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Em

Em Morley

Money Marketing Live Stream: Protection Market

Published On: September 24, 2015 at 1:51 pm

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This morning, (Thursday 24th September) Money Marketing Wired streamed a live debate on the protection market.

Money Marketing’s Editor, Natalie Holt, was joined by five industry professionals: Gemma Harle, the Managing Director of TenetLime; Dean Mason, the Practice Principal at Masons Financial Planning; Ian McKenna, the Director of Finance & Technology Research Centre; Scott Gallacher, the Director of Rowly Turton; and Tony Ormond, Corporate Business Consultant at Bright Grey.

The experts discussed selling financial protection, with McKenna stating that after ensuring the client has emergency funds in place, “protection should be the very next thing that the adviser turns to”.

And Mason insists that the focus of selling protection is on the client: “We’re worried about the customer; protection is the cornerstone of every customer.”

McKenna emphasises the difference between investments and mortgages when it comes to protection, with Mason in agreement.

Mason mentioned the Mortgage Market Review (MMR), saying that it is “a massive time drain” and that buyers “don’t have the time to invest in protection, they don’t see the need”.

He explains that, aside from mortgages, “everything else we deal with in financial services, we’re addressing their [the customers] needs.”

But the team highlighted how difficult it can be to sell protection to investors, who see the need for protection as “not so great, not a priority”.

However, Ormond points out the question he asks business owners, which investors could take into account: “What would a reduction in your cash flow look like?”

Whether you’re curious about personal, investment or business protection, the session could help answer some of your questions. Watch the on demand version of the stream here: http://www.moneymarketing.co.uk/money-marketing-wired/

 

Lettings Auction Site Seeks Investors

Published On: September 24, 2015 at 12:55 pm

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A lettings auction website for landlords and tenants is seeking new investors.

Lettings Auction Site Seeks Investors

Lettings Auction Site Seeks Investors

AuctionLets, which launched in January 2014, currently has no deals or properties on offer.

However, the firm’s CEO, Spencer Rose, states: “Our site has been successfully tested with great results.

“An increasing number of bids have gone through and both tenants and landlords have been happy with their service and the outcome.

“We know our concept works, we know landlords and tenants want it, but what we now need to do is spread the word in order for us to develop the business further.

“This is why we have decided to actively seek investors whether it’s via crowdfunding or through private investors.”

Landlords can upload their vacant properties to the site and prospective tenants can make bids. All homes are advertised on Rightmove.

Rose explains the concept: “Tenants bid for the property in a legally binding online auction and have the ability to bid on multiple properties until they are successful.

“To avoid signing up for more than one property, prospective tenants are only able to be the current highest bidder on one property. Once they are outbid they can move on to another property.

“Landlords decide a realistic minimum rent per month and simply sit back and wait for the bids to come in. They also control the end time of the auction and move-in date.”

He adds: “Tenants and landlords have been in the hands of agents, whether these are online or with a high street presence, for far too long now. It’s time for landlords and tenants to take a bit more control.”1

Regarding the site’s testing, a spokesperson says: “The testing was really for the functionality of the site. The concept has also been tested and they have actually done business and have the recommendations of both the landlord and tenant as to how good it was for both of them.”1 

1 http://www.propertyindustryeye.com/lettings-auction-site-to-look-for-new-investors/

Gross remortgage lending down by 17%

Published On: September 24, 2015 at 12:47 pm

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New data from a report conduced by LMS indicates that the total value of monthly gross remortgage lending dropped by 17% to £4.2bn. This was in comparison to July’s figure of £5.1bn and June’s higher total of £5.3bn

Additionally, the report highlights the typical amount of equity withdrawn from remortgaging per customer rose to £35,590 in the last month, with borrowers looking to take advantage of competitive rates.[1]

Record

This figure represents a new record high and a 30% increase on the previous month, when the average amount was £27,315. In addition, it is 76% greater than in August 2014, when the average amount stood at just £20,219.[1]

Affordability was found to be manageable after a 3% annual increase in wages outstripped the slight rise in average mortgage rates. These rates rose to 2.57% in July, from 2.56% in June. With highly competitive rates enticing borrowers to remortgage, the gap between new purchase mortgages and remortgage payments as percentage of income has risen.[1]

