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Mortgage and Home Loan News: December lending better than expected

Tue, 24 Jan 2012 14:12:19 +0000

New figures from the Council of Mortgage Lenders (CML) show that December was a better month than expected for those looking to raise funds towards a new purchase.

According to the body, banks and building societies lent around £11.7 billion last month, a rise of 12 per cent on December 2010.

Over the quarter, lending totalled an estimated £37.3 billion. This figure was down slightly on the previous three months but still 11 per cent greater than the same period last year.

CML chief economist Bob Pannell said: "The closing months of 2011 saw stronger mortgage lending activity and housing transactions, despite the fact that short term economic prospects are challenging."

And 2012 looks set to be a greater year still as a number of lenders have already stated that they are committed to help the market move by making more mortgage funds available.

HSBC, for example, recently stated that it had earmarked £15 billion for mortgages, with £3 billion specifically set aside for first-time buyers.

First Time Property Buyers News: More help will soon be available for first-time buyers

Thu, 12 Jan 2012 12:38:11 +0000

First-time buyers will get more help to get a foot on the property ladder this year because of new initiatives, according to the Building Societies Association.

Paul Broadhead, head of mortgage policy at the body, said that while there are still many issues restricting people's ability to purchase their first property, schemes such as the government’s new Get Britain Building scheme will help.

"The size of the deposit that they need to raise is a barrier to them getting on the housing ladder…but things are being done to try and help alleviate some of those barriers," he said.

“People may well be able to get mortgages on new-build properties with smaller deposits of five per cent as opposed to ten or 15 per cent, which has been causing a barrier. That will certainly help.”

Housing minister Grant Shapps recently estimated that the government's £420 million Get Britain Building Fund will create as many as 16,000 new properties on sites which have previously stalled due to economic circumstances.

He also suggested that around 30,000 new jobs will be created as part of the project.

Mortgage Rate & Home Loan News: Monthly mortgage repayments at their lowest level for a decade

Mon, 09 Jan 2012 16:52:14 +0000

Low interest products means that monthly mortgage payments are currently at their most affordable levels for a decade, claim Barclays.

An analysis of more than one million of the bank’s customers found that on average people paid out 15.4 per cent of their take home income towards their mortgage, the lowest percentage since records began in 2001.

Some 83 per cent of those currently enjoying low mortgage rates said that they have the financial means to cope should interest rates rise or their circumstances change.

Looking at 2012, 40 per cent said they expect an increase in rates this year, compared to 74 per cent this time last year.

Andy Gray, head of mortgages at Barclays, said: "With the cheapest ever mortgage deals offered to homeowners last year and the fiercely competitive mortgage market it stands to reason that the average monthly mortgage payment was at its most affordable level in a decade.”

Similar research from the Council of Mortgage Lenders (CML) found that on average first-time buyers spend 12.3 per cent of their income on mortgage repayments.

New Build Development News: New build market is still healthy

Tue, 01 Nov 2011 13:08:37 +0000

The healthy demand for new build homes is likely to continue, according to one expert.

Vernon Pethard, a specialist in the new homes market, said that demand for new-build property is "strong" and that there has been no indication of a seasonal slowdown in October.

He said that on the whole pessimism over house prices expressed by members of the media have largely been unfounded and that the market is improving if anything.

"Over the last year we have seen headlines predicting massive house price rises and equally headlines predicting more doom and gloom. In reality, I predict a fairly stable property market taking all things into consideration," Mr Pethard commented.

He added that the UK is a nation of house buyers and the desire to get a foothold on the property ladder is regarded as one of most people’s major priorities, alongside marriage and work.

The average value of a new build property is £221,276, whereas the national price average for all property types is £165,650 according to the Nationwide.

New Build Development News

London House Price News: House prices 'will undergo sharp swings'

Fri, 14 Oct 2011 09:59:23 +0100

London house prices, as well as those in other areas of the UK, could be subjected to "sharp swings" this year because of various factors, PricedOut has stated.

Matt Griffith, spokesman for the campaign organisation, commented that Britain's housing market tends to behave like "a rollercoaster".

"This volatility is underpinned by its two most important factors - a very unhealthy record of house building and a mortgage industry that has specialised in excesses, both during the boom and during the credit crunch," he noted.

"These two issues will continue to leave the UK vulnerable to sharp swings in prices."

Mr Griffith argued that the government should address the causes of this volatility by increasing support to house building and tackling the UK's "dysfunctional" planning permission system.

