Posts tagged "Tracy Kellett"

Buy-to-let mortgages up by a third

CML figures show buy-to-let loans in quarter one of 2012 were up by 32% annually, while repossessions have steadied

The value of mortgages taken out to fund buy-to-let purchases rose by a third year-on-year to the first three months of 2012, as falling house prices and rising rents made the sector attractive to investors.

Some 32,300 loans worth a combined total of £3.7bn were advanced to buy-to-let borrowers, according to figures from the Council of Mortgage Lenders (CML). The value was 5% down on the final three months of 2011, but 32% higher than in the opening three months of the year. However, it remains at about a third of 2007′s levels.

The CML said the buy-to-let sector continued to increase its share of the mortgage market, with the UK’s 1.4m buy-to-let mortgages representing an estimated 12.8% of the total value of outstanding mortgages.

However, would-be landlords still need bigger deposits than they did in 2007 to invest in property, with the average maximum loan-to-value available from lenders standing at 75%, compared to 85% then.

David Whittaker, managing director of Mortgages For Business, said: “The year-on-year rise in buy-to-let lending reflects the state of the overall property market. Demand for rental property is as strong as ever as mortgage funds remain out of reach for many would-be buyers and high-street banks remove scores of owner-occupier mortgages from the market.

“While the overall value of lending fell quarter-on-quarter, this has more to do with stagnant and falling prices rather than a drop in landlord appetite.”

Tracy Kellett, managing director of UK buying agents, BDI Home Finders, said: “Anyone thinking of getting into buy to let – and their number is growing by the day as house prices fall – should take a five- to 10-year-view, not look at this as a short-term play. That’s a dangerous road to go down.

“More landlords are buying up three- to four-bedroom homes, which are popular with the growing number of families that are renting. This is a whole new market for buy-to-let, and is particularly short on supply.”

In terms of loan performance, the number of buy-to-let mortgages in arrears fell a little in the first quarter of 2012, and the arrears rate on buy-to-let mortgages continues to be lower than in the owner-occupied sector.

At the end of the first quarter, about 1.7% of buy-to-let mortgages were in arrears of more than three months (including cases where a receiver of rent has been appointed), compared with around 2% of owner-occupier mortgages.

However, the repossession rate was 0.12%, higher than the 0.08% recorded in the owner-occupier sector. The CML said this difference was not surprising, given that lenders were focussing on forbearance to keep homeowners in their homes.

It said that in the rented sector, expired tenancies allowed repossession to be undertaken without unexpected disruption to tenant households.

Separately, the CML said the number of homes repossessed in the UK remained stable in the first three months of 2012, breaking the recent year-on-year trend of rising repossessions.

A total of 9,600 homes were taken into possession by lenders, the same as in the first quarter of 2011. The figure was higher than the 8,700 that took place in the final three months of 2011, but the CML said this represented a normal seasonal patter. It remained below the recent peak of 13,000 in the final quarter of 2009.

The CML said the steadying number may lead it to revise down its forecast that 45,000 properties will be repossessed over the course of 2012, but warned that continuing pressures on household finances, changes to welfare benefits, and an upward drift in mortgage rates “all have the potential to disrupt the current stable picture”.

Paul Smee, the CML director general, said: “Combined efforts by borrowers, lenders and money advisers are ensuring that payment difficulties are being managed effectively, with the result that the number of repossessions remains relatively low.

“Repossession really is a last resort, as the numbers show. Anyone worried about their mortgage should be assured that lenders will try to help them get back on track, as long as this is a realistic prospect.”

Although the number of mortgages in arrears fell overall, the number that are at least 10% behind with repayments rose to its highest level since June 2000, hitting 28,000, or 0.25% of outstanding mortgages.

In total the number of mortgages with arrears of 2.5% or more of the outstanding balance fell to 157,800, or 1.4% of all loans, down from 160,300 at the end of December 2011 and 170,500 at the end of the first quarter of 2011.

The largest fall was in the number of mortgages that were between 5% and 10% in arrears. Year on year, the number of loans in the 5-7.5% arrears band fell by 12%, to its lowest level since the fourth quarter of 2008, while the number in the 7.5-10% band fell by 13% to its lowest since the third quarter of 2008.


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Posted by admin - May 10, 2012 at 15:15

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House prices up in January

Halifax says January saw a 0.6% rise in house prices, but the three-month and year-on-year figures showed a 0.9% and 1.8% decline respectively

House prices in England and Wales rose by 0.6% in January, according to Halifax, but the lender said low interest rates has led to little movement in prices for eight months.

The average price of a home fell by 0.9% over a rolling three-month period as the Bank of England held interest rates at a record low of 0.5%, supporting demand for housing, and was down by 1.8% year-on-year. The average price of a house in January was £160,907.

