TSI
Positive outlook for buy to let lending in the UK
Intermediaries’ are positive about their future levels of mortgage business over the next year, according to the latest quarterly intermediary survey. On average, advisers expect to do 6% more overall mortgage business in the fourth quarter of this year compared with the third quarter, up slightly from an average predicted quarter on quarter increase of 5% in the second quarter, according to the survey from buy to let lender Paragon Mortgages. In terms of levels of buy to let mortgage business, advisers expect to see a 3% average increase over the next 12 months, which is unchanged from the level recorded in the second quarter of the year. More than half, 56%, of intermediaries expect their levels of buy to let mortgage business to remain stable over the next year. In comparison, 40% said they expect to do more buy to let business, with 19% expecting there to be an increase of 6% or more. The majority, 69%, of intermediaries identified rental demand as the most important factor for determining the expected change in their level of buy to let mortgage business over the next 12 months, followed closely by property prices at 65% and interest rates at 64%. ‘It is positive to see that average expected levels of mortgage business, both general and buy to let, have increased since the previous quarter, particularly following the recent implementation of the Mortgage Market Review,’ said the firm’s director of underwriting Paul Clampin. ‘Demand from tenants continues to remain high and is likely to do so over the foreseeable future as more people move into the private rented sector. Therefore, this is likely to have a positive impact on intermediaries’ expected levels of buy to let business going forward,’ he added. Continue reading
Edinburgh property market not affected by referendum vote in third quarter
Despite the uncertainty caused by the Scottish referendum during the summer months, new statistics show that the property market maintained momentum and interest. There was a large rise in the number of good quality homes coming on to the market in the third quarter of the year, according to research conducted by property consultants CKD Galbraith’s Edinburgh office. The number of potential buyers registering with the firm also increased compared to the previous quarter of this year, indicative of pent up demand in the property market from purchasers following buoyant sales market during the first half of 2014. Overall the number of properties brought to the market through CKD Galbraith increased by 50% compared to the second quarter of 2014 and the number of interested buyers registering with the firm rose by 5% compared to the last quarter. On average properties in the Edinburgh area have sold two weeks quicker than the last quarter of this year; the shortest time taken to sell a property this quarter was two weeks. ‘The Edinburgh market wasn’t quite as affected by the referendum as other regions and although we saw a slight decrease in sales and viewings in the fortnight leading up to the 18 September, there has since been a lot of new activity as confidence returns to the market,’ said Andrew Jarvie, of CKD Galbraith’s Edinburgh office. ‘Whereas last quarter we saw an influx of buyers from south of the border and overseas, the summer period has been a little quieter in comparison as was expected and buyers have predominantly been from within the Edinburgh area. Buyers and sellers are now waking up to the implications of proposed changes to stamp duty which will take effect from April 2015,’ he added. CKD Galbraith operates a network of regional offices located throughout the country and has enjoyed good growth over the last year which it expects to continue into the final quarter of 2014. Continue reading
Research reveals the UK’s property blacks spots where prices are falling
Property buyers, sellers and investors are usually eager to hear about the latest real estate hot spots but now new research reveals the UK's property investment black spots. Property prices in some of the worst performing areas are falling by more than 7% per year with popular areas in London featuring prominently in the top 20 black spots compiled by Home.co.uk. The firm’s research also shows that landlords' return on investment is also on the slide, with 11 locations recording negative real percentage yield, which occurs when the value of the property depreciates by more than the annual rent. Moreover, it's not just the North that is suffering price falls. The figures for the 12 months to September this year show Belgravia has seen a slump of 7.6% in annual house prices and the real percentage yield in the same month was down 4.4%. In Soho, another popular London borough, property prices over the same period fell by 6.8% and the real yield for September was minus 3.5%. Meanwhile in Westminster, the annual property price fall recorded in September was -5.2%, with landlords facing a real yield of -1.8%. Seaside towns are another casualty of the cooling property market. Prices have fallen by 7.1% over the 12 months to September in Poole, Dorset, where the real yield for landlords is -2.5%. In Margate, property prices fell by 6% over the same period and the real yield was -2.1% in September. Towns and cities in the North East of England have also been badly affected as austerity measures and joblessness continue to bite. Property price falls in the 12 months to September have been recorded in Newcastle upon Tyne, South Shields, Gateshead, Middlesbrough, North Shields, Hartlepool and Stockton on Tees. Of these, the coastal town of Hartlepool has suffered the most, with annual property prices dipping by 7.5% and the real yield for landlords standing at -1.8% in September. The figures show that, whilst overall the UK property market still has considerable momentum, property investments can suffer significant losses in certain locations, at least in the short term. According to the firm’s October Asking Price Index, property prices across the North East of England fell by 0.1% between September and October this year, and Wales saw the biggest monthly slump over the same period, of 0.4%. Meanwhile, despite falling prices in central London, London and East Anglia both saw rises in average property prices of 1.1% between September and October. Outside of such property hot spots, vendors' expectations are clearly being moderated. The total number of properties that are on the market at a reduced price has risen to a two year high and now represents 13% of the total stock of property for sale. According to Home.co.uk director Doug Shephard price falls in the super rich suburbs of central London have come about for very different reasons to the falls observed in the North. ‘Prices soared in central London post financial crisis as foreign investors sought safe haven investments. Such… Continue reading
