Autumn statement
Marketing No Comments

One in four UK households now predict the Bank of England to cut interest rates

The number of households expecting the Bank of England (BoE) to cut interest rates has risen to its highest level since the Brexit referendum, survey data showed today, as Britons remain downbeat about their financial health over the coming months.

Households are pessimistic despite wages rising at a fast pace and unemployment close to record lows. Brexit uncertainty has been one factor dampening the mood, and there are signs that Britain’s jobs boom is slowing down.

The UK household finance index – a gauge of people’s perceptions of financial wellbeing by data firm IHS Markit – edged up to 44.4 in October from 43.1 in September.

The figure was the gauge’s highest mark since January but nonetheless signalled pessimism among households about their finances. A score of under 50 is considered a negative reading.

IHS Markit economist Joe Hayes said the “latest survey results from UK households continue to show how economic and political uncertainty is holding back what could have been a more resilient growth period for the UK economy”.

“These concerns, coupled with the uncertain economic outlook, have led to an increased proportion of UK households expecting the Bank of England to cut interest rates.”

At the start of the year over 70 per cent of UK households through the BoE would hike rates when it went to change them. That number has now fallen to around 58 per cent, its lowest level in two years.

A growing number of households – 25 per cent – now expect the Bank’s next move to be a cut, the highest proportion since October 2016.

Hayes said: “Negative job security perceptions and a pessimistic financial health outlook have led UK households to delay spending, with major purchases suffering as a result.”

By Harry Robertson

Source: City AM

Rightmove asking prices property Mortgage Asking prices UK house prices Average house prices property prices
Marketing No Comments

UK property asking prices show weakest October rise since 2008 – Rightmove

Asking prices for British houses put on sale in October showed the smallest seasonal increase since the financial crisis, as all but the most determined sellers waited for greater certainty over Brexit, industry figures showed on Monday.

Rightmove said that the average asking price for homes sold via its website was 0.6% higher in October than in September, well below the average 1.6% rise seen for the time of year and the smallest increase since October 2008.

“With upward pricing power now pretty flat, some sellers who are motivated by maximising their money seem to be holding back. They may be waiting for more certainty around both achieving their price aspirations and also the Brexit outcome,” Rightmove director Miles Shipside said.

Average asking prices in October were 0.2% lower than in October 2018, compared with an annual rise of 0.2% in September.

Britain’s housing market has slowed since June 2016’s referendum on leaving the European Union, and official data last week – based on completed sales – showed annual house price growth of 1.3% in the year to August, up from a near seven-year low of 0.8% in July.

Consumers have become warier about making major purchases in general.

A quarterly survey of consumer sentiment by accountants Deloitte, also released on Monday, showed morale fell to its lowest since late 2018 in the third quarter of 2019, despite wages growing at their fastest rate in a decade.

“Up to now we have seen a slowdown everywhere but in the jobs market and in the consumer economy,” Deloitte economist Ian Stewart said. “A decline in consumer confidence this quarter, combined with a fall in official unemployment figures, show that the period of remarkable resilience … is coming to an end.”

Reporting by David Milliken, editing by Andy Bruce

Source: UK Reuters

Landlord confidence Universal Credit UK property market Buy To Let Property Renting
Marketing No Comments

Buy To Let Property Renting Is A Business

Many landlords are employed in business or professions; private renting is an additional income, perhaps to provide an income in older age, so I am fully aware that many have successful additional careers.

But if the main income source was from a business they were running themselves, would they survive if they used the same criteria in that business as they do in their private renting?

Let’s consider an example. Though the comparisons I make could be equally applied to any business, let’s look at a business that would have as a very large investment, as the properties that a landlord owns will also require a large investment. So, let’s look at the Jeweller, who owns properties to fund his old age.

A customer comes in, attracted by the very nice window display. You don’t know him but he has a reference from someone (again, unknown to you). He smiles nicely, is polite and asks can he borrow the Rolex watch you have in the window display. You advise that the watch will cost £7,000. He explains that he has no money but would be really grateful if you would lend it to him for a few months.

Would it be unreasonable of you to refuse to trust your valuable item into his eager, but cash-less, hands? Of course not; you need to protect your property; it was bought to realise a profit. Yet how many landlords will accept as a tenant someone without checkable references, where any deposit paid would be minimal, compared to the investment made by the landlord?

