Tag Archives: css
UK mortgage lending hits highest October level since 2008
Gross mortgage lending in the UK reached £19 billion in October, some 5% higher than September and 8% higher than October last year, according to figures from the Council of Mortgage Lenders. This is the highest lending total for an October since 2008 when it was £18.6 billion and CML economist Mohammad Jamei said that the market is in a steadier state than it was earlier in the year. ‘As the temporary impact of implementing the mortgage market review fades, a clearer picture of the mortgage and housing market is emerging. Nearly all indicators in the housing market align with our view of a gentle easing in market conditions,’ he explained. ‘While the housing market has cooled in recent months, mortgage lending continues to be underpinned by positive factors. With expectations of the first interest rate rise moving to the fourth quarter of next year, as well as positive forecasts for growth, pay and unemployment, there is potential for market activity to gain traction in the new year,’ he added. ‘These new figures show that lending is alive and well and breaking records despite stricter borrowing criteria, according to Paul Smith, chief executive officer at haart. ‘Lenders are keen to grow market share so first time buyers and ladder steppers alike are currently benefiting from a new range of excellent mortgage deals. Pre-election calm has descended on the market but savvy buyers and sellers will run with the window of opportunity that this creates,’ he said. Peter Rollings, chief executive officer of Marsh & Parsons, believe that there is a renewed spring in the step of mortgage lending this October. He pointed out that the introduction of the Mortgage Market Review and stricter affordability regulations in April have not clouded the overall progress that has been made over the past year. ‘With an interest rate rise not expected before late next year, spurring on a host of attractive mortgage products, buyers and sellers still have a lot to be feeling confident about,’ he explained. ‘Calmer trading conditions, more choice on the market, and less fierce competition will ensure activity finishes on a strong note at the end of the year,’ added Rollings. Continue reading
Concerns over watering down of affordable housing commitments
Property experts are warning of an affordable housing time bomb in the UK which needs addressing to ensure enough homes are not only built but in the pipeline to cover future demand. It follows a recent case where a new appeal mechanism to remove the obligation of a developer to provide affordable housing was implemented and may open the flood gates for others to follow suit. Prior to the recession, many property developments were granted consent on the basis that, under section 106 agreements, a certain percentage of what was to be built would be earmarked for social housing. However, as the downturn began to bite, many developers found that the projects they were involved in were becoming increasingly unviable and sought to reduce the number of these properties and replace them with dwellings for private sale. Before 2008, local councils were able to stand their ground with regard to social and affordable housing requirements. But as the recession took hold and developers started to withdraw on their affordable housing commitments, councils were held over a barrel. It now seems that a new mechanism introduced through the Growth and Infrastructure Act 2013 is being used by developers to reduce their affordable housing commitments and follows a number of recent cases where the affordable housing requirements were reduced. This includes a development in Gloucestershire where the affordable housing commitment went from 20% on one site and 30% on a second site to 14.1% across the two. Another case in Exeter resulted in the affordable housing provision being reduced to zero. Angus Taylor from property consultants Bruton Knowles now believes that developers and councils need to work closely together before committing to a scheme so that a reasonable balance is struck between the provision of affordable housing stock while allowing developers to make any scheme viable and profitable. ‘Although we’re coming out of the recession, I believe there is going to be more cases where developers appeal on their affordable housing commitments. Coupled with a reduction in the number of affordable houses being built during the recession has made for a perfect storm in affordable housing provision,’ he said. ‘What’s key is that developers undertake stringent viability studies prior to the submission of any planning application. That way they know what the bottom line will be before any work is carried out,’ he explained. ‘Councils also have to be reasonable in their demands on what they’re asking developers to provide, otherwise nothing will get built leaving a shortfall of both private and affordable housing. What we don’t want is for this ruling to turn into a free for all where developers en masse appeal against their prior commitments,’ he added. Continue reading
UK buyers better off than renters after five years, new study has found
Buyers in the UK are better off than renters within five years on average as a result of equity outstripping the value of savings, new research has found. While home owners with mortgages pay £316 more on average per month compared to those renting equivalent properties, they become better off after a few years, according to the study from property website Zoopla. The research also shows that the average monthly rental across the UK currently stands at £865 per month versus an average monthly mortgage repayment of £1,181. But while renters may pay less each month, owners recoup their initial costs and become better off than renters within five years on average as a result of the value of equity outstripping the value of savings. And after seven years, the average owner is £13,850 better off compared to an equivalent tenant. Aberdeen, Dundee and Glasgow are currently the most cost effective towns for buying versus renting, as the average monthly mortgage repayment is less than the average rent. At the other end of the scale, Bournemouth, London and Huddersfield are the most cost-effective places for renters due to higher property prices relative to rents for equivalent properties. London owners pay nearly £1,790 more a month than the average renter in the capital. ‘People who invest in property are playing the long game. While buyers have to swallow the initial upfront costs of purchasing a property, they ultimately reap the benefits over renters down the line,’ said Lawrence Hall of Zoopla. He explained this is due to building up equity in an asset that they will own by the end of the mortgage term. ‘With the strong house price growth we’ve experienced this year and interest rates still low, saving for even a 10% deposit takes its time,’ he added. Continue reading
