The Council of Mortgage Lenders (CML) has said that it is pleased with the proposals for reform on mortgage lending put forward by the Financial Services Authority (FSA).The FSA this week outlined new stricter lending rules which it hopes will prevent banks and building societies granting mortgages to people which cannot afford the repayments or allowing them to take reckless measures such as interest-only mortgages without a suitable repayment vehicle.
Initially, the CML said that it had concerns that such restrictions, which will come into forced in 2013, would hinder the market and further reduce people’s ability to acquire.But, after consultation with the FSA, it is satisfied that the changes are a positive move for borrowers and the housing market.
CML director general Paul Smee said: "If lenders are to make their contribution to improving the supply of housing and to the wider agenda for economic growth, then they need a regulatory framework which also supports that objective."
Despite the changes, EH Landlord Services have predicted that the housing market will remain strong for the next decade at least.
Mortgage Rate and Home Loan News
Tuesday, 27 December 2011
Thursday, 22 December 2011
December Dip In Rental Prices Provides Opportunity for Renters
December is a great month for people to find a rental property, claims one specialist.Property analyst Samantha Baden of Find a Property claims that monthly rents have dipped in the past month and that provides a wealth of opportunity for people looking to rent a new home.
Since the winter of 2008, rental prices have experienced a minor lull in the last two months of the year before rising again in the new year."This temporary dip in asking prices won't last long, and it's a great opportunity for potential tenants to agree a rate that's favourable in comparison to the rest of the year," she stated.
Overall UK rental prices fell by 1.5 per cent during November. The East Midlands, however, felt the highest fall, with prices dripping by 4.8 per cent.
Despite this the private rental market will remain strong well into 2012 according to the Residential LandlordsAssociation because there is currently not enough properties available to meet demand.
London Rental Property News
Since the winter of 2008, rental prices have experienced a minor lull in the last two months of the year before rising again in the new year."This temporary dip in asking prices won't last long, and it's a great opportunity for potential tenants to agree a rate that's favourable in comparison to the rest of the year," she stated.
Overall UK rental prices fell by 1.5 per cent during November. The East Midlands, however, felt the highest fall, with prices dripping by 4.8 per cent.
Despite this the private rental market will remain strong well into 2012 according to the Residential LandlordsAssociation because there is currently not enough properties available to meet demand.
London Rental Property News
Saturday, 10 December 2011
Private Rental Sector Not Enough to Boost Supply
The RLA report that the report on the private rented sector warns that current returns for landlords are very low once costs and inflation are taken into account, despite headline reports of rising rents. This is restricting the amount of new accommodation available to meet increasing demand.
Prepared by Michael Ball, Professor of Urban and Property Economics at the University of Reading, the Report highlights that rents remain significantly below their early 2008 levels, when adjusted for inflation. The Report used a new economic model fed with financial data from over 200 landlords.
Following a survey of landlords' costs and returns, the Report found that present rent levels do not cover landlords' expenses when all factors are taking into account, including refurbishment and borrowing costs, agents' and legal fees, voids and arrears, energy and safety certificates, repairs, depreciation and regulatory compliance.
Additionally the tax burden on the private rented sector is much more than on other types of tenure, averaging £1,000 a dwelling. Sharp real falls in the value of their properties over the past four years have pushed total annual returns for many landlords into negative territory.
Currently, almost 90% of English landlords are private individuals and couples and many residential investors would have been better-off if they had invested their money elsewhere.
The Report warns that the consequences for tenants will be "grim" as they face increasing rents and a chronic shortage of properties. Economic recovery will also be significantly held back by a lack of affordable rental housing. It calls for Government reforms to the taxation and regulatory treatment of the sector to alleviate pressures on rents.
Commenting ahead of the formal launch of his Report today (November 22nd) at the House of Commons at a meeting of the All Party Parliamentary Group for the Private Rented Sector, Professor Ball said:
"There is much hype about the private rented sector at present, but the reality is that landlord returns are generally poor and with a weak economy are likely to stay that way. Investment in the past was driven by rising house prices, now there is a need to rethink taxation and regulation so that rental returns come to the fore at rent levels that are affordable for tenants."
Responding to the report, Alan Ward, Chairman of the Residential Landlords Association commented:
"Professor Ball's report demonstrates clearly that the private rented sector is taken for granted - the returns are only superficially rewarding because few landlords account for the cost of regulation and taxation. Only the lack of an alternative secure investment, and the curse of capital gains tax, prevents many landlords from dis-investing just when more people need private renting because of lack of access to the owner occupied and social rented sectors."
Prepared by Michael Ball, Professor of Urban and Property Economics at the University of Reading, the Report highlights that rents remain significantly below their early 2008 levels, when adjusted for inflation. The Report used a new economic model fed with financial data from over 200 landlords.
Following a survey of landlords' costs and returns, the Report found that present rent levels do not cover landlords' expenses when all factors are taking into account, including refurbishment and borrowing costs, agents' and legal fees, voids and arrears, energy and safety certificates, repairs, depreciation and regulatory compliance.
Additionally the tax burden on the private rented sector is much more than on other types of tenure, averaging £1,000 a dwelling. Sharp real falls in the value of their properties over the past four years have pushed total annual returns for many landlords into negative territory.
Currently, almost 90% of English landlords are private individuals and couples and many residential investors would have been better-off if they had invested their money elsewhere.
The Report warns that the consequences for tenants will be "grim" as they face increasing rents and a chronic shortage of properties. Economic recovery will also be significantly held back by a lack of affordable rental housing. It calls for Government reforms to the taxation and regulatory treatment of the sector to alleviate pressures on rents.
Commenting ahead of the formal launch of his Report today (November 22nd) at the House of Commons at a meeting of the All Party Parliamentary Group for the Private Rented Sector, Professor Ball said:
"There is much hype about the private rented sector at present, but the reality is that landlord returns are generally poor and with a weak economy are likely to stay that way. Investment in the past was driven by rising house prices, now there is a need to rethink taxation and regulation so that rental returns come to the fore at rent levels that are affordable for tenants."
Responding to the report, Alan Ward, Chairman of the Residential Landlords Association commented:
"Professor Ball's report demonstrates clearly that the private rented sector is taken for granted - the returns are only superficially rewarding because few landlords account for the cost of regulation and taxation. Only the lack of an alternative secure investment, and the curse of capital gains tax, prevents many landlords from dis-investing just when more people need private renting because of lack of access to the owner occupied and social rented sectors."
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