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Number of home loans in UK in March stable, bank figures show
The number of loan approvals for house purchases in the UK reached 71,357 in March, broadly in line with the average over the previous six months, according to the latest figures from the Bank of England. A breakdown of the figures show that the number of approvals for remortgaging was 41,347, compared to the average of 40,755 over the previous six months while the number of approvals for other purposes was 12,875, compared to the average of 12,267 over the previous six months. According to Kevin Purvey, chairman of the Independent Mortgage Lenders Association (IMLA), approvals dipped just slightly from February as the short term effect of the buy to let stamp duty surcharge fades away. He pointed out that remortgaging rose slightly over the average established over the previous six months. ‘Having seen the remortgage market bounce back during summer and autumn of 2015, it’s a positive sign to see it remaining in rude health in the first quarter of 2016. This is likely to be influenced by intense competition among mortgage lenders, which has driven mortgage rates down to record lows,’ he said. ‘Following house price rises, it means now could be a sensible time to consider remortgaging whether simply to refinance or release equity. We expect remortgaging to be one of the strongest growth areas within the mortgage market this year, with home owners looking to remortgage benefitting very much from lender competition and the plethora of products available,’ he added. David Brown, chief executive officer of Marsh & Parsons, said that the first three months of 2016 was by no means a typical quarter. ‘Activity in the opening three months of this year has been exceptionally skewed by the additional layer of stamp duty for both buy to let and second home purchases,’ he pointed out. ‘Naturally, the knee jerk reaction among these groups has been to hurry through property purchases before the deadline, and make savings while they can. Second home owners really jumped to it this spring, and were much more prominent in the market than we would typically expect,’ he explained. ‘Now that the ruckus has passed, we’ll see much more orderly transactions over the summer months, as the market rebalances towards first time buyers and other owner occupiers for whom it will just be business as usual,’ he added. Meanwhile, separate research shows that just a third of remortgagors consulted a mortgage broker in March and at 35% this was the lowest amount since September, leading to concerns borrowers may be missing out on best available rates. Overall the number of remortgagors consulting brokers has declined since the start of the year, according to the latest research from LMS. It fell to just 35% in March, the lowest amount since September last year and down from 39% in February. It is also 11% lower than the 46% who consulted a broker at the start of the year. This leads to… Continue reading
UK private sector rents up 2.6% year on year
Private rental prices paid by tenants in Great Britain rose by 2.6% in the 12 months to March 2016, unchanged when compared with the year to February 2016. The figures from the private housing rental index from the Office of National Statistics also show that rental prices grew by 2.8% in England, 0.2% in Wales and 0.6% in Scotland. Rental prices increased in all the English regions over the year to March 2016, with rental prices increasing the most in London at 3.7%. Since January 2011 England rental prices have increased more than those of Wales and Scotland. The annual rate of change for Wales at 0.2% continues to be below that of England and the Great Britain average while rental growth in Scotland has gradually slowed to 0.6% in the year to March 2016, from a high of 2.1% in the year to June 2015. Private rental prices in England show three distinct periods with rental price increases from January 2005 until February 2009, rental price decreases from July 2009 to February 2010, and increasing rental prices from May 2010 onwards. When London is excluded, England shows a similar pattern but with slower rental price increases from around the end of 2010. Since the beginning of 2012, English rental prices have shown annual increases ranging between 1.4% and 3% year on year, with March 2016 rental prices being 2.8% higher than March 2015 rental prices. Excluding London, England showed an increase of 2.1% for the same period. In the 12 months to March 2016, private rental prices increased in each of the nine English regions. The largest annual rental price increases were in London at 3.7%, down from 3.8% in February 2016, followed by the East at 3% and the South East at 2.9%, both unchanged over the same period. Annual price increases have been stronger in London than the rest of England since November 2010. The lowest annual rental price increases were in the North East at 0.8% down from 0.9% in February 2016, followed by the North West at 1.1%, up from 1% and Yorkshire and the Humber at 1.2%, down from 1.3% over the same period. According to Adrian Gill, director of lettings agents Your Move and Reeds Rains, rents will start to build a gradual but inevitable path, ultimately reaching the very peak of the market in the autumn. ‘Early spring is just the calm before the storm. Demand for homes in the private rented sector is driven by the flow of jobs and the flux of a generally more mobile workforce looking for a place to live,’ he said. ‘This reflects the strengths of private renting, the opportunity for young independent adults to strike out on their own, or for families to move across the country and earn the best possible livelihood. In the towns and cities with the biggest renting populations it is a constant struggle for supply from landlords to match demand from tenants. With a… Continue reading
Initial planning permission for new homes in England rise steeply
Initial planning permission for 255,032 new homes was granted in England in 2015, up 57% from a low point of 162,204 in 2009, according to the latest pipeline report. Permissions granted in the fourth quarter of 2015 were up 13% on the same quarter in 2014, to 74,759, as developers submitted more applications to ensure they can continue to deliver further increases in supply. The report from the Home Builders Federation (HBF) and Glenigan also shows that permissions have risen steadily every year since 2009, with actual housing supply also increasingly markedly over the past two years as more of the permissions are progressed to the point that infrastructure work can start and house builders can begin building new dwellings Over 180,000 new homes were added to the housing stock in 2014/2015, up 22% on the previous year as house builders increased output in response to the rise in demand for new homes. However, many of the permissions counted in the report still have many hurdles to cross, the report points out as builders and developers navigate the complexities of the planning system before actual building work can get underway, for example discharging planning conditions. The industry continues to urge Government to streamline the planning process and ensure local authorities have the capacity to deal with the volume of applications now being processed so builders can get on to more sites more quickly. The figures though are a strong indicator of future supply, and suggest that housing completions will continue to rise as these permissions are turned into implementable permission and are the sites built out over the coming years. ‘The number of planning applications now being submitted demonstrates the commitment of the industry to deliver further increases in housing supply,’ said Stewart Baseley, executive chairman of the HBF. ‘The past two years have seen huge increases in house building levels. Whilst the increase in the number of permissions is welcome, and a strong indicator of future supply, many still have to navigate the complexities of the planning system,’ he explained. ‘This is a further sign that house builders continue to step up investment in future housing supply but we need to see these permissions being processed to the stage where we can get onto site and start building more quickly and really start to meet demand for housing,’ he added. According to Allan Wilén, economics director and head of business market intelligence at Glenigan, the strong rise in planning approvals during the closing months of 2015 was driven by an increase in the number of private housing units approved, bodes well for house building activity during the current year. ‘The expanded development pipeline will help housebuilders to meet any strengthening in demand from house buyers. Furthermore the rise marked rise in approvals in the Midlands and North of England last year demonstrates that the recovery in housing market activity is becoming more established across the country,’ he added. Proposals announced earlier this year by the… Continue reading
