TSI
Home buyers in London borrowing higher amounts, latest CML data shows
More mortgages were completed and a higher amount borrowed in Greater London in the third quarter of this year than in any quarter since 2007, according to the latest data from the Council of Mortgage lenders. House purchase lending to home buyers increased 12% quarter on quarter in London totalling £7.1 billion, a rise of 15% on the second quarter. Compared to the third quarter of 2013, the number of loans increased 3% and value of these loans increased by 13%. This is the highest quarterly volume in London since the fourth quarter 2007, and the highest amount borrowed since the third quarter of 2007. First time buyers took out more loans and borrowed more in total than in any quarter since 2007 totalling 13,300 loans and £3.3 billion. The affordability levels slightly improved with first time buyers typically borrowed 3.86 times their gross income, less than the 3.90 in the previous quarter but above the UK average of 3.41. The typical loan size for first time buyers was £221,997 in the third quarter, up from £212,500 in the previous quarter. The typical gross income of a first time buyer household was £58,000 compared to £55,255 in the second quarter. First time buyers in London have tended to put down larger deposits than in the UK, typically putting down a deposit worth 24% of the property value compared to the UK average of 17%. In the third quarter, first time buyers paid 21% of gross monthly income towards capital and interest payments, a minor change from the second quarter when it was 21.1%. Due to higher house prices within London compared to the UK overall, there was a continued shift in the mix of properties bought by first time buyers in London towards more expensive properties. In the third quarter, 66% of first time buyers bought properties priced at more than £250,000, up from 63% in the second quarter and 54% in the same period last year. This was significantly higher than the UK overall level of 20%. In the third quarter of 2014, lending to home movers saw larger growth quarter on quarter compared to first time buyer lending, but a slight decline in lending volumes when looking at year on year comparisons. Home movers did however borrow more this quarter than any other quarter since 2007 totalling £3.7 billion. Home mover affordability changed fractionally, with home movers typically borrowing 3.69 times their gross income compared to 3.66 in the second quarter and the 3.05 in the UK overall. The typical loan size for home movers was £290,000 in third quarter, up from £281,000 in the previous quarter. The typical gross household income of a home mover was £83,596 in third quarter compared to £82,614 in second quarter. Home movers in Greater London spent 20.8% of their gross income to cover monthly capital and interest payments, slightly changed from 20.6% in the second quarter and less than the 18.8% UK average. The number of loans advanced for… Continue reading
Next year looking optimistic for British buyers looking for dream home abroad
Interest from British buyers looking for property abroad in 2014 was driven by the strength of the pound against the euro and this continues to be the case, according to a new outlook report. It has been a year of contrasting halves with a surprisingly busy January followed by a difficult few months. The market only really picked up in May and June, says the report from Home Hunts which specialises in finding luxury homes and investment properties throughout France, Monaco, Geneva, London and New York. The firm is cautiously optimistic about 2015 and believes that the market should remain buoyant, particularly in the most sought after areas of France, however buyers are looking for a deal and sellers have to be realistic about prices. ‘We expect confidence to slowly continue growing in 2015 as people discover the flexibility of prices. The French General Elections in 2017 is likely to result in a change of government and savvy investors are taking advantage of the current favourable buying conditions to reap rewards later,’ said Tim Swannie, director of Home Hunts. ‘2014 was such a year of contrasting halves so we cannot predict a huge rise in property prices for 2015 but, we can confidently say the market should remain buoyant, particularly in the most sought after areas of France,’ he added. For Home Hunts, 2014 started strongly and January was the busiest month for about four years with 16 sales agreed and lots of interest from international buyers. ‘Bearing in mind that January is usually one of the quietest months of the year in terms of sales, we took this as a sign that things were set to explode,’ explained Swannie. But the market slowed. In France it started to pick-up again with busy months in May and June and this momentum continued into the summer months and with a lot of interest in July and August. The second half of the year saw even more interest, especially from UK buyers because of the strength of the pound verses the euro and this continues to be the case. ‘We have had buyers from all over the world including China, the Middle East, America, South Africa, Brazil, and Russia as well as all over Europe. We have also sold a huge range of properties such as apartments in Cannes and Paris, vineyards in Bordeaux, a chateau in Provence, waterfront villas on the Riviera and chalets in the French Alps,’ Swannie pointed out. He also explained that there has been no real pattern in nationalities of buyers, areas or property styles that our clients have been looking for, but the common factor in all of the purchases has been that every single buyer has been looking for a 'deal'. For example, clients are taking advantage of the current French housing market to find their dream home, in their dream destination, at their dream price. The properties selling at the moment are those which have either been put on the market very recently… Continue reading
Investigation claims property redress scheme not working in London
Local authorities in London are failing to do their job stamping out rogue letting agents, according to a new investigation. Since the beginning of October letting agents and property managers have had to sign up to one of three government approved ombudsman or redress schemes. But an investigation by television channel London Live says it has found failings in the legislation which shows in its current state it just isn’t working. It also suggests that Londoners are unaware they now have more powers to hold rogue agents to account if they are ripped off. If a tenant is unhappy with the way they’re treated by an agent they can go to one of these schemes to complain. If an agent refuses to comply with decisions made by these schemes, they face fines and could be banned from trading, giving the ombudsman the legal teeth they previously lacked. It's now illegal for any agent to operate without registering with a government approved ombudsman to avoid tenants paying excess fees, having their deposits withheld, or being in fear of revenge evictions. London Live asked every local authority in London if they are enforcing this, and their response ranged from Havering admitting they're not keeping track and waiting for tenants to report rogue agents, to Merton and Richmond saying it's only when they are made aware that they seek compliance. It found that Kensington and Chelsea think the law is still going through the courts so it's not clear to them which department has to deal with this. Newham is the only local authority actively taking action. They’ve issued £5,000 fines to nine letting agents who have refused to register. London renter Alex Parsons says is long overdue. ‘Just as I was about to move into a property in Waltham Forest my flat mates and I were told to pay £300 on top of the £200 I already had to pay in admin fees,’ he explained. According to Rosie Walker from Renters Rights London the scheme isn’t working at the moment as tenants are worried that if they complain they could end up without a home. ‘The redress scheme is the final tier of the complaint process, what should be happening is that the agent should be dealing with the complaints directly with the tenant and the landlord to resolve it (the problem),’ said Sean Hooker, head of Ombudsman the Property Redress Scheme. All three redress scheme operators revealed that they haven’t received a single complaint from a London tenant or landlord because not enough is being done to let people know about their new legal powers. Continue reading
