Remortgage instructions
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Second charge mortgage market volumes rise by 12%

Second charge agreements were up 12% year-on-year in August, the latest figures from the Finance and Leasing Association have revealed.

There were 2,343 new second charge agreements in August.

The value of new second charge business saw a yearly increase of 10% at £102m.

Fiona Hoyle, acting director general and head of consumer and mortgage finance at the FLA, said: “The second charge mortgage market recorded its 12th consecutive month of double-digit new business growth in August.

“In the first eight months of 2019, new business volumes were 21% higher than in the same period in 2018.”

Richard Tugwell, intermediary relationship director at Together, added: “It’s clear that secured borrowing is growing in popularity.

“People are increasingly recognising it as a cost-effective way of securing funding for a range of needs, from house improvements to debt consolidation, while intermediaries recognise the importance of including a second charge option in their advice and recommendations.

“It is gaining more traction as an alternative to unsecured lending or re-mortgaging where factors such as redemption penalties, existing lender further borrowing policy and short term funding rates make these solutions less viable.”

Martin Stewart, director at The Money Group, commented: “ It is great news for a great product and some of the hard work being done by the industry to educate brokers about second charge mortgages.

“We have not necessarily seen an increase ourselves, our enquiries tend to arrive like buses and then it could be months before we see another one.

“One aspect that we should keep an eye on is whether second charge lenders are advancing because first charge lenders are retreating.

“We are without doubt entering a period of uncertainty and it will be interesting to see who has an appetite to continue lending.”

Robert Owen, managing director of mortgages and bridging at United Trust Bank, said: “It’s pleasing to see continued growth in the second charge marketplace as new products and technology has been brought into the market to improve the customer journey and the service to our brokers.”

Pete Mugleston, managing director at Online Mortgage Adviser, also commented: “We’ve seen an increase in enquiries and customers searching for alternative products to more traditional remortgages, with many homeowners opting to renovate and extend their property over moving and citing reasons such as increased cost (tax), the potential for further house price reduction (buying at the wrong time) and a lack of suitable property on the market to move to.

“It appears as though with the uncertainty around currently, whilst we’re still having record numbers of purchase enquiries, movers aren’t quite sure it’s the right time and more are deciding to stay put.”

Kevin Thomson, sales director at Connect for Intermediaries, believes more education is needed.

He said: “We always look for the best solution for the end client and often a remortgage can be better.

“We feel there is still a lot of education needed for mortgage brokers to really understand seconds and look at second charges and the variety of different purposes they can be used for.”

By Michael Lloyd

Source: Mortgage Introducer

Landlord confidence Universal Credit UK property market Buy To Let Property Renting
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UK property market remains subdued but growth expected in next year

Residential property sales remained subdued in September and buyer demand and supply slipped into negative territory, the latest industry housing market survey shows.

New instructions across the UK reached its weakest in three years and buyer enquiries have fallen as uncertainty deters house purchases, according to the report from the Royal Institution of Chartered Surveyors (RICS) but it still expects prices to rise at a national level over the next year.

It says that much of the anecdotal commentary from the survey respondents working in the market blames heightened economic and political uncertainty and the market seems unlikely to gain impetus over the next three months, though sentiment for a year ahead is more resilient.

In September, following three consecutive months of a stable trend, a decline is reported in home listings coming on to the housing market. Comments from contributors are suggesting that the Brexit impasse is dissuading vendors. The new instructions net balance fell to -37% in September, the weakest reading since June 2016.

Average stock levels on estate agents’ books, unsurprisingly therefore, remain near record lows. As contributors are reporting that appraisals are down compared to a year earlier, there is little prospect of a pick-up in the immediate future.

Alongside this, a more cautious approach from buyers is visible in the September results. After holding steady in the last four months, the new buyer enquiries net balance fell to -15%. In keeping with this, newly agreed sales fell, with a net balance of -27%, from -11% previously, with activity reportedly slipping in virtually all parts of the UK.

As far as the near-term outlook is concerned, sales expectations stand at -9%, suggesting sales will remain subdued in the coming three months.

The headline price balance sees a flat trend in house price inflation. However, there is once again a mixed picture across the UK with negative momentum in London and the South East, and solid gains in Northern Ireland, Scotland and the North West.

