Posts with tag: investment

Purchase activity at lowest level since February 2015

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

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Categories: Property News

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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

Midlands Engine Strategy to provide boost for housing market

Published On: March 10, 2017 at 10:46 am

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Categories: Property News

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Yesterday, the Government launched its Midlands Engine Strategy, which is widely expected to give the property industry in the region a welcome boost.

It is expected that the £392m package of investment into the project will provide a shot in the arm similar to that seen with the Northern Powerhouse project.

Midlands Engine

The investment will give support to projects that include a global hub for space technology in Leicester, £12 to improve roads near Loughborough and £11m for regeneration works in Derby city centre.

Sir John Peace, chair of the Midlands Engine, noted: ‘We have come together across a wider geography than has been attempted before-to deliver a collective view of what the Midlands can achieve. We are confident in our physical, economic, commercial and cultural assets-and in our people-and our potential to contribute more to the success of UK plc.’[1]

‘We believe that with the right investments in place the Midlands can raise its performance to match global cities like Singapore, Shanghai and New York. We can grow faster and generate more wealth, helping the government to create an economy that serves everyone well,’ he added.[1]

Midlands Engine Strategy to provide boost for housing market

Midlands Engine Strategy to provide boost for housing market

Infrastructure

Richard Connolly, CEO of Rentplus, said: ‘The money announced yesterday to build the infrastructure necessary to make developments viable, to regenerate town centres and the recommitment to Garden Cities and Villages will provide a welcome boost for housing levels.’[1]

‘The National Housing Federation’s Home Truths report shows that both the East and West Midlands’ housing markets are just as broken as the rest of the UK. In the East Midlands the income needed for an average mortgage is £43,000, while the average salary is just 26,000,’ he continued.[1]

Concluding, Connolly said: ‘In the West Midlands house prices are over eight times average salaries. Therefore for many workers traditional single ownership properties will remain beyond their reach even with a substantial increase in housing supply.’[1]

[1] https://www.propertyinvestortoday.co.uk/breaking-news/2017/3/midlands-engine-strategy-will-provide-a-welcome-boost-for-housing-levels

More UK properties selling for over their asking price

Published On: March 1, 2017 at 2:24 pm

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Categories: Property News

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The latest report from the National Association of Estate Agents (NAEA) has revealed that there are now on average 11 buyers chasing each property for sale.

As a result, a number of properties are selling for over the original asking price.

Demand

Figures from the report suggest that there were 425 potential buyers registered per branch during January in comparison to the previous month. Housing stock is also fairly low in comparison.

The volume of properties ready to purchase on estate agents’ books during January stood at 38. This is a slight decrease from December when there were 41 available.

However, the NAEA sold that 76% of properties actually sold in January fetched more than the asking price. The South-West saw the greatest number of properties selling for more than the initial asking price.

Hampshire, Shropshire and the Midlands are the regions with the most house hunters in comparison to number of properties.

More UK properties selling for over their asking price

More UK properties selling for over their asking price

Competition

Mark Hayward, Chief Executive of the recently rebranded NAEA Propertymark, observed: ‘January saw a surge in buyers looking to kick off the New Year with a new home-but competition is rife with an average of 11 buyers chasing each property.’[1]

‘The increase in the number of properties selling for more than asking price in January could be a result of heightened interest and the fact there is simply not enough housing to meet demand. When the government issued their housing white paper at the start of February we stated how important it was for the industry to put forward robust solutions to really make a difference and it’s vital that building more affordable housing is at the very top of their agenda,’ he added.[1]

[1] https://www.propertyinvestortoday.co.uk/breaking-news/2017/2/more-homes-selling-for-over-asking-price-amid-lack-of-stock

Are buy-to-let investors set to move north?

Published On: January 6, 2017 at 10:10 am

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Categories: Landlord News

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There has been a substantial drop in the number of buy-to-let landlords buying properties following the raft of tax changes introduced for the industry.

It is unlikely that the trend will reverse in the immediate future, unless the Government chooses to cool or amend any of these alterations.

Unattractive

Investing in property has been considered a safe investment for a number of years, but the assault on landlords has made the proposition unattractive for a number of would-be buyers.

This is the view of Paul Smith, CEO of haart estate agents, who notes: ‘The buy-to-let market has been severely stung by the government’s war on landlords. In some parts of the country, especially London, a buy-to-let property no longer makes the same return it once did.’[1]

It is certain that some landlords will pass costs onto tenants by raising their tents. Experts suggest that others will consider leaving the market due to the Governments new rules, with rents becoming unsustainable for them.

