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Mortgage Approvals Reach 9-Month High

Homebuyers and lenders appear to have brushed Brexit uncertainty in March, as mortgage approvals reached their highest level since June of last year.

Industry data from UK Finance, a lobby group for the financial services industry, revealed that high street banks approved 39,980 mortgages in March, up 6% from a year ago and up 2% from February. That’s the highest number of mortgages approved in a single month since June 2018.

The numbers were greeted as a sign that the housing market is rebounding following a slowdown in 2018 as Brexit negotiations stalled.

The figures confirmed the optimistic prognosis from the Royal Institute of Chartered Surveyors (Rics), which found that house prices had risen last month for the first time since July 2018. However, Rics warned that worries about Brexit would continue to put a damper on price growth.

Jeremy Leaf, north London estate agent and a former Rics residential chairman, told the Financial Times: “Mortgage approvals for home purchase are always a useful lead indicator of future market activity and these are no exception.

“They confirm what we have been seeing on the ground and in other surveys — that transactions are holding up reasonably well despite political and economic distraction,” he added.

However, he noted that sales are taking longer to complete and that buyers and sellers are having a hard time finding middle grounds on prices. He attributed some of the market turbulence to the withdrawal of buy-to-let investors from the market, following the introduction of a stamp duty surcharge on second homes and cuts to the mortgage interest tax relief. Those buyers haven’t yet been replaced by fist-time buyers.

The market varied regionally as well, he noted.

“The picture is very patchy and can vary considerably between areas which are quite close together and between London and elsewhere.”

The United Kingdom was due to leave the European Union on 29 March, but was granted an extension until 31 October, after Prime Minister Theresa May failed to gain parliamentary approval for her withdrawal agreement.

With the new deadline looming, other analysts cautioned that the recovery in the housing market would be limited.

Capital Economics property economist Hansen Lu said: “Looking ahead, the delay to Brexit suggest that demand and sentiment in the housing market will stay subdued for at least the next few months. As a result, we don’t expect to see a further recovery in mortgage approvals this year. At the same time, a no-deal Brexit looks less likely than before.”

However, recovery in the housing market was matched by and related to other good economic indicators.

While consumers were still wary of big-ticket purchases, “it may well be that housing market activity has gained some support from recent improved consumer purchasing power and robust employment growth,” Howard Archer, from economic forecasting group EY ITEM, fold the Evening Standard.

Annual wage growth is at nearly a 10-year high and unemployment has fallen to 3.9%, a 44-year low.

Soruce: Money Expert

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London Buy To Let Investment In Recovery

The London buy to let property market is showing signs of recovery according to the latest data released from buy to let finance broker Commercial Trust.

London buy to let took a bit of a battering over the last year, largely due to the uncertainty caused by the Brexit fiasco. However, positive signs have been seen in the first quarter figures for 2019 from Commercial Trust.

According to the latest figures, the number of submitted purchase mortgage applications for the capital rose by 4 per cent on the previous quarter, propelling London back to its position as the leading region for buy to let business applications – 15.8 per cent of overall business, closely followed by the South East at 14.5 per cent.

This followed the last quarter of 2018 which had seen the South East overtake the capital for the first time, with London buy to let in second place.

Strong results were also shown for the East of England and the North West, enjoying an increase in the proportion of buy to let applications submitted during the first quarter. The same two regions shared top billing for buy to let completions over the quarter, with each contributing 13 per cent of overall completions.

Remortgaging continued to dominate buy to let applications, with 60 per cent of business coming from landlords looking to refinance.

Chief executive at Commercial Trust, Andrew Turner, commented: ‘The effects of Brexit have been keenly felt in London and perhaps the stalling of house price growth has to some extent created a buyers’ market for buy to let.

Our latest figures underline the importance of London and the South East within the buy to let market. For the first quarter of 2019, these two regions contributed over 30 per cent of our buy to let purchase applications, an increase from the 26 per cent recorded in Q4 of 2018.

Whilst it is good news to see increased activity in London, movement is not restricted to that area and both the North West and East Anglia have also increased their proportion of overall purchase business during the quarter.

With Brexit now pushed back to later in the year, the combination of low interest rates, a wide variety of mortgage product choice, stalling house prices and soaring tenant demand, many investors are of a mind to invest in the private rental sector.’