Looking ahead, price expectations for the coming three months stand at -16% pointing to a modest decline on a UK wide basis. However, the 12 month outlook points to a turnaround, with 18% more respondents expecting prices to rise rather than fall over the coming year.

In the lettings market, the latest set of results see demand from prospective tenants rising firmly for an eighth month in a row. Alongside this, landlord instructions remain in decline. With demand still outstripping supply, rent expectations for the coming three months remain positive at a net balance of 24%.

‘There are good reasons for thinking the latest dip in both buyer enquiries and vendor instructions is a response to the endless wrangling about Brexit, as the October 31st deadline approaches,’ said Simon Rubinsohn, RICS chief economist.

‘Indeed, much of the commentary from respondents based further away from London and the South East remains relatively sanguine, which is also reflected in some of the metrics capturing expectations. However, unless there is a speedy resolution to the ongoing impasse it does seem inevitable that the stand-off between purchasers and sellers will deepen making it harder to complete transactions,’ he explained.

‘This will not only be a direct hit on the housing market itself but could have ramifications for the wider economy as the normal spend on furniture, fittings and appliances that typically accompanies a house move is also put on hold,’ he added.

Source: Property Wire

UK house price growth UK buy to let property rents Professional landlords property market rental growth
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UK house price growth hits a six-year low in September

House prices grew at their slowest pace since April 2013 last month, in keeping with the predominantly flat trend seen over recent months.

On a monthly basis, house prices were actually down by 0.4% in September, while prices were up 0.4% quarter-on-quarter, according to the results of the most recent house price survey from Halifax.

Versus a year ago, the mortgage lender’s House Price Index was ahead by just 1.1% to reach £232,574.

The report also included some revisions to previous months’ figures following an update to the index’s methodology, with Halifax revising August’s monthly rise down to 0.2% from 0.3%.

Halifax’s managing director Russell Galley said: “Underlying market indicators, including completed sales and mortgages approvals, continue to be broadly stable.

“Meanwhile for buyers, important affordability measures – such as wage growth and interest rates – still look favourable.”

Galley added that looking forward, Halifax expects activity levels and price growth to remain subdued while the current period of economic uncertainty persists.

However, the monthly Halifax house price index was just one of many that track the UK market and has periodically been higher than others.

Nationwide building society said annual house price inflation slowed to 0.2% last month, while the Office for National Statistics, which uses data from the Land Registry, estimated it at 0.7% in July.

London estate agency Benham & Reeves’ director Marc von Grundherr said: “These most recent of statistics from one of the country’s volume mortgage lenders are the latest in a very mixed picture and one that adds to confusion as to what on earth the property market is really doing.

“The various indexes of late have not only contradicted each other but often contradict themselves month-on-month – in fact, the numbers have bounced around like a beach-ball on a bungee rope since the beginning of the year.”

Von Grundherr also said the fact that the year-on-year numbers were still positive “defies the gravity” of the current political situation.

Shares in housebuilders like Persimmon and Taylor Wimpey were down in early trade.

By Iain Gilbert

Source: Sharecast News

Private senior living housing supply
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Private senior living housing supply forecast to grow 30% in next five years

The value of the senior living sector’s private rental market is expected to increase by £2.1bn by 2024, according to global property consultancy Knight Frank.

Knight Frank’s latest Senior Living Annual Performance Review predicts a 30% increase (an additional 50,000 units) in private senior living units over the next five years.

Tom Scaife, Head of Senior Living at Knight Frank, (pictured), said: “The rental market for senior living is very likely to increase in line with the changing tenure trends across the UK’s wider housing market. As well as increased interest in purpose-built rental, for-sale operators are also increasing their allocation of private rented units pepper potted in their schemes.”

Knight Frank said growth would be concentrated in the South East, South West, Midlands and East of England with the number of units priced at more than £1,000 per sg ft in London rising from 300 to 2,000 by the end of 2023.

There are more than 4,000 existing senior living private rental units currently in the UK, with 93% incorporated within wider for-sale schemes, with the remaining 7% is being delivered by purpose-built rental accommodation.

