Jul 19

Halifax have released their latest figures this morning and revealed that, despite a less than certain political and financial climate, the UK housing market remains steady.
According to the lender, on a monthly basis, house prices fell by just 0.3%, 5.7% higher than in the same three months a year earlier. Halifax says the average price for a home in the UK now stands at £237,110.
June’s annual change figure of 5.7% comes against the backdrop of a particularly low growth rate in the corresponding period in 2018, which has had an impact on year-on-year comparisons.
Russell Galley, Managing Director, Halifax, said: “Average house prices dipped marginally in June, falling by 0.3%, to stand at £237,110. This extends the largely flat trend we’ve seen over recent months.
More generally the housing market is displaying a reasonable degree of resilience in the face of political and economic uncertainty. Recent industry figures show demand looking slightly more stable, with mortgage approvals ticking along just above the long-term average.
One of the major restraining factors on the volume of transactions in the market continues to be the very low level of stock for sale. With the ongoing lack of clarity around Brexit, people will be looking for more certainty in the coming months, both to encourage them to list their property and to create the confidence needed to encourage buyers.
Of course, the likelihood of continued historically low mortgage rates will underpin prices in the near term.”
As ever, the property market was quick to react. Here's what they're saying:

Mark Harris, chief executive of mortgage broker SPF Private Clients, says: "A steady mortgage market, despite the economic and political turbulence, is the best we could have hoped for. The ongoing uncertainty with regard to Brexit continues, resulting in many people putting decisions on hold and a lack of property coming to market. However, lenders remain keen to lend and subsequently mortgage rates are low, which is supporting property prices to an extent.'
Jeremy Leaf, north London estate agent and a former RICS residential chairman, said: "The latest Halifax house price numbers, showing a monthly dip in values, are not going to encourage buyers to make a commitment while prices continue to soften. It paints a confusing picture with the annual house price increase actually greater than it was last month while comparative figures from 12 months ago are also unreliable.
In order to get a better feel for the market, it is always preferable to look at what is happening on the ground. We are finding that some buyers, including some investors, are looking beyond Brexit and political uncertainty and are prepared to go ahead if they can perceive value. Sellers please note."
Marc von Grundherr, Director of Benham and Reeves, commented: “While it may seem as if the UK property market is treading water on a month to month basis, this short-term metric can be erratic at best and the broader picture shows that we are in a considerably better position than this time last year, with a third consecutive month registering notable levels of annual price growth above 5%.
Much like the recent weather, we’re seeing a seasonally inspired heatwave returning to the market with many wider indicators suggesting a more stable outlook for the year ahead. While the political forecast remains uncertain it's unlikely to dampen this growing market momentum, as homeowners bask in the warmth of a robust property market that is yet to see any meaningful decline despite all that's been thrown at it."
Gareth Lewis, commercial director of property lender MT Finance, had this to say: "Unfortunately, the property market is stuck in a holding pattern, with prices not growing in real terms. Buyers and sellers are hedging their bets and demonstrating caution while they wait to see what happens on the political front.
One should be cautious as the Halifax figures only give part of the picture because they measure values but not the volume of transactions. Are we seeing a decrease in values because there are fewer transactions? It flatters to deceive as we don’t have all the facts.
In the buy-to-let space we are finding that investors are looking for bargains and will only buy at the right price."

Jul 19

The Intermediary Mortgage Lenders Association, has announced that the Government action on leasehold, including action to ban Help to Buy being used to purchase leasehold properties, has been welcomed.

The changes were recently announced by the Secretary of State for Housing, Communities and Local Government, The Rt Hon James Brokenshire MP and include immediate action to prevent Help to Buy being used to purchase leasehold properties.

IMLA believes that the changes will help new buyers avoid becoming victims of unfair leasehold practices, such as high ground rent fees, and give them much more certainty around the home buying process.

Kate Davies, Executive Director of the Intermediary Mortgage Lenders Association, also expressed hope that estate charges would be brought within the scope of the new proposals.

She had this to say: “IMLA supports a housing market that is fair for all buyers. These proposals from the Government, including immediate action to remove leasehold properties from Help to Buy, will protect consumers from some of the unjust practices we have seen in recent years regarding leasehold properties, such as high ground rent fees.

