Tag Archives: middle-east
Mortgage advisors report short term uncertainty over growth of buy to let in UK
Buy to let volumes in the UK increased in the first quarter of 2016 but uncertainty remains over the long term, according to the latest financial advisor confidence tracking report. The increase in the volume of buy to let business being written by mortgage advisers was modest in the first three months of the year and financial advisors have concerns about the longer term prospects for the market. Those surveyed for the Paragon Mortgages report said that 24% of their business in the first quarter 2016 consisted of buy- to let, up from 23% in the previous quarter. Volumes of first time and next time buyers also increased. Reflecting these increases, remortgages declined from 35% of intermediary business in the previous quarter, to 32% currently. The report suggests that recent government policy has affected confidence in future business, however, with 13% of respondents expecting all types of mortgage business to decrease over the coming quarter, while 53% expect business to remain stable and 34% expect an increase. On buy to let, opinion is evenly divided with 49% of intermediaries expecting demand for buy to let products to increase or stay the same, as compared to 50% who expect a decline in demand with 1% unsure. Despite this uncertainty the number of intermediaries stating that landlords will ‘keep current properties but not buy any more’ as a result of changes to income tax relief, has nearly halved from 32% in the fourth quarter of 2015 to 18% currently, indicating that purchase intentions may be returning to the buy to let market. Likewise 23% of intermediaries stated that changes to tax relief would make ‘no difference’ to landlord plans, up from 19% in the previous quarter. Remortgages continue to constitute the largest proportion of buy to let business in the first quarter of 2016, accounting for 38% of business, up from 36%. Nevertheless, some 32% of new buy to let finance was secured for portfolio expansion. ‘Our latest report reveals that advisers are circumspect about future volumes of buy to let business as a result of recent policy developments. Over the short term around half of intermediaries expect to see a decline in buy to let business,’ said John Heron, director of mortgages at Paragon. ‘That said, on the question of what impact income tax changes will have over the longer term, sentiment appears to have improved materially over the last quarter with a sharp reduction in the proportion of landlords that are expected to sell property,’ he pointed out. ‘Increased volumes of remortgaging in the buy to let market shows that there is healthy competition with landlords shopping around for a better deal. Whether the market remains as competitive once all the fiscal and regulatory changes are implemented remains to be seen,’ he added. Meanwhile, new figures released today by the Finance and Leasing Association (FLA) show that the number of second charge mortgage repossessions in the first quarter of 2016 was down 52.8%… Continue reading
London house prices break through the £600,000 barrier
Average house prices in London have broken through the £600,000 barrier having doubled over the last seven years, according to the latest residential index to be published. Overall in England and Wales home values reached record levels in April in nine out of 10 regions with average prices no approaching £300,000. The index from Your Move and Reeds Rains estate agents also shows that house price growth is now at its fastest level 8.9% year on year. The data also shows that prices increased 1% compared to the previous month but there were fewer sales than usual. Transactions were down 20,000 but this may have been due to the buy to let rush in the months leading to the new stamp duty charges for additional homes introduced on 01 April. It means that the price of a typical home in England and Wales is now worth £24,280 more than a year ago while prices in London are up 11% or £59,605 year on year. ‘This acceleration in home values comes when many had expected house prices to dip due to a natural decline in demand from buy to let and second home buyers. However, after an exceptional March, there is now a severe shortage of properties on the market, with fierce competition between buyers for each available property,’ said Adrian Gill, director of Your Move and Reeds Rains estate agents. ‘Clearly, the Government’s offensive against landlords has not eased the way for other buyers, as property prices continue to pick up pace, growing by nearly 50% over the past seven years, with prices rising from £204,875 in April 2009 up to £298,030,’ he pointed out. ‘With the maximum value of the government’s flagship starter homes capped at £250,000, first time buyers may soon see a lot less property for their money. Chancellor George Osborne needs to increase incentives to sell and relax planning restrictions if he truly wants to fulfil the home ownership dreams of young people,’ he added. He also pointed out that rapid growth in means the average house price in London has almost doubled over the past seven years. For example, in Waltham Forest the average house price has soared by 113% over this time period, more than any other London borough. He added that across London, it’s been the more affordable areas which have seen some of the steepest increases in house prices annually, as the capital’s residents seek out cheaper properties. Also, while London may have seen the biggest boost in house prices this month, property values have hit new records in nine of the 10 regions in England and Wales, as growth ripples out from the capital. ‘This is the first time nine regions have broken records in the same month since October 2007 at the height of the boom as the market has now fully recovered from the crash. For those looking for houses to buy, the North East offers the… Continue reading
Buyers of prime country property in Ireland favour Cork and Wicklow, a new report shows
Cork and Wicklow are the most popular rural locations for country home buyers in the €1 million plus price bracket in Ireland, new research shows. According to the analysis from property consultants Savills Ireland, this suggests that many of those seeking the benefits of country living are also looking to remain within arm’s reach of major cities, be it for shopping and entertainment purposes, prestigious schools or access to good road links and international airports. Indeed, Savills sales data support this view, with a disproportionate number of transactions located in Dublin and neighbouring counties, and along national arterial routes. The report also highlighted that while domestic buyers account for a majority of Savills country homes sales, the single biggest deal in each of the last three years was a cash purchase from the UK or the United States. In addition, Savills noted a greater level of interest from American applicants, many of whom are looking to purchase a piece of family heritage here in Ireland. High net worth individuals from the United Arab Emirates and the Far East are also now beginning to show an interest in the Irish market. ‘Buyers at the top end of the price spectrum highlight location as a top priority. However, this group tends to be on the lookout for much grander homes with secondary accommodation and staff quarters, overlooking water, with 100 or more acres of mature parklands and, in many cases, adjoining equestrian facilities,’ said Harriet Grant, Savills head of country homes. Grant also reported that, unsurprisingly, some 85% of Savills country homes sales over the last three years have been cash transactions. ‘Typically, country homes buyers are not reliant on mortgage finance,’ she pointed out. ‘In reality, a trophy estate will only ever be attainable to a small minority, not only because of the higher price point, but also due to running costs. Therefore, it is little surprise that such a high percentage of Savills country homes sales over the last three years have been cash transactions,’ Grant explained. She added that deals that are being financed with a mortgage tend to involve existing home owners trading up and are generally smaller in value, averaging €520,000 in 2015, compared with almost €1 million for cash buyers. Continue reading
