There is further evidence of recovery in both the housing market and the wider economy. The difference between now and this time last year is staggering and largely unexpected. First time buyers are entering the market in volumes not seen since 2007 and buy-to-let mortgage lending continues to rise.
“Bank of England Governor Mark Carney’s recent statement has given some confidence to lenders and buyers alike. However, the reported linkage to the unemployment rate is misleading as the full text of his speech waters down this connection with various other considerations which could override it. Nonetheless, interest rates are likely to remain low at least until the General Election which is scheduled for May 2015.”
Chesterton Humbert’s Residential Observer Report August 2013 provides further evidence and support to the property market’s continued recovery. Their report has highlighted that;
• Q2 mortgage lending to first time buyers reached its highest quarterly total since 2007
• Thee number and value of new BTL mortgages in Q2 were the highest since Q3 2008
• Average UK rents reached their highest ever level in June
• 2013 has seen the highest half-yearly new home registrations since 2008
• Average national house prices continue their upward trend, albeit the growth rate is modest and talk of price bubbles appears somewhat premature for the time being. According to the Land Registry, average prices rose by just 0.8% in the year ending in June. The Nationwide and Halifax indices (based on much smaller samples) are more bullish at, respectively, 3.9% and 4.6% in the year ending in July.
• More good news from the mortgage market. The Council of Mortgage Lenders has reported that lending to first time buyers in Q2 2013 reached its largest quarterly total since 2007. First-time buyers accounted for 46% of all house purchase loans in June, compared to the 38% seen on average since 2007.
• Buy-to-let lending has also risen, with £5.1 bn worth of BTL mortgages being approved in Q2 2013 according to data from the Council of Mortgage Lenders. Both the number of loans (+19% on an annual measure) and the value of lending (+31%) were the highest recorded since the third quarter of 2008
• Recently published data from the government show that the Help-to-Buy Equity Loan scheme attracted over 10,000 reservations for new build homes between its launch in April and the end of July.
• House prices close to Premier League football grounds have increased by almost two and a half times over the last 10 years, according to research by the Halifax. The average house price in the postal districts of the 20 premiership clubs in the 2013/14 season has increased by 135% – double the 68% increase in house prices across England and Wales as a whole over the period.
• National House Building Council data show that 2013 has seen the highest half-yearly new home registrations since 2008. 67,422 new homes were registered between January 2013 and the end of June.
• Rental arrears have fallen to their lowest level for more than two years according to recent research from the National Landlords Association. 39% of landlords and buy-to-let mortgage holders experienced instances of rental arrears in the last 12 months, down 9% year-on-year, reaching levels last seen in Q1 2010. The study also noted that void periods in private residential property have also dropped to levels last seen in 2012.
• According to Homelet, the average cost of renting a home in the UK increased by 3% during June to £811 per month, the highest average UK rental amount on record.
• A recent survey from Rightmove revealed that of the 3,000 tenants contacted, 60% felt excluded from the mortgage ladder – an 8% rise since 2011. Of these trapped renters, one third had owned a property but decided to sell and return to the rental sector, and now found themselves priced out of the sales market. The survey additionally found that one in six of those expecting to buy for the first time this year will be aged 40 or over. Despite these difficulties, the desire to own a home has not diminished, with 96% of respondents aspiring to homeownership.
For more information on the market’s growing recovery, please down download the full report here;