However, for the Government’s plans to truly be successful, it’s important that estate charges are also included within the scope of these changes. These fees are often levied on freehold property owners and include unfair and disproportionate charges for simple maintenance jobs. The addition of these only serve to increase the costs of owning a new build property, and ultimately stand against the work being done by the Government and the industry to help more potential buyers onto the housing ladder.”

Jul 19

The latest statistics from the Bank of England have revealed that, during May, house purchase mortgage approvals fell back to 65,400 after April's strong numbers.

According to the figures, the number of approvals for remortgaging also dipped in May, to 46,700. Net mortgage borrowing by households fell to £3.1 billion in May, the smallest increase since April 2017.

However the annual growth rate for mortgage lending remained stable at 3.2%, and has now been around 3% since late 2016.

Mark Harris, chief executive of mortgage broker SPF Private Clients, says: "The number of mortgage approvals for house purchase, which indicate at what level future lending will be, fell back slightly in May but remain broadly in line with the narrow range seen in previous years.

It shows that the mortgage market is trundling along quite steadily with no great shocks either way. This is reassuring as there is plenty of political and economic uncertainty, which is preying on people’s minds and creating a delay when it comes to making big decisions.

Lenders remain keen to lend and several have cut rates in recent weeks so mortgage rates are likely to remain low for a while yet, further supporting the market."

John Phillips, operations director at Just Mortgages and Spicerhaart said: “There is not a huge change here; net mortgage borrowing fell slightly, but the annual growth rate for mortgages has remained stable at 3.2%, which means it has now been steady at around 3% for almost three years. Approvals, however, were down for both house purchase and remortgaging, which could suggest that lending will fall over the next few months and growth may slow too.

There is no doubt that it has been a funny old few years for the mortgage market. Brexit has obviously had – and is still having – an impact, but I don’t think it is the only factor at play.

For many years now, borrowing costs have been very low, but wages have not been keeping pace with house prices, so while mortgages are affordable, deposits and stamp duty are not. Those who may have upsized in the past are now either remortgaging to borrow more and then extending, or just saving the money they would’ve used on stamp duty and investing it into their existing homes.

If the Government wants to get things moving again, they need to do something about the cost f moving. People are simply not prepared to throw thousands of pounds that could be sued to invest in a bigger home on stamp duty. Back in April, the House of Lords Committee on Intergenerational Fairness and Provision recommended changes to stamp duty because, they said it is ‘seriously distorting the market’ and I think they’re right. Until something is done about the crippling cost of stamp duty, the market will continue to struggle.”

Kevin Roberts, Director, Legal & General Mortgage Club, comments: “The government’s Help to Buy scheme has improved affordability for first-time buyers, and with mortgage lenders increasingly offering 95% loan-to-value products, they have unparalleled access to the finance they need. The low interest rate environment has also encouraged existing homeowners to remortgage onto longer fixed-term products – giving them certainty over their future repayment costs.

However, a mortgage is usually the biggest financial commitment an individual has in their lifetime – and this process shouldn’t be rushed. Seeking professional advice is a practical first step and can help individuals choose whether it is the right decision for them. Independent mortgage advisers will not only help find the protection needed, but with access to almost six times more products than available direct from lenders, they can source a product that meets your financial needs, too.”

Jun 19

Lettings platform, Howsy, takes a look across the UK to find where is home to the best rental market when it comes to the average cost of renting as a percentage of the average salary on offer.

Howsy looked at government data on rental costs across England, Scotland, Wales and Northern Ireland and ONS data on the average salary in each area to highlight which rental market is the most affordable when it comes to the level of disposable income left after putting a roof over your head.

The research shows that at the top line, Wales in the most affordable nation with rental costs accounting for just 30% of the average monthly salary while across the UK as a whole this increases to 34%.

The North East is the most affordable region after Wales 31% of income spent on rental costs. London is, of course, bottom of the affordability scale with the average cost of renting accounting for an eye-watering 65% of the average salary. On a local level, East Renfrewshire in Scotland is the UK’s best rental market for tenants with the average rental cost of £584 a month accounting for just 23% of the average wage of £2,509.

Copeland is the second most affordable with just ¼ of the average wage spent on renting, along with Rhondda Cynon Taf and Pendle.

Hartlepool and Darlington trail marginally behind with 26% of income spent on rent, while Allerdale, Carmarthenshire, Barnsley, and Country Durham are home to a rental cost accounting for 27% of the average income.

