Thursday, 26 February 2015

UK buy to let mortgage lending rocketed in last 1/4 of 2014



Lending for buy-to-let soared by 26% during the last three months of 2014, far outstripping the growth in lending to first-time buyers, according to figures from the Council of Mortgage Lenders.

Banks and building societies handed loans worth £7.7bn to landlords in the fourth quarter of 2014, up 32% on the same period a year earlier. Meanwhile lending to first-time buyers was £11.6bn, down 2% on the previous quarter but up 5% over the year.

The number of loans for buy-to-let across the whole of 2014 totalled 197,700, up 23% compared to 2013. Mortgages awarded to first-time buyers also increased during 2014, but at a slower pace. First-time buyers in 2014 took out 311,500 loans, up 15% on 2013, boosted by the government’s Help-to-buy scheme.

Total lending for house purchase rose 1.5% month-on-month in December, although it was down by 5.1% year-on-year.

The figures will add to the growing controversy over the decline in home ownership in the UK and the scale of tax breaks given to landlords. Figures from campaign group Generation Rent suggest landlords could be gaining as much as £26.7bn a year from the taxpayer, equal to £1,011 each for the country’s 26.4m households.

Separate data from the Office for National Statistics on the property market during 2014 also confirm the slowdown in price increases in the latter part of the year. It said house prices rose 0.7% month-on-month in December after rising just 0.2% month-on-month in November and 0.1% in October. The year-on-year increase in house prices moderated to a nine-month low of 9.8% in December from 9.9% in November and 12.1% in September (the highest rate since July 2007).

The London market is coming off the boil, with the annual rate of increase in prices in the capital falling back to an 11-month low of 13.3% in December from a peak of 20.1% in May 2014. However, annual house price inflation outside London moved up in December to 8.5%

The average UK house price in December 2014 was £272,000, up £1,000 from November 2014 but below the peak of £274,000 in August.

Shelter’s chief executive, Campbell Robb, said: “Another rise in house prices is yet another blow to the millions of people across the country with barely a hope of getting on the housing ladder, no matter how hard they work or save.

“When young people have to save for more than a decade before they can scrape together a deposit, and their only choice in the meantime is to remain stuck in their childhood bedrooms or paying out dead money to landlords, there is a serious problem. The only way to solve this problem once and for all is for politicians to finally commit to building the genuinely affordable homes we desperately need.”

Source: www.landlordexpert.co.uk

Wednesday, 25 February 2015

More people are now mortgage-free than have loans


More people now own their home outright than have a mortgage, it emerged last night.

A third of households in England – some 7.4million families – now own their home mortgage-free, compared to 6.9million who have a loan.

This is the first time debt-free households have overtaken those with mortgages since records began in 1981.

Some 7.4million buyers in England now own their home outright compared to 6.9million who are paying off a mortgage, the first time debt-free households have topped those with loans
Some 7.4million buyers in England now own their home outright compared to 6.9million who are paying off a mortgage, the first time debt-free households have topped those with loans

But home ownerships overall have plummeted to the lowest level in 30 years and campaigners warn soaring house prices have put owning a home out of reach for many.

In 2013-14, some 33 per cent of households owned their home mortgage-free while 31 per cent were paying off a loan, according to the English Housing Survey.

It is a dramatic change from 2000, when 28 per cent owned outright and 42 per cent had a mortgage.

The change is partly due to record low interest rates that have allowed many to pay off their mortgages quicker than expected.

An ageing population has also contributed, as baby boomers who bought when property was cheaper now find themselves debt-free in retirement.

But the drop in the number of people with mortgages is also driven by soaring house prices, which have made home ownership too expensive for many, forcing them to rent for longer.

The survey revealed that just 63 per cent of households now own their homes, with or without a mortgage – the lowest rate since 1985.

This is the 11th year in a row home ownership has declined. The younger generation has been hardest hit, with just a third of those aged 25 to 34 having a mortgage, compared to more than half ten years ago.

The growing cost of owning a home has also been reflected in Bank of England figures on debt. At the end of 2014, UK households owed £1.26trillion in outstanding mortgage debt – more than double the £550billion owed in 2000.

Campaigners said the English Housing Survey figures revealed a disturbing generation gap was opening up, with fewer young Britons able to obtain a mortgage.

Campbell Robb, chief executive of the charity Shelter, said: ‘These figures confirm what millions of people across the country are already feeling: a home of their own has become a distant dream, no matter how hard they work or save.

‘The shortage of affordable homes is leaving young adults with no choice but to remain stuck in their childhood bedrooms, or face decades paying out dead money to landlords. This can’t go on.’

David Orr, of the National Housing Federation, said: ‘The fact that the number of people owning with a mortgage is falling is a clear sign that it’s becoming more and more difficult to get a foot on the housing ladder.

‘Priced out of the housing market, young people are stuck in a cycle of private renting at an ever escalating cost that drains them of any spare money they could have saved for a deposit.

‘As house prices continue to rise we’re in danger of winding back the clock on home ownership, with only the privileged few having any hope of affording it.’

Estate agents Savills warned that the levels of home ownership will continue to slide due to higher interest rates, greater mortgage regulation and an acute housing shortage.

House building across England remains at its lowest peacetime level since the 1920s, pushing up property prices further.

The Government has tried to increase home ownership through its Help to Buy scheme, which offers people lower deposits.

Housing minister Brandon Lewis said: ‘Thanks to Government-backed schemes, nearly 192,000 people have bought or reserved a new home, and thanks to our efforts to keep interest rates at their record low we’ve helped keep mortgages more affordable.’


Source: www.dailymail.co.uk

Tuesday, 24 February 2015

Confidence in property market reaches three year high in UK

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Confidence in the UK property market has reached a three year high, according to new research from Clydesdale and Yorkshire Banks.
 
Almost a quarter of people plan to change their current property either by extending or carrying out home improvements, the research found. A further 14% said they want to sell their house in the coming year.

Finances are also high on the agenda with 11% planning to either pay off their mortgage, make overpayments or re-mortgage in the coming 12 months.

The results, which show a consistently improving picture in the three years since homeowners were first asked about confidence levels, were revealed in the latest Annual Housebuyers Survey by the Banks.

The survey supports the latest findings from the Council of Mortgage Lenders which reported that 2014 lending levels were the highest since 2007.

Among those surveyed by the Banks in 2013, 62% of people said they planned to simply stay in their current home. The figure dropped to 58% a year later and dipped by a further 17% to 41% in 2015.

Of those planning a move in the next 12 months, Londoners are most likely to move with 22% putting up a For Sale sign. Within that group, some 8% of Londoners plan to move up the property ladder, a further 8% have aspirations to relocate and 6% hope to downsize. In contrast only 10% in Scotland and 8% of those in Yorkshire plan to move in 2015.

The optimism can also be seen with 44% expecting the value of their home to increase, while 54% think it will remain the same. Men are more optimistic about an increase with half of those surveyed anticipating an increase in value compared to 38% of women. Of those who believe the value of their home will increase the main reason is the increase in property prices in their local area, as well as an upturn in demand.

Confidence is at its highest in London where 64% believe their property will increase in value in 2015 in sharp contrast to Wales where just less than a quarter, 24%, share a similar view.

‘We have seen optimism returning to the property market over the last few years and this seems to be growing with more people planning house changes whether it is to move, make home improvements, pay off their mortgage or even help a family member to get onto the property ladder,’ said Steve Fletcher, head of Clydesdale and Yorkshire Banks Retail Network.

‘Whatever the circumstances Clydesdale and Yorkshire Banks have a range of products to suit different needs and budgets and to help make the UK's property aspirations for 2015 a reality,’ he added.

Source: www.propertywire.com

Monday, 23 February 2015

Signs of a strong house market recovery in the UK regions

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The outlook for the UK housing market in 2015 is positive, despite some challenges, with signs of a strong recovery in the regions, according to the latest quarterly analysis report.


National estate agent Strutt & Parker is forecasting UK house price growth of 5% in 2015 overall and 9% in the Greater London area. But prime central London is expected to stagnate at 0%.

According to Stephanie McMahon, head of research at Strutt & Parker, there is still an imbalance between London and the rest of the UK but there are signs of strong recovery in the regions as buyers outside the capital look for affordability.

‘The holding off of interest rate rises, now not expected before autumn 2015 at the earliest, is a big positive. This combined with continued wage growth and low inflation, should give the national market the momentum it needs. We should see a flurry of activity up until the autumn as buyers take advantage of the low interest rate environment,’ she explained.

