Gross mortgage lending totalled an estimated £11.3 billion in May, a 7% increase from £10.5 billion in April and up 10% from £10.2 billion in May 2009, according to new data from the Council of Mortgage Lenders.
The market remains subdued and, while more buoyant than a year ago, turnover is a little below that seen towards the end of 2009. Gross lending may marginally undershoot the existing CML forecast of £150 billion for 2010.
CML economist Paul Samter commented:
“The ground has been cleared for next week's Budget to be the start of an austerity drive to get the public finances onto a more sustainable footing. We do not expect it to include housing and mortgage specific direct tax measures. But the market will inevitably be affected by how policy impacts on the wider economy - particularly on household finances and confidence.
“Financial sector regulation is a further source of uncertainty. The Chancellor has announced that the Bank of England is to take on regulatory responsibility for the banking system. As well as regulating individual firms, the Bank will have "macro prudential" powers and be accountable for the stability of the system as a whole. But it is not yet clear what levers it will have at its disposal to do so.”
Stuart Law, of Assetz said:
"As expected, the latest figures from the CML show that gross mortgage lending increased again in May, following a pre-election dip in April, suggesting that consumer confidence has increased now that the Lib-Con government is in place.
"The latest data from the Assetz House Price Watch, an amalgamation of the five major UK indices – CLG, Nationwide, Halifax, Acadametrics and Rightmove, shows that average house prices are now less than 7% below the peak recorded in 2007 and they have climbed by over 3% for the year to date, rubbishing fears of an imminent second dip in the housing market.
“All signs suggest that the property market continues to prosper and we are now in the throes of a consistent housing market recovery, despite the potential tax increases which are likely to be announced in the budget next week.”
http://firsttimebuyersupermarket.co.uk/
Monday, 21 June 2010
House price growth remains robust
Latest figures show that average house prices were 7.8% higher in May than at the same time in 2009.
The Assetz House Price Watch compiles monthly average figures taken from five of the major house price indices to offer a more accurate picture of house price trends.
The average house price in May was £200,347, representing annual growth of 7.8% from May 2009 – falling back from the high rate of annual growth recorded in April (9.1%). Despite the reduced rate of annual growth, average prices continued the steady rise seen over the last 12 months, remaining at the highest level recorded in nearly two years (July 2008).
The six month rolling average continues to indicate a period of market stability, with figures maintained at a sustainable level, fluctuating only 1-2%, for the year to date. This is in stark contrast to data recorded during 2009 when the market began its correction.
Stuart Law, Chief Executive of Assetz, said:
“Since the start of 2010, the annualised House Price Watch data has been pointing towards a more stable outlook for the market and this is now being reflected in the monthly figures recorded across the indices.
"As expected the rate of UK house price growth slowed in May. However, it still remains at a robust level with the average house price climbing for the fourteenth consecutive month, barring a very minor fall during the usual slowdown in December.
“Average house prices are now less than 7% below the peak recorded in 2007 and they have climbed by over 3% for the year to date. All signs suggest that this figure will continue to edge up slowly to reach my prediction of 5% growth for 2010 as a whole.”
http://firsttimebuyersupermarket.co.uk/
The Assetz House Price Watch compiles monthly average figures taken from five of the major house price indices to offer a more accurate picture of house price trends.
The average house price in May was £200,347, representing annual growth of 7.8% from May 2009 – falling back from the high rate of annual growth recorded in April (9.1%). Despite the reduced rate of annual growth, average prices continued the steady rise seen over the last 12 months, remaining at the highest level recorded in nearly two years (July 2008).
The six month rolling average continues to indicate a period of market stability, with figures maintained at a sustainable level, fluctuating only 1-2%, for the year to date. This is in stark contrast to data recorded during 2009 when the market began its correction.
Stuart Law, Chief Executive of Assetz, said:
“Since the start of 2010, the annualised House Price Watch data has been pointing towards a more stable outlook for the market and this is now being reflected in the monthly figures recorded across the indices.
"As expected the rate of UK house price growth slowed in May. However, it still remains at a robust level with the average house price climbing for the fourteenth consecutive month, barring a very minor fall during the usual slowdown in December.