Annual remortgage repayments accounted for 17.9% of income, compared to 20.9% for new purchase repayments. This 3% difference was the largest gap since July 2012.[1]

The LMS report also shows that the number of remortgage loan rose by 18% from 22,900 in August 2014 to 27,080 in August 2015. This was still 13% lower than the number of remortgages recorded in July 2015, after remortgage lending slowed following two extremely strong summer months.[1]

Gross remortgage lending down by 17%

Gross remortgage lending down by 17%

Cashing-in

‘Rising house prices and low interest rates mean homeowners are withdrawing record sums of cash from their homes by remortgaging without impacting their loan-to-value as evidenced by a drop in new LTV’s from 55% to 53% in August,’ said Andy Knee, Chief Executive of LMS.’[1]

Knee believes that, ‘an increase in average rates for the first time in nine months, however small, is an indication that we may finally be starting to see the end of record low products and competition among lenders as rumours of an interest-rate rise persist.’ Continuing, Knee said that, ‘despite a sign that the mood might be starting to turn, annual wage growth and the growing gap between mortgage and remortgage payments mean the affordability of remortgaging is better than it has been for years.’[1]

‘Although the Bank of England Governor, Mark Carney, has consistently stated that when the base rate does rise it will occur slowly and gradually, even the smallest rise could see monthly payments increase enough to damage household budgets. Fixing now at a competitive rate would avoid an increase in outgoings that may otherwise be seen. A slight decrease in remortgaging activity from the levels seen at the start of summer is nothing to be concerned about and we anticipate maintained momentum throughout the rest of 2015 and into 2016,’ Knee concluded.[1]

[1] http://www.propertyreporter.co.uk/finance/gross-remortgage-lending-falls-17-in-august.html

 

 

RICS Urges Government to Help Older People Move House

Published On: September 24, 2015 at 11:58 am

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The Royal Institution of Chartered Surveyors (RICS) has urged the Government to help older people downsize in order to solve Britain’s housing crisis.

Elderly homeowners that have paid off their mortgage but now under-occupy their properties have been in the news recently.

Earlier in the week, it was reported that Lynda Blackwell, Head of Mortgages at the Financial Conduct Authority (FCA) said older homeowners that “sit quite happily in a very big house”1 should be encouraged to downsize.

The FCA responded, saying it is not its policy to make older homeowners move house. Read more here: /fca-says-its-not-policy-to-get-older-people-to-move-home/

RICS Urges Government to Help Older People Move House

RICS Urges Government to Help Older People Move House

Elderly homeowners who do wish to downsize say that they are often prevented from moving because they have left it too late, they cannot face the prospect of moving house, or the cost of retirement housing is too high.

Now, the RICS has joined the discussion, stating that if older people want to move they should receive support from the Government to do so.

In its residential policy review, the RICS urged the Government to help older people who wish to downsize. It says the measure could release £820 billion of property assets, or 2.6m family homes.

It adds that all new build developments should include a compulsory proportion of affordable rental accommodation and that second-homeowners should be encouraged to sell their properties or put them up for long-term tenancies.

Head of Policy at the RICS, Jeremy Blackburn, says: “Britain’s older homeowners are understandably reluctant to move out of much-loved but often under-occupied family homes.

“Clearly it’s an emotive issue and one that needs to be treated with sensitivity, but we would like to see central and local government provide older people with the information and the practical and financial support they need to downsize if that is their choice.”

He suggests: “This might include offering a fund to support with moving costs – Bristol City Council is already piloting a great scheme along these lines – or perhaps a Stamp Duty discount.

“Almost a third of over 55s have considered downsizing in the last five years, yet we know that only 7% actually did. Greater support for those looking to move could release 2.6m family homes.”

He explains the need for more homes: “The most consistent feature of the housing market over the last 18 months has been a distinct shortage of new sales instructions. Average stock levels on surveyors’ books have dropped to lows not seen for at least three decades.

“If we are to get to grips with this country’s housing crisis, we need to look at supply-led measures across Government and the wider industry in order to get the market moving.”1 

In a blog on the Council of Mortgage Lenders’ website, Sue Anderson writes: “The real debate is about how to address the current lack of (perceived) choice for older homeowners who would like to move, but feel they can’t.