As part of the report, Strutt & Parker with its retained economic advisors Volterra, also analysed the behavioural profiles of its buyers who purchased country homes in the £2 million plus market outside of London throughout 2014.

It was clear that the majority, 79%, were buying a large country home for their primary residence while for 13% it was a second home and 8% were buying as an investment.


The firm believes that this could be linked to the increasingly high cost of buying and moving, meaning that people are choosing to buy one large house rather than two smaller ones or numerous buy to let investment properties.

‘The beginning of 2015 has seen a significant increase in new applicants registered with us looking for prime properties in excess of £2 million. We are witnessing at least double the amount of potential purchasers enquiring about properties we are currently offering or are now bringing to the market,’ said James Mackenzie, Strutt & Parker’s head of Country Department.

‘However, our viewing levels are not higher, which would indicate that there are a significant number of people who are beginning to look at moving but are waiting to see what the market has in store for this year,’ he added.

The report shows that 2014 saw a significant increase in the number of transactions compared to 2013 especially in the regions outside of Greater London, as well as in Scotland, both of which recorded 7.8% and 11.6% growth respectively. In Scotland, 93,972 homes were sold in 2014, worth a total of £15.4 billion.

In Greater London, 110,417 homes were sold in 2014, worth a total of £57.8 billion. ‘Given the pending election, we are pleasantly surprised at the levels of activity, most specifically in those areas closest to London, in the sub £2 million market,’ said Guy Robinson, head of Regional Residential Agency at Strutt & Parker.

Source: www.propertywire.com

Sunday, 22 February 2015

Derbyshire town named as a UK property 'hot spot' as house sales boom


Alfreton's good road links and surrounding countryside are making it increasingly popular with home buyers.

Alfreton's good road links and surrounding countryside are making it increasingly popular with home buyers.


A DERBYSHIRE town has been identified as a property "hot spot" after recording the second-highest number of house sales anywhere in England and Wales last year.

According to the latest Lloyds Bank property sales report, published today, Alfreton saw one of the highest increases in transactions in the first 10 months of 2014.

The report said that, compared to the same period in 2013, house sales grew by 53%. This was second only to Daventry, in Northamptonshire, where sales increased by 56%.

The Lloyds report tracks home sales movements across England and Wales. It is based on Land Registry data and covers 400 postal towns and London boroughs.

The report said: "Four towns recorded a 50% or more increase in sales between 2013 and 2014, with the biggest rises in Daventry (56%) and Alfreton (53%).

"Both towns are in the East Midlands, with the region accounting for four of the ten towns recording the largest sales rises."

Overall, Lloyds found that property sales across England and Wales were 21% higher in 2014 compared to the previous year – the highest since 2007, before the recession hit. All the regions saw rises, with the East Midlands leading the way with 26%, followed by the West Midlands at 25%.

Andy Hulme, mortgages director at Lloyds Bank, said: "The recovery in the housing market continued in 2014, with sales rising further in almost all areas of the country.

"Low interest rates, improvements in the UK economy and Government schemes such as Help to Buy, all appear to have contributed to the rise in home sales. Despite these improvements, sales both nationally and regionally are still significantly below their pre-recession levels."

Residential property expert Chris Brown, a director at Derby-based Sowter and Brown, said: "I have for some time thought that Alfreton is seriously underrated as a place to live.

"It is definitely a place on the up. Viewed by an outsider, the road communications are excellent, the town itself is more than adequate and the surrounding countryside is great for walking, with good stone-built Derbyshire pubs.

"Local schooling is good and employment is solid. In the Alfreton area you can buy a less expensive house offering larger accommodation at an affordable price – and that is why it's the place where more sales are going through."

Yesterday, Graham Penny Auctions held its first sale of the year at the iPro Stadium – with a number of Alfreton properties among the lots.

Director John Fearnehough said: "One property in the Alfreton area had a starting price of £65,000 and made £92,000. Another listed at £68,000 went for £94,000.

"There was a lot of interest in both and although they made good money, in comparison to other areas, they still represent good value. I think that is why Alfreton is proving so popular."

Source: www.derbytelegraph.co.uk

Thursday, 12 February 2015

Will pension freedoms spark buy-to-let boom?



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Brokers say improving market conditions, regulatory shifts and new pension freedoms have combined to make the buy-to-let sector the most attractive lending proposition in 2015.

A string of new entrants have either already joined the UK buy-to-let market in recent months or are planning to do so in the coming months. State Bank of India, which rejoined the sector last year after an 18-month absence, started to distribute through the broker channel last month and fellow Indian-based lender Axis Bank is rumoured to be weeks away from its own launch.

New specialist buy-to-let lender Foundation Home Loans is also close to launching into the market and Council of Mortgage Lenders data shows it is a market in the midst of a resurgence. Since 2009, the market has grown each year up to 2013, when a total of £20.7bn was advanced to landlords.

MMR slowdown

Tighter regulations placed on residential lending by the Mortgage Market Review have squeezed lenders’ margins, forcing them to consider other sources of revenue such as buy-to-let.

The new regulations were blamed for a dip in mortgage approvals over the summer, while British Bankers’ Association figures published in December showed year-on-year lending by the UK’s six largest lenders fell 12 per cent to £10bn.

Mortgages for Business managing director David Whittaker says: “Lenders who are struggling to match their ambitions with the state of the residential market will be looking to the buy-to-let space to make up for a lull in volumes.”

He adds that greater margins in buy-to-let lending will make it a more attractive market to new entrants.

“Any new lender at the moment will also be focused on buy-to-let quite simply because the returns are greater,” he says.

“If you look at the treatment of buy-to-let loans on a lender’s balance sheet, it is the same risk capital as residential loans but pays a higher percentage and bigger fees, without the regulatory overtones.”

TBMC managing director Andy Young says: “If lenders have been hit in terms of what they can do in the residential side of the market, they will naturally look to buy-to-let, which has really come on in recent years.

”Arrears are down, margins are good and there is an appetite to lend, so anyone new looking to lend in the UK would probably see landlords as their best bet.”

A boom from the pensions reforms?


The pension freedoms announced in Chancellor George Osborne’s Budget last year are another potential gift for the buy-to-let market. Following the announcement that anyone aged 55 or over would be able to access their entire pension pot from April 2015, experts forecast a boom in buy-to-let investment.

Buy to Let Club managing director Ying Tan believes the changes are likely to provide a boost for the market but says pension holders may not have the required risk appetite for investing in property.

He says: “The pension freedoms set to come in will help of course, but I wonder if most pension pots are big enough to buy a property and whether people who have saved into a pension have the kind of risk appetite to take on an investment property.”

However, a Bank of Ireland study in November found that 29 per cent of retirees nationwide were planning to use their pension to buy property.

John Charcol senior technical manager Ray Boulger says: “There is a definite logic to savers using their pensions windfall to invest in property. House prices will continue to rise despite the efforts to boost supply, and I think those who are smart enough to save a decent amount over their careers will also see the sense in property investment to gain better yields.”

A cleaner market?


The buy-to-let market has largely “cleaned” itself in the years following the crisis, says Tan, making it a better proposition for lenders. The credit scoring process, in particular, has improved, leading to falling arrears in the buy-to-let market. CML data shows the percentage of buy-to-let loans in three months or more arrears has fallen from 2.31 in 2008 to 0.92 per cent as of 2013.

Tan says: “I’ve been in the market through good and bad times and right now buy-to-let is as strong and as clean as it has ever been, so it makes perfect sense to see lenders joining the market now.

“If margins are best in buy-to-let and arrears levels are low, why wouldn’t you want to get into that market? Often you think if margins are higher than its riskier but if both margins and arrears are favourable, it’s a great time to enter.”

Source: www.moneymarketing.co.uk

Wednesday, 11 February 2015

UK buy to let sector surging ahead, it is claimed

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 The UK’s buy to let sector surged ahead of other areas of the housing market in January, according to the latest research from Connells Survey and Valuation.
While most of the housing market began the year with a subdued outlook, buy to let bucked this trend and was the strongest performing sector with 37% growth in activity since the previous month, and on an annual basis the smallest dip of just 4%.


It means that the sector has bounced back from a disappointing performance in December 2014 when it recorded one of the biggest monthly falls, according to John Bagshaw, corporate services director of Connells Survey & Valuation.