Hackney is the least tenant friendly with a whopping 83% of the average salary in the borough spent on renting. While London does account for 70% of the top 10 least affordable, Oxford (70%), Brighton (66%) and Elmbridge 66%) also make the list.

Calum Brannan, Founder and CEO of Howsy, commented: “We tend to put a lot of focus on the negatives of the UK lettings market but while top-line affordability may be an issue for many, there are plenty of areas where renting isn’t such a financial burden.

Maximising your disposable income in any part of the UK is the key to living a happy life in the rental sector and it pays to do your research before making a move to ensure you can not only cover the cost of renting, but you aren’t left high and dry once you have.

These are the best areas to look to in order to do this, but we appreciate for those working in London, a commute from East Renfrewshire is probably a tad unrealistic. However, we wanted to highlight the diversity of the UK rental sector and reassure those looking to rent that there are plenty of relative pockets of affordability across the nation.”

Jun 19

The latest research from Cambridge & Counties Bank, has revealed that despite the seemingly never ending Brexit circus and challenging financial climate, around two thirds of UK landlords are optimistic about the outlook for the residential buy-to-let sector over the next three years.

Of this, more than one in 10 are “very” optimistic in terms of investment growth and yields.

The research highlights that a significant number of landlords are using the current market volatility to grow their portfolios: nearly a fifth (19%) are looking to grow their portfolios by a third and 11% want to double it over the next three years. The research found that just 19% of landlords are looking to sell.

Despite the strong level of optimism, Brexit remains a key uncertainty for property sector professionals with two fifths (40%) of landlords conceding that it is top of their list of concerns. Brexit is seen as a bigger risk than rising interest rates (cited by 32%), a lack of confidence in the stability of lenders (32%), and rising levels of tax (also 32%).

While the BTL sector is viewed most positively, a similar number (61%) of landlords are equally optimistic about student accommodation in terms of growth (with 16% being “very” optimistic). Office buildings and properties are viewed positively by two fifths (41%) of respondents - though almost a third are not optimistic.

In addition to growing their property portfolios, a significant number of landlords say they will be refurbishing their BTL and investment properties, with an average of £10,000 set to be spent. One in 10 (11%) of respondents to the Cambridge & Counties Bank study said they would spend more than £20,000, with 4% forecasting they would invest more than £50,000 in their estate.

As part of its property finance offering, Cambridge & Counties Bank2 provides refurbishment loans for experienced property investors, landlords and developers looking to upgrade or convert an existing property into a residential, commercial or mixed-use property for the purpose of either rental or sale.

Simon Lindley, Chief Commercial Director, Cambridge & Counties Bank, said: “In spite of Brexit worries, it is great to see that the overall outlook for the commercial property sector is one of optimism. At Cambridge & Counties Bank, we remain very much focused on supporting our clients with our comprehensive product suite and in doing so maintain our market leading level of customer satisfaction.”

One of the shocking results of the research was the growing concern among landlords with regards to the financial stability and strength of their banking partners. Just one in five (20%) said they were very confident of their lender’s stability, with 18% of landlords saying they are “not confident” in their lenders stability given recent announcements of funders going into administration or closing their books to new business.

Simon concludes: “Cambridge & Counties Bank has seen a steady stream of borrowers switching from other lenders, often recommended by the intermediaries and brokers we work closely with on a daily basis. We are actively focused on becoming the bank of choice for professional property investors and landlords, and will capitalise on the record set of results we posted for FY2018 and the momentum we have across the UK to grow our market share further.”

Jun 19

Specialist lender, Foundation Home Loans, has announced that it has launched a new portfolio landlord special product, with a minimum amount of upfront fees and costs to pay.

The product - an addition to Foundation’s F1 core buy-to-let range – is a 3.39% five-year fix, available up to 75% LTV. It comes with a 1.5% product fee, one free standard valuation and there is no £125 application fee to pay.

Foundation believes this product will appeal to portfolio landlord clients who want to minimise their upfront costs, especially those who are looking to make changes to multiple properties within their portfolio.

Foundation’s portfolio landlord criteria also includes: no limits to portfolio size - subject to maximum borrowing of £3m with the lender; no business plans or asset and liability statements required; and a bespoke stress test for the background portfolio.

