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Buy to let lending outpacing residential loans, new analysis suggests
Buy to let lending in the UK increased by 20% year on year in the first three months of 2015, outpacing residential lending which was up by just 1.6%, a new analysis shows. Total lending for the quarter stood at £36.2 billion, a year on year increase of 5.4%, according to an analysis report from Equifax Touchstone which covers 92% in the intermediated lending market. The data also shows that the average value of each mortgage was £177,060 for residential compared to £170,730 in the final quarter of 2014, and £151,033 for buy to let compared to £145,017 in the previous quarter. March was the top sales month for mortgage brokers in eight years. Lending was up 24.3% on February 2015, reaching £15 billion. The market saw UK wide improvement with only two postcode areas, Perth and the Western Isles, reporting negative growth during the period. However, despite growing lending levels, the number of active brokers in the market has fallen in the last 12 months, down from 8,288 in the first quarter of 2014 to 8,028 in the first quarter of 2015. The firm says that this market consolidation makes it even more important for mortgage providers to identify which networks and firms are leading the charge and successfully responding to the rapidly changing mortgage landscape and the requirements of the Mortgage Market Review. ‘In March we saw lending power ahead and the sluggish trend witnessed at the end of last year has been reversed. There have been lingering doubts over the market recovery and it is encouraging to see such positive growth,’ said Iain Hill, Equifax Touchstone relationship manager. ‘While traditional savings accounts continue to offer low returns, savers are looking for alternative ways to invest their money, prompting substantial growth in the buy to let market. An oversupply of people and an undersupply of homes makes buy to let an attractive proposition and we expect this trend to continue to gather pace over the coming months,’ he added. Separate research by Paragon Mortgages has revealed that intermediaries are writing more mortgage business with longer term initial rates. The results from the specialist lender’s quarterly intermediary tracking survey for the first quarter of 2015 shows 30% of cases were for terms of five years or more trackers and fixed rates, up from 26% in the previous quarter. At the same time, there was a reduction in two and three year terms, dropping from 71% to 66% and intermediaries have reported a decline in popularity of tracker rate products since the middle of 2012. Survey results showed a continuous fall from the third quarter of 2012 to the second quarter of 2014. However, this trend appears to be shifting, with tracker products accounting for 18% of cases in the first quarter of 2015 compared to 15% in the previous quarter. Despite the modest improvement in the sale of tracker products, fixed rates continue to be the most popular with intermediaries recommending a… Continue reading
Prices in Scotland up over 13% year on year, latest official data shows
House prices in Scotland rose by 13.3% in the first quarter of 2015 compared to the same period in the previous year, according to official statistics published by the Registers of Scotland (RoS). The average house price in Scotland from January to March was £173,830, the highest figure recorded for any quarter since RoS began compiling quarterly statistics in 2003. RoS head of data, Hugh Welsh, said Scotland has seen sustained growth in house prices throughout the last 12 months with January to March's figures representing the highest quarterly increase in average prices since 2008. ‘Future sales statistics will determine whether this is a one-off spike in quarter four average prices, or whether this is a trend that will continue,’ he added. All local authorities in Scotland showed a rise in average property prices. The highest percentage rise was in East Lothian, up 28.6% on the same period in the previous year to an average of £248,902. The total volume of sales across Scotland was 16,946, a decrease of 4.7% on the same quarter in the previous year. This is the second consecutive quarter that has seen sales volumes decrease, and is the highest annual decrease in sales volumes since 2012. West Dunbartonshire showed the largest percentage rise in the number of sales, with an increase of 10.6%. The biggest percentage decrease was in Midlothian, which dropped 28.1% to 233 residential house sales. The total value of sales across Scotland registered in the quarter increased by 8% to just under £2.95 billion compared to the previous year. This represents the highest value of sales for this quarter since 2008. The City of Edinburgh recorded both the highest average for the quarter at £260,647, a rise of 21.4% and the highest volume of sales, with 2,123 property sales. It also accounted for Scotland's largest market value with sales of just over £553 million for the quarter, an increase of 29.2% on the previous year. All property types showed an increase in average house price, with semi-detached properties recording the largest increase at 15%. With the exception of detached properties which saw an increase in sales volumes of 9.1%, the volumes of all property types decreases, with flats showing the biggest decrease at 9.1%. CKD Galbraith property consultancy, said its own sales figures largely supported statistics issued today by Registers of Scotland showing a significant growth in the values of property being sold. Simon Brown, partner and head of residential sales at CKD Galbraith, said the firm has continued to experience increased demand, which has also led to rising prices achieved across many areas of the country. ‘Last year was a time of steady growth in the property market, despite some uncertainty around the referendum period. This growth has continued into 2015, and although the introduction of the Land and Buildings Transaction Tax created a slight spike in high end sales at the very start of the year, this will be more readily seen in the next quarter’s… Continue reading
Shortage of bricks and bricklayers in UK could hamper new home building
The increasing shortages of bricks and bricklayers in the UK could threaten future house building plans, according to the Federation of Master Builders (FMB). How to solve the current housing crisis is one of the hot topics in the run up to the general election with all parties pledging to build new homes. But the latest FMB state of the trade survey reveals shortages. Half of all small construction businesses, that’s one in two firms, are finding it difficult to recruit bricklayers and 62% of firms are waiting for up to two months for new brick orders while almost one quarter are waiting for up to four months. An additional 16% are waiting for six to eight months. ‘The brick manufacturers are working hard to reignite their kilns which were mothballed during the recession and the ever growing lack of bricklayers is causing concern,’ said Brian Berry, FMB chief executive. He pointed out that compared to this time one year ago, more than twice the firms are reporting difficulties recruiting these tradespeople. In the short term, many SME house builders may have to rely on migrant labour. ‘To ensure we have an ample supply of skilled workers in the future, the next Government must ensure it sets the right framework in terms of apprenticeship funding and apprenticeship standards,’ said Berry. ‘Also more construction firms, large and small, need to willingly engage with training. After all, there’s strong evidence to suggest that training apprentices is good for business,’ he added. The survey also shows that the private new housing market saw its net balance increase by 5% to +13. More businesses reported higher workloads while those indicating no change in workloads decreased to 49% from 62% in the fourth quarter of 2014. The net balance for total enquiries remained in positive territory for the eighth consecutive quarter as it jumped by 27% to +29. Fewer firms stated lower levels of enquiries, compared with the previous quarter, while more respondents reported a higher level of enquiries. The net balance for total expected workloads increased by 25% to +30. The percentage of businesses with negative expectations went down, to 15% from 24%, while those anticipating higher workloads saw a rise, from 29% to 45%. Around 40% of firms predict no change in workloads, down from 46% in the previous quarter. The residential sector’s net balance moved back into positive territory as it rose by 22% to +19. Some 32% are predicting higher workloads over the next three months, up from 18%, while fewer firms are anticipating lower workloads. The private new housing market’s net balance jumped by 24% to +30. The proportion of firms with positive expectations for workloads went up from 22% to 41%. In contrast, those anticipating lower workloads declined, to 11% from 17% in the previous quarter. Continue reading
