TSI
UK housing market confidence falls slightly
Confidence in the UK housing market has fallen slightly despite the fact that interest rates were held again and average house prices continued to increase. According to the latest monthly Halifax Housing Market Confidence Tracker the headline House Price Outlook balance, that is the difference between the proportion of people across Britain that expect the average property price to rise less the proportion who think it will fall, slipped to +58 compared with +64 in March 2015. At the same time the net proportion of consumers who now believe the next 12 months will be a good time to buy has increased from +21 in March to +26 in April. Conversely, the net proportion who think that the next year will be a good time to sell has fallen from +33 to +30. The research found that 63% expected the average property price to be higher in one year’s time which is significantly lower than the 67% who said this in March and this is despite a number of positive short term factors. These include the emergence of record low mortgage rates, falling swap rates, GDP growth falling to its slowest pace in three years and Office of National Statistics figures showing negative inflation of 0.1% in April. MPC minutes also showed a unanimous vote to keep rates on hold at 0.5% in the latest meeting. These, along with other factors, such as rising employment levels, should start to see the consumer housing outlook improve over the next few months, according to Craig McKinlay, Halifax mortgages director. ‘With inflation now at its lowest level since records began, unemployment falling, and the economy still growing, the fundamentals for the housing market remain positive. Going forward the key factor in how consumers adjust to any changes in rates will be the way in which they manage their disposable income,’ he said. Continue reading
UK Building Societies providing bigger share of new mortgage lending
Building societies in the UK lent £12.7 billion of gross new mortgages in the first three months of the year, some 29% of all new lending across the market, the latest data shows. Societies also approved over 91,000 mortgages in the first quarter while net lending by all lenders totalled £3 billion, according to the figures from the Building Societies Association. Paul Broadhead, head of mortgage policy at the BSA, lending by building societies has been strong and without the contribution of this section of the market the stock of mortgage loans across the UK would have shrunk in the first three months of the year. ‘Societies hold a 20% share of mortgage balances, but have had a much greater share of the flow of new lending for some time. In the first quarter they delivered 29% of all new mortgages,’ he explained. ‘This is partly because of competitive products and partly due to the more personal approach they take to underwriting. The trend looks set to continue in the second quarter as around a third of mortgage approvals in the first quarter were from building societies,’ he added. Meanwhile, the latest research by specialist lender Paragon Mortgages shows the majority of intermediaries are seeing stable or growing levels of demand from landlord clients. The Financial Advisor Confidence Tracking survey for the first quarter, shows 91% of intermediaries view landlord demand as growing or stable and just 7% saying demand was weak. In terms of intermediaries’ views on levels of buy to let mortgage business, 53% said in the second quarter they expect the number of cases to remain stable. However, 45% are more optimistic saying they expect to write more buy to let business. Survey results for the first three months of the year also revealed that 23% of intermediaries’ business was buy to let, 18% was for first time buyers and 35% were remortgages. The quarterly survey has also, for the past 20 years, kept an intermediary confidence index taking the average number of mortgage cases completed in the current quarter, measured against expected business levels in the next quarter. Confidence for the first quarter of 2015 has increased with a score of 105.2 from 102.9 the previous quarter. The index recovered throughout 2013 and 2014, after it fell from 2008 onwards and reached its lowest level in the third quarter of 2010 of 63. ‘There were no great movements in this quarter’s survey findings, what is evident though, is intermediaries are feeling optimistic about the buy to let market. Following the results of the general election, it will be interesting to see whether we see an increase in intermediaries’ case load as confidence increases in the wider housing market,’ said John Heron, director of Paragon Mortgages. Continue reading
New home sales in Australia up every month so far this year
New homes sales in Australia have increased in each of the first four months of 2015, according to the latest survey of the country’s largest volume builders. However, the increase of 0.6% in April was the slowest growth pace of the four months, the new homes sales report from the Housing Industry Association shows. But HIA chief economist Harley Dale said that this is still a strong result off the back of a healthy March quarter. The April result for total seasonally adjusted new home sales comprised of two small gains, a 0.4% rise for detached house sales and 0.9% growth for multi-unit sales. ‘The profile for new home sales in 2015 is consistent with a new home building cycle where further upward momentum resides largely in the multi-unit sector and where the eastern seaboard states are driving the further growth,’ Dale explained. In terms of detached house sales, both New South Wales, Victoria and Western Australia posted monthly gains in April but Queensland recorded a disappointing decline, according to Dale. Sales in South Australia continued to weaken and are at an 18 month low. A breakdown of the figures show that in April 2015 private detached house sales increased by 7.2% in New South Wales, by 2.7% in Victoria, and by 0.9% in Western Australia. Private detached house sales dropped by 9% in Queensland and were down by 1.9% in South Australia. In the April 2015 quarter detached house sales increased in by 0.5% in New South Wales and by 7.4% in Victoria but declined by 4.7% in South Australia, by 4.4% in Queensland and by 1.6% in Western Australia. ‘This profile is broadly consistent with our forecasts for detached house commencements, with the exception of Queensland which is looking weaker than we were expecting,’ said Dale. Continue reading
