Tag Archives: news
Home lending in UK up by 8.5%, but some sectors seeing falls in recent months
Lending for home purchases in the UK increased by 8.5% year on year to £43.5 billion in the third quarter of 2015, according to the latest data from the Bank of England. However, the data also shows that the proportion of lending to first time buyers decreased in the quarter by 0.3% to 20.4% while the value of residential loans advanced to first time buyers increased by £0.6 billion from the third quarter of 2014 to £12.7 billion. The buy to let proportion of lending also decreased from 15.8% in the second quarter of 2015 to 15.6% in the third quarter of 2015 but increased by 1.3% from the third quarter of 2014. Advances, which include by to let remortgages, increased over the past year from £8 billion advanced in the third quarter of 2014 to £9.7 billion in the third quarter of 2015. This is the highest level of advances since the first quarter of 2009. Buy to let balances outstanding were £174 billion in the third quarter of 2015, which, at 14.5% of total residential balances is the highest proportion since the series began in 2007. The data also shows that the proportion of remortgages decreased from 26.2% in the second quarter of 2015 to 24.1% in the third quarter while the proportion of other new lending decreased from 3.6% to 3.4%. The proportion of gross advances at a loan to value (LTV) of over 90% decreased by 0.7% to 2.8% in the third quarter of 2015 while the proportion of gross advances to borrowers with a single income multiple of more than four time increased by 0.9% to 10.3%. According to Peter Rollings, chief executive officer of Marsh & Parsons, we can expect to see borrowing advance further after the Chancellor’s stimuli unveiled in the Autumn Statement. ‘With £15 billion of funding for housing measures taking prominence in his agenda, this will have given the green light to a queue of first time buyers, particularly in London, where there will be a designated Help to Buy scheme to reflect the accelerated house price growth in the capital, and the extra booster needed to help buyers onto the ladder,’ he said. ‘First time buyers have already been making tracks in the third quarter and in London we’ve seen this as part of wider demographic shift as domestic players and mortgage buyers become more prevalent in the housing market, while overseas investors take a temporary step back to digest the higher stamp duty payable on top-end purchases,’ he explained. ‘But proportionally, across the country, remortgaging activity has been taking up a larger chunk of the lending pie recently, as existing home owners try to build up their defences ahead of an expected interest rate rise in 2016. But the rankings may change in the run up to April’s stamp duty increase for second homes, and buy to let lending is likely to rev up quickly, as investors… Continue reading
Property listings fall across the UK, more than usual seasonal drop off
New property listings in the UK fell by 21.5% across the country in November following three months of small rises, the latest research shows, with London particularly affected. The data from the Property Supply Index compiled by online estate agents House Simple recorded the biggest drop in property supply in any one month since the index launched in May 2015. The worst fall was in Bath with a wall of 42.6% in November and the data also shows that five of the 15 towns that saw the biggest drop in supply were in the north west of England. Property supply in London fell by 21% and not a single London borough saw a rise in property listings in November while Salford and Chichester were the only locations to see a rise. Indeed Bath has seen a steady decline in supply each month since June, according to the index which tracks the number of new properties listed on Rightmove every month in more than 100 major towns and cities across the UK and all London boroughs. Only 135 new properties in Bath were listed in November, compared to a high of 284 in June. The West Midland cities of Worcester and Solihull saw new property listings drop 41% and 39% respectively in November. While Chichester and Salford saw rises of 14.8% and 11.6% respectively. According to Rightmove figures, Bootle and Swansea have seen the biggest swing in property supply in the past two months, with October seeing a 47.4% and 36.6% rise respectively in property supply compared to September, followed by a 35.1% and 23.9% fall respectively in supply in November compared to October. In London Richmond upon Thames saw new property listings drop almost a third at 31% in November. While, the boroughs of Bromley and Hillingdon, each experienced a 30% drop off in new property listings last month. The figures reveal that there wasn’t a single London borough that saw an increase in new listings in November. Greenwich and Barking and Dagenham experienced the smallest falls in supply, with new listings down just 5% and 9% last month compared to October. More than half the capital’s boroughs, some18 of the 32, saw new stock levels fall by more than a fifth in November compared to October. ‘Everyone knows by now that we have a property supply issue in this country, but these latest figures reveal just how severe that problem is as we head into the New Year. The total number of new property listings in November across the UK was just over 65,000, that is nearly 20,000 less than in October, and the lowest level since we launched the index in May,’ said House Simple chief executive officer Alex Gosling. ‘Historically, as we get closer to Christmas, the property market does start to slow down, so a fall in property supply levels is not unexpected. However, the drop off is too dramatic to be simply attributed to seasonality factors alone,’ he pointed out. He… Continue reading
Property stamp duty costs in Australia up almost 8% in six months
Stamp duty taxes on property in Australia have increased by 7.9% in the last six months and the bill is now equivalent to almost four months’ worth of earnings, the latest research shows. According to the report from the Housing Industry Association in November 2015 the typical stamp duty bill nationally rose to $19,045 from $17,653 in June. The report also points out that stamp duty is causing mortgage repayments to increase by $1,165 per year, or $34,955 over a 30vyear loan term. ‘The cost of stamp duty has a significant negative multiplier effect causing a downward financial spiral for households. Apart from the immediate effect of being over $19,000 worse off, stamp duty results in mortgage interest payments increasing by about $15,900,’ said HIA senior economist, Shane Garrett. ‘Damage from the tide of stamp duty doesn’t stop there. Home buyers have smaller deposits after stamp duty is paid and must bear larger mortgage debt. As a result, significantly higher LMI charges must then be paid,’ he explained. ‘On a standard home purchase of $527,000, stamp duty can push the LMI premium up by another $7,855. If that’s not bad enough, a further layer of mortgage interest is added on top of the LMI premium if it is capitalised,’ he pointed out. ‘The end result is that the typical stamp duty bill of $19,045 can snowball up to about $50,000 once LMI and mortgage interest are factored in. This is an unacceptable burden to place on ordinary home buyers,’ he added. ‘As state governments rely more and more on revenue from stamp duty, they have been blinded to the obvious consequences of these costs have on prospective first home buyers. Last week’s Productivity Commission report also noted the huge disincentive that stamp duty places on older households wishing to downsize,’ he concluded. A breakdown of the figures show that buyer in the Northern Territory Shane continued to suffer the highest stamp duty bills at $25,600, followed by Victoria at $24,700 and New South Wales at $23,600. Queensland continued to offer the lowest stamp duty bills by a comfortable margin at $6,300 followed by Tasmania at $9,300. Stamp duty bills are the fourth highest in the ACT at $18,400, followed by Western Australia at $16,300 and South Australia at $15,400. Continue reading
