Investment
House prices in England and Wales see biggest monthly boost for 12 months
Average house prices in England and Wales increased by almost £2,000 in august, the biggest monthly boost for a year, the latest index data to be published shows. They increased by £1,900 or 0.7% compared with July which takes the average prices of a home to its eighth peak this year at £282,816, according to the LSL index. Year on year average prices rose 4.1%, the data also shows and East Anglia has seen the highest regional rise due to a shortage of properties coming onto the market. However, sales are down, recording a monthly drop of 14% in August and are now behind 2013 levels. The north of England recorded the strongest sales activity with transactions up 3% year on year. Richard Sexton, director of e.surv chartered surveyors, pointed out that so far in 2015, monthly price rises have struggled to break above the 0.5%, so this latest rise marks a step up in pace. He believes that a shortfall of summer sellers puts buyers in hot contention for properties. He also pointed out that compared to last year, average property prices have climbed £11,225 and all 10 regions of England and Wales are showing annual increases in house prices. Indeed, the last region to experience a year on year fall in property values was Wales in July 2013. He is not too worried about the dip in sales.'Home sales across England and Wales reached 76,700 in August, down 14% on July levels. This should be taken with a pinch a salt as July was an exceptionally strong month for transactions, and activity in August can be seen as balancing this out,' said Sexton. 'But August is also the first time in 2015 to date that property sales have fallen below their equivalent month in 2013. In the three months to July 2015, property sales have dropped 3% year on year. Across all of England and Wales, the North is the only region where activity has increased over the period, with home sales up 3% during May to July 2015 compared to the same three months in 2014,' he explained. The largest fall in activity has been in East Anglia, with total property sales down 9%, and sales of flats 15% lower year on year from May to July. At the same time, this region has experienced the highest house price growth of any region, at 5.9% in July 2015. 'This suggests it’s not demand that is the problem, but supply. The lack of properties coming onto the market here is intensifying competition and heating up price rises, above temperatures we’re seeing elsewhere, said Sexton. 'The nationwide mismatch between sellers putting homes up for sale and buyer demand should warm up measures of growth for the autumn. August represented the twelfth month in succession that the annual rate of growth declined, down steadily from 11.1% in August 2014, to 4.1% last… Continue reading
UK mortgage approvals for homes reaches 18 month high
The number of mortgage approvals for house purchases in the UK has risen to an 18 month high, as the end of summer saw a surge in mortgage lending, according to the latest data from chartered surveyors. There were 69,220 house purchase mortgage approvals in August, some 9.3% higher than the 63,340 approved in August last year, and the highest monthly number since 70,239 in February 2014, the figures from the Mortgage Monitor report from e.surv shows. Compared with July, the number of house purchase approvals has risen 0.7%, from 68,764 approvals. It marks the third consecutive monthly rise in approvals, with mortgage lending steadily improving every month since the General Election in May. The firm says that this improvement also comes despite growing certainty over the likely course of interest rates in the UK, with the Governor of the Bank of England, Mark Carney, reporting that global economic uncertainty, in particular the slowdown in China’s economy, is likely to have little impact on when the bank's Monetary Policy Committee chooses to raise the base rate from 0.5%. 'Weak inflation and recovering wages mean that more British workers are able to meet the stringent affordability requirements demanded by the new MMR rules and obtain the mortgage they want,' said Richard Sexton, a director of e.surv chartered surveyors. 'This latest resurgence of demand is pushing up prices. What’s more, banks are supporting those borrowers that need finance, and many record low rates remain. It‘s a good time for many potential new buyers to get a mortgage and think about taking a first step on the ladder,' he explained. 'Concerns over an interest rate rise may have helped push some borrowers into acting quickly. However, this is now the third consecutive month of growth, and home lending has been strong since May, now that the uncertainty that surrounded the election has evaporated. Healthier mortgage lending reflects a stronger UK economy and an upturn in fortunes for British buyers,' he added. The data also shows that August saw the number of small deposit borrowers, that is those with a deposit worth 15% or less of their properties’ total value, rise in absolute terms to reach a post-recession high. There were 11,975 small deposit house purchase loans approved in August, up 7.5% compared with 11,140 in July and 6.2% up on August 2014. It was the best month for small deposit house purchase lending since April 2008. Small deposit borrowers now represent 17.3% of all house purchase mortgage approvals, the highest proportion since September 2014 and significantly higher than in July 2015, up 16.2% month on month. Sexton pointed out that the latest First Time Buyer Tracker from Your Move and Reeds Rains reported that July saw 29,700 first time buyer sales, the highest number since August 2007. 'First time buyers have… Continue reading
Easy mortgage access for home buyers in the US tightens
Access to mortgage credit in the United States tightened in the first quarter of 2015, marking a pause in easy accessibility for buyers. It had been getting progressively easier to obtain a mortgage since 2012, but the first several months of this year marked a change, according to according to the latest Zillow Mortgage Access Index (ZMAI). Mortgage credit availability is almost unchanged from a year ago, meaning despite fluctuations from quarter to quarter, there has been little progress toward making mortgages easier to obtain over the last year. In the long term, experts expect mortgage access to continue improving. In a survey earlier this summer of more than 100 economists and housing experts, more than 60% said they expect mortgage regulations to loosen further, with many expressing concern the market will become too lax over the next year. A high number in the Zillow Mortgage Access Index means credit is easier to obtain, while a lower number means credit is tighter. Mortgage credit was easiest to obtain in July 2004, when the ZMAI reached 136.4. But availability tightened over the next few years. In May 2007, both the housing and mortgage availability began a multi year plunge, leaving home values down more than 22% and credit the tightest in recent history. Mortgages were the toughest to obtain in September 2010, when the ZMAI was at 11.8. Today, access to mortgage credit has improved significantly, and is at 65, more than two thirds of the way back to 2002 pre-crisis levels. 'Recent market volatility is causing some lenders to be more cautious in their underwriting. Tighter mortgage access will make it harder for people with low credit scores to get a home loan, and even people who can get approved for a mortgage will have fewer options in terms of available mortgage products,' said Zillow chief economist Svenja Gudell. Continue reading
