Posts with tag: housing market

Buy-to-let mortgage lending defies tax changes

Published On: October 12, 2016 at 9:39 am

Tags: buy to let mortgages,Buy-to-Let,housing market,mortgage,Mortgage lending

Certainly, 2016 has seen landlords faced with some challenging legislations changes, as the Government tries to shift the balance of the housing market.

Former Chancellor George Osborne expressed his desire to return the market to a ‘level playing field’ between homeowners and investors. However, despite the raft of harmful regulation alterations, buy-to-let mortgage lending has actually seen a surge in activity during the last two months.

Increases

According to mortgage provider Connells, the introduction of the 3% extra stamp duty surcharge in April and other tax changes has not deterred investors. The firm’s valuation department reports that valuations for buy-to-let mortgages are actually up by 0.4% on the same period in 2015.

John Bagshaw, of Connells, noted: ‘Despite a bruising period of Government intervention, the buy-to-let sector has been finding its footing over the last couple of months, recovering from the 3% stamp duty surcharge, the restriction of tax relief on mortgage finance costs to basic rate tax only, and the removal of 10% wear and tear allowance.’[1]

‘The Government’s intervention had a significant effect in the short term but we appear to have recovered the lost ground now,’ Mr Bagshaw added.[1]

Buy-to-let mortgage lending defies tax changes

Remortgaging

In addition, Connells report that remortgaging valuation activity increased by 14.7% year-on-year. Many more first-time buyers are still entering the market to take advantage of the Help to Buy mortgage guarantee scheme, which comes to an end this December.

[1] https://www.landlordtoday.co.uk/breaking-news/2016/10/sharp-rise-in-buy-to-let-mortgage-lending-despite-stamp-duty-hike

Residential rental growth in the UK slows during September

Published On: October 7, 2016 at 8:48 am

Author: Em Morley

Categories: Property News

Tags: housing market,rental properties,rents,residential rents

Residential rental growth in Britain is easing slightly, according to the latest Landbay Rental Index.

Rents rose marginally, by 0.09%, during the last month. This was down from the 0.12% recorded during August.

Ups and downs

Overall, rental prices were up by 1.65% year-on-year, taking the average monthly rental cost to £1,187.

In London however, rents slipped by 0.04% month-on-month, meaning average monthly rents in the capital are now £1,891.

North of the border, monthly rents grew by 0.21% in the month and by 1.79% year-on-year. Rents in Scotland are now £720 per month. In Wales, rents increased by 0.08% over the month and 1.34% year-on-year to hit £632.

English rents increased slightly by 0.09% month-on-month and 1.66% year-on-year. Rents here are now £1,219 per month.

One-bedroom rises

A further analysis of the figures indicates that rents for one bedroom properties are rising, as rental demand for smaller rental properties remain buoyant. For the UK as a whole, Scotland saw the largest growth for one-bedroom properties, with rents up by 0.36%. This was closely followed by the East of England (0.35%) and the East Midlands (0.29%).

John Goodall, chief executive officer of Landbay, believes the figures make for interesting reading. Housing Minister Gavin Barwell has called for lower minimum space requirements for new build homes.

Mr Goodall said: ‘Housing has been high on the political agenda this week and it seems that policy makers are resolute in their ambitions to make home ownership more affordable for people across the UK. There’s no denying most people aspire to own their own home, but it’s critical that efforts to bolster the countries housing stock don’t overlook the importance of the buy-to-let market for a supportive and sustainable housing market.’[1]

Residential rental growth in the UK slows during September

Buy-to-let importance

‘The fact remains that those building up toward a house purchase rely on a well-served buy to let market to ensure that excessive rental growth doesn’t dampen their purchasing power. The challenge is exacerbated by record low interest rates, which may make mortgage borrowing cheaper for those able to buy a home, but also mean that house prices, and indeed rents, are growing more quickly than the money they have saved in bank and building society accounts,’ Goodall explained.[1]

‘The overall picture is one of moderating rents, which is good news for those in shared accommodation, but an under supply of one bed properties will continue to restrict the ability for aspiring home owners to save up for a house of their own,’ he concluded.[1]

[1] http://www.propertywire.com/news/europe/rental-growth-uk-residential-market-slowing-latest-index-shows/

Housebuilding recovers during September

Published On: October 5, 2016 at 10:02 am

Author: Em Morley

Categories: Property News

Tags: Buy-to-Let,developers,housebuilding,housing market

Housebuilding activity increased during September at the greatest rate seen since January. Many developers reported sustained demand and improved market conditions.

