Uk
UK housing market sees growth of second charge lending
Up to one in 10 remortgages or home owners seeking further advances in the UK could benefit from taking a second charge loan, it is claimed. Secured lending specialist V Loans believes that a combination of record low rates in the second charge market and the sector’s strong growth since 2011 highlights the benefits for customers and the opportunities for brokers. Customers who would potentially benefit include interest only borrowers, people facing early repayment charges, and people benefiting from lifetime trackers or low fixed rate mortgages who would lose deals by remortgaging, as well as those who may want more flexible terms for their further borrowing. Landlords could also be in line to benefit from increased competition in the buy to let second charge market, leading to significant pricing reductions, making second charge lending an attractive alternative to remortgaging allowing landlords to benefit from the increased equity within their current portfolio. The second charge market, which is on course to lend up to £750 million this year, has achieved year on year growth since 2011 against a background of a subdued remortgage market. Rates have dropped to all-time lows of 4.05% above base rate making the case for borrowers to take out a second charge without disturbing their existing mortgage arrangements. However V Loans estimates just 50% of advisers offer second charges to their clients, and is urging advisers to consider the benefits of second charge loans. 'Remortgaging or taking a further advance is not always in the client’s best interest and therefore it’s essential that all options are considered,' said Marie Grundy, managing director of V Loans. 'Interest only customers, those benefiting from lifetime trackers and low fixed rate deals or those who do not want to incur substantial early repayment charges by remortgaging, including landlords who wish to release trapped equity, could all stand to benefit from second charge finance,' she explained. 'The pending alignment of regulation for first and second charge markets will deliver huge opportunities and innovation to the market allowing advisers to provide better customer outcomes. Intermediaries should seriously consider including second charges within their scope of service ahead of the regulatory changes next year,' she added. Continue reading
Planning consent for new homes in New Zealand up 24% annually
The new build property sector in New Zealand is growing with planning consents up 24% in July compared with a year ago, the latest data shows. Overall there were 2,824 new dwellings consented nationally, the highest number since march 2005, according to the figures from Statistics New Zealand. It was boosted by apartments and town houses, flats, and units and Waikato led the growth with consents up 40% while Auckland saw growth of 31%, well above the national average. The total value of consents for all buildings in July 2015 was $1.4 billion, with some $976 million for residential buildings and $455 million for non-residential buildings. The data also shows that over $4 billion worth of building work was put in place in the June 2015 quarter, up nearly 8% on the June 2014 quarter, the highest quarterly value recorded in the 50 years since the series began, and represents almost $900 worth of building work per person. 'The value of both residential and non-residential building work increased overall. In Auckland, residential work grew, while in Canterbury most of the growth was in non-residential work,' said Statistics New Zealand business indicators manager Neil Kelly. After removing price changes and seasonal variations, the overall volume of building activity increased 1.6% following a 1.8% increase in the March 2015 quarter. Within this, the volume of non-residential work increased 5.2% while residential work fell 1%. The volume trend for non-residential building activity reached a new high in the June 2015 quarter, exceeding levels last seen in the March 2006 quarter. Meanwhile, the residential building activity volume trend is still 8% lower than the June 2004 quarter peak. The overall building activity volume trend grew to a level last seen 10 years ago in the June 2005 quarter, the previous series peak. Continue reading
UK house prices set to rise by 6% this year, says RICS
Acceleration in national house price growth in the UK is being reinforced by the continued imbalance between falling new instructions to sell and rising buyer demand, according to the latest market report. The August 2015 residential market survey report from the Royal Institution of Chartered Surveyors (RICS) says that the shortage of housing stock is driving prices higher and the organisation now predicts that house prices are set to rise by 6% in 2015. The RICS price indicator reached a 15 month high in August, with a net balance of 53% more respondents reporting price-rises, and firm growth being seen across all areas of the UK. Further analysis, using Office for National Statistics’ data as the comparator, indicates that prices now look likely to rise in the region of 6% over the course of 2015, compared with 3% predicted at the beginning of the year. The strongest price growth is forecast in Northern Ireland, where prices are now anticipated to rise by 11% throughout 2015. Both near and medium term price expectations series from the survey are reflective of the imbalance between demand and supply. Some 37% more members are expecting prices to continue to rise over the next three months and 76% over the coming year. Meanwhile the agreed sales balance edged upwards for the fourth successive month but a more robust recovery in activity is continuing to be held back in part by the lack of stock on the market. The data also shows that new buyer enquiries increased for a fifth month in succession, with 22% of respondents reporting a rise in demand, led by significant improvements in the West Midlands, Wales and the North West. New instructions, however, have yet to record any meaningful upturn since the middle of 2013, pushing average stock levels to record lows. 'While the UK housing market has seen some substantial volatility in demand over the last 18 months, the most consistent feature has been a distinct shortage of new instructions,' said RICS economist Michael Hanley. 'With respondents reporting another fall in appraisals during August, and looking at general market conditions, we have no reason to believe this will change in the near term. Therefore, despite the fact that demand has been picking up in recent months, we have lowered our forecast for transactions for 2015 from 1.25 million to 1.2 million. Alongside this, we have revised our expectations for price gains this year up to 6%,' he explained. When it come to the lettings market the report reveals that tenant demand rose at a steady pace for the eighth successive month, outstripping the modest pick-up in new landlord instructions. Accordingly, rents are expected to increase in the near term, with 34% of respondents predicting a rise in rents during the next three months. 'Given current market conditions, the latest data unsurprisingly shows house prices continuing to rise, and at an accelerating pace. As such, house price inflation has now quickened in each of the last seven months following a sustained period of easing towards the… Continue reading