Knight Frank estimated the value of the private rental market will increase from £1.3bn in 2019 to £3.4bn by 2023 with growth driven by private equity and institutional capital looking to diversify their real estate assets into alternative markets.

By LEE PEART

Surce: Care Home Professional

Stamp Duty Holiday Housing Market brokers Support RICS property investment House prices Government Scottish housing market Remortgage instructions Masthaven
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Best UK Locations For Property Investment

New research has shown up the best UK locations for property investment, either for pure investment or buy to let.

Lettings platform Howsy, has looked at what UK locations are currently the best place to invest in bricks and mortar, and where is the best location to invest in a buy to let to combine the best of both worlds in tough market conditions.

They looked to find the UK locations with the best property value growth over the last year, where is home to the highest rental yields and where is the best option for a mix of both when investing on your doorstep.

Investment Property UK Locations

For pure property value growth, North Devon tops the table at 15 per cent growth year on year, followed by Merthyr Tydfil and Blaenau Gwent in Wales, both at 13 per cent, along with a third Welsh option in Caerphilly, up 11 per cent.

Camden is the best bet in London with house prices up 10 per cent in the last year, with West Devon, Forest Heath, Rochdale and Monmouthshire all up 9 per cent, and Trafford seeing annual growth of 8 per cent.

Buy to Let UK Locations

When it comes to current buy to let rental yields, the best UK locations list was topped by Glasgow, with a return at 7.5 per cent, with Scotland also accounting for the next best three in Midlothian (6.8 per cent), East Ayrshire (6.8 per cent) and West Dunbartonshire (6.7 per cent).

Burnley and Belfast are home to current yields of 6.5 per cent, while Inverclyde (6.4 per cent), Falkirk (6.3 per cent), the Western Isles (6.2 per cent) and Clackmannanshire (6.1 per cent) complete the top 10.

Founder and CEO of Howsy, Calum Brannan, commented: ‘The face of the lettings sector has changed quite considerably with the advent of technology-based solutions to traditional problems, and now even the most amateur of buy to let landlords can own a home on the other side of the UK and manage their investment efficiently and effectively.’

Source: Residential Landlord

SME
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UK economy starts to show cracks under Brexit and global strains

UK economy is increasingly showing signs of strain as the Brexit crisis and the global slowdown intensify, with the loss of momentum appearing to spread to areas which have hitherto been sources of growth.

Confidence among businesses has ebbed to its lowest levels since the global financial crisis.

The labour market, which has long been a silver lining for the economy, is also starting to show signs of slowing, raising questions about the strength of consumer spending.

The different Brexit scenarios for the world’s fifth-largest economy make it hard to gauge the outlook for the year ahead, not least for the Bank of England, and some investors fear Britain is already flirting with recession.

Economists polled by Reuters last month put the probability of a recession within a year at 35%.

Below are some indicators of the British economy and how they have changed since the June 2016 Brexit vote.

BUSINESSES STRUGGLE
Pessimism among businesses has reached the highest levels in years.

The gauges of future activity in the Lloyds Business Barometer, CBI Growth Indicator and IHS Markit/CIPS surveys have all turned weakened recently.

The closely watched IHS Markit/CIPS survey last week showed Britain’s dominant services sector contracted unexpectedly in September — and marked the worst reading in a major developed economy.

HOUSEHOLDS STILL SPENDING

Household spending has supported Britain’s economy since the Brexit vote, although there are signs that households have spent more on non-discretionary goods such as food, while spending in restaurants and hotels has weakened.

As of the second quarter, spending on the latter was about 1.5% lower than in mid-2016, but nearly 7% higher for food and non-alcoholic drinks, according to official data.

Figures from the British Retail Consortium and payment card company Barclaycard published on Monday showed shop chains had their worst September since records started in 1995, although spending on entertainment increased.

LABOUR MARKET

The labour market is the strong point of Britain’s economy but some cracks have appeared recently. Employment fell in annualised terms in the six months to July 2019 to the greatest extent since early 2012.

Wage growth is at a decade-high although the BoE has said it may have peaked and there has been no pickup in productivity.

A measure that BoE policymakers like to look at — the three-month annualised growth rate of private sector earnings, excluding bonuses — slowed in July from an almost five-year high of 5.9% in June.

