Posts with tag: mortgage approvals

Buy-to-let approvals soar ahead of tax changes

Published On: February 11, 2016 at 10:48 am

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The forthcoming stamp duty changes have been the catalyst behind buy-to-let approvals soaring in January.

Figures from research conducted by esurv shows that in January, there were 85,432 house purchase approvals. This represented a rise of 20.6% month-on-month. In addition, this was the highest number of monthly house purchase approvals since October 2007, when 87,594 were recorded.

Annually, house purchase lending has risen by 39.3%.

Rush

‘Buy-to-let approvals contributed to the growth in January home lending,’ noted Richard Sexton, director of e.surv charterted surveyors. ‘Concerns about the sector’s growth have sparked a wave of legislation but as stamp duty changes come into effect this April, there’s been a rush to get buy-to-let loans approved. Many have predicted a narrowing of the buy-to-let sector but actually what we’re seeing in lending quarters appears to be the opposite.’[1]

‘This buy-to-let rise also hasn’t been at the expense of first-time buyers. The number of small-deposit loans granted has risen in January and this is a great sign that lenders still have the appetite to give first-timers a chance. Rising wages and a delayed interest rate rise have also boosted first-timer’s prospects. For those investing in a second property it’s also a race to beat April’s legislation-adding an extra boost to overall house purchase approval levels,’ Sexton continued.[1]

Climbs

In addition, small deposit lending climbed in January to reach 12,388 loan approvals. This was an improvement on the 11,546 recorded in December. Annually, this figure rose substantially from the 9,385 small-deposit loans given in January 2015.

Despite January seeing a numerical increase in the total of small-deposit loans granted, this may not necessarily mean an increase in sales. The most recent First Time Buyer Tracker from Your Move and Reeds Rains indicates that in December 2015, there were 26,600 first-time buyer sales. This represented a 4.7% decrease from the 27,900 seen in November.

What’s more, the proportion of total lending compromised by small-deposit approvals in January fell to 14.5% from 16.3% in November and December 2015-forming the smallest proportion since the 13.9% in December 2014.

Buy-to-let approvals soar ahead of tax changes

Buy-to-let approvals soar ahead of tax changes

Bright outlook

Mr Sexton feels, ‘ a buy-to-let surge has pushed down the proportion of small-deposit lending-but this figure conceals a more realistic and upbeat picture. In fact, January has been a positive month for small-deposit borrowers-the number of loans approved have reached their highest total for four months, since September 2015. And the slowdown in small-deposit lending seen towards the end of 2015 hasn’t continued into 2016 so far.’[1]

For first-time buyers, prospects are looking bright. Government initiatives introduced to help first-timers onto the property ladder appear to be working. According to the Treasury, large numbers of aspiring homeowners have taken advantage of the Help to Buy ISA and this is an incredibly promising start,’ he added.[1]

Concluding, Sexton acknowledged that, ‘challenges do remain, supply issues are ongoing and the promise of starter homes may take longer to be realised, but for first-time buyers, lenders remain willing to support

[1] http://www.propertyreporter.co.uk/finance/btl-approvals-hit-nine-year-high.html

 

Mortgage Approvals Up In December

Published On: February 1, 2016 at 11:58 am

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The latest Bank of England Money and Credit report has indicated that mortgage approvals were up in December.

Mortgage approvals totalled 70,837 during the month, slightly higher than the 70,410 recorded during November. In addition, this figure was higher than the average of 69,462 over the last six months.

Improving

Further data from the investigation indicates that net mortgage lending fell from £3.9bn in November to £3.2bn during December.

The total number of approvals for remortgaging also went up from 39,161 to 41,708 in the last month of 2015. This was higher than the average of 39,540 recorded over the latter half of 2015.

Total lending to individuals went up by £4.4bn in December, in comparison to £5.3bn in November and £4.6bn over the six month period.

‘Mortgage lending in December reflected some of the rejuvenated confidence radiating from buyers,’ noted Peter Rollings. ‘After the Autumn Statement extensions to Help to Buy and the rock-bottom base rate lasting out the year, first-time buyers were feeling decisive and this was mirrored by a clear upswing in house purchase approvals from November to December. This energy has definitely been carried over into 2016 and January has already seen an impressive influx of motivated buyers, eager to progress up the property ladder.’[1]

Mortgage Approvals Up In December

Mortgage Approvals Up In December

Momentum

Mr Rollings feels that, ‘2015 was also the year of remortgaging for many existing homeowners-and his momentum is showing no signs of dissipating while cheaper fixed-rate mortgages remain available.’ He notes that, ‘in coming months, we can expect strong buy-to-let lending, as the April introduction of higher stamp duty for second homes gives a new sense of urgency for those looking to invest in property or expand their existing portfolio.’[1]

Brian Murphy, Head of Lending at Mortgage Advice Bureau also said, ‘mortgage approvals reached a near two-year high in December, rounding off a successful year for borrowers. Existing homeowners were the frontrunners in this growth, with the number of remortgage approvals rising by more than a quarter since December 2014.’[1]