Source: Residential Landlord

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Edinburgh housing market activity ‘highest since credit crunch’ and resisting Brexit pressure

Property market activity in Edinburgh is at its highest level since the credit crunch and shows no sign of slowing down because of Brexit, according to Warners Solicitors & Estate Agents.

Between January and March, Warners recorded over 250 property sales – an annual increase of over 40 per cent compared to the same period in 2018 – and brought almost 300 properties to the market.

David Marshall, operations director with Warners, said: “There had been a feeling that activity in the local property market would be subdued in the early part of 2019 as people were expected to wait and see the outcome of Brexit negotiations before deciding to buy or sell. This has not been borne out in reality.

“The rise in the number of homes coming onto the market that we have seen has been the greatest improvement in the market over the last two years.

“In 2016 and 2017 many people were having to delay selling their own home because they couldn’t find a property that they wanted to buy.

“As more homes have become available it has made this problem far less common. Buyers are more often able to find a home that they want, while most sellers are still able to sell their properties quickly.”

Mr Marshall added: “With the pressure on buyers having eased, house price inflation has also come back down to more manageable levels.

“The latest figures from ESPC show that the average house price in Edinburgh rose by 1.8 per cent annually during the first quarter, well below the rate of inflation observed during 2017 and 2018.

“The levels of inflation that we are now seeing are much more sustainable over the longer term so this is good news for the health of the market and, as we move forward, we would expect to see inflation continue in the region of one to three per cent for much of 2019.”

Source: Scottish Legal

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1,000 homes a week purchased through Help to Buy last year

Just over 52,000 homes were purchased through the Help to Buy: Equity Loan scheme in England in 2018 – a 12% increase on the previous year, the latest government figures showed.

Across what’s being hailed as a very successful year for Help to Buy by mortgage industry figures, an average of around 1000 households per week bought property through the scheme.

The Ministry of Housing, Communities and Local Government (MHCLG) introduced Help to Buy in 2014 as a way of assisting first time buyers trying to get on the property ladder, and the total number of homes bought with its help since its inception is now above 210,000.

More than 42,000 (81%) of homes bought in England in 2018 through Help to Buy were purchased by first-time buyers – a 14% increase on 2017 – which means one in seven purchases by first-timers was through Help to Buy.

Recent research showed first-time buyers needed to find a deposit of more than £30,000 in order to purchase a home in 2018 – an increase on the previous year.

Very successful year
Kate Davies, executive of Intermediary Mortgage Lenders Association (IMLA), said: “The statistics for 2018 highlight a very successful year for Help to Buy. The government’s programme has continued to stimulate the bottom of the housing ladder and indirectly support the whole of the UK property sector throughout 2018.

“With as many as one in every seven first-time buyers using Help to Buy in England in 2018, it is likely that the programme will remain invaluable in supporting home buyers over the remaining years of the scheme.

“While we are yet to see if the programme is continuing to grow in 2019, strong HMRC transaction statistics for Q1 2019 possibly indicate that Help to Buy-fuelled sales are still running at a healthy pace, continuing the trend we have been witnessing for more than a year.”

Beyond 2023
The government has indicated that Help to Buy will come to an end in 2023 and, while welcoming the figures for 2018, Craig Hall, head of broker relationships and propositions at Legal & General Mortgage Club, warned that first time buyers need further help.

He said: “Looking beyond the scheme’s end, it’s vital that government and industry works together to ensure these buyers remain supported. It’s likely that we may see private schemes coming to market to help fill the void.”

He added that higher LTV lending from mortgage providers and family assist mortgages are also helping first-time buyers, who should always seek out the expertise of a mortgage broker before taking any course of action.

Written by: Max Liu

Source: Your Money

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Region’s business confidence remains above UK average

Business confidence in the region slid three points in April but remains above the UK average, a new report released today reveals.

The latest Business Barometer from Lloyds Bank Commercial Banking shows that companies in Yorkshire reported higher confidence in their business prospects, up four points to 20 per cent, but lower economic optimism, which has fallen eight points to 17 per cent. Together, this gives an overall confidence of 18 per cent, compared with a UK average of 14 per cent.

