Tag Archives: power
Mortgage approvals end 2015 on a strong footing, bank data shows
Approvals for home purchases in the UK increased towards the end of 2015 with December being a strong month, according to the latest figures from the Bank of England. The number of loan approvals for buying in December was 70,837 compared to an average of 69,462 over the previous six months while the number of approvals for remortgaging was 41,708, compared to the average of 39,540 over the previous six months But the next few months are likely to be very different, according to David Whittaker, managing director of Mortgages for Business. ‘The next wave of activity will be powered by landlords scrambling to complete transactions before they are hit with extra taxes. This is only just beginning,’ he said. ‘With 01 April marking the point at which Stamp Duty on buy to let properties bites, many investors have been rushing to get their mortgages completed and expand their portfolios before this date,’ he pointed out. ‘Expect this flurry of activity to continue into the first few months of 2016, as investors rush to apply for their buy to let mortgages and lenders do everything in their power to get the good applications completed before the April crunch point,’ he added. Peter Williams, executive director of Intermediary Mortgage Lenders Association, pointed out that December was the busiest month for remortgaging in over two years, with activity growing more than twice as fast as overall approvals. ‘The continued appetite for remortgaging was likely to be a sign of home owners eager to capitalise on market competition and lock into lower rates, especially with US raising interest rates for the time in nine years and expectations the UK would follow suit in the not too distant future,’ he explained. After the Autumn Statement extensions to Help to Buy, and the rock bottom base rate lasting out the year, first time buyers were feeling decisive, and this was mirrored by a clear upswing in house purchase approvals from November to December, according to Peter Rollings, chief executive officer of Marsh & Parsons. ‘This energy has definitely been carried over into 2016, and January has already seen an impressive influx of motivated buyers, eager to progress up the property ladder,’ he explained, adding that 2015 was also the year of remortgaging for many existing home owners and this momentum is showing no signs of dissipating while cheaper fixed rate mortgages remain available. ‘But in the coming months we can expect strong buy to let lending, as the April introduction of higher stamp duty for second homes gives a new sense of urgency for those looking to invest in property or expand their existing portfolio,’ he added. Continue reading
UK government launches consultation on buy to let regulation powers
The UK government has launched its promised consultation on the powers that the Bank of England’s Financial Policy Committee should have over the buy to let mortgage market. This consultation aims to gather views on how the operation of the nation’s buy to let mortgage market may carry risks to financial stability. It also seeks respondents’ opinions on the specific tools in relation to which the FPC has recommended it be granted powers of direction, including in their impact on business activity and prosperity, on the draft legislation, and on the consultation stage impact assessment. The consultation is primarily targeted at individuals, institutions and associated bodies that would be affected by the FPC’s powers of direction but the government said that it also welcomes the views of other parties interested in housing market policies. Following the consultation, the government will examine the consultation responses and use them to help to define the instrument that will place the powers in legislation. The government will set out how it intends to proceed in a consultation response document in 2016. It comes at a time when the private rented sector (PRS) has grown rapidly in recent years, from 2.5 million properties in 2002 to 5.2 million in 2013, from 10% of the market to 19% respectively. The government believes that the Bank of England should have more tools at its disposal to cool the buy to let market if necessary such as directing regulators to require lenders to place limits on buy to let lending. The amount buy to let investors could borrow as a proportion of the property price, or the loan to value ratio, could be capped or the Bank could also increase the required ratio of expected rental income to mortgage interest payments. Lenders are not fully supportive of more controls currently for the buy to let market and are warning that the market does not necessarily need more regulations and that new rules for by to let landlords, including an extra 3% stamp duty from April 2016, should be allowed to take effect. ‘We understand the rationale for putting the macro prudential tools at the Bank of England’s disposal, but also recognise that this does not necessarily mean they will be used. In our view, buy to let does not constitute a market that currently requires further macro prudential intervention, especially as the effect of several recent tax changes is yet to be fully felt and evaluated,’ said Council of Mortgage Lenders director general Paul Smee. ‘We urge policymakers to be mindful of the risk of unintended consequences that could adversely affect the private rented sector, alongside their focus on ensuring that the buy to let market does not pose a threat to financial stability,’ he added. Peter Williams, executive director of the Intermediary Mortgage Lenders Association, suggested that the industry is confused by what the government is trying to do. ‘In the autumn the Chancellor, in giving evidence to the Treasury… Continue reading
Survey reveals 88% of people in London have had a bad time from estate agents
Over 4.4 million in the UK feel that an estate agent had broken promises with more people in London having a bad experience than any other part of the country, new research has found. Indeed, in London 15% felt an estate agent broke their promises and 88% said they had a bad experience with an estate agent, more than any other region in the UK. While, overall 9% of the UK felt there was a lack of transparency from estate agents. The research by estate agency, Strawberry Star, also found different age groups experienced different issues. For example, 8% of 25 to 34 year olds felt pressured into buying a house by an estate agent, twice the national average. It also found that the top frustration for just over 7.5 million people across the UK is ‘the agent’s overriding interest’ in commission rather than concentrating on finding the right property for their client, with 18% of respondents in London stating so. Strawberry Star said it is offering a new approach and clients will able to choose how much of the commission fee they pay, depending on their experience of the service from the pre-sale stage to post sales service. Dorian Beresford, the firm’s chief executive officer, said the aim is to place an overriding level of attention on the relationship value behind the sale or purchase of a property, as opposed to purely the transactional value it holds. ‘Consumers both at home and overseas continue to be dramatically underserved by their agents. The level of unsatisfied customers here in the UK is astonishing and representative of the frankly abysmal service delivered by many in the industry,’ said Beresford. ‘We feel it is our obligation to redress the balance and put the power back into the hands of the public by literally putting our money where our mouth is. No tie-in periods, no false promises and if the client is not delighted by our service they get to choose how much of our fee to pay,’ he explained. The firm has a headquarters in central London, offices in Singapore and Hong Kong and plans for a further 25 UK offices are in the pipeline with expansion into India, China and the Middle East also on the cards over the next five years. ‘We put people over property and ensure every single one of our clients, whether owners, occupiers or investors from the UK and abroad, feel that they are receiving a personalised service and are dealing with people that genuinely care about what matters to them. This commitment stands throughout every stage of the buying, moving, selling and letting process,’ added Beresford. The firm believes that the UK will continue to be popular amongst Asian real estate investors with Singapore and Hong Kong based investment now accounting for 90% of international purchases in the London new build market alone. Continue reading
