Posts with tag: first time buyers

Buy-to-Let Demand to Surge as Young People Struggle to Get on Property Ladder

Published On: November 20, 2015 at 2:50 pm

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Buy-to-Let Demand to Surge as Young People Struggle to Get on Property Ladder

Buy-to-Let Demand to Surge as Young People Struggle to Get on Property Ladder

Buy-to-let demand is set to surge with each new generation, as homeownership levels drop significantly, according to a new report.

Less than half of those born in 1990 will own their own home by the age of 40, says the study from Savills.

The Residential Property Focus 2015 by Savills found that 53% of those born in 1960 owned their own home by the age of 30, increasing to 71% by the age of 40 and 79% by the age of 50.

Of those born in 1980, only 35% owned their own home by the age of 30. This is expected to fall to 26% for those born in 1990.

By the age of 40, most of this generation will live in private rental accommodation, with just 47% expected to own a property.

The Managing Director of Surrenden Invest, a specialist buy-to-let consultancy, Jonathan Stephens, says the data is good news for landlords.

He explains: “Quite simply, falling rates of homeownership mean rising rates of renters, so the growing situation in the UK creates a substantial opportunity for those looking to make their money work for them by investing in residential real estate.

“Of course, alongside this it is important to remember that the area in which you invest is important too – a few miles difference, particularly in major cities like London, Manchester and Liverpool, can have a big impact on yields.”1

He adds that this is particularly true in the capital. House prices are forecast to rise by 21.5% in central London and by 18.2% in outer London over the next five years, says Savills.

1 https://www.landlordtoday.co.uk/breaking-news/2015/11/buy-to-let-demand-will-continue-to-soar

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage Lending Continued to Increase in October

Published On: November 20, 2015 at 9:24 am

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Categories: Finance News

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Mortgage Lending Continued to Increase in October

Mortgage Lending Continued to Increase in October

The Council of Mortgage Lenders (CML) reports that gross mortgage lending hit £21.8 billion in October, an 8% rise on September’s total lending of £20.1 billion.

In addition to the monthly increase, the CML found that lending grew by 19% annually, from £18.4 billion in October last year. This is the highest monthly figure since gross lending reached £23.6 billion in July 2008.

However, the group warns that market activity only has “modest” potential for further improvement, due to the shortage of properties coming onto the market.

Chief Economist at the CML, Bob Pannell, says: “As lending in the regulated mortgage space picked up over the summer months, the pace of recovery has improved. This looks set to continue over the closing months of the year with the factors helping support this recovery continuing to be: low inflation, strong wage growth, an improving labour market and competitive mortgage deals.

“As a result, lending this year is likely to exceed our forecast of £209 billion, though affordability pressures will limit business volumes for first time buyers and movers, meaning that we think the market has only modest further upside potential over the short term.”1

1 https://www.cml.org.uk/news/press-releases/gross-mortgage-lending-continues-to-grow-in-october/

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Third of FTB have less than £10,000 in the bank

Published On: November 19, 2015 at 12:15 pm

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A concerning new report has indicated that a third of first-time buyers in the capital have less than £10,000 saved in readiness to purchase their initial home.

Despite this lack of finance, more than half still have plans to try and get onto the property ladder this year.

Financial struggles

The investigation quizzed over 1,000 would-be buyers, with a further 29% saying that they had less than £20,000 in the bank.

‘When it comes down to it, the lack of deposit is the biggest barrier for most aspiring homebuyers today,’ observed Lynda Clark, editor of First Time Buyer Magazine. ‘Although we have recently seen a return of more 95% mortgages through mainstream lenders, a bigger deposit saved will mean access to lower interest rates, therefore making monthly repayments more affordable.’[1]

‘First-time buyers need to make proper plans to save as ultimately it is the only way they will be able to take these first steps onto the housing ladder,’ she added.[1]

Warning

More worrying data from the research showed that half of potential buyers had only researched property on the internet. Clark believes that many will have a rude awakening when they eventually speak to a mortgage professional.

