Written By Em

Em Morley

The Number of Interest-Only Mortgages has Dropped Sharply

Published On: June 7, 2016 at 10:06 am

Tags: interest-only loans,mortgage market,mortgages

The number of interest-only mortgages has dropped sharply since 2012, according to data from the Council of Mortgage Lenders (CML).

Research has found that there were around 3.2m interest-only loans in 2012, when the CML began collecting data, but that figure has fallen to about 1.7m today, with a further

The Number of Interest-Only Mortgages has Dropped Sharply

500,000 mortgages being part-and-part.

A regulatory clampdown in the mortgage sector has made it more difficult for homebuyers to acquire interest-only loans, which are usually deemed too risky for ordinary homeowners. However, this type of mortgage is still available to landlords.

Lenders have been actively tackling the issue with interest-only mortgages by contacting borrowers to explore their options if there are difficulties in replaying the loan.

Many lenders also seem to be steering borrowers away from interest-only options when remortgaging comes around.

The CML reports that a significant proportion of the decline in interest-only mortgages came from loans being paid off, which indicates that purposeful remortgaging played a large part.

The figures show that 29% of total redemptions were from loans due to mature from 2028.

The Analytics Manager at CML, James Tatch, says: “In some cases, the borrowers will now be mortgage-free, either trading down or paying off in full from savings or other sources. But where they took out a new mortgage on redemption, our research suggests that, in most cases, this was on a repayment basis, rather than a new interest-only loan to replace the old one.

“Another trend we have seen is the overall profile of the remaining interest-only stock becoming progressively lower-risk each year, in terms of borrowers’ debt relative to property value.”

With targeted interest-only contact strategies now a permanent feature of lenders’ back-book management, “we see this positive story continuing,” according to Tatch. However, he warns that this is vital that those borrowers still with interest-only loans “engage with lenders” at each point of contact, to ensure that any “risks are identified and managed at the right stage”.

Property Sales Halve in Central London Ahead of EU Referendum

Published On: June 7, 2016 at 9:10 am

Author: Em Morley

Categories: Property News

Tags: EU referendum,prime central london,property sales,rent prices

Property sales have halved since March in prime central London, according to estate agent W.A. Ellis.

Property Sales Halve in Central London Ahead of EU Referendum

The report arrives after the agent experienced a period of heightened activity prior to the introduction of the 3% Stamp Duty surcharge for buy-to-let landlords and second homebuyers on 1^st April.

The firm has now advised landlords to cut rent prices ahead of the vote on whether the UK should stay in the EU.

W.A. Ellis believes that the slowdown in property sales is the direct result of uncertainty surrounding the referendum on the housing market.

The Director of W.A. Ellis, Richard Barber, comments: “According to LonRes, only 110 houses have sold within SW1, SW3, SW7, SW10, W8 and W14, which is indicative not just of the hesitancy surrounding the EU referendum, but the huge increase in the cost of moving at the upper end of the market.

“Various apocalyptic visions of what may or may not happen if we leave the EU on June 23^rd have continued to confound the electorate over the last two months.

“As a result, it would appear that buying a new property has been put on hold by the majority of potential purchasers until the future of the UK is determined.”¹

The Head of Agency at the firm, Lucy Morton, adds: “There are reports of recruitment freezes across the city and firms delaying relocating staff to London to see what awaits the UK post-referendum.

“This has had an impact on prices and the unprecedented surplus of stock has put further downward pressure on the rental market. With this in mind, we have been advising landlords to reduce rents.”¹

We will continue to provide you with updates on the property market ahead of the referendum and offer guidance on how the housing sector will be affected by the result of the vote.

¹http://www.propertyindustryeye.com/sales-halve-in-central-london-as-eu-referendum-rattles-buyers-nerves/

Most off-putting property features revealed

Published On: June 7, 2016 at 8:58 am

Author: Em Morley

Categories: Property News

Tags: Buy-to-Let,dealbreakers,property,property purchasing

Interesting new research has highlighted the most off-putting and unexpected features that deter people when viewing a property.

The study, conducted by online estate agent easyProperty, looked at a national sample of 1,000 adults. These participants were asked about what sort of things would make them lose interest in a property that they were viewings.

