Tag Archives: house
UK home lending approvals up almost 10%
House lending approvals in the UK have seen the fastest month on month increase in over five and a half years, up 9.1%. There were 65,778 house purchase approvals in January but on an annual basis they fell 12.9%, according to the latest Mortgage Monitor from e.surv, one the UK’s largest chartered surveyors. This makes January 2015 the fifth consecutive month in which the number of loans has fallen on an annual basis. ‘Lenders have a desire to return to growth and the January lending uptick is testament to this, as borrowers key in to mortgages while interest rates remain at historic lows. However, undoubtedly, some potential borrowers remain thoughtful about the approaching election and are playing a waiting game,’ said Richard Sexton, director of e.surv chartered surveyors. ‘Whilst the Mortgage Market Review and LTI caps are preventing what has previously been perceived as higher risk lending, equally we have Help to Buy supporting and encouraging first time buyers. With the announcement that the Bank’s Monetary Policy Committee is going to be given new abilities to place caps on LTV ratios, it looks like the purchase mortgage market could be closely managed and scrutinised in the run-up to the General Election,’ he added. The data also shows that loans to higher LTV borrowers grew 20.1% between December and January. The first month of 2015 saw 10,064 loans to borrowers with deposits worth 15% or less of their property’s total value, compared to 8,378 in December. While this month on month growth is partly due to the increase in the total number of approvals, higher LTV borrowers also occupied a larger proportion of borrowers in January. Some 15.3% of borrowers were higher LTV, compared to 13.9% December. On an annual basis, the proportion of higher LTV borrowers is 1.7% higher than January 2013, when they made up 13.6% of all house purchase loans. The latest First Time Buyer Opinion Barometer from Your Move and Reeds Rains found that the number of first-time buyer property completions fell to 24,800 in December from 25,900 in November, a 4.2% drop. January’s month on month increase in mortgage approvals could, however, boost numbers of first time buyers further. ‘Help to Buy is doing its work, plugging the savings gap left by low interest rates, enabling first-time buyers to get on the property ladder despite only being able to save small deposits. Lenders are locked in a price war, offering ever lower repayment rates to try and bring in borrowers,’ explained Sexton. But first time buyers can be challenged by the introduction of new regulation. No matter how you slice and dice it, caps add another layer of complexity for people fresh to the house-purchase market. With the Bank of England’s new powers to reign in LTVs, first time buyers are a group that could be more affected than others,’ he pointed out. ‘While regulatory supervision… Continue reading
UK house prices up 2% in first month of 2015, latest index sho
House prices in the UK increased by 2% between December and January, the biggest rise for January since 2009, according to the latest property index figures. The data from the Halifax also shows that in the three months from November to January prices were 1.9% higher than in the previous three months and the quarterly rate of change increased for the first time since July 2014. But it remains below the rates recorded between June and September last year and overall the Halifax expects a moderation in house price growth during 2015. It predicts that house prices nationally will increase by 3% to 5% compared with 8% in 2014. Prices in the three months to January were 8.5% higher than in the same three months a year earlier. This was an increase from 7.8% in December. This measure of annual house price growth was at its highest since October 2014 when it was 8.8%, but remains significantly below the peak of 10.2% in July 2014. It points out that sales increased by 15% in 2014 but despite this annual rise, sales peaked in the first quarter before steadily declining during the course of the year with sales in the final quarter 5% lower than in the first quarter and 1% lower than in the third quarter. ‘This bounce-back in house price growth in January coincides with reports of the first rise in mortgage approvals for six months in December. These improvements may indicate that the recent declines in mortgage rates, the reform of stamp duty and the first increases in real earnings for several years are providing a modest boost to the market,’ said Martin Ellis, Halifax housing economist. ‘It is, however, too early to draw any firm conclusions. The monthly figures in January can be particularly volatile due to the lower volumes of activity at this time of year and there have been unusually large rises on occasion in the past, such as in 2007 when it was 2.3% and 2.4% in 2009,’ he explained. ‘Housing demand should continue to be supported by an expanding economy, continuing low mortgage rates and a boost to households’ spending power resulting from lower consumer price inflation and reduced fuel bills. Nonetheless, we expect the overall downward trend in house price growth seen since last summer to continue over the coming months. Nationally, house prices are predicted to increase in a range of 3 to 5% in 2015 compared with 8% last year,’ he added. According to Rob Weaver, director of investments at property crowdfunding platform Property Partner, the figures confirm that the property has still got some punch. ‘A strong January and the first quarterly rise for six months could suggest another buoyant year but I suspect we are more likely to see a period of gentle and sustained growth,’ he said. ‘It's hard to see how the property market could under-perform in 2015. Undershoot 2014, yes, but under-perform, no. Economic conditions at home… Continue reading
UK house price sentiment moderates
Almost 20% of households in the UK perceived that the value of their home rose in January, according to the latest House Price Sentiment Index which reveals a downward trend in 2014. Some 19.5% of the 1,500 households surveyed across the UK said that the value of their home had risen over the last month, while 3.1% reported a fall, the data from Knight Frank and Markit Economics shows. This gave the HPSI a reading of 58.2, the twenty second consecutive month that the reading has been above 50. The index report points out that the HPSI was on a general downward trend for most of the second half of 2014. January’s reading of 58.2, the lowest in 14 months, was a continuation of this trend and well below the average reading for last year of 61. In spite of the month on month fall, households in all 11 regions covered by the index reported that prices rose in January, led by Londoners at 65.3 and households in the South East at 63, while, households in the North West at 53 and Wales at 53.9 perceived the slowest rates of price growth over the course of the month. In London, perceptions of house price growth moderated compared to the previous month and stand well below the previous high of 74.9 in April last year, suggesting that households are less confident that the value of their property has risen than previously. The future HPSI, which measures what households think will happen to the value of their property over the next year, fell in January to 69.5, down from 70.5 the previous month. This was the second consecutive monthly fall in house price expectations across the UK. The future HPSI stands well below its record high of 75.1, which was seen in May 2014. Households in London at 75.3 are the most likely to expect price rises over the next 12 months, followed by those in the South West at 75.1 and the South East at 74.9, the index shows. Expectations of price growth are highest among mortgage borrowers and those who own their home outright with readings of 75.8 and 71.3 respectively, followed by those living rent free at 66.8. ‘House price sentiment has slowed across the country despite the cut in stamp duty introduced by the Chancellor in December. Households in London and the South East signal slower annual rises in house prices this month than last month, an important development as these areas have been the engines of high house price growth over the last year,’ said Grainne Gilmore, head of UK residential research at Knight Frank. ‘Even the prospect of record-low interest rates being in place for longer than anticipated has not been enough to lift expectations for house price growth on a monthly basis in January, however this, coupled with an expected rise in wage growth will likely result in modest price uplifts over 2015,’ she added. Tim Moore, senior economist at… Continue reading