He believes that as landlords are now ‘spoilt for choice’ with a record number of mortgage products to choose from, they are beginning to invest more. Low mortgage rates have also continued, posing even more attractive deals for potential landlords or those expanding portfolios.

The first time buyer sector of the housing market was the only other sector which saw a monthly increase in valuations activity. On a month on month basis, activity for first time buyers increased by 3% though on an annual basis it saw one of the biggest falls of 28% compared to January 2014.

‘First time buyer activity increased on a monthly basis despite a stark contrast in performance with January 2014 when this sector had dominated the housing market. This was largely due to the flurry of activity as customers rushed to secure deals before the Funding for Lending Scheme (FLS) stopped mortgage funding at the end of January 2014. At the time the policy had boosted the housing market, particularly first time buyers by lowering mortgage rates,’ said Bagshaw.

‘Since then however, a series of policies have been introduced that have restricted lending criteria which have affected first time buyers more than other sectors and consequently had a major impact on demand. However, this month on month growth is encouraging and indicates that as the sector stabilises and adjusts to the new regulatory landscape, it should continue improving in the coming months,’ he explained.

By contrast, activity for those already on the property ladder has been subdued. On a monthly basis activity dipped by 4%, though compared with January last year, valuations activity fell by a steeper 23%.

Similarly, remortgaging saw one of the biggest falls in activity both on a monthly and annual basis. Since December, recent activity fell by 25%, while compared with January 2014 it decreased by 28%.

‘The current economic outlook indicates that low inflation and therefore the low Bank rate will continue for some time. As a result it appears that this is giving rise to optimism as more borrowers anticipate that lenders will be able to lower their mortgage rates even further. They are now waiting before securing a deal,’ said Bagshaw.

‘However, it is worth noting that current mortgage rates might not get any cheaper as the deflation in the Eurozone may affect swap rates soon. As many households look for ways to cut monthly costs, taking advantage of these rates now is a good idea,’ he pointed out.

Overall, the total activity in January saw a 4% fall since December 2014 while on an annual basis activity was down 23% but Bagshaw explained that the expected post-holiday pickup in activity failed to materialise with the market making a very restrained start to the year.

‘Mediocre comparisons are due in part to the exceptional performance seen in January 2014 as a result of a healthy pipeline at the end of the third quarter of 2013. In contrast, the transaction market slowed dramatically towards the end of last year. However, this slow start is not a cause for alarm as January is typically a slower month with lower volumes of activity,’ he concluded.

Source: www.propertywire.com

Tuesday, 10 February 2015

Buy-to-let 'even more attractive' as mortgage rates hit record lows

Lenders are slashing buy-to-let rates and relaxing lending terms as the 'mortgage rate war' spreads from mainstream to buy-to-let 

Couple looking in estate agents window

The sudden plunge in mainstream mortgage rates - which has seen a number of lenders offer 10-year fixed rate loans at less than 3pc, and sparked a widespread "rate war" - is spreading to buy-to-let.

Specialist landlord broker Mortgages for Business said there were now more than 800 buy-to-let loans available, a number that has grown by more than 100 in three months.

As in the owner-occupier market, borrowers with bigger deposits fare best, but borrowing costs are falling for almost all categories of landlord.

A 40pc deposit and good credit history could garner a landlord a market-leading five-year deal at 4.2pc.

The best two-year landlord loans charge around 3.5pc.

These are substantially lower than even six months ago. Brokers point out that with rents remaining stable or rising, these new, lower-rate mortgage deals offer landlords the opportunity to boost returns.

Moneyfacts, the rates analyst, said the average of all fixed rate loans currently available was now just 3.82pc, which it claims is the lowest it has ever recorded. Variable-rate buy-to-let loans average 3.6pc (see graph, below).

It is also becoming easier to obtain loans with smaller deposits, and lenders are looking more kindly on landlords wanting to refurbish properties or what want to buy properties to let to multiple tenants as HMOs or "houses of multiple occupation".

Sylvia Waycot of Moneyfacts said: “When you consider dire savings rates, it is hardly surprising that buy-to-let is proving popular with investors, and this is likely to increase once new pension rules come into force in April.

"Having had several years of the bank door being firmly shut to only the richest of borrowers, doors appear to not only be open but actively entice you in off the street with offers of fantastic rates.”

Lenders do still apply strict lending limits based around the number of properties a landlord owns, the level of rent they generate and in some cases landlords' other sources of income.

Mark Harris of mortgage broker SPF Private Clients said: "With lenders aggressively competing for business, there are more buy-to-let mortgages available with increasingly relaxed criteria and lower rates - all providing a further boost to an already-popular sector.

"The best rates remain available to those with the biggest deposits, while landlords are increasingly opting for fixed-rate mortgages to provide more certainty and help with budgeting.

"While it is easier to get into buy-to-let now then it was five years ago, it is still harder than it was before the downturn. Lenders have learnt their lesson and are being more cautious."

Source: www.telegraph.co.uk

Monday, 9 February 2015

Buy-to-let investor numbers up 8% last year



The total number of buy-to-let investors in the UK has risen 8 per cent in the last year to 1.63m last year, according to lettings agent Ludlow Thompson.

The net income of these investors reached £13.1bn in 2012 to 2013, again 8 per cent more than the £12.1bn net income in 2011 to 2012.

Record low interest rates on bank deposits and government bonds mean the sector is continuing to attract new money, according to the agent, which suggested that 5 to 6 per cent yields on investment properties remain achievable in some parts of London.

Capital growth for residential property was more than 7 per cent in 2014 and 16 per cent for property in London, compared with the FTSE 100 increasing by only 0.7 per cent in a year.

Stephen Ludlow, chairman at Ludlow Thompson, commented that recent regulatory changes to the mortgage market are making it harder for potential first-time buyers to acquire mortgages – meaning they stay in the rental market for longer.

The firm stated that the popularity of buy-to-let will continue to increase this year, with the reforms to stamp duty announced in the Autumn Statement benefiting investors.

Under the new rules, there will be no tax payable for houses worth less than £125,000, 2 per cent on the portion of any value above this and up to £250,000, 5 per cent on the next portion up to £925,000, 10 per cent up to £1.5m, and 12 per cent thereafter.

“Also, pension changes announced last year, should allow potential investors to use these funds for a property purchase, offering far greater yields than pension funds,” added Mr Ludlow.

At the end of last month buy-to-let specialist Paragon posted an operating profit of £30.9m for the last quarter - a 14.9 per cent increase from the end of 2013 - driven by buy-to-let completions of £222.1m, an increase of 58.4 per cent compared with the same period in the last financial year.

Source: www.ftadviser.com

Sunday, 8 February 2015

New high property investors branch out into regions




London continued its three-year reign as the most active market in the world for property in 2014

30 St Mary Axe, commonly known as the Gherkin


British landmarks, office blocks and shopping centres attracted a record £65bn of investment in 2014, driven by a 70pc rise in the regions.

Overseas investors including high-net worth individuals and sovereign wealth funds have been attracted by the low interest rate environment to plough money into property at a record rate, research from the real estate group JLL found.

London continued its three-year reign as the most active market in the world for property, with domestic and overseas investors spending £27.5bn.

However, it was the new-found popularity of areas such as the South West, the West Midlands and the South East that took UK property investment to a 16pc rise on 2013 levels. Investors sunk £28bn into the regions.

“Overseas buyers stop off in London first before going on to New York,” said Chris Ireland, at JLL. “They then go on to either buy in other European cities or they turn to the UK regions which offer good value.”

Source: www.telegraph.co.uk

Thursday, 5 February 2015

UK house prices jump unexpectedly in January - Halifax



A man walks past the signage of a new property development advertising apartments for 5.5 million pounds sterling in central London July 2, 2014.  REUTERS/Luke MacGregor


(Reuters) - British house prices jumped unexpectedly last month, recording their biggest rise since May 2014, but mortgage lender Halifax said it still expected the overall pace of house price rises to slow this year.

Halifax said that house prices rose 2.0 percent in January from the month before, up from a 1.1 percent increase in December and far outstripping the 0.1 percent average increase forecast in a Reuters poll. ECONGB

Prices in the three months to January were 8.5 percent higher than a year earlier, compared with a 7.8 percent annual increase in the three months to December.

The figures released on Thursday contrast with most other recent housing market data, such as last month's survey by the Royal Institution of Chartered Surveyors, which pointed to the slowest price growth since May 2013.

Britain's housing market has slowed since the middle of last year due to tighter regulation of mortgage lending and buyers' concerns that prices were increasing far faster than wages, though Bank of England data showed mortgage approvals picked up in December for the first time since June.

