Tag Archives: real estate
Lending for homes falls in the UK, latest CML data shows
Home buying lending in the UK has started to decline amid concerns that mortgage regulation is having an impact on the market. The latest figures from the Council of Mortgage Lenders show that lending fell in August compared to July, the first month on month drop in house purchase lending volume since February this year. Lending fell across all sectors. First time buyer lending fell by 4% compared with July but it still 9% up on August 2013. Lending to home movers declined by 3% but is up 7% on August last year. Remortgage lending fell 4% month on month and is 11% down on the same month last year. Buy to let lending fell 13% but increased 11% compared to August last year. Total gross lending in August was £18.1 billion, some 8% lower than July when it was £19.7 billion, but 10% higher than August last year when it was £16.4 billion, according to the Bank of England. ‘The lending climate had a glass half full, glass half empty feel about it in August. On the one hand it saw a decline in all lending types month on month, which would suggest a levelling off of the market, with remortgaging remaining flat. Yet, on the other hand, we saw the highest August house purchase lending levels since 2007,’ said Paul Smee, director general of the CML. He pointed out that recent Bank of England Credit Conditions Survey expects an upward trend in remortgaging in the final months of the year and overall, these figures give no support to any fears of a developing bubble in housing. ‘This has been a year of major change, and the market has shown significant resilience and responsiveness to the changing environment, improving the availability of lending without compromising financial stability, as the Bank of England's assessment last week highlighted,’ he added. According to David Newnes, director of Your Move and Reeds Rains, the change is due to shifted lending conditions. ‘Securing mortgage finance is not a conundrum restricted to first time buyers, but is a considerable hurdle for landlords too. Demand for rented accommodation is climbing, and there’s little sign of this stopping,’ he said. ‘Secure house prices and spirited tenant demand are encouraging budding buy to let investors and existing landlords to add to the number of available homes to let. Balancing the asymmetry between supply and demand depends on the growing number of buy to let investors being able to acquire affordable mortgages, in order to broaden the pool of rental accommodation on offer and keep rent rises at sustainable levels,’ he explained. ‘The government and Bank of England need to ensure that any further regulatory changes do not lift lending out of reach for good applicants, and destroy growth at the same time. The benefits of more investment will be felt in tenants’ back pockets at the end of the month, as the strain of rent rises eases further,’ he added. Continue reading
RICS latest monthly survey confirms house price growth is slowing in the UK
House price growth in the UK has slowed back to levels last seen over a year ago as demand slips for the third month in a row, according to the latest monthly report from surveyors. The Royal Institution of Chartered Surveyors (RICS) says that house price momentum has slowed to June 2013 levels and greater caution appears to be being exercised across the UK housing market. Just a day ago the Halifax signalled a similar trend as its monthly index showed that UK house prices fell 0.6% in September and quarterly grow rates have also slowed. Nationally, according to RICS, new buyer demand slipped for the third consecutive month and in London, caution took a particular toll with prospective new buyer demand seeing its fifth consecutive monthly decline, a trend not seen since April 2012. In Scotland, the effects of the referendum on independence appeared particularly significant, with a net balance of 6% more surveyors reporting a drop in the number of interested buyers compared to a net balance of 49% seeing more interest in August. Meanwhile, stock coming onto the market remained virtually unchanged in September at a net balance of -1%, which led to a number of surveyors reporting a 'return to more sensible prices', as properties staying on the market for longer were now beginning to receive offers below asking price. Probably in response to political rhetoric around Mansion Tax, the survey showed a drop in 12 month member price expectations for larger properties of three and four or more bedrooms, which have fallen since the start of the year to 2.2% and is down from 3.8% at the start of the year for three bedroom properties and 2% for four or more bedroom properties, down from 3.5% at the start of the year. At a national level, the slowdown in buyer activity stands in contrast to the lettings market, where demand has continued to grow solidly across the majority of the UK, despite new instructions to let not keeping pace with the rise in tenant demand. However, despite market conditions, surveyor expectations for price growth over the coming three months remain positive with only surveyors in London expecting to see values decrease and prices across the rest of the UK still expected to rise by on average 2.1% over the year. ‘Demand and supply are looking a little more balanced, which is removing some of the upward pressure in prices, particularly in London,’ said Simon Rubinsohn, RICS chief economist. ‘This is a healthy development. Part of this is down to the Bank of England becoming more vocal about the risks, part of this is down to affordability, part of this is down to the new mortgage rules and part of this is down to expectations of higher interest rates,’ he explained. ‘However ideally, more supply should be coming onto the market, but with interest rates still at historically low levels and long term house price expectations positive, households are not under any real… Continue reading
Technology could help combat mortgage fraud, it is claimed
Half of UK mortgage brokers believe greater use of technology by lenders when carrying out due diligence on borrowers would reduce mortgage fraud, according to new research. Lying about occupancy to gain a mortgage on a buy to let property was the most common type of fraud that could be reduced by more use of technology, according to 46% of respondents to the survey carried out by online property data network EDM Mortgage Support Services. Other types of fraud that could be reduced by more technology cited by brokers include income or employment falsification, 44%, concealing debts and liabilities, 39%, identity theft at 37%, obtaining multiple loans on the same property, 34%, and over valuing properties at 24%. Despite this, only 17% of brokers believe lenders are implementing enough technology to deal with fraud. Some 35% of mortgage brokers say the Mortgage Market Review (MMR) has not reduced the chances of fraud at all while another 2% say it has actually increased it while 56% believe the MMR has reduced the chances of fraud. ‘The argument for more use of electronic data and communication is getting stronger, not just as a result of the greater administrative burdens resulting from MMR but other issues too, such as tackling fraud,’ said EDM MSS managing director Joe Pepper. ‘There is already some use of electronic data exchange, more than a third of the brokers in our survey say they between 81% and 100% of the information/correspondence they exchange with lenders is done so electronically,’ he pointed out. ‘But there is potential for this to be much greater and more extensive use of quality online systems would help the mortgage industry deal much more efficiently with large amounts of data and correspondence,’ he added. EDM Group is investing in EDM MSS to further enable it to capitalise on the growing data exchange and technology needs in the mortgage and property sectors. Continue reading
