Posts with tag: homebuyers

Slowdown in the Property Market Normal for This Time of Year

Published On: August 4, 2016 at 10:50 am

Tags: Brexit,homebuyers,housing market,properties for sale,property market

The slowdown in the property market recorded over July is normal for this time of year, according to the latest Property Activity Index from Agency Express.

The recent property market report from the firm found that both new listings and the number of properties sold dropped in July.

Nationally, the number of new property listings fell by 15.3%, while the amount of properties sold was down by 8.8%.

Slowdown in the Property Market Normal for This Time of Year

However, over the past three months, the decline has been less severe, with new listings down by 3.2% and properties sold down by 3.8%.

Looking back over the Property Activity Index’s historical data, a slowdown in the property market in July is not uncommon. As the summer holiday months commence, a seasonal cooling in the market is expected, and this year’s figures appear consistent with those recorded between 2013-15.

Across the country, just four of the 12 regions included in the Property Activity Index bucked the seasonal trend.

The best performing region in July was the West Midlands, which saw a record best rise in new property listings for July, of 5.6%.

The strongest regions for new listings in July included:

West Midlands: +5.6%
East Midlands: +3.1%
North West: -0.5%
Wales: -1.9%

In terms of the number of properties sold, the best performing regions were:

Wales: +3.2%
North West: +0.2%
South East: -3.7%
South West: -3.8%

The greatest declines seen in July’s Property Activity Index were in London. New listings in the capital fell by a huge 49.9%, while the amount of properties sold was down by 19.9%.

With buyers and sellers in London remaining cautious over the effects of Brexit, the rental sector in prime central spots has experienced a boost: /rent-prices-prime-central-london-following-brexit/

The Managing Director of Agency Express, Stephen Watson, says: “Throughout July and August, we traditionally see a decline in the UK property market. This month, the vote to leave the EU did bring an air of uncertainty, but as it stands, figures have remained true to trend.

“However, with the Brexit effect yet to emerge, it will be interesting to see if September’s figures return with the same vigour.”

Check back to Landlord News for the latest property market updates and insight.

Customer Interest High Despite Referendum, Reports Housebuilder

Published On: July 27, 2016 at 9:39 am

Author: Em Morley

Categories: Property News

Tags: EU referendum,homebuyers,housebuilding,housing crisis,housing supply,new build homes

In its latest half-year report, housebuilder Taylor Wimpey claims that customer interest continues to be high, despite last month’s EU referendum.

In the first six months of 2016, the builder completed a total of 6,019 homes, up by 3% on the same period last year.

Its average selling price was also up, by 5.8%, to £238,000.

Looking ahead, Taylor Wimpey reports that it has a strong order book for the future, representing 8,683 new homes.

Customer Interest High Despite Referendum, Reports Housebuilder

The report found that although it is too early to assess the long-term effects of the EU referendum result, there has been no meaningful change to the housebuilder’s business to date, with trading in the past month at a normal seasonal range.

Since 24^th June (the date the referendum result was announced), the early confidence indicators amongst homebuyers, alongside continued competitive lending by mortgage providers, are encouraging the resilience of the UK housing market.

Taylor Wimpey has also found that the Help to Buy scheme continues to be a differentiator for new build housing, and remains popular with its customers.

Positively, the housebuilder reports that commentary over the last month from the Government, Bank of England and mortgage lenders demonstrates a commitment to housing supply and recognition that there remains a fundamental imbalance between demand and supply.

Additionally, customer interest from Taylor Wimpey remains high, with website visits solid, and customers continuing to register interest in forthcoming developments and make appointments to progress their home purchases. Although the builder experienced a small increase in the average cancellation rate immediately after the referendum, this remained low compared to historic norms and is now back in line with recent low levels.

However, it’s not good news for the prime central London market, where demand has continued to slow. Despite this, the wider London market remains robust.

Taylor Wimpey insists that through focusing on creating long-term value and mitigating future risk, it delivers on providing homes in the right location, which is a “key determinant of a home purchase”. It is currently operating from 286 locations across the country, in villages, towns and cities “where people want to live”.

As a result, the housebuilder believes that it will continue to perform well throughout all market conditions.

The Chief Executive of Taylor Wimpey, Pete Redfern, comments: “We have delivered a strong operational and financial performance, with continued growth in profitability, building over 6,000 new homes across the country during the first half of 2016.

“One month on from the EU referendum, current trading remains in line with normal seasonal patterns. Customer interest continues to be high, with a good level of visitors both to our developments and to our website. We are monitoring customer confidence closely across a number of metrics, including appointment bookings, and these continue to be solid. Whilst it is still too early to assess what the longer-term impact from the referendum result on the housing market may be, we are encouraged by the first month’s trading and by continued competitive lending from the mortgage providers, as well as the positive commentary from Government and policymakers.”