Murphy also noted that, ‘borrowers benefited from rock-bottom mortgage rates throughout 2015 and our data shows that rates continued to fall across all fixed-rate products in December. Growing numbers of homeowners are wising up to the fact that it pays to remortgage, particularly if moving from a poor value standard of variable rate. Borrowers who are comfortable with a long-term commitment can take advantage of today’s rates by locking into a fixed product, avoiding higher mortgage bills when an interest rate rise eventually kicks in.’[1]

[1] http://www.propertyreporter.co.uk/finance/mortgage-approvals-up-in-december-says-boe.html

Mortgage Lending Up 17% Over the Year

Published On: December 1, 2015 at 10:00 am

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The amount of mortgage approvals increased to 69,630 in October, up slightly from 69,012 in September, according to the Bank of England (BoE).

October’s number is also higher than the 68,099 average recorded over the past six months.

Mortgage Lending Up 17% Over the Year

Mortgage Lending Up 17% Over the Year

The value of new mortgage approvals reached £12.2 billion. Analysts had predicted 70,000 mortgage approvals for October, but the slightly lower figure was still 17.2% up on October 2014, from 59,423.

Chief Economist at IHS Global Insight, Howard Archer, says mortgage values are rising as house prices continue to increase.

He continues: “While housing market activity has clearly picked up appreciably overall during 2015, the slight easing back in mortgage approvals for house purchases from August’s peak levels could possibly reflect housing market activity being constrained by a shortage of properties on the market.

“It is also evident that mortgage activity has been lifted in recent months by people looking to tie in attractive mortgage interest rates before interest rates start to rise.”1

The amount of remortgaging approvals dropped to 39,629, from around 41,000 in September. However, October’s figure still sits ahead of the six-month average of 38,430.

Total lending to individuals grew by £4.8 billion in October, higher than the average monthly increase of £4.1 billion for the last six months.

CEO of Marsh & Parsons, Peter Rollings, comments on the BoE’s data: “Lending has rebounded after September’s downward blip and mortgage approvals have leaped an impressive 17% year-on-year.

“All the vitals are looking strong, and remortgaging and locking into long-term deals will still very much be the name of the game for many existing homeowners awaiting potential interest rate movement in 2016.

“These figures only look at October, and George Osborne’s package of housing announcements in the Autumn Statement last week will have keyed up a new wave of first time buyers eager to get their foot in the door.

“We may also see a winter flurry of buy-to-let borrowing before April’s Stamp Duty shake-up, as landlords seek to invest before the additional charge is levied on second homes.

“The big question as we enter the New Year is whether the supply of homes will match the increasing demand that’s clearly evident in the mortgage market.”2

In a separate study, the National Association of Estate Agents (NAEA) found that house sales to first time buyers accounted for 31% of sales in October, the highest proportion since August 2009.

It also reported that inventory increased by 16% month-on-month, up from 37 properties per branch to 43. However, it said that demand fell for the fourth consecutive month.

The NAEA revealed that there was an average of nine sales per estate agent branch in October.

1 http://www.cityam.com/229859/mortgage-lending-rose-in-october-according-to-the-latest-bank-of-england-credit-report 

2 http://www.propertyindustryeye.com/mortgage-approvals-for-house-purchase-up-17-in-a-year-says-bank/

 

Buy-to-Let Lending Up as First Time Buyer Loans Rise

Published On: November 12, 2015 at 10:02 am

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Buy-to-Let Lending Up as First Time Buyer Loans Rise

Buy-to-Let Lending Up as First Time Buyer Loans Rise

Buy-to-let mortgage lending is now at its highest level since 2007, as landlords continue to invest in the property market, despite forthcoming tax changes, which are set to hit landlords’ profits hard.

Buy-to-let lending accounted for 18% of all new mortgage lending in September, according to the Council of Mortgage Lenders (CML).

Buy-to-let remortgaging increased by 62% over the year to September, while buy-to-let lending for house purchase was up 36% on last year.

In September, 24,100 buy-to-let loans were approved, compared to 22,200 in August and 17,700 in September 2014. Of these, 11,300 mortgages for were buy-to-let property purchase.

The CML also witnessed a 10% annual increase in lending to first time buyers, up 2% month-on-month. Lending to home movers dropped by 4% on the month, but is up 15% on an annual basis.

In total, there were 62,300 mortgages in September for homeowner house purchase, the same number as recorded in August, but up from 57,600 in September last year.

Around half, 28,600, were approved for first time buyers, up from 27,500 in August and 26,300 in September 2014.

In a separate study, chartered surveyor e.surv has forecast the highest October lending levels for seven years, with house purchase approvals at 72,409. Based on its own activity, the firm is predicting a monthly and annual increase in approvals, up 5.1% on September and 21.9% on October last year.

Are you one of the investors sticking to the market despite the impending tax changes? And how will your business change in the new year?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Average House Price Increases to Almost £197,000

Published On: October 29, 2015 at 3:56 pm

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Categories: Property News

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House prices have risen over October, reaching an average of £196,807, according to data from the Nationwide.