“Average house prices are now less than 7% below the peak recorded in 2007 and they have climbed by over 3% for the year to date. All signs suggest that this figure will continue to edge up slowly to reach my prediction of 5% growth for 2010 as a whole.”
http://firsttimebuyersupermarket.co.uk/
Thursday, 3 June 2010
House prices move closer to 2007 peak
The price of a typical UK property rose by a seasonally adjusted 0.5% month-on-month (m/m) in May, following a 1.1% increase in April, reveals the latest Housing Market Review from Nationwide.
Commenting on the figures Martin Gahbauer, Nationwide's Chief Economist, said:
"The smoother 3 month on 3 month rate of increase rose from 1.1% in April to 1.7%, as February's fall in house prices dropped out of the most recent three month average. The annual rate of house price inflation dropped from 10.5% to 9.8%, which reflects the weaker pace of increase in May 2010 relative to May 2009.
"Since reaching a trough in February 2009 – following a drop of 19.3% from their October 2007 peak – house prices have risen by 12.2% and are now just 9.5% below the October 2007 peak.
“Housing market conditions remain characterised by thin transaction volumes and a relative scarcity of properties for sale, despite a slow return of more sellers in recent months. The current supply-demand balance on the market is still consistent with relatively stable to modestly upward trending prices.”
Impact of capital gains tax changes on house prices depends on timing of implementation
"The coalition agreement between the Conservatives and Liberal Democrats contains plans to increase the rate of capital gains tax (CGT) charged on the disposal of non-business assets, potentially including second homes and buy-to-let investment properties.
"Currently the CGT rate on such assets is 18%, and the coalition plans are to raise the rate to a level "similar or close to those applied to income. Precise details, however, will not be known until the Emergency Budget announcement on 22 June.
"With regard to what the short-term impact will be on the housing market and house prices, the key question is around the timing and implementation of any CGT increase.
"If there is a significant time lag between the announcement of the increase and its actual implementation, then some second home owners and buy-to-let landlords may decide to sell in advance of the higher rate being introduced.
"Such a development could lead the supply-demand balance to shift more in favour of buyers and relieve the current upward pressure on house prices. However, it is difficult to know with any precision how many people would bring forward a decision to sell.
"The incentive to try to beat the higher tax rate is most pressing for those who have owned their properties for a relatively long period of time and therefore have relatively large unrealised gains.
"Conversely, those who bought their second homes or investment property within the last five years have little incentive to sell early in order to beat the tax change. House prices have only risen back to their mid-2006 level and the first £10,100 of capital gains is currently tax free.
"If the new rate comes into effect immediately on 22 June, then supply conditions are unlikely to be affected materially as any potential sellers would not have time to react.
"There are some examples of where tax changes have had a significant short-term impact on the housing market. Most prominent was the March 1988 announcement to end double Mortgage Interest Relief At Source (MIRAS) for cohabiting couples.
"The implementation of the tax change was postponed until August of that year, which prompted a rush of buyers to try to beat the deadline. The result was a temporary surge in property values, with house prices increasing by 18% between Q1 1988 and Q3 1988 alone.
"However, the most recent change in CGT rates announced in the 2007 Pre-Budget Report did not have any discernable impact on the supply of property on the market. At the time, the existing CGT rates of 24-40% - depending on taper relief and income status - were cut to a flat rate of 18%.
"New instructions to sell property remained very low even after the tax changes were introduced, although this may also have been due to the very weak market conditions prevailing at the time."
http://firsttimebuyersupermarket.co.uk/
Commenting on the figures Martin Gahbauer, Nationwide's Chief Economist, said:
"The smoother 3 month on 3 month rate of increase rose from 1.1% in April to 1.7%, as February's fall in house prices dropped out of the most recent three month average. The annual rate of house price inflation dropped from 10.5% to 9.8%, which reflects the weaker pace of increase in May 2010 relative to May 2009.
"Since reaching a trough in February 2009 – following a drop of 19.3% from their October 2007 peak – house prices have risen by 12.2% and are now just 9.5% below the October 2007 peak.