If confidence in the housing market continues, will the demand and supply imbalance be corrected?

London Property Market Still Going Strong as Homebuyers Continue to Borrow

Published On: May 25, 2016 at 10:59 am

Author: Em Morley

Categories: Property News

Tags: homebuyers,London,London property market,Mortgage lending

The London property market is still going strong, as homebuyers continue to borrow in order to fund their purchases, according to the latest mortgage lending data from the Council of Mortgage Lenders (CML).

In the first quarter (Q1) of 2016, homebuyers in the capital borrowed £7.1 billion for house purchase, up by 6% over the quarter and 41% annually. This equated to 21,400 loans, which was down by 2% on the previous quarter, but up by 20% compared to Q1 2015.

First time buyer borrowing was down over the quarter, by 7%, but up by 19% when compared to Q1 last year. This type of buyer borrowed £2.9 billion in the form of 10,700 loans – down by 10% quarter-on-quarter, but up by 3% on the year.

London Property Market Still Going Strong as Homebuyers Continue to Borrow

Those moving home borrowed £4.2 billion in Q1 2016, up by 18% on a quarterly basis and 63% compared to last year. Some 10,600 loans were approved for home movers, up by 8% on the previous quarter and 43% on last year.

Remortgaging activity totalled £4 billion over the same period, up by 4% on Q4 2015 and 36% on the previous year. This totalled 13,500 loans – up by 2% quarter-on-quarter and 21% compared with Q1 2015.

The Director General of the CML, Paul Smee, says: “The usual seasonal dip in lending in the first quarter of the year didn’t seem to impact London as strongly as the UK overall, mainly due to a strong uptick in home mover activity. Remortgage lending also performed well, resulting in the highest first quarter remortgage levels in the capital since 2009.

“The housing market in Greater London has some unique characteristics compared to the rest of the UK – more first time buyers, but lower overall levels of homeownership. Affordability and the supply of housing remain critical factors for the London market, and we will be pleased to work with the new mayor and his deputy on how to deliver appropriate strategy over his term of office.”

Estate agent Marsh & Parsons has also recorded growth in the London property market.

In Q1, the firm saw buyer demand increase by 9% annually in prime London, and by 19% in the outer prime belt.

The number of registered buyers for every available property for sale has risen to 14 in Q1, up from 13 buyers in the previous quarter and 12 in the same period last year.

The CEO of Marsh & Parsons, David Brown, comments: “Mortgage lending in London got off to a lively start this year, jumping leaps and bounds ahead of 2015 levels across all sectors. And it’s encouraging to see home movers at the forefront of the pack – at a time when the supply of new housing is dragging its heels, it’s vital that existing homeowners are taking opportunities to sell up and move up the property ladder, freeing up properties at the lower end of the market.

“It’s also a great vote of confidence in the capital. People sell their homes when they recognise strong house price growth and the favourable returns to be made, plus the belief that they’ll be able to find a buyer easily. In London, all these elements are firmly in place. We saw buyer demand increase 9% year-on-year in Q1, with an average of 14 buyers competing for every available property on the market. It’s important in the long-term that first time buyers in London remain similarly assured of the affordability and possibility of climbing onto the ladder.”

Government to Make Gazumping Illegal to Speed Up Buying Process?

Published On: May 11, 2016 at 11:16 am

Author: Em Morley

Categories: Property News

Tags: buying a property,gazumping,homebuyers,property buying,property law

The Government is reportedly planning to make gazumping illegal in order to speed up the home buying process.

Ministers are considering a crackdown on buyers and vendors who pull out of a deal at the last minute, or who try to gazump or gazunder each other.

They plan to make house purchases legally binding much earlier in the process, for example, when an offer is accepted. If either the buyer or seller pulls out afterwards, they

Government to Make Gazumping Illegal to Speed Up Buying Process?

must pay the other party’s costs.

In March’s Budget, the Government said that it would call for evidence on how to make the buying process better value for money and more consumer friendly.

It now seems that the Government is planning to call for that evidence in the near future, through a consultation on speeding up and improving the home buying process.

A spokesperson has ruled out importing the Scottish system. In Scotland, deals are binding once missives are exchanged, which prohibits gazumping and gazundering.

The Managing Director of the National Association of Estate Agents, Mark Hayward, believes that alternatives could include having a pre-contract agreement or charging the buyer a deposit. However, he thinks these options would be unpopular.

He also warns that the Scottish system is not perfect.

He says: “The Scottish system is sometimes referred to as the ideal system, but if you speak to people in Scotland, they may disagree. The onus is on the purchaser who has to have carried out all the checks before making an offer on the off chance that it would get accepted.

“We perhaps need a hybrid system. In France, you have a ten-day cooling off period after an offer is accepted.”¹

Hayward also believes that the whole legal process of buying a property needs an overhaul.

