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Over a third of UK self-employed think they can’t get a mortgage
Some 38% of self-employed people in the UK interested in taking out a mortgage are concerned they’ll never get one because they work independently, new research has found. On top of this 63% of microbusiness owners think the self-employed have to jump through more hoops than traditional employees, with it being especially difficult for those new to freelancing. And 61% think mortgage advisors do not understand their financial situation while 45% think mortgage providers don’t want them as customers, according to the research carried out by IPSE, the Association of Independent Professionals and the Self Employed. The research also found that 61% believe it’s more difficult to supply the financial information required when applying for a mortgage if you’re new to independent working To ensure more self-employed people can access a mortgage, IPSE is calling for mortgage advisors to be given better advice on independent working and a Government review into lending to independent professionals. ‘Getting a mortgage is a major concern for the self-employed, despite 4.5 million people choosing to work independently in the UK. The whole culture around mortgage lending to the self-employed needs to be changed to accommodate the modern way of working,’ said Chris Bryce, chief executive of IPSE. “It’s crucial that better advice is given to mortgage advisors to provide them with a better understanding of independent working to ensure the self-employed are treated fairly. A dedicated member of staff is another way to achieve this,’ he pointed out. ‘The Conservative Party made a commitment to review mortgages for the self-employed in its business manifesto and we look forward to working with the new Government on this important area,’ he added. According to Paul Winter, chief executive of the Ipswich Building Society, too many credit-worthy borrowers with unusual circumstances are overlooked by mainstream mortgage lenders. ‘Our view is that mortgage misfits, including the self-employed, freelancers and contractors, should have the same level of choice and access to the mortgage market as any other group,’ he said. IPSE has issues some top tips for the self-employed seeking a mortgage. Top is ensuring that you have proof of income as self-certifying your income is a thing of the past and you now need to show you earn the money you say you do. If you have a company, this can be company accounts, otherwise other proof may be needed such as paid invoices, or even pay slips from employed work in a similar field over the last two years. Applicants also need to show that they will continue to get work and this can be done by showing you have had contracts renewed in the past or showing you have worked lined up. If you do not you may need to show you can meet mortgage payments with saving for at least a couple of months. … Continue reading
Surge of new home sales in the US due to demand outpacing supply
New home sales in the United States surged in April and they are selling quickly as not enough are being built to meet demand. Specifically, new home sales rose 26% from one year ago in April to an annualised pace of 517,000 annualised pace, the third highest monthly activity in eight years, according to data from the National Association of Realtors. The data also shows that the median price was $297,300, which is 8.3% above last year’s price and on average it took four months to find a buyer. The gap between new home price and existing home price still remains very wide, however, and according to Lawrence Yun, Nar chief economist, it implies that existing homes provide a relatively better bargain in relation to newly constructed homes. ‘Even though new home sales are rising strongly in percentage terms, they are only at about half the activity as during the bubble years nearly a decade ago. This implies, first, that today’s strong activity is not likely to be a bubble. Second, there is more room to grow,’ Yun explained. He also pointed out that the median number of months to find a buyer of new homes remains near historic lows. ‘Given the low supply of both existing and new home inventory, as evidenced by low months supply of inventory, there is zero concern over any over production,’ he said. For the year as a whole, new home sales are projected to rise by about 30% in 2015 and then another 20% to 25% in 2016. ‘It’s a good time to be a home builder. If only the banks would make more construction loans or, depending upon your point of view, if there were less financial regulations to permit banks to make more construction loans,’ Yun added. Continue reading
Long term outlook for UK prime country market looking positive
The long term outlook for the UK’s prime country property market is positive, but the election result is unlikely to lead to significant price growth, according to a new analysis. The result of the General Election has marked an end to the uncertainty experienced in the UK prime markets in the run-up to polling day, when concerns about taxation and personal finances led to weaker demand at the start of 2015, the Knight Frank report points out. Indeed, it shows that annual price growth had slowed to 2.5% by March, down from 5.2% in the second quarter of 2014 but prices have risen by nearly 1% so far this year and by 2.5% annually. ‘We now expect there will be more positive trading conditions as buyers and vendors return to the market. Transactions, which had been put on hold pending the outcome of the vote or as a result of a wider sense of political uncertainty, will proceed,’ said Oliver Knight of the firm’s residential research unit. However, prices remain below peak levels, creating an opportunity for buyers and prime market activity has picked up over the last 12 months,’ the report also says. ‘With a Conservative Cabinet, the possibility of a mansion tax for properties valued at over £2 million has gone. Now, one of the key questions is what effect a more certain political environment will have on prices,’ explained Knight. ‘While the confidence engendered by political stability is expected to result in a rise in market activity, any expectations that prices will jump significantly as a direct result of the general election may be unrealistic. ‘Any market is based on supply and demand and the number of new properties coming to the market is expected to increase. This rise in supply, together with uncertainty as to the precise direction of fiscal policies of the new government is likely to mitigate significant price rises,’ he pointed out. ‘Additionally, higher purchase costs as a result of the increase in stamp duty announced in December need to be considered. As a result of that change, the up-front cost of buying a property valued at more than £937,500 has risen,’ he added. The report says that overall the long term outlook for the prime country market is positive as for now interest rates remain at record low levels, economic growth is steady and mortgage rates are competitive. ‘As the economy continues to improve the ripples of demand from London will strengthen. Popular commuter locations, within easy reach of the capital, are likely to be the biggest beneficiaries,’ said Knight. ‘There has already been an increase in the number of buyers looking to exploit the relative price gap that has opened up between London and regional prime markets and the expectation is that this will continue,’ he concluded. Continue reading