Off-putting property features

Over half of respondents to the survey revealed that they would lose interest in a property should they detect a bad vibe when looking around.

A large number of responses suggest that house-hunters worry about the surrounding area, as much as they do about the property itself. Too many fast food, pound or even charity shops were found to put a number of property buyers off!

In addition, 18% of people questioned said that they would lose interest in a suitable property if they simply disliked the owners!

The top property dealbreakers, according to the easyProperty survey, were revealed to be:

Turn off	Percentage who said the turn off could be a dealbreaker
Detecting a bad vibe	54.3%
Lots of fast food shops nearby	37.2%
Lots of pound shops nearby	30.4%
Lots of pubs and restaurants nearby	24.9%
Charity shops nearby	21.2%
Patriotic flags on neighbouring properties	19.5%
Disliking the current owners	18%
Lots of religious buildings nearby	17.4%
Smelly pets	9.2%
Lots of vintage/charity shops/boutiques nearby	6%

Most off-putting property features revealed

Emotionally tough

Rob Ellice, of easyProperty, noted, ‘a home is more than just bricks and mortar and finding the right property can be emotionally taxing. Before deciding on a property most people try to picture themselves living in a certain house or area. What’s the neighbourhood like, would we want to go for an evening stroll? Who are the neighbours, can we imagine inviting them over? How do the schools perform, can we see our kids enjoying it there?’

‘There are many things that may sway our vision and make us become emotionally attached to a property or put us off completely and these can be quite unexpected.’[1]

[1] http://www.propertyreporter.co.uk/property/what-are-the-uks-weirdest-property-purchase-dealbreakers.html

Housing Crisis Causing Many to Put off Major Life Decisions

Published On: June 7, 2016 at 8:34 am

Author: Em Morley

Categories: Property News

Tags: first time buyers,house prices,housing crisis,rent prices,starter homes

Britain’s housing crisis is causing many people under 45-years-old to put off major life decisions, according to a new study by YouGov on behalf of homelessness charity Shelter.

Shelter reveals that 59% of people in that age group have put significant milestones, such as marriage, starting a family or moving for work, on hold. The research indicates how the housing crisis is affecting much more than just where people live.

Housing Crisis Causing Many to Put off Major Life Decisions

Over the past few years, house prices have continued to rise, with the average property value in London surpassing £600,000 for the first time last month.

Data from recent months also shows that rent prices have been increasing constantly since 2010, putting even further pressure on prospective first time buyers saving for a deposit.

Research has found that as a result of the chronic housing shortage, the average age of a first time buyer is now 38. This is expected to rise to 41 by 2025, according to financial services firm London Victoria.

However, the lack of affordable housing is also increasingly having an impact on personal lives.

The YouGov survey found that 19% of people under 45 have experienced a delay finding a job, while 16% have postponed getting married. Some 22% of respondents have put off having children because of their housing situation, while one in ten expect to delay their retirement from work.

The Government’s Starter Homes scheme was designed to boost homeownership. However, the initiative has been criticised, as the houses are still too expensive for most people on ordinary incomes.

The Chief Executive of Shelter, Campbell Robb, believes that young people have been left in limbo due to the shortage of affordable homes.

He says: “Everyone deserves the chance to have a home where they can put down roots and build a life for themselves. But our ever-growing housing crisis means millions of young people are being left behind – unable to reach many of the crucial life milestones that were taken for granted by the generations who came before them.

“As Shelter reaches its 50^th year, it’s heart-breaking to see so many young people still living in a housing limbo, facing a frustrating lifetime of instability where they feel unable to move forward with their lives.”

He insists: “We cannot make this crisis someone else’s problem, and it’s the responsibility of all of us to help fix it.”

Stamp Duty should be scrapped for professional investors

Published On: June 6, 2016 at 1:55 pm

Author: Em Morley

Categories: Finance News

Tags: built to rent,housebuilders,investors,Stamp Duty

The Better Renting for Britain campaign have called for professional investors to be made exempt from the 3% Stamp Duty surcharge.

Some of the most recognisable investors in the country have written an open letter to the Housing Minister Brandon Lewis. The letter asks for an exemption from the extra surcharge, introduced on April 1^st.

