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Remortgaging in UK reached eight year high in July
Monthly gross remortgage lending in the UK was at its highest level for almost eight years in July, reaching £7.1 billion, according to the latest data to be published. Conditions for remortgaging were boosted by the decision in June to leave the European Union, says the accompanying report from outsourced property services provider LMS. This monthly figure for July is up by 27% from £5.6 billion in June and is the largest amount since October 2008 and 42% higher than July last year when £5 billion of loans were made. The number of remortgage loans also increased by 27% from 32,400 in June to 41,157 in July, the most since January 2009. The July total was up by 36% year on year. Rising house prices, declining swap rates and speculation about an imminent base rate change at the Bank of England have all contributed to a favourable outlook for the remortgage market, the report says. LMS data also shows that home owners are remortgaging more frequently and keen to capitalise on the competitive rates currently available. The term of the average loan that was remortgaged fell by 15% or nine months from five years in June to four years and three months in July, the lowest since October 2009. This was also 18% or 11 months lower than the average for July 2015. As the average remortgage loan size increased to £172,184 in July, up 9% from £157,557 in June, the average LTV also increased from 54% in June to 58% in July. LMS data suggests that more home owners are remortgaging to fund home improvements and pay off debt and this is a sign of consumer confidence, despite widespread speculation about the effects of the UK’s vote to leave the EU. The surge in remortgaging meant the total amount of housing equity withdrawn via this route in July rose 27% from £951.8 million to £1.2 billion. This was the greatest amount for more than eight years, since £1.4 billion was withdrawn in April 2008. ‘The aftermath of the UK’s vote to leave the EU has not overshadowed an environment that is ripe for remortgaging as product rates plummeted to new lows. Home owners have been quick to capitalise on this and there’s little sign that incentives to remortgage will disappear any time soon,’ said Andy Knee, chief executive of LMS. ‘People who remortgaged in July did so more frequently than they have for more than six years, no doubt to take advantage of low rates in many cases and reduce their outgoings. Feedback suggests almost two thirds remortgaged in July to take advantage of competitive rates, highlighting that significant savings are ripe for the taking,’ he explained. ‘Although there is little for home owners to fear in terms of a base rate rise over coming months, many could seek stability by remortgaging and fixing now, and we expect… Continue reading
Research shows Olympic legacy has boosted house prices in east London
As the Rio 2016 Olympic Games get underway new research shows how house prices closest to the 2012 Olympic Park have increased three times faster than the national market. Homes closest to Olympic Park have seen more than 50% added to their value with prices up by £3,522 per month since the London Games ended in 2012. The research from Lloyds bank also shows that the majority of areas close to the main site have recorded price growth in excess of £100,000 since September 2012. Average property prices in the 14 postal districts in East London closest to the Queen Elizabeth Olympic Park have risen from £286,638 in September 2012 at the close of the Paralympic Games to £438,065 in March 2016, an increase of 53% or £151,427, equivalent to a monthly rise of £3,522. This is more than three times the rate of increase seen in England and Wales and nationally property values grew on average by 17% over the same period from £234,947 to £275,872. Price performance in the 14 East London areas has also outpaced London as a whole. Since September 2012 the average price in the capital has grown by 32% to an average price of £557,359. In the four years since the last Olympic Games, the average price in all but one of the 14 areas has risen by over £100,000. In cash terms the largest rise was seen in Shoreditch, where the average property price has grown by £245,330, followed by Dalston at £203,113, Homerton at £197,737 and Bethnal Green at £178,893. East Ham recorded the lowest rise in prices, a relatively modest increase of £83,566 in four years. ‘The last Olympics Games, held in London, was a great event which captured the world’s attention for a few weeks in 2012, but the longer term benefits of the Games are still being felt today, particularly for home owners in the areas close to the Olympic Park who have seen property prices outperform both the national and London markets,’ said Nitesh Patel, Lloyds Bank housing economist. ‘Since the Games closed in September 2012, regeneration in this part of the capital has seen significantly improved transport connections and facilities, which have helped attract businesses and households to the area and in turn boosted local property values,’ Patel added. In the 11 years since the Games were awarded to London in July 2015, the average property price in the 14 postal districts in East London closest to the Olympic Park has grown from £206,398 to £438,065 in March 2016 an increase of 112% or £231,667, which is equivalent to a monthly increase of £1,796. They have also outperformed the increase in England and Wales in this timescale as nationally property values grew on average by 48% over the same period from £185,783 in July 2005 to £275,872 in March 2016. In the past year, house prices in the 14 areas closest to the Olympic Park rose by 15%, from £379,663 in March… Continue reading
