July 31, 2017

#18 Your round-up of the latest property market commentary

Housebuilding and homeownership

Leasehold reform: The government has set out plans to ban developers from selling new-build houses as leasehold in future developments, as well as limiting the amount existing homeowners have to pay in ground rent. Read more.

Dropping homeownership figures highlights wealth inequality: A report by the Resolution Foundation think tank highlighted that the wealth of a typical British adult has fallen since the financial crisis, from £99,000 in 2006-08 to £84,000 in 2012-14. It put the fall down to reductions in property wealth, driven by falling homeownership and the fall in house prices that followed the crisis which have still not fully recovered in many parts of the UK. Read more.

Mortgages

Buy-to-let lending forecasts revised down after ‘weak start’ to 2017: The Council of Mortgage Lenders said it now expects buy-to-let lending of £35 billion in 2017 and £33 billion in 2018, a decrease from the £38 billion for each year which was previously forecast, in December 2016. The CML explains this as a result of tax and prudential measures affecting BTL. Read more.

Government urged to relent on its attack on buy-to-let: Former Cabinet minister and leader of the Conservative Party Iain Duncan Smith has urged Sajid Javid to stop “punishing” landlords and rethink its stamp duty and mortgage interest relief reforms. Read more.

Mortgage approvals hit nine-month low: The British Bankers’ Association data shows that mortgage approvals by banks have hit a nine-month low, with only 40,200 mortgages for house purchases in June, down from 40,287 in May. This is slightly down on the monthly average of 41,923 over the previous six months. Read more.

Tech can level the playing field: In the FCA Mortgage Market Study, an opportunity is laid bare to improve the experience of mortgage customers. Technology can improve competition, enhance transparency and simplify processes. Read more.

Mortgage lenders can’t keep apace with tech and regulatory change: A report by the CML suggests that mortgage lenders are hamstrung by the pace of digital and regulatory change in the market. The CML recommends that industry should view digital as an enabler, not the end, considering the application of digital changes beyond the mortgage transaction itself. Amongst other recommendations is the call for more businesses to collaborate to keep apace. Read more.

Markets and business conditions

Limited companies only work for portfolio landlords: With numerous changes to the property tax framework, a spotlight has been put on the structures under which property investors arrange their investments. Mortgage broker firm Private Finance crunched the numbers and found that property investors with less than four properties made more money as individuals than under a limited company structure. Read more.

Specialist Lending Solutions highlight that there is no one-size-fits-all answer for investors. Read more.