January 2010
21st January, 2010
Gross lending up 14% in December, reports Council of Mortgage Lenders
Gross mortgage lending reached an estimated £13.7 billion in December, a 14% rise from £12.1 billion in November and up 3% on December 2008, according to the Council of Mortgage Lenders.
This is the first time the annual monthly comparison has been in positive territory since October 2007. However, other than in 2008, this is still the lowest figure for December since 2001 (£13.4 billion).
Lending totalled £39.1 billion in the fourth quarter, up slightly from £39 billion in the previous quarter but down by 14% on the last three months of 2008. There is typically a 6% fall between the third and fourth quarter.
For 2009 as a whole, lending totalled £143.7 billion, slightly above the CML's annual forecast of £141 billion. However, this is down 43% from £253 billion in 2008 and the lowest annual total since 2000 (£119.8 billion).
CML economist Paul Samter commented: "The December figure is surprisingly strong as there is typically a small decline in the month. Evidence suggests that the rise was driven by a surge in house purchase completions – as remortgaging still remains exceptionally weak. The most likely explanation is that buyers of cheaper property wanted to complete their transactions before the end of the year to beat the end of the stamp duty holiday.
"If there has been a 'bunching' of sales to beat the rise, mortgage lending may see a larger than usual seasonal drop-off in the early part of 2010. But there is every reason to expect a gradual improvement in the latter part of the year. With a gradual pick up in economic growth and wider access to credit, 2010 will almost certainly be a better year in the mortgage market than 2009".
20th January, 2010
Halifax reviews key changes in the UK housing market over the last fifty years
Halifax has looked over the past fifty years and identified key changes in the UK housing market. The analysis starts at the end of the 1950s and commences with the record growth in housebuilding through the 1960s, a time of significant social investment.
Key findings from the report are summarised below.
House Prices
•
The average UK house price has increased by 273% since 1959 in real terms (i.e. after allowing for retail price inflation), at an average annual rate of 2.7%. This is faster than the 2% per annum average rise in real earnings over the period.
•
House prices recorded their biggest increase in the latest decade with a real rise of 62% during the 2000s; marginally ahead of the 61% increase in the 1980s. The worst performing decade for house prices was the 1990s when prices fell by 22% in real terms.
•
Pronounced cycles have been a key feature of the housing market since 1959. There have been four distinct periods of rapid real house price growth: 1971-73, 1977-80, 1985-89 and 1998-2007. Each of these periods was followed by a significant fall in real house prices.
Rise of Owner-Occupation
• Owner-occupation in the UK has increased by 25 percentage points from 43% in 1961 to 68% in 2008. The biggest rise in owner-occupation occurred in the 1980s following the introduction of the Right to Buy scheme.
• The proportion of homes that is privately rented has fallen significantly from 33% in 1961 to 14% in 2008. The private rental sector was bigger than both the owner-occupied and social rented sectors until the mid 1950s. There has been a more recent increase in the private rented sector; from 9% in 1991 to 14% in 2008.
• The relative size of the socially rented sector in 2008 (18%) was smaller than in 1961 (25%). The proportion of the dwelling stock that is socially rented expanded rapidly through the 1960s and 1970s, peaking at 33% in 1981. A sharp reduction in local authority house building and the sale of council houses have contributed to the sector's contraction since the early 1980s. In addition, the composition of the sector has changed significantly with a marked shift away from local authority provided housing towards provision by housing associations.
Dramatic Improvement in the Quality of Housing
• Households lacking an inside WC fell from 14% to just 0.2% between 1960 and 1996.
• Households without a basic hot water supply declined from 22% in 1967 to 1% in 1991.
• Households in Great Britain with central heating increased from 35% in 1971 to 92% in 2000.
Social Trends
• The proportion of single person households in England has risen significantly from less than one in five (19%) households in 1971 to one in three (33%) in 2009. The proportion of English households occupied by married couples has declined from 70% in 1971 to 42% in 2009, although married households are still the most common form of household. The number of households occupied by cohabiting couples increased from 1% in 1971 to 11% in 2009.
• The number of houses built in the UK was an estimated 156,816 in 2009; 44% less than the 281,570 built in 1959. House building reached record levels during the 1960s, with a peak of 425,800 units completed in 1968. Private sector completions (226,100) also reached a record in that year. The decline in house building has been driven by a fall in public sector completions.
• The rise of detached properties and the decline of semi-detached homes. There has been a marked shift in the type of properties built over the past 50 years. Semi-detached properties account for the largest proportion of the current English housing stock built between 1945 and 1964 (41%). Detached homes represent just 10% of the housing stock that was constructed during this period. In contrast, detached properties account for more than a third (36%) of the English housing stock built after 1980; more than any other property type. Semis account for 15% of the post-1980 housing stock.
14th January, 2010
CML: proportion of income needed for new mortgages at five-year low
Home buyers in November needed to use less of their income to cover their mortgage interest than at any time for more than five years, according to new data released today by the Council of Mortgage Lenders.
