year. But remortgaging increased, according to the latest data from the Council of Mortgage Lenders covering the fourth quarter of 2015. There were 21,800 home owner house purchase loans, down 4% on the third quarter but up 5% compared to the fourth quarter 2014. These loans were worth £6.7 billion, down 7% quarter on quarter but up 16% year on year. First time buyers took out 12,000 loans in London, down 2% on the previous quarter but up 1% on the fourth quarter in 2014. These loans totalled £3.2 billion, down 4% on the third quarter but up 11% on the fourth quarter of 2014. Home movers in London took out 9,800 loans worth £3.6 billion, down 7% by volume and 9% by value on the previous quarter. Compared to the fourth quarter 2014, this was up 11% by volume and 22% by value. Remortgage lending increased 5% by volume and 8% by value compared to quarter three totalling £3.8 billion with 13,100 loans, up 34% in number of loans and 53% in amount borrowed for remortgage compared to the fourth quarter of 2014. The number of loans for home owner house purchase in London decreased year on year to 81,600 loans at £24.5 billion, down 5% by volume but up 1% by value on 2014. First time buyers took out 45,600, worth £11.6 billion, down 6% by number of loans and 1% by amount borrowed compared to 2014. Home movers took out 35,900 loans worth £12.9 billion, down 3% by volume but up 4% by value year on year. Remortgage lending totalled 48,600 loans worth £13.7 billion, up 14% by volume and 25% by value on 2014. ‘House purchase lending in London fell in 2015 due mainly to a slow start. Later months of the year saw activity pick up again. Persisting supply and affordability issues, alongside the introduction of the Help to Buy London scheme, means there will be some uncertainty around how the market will perform going into 2016,’ said Paul Smee, director general of the CML. ‘By contrast, remortgage activity, which has been consistently flat for the past few years, appears to be on an upward trend. Competitive mortgage rates appear to have sparked this activity and we have not seen quarterly volumes at this level since 2009,’ he added. Continue reading
Average rents in Scotland up 2.3% year on year
Average rents in Scotland increased by 2.3% year on year in January but remained static month on month at £548, according to the latest index figures. However, the average figure is being distorted by high increases in some regions such as Edinburgh and the Lothians where rents were up by 6.4%, the buy to let index from lettings agent Your Move shows. Meanwhile, rents in the East of Scotland were 1.7% lower than a year ago and they fell by 0.2% year on year in Glasgow. The index also shows that slower house price growth is hampering landlord returns with a fall of 5.8% in the year to January but arrears have improved with 11.1% tenants late paying, the lowest level since July 2015. Previously, arrears surged over the autumn to reach a record high of 13.8% in October 2015, before beginning to improve. However, tenant’s finances remain in worse shape than 12 months ago. In January 2015 as little as 7.1% of all rent due was late. A breakdown of the figures show that in January 2016, rents in Edinburgh and the Lothians were 6.4% or £38 higher than a year ago, the fastest annual rent rise on record. This is nearly three times quicker than average rent growth across the whole of Scotland. On average, across Scotland as a whole rents climbed 2.3% in the 12 months to January 2016, equal to £12 in absolute terms. This is only slightly faster than 2.2% in the 12 months from December, though represents an annual acceleration compared to the 1.3% annual lift recorded in January 2015. ‘In different parts of Scotland, powerful interplays between supply and demand are shaping the regional rent patterns that are emerging. In popular cities like Edinburgh where the jobs market is hottest the competition to find homes means tenants have to act quickly. As a result, we’re seeing exceptional rent growth in some parts of the country while in others, lettings market activity is much calmer,’ said Brian Moran, lettings director at Your Move Scotland. ‘However there’s also another ingredient added to the mix now. The private rented sector is in a state of uncertainty, as landlords wait with baited breath while the Private Tenancies Bill progresses through the Scottish Parliament. Nervous landlords may be acting now before their hands are tied, and they lose control of the rent they can charge. This could have prevented a seasonal dip between January and December instead of the steady picture we have seen,’ he explained. ‘Encouragingly, the latest rent rises are underpinned by good news. We should also be looking at tenants’ bottom line. Arrears are falling which speaks volumes for affordability right now. With rents below their price peak, many tenants have been seizing the opportunity to move out of season, while good deals are available,’ he added. On a regional basis three of the five regions of… Continue reading
House prices increase more than average earnings in over 25% of UK districts
Average house prices have increased by more than the average employees net earnings in more than a quarter of local authority districts across the UK, according to new research. The number of areas where house prices are outpacing earnings over the last two years has increased significantly over the past 12 months from 73 or 19% out of 384 to 108 of 28% out of 380. The Halifax research also shows that the vast majority of these areas are in London, the south east, and east of England with these three regions representing 97 or 90% of the 108, with the biggest gap between rising property values and earnings in Three Rivers in Hertfordshire, where house prices increased by an average of £147,990 over the last two years, exceeding average take home earnings in the area by £97,992. Seven London boroughs appear in the top 10 districts while the top performers outside southern England were Warwick in the West Midlands and South Northamptonshire in the East Midlands, with house price gains in excess of earnings of £24,723 and £14,837 respectively during 2014 and 2015. ‘The housing market recovery over the last few years has led to substantial price rises in some areas of the country, particularly in London, the south east and the east of England. This has resulted in homes increasing in value by more than total take-home earnings for the average home owner in many areas of the country,’ said Martin Ellis, housing economist at the Halifax. ‘Clearly, this is good news for some home owners. However, it does make conditions tougher for those looking to buy their first home in such areas, with prices being pushed increasingly out of range for many young people,’ he added. Over the past five years, 35 local areas in the UK or 9% of the total have seen average house prices increase by more than total average pay, up from 23 districts or 6% in 2015. The biggest differential was in Hammersmith and Fulham, where average property prices have increased by £248,971, surpassing average take home pay during the period by £108,653. The top 10 performers are all in London. All 35 areas are in London, the South East and the East. Over the past decade, house prices have increased by more than total pay in four areas across the UK led by Brent up £11,760, Haringey up £8,255, Hammersmith and Fulham up £4,438 and Cambridge up £1,767. Continue reading
