Housing Market Boosts Confidence

This article of the Express on September 23th, 2013 reveals that the economy is now on its strongest levels because of the rise of market housing and jobs.

Consumer confidence in the economy has improved to its strongest levels in at least two-and-a-half years as optimism about the housing market and jobs rises, a report has found.

Sentiment towards the housing market is at its strongest since Lloyds Bank's Spending Power report began in November 2010, while worries about employment were also found to have eased.

Almost one fifth (18%) of people felt positive about the economy in August, showing a sharp increase from just over one in 10 (11%) in January. The proportion of people feeling negative about the economy fell to 31%, showing the lowest levels since research began.

These findings helped Lloyds' overall consumer sentiment index to rise to an all-time high of 115 points in August, marking a 10 point increase since the start of the year.

Patrick Foley, chief economist at Lloyds Bank, said the findings were "very encouraging". He continued: "Increasing consumer sentiment may in time embolden consumers to spend, so helping to underpin the wider economic recovery. In turn, such spending would further help improve the outlook for growth and jobs."

A new high of 39% of consumers were feeling positive about the housing market, which has recently seen a surge in activity following Government schemes such as Funding for Lending which have improved mortgage availability and led to some lenders offering their lowest ever rates.

House prices have also been back on an upward march in recent months, helping some home owners who have seen falls in the value of their property in recent years and who may have previously been stuck in negative equity.

People living in Northern Ireland, which has seen some particularly sharp drops in house prices before more recent signs that prices are stabilising, were the most likely to be downbeat about the housing market. Nearly three quarters (74%) of those surveyed in Northern Ireland said the housing market is "not good" or "not good at all", as did 72% of those in the North of England.

Meanwhile, negative feelings towards the employment market continued on a downward trend. Some 81% of consumers said the jobs market is "not good" or "not good at all", marking a decrease from 82% in July and 87% in May. Young people were the most likely to be upbeat about the employment market. More than one fifth (22%) described it as "somewhat good", compared with 16% of consumers generally.

People are also feeling less negative about how much money they will have in the coming months. The overall balance between those who feel they will have more money in the future minus those who predict they will have less was minus 3% in August, improving from minus 5% in July.

Article Source: http://www.express.co.uk/news/uk/431441/Housing-market-boosts-confidence

Mortgages Up By Third as Housing Sales Soar

Sarah O'Grady of Express discusses the banks' approved mortgages is third higher compared to last year as the housing market continues to step up according to this article on 24th August, 2013.

The number of mortgages approved by banks is a third higher than a year ago as the housing market revival continues to gather pace.

Some 37,200 approvals for house purchases worth a total of £5.7billion got the green light in July, the British Bankers’ Association reported.

This was only slightly down on a 17-month high of 37,337 the previous month.

The BBA said the “stronger pattern” seen in the mortgage market since the start of the year has continued into the summer.

Mortgage approvals to home buyers are 31 per cent higher than in the same period last year and re-mortgaging approvals are 40 per cent higher.

However, overall mortgage lending remains “subdued” because homeowners are making high repayments on their loans, the BBA said.

Various Government schemes to boost the housing market mean several mortgage lenders have been offering their lowest ever rates.

With poor returns generally on offer on savings, this has made it more attractive for people to use any spare cash to pay down their mortgage debt.

BBA statistics director David Dooks said: ­“Mortgage activity has strengthened during 2013 with the help of Government schemes. But high ­repayments and redemptions mean that we are not seeing increases in net mortgage borrowing for the high street banks.”

Jonathan Harris, director of mortgage broker Anderson Harris, said that despite the uplift in activity, house sales are still far lower than they were at the height of the boom years.

Article Source: http://www.express.co.uk/news/property/424289/Mortgages-up-by-third-as-housing-sales-soar

Buy to Let Lending in UK Rises Due to Strong Rental Demand

This recent article by the Property Wire on August 8, 2013 shows the continuing recovery of buy to let lending investors because of the ongoing rental demand according to CML.