"These improvements may indicate that the recent declines in mortgage rates, the reform of stamp duty and the first increases in real earnings for several years are providing a modest boost to the market," Halifax housing economist Martin Ellis said.

However, he added that January was also a month when house prices could be particularly volatile due to low volumes, and stuck with a forecast for house price growth to slow over 2015 as a whole.

Howard Archer, chief UK economist at consultants IHS Global Insight, also said he did not think the Halifax data pointed to a significant pick-up in the housing market.

"We have little doubt that the spike in house prices in January reported by the Halifax is an outlier," he said. "Nevertheless we do suspect that the weakness in housing market activity may be bottoming out and we see activity picking up to a limited extent in 2015."


Source: uk.reuters.com

Wednesday, 4 February 2015

UK landlords can choose from record number of buy to let mortgages

Record number of buy to let mortgages are now available in the UK with landlords able to choose from 817 different products, up 16% quarter on quarter, the latest index shows.


Lower LTV fixed rate mortgages are now cheaper than equivalent tracker products, even before rates rise, according to the latest Buy to Let Mortgage Costs Index from Mortgages for Business.

Mortgage charges have fallen further for lower LTVs while landlords at higher LTVs pay extra fees. However, the cheapest mortgage rates and lowest fees have been reserved for low loan to value ratios.

‘This unprecedented pick up reflects the huge increase in demand as well as the wider importance of the buy to let industry,’ said David Whittaker, managing director at Mortgages for Business.

‘Looking at total lending in 2014 the trend is clear. For a second consecutive year the value of the buy to let market grew by almost a quarter. We anticipate further growth in 2015 but at a slower rate as the market takes an inevitable breather after such a huge sustained spurt,’ he added.

The research suggests that fixed rate mortgages are proving to be better value than their respective tracker counterparts, particularly for lower loan to value borrowers. Low LTV mortgages now outperform their tracker equivalents at two, three and five year periods.

Likewise, at medium LTVs, the costs for a two year fixed rate is 4.4% compared with 4.7% for the tracker equivalent, while for three year products the costs are the same and only 0.3% higher than the tracker products for five years.

Even for fixed rate high LTV mortgages, the current cost of borrowing is only marginally higher than tracker products. To fix for five years at a high LTV is just 0.4% more than the corresponding tracker.

Only one in a hundred landlords now opts for a one year initial mortgage term. More widely, the popularity of short term mortgages continues to wane as 52% opted for a two year deal, down from 57% six months ago despite the very attractive two year rates on offer.

By contrast longer term mortgages are growing in popularity, with the proportion choosing five year mortgages rising from 15% in the second quarter to 18% in the fourth quarter.

‘It’s astounding that fixed rate mortgages are already better value than their respective tracker counterparts. Again the real advantage is for the ‘safest’ landlords with the lowest LTV loans. But even though tracker products are a little bit cheaper at higher LTVs, in these cases too it soon won’t be enough to compensate for the likely increase in cost of trackers when rates inevitably rise,’ said Whittaker.

‘If customers are paying only a few percentage points above the negligible Bank base rate, then if this jumps it could mean a huge proportional increase in future costs. Capital markets are still reeling from tumbling inflation and a dovish outlook from the Bank of England that no one would have predicted six months ago,’ he explained.

‘This is only just starting to have its full impact on the mortgage market and the finances of landlords. Yet it’s already clear that landlords haven’t completely abandoned caution and are beginning to look at longer fixes and planning for higher rates within the next couple of years,’ he added.

The research also shows that the effect of product charges on the cost of borrowing has improved for low and medium LTV mortgages. At the lowest LTVs, the effect of charges have now fallen to 0.39% from 0.62% in the first quarter of 2013. Medium LTV borrowers have also benefited with effective charges dropping to 0.53% in the fourth quarter of 2014 from 0.70% at the beginning of 2013.

Overall, the effect of charges levied on mortgage products across all LTVs has dropped further from 0.54% in the third quarter to 0.52% at the end of 2014. However by contrast, charges for high LTVs have risen from 0.84% in the third quarter of 2014 to 0.88% in the fourth quarter.

‘These trends indicate that lenders prefer the safest borrowers who now have a vast array of competitive products to choose from. However, with rates bound to rise soon these kind of pricings won’t last for ever and we would advise borrowers to take advantage of the fixed rate deals on offer in 2015,’ Whittaker concluded.

Source: www.propertywire.com

Tuesday, 3 February 2015

UK Buy-to-Let Occupancy Rates Highest Ever in Q4 2014




The UK’s buy-to-let property investors enjoyed a very strong year last year in terms of average occupancy rates with an average of 2.6 weeks without a tenant over the year reached in the fourth quarter.

The quarterly survey, conducted by buy-to-let mortgage specialists Paragon Mortgages for the past 13 years, indicated continued strength in the rental market last year.

UK buy-to-let tenancy has always been strong, with an average of 2.6 to 3 weeks of vacancy per 12 months recorded since Paragon began its survey in 2002.

Even during the economic crises vacancy levels peaked at 3.5 weeks per year on average. Nonetheless, a result close to the record low of 2.5 weeks of average vacancy set in 2002 will be well received news by property investors across the length and breadth of the UK.

Source: www.invezz.com

Thursday, 29 January 2015

House prices up 6.8% since January 2014

Properties are exchanging hands for 6.8 per cent more this month than a year ago.
House prices are now 2.4 per cent higher than before the 2008 economic crash - with the average home worth £188,446.


Separate Land Registry figures said prices in England and Wales in the year to December rose 7 per cent, down from 7.2 per cent in November and the fourth month in a row that the annual rate has fallen.

Both sets of figures show that average house prices have remained static since last summer.

The Nationwide said the reasons for the slowdown in the housing market since then 'remain unclear', as the economic background has in fact continued to improve.

But it predicted that house prices would take off again once people started to feel the benfit of pay rises.

Nationwide's chief economist Robert Gardner said the number of mortgages approved had been about 20 per cent below last year - and surveyors continued to report subdued levels of new buyer enquiries.

But Mr Gardner said the reasons for the continued slowdown were unclear given the fall in unemployment, wages that have started to rise faster than inflation and high levels of consumer confidence which have helped fuel strong retail sales growth.

'If the economic backdrop continues to improve as we and most forecasters expect, activity in the housing market is likely to regain momentum in the months ahead,' he said.

Prices were also likely to be supported by the long-term shortage of new houses coming onto the market.

'It is encouraging that the number of new homes built in England was up 8 percent in the year to the third quarter of 2014. However, this is still 34 percent below pre-crisis levels and little over half the expected rate of household formation in the years ahead,' Gardner said.

The Land Registry data showed that London house prices ended the year up by 16.3 per cent, at an average of £464,936.

In nine boroughs prices were up by more than a fifth over the year, and in every part of the capital rises were in double digits.

The biggest leap in prices was in the north-east borough of Waltham Forest, which includes Walthamstow, which saw prices increase by 25.1 per cent to an average of £368,000.

Kensington & Chelsea recorded the lowest level of growth within London, at 11.5 per cent over the year, but the average price was still a lofty £1.3million.

Source: www.dailymail.co.uk

Wednesday, 28 January 2015

UK property sales hit seven year high in 2014

 Estate agent's window
 
Property sales across the UK rose by 14% last year to 1.22 million, the highest number since 2007. Figures from HM Revenue and Customs (HMRC) show that sales went up in every region of the UK.

In the last few months of 2014 the number of homes being sold eased off as the market cooled, and price increases also slowed.

Mortgage lenders recently forecast that sales this coming year may drop back slightly, to about 1.18 million.

The UK property market slumped in the wake of the 2008 banking crisis as lenders turned off the "mortgage tap". Sales fell to a low of 858,000 in 2009.

But since then they have risen each year, boosted by government initiatives like Funding for Lending, and helped by a gentle revival in the economy along with rising employment.

"Since December 2008, there has been a slow but steady upward trend in the seasonally adjusted count," commented HMRC.

"This trend grew at a faster rate between April 2013 and February 2014; however since then the rate has declined slightly." Further drop?

The possibility of the recent slowdown in sales extending into this year has been indicated by the trend in mortgage approvals, the number of mortgages approved by lenders but not yet lent.

The figures, published each month by the Bank of England, show that approvals have been falling slowly since last June.

