TSI
Equity release by UK home owners reaches new record
Equity release lending in the UK reached a new high of £1.61 billion in the final quarter of 2015 as home owners over the age of 55 unlocked a record amount of housing wealth, new data shows. Lending via drawdown products totalled £271 million between October and December 2015, the largest quarterly total since this type of lifetime mortgage first emerged in 2004, the data from the Equity Release Council sows. Some 70% new plans agreed in the fourth quarter of 2015 were drawdown, up from 63% in the previous quarter as more people opted to withdraw their housing wealth in stages to boost their retirement income as and when they need it. Drawdown lending for the whole of 2015 was also the highest on record at £961 million. It pushed total equity release lending activity by members of The Council to an unprecedented £1.61 billion, up 16% from £1.38 billion in 2014. Last year saw more than 22,500 new plans agreed for the first time since 2008. At 22%, the year on year lending growth rate in the final quarter of 2015 was the largest of any quarter last year, despite a slight dip in quarterly lending from £453 million in the third quarter to £445 million. Since falling to a post-recession low of £789 million in 2011, annual equity release lending has more than doubled in the last four years and now exceeds its pre-recession peak of £1.21 billion. Over the whole of 2015, drawdown lifetime mortgages accounted for 66% of new plans agreed, while lump sum lifetime mortgages made up 34% and home reversions were below 1%. ‘These year-end figures are the latest sign of growing reliance on housing wealth as a key pillar of later life financial planning. The rising popularity of drawdown has been one of the success stories of the last decade, and product features have since appeared allowing customers to protect a percentage of their equity as an inheritance, make part-repayments of capital or make interest repayments on their loan,’ said Nigel Waterson, chairman of the Equity Release Council. ‘Looking ahead, the challenge is to continue developing products which meet consumer needs while ensuring that innovation is combined with protection and long- term sustainability. The work led by The Council and its members to uphold standards for equity release products and advice has been fundamental to creating a safe market for consumers, and we will continue these efforts to meet growing customer demand alongside regulators and the Government,’ he explained. ‘Housing wealth is often people’s greatest asset and it makes sense for equity release to be on every homeowner’s checklist to consider as part of their retirement and estate planning. At the same time, it is not suitable for every circumstance, which is why professional financial advice and independent legal advice are essential so that customers understand how the products work, and what they can offer…. Continue reading
Fewer foreigners buying in France as housing market shows signs of improvement
Foreign buyers are not yet returning to the French property market with the latest figures from Notaires showing that numbers have dropped almost threefold in the last decade. Overseas buyers made up just 1% of property sales in 2015 compared to the peak of 2.8% in 2006, just before the global economic crisis. This number dropped to 1.4% by 2014 and then to 1% in 2015 and numbers are not likely to rise much in 2016. But there are signs that the property market in France is picking up with figures, which exclude new builds, from the Notaires showing that overall house prices increased by 0.4% in the final quarter of 2015 while apartment prices rose 0.3% in metropolitan areas, but are down 1.6% and 1.9% year on year respectively. In Paris and the surrounding area house prices increased by 1% in the third quarter of 2015 and apartment prices were up by 0.7%, House prices are now down 1.1% and 1.3% year on year respectively. In rural areas house prices increased by 0.2% quarter on quarter but apartment prices fell by 0.1%. House prices are down 0.7% year on year and apartment prices down 2.3% year on year. They predict a stable market in the coming months with apartment prices up around 0.4% and house prices by 1.4% by the end of the first quarter. The report adds that a year on year rise in sales of 12.5% up to the end of November 2015 bodes well for the market in 2016. This level of sales has not been seen since Spring 2012. British buyers still make up the majority of overseas buyers, purchasing some 32.6% of foreign bought property in 2015. The next most common nationality was Italian, at 15.3% and Belgians at 11.1%. The most popular parts of France for British buyers remain old favourites like Normandy, Brittany, the Dordogne and the Loire. They buy just 7% of foreign owned property in Paris. In Normandy and Brittany some 72% of buyers are British, 10% Belgian and 3% German, while next door in an area covering the Loire and Dordogne some 78% of foreign buyers are British, 6% Belgian and 5% Dutch. The British are also the biggest group of foreign buyers in Aquitaine and along the Spanish border towards Provence at 42% with 15% Belgian and 12% Spanish or Portuguese. While in the Alps and down the Rhone some 32% are British, 22% Swiss and 12% Belgian. In PACA the largest group of foreign buyers are Italians at 28%, British at 15% and Scandinavians at 12%. In the North East 28% are Belgian, 17% British and 14% Dutch while in an around Paris 20% are Italians, 8% American and 7% British. Despite the fall, the report from the Notaries’ indicates that the financial climate for foreigners, particularly British people due to currency rates, for buying a house in France remains positive. The Notaries’ report says that since the Spring of 2015 the… Continue reading
Prime property rents in Home Counties in UK fell at end of 2015
Rents in the prime country house market in the UK’s Home Counties fell by 0.3% in the final three months of 2015 but were up 4.3% year on year, the latest index data shows. It follows a 0.8% drop the previous quarter but overall higher stock levels have ensured greater flexibility from landlords on rents, tipping the balance in the favour of the tenant, according to the prime country index from Knight Frank. It points out that in 2015 landlords looked to keep void periods to a minimum and remain competitive while agents noted that the number of properties available to rent across the Home Counties has been steadily rising over the last year. The report reveals that an increasing number of owner occupiers have been entering the prime rental market as higher tax burdens are felt by potential buyers. The data also shows that that the number of individuals registering their interest in renting in the Home Counties between October and December was up by 10% year on year and the total number of viewings conducted was up by 22% over the same time. As ever demand from individuals relocating for work, both locally and from overseas, continued to form a significant proportion of the market in the fourth quarter with a number of move-ins scheduled for early 2016, especially in the prime commuter hotspots of Ascot, Cobham and Esher. In 2015, around 40% of Knight Frank tenants in the Home Counties were from overseas, led by Europeans who accounted for 14% of all tenancies agreed and North Americans who accounted for 13% of all tenancies agreed over the period. Demand has generally come from professional couples and families, looking for flats and small houses. In the super prime market, for properties above £15,000 per month, larger budget tenants have been less active. Continue reading
