Tag Archives: lending
Housing lending falls overall in Australia but up slightly for new homes
The number of loans to owner occupiers, excluding refinancing, declined modestly in February in Australia, according to the latest figures from the Australian Bureau of Statistics. However, the number of loans to those purchasing and building new homes increased by 2% which the Housing Industry Association, the voice of the residential building industry, said is encouraging. ‘This is a relatively positive result against a backdrop where lending to households purchasing existing homes eased back modestly,’ said Geordan Murray, HIA economist. Overall the number of loans to owner occupiers buying established homes, excluding refinancing, fell by 0.9% in February to a level 4.9% weaker compared with the same time a year ago. ‘Lending figures indicate that the investor market eased by around 3.4% during February, but remained around 9.9% higher than the same period a year ago. The majority of the growth in investor lending has been to those purchasing existing homes. In February over 90% of lending to investors went into the existing home market,’ explained Murray. He pointed out that lending activity in the first home buyer market remained quite weak. The number of loans to first home buyers in the three months to February 2015 was around 8.2% lower than the corresponding period a year earlier,’ he added. A breakdown of the figures shows that the total number of owner occupier loans for new housing in February 2015 compared with February 2014 shows that only Victoria and Tasmania recorded growth at 3.2% and 71.7% respectively. Elsewhere, there were declines with a fall of 0.4% in New South Wales, Queensland down 1.7%, South Australia down 17.4% and Western Australia down 12.8%. Continue reading
Growing disconnect between perception and reality for UK first time buyers, report suggests
The number of people buying their own home in the UK for the first time increased in 2014 but there is a growing disconnect between reality and perception of the market, new research suggests. According to the latest generation report from the Halifax improving economic conditions together with high profile government schemes such as Help to Buy, saw the highest amount of first time buyers purchase their first home for seven years. From a peak in 2006 of 402,800 first time buyers, numbers fell as low as 192,300 in 2008 before climbing back to 311,500 in 2014. Despite this the annual generation report found relatively little improvement in how potential first time buyers view their chances of getting on the housing ladder. The research also shows that 79% of 20 to 45 year olds believe banks don't want to lend to first time buyers, and 21% believe it is virtually impossible for first time buyers to obtain a mortgage. The Halifax says that there is clearly some work to do to dispel the myth that banks are averse to lending to first time buyers. And the proportion of people saving for a deposit has dropped 6% with some 43% currently saving to buy a property compared to 57% who are not. The lender says that this strengthens the view that more people may be giving up on owning their own home and are instead accepting renting as a viable way of living in a nice home, in an area they want to live in and in the right size of property. The Halifax also highlights the emergence of a new demographic split between those who want to get on the housing ladder and those who say they don’t at 13% in 2011 compared to 16% in 2015. The presumption that the UK is obsessed with home ownership may need revaluating and a lower level of home ownership may become the new normal, it adds. The research also shows that 53% think the Help to Buy scheme has had a positive impact, but 39% don’t know or are undecided and the three most cited barriers to home ownership among those who do not own a property are the size of the deposit for 57%, high property prices for 56% and low income for 53%. London has the lowest proportion of home owners aged 20 to 45 or 39% and the highest number of people in this age range who worry they will never own a home at 82% while non home owners are currently prepared to save for average of 5.35 years in order to save for a deposit whereas homeowners saved for an average of 3.6 years. The average amount that non home owners can afford to save each week is now £33.35 and 39% of 20 of 45 year olds are saving to buy two bed properties, split between flats and houses at 18% and 22% respectively. ‘This year’s report has… Continue reading
Research reveals concerns about new mortgage rules in UK
More than half of people who are either considering, or are in the course of applying for a mortgage in the UK believe that the obligation placed upon mortgage lenders to assess their ability to repay will slow down the application process. Overall 59% are in this position and 32% of those who have yet to apply also said they would find it fairly difficult to obtain evidence of all the expenditure information they believe a lender needs to assess a mortgage application. The research from Equifax, a credit information provider, also found that 69% who responded to the survey expressed concern that more detailed affordability checks would affect the amount they could borrow and 40% are worried about the time it will take to complete their mortgage application. The new responsibilities placed upon lenders, which came into effect in April 2014 as a result of the Mortgage Market Review, place even greater onus on the lender to assess an applicant's ability to repay. The applicant's credit history is likely to play a crucial role in that assessment, alongside other information gathered as part of the application process. ‘It is important to remember that lenders will take into account the information provided on the application form and will look at an applicant's income and outgoings to ensure they can afford the mortgage they are applying for, now and in the future. However, our research suggests that 22% are still unconvinced that the new affordability rules will help prevent home owners overstretching themselves in the long term,’ said Laura Barrett of Equifax Consumer Affairs. ‘We would recommend compiling any financial documents and expenditure information needed to support a mortgage application, as soon as the application process starts. Advance preparation will hopefully avoid any unnecessary delays,’ she pointed out. ‘A lender will typically look at an applicant's credit history when determining whether they meet eligibility criteria and may also use credit information during affordability assessments. Therefore, it is suggested that individuals check their credit report before making any applications to ensure that it is in the best possible shape for them,’ she added. Continue reading