She said, ‘for homebuyers in more affordable parts of the country at £10,000 or £20,000 deposit may be just enough to buy a small property but in London and the South East, this amount is a long way off what is required to get on the housing ladder where deposits of up £72,000 are expected on the open market.’[1]

‘Unless planning to tap into the bank of mum and dad, those with lower amounts saved will probably be looking to buy through one of the many purchasing schemes available such as Help to Buy or Shared Ownership,’ Clark continued. ‘These helpful schemes require less upfront costs, allowing homebuyers to secure a home with a 5% deposit and as a result are proving very popular with homebuyers.’[1]

Third of FTB have less than £10,000 in the bank

Third of FTB have less than £10,000 in the bank

Show

With the aim of encouraging potential purchasers to learn more about their available options, the First Time Buyer Home Show is to be held on October 10th, at the Business Design Centre in Islington. The event is free to attend and is expected to welcome thousands of first time buyers through the doors.

Clark believes that the show, ‘is a useful event for first-time buyers who want to find out all of the opportunities available to them in the current market. Depending on what budget they have, there will be some great properties available; from one bedroom apartments in central locations to family homes within commuting distance of the capital.’[1]

‘For many, just having access to free financial advice will be a good way to kick start the home buying process and set expectations at a more realistic level,’ Clark concluded.[1]

[1] http://www.propertyreporter.co.uk/finance/a-third-of-ftbs-have-less-than-10000-saved.html

 

 

Buy-to-Let Lending Up as First Time Buyer Loans Rise

Published On: November 12, 2015 at 10:02 am

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Buy-to-Let Lending Up as First Time Buyer Loans Rise

Buy-to-Let Lending Up as First Time Buyer Loans Rise

Buy-to-let mortgage lending is now at its highest level since 2007, as landlords continue to invest in the property market, despite forthcoming tax changes, which are set to hit landlords’ profits hard.

Buy-to-let lending accounted for 18% of all new mortgage lending in September, according to the Council of Mortgage Lenders (CML).

Buy-to-let remortgaging increased by 62% over the year to September, while buy-to-let lending for house purchase was up 36% on last year.

In September, 24,100 buy-to-let loans were approved, compared to 22,200 in August and 17,700 in September 2014. Of these, 11,300 mortgages for were buy-to-let property purchase.

The CML also witnessed a 10% annual increase in lending to first time buyers, up 2% month-on-month. Lending to home movers dropped by 4% on the month, but is up 15% on an annual basis.

In total, there were 62,300 mortgages in September for homeowner house purchase, the same number as recorded in August, but up from 57,600 in September last year.

Around half, 28,600, were approved for first time buyers, up from 27,500 in August and 26,300 in September 2014.

In a separate study, chartered surveyor e.surv has forecast the highest October lending levels for seven years, with house purchase approvals at 72,409. Based on its own activity, the firm is predicting a monthly and annual increase in approvals, up 5.1% on September and 21.9% on October last year.

Are you one of the investors sticking to the market despite the impending tax changes? And how will your business change in the new year?

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mortgage Lending rises in Q3 of 2015

Published On: November 11, 2015 at 12:20 pm

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Mortgage lending is rising and is in the middle of an, ‘upward trajectory,’ according to the latest report from the Council of Mortgage Lenders.

After a slow start to 2015, lending to first-time buyers and home movers increased during the third quarter of the year, in comparison to the second. In addition, there was also an annual rise from the same period twelve months ago.

Low rates

A lot of borrowers are seeing the benefits of low costs, due to the continuing record low in the Bank Rate. Mark Harris, chief executive of mortgage broker SPF Private Clients, said that,’ with summer out of the way, lenders have an eye on year-end targets and with the Bank of England hinting that interest rates might not rise next year, there are some very competitive deals to tempt borrowers.’[1]

The Council of Mortgage Lenders stated that gross mortgage lending amounted to £61.4bn during the third quarter of 2015. This was a rise of 18% on the previous quarter and a 12% rise on the same period in 2014.

In addition, the value of homeowner loans for property purchases made up 57% of gross lending. Remortgage activity made up 24%, with buy-to-let accounting for 18%.