Let’s be a different landlord, but in the same business. He has a beautiful diamond bracelet in his window. Someone comes in to look at it. He has the cash to buy it and seems an excellent prospect for a purchase. The bracelet comes out of the window – and the prospective buyer says ‘there’s a diamond missing there; the catch is broken. Why should I buy?’ The Jeweller explains that yes, he can see the problems, but he spent £500 in replacing a diamond in a pendant, so he cannot afford to replace the diamond and repair this bracelet.

Landlords will show properties in need of substantial repairs and make the excuse all their resources have gone elsewhere, that they cannot afford repairs or replacement of a new boiler. Properties should be sound, clean and with all facilities working and no landlord should be in the business if a contingency fund does not allow for necessary repairs.

I like jewellery shops, so we’ll continue with the comparison. The jeweller engages a new assistant for his jewellery business. He takes no references as the new assistant seems quite charming. All goes well for a period of training and the owner feels confident he has made the right choice and can leave his assistant in charge when he is elsewhere.

On return from a short break away, he finds that there are a string of complaints waiting for him; the assistant has been rude to more than one customer; he has had several friends in the shop, being rowdy and intimidating customers; sales have decreased and the window is untidy and no longer appealing to the passer-by. Does the shop-keeper give his assistant another chance to do more damage? No. He has found his trust misplaced and there is only one option – he fires him, with as little notice as possible.

Why then do landlords accept the anti-social behaviour of their tenants, hesitating to take action, allowing their reputation to be damaged and finding that when the tenant is gone, there is work to do in the tenancy, probably substantially more than our Jeweller has to do to put his window back into order.

Private renting is a business. Some will believe that it is a unique business, that the rules that apply to another business are not relevant to the private rental sector. Perhaps not always but doing an exercise in compare and contrast will show whether the landlord is acting reasonably, or whether he is being taken advantage of and should take action – perhaps quicker than they usually do.

Source: Residential Landlord

Marketing No Comments

Bank of England deputy suggests Brexit deal could see rates rise

Deputy Bank of England governor Dave Ramsden has said he thinks gradually increasing interest rates could still be the right path if Britain achieves a smooth exit from the European Union.

Threadneedle Street has repeatedly struck a more hawkish tone than its American and European counterparts, saying it foresees “limited and gradual” rate rises unless Britain’s economy takes a downturn.

Ramsden spoke to Bloomberg yesterday after Prime Minister Boris Johnson announced a “great new” deal with the EU that would see existing trading arrangements stay as they are for at least a year while a new trade deal was reached.

“The kind of guidance we’ve been giving – in the world of a deal it still applies,” Ramsden said in the interview, published today. “We’re not saying over what timeframe, but limited and gradual is a reasonable qualitative framing.”

Ramsden’s view diverges from some of his Bank of England policymaker colleagues. Extern monetary policy committee (MPC) members Gertjan Vlieghe and Michael Saunders have suggested rates should be lower even in the event of a deal.

The BoE deputy said a Brexit deal and some certainty for UK businesses will lead to “some pickup in investment” and will bolster demand and “hopefully” productivity.

Business investment has slumped in 2019, with firms reticent to spend until there is greater certainty over Brexit.

Johnson’s new Brexit deal goes before MPs tomorrow in what looks set to be an incredibly tight vote. Ramsden said the BoE will keep an eye on currency movements after the vote.

By Harry Robertson

Source: City AM

Buy To Let Mortgage Market Brexit deal BTL Tax changes Rental income buy-to-let hotspots Buy To Let Property Sector buy-to-let buy to let property investors Buy-to-let Two bed properties
Marketing No Comments

Brexit Deal Positive For UK Buy To Let Property Sector

The news yesterday from Boris Johnson that a new Brexit deal has been agreed should be a positive step for the UK buy to let property sector, taking away much of the uncertainty from the property market.

Leading figures from the property sector reacted positively to the Brexit deal news from the government.

Co-founder of ideal flatmate, Tom Gatzen, commented: ‘The news of a Brexit deal will bring relief to the many European renters currently residing across the UK. For many, the political purgatory caused by a protracted Brexit process has thrown doubt over their status to live and work in the UK and this has had a direct impact on their ability to rent, how long they can rent for and their commitment to enter into a lengthy tenancy agreement.

