Search Results for: Mortgages
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Latest property news
CML predicts fewer buy-to-let property purchases in 2017
The Council of Mortgage Lenders (CML) says the number of houses bought by landlords next year is likely to fall as several headwinds reduce demand for buy-to-let property. This includes the recently-introduced additional 3% Stamp Duty for buy-to-let purchases, the Prudential Regulation Authority’s buy-to-let lending stress tests starting on January 1st, and the new and less generous tax allowances for landlords, which kick off in April next year. Consequently, CML director general Paul Smee (pictured, below) says that although the overall mortgage market is resilient and will ‘plateau’ during 2017, buy-to-let lending is to likely to decline. The CML predicts that total lending for all types of mortgages in 2017 will be £248 million, approximately the same as 2016, before increasing in 2018 to £252 billion. But lending for new buy-to-let purchases is to decline in both 2017 and 2018, it says. “We expect any modest strengthening in home-owner lending to be rather offset by a less active house purchase market in buy-to-let, as both tax and regulatory changes bite on landlords,” says Paul. But lending is not the only dial on the buy-to-let market to be going down. Lender Landbay says average UK rental growth during 2016 halved from 2.34% to…
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Latest property news
FCA to investigate mortgage lending via estate agents
Estate agents who introduce customers to in-house or third party mortgage brokers are to be investigated by the Financial Conduct Authority (FCA) as part of a new wide-ranging look at competition in the home loans market. The aim of the review is to see if customers are being offered the best deals, advice and whether links between industry players limit choice, all part of a wider government drive to reduce the cost of buying a home. There are currently 11.1 million home loans held in the UK worth £1.3 trillion, according to the Council of Mortgage Lenders. “As a mortgage is likely to be the biggest financial commitment most people make in their lifetime, we’re keen to ensure that competition in the mortgage sector is healthy and working to the benefit of consumers,” said Christopher Woolard, the FCA’s executive director of strategy and competition (pictured). This will include a close look at how estate agents, conveyancers, surveyors and developers all introduce customers to mortgage lenders or brokers. But when launching the full review the FCA singled out estate agents for criticism, saying that some customers could be coming under pressure from estate agents to use certain brokers if they want…
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Features
Can proptech change the industry or is it all just an expensive experiment?
The first wave of the digital revolution hit in the early noughties – soon after that Rightmove and later, Zoopla, were born. But 15 years on, the next giant leap has arrived which, if its proponents are to be believed, will have an equally profound effect. You may have noticed it. Everyone is now talking about ‘proptech’; the community of small to medium-size new companies that are launching online services into the property market both for agents and consumers. But rather than monolithic giants like Zoopla, proptech firms are a swarm of smaller businesses changing the way property transacts, bit by bit, with no less potential impact. In the past 12 months we have witnessed a significant proliferation in the number of start-ups entering the market. Some of the digital world’s best minds are fixing their brains on making the property game more seamless, not only for purchasers and vendors but also for agents, investors and developers in the sales market. “The property market is an industry steeped in history and, to a certain extent, set in its ways but, perhaps later than other sectors such as retail or transport, technology is starting to have a real bearing on the…
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Latest property news
Are buyers finally returning after the Brexit vote?
Purchasers are returning to the market following the Brexit vote according to figures from both the Royal Institute of Chartered Surveyors (RICS) and the Council of Mortgage Lenders (CML). RICS says this morning that buyer demand has grown for the first time in seven months and that “market confidence continues to improve following post-referendum jitters”. Its survey of RICS members reveals that last month eight percent more of them reported an increase in buyer enquiries compared to June, when 34% of respondents reported a drop. “The market does now appear to be settling down following the significant headwinds encountered through the spring and summer,” says Simon Rubinstein, RICS Chief Economics. “Buyers do appear to be returning, albeit relatively slowly, but the big issue that continues to be highlighted by respondents is the lack of fresh stock on the market.” The CML also published an uptick in activity within the market this week. It revealed that the number of people borrowing money to buy homes increased by 14% month-on-month to £12.2 billion and up 11% year-on-year. First time buyers played a significant role in this activity increase, borrowing £5.5 billion during August, up 24% on the same month last year. “House…
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Latest property news
Cherie Blair says: axe the tenant tax!
Landlords fight back over The Tenant Tax: Cherie Blair QC is to represent the organisation called, ‘Axe the Tenant Tax’ at a permission hearing for judicial review of section 24 of the Finance Act 2015 on Thursday 6th October 2016 at the Administrative Court, Royal Courts of Justice, WC2A 2LL The organisation says that changes proposed in Section 24 of the Finance (No.2) Act 2015 will stop buy-to-let finance costs (largely mortgage interest) being a claimable business expense. This means, they say, that most landlords with mortgages will now have to pay tax – The Tenant Tax –on their turnover rather than their profit and no other business in the UK is treated in the same manner. Many landlords will have to pay extra tax of 20 per cent or more of their mortgage interest payments. The tax they pay might be greater than their real profit, leaving them with a rental loss and a cash shortfall. This tax will only affect individuals who own rental properties in their own names, like the millions of smaller landlords in the UK. Companies owning buy-to-let property and wealthy cash investors are excluded from the tax. Co-claimants Steve Bolton, Founder of Platinum Property Partners, and…
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Latest property news
Buy-to-let mortgage stress test shock
As mortgage approvals continue to fall – down to 60,058 in August from 60,925 in July – buy-to-let lending is also likely to decrease with the latest news from the BoE’s Prudential Regulation Authority (PRA) which has confirmed that a series of investors’ affordability checks and interest rate “stress tests” will be introduced from January 2017. Buy-to-let lenders will be required to verify that landlords can afford to pay the mortgage under potential future interest rates of 5.5 per cent, as the PRA recommended that the interest coverage ratio, a commonly used measure of the ratio of rental income to mortgage payments, does not fall below 125 per cent. Affordability assessments will need to take into account borrower’s costs, personal income and possible future interest rate increases, with lending to portfolio landlords to be assessed using a specialist underwriting process. “The PRA’s actions are intended to bring all lenders up to prevailing market standards and guard against any slipping of underwriting standards during a period in which firms’ growth plans could be challenged by the changing economic landscape and the impact of forthcoming tax changes,” it said. Peter Williams, Executive Director of Intermediary Mortgage Lenders Association (IMLA) said, “IMLA welcomes…
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Latest property news
New revenue opportunities for estate agents
ZPG adds mortgage pre-qualification data to applicant leads.
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Regional Reports
Westerham, West Bridgford and West Hampstead
This month we meet members of The Guild of Professional Estate Agents in Westerham, West Bridgford and West Hampstead.
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Features
Will resi rise?
Property investment doesn’t appear to be the safe house that it used to be, says Andrea Kirkby, but is it still a better bet than other options?
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Features
The ticking timebomb
What’s next for the buy-to-let market? London landlords are playing a high-risk game that will undoubtedly leave casualties.
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