Uk
Mortgage lending in UK up 23% year on year, says latest CML data
Gross mortgage lending in the UK reached £19.9 billion in December, some 3% less than the previous month but up 23% year on year. The data from the Council of Mortgage Lenders (CML) brings the estimated total for the year to £220.3 billion, an 8% increase on 2014’s £203.3 billion and the highest annual gross lending figure since 2008. Gross mortgage lending for the fourth quarter of 2015 was therefore an estimated £62.3 billion. This is a 1% increase on the third quarter and a 23% increase on the fourth quarter of 2014. ‘Lending ended the year stronger than it started, with our estimate of nearly £20 billion lent in December. This brings total lending to just over £220 billion for 2015 as a whole, and slightly higher than we had anticipated,’ said CML economist Mohammad Jamei. ‘The low inflation environment, along with real wage growth, an improving labour market and competitive mortgage deals have all helped to underpin demand. Having said this, the upside potential looks limited over the near term, as the supply of existing and new properties on the market remains weak, and affordability pressures weigh on activity,’ he pointed out. ‘There is an added element of uncertainty as we wait to see the impact of tax changes on the buy to let sector,’ he added. John Eastgate, sales and marketing director of OneSavings Bank, believes that the stamp duty tax changes on second properties from April are expected to increase mortgage lending activity ahead of their rollout. ‘However we don’t see this as a long term trend. The end of the year is a difficult time to conclude a great deal. Regulatory changes are expected to cause a short term spike in demand from investors, which will be reflected in first quarter figures, while overall conditions are supportive of sustainable growth in gross mortgage lending,’ he said. ‘Investor demand may balance out after the April rush, but the Help to Buy ISA will help underpin long term first time buyer demand, and the diminishing prospect of an interest rate rise will help keep a lid on monthly mortgage payments. As UK employment hits a record high, all this bodes well for borrowers’ finances and the health of the market,’ he added. The indusry should not be concerned about that dip in December, acdoring to Rishi Passi, chief executive officer of Oblix Capital. 'In the longer term, low inflation and reasonable wage growth look set to improve affordability for first time buyers and those on the bottom rungs of the ladder,' he said. 'Help to Buy will also go some way to fill the void left by any buy to let landlords downsizing their portfolios, so developers with one eye on the future should be preparing future stock to meet this shifting demand,' he added. Continue reading
Buy to let demand keeping UK housing market buoyant say surveyors
The UK housing market saw an unseasonal rise in demand in December with anecdotal evidence suggesting this is due to an increase in buy to let investors. An extra 3% stamp duty levy due to come into force in April which will affect buy to let property and second homes could be behind the lift in demand, says the latest monthly residential report from the Royal Institute of Chartered Surveyors (RICS). It says that demand for properties reached a three month high in December and the month saw the first rise in new instructions since the beginning of 2015 with anecdotal evidence pointing to a jump in buy to let interest leading this demand. Since the Chancellor George Osborne announced the extra stamp duty levy in his Autumn Statement last November some 16% more chartered surveyors reported a rise in new buyer enquiries. ‘The housing market has experienced an unusually buoyant December. Those in the industry have been speculating that this is the result of the Chancellor’s announcement last November,’ said RICS chief economist Simon Rubinsohn. ‘Potential buy to let investors are looking to pick up properties before the increased stamp duty levy comes into force next April. If that is the case, then we can expect to see the housing market heating up further over the next few months,’ he explained. The belief that demand was fuelled by announcements included in the Autumn Statement was further supported by qualitative responses to the survey. ‘December was busier than normal as stamp duty changes have brought buyer back to the market, ahead of April,’ said chartered surveyor Robert Green of Chelsea based estate agent John D Wood & Co. While James McKillop of Knight Frank in London said: ‘The 3% Stamp Duty Land Tax (SDLT) proposal in the Autumn Statement has led to more buyers firming up their intention to buy additional residences in my region before April 01’. The RICS report also says that house prices in London, the South East and East Anglia look set to rise by a further 5% per annum in each of the next five years, compared to a UK average of 4.5%, despite offering the poorest value for money in the UK. Some 62% of respondents said that homes in the South East were either expensive or very expensive given the relative benefits they offered, with 57% of contributors in the capital taking the same view. By way of contrast, 100% of Northern Irish respondents and 92% from the North of England believe that homes in their areas offer fair value for money. A net balance of 50% of respondents reported that UK house prices had risen since November, with East Anglia and the South East of England witnessing the strongest growth. Robert Grigg, managing director of Property Finance at Hampshire Trust Bank, said that the report highlights that 2015 was yet another year in which becoming a home owner was out of reach for many. ‘The government’s Help… Continue reading
A third of people in UK renting a home have put buying plans on hold
One in three people in the UK renting have put their plans to buy a home on hold and remained in rented accommodation longer than planned, according to new research. It suggests that 1.66 million tenants in the private rented sector are actually frustrated first time buyers and the research from credit check firm Experian also gives an insight into why. Some 18% don’t believe they would be accepted for a mortgage so feel renting is their only option, while 10% have struggled to raise a deposit and consequently been forced to delay their plans to buy. A further 5% have had to prolong their time renting as they’ve been held up in securing a mortgage. Despite making regular payments for their housing, private renters don’t see this reflected on their credit report in the same way mortgage payers do, the firm explains. ‘Many would be first time buyers face the challenge of saving for a deposit on a home while paying rent each month,’ said Jonathan Westley of Experian. He pointed out that the research also shows that a significant amount of people are happy to rent in the long term, whether it’s because they enjoy a good relationship with their landlord or the flexibility of rented accommodation. Indeed, a third are content to rent and have no plans to buy a home of their own in the next five years. Some 25% of those surveyed intend to buy a place of their own sooner rather than later and the results show that 9% are currently saving for a deposit and believe they will be able to buy within the next 18 months, while 16% reckon they will need between two and five years to build up the required deposit. Would be first time buyers who have been frustrated in their attempts to get onto the housing ladder are more likely to be single parents or couples with children. These tenants either doubt they would get a mortgage or have had difficulty securing one, or have struggled to get a deposit together. The research also found that 74% would like to see rental payments contribute to their credit report. The greatest appetite for including rental payment data on credit reports is among people who are looking to buy in the next five years with 91% in this group recognising the importance of a good credit report and 83% would like to see rental payment data added to it. People who are happy to rent tend to live alone or only with other adults and are less likely to see rent as ‘dead money’ than private tenants as a whole and 26% of satisfied renters disagree when asked if renting is a waste of money compared to 16% of all private renters. Continue reading
