31% Pay 'Unaffordable' Rent or Mortgage Costs

This article by Adam Shaw of BBC News UK on November 11th, 2013 reveals how people think property prices are too high in their area.

Thirty one per cent of people paying a mortgage or rent spend more than a third of their disposable income each month doing so, a survey for BBC Panorama suggests.

Housing charity Shelter said that makes mortgage or rent costs "unaffordable".

It said family budgets are being put under "enormous pressure" because of a "shortage of affordable homes".

The survey of 1,003 people also suggests 46% of people think property prices are too high in their area.

According to Shelter and the Joseph Rowntree Foundation, spending more than a third of your disposable income on rent or a mortgage means you may not be able to afford other basic needs.

'Impossible choices'

Shelter chief executive Campbell Robb said: "The widely accepted test of affordability is that housing costs should take up no more than a third of your income."

"But in reality, many families don't have any option but to pay out much more," he said.

"This sees some faced with impossible choices every day - including between putting enough food on the table or paying for the roof over their head."

Among those affected by rising property prices is Abi Reilly, a 33-year-old special needs school teacher.

She lives in a terraced house in Reading with her husband, Chris, and two children, five-year-old Daniel and four-month-old Elsie.

They spend around 40% of their disposable income on rent.

Having rented 13 different properties over the past 10 years, Mrs Reilly said homeownership does not feel realistic.

"It feels too far away," she said. "How can we save for a deposit when our rents are going up, energy's going up, everything's going up, wages stay the same, house prices go up? Mathematically it doesn't work."

The Ipsos MORI survey commissioned by Panorama questioned a total of 1,003 adults - of whom 697 pay a mortgage or renting a property. Mrs Reilly would belong to the 31% of people in this latter group who pay more than a third of their disposable income on their mortgage or rent.

The survey also suggested that 46% of people think property prices are too high in their area and 39% would like to see property prices fall.

In August, the Office for National Statistics said the average price of a property had reached a record high of £247,000.

ONS figures also show that home ownership peaked at 69% of households 12 years ago. Since then it has been falling and is now at 64%.

'Risk of overheating'

Panorama has also looked at the Help to Buy scheme set up by the government in April to assist people who could afford mortgage repayments but were struggling to raise a deposit.

It allows buyers of new-build homes to put down a 5% deposit and take out a government loan for up to 20% of the value of the property. Help to Buy was extended to existing homes in October, under which the government partially guarantees mortgages.

Since it began, there has been a 6% rise in the number of new homes being built.

Merryn Somerset Webb, editor-in-chief of MoneyWeek magazine, said Help to Buy risks inflating prices and overheating the housing market.

"It's like pouring petrol over the car and setting fire to the whole thing," she said.

"You know you might get a little heat in the short-term but the end result is not actually what you wanted."

But the government has dismissed concerns about a property price bubble.

Housing Minister Kris Hopkins said: "In Yorkshire, the North East and Scotland, house prices have moved very little or in some cases have actually gone backwards."

"And that's reflecting where wages are and what money people have actually got to spend. "

He also told Panorama: "We've seen nothing yet to suggest there is anything, going anywhere near a bubble at this moment in time."

Article Source: http://www.bbc.co.uk/news/uk-24856594

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House Building Growth Continue to Rise

This article of Belfast Telegraph.co.uk on October 2nd, 2013 shows the increasing demand of house building and now at its fastest pace for a decade.

Home building grew at its fastest pace for a decade in September in the latest sign of the housing sector forging ahead amid Government initiatives such as the Help to Buy scheme.

Figures from the closely-watched Markit/CIPS purchasing managers' index (PMI) showed residential construction activity growing at the highest rate recorded since November 2003.

The wider construction industry continued to grow strongly though the reading of 58.9 - where 50 separates growth from contraction - represented a slowing in the pace of expansion compared to 59.1 seen in August.

It was dragged down by an easing of growth in civil engineering from an August high.
However, commercial construction continued to forge ahead, increasing output at its fastest since May 2012 as analysts predicted a surge in occupier demand pushing up rents.

The sector was badly hit by the economic downturn but Tim Moore, senior economist at Markit, which carried out the survey, said: "Construction is no longer the weakest link in the UK economy."

The figures showed the sector had grown for the fifth month running, adding to hopes that overall gross domestic product for the third quarter will have increased by as much as 1%.

Optimism about the outlook for the year ahead is at its strongest since April 2010, while jobs rose for the fourth month in a row, encouraged by increased volumes of new work, the report said.

Anecdotal evidence pointed to greater levels of spending among both public and private sector clients.

David Noble, chief executive of the Chartered Institute of Purchasing and Supply, said: "The construction sector is firing on all cylinders.

"Having been in the doldrums so long, builders are using this renewal as a platform to invest, with employment seeing the most dramatic upturn in close to six years."

Howard Archer, economist at IHS Global Insight, said: "House building activity is seeing particular strength which is welcome news given concerns that a shortage of properties risks contributing to a new housing market bubble."

Kelvin Davidson of Capital Economics said predictions that commercial rents would only edge up modestly over the year were looking likely to be surpassed.

He said the data suggested property developers were increasingly confident about the prospects for occupier demand and hence the rental values they could expect.

House builders have been buoyed in recent months by easing credit conditions as well as Government initiatives such as Help to Buy.

The latest extension of the scheme offering mortgage guarantees to help buyers get onto the housing ladder has just been brought forward - despite fears it could lead to an overheating in property prices.

Article Source: http://www.belfasttelegraph.co.uk/business/news/house-building-growth-continues-29629083.html

 

A Quarter of All Homes Sold to First Time Buyers

According to this latest article by Alex Johnson of The Independent on September 10th, 2013 NAEA figures show around 26% home sales were sold to first-time buyers.

Around 26% of home sales in August were by first time buyers, according to figures from the National Association of Estate Agents (NAEA), the highest proportion since July 2010 and up from 22% in July.

NAEA members also reported an increase of 29% in the average number of house hunters per branch, up from 250 in July to 322 in August, as well as a slight increase in the average sales agreed per branch in August (nine) compared with July (eight). However, supply levels dropped slightly over the month – the number of available properties per branch decreased from 53 in July to 52 in August.