Stamp Duty

Institutional investors who have invested significant sums of cash in Build to Rent schemes were deterred when Chancellor Osborne announced that they would be subjected to the additional charge.

The letter to Mr Lewis has been signed by 11 companies and outlines a three-point action plan that could see 250,000 additional homes built for rent. This in turn would help to deliver on its promise to build one million homes by 2020.

Signatories to the letter include Grainger Plc, Essential Living, LaSalle Investment Management, Fizzing Living and Hermes Investment Management.

Facing facts

Martin Bellinger, chief operating officer at Essential Living said, ‘until we face up to the fact that promoting home ownership at all costs will lead us nowhere, Britain will not overcome its housing shortage. The housing minister has been very supportive of Build to Rent, but what’s crucial is that the prime minister and chancellor recognise the contribution this could make to helping them keep their promises on building a million homes by 2020.’[1]

Helen Gordon, chief executive at Grainger Plc, feels that it is vital that the Government does all it can to housebuilders to develop more homes.

Gordon said, ‘our vision is for a better rental market, underpinned by good value for money for our customers, supporting economic growth and housing supply. We are looking to invest hundreds of millions of pounds into new rental homes, designed specifically for the renting, which we will directly manage for many years to come.’[1]

Stamp Duty should be scrapped for professional investors

Potential

Chris Taylor, head of private markets at Hermes Investment Management, believes that experience from countries such as Germany and Holland shows that there is potential for a profitable Build to Rent market here in the UK.

Mr Taylor said, ‘crucially, this investment will typically be long term institutional programmes committed to providing institutional quality and professionally maintained, purpose built rental blocks. Designating sites as suitable for Build to Rent in local plans, as well as identifying public land sites, will greatly assist new supply.’[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2016/6/investors-want-extra-stamp-duty-scrapped

New Partnership to Deliver 5,000 Rental Properties

Published On: June 6, 2016 at 11:25 am

Author: Em Morley

Categories: Property News

Tags: housebuilding,private rental sector,property investment,property investors,rental properties

A new partnership between Keepmoat and Sigma Capital Group will deliver 5,000 rental properties through a £800m investment.

Keepmoat, a housebuilder and regeneration specialist, and investor Sigma say that the new joint venture will provide around 5,000 homes for the private rental sector by 2021.

The project, which will mark Keepmoat’s first private rental sector venture, will feature a range of two, three and four-bedroom properties in locations across the North East, Yorkshire and the East Midlands, with construction expected to begin this summer.

New Partnership to Deliver 5,000 Rental Properties

The partnership will primarily deliver homes for rent on land owned and to be acquired by Keepmoat, while Sigma will undertake lettings and investment management.

The Chief Executive at Keepmoat, Dave Sheridan, says: “This is a significant milestone for our business, and we are proud to be working alongside Sigma to scale up their private rental sector growth ambitions.

“The partnership will deliver great quality market rented homes, alongside our Keepmoat homes for sale, which will allow the pace of housing delivery on strategic sites to be increased, to deliver the Government’s aspirations and provide people across the country with much-needed housing options.

“Sigma came to us because of our national capability, our great quality product and our efficient supply chain that delivers great value for money.”

Last year, Keepmoat built more than 4,000 homes, and the firm aims to increase their housing growth by 25% year-on-year moving forwards.

Sheridan adds: “To deliver this target, we are working closely with our supply chain – many of which are small and medium-sized businesses – to help them to growth and respond to the market need.”¹

The partnership with Keepmoat will significantly increase Sigma’s construction resource, access to land and geographic reach, as the company seeks to deliver high quality family homes to rent in large-scale across England. The new relationship complements Sigma’s long-term agreements with Countryside Properties Plc, as well as its existing private rental sector platform.

The Chief Executive of Sigma, Graham Barnet, comments: “I am delighted to be working with Keepmoat to not only create more housing options and meet the growing need for alternative tenure housing in key areas across the country, but they will support us with strengthening our private rental sector and regeneration portfolio.

“We are looking to significantly expand our business in the private rental sector, and this partnership will accelerate our strategy for growth in this market.”¹

¹http://www.sigmacapital.co.uk/news/article/2016/06/03/major-new-strategic-partnershi/176