Here is a summary of the key changes and news in the mortgage and housing market for the month of April 2018.
Traditionally Sterling rallies against the Euro in April, so mindful of this and my forthcoming sojourn in Majora, I held off buying currency in the forlorn hope that the anticipated imminent interest rate increases would strengthen the pound and give me more spending money but no, after the dismal 1% GDP performance for the first financial quarter an increase in interest rates looks unlikely any time soon and exchange rates have slipped back again. It will be interesting to see over the coming weeks what the mortgage market lenders makeof the economy……………….
Looking at the housing market generally, figures released by Hometrack reveals that across the UK house price inflation has increased to 5.5%, up from 3.7% a year ago.
Edinburgh is once again the fastest growing city (8.1%), with Nottingham, Manchester, Birmingham and Leeds all registering growth above 7% per annum. Lower starting points offer more potential for growth but in London residential sale values aren’t keeping pace with new supply coming to the market, with an average of 1.5 homes coming to market for every sale. However, price inflation in London remains positive, at 1.6% so values are still going up provided thestarting asking price isn’t too high.
Aberdeen and Cambridge are both showing falling prices, at a rate of -6.9% and -1.2% respectively. Odd, I would love to hear anyone’s views on why this should be the case. Answers on a postcard please………
We learn from HMRC that 69,000 first time buyers claimed Stamp Duty Relief which totalled savings of £159m. Almost half of the savings were made by buyers in London and the South East, where the average saving was £4,300. London accounted for 13% of transactions where Stamp Duty Relief applied, with 4 in 10 of the FTBs buying between £300,000 & £500,000.
Question. If HMRC can provide all this information why can’t they operate a website that works? Has anyone tried to use it recently? It’s HORRENDOUS!
Rant over, over to what the mortgage market has to offer:
Virgin Money are attacking the Buy to Let lending market and will now accept income to cover any rental shortfall and have improved the stress rates used to assess rental affordability. Virgin will consider using personal income to cover a shortfall in rent from 100% to 145% of themortgagepayment. They have also reduced the stress rate on 5 year fixed from 5.24% to 5%. I can see them picking up some business, it’s an innovative approach that will appeal to some borrowers.
The Mortgage Works have made a welcome policy amendment for its experienced landlords. They have removed the maximum age cap at application of 70 yearsfor thoseclients that already owninvestment property. There’s hope for me yet.
Barclays Bank will become the first UK lender to launch a “greenmortgage”. The bank is looking to offer a rate discount for those new build properties with an A or B EPC energy efficiency rating. The discounts will apply on selected 2 & 5 year fixed rates and is currently applicable to a select panel of housebuilders. Barclays are looking to expand this to all housebuilders by the end of the year. Good idea Barclays but what about extending it to existing homes with the same energy efficiency ratings to encourage us all to save energy?
TSB have increased the cashback offered on some of itsmortgagesin the 85% - 95% loan to value range. This increase from £250 to £500 is a welcome boost to those many clients where deposit and associated purchase costs are important. This change has also allowed the bank to make some changes to rates in the same loan to value with the 85% rate now 2.29% fixed for 2 years.
For us April was a busier month, once again lettings was busier than sales, enquiries increased and transaction levels were up, it appears that the property market has woken up but it is price sensitive so restrained confidence is the order of the day.
As the market changes I really do encourage clients to update their portfolio valuations, so to receive a sales valuation for your property please contact our Sales Manager Nigel Richards by calling 020 7619 6589 or by emailNR@stadiumresidential.com
or for rental values and advice please contact Alex Giraldin on 020 7619 6590 or emailAG@stadiumresidential.com
Alternatively I would be delighted to hear from you myself. 020 7619 6584 or by email GM@stadiumresidential.com