‘Although the devil will very much be in the detail of today’s deal, a light at the end of a very long, dark tunnel should go some way in stabilising this segment of the UK rental sector and we can now get back to living in happy, harmonious households.’

Founder and CEO of Springbok Properties, Shepherd Ncube, commented: ‘Hallelujah. Against the odds and in the face of doubters, a Brexit deal has now been done and the UK property market can emerge from its dormant state brought about by months of political uncertainty.

‘We don’t yet know the detail, of course, however regardless, the property sector will surely begin to breathe again on the basis of some level certainty being restored and this uplift in market activity should see the cogs of positive price growth and transactions start to climb once again.’

Director of London lettings and estate agent, Benham and Reeves, Marc von Grundherr, commented: ‘The political paralysis that the economy and in particular the housing market has endured these last few months has been torturous for would-be home sellers, buyers, estate agents, conveyancers and mortgage lenders alike.

‘London has certainly taken the brunt of this and while there are no doubt many details left to iron out, we can start to look forward and finally, beyond Brexit. This will bring about a notable change in the fortunes of weary London home sellers and the capital will now regain its title as the cornerstone of the UK property market.

‘Foreign investment has remained strong despite the current landscape, but this revival in domestic appetite will fill the tank and see the market shift through the gears, if not immediately, certainly as we see in a new year.’

Source: Residential Landlord

Mortgage brokers stamp duty Welsh housing market UK properties Yorkshire property sector buy-to-let mortgages October property
Marketing No Comments

UK properties taking longer to sell

UK properties are taking almost two weeks longer to sell than last year according research by Post Office Money.

The ‘City Rate of Sale’ report, developed with the Centre of Economics and Business (Cebr) reveals on average it takes 114 days to sell a property in the UK.

Homes in Oxford take the longest to sell, staying on the market for an average of nearly five months.

Glasgow and Edinburgh saw properties sell the fastest in the UK spending 47 and 45 days on the market respectively.

Properties in Stoke have seen the largest increase in time spent on the market rising by 47% from 57 days to 84 days in the past year.

The report looked at the average time it takes for a property to sell in 66 major cities across the UK.

Ross Hunter, spokesperson for Post Office Money, said: “Properties are taking almost two weeks longer to sell compared to last year, but this doesn’t mean that interest in moving up the housing ladder is waning.

“At Post Office we have continued to see a rise in mortgage applications and approvals in the last year. There is political uncertainty at the moment, and the housing market can fluctuate, so it pays to be prepared.

“Whether you are a first-time seller or someone looking to sell up and downsize, it is more important than ever to understand the market in your area to ensure a smooth transaction.

“Our online tool allows you to find out how quickly you could sell your home across the UK, allowing you to plan ahead.”

By Jessica Nangle

Source: Mortgage Introducer

London house prices Expat mortgage London’s Rental Market London house prices London housing market General Election Renters housing market
Marketing No Comments

Housing market ‘in limbo’ as London house prices drop 1.4 per cent

London house prices booked a steep 1.4 per cent annual drop in August as UK house prices grew at a lower level than last year, according to the latest data.

While UK house prices posted annual growth of 1.3 per cent to beat that of 0.8 per cent in July, growth dipped below last year’s level amid a general slowdown.

London fuelled the drop as the capital suffered the UK’s biggest annual fall. followed by a 0.6 per cent decline in south east house prices.

That left the average UK house price worth £235,000 in August, the Office for National Statistics (ONS) said.

London house prices dropped to an average of £472,753.

“Annual growth in UK house prices showed a moderate pick-up in August although it remains below the increases seen throughout 2018,” ONS head of inflation Mike Hardie said.

“Wales saw the strongest growth with prices continuing to fall in London and the south east.”

Experts said the latest statistics painted a “picture of a housing market in limbo” as London suffered the worst effects of political uncertainty on the UK housing market.

“The closer we come to an apparent EU exit, the more likely it is that even the most fearless home buyer or seller will hold tight until the dust has settled,” warned Benham and Reeves director Marc von Grundherr.

“Further downward trends should be expected until the start of next year at the very least.”