Around 40% of home buyers last month were aged between 41 and 55 years old, followed by 31 to 40 year olds at 36 per cent. Nearly eight out of ten properties were sold to couples.

Five thousand Lanarkshire homes set to receive green energy

Muirhall Energy has secured a £9million finance package from Santander to expand the Muirhall Windfarm in South Lanarkshire. It is adding two new turbines to the site, the tallest in the UK, to increase production to 60,800 MWh per year, enough to power over 14,300 homes each year. This will prevent 26,144 tonnes of carbon dioxide emissions each year.

Chris Walker, Managing Director of Muirhall Energy, said: “As demand for power increases and fossil fuel reserves deplete it is important we continue make the most of alternative sources of energy and wind power continues to be one of the most cost effective and green solutions.”

Lack of rental homes for families on the market

Figures from Countrywide show that two and three bedroom rental properties saw an increase in average monthly rents in August, up 0.6% and 0.9% respectively. One and four-plus bedroom properties saw a drop of 0.1% and 1.6% respectively. Nick Dunning, Group Commercial Director at Countrywide, said: “August is traditionally a busy period for the rental market with tenants, particularly families, wanting to move into their new rented accommodation before the start of the school term in September. However, demand is not being met by supply and currently there is a particular lack of family-sized properties available to rent, especially in the South of England. Improved conditions in the sales market are attracting reluctant landlords to sell these types of properties specifically in the catchment areas for good schools.”

Property prices in Surrey

According to Zoopla the property prices in Surrey are up 7.35% from five years ago and 4.12% from a year ago. James Wyatt, Partner of Barton Wyatt and Chairman of NAEA Surrey, said: “These figures point to the change in attitude of the money lenders in the last there months. Yet again financial institutions are driving the market and the recent decisions which enables UK buyers to borrow money more easily again has positively turned the market. This has aided sales in the small to medium sized end of the market as most of these properties are purchased with mortgages and in turn we have seen a 33% increase in domestic buyers over the past year in north Surrey.”

Article Source:  http://blogs.independent.co.uk/2013/09/10/a-quarter-of-all-homes-sold-to-first-time-buyers/

House Prices Rising at Their Fastest Rate for 3 Years

According to these data and figures from Halifax the average property shot by 5.4% in the three months to August compared with the same time last year as shown  on this article by Mirror on September 7th, 2013.

House prices are rising at their fastest rate for three years, new figures have revealed.

Data from the Halifax showed the average property shot up by 5.4% in the three months to August, compared with the same time last year.

Prices rose by 0.4% in August alone – the seventh consecutive monthly rise, leaving the average home worth £170,231.

Experts say the pick-up in property prices has been fuelled by a flood of cheap finance, boosted by the Bank of England’s Funding for Lending scheme and the Government’s Help to Buy initiative.

Rock-bottom mortgage rates led to a 45% jump in first-time buyers in July, a report earlier this week found.

But critics warn the latest leap in prices is creating another housing bubble that is excluding many people from the property market and lumbering borrowers with large debts.

Halifax housing economist Martin Ellis said: “Overall, house prices are expected to rise gradually over the remainder of the year.”

Halifax’s report follows similar findings from building society Nationwide last week that the housing market revival is gathering pace.

Bank of England governor Mark Carney recently addressed concerns that Government stimulus ­measures risk stoking another property bubble. He said the Bank is “acutely aware” of the potential threats and said action will be taken to clamp down on mortgage lending if needed.

Matthew Pointon, property expert at Capital Economics, said the imbalance between demand and the supply of homes for sale is likely to subside gradually, which will reduce the upwards pressure on prices.

He added: “The rise in wholesale interest rates seen over the past few weeks may soon start to feed through to mortgage rates, dampening demand.”

Comment by Campbell Robb, Chief Executive, Shelter

Some people might cheer as house prices rise again, but not England’s 1.8 million forgotten families.

That’s the number of working families in this country who are taking home between £20,000 and £40,000 – but are still priced out of a reasonable home of their own.

In the past, they would have been able to put down roots in a home they own or in social housing.

But now, their reality is often expensive private renting, where they can find themselves trapped on a merry-go-round of one six-month tenancy to the next. Shelter’s advisers see families like this every single day.

Many simply won’t be able to afford high monthly mortgage payments, thanks to rising house prices.

And Government mortgage guarantees won’t help – because it means borrowing more, and paying higher costs each month.

The root of the problem is that we need more homes that people can afford.

Until we do, the simple laws of supply and demand will keep pushing prices higher.

If we want to give hope to forgotten families, celebrating high house prices won’t help. We need to build more homes.

Article Source: http://www.mirror.co.uk/money/personal-finance/house-prices-rising-fastest-rate-2257130

Prices on Climb Amid Strongest Market Conditions for Six Years in UK

The market is in its best shape since the financial crisis as demand continues to outpace the number of homes for sale, adding to values, according to this recent article by South China Morning Post on September 4th, 2013.

British house price growth accelerated last month amid the strongest market conditions for six years as demand continued to outpace the number of homes for sale, Hometrack said.

Average values in England and Wales rose 0.4 per cent after a 0.3 per cent gain in July, the London-based property researcher said. Prices were up 1.8 per cent from a year earlier, the most since July 2010.

In a separate report, the Engineering Employers' Federation raised its forecasts for UK economic growth and manufacturing output.

Hometrack's survey adds to evidence of a mini-boom in the housing market, with reports last week showing values rising and mortgage approvals at their highest since 2008.

Bank of England Governor Mark Carney said he was alert to risks from the property market and policymakers would act if signs of a bubble emerged.

Richard Donnell, director of research at Hometrack, said: "A lack of housing for sale is set to remain a feature of the market and this will keep an upward pressure on prices in the near term.

"We expect demand to continue to expand over the remainder of the year so long as the outlook for the economy and mortgage rates remains unchanged."

Underlying market conditions are at levels not seen since the financial crisis, with the average time taken to sell a property falling to 8.1 weeks and sellers achieving 94.6 per cent of the price sought last month, Hometrack reported.

