Tag Archives: real estate
Survey reveals confusion over UK new mortgage rules one year on
Some 45% of people who planned to buy a property since the introduction of the UK Government’s new affordability rules last year have failed to do so, new research has found. And many feel less in control of securing a mortgage as the new Mortgage Market Review (MMR) introduced a year ago has created confusion, according to the research from Experian. A quarter claim that the MMR has impacted their ability to buy a property, while 37% report that the changes have made them feel less in control of securing a mortgage. The research also suggests that among those who were unable to buy since the introduction of the MMR, many still appear to be overlooking the basics in financially preparing to apply for a mortgage. For example, 46% have never checked their credit report, meaning they have no indication of how a lender might view their ability to repay money. ‘Preparation is the key to successfully navigating the mortgage market post-MMR. Understanding the affordability rules and how a lender makes their decision is the key to success,’ said James Jones, head of consumer affairs at Experian. ‘But it can take time to build a positive credit history and a solid track record of positive money management, so it’s important you start preparing as soon as you make the decision to buy,’ he added. The research also found that 62% were not aware that lenders may require bigger deposits, 23% believed they could apply for mortgages with smaller deposits than before while 37% didn’t recognise that lenders would now be more careful on whether they could afford repayments and 15% mistakenly believe that lenders have now relaxed their lending criteria as a result of the MMR. Some 13% do not know how much money they have left over at the end of the month, 18% don’t even know what monthly repayments they can afford, 14% did not have a big enough deposit for the property they wanted and 12% were unable to secure the size of mortgage they needed. Experian said it was concerned that 11% of those who were unsuccessful did not know why or haven’t asked their lender, leaving them at a significant disadvantage when it comes to improving their chances of being accepted in the future. Guy Shone, from Explain the Market, said that it seems many people remain stuck in a bit of a muddle.’ More needs to be done in 2016 to encourage personal financial planning and properly support aspiring home buyers, so that all buyers fully understand the rules of the game and stand the best chance of securing a property they can afford,’ he explained. Continue reading
Two thirds of UK landlords now planning to buy new properties
Landlords in the UK are looking to expand their property portfolios at an accelerated pace over the rest of 2015, according to a new property investor survey. Some 65% of UK landlords plan to buy at least one further property in the next six months up from 55% looking to buy six months ago, says the research from specialist buy to let mortgage broker Mortgages for Business. . Just 8% of landlords currently plan to sell any property, while 27% do not intend to either grow or reduce the size of their property portfolio over the next six months. ‘Landlords are better capitalised and now more confident about reinvesting. A strong rental market is being driven by tenants moving to make the most of job opportunities, and now gradually starting to earn more too,’ said David Whittaker, managing director at Mortgages for Business. ‘That new surge of demand is putting more upwards pressure on rents, and landlords are only just beginning to supply more homes to let in response. On top of this, after the surprise stability of a majority government, landlords will almost certainly see a short term boost of house price growth while the threat of damaging regulation has been lifted for at least the next five years,’ he added. When choosing how to finance borrowing, landlords are also changing their approach. Some 26% would currently prefer a variable rate deal for a new buy to let mortgage, up from 23% in November 2014. However, choosing to fix repayments for just a short time period is actually slightly less popular than six months ago. Currently 22% prefer a two year fixed rate mortgage, down marginally from 23% in November, while 12% would go for a three year fix, down from 15% in November. Some 30% would still choose the safety of fixing their mortgage repayments for five years, though this is also slightly down on 31% in November. By contrast, very long term fixes appear to be gaining popularity and 10% would now choose a 10 year fix, more than the 8% recorded in November. Landlords’ average loan to value ratios have fallen in the space of the last six months. Overall, the average overall LTV ratio for UK landlords now stands at 54%, down from 57% in November. The proportion of landlords with overall borrowing above 75% LTV has fallen to just 12%, down from 16% in November. The vast majority have some borrowing, though below 75% LTV. This now represents 81% of landlords, up from 79% in the previous survey. Currently only 6% of UK landlords have no borrowing whatsoever. ‘Over the medium term, interest rate expectations have never been friendlier to landlords. This is clearly reflected in the proportion willing to eschew guaranteed stability in favour of some immediate savings. Over a two year period this may be rational, and landlords as a whole don’t tend to take extraordinary risks with their financial position,’ said Whittaker. Continue reading
RICS launches quality mark for the UK property and construction industries
The Royal Institution of Chartered Surveyors is launching a new initiative to make the land, property and construction sector in the UK more inclusive and diverse. The land, property and construction sector is not known for its diversity but RICS said it has been working across the industry and learning from other professions to find out what is not working and what can be done differently. Findings from the organisation’s research have led to it launching a scheme known as the Inclusive Employer Quality Mark, designed to help firms gain a competitive advantage and a diverse workforce. Launching next month, the Inclusive Employer Quality Mark asks employers to pledge their commitment to adopting and continually improving several key principles including increasing the diversity of the workforce engaging and attracting new people to the industry from underrepresented groups. It also includes developing training and promotion policies that offer equal opportunities for career progression, introducing flexible working arrangements and adaptive working practices and creating an inclusive culture where all staff engage with developing, delivering, monitoring and assessing the diversity and inclusivity policies. It also wants firms to continually refresh and renew commitments to being the best employer as well as sharing and learning from best practice across the industry Accompanying each of RICS’ these six principles are multiple ‘proof points’, against which signatories will be required to assess, on a bi-annual basis, the actions they are taking and the outcomes to date. RICS has created two separate criteria metrics too so that both small and large firms are assessed fairly. RICS will be using the assessment to document the outcomes and trends for the profession as a whole. Once a firm becomes a signatory they gain access to details about how they are performing according to RICS standards across all six principles in comparison with their peers, as well as a spread of support, ideas and case studies from high performers to help drive up improvements for all. Signatories will be published on the RICS website, and member firms may then use the tag line ‘signatory to the RICS Inclusive Employer Quality Mark and the logo’. Louise Brooke-Smith, RICS president said the launch will mark a step change that the profession needs. ‘This initiative has been discussed with, and has the support and encouragement of, a number of leading firms, both large and small, across the land and property sector,’ she explained. ‘Employee needs are changing, along with their expectations and demographic make-up. The competitive war for talent has also shifted the focus to attracting and retaining talent in the industry. Only by doing so, can we deliver a sustainable future. By committing to the Quality Mark, firms will gain a competitive advantage. An inclusive approach allows organisations to reflect and engage with their clients more effectively and efficiently,’ she added. Kim Worts, external affairs director at RICS,… Continue reading
