Tag Archives: financial
UK mortgage holders expect to be in a better financial position in three years
Some 60% of mortgage holders in the UK anticipate that they will be in the same financial position or better in three years' time even though the majority expect interest rates to rise. Around half expect their finances to be broadly unchanged, with more than 10% predicting their financial position will improve, according to new data published by the Council of Mortgage Lenders (CML). The figures, published in conjunction with YouGov, shows that almost one third expect their finances to worsen as rates rise with a fifth say they are currently experiencing some financial difficulty, but fewer than half this amount believe themselves to be in danger of missing a mortgage payment. Across the market, however, mortgage arrears are continuing to decline, and CML data shows there are currently only 1.18% of loans with arrears amounting to 2.5% of the outstanding balance. The data also sheds light on likely triggers of mortgage payment difficulties, many of which are not simply related to the loan commitment itself. Some 61% said that a higher cost of living is the most common factor affecting future mortgage affordability, with 41% citing minimal savings, 36% low or falling income , 30% other debts and 17% ill health. The survey identifies that borrowers have a range of coping strategies or actions they are prepared to take to ensure that their mortgage remains affordable. Top of the list is cutting back on non-essentials cited by almost 40%, but other options include cancelling major spending plans, remortgaging to a cheaper deal or working more hours. ‘Those who expect their situation to get worse and to be in some degree of difficulty over the next few years are willing to take more action and consider a broader range of actions. They are generally open to trying a combination of coping strategies, rather than just opt for one,’ said a CML spokesman. ‘Although this might be a hypothetical situation, it shows households apparently have a well-grounded understanding of the plausibility of their coping strategies and are being realistic about their prospects,’ he added. Continue reading
Australia’s office market recovers with strong growth in 3,000 square meter sector
Strong demand for 3,000 square meter plus office space is driving healthy activity and growth across Australia’s office sector as the market looks towards 2015, according to new figures. The Colliers International Office Demand Index quarter three report has recorded a 51% increase in enquiry for office space nationally at 626,237square meters, compared to the September 2013 quarter figure of 413,538 square meters. According to Simon Hunt, Colliers International managing director of Office Leasing, the growth in office demand, a barometer for the state of the market, was being driven by enquiries within the 3,000 square meter plus market, which increased 126% from only 147,301 square meters in the September 2013 quarter to 332,500 square meters this year. Some 47% of all enquiries recorded for September year to date was for 3,000 square meters or more. Breaking the figures down further shows the greatest spike in demand for office was in Sydney where space enquired for more than doubled from 102,486 square meters in the third quarter of 2013 to 235,660 square meters in the third quarter of 2014, an increase of 130%. ‘These Sydney numbers have been driven by a significant rise in demand for office space in the above 3,000 square meter market where only 29,601 square meter was enquired for in the third quarter of 2013 compared to 114,800 square meters in the third quarter of this year,’ said Hunt. Demand for office space also doubled in Canberra, with 112,600 square meters in the third quarter of 2014 compared to 58,090 square meters in the third quarter of 2013, again driven by enquiry in the 3,000 square meter plus market. The Office Demand Index also recorded positive signs of increases in demand in Adelaide, up from 29,251 square meters in the third quarter of 2013 to 49,920 in the third meter of 2014 and Brisbane, which rose, quarter on quarter, from 47,095 square meters to 53,687square meters. Enquiry in Melbourne was down from 166,785 square meters in the third quarter of 2013 to 150,851 square meters in the third quarter of 2014, primarily driven by increased activity at the smaller end of the market, where 65,063 square meters was recorded in the under 1,000 square meter market in the third quarter of 2013 compared to only 51,001 square meters In the third quarter of 2014. The over 3,000 square meter market, however, saw an increase from 53,500 square meters in the third quarter of 2013 to 61,700 square meters in the third quarter of 2014. Hunt said the growing enquiry levels nationally for space over 3,000 square meters pointed to a strong period of business expansion driven by white collar employment growth in the corporate sector. White collar employment growth was set to be strongest in the Financial Services, IT, Communications and Healthcare sectors, with national forecasts indicating that over 10,000 new jobs would be created in these sectors in 2015. It was anticipated that the mining, government and manufacturing sectors would have slightly weaker… Continue reading
UK mortgage lenders braced for further interventions despite market growth cooling
Mortgage lenders and brokers expect further interventions by the Bank of England’s Financial Policy Committee (FPC) despite market growth cooling, according to new research. According to the latest survey by the Intermediary Mortgage Lenders Association (IMLA) some 55% of intermediary mortgage lenders and 40% of brokers are expecting further intervention. The findings come as the first FPC recommendations; the interest rate stress test against a 3% base rate increase for borrowers, and a 15% cap for lenders on the volume of new loans above 4.5 times loan to income (LTI ), take effect across the mortgage market this month. IMLA’s research reveals lenders and brokers are in agreement that the 3% stress test will have the biggest impact of the two measures. Some 54% of brokers and 26% of lenders believe this will have a high impact, compared with just 34% of brokers and 11% of lenders who feel the same about the cap on high LTI loans. Following the implementation of the Mortgage Market Review (MMR) in April and the FPC recommendations in its Financial Stability Report in June, IMLA’s research found that industry optimism over the mortgage market recovery has cooled. Just 44% of lenders and 41% of brokers feel market conditions were improving in the third quarter of 2014, down from 100% of lenders and 90% of brokers in the first quarter of 2014. Just 3% of brokers felt conditions were worsening in Q1, but 45% took this view in the third quarter and the proportion that felt lending volumes were growing faster than expected dropped from 87% to 31% among lenders from the first to the third quarters and from 60% to 45% among brokers. Concerns remained over the housing market with the latest findings showing 31% of lenders and 38% of brokers believing house price growth was unsustainable, up from 13% and 25% in the first quarter. However, subsequent data from national house price indices show that the monthly growth of house prices has since slowed. ‘These findings show the industry is well aware that its recovery will be closely monitored in the interests of maintaining economic and financial stability. The announcement that the FPC is considering loan to value (LTV) limits shows it remains vigilant,’ said Peter Williams, executive director for the IMLA. ‘But recent changes, including MMR, have already had a calming effect on activity and the full effects are still to emerge. IMLA’s research has clearly shown that some would-be borrowers are not passing initial broker checks which have been tightened to fully reflect the lender assessments that follow,’ he explained. ‘While caution is needed for the good of consumers and the economy, this applies to regulation as well as lending. Market interventions have been reasonable to date, but an immediate push for further regulation would be excessive, especially when house price growth appears to be slowing,’ he added. Using credit policies to compensate for weak supply in the housing market can have a major impact on who can… Continue reading