INVESTMENT

Although the Office for National Statistics has revised up the level of business investment in Britain’s economy lately, the figures still show capital expenditure has stagnated since the Brexit vote.

Business investment is running about 5 billion pounds lower than it would have been had it followed its pre-Brexit vote trend since the financial crisis, according to the latest data.

Reporting by Andy Bruce; Editing by William Schomberg

Source: UK Reuters

North's house prices brokers
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North’s house prices still 30 per cent below boom height

THE average price of a house in the north is almost 30 per cent below the height reached in the 2007 property boom.

New research published today by Property Pal found the £134,200 median price of a house here is 40 per cent below the UK average. The online housing portal has produced new micro-area analysis to show the five most popular places in the north to buy a house.

Carrowreagh, just outside Dundonald topped last year’s list with 180 homes sold. It came just ahead of Windsor (171), Bloomfield (137), Connswater (126) and Central Craigavon (125).

Cultra and Malone are the most expensive areas to buy a home, with median property prices of just over £400,000.

However research found over 80 locations in the north where median property prices are under £100,000.

According to Property Pal’s new economic and housing forecast, house prices grew 3.6 per cent last year. Assuming a ‘soft Brexit’ can be secured, it anticipates prices will rise by 2.9 per cent in 2019, 3.6 per cent next year and continue to rise from 3-4 percent until 2023.

The company’s chief economist Jordan Buchanan said that the north’s economy is expected to grow by 1.2 per cent this year, 1.3 per cent next year and between 1.5-2 per cent until 2023.

“The Northern Ireland economy has been performing particularly well in recent years despite an increasingly challenging backdrop,” he said.

“Firms have been hiring at record rates, economic inactivity is falling and unemployment is exceptionally low by historical standards, and amongst the lowest of any advanced nation in the world. However, the outlook remains cautious with many forward leading indicators suggesting the local economy is close to a recession.”

Focussing on the housing market, he said the north remains amongst the most affordable places in the UK to buy a home.

“Today the median house price in Northern Ireland stands at £134,200, 29 per cent below the highs of 2007 and over 40 per cent lower than the UK average (though a more sensible comparison is 34 per cent lower that Great Britain excluding London).”

Commenting on the potential impact Brexit might have on the market’s outlook, the economist added: ‘Until a Brexit deal is secured, economic and political uncertainty will restrain buyer sentiment.

“The UK wide housing market will remain price sensitive and beyond that, depending on what deal is agreed, will have an impact on the path of interest rates, wage growth and house prices.

“Fortunately from a Northern Ireland perspective, there is a case for optimism as the fundamental drivers remain encouraging. Ongoing affordability, pent up demand, a low interest rate environment – with competitive mortgage deals – and an increasingly tight labour market, with real wage growth, should support house price growth in the coming years.”

By Ryan McAleer

Source: Irish News

Adverse Credit Remortgage Halifax UK house prices ONS UK housing market average UK house price
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UK house prices grow at slowest rate for six years

UK house prices grew at their slowest annual rate in six years in September, a closely-watched gauge has revealed, as Brexit uncertainty continues to smother activity in the sector.

House prices grew by just 1.1 per cent over the last year, undershooting economists’ expectations of a rise of 1.6 per cent, Halifax’s house price index showed today. Prices rose at an annual rate of 1.8 per cent in August.

Month on month, UK house prices fell by 0.4 per cent in September, down from 0.2 per cent growth in August. The monthly figure also dropped below economists’ expectations of a 0.1 per cent rise.

Russell Galley, managing director of Halifax, said that although the 1.1 per cent annual growth is the lowest since April 2013, it “remains in keeping with the predominantly flat trend we’ve seen in recent months”.

“Underlying market indicators, including completed sales and mortgages approvals, continue to be broadly stable. Meanwhile for buyers, important affordability measures – such as wage growth and interest rates – still look favourable.”

“Looking ahead, we expect activity levels and price growth to remain subdued while the current period of economic uncertainty persists.”

Housing is just one market that has been subdued by political uncertainty in Britain. Potential buyers and sellers are putting off their decisions until there is more clarity over Brexit.

Halifax said today that recent surveys show a flatter trend in demand and lower mortgage approvals in recent months.

