Search Results for: Mortgages
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Associations & Bodies
Nearly a million mortgage borrowers “face difficulties”
Close to 1 million homeowners are unable to pay off their mortgages because they opted for interest-only loans, according to Citizens Advice. Citizens Advice said 934,000 owners did not have a plan in place to pay back the outstanding debt on their property at the end of the mortgage term, and face having to sell their home or even have the property repossessed. “People buy a home for stability, but interest-only mortgages have forced many into a financial black hole,” said Citizens Advice’s Chief Executive, Gillian Guy. The charity has highlighted between 2017 and 2018 as the period when there is most likely to be a spike in the volume of people facing repossession as it is when many people will face the end of their mortgage repayment period. Prior to rules being tightened three years ago, it was relatively simple to get an interest-only mortgage. Now only buy-to-let investors can take out cheaper ‘interest-only’ mortgages currently deemed too risky for regular homebuyers, reducing their monthly payments in the process. “This can help many borrowers to make easy savings, which means that they can generate even bigger returns on their investment,” said Charlotte Nelson (right), Finance Expert at Moneyfacts.co.uk. Citizens…
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Housing Market
First-time buyer activity hits pre-recession high
There was a sharp increase in the volume of first-time buyers in the UK in July, as the prospect of a rise in mortgage borrowing costs encouraged more young purchasers to acquire their first home. The latest First Time Buyer Tracker index from Your Move and Reeds Rains reveals that the number of first-time buyers reached their highest level in July since the recession, paying £161,985, on average, which is 8.9 per cent higher than in the corresponding month in 2014. Overall, there were 29,700 sales of residential properties to first-time purchasers in July, up 4.9 per cent month-on-month. This is in spite of the fact that the average first-time buyer now requires a deposit of £27,975, which is up 10 per cent compared with July 2014’s figure of £25,429. While rising deposit costs may have deterred some prospective purchasers in recent months, increasing real wages have enabled some first-time buyers “to shoulder the short term burden of a slightly higher deposit” to spare the risk of losing out on a good mortgage deal, according to Adrian Gill (left), Director of estate agents Your Move and Reeds Rains. He added, “This month’s particularly high transaction rate is also partially due…
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Housing Market
Mortgage approvals surge
There was a significant rise in the volume of mortgage deals secured in the first half of August, with early indications suggesting that this could be a record month for mortgage approvals. With property buyers and existing homeowners not wanting to miss out on record low mortgage borrowing rates, conveyancing firm QCAS has suggested that we could see record transactions this month following a sharp increase in the number of mortgage deals for August so far – already the highest since 2010. Victoria Mortimer, Head of QCAS, the conveyancing division of corporate law firm Shulmans LLP, said, “Normally transactions are low in August due to holidays, but we’ve got more work on than ever compared with the same time in previous years. As a national, large scale conveyancer we are well placed to spot emerging trends and there’s no doubt about this one. People are getting their finances sorted before the end of the year.” Mortimer described activity levels over the past 12 months as “incredible”, with her firm having handled more than £3 billion worth of property transactions during that time. “We believe this is due to a combination of factors; there are some great deals out there at…
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Housing Market
Repossessions fall to historic low
Repossessions in the UK dropped to the lowest level since records began in 2008 during the second quarter of 2015, the latest data shows. The figures from the Council of Mortgage Lenders (CML) reveals that the repossession rate in the last quarter was just 0.02 per cent, which is equivalent to just one in 5,000 mortgages and the data from the CML revealed that arrears also continued to drop. Record low interest rates were a major factor in helping homeowners stay on top of their mortgage payments in the second quarter of the year, along with falling unemployment and a strengthening domestic economy. In total, there were 2,500 properties taken into possession in the second quarter, down from 3,000 the previous quarter and 5,400 in the second quarter of 2014. Of these, 1,800 were in the owner-occupier market and 700 in the buy-to-let market. In terms of arrears, the total number of mortgages with arrears equivalent to 2.5 per cent or more of the mortgage balance was 106,400, or 0.96 per cent of all mortgages, which again, was the lowest rate since quarterly records began seven years ago. Of all loans with arrears of over 2.5 per cent of balance,…
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Housing Market
Number of home movers fall in H1 2015
