Investment
House purchase lending fell in London in 2015, latest CML data shows
London is often regarded as the powerhouse of the UK property market but new data shows that house purchase lending in the city fell in 2015 in comparison with the previous year. But remortgaging increased, according to the latest data from the Council of Mortgage Lenders covering the fourth quarter of 2015. There were 21,800 home owner house purchase loans, down 4% on the third quarter but up 5% compared to the fourth quarter 2014. These loans were worth £6.7 billion, down 7% quarter on quarter but up 16% year on year. First time buyers took out 12,000 loans in London, down 2% on the previous quarter but up 1% on the fourth quarter in 2014. These loans totalled £3.2 billion, down 4% on the third quarter but up 11% on the fourth quarter of 2014. Home movers in London took out 9,800 loans worth £3.6 billion, down 7% by volume and 9% by value on the previous quarter. Compared to the fourth quarter 2014, this was up 11% by volume and 22% by value. Remortgage lending increased 5% by volume and 8% by value compared to quarter three totalling £3.8 billion with 13,100 loans, up 34% in number of loans and 53% in amount borrowed for remortgage compared to the fourth quarter of 2014. The number of loans for home owner house purchase in London decreased year on year to 81,600 loans at £24.5 billion, down 5% by volume but up 1% by value on 2014. First time buyers took out 45,600, worth £11.6 billion, down 6% by number of loans and 1% by amount borrowed compared to 2014. Home movers took out 35,900 loans worth £12.9 billion, down 3% by volume but up 4% by value year on year. Remortgage lending totalled 48,600 loans worth £13.7 billion, up 14% by volume and 25% by value on 2014. ‘House purchase lending in London fell in 2015 due mainly to a slow start. Later months of the year saw activity pick up again. Persisting supply and affordability issues, alongside the introduction of the Help to Buy London scheme, means there will be some uncertainty around how the market will perform going into 2016,’ said Paul Smee, director general of the CML. ‘By contrast, remortgage activity, which has been consistently flat for the past few years, appears to be on an upward trend. Competitive mortgage rates appear to have sparked this activity and we have not seen quarterly volumes at this level since 2009,’ he added. Continue reading
UK residential sales down 2.8% month on month but up almost 10% year on year
Residential property sales in the UK fell by 2.8% between December 2015 and January 2016, according to the latest data published by HMRC, the UK’s taxman. However, the seasonally adjusted sales figure is 9.7% higher compared with the same month last year, with transactions reaching 105,940. Doug Crawford, chief executive officer of My Home Move, believes that it is significant than January sales are up considerably year on year. ‘This could be accredited to a spike in purchases by additional home buyers looking to escape the rise in stamp duty, set to be introduced in April. This may continue to provide a short term boost for a matter of weeks,’ he said. ‘However, we are now explaining to new clients that it is too late to guarantee completion before 01 April. Looking ahead, the question is whether the market will sustain this level of activity. Supply is likely to be the biggest constraint, so new house building will remain critical,’ he added. However, the figures are published as property experts are being asked what effect the newly announced referendum on the UK’s position in the European Union might have on housing markets. According to Peter Rollings, CEO of Marsh & Parsons, sales activity often cools in times of political uncertainty and the London housing market usually bears the brunt of it. ‘First and foremost, foreign investors may be more tentative given this latest turn in events, especially as it follows hot on the heels of higher Stamp Duty for million pound properties,’ he said. ‘But history shows us that the market recovered quickly from this short term ambiguity in 2015 and in fact, home sales have really been building momentum over the past year. The property market is chock a block with eager buyers, who are being propelled on by cheap mortgage finance and government support schemes,’ he explained. ‘Given the extent of buyer demand, it’s a great time for existing home owners to be thinking about their next step up the ladder, which should drive further purchase activity. For investors, the change in Stamp Duty for second homeowners in April will be an incentive to make purchases quickly over the next month,’ he added. ‘It remains to be seen how much of an impact the EU referendum will have on these current levels of confidence but go or stay, London remains an attractive safe haven in times of uncertainty,’ he concluded. According to real estate services firm Savills the fact that the referendum has been announced now means that the relatively long lead in should minimise the potential impact on property market. ‘We’ve already seen a number of short-term factors impact investors’ sentiment this year, however appetite for UK property remains healthy. Chinese investors remain active in the market and negative interest rates in Japan will also benefit global real estate,’ said Mark Ridley, Savills chief executive officer UK and Europe. ‘As we saw in the run up to the 2015 General Election, one of… Continue reading
Prime property sales rise in Italy with prices up in areas popular with overseas buyers
The prime residential property market in Italy has turned a corner with viewings and sales increasing in 2015, new research shows. The weak euro and a growing realisation that prices are at, or close to, their floor has boosted buyer confidence, according to a new analysis from international real estate firm Knight Frank. Across key second home destinations price performance has converged with annual growth ranging from 2.1% in Venice) to a fall of 3% in Sardinia in 2015. The report says that market confidence is strengthening and residential sales increased by 7% in 2015 and the outlook is helped by the fact that Italy’s consumer confidence index is up 39% since its low in 2012. In 2015 the number of enquiries from buyers looking for an Italian property jumped 57% year on year and Tuscany continues to generate the most interest but Liguria and the Italian Lakes from Como to Maggiore are increasingly on buyers’ radar. The report also points out that in the last two years, the Euro has slipped from 0.83 to 0.73 against the pound and from 1.38 to 1.09 against the dollar providing British and US buyers with a strong buying incentive in Italy. A breakdown of the figures shows that in Venice prime property prices increased by 2.1% in 2015 and Dutch, Italian and French buyers are most numerous there, preferring waterside apartments. In Florence, another popular destination for overseas buyers, prices increased by 2% last year and the bulk of buyers are from the UK, Belgium and Canada while prices are also up, by 1.5%, in Liguria which is popular with buyers from Italy, Switzerland and Sweden. Prices increased by 0.2% in the Italian Lakes where all types of properties are sought after by buyers from Italy, the UK and Russia. Prices also increased by 0.3% in Rome with buyers from Italy, Germany and Russia. Elsewhere in places popular with overseas buyers prices fell in 2015, led by a decline of 3% in Sardinia with most buyers coming from Germany, Italy and the UK. They fell by 2% in Umbria which is popular with buyers from the United States, Germany and the UK. Prices fell by 1.9% in Milan where buyers from Italy, China and Egypt opt for apartments. Prices also fell by 1% in Tuscany with buyers from the UK, Germany and the Netherlands also looking for rustic renovations projects as well as apartments and houses. Looking ahead the firm expects prices to stay level. ‘We don’t see immediate rises or substantial drops on the horizon. What we are seeing is a return to the long term trusted locations,’ said Rupert Fawcett, head of Knight Frank’s Italian Department. He explained that at the market’s peak, buyers looked to regions such as Le Marche, and Abruzzo for greater value for money. With prices having dropped across the board since 2009 and now resting at about 30% below their peak, Chianti is back in favour, along with Lucca and… Continue reading
