Although young home owners are struggling to obtain suitable mortgage finance experienced buy to let landlords are enjoying an ever increasing pool of mortgage capital. It’s all about the banks mitigating risk, why lend to young first time buyers with a limited track record when you could lend at a lower gearing to experienced investors with a proven track record and other security in the back ground? There is said to be a hundred more deals on offer than there was a year ago and the increased competition is leading to better deals. In the last year the average buy to let rate has dropped from 5% to less that 4.8% which on typical buy to let margins has a great affect on landlord’s bottom line. This is like a self fulfilling prophecy as first time buyers struggle to get mortgage funding they are forced to rent and that’s another tenant for the buy to let landlords.
Commercial property transaction volumes drop by over 6% from 2010 to 2011
January 25, 2012
The values of commercial property transactions have dropped from just short of 36 billion to just less than 33 and a half billion. In 2011 there were just over 1700 sold mainly by banks or the customers of banks under pressure to stay within their facility agreements. University research estimates that a quarter of all commercial property has 100% outstanding property loans. They estimate that a further 35% are at 70% or more, this mean that 60% of all commercial property will not be re-financeable at the end of their facility terms. This has the knock on effect that banks cannot clear property backed loans off their balance sheets. So they have little or no appetite for speculative property development and new commercial property loans.
Buy to let mortgages just got easier
January 23, 2012
Increased competition in the buy to let mortgage arena shows with looser lending criteria. The Yorkshire building society has expanded its range of mortgage products to include properties with a value of less than a £100,000 and for applicants with incomes of £20,000 rather than the £35,000 previous figure. Although house prices have stagnated the growth in rent inflation has encouraged both landlords and banks to place their funds back into the property sector. The Co-operative bank has also pledged to increase funds to the buy to let mortgage sector by another third. All this has lead to triple the number of buy to let mortgage products available to landlords.
HSBC pledges 15 billion to UK mortgages market
January 19, 2012
Last year the HSBC lent approximately 6.7billion to home owners so this represents a large increase, which could tempt other lenders to compete. The new money to the mortgage market is thought to be enough to help a further 150,000 home buyers. The new funding promise will defy economists who have remained pessimistic about the future of the UK property funding market. It is thought that at least 3billion of this property funding will be reserved for first time buyers. This come at a time when many mortgage brokers are expecting a sizable increase in interest from first time buyers.
Yorkshire capital home to housebuilding cash
January 12, 2012
The York based popular house builder and property developers Persimmon Homes have announced that 2011 matched the performance of 2010. The company has benefitted from improved conditions in the world of speculative development funding with this having a positive impact on margins and profits. While the business has reduced borrowings it has also enlarged its land bank. A very impressive performance considering market conditions and the troubles of many of its competitors. The company should be further bolstered this year as the whole of the property and construction industries look forward to the effects of 95% loan to value mortgages.
Tenants get poorer as home owners pay less to live
January 2, 2012
Tenants are paying more in rent than their home owning counterparts are paying in mortgage payments. This come as little shock too many as interest rates stay at these historic lows and rent inflation soar skyward. At the beginning of 2011 it was cheaper to buy a home than rent in 80% of the biggest towns and cities. During 2011 the figure jumped to 94% this is a depressing statistic for those stuck in rented accommodation by the mortgage drought. With banks and big lending institutions happily rebuilding their capital reserves and balance sheets things look unlikely to change direction soon.
Vendors get jumpy before Christmas?
December 17, 2011
In November asking prices for houses coming to market have reduced by over 3% this takes the average asking price of property down by a over seven thousand pounds. This fall in asking prices in real terms has been the largest that Rightmove has seen since 2007 and the start of the economic down turn. Many blame the situation with the Euro as a key reason that sentiment and there for house prices are taking a turn for the worst. All this tailored with a 13% reduction in new vendors really highlights the population’s new aversion to large financial decisions and commitments.
Property market welcomes £4 billion pledged by government to kick start developments
November 29, 2011
The property market has been desperate for new build housing stock and assistance for first time buyers. The governments announcement that it will back the proposed new-build mortgage indemnity scheme coupled with the 4 billion it plans to invest to kick start stalled developments means Christmas has come early for the property sector? Well it is good news but is it what they really want? Developers, house builders, main contractors and surveyors are all keen to see a sensible return to 95% loan to value mortgages. Once home buyers can easily secure their dream homes with a 5% deposit the housing market will open up. This will really assist the UK’s economic recovery as it will increase employment in the property and construction sectors.
Investment bankers look to lend to investment property mortgage specialists
November 20, 2011
The third quarter of 2011 has seen an increase in the number of loans to landlords by 16 percent. Interestingly this quarter has also seen investment banks looking to lend to the mortgage lenders who specialise in the buy to let market. The investment funds passed to these mortgage lenders has increased by 19 percent. This gives a clear indication that organisations and individuals that are best placed to predict the future of the buy to let property market are rapidly gaining confidence in the market. The 3.2 billion pounds that has been lent into the buy to let residential housing market is the highest level of investment funding hitting the market since the previous boom.
House builders and lenders make use of shared equity schemes for over 1 in 5 new builds
November 16, 2011
Figures from the website SmartNewHomes shows that nearly one quarter of all new homes are available with shared equity schemes. 23 percent of the properties offered offer the scheme the scheme offers matched funding for property deposits. In essence the first time buyer can apply for 50% of the required deposit as long as they can fund the remaining 50% themselves. The scheme is working partially well when the Governments FirstBuy scheme is utilised this allows for a 20% loan provided by the house builder and the government with 5% coming from the first time buyer. The remained is secured with a 75% loan to value mortgage which also has the advantage of better mortgage rates and fees. When you consider that the first half of this year had half the first time buyers of the same period in 2007, it shows how critical these schemes are to recovery in the housing market and ultimately the UK’s GDP.