New buyers registering with real estate agents to browse property rose 1.1 per cent, the same as in July. Demand fell in August in each of the last three years. Growth in new property listings slowed to 0.8 per cent from 2.4 per cent.

Seven of the 10 regions tracked by Hometrack showed price gains, led by a 0.9 per cent increase in London. Two regions showed no change while values dropped 0.1 per cent in the northeast.

Signs of economic growth have lifted consumer confidence. The economy expanded 0.7 per cent in the second quarter, and recent data suggests the recovery is gaining traction.

A survey by the manufacturers' organisation EEF and the accounting firm BDO showed manufacturing output rose to a three-year high in the third quarter, with a gauge of production rising to 32 from 12.

A measure of investment intentions rose to 24, the highest in six years.

The group raised its forecast for manufacturing growth next year to 2.1 per cent from 1.9 per cent, following a 0.5 per cent contraction this year.

It also raised its forecast for UK gross domestic product growth to 1.2 per cent this year and 2 per cent next year, versus earlier projections of 1.1 per cent and 1.8 per cent.

"Industry's prospects have brightened considerably," said Lee Hopley, chief economist at the EEF. "There is growing confidence that improving trading conditions will continue into the final months of this year and then accelerate through the gears in 2014."

Nationwide Building Society said last week that home prices rose 0.6 per cent last month and the Bank of England's commitment to maintain record-low interest rates until at least the end of 2016 may be helping to support demand.

Article Source: http://www.scmp.com/property/international/article/1302634/prices-climb-amid-strongest-market-conditions-six-years-uk

Deposits Fall and Home Affordability in the UK Improves

According to the new research from Lloyds TBS, the average deposit put down by home owners in the UK in 2013 was £70,540, just 6% higher than a decade ago as as shown on this September 2nd, 2013 article by the Property Wire.
 
The research report says that the average age of a home mover is 40 and affordability for second steppers, that is those moving to their second home, has improved over the last year but fallen over the last decade.

The research also shows that since 2008, the average price paid by a home mover has fallen by 10% from £235,078 to £212,586 in 2013. Nationally, home mover property prices grew by 3% in the past year.

Not surprisingly home movers in London, where prices have been rising faster than in the rest of the country, put down the largest average deposit at £126,528 or 34% of the average property value. This is close to three and half times the average deposit put down by home movers in Northern Ireland at £36,912 and the lowest in the country.

The average mortgage advance for a new home mover is £142,046, a quarter higher than a decade ago when it was £101,472.

With the average age of a home mover now at 40 years old, this has increased three years since 2002 when it was 37 in 2002. Most of the increase in buyer age has occurred since 2007.

Typical mortgage payments for a home mover, that is those already in the housing market, stood at 31% average gross disposable earnings in the second quarter of 2013. This has come down sharply from an all time peak of 52% in 2007. This improvement has been due to a reduction in both mortgage rates and house prices.

Housing affordability for second steppers, calculated as the average price of a typical second stepper home less their current equity position, stood at 4.4 times gross annual average earnings in June 2013 compared with a ratio of 4.9 in June 2012.

A typical second stepper's current equity position accounts for 13% or £21,200 of the price of an average second stepper home, a rise from 1% in 2012.

Although the position has improved for those looking to put down a deposit on a new home, for some potential second home movers this may still not be sufficient to put towards a deposit when also taking the cost of moving into account.

‘Housing affordability for the typical second stepper has improved in the past year.

Nonetheless, there are many potential second steppers who are still in their first home which they bought in the run up to and at the peak in house prices in 2007. Many of these home owners may still be unable to move due to having either very low, or negative, equity in their homes,’ explained Nitesh Patel, housing economist at Lloyds TSB.

‘The lack of equity for many home owners in their existing home largely explains why the number of home movers in the first six months of 2013 was broadly unchanged compared with a year earlier in sharp contrast to the number of first time buyers growing by close to 20% over the period,’ Patel added.

The report also reveals a considerable variation in housing affordability between regions, with northern regions more affordable than southern regions for second steppers. This is largely a reflection of the lower prices for second stepper properties in the north. The West Midlands and East Midlands both at 3.1, are the most affordable regions for those in their first home looking to take their next step on the property ladder. While London at 5.7, the South West at 4.6 and the  East at 4.5 are the least affordable.

Article Source: http://www.propertywire.com/news/europe/uk-property-deposits-afford-201309028183.html

Property Market Slide 'Arrested'

In this article by Belfash Telegraph.co.uk on August 30th, 2013 said that research shows that the number of properties sold in Dublin rose at a three year high.
 

The number of properties sold in Dublin soared by 13% in the first half of the year, research showed.

A study found 3,671 homes and apartments were snapped up in the capital by the end of July, compared to 3,252 in the same period last year and 2,409 in 2011.

The value of transactions was also at a three year high with almost 1.2 billion euro raised from sales, up a quarter from 965 million a year earlier.

MyHome.ie revealed while the number of transactions rose in 18 areas across the city and county, they fell in some of the most popular places to buy because of lack of supply.
Dublin 14 - which covers from Churchtown, Rathgar and Rathfarnham - boasted the highest number of sales at 224, but was down 5% on last year.

Elsewhere 207 properties changed hands in west Dublin, a 20% drop from last year, and Dublin 16 had suffered a 2% fall despite 217 sales confirmed.

Angela Keegan, managing director, said the main reason behind the fall in certain areas was a lack of suitable stock.

"These figures reflect the shortage of family homes coming to the market," she said.
"Many people are holding onto their tracker mortgages rather than upsizing but it's clear we need to see more new developments coming on stream in the greater Dublin area."

The property website analysed official figures from the property price register, which last week revealed the cost of a home in Dublin jumped by 8% over the last year. The Central Statistics Office said the figure caused national prices to go up 2.3% despite a drop in sale prices outside the capital.

The figures showed more than two thirds of the 23 postcode areas and Dublin county had a record number of transactions for the first half the year since 2010.