In particular, home movers are experiencing a low debt burden by historical standards. They typically needed only 10.6% of gross income in November 2009 to cover mortgage interest payments, down from 11.1% in October. Other than a brief low of 10.2% in the middle of 1996, this is the lowest debt burden on home movers since the CML started recording this data in 1974.
The debt burden on first time buyers also reduced, with 14.4% of gross income needed in November, down from 15.1% in October - the lowest it has been since May 2004.
Table 1: Home movers, lending and affordability
Table 2: First-time buyers, lending and affordability
Lending volumes experienced a seasonal dip in November.
Even so, although the 53,000 house purchase loans represented a 4% decline on October, the number was an emphatic 66% increase on November 2008. On the other hand, the 31,000 loans for remortgage fell 6% from October with a drop of 39% year on year, showing a continuation of the "two speed" market for house purchase and remortgaging.
Table 3: Loans for house purchase and remortgage
Loans for house purchase in November accounted for 60% of total new lending, the highest proportion since 2001. While the share of house purchase activity has grown considerably from the record low of 27% seen at the start of 2009, low interest rates and tight lending criteria have meant that remortgage demand has gone in the opposite direction. From January 2009, the percentage of loans for remortgage has dropped from 53% to 31% in November.
Commenting on the data, CML director general Michael Coogan said: "It is encouraging to see that mortgage interest payments are so affordable for home movers and first-time buyers. But with substantial deposits still needed to secure a mortgage, the market will continue to be relatively restrained for some time to come.
"With refinancing still unattractive or unnecessary for many borrowers due to continuing low rates, we are now seeing a much more house purchase-focussed market, a profile much more like the beginning of the Noughties than its latter years."
12th January, 2010
House prices continue to rise, albeit at a slower pace: RICS
House prices in December rose at a slower pace, as the gap between supply and demand narrowed, says RICS' latest UK Housing Market survey.
In December, 30 percent more Chartered Surveyors reported a rise than a fall in house prices, down from 35 percent in November. A significant majority of surveyors are still recording price increases in London, the South East, the South West and East Anglia. However, more surveyors in the North and the West Midlands are seeing falls in house prices, indicating that the recovery in the market is less entrenched in some parts of the country than others.
For the seventh consecutive month, more Chartered Surveyors are reporting that the number of new instructions is increasing rather than falling. 17 percent more Chartered Surveyors reported a rise than a fall in new instructions. Fresh demand for property is still outstripping new supply, but the gap has narrowed. 20 percent more surveyors stated that enquiries from potential purchasers are rising rather than falling, but enquiries rose at the slowest pace since January 2009.
Other demand indicators are also losing some momentum, although they remain in positive territory. The 'newly agreed sales' balance slipped to 22 from 24, while the 'sales expectations' net balance dropped to six from 20.
Outpace
Transaction levels were little changed in December. The number of sales per surveying firm is still hovering around 19 for the fourth consecutive month, while the closely watched sales to stock ratio - a measure of market slack and a lead indicator of future prices - fell back slightly.
"New enquiries are continuing to outpace new instructions", said RICS spokesperson, Jeremy Leaf, "which is helping to push house prices higher. The recent loss of momentum in prices and the moderation in new buyer interest can be in part attributed to the housing market pulling down its shutters for Christmas.
"It is likely that the new year will see more interest and activity in the market as those who held back start to market their property with renewed optimism".
7th January, 2010
Bank of England leaves lending rate unchanged at 0.5%
The Bank of England has left the Bank Rate unchanged at 0.5%.
The Bank’s Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%. The Committee also voted to continue with its programme of asset purchases totalling £200 billion financed by the issuance of central bank reserves.
The Committee expects the announced programme to take another month to complete. The scale of the programme will be kept under review.
The minutes of the meeting will be published at 9.30am on Wednesday, 20th January.
5th January, 2010
Housing affordable for first-time buyers in four in ten areas
Home affordability for potential first-time buyers (FTBs) has improved significantly. In 2009, the average price paid by an FTB was affordable for someone on average earnings in nearly four in ten (39%) of local authority districts, according to this year's Halifax First-Time Buyer Annual Review.
In 2007, only 6% of areas were affordable. Nearly a quarter (24%) of local authority areas became affordable between 2008 and 2009.
The proportion of disposable earnings devoted to mortgage payments by a potential new FTB on national average earnings – a measure of affordability that includes the impact of interest rate changes - has almost halved from a peak of 50% in June 2007 to 27% in November 2009, according to the Review. This improvement in affordability has been a result of the combination of lower house prices and interest rate reductions. The current level is below the average over the past 25 years of 34%.
The tightening in lending criteria since the summer of 2007 has meant that some potential FTBs have been unable to enter the market despite the marked improvement in affordability. There are, however, signs that lending criteria have stopped tightening.
Combination
For example, industry-wide figures show that the average deposit put down by a FTB has been unchanged as a percentage of the purchase price since early in 2009 following a significant increase in 2008. There is also evidence of increased mortgage availability. The number of live mortgage products has risen by 33% from a low of 1,209 in April 2009 to 1,610 in December.
Martin Ellis, housing economist at Halifax, commented: "Housing affordability for potential first-time buyers has improved substantially over the past two years due to the combination of lower house prices and reduced mortgage rates.
