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Lending to first time buyers in the UK falling, latest CML data shows
First time buyer and house purchase lending in the UK has slowed, according to the latest figures from the Council of Mortgage Lenders. The figures show the full impact of new mortgage rules introduced a year ago and suggests that people are staying put for longer with mortgage pricing at record lows. The total number of loans advanced to first time buyers in March was up 20% compared to February but 5% down compared to March 2014. First time buyers borrowed £3.4 billion, which was up 21% on February and 3% up on March last year. Loans to home movers increased by 14% compared to February but was down 3% year on ear. These loans were worth £4.9 billion, up 17% on February and 7% compared to March 2014. Remortgage lending increased 19% month on month and 6% year on year. The value of these loans at £4.2 billion also increased month on month by 24% and was up 14% year on year compared to March 2014. Buy to let loans also increased month on month and year on year, up 12 compared to February and up 21% compared to March 2014. These loans were worth £2.7 billion, up 13% compared to February and up 35% on March 2014. The quarterly figures show how much lending has slowed. First time buyers took out 61,300 loans in the first quarter 2015, down 24% on the fourth quarter of 2014 and 11% down on the first quarter of 2014. They borrowed £9 billion, down 23% on the fourth quarter of 2014 and a year on year decrease of 5% compared to the first quarter of 2014. Home movers took out 70,400 loans, a decrease of 25% compared to the fourth quarter 2014 and a decrease of 11% year on year. These loans totalled £13.5 billion, down 22% on the previous quarter and 5% down year on year on the first quarter of 2014. Remortgage lending increased quarter on quarter with 75,400 loans advanced, up 3% on the fourth quarter 2014 but down 5% on the same quarter last year. The value of these loans at £11.8 billion also increased quarter on quarter by 6% and was up 2% year on year compared to quarter one of 2014. There were 52,300 buy to let loans advanced in the first quarter of 2015, down 3% on the previous quarter but up 15% on the same period in 2014. These loans were worth £7.8 billion in value, up 1% compared to the first quarter and up 28% on the first quarter of 2014. ‘It was a slow start to activity in the first couple of months of 2015 but the market started to get out of the dip in March, a trend that we think will continue as the year goes on,’ said Paul Smee, director general of the CML. ‘We will have to wait and see how the housing market reacts to the general election result and the… Continue reading
UK property market sees lowest annual price growth since 2013
Annual UK property price growth was 3.7% in April, taking the average price of a home to £208,717, the lowest level of annual growth since July 2013, the latest index shows. Month on month prices were up 0.5%, according to the latest monitor report from haart estate agents. In London prices were up 1.9% month on month and 6.8% year on year to an average of £513,154. The data also shows that in April new buyer registrations fell by 1.6% compared with March, the first monthly fall this year, as buyers adopted a pre-election ‘wait and see’ attitude. Seller activity also slowed in April with new property instructions up just 1.5% month on month. The report also shows that house sales were up 3.3% in April compared to March but down 17.1% from April 2014. But there has been a post-election pick up in seller activity with the weekend after polling day seeing a 34% surge in new property instructions compared with the previous weekend. The average price of a first time buyer home increased 3.5% annually and 0.8% on the month. The report says that the new Help to Buy ISA, when the product is designed and implemented, will provide further assistance to first time buyers seeking to buy a home. First time buyers now make up 42.9% of all mortgages written, which is up slightly on March but still falls below 46.1% in April 2014. The average mortgage granted to first-time buyers is up 1.2% on the month in April and 2.5% annually. ‘The pre-election property market held its breath in April but the election uncertainty did not have an overall stifling effect on the market average property price growth for the UK slowed but did not come off the boil,’ said Paul Smith, chief executive officer haart, which has a network of over 200 branches across the country. ‘However, there was a drop in activity from sellers and prospective buyers in the run up as a wait and see attitude took hold of the market. We are already seeing the reversal of this with a flurry of activity from prospective sellers in the weekend immediately following the election,’ he explained. ‘Continuity of government, no mansion tax and supportive policies like the Help to Buy ISA should keep the property market on its upward trajectory for the rest of 2015,’ he added. Continue reading
Research finds UK first time buyers support Help to Buy schemes
The housing policies from the Conservative Party seem to be most in-tune with the needs of first time buyers in the UK, particularly Help to Buy according to new research. In particular getting empty homes back in to the market has strong support but this was planned by the Liberal Democrats who are no longer in coalition with the Conservatives, says the Halifax Generation Rent report that provides ongoing insight into the attitudes and behaviour of young people towards home ownership. However, while five of the top nine policies were from the Conservative party, the top rated policy was put forward by the Liberal Democrats. The Liberal Democrat policy proposed increasing supply by giving greater powers to local authorities to tackle empty homes in the form of renovation and subsequent return of the property to the rental or sales markets. Increasing the supply of housing was the overall mandate given to the incoming Government by Generation Rent participants. All pledges to build more homes and to either reserve a proportion of these homes or offer them all to first time buyers were welcomed by the majority of respondents. Other popular policies included the Conservative proposals to launch a new Rent to Buy scheme and a new Right to Buy scheme. As a demand side policy the new Right to Buy scheme has received a mixed reception to date, but 54% of the young people surveyed in the Generation Rent Report thought it would be of benefit to getting more people on the housing ladder. ‘Housing was a major issue during the general election campaign and political parties of all hues acknowledged that more needs to be done to help first time buyers. However, this now needs to translate into concrete plans during the next Parliament,’ said Craig McKinlay, mortgages director at the Halifax. He pointed out that by taking the most beneficial cross party policy positions according to 20 to 45 year olds, the Generation Rent report has created the ‘ideal’ policy package. ‘Earlier this year the independent Commission on Housing identified that we need to deliver at least 2 million homes by 2025 to meet demand. Getting empty homes back on the market and tackling the shortfall in housebuilding needs to be a political priority and requires a long-term commitment if it’s to address the shortage of supply,’ he added. In the first two years of the Help to Buy Equity Loan Scheme to 31 March 2015 some 47,018 properties were bought with an equity loan. Taking this into account the report found 53% of 20 to 45 year olds think the current Help to Buy schemes have had a positive impact, compared with 8% who think it has had a negative effect, and 39% who don’t know or are undecided. As such , the Conservative party proposal to extend the Help to Buy Equity Loan scheme for new build homes until at least 2020 was popular among first time buyers with 56% expressing… Continue reading
