Uk
Surge in mortgages available in UK for small deposit buyers
A surge of product launches over recent months means the number of 95% loan to value (LTV) mortgage products available in the UK rose by 84% year on year, new research shows. In November some 260 different products in this range were available, the highest amount since the recession according to the latest Genworth/Moneyfacts Mortgage LTV Tracker. Analysis by Genworth, a mortgage insurer, reveals the number of mortgage products available to buyers with a 5% deposit has risen by 119 over the last year, from 141 in November 2014 to 260 last month. There are now more than six times as many 95% LTV loans available compared to September 2013 at 260 compared to 43, before the Government’s Help to Buy mortgage guarantee scheme launched. It means there are more deals available for home buyers with a 5% deposit than at any other time since the recession as the number of available products has surged in recent months, rising by 68 in the last three months alone. In comparison, competition in other areas of the market has stayed relatively stable or, in some cases, even declined. The number of 75% LTV products fell by 38 between August and November this year. The number of 90% LTV loans fell by one, while 80% LTV products rose by just nine in the same period. 85% LTV loans remained constant, with 669 products available. The tracker report also shows the average rate of a 95% LTV mortgage fell 1.15% from 5.27% in November 2014 to 4.12% last month, also the lowest amount since the recession. Average 75% LTV mortgages also fell by 0.27% annually to 1.90% in November from 2.17% at the same point last year. However, this was 0.07% higher than the record low of 1.83% seen in June 2015. Nevertheless, this means the price gap between 95% and 75% LTV decreased year on year by 0.88% to 2.22%, the smallest since the recession. Off the back of low rates, the number of first time buyers has also increased. Indeed, the third quarter of 2015 saw the highest number of loans to first time buyers so far this year at 86,800, up by 13% from the second quarter of 2015 and 6% more than the 82,100 loans made in the third quarter of 2014. The average first time buyer LTV in the third quarter rose from 82% in the first quarter of the year and the second quarter to 84%, giving the average first time buyer a deposit of 16%, down from 18%, unchanged from the third quarter of 2014. However, Genworth’s analysis raises concerns that lending at 90 to 95% LTV is actually in decline. There was £1.61 billion lent through 90% to 95% LTV loans in the third quarter of 2015, down by 27% from the £2.20 billion lent in the third quarter of 2014. This means… Continue reading
Buying is still cheaper than renting in many US housing markets
Buying a home in the United States is still more affordable than renting in the majority of markets, according to the latest analysis from real estate data firm RealtyTrac. But the opposite is true in markets with the biggest increase in the millennial share of the population over the last six years, the research also shows. In the 473 counties covered by the research, the fair market rent for a three bedroom property in 2015 needed an average of 27% of median household income, while buying a median priced home required an average of 25% of median household income based on the median sales price in November. Buying a median priced home was more affordable than renting a three bedroom property in 68% of the counties analysed, representing 57% of the total population in those counties. But in the 25 counties with the biggest increase in millennials between 2007 and 2013, fair market rents for a three bedroom property in 2015 required 30% of the median household income on average while buying a median priced home required 36% of median household income on average. For the analysis millennials were defined as anyone born between 1977 and 1992. ‘First time buyers and potential boomerang home buyers are stuck between a rock and a hard place in today’s housing market. Many of the markets with the jobs and amenities they want have hard-to-afford rents and even harder to afford home prices while the more affordable markets have fewer well-paying jobs and tend to be off the beaten path,’ said Daren Blomquist, vice president at RealtyTrac. ‘Those emerging markets with the combination of good jobs, good affordability and a growing population of new renters and potential first time buyers represent the best opportunities for buy and hold real estate investors to buy low and benefit from rising rents in the years to come,’ he added. The top markets with the biggest increase in the percentage of millennials over the past seven years were counties in Washington D.C., San Francisco and Denver, all of which saw an increase of more than 50% in the share of the population that is millennials. Other markets in the top 25 for biggest increase in millennials included counties in New York, Nashville, Portland, St. Louis, Seattle, Charlotte, Minneapolis, Indianapolis, Atlanta, Orlando, Austin, Des Moines and Midland, Texas. The average 2015 fair market rent in these top 25 counties is $1,459, some 19% above the national average for all counties analysed, the data also shows. On average 2015 fair rents increased 3% from a year ago in these counties, with the standouts being Denver County and Midland County, Texas, both of which saw fair market rents increase more than 2%. Median home prices increased 8% from a year ago in these counties on average compared to an average 7% increase among all counties analysed nationwide while the average unemployment rate among these counties was 5.2% in October compared to an average of 5.5% for all… Continue reading
London borough of Newham sees biggest urban house price rise in UK in 2015
Newham in London recorded the biggest percentage rise in house prices among major UK towns and cities over the past year, according to new research. The average house price in the London borough was 22% higher than in the previous year, increasing from £261,399 to £319,522 in 2015, nearly double the 12% increase in London as a whole. The research from home lender the Halifax, based on its own figures, also shows that Royston in Hertfordshire experienced the second biggest rise in average house prices with an increase of 19%. And all 10 top performers were in London and the South East. Stroud in Gloucestershire, Wellingborough in Northamptonshire, and Solihull in the West Midlands were the top performers outside London and the South East, recording price rises of 14% to 15% over the past year. A small number of towns recorded modest declines in house prices 2015. Prices in Merthyr Tydfil in South Wales fell 3.8%, in Colwyn Bay in North Wales they fell by 2.3%, while in Durham prices were down 2.1% and in Coalville in Leicestershire down 0.5%. The 10 worst performing towns are outside London and the South East with the exception of the country’s most expensive area, Kensington and Chelsea, where prices have risen by just 1% in the last year. ‘Those areas that have seen the biggest house price increases over the past year are either in outer London or within close commuting distance of the capital. Demand in these areas has risen as rapid house price rises in central London in the past few years have caused increasing numbers of people to look for property in more affordable areas,’ said Martin Ellis, housing economist at the Halifax. ‘A few towns have experienced modest price falls. These areas are typically still suffering from relatively weak employment and economic conditions, which has dampened local housing demand,’ he added. Continue reading
