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Em Morley

Mortgage Lending Continued to Increase in October

Published On: November 20, 2015 at 9:24 am

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Categories: Finance News

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Mortgage Lending Continued to Increase in October

Mortgage Lending Continued to Increase in October

The Council of Mortgage Lenders (CML) reports that gross mortgage lending hit £21.8 billion in October, an 8% rise on September’s total lending of £20.1 billion.

In addition to the monthly increase, the CML found that lending grew by 19% annually, from £18.4 billion in October last year. This is the highest monthly figure since gross lending reached £23.6 billion in July 2008.

However, the group warns that market activity only has “modest” potential for further improvement, due to the shortage of properties coming onto the market.

Chief Economist at the CML, Bob Pannell, says: “As lending in the regulated mortgage space picked up over the summer months, the pace of recovery has improved. This looks set to continue over the closing months of the year with the factors helping support this recovery continuing to be: low inflation, strong wage growth, an improving labour market and competitive mortgage deals.

“As a result, lending this year is likely to exceed our forecast of £209 billion, though affordability pressures will limit business volumes for first time buyers and movers, meaning that we think the market has only modest further upside potential over the short term.”1

1 https://www.cml.org.uk/news/press-releases/gross-mortgage-lending-continues-to-grow-in-october/

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

London Homes Up for the House of the Year Prize

Published On: November 19, 2015 at 4:04 pm

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Categories: Property News

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Five homes in London have been put on the shortlist for the Royal Institute of British Architects (RIBA) House of the Year award. The winner will be announced on 25th November.

A quarter of the 20 finalists are in the capital, with developers keen on defying London’s tight space restrictions with imaginative homes.

The award replaces the RIBA Manser Medal, indicating how significant housing design has become.

Two of the London finalists are large, glamorous and expensive homes.

Fitzroy Park House in Hampstead, by Stanton Williams, is a gleaming, modern masterpiece. It is situated on a steep slope on the site of a 1950s home. The architects took advantage of the slope, by placing the entrance at the house’s midpoint, complete with a slim, steel bridge.

The house is built from large panes of glass, pale limestone and lots of wood, from cedar and iroko to grey-painted Accoya outside.

Inside, the floors and ceilings are made of oak. All six bedrooms have an en suite, with timber-clad balconies on a cantilevered upper floor. Although the home is extremely transparent, the 6,000 square foot property is also private, looking out onto Fitzroy Park.

Levring House is located in the Bloomsbury conservation area. Architect Jamie Fobert has created a huge, cuboid property at the end of a mews. However, by sinking it into a basement and forming a broken exterior of brick, glass and bronze, its size melds in perfectly with neighbouring houses.

It sits around a glazed atrium that goes up through the centre. The concrete home, with double-height spaces, a secret terrace and a 14-metre marble-lined pool in the basement is completely out of the ordinary.

Kew House is in another conservation area, Kew Green. Integrated into a Victorian wall, this brave pre-fabricated building was created by Piercy & Company using Corten steel, which goes rusty on purpose to create striking colours.

The home was built for a structural engineer couple, who were involved in the whole process of construction. The two steel volumes are connected by a double-height glass atrium.

The site was found near Kew Gardens by accident. It was previously a stable block. The steel features laser-cut patterns and a slide for the children straight down to the basement. The home also has lots of storage, making it perfect for the family.

Other homes highlight the creativity of architects in finding difficult spaces and maximising their potential.

Vaulted House by vPPR Architects was built on the site of a former taxi garage in Chiswick, which was encased by brick walls with 24 overlooking neighbours. All of the home’s light comes from the top, through six geometrically coved roof lights.

A covered passage through to the house makes it a secret spot. On two levels, the roof lights bring in natural light to the upper floor, highlighting certain areas within the open-plan living space, which features geometric ceilings. The lower level is where the bedrooms can be found, but a retracting flat glass roof section pours light down there too. The space below can be used as a summer courtyard or winter garden.

Courtyard House makes use of a similar wall-bound site in Hackney – a long, triangular sliver. Architects Dallas Pierce Quintero cleverly inserted a small two-bedroom home using timber, brick and glass, with four separate courtyards. The discouraging space and a tight budget were defeated by the original design.

Through an industrial gate is the first courtyard, then a studio, then a herb garden, then the main house, another courtyard at the back with French windows, and a tiny space with an olive tree. Thoughtful use of exposed joists and blue-black bricks give the property a distinct, luxurious feel.

We’ll be looking out for the winner next week, but any of these inventive homes could take the crown.

 

 

Could American-Style Renting Arrive in the UK?

Published On: November 19, 2015 at 1:24 pm

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Categories: Landlord News

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An American style of private renting, called multi-family renting, could arrive in the UK after a conference was held in London on the idea by US property trade body, the National Apartment Association.

The firm said that it was pleased with the success of its first UK conference, with plans to establish itself in the British market and hold further events.

Multi-family is similar to institutionally-backed build-to-rent schemes that are beginning to appear in the UK, through brands like Be:Here, Essential Living and Fizzy Living.

Could American-Style Renting Arrive in the UK?

Could American-Style Renting Arrive in the UK?

