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Em Morley

Smaller UK mortgage lenders seeing strong growth

Published On: June 21, 2017 at 9:55 am

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Categories: Finance News

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The most recent report released by CML shows that small and medium sized mortgage lenders are seeing strong growth. This comes despite the 10 biggest lenders continuing to take up the most business in the market.

In 2015, medium-sized lenders saw strong growth, with a 56% increase in annual lending volumes. In 2016 however, there was a more steady rate of growth experienced by these lenders.

Instead, those classified in the next tier down – between 21-30 by volume of lending – saw improved growth.

Lending Rises

These firms saw volumes increase by 60% in aggregate and include names such as Paragon, Nottingham BS, Tesco Bank and Fleet Mortgages.

The proportion of new lending by the top ten firms remained steady at 84% during 2016. However, there were some considerable movements.

For example, Lloyds Banking Group remained the largest mortgage lender in the UK, but saw a fall in its market share, from 17.3% in 2015 to 15.6% last year.

Santander UK also saw a fall in its market share, from 11.8% to 10.4%. The Royal Bank of Scotland however saw its share rise from 1.8% to 12.9% – a rise to sit at third place in the lending list.

Smaller UK mortgage lenders seeing strong growth

Smaller UK mortgage lenders seeing strong growth

Challenger Headway

One particular trend that has continued for the last couple of years was the rise in challenger banks and specialist lenders making headway in the list. TSB Bank saw the most significant growth, with its market share rising by 0.5%.

Activity for this particular group was significantly up, with Precise Mortgages, Metro Bank, and Fleet Mortgages seeing rises of 54%, 67% and 150% respectively.

Gross overall lending in 2016 amounted to £245bn, up 11% on 2015. This was a slightly higher rate of market growth than the 9% seen in the year before. In addition, there was a corresponding increase in marketplace competition. 60 lenders appeared in the CML table for lending in 2016 – made up of those who lent over £50m- up from 55 in the preceding year.

Thousands of Landlords Ditching Letting Agents to go it Alone

Published On: June 21, 2017 at 9:42 am

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Categories: Landlord News

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Thousands of landlords are ditching letting agents to go it alone in finding tenants and managing their properties, as the Government’s reduction in mortgage interest tax relief and stricter mortgage lending criteria are making buy-to-let investment more expensive.

Thousands of Landlords Ditching Letting Agents to go it Alone

Thousands of Landlords Ditching Letting Agents to go it Alone

A new survey of 2,000 landlords by LetBritain found that 64% of landlords – or around 600,000 nationwide – would consider using private websites to find tenants in order to avoid paying costly letting agent fees.

Some 37% of landlords questioned said that they do not feel that the UK rental market is fit for purpose, with this proportion rising to 50% in London. This is unsurprising, given that almost a quarter – 23% – of respondents claim to have lost hundreds, if not thousands, of pounds through void periods, because instructed letting agents had failed to secure them new tenants.

The Founder and CEO of LetBritain, Fareed Nabir, says: “Today’s research presents a number of concerning insights into the difficulties faced by the Britain’s vital landlord community. It is obvious that landlords up and down the country feel let down by the current property letting system.”

Previously, LetBritain research found that two fifths (40%) of UK tenants – 7.21m people – find the marketplace to be “ruthless and unethical”, with letting agents allowing gazumping and non-existent “phantom properties” to become too commonplace in the sector.

“Clearly, a faster, more affordable and transparent system is required to support the market of 2017 for both landlords and tenants,” adds Nabir.

Landlords must be aware that using a letting agent may become more expensive when the Government’s planned lettings fee ban for tenants is introduced.

If you do decide to ditch your letting agent and go it alone, we urge all landlords to follow this guide to personal safety: https://www.justlandlords.co.uk/news/landlords-guide-personal-safety/

 

 

 

 

 

 

 

 

 

Home Sales Tumble by a Third Since Housing Boom

Published On: June 21, 2017 at 9:18 am

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Categories: Property News

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Home sales across England and Wales have tumbled by over a third compared with transaction levels at the end of the housing boom in 2006. Last year, home sales were well below the one million mark, at 848,857.

