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Approved home lending in UK up in June month on month
The number of loan approvals for house purchase in the UK increased by 2.7% in June compared to the previous months, the latest Bank of England data shows. Loan approvals reached 66,582 compared to the average of 62,971 over the previous six months and the value of these loan approvals has increased 6.48% month on month, the data also shows. The number of approvals for remortgaging was 36,620, compared to the average of 33,759 over the previous six months while the number of approvals for other purposes was 10,800, compared to the average of 9,918 over the previous six months. It is good news for the homes market according to Adrian Gill, director of Your Move and Reeds Rains estate agents. ‘Mortgage approvals have filtered into a faster lane, and are speeding away from May’s speed bump. Compared to a year ago, lending has also covered a fair distance, and the road ahead looks promising,’ he said. ‘Both house prices and sales are driving forward steadily, as renewed confidence fuels the market this summer. But this is increasingly witnessed by a congestion of buyers. The supply of properties is struggling to keep up and needs a serious boost if the upwards trend in borrowing continues,’ he added. Peter Rollings, chief executive officer of Marsh & Parsons, pointed out that the month on month boost has nearly brought lending back into line with April activity, and the energy building up in the housing market should carry it further forward. ‘There’s now plenty of clear blue sky between borrowing totals now and a year ago, as buyer demand continues to mount. In London, we saw new buyer registrations climb 27% from January to June, and properties are changing hands quickly,’ he explained. ‘This will cause further price rises over the summer, but buyers have plenty of cause for confidence, as cheap mortgage finance and smaller Stamp Duty fees keep home ownership within grasp,’ he added. Continue reading
First time buyers underestimate cost of moving into their home, survey finds
Almost three quarter of first time buyers in the UK underestimate the costs needed to buy a new home, with most only saving for a deposit, new research shows. They also spend £1,680 more than expected on essential repairs to a first home and under budget by over £6,000, according to a survey by home insurer Aviva. As a result, more than half were forced to wait an extra two years and eight months before finally having the cash to get on the property ladder and almost half confessed to coming close to giving up plans to buy their first home altogether. First time buyers typically take nearly four years saving for a first home, banking an average £12,143 during that time. In reality though, the average total amount actually needed is closer to £18,624. ‘Scraping together the cash for the deposit alone can be a mammoth task, but that’s just the first hurdle. It’s the other essential costs such as solicitors’ fees and Stamp Duty which can be the sting in the tail, not forgetting any essential repairs which might be needed once the keys have been handed over,’ said Heather Smith, marketing director at Aviva. Home owners spend an average £3,727 on essential repairs to their newly purchased home – typically forking out around £1,680 more than expected. One in five looking to buy their first home now would consider buying a house which needed significant DIY or repairs, just to get on the property ladder, the research also shows. ‘First time buyers face walking into a money pit if a first dream home turns out to be a nightmare. If the cash outlay needed to buy the house isn’t expensive enough, a hefty bill for unforeseen essential repairs is the last thing needed,’ explained Smith. ‘Anyone looking to buy a home should investigate every nook and cranny of the property before putting in an offer and must not be afraid of asking for several viewings,’ she added. With three quarters admitting to not doing enough research into the total cost of buying a home, Aviva has launched a First Home section to its website which includes a step-by-step guide to buying a first home and a mortgage jargon buster. Continue reading
Pending homes sales in US dipped in June, latest NAR data shows
After five consecutive months of increases, pending home sales in the United States slipped in June but remained near May's level, which was the highest in over nine years, the latest data shows. Modest gains in the Northeast and West were offset by larger declines in the Midwest and South, according to the pending home sales index (PHSI) from the National Association of Realtors (NAR). The index, a forward looking indicator based on contract signings, fell 1.8% to 110.3 in June but is still 8.2% above June 2014 when it was 101.9. Despite last month's decline, the index is the third highest reading of 2015 and has now increased year on year for 10 consecutive months. Lawrence Yun, NAR chief economist, said that although pending sales decreased in June, the overall trend in recent months supports a solid pace of home sales this summer. ‘Competition for existing houses on the market remained stiff last month, as low inventories in many markets reduced choices and pushed prices above some buyers' comfort level,’ he explained. ‘The demand is there for more sales, but the determining factor will be whether or not some of these buyers decide to hold off even longer until supply improves and price growth slows,’ he added. According to Yun, existing home sales are up considerably compared to a year ago despite the share of first time buyers only modestly improving and he said the reason is that the boost in sales is mostly coming from pent-up sellers realizing their equity gains from recent years. ‘Strong price appreciation and an improving economy is finally giving some homeowners the incentive and financial capability to sell and trade up or down. Unfortunately, because nearly all of these sellers are likely buying another home, there isn't a net increase in inventory,’ Yun pointed out. ‘A combination of homebuilders ramping up construction and even more home owners listing their properties on the market is needed to tame price growth and give all buyers more options,’ he added. The PHSI in the Northeast increased by 0.4% to 94.3 in June, and is now 12% above a year ago. In the Midwest the index fell by 3% to 108.1 in June, but is still 5% above June 2014. Pending home sales in the South also decreased 3% to an index of 123.5 in June but are still 7.8% above last June. The index in the West increased 0.5% in June to 104.4, and is now 10.4% above a year ago. The national median existing home price for all housing types in 2015 is expected to increase around 6.5% to $221,900, which would match the record high set in 2006. Total existing home sales this year are forecast to increase 6.6% to around 5.27 million, about 25% below the prior peak set in 2005 which was 7.08 million. Continue reading
