Tag Archives: news
Latest data shows remortgage activity in the UK soared in 2015
Remortgaging activity in the UK has soared over the past year with the total number of valuations some 53% higher than in October 2014. The data from the latest research report from Connells Survey & Valuation says that this is despite the seasonal fall, which saw activity from remortgaging in October drop 21% compared to September 2015. Those looking for cheaper rates have likely been tempted to remortgage to take advantage of the rock-bottom interest rates while they last, according to John Baghsaw, the firm’s corporate services director. ‘Many are also taking this opportunity to remortgage in order to release equity and so upgrade their current property. That said, it’s still a great time to move house. Home sales continue to climb and the Government is improving the liquidity in the housing market by kick starting the construction of starter and mid-range homes. In addition, low interest rates are not just a remortgagors dream, they also make it easier for home movers to climb the property ladder,’ he explained. Despite home mover valuation activity falling 27% between September and October of this year, growth on a 12 month basis remains solid. The sector registered 14% growth in October 2015, when compared to October of last year. Valuation activity for all purposes remains strong, climbing 28% between October 2014 and October 2015, despite dropping back by 21% compared to last month, the data also shows and Bagshaw pointed out that home movers, traditionally the bedrock of the housing market, have experienced more steady activity in October compared to previous months. ‘But with home values continuing to rise solidly and mortgage rates remaining low, this seems like more of a seasonal blip than the start of a trend. By most measures, it’s still a great time to buy. The housing market’s forward indicators remain strong. Activity in all sectors is up on last year, a reflection of a positive combination of economic growth, rising consumer confidence and increasing real terms wages,’ he added. Both the buy to let and first time buyer sectors recorded strong year on year activity in October. Valuations carried out for buy to let investors grew by 25% between October of this year and October 2014, while first time buyer valuations increased by 20% over the same period. However, both sectors also experienced a slight monthly downturn, with October activity in the buy to let sector down by 9% on September. Meanwhile, first time buyer activity saw a 17% dip over the same period. The buy to let sector continues to thrive, albeit it at a steadier pace than in previous months. The fundamentals of its profitability have remained intact. Demand for housing still exceeds supply and very low mortgage rates remain in abundance. Moreover, the Bank of England announced recently that any rate rise is off the cards for the immediate future, meaning the field is still open for many more investors to acquire a portfolio and become a new… Continue reading
Landlord sentiment survey reveals impact of tax changes for buy to let
The UK Government’s reduction of landlord buy to let tax relief looks set to have an impact with landlords in the private rented sector looking to sell up, according to new research. The latest sentiment survey indicates that the tax changes, announced as part of the Summer Budget, are proving a major concern for buy to let investors. Currently, 9% of landlords think it’s a good time to sell up, with the tax reforms influencing their decision more than any other factor. Indeed, according to the survey from lettings agents Your Move and Reeds Rains, many fear letting out a property will become far less profitable when the reforms start to come into force in April 2017, and they are now considering leaving the sector as a result. This loss of enthusiasm is even dampening the optimism of the 31% of landlords who think that now is a good time to buy rental properties and 44% believe investing in buy to let property is more complicated than it was six months ago. The survey report says that this is due to more rigorous regulation, also introduced as part of the Budget, which includes requirements for landlords to check their tenants’ immigrations status before they let their properties. Some 19% of landlords are daunted by this task, and now feel unequipped to let out their houses without the support of letting agents to manage their investment. The survey also shows that 24% of landlords believe the legislation on letting out properties has become more confusing, with 11% feeling that they don’t fully understand the current regulations. These changes are denting landlord confidence, and general disenchantment with the letting industry was an important factor for 23% of landlords who think now is a good time to sell. ‘Landlords could be forgiven for feeling a little deflated at the moment and its worrying to see this may motivate many to reconsider their investment. The Government’s tax changes appear to be making investing in buy to let less attractive because of the seemingly smaller profits margins on offer in the future,’ said Adrian Gill, director of Your Move and Reeds Rains. He pointed out that if a tenth of landlords do decide to leave the industry, this would seriously shrink the number of properties available for tenants. ‘At a time when tenant demand is only rising, shorter supply will only translate into increased rents. This may mean landlords are underestimating the likely pace of future rent rises,’ he explained. ‘The government needs to cut the red tape involved in providing homes for renters if they hope to maintain a healthy supply of rental properties. With the Bank of England keeping a wary eye on the buy to let market, further regulatory interference may only make landlords’ and tenants’ lives harder. We need landlords to stay in the market and invest further in the sector,… Continue reading
UK house prices see high growth in East and South East
UK house prices increased by 0.8% in September and were 6.1% year on year, according to the latest data from the Office of National Statists (ONS). House price annual growth was strongest in Northern Ireland at 10.2% followed by England at 6.4% and there was a 1.1% rise in Wales and Scotland. Annual house price increases in England were driven by the East with year on year growth of 8.4% and the South East up 7.4%. But excluding London and the South East, UK house prices increased by 5% in the 12 months to September 2015. The data also shows that in September 2015, prices paid by first time buyers were 4.3% higher on average than in September 2014. For owner occupiers prices increased 6.9% for the same period. Neal Hudson, associate director of Savills research, pointed out that the continued growth in the ONS house price index highlights the impact of increasing competition by mortgage lenders on a low stock housing market. ‘Potential buyers that have a deposit are benefiting from historically low mortgage rates, increasing net lending, and are now able to borrow record high multiples of their income. That is despite the introduction of tougher affordability tests following MMR last year. The average buyer no longer has an average income, and so home ownership remains a dream for the many who still aspire to it,’ he added. The growth is being driven by constricted supply and fewer home owners selling, according to Rishi Passi, chief executive officer of Oblix Capital. ‘Improving economic conditions, rising wages and postponed interest rate rise expectations are all also bringing more buyers to the market, stoking up demand and inflating prices in the lower end of the market,’ he said. ‘The good news is that rising prices in this band will attract further investment and provide opportunities for developers, especially SMEs and should lead to an increase in attention paid to providing houses for this underserved end of the market,’ he added. Alex Gosling, chief executive officer of online estate agents HouseSimple, believes that there is likely to be a slight cooling in price growth in the coming weeks leading up to Christmas. ‘But, while demand continues to significantly outstrip supply, and interest rates remain static, we could well see a price spurt at the beginning of 2016. The market desperately needs a boost in new properties being listed if supply is ever to come close to catching up with demand,’ he added. First time buyers could be being outbid by existing home owners because they are more reliant on mortgages which are constrained by tougher lending criteria, according to Rob Weaver, director of Investments at property crowdfunding platform Property Partner. ‘Despite cheap finance, the tightening of the lending rules has made it increasingly difficult to get a mortgage and hence may be having a negative impact on supply. Longer term, property remains a good, solid investment… Continue reading