“Housing market conditions remain characterised by thin transaction volumes and a relative scarcity of properties for sale, despite a slow return of more sellers in recent months. The current supply-demand balance on the market is still consistent with relatively stable to modestly upward trending prices.”
Impact of capital gains tax changes on house prices depends on timing of implementation
"The coalition agreement between the Conservatives and Liberal Democrats contains plans to increase the rate of capital gains tax (CGT) charged on the disposal of non-business assets, potentially including second homes and buy-to-let investment properties.
"Currently the CGT rate on such assets is 18%, and the coalition plans are to raise the rate to a level "similar or close to those applied to income. Precise details, however, will not be known until the Emergency Budget announcement on 22 June.
"With regard to what the short-term impact will be on the housing market and house prices, the key question is around the timing and implementation of any CGT increase.
"If there is a significant time lag between the announcement of the increase and its actual implementation, then some second home owners and buy-to-let landlords may decide to sell in advance of the higher rate being introduced.
"Such a development could lead the supply-demand balance to shift more in favour of buyers and relieve the current upward pressure on house prices. However, it is difficult to know with any precision how many people would bring forward a decision to sell.
"The incentive to try to beat the higher tax rate is most pressing for those who have owned their properties for a relatively long period of time and therefore have relatively large unrealised gains.
"Conversely, those who bought their second homes or investment property within the last five years have little incentive to sell early in order to beat the tax change. House prices have only risen back to their mid-2006 level and the first £10,100 of capital gains is currently tax free.
"If the new rate comes into effect immediately on 22 June, then supply conditions are unlikely to be affected materially as any potential sellers would not have time to react.
"There are some examples of where tax changes have had a significant short-term impact on the housing market. Most prominent was the March 1988 announcement to end double Mortgage Interest Relief At Source (MIRAS) for cohabiting couples.
"The implementation of the tax change was postponed until August of that year, which prompted a rush of buyers to try to beat the deadline. The result was a temporary surge in property values, with house prices increasing by 18% between Q1 1988 and Q3 1988 alone.
"However, the most recent change in CGT rates announced in the 2007 Pre-Budget Report did not have any discernable impact on the supply of property on the market. At the time, the existing CGT rates of 24-40% - depending on taper relief and income status - were cut to a flat rate of 18%.
"New instructions to sell property remained very low even after the tax changes were introduced, although this may also have been due to the very weak market conditions prevailing at the time."
http://firsttimebuyersupermarket.co.uk/
Tuesday, 18 May 2010
House purchase lending continues momentum during march
House purchase lending increased by 45% year on year in March, making it the ninth consecutive month of year-on-year growth, according to figures released today by the Council of Mortgage Lenders.
Remortgaging, however, was 29% down year on year, the 23rd consecutive annual fall. This plainly shows the continuing trend of recovering house purchase activity but a moribund remortgage market.
The 45,000 loans for house purchase in March (worth £6.3 billion), were up 25% in volume (24% in value) from February and the 28,000 loans for remortgage (worth £3.5 billion) were up 23% in volume (21% in value).
For the first quarter as a whole, there were 112,000 loans for house purchase (worth £16.1 billion), down from 171,000 (worth £23.3 billion) in the last quarter of 2009 and 74,000 remortgage loans (worth £9.3 billion) down from 89,000 (worth £11.1 billion) in the last three months of 2009. No trend can be inferred from this though, given the distortion caused by the end of the stamp duty holiday in December.
First-time buyer activity is now rebounding faster than home-mover activity with 17,300 loans to first-time buyers (worth £2 billion) in March, up 27% on February and 42% on March 2009. The 27,500 home-mover loans (worth £4.3 billion) was a 24% rise in volume (23% in value) on February and a 49% rise in volume (65% in value) on March last year.
March also saw first-time buyers borrow an average of 76% of the property price for the second month running. This is the first time average deposits for first-time buyers have been lower than 25% for more than one month since January 2009. Only time will tell if this genuinely reflects a tentative sign of easing, but for the time being deposit constraints remain tight in all areas of lending.
For those with the deposits needed, low rates have made home loans initially very affordable. Home movers in March needed less than 10% of gross income to cover their mortgage interest payments. This is unchanged from February and is the lowest amount since the CML started recording this data in 1974.
