Tag Archives: black
Buy to let mortgage lending still the star in the UK housing market
Mortgage lending to first time buyers in the UK increased by volume month on month and on an annual basis in September, the latest data from the Council of Mortgage Lenders shows. However, in contrast, lending to people moving home saw a dip in September compared to August, but grew by volume and by value compared to a year ago while home owner remortgage activity rebounded after a dip in August to increased levels in September both compared to a month ago and the same time last year. The buy to let sector continues to grow and saw year on year increases by volume and by value in both buy to let house purchase and buy to let remortgage sectors. The CML data also shows that first time buyers increased in number of loans advanced and amount borrowed both in comparison to quarter two and the third quarter last year and home mover lending saw a similar trend to first time buyers but the percentage increases by volume and by value were higher. Home owner remortgage activity saw an increase compared to the second quarter of the year, but a more substantial increase compared to the third quarter 2014 while buy to let saw large quarter on quarter and year on year increases by number of loans and amount borrowed. Paul Smee, director general of the CML, pointed out that the mortgage market had a slow start to the year. ‘This quarter shows it is now firmly on an upward trajectory. With competitive rates and high levels of product choice currently available, alongside generally improving economic conditions, we expect this to continue as we head into the New Year,’ he explained. ‘Buy to let continues its growth this period, but at 18% of new lending in September remains the fourth largest lending type behind first time buyers, home movers and remortgage. There were five times as many house purchase loans to home-owners as buy to let landlords in September, and the growth in buy to let lending largely continues to reflect its more belated recovery from recession,’ he added. According to Rishi Passi, chief executive officer of Oblix Capital, on the one hand Help to Buy has driven up borrowing by first time buyers both in volume and value and on the other, there is little sign that impending buy to let tax restrictions are dissuading landlords from expanding their portfolios. ‘Meanwhile cheap money is allowing lenders to offer historically attractive rates to the market and as a consequence lenders are enjoying their best spell since 2008, enticing first time buyers and developers alike to move and borrow,’ he said. Rob Weaver, director of investments at property crowdfunding platform Property Partner, the growth in buy to let lending underlines the continued confidence UK investors have in this asset class. ‘As an asset class buy to let is also… Continue reading
Rents in England and Wales up almost 3% in last 12 months
Residential rents in England and Wales increased by 2.8% in the last year to an average of £763 and are now 16% higher than in 2010, according to the latest rental index to be published. The data also shows that over last five years rents have grown by an average 3% per year but after inflation is taken into account this amounts to just 0.6% annually, the buy to let index from Your Move and Reeds Rains shows. In absolute terms, the average residential rent across England and Wales has grown by £107 since January 2010, to reach £763 as of January 2015. This amounts to an average annual rent rise of 3.0% over the last half decade. However, this represents a real terms increase of 0.6% per annum when adjusted for inflation over the same period. Most recently, rents have fallen on a monthly basis, down 0.6% between December 2014 and January 2015. On an annual basis, rents are 2.8% higher than was seen last January. ‘The nature and affordability of UK housing is transforming before our eyes. In the last five years the private rented sector has successfully absorbed an unprecedented influx of tenants, while rental prices have broadly tracked inflation,’ said Adrian Gill, director of estate agents Reeds Rains and Your Move. ‘As ever, the devil is in the detail but as this growth accelerates, even more investment will be necessary for the industry to keep up. So we need more buy to let landlords to help solve the crisis in demand for homes to rent,’ he explained. He pointed out that it is also important to recognise that these figures don’t float in a hermetically sealed chamber. ‘Many other aspects of finance and the housing market feed into this sector. Rents represent a landlord’s attempt to recoup investment at a reasonable market rate dictated by consumer prices, inflation, and basic principles of supply and demand. Over the long term, rents also tend to reflect higher house prices,’ he said. ‘In real terms, rents have risen only incrementally. But any real and sustained growth in rents should offer a clear lesson. As with the purchase market, the only clear way to make rented housing dramatically more affordable is to build far more homes, far more quickly than is currently the case. And until this happens, landlords are likely to continue to earn double digit returns on their investments,’ he added. Eight out of 10 regions saw lower rents in January 2015 than in December 2014. Only the East of England and the North East defied this downward trend, with 1.3% and 0.7% monthly increases in market rents, respectively. The dominant movement towards lower rents in January was led by a 2% month on month drop in the South West, closely followed by the North West with a 1.7% drop, and the East… Continue reading
Demand for property in prime central London from overseas remains high
Demand for prime central London real estate remains high and Chinese interest continues to grow, according to a new analysis of the sector, despite stamp duty reform and the looming election. According to the report from independent property buying agency, Black Brick, a rise in the US dollar against the pound has boosted international demand, while record low mortgage rates are encouraging domestic demand. Black Brick has signed new clients from Hong Kong, Saudi Arabia, Russia, Cyprus and the UK so far in 2015, with budgets varying from below £1 million to above £10 million. ‘At first glance, the global backdrop hardly seems positive for the prime central London market. Renewed concerns about the Eurozone, heightened geopolitical risks, and plunging oil prices, add in the changes to stamp duty land tax and it is not hard to see why vendors are now having to be more realistic,’ said Camilla Dell, managing partner of Black Brick. ‘It is no co-incidence that the falls reported at the top end of the capital’s property market equate roughly to the additional 5% in stamp duty that buyers must now pay. Importantly, while price adjustments have been the order of the day for deals already in progress, there has been scant evidence of deals falling through due to the stamp duty changes. Though very early days, we believe this bodes well for the market’s ability to absorb the higher tax rates and adjust accordingly,’ she explained. The firm said it has seen continued interest in prime central London property from its client base across the world as stamp duty reform and the impending election have not deterred them. Shorter term supports include the sterling’s recent weakness, particularly against the US dollar. The 14% decline in the value of the pound against the US dollar since the summer is a significant boost to many overseas buyers with dollar assets. Meanwhile, the changes to stamp duty are providing a welcome fillip to potential property buyers at lower price bands. ‘Chinese interest in London property continues to grow apace. According to figures recently released by the government, the number of so-called investor visas granted to Chinese nationals doubled in the year to the end of September. Chinese nationals accounted for 43% of all investor visas, the highest proportion of any country. It’s no surprise that we have seen continued growth in interest from this market,’ explained Dell. To cope with the firm recently hired Grace Ding, a fluent Mandarin speaker who will focus on assisting Black Brick’s fast growing Chinese client base and on developing its business network across Asia. As far as other trends for 2015 go, the firm believes that home owners with existing large basement extensions will now be able to command a significant premium over neighbouring properties given the restrictions announced on future development by the London Borough of Kensington and Chelsea. ‘The… Continue reading