Lenders in the UK advanced 40,000 mortgages, worth £5.1 billion, to buy to let property investors in the second quarter of 2013, according to the latest data published today (Thursday 08 August) by the Council of Mortgage Lenders. Both the number of buy to let loans, and the value of lending, were the highest since the third quarter of 2008, the data also shows. Buy to let lending is continuing to recover strongly, but from a low base. The number of loans advanced in the second quarter was 19% higher by volume and 21% higher by value than in preceding three months when lenders advanced 33,500 mortgages, worth £4.2 billion. Year on year, buy to let lending was 19% higher by volume and 31% higher by value compared to 33,600 loans in the second quarter of 2012, worth £3.9 billion. Lending for house purchase accounted for around half the loans advanced, and increased by 15% by volume and 19% by value over the preceding quarter. But the growth in remortgaging was stronger, with an increase over the same period of 24% by volume and 29% by value. The CML said that this growth in remortaging partly reflects improved conditions in funding markets and more widespread availability of mortgage credit. By the end of June, buy to let mortgages accounted for 13.3% of outstanding lending in the UK, up from 13.1% in the preceding quarter and 12.9% a year earlier. The number of outstanding mortgages totalled 1.48 million, worth £168.5 billion. Buy to let mortgages in arrears of over three months accounted for 8.4% of the total, up slightly from 8.3% in the preceding quarter but down from 9.7% a year earlier. The possession rate, at 0.09%, was higher than the 0.07% in the wider mortgage market, but fell from 0.11% in the previous quarter. ‘Strong rental demand is contributing to the continuing expansion of the buy to let sector, but growth is also being helped by improved conditions in funding markets and more widespread availability of mortgages,’ said the CML's head of policy Jackie Bennett. ‘These conditions are creating more opportunities for landlords to remortgage, as well as helping to fund increased activity in the mortgage market more generally. This spring, we have seen the highest levels of lending to first time buyers since 2007, alongside the continuing recovery in the buy to let market,’ she added. The figures highlight that the buy to let sector continues to boom, according to Stuart Law, chief executive officer of Assetz. ‘We are seeing more people approaching pensionable age investing in order to bolster their retirement income at a time when the Bank of England indicates base rates, and therefore savings rates, will stay low for at least three more years,’ he said. ‘While the growth of the sector in London is clear to see, the house price ripple effect is only just beginning now in the North where there are excellent opportunities for investment, particularly in key cities like Manchester, Liverpool, Birmingham and their suburbs. Many Southern investors are broadly unaware of the lucrative yields available in northern market, at prices that represent the beginning of the next cycle,’ he added. Article Source: http://www.propertywire.com/news/europe/uk-buy-let-lending-201308088098.html

Buoyant Mortgage Lending Figures Signal Meaningful Recovery in UK Property Market

This June 18, 2013 article by the Property Wire reveals the total gross mortgage lending in the UK in June increase to  £15 billion, the highest monthly estimate since October 2008, according to the latest data report from the Council of Mortgage Lenders.
 
It is a rise of 2% from £14.7 billion in May and 26% higher than the total of £11.9 billion in June 2012. And gross lending for the second quarter of 2013 was an estimated £42 billion, a 24% increase from the previous three months and is the highest quarterly estimate since the end of 2008.

‘Improvements in the cost and availability of mortgage credit are underpinning a meaningful recovery in the housing market. In recent months, we have seen the strongest performance for mortgage lending since 2008,’ said CML chief economist Bob Pannell.

‘However, although the pace of first time buyer activity is approaching a quarter of a million per annum, it is worth bearing in mind that this is still barely half of activity rates a decade earlier, and so far below what might be considered normal levels,’ he added.

But it is slow progress, according to David Brown, commercial director of LSL Property Services. ‘A whole year of months like June would be needed to bring gross mortgage lending to half its 2007 peak. But by any measure, 26% annual growth is definitely a positive sign,’ he pointed out.