Countrywide has also entered the build-to-rent industry.

The American multi-family style of renting is a much more advanced and longer established model. Multi-family is also focused on putting tenants with very similar interests or lifestyles together.

More than 300 UK property professionals attended the conference.

It highlighted how much more evolved and professional the rental sector is in the USA. In America, branding and customer service are two of the most important aspects of the multi-family industry.

As with the UK, the US rental market is thriving, with homeownership declining slightly to 64% of the population.

It is unknown whether the term multi-family will ever be used in the UK, but key features of the regime were discussed at the conference.

It explained how US schemes offer a range and variety of facilities for residents. Fitness suites and pools are common, but wine rooms and bike workshops are also popular, alongside pet spas. Social communal space is also provided, with a wide range of resident events on offer.

These services are designed to be convenient to the resident. Amenities are offered on renters’ doorsteps, forming a community atmosphere and a place for residents to spend their leisure time.

Many developments feature a 24-hour tech café, with high-speed wifi, printing facilities and refreshments. These spaces have become increasingly popular as more people work from home, giving them a change of scenery.

An on-site concierge is usually available during business hours, providing a range of additional services, from dry cleaning to room service meals, made by an on-site restaurant. High quality customer service means that maintenance and repairs are dealt with within a specified timeframe.

Apartments are often let unfurnished, but managers usually offer a furniture rental service. They use third party firms to provide furniture without the landlord having to kit out the property.

Revenue management systems are in place with these schemes, designed to maximise revenue by updating rents on a daily basis. In the UK, properties are valued when they are empty, but in the US, the rent price is set based on market demand and income achieved. The average lease is 12 months and firms prefer a break in the agreement to review rents for potential increase at the end of the tenancy.

The model emerging in the UK includes all costs in one monthly payment, whereas the US charges for everything separately. As well as providing additional income, this method can benefit the environment, as occupiers paying their own utility bills are more like to use less, with consumption down 25% in these situations.

As a landlord, would you be interested in this type of lettings scheme? And do you believe it is more professional than the British private rental sector?

Third of FTB have less than £10,000 in the bank

Published On: November 19, 2015 at 12:15 pm

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A concerning new report has indicated that a third of first-time buyers in the capital have less than £10,000 saved in readiness to purchase their initial home.

Despite this lack of finance, more than half still have plans to try and get onto the property ladder this year.

Financial struggles

The investigation quizzed over 1,000 would-be buyers, with a further 29% saying that they had less than £20,000 in the bank.

‘When it comes down to it, the lack of deposit is the biggest barrier for most aspiring homebuyers today,’ observed Lynda Clark, editor of First Time Buyer Magazine. ‘Although we have recently seen a return of more 95% mortgages through mainstream lenders, a bigger deposit saved will mean access to lower interest rates, therefore making monthly repayments more affordable.’[1]

‘First-time buyers need to make proper plans to save as ultimately it is the only way they will be able to take these first steps onto the housing ladder,’ she added.[1]

Warning

More worrying data from the research showed that half of potential buyers had only researched property on the internet. Clark believes that many will have a rude awakening when they eventually speak to a mortgage professional.

She said, ‘for homebuyers in more affordable parts of the country at £10,000 or £20,000 deposit may be just enough to buy a small property but in London and the South East, this amount is a long way off what is required to get on the housing ladder where deposits of up £72,000 are expected on the open market.’[1]

‘Unless planning to tap into the bank of mum and dad, those with lower amounts saved will probably be looking to buy through one of the many purchasing schemes available such as Help to Buy or Shared Ownership,’ Clark continued. ‘These helpful schemes require less upfront costs, allowing homebuyers to secure a home with a 5% deposit and as a result are proving very popular with homebuyers.’[1]

Third of FTB have less than £10,000 in the bank

Third of FTB have less than £10,000 in the bank

Show

With the aim of encouraging potential purchasers to learn more about their available options, the First Time Buyer Home Show is to be held on October 10th, at the Business Design Centre in Islington. The event is free to attend and is expected to welcome thousands of first time buyers through the doors.

Clark believes that the show, ‘is a useful event for first-time buyers who want to find out all of the opportunities available to them in the current market. Depending on what budget they have, there will be some great properties available; from one bedroom apartments in central locations to family homes within commuting distance of the capital.’[1]

‘For many, just having access to free financial advice will be a good way to kick start the home buying process and set expectations at a more realistic level,’ Clark concluded.[1]

[1] http://www.propertyreporter.co.uk/finance/a-third-of-ftbs-have-less-than-10000-saved.html

 

 

Most Expensive Homebuyers Prefer City Living

Published On: November 19, 2015 at 10:17 am

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Buyers purchasing the most expensive homes are choosing to live in urban areas, as opposed to a rural setting, reveals analysis of prime property sales by Knight Frank.

Research by the firm looked at the places outside of London where the most expensive property sales were completed. It found that the top 10% were in towns and cities.

Typically, prime house sales outside the capital are for properties costing between £400,000-£500,000.

Most Expensive Homebuyers Prefer City Living

Most Expensive Homebuyers Prefer City Living

Although the number of prime sales in England and Wales dropped by 13% between 2005-14, in six locations, the amount increased by more than 40% over the same period.