His remarks come after a Centre for Economics and Business Research report predicted that the market's recovery will stall this year, leading house prices to fall 1.7 per cent on last year's values.

London House Price News

London Estate Agents News: Energy efficiency 'should be recognised in valuation'

Fri, 23 Sep 2011 11:14:38 +0100

Homeowners who have secured flats and houses for sale in Brondesbury, London, should have any energy efficiency improvements to the property recognised in its valuation.

This is the view of Gordon Miller, co-founder and sustainability and communications director at Sustain Worldwide, who argued that it is "long overdue" that the valuation sector recognises the "inherent value premium" in energy efficient homes.

"It stands to reason: sustainable homes are cheaper to run because they are better insulated and require less heating and mechanical cooling, and they are fitted out with hands-off energy saving applications," he pointed out.

"What's more, they will increase in value faster - or depreciate less than existing homes - because they are more future-proofed than a conventionally built existing house that will require expensive retro-fitting."

Mr Miller's remarks came after the Royal Institution of Chartered Surveyors posited that a property's sustainability characteristics should be taken into account in its valuation.

London Estate Agents News

London Housing Market News: Buy to let market is ripe for those with capital

Fri, 15 Jul 2011 16:51:40 +0100

There has never been a better time for cash buyers in London to invest in buy to let properties.

This is the opinion of Darren Owen, director at Property & Finance Solutions, who commented: "If you have got capital, then there has never been a better time to buy - there really hasn't.

"The issue comes back to the finance because even people with capital don't really want to pay cash for a property; they want to obtain some sort of mortgage because the problem with property is that it is not a very liquid asset," he explained.

Mr Owen added that investors should be sure they want to pursue the buy to let route, as they need to be aware that their money will be tied up for some time.

Meanwhile, research by Mortgages for Business has revealed that average buy to let yields have risen on a quarterly basis, with complex deals now offering up to ten per cent.

London Housing Market News

London Estate Agents News: London property market sees robust growth in Q2

Thu, 30 Jun 2011 13:28:58 +0100

Property hunters looking for flats and houses for sale in Mapesbury, London, might be interested to hear that the capital is the only region in the country where house prices have not fallen.

According to figures published by Nationwide, average prices in the second quarter of this year were down year-on-year in every other part of the UK, with average prices slipping 1.2 per cent to £166,764.

Robert Gardner, chief economist at the building society, commented: "Across the UK, prices rose by just 0.2 per cent in the second quarter of 2011, resulting in a further deterioration in the annual rate of change to -1.2 per cent.

"Quarterly price growth in London remained robust, with a seasonally adjusted price increase of 2.6 per cent. London was the only region to see an annual price rise, with prices up 2.9 per cent on the same quarter one year ago," he added.

Meanwhile, investors have been encouraged to search for student accommodation in London, as there is always a steady supply of tenants.

London Estate Agents News

Change of Use News: Conversion of empty homes 'cheaper than new build properties'

Tue, 28 Jun 2011 16:40:53 +0100

As the rate of new build properties being constructed is at its lowest since the 1920s, it is important to consider all the options to address the growing housing shortage.

David Ireland, chief executive at Empty Homes, noted that there is a "real problem" with regard to increasing housing waiting lists.

"The amount of homes that are being built at the moment is well short of the numbers needed to deal with that problem, therefore you have got to look at what other options there are for providing homes for people - particularly providing affordable homes," he said.

One such option is to upgrade derelict properties in London and other parts of the country to turn them into homes, business start-ups and community centres.

"It is certainly cheaper than building a new house," added Mr Ireland.

Under government plans announced by planning minister Greg Clark, red tape could be cut to encourage 'meanwhile uses' of empty buildings.

Change of Use News

First Time Property Buyers News: First time buyers scheme 'is whitewash'

Tue, 21 Jun 2011 14:41:53 +0100

Government plans to help out first time property buyers by way of a new FirstBuy scheme have been described as "window dressing for the gullible".

Paul Holmes, chief executive of Firstrung, commented: "Their [the government's] preoccupation is to stimulate new house sales, not to help first-time buyers. There is absolutely no point in a first-time buyer getting assistance on an overpriced property."

He argued that the initiative is a "complete shambles" and that "the coalition should be ashamed of putting their name to it".

Mr Holmes noted that the best thing for first time buyers to do is to wait for a bargain, or else select property in need of restoration and do it up themselves.

His comments come after the government announced its FirstBuy project would help first timers get onto the property ladder by offering help with deposits on new build properties.

