Tag Archives: shows
UK buyers want a return to 100% mortgages
Half of home buyers in the UK would welcome a return to 100% loan to value mortgages to jump the hurdle of not being able to save a big enough deposit, a survey has found. The poll of 2,000 people reveals that half of those who plan to buy a home within the next two years are in favour of a relaxation of the lending criteria including 100% LTV mortgages. The research by lender and mortgage broker Ocean Finance also found that buyers of all ages want to see lenders offer zero deposit mortgages again, with those aged 25 to 34 most keen. 100% LTV mortgages disappeared as part of a major overhaul of the financial market that led to the Mortgage Market Review (MMR) being introduced in April 2014. The Review, the biggest piece of mortgage regulation in a decade, tightened the rules on the size of deposit required to get a loan. It also placed responsibility on lenders to ensure borrowers only get a mortgage they can afford. In practice, the new regulations have meant that borrowers face increased scrutiny about their income and spending, and often need to save large deposits to gain approval for a mortgage. ‘Buyers would welcome a return to 100% LTVs and many lenders would like to offer them,’ said Gareth Shilton, Ocean’s spokesperson. ‘Many people trying to get on to the housing ladder struggle to get enough cash together for a deposit, then house prices rise further, and they find themselves stuck on a never-ending treadmill,’ he pointed out. ‘The Mortgage Market Review states that lenders must ensure buyers can afford a mortgage. So it’s frustrating for those buyers who are able to prove they can afford a mortgage, but can’t raise a deposit because of their rent and living costs,’ he explained. ‘It would be a brave lender who is the first to go back into the mass market with 100% LTVs, although others would no doubt follow suit,’ he added. Continue reading
Scottish farm land market subdued but the best still sells well
Weak commodity prices, increased acres on the market and reduced subsides have subdued the Scottish farmland market yet, a new analysis report suggests. But the very best land has continued to achieve record prices, according to the latest data from real estate firm Savills. The statistics also shows that supply in Scotland was up by 23% this year in the 12 months to the end of September to 37,000 acres compared with the same period last year. ‘With UK farm debt at a record high, and prospects for improved commodity prices looking gloomy, more farms are likely to appear on the market in 2016 and this may have an impact on land values,’ said Luke French of Savills. ‘However with farmland supply at record lows, the fundamentals for why land is a good long term investment remain the same,’ he added. The Savills report says that there is a margin of around 20% to 30% between the average price per acre for prime arable land in England compared to Scotland and that is continuing to attract national interest in Scotland’s farms from those seeking to expand their farming businesses. Despite a good harvest in terms of yield, changes to the support system and continued poor commodity prices have created a tougher market, the report points out and units are taking longer to sell as more due diligence is undertaken and funding arranged. At the same time, it adds that buyers have become more discerning, resulting in a more fragile market and values out with local hot spots have plateaued across the board and are under pressure, as has been evident in some recent sales. ‘What is very evident is the resulting regional variation in average land values across all land types. Best in class continues to sell and sell well,’ said French. He gave as an in the Spring of 2015 in the lead up to the General Election in early May when Mains of Ravensby, a 190 acre arable farm on Angus, sold in five weeks after a highly competitive closing date, at a record price per acre. According to Savills buyers of Scottish farms continue to be predominantly farmers, many with funds from renewable projects and development land, in contrast to the English market where the lifestyle buyer has returned to the list of active purchasers in 2015. Continue reading
Most UK home owners don’t know the rebuild cost of their property
The majority of home owners in the UK don’t know the rebuild cost of their home and many think it is the same as the value of their property, a new survey has found. Overall some 67% of home owners said that they don’t know how much it would cost to rebuild their home if it was destroyed and 35% thought it would be the same as the valuation. This means that they are probably not insured properly should the unthinkable happen and the property is badly damaged and needs to be rebuilt, according to the research from insurance firm SunLife. ‘When you buy buildings insurance, you will need to know the rebuild cost of your home, which is the amount it would cost to completely rebuild your home if it was destroyed beyond repair,’ said Simon Stanney, director of insurance at SunLife. ‘Unfortunately, two thirds of home owners don’t actually know what this is or how calculate it properly. Contrary to popular belief, it is not the same as the current market value of the property,’ he added. He explained that having an accurate figure can help prevent over or under insurance. If you over insure, you could be paying out hundreds of pounds in unnecessary premiums, but if you underinsure, the consequences could be very serious. ‘In the unfortunate event that your home requires a complete rebuild and your buildings insurance is not sufficient, you will be left to cover any difference in price. Worse still, if your property is mortgaged you could be left with no home and thousands to pay back to your lender,’ Stanney explained. He pointed out that the best way to get an accurate rebuild cost is to get a surveyor to carry out detailed measurements of a home and then prepare a professional Rebuilding Cost Assessment which generally costs around £250. However, the survey found that only 8% of home owners do this. ‘Most people either don’t want to or cannot afford to spend this kind of money,’ said Stanney, adding that the research found 22% said they had calculated the rebuild cost themselves and 30% just leave it, hoping the insurer will estimate it for them. There are tools available, for example, the rebuild cost calculator from the Royal Institution of Chartered Surveyors which needs a property’s external floor area for both upstairs and downstairs as well as what it is made from, the type of house, and how old it is. The other way to avoid the issue of over or under insurance is to shop around for a policy that doesn’t ask the question. There are a number of providers out there that offer buildings insurance with a standard rebuild cost cover, including SunLife. ‘Despite the fact our research shows that most people don’t know what rebuild cost is, many policies still ask for it, and this is an example of how some insurers are not thinking enough about their customers. At SunLife we’re doing… Continue reading