The annual rate of price growth has bounced back slightly to 3.9% after dropping to a two-year low of 3.2% in August. However, it remains much lower than the peak of 11.8% recorded in June 2014.

Chief Economist at the building society, Robert Gardner, comments: “Over the past five months, annual price growth has remained in a fairly narrow range between 3% and 4%, broadly consistent with earnings growth over the longer term.

“While this bodes well for a sustainable increase in housing market activity, much will depend on whether building activity can keep pace with increasing demand.”

After a strong start to 2014, the property market slowed in the second half of last year, with the drop in activity continuing into the first half of 2015.

Average House Price Increases to Almost £197,000

Average House Price Increases to Almost £197,000

Recent data reveals a rise in the amount of buyers taking out mortgages and registering with estate agents. However, many agencies have reported a lack of homes for sale.

Nationwide’s study, based on loans approved by the building society during October, shows that over the last three months, house prices have increased by 1.1%, up from 0.8% growth over the previous three months.

Chief UK Economist at IHS Global Insight, Howard Archer, believes that stronger earnings growth, high employment levels, increased consumer confidence and low interest rates are supporting the market.

He says: “We expect house prices to see solid increases over the coming months amid firm activity. Given that house prices were soft in the latter months of 2014, this is likely to see annual house price inflation on the Nationwide’s measure move higher over the coming months.”1

Mortgage lenders have been competing for the best deals over the last few months, helping buyers keep their monthly repayment costs down, adds Gardner. Despite average prices being £10,763 higher than the previous peak hit in the early 2000s, the amount of money needed to repay a mortgage each month has not risen.

And for first time buyers, mortgage payments account for just under 35% of take-home pay, according to Nationwide, significantly less than the 52% needed in 2007.

Gardner explains: “Historically low interest rates have helped to offset the negative impact of rising house prices on affordability. Indeed, even though house prices are at an all-time high, the cost of servicing a typical mortgage is still close to the long-term average as a share of take-home pay.”

However, the difficulty of affording a mortgage was highlighted by data published by Nationwide at the end of September, which found that the cost of a first time buyer home in London had risen to 9.6 times the average income.

Separate research from the Bank of England (BoE) reveals a slowdown in mortgage approvals for September. The amount of loans approved for home purchase dropped for the first time since May, to 68,874 last month from 70,664 in August.

These figures reflect data from the British Bankers’ Association (BBA), which also shows a fall in mortgage approvals, reportedly the result of a shortage of properties on the market.

Chief UK Economist at consultancy firm Pantheon Macroeconomics, Samuel Tombs, says the “big picture is that overall credit flows are improving, albeit slowly”.

The BoE data reveals that mortgage lending increased monthly by £3.6 billion in September, the highest net growth since early 2008.

Tombs continues: “The drop in mortgage approvals is neither a shock nor the start of a trend. The BBA’s narrower measure of approvals pointed to a September fall earlier this week, while lenders’ intention to increase the supply of secure credit and strengthening wage growth point to an imminent revival.”1

Gardner reports that in recent years, fixed-rate deals have become so popular that the proportion of outstanding mortgages on variable rates has dropped steadily; these are the loans prone to interest rate rises. In mid-2012, around 70% of outstanding mortgages were on variable rates. This had declined to about half by June this year.

Gardner adds: “This should help to insulate many households from the impact of higher interest rates, though the proportion on variable rates is still higher than the 38% prevailing in 2007. It is also important to note that the majority of recent fixes are for relatively short time periods – 65% were for two years and 30% for five years.”

However, he believes that the housing market should cope with any interest rate rises in the coming year – “provided the increase is modest and the economy and the labour market remains in good shape”1.

1 http://www.theguardian.com/society/2015/oct/29/uk-house-prices-average-197000-nationwide

Lack of supply driving up house prices

Published On: October 26, 2015 at 2:50 pm

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New investigations suggest that despite mortgage activity increasing over the last twelve months, the lack of property for sale is likely to drive up house prices.

A report from The Centre for Economics and Business Research (CEBR) predicts that house prices will increase by 5.6% this year, higher than its previous forecast of 4.7%.

Deals

This comes despite a 14% rise in mortgage approvals for house purchases, according to the major banks. The British Bannkers’ Association noted that the rise in September in comparison to the same period last year was partly down to first-time buyers being able to find a more suitable deal.

With this said, the 44,489 mortgage approvals for house purchases in September was actually 4.5 % down on August.

Lack of supply driving up house prices

Lack of supply driving up house prices

The CEBR said that price gaps between different property types are making it more difficult for people to first get on to and then climb up the property ladder.

In London, someone who wished to move from a flat to a terraced property would have to find an extra £176,000, according to the report. The CEBR has called on the Government to expand its current housebuilding programme, claiming that prices would continue to rise-by 3.5% in 2016 and by 4% in the next four years.

Housing charity Shelter has also warned that more house price rises will, ‘push the goal posts even further away for those hoping to become homeowners.’[1]

[1] http://www.bbc.co.uk/news/business-34636836