Jeremy Leaf, a former residential chairman of the Royal Institution of Chartered Surveyors, said the latest figures show a small recovery in the housing market.

“Sadly, this is nothing to get too excited about because the market remains relatively flat although of course the resilience is welcome,” he added.

Better affordability and almost record-low mortgage rates are improving buyers’ and sellers’ confidence, he added.

Brexit leaves UK house prices in ‘growth rut’
However, property lender Octane Capital’s chief executive, Jonathan Samuels, warned that Brexit has left the UK housing market in a “growth rut”.

“With Brexit hanging over it, it’s as if the property market is frozen in a one per cent annual price growth rut,” he said.

“Very low single digit growth has been the narrative for well over a year now and it’s hard to see that changing anytime soon,” he added.

“London and the south east remain the primary drag on average prices, as they pay for the riotous growth of five or six years ago.

“While the market is down, low supply and stock levels, cheap mortgages and the strong jobs market are ensuring a degree of movement.”

Brexit endgame could increase volatility
Samuels warned that UK house prices could grow more volatile as the urgency for a Brexit deal increases

“We’re now approaching the Brexit endgame and the ride could get increasingly bumpy.

“It’s possible that what happens during the next few months, even weeks, could determine the fate of the property market over the next few years.”

London house prices ‘must end boom or bust cycle’
Gareth Lewis, commercial director of property lender MT Finance, said London house prices must show more modest growth to end their volatility.

“It may be the case that London and the south east need more sensible levels of price growth in order to produce a more robust market, rather than boom and bust,” he said.

EY Item Club economic adviser Howard Archer said the data showed a “renewed softening” in London house prices. He pointed out that it is the 14th successive month of decline for the capital.

Economy ‘too weak’ to prop up UK house prices
UK house prices and London house prices could benefit from a lack of housing supply, Archer predicted.

But he warned that the UK economy may not hold up house prices for much longer, a day after the unemployment rate inched upwards.

“The government’s recent – and ongoing – initiatives to boost house building will take time to have a significant effect so are unlikely to markedly influence house prices in the near term at least,” Archer said.

“However, the labour market has recently faltered and it looks likely to continue to do so in the near term at least as companies face a soft domestic economy, heightened Brexit uncertainties, an unsettled domestic political situation and a challenging global environment.”

“With the economy largely struggling and the outlook highly uncertain, we suspect that house prices will remain soft in the near term at least,” Archer added, predicting a one per cent rise across 2019.

PwC economist Jamie Durham disagreed, saying wage growth and unemployment remained sturdy supports for the housing market.

“But continued uncertainty in the market, related to Brexit among other factors, is likely to be dampening both supply and demand,” he added. “This is particularly the case in the capital and will likely continue to affect price growth over the coming months.”

By Joe Curtis

Source: City AM

UK inflation House Price
Marketing No Comments

UK Inflation Continues its Downward Trend and is Unlikely to Pick Up Anytime soon

The Consumer Prices Index measure of inflation in the UK showed prices increased by 1.7% year-on-year in September, unchanged on the previous month but a shade below the market’s expectation for a more robust reading of 1.9%, as a trend of steadily declining price pressures on the UK consumer extends.

According to the ONS, the softer-than-expect inflation reading was driven by downward pressures to the costs of motor fuels, second-hand cars, and electricity, gas and other fuels.

However, increases in the cost of furniture, household appliances, hotel overnight stays, and from recreation and culture items limited the decline in the prices consumers are paying.

The data confirms a steady trend of declining cost pressures in the UK, with prices moving steadily lower from the multi-year peak of 3.1% measured in November 2017.

The movement in prices will almost certainly only add to the perception that there is little reason for the Bank of England to raise interest rates anytime soon.

Yesterday’s labour market data confirmed the jobs market is softening, and combined with the downward trend confirmed by today’s inflation data, the Bank of England could in fact see scope for an interest rate cut as being their next move.

Such an outcome would likely weigh on Sterling’s outlook, as currency’s tend to fall when their central bank signals it is about to enter a rate cutting cycle.

Of course, it it is too soon to speculate on Bank of England policy moves, as it will be heavily Brexit dependent. But, strip out Brexit and we see the pressures to raise rates that were in place at the start of 2019 have now certainly evaporated.

