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UK remortgaging rate jumps as owners cash in on low interest rates

The number of people remortgaging their homes with additional borrowing spiked in March, according to data released today, as people took advantage of favourable interest rates.

Meanwhile the number of new loans to both movers and first time buyers fell in March year-on-year, figures from finance and business services company UK Finance have revealed.

In March there were 16,180 new remortgages with additional borrowing, a 9.1 per cent increase year on year. The average amount taken out on top of the remortgage money was £55,700.

There were 1.1 per cent fewer simple pound-for-pound remortgages in March, at 15,030.

New first-time buyer mortgages reached 28,800 in March, according to the finance and business services organisation, 2.4 per cent fewer than in the same month a year earlier.

The number of new mortgages going to those moving house fell six per cent to 25,280.

Andrew Montlake, director of the UK mortgage broker Coreco, said: “With rates nearing rock-bottom given the intensity of competition among lenders, remortgages have gone off the Richter Scale.”

“The 9.1 per cent rise in additional borrowing remortgages compared to a year ago reflects the fact that a lot of people are choosing to add value to their existing homes rather than move,” he said.

“While home-mover mortgages were down in March, purchases have really started to gain momentum since April, with the usual late spring lift being boosted by a growing indifference to Brexit,” Montlake added.

Keith Haggart, managing director of mortgage provider Responsible Lending, said: “March was meant to be the month when the Brexit trigger was pulled, and it may have been a significant deterrent for first-time buyers who tiptoed away from the housing market for the first time in six months, despite low interest rates and other incentives.”

“The jump in remortgaging chimes with a market that is languishing on low supply of homes for sale,” he said.

By Harry Robertson

Source: City AM

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Properties selling at slowest rate for five years as market slump continues

The property market is moving at its slowest rate for five years, claims.

Analysis of listings data from the property website found the median time on the market for May is 89 days – 11 days longer than the same month last year and the slowest rate for this time of year since 2014.

Time on the market – defined as the period between listing and sold subject to contract – is now at its slowest rate in ten years for London at 96 days.

Supply continues to fall, with new instructions down 9% year-on-year across the UK and down 28% in the capital, while total stock levels are up just 1.7%.

This malaise has seen asking prices increase just 0.5% on a monthly basis but fall 0.2% annually to £307,521.

Doug Shephard, director of, said: “Uncertainty is a highly corrosive factor for the economy. Decisions are postponed indefinitely, projects put on hold and normally bold actors become cautious in the midst of the unknown.

“The Brexit mess may not hamper the purchase of a pair of jeans, but the housing market is severely affected because the stakes are so high.

“Key factors such as cost, importance of timing and the irreversible commitment involved in a home purchase make the current economic environment almost unbearable for the average buyer or seller.

“Uncertainty in the market moves the ‘invisible hand’, a term coined by Adam Smith to describe the unobservable market force that helps the supply and demand of goods in a free market to reach equilibrium.

“That equilibrium is vital for price recovery but is currently being undermined by a growing crisis of confidence in the housing market, especially in Greater London.

“While evidence of falling demand is widespread across the UK, in London both supply and demand are collapsing, and this is causing an acute distortion of the market.

“Price fluctuations during such episodes are to be taken with a pinch of salt. Low volumes lead to extreme volatility in several key market price indicators.

“Take the Halifax and Rightmove indices, which are showing wild variations from month to month and adding to confusion in the marketplace.”


Source: Property Industry Eye

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The best and worst places to sell your home in Britain

Scotland is the best place to sell your home quickly in Britain, with homes in some parts of the country taking less than four weeks to go under offer, according to a new report.

Zoopla found Edinburgh and Falkirk have the fastest-moving property markets in Britain, with homes in the two locations getting snapped up in just 27 days.

This is against Scotland’s average of 42 days and a nationwide average of 56 days.

