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UK women say mortgage rules are discriminatory

Published On: October 8, 2015 at 10:59 am

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Concerning new research from comparison website uSwitch indicates that many women who apply for mortgages in the UK feel discriminated by lenders, because starting a family would impact on their finances.

Since 2014, securing a mortgage has become tougher in the face of stricter regulations. Applicants are now permitted to detail their monthly outgoings and how they would cope should interest rates rise.

Undisclosed

Data from the report shows that 25% of women have purposely not disclosed plans to begin a family over fears that their mortgage application would be refused. 9% said they have been discriminated against because of their plans to have a family.[1]

11% said that they would delay having a child in order to obtain a mortgage, with 48% saying they would save up to cover payments during maternity leave. In addition, the added information required when applying for a mortgage of having an emotional impact on a many women. 71% of those who didn’t disclose family plans to their lenders experienced increased levels of stress and anxiety during the application process.[1]

In total, 27% of women believe that current affordability criteria is out of touch with modern family finances, with a large number saying savings should be taken into account.[1]

UK women say mortgage rules are discriminatory

UK women say mortgage rules are discriminatory

Punishing

‘There is a strong feeling that mortgage lenders, rightly or wrongly, may be penalising women for starting a family,’ said Tashema Jackson, money expert at uSwitch. ‘A worrying oucome is that some female mortgage applicants are feeling forced to withhold information from potential lenders. Not only can this have severe implications in terms of invalidating any mortgage offers, but it is causing stress and anxiety for home buyers at a critical time in their life,’ she continued.[1]

Jackson suggests that, ‘while it’s vital that lenders help people only borrow within their means and ensure they can afford future payments, it’s not fair for lenders to make blanket assumptions.’ She said that, ‘those planning a family may be able to manage their repayments even with a drop in household income, thanks to careful planning or savings.’[1]

Concluding, Jackson said that uSwitch, ‘believe lenders should be making decisions based on a broader picture of an applicant’s financial situation, including the amount that they have in savings, rather than on assumptions about a woman’s personal circumstances or intentions.’[1]

[1] http://www.propertywire.com/news/europe/uk-mortgage-rules-discrimination-2015100711066.html

 

 

Buy-to-Let Property Sales Up by 50% in a Year

Published On: October 8, 2015 at 9:57 am

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reform of leasehold

Buy-to-let property sales rose by more than 50% in August, compared with the same month last year, at a total value of £3.31 billion, according to market research company Equifax Touchstone.

Buy-to-Let Property Sales Up by 50% in a Year

Buy-to-Let Property Sales Up by 50% in a Year

From January to August this year, buy-to-let sales had hit £25.62 billion, a 30% increase on January to August 2014.

Equifax Touchstone believes that buy-to-let investors are attracted to the market by the continued economic recovery, low interest rates and competitive deals from lenders.

Additionally, private rent prices have grown by more than 10% since the start of the year.

Despite seeing annual growth, buy-to-let sales actually dropped in August by 12.5% from the £3.77 billion reported in July.

However, this is common during the summer holiday period and is considerably less than the fall in sales recorded last year, of 21%.

The figures cover 92% of the intermediated lending market. Residential sales between January and August rose by 14.8% compared to the same period in 2014.

Including the buy-to-let sales growth, total sales for January to August were up by 18% annually. The average value of a residential mortgage in August was £183,337, compared with £170,371 in August 2014. The typical buy-to-let loan was worth £158,782 compared to £143,546 last August.

Relationship Manager at Equifax Touchstone, Iain Hill, says: “We have seen promising signs of growth in the buy-to-let lending market in the past year, as demand continues to rise and this has been further consolidated by last month’s figures. We expect this upward trend to continue in the coming months.

“Despite a fall in sales in August, which was slightly more than expected given the robust nature of the market so far this year, it’s promising to see sustained year-on-year growth.

“The current favourable market conditions, supported by low interest rates and the greater capacity for lenders to offer mortgages, have encouraged borrowers to enter the market.”1

1 http://www.propertyindustryeye.com/buy-to-let-sales-rise-by-50-in-one-year/

 

Psychological barrier for old people moving home

Published On: October 8, 2015 at 9:15 am

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There is a psychological barrier stopping older people from downsizing their existing properties. That is the view of Housing Minister Brandon Lewis, who has suggested he would like property companies to produce more attractive bungalows to encourage pensioners to move from larger homes.

Positivity

Speaking at a fringe meeting, Lewis said, ‘we need to find the product that makes my parents, my inlaws find a property that they want to move to. It has got to be a positive thing.’

The number of households is on course to increase by 2.2milion by the year 2021. Of these, 1.2million, or 54%, will be households with owners aged 65 or over.

