Investment
UK mortgage market getting over slowdown of new regulation
Mortgage approvals for home buyers in the UK are improving with the latest figures from the Bank of England showing an 8.2% rise in the six months to August 2015. The number of loan approvals for house purchase was 71,030 in August, up from an average of 65,594 over the previous six months while approvals for remortgaging increased by 14.2%. Lending secured on dwellings increased by £3.4 billion in August compared to the average monthly increase of £2.4 billion over the previous six months. The three month annualised and 12 month growth rates were 2.9% and 2.1% respectively. David Whittaker, managing director of Mortgages for Business, pointed out that mortgage approvals as a whole are going from strength to strength but he warned that beneath this surface current, there are also deeper and more complicated flows. ‘There is an ongoing shift to different sorts of mortgage lending, and a booming remortgage market reflects that interest in new products. Even compared to extremely buoyant house purchase approvals, remortgaging has picked up more quickly, reflecting ongoing expectations of higher interest rates on the horizon, as well as a newfound love for the peace of mind of fixed rate deals,’ he said. ‘It isn’t boom times in every quarter though. Buy to let lending accounts for much of the trend to remortgaging specifically, and we are seeing strong interest from experienced landlords looking to take advantage of record low rates, even for fixed rate deals for five years or longer. But there is also a more muted tone to the buy to let industry now. Alongside an acceleration in overall mortgage lending, this could indicate a gradual correction in the proportion of mortgage lending to landlords,’ he added. He also explained that while buy to let lending accelerated through the first half of 2015 to reach nearly 20% of gross lending, it should now be time for that proportion to drop back again. ‘Fresh interest from the Government and Bank of England have not yet changed the fundamentals of the private rented sector or the long term business models of responsible and experienced landlords. But the real momentum may be turning back towards owner occupiers,’ he concluded. According to Adrian Gill, director of Your Move and Reeds Rains estate agents, the mortgage market has moved on past the slowdown caused by regulatory changes, in particular the MMR regulations introduced in April 2014. ‘It is not just first time buyers who are benefiting from these calmer waters. Remortgaging activity has been making considerable headway recently, as existing home owners secure the best possible deals before an interest rate rise. In the purchase market, buoyant demand is being met with a dried up pool of available homes, and this imbalance will propel property prices on throughout the autumn,’ he said. Peter Rollings, chief executive officer of Marsh & Parsons, pointed out that August was the third consecutive month on month increase in house purchase loan approvals…. Continue reading
Monthly residential rents in Ireland up 7.1% quarter on quarter, latest index shows
Monthly rents for private sector accommodation across the Ireland increased by 7.1% in the second quarter of this year compared with the same period last year, the latest published data shows. Nationally, rents for houses were 6.4% higher, while apartment rents were 7.6% higher than in the second quarter of 2014, according to the data from the Private Rented Tenancies Board (PRTB) which is regarded as the most accurate and authoritative rent report of its kind on the private accommodation sector in Ireland. Annual growth in the Dublin market was stronger, up by 9.2%. Dublin house rents were up 8.8% and Dublin apartment rents were higher by 9.4%. However, annual growth in rents for the market outside Dublin remains more subdued, recording growth of 5.8% when compared to the second quarter of 2014. There is also a gap in the performance by property type. The rent for houses outside Dublin increased by 5.8%, while apartments outside Dublin experienced an increase of 5.9%, according to the data which is based on actual rents being paid rather than asking or advertised rents. The rent for private sector accommodation across the whole country in was €878, up from €820 in the second quarter of 2014. The rent for apartments nationally was €922 compared to €857 a year earlier and for a house it was €853 compared to €801 a year earlier. In Dublin, the rent was €1,387 for a house and €1,260 for an apartment compare to €1,275 and €1,152 respectively in the second quarter of 2014. This represents a monthly increase in Dublin rent of €112 for a house and €108 for an apartment over the course of the 12 month period. Outside Dublin, the rent was €677, with houses averaging €695 and apartments €660. A year earlier, these figures stood at €640, €656 and €623 respectively. This represents a monthly increase in rent outside of Dublin of €39 for a house and €37 for an apartment in the 12 month period. Looking at the quarter on quarter picture for 2015, nationally the rate of increase in monthly rent levels was 2.9% in the second quarter of this year compared to the first quarter of 2015. This compares to a national quarterly growth rate of 1.3% in the first quarter of 2015. Looking at trends in more detail, monthly rents for houses recorded quarter on quarter growth of 2.4% in the second quarter of the year, while rents for apartments grew by 3% when compared with the first quarter of 2015. The results show quarterly growth in rents outside Dublin of 2%, with rents in Dublin showing stronger growth of 4.2% in the quarter. Rents for houses in Dublin grew by 2.9% compared to the first quarter of 2015, while Dublin apartment rents were higher by 4% in the quarter The rent indices show, for properties outside Dublin, rents in the second quarter of 2015, when compared with the first quarter… Continue reading
Retired UK home owners seeing value of property grow
Retired home owners in the UK have seen their property wealth grow by nearly £17.5 billion in the past three months as house prices continue to climb, new research shows. Pensioners who own their homes outright have gained an average of £3,725 each from their houses in the past three months taking their property wealth to a new record high, according to the index from over 55s financial specialist Key Retirement. In the five years since Key started monitoring the housing wealth of the over 65s, in January 2010, total pensioner property wealth has increased by 14% or £111 billion which equates to £23,700 on average for every home owner. The Pensioner Property Index shows over 65 home owners now own property wealth of £891.249 billion outright with pensioners across almost all of the UK benefiting. Key believes the strong growth in property prices will drive expansion of the equity release market further which enables homeowners to release wealth from their homes. Customers releasing property wealth are taking around £68,500 on average, its figures show. Retired home owners in London were the biggest winners gaining an average of around £14,238 each in the past three months, while home owners in the South East of England are more than £8,290 better off and pensioners in East Anglia are £8,524 better off. Key’s figures show a fifth of all pensioner property equity is owned by over 65s in London with total wealth of £178.894 billion. Nearly two thirds of pensioner property wealth is concentrated in London, the South East, the South West and East Anglia. ‘The strength of the housing market is reflected in the growth in the amounts being released through equity release plans which are now an average £68,500, an amount which dwarfs the average pension pot in the UK,’ said Dean Mirfin, technical director at Key Retirement. ‘The success of property investment for millions of over 65s home owners highlights how homes are major assets which should be considered as part of anyone’s retirement planning,’ he explained. ‘Property prices rise and fall but over 65 home owners control more than £891 billion in assets which can make a major contribution to enhancing retirement lifestyles. Pensioners however need specialist advice before accessing their property wealth,’ he added. Continue reading
