Tag Archives: lending
Asking prices up slightly in UK with London forging ahead
Average asking prices in England and Wales increased by 0.6% in England and Wales in July while in Scotland there was no change month on month, the latest index shows. London prices increased the most, up 1.5% month on month and 12.5% year on year. In England and Wales the annual price growth was 6.2% and in Scotland it was 3.6%, according to the date from Home.co.uk. This takes the average asking price in England and Wales to £281,497 but in London it is £525,145. In Scotland it is £167,680. The data also shows that the supply of property for sale has fallen across the UK, down by 10% year on year and the South East remains the UK’s fastest regional market, with a typical time on market of 61 days. The UK property market continues to enjoy considerable momentum despite talk of mortgage rates rising in the near future, according to Doug Shephard director at Home.co.uk. He pointed out that a combination of buyer demand and short supply is driving prices higher, but at a lesser rate than last year. ‘The supply crisis is becoming more acute, and July recorded the lowest number of properties entering the market for that month since the onset of the financial crisis. Lack of supply is felt most keenly in London and the East of England, where the volumes of properties entering the market are down 23% and 16% respectively,’ said Shepherd. ‘These and other southern regions are clearly sellers' markets and prices are firmly on an upward trajectory. Marketing times in the South East continue to be the lowest in the country. Indeed, across the nation, marketing times are currently around the lowest we have witnessed since 2008,’ he added. He explained that buyer demand coupled with low numbers of properties entering the market has led to a significant reduction in the total stock for sale. The number of properties on the market in England and Wales is 11% lower than in August last year and 39% less than in August 2007. ‘Hence in the southern regions, where supply problems are most acute, buyers have only half the choice that was afforded to them eight years ago. Ultra low interest rates and other stimulus measures have ensured that more money, largely new debt, is chasing ever fewer properties,’ Shephard said. Whilst national supply levels are at an all-time low and trending down, a more detailed regional analysis of supply shows how this key market driver varies across the nation. What is immediately evident is that those regions which have suffered the greatest reductions in supply over the last seven years have also shown the greatest price growth. Shephard pointed out that along with demand, supply is a key market driver with direct consequences for regional property market performance. London shows the biggest contraction in supply over the last eight years, of 69%. ‘For the buyer, this means that whereas before there were, say, 10… Continue reading
UK housing repossessions continue downward to record low
Residential property repossessions in the UK, already at their lowest since records began, continued to fall in the second quarter of 2015, according to latest data to be published. In that period, the repossession rate was 0.02%, equivalent to just one in 5,000 mortgages and the data from the Council of Mortgage Lenders also shows that arrears continued to fall as well. Overall there were 2,500 properties taken into possession in the second quarter, down from 3,000 the previous quarter and 5,400 in the second quarter of last year. Of these, 1,800 were in the owner occupier market, and 700 in the buy to let market. However, the CML report points out that as in the first quarter, the current flow of repossessions probably continues to remain lower than the underlying trend would imply, even though arrears are also falling. In terms of arrears, the total number of mortgages with arrears equivalent to 2.5% or more of the mortgage balance was 106,400.This equated to 0.96% of all mortgages, again, the lowest rate since quarterly records began in 2008. CML director general Paul Smee pointed out that this is the first quarter in which the CML has been able to publish fully consistent data on arrears and possessions across both the owner occupier and the buy to let markets. As a result of improvements to the underlying data surveys, some back data has been restated. Of all loans with arrears of more than 2.5% of balance some 100,700 were owner occupier and 5,700 buy to let. In both the owner occupier and buy to let markets, the number and proportion of mortgages in arrears fell or remained static in all arrears bands and none experienced a worsening. Continue reading
Renting a home in the US less affordable than ever, new research suggests
Renting a home in the United States is less affordable than ever before with tenants paying 30% more of their income on paying for their home compared with home owners at 15%, new research shows. Mortgages remain affordable by historical standards while rent is unaffordable in three quarters of housing markets, especially high demand locations in Miami, San Francisco and San Jose, according to the latest report from real estate firm Zillow. It also shows that rental affordability worsened year on year in 28 of the 35 largest metro areas covered by the Zillow index while Denver, Los Angeles, San Francisco, San Jose and San Diego are unaffordable for both renters and buyers. Overall in the second quarter of 2015 renters paid some 30.2% of their monthly income toward rent, the highest percentage ever. Before the real estate downturn tenants could expect to spend about 24.4% of their incomes on rent. In contrast, buyers pay 15.1% of their income towards mortgage payments, which is still less than what they spent historically. From 1985 through 2000, home owners spent about 21.3% of their monthly income on mortgage payments. In Denver and four California metros, both renters and buyers can expect to pay more of their income towards either rent or mortgage payments than in pre-bubble years. In San Jose, renters and buyers should each plan to put about 42% of their incomes towards housing. ‘Our research found that unaffordable rents are making it hard for people to save for a down payment and retirement, and that people whose rent is unaffordable are more likely to skip out on their own healthcare,’ said Zillow chief economist Svenja Gudell. ‘There are good reasons to rent temporarily, for example when moving to a new city, but from an affordability perspective, rents are crazy right now. If you can possibly come up with a down payment, then it's a good time to buy a home and start putting your money toward a mortgage,’ added Gudell. The Zillow report says that mortgage payments will continue to be affordable even if mortgage rates rise as expected. If rates reach 6% next year, home buyers can still expect to spend 30% or less of their income on mortgage payments in 265 out of 290 or 91.4% of the metros Zillow analysed, and mortgage payments will be considered more affordable than in pre-bubble years in 72.1% of metros. Rents, on the other hand, are already unaffordable compared to historic norms in 77% of metros, and with relatively stagnant wage growth, this likely won't improve as rents keep climbing. Continue reading