Most recent figures suggest that only 2% of homes in England are bungalows. Mr Lewis added, ‘we need to see more bungalows being built that people want to move to. It is around creating a product that older people find attractive enough that they positively want to move to because there is a psychological barrier to get over.’[1]

Psychological barrier for old people moving home

Psychological barrier for old people moving home

Life decisions

‘If you have got to a point in your life where you have got your dream home, then you get to the point where you decide it is time to move from that, it is a decision you are making about where you are in your life,’ Mr Lewis continued. ‘That is a really big psychological barrier and we have not cracked that yet in this country. There are other countries where they do have this product,’ he added.[1]

Number 10 is looking to increase pressure on elderly people who live in large accommodation with spare rooms, after their children have moved on. Just last year, a Liberal Democrat minister stated that more than half of over 55-year olds had property with spare rooms.

In 2011, research showed that 25million bedrooms in England were empty, mostly due to the fact that elderly couples do not move on to small properties.

[1] http://www.telegraph.co.uk/news/politics/11915572/Psychological-barriers-stop-old-people-from-downsizing-says-housing-minister.html

 

 

 

The Current Property Hotspots in the UK

Published On: October 8, 2015 at 9:01 am

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London has been the property market leader in recent years, with the rest of the country following in its tracks. However, the latest quarterly study from eMoov has uncovered some surprising hotspots.

The online estate agent has tracked supply and demand in the most populated locations in the UK.

It reveals that the top hotspot is Bexley in southeast London, with demand at 77%. eMoov calculates demand by measuring the number of homes sold in the third quarter (Q3) against the amount of homes registered for sale, as tracked on Rightmove and Zoopla.

Bexley is right within the capital’s commuter belt and it seems that commuters are fuelling demand in the South East.

The Current Property Hotspots in the UK

The Current Property Hotspots in the UK

Other commuter hotspots with high demand include Watford at 72%, Reading at 68%, Sutton at 68% and Barking at 65%.

But it’s not just the thriving South East experiencing a surge in demand. Bristol has recorded a level of 71% and York is at 56%.

The lowest demand in the UK is currently being felt in Aberdeenshire, at 10%. This is thought to be due to the state of the oil industry at present. A similar drop in demand is predicted to hit Redcar, following the closure of the town’s steel works.

However, other areas seeing low levels of demand, Westminster (15%) and Kensington and Chelsea (17%) for example, include some of the most aspirational addresses in the country.

And Camden is also witnessing a drop in demand, with levels down by 14% in Q3.

The greatest increase in demand was recorded in Chester, rising by a huge 164% in the last 12 months.

Ealing’s level is also intriguing, with demand sitting at just 38% in Q3, but after a huge 74% rise on Q2.

Russell Quirk, the founder of eMoov, says: “In early 2014, we predicted the ripple effect which London would have on the UK property market. Well, it would seem that those waves have started to reach some far-away shores.”1

Other surges in demand over the past year were experienced in Dudley at 68%, Tameside at 64%, Barnsley at 54% and North Lanarkshire at 52%.

However, determining a property hotspot has been debated. While eMoov measures demand, other studies track the price of homes sold, which can produce a different outcome.

However, Aberdeenshire was again named as the place where demand dropped the most over the last year. The number of properties sold from July to September compared to the amount of homes registered for sale fell by 50%.

Newcastle came in second with a decline of 36% and Westminster followed. Gateshead, Camden and Sheffield were also in the top ten biggest fallers.

The latest Luxury Property Index from Savills reveals that the commuter belt may be developing a housing bubble. It shows that in urban areas named outer commute spots, prices have increased by 6.3% in the past year. In inner commute areas, they have risen by just 2.6%, while in villages and rural locations, they have remained steady.

Head of Research at Strutt & Parker, Stephanie McMahon, agrees that proximity to central London is no longer as profitable as in the past: “We predict that, over 2015 as a whole, house prices will only rise by 2.5% in central London, compared with 5.1% in Greater London and 5.8% in the rest of the South East – that is, the outer fringes of commuter-land.”1 

In the future, Strutt & Parker predicts that between 2015-19, the area likely to record the greatest price rises, at 21% will be the East of England, including Cambridge, Norwich and Lincoln. The South West is also expected to perform well, with growth of 15.5%.

1 http://www.telegraph.co.uk/finance/property/11916135/Britains-unlikely-property-hotspots.html

 

 

David Cameron’s Starter Homes Only Affordable to Those Earning Over £50,000

Published On: October 7, 2015 at 5:36 pm

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David Cameron’s 200,000 new starter homes will only be affordable to those earning over £50,000 a year and more than £77,000 in London, according to housing charity Shelter.

Shelter calculates that the new scheme to fuel low-cost homeownership will be unaffordable for average income households in six out of ten English council areas. The policy was the focus of the Prime Minister’s first Conservative Party conference speech today.

David Cameron's Starter Homes Only Affordable to Those Earning Over £50,000

David Cameron’s Starter Homes Only Affordable to Those Earning Over £50,000

For those on the new living wage of £9 per hour in 2020, the homes will only be affordable in 2% of councils.

