TSI
UK residential mortgage market becoming too restrictive, study suggests
Renewed optimism in the UK mortgage industry for growth in 2015 is being overshadowed by the view that the market has become too conservative, it is claimed. Post financial crisis regulation is hampering the market and brokers are reporting difficulties in meeting customer needs, according to the latest research from the Intermediary Mortgage Lenders Association. While optimism is returning some 84% of brokers were unable to help at least one customer in the last six months, up from 78% in July 2014, the report points out. Products for the self-employed or those seeking to borrow into retirement are among those in short supply and people with low incomes or dependents have been most affected by reduced access to finance. Overall 74% of brokers took the view that market conditions are worsening, which is backed by 65% of lenders. It comes despite improving sentiment towards market conditions following a period of changes to lending criteria. IMLA’s previous research in July 2014 found 45% of brokers and 33% of lenders reporting that market conditions were worsening. This followed the implementation of the Mortgage Market Review (MMR) in April and with new macro-prudential controls on the horizon. Their pessimism has since softened with just 23% of brokers and 21% of lenders feeling the same way in January 2015. Some 51% of brokers, up from 41% in July, and 53% of lenders, up from 44% in July, now feel market conditions are currently improving. However, IMLA’s research reveals 84% of brokers were unable to source a mortgage for at least one client during the last six months, up from 78% who said the same in July 2014. A breakdown of the figures shows that 53% of brokers were unable to help a client with adverse credit, 53% were unable to help an interest-only borrower, 50% were unable to help a customer seeking to borrow into retirement and 46% were unable to help a client who was self-employed or had an irregular income. Overall, brokers and lenders both identify low income borrowers and those with dependents as the two consumer groups who have been most impacted by reduced access to finance following the MMR. Among the new rules, interest rate stress tests are seen to have had the biggest effect in reducing the amount people can borrow. More brokers and lenders report that the new rules are having an impact than was the case in July. Some 39% of brokers feel product availability has increased following the MMR, while just 18% feel it has reduced. Yet opinion is more evenly split on product flexibility with 27% of brokers feeling this has improved but 23% that it has not. ‘Regulation is vital to ensure that mortgage lending is safe and in proportion to consumer needs and the wider economy. But when families with dependents are among those who find themselves at a disadvantage, there are legitimate concerns that the pendulum has swung too far as a result of successive, incremental measures,’ said… Continue reading
Millions of home owners suffer damage to neighbour’s renovations, research shows
Some 3.7 million home owners in the UK have suffered property damage due to neighbour renovations in the last five years with only a third accepting responsibility for damages, new research shows. The repair bill for damages across the country totalled more than £1.5 billion with just 33% of neighbours accepting responsibility and 30% blaming someone else, according to the research from Direct Line’s SELECT Premier Insurance. Some 17% did not directly confront neighbours about damage to their property, surprising given that the average cost to repair damages was £533 and for 8% more than £1,000 was required to repair the damage. According to those whose damaged property incurred a cost to repair, the majority of their neighbours, 53%, shared at least half of the cost of repairs and 14% paid over 80% of the costs. However, 19% of neighbours paid nothing towards damages caused by their home makeovers. ‘In the UK we take pride in our homes with many seeing extending and renovating their homes as a way to improve their living standards. As such it is not surprising that in the 12 months to September last year we saw more than 55,000 residential planning applications made in England with more than three quarters of them accepted,’ said Nick Brabham, head of SELECT Premier Insurance. ‘If you or your neighbours are thinking about starting a home makeover project it is worth assessing and discussing the risk of damage to adjacent properties with neighbours. It is also crucial to check whether your home insurance policy covers damage caused by neighbour renovations, otherwise you could be left with a hefty repair bill,’ he added. Damage to fencing was the most common ailment for victims of over exuberant home transformation projects, with 43% suffering damage. A quarter of people highlighted damage to windows and damage to garden features such as fountains and sheds, making these the next most common casualties of neighbour renovations. Some 24% suffered damage to gates, 22% damage to roofs, 22% damage to plumbing include leaks, flooding and moisture, 21% damage to contents, 20% damage to plants, 19% damage to exterior walls and 17% damage to a driveway. Home renovations have also caused other annoyances to neighbours with 26% enduring noise disturbances and 14% experiencing reduced parking. This was a major issue in already congested London where 26% went through reduced parking whilst their neighbours renovated their properties. Continue reading
Estate agents under more pressure to sell in some parts of the UK, it is claimed
Estate agents in some parts of the country are facing increased pressure from vendors over the length of time it is taking to sell property, according to new research. According to Part Exchange Register, agents are under increased pressure in areas were the sales process is much slower and are at a higher risk of losing their vendors to another agent. The research points out that there are enormous regional variations in the country’s housing market. It can take up to three months longer to sell a home in some parts of the UK than others, with certain areas taking ‘more than a year’ to find a buyer. In fact, Wales and the North West dominate Rightmove’s list of the most difficult places to sell a home. Of the bottom 10, three are in Wales, namely Powys, Gwynedd and Conwy, and four are in the North West, Sefton, Fylde, Rochdale and Allerdale, as well as Workington in Cumbria. Properties sell the quickest in the university town of Cambridge than they do anywhere else in the country, typically taking just 27 days to find a buyer, compared to a national average of 65 days. ‘The recent housing boom has not reached many parts of the UK and the good times experienced by agents in the South East is certainly not reflected in Wales and the North West,’ said Joanne McClarence, operations director of Part Exchange Register. ‘In some parts if the UK, it can be very challenging for agents to find buyers and at the same time, assure vendors that everything possible is being done to sell their property. Agents often face aggressive marketing from their competitors, who target their vendors who have not sold in a given period,’ she explained. The firm has developed a new ‘matching’ service, which enables agents to generate additional property sales, by bringing vendors and buyers together, in a more targeted and effective way. ‘Part Exchange Register creates property matches between an agent’s vendors and those of other Agents, as well as matching vendors to new homes from a national network of property developers. The fact is that many vendors are really keen to move, but can’t do so until they find a buyer for their property. The problem is that many home movers wait around until their property is sold before they start to view other houses,’ McClarence pointed out. The aim is to give agents the opportunity to offer a unique, added value service to vendors and provides another sales channel and is described at ideal for agents who are looking to secure new sales opportunities. Continue reading