Home Sales Tumble by a Third Since Housing Boom

Home Sales Tumble by a Third Since Housing Boom

The latest Land Registry figure is 7% lower than in 2015 and 34% lower than after the housing boom in 2006.

A new Lloyds Bank report suggests that homeowners may not be moving due to a lack of equity for a deposit or not finding the right location. Surprisingly, there is no mention of higher Stamp Duty rates or stricter mortgage lending requirements.

All regions of England and Wales experienced a decline in homes sales in 2016 compared with 2015, with the greatest falls seen in Greater London – down by 18% annually to 94,000 – and the South East – down by 10% to 203,923.

Home sales in London and the South East were down by 44% and 33% on the period after the housing boom respectively.

Both the East and West Midlands fared the best annually, with just a 1% decrease to 74,547 and 80,921 respectively, followed by the North West, where there was a 2% drop to 96,552.

However, property transactions have picked up compared with five years ago, when the market was deep in recession, with the number of home sales in England and Wales up by 29% on 2011, buoyed by a 23% rise in the South East and 46% increase in the North West.

Sales in Greater London have stood still over the past five years, however, up by just 2%.

The Mortgage Director at Lloyds Bank, Andy Mason, comments: “The recovery in the housing market has stumbled during the past year, with sales declining in all regions.

“Despite record low interest rates and Government schemes such as Help to Buy, sales remain significantly below the levels seen at the height of the last housing boom.”

He explains: “The decrease in the amount of people moving home could be caused by movers not being able to find the right home in the right location, or those who don’t have enough equity in their current home to put down as a large enough deposit for their next mortgage.

“Add to this that the average cost of moving home is close to £11,000, with costs in London over £31,000, and these factors make it more challenging for those looking to move home.”

Fewer EU nationals looking to rent in UK following Brexit vote

Published On: June 21, 2017 at 8:51 am

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New figures have revealed that there has been a sharp fall in the number of EU nationals looking to move to Britain following the result of last year’s referendum.

This in turn is putting downward pressure on rental demand in many parts of the UK, according to data released by SpareRoom.co.uk.

Referendum Changes

In the lead up to the EU referendum, the number of EU nationals looking to move into the UK was up by 14.7%. However, during the 10 months following the decision to leave the European Union, that percentage fell to just 4.35%.

Further data from the flatshare website shows that the UK’s decision to exit the EU has led to a significant decline in people from Eastern Europe looking to rent in Britain. This was fronted by an 8% drop in those coming from Slovakia, 5.54% from Poland and 3.18% from Hungary.

Matt Hutchinson, director of SpareRoom.co.uk, observed: ‘With so much uncertainty over what Brexit really means, it’s no surprise to see interest in moving to the UK from EU countries in decline. Until people know how their freedom of movement and right to reside will be affected it’s hard for them to make long term decisions.’[1]

‘Key Eastern European countries like Poland, Slovakia and Romania, which have traditionally supplied large number of workers to the UK, are showing the biggest drops in traffic,’ he continued.[1]

Fewer EU nationals looking to rent in UK following Brexit vote

Fewer EU nationals looking to rent in UK following Brexit vote

Immigrants

What’s more, the data show that the result of last year’s referendum is putting off a number of immigrants from outside of Europe coming into the UK.

Growth in non-UK traffic in the 10 months following the Brexit vote stood at 8.73%, in comparison to 19.65% in the period before.

In addition, the UK saw a fall in interest from the USA.

Hutchinson concluded by saying: ‘We also saw a spike in interest in moving to the UK from the USA in the weeks surrounding the presidential election last year. While it’s probably too simplistic to entirely put that down to anti-Trump sentiment, the timing suggests that’s a factor.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/6/fewer-eu-nationals-renting-property-in-the-eu-flatshare-data-suggests

 

Some Grenfell Tower Victims May Never be Identified due to Subletting

Published On: June 21, 2017 at 8:12 am

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It’s been one week since the devastating Grenfell Tower fire shook North Kensington. But some victims of the blaze may never be identified due to subletting, believes a lawyer.