Estate agent Chris Wood, of PDQ Property, agrees.

He says: “Gazumping is a problem, but it is not the main problem. The problem doesn’t happen as often as people think.

“What is needed is a review of the process so there are minimum statutory time periods that parties like solicitors and mortgage lenders have to respond in. Banning gazumping won’t solve the problem of delayed or failed property sales. Some would say that is just how the price is tested.”¹

How do you believe issues with the property buying process could be resolved?

¹http://www.propertyindustryeye.com/government-considering-making-gazumping-illegal/

Barclays offers 100% mortgage

Published On: May 4, 2016 at 1:38 pm

Author: Em Morley

Categories: Finance News

Tags: homebuyers,investors,mortgage,mortgage lenders

Barclays has today announced that it is to offer a 100% mortgage-a three-year fixed rate deal for buyers with no deposit

However, there is a catch!

The lender is offering the deal at 2.99% for buyers who earn more than £50,000 per year.

Celebration

Barclays has made changes to its Family Springboard Mortgage, on the third anniversary of its launch. Previously however, borrowers were required to put down a deposit of at least 5%.

As part of the deal, family or friends of the borrower will be required to deposit the equivalent of 10% of the property’s purchase price into a savings account. This must then be kept there for at least three years.

At the end of this period, the family member or friend will receive this money back, with interest, equivalent to the base rate plus 1.5%.

Barclays offers 100% mortgage

Affordability

Jody Baker, Head of Money at comparethemarket.com, noted, ‘the government’s commitment to building new starter homes, the introduction of the Help to Buy ISA and changes to stamp duty, has shown its efforts to make housing more affordable to first time buyers and its encouraging to see the industry getting in on the act too.’ [1]

‘Whilst Barclays’ move adds a viable option for those looking to buy a home, there is, of course, a note of caution. Loans of this sort require prudence on the part of the borrower, ensuring that they have not over-extended themselves. We would always recommend to anyone that is taking a mortgage works out a detailed budget of their monthly household expenses and assesses in some depth their incomings and outgoings. Equally, we would expect these products to remain few and far between at the fringes of the mortgage lending universe by necessity – after all, it was riskier lending which caused the financial crisis in the first place.’[1]

However, buying agent and housing market commentator Henry Pryor, was less complimentary, describing the move as, ‘a financial grenade.’[1]

[1] http://www.propertyreporter.co.uk/hero/the-100-mortgage-returns.html

EU Referendum Uncertainty Could Slow Housing Market, Believes Hometrack

Published On: February 26, 2016 at 1:05 pm

Author: Em Morley

Categories: Property News

Tags: buy to let investors,homebuyers,housing market,property market

Uncertainty over the outcome of the EU referendum is expected to slow the UK housing market in the next few months, according to property firm Hometrack.

The company, which supplies data to mortgage lenders and property developers, reports that the amount of home sales in the country’s 20 biggest cities already dropped by 2% last year and activity is likely to fall further in the run up to the 23^rd June vote.

The Director of Research at Hometrack, Richard Donnell, comments: “After a three-year upturn in housing market activity and house prices, the outlook for the market appears increasingly tied up with policy impacts and the potential outcome of the referendum, rather than the operation of market forces.

EU Referendum Uncertainty Could Slow Housing Market, Believes Hometrack

“Businesses operating in housing face risk and uncertainty, which will have to be managed and monitored carefully.”¹

Yesterday, CBRE said that property investors and owner-occupiers are likely to behave in the same way as they did in Scotland ahead of its 2014 independence referendum, by delaying decisions until after the vote.

It stated: “After the Scotland referendum, there was a catch up effect and CBRE expects the same for the UK, assuming that it decides to remain in the EU.”¹

A survey of its investor clients found that almost three-quarters felt that the UK would be a worse place to invest in if it leaves the EU.

Activity in the housing market slowed ahead of last year’s general election, especially in London’s prime property market, where buyers were worried about the possibility of a mansion tax.

Donnell reports that there is evidence of a 10% decline in sales in Scotland during the 18 months before its independence referendum in 2014. Buyers were concerned about the threat of businesses relocating if voters chose Scottish independence.

He believes that a vote to remain in the EU would trigger a return to housing market activity in the second half of 2016, while a vote to leave would raise uncertainty and dampen activity over a longer period.

The latest UK cities house price index from Hometrack shows that property values continued to increase in 2015, recording an average rise of 10.2% over the year.

Double-digit price growth was recorded in London, Cambridge, Oxford and Bristol. The average house price in the capital rose by 13.4%, to £455,100.

As buy-to-let landlords are currently rushing into the housing market ahead of the 1^st April Stamp Duty deadline, it is also likely that activity will dampen after this date.

¹http://www.theguardian.com/business/2016/feb/26/eu-referendum-uk-housing-market-hometrack