However it is believed the housing market in the first few months of 2013 may have been affected by buyers availing of mortgage interest relief which ended at the end of 2012.

More recent data showed there have been 4,743 transactions in Dublin up to August, compared to a total of 8,984 for all of 2012.

Ms Keegan said the figures were encouraging after six years of falling prices.

"That trend could not continue and the fact it has been arrested in Dublin and prices are beginning to stabilise or rise in most areas is a positive development for the property market in the capital," she added.

Article Source: http://www.belfasttelegraph.co.uk/news/local-national/republic-of-ireland/property-market-slide-arrested-29537489.html

 

George Osborne's Homes Scheme Could Sideline First-Time Buyers

Help to buy homes scheme could cause property prices to new highs says lenders as shown on this article by Hilary Osborne and Phillip Inman of TheGuardian on August 28, 2013.

Help to Buy scheme may 'give with one hand and take with the other' by pushing costs up by 11% by the end of 2016.

George Osborne's policy of kickstarting the housing market with subsidised mortgages could inflate prices to pre-crash peaks and sideline the first-time buyers it is designed to help, according to a group representing some of the UK's biggest banks and building societies

In the latest warning about the impact of the Help to Buy programme, lenders said property prices could rise by 11% by the end of 2016, with artificially inflated valuations the biggest threat to its success. Without a housebuilding programme to address the extra demand, property prices could spiral to new highs, said the Intermediary Mortgage Lenders Association.

"If house prices continue to rise for the duration of the scheme, then in essence we will be giving with one hand and taking away with the other," said Peter Williams, executive director of the IMLA and director of the University of Cambridge Centre for Housing and Planning Research.

House prices in London are above their 2007 peak, according to the Nationwide building society, but taken across the entire country they remain 9% lower, as IMLA warned that under the scheme the average UK home would cost £180,256 by the end of 2016. That would take average prices close to 2007 peak of £181,975.

The Help to Buy scheme, announced by the chancellor in March, aims to grant mortgages to homebuyers with a deposit of as little of 5% of a property's price.

The first part of the programme, which allows buyers to subsidise purchases of newbuild homes with an interest-free loan from the government, launched in April. It has been credited with reversing a fall in housebuilding and boosting consumer confidence. However, the second part, which will be introduced at the start of 2014 and will offer a taxpayer-backed guarantee to lenders who offer mortgages worth up to 95% of the property's value, has attracted criticism from economists, politicians and other commentators, who have warned it could fuel a house price bubble. Albert Edwards, who heads the global strategy team at Société Générale, described it as a "moronic policy".

IMLA, whose members include subsidiaries of Santander, Barclays and Nationwide that offer mortgages through brokers, said 60% of its members believed the scheme could be undermined by a house price bubble.

While all respondents agreed first-time buyers had the most to gain from the second part of the scheme, they are likely to be the hardest hit by a rise in prices to 2007 levels. This would push the cost of a 5% deposit from £8,321 at the end of this year to £9,013 by the end of 2016.

A recovery in the housing market has accompanied a turnaround in the economy since the beginning of the year. GDP has risen by 1% in the first six months, with most sectors of the economy showing they expanded compared to last year.

However, the TUC is warning that a rise in UK population, by 2.3 million to 63.7 million over the last five years, means the benefits of GDP growth have been spread over a greater number of people. According to a TUC analysis, GDP per head is still 0.7% lower than when the coalition took office and 7.5% lower than the UK's peak level in late 2007.

The TUC's general secretary, Frances O'Grady, warned that the recent burst of borrowing by consumers to fund everything from house purchases to the weekly shop was based on extra debt and not on a rise in incomes.

She said: "Too many people are having to run down their savings or turn to credit cards to spend in the shops, rather than see their incomes grow. And behind improving employment figures are millions of workers whose incomes are falling and who can't get enough hours to make ends meet.

"We all want to see the UK economy back on track but any talk of recovery is meaningless unless we get the right kind of growth."

The current level of GDP per head at £23,728, is mere 0.7% higher than at the lowest point of the recession in September 2009, the TUC said.

Article Source: http://www.theguardian.com/money/2013/aug/28/george-osborne-housing-policies-damage

Prime Property Prices in Central London Still Rising

This article of the Property Wire on August 26, 2013 shows that prime property prices in central London continued to rise in August but there are indications that buyers are becoming more resistant to continued price rises, especially at the top of the market.
 
The latest central London sales index from Knight Frank shows that property prices in London’s best postcodes increased by 0.6% this month and so far this year prices have risen by 4.8%.

Marylebone and Notting Hill recorded the largest rises over the course of the month, up by 1.5% and 1% respectively. Islington, City Fringe and Hyde Park all reported price growth of 0.9% in August.

In spite of record prices, enquiry levels are still robust and interest among prospective buyers remains high across central London. The number of new applicants is up by 33.9% over the year to date compared to the same period in 2012 and the number of property viewings conducted over this period is up by 18.5%.

At the same time annual price growth for properties in Greater London is now outstripping prime central London, boosted by the city’s continued economic recovery and government policy.

Figures from the Office of National Statistics show that property prices in Greater London have risen by 8.1% over the past 12 months. In comparison the Knight Frank Prime Central London Sales Index is up by 7% on an annual basis.

Price rises in prime central London are primarily being driven by homes in the sub £1 million and £1 million to £2.5 million price bracket.

Homes in these price brackets increased by around 1% in August and are up by 8.7% and 7% respectively over the year to date. Comparatively, homes in the £5 million to £10 million and the £10 million plus price brackets increased in value by 0% and 0.2% month on month and are up by 2.6% and 1.6% respectively so far in 2013.

Knight Frank says that key factors driving price growth and interest include the city’s reputation as a safe haven for investment, and the value of the pound. However the firm’s global head of residential research Liam Bailey pointed out that performance has outperformed forecasts.

‘Last year, we forecast that prices would remain unchanged in 2013, marking an end to the strong run the market has seen since early 2009. Our rationale was that the increase in Stamp Duty would have an impact on the top end of the market and there would be resistance to price growth from domestic and international purchasers,’ he explained.

