Tag Archives: real-estate
Remortgaging in UK hits seven year high of £6.4 billion in April
The value of remortgage lending in the UK has increased 48% year on year and is the largest amount recorded since November 2008, the latest data shows. The figures from LMS also show that the number of borrowers remortgaging exceeded 39,300 and is the highest since July 2009 while affordably improved markedly with typical remortgage repayments falling to a record low. This represents a 36% increase from the £4.7 billion n recorded in March and a 48% uplift from April 2015’s figure of £4.3 billion. The number of remortgage loans also increased by 41% from 28,000 in March to 39,353 in April. This is 47% more than April 2015 when 26,700 borrowers remortgaged. This is the greatest number since July 2009 when 39,500 remortgaged. Low interest rate has resulted in mortgage affordability improving sharply. Now remortgage payments as a percentage of income are at 16.79%, a record low, down from 18.4% the previous month. Andy Knee, chief executive of LMS, pointed out that March saw the market overwhelmed by second home owners and buy to let investors looking to push through transactions before changes to stamp duty came in, but as April arrived, existing home owners were able to remortgage and capitalise on the great rates currently available. ‘The average amount people are withdrawing through remortgaging fell to a 13 month low, suggesting household budgets are not as constrained as previously. Home owners can also celebrate that as a result of such low mortgage rates and rising incomes repayments as a percentage of income have fallen to a record low, boosting family finances,’ he said. But he also pointed out that the forthcoming referendum on the UK’s place in the European Union will continue to dominate headlines until the vote on 23 June which could have an impact on the mortgage rates that banks offer as well as household finances if the result is to leave. The data also shows that mortgage interest rates fell to 2.49% in March, down from 2.51% in February and the sum of annual remortgage repayments fell from £8,593 in February to £8,344 in March as a result of lower interest rates, while average household income rose by 7% from £46,605 to £50,000 in the same period. This meant that annual remortgage repayments as a percentage of income fell from 18.4% to 16.7% month on month, a record low. Average mortgage payments as a percentage of income also fell, from 21.2% to 19.7% between February and March, but this remains 3% more than remortgage costs. Continue reading
Monaco has the second most expensive ultra prime property in the world
Ahead of the Formula One annual Grand Prix in Monaco new research shows that the price of ultra prime property per square metre is the second most expensive in the world with only Hong Kong more costly. Last year was a strong one for Monaco with a total of €2.25 billion sales with new builds making up just 7% of total sales but 20% of total sales value. The data from Savills World Research also shows that prime two bedroom apartments on the Grand Prix track are nearly nine times the cost of comparable properties on the Singapore race track and if the track was measured as dwelling floor space, it would be worth €3 billion The report points out that Monaco is a small market and average prices are prone to fluctuation depending on the sample of properties sold in any one year. In 2015 the average resale price in Monaco stood at €3.5 milion, down 4.8% on the previous year, while the median price at €2.1 million was up 5%. The long term median price trend shows consistent growth, averaging 5.8% per annum since 2010. ‘Monaco continues to be an exceptionally attractive location for the global wealthy and has all the key ingredients for real estate price growth’ the report says. ‘A very strong local economy employs more people than can be physically accommodated within the Principality. High demand for both residential and commercial space meets with slow supply in an extremely land limited area,’ it explains. This means that Monaco remains one of the most expensive destinations for ultra prime property in the world only Hong Kong tops it at €109,800 per square meter compared to Monaco’s €90,900 per square meter. The report points out that while Monaco’s residential property market may be very valuable it is also very small. Transaction numbers topped only 547 in 2015, but even then this represented less than 4% of private housing stock numbers in Monaco. On average, since 2006, less than 3% of private stock has traded each year. This means the average Monegasque property changes hands only once every 37 years compared to prime London where properties trade nearer once every 20 years. In the re-sale market, which accounted for 93% of deals, 509 sales were recorded. This was 8% down on 2014 volumes but still 11% above 2007 levels. The very upper tiers of the market are the most liquid and total euro volumes stand 67% above their 2008 peak. Land constrains means that Monaco is taking innovative approaches to urban development. Project Portier, a reclamations project agreed in 2015 and scheduled to complete by 2025, will add a further six hectares of land. ‘Monaco is expanding and rebuilding to remain relevant to modern-day occupier demands. The Principality’s dual status as business destination and recreation centre, coupled with safe haven credentials, will continue to underpin its appeal,’ said Paul Tostevin, associate director, Savills World… Continue reading
Commercial property lending market in UK seeing renewed confidence
Confidence has returned to the commercial property lending market in the UK as new loan originations hit a post crisis high, new figures shows. Indeed, the value of outstanding loan books saw its first increase since 2008, according to the most comprehensive study of the UK’s commercial property lending market from De Montfort. The total amount of outstanding debt at the year end in 2015 was £168.4 billion, representing a 1.9% increase from £165.2 billion at the year-end in 2014, and the first increase recorded since 2008. Overall some £53.7 billion of loan originations were recorded during the whole of 2015, compared to £45.2 billion in 2014 and while new lending volumes rose, the proportionate increase moderated to 18.8% in 2014/2015, compared to a post-crisis record of 51.2% in 2013/2014. The report says that further evidence that the market has recovered can be seen in the decline of almost 50% in the value of distressed loans, that is those in default and in breach of financial covenant. At the year-end in 2015, the value of distressed loans reported to the research was £12.1 billion, compared to £23.2 billion a year earlier and £47.6 billion at the end of 2009. Loan to value (LTV) ratios on existing loans continue to fall, reflecting the rise in commercial property values and banks continuing to lend on similar terms to recent years. At the year-end in 2015, some 87.5% or £123.5 billion of outstanding debt had a LTV ratio of 70% or less, compared to 77% or £107 billion at the year-end in 2014 and 63% or £99 billion at year end in 2013. Outstanding debt with a LTV between 71% and 100% represented 7.5% or £10.6 billion of the market, and just 5% or 6.9 billion had a LTV greater than 101%. Notably, average lending LTVs fell during the course of 2015 for all sub-sectors, suggesting good lender discipline despite the strength of the market. Although they still dominate the market, UK banks and building societies saw their market share continue to decline. They represented 34% of new loan originations at year end in 2015, the lowest level ever recorded by the research, compared to 39% the previous year. The proportion of outstanding debt held on their books also fell, from 49% of the total at year end in 2014 to 45.5% in 2015. For the first time, insurance companies were the second largest category of new loan originators, representing 16% or £8.57 billion of the total in 2015. The exposures of insurance companies now account for 15.1% or £25.4 billion of the market, compared to 12.7% or £21 billion in 2014. Regional distribution of outstanding loans showed a strong bias in favour of central London; 43% of the total outstanding debt is secured against real estate in the capital city, the highest result ever recorded by the research, and a dramatic increase from the 26% recorded in 2010. This indicates… Continue reading
