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UK mortgage holders expect to be in a better financial position in three years
Some 60% of mortgage holders in the UK anticipate that they will be in the same financial position or better in three years' time even though the majority expect interest rates to rise. Around half expect their finances to be broadly unchanged, with more than 10% predicting their financial position will improve, according to new data published by the Council of Mortgage Lenders (CML). The figures, published in conjunction with YouGov, shows that almost one third expect their finances to worsen as rates rise with a fifth say they are currently experiencing some financial difficulty, but fewer than half this amount believe themselves to be in danger of missing a mortgage payment. Across the market, however, mortgage arrears are continuing to decline, and CML data shows there are currently only 1.18% of loans with arrears amounting to 2.5% of the outstanding balance. The data also sheds light on likely triggers of mortgage payment difficulties, many of which are not simply related to the loan commitment itself. Some 61% said that a higher cost of living is the most common factor affecting future mortgage affordability, with 41% citing minimal savings, 36% low or falling income , 30% other debts and 17% ill health. The survey identifies that borrowers have a range of coping strategies or actions they are prepared to take to ensure that their mortgage remains affordable. Top of the list is cutting back on non-essentials cited by almost 40%, but other options include cancelling major spending plans, remortgaging to a cheaper deal or working more hours. ‘Those who expect their situation to get worse and to be in some degree of difficulty over the next few years are willing to take more action and consider a broader range of actions. They are generally open to trying a combination of coping strategies, rather than just opt for one,’ said a CML spokesman. ‘Although this might be a hypothetical situation, it shows households apparently have a well-grounded understanding of the plausibility of their coping strategies and are being realistic about their prospects,’ he added. Continue reading
Prime central London house prices expected to be flat for rest of 2014
House prices in the prime London market are expected to stay flat until end of the year after slowing considerably in the third quarter of the year. House price growth across the sector slowed to 0.5% from 3.1% in the previous quarter, according to the latest London Property Monitor from estate agent Marsh & Parsons. The data also shows that the ratio of buyers per property dropped to 12 in September, as supply soared 13% in three months. However, one and two bedroom homes in the outer prime London sector outperformed the rest of the city in annual growth stakes, up 19% in past year Overall, following a robust 11.4% climb in prime London property values over the past 12 months, equivalent to £163,973, there has been a sharp drop in the rate of quarterly price growth across the capita. The report suggests that house price rises have been steadied by rising supply of prime London property on the market, up 13% in the last three months. This has cooled the level of competition in the market and the number of registered buyers per available property in Prime London has fallen from 24 at the start of 2014 to 12 in September. ‘We’ve reached a plateau in the course of house price growth, and the path paved out for London property prices for the rest of 2014 looks to be levelling off. This isn’t terminal, but just a necessary pit stop in the long term growth and sustainability of the market,’ said Peter Rollings, chief executive officer of Marsh & Parsons. ‘And it doesn’t mean we’re in for a quiet winter either. Sales will continue, albeit at a more normal level, as buyers revel in the greater choice on offer, and without the frenetic competition many faced at the start of the year. With more realistic pricing sellers are prospering too, and on average 98% of the asking price is currently being achieved on properties sold,’ he explained. He pointed out that in the hubbub surrounding the property market recently, seasonal patterns have been lost in translation. The majority of house price growth typically falls in the first half of the year, so this autumnal re-calibration is nothing new. He believes that in the run up to the general election next May caution will be exercised by many home owners and would be investors, as high end property is marked out as a key battleground for politians. ‘Wading in with a mansion tax threatens to douse the growth at the top tiers of the market, and in London especially, thousands of ordinary families would get swept up in its wake. Packaging it as a levy on mansions is misleading as across the capital it is tricky to find a home big enough for your average 2.4 family without a million pound price tag,’ added Rollings. The agent believes that there are still strong capital gains to be had… Continue reading
Australia’s office market recovers with strong growth in 3,000 square meter sector
Strong demand for 3,000 square meter plus office space is driving healthy activity and growth across Australia’s office sector as the market looks towards 2015, according to new figures. The Colliers International Office Demand Index quarter three report has recorded a 51% increase in enquiry for office space nationally at 626,237square meters, compared to the September 2013 quarter figure of 413,538 square meters. According to Simon Hunt, Colliers International managing director of Office Leasing, the growth in office demand, a barometer for the state of the market, was being driven by enquiries within the 3,000 square meter plus market, which increased 126% from only 147,301 square meters in the September 2013 quarter to 332,500 square meters this year. Some 47% of all enquiries recorded for September year to date was for 3,000 square meters or more. Breaking the figures down further shows the greatest spike in demand for office was in Sydney where space enquired for more than doubled from 102,486 square meters in the third quarter of 2013 to 235,660 square meters in the third quarter of 2014, an increase of 130%. ‘These Sydney numbers have been driven by a significant rise in demand for office space in the above 3,000 square meter market where only 29,601 square meter was enquired for in the third quarter of 2013 compared to 114,800 square meters in the third quarter of this year,’ said Hunt. Demand for office space also doubled in Canberra, with 112,600 square meters in the third quarter of 2014 compared to 58,090 square meters in the third quarter of 2013, again driven by enquiry in the 3,000 square meter plus market. The Office Demand Index also recorded positive signs of increases in demand in Adelaide, up from 29,251 square meters in the third quarter of 2013 to 49,920 in the third meter of 2014 and Brisbane, which rose, quarter on quarter, from 47,095 square meters to 53,687square meters. Enquiry in Melbourne was down from 166,785 square meters in the third quarter of 2013 to 150,851 square meters in the third quarter of 2014, primarily driven by increased activity at the smaller end of the market, where 65,063 square meters was recorded in the under 1,000 square meter market in the third quarter of 2013 compared to only 51,001 square meters In the third quarter of 2014. The over 3,000 square meter market, however, saw an increase from 53,500 square meters in the third quarter of 2013 to 61,700 square meters in the third quarter of 2014. Hunt said the growing enquiry levels nationally for space over 3,000 square meters pointed to a strong period of business expansion driven by white collar employment growth in the corporate sector. White collar employment growth was set to be strongest in the Financial Services, IT, Communications and Healthcare sectors, with national forecasts indicating that over 10,000 new jobs would be created in these sectors in 2015. It was anticipated that the mining, government and manufacturing sectors would have slightly weaker… Continue reading
