Posts with tag: Private Finance

House prices continue to rise, latest ONS UK House Price Index shows

Published On: December 17, 2020 at 9:10 am


Categories: Property News

Tags: ,,,

The October Office for National Statistics (ONS) UK House Price Index has been released, showing that house prices still continue to rise.

The main highlights of the report include:

  • The average UK house price has increased by 5.4% over the year to October 2020, reaching a record high of £245,000
  • Average house prices in England have increased over the year by 5.4% (£262,000)
  • Average house prices in Wales have increased over the year by 5.8% (£176,000)
  • Average house prices in Scotland have increased over the year by 6.0% (£163,000)
  • Average house prices in Northern Ireland have increased over the year by 2.4% (£143,000)
  • The highest regional annual growth in average house prices occurred in the East Midlands, North West, and Yorkshire and The Humber, each seeing an increase of 6.6%

You can read the full report here.

Chris Sykes, mortgage broker at Private Finance: “These latest figures from the ONS show that UK average house prices increased by 5.4% over the year to October 2020, up from 4.3% in September, reaching a record high of £245,000 – the highest annual growth rate the UK has seen since October 2016. This highlights the extent to which the housing market has dramatically contradicted and outperformed expectations in 2020. 

“These figures come after other recent statistics, also from the ONS (14th Dec 2020), highlight that redundancies have reached record highs of 370,000 in the third quarter of the year and the unemployment rate sits at 4.9% – more evidence that the unique circumstances of the year have led to the housing market being detached from the economic reality. 

“Moreover, it remains important to remember that as with any economic shock, existing inequalities are amplified, and the housing and mortgage market is indicative of this amplification, with borrowers with large amounts of cash for a deposit or large amounts of equity benefitting from historically low interest rates as well as saving money through the SDLT holiday – to those who have, more shall be given…

“This growth in house prices has led to renewed confidence in the housing market and lenders are now returning to offering riskier propositions, including lending at higher LTVs, a section of the market that was effectively extinct until quite recently. 

“These figures clearly indicate a period of unprecedented levels of demand and sales, however, the question remains as to for how long the market can keep flying in the face of the economic facts and will it be able to continue this period of growth or at least stabilise, or will we now see decline in prices in the coming months?

“With Brexit, further lockdowns, and the complexity of the vaccine rollout it would appear that there are still some turbulent times for the market to navigate…”

Government announces three-month mortgage payment holiday

Published On: March 19, 2020 at 10:28 am


Categories: Finance News,Landlord News

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The Government is to offer coronavirus-affected mortgage holders a three month payment holiday.

In a joint statement, the RLA and the NLA said: “Our priority is to ensure that tenants are secure in their homes during this crisis. The three-month buy-to-let mortgage payment holiday will take a lot of pressure off landlords enabling them to be as flexible as possible with tenants facing difficulties with their rent payments.

“No responsible landlord will be considering evicting tenants because of difficulties arising from the current situation. There does need to be some flexibility though such as with dealing with a tenant engaging in anti-social behaviour.

“This could cause misery for fellow tenants or neighbours especially when they are going to be spending a lot of time together.

“We would like to see further measures taken including pausing the final phase of restricting mortgage interest relief to the basic rate of income tax due in April.

“In addition, we need to do all we can to prevent the spread of the coronavirus. There should be national guidelines for local authorities to suspend routine inspections of properties and a temporary halt on enforcement action where landlords are unable to fulfill certain required obligations because of the health risk posed to them, tenants and contractors.”

Henry Jordan, Director of Mortgages for Nationwide Building Society, comments: “As the UK’s second-largest buy-to-let mortgage provider we feel it is important to extend protection to landlords and their tenants during this uncertain period.

“We have extended mortgage payment holidays to include rental properties so that landlords with tenants who are unable to meet rental payments because of coronavirus are protected as much as possible.

“These payment breaks will be able to be arranged via The Mortgage Works – Nationwide’s buy-to-let arm. We would encourage tenants to speak to their landlords if they are impacted or worried about coronavirus to ensure that steps can be taken to support them at this time.”

Franz Doerr, founder and CEO of flatfair, comments: “It is pleasing to see that the government is taking measures to ensure landlords are protected during this crisis with a three month mortgage holiday, but support must also be offered to tenants as well, who may very well be unable to make their payments in the months ahead.