Across the UK, average selling times by region are:

  1. Scotland, 42 days
  2. West Midlands, 46 days
  3. East Midlands, 47 days
  4. Yorkshire and the Humber, 54 days
  5. South-west England, 56 days
  6. North-west England, 57 days
  7. East of England, 59 days
  8. Wales, 60 days
  9. South-east England, 61 days
  10. North-east England, 67 days
  11. London, 70 days

Scotland, where the average home costs £192,147, dominated the fast movers, taking the top four spots. Glasgow, where properties sell in about 31 days, and Stirling, where they go in 32, come in second and third, respectively.

And in Cardiff and Coventry, sellers manage to get rid of their homes in about 37 days.

The fastest-moving towns and cities in Britain are:

  1. Edinburgh and Falkirk (tied), 27 days
  2. Glasgow, 31 days
  3. Stirling, 32 days
  4. Cardiff and Coventry (tied), 37 days
  5. Newport, 40 days
  6. Nottingham and Birmingham (tied), 41 days
  7. Birmingham, 41 days
  8. Mansfield, 42 days

“The key is to get your pricing correct, meaning the best way to sell your home quickly is to ask for its true value given the current market,” Annabel Dixon, a spokesperson for Zoopla, said. “Over-priced homes won’t shift and may have to be discounted and on the flip side nobody wants to sell for less than their property is worth.”

At the other end of the scale, Blackpool has the slowest property market in Britain. Homes in Blackpool typically take 71 days to go under offer, Zoopla found.

However, London was hot on its heels. Properties in the capital remain listed for about 70 days before an offer is made, reflecting the subdued state of its housing market and stretched affordability, with the typical property costing £659,660.

Newcastle has the third-slowest property market, with homes taking an average of 68 days to sell, followed by Hemel Hempstead at 65 days. Homes in Bradford and Reading both took 64 days to sell.

The slowest moving towns and cities:

  1. Blackpool, 71 days
  2. London, 70 days
  3. Newcastle-upon-Tyne, 68 days
  4. Hemel Hempstead, 65 days
  5. Bradford and Reading (tied), 64 days
  6. Preston, 63 days
  7. Telford, 62 days
  8. Doncaster, 60 days
  9. Swansea, 59 days

By  Abigail Fenton

Source: Yahoo Finance UK

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Bank of England downgrades its forecasts for housing market

The Bank of England has downgraded its forecasts for both mortgage lending and the housing market. It now expects less lending for house purchase, and house price falls rather than rises.

It now says that there are likely to be average of 60,000 mortgage approvals for house purchase each month between the second and fourth quarters this year. In February, it expected a monthly average  of 65,000.

The Bank has also revised down its expectations for house prices. It had expected growth of 0.25% per quarter. It now expects that house prices are likely to fall by 1.25% in the year to Q4.

It released its latest report after gathering views from estate agents.

It said: “Contacts of the Bank’s agents have reported that in some regions, such as southern England, an excess of supply of housing has led to a widening gap between asking and offered prices.”

The report also notes that the housing market has been weak since the referendum and that Brexit-related uncertainties have weighed on house prices, alongside “many other factors”.

It says that Brexit uncertainty is particularly important for “large, hard-to-reverse spending such as on housing than it is for day-to-day expenditure”.

It says some households have delayed buying or selling homes, while affordability constrains have had a likely effect.

It also says that changes to the buy-to-let market, including the surcharge in Stamp Duty and lower mortgage interest relief, have reduced demand.

The Bank released its latest inflation report as it decided to keep base rate at 0.75%.


Source: Property Industry Eye

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Edinburgh property market at its hottest since credit crunch

THE Edinburgh’s property market is at its hottest since the credit crunch, a new report claims.

More homes in the city are being put up for sale and more people are looking to buy.

Warners Solicitors & Estate Agents said activity among both buyers and sellers was at record levels and showing few signs of slowing down despite Brexit.

Between January and March, the firm said it recorded over 250 property sales – an 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.”

He said throughout 2016 and 2017, a significant shortage of homes for sale across Edinburgh and the Lothians had led to multiple buyers competing to secure properties, which meant that buyers found themselves having to bid well in excess of the Home Report valuation in order to be successful.

