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UK mortgage approvals rising but still down on a year ago
Mortgage approvals in the UK have been steadily improving over the past five months but are still below where they were a year ago, according to the latest figures to be published. Gross mortgage borrowing in May was £10.4 billion, similar to April but 5% lower than in the same month last year, the data from the British Banking Association shows. Much of this could be to tougher new approval rules that were introduced in April 2014. For house purchase approvals, the annual comparison, adjusted for the effect of the new rules, suggests a year on year fall of 3%. Indeed, Charles Haresnape, chairman of the Intermediary Mortgage Lenders Association (IMLA), pointed out that there has now been a fourth successive monthly rise in mortgage approvals which suggests the high street banks have got to grips with recent changes to mortgage regulations. ‘All the same, there were 5,000 fewer approvals in May than was the norm in the six months before the Mortgage Market Review (MMR) took effect. Clearly there is still some way to go before lending activity on the high street is fully restored,’ he said. ‘Looking ahead, our chief concern is that UK mortgage borrowers face another wave of changes headed their way in the shape of the Mortgage Credit Directive (MCD). The short term threat is that another transitional period will slow the applications process and reduce the industry’s capacity to lend,’ he explained. ‘In the long term, extra layers of regulation threaten to squeeze more consumers out at the margins. When the rules change so often, it is very hard to judge the right time to say enough is enough before we are left with a far more subdued market than anyone intended. Balancing consumer choice and financial safety is a constant challenge, and the Bank of England should stand ready to act if the pendulum swings too far in either direction,’ he added. According to Steve Bolton, chairman of Platinum Property Partners, figures from the BBA show that there is life in the mortgage market, indicating that there has been a 2% jump in general mortgage approvals over the last 12 months. ‘However, the figures also show that lending to homebuyers is down on last year by 3%, meaning that access to the property ladder is becoming more and more difficult for many people. This means that the rental sector is likely to come under increased pressure as growing numbers of people look to it for longer term solutions to their housing needs,’ he said. ‘It is therefore of the upmost importance that the market is able to meet the needs of a growing population of renters, and provide them with high quality and affordable housing. While renting is now a lifestyle choice for many young people, the majority still aspire to own their own home and certain types of rental properties can give would be buyers an advantage in times… Continue reading
Wales has lowest median house price while Kensington in London has the highest
Blaenau Gwent had the lowest median house price in England and Wales in 2014 at £75,000, a sharp contrast to the highest in the London borough of Kensington and Chelsea at £1.19 million, official figures show. The data from the Office of National Statistics (ONS) also reveals a sharp north/south divide when it comes to property prices in the country as house prices in London surged by 32% last year, leaving the rest of the country trailing. Every area of the country where property prices increased by over 20% were in the capital, while areas in the north saw homes fall by almost a quarter in value. The figures also look at home prices according to council areas. These show that the local authority that had the largest increase in median house price between 2013 and 2014 is South Bucks increasing by 23% from £390,000 to £480,000. The local authority that had the largest decrease in median house price between 2013 and 2014 is Isles of Scilly decreasing by 15% from £275,000 to £235,000. Figures were also released according to Parliamentary constituencies. Walthamstow in north east London saw the highest house price growth last year, up by 32%, taking the average price of a home from £250,000 in 2013 to £330,000 last year. While in Hammersmith prices increased by 25% from £456,000 to £570,000 on average. Dulwich, Westminster, Tottenham, Lewisham, Chelsea and Islington, representing Parliamentary constituencies across the capital make up the top 10 constituencies for house price growth. Nottingham East is the only area outside of the capital and its surrounding areas which made it into the top 25 constituencies for property price increases with 19% growth taking the typical price from £92,500 to £109,950. Bradford West suffered the worst property slump in the country with prices dropping 23% and in Blaydon in the north east the price of homes fell 5% with Rotherham in South Yorkshire also seeing a 5% drop. Data looking over the last decade shows that the biggest house price rises have been in Kensington in London with a 550% rise to £1.15 million, followed by the City of London and Westminster with a 535% rise to £980,000. Other popular commuting areas in London also saw a big rise such as Tooting with a jump of 515% taking the typical home price to £497,750 while Westminster North was up 50% to £700,000 and Vauxhall up 507% to £485,000. Continue reading
Immigration check scheme in UK makes landlords reluctant to take on foreign tenants
The immigration check pilot scheme in the UK which is running in the Midlands has led to tenants being charged additional fees and is making it harder for foreigners to rent a property, new research has found. Tenants are being charged an extra £100 in administration fees, according to a survey by the Joint Council for the Welfare of Immigrants (JCWI) which polled landlords and tenants in the pilot area since the roll-out. Under the pilot scheme, which is expected to be rolled out across the UK later in the year, landlords are required to carry out checks on new tenants and face action if they are found to be renting to an illegal immigrant. If a landlord breaches the rules they face a fine of £1,000 per illegal adult occupier and for a second offence that rises to £3,000 per adult. The survey also indicated that landlords are now more hesitant to offer viewings to anyone needing more time to provide paperwork, meaning migrants are more likely to be turned down. The research also shows that landlords are discriminating between applicants on the basis of their background and are preparing to turn away tenants because they have a foreign accent. Furthermore, some legitimate tenants who cannot easily identify themselves using a British or European Union passport are finding it harder to secure somewhere to live. ‘This research clearly shows the dilemma that landlords are facing. On the one hand they want to be fair to prospective tenants, but on the other hand, they are fearful of renting a property to an illegal immigrant,’ said Jane Morris, managing director of Property Let By Us. She gave an example of an American tenant who reported that her British husband could secure viewings for the same properties she had been told were no longer available. Morris explained that under the pilot scheme, would-be tenants have to produce evidence from a checklist of documents that they have permission to be in the UK and landlords have to take a copy for their records. ‘So before dismissing a prospective tenant, it is important that agents and landlords make all the necessary checks. For example, if an agent is taking on the responsibility for checking an occupier’s immigration status, he/she must agree this in writing and must report the findings to the landlord,’ she pointed out. ‘Agents should set out timescales for checks and reports in the agency agreement and report occupiers without the right to rent to the landlord in writing. If the landlord still authorises a tenancy agreement, they will be liable for the penalty,’ she added. She also pointed out that in the event of a breach, where an occupier is found to be living illegally in a rented property, the agent or landlord will need to establish a statutory excuse to avoid a penalty. ‘A statutory excuse can be maintained if… Continue reading
