Investment
Lending for new home investors in Australia reached all-time high
Lending to investors buying new homes reached an all-time high in Australia July but lending to owner occupiers remained below the peak that occurred nearly a year ago. The total number of loans to owner occupiers purchasing or constructing new homes remained largely unchanged in July 2015 compared with the level in June, but was 9.4% lower than the peak level of lending that occurred in September of last year, the data from the Australian Bureau of Statistics shows. In contrast, lending to investors constructing new homes increased strongly in July. The value of lending in this category jumped by 11.7% in the month alone to reach a new all-time high. Investors have played a major role in the current new home building cycle, contributing a larger share of new housing supply than has historically been the case, according to the Housing Industry Association, the voice of the residential building industry. ‘New home building has been a key element to the broader domestic economy’s continual growth in recent years, but critically, it has also made meaningful headway in satisfying the housing needs of Australia’s growing population,’ said HIA economist, Diwa Hopkins. A breakdown of the figures show that compared with 12 months ago, the number of owner occupier loans for the construction or purchase of new dwellings declined across most states. New South Wales and the Australian Capital Territory were the only areas to record increases at 0.7% and 4.8% respectively. The number of loans declined in the Northern Territory by 29.7%, in Tasmania by 29.4%, in Western Australia by 17.4%, in Queensland by 8.9%, in Victoria by 7.8% and in South Australia by 6.6%. Continue reading
UK annual property price growth dips slightly, latest official data shows
UK house prices increased by 5.2% in the year to July 2015, taking the mix adjusted price of a home to £282,000, according to the latest data from the Office of National Statistics (ONS). This mean annual growth was down slightly from 5.7% in the year to June 2015 and excluding London and the South East, which tend to have higher prices, the average annual growth was 4.4%. A breakdown of the figures show that the average mix-adjusted house prices in July 2015 stood at £295,000 in England, £173,000 in Wales, £154,000 in Northern Ireland and £196,000 in Scotland. London continued to be the English region with the highest average house price at £525,000 and the North East had the lowest average house price at £156,000. London, the South East and the East all had prices higher than the UK average price of £282,000. House price annual inflation was 5.6% in England, 0.3% in Wales, 7.4% in Northern Ireland and down 1.3% in Scotland. Annual house price increases in England were driven by an annual increase in the East of 8.3% and the South East at 6.7%. The data also shows that in July 2015, prices paid by first time buyers were 4.4% higher on average than in July 2014. For owner occupiers (existing owners), prices increased by 5.5% for the same period. Overall average house prices in seven of the nine 9 English regions are at record levels, with prices in the North West surpassing the pre-economic downturn peak of January 2008 for the first time. The only English regions not now at record levels are the North East and Yorkshire and The Humber. It is weak supply that is driving up prices, according to Rob Weaver, director of property at residential investment platform Property Partner. ‘The supply issue is nothing less than an enigma. Given that properties overall are commanding decent prices, you would expect to see more people selling. Something in the market is broken. Even though employment levels are strong, consumer confidence may not be as robust as surveys suggest,’ he said. ‘Many households are almost certainly wary of not being able to secure a mortgage under the new lending rules, and that could be impacting their intent to move. Households have almost certainly become more conservative in the wake of the global financial crisis. Paying debt down has become more appealing than racking it up,’ he pointed out. ‘Many are doubtless sitting on their hands until the economic picture gets clearer because the recovery has become less definitive during the first half of the year. This latest data shows that the property market has become a lot more balanced, with sustainable levels of price growth across a number of regions. It is almost a relief to see prices in the capital growing at 5.5%, compared to the high double digit growth rates of a two years ago,’ he added. Peter Rollings, chief executive officer of Marsh & Parsons, comments pointed… Continue reading
UK to get new buy to let index
A new property index is being launched in the UK that will include more micro level data aimed at providing advanced insight into buy to let investment. The Landbay Rental Index, powered by MIAC for the peer to peer buy to let mortgage lender, will be available for the first time later this month and will monitor rental prices and market trends across the country. The index is intended to serve as a more practical guide to current and potential landlords looking to invest in buy to let properties, as well as others interested in trends in the private rented sector. Rental trends will be reported by granular geographical levels including region, county and London boroughs. Rents will also be analysed by the number of bedrooms and include detailed analysis and explanation of emerging trends. Each monthly report will contain national and local breakdowns, alongside practical detail for rental asking prices by number of bedrooms with input data sourced from Zoopla. ‘The ability to offer new and highly developed data insights into the buy to let and wider property market is very exciting for us. Our P2P mortgage lending platform was developed using the latest innovations in financial technology, so data and insight are already in our DNA,’ said John Goodall, Landbay chief executive officer. ‘We’re confident our partnership with MIAC will give answers to what is driving prices and trends in the private rented sector. Being able to see how rental trends differ by number of bedrooms will be useful in a very practical way, particularly for those looking to invest in buy to let. We hope this tool will prove a useful guide to buy to let investors, and stimulate a discussion amongst industry commentators,’ he explained. ‘The UK property market is fluid and complicated. To really pinpoint what is happening we need local and bedroom number data. With this index we’ll truly find out who and where is pulling the levers in the rental market,’ he added. According to Joe Macklin, director of risk and analytics of MIAC, the new index will benefit from the richest available underlying data and the most fit for purpose statistical techniques to deliver a rental index that is both granular and accurate. Continue reading
