Tag Archives: real estate
UK remortgage figures up in May, but uncertainty could now creep in
Last month was the best May for remortgaging since 2008 but uncertainty and volatility are now expected following the decision by the UK to leave the European Union. Remortgaging reached £5 billion in May and the number of loans reached 32,334, higher than every May since 2008, when 77,100 loans were approved while the average amount of equity withdrawn reached £33,600, the highest amount this year and 43% up from the previous month. However, despite record low interest rates, borrowers felt the pinch due to falling incomes, according to the research from LMS. Remortgage lending was up by 26% compared to May of last year but was down by 16% from April, which was an exceptional month for remortgaging. The number of remortgage loans also decreased month on month by 7% from 34,800 in April to 32,334 in May but this is 31% more than May 2015 when 24,700 borrowers remortgaged. The average amount of equity withdrawn per customer from remortgaging activity has risen by 43% month on month, from £23,479 in April to £33,691 in May. The average amount of equity withdrawn is also up by a quarter in comparison to May last year when equity withdrawn stood at £26,863. The total amount of equity withdrawn rose by 33% over April from £817 million to £1089 million in May, some 64% more year on year from the £664 million recorded in May 2015. This is also the highest amount of total equity withdrawn since May 2008, back when remortgagors withdrew almost £1.21 billion. Despite being the lowest interest rate on record, however, average household income fell from £50,000 in March to £44,898 in April. A drop of 10%. The household income recorded in April 2016 is also 1% lower than in April 2015, when income was recorded at £45,365. ‘Remortgaging witnessed its best month of May since 2008, although the numbers are slightly down following a rush to remortgage in April. The favourable mortgage market, with eagerly competitive lenders, record low rates and rising house prices provided the ideal background remortgaging to continue its year on year surge,’ said Andy Knee, chief executive of LMS. ‘We will have to wait and see what the impact of June’s Brexit decision on the housing and mortgage markets will be in the short and medium term. There will be some uncertainty and volatility to cope with as everyone absorbs the news and this is likely to put a dampener on the housing market at least until the autumn,’ he pointed out. ‘However, interest rates remain at historically low levels and for those with a mortgage now is a great time to take out a fixed rate and stabilise their financial outgoings. Lenders may well come under pressure and their appetites for new business may shrink in the short term. If they do, the range of excellent rates available today might not be around… Continue reading
Fewer affordable homes being built in England, latest data shows
There were over 33,300 new homes started in England in the 12 months to March 2016, excluding parts of London, of which the majority were affordable properties but fewer than the year before. Overall there were 33,332 housing starts on site and 25,315 housing completions delivered through programmes managed by the Homes and Communities Agency (HCA) in England, excluding London for all programmes except those administered by the HCA on behalf of the Greater London Authority between 01 April 2015 and 31 March 2016. The data shows that while the majority, 21,304 or 64%, of the housing starts on site in 2015/2016 were for affordable homes, this is a fall of 19% on the 26,458 affordable homes reported in 2014/2015. The data also shows that of the 16,544 affordable homes started in 2015/2016 were for affordable rent, a decrease of 24% on the 21,879 started in 2014/2015 but the number for shared ownership sand other affordable schemes at 4,158 rose by 25%. The remaining 602 were for social rent, a decrease of 52%. Some 17,394 or 69% of housing completions in 2015/2016 were for affordable homes, a fall of 57% on the 40,864 affordable homes completed in 2014/2015 but the report says that this reflects the normal peaks and troughs in delivery between programme periods, as the AHP 2011/2015 drew to a close in March 2015. And 13,100 affordable homes completed in 2015/2016 were for affordable rent, a decrease of 58% on the 30,834 completed in 2014/2015 while 2,801 were for intermediate affordable housing schemes, including shared ownership, a decrease of 60% and the remaining 1,493 were for social rent, a decrease of 50%. Of the affordable homes completed in 2015/2016, the AHP 2015/2018 accounted for 37%, the Affordable Homes Guarantees programme for 30% and the Affordable Homes Programme for 19%. Richard Connolly, chief executive officer of Rentplus, described the figures as disappointing. ‘Given investment from the Homes and Communities Agency helps to build around half of new homes in England each year, today’s data makes for a disappointing read,’ he said. ‘Affordable housing starts have been on a steady decline over the last three years and in view of population growth and the endemic housing affordability crisis in the UK, this is the wrong track to be heading down. Our belief is that mixed tenure communities, offering a range of housing options to suit different needs, including rent-to-buy, are crucial to building a strong and sustainable UK property market,’ he explained. ‘Completions of homes for affordable rent also fell 58% annually which will put more pressure on an increasingly diminishing resource for people in housing need. Affordable rent to buy homes provide a viable and complementary alternative to traditional rented homes, helping the many people struggling to save for a deposit to buy due to rent now consuming around half of young people’s salaries,’ he added. He also pointed out that the recent vote for the UK to leave the European Union… Continue reading
Survey suggests UK property owners carry out work to create their dream home
British home owners renovate their property for living in for the long term with the majority not doing so to increase the price, new research suggests. Some 67% are planning to stay in their home for over five years and carry out work with the aim of creating their dream home, according to the research by Zopa with kitchens the top target for change. The survey, of over 1,200 people who had taken a Zopa home improvement loan, found that 27% either have had or plan to get their home revalued after renovations, and only 9% said they would need to move to be in their ideal home. So far in 2016, Zopa customers have borrowed over £50 million to improve their homes, a 54% increase on home improvement loans compared to the same period last year. Some 34% used their home improvement loan to revamp their kitchens and, of those who said their homes are not yet perfect, 19% cited a bigger kitchen as top of their wish list. After renovations two out of five people say they are now in their perfect home. Of those who still don’t think their property is perfect, 22% said they would need to move. The most commonly cited areas for improvement were better decoration at 31%, bigger kitchens at 19% and more bedrooms also at 19%. The research also found that the majority, 73%, used professionals to complete their home improvements, with 45% using skilled professionals for the entire job while 13% undertook all the renovations themselves and the same number sourced help from family and friends. Some 77% said they’d be happy to do painting, with 51% ready to take on wallpapering and 32% happy to complete tiling but people were least confident when it came to masonry work at just 6%, bricklaying at 7% and plastering at 10%. The survey also found that 4.2% were considering moving to unlock the increased property value with 98% agreeing that their renovations have added value to their home. Some 27% believed the increase to be worth between £11,416 and £19,027, adding between 6% and 10% to the price while 19.4% said it would be an increase of between £20,930 and £28,541, a 11% to 15% rise in value and 11.4% expected to see an increase in value of over 21%. Continue reading