First-time buyers have not seen quite as much benefit reflecting the fact that the best priced deals are available only to those with larger deposits. But even so, in the first three months of 2010, they needed just 13.3% of their income to cover their interest payments, the lowest since 2004.
In terms of product choice, only 46% of new loans were fixed-rate deals in March. This has remained broadly unchanged for the first three months of 2010, but is down from 60% in the last quarter of 2009 and a peak of 80% last July. Tracker rates accounted for 37% of new mortgage lending, again broadly unchanged, but up from last July's low of 12%.
Commenting on today's figures, Michael Coogan, director general of the CML, said:
"Today's figures indicate there is currently some momentum to house purchase lending, but for the sake of the future health of the housing and mortgage markets, the new government will need to focus on the critical issue of funding and how to address the issues arising from the repayment of the emergency support provided during the financial crisis. The UK is at risk of a chronic under-supply of credit – and the rationing of mortgages for customers – for years to come.
“The mortgage market appears to be stirring after 18 months of deep sleep but it will be a while before it awakens fully and returns to some semblance of normality” says Nigel Lewis, property analyst at Findaproperty.com
“Agents in some parts of London and the South East are still seeing cash buyers make up 50% of their customers at the moment. So it’s clear the mortgage market is still in a weak position. But lenders are beginning to show signs of relaxing their lending criteria and first-time buyers and those with small deposits are finding more financing options open to them. Rumours are that there will be more new lenders joining the market over the next six months which will increase competition and open up more affordable mortgages for those looking to buy. It’s still early days, but the signs to recovery are pointing in the right direction.”
http://firsttimebuyersupermarket.co.uk/
Remortgaging, however, was 29% down year on year, the 23rd consecutive annual fall. This plainly shows the continuing trend of recovering house purchase activity but a moribund remortgage market.
The 45,000 loans for house purchase in March (worth £6.3 billion), were up 25% in volume (24% in value) from February and the 28,000 loans for remortgage (worth £3.5 billion) were up 23% in volume (21% in value).
For the first quarter as a whole, there were 112,000 loans for house purchase (worth £16.1 billion), down from 171,000 (worth £23.3 billion) in the last quarter of 2009 and 74,000 remortgage loans (worth £9.3 billion) down from 89,000 (worth £11.1 billion) in the last three months of 2009. No trend can be inferred from this though, given the distortion caused by the end of the stamp duty holiday in December.
First-time buyer activity is now rebounding faster than home-mover activity with 17,300 loans to first-time buyers (worth £2 billion) in March, up 27% on February and 42% on March 2009. The 27,500 home-mover loans (worth £4.3 billion) was a 24% rise in volume (23% in value) on February and a 49% rise in volume (65% in value) on March last year.
March also saw first-time buyers borrow an average of 76% of the property price for the second month running. This is the first time average deposits for first-time buyers have been lower than 25% for more than one month since January 2009. Only time will tell if this genuinely reflects a tentative sign of easing, but for the time being deposit constraints remain tight in all areas of lending.
For those with the deposits needed, low rates have made home loans initially very affordable. Home movers in March needed less than 10% of gross income to cover their mortgage interest payments. This is unchanged from February and is the lowest amount since the CML started recording this data in 1974.
First-time buyers have not seen quite as much benefit reflecting the fact that the best priced deals are available only to those with larger deposits. But even so, in the first three months of 2010, they needed just 13.3% of their income to cover their interest payments, the lowest since 2004.
In terms of product choice, only 46% of new loans were fixed-rate deals in March. This has remained broadly unchanged for the first three months of 2010, but is down from 60% in the last quarter of 2009 and a peak of 80% last July. Tracker rates accounted for 37% of new mortgage lending, again broadly unchanged, but up from last July's low of 12%.
Commenting on today's figures, Michael Coogan, director general of the CML, said:
"Today's figures indicate there is currently some momentum to house purchase lending, but for the sake of the future health of the housing and mortgage markets, the new government will need to focus on the critical issue of funding and how to address the issues arising from the repayment of the emergency support provided during the financial crisis. The UK is at risk of a chronic under-supply of credit – and the rationing of mortgages for customers – for years to come.
