Tag Archives: house
First time buyers lending in Scotland up 23% last year
Lending for homes in Scotland fell in the final quarter of 2014 but there were more mortgages going to first time buyers compared to the same period the year before. The latest data from the Council of Mortgage Lenders shows that overall lending was up 23% last year but mortgages fell at the end of the year. Scotland accounted for 6.6% of UK wide annual house purchase activity, down from 6.9% in 2013. Lenders advanced 27,700 loans to first time buyers in Scotland totaling £2.9 billion, 16% up in volume compared to 2013, and 23% up in value. A breakdown of the figures show that there were 7,000 first time buyer loans in Scotland, worth £750m. This was down compared to the third quarter 5% by value and 4% by volume. Compared to the fourth quarter of 2013, the number of loans increased by 3% and the amount borrowed by 9%. There were 8,000 loans to home movers, valued at, £1.2 billion, down 8% in volume and down 9% in value compared to the third quarter. Compared to the fourth quarter of 2013, there was a decrease of 8% in volume and a decrease of 5% in value. The total number of remortgage loans declined in the fourth quarter to 5,700 loans at £650 million, which was down 3% in volume but unchanged in value on the third quarter. Compared to the fourth quarter of 2013, activity was down 17% in volume and 13% in value. First time buyer affordability changed slightly in Scotland quarter on quarter with first time buyers typically borrowing 2.90 times their gross income, less than the 2.94 income multiple in the third quarter and less than the UK average of 3.38. The typical loan size for first time buyers was £97,200 in the fourth quarter, down from £98,600 in the previous quarter. The typical gross income of a first time buyer household was £33,965 compared to £33,520 in the third quarter. The relatively low level of interest rates saw first time buyers' payment burden remaining relatively low in the third quarter at 16.8% of gross income being spent to cover capital and interest payments, higher than the third quarter's 17.3%. Home mover affordability changed fractionally, with home movers typically borrowing 2.64 times their gross income compared 2.62 in the third quarter and to 3.03 for the UK overall. The typical loan size for home movers was £128,244 in fourth quarter, down from £130,000 in the previous quarter. The typical gross household income of a home mover was £50,773 in fourth quarter compared to £50,971 in the third quarter. Home movers' payment burden remained relatively low in Scotland at 16.5% of gross income being spent to cover monthly capital and interest payments, less than the 16.9% in the third quarter and considerably less than the 18.4% UK average. Overall for 2014, remortgage lending in Scotland was 23,400 loans reflecting a value of £2.6 billion. This was 14% down in volume compared to 2013,… Continue reading
Prime farm land sees 14% growth in UK, but with regional variations
Values for prime arable land has strengthened across the UK by 14% to average almost £10,000 per acre, according to the latest survey figures. It is set to see 8% capital growth and 5% to 6% rental growth from 2015 to 2019, an analysis in the latest Savills farm land value survey suggests. The average capital value of farm land has shown very significant growth of over 250% during the past decade, however, this conceals regional variations with factors including land quality, position and local demand key drivers to an outcome. ‘The flight to quality, particularly in respect of arable farm land is a major contributor to the widening gap in values including between England and Scotland,’ said Alex Lawson head of Savills farms and estates. ‘If this gap continues widening the opportunity for investors to acquire land in Scotland starts to become quite compelling. Likewise there are buyers who are choosing to take advantage of the relatively good value poorer quality livestock land,’ he added. Market activity continues to include a variety of buyers and sellers. Last year non farming and lifestyle sellers accounted for more buyers than farmers compared with in 2000, when almost three quarters of them were farmers. On the buying side, political uncertainty coupled with the latest CAP reforms have encouraged some potential farmer buyers to sit tight. They represented 45% of all buyers down from 60% in 2011. The proportion of overseas buyers has remained steady over the past three years at around 8%. This is almost double the activity during the height of the recession from 2009 to 2011, but significantly below the mid noughties when collectively they accounted for over 20% of all buyers. According to Savills’s forecasts top quality agricultural land will be a long term performer in 2015 to 2019 with 8% capital growth and 5% to 6% rental growth, while investors with industrial properties as well as secondary office schemes could be set to see as much as 10% capital growth in 2015, with secondary retail at 9%. ‘Farmland supply is historically low, product is finite and competing land uses combined with diverse ownership keep values positive but a local understanding of market conditions is key to investing well in this sector, and only the top quality stock will achieve 8% growth,’ said Ian Bailey head of rural research at Savills. The report points out that the key to these returns is the focus on supply and demand fundamentals whilst taking into account factors such as the UK general election, mansion tax proposals and mortgage market review. However, whilst there may be an effect on sentiment in the run up to the election, the impact for commercial and agricultural markets is likely to be muted. Drawing on the macro-economic story, Savills predicts base rates will not move in the short… Continue reading
Londoners set to cash in on short term rental law change
With the Deregulation Bill currently working its way through the UK parliamentary system, a new analysis shows that London homeowners could earn thousands by renting out spare rooms in their homes. The bill, first announced in 2013, would end rental rules imposed in 1973 but now largely viewed as outdated. These currently prevent Londoners from renting out their homes, or rooms within their homes, on a short term of three months to visitors. Unlike other residents across the UK, Londoners require planning permission if they let a room or home on this basis. When it becomes law, probably in a few months’ time, it will allow London home owners to rent out rooms or their entire property, for up to three months of the year. According to central London lettings agency E J Harris, a home owner renting out their two bedroom apartment in prime central London could potentially earn anything from £2,000 per month up to over £5,000 per month, depending on location, netting themselves a potential additional income over three months of anything from £6,000 up to £15,000 or more. At the very top of the luxury housing market in locations such as Knightsbridge or Mayfair an owner of a penthouse could earn themselves £10,000 per week, or up to £120,000 over a three month period. E J Harris adds that if a home owner decided just to rent out a room in their apartment, then at the top end of the market, rental income for an en-suite bedroom in Knightsbridge could earn them up to £6,600 over a three month period. Renting out a room in a two bedroom Mayfair apartment could potentially earn £500 a week or £6,000 for a three month let. In St John’s Wood a room in a two bedroom property could earn £250 a week, or up to £3,000 over three months. However, it is not only home owners in luxury addresses who could benefit significantly. E J Harris, estimate that renting out a room without an en-suite bathroom in a typical apartment in inner London could earn the owner around £100 per week, allowing the owner to bring in an extra £1,200 over three months. Despite the huge sums of money that a wealthy owner in Knightsbridge or Mayfair could earn from a very short term apartment let or room share, Elizabeth Harris, the firm’s managing director, thinks it is unlikely that anyone at this end of the market will choose to enter the short let or room share marketplace. ‘For a super wealthy oil Sheikh or Russian Oligarch an extra £120,000 is pocket change and people who live in addresses such as One Hyde Park or The Knightsbridge really don’t need to room share,’ she said. ‘However, I do forecast that there is a strong potential market from young professionals aged in their late 20s to late 30s who… Continue reading