‘What’s especially encouraging are the lower rates that are slowly trickling through to borrowers with less equity. More first time buyers are very gradually emerging into the world of home ownership,’ he said.

‘Of course it’s still very early days, and the number of people renting is still rising too. Wage growth is only creeping slowly towards buoyant inflation, and measly savings rates are a serious obstacle to raising a deposit. But so long as this isn’t a false dawn, mortgage availability is going in the right direction,’ he added.

Duncan Kreeger, director of secured peer to peer lender West One Loans,  explained that comparisons with October 2008 do nothing to hide the fact that mortgage lending in the UK still has a long way to go. ‘In October 2008 the global economy was in free fall.  The financial crisis had just hit its very peak. In the US emergency measures were agreed by Congress to prevent economic collapse. In the UK stock markets were tumbling and millions of people saw their financial future melt in front of their eyes,’ he said.

He believes that unwieldy high street banks might never recover the levels of business they saw before the collapse and the largest lenders are still losing market share to new forms of finance. ‘We expect that to continue and we believe it’s a positive trend. New financial models will be better for consumers, better for business, and a better way to prevent economic disasters like October 2008,’ he added.

Paul Hunt, managing director of Phoebus Software, a specialist in banking technology, said that although a lot of new buyers are still struggling to overcome the deposit hurdle, lenders are offering great rates and attractive mortgage packages.

‘The increasing confidence of the banks is shining through. The mortgage market is gaining strength. The government has boosted first time buyer activity successfully and there’s been a vast improvement in the availability of good mortgage deals for high LTV borrowers,’ he explained.

‘There is more competition amongst lenders and that’s delivering better value products to borrowers and boosting opportunities for first time buyers. And with lending up, rays of light have entered the economic picture. But the government’s role is crucial if mortgage lending targets are to be met and the market is to maintain its forward momentum,’ he added.
David Newnes, director of LSL Property Services, owners of Your Move and Reeds Rains, believes that the improving economic climate is boosting the confidence of banks and that’s translating into more lending and that increased supply of mortgages is being eagerly consumed by potential buyers with a strong appetite for borrowing.

'Lenders' efforts to bolster first time buyer activity are clearly having a positive effect, with more competitive mortgage rates and higher loan to values leading to a conspicuous jump in first time buyers loans. The spotlight is focused on the Help to Buy scheme and whether it will feed through into a noteworthy jump in lending figures this year. Hopefully these efforts will be bolstered further by the Government's Funding for Lending programme,' he explained.

'Together these initiatives will continue to boost competition among lenders and help stimulate greater activity in the vital lower tiers of the market even further by making more cheap funding available for mortgages. At this rate, lenders will be more likely to offer better rates on 90 to 95% loans and this will hopefully reach out to an even wider audience of first time buyers struggling to put together a deposit.The only way major leaps will be made is if the Government and lenders sharpen the focus for their mortgage targets onto the first time buyer market,' he added.

According to Stuart Law, chief executive of peer to peer lender Assetz Capital, the latest CML figures are extremely positive news for main stream mortgage lending as funding for lending frees up new low cost capital for banks. 'Help to buy is already helping new build sales and will massively help the second hand home buyers when the mortgage guarantee scheme comes on stream next January,' he said.

He also said that while all this activity will drive new construction and hence jobs and GDP growth, small businesses, also a huge contributor to the economy, are not being allowed to share in this lending frenzy. 'Banks have turned their back on the once profitable SME business lending leaving it to the UK’s peer to peer lending market to fill the gap. Appetite for investors is huge, encouraged by the prospect of regulation in April 2014, and we are advocating a return to back to roots banking to help small businesses grow instead of being denied the credit, on offer in spades to the mortgage market, that they need to expand,' he added.

Article by: Property Wire
Article Source: http://www.propertywire.com/news/europe/uk-mortgage-lending-cml-201307188021.html