D_Property

Gross mortgage lending in the UK held steady in October but is being driven more by remortgages than new buyers due to a lack of supply in the current housing market.

It reached an estimated £20.6 billion, according to the latest figures from the Council of Mortgage Lenders and closely matches September’s gross lending total of £20.5 billion, but is 5% lower than October last year when it was £21.8 billion.

‘Housing market sentiment is holding up well, with demand still strong. This has led to a pickup in approvals, as expected. The more pressing issue is on the supply side, where the lack of private sellers continues to be an obstacle for would-be borrowers,’ said CML senior economist Mohammad Jamei.

‘For this reason, we expect lending in the months ahead to be driven more by remortgaging activity and less by house purchases. Remortgaging will be helped by competitively priced mortgage deals, which are encouraging borrowers to refinance,’ he added.

According to Ishaan Malhi, chief executive officer of Trussle, the figures conceal two very different stories in the mortgage market. ‘On the one hand, new purchases are seeing a slight fall as first time buyers continue to face challenges saving for a mortgage deposit. This is having a long term impact on home ownership,’ he said.

‘On the other, we’re witnessing a surge in remortgaging, up 17% in the last 12 months, as existing home owners take advantage of record low rates to secure better deals,’ he added.

John Goodall, chief executive officer of peer to peer platform Landbay, also believes that the push is coming from home owners changing to lower interest products. ‘Many existing homeowners are choosing to take advantage of low interest rates to refinance their mortgage. However, this growth in lending volumes belies a much more mixed picture across the sectors. Buy to let lending levels remain around 24% down on this time last year, as April’s 3% stamp duty hike caused an initial wave of transactions, but left in its wake a much more subdued market,’ he pointed out.

‘The fundamentals of the buy to let market are still pointing toward long term sustainable growth, but landlords have had a white knuckle ride over the last 12 months, and we hope to see them given some relief at next week’s Autumn Statement,’ he added.

The lack of homes for sale is also highlighted by comments from John Eastgate, sales and marketing director at OneSavings Bank. ‘Mortgage activity is in good health, reflecting growing consumer confidence after the European Union referendum and impressive resilience in a quite exceptional year. Borrowers are benefitting from record low interest rates, with remortgage activity buoyant, although purchases are constrained by lack of homes for sale,’ he said.

‘However, with the Government set to fall short of the 200,000 new homes it had committed to providing annually, the UK’s chronic housing shortage, and resultant rising house prices, are set to remain a major barrier towards lending growth. Tax changes on buy to let will only make matters worse. The mortgage market needs to be supported by house building of all tenures which is the only long term solution that can prevent further deepening of the housing crisis,’ he added.

Henry Woodcock, principal mortgage consultant at IRESS, believes that the mortgage market remains vibrant. ‘Low interest rates, a levelling of house prices and continued consumer confidence have all combined to maintain market momentum,’ he said.

‘It’ll be interesting to see if the Chancellor has any good news for the mortgage and housing markets in the Autumn Statement. It’s expected he will confirm earlier announcements of funds towards new homes to be built by small firms, but many would like to see further investment into rental properties,’ he added.

Source: www.propertywire.com

November 18, 2016
js60725005

Remortgages drive growth in UK home lending market

Gross mortgage lending in the UK held steady in October but is being driven more by remortgages than new buyers due to a lack of supply in the current housing market. It reached an estimated £20.6 billion, according to the latest figures from the Council of Mortgage Lenders and closely matches September’s gross lending total of £20.5 billion, but is 5% lower than October last year when it was £21.8 billion.
November 18, 2016
home-1596607_1920

Property prices went up in September due to more enquiries and fewer listings

Prices for property in the UK continued their rise in September as interest from new buyers increased slightly whilst the number of homes being listed for sale dropped. On average, a property in the UK was £217,888 in September, with statistics showing a 7.7% increase year-on-year. Property prices increased by 0.2% between August and September, the Office for National Statistics (ONS) revealed. The ONS said the numbers for September “suggested a period of relative stability during the month”. The ONS referred to data by the Royal Institution of Chartered Surveyors stating that there was a modest increase in enquiries from buyers, furthermore, the number of lending approvals also experienced a rise. The ONS also leaned on…
November 17, 2016
taxi-cab-381233_1920

London and other global property markets could benefit from Trump election

Property markets around the world could benefit from the election of Donald Trump as the next President of the United States but a lot will depend on how the country’s economy and dollar performs. Experts believe that it could be good news for US investment in the UK property market as London in particular is regarded as a safe haven for real estate investors while the Canadian market could suffer as Americans look to buy elsewhere. The election result saw the value of the dollar immediately fall and a prolonged dip could have a positive effect in that investors might want to move their money to other international markets, but it could also mean property buyers…
November 17, 2016
neighborhood-802074_19201

Bank of England receives new powers to ease BTL lending

The Bank of England is to receive new powers from the Government in order to regulate mortgages for small-scale buy-to-let landlords, Chancellor Phillip Hammond has announced. From early next year, the Bank will be able to limit loan-to-value ratios on buy-to-let mortgages, alongside the minimum amount by which the predicted rental income from a home will exceed mortgage interest payments. This move has been designed to help protect the financial system from any future risks in the buy-to-let market.
November 16, 2016
salford-quays-1320484_1920

Meet the four projects Manchester wants to see Chinese investment going into

Chinese investors are being asked to pump their leftover cash into four great developments across Manchester as they push their Northern Powerhouse initiative with business and politics from the Far East. Ministers hope to attract more than £5 billion in 13 projects from Chinese and international business leaders and four of those developments are in the Greater Manchester region.
November 16, 2016
building-1245932_1920

UK property prices remain resilient, latest index data shows

Average house prices in the UK have increased by 7.7% in the year to September 2016, the same as the previous month, and 0.2% month on month, the latest nationwide index shows. This takes the average price of a home to £218,000, some £16,000 higher than in September 2015 but London continues to be the region with the highest average house price at £488,000. Indeed, the index figures from the Office of National Statistics and Land Registry show that London house prices rose 1.4% month on month, the fastest rate of any region and in Croydon house prices have risen from £320,175 to £373,339 year on year, a rise of 16.6%.
Restricted Content
The contents of this website are intended only for investors from certain qualifying classes (“High Net Worth Individuals” and “Self-Certified Sophisticated Investors”). To access the full contents of the site you must first register in one of these categories.
Please confirm that you are a suitable investor before proceeding. If you are unsure whether you meet the specific criteria or not, you can check the definitions here.
Will be back soon