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UK mortgage lending falls back to similar level a year ago, latest data shows
Gross mortgage lending in the UK reached £16.9 billion in November, some 9% lower than October when it was £18.6 billion, according to the latest figures from the Council of Mortgage Lenders. It matches the £16.9 billion seen in November last year but shows that the last 12 months has been one of ups and downs for the UK mortgage market. ‘Current activity in the housing market has eased with transactions back down to levels seen almost a year ago,’ said CML economist Mohammad Jamei. ‘The reform in stamp duty is likely to provide a modest short term boost in activity over the next few months, but its impact will fade away in the medium term,’ he added. Reacting to the figures, Peter Rollings, chief executive officer of Marsh & Parsons, said that the contours of the UK housing market have shifted from the start of 2014, with property price rises softening into a more organic upward curve. ‘New configurations of affordability checks and pre-emptive measures in the mortgage market temporarily diverted the route of lending, but overall progress is healthy,’ he explained. He pointed out that mortgage products have never been more attractive. ‘With a plentiful choice of properties and now smaller up-front stamp duty costs, buyers are faced with a very favourable set of conditions,’ said Rollings. ‘This has a knock-on effect for sellers, as durable demand enables them to trade up, and this fluidity of movement at every level of the market will ensure buoyant activity and optimism spills over into the start of next year,’ he added. Continue reading
A year of two halves for the prime central London lettings market
It has been a year of two halves in the lettings market in prime central London with the supply and demand pendulum swinging towards supply in the latter half of the year, according to a new report. In the first half of 2014 supply levels in the lettings market dipped with flats down by 14% and house supply down by 27%, year on year. As a result rental values in the second quarter of 2014 were 5.1% higher than they were in the same quarter of 2013, the data from agency W.A. Ellis shows. However, the second half of the year has seen supply levels increase, most noticeably in flats priced between £1,000 and £2,000 per week. The firm said this is due to a combination of factors including an increase in buy to let investors and a rise in the number of new developments coming onto the lettings market. According to Lucy Morton, director and head of agency, the one bedroom market has remained buoyant throughout the year, as is historically the case and the family house market peaked, as usual, in July thanks to families wishing to move on prior to summer holidays. ‘We have been successful in some substantial lettings in the super prime market, which has been active throughout the year, like the family home market, particularly during the spring and summer months,’ she said ‘In terms of meeting tenants rising levels of expectations presentation and decorative condition continue to be paramount across all areas of the market. We are seeing growing number of landlords making considerable investment in refurbishing their properties to gain an edge in a rental market that is growing fiercely competitive,’ she explained. The firm has now merged with JLL and as a result is now advising on the lettings potential of more and more new developments across the capital. Morton said that these new build developments are becoming increasingly sought after as the city and skyline are set to evolve over the coming years. ‘These developments offer an exciting variety of investment opportunities for both British and overseas investors. They also offer a modern and convenient way of living for prospective tenants who often register for specific schemes,’ she pointed out. An example is the Nine Elms regeneration project, which is the largest redevelopment project in London since Canary Wharf, and is the size of the entire West End. It has thousands of new homes, luxury penthouses, high end retail, hotels, entertainment centres, the American Embassy and an underground station. Morton predicts that the area will create a new hub for London over the next few years. Continue reading
UK surveyors report a resurgence in remortgage activity
November saw a resurgence in remortgaging activity even as the rest of UK housing market cooled, according to the latest research from Connells Survey and Valuation. Remortgaging was the most robust sector of the housing market and performed well both on a monthly and annual basis. The total number of remortgaging valuations conducted in November increased by 10% compared to October, and by 3% compared to November last year. ‘Remortgaging is defying the rest of the market. With the base rate set to remain low well into 2015, it is clear that this is driving demand,’ said John Bagshaw, corporate services director of Connells Survey & Valuation. ‘Lenders continue to offer even more competitive mortgage rates, while many households are using this opportunity to remortgage and reduce their monthly payments,’ he added. By contrast, the total number of valuations for all purposes fell 5% on an annual basis. This is a considerable improvement from a steeper drop of 10% over the 12 months to October 2014. On a monthly basis property valuations remained static since October. According to the firm November saw a marked shift in sentiment with more lenders and borrowers opting for a tone of caution. ‘Regulatory changes continue to impact other sectors of the market, especially first time buyers with restrictions on lending. On the other hand, the low base rate has powered demand for remortgaging, and to a lesser extent, buy to let,’ explained Bagshaw. ‘While this year the total number of valuations fell by 5% compared to last year, this annual figure compares favourably with historic data and exceeds the number of valuations recorded in November 2012, 2011 and 2010. With so many variables in play it remains to be seen whether this points to a cooling market in 2015 or if this is part of the usual festive seasonal trend,’ he pointed out. Buy to let also performed well compared with the rest of the market. On a monthly basis, the number of buy to let valuations dipped 5% since October and by 1% compared to the previous November. The sector is supported by an array of low LTV products and lenders have become more focused on low risk borrowers, such as landlords who typically have lower LTVs and multiple streams of income, according to the firm. As a proportion, first time buyer valuations now make up under a third of total activity at 28%. In terms of numbers this area of the market was down the most on an annual basis with a fall of 11% and also dipped 7% compared to the previous month. The number of valuations for owner occupiers moving home saw the second fastest annual fall, down 9% compared to November last year. However, on a month on month basis this sector of the market saw no change. ‘Recent policy changes such as loan… Continue reading
