Tag Archives: real estate

An interest rate rise could cripple almost seven million borrowers in the UK

Almost seven million how owners could struggle to cover their mortgage repayments if interest rates rise just 1%, according to new research. Interest rates have been at a historical low of 0.5% but some economists have predicted that they will begin to climb from Spring 2016. They are unlikely to rise steeply, however, a rise of 1% would see borrowers with standard variable rate mortgages pay an additional £55 a month for every £100,000 owed and once rates begin to rise, some 63% of borrowers say they would have to cut back on all non-essential spending, such as weekends away or even meals out, to cover the additional cost. The research, carried out on behalf of mortgage and loans provider Ocean Finance, also shows that while many borrowers are able to reduce spending to cover the increased mortgage cost, a further 13% are concerned they would quickly get into financial difficulty trying to make ends meet. Almost a quarter of borrowers have already switched to fixed rate mortgages and a further 16% plan to take fixed rate mortgages to protect themselves against a rate increase. However, the firm says it is worryingly that more than a third of home owners are not taking any steps to shield themselves from an interest rate rise. The pressure to meet increased mortgage payments would force about 10% of home owners to consider selling their home to avoid the higher cost of their mortgage, the research also suggests. ‘It’s inevitable that interest rates will rise at some point, whether that happens in Spring next year or later in the year. Whilst the rate rise is likely to be gradual and it may take a while to get to a 1% increase, every rate hike will have an impact on hard working families who are already struggling to make ends meet,’ said Gareth Shilton, Ocean’s spokesperson. ‘Many people will feel like mortgage prisoners because their circumstances have changed since they took out their loan and they’ll understandably be concerned about what a potential interest rate rise means for them,’ he pointed out. ‘It’s important to understand that in most cases there are options, so it’s important that anyone who is concerned about a rate increase should seek advice on the best deal available to them,’ he added. Continue reading →

Posted on June 4, 2015 by tsiadmin | Posted in Investment, investments, London, News, Property, Real Estate, Shows, Taylor Scott International, TSI, Uk | Tagged , , , , , , , , , | Comments Off on An interest rate rise could cripple almost seven million borrowers in the UK

Downward house growth trend in UK continues, says latest index report

UK house prices increased by 0.3% in May and the annual price growth figures moderated to 4.6% from 5.2% in April, according to the latest index figures. The data from the Nationwide Building Society confirms a gradual downward trend that takes the average price in the country to £195,166. Robert Gardner, Nationwide's chief economist, pointed out that this general trend has been in evidence since the summer of 2014 but was briefly interrupted in April when price growth edged up to 5.2% from 5.1% in March. However, annual house price growth is now running at less than half the pace prevailing in the middle of 2014. ‘Over the longer term we would expect house price growth to converge with earnings growth, which has typically been around 4% per annum. However, much will depend on supply side developments and in recent years the rate of building activity has remained well below that required to keep up with population growth,’ Gardner explained. The index report shows that cash transactions remain relatively high in the UK residential market. ‘We estimate that the share of cash purchases in the housing market reached an all-time high of 38% in the first quarter of 2015,’ said Gardner. ‘Continued healthy demand from cash buyers has helped to support transaction levels in recent quarters, since mortgage lending has remained relatively subdued. For example, in the first quarter of 2015 overall housing transactions were down by around 5% compared with the first quarter of 2014, while mortgage completions were around 11% lower,’ he pointed out. ‘Although the 38% share was a record, it was only modestly above the average of 36% prevailing in 2014. The significant rise in the share of cash transactions occurred in the wake of the financial crisis, where a tightening in credit conditions and a deterioration in the labour market limited the number of people able to buy with a mortgage,’ he added. Gardner also said that the current low interest rate environment is likely to have supported the flow of cash into other asset classes in recent years, including UK residential property. The Nationwide data suggests that the share of cash purchases in London is not out of line with the rest of the UK, which can be regarded as a surprise, given the greater involvement of investors, both domestic and overseas, in the London property market. ‘A limiting factor may be that house prices in the capital are over twice as high as the rest of the UK at £408,780 versus £188,566 in the first quarter of 2015,’ added Gardner. Continue reading →

Posted on June 3, 2015 by tsiadmin | Posted in Investment, investments, London, News, Property, Real Estate, Shows, Taylor Scott International, TSI, Uk | Tagged , , , , , , , , , , | Comments Off on Downward house growth trend in UK continues, says latest index report

Slower development land value growth in UK due to increasingly polarised land market

Development land values across the UK have remained stable or increased only slightly in the last three to six months, according to the latest research report. Greenfield land values increased by 0.5% in the first quarter of 2015 compared to 0.6% in the fourth quarter of 2014, bringing annual growth to 5.8%, the data from international real estate firm Savills shows. Growth in urban land values, replicating their previous quarter performance, increased by 1.6% in the first three months of 2015 with annual growth at 9% exceeding that of greenfield land. Residential development land values in London remained stable over the six months to March 2015 following a period of strong growth, the data also shows. The UK as a whole has experienced increased construction costs and the scarcity of bricklayers and joiners has increasingly become a problem, the report points out. In some parts of the UK there have been fewer bids per site due to the selectivity of house builders. These factors have prevented land values from rising significantly. Download the full PDF report > > However, the picture across the country is varied and is becoming relatively polarised between higher value markets of stronger demand, generally in the South East, and the rest of the country. Residential development land values in London remained stable over the last six months after very strong increases in values in 2013 and 2014 with 25.8% growth in the year to March 2014. Sentiment for London residential land remains strong, the report says, particularly in areas with good transport links or planned infrastructure improvement and sites continue to attract a high number of bids. However, increasing construction costs, the introduction of CIL in some boroughs and election uncertainty have kept residential development land values from increasing. The growth in hotel and office development land values in London has lagged behind residential since the start of the recovery in 2009. However, in the last six months values for hotel and office land continue to grow while land values for residential stand still. Development land values for hotels and offices in the capital increased by 3.8% and 4.4% over the six months to March 2015 compared to 0% for residential development land. Scotland stands out as experiencing strong increases in urban development land values which rose by 6.9% in the quarter. This follows the bounce back in greenfield land values last quarter after the referendum in September 2014. Both urban and greenfield land values had relatively low growth leading up to that point. Urban land values in Edinburgh and Glasgow have been at the forefront of this growth and now stand at double that of their 2008/2009 lows, approximately three quarters of their 2007/2008 peak. The South East and Cambridge has the highest value land market where sites, according to a survey of agents, receive the greatest number of bids. Development land values in this area are the highest in the country, in many cases above their… Continue reading →

Posted on June 3, 2015 by tsiadmin | Posted in Investment, investments, London, News, Property, Real Estate, Shows, Taylor Scott International, TSI, Uk | Tagged , , , , , , , , , | Comments Off on Slower development land value growth in UK due to increasingly polarised land market