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UK mortgage activity has reached a plateau, latest data suggests
Lending for homes in the UK has reached a plateau with concerns about interest rate rises affecting activity, according to the latest figures. The Council of Mortgage Lenders estimates that gross mortgage lending reached £17.8 billion in September, some 1% lower than August but 10% higher than September last year when it was £16.2 billion. Gross mortgage lending for the third quarter of this year was therefore an estimated £55.5 billion, an 8% increase from the second quarter of this year, and a 13% increase on the third quarter of 2013 when it was £49.2 billion. ‘Uncertainty over when we will see the first increase in UK base rates is exacerbated by weaker growth prospects in several major economies, including the Eurozone,’ said CML chief economist Bob Pannell. ‘Recent indicators and policy actions corroborate our view of a gentle easing in market conditions. There is growing evidence that mortgage lending activity, and the housing market, are sitting on a plateau,’ he added. Meanwhile, the latest figures from the Bank of England show that mortgage approvals by all UK resident mortgage lenders for house purchase picked up in June, before easing back slightly in August. The average monthly net lending flow by UK resident mortgage lenders was £2.3 billion in the three months to August, broadly unchanged compared to the previous three months. The data also shows that total gross secured lending in the three months to August increased compared to the previous period. The Bank report says that in recent discussions, most of the major UK lenders reported that operational issues associated with the implementation of the Mortgage Market Review had pushed down on approvals over the summer, but had now largely dissipated. It amounts to a natural ebb and flow, according to Peter Rollings, chief executive officer of Marsh & Parsons. ‘After a strong surge at the start of the year, house price growth is easing to more natural levels, and as a result, overall mortgage lending dipped in the month to September. But the stream of lending has not dried up, and the mortgage market has negotiated the new criteria of the Mortgage Market Review around the introduction of tighter affordability checks and more rigorous regulation in the spring,’ he said. ‘Confidence is still buoyant, kept afloat by the growing pool of available properties on the market and some outstanding mortgage products coming to the market since the indication from the Bank of England that interest rates would stay lower for longer,’ he explained. ‘Trading conditions are considerably less turbulent than they were a few months ago, and buyers and sellers alike are enjoying the less frenetic pace, increased choice and the calmer pace of competition, and this is already leading to a more active fourth quarter of the year. The only obstacles that could disrupt the course of the recovery are additional interventions in the mortgage market or premature withdrawal of schemes like Help to Buy, which could sink first-time buyer aspirations and stall progress… Continue reading
Average rental prices down across much of the UK in September
Rental price growth across the UK continued to ease in September, with twice as many regions in the UK seeing rental price falls than those recording an increase in rental prices, the latest figures show. Overall eight regions saw rental prices fall, taking the average monthly price, excluding London to £728 while in London it is now £1,466, according to the September 2014 HomeLet Rental Index. The index, which is described as the largest monthly survey of private tenants in the UK, has shown a modest cooling in the rental market for the second month in a row, with UK regions such as Greater London, the South East, South West and East Anglia, that have recently reported large month on month price increases, moving to slower growth and a greater proportion of regions reporting negative price movement. In September only four regions recorded rental price growth. In Greater London there was a rise of 0.1%, the West Midlands up 1.2%, the South West up 2% and Northern Ireland up 4.2%. This is 50% fewer than the number of regions reporting growth in August where six regions delivered rental price growth and six recorded falls. While the annual data still points to a rental market averaging largely positive growth, this month’s data has shown the number of UK regions recording annual negative rental growth doubling from two to four. Scotland, Wales, the North East of England and the East Midlands now show rental prices are lower now than a year ago. ‘There can be an element of seasonality to the rental market with September often recording marginally lower average prices than other months, perhaps due to the number of student letting agreements being signed at this time of year,’ said Martin Totty, chief executive officer of the Barbon Insurance Group of which HomeLet is a part. ‘However, with this month’s data being the second consecutive month of slower rental price growth, and house prices indices indicating a slowing of house price growth, which could suggest movement to a period of more settled rental prices, even in previously booming markets such as London and the South East,’ he added. A breakdown of the figures show that in Greater London rental prices have increased to £1,466, a monthly rise of 0.1% and an annual rise of 9.6%. In the South East prices fell month on month by 0.1% to an average of £908 but are up 7.2% year on year. The South West saw average rental prices rise by 2% month on month to £868 and are up 8.1% year on year while in the West Midlands they increased by 1.2% month on month to £656 and are up 8.3% year on year. In East Anglia average rents fell 1.4% month on month to £826 but are 11.3% above a year ago while in the East Midlands they fell 1.2% month on month to £585 and are 1.2% down year… Continue reading
Research reveals almost half of UK non-home owners think they will never buy
Almost half of non-home owners in the UK don’t ever expect to own their own place and 1.1 million, or 7%, would consider moving abroad to fulfil their dream of owning a property, new research has found. Those aged 18 to 24 are most likely to take drastic measures to own a home, according to the study from Santander Mortgages which shows 49% think they will never own a property. Some 9% would be willing to move jobs or relocate somewhere else in the UK to get a foot on the ladder, rising to 23% of 18 of 24 year olds, some 20% were willing to reduce their standard of living and 20% were willing to sacrifice luxury purchases such as a car or holiday. The research also found that 28% of 18 to 24 year olds are living with their parents or partner’s parents while they save money for a deposit and an additional 6% of this age group would be willing to move back in with parents despite having already flown the nest. Some 30% of 18 to 24 year olds who are non-home owners would use their inheritance to build deposit funds and 11% will use their parents as guarantors to secure a mortgage. The same number would be willing to withdraw money from pension savings, compared to only 6% of 45 to 54 year olds. ‘With living costs rising ahead of salaries for many people, raising a deposit remains one of the biggest concerns for first time buyers, especially for younger generations,’ said Miguel Sard, head of Santander Mortgages. ‘However, there are a variety of options available to suit most budgets, so it is crucial that prospective buyers shop around for the best deals and get sound advice in terms of properties and mortgages,’ he explained. ‘Santander can help with upfront costs and our range of Help to Buy mortgages offer competitive fixed and tracker rates to buyers with a 5% deposit. Our 1|2|3 Current Account also gives 1% cash back on Santander mortgage payments, rewarding our customers and helping them make the most of every penny they spend,’ he added. Continue reading
