Bank of England clamping down on buy to let landlords!

Larger landlords with four or more properties in their portfolio should be subject to tougher underwriting standards, the Bank of England’s Prudential Regulation Authority (PRA) has advised. The PRA claims that without further constraints, lenders expect a gross increase of 20% in buy-to-let borrowing over the next two to three years. It set out four measures designed to tighten buy-to-let lending standards: Lenders should consider the borrower’s costs associated with letting the property, including tax costs A borrower’s personal income should be verified if the lender wants to include it to support the mortgage Lenders should include future interest rate increases in affordability assessments at 5.5% There should be a special underwriting process for “portfolio landlords” with four or more properties The Residential Landlords Association, said the buy-to-let proposals were premature. Policy director David Smith said: “The Bank needs to be careful that it does not over-react to the current...
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Possible Brexit drives demand for mortgages

The possibility of Brexit is fuelling a surge in mortgage enquiries, reveals deVere Mortgages. The observation from the mortgage division of deVere Group, one of the world’s largest independent financial advisory organisation, comes as both sides of the debate on whether Britain should leave the EU up the ante in a bid to win UK voters’ hearts and minds ahead of the In/Out referendum in June. Mike Coady, Managing Director of deVere Mortgages, comments: “The UK’s EU referendum is getting almost wall-to-wall media coverage. The issue is dominating news agendas and it is likely to increasingly do so as we move towards the vote on 23 June. “The campaigning has noticeably ratcheted up a gear over the last two weeks.  This is especially so since the announcement of London Mayor Boris Johnson, who has a long-standing ambition to be Prime Minister, to back the Vote Leave lobby. “Despite pro-Brexit groups...
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Mark Carney: Interest rates to stay low

Amid slowing UK growth and a weak world economy. Bank of England governor Mark Carney has said policymakers are in no rush to raise interest rates. He said "now is not yet the time" to hike rates from their historic low of 0.5% following turmoil in financial markets as oil prices have plunged and China's economic slowdown has spooked investors. Mr Carney delivered a speech at Queen Mary University of London, He said a rise in UK rates will "depend on economic prospects, not the calendar". “The year has turned and, in my view, the decision proved straightforward: now is not yet the time to raise interest rates,” he said. “The world is weaker and UK growth has slowed.” "That means we'll do the right thing at the right time on rates," he said. Mike Coady, Managing Director of deVere Mortgages, observes: “The collapse of oil prices, weak economic performance in...
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Quarterly house price growth remains below 2%

Halifax have released their House Price Index for December 2015. House prices in the latest three months (October-December) were 1.6% higher than in the preceding three months. Prices in the three months to December were 9.5% higher than in the same three months a year earlier. House prices increased by 1.7% between November and December. This maintained the fluctuating monthly house price pattern seen during the second half of 2015. The quarter on quarter change is a more reliable indicator of the underlying trend. Housing Activity Home sales up on a year ago. UK home sales during September to November were 5.2% higher than in the same three months last year. Sales were also 1.4% higher than in the preceding three months despite a 5.7% decline between October and November. (Source: HMRC, seasonally adjusted figures) Mortgage approvals on a steady upward trend. The volume of mortgage approvals for house purchases...
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Why Student Property Investment should not be impacted by rising interest rates

For the first time since 2007, interest rates are set to rise in the United Kingdom. This is something which an investor has not had to worry about in a while. However, they are going to have to start. A rise in interest rates is going to have an impact on your mortgage and the amount of yield you get from the properties you own.
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Emergency Budget Losers

LANDLORDS were given a nasty shock in Chancellor George Osbornes emergency budget earlier this month. In his first budget given as a Conservative rather than coalition chancellor, Osborne surprised property investors by scrapping mortgage interest tax relief at the higher levels. Buy-to-let owners were told they are to be stripped of the right to claim the tax relief at the 45 and 40 per cent tax bands. Kicking in from 2020, the change could have a significant impact on owners of multiple properties or those relying on rental income to pay outgoings. The surprise move caught landlords off guard in a budget aimed at encouraging home ownership rather than renting. Bank of England Base Rate With the Bank of England base rate still at its historic low of 0.5 per cent, the impact is likely to be minimal in the immediate future as returns on other financial investments are also...
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Housing supply remains tight

  The Halifax released their House Price Index for June 2015.   Commenting, Martin Ellis, housing economist, said: "House prices in the three months to June were 3.3% higher than in the preceding three months. This measure of the underlying rate of house price growth picked up following two successive falls. Annual house price growth also increased to 9.6% from 8.6% in May and is at its highest since September 2014. “Supply remains very tight with the stock of homes available for sale currently at record low levels. This shortage has been a key factor maintaining house price growth at a robust pace so far in 2015. Economic growth, higher employment, increasing real earnings growth and very low mortgage rates are all supporting housing demand with signs of a recent modest pick-up in demand.” Key facts • House prices in the latest three months (April-June) were 3.3% higher than in...
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Bank of England maintains Bank Rate at 0.5%

Bank of England maintains Bank Rate at 0.5% and the size of the Asset Purchase Programme at £375 billion
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Bank of England shows Lending to Individuals has increased