“No one, as far as we know, is suggesting that older homeowners should be forced or guilt-tripped into doing anything they don’t want to do.”

Read more of the blog here: http://www.cml.org.uk/news/older-home-owners-public-outrage-or-broad-consensus/

Earlier in the year, Legal & General also published a report on the issue, which can be found here: http://www.legalandgeneral.com/mortgageclub/da/latest-news/digest/2015/june/040615-last-time-buyers.html

1 http://www.propertyindustryeye.com/rics-elderly-should-be-given-help-to-downsize/

Housing supply falls to 11 year low

Published On: September 24, 2015 at 11:27 am

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A new report suggests that the number of properties available to purchase per estate agent branch dipped to an eleven-year low during August.

Data from the latest report by the National Association of Estate Agents shows that supply of available housing dropped by one-third in the last month, with 38 properties available, in comparison to 55 in July.

Drop

This was the lowest level of housing supply recorded since January 2004, when 38 properties were also available per branch.

August also saw a fall in the number of house hunters, with an average of 408 house-hunters registered per member-branch, in comparison to 462 in July. This was a drop of 12%.[1]

The number of completions in August rose by one to hit an average of ten properties per branch. However, sales made to first-time buyers dipped to their lowest level since July last year. 20% of sales were made to first-time buyers in August, down from 23% in July and 24% in June. This indicates that movement I the market is happening further up the property ladder, with second and third time movers cranking up sales.[1]

Housing supply falls to 11 year low

Housing supply falls to 11 year low

Crisis point

‘We’ve been banging the drum about the dwindling supply of housing for a while and this month’s report reiterates what we’ve been saying-there simply aren’t enough houses to match demand and we’re reaching crisis point,’ said Mark Hayward, managing director of the National Association of Estate Agents.[1]

‘There are now eleven house hunters fighting after every available house which isn’t sustainable. First time buyers are finding themselves being squeezed out of the competition, which of course means it’s taking young buyers longer to get their foot on the first step of the ladder, which will in turn increase pressure on the rental market,’ Mr Hayward concluded.[1]

[1] http://www.propertyreporter.co.uk/property/housing-supply-dr0ps-to-11-year-low.html

 

First Time Buyers Underestimate Additional Moving Costs

Published On: September 24, 2015 at 10:57 am

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The average homebuyer is left with thousands of pounds in debt when purchasing a property, after underestimating additional costs, such as Stamp Duty, contents insurance and solicitors’ fees.

First Time Buyers Underestimate Additional Moving Costs

First Time Buyers Underestimate Additional Moving Costs

A new study by Aviva reveals that the average homebuyer budgets £12,143 for costs, which includes the deposit, surveys, furniture and buildings insurance.

However, the research shows that the average additional cost is actually £18,624.

Over half of first time buyers in London have asked a family member for a loan when buying a house, and the figure is also high in the East Midlands at 43% and East Anglia at 33%.

Buyers in the South West seem to handle their finances better, with just a quarter (25%) saying they had to ask a family member for a loan.

Marketing Director at Aviva, Heath Smith, says: “Scraping together the cash for the deposit alone can be a mammoth task, but that’s just the first hurdle. It’s the other essential costs such as solicitors’ fees and Stamp Duty, which can be the sting in the tail – not forgetting any essential repairs which might be needed once the keys have been handed over.

“First time buyers face walking into a money pit if a first dream home turns out to be a nightmare. If the cash outlay needed to buy the house isn’t expensive enough, a hefty bill for unforeseen essential repairs is the last thing needed.

“Anyone looking to buy a home should investigate every nook and cranny of the property before putting in an offer and must not be afraid of asking for several viewings.”1 

The study reveals that first time buyers in East Anglia spent the longest amount of time saving for their home, at just over four years, while those in Scotland saved for just under three years.

People in the South East were the least likely to give up on buying while saving at 32%, but over half (60%) of Londoners are likely to give up.

Almost one in four Londoners had to take a second job to be able to afford their first home, compared to less than one in ten in Scotland.

Aviva surveyed 2,000 homeowners in June.

1 http://www.propertyindustryeye.com/first-time-buyers-underestimating-additional-costs/