‘In the event we overstated the negative impact of the 5% to 7% Stamp Duty rise for £2 million plus properties. The further weakening in sterling in the first half of the year helped to boost overseas interest and domestic demand has been aided by London’s continued economic recovery and, arguably, from the government’s Help to Buy scheme, which was launched at the end of the first quarter this year and has boosted sentiment across the market,’ he added.

He also said that while Help to Buy, with its £600,000 valuation cap is a more significant factor in the wider mainstream market, rising housing market sentiment, as reported in the firm’s latest House Price Sentiment Index, is infectious across markets and price brackets and is likely to act as a positive influence in terms of future pricing, even in London’s prime
market segments.

‘We have therefore raised our forecast for prime central London price growth for 2013 to 6%,’ he added.

Article Source: http://www.propertywire.com/news/europe/prime-london-property-prices-201308268161.html

UK Property Prices Rise By 5.5%

This article by Natasha Al-Atassi of Select Property on August 22, 2013 reveals that properties in the UK rose in price by 5.5% between August 2012 and August 2013 according to Rightmove.

Summary:

• House prices in the UK are £249,199 on average
• This is an increase of 5.5% in August 2012
• London saw the greatest price increase, rising 10.2% in the 12 months

Property values in the UK have risen by 5.5% over the last year, according to recent figures from Rightmove.

In the property search website’s latest House Price Index, it revealed average property prices rose significantly between August 2012 and August 2013, taking the typical asking price to £249,199.

According to figures, the average cost of a detached home in the UK is £364,254, up by 4.2% year-on-year, and semi-detached properties are typically £204,392, an increase of 3.8% over the 12 months.

Rightmove also reported terraces rose in value by 4.4%, taking them to £188,445, while apartments average £209,652, an increase of 5.9% over the year.

The area of the country with the most expensive average prices is London, which saw prices grow by 10.2% over the year to £501,067.

Comparatively, costs in the north were the cheapest in the UK with values averaging £149,362 in August, a rise of 0.8% over the year, followed by Yorkshire and Humberside’s low prices at £154,237, and the north-west at £164,503.

These results come after Knight Frank and Markit’s released findings that showed 18% of British homeowners believe their property increased in value in July, which is the fifth consecutive month households have thought real estate values in the UK are on the rise.

Article Source:  http://www.selectproperty.com/2013/08/rightmove-uk-property-prices-rise-by-5-5/

House Price Rise Doesn't Have Any Bearing on Real Life

In this article on August 17, 2013 by Kate Hughes of The Independent discussing the value of house price rise means nothing because a house only worth what someone will pay for it and besides it's a home and you can't sell what you still need. 

Your home might be worth more on the market, but you still need somewhere to live.

Feeling better about cash, the economy and everything yet? The latest rounds of financial and economic survey data suggest we should be.

Just by way of a quick recap, unemployment is down by 4,000 to 2.51 million in the quarter to June this year, and the number of "economically inactive" people aged 16-64 in the UK was down 10,000 from the first quarter of 2013, according to the Office for National Statistics. Total pay also rose in the last year by 2.1 per cent.

Inflation is also down, very slightly, across the board, with the Consumer Prices Index down just a touch from 2.9 per cent to 2.8 per cent in July, thanks in part to the drop in leisure, cultural and clothing costs, and the Retail Prices Index, which includes housing costs, was down from 3.3 per cent to 3.1 per cent.

Meanwhile, Gross Domestic Product – the broad measure of the state of the economy – is up 0.7 per cent in the last quarter to July according to this month's estimate, following 0.6 per cent growth the quarter before.

And unless you've been in a coma this week, you'll already know that house prices are up by 3.1 per cent in the year, compared with 2.9 per cent in May. The term "escape velocity" is being used with reckless abandon. Happy days.

Except that last piece of good news in particular has no bearing on real life. First, a house is only worth what someone will pay for it, and until the money is in your account, a valuation means nothing. Some unscrupulous agents are already overegging valuations in a bid to max out their commission if it does come off, safely hidden from view by this rising tide.

Second, the British obsession with owning property means we often forget that our house may be our greatest asset, but it's a home first and foremost. And you can't sell what you still need. So unless you're not too worried about having a roof over your head, when exactly are you going to crystallise that "gain"?

Third, if you do sell to move on what difference does it make anyway as your next step on the ladder is likely to have headed the same way, unless you're moving far, which is statistically unlikely, or you are downsizing significantly.

Of course, there's the much-repeated argument about house prices, consumer confidence and economic wellbeing. But consumer confidence based on thin air puts us right back where we were a few years ago, or have we all forgotten?

Unless you have some truly altruistic wish to support the wider economy rather than yourself, go out and spend your cash when you (eventually) get a pay rise, when there is real money in your pocket, not when someone with a sharp but cheap suit tells you your house is worth 5 per cent more than it was the last time you blinked.

Finally, and most importantly, as those outside the South-east of England have learned, house prices can fall as well as rise. But historically low interest rates and pressure on banks not to repossess mean the rest of us have forgotten what that really looks like.

The average house price is now £169,624. (And here I acknowledge that "average" covers a multitude of north-south divide sins.) Meanwhile, the average UK salary before tax is £23,244. Even if there are two or more adults working full time in your household, with one far outstripping the other, this isn't rocket science. And the problem is far, far more extreme in the South-east.

I feel for first-time buyers watching property prices sprint off into the distance. But for them there should be some comfort drawn from the fact that this too is temporary.

Article Source: http://www.independent.co.uk/money/spend-save/kate-hughes-house-price-rise-doesnt-have-any-bearing-on-real-life-8772589.html

Southern Eurozone Countries Continue to Attract Property-Buyers From the UK

An interesting article by The Economic Voice on August 13, 2013 showing how southern delights of the Eurozone drawing property buyers from UK.

Knock-down property prices in southern Eurozone countries continue to attract property-buyers from the UK, with interest in Spain, Italy, Portugal and Greece getting noticeably stronger during the second quarter of the year.

Demand for information about foreign property rose 36 per cent year-on-year for the three months to the end of June, according to the most recent Overseas Guides Company (OGC) Quarterly Index, which measures interest in destinations popular with second homeowners and expats.

