Tag Archives: real estate
January saw 14% fall in mortgage lending in the UK
Gross mortgage lending in the UK reached £14.3 billion in January, a 14% decrease from December, according to the latest estimate from the Council of Mortgage Lenders. It is well below December 2014’s gross lending total of £16.6 billion and is also 11% lower than the £16.1 billion lent in January 2014. According to CML chief economist Bob Pannell, the softer pace of approvals through the second half of last year contributed to the relatively weak pace of mortgage lending in January. ‘Although seasonal factors will continue to weigh on activity levels for a while longer, we expect the underlying picture to pick up over the coming months, in line with stronger earnings and employment, gentle interest rate trends and recent stamp duty changes,’ he explained. ‘As we forecast at the end of last year, gross mortgage lending remains on course to reach an expected £222 billion this year,’ he added. According to Adrian Gill, director of Your Move and Reeds Rains estate agents, regulatory change has actually improved the borrowing process, making it more efficient, and leading to better outcomes for buyers. ‘Mortgage approvals may take longer to navigate, but this is because brokers are doing a more thorough job, and front end demand is vibrant and warming up,’ he said. He also pointed out that January activity is not a fair foreteller of what’s to come. ‘The stride of lending may have slowed, but the underlying appetite is growing. House price growth has tapered off at the higher end market, but in places where properties are more affordable and within reach of a leg up from Help to Buy, demand is energetic,’ he explained. ‘The market is only just starting to feel the effects of stamp duty changes, which is taking the edge of buying, and confidence is also buoyed by low interest rates and attractive mortgage products. All the footings are in place for savvy buyers to make great deals on homes, building further on the housing recovery,’ he added. Continue reading
Home sales in Canada fall to 2% below levels from a year ago
Residential property sales in Canada fell by 3.1% in January compared with the previous month and are 2% below levels recorded a year ago, according to the latest data from the Canadian Real Estate Association. The monthly CREA home index also shows that prices are 3.1% above a year ago. Price gains varied among housing markets tracked by the index with growth of 7.76% in Calgary, 7.47% in Greater Toronto and 5.53% in Greater Vancouver being the largest year on year increases. In other markets prices were up on a year on year in the Fraser Valley, Victoria, and Vancouver Island, while remaining stable in Saskatoon, Ottawa, and Greater Montreal. By contrast, prices declined year on year in Regina and Greater Moncton January sales were down from the previous month in about 60% of all local housing markets and on a provincial basis, the monthly decline largely reflected fewer sales in Alberta and Saskatchewan. ‘As expected, consumer confidence in the Prairies has declined and moved a number of potential home buyers to the side lines as a result. By contrast, housing market trends in the Maritimes are continuing to improve,’ said CREA president Beth Crosbie. Actual, not seasonally adjusted, activity in January stood 2% below levels reported in the same month last year, marking the first year on year decline since April 2014. ‘Comparing sales activity for January this year to sales one year earlier, there was a fairly even split between the number of markets where sales were up versus the number of markets where sales were down,’ said Gregory Klump, CREA’s chief economist. ‘The decline in national sales largely reflects weakened activity in Calgary and Edmonton. If these two markets are removed from national totals, combined sales activity remained 1.9% above year ago levels,’ he explained. The index data also shows that the number of newly listed homes rose 0.7% in January compared to December. New supply climbed higher in just over half of all local markets, led by Edmonton and Greater Toronto. By contrast, Greater Vancouver, Calgary, and Regina posted the largest monthly declines in new listings. The national sales to new listings ratio was 49.7% in January, marking the first time this measure of market balance has dipped below 50% since December 2012. A sales to new listings ratio between 40% and 60%n is generally consistent with balanced housing market conditions, with readings above and below this range indicating sellers’ and buyers’ markets, respectively. The ratio was within this range in more than half of all local markets in January. The number of months of inventory is another important measure of the balance between housing supply and demand. It represents the number of months it would take to completely liquidate current inventories at the current rate of sales activity. There were 6.5 months of inventory nationally at the end of January 2015, its highest reading since April 2013. As with the sales to new listings ratio, the reading for the number… Continue reading
Irish house prices expected to continue rising in 2015
New mortgage rules and the recently announced quantitative easing programme will have a game changing impact on investor demand for residential property in Ireland, according to a new analysis. International property advisor Savills expects that house prices will continue to rise in 2015 due to an overall shortage of supply relative to demand. However, because compounding price growth over the last two years has raised baseline prices, the percentage rate of growth will be more moderate than before. The Irish Central Bank’s new mortgage rules will channel demand into the rented sector leading to further rental growth, according to John McCartney, director of research at Savills Dublin. He pointed out that this, and falling deposit yields due to quantitative easing, will attract investors despite the expiry of Capital Gains Tax Incentives last December. ‘By increasing the down payment that is needed to qualify for a mortgage, the Central Bank rules will inevitably lead to first time buyers spending longer in rented accommodation,’ he said. ‘This guarantees a stable platform of demand which will undoubtedly encourage landlords to invest. At the same time, investors will be driven into property by low returns on cash deposits, and these are being further depressed by quantitative easing,’ he added. He explained that while these factors will continue to attract large institutional investment into ‘multi-family’ residential blocks, they will also lead to continued buying activity by smaller retail investors. However, according to Graham Murray, director of residential at Savills, the profile of these investors is changing dramatically. ‘We are really seeing a changing of the guard. On one hand, the recovery in house prices has provided the opportunity for many of the accidental boom time investors to exit the market and, reflecting this, investors were our second biggest seller group last year,’ he said. ‘At the same time, there is a new breed of more professional, yield driven landlords flooding into the market. In fact this new generation of investors represented our biggest single group of buyers last year,’ he added. Contrary to the popular opinion, Savills believes that the Central Bank mortgage rules will do nothing to reduce the rate of house price growth and will only result in a change in the mix of buyers. ‘By diverting demand into the rented sector the new rules will lead to stronger rental growth. In time this will attract investors who will compete with everybody else to buy properties. Therefore the new measures will do nothing to soften house price growth by curtailing demand. They will simply increase the ratio of investors to first time buyers,’ said McCartney. Elsewhere in the report, Savills notes that declining affordability in Dublin, combined with demographic trends, will lead to increased demand and sharper house price growth in the commuter counties of Wicklow, Kildare and Meath. ‘Prices outside Dublin have been rising at an accelerating rate for the last nine months. This is set to continue as demand is… Continue reading
