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UK mortgage approvals for homes reaches 18 month high
The number of mortgage approvals for house purchases in the UK has risen to an 18 month high, as the end of summer saw a surge in mortgage lending, according to the latest data from chartered surveyors. There were 69,220 house purchase mortgage approvals in August, some 9.3% higher than the 63,340 approved in August last year, and the highest monthly number since 70,239 in February 2014, the figures from the Mortgage Monitor report from e.surv shows. Compared with July, the number of house purchase approvals has risen 0.7%, from 68,764 approvals. It marks the third consecutive monthly rise in approvals, with mortgage lending steadily improving every month since the General Election in May. The firm says that this improvement also comes despite growing certainty over the likely course of interest rates in the UK, with the Governor of the Bank of England, Mark Carney, reporting that global economic uncertainty, in particular the slowdown in China’s economy, is likely to have little impact on when the bank's Monetary Policy Committee chooses to raise the base rate from 0.5%. 'Weak inflation and recovering wages mean that more British workers are able to meet the stringent affordability requirements demanded by the new MMR rules and obtain the mortgage they want,' said Richard Sexton, a director of e.surv chartered surveyors. 'This latest resurgence of demand is pushing up prices. What’s more, banks are supporting those borrowers that need finance, and many record low rates remain. It‘s a good time for many potential new buyers to get a mortgage and think about taking a first step on the ladder,' he explained. 'Concerns over an interest rate rise may have helped push some borrowers into acting quickly. However, this is now the third consecutive month of growth, and home lending has been strong since May, now that the uncertainty that surrounded the election has evaporated. Healthier mortgage lending reflects a stronger UK economy and an upturn in fortunes for British buyers,' he added. The data also shows that August saw the number of small deposit borrowers, that is those with a deposit worth 15% or less of their properties’ total value, rise in absolute terms to reach a post-recession high. There were 11,975 small deposit house purchase loans approved in August, up 7.5% compared with 11,140 in July and 6.2% up on August 2014. It was the best month for small deposit house purchase lending since April 2008. Small deposit borrowers now represent 17.3% of all house purchase mortgage approvals, the highest proportion since September 2014 and significantly higher than in July 2015, up 16.2% month on month. Sexton pointed out that the latest First Time Buyer Tracker from Your Move and Reeds Rains reported that July saw 29,700 first time buyer sales, the highest number since August 2007. 'First time buyers have… Continue reading
Easy mortgage access for home buyers in the US tightens
Access to mortgage credit in the United States tightened in the first quarter of 2015, marking a pause in easy accessibility for buyers. It had been getting progressively easier to obtain a mortgage since 2012, but the first several months of this year marked a change, according to according to the latest Zillow Mortgage Access Index (ZMAI). Mortgage credit availability is almost unchanged from a year ago, meaning despite fluctuations from quarter to quarter, there has been little progress toward making mortgages easier to obtain over the last year. In the long term, experts expect mortgage access to continue improving. In a survey earlier this summer of more than 100 economists and housing experts, more than 60% said they expect mortgage regulations to loosen further, with many expressing concern the market will become too lax over the next year. A high number in the Zillow Mortgage Access Index means credit is easier to obtain, while a lower number means credit is tighter. Mortgage credit was easiest to obtain in July 2004, when the ZMAI reached 136.4. But availability tightened over the next few years. In May 2007, both the housing and mortgage availability began a multi year plunge, leaving home values down more than 22% and credit the tightest in recent history. Mortgages were the toughest to obtain in September 2010, when the ZMAI was at 11.8. Today, access to mortgage credit has improved significantly, and is at 65, more than two thirds of the way back to 2002 pre-crisis levels. 'Recent market volatility is causing some lenders to be more cautious in their underwriting. Tighter mortgage access will make it harder for people with low credit scores to get a home loan, and even people who can get approved for a mortgage will have fewer options in terms of available mortgage products,' said Zillow chief economist Svenja Gudell. Continue reading
Apartments near Royal Parks in central London attract high price premium
The selling prices of apartments situation on roads surrounding the five central Royal Parks in London have increased by 172% in the last decade, new research has found. This is compared to prices for other prime properties in London that are not close to this prestigious group of green space that include Regent’s Park, Kensington Gardens, Hyde Park, Green Park and St James’ Park. Hyde Park, which stretches across central London, has seen the greatest rises. Between 2013 and 2014 alone, the premium commanded by properties in close proximity to the park was 23.8%, according to the Parkside premium Report by Dataloft. 'London as a city is rightly proud of its green spaces, which define the centre of London and provide more outside public space than New York, Paris or Tokyo. The Parkside Premium Report mirrors our experience of the market,' said Gary Hersham of Beauchamp Estates. He explained that living next to a park is increasingly a priority for many buyers in the prime London property market.'In 2012, for example, an influx of super luxury developments pushed the premium for living parkside to 32% over other prime central London areas,' he said, adding that close proximity to a Royal Park is a pre-requisite of many high net worth individuals purchasing in London. Hyde Park, in the borough of Westminster, is the most sought after park to live close to. The south side of Hyde Park, driven by key sales in developments such as One Hyde Park and 4-5 Princes Gate, has reportedly achieved sales values of up to £9,000 per square feet and in doing so set record prices in London. The report notes that the north side of Hyde Park has achieved values of around £3,500 per square feet. The north side of the park also has less of a gap between parkside properties and the surrounding areas when compared to the south, with a 43.2% premium to live parkside for the north versus a 67.7% premium for apartment properties on the south. Hersham pointed out that the rise in the premium for parkside properties boosted by UK domestic buyers. Some 26% of those living around Hyde Park also own another home and 38% are within the UK. The report also shows that apartments by the five central London Royal Parks have commanded a premium of 20% in the year 2014/2015, compared to just a 5% premium in 2005. The most marked jump in price premiums for living parkside was between 2006 and 2007, with an 11% rise in premiums. This can be explained by the myriad of luxury developments launched that year such as One Hyde Park, which reportedly set the world record for a penthouse selling price. The report also looks towards the future of this sector of the property market. 'The report shows beyond all doubt the difference that being situated next to a Royal Park can… Continue reading