The market began to see a steady improvement last year, with Warners observing an 11 per cent rise in the number of new property listings compared to 2017.

Supply improved further in the first quarter of this year with more sellers willing to take the plunge and get their home onto the market.

Mr Marshall said as a result, the premiums buyers were now having to pay were lower than in recent years, with the average premium paid over the Home Report valuation now 3.4 per cent, down from 6.9 per cent in the first three months of 2018.

He said: “With the pressure on buyers having eased, house price inflation has also come back down to more manageable levels.”

Latest figures from ESPC show the average house price in Edinburgh rose by 1.8 per cent during the first quarter, though one and two bedroom flats in popular parts of the Capital have seen prices soar.

Mr Marshall said: “The levels of inflation 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: Edinburgh News

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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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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.”


Source: Property Industry Eye

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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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UK property: why house prices are so high

House prices across the UK have risen substantially over the past quarter-century. In some parts of the country it is now a real struggle for first-time buyers to step onto the property ladder.

UK house prices grew faster on average over the 40 years from 1971 to 2011 than any other OECD country. But prices really took off in the mid-1990s.

Land Registry data shows that the average UK house price in January 1995 was £55,437, a similar level to the beginning of the 1990s.

By March 2019, the average price was £223,610, a 303% increase over that period.

To give a sense of just how large that number is relative to the cost of living, if the average house price in 1995 had risen by the rate of inflation each year, it would only be around £105,000 today.

So why exactly have things gotten so out of control? Well, there are two parts to the housing market story: supply and demand.

Easy mortgages and booming demand
Let’s start with demand. Over the past few decades, demand for house purchases was supported by a booming economy and easy access to mortgages.

People had well-paying jobs and, up until the financial crash in 2008, banks were very keen to approve mortgages to both homebuyers and buy-to-let investors — too eager, in fact, which contributed to the economic crisis.

The number of mortgage approvals for house purchases peaked in December 2003 at 132,737. Some buyers were able to secure 100% mortgages at the time and borrowed debt that was a substantial multiple of their income, much higher than the four or five times available today.

Irresponsible lending to both homebuyers and buy-to-let investors fuelled a demand boom in the housing market.

Even today, in the aftermath of the crisis, mortgage approvals still hit 64,337 in February 2019, despite affordability issues for young house hunters. While the number is well down from the peak, it’s still buoyant.

Demand is currently supported by ultra-low interest rates and schemes such as Help to Buy and shared ownership, though buy-to-let investor demand is curbed by a number of tax rises, including higher stamp duty on additional property purchases.

Severe housing supply shortage
But the bigger problem in the housing market is supply.

Set against hot demand for property over the past two decades is an ongoing and severe shortage of housing supply across the UK. This shortage is most acute in London and south-east England, but also affects other areas, particularly urban centres.

“Estimates have put the number of new homes needed in England at between 240,000 and 340,000 per year, accounting for new household formation and a backlog of existing need for suitable housing,” according to a House of Commons briefing paper.

“In 2017/18, the total housing stock in England increased by around 222,000 homes. This was 2% higher than the year before — and the amount of new homes supplied annually has been growing for several years — but is still lower than estimated need.”

The number of homes built has consistently fallen substantially short of demand for a while, a problem that deepens each passing year. So why can’t we build enough homes?

The most fundamental problem is the country’s strict planning laws, particularly in England, where a tangle of complex regulations hinder development. Planning laws have a bias against development and put a lot of power in the hands of local communities to block construction.

Local planners are at the mercy of the communities they serve. The politics of planning make it hard for them to approve developments without facing a substantial backlash. Councillors on planning committees are keen not to upset their voters.

One example is the “green belt” protections. It is incredibly hard to build housing within green belt areas, even if some of the land within them is not considered “green,” such as fields used for environmentally-damaging intensive farming.

Planning restrictions limit the supply of land available for developers to build on and increase the building cost even on land where housing is permitted. This drives up the price of land for developers, so they build fewer homes.

House prices would be 35% lower on average if all regulatory constraints on housebuilding were removed, according to a 2013 academic study titled “The Impact of Supply Constraints on House Prices in England.”