The upturn in residential property activity has assisted the construction industry in returning to growth, with the Purchasing Managers’ Index (PMI) showing its first growth for four months.

Rises

In September, the PMI reading was 52.3, above the score of 50 which represents stagnation. This figure was also above the 49.2 recorded in August and more than the 49 expected by economists.

Tim Moore, senior economist at IHS Markit and author of the Index, noted: ‘UK construction companies moved back into expansion mode during September, led by a swift recovery in residential building from the three-and-a-half year low recorded in June.’[1]

‘Resilient housing market conditions and a renewed upturn in civil engineering activity helped to drive an overall improvement in construction output volumes for the first time since the EU referendum. A number of survey respondents noted that Brexit-related anxiety has receded among clients, although it remained a factor behind the ongoing decline in commercial building work.’[1]

Housebuilding recovers during September

Moving forwards

Given the need for new homes in Britain, the rise in new home construction is a sure step in the right direction. This should be helped by the announcement of Government support to increase new home delivery.

John Tutte, chief executive officer at Redrow commented: ‘It is encouraging to see housebuilding has not been impacted by Brexit and is underpinning an upturn in UK construction activity.’[1]

‘At Redrow we have been gearing ourselves up for growth over a number of years, building many more high quality homes to create new sustainable communities in response to increased demand. Last year we increased completions by 17% and we have doubled our annual output over the past five years to 4,700 much-needed new homes-our forward order book is also at record levels,’ he continued.[1]

Concluding, Mr Tutte said: ‘Any Government policy that has the potential to continue to accelerate housebuilding is very welcome but, as ever, the devil is in the detail and we are watching closely to see how this unfolds in the run to the Autumn Statement. Meanwhile, we are doing whatever we can continue to build more new homes, including efforts to boost the number and quality of the talented people we employ to overcome the skills shortage and also continuing to identify and acquire high quality sites.’[1]

[1] https://www.propertyinvestortoday.co.uk/breaking-news/2016/10/swift-recovery-in-housbuilding-as-brexit-fears-fade

New property listings up by more than 10% in September

Published On: October 5, 2016 at 8:40 am

Author: Em Morley

Categories: Property News

Tags: housing market,landlords,new property listings,UK housing

New property listings in Britain rose by more than 10% month-on-month during September.

In fact, more than two thirds of UK towns and cities experienced a rise in supply, according to latest research conducted by online estate agent House Simple.

Increases

Total supply rose by 10.4%, with the largest increases reported in Basildon, Essex, where supply rose by a substantial 68.1%. London saw a rise of 16.5%.

Hereford also saw a massive increase, with supply up by 58.3% and in Lichfield, there was a rise of 53.5%. In Hemel Hempstead, property listings were up by 52.2% and in Truro 48.3%.

At the other end of the scale, supply in Falmouth, Cornwall slipped by 27.5%. Other notable falls were evident in Sutton Coldfield (-25.8%), Ely (-22.9%) and Stockton on Tees (-22.2%).

New property listings up by more than 10% in September

Post-Brexit high

The property market in the UK continues to defy predictions of post-Brexit chaos, returning to some kind of normality following the traditional summer drop.