Are buy-to-let investors set to move north?

Are buy-to-let investors set to move north?

Northern Lights

Mr Smith does not think that landlords with a low profit margin will leave the market, but instead concentrate more on investing for high yields. Many savvy investors have also realised that the north and not London is where the best yields can be found.

‘Investors will naturally gravitate north where values are cheaper and yields are higher-you can pick up a small portfolio of two bedroom terrace properties in Doncaster for the same price as a one bedroom flat in a new build London development,’ Smith concluded.[1]

[1] https://www.landlordtoday.co.uk/breaking-news/2017/1/buy-to-let-landlords-will-naturally-gravitate-north-in-2017-says-agent

 

Investors remain active ahead of festive period

Published On: December 20, 2016 at 3:40 pm

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Categories: Landlord News

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It is currently a time of cooling off for the UK housing market as Christmas approaches. However, there are still some signs that investors are remaining highly active.

A clear sign of this was the outcome of Cheffins’ auction in Cambridge last week, where £1.65m worth of sales was achieved across 13 lots. This represented a sales rate of 77%.

Activity

Ian Kitson, associate at Cheffins, said: ‘December sales often feature slightly smaller catalogues than the rest of the year, but there was good interest in a range of the lots throughout the marketing period, suggesting that buyers remain motivated regardless of the looming festive period.’[1]

‘We saw a good turnout on the day and achieved strong prices across the board. The sale of 77% appears strong compared to some of the results being reported nationally and we can attribute this to the quality of lots on offer, as well as the popularity of our region,’ he continued.[1]

Investors remain active ahead of festive period

Investors remain active ahead of festive period

Renovation

It appears that investment properties offering good opportunities of redevelopment attracted the most interest, with bidding and results well over guide prices across multiple lots.

The lot fetching the highest value offer on the day was a development site of 0.2 acres in Westfield Road, near Cambridge. This site had planning permission for the demolition of an existing bungalow, with the creation of two detached houses. This lot eventually sold for £419,000.

Mr Kitson also noted: ‘Renovation projects and investment opportunities were definitely the most sought-after lots of the day at this month’s auction. Previously the mainstay of property developers, we are actually seeing a shift in the types of person who look to purchase renovation projects, with a larger number of owner-occupiers entering the bidding.’[1]

[1] https://www.propertyinvestortoday.co.uk/breaking-news/2016/12/investors-remain-motivated-regardless-of-the-looming-festive-period

 

Bank of England receives new powers to ease BTL lending

Published On: November 17, 2016 at 10:06 am

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Categories: Finance News

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The Bank of England is to receive new powers from the Government in order to regulate mortgages for small-scale buy-to-let landlords, Chancellor Phillip Hammond has announced.

From early next year, the Bank will be able to limit loan-to-value ratios on buy-to-let mortgages, alongside the minimum amount by which the predicted rental income from a home will exceed mortgage interest payments. This move has been designed to help protect the financial system from any future risks in the buy-to-let market.

Powers

Initially, the Bank had asked for these powers over two years ago, with the Government holding a consultation in early 2016.

Chancellor Hammond observed: ‘It is crucial that Britain’s independent regulators have the tools they need to keep our financial system as a safe as possible. Expanding the number of tools at the Financial Policy Committee’s disposal will ensure that the buy-to-let sector can continue to make an important contribution to our economy, while allowing the regulator to address any potential risks to financial stability.’[1]

Buy-to-let investment has outperformed all other major asset classes in recent years. However, the Government’s decision to introduce measures to deter buy-to-let landlords has raised concern that the windfall could soon be coming to an end.

Bank of England receives new powers to ease BTL lending

Bank of England receives new powers to ease BTL lending

Alterations

The introduction of the 3% stamp duty surcharge on buy-to-let properties is just one of the measures introduced with the intention of levelling the playing field between homeowners and investors. Mortgage interest tax relief is to be phased out from next year, with the wear and tear allowance also scrapped.

Now, the introduction of new powers for the Bank of England’s Financial Policy Committee could make it even trickier to get a mortgage.

As such, could it be that the buy-to-let market is suddenly be becoming an unattractive proposition?

[1] https://www.landlordtoday.co.uk/breaking-news/2016/11/bank-of-england-gets-new-powers-to-curb-buy-to-let-lending