According to Knight Frank’s data, house prices in town and city markets have risen by 26% since 2005 and now stand 3% above the peak recorded in 2007. Rural property values have grown by just 7% and are currently 13% below the pre-crisis high.

The locations with the biggest increase in prime sales are all in the South East, with Tonbridge coming out on top after an 80% rise in transactions in the last ten years. Cambridge is second, with prime sales increasing by 69% and an average house price of £811,332 in the top 10% of the market.

Recently, house builder Hill revealed that it has sold six homes on a seven-property development in Cambridge, before the scheduled launch date. The £1.3m price of a four-bedroom home clearly did not discourage buyers. The purchasers were described as a mix of Cambridge residents, some of which commute to London. They are predominantly owner-occupiers.

Knight Frank expects the trend for urban living to continue.

Senior Analyst at Knight Frank, Oliver Knight, comments: “The top towns and cities are all places that are doing well economically. A lot of the reason people move is for work and many of these areas are places where new jobs are being created.”

As well as being a commuter hotspot, Tonbridge could also be witnessing increased activity as banking jobs in nearby Tunbridge Wells are on the rise, says Knight.

Cambridge and Exeter also have science parks, which drive employment levels up.

Knight concludes: “As the economy continues to recover and house prices outside London show further growth, we predict more London buyers will make the move out to the regions and this will boost the ripple effect of house price growth from the capital.”1

1 http://www.theguardian.com/money/2015/nov/15/wealthy-homebuyers-prefer-to-live-in-cities

How to make your BTL investment more profitable

Published On: November 19, 2015 at 10:00 am

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The million-dollar question for all landlords is, ‘How do I make my buy-to-let investment more profitable?’

For all of the necessary fees landlords must pay, from letting agents to addressing repairs, keeping costs at a minimum can be tough. This is not made easier by void periods or accidental damage. Arguably though, the biggest cost to a landlord is the mortgage.

Many landlords forget about mortgages once they have secured an opening deal. This has provoked a warning from the director at a leading estate agency Douglas and Gordon. ‘Don’t get comfortable,’ says Ed Mead, ‘I like to know what I’m doing for five years, but it doesn’t do any harm to check annually. Always use a broker. A broker will know more than you, or the internet, will’.[1]

Prosperous year

2013 is predicted to be a busy year for the buy-to-let industry. According to a survey from the Association of Residential Letting Agents, (ARLA) the average portfolio of buy-to-let investors rose from seven to eight in 2012.

Existing mortgage lenders are already taking steps to entice new and existing landlords. BM solutions have announced plans to increase buy-to-let lending rates from 17 to 21% of its annual lending.

On the whole, it appears that landlords are starting to become more savvy about refinancing their property. A survey from brokers Mortgages for Business suggested around eight in ten landlords want to remortgage in 2013, as opposed to five in ten last year.

How to make your BTL investment more profitable

How to make your BTL investment more profitable

Find a rate that suits you

Kate Faulkner, director of independent advice service Designs on Property, said that the right mortgage may not be the cheapest. She said, ‘Finding a best rate is essential, but this might not be the cheapest; it might just be the one that is right for your investment objectives.’[1]

She went on to say that, ‘If your aim is for capital growth, get a mortgage that offers a higher loan-to-value so your property covers its costs but won’t necessarily provide much income beyond that. If you want to create income, you need a low mortgage rate to boost your income.’[1]

On average, buy-to-let mortgages are around 1.5% higher than a traditional homeowner rate. Monthly yields typically range from 3-10%, with London landlords yielding an average of 5%. If a landlord becomes too-greatly mortgaged, then they are unlikely to be left with a significant monthly income.

Building societies

The way forward for some landlords may be to take out a mortgage through a building society. Recently, building societies have become decidedly competitive, providing lower rates and flat arrangement fees. Andrew Montlake of brokers Coreco, explains that, ‘The key is the arrangement fee, which can be as high as 3 per cent – but lenders such as Abbey and Godiva, part of Coventry Building Society, are starting to offer £999.’[1]

Landlords should be advised however that different mortgage lenders will vary on how many properties that can cover. For example, Woolwich and Aldermore permit up to ten properties, whereas Lloyds allows only three. Also of note is the fact that for those looking to remortgage on a regular basis, by-to-let policies without penalties for redemption are few and far between.

Further considerations

Other things for landlords to take into account when seeking mortgage providers are that certain properties can be refused finance. These include ex-council houses, flats with in excess of five floors and flats above shops. Buy-to-let investors may also be required to provide a 25% deposit to remortgage.

Faulkner believes that by asking themselves the correct questions, they will be in a much stronger position to chose the correct mortgage policy and provider; -, ‘What if rents fell by 5 or 10 per cent? What if property prices fell by the same amount – could you still remortgage? And if the property is empty for months, could you cover the costs of mortgage, service charges and ground rent?’[1]

Choosing the correct mortgage policy and provider could be the key to sustaining a profitable return on a buy-to-let investment.

[1] http://www.landlordexpert.co.uk/2013/02/18/how-to-making-your-buy-to-let-investment-more-profitable/