Tag Archives: real estate
UK property becoming increasingly important part of retirement planning
Property is becoming an increasingly important part of retirement planning in the UK with new figures showing a surge in the number of retirees using the wealth stored in their home to fund their retirement. The total value of equity release lending passed £1 billion in the first nine months of 2014 and reached a record quarterly amount in the third quarter of £375.5 million, according to the latest industry figures from the Equity Release Council. The data also shows that there were more than 5,500 new customers in the third quarter of the year, the most recorded in a single quarter for six years and the average amount of equity release lending also hit a new high. The amount lent for the first three quarter of 2014 at £1.02 billion is more than the entire year's lending totals for 2009 to 2012 and is already 95% of the total value of the market in 2013. The value of equity release lending in the third quarter was up by 15% on the previous quarter when it totalled £325.6 million, and up 32% year on year from £284.1 million in the third quarter of 2013. The 5,565 new customers in the third quarter of 2014 is the largest amount in a single quarter for almost six years when it reached 7,526 in the fourth quarter of 2008, a rise of 5% on the second quarter of 2014 and a 12% year on year increase. This brings the number of new customers to 15,624 in 2014 to date, putting the industry on track to see 20,000 new customers in total by the end of the year. The average value of equity release lending also broke new ground in the third quarter of 2014 by reaching £67,467, the largest amount on record and up by 9% since last quarter and up by 18% since the third quarter of 2013. The council said that the growth is being driven by the need for additional funds in retirement and by the boost that rising house prices have given to people's available equity. Lump sum and drawdown lifetime mortgages have continued their upward climb, with increases for both products in the third quarter of 2014. The value of lending via lump sum products rose 16% from the last quarter to £148.7 million while the value of drawdown lending rose by 15% to £225.7 million, demonstrating largely even growth across both product options. Lump sum plans accounted for 40% of the total market by value in the third quarter of 2014, while drawdown plans made up 60%. In contrast, for the same period last year 34% of equity release lending was via lump sum plans and 66% was drawdown. The council pointed out that this is a notable shift, potentially fuelled by the appeal of larger initial sums that allow customers to pay off lingering debts, such as outstanding mortgages, or to fund one-off expenses. While making up less than 1% of the market, home… Continue reading
UK mortgage activity has reached a plateau, latest data suggests
Lending for homes in the UK has reached a plateau with concerns about interest rate rises affecting activity, according to the latest figures. The Council of Mortgage Lenders estimates that gross mortgage lending reached £17.8 billion in September, some 1% lower than August but 10% higher than September last year when it was £16.2 billion. Gross mortgage lending for the third quarter of this year was therefore an estimated £55.5 billion, an 8% increase from the second quarter of this year, and a 13% increase on the third quarter of 2013 when it was £49.2 billion. ‘Uncertainty over when we will see the first increase in UK base rates is exacerbated by weaker growth prospects in several major economies, including the Eurozone,’ said CML chief economist Bob Pannell. ‘Recent indicators and policy actions corroborate our view of a gentle easing in market conditions. There is growing evidence that mortgage lending activity, and the housing market, are sitting on a plateau,’ he added. Meanwhile, the latest figures from the Bank of England show that mortgage approvals by all UK resident mortgage lenders for house purchase picked up in June, before easing back slightly in August. The average monthly net lending flow by UK resident mortgage lenders was £2.3 billion in the three months to August, broadly unchanged compared to the previous three months. The data also shows that total gross secured lending in the three months to August increased compared to the previous period. The Bank report says that in recent discussions, most of the major UK lenders reported that operational issues associated with the implementation of the Mortgage Market Review had pushed down on approvals over the summer, but had now largely dissipated. It amounts to a natural ebb and flow, according to Peter Rollings, chief executive officer of Marsh & Parsons. ‘After a strong surge at the start of the year, house price growth is easing to more natural levels, and as a result, overall mortgage lending dipped in the month to September. But the stream of lending has not dried up, and the mortgage market has negotiated the new criteria of the Mortgage Market Review around the introduction of tighter affordability checks and more rigorous regulation in the spring,’ he said. ‘Confidence is still buoyant, kept afloat by the growing pool of available properties on the market and some outstanding mortgage products coming to the market since the indication from the Bank of England that interest rates would stay lower for longer,’ he explained. ‘Trading conditions are considerably less turbulent than they were a few months ago, and buyers and sellers alike are enjoying the less frenetic pace, increased choice and the calmer pace of competition, and this is already leading to a more active fourth quarter of the year. The only obstacles that could disrupt the course of the recovery are additional interventions in the mortgage market or premature withdrawal of schemes like Help to Buy, which could sink first-time buyer aspirations and stall progress… Continue reading
Average rental prices down across much of the UK in September
Rental price growth across the UK continued to ease in September, with twice as many regions in the UK seeing rental price falls than those recording an increase in rental prices, the latest figures show. Overall eight regions saw rental prices fall, taking the average monthly price, excluding London to £728 while in London it is now £1,466, according to the September 2014 HomeLet Rental Index. The index, which is described as the largest monthly survey of private tenants in the UK, has shown a modest cooling in the rental market for the second month in a row, with UK regions such as Greater London, the South East, South West and East Anglia, that have recently reported large month on month price increases, moving to slower growth and a greater proportion of regions reporting negative price movement. In September only four regions recorded rental price growth. In Greater London there was a rise of 0.1%, the West Midlands up 1.2%, the South West up 2% and Northern Ireland up 4.2%. This is 50% fewer than the number of regions reporting growth in August where six regions delivered rental price growth and six recorded falls. While the annual data still points to a rental market averaging largely positive growth, this month’s data has shown the number of UK regions recording annual negative rental growth doubling from two to four. Scotland, Wales, the North East of England and the East Midlands now show rental prices are lower now than a year ago. ‘There can be an element of seasonality to the rental market with September often recording marginally lower average prices than other months, perhaps due to the number of student letting agreements being signed at this time of year,’ said Martin Totty, chief executive officer of the Barbon Insurance Group of which HomeLet is a part. ‘However, with this month’s data being the second consecutive month of slower rental price growth, and house prices indices indicating a slowing of house price growth, which could suggest movement to a period of more settled rental prices, even in previously booming markets such as London and the South East,’ he added. A breakdown of the figures show that in Greater London rental prices have increased to £1,466, a monthly rise of 0.1% and an annual rise of 9.6%. In the South East prices fell month on month by 0.1% to an average of £908 but are up 7.2% year on year. The South West saw average rental prices rise by 2% month on month to £868 and are up 8.1% year on year while in the West Midlands they increased by 1.2% month on month to £656 and are up 8.3% year on year. In East Anglia average rents fell 1.4% month on month to £826 but are 11.3% above a year ago while in the East Midlands they fell 1.2% month on month to £585 and are 1.2% down year… Continue reading