“Our findings point to the English planning system as an important causal factor behind this ‘affordability crisis,’” the study’s authors Christian A. L. Hilber and Wouter Vermeulen wrote.

In short, a boom in housing demand fuelled by loose lenders and severe constraints on supply have pushed house prices higher and higher.

Source: Yahoo Finance UK

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Analysts Expect Summer ‘Brexit Relief Rally’ to Lift the UK Property Market

Irrespective of personal or political views, frustrations regarding the lingering uncertainty of Brexit have united the country. Whether you’re an ardent Remainer or an active Brexiteer, an amicable resolution to the mess the UK is currently in is undoubtedly your priority.

By this stage, it’s evident that whichever way Brexit goes, there will be political and economic damage to recover from. Nevertheless, there are some who expect the most recent extension of the Brexit deadline to actually have a beneficial impact on part of the UK’s economy.

Following an extended period of turbulent unpredictability, Britain’s housing market could see solid gains over the next few months.

That’s according to analysts at the real estate group Rightmove, who’ve reported welcome signs of property value gains over recent weeks. Specifically, the organisation stated that average property prices within its own portfolio had increased by 1.1 per cent on average in the four weeks running up to April 6. That’s still a fall of 0.1 per cent from the same month last year, but could nonetheless represent the start of a summer “relief rally”.

Responding to On-going Uncertainty

Paradoxically, the prediction of a summer uptick in property prices is directly attributed to the on-going uncertainty surrounding Brexit. The March 29 deadline for the UK’s EU departure had prompted movers, investors and property buyers in general to sit tight, watch the markets closely and wait to see what happened next.

The deadline came and went – the UK remained in the EU.

A short extension was then granted, resulting in much of the same. With just a matter of weeks to wait for an apparent resolution, the time hadn’t come to commit to anything significant. Nevertheless, the deadline once again passed with no outcome of any kind.

Today, we’re looking at a significantly extended deadline of October 31. The possible implications of Brexit remain unchanged and there’s as much uncertainty as ever before, but we’re also now looking at a period of six months of at least relative certainty.

Hence, the prediction by some that confidence in the British property market will experience a significant boost over the summer. Particularly among those on the verge of making a move but unwilling to do so at such a close juncture to the prior deadlines, now could be the time to go ahead.

Buyers and sellers alike are expected to take advantage of this finite “window of relative certainty”, providing at least temporary relief in the most uncertain of times.

Affordable Fixed-Rate Mortgages

One additional way Brexit uncertainty is playing into the hands of would-be buyers is in the form of affordable fixed-rate mortgages. Property prices have remained relatively static for some time, which combined with the availability of cheap mortgages adds up to an appealing prospect for movers and investors alike.

Evidence also suggests a significant increase in general secured loan application volumes, along with more specialist property funding solutions like a bridging loan.

It’s acknowledged that the outcome of Brexit could have a dramatic impact on mortgage rates in either direction, or little to no effect whatsoever.

Nevertheless, the prospect of locking in a great deal while the opportunity exists is convincing many to do precisely that.

Economists have also suggested that much of the predicted summer uptick will be attributed to parents and families being unwilling and unable to further delay their relocation plans due to Brexit. With the UK no closer to reaching an amicable deal with the EU, there’s still a strong chance of an even more extensive delay to Britain’s departure.

That is, assuming Brexit goes ahead at all.

Should the findings and predictions of Rightmove prove accurate, they’d map out a summer that contrasts sharply with the most recent forecast from The Royal Institution of Chartered Surveyors. Quite the contrary, Britain’s surveyors spoke of the likelihood of property values across the UK decreasing consistently for at least the next six consecutive months.

For London and the south east, they predicted at least a year of steady declines.

This was around the same time the Halifax reported an astonishing 5.9% per cent improvement on property prices in February alone. Followed by a somewhat less inspiring 1.6 per cent decrease in property prices for March, highlighting the turbulence that’s become the norm for the market since the EU referendum.

Source: FinSMEs