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UK equity release market sees record start to the year
The equity release market in the UK has seen a record start to 2016 with lending reaching £393.9 million, the highest for a first quarter on record. This kind of lending is now up 21% compared with last year and new equity release plans have reached over 5,000 for the first time since 2009, the data from the Equity Release Council also shows. This year is the 25th anniversary of the first industry standards being developed for equity release and now drawdown popularity is continuing to increase its market share. With new loans rising, they have now reached the highest amount ever recorded as home owners make use of their housing wealth to supplement their monthly income, make home improvements, support younger family members with buying a property or pay for the trip of a lifetime. The data also shows that the market share of drawdown lifetime mortgages products has increased slightly year on year and it remains the most popular product. The value of drawdown products accounted for 60% of all loans, while the volume of loans was 67%, up 1% and 2% respectively from the first quarter of 2015. There were 3,450 drawdown loans agreed in the first three months of 2016, up 9% on the same period in 2015. Their value was £234.5 million, up by 22% in the same period. The value of lump sum mortgages accounted for 40% of total lending in the first quarter and 33% of the total volume of loans. The value of lump sum mortgages was £158.8 million, up 19% from the first quarter of 2015 and the value of home reversion plans sold remains less than 1% of the market. ‘These latest figures represent a strong start to the year for the equity release market, and place housing wealth centre stage in financial planning for later life. In a year that marks the milestone of 25 years of safe equity release, the market is continuing to build on the momentum of recent years,’ said Nigel Waterson, chairman of the Equity Release Council. ‘The recent decision from the Financial Conduct Authority to reduce affordability assessments for Lifetime Mortgages is a positive development that will help more people benefit from all that equity release has to offer. For a generation that are often asset rich and cash poor, their home is likely to be their greatest asset and should form part of everyone's planning for retirement,’ he pointed out. ‘As we look forward to the next 25 years, it is important now to maintain expert adviser support for customers as the sector grows, as well as continuing to innovate to satisfy customer demand, all the while preserving standards and consumer protections,’ he added. According to Alice Watson, product and communications manager at Retirement Advantage Equity Release, the figures highlight more clearly than ever how equity release is now an integral part of financial planning for retirees across the UK. 'The sector is… Continue reading
Property prices in Spain rose in February as recovery takes hold
The prices of homes in Spain increased by 0.6% in February year on year, taking average values to €1,233 per square meter, according to the latest data from the General Council of Notaires. Prices are strongest in the single family home sector with growth of 3.8% year on year while the price of apartments fell slightly by 0.2% compared to February 2015. The average price for single family homes is now €1,007 per square meter, for second hand apartments it is €1,350, up 0.6%, and for new apartments it is €1,619 per square meter, a rise of 0.3%. At the same time sales are rising steadily, up 22.9% year on year with the growth being led by apartments with transactions in this sector up by 25.9%, the data also shows. Sales of single family homes also registered a significant increase year on year with growth of 22.6% but new homes are not as popular with transactions down by 5.1%. The report from the Notaires states that in general terms the figures reflect an underlying trend of recovery. The recovery is also being reported by estate agents. Barcelona based Lucas Fox International said it recorded a 33% increase in sales in 2015 and much of the growth is coming from Spanish buyers rather than from those from overseas. Property sales to Spanish buyers were up by 86% year on year, according to the company’s latest market report and it said this is a sign that the Spanish property recovery is well underway. International buyers, however, continue to dominate high end sales. Some 17% of prime market buyers in Barcelona purchasing property above €950,000 were to national clients compared to 11% the previous year, the majority of whom were purchasing primary residences. ‘The increased market activity by local buyers was the standout trend in 2015. Spanish buyers have been active predominantly at mid end of the market, attracted by property prices at an eight year low, a recovering economy and increased lending from Spanish banks,’ said Tom Maidment, partner at Lucas Fox. ‘For several years the market has been dominated by international buyers and whilst foreign investors still account for the majority of our sales, the number of local buyers is clearly on the rise and we expect this trend to continue apace throughout 2016,’ he added. Sales to the British were also up by 50% in Barcelona, and in Lucas Fox’s Ibiza office, UK buyers accounted for more than two thirds of home sales, primarily due to the strong Pound against the Euro during 2015. The Barcelona office also saw a significant rise in Dutch and US buyers during 2015. The number of Russian buyers has dropped substantially, however, and are being replaced by buyers from the Middle East. Sales to the Spanish were also particularly strong in Valencia where transactions to local buyers more than doubled. There were also significant increases in Maresme, the coastal area to the North of Barcelona, and… Continue reading
Demand for office space in London remained in quiet first quarter of 2016
Demand for office space in London remained robust through the traditionally quiet first quarter of 2016 with 3.1 million square feet leased by companies, a new report shows. This was marginally below the 10 year average of 3.2 million but despite fears that economic headwinds and the possibility of the UK leaving the European Union could dampen demand, according to the analysis from global real estate advisor CBRE. The largest deal in the first quarter of the year saw Thomson Reuters acquiring 315,400 square feet in Canada Square in the Docklands, lifting overall take-up for the quarter. The data from the report also shows that the amount of office space currently under offer remains unchanged from the previous quarter at three million square feet, having been above the 10 year average of 2.8 million square feet since the beginning of 2014. It explains that the development response has so far tracked demand, with supply increasing by 2% over the course of the quarter to stand at 12.2 million square feet, some 17% below the 10 year average. ‘Between a weak outlook for global economic growth and an upcoming vote on EU membership, businesses have had to contend with a heightened level of uncertainty,’ said Emma Crawford, head of Central London Leasing at CBRE. ‘That demand for office space has remained so resilient speaks volumes for London’s ongoing attractiveness as a global hub for those companies hoping to lay down roots or expand their footprint in the capital,’ she pointed out. ‘Whilst the high level of space under offer is particularly encouraging, we anticipate a more subdued second quarter as the referendum vote gets closer. We will be on course for a rebound in leasing activity in the second half of the year provided the UK votes to remain in the EU,’ she added. Continue reading