As further evidence, the Royal Institution of Chartered Surveyors (Rics) said earlier this month that the number of new properties being listed for sale by its members had fallen for 10 of the last 12 months.

It added that the number of potential buyers entering the market had now fallen for six months in a row.

Source: www.bbc.com

Tuesday, 27 January 2015

UK house price sentiment moderates

Image 
  Almost 20% of households in the UK perceived that the value of their home rose in January, according to the latest House Price Sentiment Index which reveals a downward trend in 2014.
 
Some 19.5% of the 1,500 households surveyed across the UK said that the value of their home had risen over the last month, while 3.1% reported a fall, the data from Knight Frank and Markit Economics shows.

This gave the HPSI a reading of 58.2, the twenty second consecutive month that the reading has been above 50. The index report points out that the HPSI was on a general downward trend for most of the second half of 2014. January’s reading of 58.2, the lowest in 14 months, was a continuation of this trend and well below the average reading for last year of 61.

In spite of the month on month fall, households in all 11 regions covered by the index reported that prices rose in January, led by Londoners at 65.3 and households in the South East at 63, while, households in the North West at 53 and Wales at 53.9 perceived the slowest rates of price growth over the course of the month.

In London, perceptions of house price growth moderated compared to the previous month and stand well below the previous high of 74.9 in April last year, suggesting that households are less confident that the value of their property has risen than previously.

The future HPSI, which measures what households think will happen to the value of their property over the next year, fell in January to 69.5, down from 70.5 the previous month. This was the second consecutive monthly fall in house price expectations across the UK. The future HPSI stands well below its record high of 75.1, which was seen in May 2014.

Households in London at 75.3 are the most likely to expect price rises over the next 12 months, followed by those in the South West at 75.1 and the South East at 74.9, the index shows.

Expectations of price growth are highest among mortgage borrowers and those who own their home outright with readings of 75.8 and 71.3 respectively, followed by those living rent free at 66.8.

‘House price sentiment has slowed across the country despite the cut in stamp duty introduced by the Chancellor in December. Households in London and the South East signal slower annual rises in house prices this month than last month, an important development as these areas have been the engines of high house price growth over the last year,’ said Grainne Gilmore, head of UK residential research at Knight Frank.

‘Even the prospect of record-low interest rates being in place for longer than anticipated has not been enough to lift expectations for house price growth on a monthly basis in January, however this, coupled with an expected rise in wage growth will likely result in modest price uplifts over 2015,’ she added.

Tim Moore, senior economist at Markit, explained that as UK house price sentiment cooled again in January, the survey’s gauge of current property values is the least positive for over a year.

‘All regions have seen a sharp moderation in house price sentiment from its highest point in 2014, with London and the South West experiencing the greatest slowdown from recent peaks. January’s gradual drift in UK house price sentiment hints at slower trends for property values over the coming months, reinforced by stretched affordability and slow wage growth,’ he said.

‘That said, the balance of households forecasting a rise in their property value this year is still high by the survey’s historical levels, suggesting that subdued interest rate expectations and falling consumer price inflation could limit the scale of any retreat in UK house price sentiment during 2015,’ he added.

Source: www.propertywire.com

Monday, 26 January 2015

Estate agents launch new property website


Onthemarket website

A group of estate agents has launched a new property website to rival Rightmove and Zoopla, which dominate the market.

Called Onthemarket.com, it has been set up by a consortium of estate agency firms from around the UK.

All agents that use the new site to advertise their properties for sale will automatically become part owners of the new business.

But to join, they must agree not to advertise with one of the big two established websites.

Onthemarket.com's chief executive, Ian Springett, spelled out the new site's aggressive approach.

"In order to enter a market where two major players are so dominant, Onthemarket.com member agents commit only to advertise their properties on one other portal," he said.

"In practice, this means in most cases removing their properties from either Rightmove or Zoopla.

"The result is that... as well as losing large amounts of property stock, Rightmove and Zoopla will also suffer a substantial hit to their income," he added.

In response to the start of the new website, Lawrence Hall of Zoopla was scathing.

"This new portal, owned by about one in four High Street estate agents, is a regressive business model trying to stifle innovation at the expense of home sellers up and down the country," he said.

"It creates the single biggest conflict of interest we have ever seen between an agent and their client where the agent is now trying to limit exactly what the seller is paying for - maximum exposure of their property."

The new site says it already has 2,200 estate agents signed up, operating more than 4,600 branches between them.

Many, the new business said, have also agreed to advertise their properties only on the new site for the first 48 hours, before advertising them elsewhere.

Property commentator Henry Pryor said the new website would cause confusion.

"This will make life harder rather than easier in the short term," he said.

"It will make things more frustrating because it won't make it easier or cheaper to find properties to buy or rent." Profitable

There seems little doubt that the dominant position of Rightmove and Zoopla is ripe for a challenge.

Their businesses are enormously profitable with Rightmove making annual profits of £104m on a turnover of £140m, and Zoopla making annual profits of £39m on a turnover of £80m.

A big attraction for estate agents who join Onthemarket should be lower fees for advertising properties for sale to to let.

Rightmove said its basic fees were £720 a month for each branch of a sales agency, and £395 ar month for each branch of a lettings agency.

Zoopla said its average fee per agent was £323.

By contrast, Onthemarket said its typical fees for a selling agent might range from £177 a month to £655 a month depending on its location, with central London branches attracting the highest fees.

Its fees for a letting agent will be half that of a selling agent. 'Cynical'

Online-only estate agents, with about 2% of the market, will not be allowed to join the new business.

One of them, Alex Gosling of House Simple, denounced the new initiative as a purely protectionist measure by traditional estate agency businesses.

"Onthemarket is the High Street agents' cynical, anti-competitive and desperate reaction to a market that is changing," he said.

"Homeowners are fed up paying the exorbitant fees High Street agents charge for a poor and inflexible service."

Source: www.bbc.com

Sunday, 25 January 2015

Buy-to-let: which types of property give the biggest returns?

In charts: rental yields on mainstream buy-to-let compared with those from 'HMOs' and small blocks of flats 

Research published this week showed the effect high property prices are having on landlords' returns, especially in the South West


The controversial but lucrative tactic of chopping up family homes into bedsits or “houses of multiple occupation” (HMO) is no longer the biggest earner in buy-to-let.

So-called "multi-unit freehold blocks", which involve buying a block of flats or a converting a building into apartments, earnt investors 9.3pc in gross rental yields between October and December 2014.

By contrast, HMOs, the buy-to-let formula of millionaire property investors like developer Jim "HMO Daddy" Haliburton, earned 9pc in the same period.

These yield figures, based on thousands of actual transactions made since 2011 through leading buy-to-let broker Mortgages for Business, are “gross”. That means they don’t take into account costs such as servicing a mortgage, maintenance costs, ground rent – or add-ons such as letting agent fees and income tax.

The chart (below) compares rental yields across buy-to-let investment in blocks of flats, HMOs, and mainstream buy-to-let which usually involves a two or three-bedroom house or flat.

Investing in blocks of flats doesn’t come cheap. Prices start at around £500,000 for an eight-apartment building in a city outside London and £4m for the same size building in central London.

However, the average buyer’s budget for a block of flats has fallen in recent years. In early 2011, the average property price was £932,148 with a 44pc deposit. Now, investors pay £497,644 on average with a 36pc deposit.

Typically, landlords rent out the flats to individual tenants, charging rent for the individual flats and a ground rent.

Currently, investors can buy a converted Victorian home with eight flats in Nottingham, on the market for £475,000, which currently yields 7pc, according to online property portal Rightmove. A luxury development of 20 apartments in Canary Wharf, London, recently sold for £33m.

HMO will continue strong performance, experts say

HMO rental yields are higher than more traditional buy-to-lets, but returns have slipped over the past year. Slicing up properties for multiple occupants, where tenants share a living space but hold separate rental agreements, yields 1.4 fewer percentage points than at the same point last year.

For the year ahead, buy-to-let investors are confident that HMOs will produce the best income.

"The fact that yields on multi-units have overtaken HMOs is surprising but can be attributed to a larger proportion of transactions for larger multi-units in the quarter," said David Whittaker of broker Mortgages for Business.

Multi-unit flats are lucrative because of "economies of scale" and therefore may only benefit high value investors.

Meanwhile HMO remains popular with high demand from tenants. "For a multitude of reasons, not least stagnant wage growth for half a decade, many tenants simply can’t afford an enormous flat with a spare bedroom," Mr Whittaker said.

