Tag Archives: finance-update
More UK home owners remortgaged in July due to falling rates
Home owners who remortgaged their properties in July lost no time in taking advantage of falling mortgage rates following the UK’s decision to exit the European Union (EU), a new report shows. Some 63% of remortgagers lowered their mortgage rates last month, up by 7% from May and 43% acted to reduce monthly payments as cheaper deals appeared on the market in the wake of the Brexit vote, according to data from LMS. With the exception of two-year variable products at 75% loan to value (LTV), Bank of England data shows average mortgage rates were lower across the board in July than was the case in May before the EU referendum took place with many falling to record lows. The rate cuts meant that more home owners who remortgaged to reduce their payments enjoyed substantial savings. Just 28% of those who took this course of action in May saved £200 or more each month from their new deal. In comparison, 35% who remortgaged to reduce their payments in July reported a monthly saving of £200 or more. The report says that the appetite for securing lower rates and reducing monthly payments in July came despite growing speculation of a base rate cut from the Bank of England, which ultimately occurred in August. For the first time since tracking began in December 2014, LMS data shows that there were higher expectations of rates falling than rising in July. Among the 13% of remortgagers who expected rates would change in July 59% expected rates would fall compared with just 18% who felt this way in May and 29% in June, when the EU vote took place. Despite widespread speculation over the economic impact of the UK’s vote to leave, the July data from LMS also shows little sign of a drop in consumer confidence in the remortgage market. The percentage of remortgagers increasing the size of their loan rose from 26% in May to 28% in July, while the percentage increasing their loan by more than £10,000 was unchanged from May at 19%. Similarly, the percentage remortgaging to pay for home improvements increased slightly from 19% in May to 21% in July, while there was a two percentage point increase in those remortgaging to pay off other debts from 7% to 9%, potentially in a bid to stabilise their finances in the face of an uncertain economic environment. ‘The aftermath of the vote to leave the European Union has seen many mortgage rates tumble to record lows, a fact that has not been lost by home owners as many seek to take advantage of low rates. July’s figures show many people were keen to press ahead with plans to remortgage, regardless of growing speculation that a base rate cut might be on the cards,’ said Andy Knee, chief executive of LMS. ‘The Bank of England’s reduction of the 0.5% base rate to 0.25%… Continue reading
Research reveals extent of incorrect property listings in UK
When buying a home prospective sellers expect the details to be listed correctly but new research has found that 48% of houses in sale across the UK contain rooms that are listed incorrectly. The analysis of estate agent data also found that 36% of single bedrooms rooms are technically too small to be classed as such for anyone aged over 10 and 17% of double rooms are not big enough to be inhabited by two people. Liverpool has the most errors for single rooms with 69% listed not meeting size requirements as set out by the Housing Act 1985 which says that a child under the age of 10 can occupy a room which is less than 50 square feet because they are classed as ‘half a person’, however a single bedroom should have a floor space of between 50 and 70 square feet. Leeds has the most errors for double bedrooms with 14% listed as such not meeting the requirements that double bedrooms for two people should be at least 110 square feet. One property in the city even listed a 69 square foot room as a double bedroom. The city with the least errors is Edinburgh where just 3% if single rooms did not meet the requirement and 4% of double rooms. Estate agents in Manchester and Glasgow were also pretty accurate. The research also found that a further 6% of rooms across the UK are technically uninhabitable, containing rooms smaller than the 50 square feet legally required to be classified as a single bedroom. Estate agents in Sheffield are guiltiest of this, with 15% of single bedrooms rooms advertised being too small to be habitable. When looking at properties overall, estate agents in Bristol are the most inaccurate, as 66% of properties for sale in the city had at least one incorrectly listed bedroom. This is followed by Sheffield at 60%, Liverpool at 57% and Birmingham also at 57%. Estate agents in Edinburgh are by far the most honest overall with only 17% of properties in the Scottish capital containing incorrect room listings. ‘Anyone who has purchased a property knows the marketing literature can often be misleading, but it is concerning to see so many properties across the UK being marketed by estate agents as having single and double bedrooms which technically aren’t fit for purpose,’ said Nick Brabham, head of SELECT Premier Insurance which carried out the research. ‘We urge buyers to check the measurements of bedrooms before putting in an offer on a house; otherwise they may find their double bedroom barely has enough space for a bed. It’s easy to think a room looks big enough when there is no furniture in it so if in doubt, check against the official standards and let estate agents know that they are marketing it incorrectly,’ he added. Continue reading
UK rents up 2.4% in 12 months to July 2016, latest index shows
Rents in the UK’s private rental sector increased by 2.4% in the 12 months to July 2016, unchanged compared with the year to June 2016, according to the latest index data. The figures from the Office of National Statistics (ONS) shows that rental prices grew by 2.6% in England, 0.2% in Scotland and were unchanged in Wales. Rental prices increased in all the English regions over the year to July 2016, with rental prices increasing the most in the South East at 3.5%, up from 3.4% in June 2016, followed by the East of England at 3.1% and London at 3%, both unchanged from June 2016. Annual rental growth in the South East has surpassed that of London since May 2016. Since the beginning of 2012, English rental prices have shown annual increases ranging between 1.4% and 3% year on year, with July 2016 rental prices being 2.6% higher than July 2015 rental prices. Excluding London, England showed an increase of 2.3% for the same period. The lowest annual rental price increases were in the North East, up 0.9% and up from 0.8% in June 2016, the North West up 1.2% and Yorkshire and The Humber up 1.3%, both unchanged when compared with June 2016. But the lack of movement in Wales meant that rents continue to be well below that of England and the average for the country as a whole while rental growth in Scotland has gradually slowed to 0.2% in the year to July 2016, from a high of 2.1% in the year to June 2015. Looking at data from the UK House Price Index over a longer period shows residential house price growth has typically been stronger than rental price growth for a number of years, with an average 12 month rate of house price inflation between January 2013 and June 2016 of 6%, compared with 2.1% for rental prices. Inflation in the rental market is likely to have been caused by demand in the market outpacing supply, says the ONS report which points out that the Royal Institute of Chartered Surveyors (RICS) Residential Market Survey reported an increase in demand in the three months to July, while tenant demand increased in June according to the Association of Residential Letting Agents (ARLA). On the supply side, RICS reported that new landlord instructions were flat in July and ARLA reported that the supply of rental stock bounced back in June 2016, following a sharp drop in May. It points out that rental prices have been growing at a slightly faster rate than real wages in recent months. Regular pay also grew by 2.3% in the three months to June 2016 compared with the same period last year, continuing a revival of real earnings growth. The annual jump in private rental prices is a stark reminder of the struggles that many people living in private rented homes are facing in saving a deposit to buy their first home, according to Richard Connolly,… Continue reading