Businesses’ hiring intentions show a net balance of eight per cent of businesses in the region expect to hire more staff during the next year, down seven points on last month.

Across the UK, overall confidence climbed four points as both firms’ optimism about the economy and their confidence in their own prospects continued to climb from lows recorded earlier this year.

Companies’ economic optimism rose to four per cent, while their confidence in their own business prospects climbed three points to 23 per cent.

The Business Barometer questions 1,200 businesses monthly and provides early signals about UK economic trends both regionally and nationwide.

Kelly Green, regional director for Yorkshire at Lloyds Bank Commercial Banking, said: “It’s very positive to see Yorkshire firms increasingly confident about their trading prospects, but perhaps surprising to see this isn’t reflected in their hiring intentions.

“By carefully managing working capital, firms can build their financial flexibility to increase staffing and take advantage of growth opportunities without harming day-to-day spending.

“We’ve pledged to lend up to £1.4bn to Yorkshire firms in 2019, including through working capital tools, to help firms make the most of the opportunities that come their way.”

Across the region, a net balance of two per cent of businesses said they felt the UK’s exit from the European Union is having a negative impact on their expectations for business activity.

By Rachel Covill

Source: The Business Desk

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Brexit wobbles spread across the UK as annual price growth hits a six year low

New-build sales plummeted by almost a quarter in the first three months of 2019, rendering the Government’s housing incentives “impotent,” research claims.

Analysis by property adviser London Central Portfolio (LCP) found that the number of new-build transactions in England and Wales dropped 24.3% between the fourth quarter of 2018 and the first three months of the year to 95,935.

Naomi Heaton, chief executive of LCP, said: “Despite the Government’s various schemes created to incentivise the purchase of new homes, the calamitous state of UK politics is rendering them impotent.

“The uncertainty rolls on.”

The new homes transaction figure doesn’t include greater London, where new-build sales were down 19% on a quarterly basis to 13,003.

It comes as LCP analysis of Land Registry data suggests there were 885,889 sales across England and Wales, including transactions in London and new-builds, during the 2018/2019 financial year.

This is below the 1.2m estimated by HMRC based on Stamp Duty receipts.

Heaton told EYE that the discrepancy could be due to HMRC’s statistics including the whole of the UK, while the Land Registry doesn’t include transfers such as those under  power of sale repossessions or to companies.

Heaton added that HMRC and Land Registry data never corresponds and said LCP has not had an explanation despite raising this several times.

There is also plenty of gloom in the wider market when it comes to prices and sales.

LCP found that average property prices in England and Wales, excluding London, are now growing at their slowest rate since 2013 at 2.9% annually to £254,196 in March.

Sales volumes in England and Wales, excluding London, fell 0.8% in the 12 months to March to 798,521.

In prime central London, average prices were up 1.8% annually to £1.84m, while transactions fell 15.7% to 3,378 over the same period.

Average prices in greater London were up 1.4% annually to £624,343, while sales fell 3.4% to 87,368 in the year to March 2019 – 24.7% lower than at the EU referendum in June 2016.

Heaton added: “The Brexit wobbles that have been evident in the capital for some time are now impacting on England and Wales.

“Buyers’ faith in the market has waned and sellers are beginning to question whether now is the best time to make a move.

“In previous market cycles, London has often been an early indicator of what was to come for the rest of the UK. This may well presage more bad news to come for the domestic market.”

By MARC SHOFFMAN

Source: Property Industry Eye

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Buy To Let Property Investors Back As Prices Fall

Buy to let property investors are returning to the market as falling prices make property investments viable according to independent estate agent, haart.

The agent found that the number of landlords registering for buy to let property has risen by 7.9 per cent on the month but has fallen by 21.8 per cent on the year across England and Wales.

In London, the number has risen by 11.8 per cent on the month but fell by 28.1 per cent on the year. The number of buy to let property sales has dropped by 2.6 per cent on the year across England and Wales and fell by 71 per cent in London. Average buy to let property sale prices are down 11.9 per cent across England and Wales annually, and by 12.4 per cent in London.

According to haart’s figures, house prices across England and Wales fell by 0.6 per cent on the month and by 5 per cent on the year with the average house price now sitting at £218,556.

