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Home lending in UK reaches highest quarterly level for seven years
Lending for home buying in the UK has reached its highest quarterly level since 2007, according to the latest data from the Council of Mortgage Lenders (CML). However, first time buyers saw a month on month lending decline for the second month in a row, down 3% compared to August, but still 16% up on September 2013. By value, there was £4 billion advanced to first time buyers in September, 2% down on August but 25% higher than September last year. Lending to home movers also weakened month on month for the second month in a row. In September, the number of loans advanced to movers was 31,700, a 10% fall on the previous month but up 11% on September last year. By value, lending to movers totalled £6 billion, 12% down on August but up 18% on September last year. Remortgage lending activity saw an increase month on month in September, with the number of remortgage loans totalling 28,300. This was 20% up on August but 12% down on September last year. The value of these loans at £4.4 billion was up 22% on the previous month but down 6% on September last year. There were 18,100 buy to let loans in September, representing lending of £2.5 billion. Following the August low of 15,700 loans worth £2.2 billion, this returned buy to let lending to levels very similar to July, up 24% by volume and 32% by value on September last year. The data also shows that first time buyer affordability changed fractionally, with first time buyers typically borrowing 3.4 times their gross income, compared to 3.42 in August and the typical loan size for first time buyers rose month on month to £125,999 in September, up from £125,375 in August. Home movers typically borrowed 3.06 times their gross income in September, compared to 3.05 in August. The typical loan size for home movers was £154,800 in September, down from £155,995 in August. The typical gross household income of a home mover was £53,291 in September compared to £54,150 in August. ‘We are approaching the end of 12 months of change, transition and growth. This has been a year when lenders and intermediaries have been put under increased spotlight from regulatory, political and media spheres and have risen to meet the challenges,’ said Paul Smee, director general of the CML. ‘The lending market is healthier than it was a year ago, and set to remain so. Remortgaging has returned as a driver of lending volume in the buy to let sector. But any fears of overheating in the housing market are now dissipating as house purchase lending activity seems to be softening,’ he added. Continue reading
PRS sector in UK benefits from improvement in tenant arrears
The number of UK tenants severely behind on rental payments has fallen by 9% over the last 12 months, new research shows. Improvements mean an overwhelming 98.6% of private sector tenants now avoid significant rent arrears and this is being reflected in the rate of evictions with court orders drown by 16% in the latest quarter. Overall the figures from the latest Tenant Arrears Tracker by estate agency chains Your Move and Reeds Rains, part of LSL Property Services, shows 65,200 UK households remain more than two months behind on rent, compared to 71,700 in the third quarter of 2013. In absolute terms, those more than two months behind on their rent now number just 65,200. This compares to 71,700 tenants at least two months in arrears in the same period last year, or an annual improvement of 6,500 households who no longer face the potential threat of losing their home. As a proportion of all tenants, those in serious arrears of more than two months have also improved, standing at just 1.4% in the third quarter of 2014 compared to 1.6% of all tenants in the same period in 2013. This means 98.6% of tenants in the private rented sector now avoid falling into significant rental arrears. Improvements in the most serious rental arrears also tally with the latest figures on overall levels of late rent, including shorter lapses on payments. According to LSL’s latest Buy to Let Index, overall tenant arrears of any duration now stand at just 7.2% as of September 2014, down from 8.5% in September 2013. ‘The private rented sector has mustered enough new capacity to meet, in part, the growing demand for affordable housing, through the greatest economic depression in modern times,’ said David Newnes, director of estate agents Your Move and Reeds Rains. ‘This isn’t just about those relatively prosperous households forced to put ownership plans temporarily on hold. For many thousands of others, with far tougher monthly budgets, private tenancies have also provided a lifeline. For many renting is now their chosen route as it provides flexibility and mobility,’ he explained. ‘Gradual rent rises, on a par with inflation, have helped. But now a bigger turnaround appears to have happened. For many years more momentary cases of rent arrears have been in decline, yet it’s only recently that the most serious cases where families could actually lose their homes are following suit,’ he pointed out. He said one explanation is the improving jobs market, with the improvement in unemployment constantly outperforming expectations. ‘Wages would however need to rise faster for most households to feel the full effects of economic recovery. Reduced unemployment levels would seem to be far more beneficial for those households who are struggling the most,’ he added. The data also shows that eviction rates see first annual improvement since 2010. In the latest data, for the second quarter, 27,700… Continue reading
New partnership to create 14,000 new homes in London
A new partnership that is expected to create 14,000 new homes across London and the South East has been welcomed by the Mayor of London's Office. National Grid and Berkeley Group have established a joint venture to develop major residential and mixed use development schemes in an initiative known as St William Homes LLP. It brings together access to a significant portfolio of brownfield land owned by National Grid Property in key areas of housing need with Berkeley's ability to design, build and market new developments. ‘London's population is set to rise by 37% to more than 11 million people by 2050 and innovative approaches to house building such as this well help to unlock vast swathes of land and deliver thousands of much needed new homes,’ said Sir Edward Lister, deputy Mayor for Planning. ‘National Grid has numerous sites across the capital that are ripe for regeneration and this partnership will stimulate development and create new jobs. Schemes such as this go hand in hand with the Mayor's work to accelerate the building of thousands more homes for Londoners with a range of pioneering new policies, including the creation of new housing zones and a housing bank,’ he added. In its first phase, St William aims to develop more than 7,000 new homes, including over 2,000 affordable homes. Development at this scale would also deliver 5,500 jobs, 2 new schools and 22 acres of public open space, transforming 84 acres of former industrial land and contributing over £150 million to local infrastructure and amenities. Meanwhile, the Lewisham Gateway development is set to deliver hundreds of new homes, a new riverside park and over 1,000 new jobs on land released by the Mayor of London, the London Borough of Lewisham and Transport for London, as part of a drive to accelerate house building on thousands of sites across the capital. Engineers on the site have rerouted two rivers and begun work on a completely new road layout. Work is also underway on the first two new buildings on the site, which are already beginning to rise from their foundations. When work on the site in Lewisham is complete it will provide up to 800 new homes in a world class development that will include new shops, cafes, park land and hugely improved access to the town centre. It is a plan that was first conceived a decade ago but was only made possible last year when, with strong support from the Mayor of London, the Government approved £20 million of funding to kick start redevelopment of the area. The development is part of a wider drive by the Mayor of London to deliver new homes on surplus land owned by the public sector. Almost 90% of 670 hectares of public land taken on by the Mayor in 2012 is now in the development pipeline, including on the former Catford stadium, and most recently appointing two developers for sites in Newham at Pontoon Dock and Silvertown Way… Continue reading
