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UK Finance: Finance sector committed to supporting commercial landlords

UK Finance has confirmed that the banking and finance industry will continue to support commercial landlord customers with the June/July rent quarter rapidly approaching.

The trade body said that lenders recognise that commercial landlords and their tenants may have concerns about their ability to make their payments and that support was available including the providing of capital payment holidays and amending current facilities.

Stephen Jones, chief executive of UK Finance, said: “Commercial finance providers are working hard to support business customers through these difficult times and lenders recognise that the current situation poses particular challenges for commercial landlords and their tenants.

“A wide range of flexible support is available, including amendments to facilities and capital payment holidays to help landlords and their tenants manage through the disruption.

“As part of the support being provided ahead of the June quarter day all the main commercial lenders are proactively contacting their major commercial landlord borrowers to identify concerns they have and provide support where appropriate.”

Those commercial landlords who are concerned about making loan repayments or require financial assistance during this time and who have not yet been in contact with their lenders should do so through the usual channels.

By Ryan Fowler

Source: Mortgage Introducer

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UK Finance: Mortgage market is still strong

Despite a backdrop of uncertainty, the mortgage market is still strong and competitive, UK finance chief executive Stephen Jones said at the regulator’s annual mortgage dinner.

He pointed to figures showing that gross mortgage lending will reach around £265bn in 2019, almost the same as in 2018.

Jones (pictured) said: “Our industry wants to focus on competitiveness, innovation, talent, tax, regulatory proportionality and coordination, and regulation fit for the future, all themes that underpin UK Finance’s work for our members.

“At UK Finance we seek to help our members, large and small, navigate change.

“A growing number of first-time buyers are entering the housing market, while existing homeowners are taking advantage of competitive products available in a low interest rate environment.

“The potential end of Help to Buy in 2023 presents a major challenge to growth in new housing delivery.

“We will continue to engage with governments across the UK on initiatives to support low cost home ownership and increase the new supply of affordable and social housing, and to ensure that housing association lending and investment continues to be attractive.”

He warned about the challenges that remain, for example 5-year fixed mortgages now account for nearly half of all fixed rate sales, a market where 2-year deals once dominated.

Jones added: “Longer terms will inevitably mean fewer remortgages in the coming years, which the industry must deal with.

“Our figures show that, despite challenging conditions in the buy-to-let market, lenders are continuing to support and work with landlords, to ensure sustainable and affordable finance is available for the private rented sector.”

By Michael Lloyd

Source: Mortgage Introducer

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UK mortgage lending rises but experts warn of tough year ahead

THE number of mortgages approved by UK banks increased for the first time in four months in January, according to industry data.

However, UK Finance – the body that represents all the major high street banks – found lending to consumers fell, reflecting caution among households.

Total mortgage lending rose by 9.7 per cent to £21.9 billion in January compared with the same month a year ago.

Consumer credit declined by 0.2 percent in annual terms in January – the first drop since UK Finance’s new consumer credit series started in April 2017.

Much of the boost to mortgage lending could have come from a cut in stamp duty for first-time buyers.

But lending to businesses contracted by 1.4 per cent, with construction falling. Spending on credit cards rose by 5.8 per cent, or much faster than the growth in personal incomes, although the banks said that repayment levels on credit cards were also high.

The figures suggest that borrowers are switching away from personal loans, which declined by 15 per cent on the month, and preferring to borrow via their credit cards instead.

Deposits at banks and building societies advanced just two per cent on the year, hitting a total of £835bn, with ISA products continuing to see outflows.

UK Finance warned 2018 is likely to be a difficult year for the housing market.

Howard Archer, chief economic advisor to the EY Item Club said: “UK Finance reported that mortgage approvals for house purchases picked up to a three-month high of 40,117 in January after slowing to a 56-month low of 36,085 in December from 39,624 in November, 40,599 in October and 41,647 in September.

“January’s rebound in mortgage approvals suggests that there may have been a hit to activity in December as a reaction to the Bank of England raising interest rates in November.

“It is also possible that cutting stamp duty for first-time buyers in the Chancellor’s Budget may have provided limited support to mortgage approvals in January. The abolition of stamp duty for first time buyers for properties costing up to £300,000 (and on the first £300,000 for properties costing up to £500,000) should also provide some support to house prices.

“It should be noted that housing market activity can be particularly volatile around Christmas and New Year.

“While January’s rebound in mortgage approvals suggests that December’s drop overstated the weakness of housing market activity, it is still subdued. Indeed, January saw mortgage approvals for house purchases at the third lowest level since September 2016.

“Furthermore, at 40,117 in January, mortgage approvals for house purchases were still 22.2 per cent below their long-term (1997-2018) average of 51,563

“The latest survey evidence also points to lacklustre housing market activity early on in 2018.

“New buyer enquiries were down for a 10th month running while agreed sales fell for an 11th month.

“The latest UK Finance mortgage approvals data does little to dilute our belief that 2018 will be a difficult year for the housing market and price gains over the year will be limited to a modest two per cent.

“The fundamentals for house buyers are likely to remain challenging. The squeeze on consumers’ purchasing power remained significant going into 2018, and it is likely to only gradually ease as the year progresses.”

Source: The National

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UK mortgage approvals hit lowest since 2013 in December

British banks approved the fewest mortgages since April 2013 last month and growth in consumer credit slowed, industry figures showed on Thursday, pointing to a weaker housing market this year.

Banks approved 36,115 mortgages for house purchase in December, down some 19 percent from with a year ago and weaker than the 39,007 approved in November, trade association UK Finance said.

Britain’s economy slowed last year as higher inflation triggered by the June 2016 referendum to leave the European Union ate into households’ disposable income, causing the housing market to cool in much of the country.

Thursday’s figures are the first to show what happened to lending after the Bank of England raised interest rates for the first time in 10 years in November, when the government also announced it would scrap a property purchase tax for most first-time buyers.

“December’s marked drop in mortgage approvals suggests that already pressurised housing market activity took a further hit from the Bank of England raising interest rates in early-November,” said economist Howard Archer from the EY ITEM Club consultancy.

Nor was there much sign that the government’s property tax changes in November – which included scrapping purchase taxes for most first-time buyers – had lifted total demand.

UK Finance described the figures as showing “a healthy mortgage market in a traditionally quiet month” and said there was an underlying upward trend in the number of first-time buyers, boosted by previous government initiatives.

Annual growth in consumer credit slowed to 0.7 percent from 0.8 percent, the weakest reading since UK Finance started publishing a new version of this figure in April last year.

More comprehensive lending figures from the Bank of England are due on Tuesday.

Source: UK Reuters