Home buying concerns for young

With increasing property prices, rents and no real increase in wages, particularly for the young, there is increasing concern that they are not going to be able to afford to get on the housing ladder.

Which? has recently conducted a survey where they have identified that half (49%) of 18 to 34 year- olds are concerned about buying, more than social care for older people (46%) and energy prices (34%).

Alex Neill, Which? managing director of home products and services, said: “Buying a home is one of the most significant purchases consumers ever make and one of the most stressful life experiences.”

“It takes people far too long to buy property and home-buyers are losing out on substantial amounts of money due to flaws in the system.

“The next government must fix the outdated home-buying process.”

Three in 10 (28%) people of all ages see homebuying and selling as a top three priority for the next government, rising to four in 10 (42%) for those in London.

Original source: http://www.mortgageintroducer.com/homebuying-top-concern-young-people/#.WRAm2FPysWp

That said there has been some flattening of rental prices, particularly in London, with Homelet’s April Rental Index has shown that rents in the capital fell 1.2%, which the first fall since December 2009.

Martin Totty, chief executive of HomeLet, said: “Rents have been rising at a more modest pace across the whole of the UK in recent months, with lower levels of rental price inflation and even falling rents in areas of the country where prices were previously rising most quickly.

“We continue to see landlords’ and letting agents weighing tenant affordability considerations very seriously.”

Original Source: http://www.mortgageintroducer.com/london-rents-fall-first-time-eight-years/#.WRAmYFPysWo

House prices in Hertfordshire continue to grow, although detached houses have seen a bit of a fall off of 2% since April 2016, according to Home.co.uk. This is potentially down to the increased stamp duty on properties over the £1m threshold, which would certainly impact house prices in Herts.

This in conjunction with recent tax incentives introduced by the government, which are designed to generate revenues from landlords could lead to a softening of housing prices, where some landlords landlords will inevitably be generating net losses on their property portfolios with tax taken into consideration.

However, reduced availability of loans for first time buyers, and more stringent borrowing criteria mean that the outlook does remain tough for the young aiming to get onto the housing ladder.

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Property Investor Confidence Continues

Property investor confidence continues to remain high.

Property investors appear to be maintaining confidence in the UK real estate market, according to a recent survey undertaken by Shawbrook Bank, who are one of the leading “challenger” banks in the marketplace, providing bridging, development finance and buy to let funding, along with a range of normal banking services.

A new survey undertaken by Shawbrook Bank, which focuses on the outlook for 2017 from property professionals and the expectations they have for their own investments, found that 81% of landlords feel confident that their property portfolios will perform well this year.

Many property investors are feeling broadly confident about the prospects for the property market, thanks in part to improvements in the lending environment, Shawbrook said.

Helping to boost this optimistic outlook, investors revealed that tenant demand remains strong with nearly one out of three (30%) landlords seeing an increase in renters when comparing the first half of 2016 to the second. As well as this, half of all buy-to-let landlords have also seen increasing rental income over the last year.

This feeling of confidence extends to property professionals looking to invest in the buy-to-let market, with 66% of respondents stating that they plan to acquire an additional buy-to-let property during the first half of this year, in spite of various tax changes and potential political upheaval following the Brexit decision.

Karen Bennett, managing director of commercial mortgages at Shawbrook Bank, said: “Despite uncertainty surrounding Brexit, landlords are still optimistic about the performance of their portfolios. With Brexit negotiations officially underway, as well as recent changes to housing policy, it is encouraging that the market doesn’t seem to be slowing.

“Following last year’s tax changes it’s clear that investors are still getting a feel for how the changes will affect them.

https://www.propertyinvestortoday.co.uk/breaking-news/2017/4/property-investor-confidence-runs-high?source=newsticker

Matt Lenzie of Hertfordshire Business Funding says: “it is an interesting time from an economic perspective with some focus on the recent tax changes and how these are going to impact. In the short term there won’t be a huge amount of impact, as these will only start to bite when investors start to file their personal tax returns. It is very important that private investors and buy-to-let landlords do start to consider this today, as otherwise they could have some lean years ahead.

 

A number of the leading lenders in the market are taking less aggressive positions in the facilities which they are providing, with a shortage of funding above the £1m per unit mark, as there is some concern that stamp duty costs will reduce the momentum in this area.

Critical for all developers and buy-to-let landlords is buying well, and we firmly believe that there is and will continue to be some value to be achieved if you look hard enough.”

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Bridging Finance Confidence Grows – Despite Brexit

Theresa May has now, as you are no doubt aware, triggered the formal process of the UK leaving the EU, and the view of the markets is mixed. There’s the pessimists as ever, who believe that the risks associated with the UK having to navigate the forthcoming choppy waters are not fully priced into the markets, and then there are those who firmly believe that the process is a breeze. Interestingly the situation with Spain and Gibraltar looks to be the first of many negotiation points which will no doubt ruffle a few feathers.

Anyway, in the UK lenders appear to be increasingly confident regarding the bridging market as reported by Mortgageandintroducer, which is interesting, as there is potential for some buy-to-let owners to begin to feel the squeeze post 5th April as the interest cover tax changes start to bite.

Bridging lenders are becoming increasingly confident about the sector’s prospects despite the recent triggering of Article 50, Association of Short Term Lenders research has found.

As it stands 85% of ASTL lenders expect their own volumes to increase in the next six months, while 56% expect the bridging market as a whole to increase.

Regarding the future prospects of the UK economy 45% are confident, up from 35% in November and 28% last April before the EU referendum took place.

Aspen Bridging joins ASTL

Among other members one in five (21%) were not confident about the UK’s prospects in the next 12 months, down from two thirds (67%) immediately after the referendum.

Benson Hersch, chief executive of the ASTL, said: “Good results in Q1 of 2017 have caused lenders to be more positive about the future.

“The ASTL should continue to grow in both numbers and influence as recognition of the sector spreads. Bridging finance has come a long way and, whilst there will no doubt be ups and downs, it’s here to stay.”

Source: http://www.mortgageintroducer.com/bridging-lender-confidence-growing-despite-article-50/#.WOP4m3TysWo

It really is a guessing game, and private investors and institutional funds alike appear to be able to earn good returns on their capital through investing in bridging, although this market has fundamentally expanded during a boom cycle. We are now 6 or 7 years into this boom and frankly it’s time for a correction in property prices, and Brexit could well be the trigger of this.

 

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