The Bank of England released its money and credit report for October last week.
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Osbornes Surprise Cut to Stamp Duty Throws The UK Housing Market Into Temporary Disarray

It’s not often that an official announcement from the government provokes an immediate flurry of positive activity, but George Osborne’s surprise announcement that ‘unfair and punitive’ tax duties would be “slashed” from midnight on the 3rd of Dec 2014, which came bundled as part of his Autumn statement to the House of Commons, seems to have triggered a storm of purchasing activity for properties below the £937,000 “break even” point that are positively affected by the chancellor’s new policies.
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Market in midst of a temporary slowdown says RICS

  The RICS survey for October shows a temporary slowdown in the market. Key Facts: • Demand and sales volumes continue to fall • Price momentum, however, remains positive • Scotland enjoys a post-referendum bounce in activity Dip in Activity The October 2014 RICS UK Residential Market Survey continues to show a modest dip in activity alongside an ongoing deceleration in house price growth. For the time being, surveyors expect the current weakening trend to be temporary; near term expectations indicate a flatter picture but medium term expectations remain fairly positive. The ‘temporary slowdown’ story also squares with the broader macro backdrop and the flat trend in new instructions, which suggest that for the time being homeowners are not, under any significant pressure to sell. Buyer Enquiries Buyer enquiries and agreed sales continued to decline and at a faster pace than in the previous month. Falling activity is no longer just...
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Bank of England says Mortgage approvals down in September

The number of loan approvals for house purchase was 61,267 in September, compared to the average of 64,720 over the previous six months. The number of approvals for remortgaging was 30,500, compared to the average of 31,632 over the previous six months.
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Lending in August is 3% down on July say CML

New CML data shows that lending is down slightly compared to July.  The first month-on-month drop in house purchase lending volume since February this year.  Monthly highlights: First-time buyer lending declined in August compared to July, with 28,900 first-time buyer loans - 4% fewer than in July but 9% up on August 2013. By value, there was £4.4 billion of lending to first-time buyers - 4% down on July but 22% higher than August last year. Lending to home movers also declined, with the number of loans advanced to movers totalling 36,500, a 3% fall on the previous month but up 7% on August last year. By value, lending to movers totalled £7 billion, 3% down on July but up 17% on August last year. Remortgage lending activity saw a decrease month-on-month and also year-on-year in August. The number of remortgages in August was 4% down on July and 11% down on the same month last year. The value of these loans (£3.7 billion) was down 5% on the previous...
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The Bank of England keep the interest rate at a record low of 0.5%

The Bank of England’s Monetary Policy Committee at its meeting on 8 October voted to maintain Bank Rate at 0.5%. The previous change in Bank Rate was a reduction of 0.5 percentage points to 0.5% on 5 March 2009. Rates have been at 0.5% since March 2009, with the market expecting a small rise early next year. There has been lots of speculation over when the Bank will start to raise rates again. An increase is expected some time in the new year, although some think it could be later this year as the Bank may not want to raise rates close to a general election, scheduled for May 2015. "Overall, our central case still sees the Monetary Policy Committee raising rates next month, not least because we struggle to envisage the committee either beginning to tighten in the first few months of next year, so close to Mays general election, or waiting until...
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Bank Lending continues to increase

The Bank of Englands Money and Credit release for July 2014 shows an increase in lending. Lending secured on dwellings was up by £2.3 billion compared to an average 6th monthly increase of £2.0 billion.
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Bank holds UK Interest Rates at 0.5% for yet another month

The Bank of England today again announced to keep the UK Interest rates at their record low of 0.5% for a further month. They also voted to leave unchanged the size of the quantitative easing programme. Last month all of the members of the Monetary Policy Committee (MPC), who vote on what to do with interest rates, agreed to keep rates on hold. It is widely known, mainly due to the governors announcements, that a rate increase is imminent, but the exact timing of the rate increase is unclear. Recent hints by Mark Carney indicate that this could possibly be by the end of the year, sooner than most of the financial markets expect. Generally the belief has been that the five year run of 0.5% interest rates would come to an end early next year rather than in 2014.  
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Lending on dwellings increased in May

Lending specifically secured on dwellings was also up by £2.0 billion in May to £16.9 billion, up substantially compared to the monthly average over the last 6 months increase of £1.5 billion.
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Mortgage Cuts in Britains Future

Growing concerns over the state of the UK’s property market have led to a number of large institutions putting plans in place that would see a curb on the amount of high level mortgage lending being offered to consumers. Mark Carney, Governor of the Bank of England, was recently quoted as saying, “… recovery [of the housing market outside London] is fragile and … it’s important we don’t disrupt this recovery.” He went on to point out high LTI mortgages as being one of the biggest risks to the health of the UK property market.
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Growth continues in mortgage lending in April

The Council of Mortgage Lending (CML) saw gross lending continuing to grow in April with Gross mortgage lending at appriximately £16.6 billion.
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Mortgages could be capped to control house prices, says Bank Governor

The Bank of England could step in to curb mortgage lending amid fears Britains booming housing market risks threatening the economic recovery, says its Governor Mark Carney.
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