Tag Archives: industry
Latest CML figures show lending to first time buyers still rising
Lending to UK first time buyers increased by 12% in October compared to the previous month and is now 14% up on the same month in 2013, according to the latest figures from the Council of Mortgage Lenders. By value, there was £4.4 billion advanced to first time buyers in October, 10% up on September and 22% higher than October last year, the CML data also shows. But first time buyer affordability changed fractionally, with first time buyers typically borrowing 3.39 times their gross income, compared to 3.4 in September. The typical loan size for first time buyers fell slightly month on month to £125,800 in October, down from £126,000 in September. First time buyers in October paid 19.5% of gross income towards covering capital and interest payments, little changed from 19.6% in September but still significantly less than the recent peak of 24.8% in December 2007. Lending to home movers also strengthened month on month. In October, the number of loans advanced to movers was 35,000, a 10% rise on the previous month and up 4% on October last year. By value, lending to movers totalled £6.5 billion, 8% up on September and up 10% on October last year. Remortgage lending activity saw a decline month on month in October, with the number of remortgage loans totalling 26,600. This was 6% down on September and 11% down on October last year. The value of these loans at £4.1 billion was down 7% on the previous month and down 5% on October last year. There were 19,600 buy to let loans in October, representing lending of £2.7 billion. This continued the growth seen last month with loan volumes and the value of these loans up 8% on September. Compared to October 2013, the number of loans increased 22% and the value of these loans went up 29%. ‘This has been a year of change for our industry, but the market has shown remarkable stability with house purchase and buy to let lending showing steady, consistent growth throughout 2014 compared to 2013,’ said Paul Smee, director general of the CML. ‘There have been fluctuations month to month but overall the market appears to be showing a positive direction of travel going into the New Year. Stamp duty reform was long overdue and it is welcome that the tax has been changed. It will now be interesting to see how the market reacts. The new structure should be less of a barrier to mobility for those looking to get on the housing ladder or movers looking to switch homes,’ he added. According to David Newnes, director of Your Move and Reeds Rains estate agents, while first time buyers have been forging ahead in the market this year, more recently lending to new buyers is starting to wane. ‘Mortgage market measures introduced in April have trimmed back lending since, coupled with the ongoing debate about when interest rates might rise and the LTI cap this has discouraged… Continue reading
New build completions in Scotland at their highest level in over three years
The number of new homes being built in Scotland is at its highest level for over three years, new official figures have shown. Across all sectors, 4,583 homes were completed in April to June this year, the highest quarterly figure since 2010, and 29% higher than in the same quarter last year. The latest completion figures also bring the Scottish Government closer to its target of delivering 20,000 homes for social rent by March 2016, with 80% of homes completed. ‘I welcome the fact that the number of new homes built across all sectors is at its highest level for over three years, and I am particularly pleased that we are nearing our target of delivering 20,000 homes for social rent by March 2016,’ said Housing Minister Margaret Burgess. ‘The Scottish Government’s investment in affordable housing, together with measures to support the industry and help people into home ownership, have undoubtedly helped to stimulate housing supply,’ she pointed out. ‘Making sure everyone in Scotland has access to good quality housing is a vital part of the Scottish Government’s drive to secure economic growth, promote social justice, strengthen communities and tackle inequality,’ she added. She explained that the government has delivered over 4,500 new council houses since 2009 and has acted to preserve Scotland’s social housing stock by abolishing the Right to Buy from 01 August 2016, which will protect up to 15,500 social houses from sale and safeguard social housing for future generations. ‘In addition, the supply of affordable housing continues to be a high priority for us, and we are now three quarters of the way towards our target of 30,000 affordable homes by March 2016. This commitment is underlined by our £1.7 billion investment in affordable housing over the current parliamentary term, which supports an estimated 8,000 jobs each year,’ Burgess added. Continue reading
Sharp increase in house building boosts UK construction market
A sharp rise in private housing and private commercial construction activity has pushed up workloads at the fastest rate since 1994, according to the latest RICS survey. The Royal Institution of Chartered Surveyors third quarter construction market survey also shows that the shortage of quantity surveyors continuing to grow with 57% of respondents citing this issue as a problem. Despite this industry workloads continue to make a strong recovery, with 46% more surveyors reporting a rise in activity, up from a net balance of 41% in August. This marks the eighth consecutive quarterly rise in workloads. The private housing sector grew robustly across all parts of the UK, with the London and the South East regions seeing the strongest growth. In the private commercial sector, workloads also reached a series high, with a net balance of 59% more surveyors reporting an increase in activity. However, while still positive, workloads in infrastructure saw much more balanced growth with 27% more surveyors seeing activity levels rise. Significantly for Northern Ireland, for the fourth consecutive quarter, infrastructure and private industrial sector growth in Northern Ireland remained flat, 0% net balance. Across the whole of the UK, the main factors which were found to be limiting building activity were a shortage of labour, followed by access to finance and a shortage of materials with both at a net balance of 58%. RICS says that it is significant that demand for bricklayers increased strongly on the previous quarter, with 71% of respondents now saying that this is an issue compared to 59% in the second quarter of the year. Also, planning and regulation factors were the fourth highest limiting factors with a net balance of 51%. However, despite these concerns, the strength and breadth of the growth that is being reported is promising and feeding expectations for further growth over the coming year. As a result, 47% more surveyors expect to see profits increase, rather than decrease, and 58% more respondents expect to take on more people in response to the rising workloads. ‘Unprecedented housing demand, the bounce back from a very deep recession and government's commitment to invest £36 billion in over 200 infrastructure projects is driving much-needed confidence across the industry, translating into UK workload sentiment now standing at its highest level in two decades,’ said Alan Muse, RICS director of Built Environment. ‘Of course factors impacting construction activity, such as skill shortages and material shortages, must be addressed if we are to avoid capacity constraints and promote productivity and efficiency in the workplace, but it is equally important that the underlying framework for effective planning and delivery of projects is in place to ensure long term construction growth that is evenly spread across the UK,’ he explained. ‘Government must now ensure it builds on these foundations of confidence with the mechanisms to get house building and infrastructure projects out of the pipeline and into the ground. RICS believes a National Infrastructure Delivery Plan and enforced local planning are… Continue reading