"As such, the attraction for many of renting a room rather than whole property will ensure that there is a steady yield-boosting demand for HMOs over 2015."

The average residential rent across England and Wales is now £767 per month, up from £745 in December last year, according to estate agent chains Your Move and Reeds Rains.

The gross yield on a typical rental property in England & Wales is 5.1pc, while the average capital gain amounts to £10,546.
Source: www.telegraph.co.uk


Wednesday, 21 January 2015

How do the property tax systems add up?






Houses aerial

The Scottish Finance Secretary John Swinney has revised his planned property tax changes, due to come into effect on 1 April.

His original scheme, announced in October last year, proposed new bands, plus a gradual tax, similar to income tax.

Two months later, UK Chancellor George Osborne adopted the same gradual approach to stamp duty, but with different bands and rates.

That move prompted a re-think by Mr Swinney who has now changed his proposal.

Here are some random purchase prices showing what the tax was under the old stamp duty system; the new UK property tax system; the draft Scottish system and the revised Scottish system......

 What's the tax for a £135,000 house?


Property in Scotland
  1. Stamp duty system (now abolished) - £1,300 tax
  2. New system (UK) - £200 tax
  3. Draft Scottish system - No tax to pay
  4. Revised Scottish system - No tax to pay 

What's the tax for a £233,000 house?

Property in Scotland
  1. Stamp duty system (now abolished) - £2,330 tax
  2. New system (UK) - £2,160 tax
  3. Draft Scottish system - £1,960 tax
  4. Revised Scottish system - £1,760 tax
What's the tax for a £325,000 house?

Property in Scotland
  1. Stamp duty system (now abolished) - £9,750 tax
  2. New system (UK) - £4,000 tax
  3. Draft Scottish system - £9,800 tax
  4. Revised Scottish system - £5,850 tax
 What's the tax for a £1m house?
 Property in Scotland
  1. Stamp duty system (now abolished) - £50,000 tax
  2. New system (UK) - £43,750 tax
  3. Draft Scottish system - £77,300 tax
  4. Revised Scottish system - £78,350 tax
Source: www.bbc.com

Tuesday, 20 January 2015

UK asking prices up 1.4% this month, latest index shows

The price of property coming to the market in the UK increased by 1.4% in January at a time of year when prices usually fall, according to the latest index from Rightmove.

Image
It takes the average national asking price to £273,275 and means prices have increased by 8.2% in the last 12 months.

But it points out that even although the number of properties on sale has increased by 2% this if failing to replenish agents’ historically low stock and currently levels are 10% below the same period last year.

Sales activity has been boosted by Stamp Duty savings of up to £1,250 for some first time buyers and average property prices in this sector are down by £1,132 this month.

However the firm reckons that despite continued low mortgage and inflation rates, sellers will have to work harder in 2015 than in 2014 due to election jitters and mortgage restrictions. It believes that lenders are selecting buyers who are good risks to lend to, and in turn buyers are very selective with the properties they choose.

A closer look at the figures show that prices and activity both cooled in the second half of 2014, though there are signs of a New Year bounce back. More people are looking for property than last year, and more sellers are putting their property up for sale.

‘Early 2015 statistics currently point in the right direction for home movers, with the Chancellor’s Stamp Duty reform perhaps being the spur for people to get on with moving. There are more positive signs of early bird activity rather than pre-election jitters or economic worries deterring prospective movers,’ said Miles Shipside, Rightmove director and housing market analyst.

‘The unseasonably high 1.4% jump in new sellers’ asking prices suggests that there are more rises in the pipeline for the next few months. Early-bird buyers, including trader-uppers, can potentially catch a good deal by getting off the mark quickly in 2015, and get a better pick of the housing crop,’ he explained.

Rightmove’s updated House Price Index now tracks typical property prices and supply for the main market sectors, including first time buyers, second steppers and the top of the housing ladder.

It says that with the average first time buyer property coming to the market at £163,251, the reform to Stamp Duty announced in the Autumn Statement could mean potential savings of up to £1,250.

‘Should prices rise, as they look set to over the next few months, potential Stamp Duty savings will diminish, but they will still be helpful to first time buyers struggling to save enough to cover the Stamp Duty bill as well as the mortgage deposit,’ said Shipside.

‘First time buyers are in a potential win-win savings window this month with the price of property coming to market in this sector being over £1,100 cheaper, coupled with up to £1,250 in Stamp Duty savings. This is a welcome boost given that the price of property coming to market in the first time buyer sector has increased by 10.5% in the last year,’ he added.

The index also shows that visits to the Rightmove website were up over 10% in the first 13 days of January versus last year. In addition Rightmove set a new record for pages viewed on the website on Sunday 11th January. Shipside believes that these early indicators of increased property interest, combined with estate agents reporting low stocks of appealing property in popular locations, should give encouragement to prospective sellers.

However, Rightmove still cautions sellers that it will be harder to sell in 2015 than in 2014. ‘Election jitters could lower the number of property transactions rather than lower prices, resulting in a moderate reduction from the high volumes seen in 2014, but with average prices driven up by the more resilient activity in popular locations,’ said Shipside.

‘In addition, we predict that many buyers who have jumped the hurdle of lenders’ selective criteria to secure a mortgage will be fussier about the home they buy. The lack of the right quality property situated where people want to live may cause some to postpone their move,’ he pointed out.

Shipside predicts that the popular properties that most people want will remain sought after and will remain both highly prized and priced. Less attractive property is available in many locations but has often been on the market for some time, though it could be an option for choosier buyers if the seller is more negotiable on price.

‘Buyers deemed mortgage worthy will value their hard won purchase pots and want to spend them wisely. That might mean stretching themselves to afford a property that ticks all the boxes, but wanting a heavy discount on one that falls short,’ he said.

‘A property that offers longevity of stay by having adaptable accommodation and scope for increase of floor area will be especially appealing given the costs and upheaval of moving more regularly,’ he added.

Rightmove believes that 2015 will be the ‘Year of the Selective Mover’ on two counts, firstly because lenders have selected them as a good risk to lend to, and secondly because they will be very selective about which properties they choose.

‘The high traffic volumes on Rightmove not only indicate underlying demand, but also people regularly searching for a property that suits their needs. With insufficient new build over the last few decades and a systemic change in the makeup of our current housing stock, buyers are dissatisfied with, and therefore dismissive of, some of what is up for sale,’ said Shipside.

‘While you cannot change the location of a property, sellers can improve the appeal of their home in other ways to persuade today’s choosier buyers that the positives outweigh the negatives. Getting advice from estate agents about how to prepare or adapt your property ready for sale, pricing correctly to attract value-conscious buyers, and then getting it in front of as many of them as possible will be very important in 2015,’ he concluded.

Simon Gerrard, president of National Association of Estate Agents (NAEA) said that the start of the year has been a strong one. ‘More people seem to be putting their property on the market early this year, one explanation for this is that they are doing so rather than waiting for the normal seasonally busy time of Spring,’ he explained.

‘This is most probably because spring 2015 will coincide with the General Election that could lead to uncertainty in the market at that time. There is still more demand than supply, and sellers with property values near the old Stamp Duty thresholds are now able to market their property for its true worth, both of which are contributing to higher asking prices,’ he pointed out.

‘Overall I think we’ll see a strong first quarter to the year, especially as potential buyers are now getting used to what is expected of them with the stricter lending criteria,’ he added.

Source: www.propertywire.com

Monday, 19 January 2015

UK Mortgage price war starts in 2015


UK-Mortgage-price-war-starts

UK house prices have certainly slowed down and according to popular tracking websites like Zoopla, they have dropped in many areas across England. The situation isn’t all bad, especially when you consider there’s a UK mortgage price war started in 2015 that will benefit consumers.

Building societies will be one of those not benefiting from the price war. This is due to trading being squeezed after restrictions on home loans and cheap wholesale funding adding to the pressure building societies are under.

Thanks to mortgage interest rates dropping over the past three months, mutually-owned lenders are losing new business and this has been confirmed by a new survey. Building societies cannot tap into wholesale markets like banks can and they are financed with deposits, so this has led to really low-rates for funding.

The mortgage price war in the UK is seen with bank rates down to 2.08% and this is improved on the 2.6% that we saw in summer 2014. Confidence in banks is increasing and has been for eighth quarters, also the business volumes are getting close to so-called “normal” levels.