First Time Property Buyers News

First Time Property Buyers News: Buyers will have more options if they can secure jobs

Mon, 20 Jun 2011 17:08:20 +0100

The key issue for first time property buyers is whether they are able to move to a new location and secure employment.

This is the opinion of Richard Horner, northern south sector regional executive for the National Association of Estate Agents, who noted: "In the current economic climate we are all suffering from a lack of availability [of] good jobs."

He pointed out that if first time buyers are looking to get onto the property ladder, have flexible jobs and are able to move around the country, they have a greater choice about where to relocate.

Mr Horner's comments come after the Council of Mortgage Lenders revealed that lending to first time buyers increased by eight per cent in March, from 14,700 to 15,800.

The value of UK mortgage lending to those hoping to get their foot on the property ladder also rose, up from £1.7 billion to £1.9 billion.

First Time Property Buyers News

London Property Market News: Spring bounce in housing market 'hampered by lack of mortgage funding'

Tue, 14 Jun 2011 17:05:03 +0100

A dearth of UK mortgage lending options contributed to the lack of a spring bounce in the housing market, according to figures from the Royal Institution of Chartered Surveyors (RICS).

Its latest UK Housing Market index revealed the average number of completed house sales per surveyor dropped by 3.4 per cent to 14.7 in the three months to May 2011, which is the lowest average since January.

The sales to stock ratio also declined to 20.6 per cent, significantly below the long-run average of 33.5 per cent.

RICS housing spokesperson Ian Perry commented: "Buyer interest in purchasing property remains flat across much of the country and there is little sign of this changing any time soon.

"Uncertainty over the economic outlook remains as important as the availability of mortgage finance in depressing demand."

However, those with property to rent in London and other parts of the country could benefit from the growing "appetite to rent".

London Property Market News

London Housing Market News: Overseas buyers spend £3bn in London each year

Tue, 14 Jun 2011 17:03:01 +0100

Overseas property buyers in London are increasingly coming from emerging markets, such as China, India and Russia, according to reports.

The Moscow Times cites figures showing foreign property buyers invest more than £3 billion a year into the London housing market, of which around £2.7 billion is used to purchase homes in the upmarket neighbourhoods of Chelsea and Mayfair.

Eastern Europeans and those from the former Soviet Union are particularly big spenders in the UK capital, with these investors buying at an average of £6.2 million, while people from the Middle East put down an average of £4 million.

Property consultant Siqi Zhang told the London Evening Standard that buyers from China and Hong Kong are also turning to London for property investments.

"London now offers much better value than Beijing, Shanghai and Hong Kong. For a normal £400,000 investment you can buy a freehold property in London. But in Beijing you can't even get a central apartment," she added.

London Housing Market News

London House Price News: London's Kensington 'is the most expensive place to live in the UK'

Mon, 06 Jun 2011 11:33:34 +0100

More people could start searching for flats and houses for sale in Mapesbury, London after research found Kensington is the most expensive place in the entire country to live.

A survey from Zoopla.co.uk revealed the average property in Kensington costs almost £1.75 million, which could lead prospective homeowners to look for cheaper postcodes in parts of north London.

Nick Leeming, business development director at the property website, commented: "Despite the recent property market uncertainty, Brits remain obsessed with the value of their home as well as those of their neighbours, friends and family."

He noted that the findings show "an ever-widening north-south divide", with London containing the highest number of streets with million-pound homes at 2,290.

The Property Rich List also found the top ten most expensive neighbourhoods in the UK are almost all in the capital, although Surrey's Virginia Water took seventh place.

Of the top ten, only Hampstead saw house prices rise, which could see more people setting their sights on flats and houses for sale in Hampstead, London to see if they can cash in.

London House Price News

Mortgage Rate & Home Loan News: There is 'little' to suggest mortgage lending will increase

Fri, 03 Jun 2011 12:11:35 +0100

First time property buyers still face problems in securing UK mortgage offers and there is little to suggest lending will increase this year.

This is the view of Ray Boulger, senior technical manager at John Charcol, who was surprised that the Council of Mortgage Lenders (CML) increased the forecast for gross lending from £136 billion to £140 billion this year.

However, he was unsurprised by the organisation's net UK mortgage lending prediction.

"I think the [CML] forecast of an increase in net lending from £6 billion to £9 billion [in 2011] makes good sense. But frankly I am surprised that they forecast net lending to fall as low as £6 billion in the first place," he commented.

"The wholesale markets are beginning to recover, albeit still fairly slowly."

The CML also predicted gross mortgage lending will rise to £150 billion next year, which could help more first time buyers secure finance to purchase a home.

