It has been the year when the mortgage market has expanded, contracted, expanded, contracted and ends expanded - as lenders, faced with the challenges of the Mortgage Market Review have been decreasing and increasing rates like a fairground roller coaster. It is now clear that many lenders won't achieve their end of year numbers and Nationwide, the UK's largest building society reported on the BBC, last week it has fallen short by £1 billion. This month we were featured on the front cover of the London City AM newspaper commenting on the article Home Loan Rates Set To Drop Further, written by financial journalist David Papadopullas. The article succinctly portrays the current market conditions and availability of record low, cheap loans. We are seeing mortgage rates being offered at levels we have never witnessed before in our 9 year history, for example the recently launched 1.29% rate from Woolwich. This is great news for our customers looking to re-mortgage with us. Our round up of news this month, adds weight to the housing market cooling and raises the issue as to whether this is a temporary blip or a long term trend. Next year will prove interesting as low inflation, weak growth in Europe, intense competition amongst lenders, increased devolution within the UK and probably the most unpredictable election outcome for 100 years all being on the horizon. From of all us here, we thank you for your on-going support this year which again has seen record growth on both the insurance and protection side of the business. We hope you all enjoy the forthcoming festive season and we will see you in the New Year, with our continued, monthly summary of news.
Housing market dip only temporary, says Rics
A dip in activity in the UK housing market and slowing property prices will only be 'temporary', surveyors say. Demand from new buyers slowed for the fourth consecutive month in October, the Royal Institution of Chartered Surveyors (Rics) said. Sales also declined during the month in all but a few regions of England and Wales, Rics said. However, surveyors said they were confident the market would pick up in the medium term. The survey suggested that buyer inquiries had fallen in all regions of England and Wales. As a result, sales also fell in every region except south-west England, Yorkshire and Humberside.
Savvy Second Steppers bide their time to jump straight into a family home
According to the fourth annual Second Steppers Report from Lloyds Bank, those living in their first home are increasingly looking to move into bigger four bedroom detached houses, reducing the number of steps they're taking on the property ladder to get to their long term family home.
In 2010, three bed semi-detached properties were the preferred second step. At that time, almost two thirds (60%) said that they were looking to move to a semi-detached house, with half (48%) also saying detached properties would also be an option. Fast forward to 2014 and 54% of Second Steppers stated they would be looking to next move to a detached house, now the most preferred option, with semi-detached properties reducing to 51%.
Gross mortgage lending up 5% month-on-month
The Council of Mortgage Lenders estimates that gross mortgage lending reached £19 billion in October. This is 5% higher than September (£18 billion), and 8% higher than October last year (£17.5 billion). This is the highest lending total for an October since 2008 (£18.6 billion). Commenting on market conditions in this month's Market Commentary, CML Economist Mohammad Jamei observes: "The market is in a steadier state than it was earlier in the year....With expectations of the first interest rate rise moving to the fourth quarter of next year, as well as positive forecasts for growth, pay and unemployment, there is potential for market activity to gain traction in the new year."
Rents reach new record high
Rents in England and Wales now average £770 per month, £12 more than October 2013 and up 0.3% compared to last month, says a report from Your Move and Reeds Rains. "Rents have edged to a new record and the rental market is pulsing with new demand. Yet at the same time, tenants are getting on top of their finances helped by a cooling pace of such rent rises," said David Newnes, director of estate agents Reeds Rains and Your Move. "Better affordability is good for tenants in the longer run too and for landlords who can rely on steady revenue to pay the bills," Rents in nine out of ten regions of England and Wales are higher than a year ago
Tax debts: HMRC powers to raid bank accounts revised by Treasury
Controversial plans that allow HM Revenue and Customs (HMRC) to raid bank accounts to collect tax debts have been revised by the Treasury. Under the revised plans, taxpayers will have longer to appeal before any raid. Announced by George Osborne in the Budget, the powers allow HMRC to seize assets from anyone who owes more than £1,000 in tax or tax credits, subject to certain safeguards. But the proposals attracted criticism from banks, MPs and debt charities. The revised plans also mean that HMRC will have to hold face-to-face meetings with debtors first before taking any money from their accounts.
Home is where the office is for microbusinesses
84% of the UK's smallest businesses now use their home as a place of work, according to new research from Lloyds Bank Insurance. The latest Big Issues for Small Businesses report from the insurer found that 53% of all microbusinesses were started from home and half of the top 10 working locations identified are within the home, including the living room, dining room and kitchen. There are now 2.7 million self-employed people working from home in the UK, and the research revealed that 82% of these microbusiness owners have made significant changes to make their property 'work ready'. The average cost of adapting homes for working life is revealed to be £1,392, with the most popular adjustment converting a room into an office (42%).
Mortgage Lending to jump 10% in 2015
Gross mortgage lending is set to increase by around 10% in 2015, experts have predicted, as the market bounces back in the wake of the general election. This year gross mortgage lending is set to be around £205bn, compared to £176bn in 2013, £145.3bn in 2012 and £141.3bn in 2011. Speaking to FTAdviser, Nigel Stockton, Countrywide's financial services director, said that mortgage lending should increase from circa £205bn in 2014 to £215-220bn in 2015. 'Some of this will come from increased remortgage activity, as a bank base rate rise looks increasingly likely, but I also expect some transaction growth albeit at modest increases to 2014 and predominantly outside of London.' He added that whilst overall gross mortgage lending will increase, he believes most of the action will be post-election.
Housing market continues to soften, Nationwide says
The annual pace of house price growth has slowed for the third consecutive month, according to the UK's second biggest mortgage lender. Nationwide said house price inflation fell to 8.5% in November on an annual basis, down from 9.0% in October. Prices rose by 0.3% in November from the month before, compared with an increase of 0.5% in October. However the Land Registry said there had been a rise in the rate of house price inflation in England and Wales. The Land Registry figures, which relate to the previous month of October, suggest than annual house price inflation rose to 7.7% in England and Wales, up from 7.2% in September.
Arrears and repossessions still falling, reports CML
Latest figures from the Council of Mortgage Lenders for the third quarter of 2014 show a continuing reduction in the number of both repossessions and mortgages in arrears, across all categories. At the end of the third quarter, the proportion of mortgages with arrears equivalent to 2.5% or more of the total mortgage value was 1.12% - down from 1.18% in the second quarter and 1.33% in the third quarter of last year. This is the lowest proportion since the first quarter of 2008 (1.08%) In numerical terms, this equates to 125,100 mortgages - down from 131,400 in the second quarter and 149,400 in the third quarter of 2013
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