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UK mortgage lending expected to see steady growth in next two years
The value of home lending in the UK increased across all residential sectors in December but there is a mixed picture in terms of growth and decline, according to the latest data from the Council of Mortgage Lenders. New data from the Council of Mortgage Lenders reveals a mixed picture on lending in December to November. However, on an annual basis, the value of lending grew across all lending types and the CML expects steady growth in the next two years. First time buyers borrowed £4.5 billion for home owner house purchase, up 7% on November and 18% on December last year. This totalled 29,300 loans, up 6% month on month and 11% year on year. Home movers borrowed £6.6 billion, up 2% on November and 20% year on year. This totalled 33,400 loans, up 3% month on month and 12% compared to December 2014. However, home owner remortgage activity was down 16% by volume and 16% by value compared to November. Compared to December 2014, remortgage lending was up 14% by volume and up 24% by value. Gross buy to let saw month on month decreases, down 3% by volume and 3% by value, but the growth year on year continued. The data also shows that first time buyers took out 87,100 loans totalling £13.3 billion to purchase homes. This was up by volume 3% on the third quarter and 14% on the fourth quarter 2014 and by value it was up 3% quarter on quarter and 8% year on year. Home movers took out 101,900 loans, down 1% quarter on quarter but up 9% compared to the fourth quarter 2014. This totalled £20.3 billion, down 3% on quarter three but up 18% year on year. Home owner remortgage activity was up 4% by volume and 6% by value compared to the third quarter. Compared to the fourth quarter 2014, remortgage lending was up 21% by volume and up 35% by value. Gross buy to let saw a slight quarter on quarter decrease, down 1% by volume and 1% by value, but year on year growth continues. First time buyers borrowed £46.7 billion for home owner house purchase in 2015, which was up 4% on 2014. This totalled 311,700 loans, unchanged from the previous year. First time buyer lending was at its highest since 2007. Home movers took out 365,800 loans, down 0.2% on 2014, but the amount borrowed totalled £72.1 billion was up 7% on 2014. Lending was at its annual highest since 2007. Home owner remortgage activity was up 11% by volume and 20% by value compared to 2014. The value of remortgage lending was at its highest since 2008. Gross buy to let also saw year on year increases, up 28% by volume and 39% by value. Buy to let lending was at its highest since 2007. ‘Improving economic conditions, boosted by government schemes like… Continue reading
Number of million pound properties in UK expected to triple by 2030
The number of million pound properties in the UK will more than triple by 2030 and one in four London homes will cost £1 million or more by 2030, new research shows. Yet less than 1% of properties in the North East, Yorkshire and Humber, the North West, Scotland and the East Midlands will be in this price bracket, according to the study from Santander Mortgages. Also, by 2030 the average property price in the UK expected to double, surpassing the half a million pound mark with prices set to soar to as much as 16.5 times average incomes. Today, less than half a million homes in the UK are valued at £1 million or more, says the research done partnership with economist and London School of Economics professor of economic geography Paul Cheshire. It says that 25% of housing stock in London is expected to be valued at £1 million or more, rising to 70% in two London boroughs, highlighting a stark geographical divide. Overall, the average UK property price, which currently stands at £283,565 is expected to increase 23% by 2020 to £349,3000. Fifteen years from now in 2030, the average UK property price will have almost doubled with a 97% increase, surpassing the half a million pound mark at £557,444. While property prices are expected to soar, predictions suggest that incomes will not keep pace, resulting in an overall decline in affordability. At present in the UK, the average property price is 7.9 times the average income, but by 2030, this is expected to hit a multiple of 9.7. Again, this trend is elevated in London, where prices are currently 11.5 times incomes and predicted to rise to an eye-watering 16.5 by 2030. ‘Property price inflation will tip many existing home owners into the million pound price bracket but could also price some aspiring buyers out of the market if they don’t have the right support. The current property market is buoyant and the deals available to new and existing owners are extremely competitive, so those wishing to buy or move shouldn’t be put off,’ said Miguel Sard, managing director of mortgages, Santander UK. ‘Regardless of the price point a buyer is considering, our advice remains the same; do your research, find a mortgage provider that offers competitive rates and a range of products to ensure that the right deal is secured, and above all, ensure the repayments are affordable,’ he added. Cheshire pointed out that by 2030 the divide between housing haves at the top and the have nots at the bottom will be even wider than it is now. ‘More owners will enjoy millionaire status, as homes that many would consider modest fetch seven figure prices in the most sought after areas,’ he said. ‘Property price inflation is beneficial for existing owners who will see their net-wealth increase, but it will make entering the market more difficult still for new buyers, further highlighting the importance of… Continue reading
Home movers in the UK have seen average savings of £5,000 due to stamp duty change
Stamp duty changes have resulted in UK home movers seeing average saving of £5,000 since 2010 but fewer people are moving home, new research has found. The number of people moving house in 2005 stood at 365,000, slightly behind the 366,400 who moved in 2014, according to the latest Lloyds Bank Home Mover Review report. Whilst the 2015 levels are 16% higher than the 2009 market low of 315,800, they are just half of the 2006 peak level of 712,000, the data also shows. Over the past five years the average price paid by home movers has grown by 30% from £210,252 in 2010, to £273,491 in 2015, an increase of £63,239, equivalent to a monthly increase of £1,054. This was a marginally faster rise than the increase in average house prices across the whole market which was 29%. The average deposit put down by a home mover has increased by 22% in the past five years, from £74,649 in 2010 to £91,020 in 2015, equivalent to 33% of the average price paid by home movers. London continues to see stronger growth than the rest of the UK, as average prices paid by home movers in the capital have increased by 51% to £515,004 in the past five years. London home movers have also put down the largest average deposits at £183,353, which is 36% of the average property value. At the other end of the scale, Northern Ireland saw the average price paid by a home mover drop 4% to £157,368, and also the smallest average deposit of £43,380. Stamp duty changes, introduced in December 2014, provided home movers across the UK with a boost by providing buyers with an average saving £4,530 on purchases. The largest savings last year were made by home movers in East Anglia, where someone buying at the average price of £255,028 paid £2,751 in stamp duty fees compared to £7,650 before the change, a difference of £4,899. Buyers in three other regions also made substantial savings of over £2,500. In London the saving was £4,850, in the South West it was £4,654 and in the South East it was £2,767. ‘The 2015 stamp duty changes, low mortgage rates and rising real pay growth, provided more favourable conditions for home movers in 2015, although that hasn’t translated to any increase in numbers,’ said Andrew Mason, Lloyds Bank mortgages director. ‘2015 brought good news to home movers. We might have expected the change to the stamp duty structure to have resulted in a greater numbers. The ongoing increase in house prices throughout the year will have been especially welcomed by those who bought at the peak of house prices, who have been looking to rebuild their equity in order to make their next move,’ he added. The Lloyds Bank Home Mover Review tracks conditions for those who already own a home and is based on data from the Lloyds Banking Group house price database, the Council of Mortgage Lenders,… Continue reading