The volume of home movers in the UK in the first six months of 2015 fell by 9 per cent compared to the corresponding period in 2014, new data has revealed. The latest Lloyds Bank home movers review estimates that 155,000 people moved home in the first half of this year, which although down year-on-year, does actually represent a 32 per cent rise compared to the first six months of 2009 when the market was at its lowest point. The sharp rise in home moving activity witnessed since the trough of the market in March has contributed towards the hike in property values seen across many parts of the country during the same period, and while the number of home movers did fall, many experts believe that this is largely owed to general uncertainty in the run-up to May’s General Election. “There was a modest decline in the number of home movers in the first half of the year compared with 2014, which was in line with the general softening in housing market activity,” said Andrew Mason, Lloyds Bank Mortgages Director. He added, “Whilst the number of home movers has risen significantly since 2009, it remains well below previous…
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Housing Market
Rental yields fall
Average rental yields on buy-to-let properties fell in the second quarter of this year, the latest buy-to-let index compiled by Mortgages for Business shows. Returns on residential rental properties fell from 6.4 per cent to 5.8 per cent between the first and second quarters of 2015, led by declines in the Houses in Multiple Occupation (HMOs) sector which saw yields drop 1.3 per cent to 9.3 per cent. The figures also reveal that the average loan-to-value (LTV) ratio in the second quarter of 2015 for standard buy-to-let and multi-unit freehold blocks remained unchanged at 66 per cent and 67 percent in relation to the first quarter of this year. David Whittaker (left), Managing Director of Mortgages for Business, said, “While rental yields are still robust they seem to have lost the momentum they were gathering between the end of last year and the start of this one.” But Whittaker pointed out that multi-unit freehold blocks seem to have avoided the yield downturn, demonstrating once again that complex property types produce higher yields “because they offer tenants more features and facilities”. He added, “While many landlords had hoped that the improving economic climate may have pushed loan-to-value ratios even higher, the…
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Features
Japanese Knotweed – a growing issue
Are estate agents responsible for identifying this problematic weed? We asked Conor Leyden, a specialist in invasive species.
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Features
Playing the buy-to-let game
Andrea Kirkby says investors can win the buy-to-let game, if they hit the right location, at the right price, at the right time.
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Overseas Properties Andrea Kirby meets some UK agents who have launched international operations The credit crunch marked the end of a booming property market, not just in the UK but overseas. After years when Spanish, Turkish, even Bulgarian or Cape Verde properties were selling like hot cakes, suddenly the markets froze. Both mortgages on overseas properties and re-mortgages on UK properties dried up, media coverage dwindled, and resale markets froze. But some UK agents are continuing to do well from overseas property. Not just the big guys like Savills and Knight Frank, either, smaller, independent agents are prospering in international markets. For instance, Waterside Properties now represents properties in a number of international destinations. Nick Byrne of Waterside says, “Typically, commission rates are five per cent of the sale price, so considerably higher than those achieved by estate agents here in the UK.” Split or shared commissions with overseas affiliate agents, though, do reduce that figure on occasion. There are different ways of getting into the market. Starting your own overseas branch, obviously, requires a huge commitment of investment cash and working capital. So does acquiring an overseas agency. Smaller agents have generally chosen, instead, to work with overseas agents and developers, representing their properties in the UK. That’s what Waterside Properties did. Nick Byrne says, “We started by working with associated/partner agents overseas – they secure the listings, and we provide the UK marketing effort and introduce buyers to them.” However, he says, over the years the…
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Uncategorised
Buy-to-let returns beat all other mainstream investments
Buy-to-let landlords have earned returns of up to 1,400 per cent since 1996, outstripping those returns from investment in shares, bonds and cash. The research by the Wriglesworth Consultancy, on behalf of Landbay, found that on average, £1,000 invested in a buy-to-let asset in the final quarter of 1996 was worth £14,987 by the end of last year. This was more than four times than the equivalent investment in commercial property, UK Government bonds or shares and seven times the return on cash. Despite a few downturns in the housing market over the past 18 years, including the slump following the financial crisis, overall strong levels of capital growth and soaring rental values have ensured that landlords have reaped the rewards. The analysis was based on a buy-to-let investor using the rental income to pay off their mortgage, clearing it after 13 years and cashing in during the final five. Many of those buy-to-let investors who have not sold their properties, but continue to hold on to their residential assets, may have found that the rental value of their property investments may have risen further in recent months. The latest HomeLet rental index shows that residential rents across the UK…
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