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UK home sales steady, seasonally adjusted figures show
Sales of residential property in the UK remained steady at the end of 2014, with seasonally adjusted transaction levels in December around the same level as November. The HMRC statistics also show that sales in December 2014 were 0.4% lower compared with the same month in 2013 and on a non-seasonally adjusted basis, residential property transactions increased 2.3% year on year. Peter Rollings, chief executive officer of Marsh & Parsons, pointed out that while other housing market indicators started to flounder towards the end of 2014, sales held steady. ‘The additional pressure of loan to income caps and stricter affordability regulations has slowed mortgage lending somewhat, but consumer confidence hasn’t slipped and the Stamp Duty overhaul is injecting a new lease of life into demand in the New Year,’ he explained. ‘House price growth was fading in the final few months of the year, as increased supply of housing stock relaxed the competition on the market and gave buyers a breather. Demand continues to be healthy, and combined with rock-bottom interest rates and attractive mortgage products, activity will pulse through the market and push forward further price rises According to Danny Waters, chief executive officer of Enterprise Finance, while December is traditionally a quiet time of year for residential property transactions, the non-residential market isn’t bound by the same conventions and saw an uptick at the end of 2014. ‘Whereas home seekers don’t want the upheaval of completing and moving around Christmas time, businesses often don’t have the same luxury of placing plans on the back burner and have to act more decisively,’ he pointed out. ‘These latest figures and the year on year improvement suggest a non-residential market headed in the right direction, but commercial mortgages can still be harder to obtain than residential home loans if buyers don’t look in the right places,’ he explained. ‘Indifferent attitudes from high street banks mean non-residential purchasers are often better served by specialist lenders and brokers are well positioned to help introduce the two,’ he added. Continue reading
UK buyers less concerned about interest rates, survey suggests
The drop in inflation in the UK to 0.5% in December 2014 has corresponded with a steep drop in the proportion of consumers viewing interest rates as one of the main barriers to buying a property, it is claimed. According to the latest Halifax Housing Market Confidence Tracker index over the last 12 months, the proportion of consumers citing concern about rises in interest rates as a barrier to buying property rise steadily from 14% in the fourth quarter of 2013 to 19% in the third quarter of 2014, the highest since the Tracker began at 22%. However, this fell back to 13% in the fourth quarter of 2014, the lowest level in over a year, at the same time as inflation began to fall sharply in the last few months of the year. ‘Speculation over a potential rate rise was high on the news agenda at certain times in 2014 and the Housing Market Confidence Tracker showed consumers becoming increasingly anxious about interest rate rises,’ said Martin Ellis, housing economist at the Halifax. ‘But with inflation falling sharply in the last few months it’s taken away some of risk of an imminent rise and worries have fallen accordingly. While a rate rise will happen eventually, lenders take this into account as part of our affordability checks in the mortgage application process. Going forward the key factor in how they adjust to any changes in rates will be the way in which borrowers manage their disposable income,’ he explained. It is not only interest rates that consumers perceive as being a barrier to buying a property. The largest single barrier is perceived to be the ability to raise a deposit, cited by 61% in the fourth quarter of 2014. However, in the last few years there have been a number of schemes launched specifically aimed at supporting borrowers with smaller deposits such as the Help to Buy scheme, which has loaned buyers deposits and guaranteed loans. ‘Mortgage affordability has improved significantly in recent years with record low mortgage rates a major contributor behind this improvement. Figures from the 2014 Halifax First Time Buyer annual review show that the number of first time buyers is at its highest level since 2007 and last year the number of first-time buyers increased by 22%. This was the third successive annual increase with a 50% rise in the past two years,’ Ellis pointed out. Continue reading
Gross mortgage lending in UK stalled in December, latest CML figures show
Gross mortgage lending in the UK reached £16.5 billion in December, unchanged month on month compared to November but down 1% compared to December 2013, the latest data shows. The figures from the Council of Mortgage Lenders also shows that the gross lending estimate for the fourth quarter of 2014 is £51.6 billion, down 8% on quarter three but up 1% on the fourth quarter of 2013. Overall, for 2014 the gross lending estimate is £205.6 billion, up 17% on 2013's £176 billion gross lending figure. ‘Housing market activity has been cooling and house price growth slowing in recent months, but 2014 was still the strongest year for mortgage lending since 2008,’ said CML chief economist Bob Pannell. ‘First time buyers were a key driver, helped by government initiatives such as Help to Buy. As a result, the number of first time buyers topped the 300,000 mark. While a far cry from the half million that we might regard as normal, this was the highest number of first time buyers since 2007,’ he pointed out. ‘Although lending remained muted in December, the previous monthly pace of decline in approvals appeared to moderate. So, alongside the big picture of a softer market, we are beginning to detect signs that underlying market conditions may be stabilising,’ he added. Adrian Gill, director of Your Move and Reeds Rains estate agents, said that while many places across the country have witnessed a recent lull in house price growth, the underlying sentiment in the market remains strong. ‘It will continue to carry the housing recovery further forwards, with unprecedented fundamentals for growth this year and 2014 will stand out as the best year for new buyers since the recession,’ he explained. ‘Towards the latter end of the year, demand was slightly spooked by the introduction of loan to income caps, but stamp duty reform provided some new comfort for prospective buyers. Along with the continued support of the Help to Buy scheme, aspiring home owners can more easily stomach the upfront costs of buying a home and save up for the necessary deposit,’ he added. Continue reading
