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UK election not harming house price sentiment, latest index suggests
Households in the UK perceive that the value of their home rose in April despite the uncertainty being created by the country’s forthcoming general election, the latest sentiment index shows. Some 20.9% of the 1,500 households surveyed across the UK said that the value of their home had risen over the last month, while 4.5% reported a fall, according to the House Price Sentiment Index (HPSI) from Knight Frank and Markit Economics. This gave the HPSI a reading of 58.2, the 25th consecutive month that the reading has been above 50 and a slight increase on last month’s reading of 57.5, suggesting that households believe prices continued to rise in spite of the uncertainty surrounding the outcome of the election. ‘The outcome of the election may be uncertain, but there are some key factors underpinning house prices at present. Confidence in the economy continues to grow while the cost of living has stopped rising,’ said Grainne Gilmore, head of UK residential research at Knight Frank. ‘Mortgage rates have dipped to a new low, making owning a home for those who can clinch a mortgage deal cheaper than at any time before. The cost of buying a home for the majority of purchasers has also fallen after the reform of stamp duty in December last year. A lack of supply of homes for sale in recent months has also boosted prices,’ she explained. The future HPSI, which measures what households think will happen to the value of their property over the next year, also rose in April to 70.2, up from 69.6 in March and the highest reading so far this year. According to Tim Moore, senior economist at Markit, the UK housing market showed resilience in the face of upcoming election uncertainty, with April’s survey highlighting the first back to back monthly rise in house price sentiment for almost a year. ‘Reduced pressure on household finances, improving labour market conditions and low mortgage rates continued to support house price sentiment in April. However, stretched affordability and tighter lending conditions are keeping a lid on house price momentum,’ he said. He pointed out that on a regional basis, people living in the East of England are the most likely to anticipate rising property values over the next 12 months, followed by those living in the South East. Meanwhile, the gap between UK wide house price growth expectations and those in the capital fell to its joint lowest since the start of 2011. The report also shows that some 6.5% of UK households said they planned to buy a property in the next 12 months, up from 5.7% in March. On a regional basis, nearly one in 10 households in Wales is planning a purchase in the next 12 months, followed by those in the East of England where 9.5% of households said they would be buying a property in 2015. Individuals aged between 25 and 34 are more likely to be considering buying a home in… Continue reading
UK mortgage seekers set to change spending to deal with tougher lending rules
A fifth of mortgage borrowers in the UK will use cash more frequently to avoid lenders seeing exactly what items they are spending on due to tougher lending regulations brought in a year ago. Some 25% plan to rein in their spending by £159 a month in a bid to present themselves as sensible with money and a fifth plan to spend on credit cards to maintain a healthier balance in their current accounts and pay off the balance each month. The research by comparison site MoneySuperMarket shows that 20% of those looking to apply for a mortgage in the next three years are planning to use cash more frequently to hide exactly what they spend their money on from a prospective lender. Some 21% will pay for more items on their credit card and then clear the balance at the end of each month so they can maintain a healthier balance in their current account. Spend-conscious borrowers also plan to rein in their monthly spend by an average of £159 by cutting back on non-essential items so as not to appear frivolous with their money. And 29% intend to pay off all debts in the lead up to their mortgage application. However, some 8% had never even heard of the new mortgage market review rules. ‘Since the new mortgage lending rules came into play a year ago, those looking to remortgage, existing borrowers who are moving home and looking for a new deal and first time buyers will have been subject to their lender looking more closely, almost forensically, at their monthly outgoings,’ said Kevin Mountford, head of banking at the site. ‘While the rules were introduced for the right reasons, in some cases borrowers who can easily afford a mortgage are being turned down for arbitrary reasons, despite them being able to easily afford mortgage repayments,’ he pointed out. ‘We wouldn’t want to see the ease of approval going back to the pre-credit crunch levels, it is clear than some consumers have changed their spending habits in order to pass the tests, so may be trying to paint a picture that is far from the reality just to satisfy the requirements,’ he added. He explained that paying off debts is always a good way to start when it comes to applying for a mortgage as existing borrowing will be taken into account by a lender when it comes to your application. Reducing the amount you spend each month could also help when it comes to the amount a lender thinks you can afford to borrow. ‘But those trying to ‘play’ the system should exercise caution as lenders may still require you to prove where your cash goes. Using a credit card to hide your spending may also count against you as lenders have access to your credit report, so will be able to see a real-time snapshot of your credit card balance at any time within the month,’ Mountford added. ‘Research… Continue reading
Cornwall is top spot for holiday homes in England and Wales
Some 165,000 people in England and Wales have holiday homes with Cornwall the most popular location for this type of second property, new research shows. Indeed, the county in the south west of England has over 10,000 holiday properties, according to a new analysis from Direct Line’s SELECT Premier Insurance. That means Cornwall has 6% of the nation’s holiday homes and according to estate agents its 300 mile coastline makes it the top holiday home hotspot. In second place is Gwynedd in Wales with 7,784 or 4.7% of holiday homes with its proximity to Snowdonia National Park adding to its attraction, followed by North Norfolk with its sandy beaches and salt marshes, which has 4,842 or 2.9% of holiday homes. South Lakeland with 4,684 holiday homes, East Lindsey with 4,472, Pembrokeshire with 4,310, the East Rising of Yorkshire with 4,059, South Hams with 3,738, Scarborough with 3,687 and Kings’ Lynn and West Norfolk with 3,539 complete the top 10. Across England and Wales there are almost 1.6 million people who have a second property in a different area to where they live permanently and 11% of these are used as holiday homes with the remainder being used for purposes such as work, or accommodation for student children. According to Nick Brabham, head of SELECT Premier Insurance, holiday homes are very valuable to owners as they are often a place to relax and spend quality time with loved ones. ‘This time is often limited, which means it is essential to keep the property and its contents in top condition all year round,’ he added. Peter Olivey a partner at Cornish based estate agents Cole, Rayment & White in Padstow, explained that Cornwall ticks a number of important boxes for second home owners with its coastal location and abundance of activities. ‘It’s a true holiday haven without the hassle or cost of going abroad. The local property market here is competitive but with a number of new developments springing up and mortgage rates much lower than they have been, there’s still plenty of opportunity for prospective buyers,’ he said. Continue reading