“The impacts of Covid 19 are just becoming visible and it is crucial that everyone pulls together to help us all come through this.”

Chris Sykes, mortgage consultant at Private Finance, the mortgage broker, comments: “While many holiday plans are in disarray, mortgage borrowers will welcome a break from monthly repayments in the current climate.

“The biggest beneficiaries are likely to be customers who are self-employed or have little saved to help them through these challenging times. A mortgage holiday will ease concerns about loss of earnings if people are isolated for any period or if their working hours are reduced due to business closures.

“This flexible relief is an intelligent move for both lenders and borrowers. Lenders will reduce the risk of having ‘bad debt’ on their books if customers miss payments without taking a mortgage holiday, which can reflect poorly on their business and make it harder to raise finance in future.

“Customers can rest easier by avoiding the danger that a missed payment creates a blemish on their credit profile which lasts longer than the current pandemic and limits their borrowing options for three years or more.

“Customers need to be mindful that pre-emptive action will be key to making the most of a mortgage holiday. It will be important to agree deferred payments with their lender in advance, so they are not recorded as missed.

Andy Foote, director at SevenCapital comments: “This evening’s (18th March) measures announced by the Government will be welcomed by landlords and tenants alike. We heard measures yesterday designed to protect landlords through mortgage relief over a period of three months.

“It’s extremely good news, and I’m sure there will be thousands who will breathe a huge sigh of relief, to hear that any renters affected, who as a result are unable to pay their rent during this period will also be protected.

“It’s also highly encouraging to see that this legislation has been extended to both the social and private rented sector, where there are many landlords and tenants who may be impacted by these events and unsure about their payments in this unprecedented situation.

“During a tough period of time, as the Prime Minister himself said, “it would not be right for people to be penalised as a direct result of following government advice”.

“The information that appears to be missing, however, with regards to mortgage relief, is whether landlords who run their properties through limited companies will be protected under this legislation or whether there are alternate business measures being put in place that will cover this.

“We await further developments over the next few days.”

House price growth slows to seven-year low, according to latest ONS report

Published On: December 19, 2019 at 9:43 am


Categories: Property News

Tags: ,,,,,,

The latest UK House Price Index from the Office of National Statistics (ONS) has been released. UK house prices have shown a slight yearly increase, the lowest growth since September 2012.

The main points of the report include:

  • UK average house prices increased by 0.7% over the year to October 2019 to £233,000.
  • Average house prices increased over the year in England, to £249,000 (0.5%); in Wales, to £166,000 (3.3%); in Scotland, to £154,000 (1.4%); and in Northern Ireland, to £140,000 (4.0%).
  • The annual increase in England was driven by Yorkshire and The Humber (3.2%).
  • The lowest annual growth rate was in London (negative 1.6%), followed by the North East (negative 1.1%).

Andrew Southern, chairman of property developer Southern Grove, has shared his comments: “This is the first house price index since the election and it’s time to say farewell to a read-out that has been wracked by indecision and self-doubt for too long.

“The UK HPI has the longest lead time of all the indices and Boris Johnson has taken his boot and stamped a use-by date all over the Land Registry’s dial.

“You can expect the market to start deciding which way it really wants to move now and that new direction will show itself even more in the New Year. 

“One near certainty is that transaction volumes should start to recover, though first-time buyers may be a little afraid that prices could begin to advance again in tandem. 

“The basic equation here is that, with the exception of first-time buyers, there won’t be anyone sensible in the property world who won’t welcome the injection of certainty that the election has delivered, no matter what your political persuasion.

“Even they would do well to remember the effect so much uncertainty has had already on house building, trimming developers’ forecasts and, with it, their risk appetites. Seeing the back of that is just as important to today’s young.”

Andy Sommerville, Director at Search Acumen, comments: “Where there is growth there is life. And although we haven’t seen much in the way of house price growth, today’s statistics show life is returning to the housing market – particularly in areas outside of the Capital.

“These latest ONS statistics are from October and we expect to see an even greater uplift at the end of the quarter, particularly following the recent election. The stock market rally we have just witnessed and a majority government drawing a line under Brexit uncertainty could be the shot the housing market needs to get back to health.

