Posts with tag: home buyers

Purchase activity at lowest level since February 2015

Published On: March 14, 2017 at 11:34 am

Author:

Categories: Property News

Tags: ,,,

According to the most recent data released by CML, the number of loans advanced for house purchases in January slipped to its lowest monthly total since February 2015.

Remortgaging activity however continued to increase- rising by 54% by value and 46% by volume in December. In addition, home buyers borrowed £8.4bn in January, down 28% on December but unchanged year-on-year.

Buy-to-let increases

In terms of buy-to-let, there were increases, with values up by 11% and volume by 12% In comparison to 2016 however, both the number of loans and amount borrowed fell by 16%.

On a seasonally-adjusted scale, month-and-month changes in first-time buyer and home mover activity was marginal. First-time buyer lending increased 2% by value with the number of loans dropping by 2% in comparison to December.

Paul Smee, Director General of the CML, commented: ‘January gives the impression of a flattish market overall, albeit one with a resurgent remortgage sector. We expect a seasonal dip in activity in the winter months and this appears to be the case in January. However, the lull in moving activity appears stubbornly persistent and we have commissioned research on the reasons why the number of transactions seems in secular decline.’[1]

‘Buy-to-let house purchase activity continues to be weak, despite strong buy-to-let remortgage levels. This will likely remain so going forward as lenders tighten affordability criteria ahead of the PRA mandated stress tests and the introduction of tax changes in April,’ he continued.[1]

Purchase activity at lowest level since February 2015

Purchase activity at lowest level since February 2015

Resilience

Jeremy Leaf, north London estate agent and former residential chairman of RICS, said: ‘While there is little change month-on-month, the figures are encouraging because they demonstrate market resilience – which is what we are seeing at the coalface. Encouragingly, we have noticed a bit of a pick-up in activity over the past few weeks as buyers and sellers seem to be getting on with it as they usually do at this time of year.’[1]

‘Listings are improving but property must still be very compelling in terms of price, location and presentation – or all three – in order to gain attention from increasingly discerning buyers,’ he added.[1]

[1] http://www.propertyreporter.co.uk/property/house-purchases-fall-to-lowest-levels-since-2015.html

UK residential property stamp duty increases

Published On: October 2, 2015 at 12:50 pm

Author:

Categories: Landlord News

Tags: ,,

The 2014/15 financial year was particularly fruitful for the UK taxman, with HMRC collecting a record £7.5bn in stamp duty from residential property transactions.

This was a rise from the £6.45m in the previous year and from £4.9bn in 2012/13. What’s more, the total tax collected from home-buyers in Britain has risen by 165% over the last six years alone, according to a new report from Knight Frank.

Revenue

Unsurprisingly, transactions in London contributed the largest amount of residential stamp duty revenue, totalling just over £3bn. The South East followed the capital, where revenue totalled £1.6bn. Put together, these two areas accounted for 66% of the total tax take for UK properties.[1]

In between the 2008/09 and 2014/15 tax years, stamp duty revenues in the capital have risen by 248%, in comparison to 158% in the East of England and 140% in the South East. Other regions in England had between 75% and 120% growth during the same timeframe.[1]

These increases in London show that the greater rates of stamp duty on property transactions worth more than £1m mostly affect homes in the capital.

Grianne Gilmore, head of UK residential research at Knight Frank, said that overall, ‘home-buyers still paid more in stamp duty than over the previous 12 months. While the increased take from stamp duty reflects the growth in house prices and a pick-up in transactions, another factor has been the increases to stamp duty charges, especially towards the top end of the market.’[1]

UK residential property stamp duty increases

UK residential property stamp duty increases

Steady increases

In addition, Gilmore noted that residential stamp duty raised £7.5bn for the Treasury in the year to April, more than double the amount in 2002/03.

‘The relative burden of stamp duty is also highlighted by the data,’ Gilmore continued. ‘Londoners paid 43 times more stamp duty than buyers in the North East over the last year, a reflection of the widening of the North/South divide in terms of activity and prices but also the higher stamp duty changes for more expensive homes. Buyers in London and the South East accounted for 66% of all stamp duty receipts on residential property in the year to April.’[1]

Gilmore went on to say that, ‘it remains to be seen what the impact of the new stamp duty regime will be for the Treasury in the coming year.’ She said, ‘despite hitting a record high for residential receipts in the year to 2015, the total stamp duty tax take at £10.7bn is £800m lower than the Treasury forecast when it made the changes to stamp duty in December.’[1]

Impact

Tom Bill, head of London residential research at Knight Frank, observed that despite the fact stamp duty rules were only applicable during a quarter of the timeframe in question, the impact that it has had on the prime central London market is irrefutable. He said that the stamp duty figures indicate the contribution to the total UK revenue of the top two local authorities in the country, namely Westminster and Kensington and Chelsea, dropped last year.