Alex Gosling, chief executive officer of House Simple, noted: ‘The figures don’t show an uplift in new listings after a typically slow August. The more than 10% boost in new properties is evidence of a resilience in the housing market that many didn’t expect. Many clearly believe that the market is strong enough to sell in despite the ongoing political uncertainty.’[1]

‘What was a sellers’ market before the European Union membership referendum vote and buyers’ market in the initial months after it may now be somewhere in between. This is no bad thing,’ Mr Gosling added.[1]

[1] http://www.propertywire.com/news/europe/new-property-listings-10-uk-month-month/

Latest High Street Banking Statistics Suggest Softening in Housing Market

Published On: September 27, 2016 at 10:44 am

Author: Em Morley

Categories: Finance News

Tags: banking,finance,housing market,mortgages

Latest High Street Banking Statistics Suggest Softening in Housing Market

The latest High Street Banking Statistics report, for August 2016, from the British Banking Association (BBA) suggests that the housing market is beginning to soften.

On an annual basis, gross mortgage lending rose by just 1% in August, to £12.4 billion.

The organisation also found that consumer credit continues to show annual growth, of over 6%, reflecting fairly strong retail sales and favourable interest rates for personal loans and overdrafts.

In addition, non-financial company deposits rose by an average of around £2-3 billion per month in 2015, but fell back in the first half of this year. They are currently growing at an annual rate of 3.8%, compared to around 9% in 2015.

The Chief Economist at the BBA, Dr. Rebecca Harding, comments on the figures: “The High Street Banking Statistics published today point to a softer housing market, strong consumer credit and slightly weaker business borrowing in August. The data was collected before the Bank of England reduced interest rates to 0.25% and so gives an indication of some of the underlying pressures that the MPC [Monetary Policy Committee] was responding to when it made this decision.

“Mortgage borrowing is growing at a slower pace than it has for the last few months, reflecting both the slowdown in housing market growth after the April spike and broader trends in the sector.”

Ahead of the introduction of a 3% Stamp Duty surcharge for additional homes on 1^st April 2016, the housing market experienced a significant surge in property sales.

Dr. Harding continues: “Given the low interest rate environment and high levels of confidence during the summer, the strong credit growth can be interpreted as strong consumer sentiment.

“Company deposits grew at an annual rate of 3.8% in August 2016, compared 9% in August 2015, suggesting that companies may be using their own internal resources to fund working capital and growth requirements.”

UK housing market is stable following Brexit

Published On: September 23, 2016 at 2:36 pm

Author: Em Morley

Categories: Property News

Tags: Brexit,EU referendum,housing market,residential housing property

Three months have passed since the historic result of the EU referendum. Despite this, economists are still trying to come to terms with the impact of Brexit.

However, for the housing market, it seems that the future is bright, according to Jackson-Stops & Staff.

Volumes

Analysis of the UK housing market by the national estate agency, based upon a sample of more than 500,000 properties for sale in Britain, reveals that the volume of homes has actually risen since the vote. On the other hand, the proportion subjected a contract has slipped by only 2.5%.

This slight decline in residential property sales has led to a 2% fall in the average asking prices across the UK. Prices have fallen from 297,508 in mid-June to £291,547 at present.

Nick Leeming, chairman at Jackson-Stops & Staff, commented: ‘three months after the UK’s historic vote to leave the EU, the property market remains alive and active.’[1]

‘There are more properties on the market today than one the day of the Brexit vote and there has only been a marginal decline in the number of properties under offer. House prices have also declined only moderately. The normal events-families growing, the desire to downsize, a new job, a change of lifestyle-the fundamental drivers for people buying and selling property, have remain unchanged.’[1]

UK housing market is stable following Brexit

Stamp Duty impact

However, while the overall housing market remains stable, further data from the report indicates that high stamp duty rates are having in impact. This is being felt particularly at the top end of the market, in particular for properties over £2m.

Mr Leeming continued by saying, ‘London has always been an island when it comes to the housing market and is governed by a range of forces that are not as strongly at play across the rest of the UK, such as significant international investment and high net worth buyers.’[1]

‘The fact that there is a freeze around the higher value properties in the capital is due to a number of factors, not just confidence levels following the Brexit vote, but also the impact of stamp duty at the very highest levels. We anticipate that the market will correct itself as we head into the final quarter of this year,’ he added.[1]

[1] https://www.propertyinvestortoday.co.uk/breaking-news/2016/9/uk-housing-market-remains-alive-and-active-three-months-after-eu-poll