Tag Archives: finance-update
Home lending in the UK increased in May, latest CML data shows
Home owners in the UK borrowed £9.4 billion for house purchase, up 15% month on month and 8% year on year in May, according to the latest data. They took out 53,800 loans, up 13% on April and 5% on May 2015, according to the Council of Mortgage Lenders which said that some equilibrium is coming back into the home lending market. A breakdown of the figures show that first time buyers borrowed £4.3 billion, up 10% on April and 23% on May last year. This equated to 27,500 loans, up 9% month on month and 16% year on year. Home movers borrowed £5.1 billion, up 19% on April but down 2% compared to a year ago. This represented 26,300 loans, up 18% month on month but down 5% on May 2015. The data also shows that remortgage activity totalled £5.2 billion, down 15% on April but up 30% compared to a year ago. This came to 30,900 loans, down 12% month on month but up 25% compared to a year ago. Landlords borrowed £2.6 billion, up 4% month on month but down 4% year on year. This came to 16,600 loans in total, up 3% compared to April but down 8% compared to May 2015. ‘There was a sense of the market regaining some equilibrium in May, following the stamp duty driven spike in March and the subsequent dip in April,’ said Paul Smee, director general of the CML. ‘For the second month running, first time buyers borrowed more than home movers, the first time in 20 years that this has been the case. Buy to let continues at lower levels as expected, after the change to stamp duty,’ he pointed out. However, he also pointed out that Brexit, and its likely effect on the market, is a question to which the answer will not immediately be forthcoming. ‘Lenders will continue to be open for business as usual, but lending volumes may be affected by uncertain consumer sentiment,’ he added. The CML report also shows that affordability metrics for first time buyers have remained relatively stable. The typical loan size increased to £131,000 from £130,000 in April, while the household income of borrowers also increasing slightly from £39,700 in April to £40,000 in May, which meant the income multiple went up from 3.46 to 3.51. Home movers showed a similar trend with the average amount borrowed increasing to £166,000 from £163,000 in April, and the average household income of a home mover also increasing to £53,300 from £52,500. This meant the income multiple went down from 3.26 to 3.25 month on month. Remortgage lending saw a month on month decrease in May but a year on year increase by both volume and value, reaching levels similar to those in the first three months of the year. Gross buy to let lending continues to be lower than usual as expected after the surge in activity to beat the stamp duty changes on second properties ahead… Continue reading
Residential sales in Spain record highest growth since January 2013
Residential property sales in Spain increased by 23.6% in May year on year, the highest figures since January 2013, the latest official figures show. The figures from the National Statistics Institute also show that home sales have now increased year on year for four months in a row. However, sales did fall back slightly from the year on year figure of 29% recorded in April. The second hand market and, to a lesser extent, sales of new homes, were responsible for the May increase, up by 26.7% and 12% year on year respectively. The data also shows that in the first five months of the year home sales increased by 15.8% compared with the same period of 2015, with second hand homes up 21.9% but new house sales down 3.4% over the five months. Month on month sales growth has slowed. Compared with April sales in May 2016 were up by 3.5% but this was the lowest increase registered in this month in the past five years. The highest numbers of home sales per 100,000 inhabitants were registered in the Balearic Islands and La Rioja and Andalucía was the region to register most home sales, followed by Catalonia, Valencia and Madrid. In contrast, the regions which registered the least home sales in May were La Rioja, Navarre and Cantabria but in relative terms, home sales rose in all of Spain’s regions except for Navarre, which registered a decline of 20.2% compared with May 2015. The most significant increases were in the Balearic Islands with growth of 70%, followed by La Rioja up 68.9% and Murcia up 61.8%, while the lower increases were in Cantabria with sales growth of just 1.7% and Galicia up 7.8%. Continue reading
Landlords organisation calls for change of mind on UK tax rises
Private sector rent increases in the UK are inevitable unless MPs move to halt the what the sector believes are unfair tax changes being brought in by the government, it is claimed. The plans to tax landlords on their income rather than after allowances, part of the loss of mortgage interest relief, will inevitably lead to rent increases, according to the Residential Landlord’s Association. Legislation now going through Parliament to implement the Budget will see landlords’ tax bills soar and in some cases will wipe out their profit altogether and as supply of rental homes falls and remaining landlords are facing higher overheads rents will rise to cover costs, the association says. In a recent survey of RLA members, some 84% said that they are likely to consider increasing rents following the Chancellor’s tax hikes which have also included and extra 3% stamp duty charge on buy to let properties. The RLA is now calling for reasonable changes to the Finance Bill to protect both landlords and tenants. It wants the Government to scrap its MIR changes and to remove the stamp duty levy where landlords invest in new property to increase supply in the private rented sector. It has warned this tax raid will have a devastating impact on landlords at a time when the Government needs them more than ever. Some MPs have already voiced concerns. The former Welsh Secretary, David Jones, has called on the Government to stop clobbering landlords whilst the chairman of the influential 1922 Committee, Graham Brady said he has serious concerns about the effect on landlord finances. ‘Landlords do not want to increase rents unnecessarily but many will have to if they are stay in business as a result of these wholly unreasonable tax increases. It is unfortunately tenants who will end up paying the price either through higher rent bills or finding it more difficult to find somewhere suitable to live,’ said Alan Ward, RLA chairman. ‘We welcome the concern of many MPs and hope that they will be able to persuade the Government to change its mind,’ he added. Continue reading
