Tag Archives: lending
First time buyers lending in Scotland up 23% last year
Lending for homes in Scotland fell in the final quarter of 2014 but there were more mortgages going to first time buyers compared to the same period the year before. The latest data from the Council of Mortgage Lenders shows that overall lending was up 23% last year but mortgages fell at the end of the year. Scotland accounted for 6.6% of UK wide annual house purchase activity, down from 6.9% in 2013. Lenders advanced 27,700 loans to first time buyers in Scotland totaling £2.9 billion, 16% up in volume compared to 2013, and 23% up in value. A breakdown of the figures show that there were 7,000 first time buyer loans in Scotland, worth £750m. This was down compared to the third quarter 5% by value and 4% by volume. Compared to the fourth quarter of 2013, the number of loans increased by 3% and the amount borrowed by 9%. There were 8,000 loans to home movers, valued at, £1.2 billion, down 8% in volume and down 9% in value compared to the third quarter. Compared to the fourth quarter of 2013, there was a decrease of 8% in volume and a decrease of 5% in value. The total number of remortgage loans declined in the fourth quarter to 5,700 loans at £650 million, which was down 3% in volume but unchanged in value on the third quarter. Compared to the fourth quarter of 2013, activity was down 17% in volume and 13% in value. First time buyer affordability changed slightly in Scotland quarter on quarter with first time buyers typically borrowing 2.90 times their gross income, less than the 2.94 income multiple in the third quarter and less than the UK average of 3.38. The typical loan size for first time buyers was £97,200 in the fourth quarter, down from £98,600 in the previous quarter. The typical gross income of a first time buyer household was £33,965 compared to £33,520 in the third quarter. The relatively low level of interest rates saw first time buyers' payment burden remaining relatively low in the third quarter at 16.8% of gross income being spent to cover capital and interest payments, higher than the third quarter's 17.3%. Home mover affordability changed fractionally, with home movers typically borrowing 2.64 times their gross income compared 2.62 in the third quarter and to 3.03 for the UK overall. The typical loan size for home movers was £128,244 in fourth quarter, down from £130,000 in the previous quarter. The typical gross household income of a home mover was £50,773 in fourth quarter compared to £50,971 in the third quarter. Home movers' payment burden remained relatively low in Scotland at 16.5% of gross income being spent to cover monthly capital and interest payments, less than the 16.9% in the third quarter and considerably less than the 18.4% UK average. Overall for 2014, remortgage lending in Scotland was 23,400 loans reflecting a value of £2.6 billion. This was 14% down in volume compared to 2013,… Continue reading
House prices rise in Portugal for first time in five years
House prices in Portugal increased in January as the country’s economy expands and the unemployment rate falls, according to the latest monthly market survey from the Royal Institution of Chartered Surveyors. It is the first time that prices have increased since the RICS/Ci survey was launched in 2010 and comes at a time when buyers demand is increasing. RICS says that improving employment is being reflected in rising new buyer demand and for over 12 months now, new buyer enquiries have been in positive territory and national confidence has reached a series high of +32. It also says that the outlook for sales volumes is strengthening and sales expectations are more elevated than at any other point in the survey’s four year history. The Portuguese economy expanded for the first time since 2010, albeit modestly, with average annual GDP growth of 0.9%. After a three year period in which GDP contracted by nearly 6%, a recovery does now appear to be emerging. The rate of unemployment has fallen by nearly 2% over the past 12 months and now stands at 13.4% having reached a peak of 17.7% in early 2013. The report describes the emergence of a recovery in house prices, supported by a consistent rise in confidence but also points out that in the lettings market, rents are still falling for now, although survey respondents’ expectations point to a more stable trend on the horizon. In the sales market, buyer demand continued to increase, with the pace of improvement accelerating slightly over the month. Meanwhile, sales continued to rise, extending an uninterrupted positive run dating back to February 2014. Moreover, respondents’ sales expectations are more elevated than at any other point over the past four years. Looking ahead, prices are expected to continue to rise over the next three months but RICS explains that a sustained run of positive data will be needed before it is in a position to talk about a genuine recovery. At the regional level, prices are now rising in both Lisbon and the Algarve, but remain more or less stable in the Porto market. In the lettings sector, tenant demand continues to rise gradually and the number of new landlord instructions is diminishing. However, rents are still falling for the time being, although respondents do expect a flatter trend to emerge in the coming months. ‘Even though the volume of new credit is still low, it has been reported by several real estate agents that banks are now more positive about the market,’ said Ci spokesman, Ricardo Guimaraes. ‘Some already have commercial campaigns, announcing lower spreads. This might be the element that was missing to broaden out the recovery that was primarily located in Lisbon,’ he added. According to RICS senior economist, Josh Miller, the Portuguese housing market reached an important milestone in January with prices rising for the first time since the country’s bailout programme. ‘Whether this trend can be sustained depends on the broader economic recovery…. Continue reading
UK annual house price growth slows for six month in a row
Annual house price growth in the UK slowed to 5.7% in February from 6.8% in January, the sixth month in a row that it has slowed, the latest index figures show. UK house prices fell by 0.1% in February, taking the average price to £187,964, according to the data from the Nationwide Building Society. According to Robert Gardner, Nationwide's chief economist, the broader economic backdrop has remained supportive of housing market activity. ‘Mortgage rates remain close to all-time lows and consumer confidence remains buoyant thanks to a further steady improvement in labour market conditions,’ he said. ‘Indeed, the unemployment rate has continued to decline and earnings growth has picked up, particularly in inflation adjusted terms, thanks in part to the sharp decline in energy prices,’ he added. But he pointed out that the pace of housing market activity remains fairly subdued. ‘There was a small increase in the number of mortgages approved for house purchase in December, up 2% from 59,000 in November to 60,300 in December, though it remains too early to determine whether this marks a turning point in activity,’ he concluded. The UK property market is undergoing a sustained reality check, according to Alex Gosling, chief executive officer of online estate agents House Simple. But he believes it is far too premature to suggest that the property market is running out of steam. ‘The strong jobs market, rising real wages and cheap credit are fuelling consumer confidence, and for many renters the home owning dream remains as attractive as ever. But the fillip provided by the Stamp Duty reforms announced late last year appears to be waning, and mortgage activity is fairly subdued,’ he explained. ‘Tightened lending criteria are forcing first time buyers to save much more and much longer before they can get a mortgage. The most recent English Housing Survey found that just 36% of 25 to 34 year olds own their home, compared to 59% a decade before,’ he pointed out. ‘Steady, not stellar, growth is likely to be the pattern for house prices in 2015. The double digit rises of 2014 are history,’ he added. Continue reading