New buyer registrations rose by 23.2 per cent on the month and by 7.8 per cent annually. The number of properties coming onto the market this month rose by 12.3 per cent and has risen by 1.9er cent on the year. In March, there were 12 buyers chasing every property across England and Wales.

CEO of independent estate agent, haart, Paul Smith, commented: ‘Three years on from George Osborne introducing the 3 per cent hike in stamp duty surcharges on second homes, landlords are beginning to come to terms with the additional costs and are cautiously entering the market again. Our branches across England and Wales saw a monthly uptick of 7.9 per cent in the number of landlords registering to buy, a figure which has been continuing to grow since the start of 2019.

Interestingly, sale prices to landlords are down by nearly 12 per cent on the year which may be spurring on this activity, these price decreases could be causing the available stock to fall within lower stamp duty thresholds, making the stamp duty levy a little easier to stomach. Despite this, landlords are not back in their hundreds, the number of registrations is still down 22 per cent on the year. Whilst some brave souls are re-entering the market, the hammering buy to let property investors received in terms of various tax changes is still fresh in many of their minds.’

He concluded: ‘Clearly investors are recognising the value that can still be found in buy to let property, especially in comparison to the overvalued and faltering stock market. Although the property market hinges on confidence, the FTSE 100, gold and cash are far more volatile to socioeconomic impact, so investors are increasingly returning to property where they deem their money safest, and where the yields are highest.’

Source: Residential Landlord

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More properties coming onto the market

The number of properties coming onto the market this month rose by 12.3% and by 1.9% on the year, estate agent haart has found.

In March, there were 12 buyers chasing every property across England and Wales. House prices across England and Wales fell by 0.6% on the month and by 5% on the year. The average house price now sits at £218,556. New buyer registrations rose by 23.2% on the month and by 7.8% annually.

Paul Smith, chief executive of haart, said: “Three years on from George Osborne introducing the 3% hike in stamp duty surcharges on second homes, landlords are beginning to come to terms with the additional costs and are cautiously entering the market again.

“Our branches saw a monthly uptick of 7.9% in the number of landlords registering to buy, a figure which has been continuing to grow since the start of 2019.

“Interestingly, sale prices to landlords are down by nearly 12% which may be spurring on this activity, these price decreases could be causing the available stock to fall within lower stamp duty thresholds, making the stamp duty levy a little easier to stomach.

“Despite this, landlords are not back in their hundreds, the number of registrations is still down 22% on the year. Whilst some brave souls are re-entering the market, the hammering buy to let investors received in terms of various tax changes is still fresh in many of their minds.

“Clearly investors are recognising the value that can still be found in buy-to-let property, especially in comparison to the overvalued and faltering stock market.

“Although the property market hinges on confidence, the FTSE 100, gold and cash are far more volatile to socioeconomic impact, so investors are increasingly returning to property where they deem their money safest, and where the yields are highest.

“The market as a whole continued to gain momentum in March as the pent-up demand from a delayed Brexit continued to drive transactions. Transactions are up 11% on the year whilst new buyer registrations boomed by 23%.”

The market has become less efficient this month, as the number of transactions has fallen by 2.9%, whilst the number of viewings has increased by 19.5%.

This indicates there is pent-up demand in the market. The average purchase price for first-time buyers has fallen by 2.5% on the month and by 2.2% on the year.

This comes as the number of first-time buyers registering has risen by 19.2% on the month, but fallen by 15.6% on the year. The average amount first-time buyers are paying for a deposit has risen by 0.8% but fallen by 5.7% on the year.

Clearly, first-time buyers are capitalising on low prices and are putting down larger deposits than needed to own more of their own homes this month.

The average property price in London has fallen by 0.8% on the month and by 2.5% on the year. The number of new buyers entering the market has risen by 22% on the month, and by 17% on the year.

The number of new instructions has risen by 7.5% on the month, but fallen by 18% on the year. Sale transactions decreased by 10% on the month and by 20% on the year.

The number of tenants entering the market across England and Wales has risen by 14% on the month and by 25% on the year.

The average rent is down 0.3% on the month, and by 4.2% on the year. The average rent now sits at £1,293 per month  across England and Wales. Tenant demand in London has increased by 11.7% on the month, and by 52% on the year.