Source: www.100mortgages.org

Sunday, 18 January 2015

U.K. Property Asking Prices Rebound on Tax Cut, Rightmove Says

The housing market is showing signs of a "new year bounce" in activity, with new sellers hiking their asking prices by nearly £4,000 in January, property search website Rightmove has reported.

New sellers have been increasing their asking prices in January

The price of property coming on the market increased by 1.4% or £3,798 compared with December - despite January usually being a month when asking prices fall, the website said.

Across England and Wales, the average asking price for a property this month is £273,275, which is 8.2% higher than a year ago.

Rightmove said that while it is still early days, "there are signs of a new year bounce-back", with visits to the website this year so far running at 10% higher than a year ago.

Meanwhile, people looking to take their first step on the property ladder have the opportunity to grab a cheaper deal this month, the website's findings suggest. Sellers of typical first-time buyer homes are asking for around £1,132 less than they were in December.

The average asking price on a first-time buyer property is now £163,251, although this is still a significant 10.5% increase on a year ago.

Rightmove also said that the recent reforms to stamp duty, which have made the tax less expensive for the vast majority of home buyers, could mean potential savings of as much as £1,250 for a first-time buyer.

Miles Shipside, director of Rightmove, said: "First-time buyers are in a potential win win savings window this month, with the price of property coming to market in this sector being over £1,100 cheaper, coupled with up to £1,250 in stamp duty savings."

In further signs that the wider market is showing an early pick-up in 2015, Rightmove said it had more than 52 million page views on Sunday, January 11, marking a new record for the website.

It said that the signs of increased interest in homes for sale, combined with estate agents reporting low stocks of property on the market in popular locations, is likely to create a further upward pressure on prices in desirable areas.

Mr Shipside said these signs of "early bird activity" in 2015 could be a result of the stamp duty changes which were unveiled in December and are expected to encourage more people to move home.

But he continued: "Rightmove still cautions sellers that it will be harder to sell in 2015 than in 2014."

He said that the looming general election could cause some disruption to the market. Meanwhile, mortgage lenders are showing signs of introducing more selective criteria - and this could mean that buyers who are able to pass the criteria and secure a mortgage will be more "fussy" about the home they buy, he said.

Mr Shipside said: "Buyers deemed mortgage-worthy will value their hard-won purchase pots and want to spend them wisely.

"That might mean stretching themselves to afford a property that ticks all the boxes, but wanting a heavy discount on one that falls short."

Rightmove's figures show that asking prices in London have seen the highest year-on-year increase, at 12.8%, pushing the average price to £566,404. The South West of England has recorded the biggest month-on-month jump in asking prices, with a 3% increase taking the typical price to £267,623.

The North East of England recorded both the lowest year-on-year increase in sellers' asking prices and the biggest month-on-month dip. Prices in the North East stand at £135,055, on average, marking a 0.8% increase on a year ago and a 1.7% month-on-month decrease.

In Wales, asking prices have typically increased by 6% annually and by 2.7% month-on-month to reach £166,833.

Mike Woods, a building surveyor at RK Lucas and Son in Pembrokeshire, Wales, said: "We've had some vendors who want to wait until March to put their property on the market as there is a perception that homes will sell better in the springtime, but in reality getting their home on and marketed to a wide audience now could make it easier for them to sell and complete before the election."

Simon Gerrard, president of the National Association of Estate Agents (NAEA) and managing director of Martyn Gerrard Estate Agents with 11 branches in London, said: "Overall, I think we'll see a strong first quarter to the year, especially as potential buyers are now getting used to what is expected of them with the stricter lending criteria."

Source: www.expressandstar.com

Thursday, 15 January 2015

'Pitiful' interest rates for savers fuelling £12billion buy-to-let boom with mortgage lending to landlords up 9% in a year


Pitiful interest rates for savers are fuelling a £12billion buy-to-let boom, new figures revealed today.

Thousands of middle-class families fed up with rock-bottom interest rates on savings and investments are making their first foray into the buy-to-let market.

The value of buy-to-let mortgages on new purchases rose by 34 per cent to £11.6billion between January and November last year – £3billion more than the same period in 2013.

Lending to landlords soared by 9 per cent in November compared with the year before, while mortgages for ordinary home-buyers fell by 7 per cent.




The number of landlords taking out mortgages on new purchases in the UK also grew by 21 per cent to 93,970 between January and November 2014 – with 8,500 handed out every month.

This compares to a modest rise of 13 per cent among home movers and first-time buyers as they faced tougher lending regulations – while the buy-to-let market remains unregulated.

The number of first-time buyers securing a mortgage fell sharply to a seven-month low.

Some 17,700 buy-to-let loans worth £2.4 billion were handed out in November as desperate savers turned to the housing market for a return on their money.


It comes after figures revealed just under 26,000 first time buyers got a loan to get on to the property ladder in November, down 11 per cent compared with October, and 3 per cent lower than in November 2013.

Buy-to-let mortgages are more expensive than normal owner-occupier mortgages. Providers charge a higher rate of interest and also levy an initial fee, which can be as much as £2,000.

The cheapest buy-to-let mortgage is charging 2.29 per cent interest, while traditional mortgages are from as little as 1.29 per cent.

But thanks to low interest rates, the cost of buy-to-let loans have plummeted in recent months, making it an affordable option for many Britons for the first time.

24,000 remortgage loans were handed out in November with a total value of £3.6 billion, which was 10 per cent down on the previous month

Investors are capitalising on bumper rental returns fuelled by people forced to rent for longer by escalating house prices and stricter lending rules.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said it was 'no real surprise' that buy-to-lending was growing, with the attractive potential returns on offer for investors compared with savings accounts - which are paying 'pitiful' rates of interest.

He said: 'Of course, the resurgence of buy-to-let does have an impact on first-time buyers, with many competing for the same entry-level properties.'

The trend for ‘amateur’ landlords is expected to accelerate in April, when radical pension reforms will allow people to withdraw their retirement savings for the first time.

According to the Council of Mortgage Lenders (CML), its latest November figures showed ‘a decline in lending to first-time buyers, home movers and remortgaging from the heights of November 2013, but a year-on-year increase in buy-to-let lending.’

Brian Murphy, at the Mortgage Advice Bureau, said the buy-to-let market had been ‘reinvigorated’ after being crushed by the financial crisis.

But the figures will reignite fears that buy-to-let landlords are pushing up prices for families struggling to take their first step on the property ladder.

With the average age of first-time buyers now 30, they needed a mortgage worth almost £125,000 to get the keys to their first home.

Some 25,900 home loans with a total value of £3.8 billion were advanced to people taking their first step on the property ladder.

This is the lowest number of loans handed out to this sector since last April, figures from the Council of Mortgage Lenders (CML) show.

The CML's new figures also show that first-time buyers typically needed to put down a deposit of 17 per cent of the property's value in November.



This is an increase on the 16 per cent average deposit they put down the previous month - but still less than the 20 per cent deposit they needed a year earlier.

The typical size of a first-time buyer loan has also fallen for the second month in a row, reaching £124,822 in November, which is almost £1,000 less than the average loan of £125,800 handed out to a first-time buyer the previous month.

Remortgaging for buy-to-let borrowers rose almost ten times faster compared to house movers, with the number of loans soaring by 24 per cent between January and November, compared to just 2.4 per cent for ordinary buyers, CML figures show.

This dip in ordinary home loans was blamed on the introduction in April of strict affordability checks.

Earlier this month, a Bank of England survey found that while mortgage availability has seen a slight increase generally in recent months, lenders became less willing to hand out mortgages to people with deposits of less than 10 per cent towards the end of last year.

The CML's figures also show that mortgage lending to existing home owners who were moving into a different property also fell back in November, as did lending to people who were remortgaging.

But buy-to-let lending has increased year-on-year.

Some 29,700 loans collectively worth £5.4 billion were advanced to home movers in November, marking a 13 per cent fall on the previous month and down by 10 per cent on November 2013.

Meanwhile, 24,000 remortgage loans were handed out in November with a total value of £3.6 billion, which was 10 per cent down on the previous month and a 14 per cent fall on November the previous year.

Yesterday, figures from the Office for National Statistics (ONS) showed that the typical price paid by a first-time buyer for a house was £208,000 last November, which is 11 per cent more than it was in November 2013.

Graham Davidson, of Sequre Property Investment, said: ‘Many people are turning away from the more traditional but volatile investments, and poor interest rates on their savings, in favour of the tried and tested route of bricks and mortar. The buy-to-let market has never been healthier.’