Some victims of last week’s fire were living in flats that were sublet without permission by the original tenants, according to the local North Kensington Law Centre.

At the time of writing, Scotland Yard has confirmed that the death toll stands at 79.

Some of those that survived the blaze were reluctant to seek help from the authorities, as they feared being detained over their unresolved immigration status, says Victoria Vasey, the Director of North Kensington Law Centre.

A further problem for survivors, she explains, is that those sent by the Kensington and Chelsea authority to hotels for emergency accommodation last week were all informed that they would have to leave by Tuesday (yesterday).

“They were told last Friday and spent all weekend stressing because there was no one available to answer questions,” Vasey states. “It affected scores of people, but they have now been reassured and allowed to stay where they are.”

Vasey also adds that the problem of identifying victims was being complicated by the fact that “a lot of people were irregular in their tenancies and some were subletting. Some of them were illegal sub-tenancies”.

Those who died in the fire may not be those recorded as the official tenants of the flats.

Vasey welcomes the large number of lawyers who have volunteered to help provide free legal advice.

Daily legal clinics have been set up to advise displaced tenants on housing problems.

“Many people were concerned about their immigration status,” Vasey reports. “Some were in the middle of applications [to be naturalised] and have lost all their papers. We are offering support to them.”

She continues: “Some of the people feel they can’t seek help because they are terrified they will be carted off to immigration detention. It’s a big problem. We are trying to get the word out to get them to come and see us. We can give them advice on the basis of client/lawyer confidentiality.”

While survivors may, at a later stage, consider bringing compensation claims or seek other ways to obtain justice, Vasey claims that families are at the moment focused on more immediate needs.

One issue that may become more important once the inquiry is launched is whether the cladding added to the exterior of Grenfell Tower was primarily for insulation purposes, or because it made the building more attractive. There have been allegations that the tower had been renovated to attract more upmarket tenants.

Vasey wrote to the Home Office on Friday, calling on officials to provide emergency help for those who have lost all of their documents.

“There has been nothing to suggest there will be a waiver of the fees,” she says. “Which would be important given the circumstances they are left in.”

Is UK property price growth rising at an unattainable rate?

Published On: June 20, 2017 at 1:07 pm

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Categories: Property News

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Yesterday saw Rightmove release data indicating that the average property price in the UK slipped by 0.4% in June, in comparison to the previous month.

However, would-be property investors should take these figures with a pinch of salt according to Jeremy Duncombe, director at Legal & General Mortgage Club.

Prices

Mr Duncombe, a mortgage expert, explains that despite the typical asking price this month dropping to £316,109, prices are still up by 1.8% on a yearly basis.

Despite this being the lowest rate of annual price growth seen since April 2013, residential property prices are still rising. However, there are concerns that in regions where affordability levels are stretched, less households are able to take part in the market.

Duncombe observed: ‘Although the data shows a minor decrease in monthly house price growth, on a year-on-year basis, house prices are still rising. Potential buyers are having to increase their borrowings, or depend on family members to help fund a deposit.’[1]

‘For many workers, price increases are occurring at an unattainable rate, with house prices now at a record 7.6 times earnings. For London, this is stretched to more than 10 ten times,’ he continued.[1]

Is UK property price growth rising at an unattainable rate?

Is UK property price growth rising at an unattainable rate?

Supply

A main cause for the increase in property prices is due to the fact that demand continues to outstrip supply in many regions of Britain. This once again underlines the need for new affordable housing to be developed.

Mr Duncombe went on to say: ‘Once the dust has settled in the newly-formed government, the task of building more affordable housing needs to become an urgent priority on the agenda. Building affordable housing in the right places will help first time buyers to take their first steps onto the property ladder.’[1]

 

[1] https://www.propertyinvestortoday.co.uk/breaking-news/2017/6/uk-property-price-growth-is-occurring-at-an-unattainable-rate