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Better lending conditions leads to rise in first time buyers in Northern Ireland
Better mortgage conditions have led to Northern Ireland seeing 25% more first time buyers in in the third quarter of 2014 than a year ago, according to data from the Council of Mortgage Lenders. Then figures point to significant growth in first time buyer and home mover activity with first time buyer loans 25% up on the third quarter 2013. The number of loans to home movers increased by 5%compared to the second quarter and were up 36% compared to a year ago. However, remortgage lending in Northern Ireland declined quarter on quarter in both volume and value. It also declined in number of loans compared to the third quarter of 2013. The data also showed that first time buyer affordability being favourable may account for this growth. First time buyers typically borrowed 2.73 times their gross income, considerably less than the UK average of 3.41. The typical loan size for first time buyers was £80,000 in the third quarter, unchanged from the previous quarter. The typical gross income of a first time buyer household rose to £29,768 compared to £27,009 in the second quarter. First time buyer monthly payment burden decreased to 16.2% of gross income being spent to cover capital and interest payments in the third quarter, from 17.6% in the previous quarter, remaining lower than 19.6% in the UK overall. Affordability for home movers also improved, with home movers typically borrowing 2.45 times their gross income compared to 2.5 in the second quarter but substantially less than 3.05 for the UK overall in the period. The typical loan size for home movers was £103,500 in third quarter, down from £104,000 in the previous quarter. The typical gross household income for home movers was £44,000 in the third quarter compared to £41,241 in second quarter. Home movers' payment burden remained low in Northern Ireland compared to the UK at 16.1% of gross income being spent to cover monthly capital and interest payments, slightly up from 15.9% in the second quarter but less than the 18.8% UK average. ‘Northern Ireland saw higher house purchase lending growth year on year than the UK overall in the third quarter. The Northern Irish market in 2013 was really driven by first time buyers but this year we have seen a resurgence of growth in home movers, suggesting it is becoming easier to transact,’ said Derek Wilson, chairman of CML Northern Ireland. ‘Borrowers are seeing good affordability conditions as the economy recovers, attractive rates are being offered by lenders, and there is further choice available through government schemes like Help to Buy,’ he explained. ‘Two quarters have passed since the new Financial Conduct Authority rules were introduced and they do not seem to have had any unintended consequences in the Northern Ireland market. This is not surprising given that house prices and the amount people borrow next to their household income is less than the UK average. The Northern Ireland market is open to those who aspire to be home owners,’ he added…. Continue reading
Research reveals high number of UK tenants don’t have contents insurance
With both the cost of renting and the number of renters increasing in the UK new research has found that a third of tenants don’t have any form of home insurance to protect their contents. This proportion is almost six times larger than the comparative figure for those who own their own homes which is 6%, according to the research by Co-operative Insurance. The research reveals the most common reason that those renting have no contents cover is a belief that they can’t afford it with this affecting 44%. This is in spite of recent industry data, which reveals that the average home contents policy costs just £2.44 per week. Furthermore, the findings highlight that 29% of those without insurance feel that they don’t need contents cover as they don’t have expensive belongings whilst 26% believe they don’t need insurance as they rent rather than own a property and 16% are happy to take the risk of not insuring their contents. Some 7% said that they don’t have contents insurance as there are too many things excluded from the cover, 6% will just pay for damage from savings, 5% have not got round to it yet, 3% believe this is covered under landlords insurance, 2% think insurance is too complicated and 1% didn’t renew last time their policy finished. The research also revealed that the average value of contents estimated by renters is £16,644, for home owners this doubles to £31,651. Industry findings highlight that the average theft claim for contents now costs £1,700 whilst this rises to £11,000 in the event of a fire. The average claim for accidental damage is now £550. ‘This research uncovers a worrying insurance gap, amongst a growing proportion of the UK population,’ said Anthony Lewis, Head of Insurance for The Co-operative Insurance. ‘Prized possessions and home contents are worth protecting whether people own or rent their property, and our research suggests that many millions of people are taking a risk without any cover in place in the event of theft, or other perils such as flooding and fire,’ he added. The research also shows that 10% of those who rent, have stopped insuring their home over the last five years. This compares to just 6% of those who own their own homes. Overall the figures reveal the main factor behind people stopping insuring their homes, is a desire to save money with 47% saying so, while 20% say they have moved to an area with a lower crime rate, the same number have moved from owning a home into rented accommodation, 19% lost their job and 14% have installed extra security. Continue reading
Auckland property sales up 17.7% month on month and new average price record set
The Auckland housing market was its most active for the past six months in November, with house sales numbers up 17.7% compared to the previous month. The latest data also shows that the average selling price set a new high of $756,909 and the median price also reaching its highest level ever at $691,500. ‘For the previous three months the uncertainty that always exists around general election time was influencing sales, but the market put that behind itself by November,’ said Peter Thompson, Managing Director of Barfoot & Thompson. ‘November is normally one of the strongest sales months of the year, and has proved to be again this year. Attendance at auctions was extremely high, there was keen buyer demand and new listings were strong,’ he explained. ‘It added up to a buoyant month’s trading that saw the average price increase by 2.8% over that for October and it was 10.6% higher than the average price in November last year,’ he said, adding that sales for the month were the highest since May. Sales were also 18.1% higher than the average number of sales the firm has achieved monthly over the previous three months. He pointed out that the current record sales prices are not proving a deterrent to buyers, with demand at the top end of the market being extremely strong. ‘We sold 225 homes for in excess of $1 million, only the second month we have ever sold more than 200 homes in a month in this price segment,’ said Thompson. ‘This year, we have sold a third more homes in the $1 million plus category that we did at the same point last year,’ he added. The data also shows that the number of new listings at 1,693 was the third highest for the year and this was 20.7% percent higher than the average number over the previous three months. ‘It provided greater choice than there has been since April. At month end we had 3,303 homes on our books. While this will contribute to an active month’s trading in December we anticipate sales numbers and prices to edge lower during the current month,’ Thompson continued. However, sales of homes in the under $500,000 price category at 225 made up only 20.4% of total sales, the lowest number of sales in this price category in any month this year. Thompson said this reflects the challenge those not already in the market face when trying to meet the LVR ratio. Continue reading