These figures weaken Mr. Cameron’s vow to help young people get onto the property ladder.

Last year, Mr. Cameron promised to build 100,000 new homes a year, but doubled it to 200,000 per year by 2020 in the Conservative general election manifesto.

Today, he explained in more detail how the Government will engage in a “national crusade to get homes built” and turn “generation rent to generation buy”1 by introducing incentives for developers to build more affordable homes, by relaxing planning regulations.

However, Chief Executive of Shelter, Campbell Robb, insists the new scheme will only benefit those already able to buy a home.

He explains: “You don’t solve an affordability crisis by getting rid of the few affordable homes we’re building, yet that’s exactly what this policy will do.

“Today’s announcement confirms our fears that starter homes costing up to £450,000 will be built at the expense of the genuinely affordable homes this country desperately needs.

“Our research has shown that these starter homes will too often only be affordable for higher earners, not the millions of people working hard for an average wage, who will be left stuck in expensive private renting.”

He concludes: “There’s nothing wrong with helping people onto the property ladder, but the Government has to invest in genuinely affordable homes to buy and rent for all of those on ordinary incomes who are bearing the brunt of this crisis.”1

Last year, 141,000 homes were built in the UK – just over half of the amount needed to prevent house prices continuing to soar.

In his speech, Mr. Cameron revealed the first steps towards increasing housing supply, by permitting developers to build affordable homes to sell, and rent, under their planning obligations.

At present, developers must set aside a certain proportion of their site to be used for affordable renting.

In the future, they will be able to sell these homes at a 20% discount on the price of other properties on the site. The Government will impose a cap on the amount that developers can charge for these homes – £250,000 outside of London and £450,000 in the capital.

1 http://www.independent.co.uk/news/uk/politics/david-cameron-s-solution-to-the-housing-crisis-only-affordable-to-those-who-earn-more-than-50000-a6684246.html

 

 

 

 

Countrywide Defends Changing Energy Supplier When Property was Empty

Published On: October 7, 2015 at 4:41 pm

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Countrywide has defended itself after a landlord complained that one of its agent had switched the energy supplier to Spark Energy when the property was empty. Spark has also defended itself.

The landlord states that the practice is a scam. They say that they signed a contract with Regal Lettings to find a tenant. The tenant was actually found via another agent.

The landlord explains: “I discovered that Regal Lettings had changed the energy supplier for both gas and electricity to Spark Energy. The only reason I can think of for doing this is to be paid by Spark Energy. Even small fees would mount up for a letting agent with many empty properties.

Countrywide Defends Changing Energy Supplier When Property was Empty

Countrywide Defends Changing Energy Supplier When Property was Empty

“Regal Lettings says that they change all empty properties to Spark Energy because it makes it easier to alert the company when a new tenant moves in. Two admin processes rather than one? That doesn’t make sense.”

They continue: “I’m appalled that letting agents are even allowed to change energy suppliers. Worse, no one is interested – not OFGEM or the Energy Ombudsman or ARLA.

“As a landlord, I don’t really care if energy is supplied by British Gas or British Airways. But I do care that my empty property was used to make money for Regal Lettings and they would have charged me for the privilege.”1

The landlord accepts that the contract with Regal Lettings permitted it to change gas and electricity suppliers when the property was empty.

A Spark spokesperson says: “We pay a small fee per property to cover the costs of administration involved in managing the utilities when properties are empty. For commercial reasons, we are not willing to say how much.”

When asked whether it is common practice for letting agents to change empty properties over to Spark, the spokesperson responds: “Every property needs an energy supplier. So like other energy companies, we are asked by letting agents to become the default energy supplier for their void properties.

“This process saves the agent considerable time and effort and the new tenant moves into a cheaper price than they would inherit on average if the provider was one of the Big Six. Landlords benefit because we manage all the meter readings and admin that they would normally have to do when the property is empty.

“It’s worth noting that Spark receives fewer complaints than any of the Big Six – according to OFGEM Q2 2015 stats – and that tenants and landlords have the right to choose another supplier at any point with no penalty whatsoever.”1

Managing Director for Retail at Countrywide, Sam Tyrer, comments: “Putting the customer at the heart of what we do is fundamental to our business.

“As part of our change of occupier process and, in accordance with beneficial property management practice, we will arrange to manage the energy supply for the property during a change of occupier. Permission from the landlord has to be sought before we can complete this process.

“By implementing the change of occupier process with a chosen energy provider, we are able to identify the outgoing energy provider and provide accurate meter readings gained at occupier check-out.

“The chosen energy provider will manage the check-out meter readings with the outgoing energy provider, and this will ensure that accurate final billing is achieved to the outgoing occupier.

“We see this as a benefit to the landlord during void periods and for the tenant when they move in and out of the property.”1 

1 http://www.propertyindustryeye.com/countrywide-defends-switching-energy-supplier-to-while-property-is-empty/