Tag Archives: european
UK sees highest gross home lending for May since 2008
Gross mortgage lending in the UK reached £18.2 billion in May, some 4% higher than April’s £17.6 billion and 14% higher than May 2015, the latest data shows. The figure from the Council of Mortgage Lenders, which represents the vast majority of home lenders in the UK, was the highest May figure since 2008 when gross lending reached £23.7 billion. CML senior economist Mohammad Jamei pointed out that, as expected, lending continued to be somewhat dampened in May, reflecting the earlier rush in the first quarter to beat the stamp duty change on second properties. ‘Looking ahead, there is likely to be considerable uncertainty as a result of the European Union referendum decision. We expect this to affect sentiment and reduce activity below levels that would otherwise be expected in the near term, as both buyers and sellers adopt a wait and see attitude until the dust begins to settle,’ he explained. ‘Market fundamentals underpinning house prices still look sound, and we do not expect significant house price falls, especially given the current supply demand imbalance,’ he added. According to Adam Tyler, chief executive officer of the National Association of Commercial Finance Brokers (NACFB), a wait and see attitude and increased caution is likely among buyers and sellers alike due to the referendum result. ‘Our own view mirrors that of the Council of Mortgage Lenders in that market fundamentals still look sound and the sharp imbalance between supply and demand will prevent a material decline in prices,’ he said. ‘Sentiment may have shifted dramatically over the past few days but the structural imbalance between supply and demand is as strong as ever. Demand naturally tapered off in the buy to let sector following the stamp duty surcharge but it may experience a bounce after Friday's referendum result,’ he explained. He also pointed out that current market, political and economic volatility could benefit buy to let as investors once again look to bricks and mortar as a safe investment and the fact that Bank Rate is now more likely to go down than up in the near term will provide further support to the property market. ‘Understandably, there's a lot of hysteria surrounding the trajectory of the property market but our own view is that the reality will prove to be relatively benign,’ he added. Continue reading
Should be business as usual for Brits buying property in the EU
British people seeking to buy a property in the European Union should not be downhearted by the referendum decision that the UK should leave, according to overseas real estate experts. Those who are looking to purchase a holiday home overseas, for example, are likely to see that owning a property in the EU will only be marginally more complex than it is currently, according to Andy Bridge, managing director of A Place in the Sun. He pointed out that citizens of the United States, Canada, Russia and many other nationalities own properties throughout Europe, so while it may become slightly more complex for British buyers than currently, they are not going to be prevented from owning property in Europe. Erna Low Property, French Alpine property specialists located in London and in the French ski resort of Les Arcs 1950, say that buyers must resist the urge to panic as there will be no change to buyers conditions and they state that right now buyers should focus on risk assessment and limitation of potential future damage. ‘We are sure that there will be no change in buying costs for those looking to buy property in France, and there are no planned changes in taxations for the income made from property rentals, as well as no difference in capital gain tax as since January 2015 a single rate was applied for EU and Non-EU members,’ said director Francois Marchand. ‘In time, UK residents might be limited regarding the amount of GBP investments and the amount of wealth that can be sent abroad when a new government is in. A safe investment risk strategy has always been to diversify your portfolio. It will make no difference for our clients investing in a French property whether they have bought, are planning to buy, or are currently in the process of buying a property in France. The mountains were there before EU existed, and will be there tomorrow to welcome any international property investors, part of the EU or not,’ he added. However, Alejandra Vanoli, managing director of Mallorca Sotheby's International Realty, believes that the real impact Brexit will have on European property markets will be hard to determine until the negotiations between the UK and the EU are finalised. ‘This of course will be most prevalent in the Spanish market due to the high concentration of British expats. However, these changes will undoubtedly need some time to take effect. Despite this, the Balearics are still a very attractive second home destination to British buyers due to our short flight time from the UK, secure lifestyle, warm climate and favourable legal framework for expats looking to invest in the property market,’ he said. One possible effect is that prices could rise in popular locations if real estate investors move away from the UK to other EU countries to buy property. Camille Letuve Partner of Athena Advisers said that some foreign investors might turn away from London… Continue reading
UK property market set to see short term volatility due to EU vote result
The UK property market is facing short term volatility due to the decision by the people to vote to leave the European Union, but over the long term experts predict it will settle down and still be attractive. The main issues seem to revolve around how foreign buyers will react to the leave vote as there had already been signs of a wait and see attitude in terms of overseas investment in property in London in particular where demand and prices were showing signs of slowing. There will be international buyers who may initially give the London market a wide berth, according to Edward Heaton, managing director of property buying and search agent Heaton & Partners. But he pointed out that this could be short lived if the pound drops dramatically, as London will suddenly look much better value to foreign buyers. ‘There is a risk that with a period of uncertainty ahead of us, prices may drop off, but I believe that any fall will be limited and suggestions of a crash are overstated. The effect is most likely to be felt in London and the South East,’ he explained. However, Ian Westerling, managing director of Humberts, believes that continued uncertainty during lengthy negotiations as politicians thrash out what post-Europe looks like for Britain is likely to keep the brakes on the property market for the foreseeable future. He explained that people who have to move house will still do so but many investors and less committed buyers are likely to sit tight to see the economic and social impact of the referendum result. ‘Housing market professionals will need to brace themselves for a new norm in market dynamics, underpinned by the ongoing unknowns. The wait and see period could lead to some price adjustments. The onus will be on the Government to act swiftly to avoid the property market becoming paralysed which would have a knock-on impact on the rest of the economy,’ he said. Adam Challis, head of residential research at JLL, also believes that the London housing market will feel the effects of the decision more deeply. ‘The interconnected trading relationship between London and the rest of Europe means the implications are more complex. This will exacerbate the uncertainty for London’s home owners,’ he said. But he also pointed out that paradoxically, investors may well identify opportunities in this market over the short term, particularly international purchasers that can benefit from the currency arbitrage that has opened up by a weaker pound. ‘While the focus leading up to the Referendum has been on the UK's international trading relationships, we are deeply concerned that domestic politics will now be the key risk to the housing market. The UK has a deep housing supply imbalance and concerted attention from politicians to deliver credible, lasting solutions to the supply conundrum is desperately needed. Protracted infighting within the UK’s political parties will only harm the UK economy and any chance… Continue reading