And, cost prices are only likely to stay lower for longer, according to economists.

“Absent hard Brexit and a significant decline in Sterling inflation are likely to keep undershooting BoE’s 2% target. Meanwhile, the decelerating global demand could act as another deflationary impulse as Chinese goods blocked by tariffs in the US are likely to make their way towards Europe. BoE is likely to stay put for a while as, considering how fragile the UK economy is at the moment, a policy mistake would be disastrous,” says Artur Baluszynski, Head of Research at Henderson Rowe.

Written by Gary Howes

Source: Pound Sterling Live

UK house prices North's housing market UK property market
Marketing No Comments

Market slows as Brexit uncertainty continues

The UK property market has continued to slow in the face of Brexit uncertainty – except for an 8% increase in first-time buyers exchanges – the TwentyCi Property & Homemover Report for Q3 2019 has shown.

The report found that whilst property exchange volumes held up with 966,464 homes exchanged in Q3 (marking a 2.2% growth year-on-year) there was a decline of new properties coming on the market.

Q3 saw a total of 1,715,395 new instructions, 212,319 fall throughs and 801,013 withdrawals in the market, to change agent, or withdraw in this quarter.

Properties valued at £300k and below sold best in Q3, with exchanges up across all property price bands to this value compared to the same period last year.

More properties were also exchanging from lower income household bands from £15,000 upwards. Overall households with income bands of £20,000-£50,000 were proportionally buying and selling more properties covering a total of 126,941 exchanges.

Colin Bradshaw, chief customer officer at TwentyCi, said: “Consistent to our previous reports, this last quarter has again shown an overall slower moving market, reflecting the current unpredictable trading environment.

“Consumers are showing caution when it comes to both buying and selling property. With the likely outcome of Brexit still unclear, the uncertainty over both the economy, consumer confidence and the housing market will persist at least in the short-term.”

Nationwide, there is a clear North-South divide with any growth in average asking prices across the North of the UK and the Midlands, while London and the south show a small percentage reduction in average asking prices.

The figures reveal a 7% growth in Scotland, 5% in North East, 4% in Yorkshire and the Humber and 2% in the North West and East Midlands.

However there was a fall in asking prices of -3% in London, -2% in South East and -1% in South West.

But across the UK’s major cities average asking prices have been more resilient overall with more major cities reporting an increase for example, Leeds (7%) and Nottingham (5%) or holding steady – with the exceptions being Birmingham (-1%), London (-3%) and Southampton (-3%).

By Ryan Fowler

Source: Mortgage Introducer

mortgage
Marketing No Comments

First-time buyer numbers close to 12 year high

The number of first-time buyer mortgages in August 2019 edged towards the highest monthly total since August 2007, according to the latest data from UK finance.

In August this year, 35,010 first-time buyer mortgages completed compared to 35,070 in August 12 years ago just before the financial crisis struck.

The August 2019 rise was 0.7% on the same month in 2018.

There were 35,380 homemover mortgages in August 2019, a drop of 5.5% on the same month a year earlier.

A downturn in remortgaging

Remortgages with additional borrowing in August, fell by 2.9% year-on-year to 18,640 cases and the average additional amount borrowed was £55,000.

There were 18,100 new pound-for-pound remortgages (with no additional borrowing) in August, 2.3% fewer than in the same month a year earlier.

Buy-to-let numbers fall

A total of 5,900 new buy-to-let mortgages completed in August 2019, representing a drop of 3.3% from August 2018.

There were 13,800 remortgages in the buy-to-let sector, 0.7% fewer than in the same month the previous year.

Rob Barnard, sales director at Masthaven, commented: “This summer has been encouraging for the mortgage market. Lending activity has remained steady and first-time buyers continue to reap the benefits of Help-to-Buy.

“Remortgagers are taking advantage of the competitive deals available with lenders intensifying competition in the market by offering innovative products to homeowners who would rather stay put than move in the current climate.

“However, affordability and complex financial circumstances still leave many customers unable to secure a mortgage. With Help to Buy coming to an end in 2023, the mortgage market needs to continue to provide innovative solutions to encourage individuals onto-and-up the property ladder.”

By Joanne Atkin

Source: Mortgage Finance Gazette