London rents are up 1.1% on the month and have risen by 4.2% on the year. The average rent now sits at £1,941 per month.

By Michael Lloyd

Source: Mortgage Inteoducer

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Prime UK commercial property rents increase 0.1% in Q1 2019

UK prime commercial property rental values increased 0.1% in Q1 2019, according to CBRE’s latest Prime Rent and Yield Monitor. At the All Property level, prime yields moved out 6bps over the quarter. Overall results in both prime rents and yields were driven by the continued outperformance of the Industrial sector.

Q1 2019 marked the ninth consecutive quarter of Industrial outperformance, with prime rental values increasing 1.0%. This is the sector’s lowest quarterly growth in prime rents since Q4 2015 as the stellar increase of 8.3% p.a. over the previous three years slows to more trend levels. Industrials in the North West reported the biggest increase in prime rents over the quarter (4.3%). Industrial prime yields were stable overall in Q1 2019. At the regional level, Scotland reported a -15bps decrease in prime yields while the Yorkshire & Humberside and North East markets reported increases of 29bps and 25bps respectively.

At the national level, High Street Shop prime rents fell -1.0% in the first quarter of 2019. This was an acceleration of the falls reported in Q3 (-0.4%) and Q4 (-0.4%) of 2018. Shopping Centre prime rents fell ‑1.3% over the quarter, while Retail Warehouse prime rents decreased -1.0%. Overall, High Street Shop prime yields rose 12bps in Q1. Prime Shopping Centre yields increased 12bps over the quarter. Retail Warehouse prime yields rose 25bps.

Office prime rents increased 0.6% overall in Q1 2019. Sector results were pulled up by the Central London (1.0%), Eastern (1.1%), Yorkshire & Humberside (1.2%), and North West (2.1%) markets. No UK region reported a decrease in prime Office rents in Q1. Prime yields for the Office sector were relatively stable overall in Q1 (+1bp).

Robin Honeyman, Senior Research Analyst at CBRE UK, said: “Falls in the Retail sector pulled down the All Property results in Q1 2019, despite the relative strength of Office and Industrial performance. Our Prime Rent & Yield data continues to show prime Retail coming under pressure, both in pricing and rental values.”

By David Tran

Source: SHD Logistics

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Number of rental properties to be increased through £43 million fund

The Scottish Government has announced it will provide £30 million of funding to help boost the number of properties being built for private rent.

Investment will be provided to Edinburgh property group Sigma through the Building Scotland Fund, which was set up last year to provide loans at commercial rates as a precursor to the Scottish National Investment Bank.

The £30 million will contribute towards a £43 million Scottish Private Rental Sector Fund set up by Sigma to increase the number of rental properties in Scotland.

It is estimated the funding will enable an additional 1,800 properties to be built for private rent across the country.

Communities Secretary Aileen Campbell said: “Renting accommodation is becoming a long-term option for many people, at many stages of life, for example when starting a family or when retiring.

“We want everyone who rents to be able to live in a house that suits their needs and in an area where they want to live, including near family, friends or schools.

“We want people to have the security to make that house their home – whether they are looking for a house for three years or 30 years.”

She added: “The Private Residential Tenancy already offers greater security for tenants, balanced with appropriate safeguards for landlords and investors.

“These additional new properties to the sector can give people long-term security and the confidence they are renting from an experienced, professional management company.

“The additional long-term stability these properties provide will make a huge difference for many households, especially those wanting to create a family home and settle into a community.”

Graham Barnet, Sigma chief executive, said: “We are delighted to have the support of the Scottish Government’s Building Scotland Fund.

“Our approach to housing delivery has been working extremely well in England and is helping to deliver thousands of new houses for the private rental market.

“We see significant demand for our high-quality, professionally managed homes in Scotland and look forward to using this new fund to assist in addressing Scotland’s housing needs.

“We are also continuing to explore other opportunities to extend our business model.”

The planned investment follows First Minister Nicola Sturgeon’s comments at the SNP conference in Edinburgh that a £150 million scheme would be established to provide loans to help first-time buyers with deposits.

The scheme would offer first-time buyers loans of up to £25,000 to fund or top up their deposit.

Source: Herald Scotland