OGC – a free resource for overseas property-buyers – attracted 9,096 direct requests for information in the form of downloads of its free Buying Guides for Q2 2013, compared with 6,707 in Q2 2012. While this represented a decrease of six per cent from the 9,685 enquiries it generated in the first quarter of 2013, the slight fall was largely down to the seasonal fall in enquiries about long-haul destinations, including Australia, USA, Canada and New Zealand.

“It seems the euro’s continued strength during the second quarter hasn’t put British buyers off tapping into some very attractive property prices in southern Eurozone countries,” said Richard Way, Editor at The Overseas Guides Company. “There are reports of buyers taking advantage of current favourable euro mortgages, expecting their loan to become even better value if the pound strengthens in coming months.”

Mr Way continued: “Enquiries for Spain were up, if slightly, on Q1, while Italy, Portugal and Greece saw hikes of 18 per cent, 9 per cent and 48 per cent respectively. It’s interesting that enquiries for Turkey were also up by 30 per cent on the previous quarter, despite the civil unrest in Istanbul – and that while France’s enquiries fell by 5 per cent, it still remains our most popular destination.”

The total number of enquiries received by OGC for the first half of 2013 was 18,781, a year-on-year increase of 43 per cent from 13,175 for the same period in 2012.
OGC has a quality database of approximately 64,800 people interested in buying overseas property and/or moving abroad.

Article Source: http://www.economicvoice.com/southern-delights-of-the-eurozone-drawing-uk-property-buyers-looking-for-a-bargain/50039353

Property Prices Near Premier League Football Grounds in the UK up by 135% in 10 years

An article by Ray Clancy on August 12, 2013 of the PropertyCommunity.com shows the increase of property prices close to the premier league grounds as the football season started.

As the football season gets underway the UK annual research into the price of properties close to Premier League grounds shows that they have increased by 135% over the past decade. Prices have more than doubled in the areas close to five grounds, the Halifax premier league football grounds house prices review also shows.

The average house price in the postal districts of the 20 clubs kicking off the 2013/2014 season has increased by 135% or £183,583 in the past decade from £136,300 in 2003 to £319,800 in 2013. This is equivalent to a weekly rise of £353 and is double the 68% increase in house prices across England and Wales as a whole over the period. The average house price in the 20 Premier League stadium postal districts of £319,800 is a third or £79,500 higher than the average for the whole of England and Wales at £240,300.

Average prices have more than doubled since 2003 in the areas close to five Premier League grounds. The biggest increase has been close to the home of 2011/2012 champions, Manchester City, with the average home value in the postal district of the Etihad Stadium rising by 259% over the decade. The area around newly promoted Hull City’s KC Stadium has seen the second biggest increase with a rise in average property prices of 162%. Chelsea and Fulham recorded the third biggest rises, both 102%, followed by Arsenal at 101%.

Newcastle United finished bottom of the Premier League house price table with the average value of properties close to its home ground falling by 11% between 2003 and 2013, the only stadium to record a decline in prices over the past decade. The research also shows that prices have typically risen faster close to new football stadia. Three of the five Premier League postal districts that have recorded the biggest house price increases over the last 10 years are home to stadia that have been built since 2000. In contrast, four of the five Premier League stadium postal districts that have seen the smallest house price growth have stadia that were opened before the outbreak of the Second World War. Newcastle United’s ground, built in 1892, is one of the oldest in the Premier League.

‘The areas surrounding many of the country’s top football clubs have seen house prices rise considerably during the past 10 years, with some of the best performers being those clubs with new grounds,’ said Craig McKinlay, mortgage director at the Halifax. ‘The boost to property prices in these areas partly reflects the local regeneration that typically takes place alongside the building of modern sporting arenas, including improved transport links. There are, however, significant variations in home prices around the nation’s leading clubs with some supporters needing to pay far more to live near the ground of their favourite team than others,’ he explained.

Price variations are considerable around Premier League grounds the postal district covering both Chelsea and Fulham Football Clubs (SW6) is the most expensive to live in with an average house price of £851,812. This is more than 13 times the average price in the least expensive Premier League postal district of L4 which is home to both Liverpool and Everton Football Clubs with an average house price of £63,974. Overall Premier League homes cost nearly 10 times average annual earnings. The average Premier League house price of £319,847 in 2013 is, on average, 9.6 times higher than national average gross annual earnings.

All five of the least affordable Premier League postal districts are in London. Postal district SW6, which is home to both Chelsea and Fulham Football Clubs, is the least affordable Premier League postal district with an average property price of £851,812 which equates to 15.6 times gross average earnings in the area. Arsenal at 10.9 is in the second least affordable postal district, followed by Tottenham Hotspur at 7.2.

Article Source: http://www.propertyforum.com/property-in-the-uk/property-prices-near-premier-league-football-grounds-in-the-uk-up-by-135-in-10-years.html

The number of first-time home buyers in the U.K. is skyrocketing with confidence returning to the market. 

During the second quarter of 2013, 68,200 first-time homebuyers purchased homes, marking the highest quarter for first-time buyer lending since 2007, according to data from the Council of Mortgage Lenders released today. 

A total of 25,300 loans were advanced to first-time buyers in June, a 30 percent increase of the 19,400 loans advanced in June last year. 

Along with a higher number of first-time home buyers, the amount they borrowed went up. The average loan was £117,000 in June, an increase from £112,500 in May. The total value of loans advanced to first-time home buyers totaled £3.5 billion in June, a nine percent increase from May and 40 percent higher than last year, according to the data. 

Although home prices have been increasing, mortgage rates are falling, maintaining the affordability for first-time buyer loans. Most first-time home buyers are taking out fixed-rate mortgages. 

"Average fixed rates are significantly lower across two, three and five year products than they were this time last year, and the latest data shows average five year fixed rates at 3.83pc - the best we have seen in recent memory," Brian Murphy of the Mortgage Advice Bureau told The Telegraph. "The Bank of England has signaled that interest rates are likely to favor mortgage borrowers for the foreseeable future, but with rates this good, fixing still looks like the most appealing option for long-term security."