“However, we must not be complacent – more of the same “wait and see” approach would jeopardise the recovery. Instead the Government and private firms needs to be forthright in their commitment to supporting smart solutions to advance the digitalisation of the property industry. Unleashing Britain’s potential needs more than fine words. It requires breaking down the barriers to data accessibility and investment.”

John Goodall, CEO and Co-founder of buy-to-let specialist Landbay, said: “Though another set of poor growth figures is disappointing and a seven year low is certainly cause for concern, now is the time to look to the future. Boris Johnson’s election victory should pave the way for a stronger UK economy, and thus a healthier housing market, as we break away from political ambiguity. 

“The ‘Boris bounce’ is expected to put an end to the recent stalemate in the property market, offering confidence to buyers and sellers alike to make a move. Demand has been humbled by instability, so 2020 should bring an early ‘spring bounce’ as those who have sat on their hands are spurred into action.”

Lucy Pendleton, founder-director of independent estate agents James Pendleton, comments: “The spinning compass of uncertainty and doubt have been dislodged by the north star of a new PM, and the market has reacted immediately. 

“As a result, the tired and frustrated reality that is still faintly visible in this Land Registry report reflects a status quo that is already a distant memory. 

“Not yet visible is the Boris bounce in house prices we all sense is already well underway. The UK house price index has well and truly been overtaken by events. 

“The index will now spend the next two months going through the motions while it catches up with history. Meanwhile, there’s every sign on the high street that buyers and sellers are returning to the fold. 

“The UK is certainly experiencing a resurgence in activity but we won’t know for a couple of months whether, on balance, this will begin to push prices higher or whether greater supply will have a moderating influence while brokers and agents enjoy a pick-up in volumes.  

“New enquiries for property picked up the day of the election result and foreign buyers are matching their domestic counterparts for renewed enthusiasm.”

Shaun Church, Director at Private Finance has said: “House price growth has almost ground to a halt, with the lowest annual increase in prices seen in more than seven years. 

“A slump in demand due to a wait-and-see approach in response to Brexit has stifled housing market activity throughout the year, with this having a direct impact on house prices. Though less comforting for homeowners looking to see a return on their investment, buyers will benefit from this long-awaited improvement in housing affordability.

“However, the property market could well be entering a new, more active phase of growth. Post-election, a degree of certainty has been injected back into the national psyche, and a release of pent-up property demand is expected as a result. 

“Those looking to make a move in the New Year should act quickly to snap up cut-price properties while they’re still around. Buyers should also consider locking into today’s record-low mortgage rates to guarantee affordable repayments for the foreseeable future, as these, too, aren’t guaranteed to last forever.”

Election result to release pent up demand in housing market

Published On: December 18, 2019 at 9:04 am


Categories: Finance News

Tags: ,,,

The latest Mortgage Trends Update report by UK Finance has been released, showing the changes in the number of mortgages completed during October 2019.

The report highlights:

  • 32,260 new first-time buyer mortgages were completed in October 2019, 2.8% more than in the same month in 2018.
  • 33,370 homemover mortgages were completed in October 2019, 4.2% more than in the same month last year.
  • There were 18,910 new remortgages with additional borrowing, which was 20.8% fewer than in the same month in 2018. The average additional amount borrowed for these remortgages in October was £51,000.
  • There were 20,660 new pound-for-pound remortgages, 20% fewer than in October 2018.
  • 6,600 new buy-to-let home purchase mortgages were completed in October 2019. This was 1.5% fewer than this time last year.
  • There were 16,200 remortgages in the buy-to-let sector, 2.4% fewer than the same month in 2018.

Shaun Church, Director at Private Finance comments on UK Finance’s latest report: “The home-mover market is slowly getting back up and running, with the number of completions up 4.2% month-on-month.

“Thursday’s election result has delivered some clarity, in that some form of Brexit now seems inevitable. This greater certainty is likely to release pent-up demand, as the many sellers and buyers that have sat on their hands for the past couple of years will now be galvanised to pursue their home-moving ambitions.

“Easing house prices should also inspire prospective buyers to make a purchase. This window of opportunity won’t stick around forever, with prices likely to nudge back up as more activity returns to the market.

“Buyers that are seriously considering making a move in the New Year should act quickly to take advantage of the discount priced in to many properties up and down the UK, as well as the ultra-competitive mortgage rates currently on offer.”

You can read UK Finance’s full Mortgage Trends Update here.