Bill noted that, ‘the contribution of the top five London boroughs has fallen to 18.9% from 21.1% over the last two years. To some extent, this may be explained by a pick-up in sales in the rest of the country as stamp duty has fallen for properties worth less than £1.1m, which may have prompted more transactions.’[1]

This said, the rate of growth for stamp duty revenue in Westminster and Kensington and Chelsea has slowed to below the UK average. Indeed, stamp duty revenues in Kensington and Chelsea rose by 1.6% in 2014/2015, in comparison to 27.6% in 2013/14.[1]

Westminster meanwhile recorded revenue growth of 13.3% in the last year, in comparison to 19.4% in 2013/14. In the UK as a whole, stamp duty revenues in the UK rose by 16.3%, compared to 31.5% in 2013/14.[1]

[1] http://www.propertywire.com/news/europe/uk-stamp-duty-analysis-2015100211048.html

 

 

Potential first time buyers not doing enough to save

Published On: September 4, 2015 at 12:43 pm

Author:

Categories: Landlord News

Tags: ,,

An investigation into would-be first-time buyer spending habits has uncovered the luxuries that many refuse to give-up in order to save for their initial home.

A Principality Building Society survey of 1,000 people in England and Wales who are actively saving for their first property showed that coffee from a leading chain and having the latest smartphone were more important than putting many aside for a dwelling.

Luxuries

The average asking price of a home for first time buyers in the UK stands at £169,414, meaning just a 5% deposit would be £8,470.70. This could be reached in a year if a saving couple put away £353 per month over the period.[1]

Of course, saving is not easy but Principality suggest that with only a few changes could see many turning the dream of owning a home into a reality.

Data from the report indicates that people already save an average of £286.51 per month for a house deposit. However, a further £218.38 was spent on luxuries perceived a ‘necessities.’[1]

Smartphones, satellite television and beauty treatments were found to be the hardest luxuries to give up, followed by a regular coffee shop fix. Despite this, 59% of people said that they would give up takeaway food to get a foot on the property ladder.

56% of people said however that going on holiday was non-negotiable and they wouldn’t sacrifice this in order to get onto the property ladder.[1]

Potential first time buyers not doing enough to save

Potential first time buyers not doing enough to save

Changes

‘We know that savings for a deposit can seem like a huge burden, which many first time buyers feel they can’t afford but by making some minor changes to their spending habits, they could soon realise their dream of becoming a home owner,’ said Principality’s customer director, Julie-Ann Haines. She feels that, ‘by simply doing things like swapping a takeaway coffee for a flask of coffee from home each day or by cutting back on the city breaks for a year people could soon have that deposit that they have longed for. A saving of £218.38 a month can make a huge difference when you are trying to reach your deposit.’[1]

Haines went on to say that, ‘we want to give first time triers all the information they need to help them get on the property ladder and own their first home. It can be one of the most rewarding moments of your life, giving you a place where you can seek the independence you’ve always wanted or finally start a family.’[1]

‘By simply cutting back on the everyday luxuries for a short time it will enable you to save more in the long run, and ultimately be on the housing ladder much sooner than anticipated,’ she concluded.[1]

[1] http://www.propertyreporter.co.uk/property/smartphones-and-coffee-shops-more-important-than-the-housing-ladder.html

 

Half of Hopeful Buyers Disappointed After MMR

Published On: May 29, 2015 at 1:19 pm

Author:

Categories: Landlord News

Tags: ,,,

Around half (45%) of those planning to buy a home since the Mortgage Market Review (MMR) last year have been unable to do so.

Research has revealed that prospective buyers are confused about the Government’s new affordability rules, which has caused disappointment.

A quarter of survey respondents said that the MMR has affected their ability to buy a property, and a further third (37%) claimed that the changes have made them feel less in control of being granted a mortgage.

The study was conducted by Experian as part of its latest report, The Mortgage Muddle – One Year After the MMR.

Half of Hopeful Buyers Disappointed After MMR

Half of Hopeful Buyers Disappointed After MMR

The research also found that among those who could not buy since the MMR, many are still unaware of the basic financial preparations they must make to apply for a mortgage. Almost half (46%) have never checked their credit report, meaning that they do not know how a lender would assess their ability to repay the loan.

Head of Consumer Affairs at Experian, James Jones, says: “Preparation is the key to successfully navigating the mortgage market post-MMR. Understanding the affordability rules and how a lender makes their decision is the key to success.

“But it can take time to build a positive credit history and a solid track record of positive money management, so it’s important you start preparing as soon as you make the decision to buy.”1 

In another study by Experian from April 2014, only 44% of respondents knew that the MMR would make lenders more careful about making sure borrowers could afford their repayments.

A year later, it seems that this confusion is still affecting hopeful buyers. Of 1,500 respondents who either bought or planned to buy in the past year:

  • 62% did not know that lenders might require higher deposits. 23% thought they could have smaller deposits than before.
  • 37% were unaware that lenders would be more careful about whether borrowers could afford the loan.
  • 15% thought that lenders had relaxed their lending criteria due to the MMR.

Of those unable to buy in the last year:

  • 13% don’t know how much money they have left over at the end of the month.
  • 18% don’t know how much they can afford in monthly repayments.
  • 14% did not have a large enough deposit for the property they wanted to buy.
  • 12% could not secure the size mortgage that they needed.
  • 11% of those who were unsuccessful didn’t know why or didn’t ask the lender, putting them at a disadvantage when they look to be accepted in the future.

ExplaintheMarket’s Guy Shone, notes: “We’re now one year on from the MMR and it seems many people remain stuck in a bit of a muddle. More needs to be done in 2016 to encourage personal financial planning and properly support aspiring home buyers, so that all buyers fully understand the rules of the game and stand the best chance of securing a property they can afford.”1

1 http://www.propertyreporter.co.uk/property/half-of-prospective-property-buyers-disappointed-in-year-since-mmr.html