Since 2007 first-time buyers have accounted for 38 percent of all home purchases. The new data shows the group made up 46 percent of buyers in June. - See more at: http://www.worldpropertychannel.com/europe-residential-news/uk-first-time-homebuyers-uk-housing-market-council-of-mortgage-lenders-home-loans-7206.php#sthash.9NBkj0Vu.dpuf

The number of first-time home buyers in the U.K. is skyrocketing with confidence returning to the market. 

During the second quarter of 2013, 68,200 first-time homebuyers purchased homes, marking the highest quarter for first-time buyer lending since 2007, according to data from the Council of Mortgage Lenders released today. 

A total of 25,300 loans were advanced to first-time buyers in June, a 30 percent increase of the 19,400 loans advanced in June last year. 

Along with a higher number of first-time home buyers, the amount they borrowed went up. The average loan was £117,000 in June, an increase from £112,500 in May. The total value of loans advanced to first-time home buyers totaled £3.5 billion in June, a nine percent increase from May and 40 percent higher than last year, according to the data. 

Although home prices have been increasing, mortgage rates are falling, maintaining the affordability for first-time buyer loans. Most first-time home buyers are taking out fixed-rate mortgages. 

"Average fixed rates are significantly lower across two, three and five year products than they were this time last year, and the latest data shows average five year fixed rates at 3.83pc - the best we have seen in recent memory," Brian Murphy of the Mortgage Advice Bureau told The Telegraph. "The Bank of England has signaled that interest rates are likely to favor mortgage borrowers for the foreseeable future, but with rates this good, fixing still looks like the most appealing option for long-term security."

Since 2007 first-time buyers have accounted for 38 percent of all home purchases. The new data shows the group made up 46 percent of buyers in June. - See more at: http://www.worldpropertychannel.com/europe-residential-news/uk-first-time-homebuyers-uk-housing-market-council-of-mortgage-lenders-home-loans-7206.php#sthash.9NBkj0Vu.dpuf

The number of first-time home buyers in the U.K. is skyrocketing with confidence returning to the market. 

During the second quarter of 2013, 68,200 first-time homebuyers purchased homes, marking the highest quarter for first-time buyer lending since 2007, according to data from the Council of Mortgage Lenders released today. 

A total of 25,300 loans were advanced to first-time buyers in June, a 30 percent increase of the 19,400 loans advanced in June last year. 

Along with a higher number of first-time home buyers, the amount they borrowed went up. The average loan was £117,000 in June, an increase from £112,500 in May. The total value of loans advanced to first-time home buyers totaled £3.5 billion in June, a nine percent increase from May and 40 percent higher than last year, according to the data. 

Although home prices have been increasing, mortgage rates are falling, maintaining the affordability for first-time buyer loans. Most first-time home buyers are taking out fixed-rate mortgages. 

"Average fixed rates are significantly lower across two, three and five year products than they were this time last year, and the latest data shows average five year fixed rates at 3.83pc - the best we have seen in recent memory," Brian Murphy of the Mortgage Advice Bureau told The Telegraph. "The Bank of England has signaled that interest rates are likely to favor mortgage borrowers for the foreseeable future, but with rates this good, fixing still looks like the most appealing option for long-term security."

Since 2007 first-time buyers have accounted for 38 percent of all home purchases. The new data shows the group made up 46 percent of buyers in June. - See more at: http://www.worldpropertychannel.com/europe-residential-news/uk-first-time-homebuyers-uk-housing-market-council-of-mortgage-lenders-home-loans-7206.php#sthash.9NBkj0Vu.dpuf

The number of first-time home buyers in the U.K. is skyrocketing with confidence returning to the market. 

During the second quarter of 2013, 68,200 first-time homebuyers purchased homes, marking the highest quarter for first-time buyer lending since 2007, according to data from the Council of Mortgage Lenders released today. 

A total of 25,300 loans were advanced to first-time buyers in June, a 30 percent increase of the 19,400 loans advanced in June last year. 

Along with a higher number of first-time home buyers, the amount they borrowed went up. The average loan was £117,000 in June, an increase from £112,500 in May. The total value of loans advanced to first-time home buyers totaled £3.5 billion in June, a nine percent increase from May and 40 percent higher than last year, according to the data. 

Although home prices have been increasing, mortgage rates are falling, maintaining the affordability for first-time buyer loans. Most first-time home buyers are taking out fixed-rate mortgages. 

"Average fixed rates are significantly lower across two, three and five year products than they were this time last year, and the latest data shows average five year fixed rates at 3.83pc - the best we have seen in recent memory," Brian Murphy of the Mortgage Advice Bureau told The Telegraph. "The Bank of England has signaled that interest rates are likely to favor mortgage borrowers for the foreseeable future, but with rates this good, fixing still looks like the most appealing option for long-term security."

Since 2007 first-time buyers have accounted for 38 percent of all home purchases. The new data shows the group made up 46 percent of buyers in June. - See more at: http://www.worldpropertychannel.com/europe-residential-news/uk-first-time-homebuyers-uk-housing-market-council-of-mortgage-lenders-home-loans-7206.php#sthash.9NBkj0Vu.dpuf

The number of first-time home buyers in the U.K. is skyrocketing with confidence returning to the market. 

During the second quarter of 2013, 68,200 first-time homebuyers purchased homes, marking the highest quarter for first-time buyer lending since 2007, according to data from the Council of Mortgage Lenders released today. 

A total of 25,300 loans were advanced to first-time buyers in June, a 30 percent increase of the 19,400 loans advanced in June last year. 

Along with a higher number of first-time home buyers, the amount they borrowed went up. The average loan was £117,000 in June, an increase from £112,500 in May. The total value of loans advanced to first-time home buyers totaled £3.5 billion in June, a nine percent increase from May and 40 percent higher than last year, according to the data. 

Although home prices have been increasing, mortgage rates are falling, maintaining the affordability for first-time buyer loans. Most first-time home buyers are taking out fixed-rate mortgages. 