The UK housing market has also been hit by a global economic slowdown that has weighed on asset prices. First-time buyers will be cheered by the news that houses are not rocketing in price, however.

Andrew Montlake, managing director of UK-wide mortgage broker Coreco, said: “As we approach Halloween and the Brexit endgame it’s no surprise price growth is slowing, but the horror show many predicted hasn’t played out.”

“Extremely low borrowing costs continue to make property affordable while the strength of the jobs market is giving people confidence amid the chaos.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, said low levels of activity was forcing mortgage lenders to “work incredibly hard to generate business and stand out from the competition”.

“This is excellent news for borrowers and once buyers return to the market, when the uncertainty is removed from the equation, there are some extremely competitive products for them to take advantage of.”

By Harry Robertson

Source: City AM

London Super prime property market
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London remains main target for foreign investment

London continued to attract more foreign direct investment than any other UK city last year, prompting calls for a wider distribution of funds across the country.

The capital attracted 73 per cent of the total 624 projects secured in 2018, according to research by EY and the Centre for Towns.

The level of investment into the UK’s 12 largest cities has increased from 31 per cent in 1997 to 59 per cent in 2007, with London dominating the list.

However, Edinburgh, Leeds, Manchester and Newcastle upon Tyne more than doubling the number of FDI projects in the ten-year period.

The called for more investment in the UK’s towns and rural communities after research found that manufacturing FDI projects in former industrial and university towns fell by 50 per cent last year.

Over the last 20 years, large towns – with a population of more than 75,000 people – have seen their share fall from 26 per cent to 17 per cent.

EY chief economist Mark Gregory said: “The towns and conurbations on the periphery of the UK’s core cities are facing unprecedented economic challenges, but what is particularly worrying is how deep the economic disparity between cities, towns and smaller communities has become over the last 12 months.

“Core cities have been far more successful in attracting FDI while levels of investment in other locations has at best flatlined over the past 20 years.

“UK economic policy has tended to be based around core cities and this is likely to have exacerbated the geographic disparities in attracting FDI. With Brexit being one of a range of challenges facing the UK economy it is vital that a new approach to FDI policy, centred on geography, is developed as a priority.”

In total, 34 per cent of foreign investors said the availability of transport and technological infrastructure was an important factor when choosing a location to invest, while 32 per cent said the local skills base was a key criteria.

By Jessica Clark

Source: City AM

UK business UK economy
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UK business morale slides, especially in manufacturing

UK business activity wilted in the third quarter, especially in manufacturing, according to a survey on Friday that boded poorly for the country’s economy in late 2019 as it faces the Brexit crisis and a global slowdown.

The British Chambers of Commerce’s (BCC) survey of 6,600 companies showed domestic manufacturing sales fell at the fastest pace since late 2011. Growth in the much larger services sector also slowed.

Overall, the survey chimed with other signs of a sharp deterioration in business confidence in Britain as the Oct. 31 Brexit deadline nears with little clarity on how or if the country will leave the European Union.

The BCC survey also pointed to the biggest drop in manufacturing export orders in 10 years.

“Our findings point to a worrying drop-off in UK economic activity, with unrelenting uncertainty over Brexit and a notable slowing in global growth prospects dragging down almost all the key indicators in the quarter,” BCC head of economics Suren Thiru said.

“Looking forward, weakening orders, confidence and investment intentions suggest that unless action is taken the UK’s current weak growth trajectory could drift markedly lower over the near term.”

Consumer spending, boosted by the fastest wage growth in 11 years and low unemployment, has helped to offset the economic slowdown although there have recently been some signs of a weakening in job creation.

The BCC said more manufacturers reported a worsening of cash-flow than those reporting an improvement. The difference was the widest since late 2011.

A renewed drive to stockpile to avoid disruption after the Oct. 31 Brexit deadline – shown in an IHS Markit/CIPS survey on Monday – is likely to put more pressure on manufacturers’ finances.

Expectations for profits declined particularly sharply in the manufacturing sector, falling to their lowest level since late 2011, the BCC said.

The BCC survey was conducted between Aug. 26 and Sept. 16.

Reporting by Andy Bruce; Editing by William Schomberg

Source: UK Reuters