Tag Archives: lending
Mortgage lending in UK up after summer dip
Gross mortgage lending in the UK reached £20 billion in September, up 2% from the previous month and up 12% year on year, the latest figures show. It is the fourth month in a row that there has been a sharp improvement in year on year lending, says the report from the Council of Mortgage Lenders. Gross lending in the third quarter of 2015 was therefore an estimated £61.4 billion some 18% higher than the £52.2 billion advanced in the second quarter, and an increase of 12% on the third quarter in 2014, when lending totalled £55 billion. ‘Mortgage lending is currently enjoying its best spell since 2008. As we expected, the second half of 2015 has seen a pickup in activity in the housing market after a slow start to the year,’ said CML economist Mohammad Jamei. ‘Low inflation, strong wage growth, falling unemployment and competitive mortgage deals are all helping to support housing demand. We expect to see further modest growth towards the end of the year, although affordability pressures are likely to limit gains for home movers and first time buyers,’ he added. According to Henry Woodcock, principal mortgage consultant at IRESS, buoyant house purchase lending, paired with a buy to let mortgage market at its strongest level for two years has sustained momentum. ‘On top of this, the number of mortgage products available is at an all-time high, providing consumers with far more choice and a healthy remortgage market are all combining to create a real buzz,’ he said. ‘With speculation around an interest rate rise dying down and unlikely to happen until the first half of 2016, consumers should benefit. Historically attractive rates will be available for longer, continuing to support buyer demand,’ he added. John Eastgate, sales and marketing director of OneSavings Bank, also believes that it is the buoyancy in the market supported by persistently low mortgage rates that is boosting lending. ‘The recent global economic uncertainty has caused central bankers to hit the pause button on possible rate rises, with many speculating that the UK may not see rates increasing before late 2016. House prices also grew at their slowest rate for two years last month, and if this trend continues, should ease affordability issues for buyers,’ he explained. Continue reading
Rental growth is weak outside of Australian capital cities, new data shows
Residential rental market conditions outside of capital cities in Australia remained weak over the September 2015 quarter with prices falling or remaining flat. Weekly rents fell the most in regional Western Australia with a decrease of 2.6, they were down 2.1% in the Northern Territory and down 1.7% in Victoria. The remaining capital cities all recorded flat condition over the three months ending September 2015. Regional unit markets also showed weak rental conditions, with regional Tasmania the only area recording an increase in apartment rents over the quarter with growth of 2.2%. Unit rents were down over the quarter in regional Western Australia by 2.9%, in New South Wales by 1.5% and the remaining capital cities all showed flat rental conditions. According to CoreLogic RP Data head of research Tim Lawless there has been a significant slowdown in the rate of rental growth over the past couple of years due to new housing supply increasing and investor purchasing at record highs. He expects this trend to continue over the coming year. Annually, rents rose across some of the regional rental markets, however, Lawless noted that the performance as a whole remains relatively weak. Tasmania recorded the strongest rental growth across the country with a 2% increase for houses and 4.5% for units. He pointed out that on the other hand, the most substantial fall in rental rates, relative to September last year, were across regional Northern Territory where house rents are down 6% year on year and units down 6.5%. ‘Those regions with strong ties to the mining and resources sector are pulling regional rental lower as demand for housing continues to moderate. On the other hand, regional lifestyle and coastal markets are bucking the softening trend to some extent with showing year on year rises,’ Lawless concluded. Continue reading
UK mortgage sector competition to be examined
The UK’s financial watchdog has launched a consultation process on competition in the mortgage sector to seek input from interested parties to identify both good points and potential areas for improvement. ‘For millions of consumers a mortgage is one of the biggest, if not the biggest, financial transaction they will enter into in their lifetime. The mortgage sector also plays a vital role in the financial services industry and many areas of the economy,’ said Christopher Woolard, director of strategy and competition at the Financial Conduct Authority (FCA). He explained that competition can play a key role in ensuring that the sector works well, delivering consumer benefits through lower prices, better customer service, and more product choice. ‘We are seeking stakeholders’ views on competition in the mortgage sector. These views, together with evidence from the FCA’s wider programme of work on mortgages, will help inform any future FCA work on this key sector of the economy, including any future competition market study,’ he added. The FCA is interested in the range of factors that might affect competition in the provision of loans secured against a property, whether regulated or unregulated, including as a result of changes introduced following the Mortgage Market Review and any other barriers to entry, expansion or innovation. It also wants to examine consumers’ ability to effectively access, assess and act on information about mortgage products and services and firms’ conduct and relationships and the deadline for input is 18 December 2015 with feedback scheduled for the first quarter of 2016. The Council of Mortgage Lenders welcomed the announcement and described it is an excellent opportunity for the regulator to review the effect of regulation, as well as market practice, on lenders as well as their customers. ‘The FCA's role in promoting competitive markets is the part of regulation that best helps foster creativity, innovation and a sharp focus on what drives customers,’ said CML director general Paul Smee. ‘It's also essential in delivering the kind of environment in which reputable lenders of all shapes and sizes can thrive. We will be working with all our members to ensure that their perspectives are fully reflected as we work with the FCA on this vital issue,’ he added. Continue reading