Source: www.dailymail.co.uk

Wednesday, 14 January 2015

Buy-to-let property investments appreciated 17% over the year

Buy-to-let property investments appreciated 17% over the year

Buy-to-let property investments appreciated 17% over the year



Property investments bought with the UK’s growing rental sector in mind proved to be very fruitful during 2014.

Although capital appreciation is perhaps secondary to the long-term income provided by rental yields, property investors have seen their assets grow in value by an incredible 17% over 2014 and by more than £180 billion over the past five years, according to research by Savills.

This is in part due to the wider grow of the UK’s housing market over the period but also because investors are starting to realise the country’s private rented sector shows no sign of slowing down.

The reason many investors want to secure buy-to-let property investments is that demand for rental properties is soaring. There are two reasons why this is happening. Firstly, many would-be first-time buyers are unable to meet mortgage requirements, but also the millennial generation is more likely to choose rental accommodation over purchasing than any other past generation.

As such Savills highlights the total number of private rented homes has increased by almost 1.2 million since 2009, with the current total somewhere around the 5.4 million mark, compared to 4.7 million in the social rented sector. Homes owned via the aid of a mortgage have fallen by almost 800,000 over the past five years, reflecting the two trends highlighted above.

It is an old adage in the UK that you can’t go wrong with bricks and mortar and while that’s broadly true, bricks and mortar that appeal to Britain’s growing core of renters will most likely be the best investment over the coming years.

Source: www.selectproperty.com


Tuesday, 13 January 2015

House prices boom continues: Properties up 10% across the UK

House prices soared by 10 per cent over the past year - driven 'in large part' by runaway prices in London, official figures revealed this morning. Homes in the capital were £65,000 more expensive in November than at the same time last year – a 15.3 per cent increase in 12 months. Excluding London and the wider South East, house prices increased by 7.1 per cent across the rest of the country, the Office for National Statistics said.

House prices in the UK were up 10% in the 12 months to November, the Office for National Statistics said. The boom was driven 'in large part' by the runaway prices in London - with properties up 15.3 per cent 
House prices in the UK were up 10% in the 12 months to November, the Office for National Statistics said. The boom was driven 'in large part' by the runaway prices in London - with properties up 15.3 per cent.

But there were some signs that the great house price boom was easing off.

In the month between October and November last year, house prices grew 0.2% - compared to an increase of 0.6% during the same period a year earlier.

London homes are also slightly down compared to August - falling 2.5 per cent in three months. However, this is still 36.1 per cent higher than in January 2008.

Housing charity Shelter said the booming housing market was making it impossible for an increasing number of families to get on the property ladder.

Chief executive Campbell Robb, said: 'With house prices still sky-high, it's no surprise that homeownership in the UK is now below the European average.

'Shelter hears from people every day who are desperate to put down roots for their family, but have lost hope of ever having a home of their own. Something's just not right when millions of people are stuck in a "rent-trap", with barely enough money left over each month to make ends meet, let alone save up for a deposit.'

In the year to November, prices grew 10.4 per cent in England, 3.1 per cent in Wales, 4.4 per cent in Scotland and 11.7 per cent in Northern Ireland.

Every region in England recorded higher house price growth more than Scotland and Wales.



Britain's housing boom continued in the 12 months to November, but was showing signs of slowing down with house price growth falling from 10.4 per cent to 10 per cent

Prices grew fastest in the South East and East Anglia – up 10.8 per cent and 11.9 per cent respectively.

House price growth was weakest in the West Midlands - with properties up 5.1 per cent - followed by Yorkshire & The Humber and the North East, recording 5.3 per cent and 5.9 per cent.

The booming property market is making it increasingly difficult for first-time buyers to get on their foot on the housing ladder.

In November, prices paid by first-time buyers were 11 per cent higher on average than at the same time the year before - with the average price paid hitting £208,000.

The average UK house price in October was £271,000 – with properties in England the most expensive at £283,000.

Homes in Wales cost £171,000 on average, £194,000 in Scotland and £147,000 in Northern Ireland.

In London meanwhile the average house costs £501,000 – almost three and a half times more than in the North East which has the lowest average house prices at £155,000.

London, the South East and the East all had prices higher than the UK average price of £271,000.
Source: www.dailymail.co.uk

Monday, 12 January 2015

UK landlords make £177bn from rising house prices over 5 years




View of Victorian tenement housing in the West End of Edinburgh, Morningside. 

Landlords have made £177bn profit from capital growth over the past five years according to research which adds fuel to the political debate about rising house prices in the UK.

There has been growing demand for rental property in Britain as high prices and a lack of new housebuilding have made it harder for first time buyers to get on the property ladder.

As well as a rise in the number of tenants this has led to more buy-to-let landlords, and they have been the biggest beneficiaries of rising house prices according to the figures from property adviser Savills.

Alex Hilton, director of Generation Rent, a group that campaigns for the rights of tenants, said Savills’ figures were “stomach-wrenching”.


UK housing data
It was wrong that landlords were able to “cream generous tax breaks” at a time when tenants were enduring the effects of government spending cuts, he said.

The total value of privately rented housing in Britain has grown 57 per cent since the financial crisis, topping £1tn this year for the first time, although some of that growth reflects the increasing number of people buying homes to let.

The profit figure of £177bn is an estimate of capital growth alone and excludes income from tenants’ rents — another source of wealth for landlords.

By contrast the total value of UK housing held by owner-occupiers with mortgages rose just 5 per cent in the past five years, Savills found.

Lucian Cook, director of residential research at Savills, said the data showed that “the benefit of recent house price growth has become increasingly concentrated in the hands of private investors”.

He added: “In a housing market that is expensive, relative to people’s income, it is difficult to see how this will change, particularly given increased mortgage regulation.”

The findings showed that the rental market was “fundamentally unsupplied”, Mr Cook said. In order to mitigate the situation the government should do more to encourage professional investors to build more new homes for rent, he argued.

Rising house prices are also fuelling Britain’s housing benefit bill, as landlords raise rents in order to pay off their own borrowings. In the 2013-14 financial year the country paid £9.3bn to private landlords to subsidise tenants’ rents — more than a third of the total spent on housing benefit that year.

Private sector tenants live in the country’s poorest quality accommodation and have the highest housing costs, with rents taking up an average 40 per cent of gross income, according to data published in the summer.

Mr Hilton said the figures showed “how landlords have profiteered from the undersupply of housing while tenants struggle with ever higher rents.

“Despite these huge returns, private sector tenants get the worst living conditions, the worst security of tenure and the least affordable housing, often cutting back on food or heating to meet the rent.”

Labour has proposed cracking down on landlords by capping rents and banning buy-to-let investors from purchasing newly built properties in some new “housing growth areas”.

The Savills figures are likely to prompt closer scrutiny in Westminster of the tax breaks enjoyed by landlords — and not only by leftwing politicians.

Charlie Elphicke, Conservative MP for Dover, said there was a strong case for ministers to call a halt to relief on mortgage interest, for example, and look at other perks such as wear and tear allocations.

“Most people would say that is money which could have gone to people owning their own homes rather than investors,” he said. “It underlines that tax breaks that buy-to-let investors get would be better off used to help first time buyers to own their own homes.”

Clive Betts, who chairs parliament’s communities committee, said the figures demonstrated the need for more homes to be built. “In the end you can take away tax breaks and other aspects of housing finance but you will never combat the problem of rising rents and rising prices without building more homes,” he said.

Source: www.ft.com

UK house prices: Total value of UK residential property hits £5.8tn

UK house prices: Total value of UK residential property hits £5.8tn 

 

The combined cost of all the homes in the UK has increased by almost a trillion in the last five years, according to data from the estate agent Savills.

Adding the values of all the homes in Britain makes a heady total of £5.75 trillion, or 2.7 times the UK’s GDP. The region with by far the most value was, unsurprisingly, London.

The biggest increases were in London, where prices have jumped by 61 per cent in the last five years and 20 per cent in the last year. Only in the north west, north east and Northern Ireland are prices lower today than they were five years ago.
 

Apart from the regional trends, there were some interesting changes in the type of tenure, too. According to the report, the  number of homes owned without a mortgage rose 437,471 in the past five years, to over 8.3 million, with values rising £325 billion to almost £2 trillion.
As a result of the credit crunch, however, the number of homes owned with a mortgage fell by around 800,000 over five years. Reflecting this drop, the value of private rented stock has soared by 59 per cent in the last five years and 17 per cent in the last 12 months. It now stands at over £1tn.

Source: www.cityam.com