Earlier this month rival lender Nationwide reported that prices dropped by 0.2% in January, but were up by 0.6% year-on-year. It put the average price of a UK house at £162,228 and suggested house prices would move “sideways or only modestly lower in the months ahead”.

Interest rates have seen mortgage payments fall to their lowest level as a proportion of household earnings for a new borrower for 14 years, Halifax said. Martin Ellis, housing economist at the lender, said: “If the UK can avoid a prolonged recession we expect broad stability in house prices in 2012.”

Prospects for house prices over the coming months will depend on events in the eurozone and the repercussions of developments there for the UK economy, Halifax added.

The figures come as the industry-wide number of mortgages approved to finance house purchase – a leading indicator of completed house sales – held steady at approximately 53,000 for the third successive month in December 2011, according to the Bank of England.

Overall, approvals in the final three months of 2011 were 3% higher than in the previous quarter and 16% higher than in the same period of 2010. Housing demand may have been helped by a slight improvement in the number of people in employment in the three months to November 2011, which was 18,000 higher than in the preceding three months.

Elsewhere, Halifax said typical mortgage payments for a new borrower – both first-time buyers and home movers – at the long-term average loan-to-value ratio stood at 27% of disposable earnings in the fourth quarter of 2011. This was well below the average of 37% recorded over the past 27 years.

Howard Archer, economist at IHS Global Insight, said the monthly increase in January did not alter his view that house prices were likely to decline by 5% this year. He said: “We suspect that low wage growth, rising unemployment and persistent concerns over the economic situation and outlook will limit potential buyers and weigh down on house prices.”

Tracy Kellett, managing director of estate agent BDI Home Finders, added: “The quarterly change of -0.9% is a more accurate description of where the market is at than January’s 0.6% rise. The lack of transactions and activity generally can easily exaggerate an individual month’s figures.

“House prices are being held artificially high by two key factors: an extreme lack of stock and historically low interest rates. Throughout 2012 we are likely to see a further widening of the north/south divide. Prices will be hit hardest where the economy is feeling it the hardest.”


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Posted by admin - February 7, 2012 at 18:21

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House prices move on in January

Halifax says January saw a 0.6% rise in house prices, but the three-month and year-on-year figures showed a 0.9% and 1.8% decline respectively

House prices in England and Wales rose by 0.6% in January, according to Halifax, but the lender said low interest rates has led to little movement in prices for eight months.

The average price of a home fell by 0.9% over a rolling three-month period as the Bank of England held interest rates at a record low of 0.5%, supporting demand for housing, and was down by 1.8% year-on-year. The average price of a house in January was £160,907.

Earlier this month rival lender Nationwide reported that prices dropped by 0.2% in January, but were up by 0.6% year-on-year. It put the average price of a UK house at £162,228 and suggested house prices would move “sideways or only modestly lower in the months ahead”.

Interest rates have seen mortgage payments fall to their lowest level as a proportion of household earnings for a new borrower for 14 years, Halifax said. Martin Ellis, housing economist at the lender, said: “If the UK can avoid a prolonged recession we expect broad stability in house prices in 2012.”

Prospects for house prices over the coming months will depend on events in the eurozone and the repercussions of developments there for the UK economy, Halifax added.

The figures come as the industry-wide number of mortgages approved to finance house purchase – a leading indicator of completed house sales – held steady at approximately 53,000 for the third successive month in December 2011, according to the Bank of England.

Overall, approvals in the final three months of 2011 were 3% higher than in the previous quarter and 16% higher than in the same period of 2010. Housing demand may have been helped by a slight improvement in the number of people in employment in the three months to November 2011, which was 18,000 higher than in the preceding three months.

Elsewhere, Halifax said typical mortgage payments for a new borrower – both first-time buyers and home movers – at the long-term average loan-to-value ratio stood at 27% of disposable earnings in the fourth quarter of 2011. This was well below the average of 37% recorded over the past 27 years.

Howard Archer, economist at IHS Global Insight, said the monthly increase in January did not alter his view that house prices were likely to decline by 5% this year. He said: “We suspect that low wage growth, rising unemployment and persistent concerns over the economic situation and outlook will limit potential buyers and weigh down on house prices.”

Tracy Kellett, managing director of estate agent BDI Home Finders, added: “The quarterly change of -0.9% is a more accurate description of where the market is at than January’s 0.6% rise. The lack of transactions and activity generally can easily exaggerate an individual month’s figures.

“House prices are being held artificially high by two key factors: an extreme lack of stock and historically low interest rates. Throughout 2012 we are likely to see a further widening of the north/south divide. Prices will be hit hardest where the economy is feeling it the hardest.”


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Posted by admin - February 6, 2012 at 15:25

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