Tag Archives: government
CML expected improved mortgage market activity ahead in UK
A benign economic backdrop should underpin a gentle improvement in housing and mortgage market activity in the coming months, according to the latest forecast from the Council of Mortgage Lenders. The CML market review report points out that this follows a softer patch over the past year, which has dragged down our expectations for gross mortgage lending to £209 billion this year, from the £220 billion the CML had expected previously. ‘Several of the government’s fresh housing initiatives will take time to take effect and so do not fundamentally reshape market prospects this year or next, as far as we can judge at this stage,’ said Bob Pannell, CML chief economist. The report explains that with house price levels already elevated and continuing to outpace earnings across much of the country, the upside potential for regulated lending is likely to be constrained by affordability pressures, reinforced by the recent MMR mortgage rules and macro-prudential rules. It also points out that perceptions of the buy to let sector can be distorted by the fact that remortgage activity accounts for a much larger share of overall buy to let lending, more than half, than is the case for home owner loans. ‘Although buy to let business volumes continue to expand, the underlying pace of growth in buy to let activity, both for house purchase and refinancing, has been slowing, following its strong recovery over the past few years. Policy interventions in the buy to let space may reinforce this downward trend,’ said Pannell. ‘We expect a further improvement in arrears and possessions this year and anticipate that the overwhelming majority of borrowers will cope with the modest interest rate increases that start in 2016,’ he added. Overall the CML is slightly more optimistic about housing market developments than it was at the turn of the year and Pannell explained that this is largely because of the continuing resilience of cash transactions, amounting to nearly 37% of all transactions over the past year. He added that regulated house purchase activity has continued to edge down relative to the market as a whole over the past year, and this has acted to drag down our overall mortgage lending total for 2015. ‘We now expect gross lending of £209 billion, compared with our earlier estimate of £222 billion,’ he concluded. Continue reading
Hong Kong residential property prices reached record high in May
Residential property prices in Hong Kong reached a record high in May, increasing more than 20% compared with the same month last year. The growth in values continues despite the government’s series of property market cooling measures. The transaction volume of new homes reached over 8,700 for the first half of 2015, the data from the Rating and Valuation Department shows. According to an analysis by international real estate firm Knight Frank it is a result of strong housing demand, ample liquidity partly attributable to the previous rally in the Mainland and Hong Kong stock markets and the continual return of wealthy Mainland investors to the city’s residential sector. Amid positive market sentiment, property developers have been actively acquiring residential sites this year, in line with the government’s target to boost housing supply. In early July, a large residential site in So Kwun Wat in Tuen Mun, estimated to require an investment of up to HK$8 billion, was sold for HK$3.82202 billion, representing the second highest ever accommodation value in the area. During the third quarter of this year the Hong Kong government will release three residential sites for sale. It has indicated that additional land may be launched by the end of September, depending on the market situation and progress of preparatory work. ‘The annual private housing supply target of 19,000 flats is considered achievable this year. Despite the rising supply, we expect home prices to continue rising this year, as it will take time for the new sites to be developed into flats,’ the Knight Frank report concludes. Meanwhile in Greater China the Grade-A office market remained active in June, driven by continual expansion demand from Chinese financial institutions, most notably fund and asset management companies. Knight Frank believes that Grade-A office rents in Central will continue rising steadily in the second half of 2015. Last month, with rents in prime retail districts softening, mid-range retailers gained opportunities to enter high profile streets at lower rents. Retail sales are not expected to recover in the near term. Knight Frank says that prime retail rents will continue to come under downward pressure for the remainder of the year. Continue reading
Lettings industry unhappy about proposed tenancy changes in Scotland
Every summer on top of the thousands of tourists that arrive in Edinburgh there are thousands more seeking short term rentals for the duration of the city’s famous International Festival and Fringe. But concern is being expressed that proposed changes to the lettings market in Scotland put forward by the government could adversely affect the private rented sector’s ability to cope with the influx. On top of this there are students seeking properties to rent when the university term starts and this too could be affected by the plans, according to an analysis report from Lettingstats, part of the online property lettings firm Lettingweb. The Scottish Government has proposed that assured and short assured tenancies should be replaced by the Scottish Private Rented Tenancy (SPRT) for all letting in the private sector. It would make the current situation where a landlord rents to students during term time then to tourists and Festival workers during the summer without having to end and start a new tenancy impossible. Lettingstats believes that these new tenancy rules will stop the ability of key providers in the private rental market to offer guaranteed accommodation for both students and festival visitors. It could also affect landlords around the country who rent to students. It says that the legislation, scheduled for the autumn, will force private landlords, Edinburgh’s universities, and PBSAs to offer unlimited tenancies with no clear end dates, instantly removing these landlords’ capacity to know when they can market their properties to festival performers, visitors and students alike. ‘Private rented housing stock and university accommodation is critical to the success of Edinburgh’s festivals. The new tenancy reform proposals may be well intentioned, but the Scottish Government and City of Edinburgh Council have so far ignored the dire warnings consistently presented to them from across the entire private rented sector,’ said Lettingweb’s head of research, Dan Cookson. ‘Given that the identification of additional Festival accommodation was seen as a key recommendation in the city’s recent festival strategy, it is bizarre that the city would support tenancy reform changes that will immediately put at risk much needed accommodation capacity within the city,’ he explained. ‘Just the prospect of this legislation being introduced is already having a wider impact on the private rented sector. Landlords are starting to move to protect themselves by either transferring their tenancies over to short term only, or even considering disinvesting which would be a disaster as falling supply will inevitably push up prices,’ he pointed out. ‘Ultimately this legislation will have an unintended negative impact upon the availability of housing stock for residents, students and visitors alike. It is hugely disappointing that policy makers are ignoring the stark warnings of the sector,’ he added. Letting agents are also expressing concern. Stuart Montgomery, director of Rettie & Co, believes the legislation is based on a fallacy that landlords evict tenants from their homes… Continue reading