"Mortgage payments in relation to earnings are currently significantly below the average during the past 25 years. The tightening in lending criteria over the past two years is, however, making it very difficult for some to take advantage of lower property prices and mortgage rates".
2nd January, 2010
Streets of West London are the most expensive in England and Wales
Wycombe Square in the Royal Borough of Kensington and Chelsea is the most expensive street in England and Wales, with an average property price of £5,401,447, according to latest research from Halifax.
The Royal Borough provides half of the twenty most expensive residential streets in the country (all prices are based on transactions between 2005 and 2009 recorded on the Land Registry database).
The ten most expensive streets are all in Greater London. The second most expensive street is Ingram Avenue in Hampstead with an average house price of £4,872,500.
Moles Hill in Leatherhead in Surrey (£2,645,000) is the most expensive street outside the capital. South Road in Weybridge (£2,550,625), Leys Road in Leatherhead (£2,549,545), Woodlands Road West in Virginia Water (£2,543,500) and Phillipines Shaw in Sevenoaks (£2,351,538) are the other most expensive streets outside London in the country's top twenty.
The most expensive street outside southern England is Withinlee Road in Macclesfield (£1,205,833). The two next most expensive are both in Altrincham in Cheshire: Park Lane (£1,167,500) and Eyebrook Road (£1,090,916). Five of the nine regions in England have streets with an average house price of over £1,000,000.
Druidstone Road in the Old St Mellons area of Cardiff is the most expensive residential street in Wales with an average house price of £621,000.
Nitesh Patel, housing economist at Halifax, put the figures in context: "Unsurprisingly, many of the most expensive residential streets in England and Wales are in the Royal Borough of Kensington and Chelsea with more than half of the thirty most expensive London streets in the borough. Kensington and Chelsea has long had a global appeal, but the fall in the value of sterling has helped to attract foreign buyers over the past year despite the worldwide economic recession.
"Across most regions, the survey shows that the most expensive streets are tightly clustered within the same area".
East Anglia
Eight of the ten most expensive streets in East Anglia are in Cambridge. Six of these streets are close to the main University area (particularly around the Botanic Gardens) in the CB2 postal district. The most expensive street is Sedley Taylor Road with an average house price of £958,440.
East Midlands
Valley Road in West Bridgford - south of the River Trent in Nottingham - is the most expensive street in the East Midlands with an average price of £851,000. Other expensive streets in the region include Turnberry Lane in Northampton (£676,000), First Drift in Stamford (£622,083) and Gullet Lane in Leicester (£601,388).
North East
Seven of the ten most expensive streets in the North East are in Newcastle, with many of them in the Jesmond and Gosforth areas. Lindisfarne Road is the most expensive, with an average price of £1,003,822, followed by Darras Road (£830,750) and Grove Park Square (£730,541).
North West
The ten most expensive streets in the North West are all in areas south of Manchester. These include Withinlee Road in Macclesfield (£1,205,833), Park Lane in Altrincham (£1,167,500), Eyebrook Road in Altrincham (£1,090,916), Macclesfield Road in Alderley Edge (£1,018,948) and Pownal Road in Stockport (£1,004,215).
South East
Seven of the ten most expensive streets in the South East are in Surrey. These include South Road in Weybridge (£2,550,625), Leys Road in Leatherhead (£2,549,545) and Woodland Road West in Virginia Water (£2,543,500). Philippines Shaw in Sevenoaks is the most expensive street in Kent (£2,531,538).
South West
The attraction of coastal life has its pull as Poole has seven of the ten most expensive streets in the South West. These include Brudenell Avenue, which is the most expensive street in the region, with an average price of £1,927,491, followed by Elms Avenue (£1,482,987), Bingham Avenue (£1,138,756) and Lilliput Road (£1,073,588). These are all situated in, or close to, the Sandbanks area of Poole.
Wales
The majority of the most expensive streets in Wales are in the Cardiff area, including Druidstone Road in Old St Mellons (£621,000), Cefn Mably Park in Cefn Mably (£564,612) and Lady Mary Road in Roath Park (£528,662). Honeysuckle Lane in Colwyn Bay on the north coast (£550,000) is the only street outside south Wales in the top ten.
West Midlands
Five of the ten most expensive streets in West Midlands are in Solihull. The most expensive streets are Alderbrook Road (£837,208) and Widney Manor Road (£735,030). Other expensive streets in this region are Avenue Road in Stratford-upon-Avon (£745,550), the Manors of Shelsley in Worcester (£726,400) and Oldborough Drive in Warwick (£689,812).
Yorkshire and Humber
The most expensive streets in Yorkshire and the Humber are mainly in the area that makes up the so-called "Golden Triangle" between Harrogate, York and north Leeds. Six of the ten most expensive streets in the region are in Harrogate, including Royal Gardens (£720,800), Green Lane (£712,465) and Wheatlands Road East (£600,062). The region's top ten also includes Main Street in Knaresborough (£696,000), St. Paul's Square in York (£623,000) and Wigton Lane in Alwoodley, Leeds (£611,406).
|
|
December 2009
 UK property news
|