“The mortgage market appears to be stirring after 18 months of deep sleep but it will be a while before it awakens fully and returns to some semblance of normality” says Nigel Lewis, property analyst at Findaproperty.com
“Agents in some parts of London and the South East are still seeing cash buyers make up 50% of their customers at the moment. So it’s clear the mortgage market is still in a weak position. But lenders are beginning to show signs of relaxing their lending criteria and first-time buyers and those with small deposits are finding more financing options open to them. Rumours are that there will be more new lenders joining the market over the next six months which will increase competition and open up more affordable mortgages for those looking to buy. It’s still early days, but the signs to recovery are pointing in the right direction.”
http://firsttimebuyersupermarket.co.uk/
Monday, 17 May 2010
Don't get left behind
The UK property market has continued its recovery in May despite fears the election would deter buyers and sellers from entering the market.
The average UK asking price has risen for the fourth consecutive month and now stands 0.6% higher than April at £219,748 (compared to £218,475). On an annual basis, average prices in the UK are 1.8% higher than May 2009 (£215,761).
The number of properties for sale in the UK jumped 8% in May – the fourth consecutive month of rising stock levels in 2010 after rises of 4.2% in April, 5.6% in March and 3.6% in January.
There is now almost as much stock available as in April 2009. This can largely be attributed to sellers’ expectation of a hung parliament. Changes to property legislation will be low on the priority list for a coalition government and sellers have felt little need to sit on their hands and wait for the election result.
These latest figures support the FindaProperty.com survey conducted at the beginning of the election which showed house hunters would not let the election affect their decision to continue searching for a property. Eight in ten (83%) people searching for a property stated that they will continue their search despite the election and three quarters (74%) said that the election result would not stop them buying a property.
This steady demand has controlled prices as more stock has hit the market.
The regional picture for the housing market is positive in May with all regions except Scotland recording stable or rising prices. The largest rise was in the East of England (+1.1%) with average prices now standing at £217,774.
Nigel Lewis, property analyst at FindaProperty.com, comments:
“The election has done little to temper people’s appetite to enter the property market. We’ve seen another rise in the number of properties for sale, so sellers haven’t felt the need to wait until after the election. And prices continue to rise suggesting that strong demand is propping up prices despite the influx of new stock.
"Many have speculated that a hung parliament will be bad for the housing market, which tends to pick up after elections whatever the outcome. The new Con-Lib government has now confirmed that they will be scrapping HIPs in favour of a standalone EPC, but other than that, so far none of the other announced policies include major changes to the home buying and selling process, so there's no reason we should expect the coalition government to cause a property crash."
http://firsttimebuyersupermarket.co.uk/
The average UK asking price has risen for the fourth consecutive month and now stands 0.6% higher than April at £219,748 (compared to £218,475). On an annual basis, average prices in the UK are 1.8% higher than May 2009 (£215,761).
The number of properties for sale in the UK jumped 8% in May – the fourth consecutive month of rising stock levels in 2010 after rises of 4.2% in April, 5.6% in March and 3.6% in January.
There is now almost as much stock available as in April 2009. This can largely be attributed to sellers’ expectation of a hung parliament. Changes to property legislation will be low on the priority list for a coalition government and sellers have felt little need to sit on their hands and wait for the election result.
These latest figures support the FindaProperty.com survey conducted at the beginning of the election which showed house hunters would not let the election affect their decision to continue searching for a property. Eight in ten (83%) people searching for a property stated that they will continue their search despite the election and three quarters (74%) said that the election result would not stop them buying a property.
This steady demand has controlled prices as more stock has hit the market.
The regional picture for the housing market is positive in May with all regions except Scotland recording stable or rising prices. The largest rise was in the East of England (+1.1%) with average prices now standing at £217,774.
Nigel Lewis, property analyst at FindaProperty.com, comments:
“The election has done little to temper people’s appetite to enter the property market. We’ve seen another rise in the number of properties for sale, so sellers haven’t felt the need to wait until after the election. And prices continue to rise suggesting that strong demand is propping up prices despite the influx of new stock.
