Tag Archives: investment
UK gross mortgage lending up 16% in June month on month
Gross mortgage lending in the UK reached £20.7 billion in June, some 16% higher than May’s lending total of £17.8 billion, and 3% higher than the £20.1 billion lent in June last year. The data from the Council of Mortgage Lenders (CML) shows that this is the highest June figure in eight years when gross lending reached £22.6 billion in 2008. Gross mortgage lending for the second quarter of 2016 was therefore an estimated £56.1 billion but this is 10% lower than the first quarter of this year, but 8% higher than the second quarter of 2015. ‘The result of the European Union referendum is likely to affect the housing market, but there remains considerable uncertainty,’ said CML senior economist Mohammad Jamei. ‘Although mortgage firms have ample lending capacity, activity levels are likely to bear the brunt of any market adjustment over the next six months or so, as buyers and sellers wait to get a clearer idea of where we might be headed,’ he explained. ‘But as with the economy, the UK housing market’s starting position is relatively favourable, with transactions having increased by almost 80% from post-crisis lows. Over the next six months, activity is likely to soften modestly, while lending will be driven more by remortgaging and less by house purchases,’ he added. ‘We also expect some form of monetary easing to be undertaken by the Monetary Policy Committee when it meets on 04 August, given the uncertain outlook that has set in after the vote result,’ he pointed out. According to John Goodall, chief executive officer of peer to peer platform Landbay, this spike in mortgage lending levels in June suggests both home buyers and sellers refused to sit on their hands in the run up to the EU referendum result. ‘The market has been something of a rollercoaster ride since the Stamp Duty stampede at the start of 2016, but while the mortgage market continues to find its new normal, its foundations continue to show strength,’ he said. ‘We’re yet to see the long term effects of the Brexit vote on market activity, but it’s clear that the UK’s housing shortage will remain the pivotal issue in defining the future health of the sector. Theresa May has made her political intentions clear for further housebuilding pledges, but must recognise the vital importance of the private rented sector in the housing mix,’ he pointed out. ‘Even with a radical programme to combat housing shortages, supply has a mountain to climb before it catches up with demand, so even a moderate house price correction would do little to hamper the UK’s reliance on the buoyant buy to let market,’ he added. Continue reading
Brexit hits UK commercial property market sentiment
Sentiment in the UK’s commercial property market has dampened significantly since the referendum vote to leave the European Union with investment demand falling sharply, most notably in London. The heightened sense of caution is visible across both investment and occupier sides of the market, with uncertainty pushing rental and capital value projections into negative territory, according to the latest commercial property market survey from the Royal Institution of Chartered Surveyors. It shows that and increasing share of respondents across the UK now feel the market is in an early downturn phase and the 12 month capital value and rental projections have now moved into negative territory. On a UK wide basis, occupier demand failed to rise for the first time since 2012. The headline net balance fell from +21% previously to a reading of zero in the second quarter of the year. Declines were reported in the office and retail areas of the market but demand proved somewhat more resilient across the industrial sector. The regional breakdown shows the occupier demand gauge moderated across all parts of the country, although the shift was most noticeable in London. Alongside this, availability remains constricted, with the supply of leasable space more or less unchanged in the office and retail sectors during the second quarter, while industrial availability continued to decline. Worries over a potential hit to business confidence, caused by political and economic uncertainty, appear to be reflected in respondents’ rental outlook. This is especially the case over the shorter term. Indeed, the headline three month rent expectations net balance dropped from +26% to -7% in the second quarter. The office and retail sectors experienced the steepest decline, with the reading for both now comfortably in negative territory. In the industrial sector, although the net balance softened notably, it remains positive given the very tight supply and demand conditions. When the results are disaggregated, the rental outlook is most negative in London. Over the next 12 months, rents are projected to fall by around 3% at the all-sector level. Within this, rents across the secondary retail sub market are expected to come under the most significant downward pressure. The survey report points out that the weakness in demand is perhaps even more visible on the investment side of the market. During the second quarter the investment enquiries series fell sharply, posting a net balance of -16%, down from +25% in the first quarter of the year. What’s more, all traditional sectors covered in the survey experienced a drop-off in investor interest. Foreign investor demand declined at an even greater rate, as the net balance fell to -27%. While respondents in virtually all parts of the UK noted a decline in overall investment enquiries, the trend was again most pronounced in London. In fact, at -41%, the investment enquiries gauge for the capital was the weakest since 2009. Back at the UK wide level and, despite a softening demand backdrop, the supply of… Continue reading
UK house builder calls for stamp duty change
The chairman of one of the UK's largest housebuilders has called for stamp duty and Help to Buy changes to drive the housing market forward and keep the economy growing. Redrow founder and chairman Steve Morgan was speaking at the launch of Woodford Garden Village, one of the largest brownfield redevelopments in the North West, where local community groups, politicians and industry professionals had gathered to help Redrow celebrate its opening. During the day he highlighted how housing transactions have gone down as stamp duty has gone up and the tax was affecting people's mobility. ‘Stamp duty has a huge impact on the market. Not only do buyers have to raise huge deposits, they then have to find thousands more in stamp duty. The last two increases have been very damaging, particularly to the London market,’ he said. He also called for the Government to extend the time limit from application to completion on Help to Buy equity loans to 12 months from the current six months. He said this would enable first time buyers to reserve a new build house farther in advance of its completion when using the incentive, allowing them to compete with investors who are free to reserve at an earlier stage. Overall though the Redrow chairman was positive about the housing market, and saw the current climate as a good time for house builders, with land finally coming through the planning system, albeit still too slowly for his liking, and for customers, with mortgage interest costs remaining low. He pointed out that the Woodford Garden Village development, on the former Woodford Aerodrome site, near Stockport, in Greater Manchester, is the first garden village site for over 100 years in the north west of England and one of the first of a new generation of garden villages with Redrow leading the way. ‘It's important that we're creating sustainable new communities that have longevity and Woodford Garden Village is a prime example of that. It will be a self-sustaining development with a new primary school, shops, a village pub and doctor's surgery to name but a few of its amenities,’ he explained. ‘It's also perfectly located for commuters, close to Manchester Airport and, importantly, it's a brownfield redevelopment, so it's bringing a redundant industrial site back into good use in a fantastic rural location,’ he added. He thanked officers and politicians of Stockport Metropolitan Borough Council for their positive role in bringing the scheme to fruition. Continue reading
