Tag Archives: finance
Mortgage advisors report short term uncertainty over growth of buy to let in UK
Buy to let volumes in the UK increased in the first quarter of 2016 but uncertainty remains over the long term, according to the latest financial advisor confidence tracking report. The increase in the volume of buy to let business being written by mortgage advisers was modest in the first three months of the year and financial advisors have concerns about the longer term prospects for the market. Those surveyed for the Paragon Mortgages report said that 24% of their business in the first quarter 2016 consisted of buy- to let, up from 23% in the previous quarter. Volumes of first time and next time buyers also increased. Reflecting these increases, remortgages declined from 35% of intermediary business in the previous quarter, to 32% currently. The report suggests that recent government policy has affected confidence in future business, however, with 13% of respondents expecting all types of mortgage business to decrease over the coming quarter, while 53% expect business to remain stable and 34% expect an increase. On buy to let, opinion is evenly divided with 49% of intermediaries expecting demand for buy to let products to increase or stay the same, as compared to 50% who expect a decline in demand with 1% unsure. Despite this uncertainty the number of intermediaries stating that landlords will ‘keep current properties but not buy any more’ as a result of changes to income tax relief, has nearly halved from 32% in the fourth quarter of 2015 to 18% currently, indicating that purchase intentions may be returning to the buy to let market. Likewise 23% of intermediaries stated that changes to tax relief would make ‘no difference’ to landlord plans, up from 19% in the previous quarter. Remortgages continue to constitute the largest proportion of buy to let business in the first quarter of 2016, accounting for 38% of business, up from 36%. Nevertheless, some 32% of new buy to let finance was secured for portfolio expansion. ‘Our latest report reveals that advisers are circumspect about future volumes of buy to let business as a result of recent policy developments. Over the short term around half of intermediaries expect to see a decline in buy to let business,’ said John Heron, director of mortgages at Paragon. ‘That said, on the question of what impact income tax changes will have over the longer term, sentiment appears to have improved materially over the last quarter with a sharp reduction in the proportion of landlords that are expected to sell property,’ he pointed out. ‘Increased volumes of remortgaging in the buy to let market shows that there is healthy competition with landlords shopping around for a better deal. Whether the market remains as competitive once all the fiscal and regulatory changes are implemented remains to be seen,’ he added. Meanwhile, new figures released today by the Finance and Leasing Association (FLA) show that the number of second charge mortgage repossessions in the first quarter of 2016 was down 52.8%… Continue reading
Buyers of prime country property in Ireland favour Cork and Wicklow, a new report shows
Cork and Wicklow are the most popular rural locations for country home buyers in the €1 million plus price bracket in Ireland, new research shows. According to the analysis from property consultants Savills Ireland, this suggests that many of those seeking the benefits of country living are also looking to remain within arm’s reach of major cities, be it for shopping and entertainment purposes, prestigious schools or access to good road links and international airports. Indeed, Savills sales data support this view, with a disproportionate number of transactions located in Dublin and neighbouring counties, and along national arterial routes. The report also highlighted that while domestic buyers account for a majority of Savills country homes sales, the single biggest deal in each of the last three years was a cash purchase from the UK or the United States. In addition, Savills noted a greater level of interest from American applicants, many of whom are looking to purchase a piece of family heritage here in Ireland. High net worth individuals from the United Arab Emirates and the Far East are also now beginning to show an interest in the Irish market. ‘Buyers at the top end of the price spectrum highlight location as a top priority. However, this group tends to be on the lookout for much grander homes with secondary accommodation and staff quarters, overlooking water, with 100 or more acres of mature parklands and, in many cases, adjoining equestrian facilities,’ said Harriet Grant, Savills head of country homes. Grant also reported that, unsurprisingly, some 85% of Savills country homes sales over the last three years have been cash transactions. ‘Typically, country homes buyers are not reliant on mortgage finance,’ she pointed out. ‘In reality, a trophy estate will only ever be attainable to a small minority, not only because of the higher price point, but also due to running costs. Therefore, it is little surprise that such a high percentage of Savills country homes sales over the last three years have been cash transactions,’ Grant explained. She added that deals that are being financed with a mortgage tend to involve existing home owners trading up and are generally smaller in value, averaging €520,000 in 2015, compared with almost €1 million for cash buyers. Continue reading
More people in UK want to buy a home but are concerned about rising prices
More people dream of becoming home owners in the UK with new research showing 73% aspire to owning a property, up from 65% four years ago. However some 78% of aspiring home owners are concerned about the availability and quality of homes, up 6% from last year, and house prices, the ability to get on the property ladder and saving for a deposit continue to top the nation’s list of housing concerns Overall the 2016 home owner survey conducted by YouGov for the HomeOwners Alliance and BLP Insurance suggests that the housing crisis is deepening as concerns mount about the availability and quality of homes. While the desire to own is rising, the ability of first time buyers to get on the housing ladder and saving for a deposit remains the top concerns nationally, at 82% and 80% respectively. On top of this, the proportion of aspiring homeowners who say that the availability of housing is a serious problem has increased to 78%, up from 72% last year. Aspiring home owners are also increasingly concerned about the quality of housing, with 60% saying it is a serious problem. The survey shows that the housing crisis is most acute in the capital, as Londoners head to the polls to elect a new mayor. However, there is a noticeable drop in concern about the rates of stamp duty, in the wake of the government’s reforms of the stamp duty system. Concern about negative equity has slumped among the UK overall to 44% from 64% two years ago, as house prices have continued to rise. ‘Despite government initiatives aimed at helping home owners, the housing crisis is deepening across the country, with ever more non-home owners wanting their own home, and ever greater concern about the lack of housing,’ said Paula Higgins, chief executive of the HomeOwners Alliance. ‘Many government policies have boosted demand for homes, but what this survey shows is that the real problem is the desperate shortage of houses. Until the government tackles the fundamental issue that we just don’t have enough good quality homes, the housing crisis will continue to deepen and a generation will continue to have their dreams of homeownership crushed,’ she added. According to Kim Vernau, chief executive of BLP Insurance, the current situation is a critical juncture for the construction industry and housing market. ‘The government urgently needs to speed up the delivery of new homes for aspiring first time buyers. Tenures of all types are required across the country and affordable housing and social housing should also be a priority,’ he said. ‘Balancing these competing demands is a challenging task, particularly given the shortage of labour skills that we are currently witnessing in the construction industry. This is likely to get worse in the absence of key initiatives to help address this critical issue and the new Housing and Planning Bill and threat of… Continue reading