Mortgage Rate & Home Loan News

Mortgage Rate & Home Loan News: Variable rate mortgage could provide best value

Fri, 03 Jun 2011 12:04:54 +0100

Prospective house-buyers who have been keeping an eye on London property prices have been given advice about which mortgage product is the best value.

Ray Boulger, senior technical manager at John Charcol, told the FT Money Show podcast that UK mortgage offers with variable rates might provide better value for homeowners as he believes rates will rise more slowly than the market.

"Clearly, everybody will have their own view on that and if you do want to buy security, then if you only buy that security for two years, you're buying it for a period when you least need it because rates are clearly not going to go up very quickly," he pointed out.

"Whilst there will be some people for whom a two year fixed rate does make sense […] for the majority of people, I don't think a two year fixed makes sense."

Mr Boulger added that either a lifetime tracker or a five year fixed product will work best for most people.

Mortgage Rate & Home Loan News

First Time Property Buyers News: Capping UK mortgage lending 'is ridiculous'

Wed, 01 Jun 2011 17:08:31 +0100

First time buyers may face an even harder struggle to secure UK mortgage lending if proposals put forward by the Institute for Public Policy Research (IPPR) are implemented.

This is the opinion of Catherine Hearnden, director at Mymortgagedirect, who said plans to cap UK mortgage offers at three and a half times household income are "ridiculous" as every household has different expenditure.

"To some people, three and a half times £80,000 [income] could be £80,000 on one person, and with somebody else it could be £40,000 each. Affordability calculators are the way that you should asses the affordability on a mortgage, not a set limit of three and a half times [income] because some people can afford more," she advised.

Ms Hearnden conceded that the IPPR's suggestion to cap mortgages at 90 per cent loan to value is "not necessarily a bad thing" as long as there are still schemes in place to help first time property buyers.

First Time Property Buyers News

London House Price News: Prime property values up 1.4% in May

Tue, 31 May 2011 12:19:22 +0100

Prospective house-buyers looking for flats and houses for sale in Maida Vale, London might be surprised to learn that prime property prices in the capital have risen 1.4 per cent this month alone.

Research found that the increase has driven annual growth to 8.3 per cent, with average London property prices 1.3 per cent higher than their previous peak in March 2008.

Oliver Lewis, sales negotiator at Paramount, commented: "Although prices seem to have recovered by an approximate third since March 2009, foreign purchasers are still benefiting due to the currency movements over the globe.

"Whilst there have been minor improvements in the stability and strength of the sterling since early 2009, the typical purchaser buying a property with euro financing will see that prime London homes remain approximately 16 per cent cheaper than they were in late August 2007 when the financial crisis began," he added.

Meanwhile, estate agency director Ed Mead has forecast that overseas buyers in London will continue to opt for the capital over other cities.

London House Price News

London Property Market News: London 'outperforming' rest of the country

Tue, 31 May 2011 09:59:00 +0100

In recent London property market news, it appears that the capital is outperforming other parts of the UK in terms of demand.

The International Business Times reported that research from Colliers International found those behind London property developments are converting offices into residential properties in order to meet demand from buyers.

It also revealed that strong demand in London is forcing rental prices higher, particularly as supply is down in many parts of the city.

Meanwhile, the Royal Institution of Chartered Surveyors (RICS) has urged the property industry to support communities when the government's localism plans come into effect.

Trevor Beattie, chair of the independent Land and Society Commission, which was established by RICS, commented: " Early and active community engagement is good for business and good for communities.

"Developers and planners should not fear greater community involvement and accountability since this can speed up the planning and construction process, reduce risk, and add considerable commercial value," he added.

London Property Market News

London Housing Market News: Southern Europeans look to London residential property

Fri, 27 May 2011 17:02:28 +0100

Buyers from southern Europe are increasingly expanding their residential portfolios in London, analysis has shown.

Reuters reported that investors from Italy, Spain and Greece are leaving behind concerns about the stability of the euro and taking advantage of favourable exchange rates by purchasing property in the capital.

"In 2011, I suspect the lure of a 'safe', sterling denominated asset once again looks attractive as the financial markets in those countries... look particularly precarious," said Yolande Barnes, head of Savills Research, which carried out the study.

Overseas property buyers in London who originate from Spain, Italy and Greece now make up 36 per cent of people purchasing prime residential property in the city, an increase from 25 per cent last year.

Meanwhile, Knight Frank research showed three-fifths of individuals buying new build properties in central London are Asian investors, with the capital being seen as a top destination for international property purchases.

London Housing Market News