Tag Archives: consumer
Consumer confidence in UK housing market outlook rebounds
While house price growth continued to slow in March in the UK, consumer confidence in the outlook for the housing market has rebounded to its highest level since July last year, new research shows. Consumer confidence in the outlook for the housing market has bounced back to a net balance of +64 in March from +60 in February, according to the latest quarterly Halifax Housing Market Confidence Tracker as measured by Ipsos MORI. Conversely, house prices increases have slowed over the same period and in the three months to March this year house prices were 8.1% higher than in the same three months a year earlier, compared to 8.5% in January 2015, and 10.2% in July 2014. As to just how confident consumers are in the outlook for the housing market over the next 12 months some 33% are expecting the average property price to be higher by up to 5%, while 25% anticipate increases of between 5% and 10%. ‘We’ve seen a strong start to the year in terms of the net sentiment regarding the outlook for the housing market, and this has translated into an increase in transaction volumes. This increase in optimism is likely to be the result of a combination of factors, including the improving economic figures, greater numbers of higher loan to value mortgages, and extremely competitive mortgage rates,’ said Craig McKinlay, Halifax mortgages director. There has been an increase in the net proportion of consumers who believe mortgage interest rates will be higher in 12 months’ time at +41 compared to +35 in February. Nevertheless, only 12% spontaneously cited concerns about interest rate rises as one of the main barriers to being able to buy a property, down from 15% in the first quarter of 2014. The main perceived barriers to homeownership are the ability to raise enough deposit for 61% while 44% have concerns about job security). A year ago, 60% and 51% respectively identified these as among the main barriers. ‘The results highlight that an increasing number of consumers believe interest rates will begin to rise in the next 12 months, but at the same time it is falling as a perceived barrier to homeownership,’ McKinlay explained. ‘This is perhaps a result of rising incomes and the current low mortgages rates. The fact that consumers’ ability to raise a deposit remains the greatest perceived barrier to home ownership shows there is more work to be done in terms of letting people know what support is now available,’ he added. Overall a net +33 of consumers think the next 12 months will be a good time to sell, compared to +24 at end of December 2014. This is the highest score on this measure since the survey’s inception in April 2011. At the same time the proportion who believes it is now a good time to buy has slumped from +26 at end of December 2014 to +21 as at end of March 2015. Regionally, house price optimism… Continue reading
UK buy to let lenders adopt new practice statement
Buy to let lenders in the UK who are members of the Council of Mortgage Lenders are adopting a new statement of practice, designed to provide clarity about how responsible lenders operate. The statement reflects existing good practice and aims to ensure that there is a clear explanation of the obligations of buy to let borrowers on their mortgages and is a sign that buy to let lending is growing. It signposts additional information from other organisations about the responsibilities of being a landlord, and is endorsed by the Residential Landlords Association, the Association of Residential Letting Agents (ARLA), the Association of Mortgage Intermediaries, the Intermediary Mortgage Lenders Association, and the British Bankers Association (BBA). Some 31 lenders representing an estimated 90% of the buy to let market have already adopted the statement of practice. All CML members who offer buy to let mortgages are expected to adopt it over the course of 2015. The statement sets out the overarching principles that individual lenders use in determining their own lending strategy and practice in relation to lending principles, information given to customers, customer responsibilities, lender responsibilities on affordability, handling financial difficulties, fraud prevention and complaint handling. Next year when the consumer buy to let lending framework is established under the Financial Conduct Authority, the UK’s financial watchdog, to comply with the Mortgage Credit Directive, buy to let lending will fall into one of three types. These are mortgages regulated by the FCA like residential mortgages when the property is either partly occupied by the borrower or let to an immediate family member; mortgages regulated by the FCA under the Mortgage Credit Directive Order 2015 defined as ‘consumer’; and mortgages not regulated by the FCA which are those predominantly for a business purpose. The statement of practice will cover any residential buy to let lending not otherwise covered by FCA regulation. ‘Lenders know how important it is to have a transparent mortgage market, in which borrowers can have confidence, and where lending policy is both responsible and clearly understood,’ said CML director general Paul Smee. ‘The new buy to let statement of practice reflects what responsible lenders already do and offers a clear explanation of how buy to let lenders operate. We hope it will make a valuable contribution to understanding the buy to let lending environment,’ he added. Continue reading
Duty for UK lettings agents to publicise fees welcomed
Measures which impose a duty on UK lettings agents to publicise fees both on websites and in branches have been welcomed by a leading industry organisation. The new Consumer Rights Act stipulates that charges displayed must include a description of each fee and the service it covers and state clearly if the charge applies to the property being let or each individual tenant. The Association of Residential Lettings Agents (ARLA) said that it supports the view that letting agent fees should be transparent and this will help consumers understand what services they are paying for. ‘In the interests of consumer protection, we would have liked to see legislation go further than it did and continue our call to make it mandatory for letting agents to be members of a client money protection scheme,’ said David Cox, managing director of ARLA. ‘We urge the next government to review this after the general election as the schemes provide guaranteed protection to both landlords and tenants should a letting agent abscond or misuse any money they are holding for either party; such as a deposit or rent,’ he added. However, the association, which backs the eradication of unnecessary bureaucracy and red tape, it believes that further measures outlined in the Deregulation Act will have a detrimental and unintended effect on the UK lettings market. ‘ARLA greatly welcomes the new tenancy deposit legislation contained within the Act. However, the provisions in the Act designed to prevent retaliatory evictions by landlords, creates a number of unintended consequences,’ said Cox. ‘ARLA supports the principle of legislation seeking to stop landlords from evicting tenants in response to a genuine disrepair issue. The measures will mean that protections previously afforded to compliant landlords may be eroded by dishonest tenants using the new powers to defend against legitimate possession proceedings, possibly by intentionally causing damage to properties,’ he explained. He pointed out that Section 44 of the new Act, relaxing the restrictions on the use of residential properties for short term lettings in London, will have an adverse effect on the capital’s long established and unique communities. ‘The added ability for residential homeowners to use their properties as ‘pseudo-hotels’ will lead to a constant churn of short term tenants, eroding the foundations of existing communities. Moreover, the new measures may lead to longer term, more established tenants being forced out, an increase in anti-social behaviour, reduced security and an increased risk of crime for permanent residents. London’s success is predicated upon its varied but long established community identities, coupled with the ever growing strength of its booming lettings market,’ Cox added. Meanwhile, the National Landlords Association (NLA) is claiming a victory for landlords in Liverpool after gaining two significant concessions from Liverpool City Council (LCC) in the run up to the launch of their city wide licensing scheme. Although the council has refused the NLA’s request to postpone the launch of the scheme that is due to go live on… Continue reading
