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New mortgage deals create opportunity for next time movers in UK
Recent changes by lenders to raise the maximum age limits for mortgage applications are a sign of a changing culture in the UK. Changes in policies have been announced by leading lenders including the Halifax and Nationwide who have raised the age limit for mortgages to 80 and 85 respectively. Linden Homes is advising people to take this as an opportunity to step up the ladder. ‘These new mortgages offering people the chance to lend later in life are ideal for those people in their 40s and 50s who are considering a property move, but may’ve been restricted previously by the length of term they could borrow money for,’ said Tom Nicholson, the firm’s divisional managing director. ‘This is another move by the lenders to drive the market and reflects the changing habits of people renting for longer and moving up into larger homes, later in life. The new mortgage policies work the same as any other monthly mortgage repayment agreement. Providing those applying have an existing pension in place which will cover the cost of the monthly repayments, a mortgage agreement will be drawn up against the usual rigorous criteria for eligibility,’ he explained. According to Adam Champion, business development director at the New Homes Mortgage Helpline this new type of mortgage product is a sign of the times. ‘People need to see these new mortgage opportunities as a type of financial planning tool and they have their place in the market,’ he said. ‘First time buyers are getting older which over time pushes back the ages of those making the second, third or final move. These new mortgages available open up the market for those looking to make their next move as they approach retirement age for instance,’ he added. Champion stressed that these products are a positive advance for the housing market to help people make choices as they get older and shouldn’t be confused with old endowment style mortgages. ‘They work just the same as any other monthly repayment mortgage, with the debt being repaid over the term. These products give people the chance to make individual choices and find a financial product that works for them and their own situation. I am sure this will really create a great opportunity for those people looking to upgrade their property to consider the new options that now are available to them,’ he pointed out. Nicholson believes, however, that people looking to make the next house move may be missing out on securing their dream home to meet their family’s needs if they aren’t aware of what is on offer. ‘People in their 40s, 50s or 60s considering a house move will consult their bank to see how much they can borrow and may be told they aren’t in a position to get that larger home they want. What they may not have considered, is speaking with house builders offering new build homes, where potential can be… Continue reading
Rental supply in the UK continues to fall, latest analysis report shows
The supply of residential rental properties in the UK has continued to fall but this comes at a time when rental costs are expected to rise. Overall the number of rental properties managed per lettings agents branch increased by 8% in April to the highest level this year but is down from April 2015, according to the data from the Association of Residential Lettings Agents (ARLA). The jump from March this year follows a rush from buy to let landlords pushing to complete sales ahead of the April stamp duty increase deadline, the ARLA report says. But supply still stands at 5% lower than in April last year and continues to fall year on year. In April 2015, the average number of properties managed per branch was 193, this year it stands at 183. Demand is also falling year on year: In April, the number of prospective tenants per branch was 34, down from 33 the previous month and down from 36 April of last year. Meanwhile, rent costs expected to rise following buy to let stamp duty rise. Some 66% of ARLA agents predicted that the stamp duty reforms will push rent costs up for tenants down the line. ARLA agents also reported an increase in the number of landlords selling their buy to let properties. An average of four, up from three in March, are pulling out of the market, showing an increase for the first time in a year. ‘It’s likely that this increase in supply is only temporary. At the end of April we saw a flurry of landlords seizing the last few moments before the stamp duty rise to complete sales, triggering an increase in the supply of empty rental homes to be filled this month,’ said David Cox, ARLA managing director. ‘However, we expect that fewer investors will be taking on buy to let properties over the next six months, following the price hikes, meaning that once these properties are filled we’ll see supply nose dive once again,’ he added. Continue reading
UK property sales fell considerably in April, latest data shows
Residential property sales in the UK fell by 45.2% between March and April and was probably due to a boost in the previous weeks to beat the stamp duty surcharge for additional homes. The provisional seasonally adjusted UK property transaction figures from HMRC for April 2016 was 84,280 residential and 10,090 non-residential sales. April’s seasonally adjusted figure is 14.5% lower compared with the same month last year and the report says that the large increase in sales for March 2016 followed by the substantial reduction in April is likely to be associated with the stamp duty surcharge of 3% for buy to let properties and second homes. However, the report points out that whilst April 2016 is lower than April 2015, it should be noted that the total for March and April 2016 is still substantially higher than the corresponding period last year. The additional property rates were announced in the Autumn Statement 2015 for England, Wales and Northern Ireland, and in the Scottish Government's draft 2016/2017 budget for Scotland. The HMRC report also says that additional non-tax factors may have played a role as well, for example the Bank of England's plans to curb buy to let mortgages resulting in a rush to purchase. For April 2016 the number of non-adjusted residential sales was about 59.2% lower compared with March 2016. The number of non-adjusted residential transactions was 18.7% lower than in April 2015. Greg Bryce, managing director at SearchFlow, said it was inevitable that there would be a significant fall in April and he pointed out that if you take into account the total for March and April, activity levels are still substantially higher than the corresponding period last year. ‘The activity levels are widely recognised to be attributed to the additional surcharge and unreflective of any market malaise. Our latest conveyancing sentiment survey reveals that a third of conveyancers are expecting activity levels to increase by 1% to 10% over the next three months,’ said Bryce. ‘However, as expected, uncertainty surrounding the referendum is setting in, with 40% unsure how the market will perform over the next three months. But with the economy strong, employment level high, interest rates low and the economic and housing policies unlikely to change very much, the clear majority believe that regardless of the referendum result, activity levels will remain buoyant for the second half of the year,’ he added. The fall in sales was in line with industry expectations, according to Doug Crawford, chief executive officer of My Home Move. ‘With thousands of pounds potentially at stake there was a clear incentive for landlords to complete ahead of the 01 April deadline, and the falling off of transaction volumes confirms the vast majority did so,’ he said. He pointed out that the drop follows data published by the Council of Mortgage Lenders (CML) last week, which highlighted that mortgage lending fell 29% between March and April and he… Continue reading