"Many have speculated that a hung parliament will be bad for the housing market, which tends to pick up after elections whatever the outcome. The new Con-Lib government has now confirmed that they will be scrapping HIPs in favour of a standalone EPC, but other than that, so far none of the other announced policies include major changes to the home buying and selling process, so there's no reason we should expect the coalition government to cause a property crash."
http://firsttimebuyersupermarket.co.uk/
Tuesday, 11 May 2010
Property prices continue to grow in April
The April Nationwide property index returned another mild shock with yet another monthly rise of one per cent. Back in February, a dip was followed by a one per cent rise in March, so despite all the doom mongering, the market keeps on outperforming all expectations.
Growth this year to April is in double figures for the first time since June 2007. This is no mean feat considering the lack of mortgage financing and shock to the economy and property market we’ve just had.
And it seems a stability of a sort is working itself out as more and more sellers commit to sales reversing the trend and producing a more buyer-friendly market.
The commentators insist price rises are out of kilter with economic fundamentals and we have learnt to expect the unexpected. But one result of the property boom is that the property fanaticism homeowners stoked ever higher has cooled to a calm certainty in property. An Englishman’s home has always been his castle, but we seem to believe it more, not less despite the shock of the property crash.
http://firsttimebuyersupermarket.co.uk/
Growth this year to April is in double figures for the first time since June 2007. This is no mean feat considering the lack of mortgage financing and shock to the economy and property market we’ve just had.
And it seems a stability of a sort is working itself out as more and more sellers commit to sales reversing the trend and producing a more buyer-friendly market.
The commentators insist price rises are out of kilter with economic fundamentals and we have learnt to expect the unexpected. But one result of the property boom is that the property fanaticism homeowners stoked ever higher has cooled to a calm certainty in property. An Englishman’s home has always been his castle, but we seem to believe it more, not less despite the shock of the property crash.
http://firsttimebuyersupermarket.co.uk/
IS NOW A GOOD TIME FOR FIRST TIME BUYERS?
Now is a great time to buy!
Is now a good time for first-time buyers to buy?
If you’re a first time buyer asking yourself that question then you’re in a very fortunate position. Alistair Darling has dangled a very juicy carrot in front of first-time buyers with the new Stamp Duty regulations and this will tempt a lot more in to the market. Despite these changes to Stamp Duty there will still be many people who considered themselves first-time buyer material two or three years ago who now find themselves only able to rent. The mortgages that would have enabled them to buy a property in the past are no longer available and we’re unlikely to see the same levels of laissez-faire lending ever again.
Is now a good time for first-time buyers to buy?
If you’re a first time buyer asking yourself that question then you’re in a very fortunate position. Alistair Darling has dangled a very juicy carrot in front of first-time buyers with the new Stamp Duty regulations and this will tempt a lot more in to the market. Despite these changes to Stamp Duty there will still be many people who considered themselves first-time buyer material two or three years ago who now find themselves only able to rent. The mortgages that would have enabled them to buy a property in the past are no longer available and we’re unlikely to see the same levels of laissez-faire lending ever again.
But the biggest issue for first-time buyers stepping onto the housing ladder is finding the deposit – in our latest survey half of the respondents confirmed that. Happily, there are signs that lenders are beginning to relent as property prices have settled down and this has led to a slight fall in the deposit first time buyers need to scrape together. It’s now easier for them to buy their first home than at any point since the start of the credit crunch.
But the window of opportunity may be small. House prices at the entry-level end of the market are showing the first signs of moving upwards again and this could make homes more expensive over the coming months. Although more properties are coming onto the market, there are still 12% fewer entry-level homes available compared to the same time last year so it would take a large injection of new stock to level out prices once more.
We have deposit paid or deposit matching schemes available. Visit our web site and get informed
http://firsttimebuyersupermarket.co.uk/
But the window of opportunity may be small. House prices at the entry-level end of the market are showing the first signs of moving upwards again and this could make homes more expensive over the coming months. Although more properties are coming onto the market, there are still 12% fewer entry-level homes available compared to the same time last year so it would take a large injection of new stock to level out prices once more.
We have deposit paid or deposit matching schemes available. Visit our web site and get informed
http://firsttimebuyersupermarket.co.uk/
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