"Average fixed rates are significantly lower across two, three and five year products than they were this time last year, and the latest data shows average five year fixed rates at 3.83pc - the best we have seen in recent memory," Brian Murphy of the Mortgage Advice Bureau told The Telegraph. "The Bank of England has signaled that interest rates are likely to favor mortgage borrowers for the foreseeable future, but with rates this good, fixing still looks like the most appealing option for long-term security."

Since 2007 first-time buyers have accounted for 38 percent of all home purchases. The new data shows the group made up 46 percent of buyers in June. - See more at: http://www.worldpropertychannel.com/europe-residential-news/uk-first-time-homebuyers-uk-housing-market-council-of-mortgage-lenders-home-loans-7206.php#sthash.9NBkj0Vu.dpuf

Prime Central London Property Prices set for Further Growth in 2013

This recent article by the Property Wire shows how the property houses continued to increase in Prime Central London.

Tuesday, 30 July 2013 Property prices in prime central London increased again in July, up by 0.5% month on month and so far in 2013, prices for the very best homes in London have increased by 4.2%.

And over the last 12 months prices have grown by 7%, according to the latest prime central London index from property firm Knight Frank.

The strongest price growth has been in the sub £1 million market and the biggest rises in June were in Islington and Marylebone where prices increased by 1.1% and the South Bank where they increased by 1.5%.

‘In spite of new record prices, interest among prospective buyers remains high. Property viewings in prime central London over the year to date are up by 15% compared to the same period in 2012 and the number of new applicants is up by a similar level. Rising demand has translated into higher sales volumes, up by 8.2% year on year,’ said global head of residential research Liam Bailey.

‘Last year, we forecast that prices would remain unchanged in 2013, marking an end to the strong run the market has seen since early 2009. Our rationale was that the increase in Stamp Duty would have an impact on the top end of the market and there would be resistance to price growth from domestic and international purchasers,’ he explained.

‘In the event we overstated the negative impact of the 5% to 7% Stamp Duty rise for £2 million plus properties. The further weakening in sterling in the first half of the year helped to boost overseas interest and domestic demand has been aided by London’s economic recovery and arguably from the government’s Help to Buy scheme, which was launched at the end of the first quarter of this year. We have therefore raised our forecast for prime central London price growth for 2013 to 6%,’ he added.

The report also shows that there remain differences in performance between locations and price bands across prime central London. In July, property in the sub £1 million bracket increased in value by 1%, while homes in the £1 million to £2.5 million price bracket climbed 0.6%. Comparatively, the price of super prime homes in the £10 million plus sector remained unchanged over the course of the month.

Article Source: http://www.propertywire.com/news/europe/prime-central-london-property-201307308059.html

Property Prices Up Year on Year in Ireland

Here's a very engaging article by the Property Wire on the 4th of July, 2013 showing evidence that the residential property market in Ireland is recovering.

There is further evidence that the residential property market in Ireland is recovering with the latest data from the Central Statistics office showing that prices increased by 1.2% in the year to June. This is the first annual increase since January 2008 and it compares with an annual rate of decline of 1.1% in May and a decline of 14.4% recorded in the 12 months to June 2012. Residential property prices grew by 1.2% in the month of June. This compares with an increase of 0.3% recorded in May and is much improved on a year ago when prices fell by 1.1% in the month of June. In Dublin residential property prices grew by 1.7% in June and were 4.2% higher than a year ago. Dublin house prices grew 1.4% in the month and were 3.6% higher compared to a year earlier. Dublin apartment prices were 9.7% higher when compared with the same month of 2012. However, a spokesman for the Central Statistics Office said that it should be noted that the sub-indices for apartments are based on low volumes of observed transactions and consequently suffer from greater volatility than other series. The price of residential properties in the rest of Ireland grew by 0.7% in June compared with a decrease of 1% in June last year. Prices were 1% lower than in June 2012. It means that house prices in Dublin are 54% lower than at their highest level in early 2007 while apartment prices in Dublin are 58% lower than they were in March 2007. But the property market still has a lot of recovering to do. Residential property prices in Dublin are 55% lower than at their highest level in March 2007. The fall in the price of residential properties in the rest of Ireland is somewhat lower at 48%. Overall, the national index is 50% lower than its highest level in 2007.   Article Source: http://www.propertywire.com/news/europe/ireland-residential-property-prices-201307248041.html

European retail property investment volumes reached €10.3 billion during the first half of 2013, a 40 percent increase from the €7.3 billion reported for the same period last year, according to the latest data from Jones Lang LaSalle.

During the second quarter of the year, retail real estate investments equaled €5.1 billion, up from €4.1 billion recorded last year, mostly driven by an increase in stock in the market. 

"We are seeing a greater presence in the market of opportunistic investors, as underlined by the first acquisition by KKR," Jeremy Eddy, director, European retail capital markets at JLL, said in the report. "Looking at the geographic trend there are a number of transactions in the pipeline in Southern Europe, which will provide much needed signposts, and greater confidence to investors creating momentum in the market as we move forward." 

North American investor KKR entered the U.K. retail warehouse market with the purchase of a 40,000-square-foot retail park portfolio from Resolution Property for €130 million, in alliance with asset manager, Quadrant Estates, JLL reports.

The U.K., France and Germany in particular continue to report "healthy" investment activity, while investor interest spreads across Europe. Sweden, Poland, Italy, Portugal, Slovenia, Austria, Russia and Turkey all had active quarters, JLL said. 

Investors are diversifying, placing greater appreciation on property fundamentals. One of several large transactions signed during the quarter includes the purchase of Silesia City Center in Katowice, Poland, by an international consortium led by Allianz Real Estate for €412 million. 

The research firm reports an increasing trend of joint venture partnerships in the retail sector. Overall, the firm expects greater investor interest in the following months. 

"With an increase in the amount of debt available to the property market, we expect further activity by these investors in the second half of the year," Mr. Eddy said. - See more at: http://www.worldpropertychannel.com/europe-commercial-news/european-retail-property-investments-jones-lang-lasalle-kkr-retail-real-estate-investment-7123.php#sthash.5GzgyGZh.dpuf

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