The launch of this product follows the launch earlier this month of a five-year fix remortgage product suitable for portfolio landlords, limited companies and individuals. It is available at 3.59% up to 65% LTV and 3.89% up to 75% LTV and comes with a flat fee of £2,995 with stepped ERCs from 5% down to 1%. This product also comes with Foundation’s free standard valuation and £250 cashback upon completion.

All Foundation’s products are available via its distributor network including all mortgage clubs, networks and key packagers.

Jeff Knight, Director of Marketing at Foundation Home Loans, said: “We are seeing a strong growth in demand from portfolio landlords and this new product is designed to support their activities, whether they are looking to purchase or seeking refinance. Minimising upfront costs is often a priority for such clients so with this new ‘special’ we have kept those costs purposefully low, while providing payment certainty over a five-year term. For professional landlords, and their advisers, using a lender that is immersed in the sector and understands their specific – and often complex – needs is absolutely vital. This is why we have the specialist knowledge and drive to deliver what landlords need in order to help them develop and grow their portfolios.”

Jun 19

The Tory leadership race continues to rage on with Rory Stewart, the latest casualty, dumped out of the contest on Wednesday evening.

While Bojo seems to be the frontrunner, London letting and estate agent Benham and Reeves has had a look at each candidate on a property price growth basis to see who has at least, been best for homeowners in their respective constituencies.

Benham and Reeves looked at the change in house prices across each candidate’s constituency since they’ve been elected and what this equates to on an average yearly basis to compare performance.

Interestingly, the data shows that Boris really could the best man for the job from a property point of view. During his time as MP for Henley between June 2001 and June 2008, house prices increased by 10.4% on average each year, 0.3% higher than Oxfordshire as a whole.

As the now MP for Uxbridge and South Ruislip having secured the seat in May 2015, Boris has presided over a 5.7% annual rate of growth, which is 3.2% higher than London during that time.

That’s also an average annual increase of 8% a year across both constituencies and 3.2% higher than the average annual increase for London and Oxfordshire combined at 6.25%.

Now in their defence, the rest have also seen average yearly house price growth exceed that of the wider area, but none to the level of Bojo. In fact, Raab is the closest having seen an annual increase of 7.4% across Esher and Walton since May 2005 – irrelevant now but he has something to cling onto at least.

Jeremy Hunt is the next best candidate for homeowners with an increase of 5.9% a year in South West Surrey, while Michael Gove has seen prices increase 5.4% in Surrey Heath over the same time period.

Sajid Javid has seen an average annual increase of 4.6% in Bromsgrove since being elected in May 2010 and while an outside favourite for the actual role, house prices in Penrith and the Border have increased by just 1.1% since Rory Stewart was elected at the same time.

But what about Boris and his time as the Mayor of London?

Well over his two terms, house price growth in the capital soared by 58.4%, 43.9% higher than the UK as a whole. His time as mayor also saw four separate boroughs gain notable deprivation improvements. Of these four, house prices in Hackney and Haringey also outperformed the London average with an increase of 59% and 64.5% respectively, while price growth exceeded 40% in Tower Hamlets and 53.6% in Newham.

Investment in Lambeth’s via regeneration projects like Loughborough Junction, Southwark via the Elephant and Castle Project, Wandsworth via the Battersea Arts Centre and new homes in Islington also seem to have helped these boroughs achieve price growth above and beyond the London average during Boris Johnson’s time as the Mayor of London. Bojo’s investment in the Croydon partnership helped price growth hit 45.5% during his time in the role.

Finally, previous research by Benham and Reeves found that even the presence of Boris Bikes is enough to increase house prices, with areas to have benefitted due to a lack of public transport seeing a sharp increase in house prices.

Marc von Grundherr, Director of Benham and Reeves, had this to say: “One thing that certainly stands out is that investment into an area, whether it be London or any other constituency, is always going to bring additional benefits such as an uplift in the local housing market.

Whether Boris intended such an extensive CV of housing-related achievements is probably a matter of opinion, however, he seems to have done a good job in his local constituencies and he certainly nursed the capital’s through a tough time with the financial crisis.

With the market currently suffering from a Brexit induced lethargy, he could be the right man to kickstart it back into action, but we will have to wait and see who is left standing at the end of it all.”