Pick up

‘After a slight lull in August, monthly mortgage lending picked back up in September,’ said Brian Murphy, Head of Lending at the Mortgage Advice Bureau. ‘Lending is now at similar levels to those seen in June and July, which represented a post-recession high. Remortgage lending had a significant role to play in this growth, with both the volume and value of remortgage loans up substantially month-on-month. In contrast, the value of loans for house purchases saw a slight decline while the volume remained static,’ he continued.[2]

Mortgage Lending rises in Q3 of 2015

Mortgage Lending rises in Q3 of 2015

Paul Smee, Director General of the Council of Mortgage Lenders, also noted that, ‘the market was a slow starter this year, but this quarter shows it is now firmly on an upward trajectory. With competitive rates and high levels of product choice currently available, alongside generally improving economic conditions, we expect this to continue as we head into the new year.’[2]

‘Buy-to-let continues its growth this period, but at 18% of new lending in September remains the fourth largest lending type behind first-time buyers, home movers and remortgage. There were five times as many house purchase loans to home-owners as buy-to-let landlords in September, and the growth in buy-to-let lending largely continues to reflect its more belated recovery from recession,’ he concluded.[2]

Buy-to-let increases

Andrew Turner, director at Commercial Trust, echoed the positive sentiment surrounding buy-to-let lending. Turner said, ‘It is positive to learn that during September, gross lending of buy-to-let, buy-to-let house purchasing and buy-to-let mortgaging have all seen strong increases from the same time the previous year, indicating favourable lending conditions across all tenures.’

‘It is clear that buy-to-let is continuing to show real improvement, growing far more quickly than any other type of lending and continuing its trend of being the strongest UK mortgage market in the years since the recession. Though the bulk  of both gross activity and yearly growth was remortgage loans, property purchase loans have also seen a more than modest climb – despite the continuously changing legislative environment in which landlords operate and the threat of increased buy to let regulation, both from pan-European legislation and the Bank of England itself.’[2]

Turner concluded by warning against a return to previous lending conditions. He noted that, ‘if the past few years have shown us anything, it is that buy-to-let has been the biggest driver of the housing market recovery and instrumental in servicing the housing needs of the UK. Whilst it is crucial that we do not return to the risky lending conditions seen prior to the recession, it is equally crucial that we do not stifle landlords’ ability to continue to invest and provide homes we desperately need.’[2]

[1] http://www.bbc.co.uk/news/business-34786105

[2] http://www.propertyreporter.co.uk/finance/18-rise-in-lending-sees-market-moving-in-right-direction.html

 

Rents Continue to Rise, but Buying is Still Unaffordable for Renters

Published On: November 10, 2015 at 1:15 pm

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Newly agreed rent prices are continuing to increase, but at a slower rate, according to the latest data.

Rents Continue to Rise, but Buying is Still Unaffordable for Renters

Rents Continue to Rise, but Buying is Still Unaffordable for Renters

Additionally, two thirds of tenants have claimed that saving a deposit to buy a home is unaffordable.

Excluding London, the average new rent in the UK is now £749 per month, a 3.5% rise on last year’s £724 a month.

Although this is running at a higher pace than inflation, it is significantly lower than the 8.5% growth recorded earlier this year.

The average new rent in the capital is now 7.5% higher than last year, standing at £1,560 per month.

This means that rents in London are now over £800 more per month, or 108% higher, than the typical rent agreed in the rest of the UK.

Lettings specialist HomeLet has conducted a survey of 15,000 renters, which found that 64% expect to continue living in rental accommodation for the foreseeable future.

CEO of HomeLet’s parent firm, Barbon Insurance Group, Martin Totty, says: “Our survey showed that many tenants ultimately aspire to own their own home, but that just over half of them aren’t actively saving for a deposit; 66% of those questioned said that a deposit wasn’t affordable for them.

“However, the positive news is that almost nine out of ten tenants told us they were happy with the standard of their current rented property, and the majority told us they were happy with the service provided by their landlord or letting agent.”

He adds: “Whilst we are seeing upward pressure on the rental market, it’s important that the sector continues to drive professional standards forwards for mutual benefit of tenants, landlords and letting agents.”1

For the second consecutive month, HomeLet reports that rent prices are growing fastest in Scotland, where rents over the three months to October have risen by 9% compared with the same period in 2014.

Rent prices on new tenancies increased in nine out of 12 regions, the exceptions being the North West, East Anglia and Northern Ireland.

1 http://homelet.co.uk/news/article/tenants-look-to-prs-for-the-long-term