It is great news for everyone in the UK that home borrowings are showing an increasing trend after so many years. As per the latest statistics, it is quite evident that at least 10 to 12 percent increase is consistent from last four quarters. Even the number of loan applications has increased 3% as compared to the last quarter of 2013 and in terms of value the increase was 13%. Experts say that it is the highest ever increase in last 7 years. It has happened after quite a long time that buyers borrowed more money for the purchase of property.
With the rise in the affordability, first-time buyers borrowed 4 times than the gross income, and it is even higher than the average UK ratio of 3.5 times. Loan size also showed a tremendous growth from approximately 212K to 220K in a quarter with a background of individual gross income around 58K.
It is also quite evident that people do not hesitate in putting more money s deposits. There are cases where people deposited 25% of the total property value so that they take relatively fewer borrowings. It is quite high as compared to the earlier 16% levels. People deposited up to one-fifth of their gross monthly income for capital and interest payout. The earlier ratio was 21% though. People show incredible interest in the properties, and surprisingly the first time buyers in London go for expensive and luxurious properties. It indicates that the overall living standard is increasing and people want to live lavishly instead of thinking conservatively.
As far as home movers are concerned, lending figures show quite an impressive trend at that front as well. There is a steady increase QOQ basis, but it is slightly low than the first-time buyers. Home movers affordability did not change much as compared to last quarter’s also, and it is not very much different than the UK average. Lone size for home movers increased a little bit from 281K to 290K. Home movers also spent one-fifth of their income for covering monthly capital and interest payments. It is almost in sync with the national average.
Number of loans for remortgage also increased on QOQ basis. However, there has been a decline on YOY basis. With the rise of 4 percent, the lending figures touched 11.5K in numbers, and the valuation comes out to be over 3 Billion Pounds. Since it is an increase of 3% on a QOQ basis and 4% as compared to last quarter, experts are overwhelmed about a great future.
It seems that both first-time buyers and home movers find the current economic scenario exciting. Since people can find affordable properties in the town, London lending will show highly encouraging levels. In spite of such an impressive lending level, property rates have been quite consistent. It shows that the market will be stable, and prices will not go up just on the basis of market sentiments.
2015 seems to be further optimistic from buyer’s perspective
Property experts are very optimistic about 2015. They presume that British buyers will be able to buy properties not only in the domestic market, but abroad also. 2013 and 2014 have been driven by the strength of the British Currency against Euro. The history is going to be repeated, experts say confidently. In spite of two contrasting halves, 2014 was in all a great year. It was timid first 3-4 months and then became strong during summers. Buyers from London and other places of the UK invested heavily in villas and apartments at France, Geneva, New York and Monaco.
The market is expected to by buoyant with the same pace next year as sellers and buyers both are realistic in terms of pricing and financial situation. With prices becoming more flexible, there is a steady increase in buyer’s confidence in properties. Changes in the political scenario (especially, in the neighboring France) may change the financial scenario as well. Therefore, everyone will be interested to invest in 2015. There can be positive or negative change after the elections and it is advisable not to take risk waiting till 2017.
History repeats itself
In fact, 2014 started with a great enthusiasm when January recorded heavy number of sales. The subsequent months were not so promising. Nevertheless, sales again picked momentum in the third and fourth quarter. December is expected to be a bright month initially, but last two weeks (and the first week of 2015) will be a slack time due to Christmas. Last year also, January sales started sheepishly and then took momentum from 10th January. It looks that the trend will be similar in 2015.
Smart buyers reaped the profit
It was quite evident last year as large countryside properties with huge open land, swimming pool and Tennis court were available in at unreasonably discounted prices. The deals were finalized, and people owned great houses and bungalows at just throwaway prices.
Swift and smart property agents took advantage of it and contacted potential buyers and sellers at the same time. Since there was no delay in the whole process, both parties found it a reliable and worth deal.
Buyers from all around the world invested in properties at the UK and France. However, people from the UK were one of the top investors in apartments at Paris, Cannes or waterfront villas at Riviera or Chalets. Even vineyards of Bordeaux also saw a lot of British buyers last year. Every buyer was interested in a fantastic deal, and negotiations were rampant. No wonder, property dealers who had the best convincing skills grabbed the best sales. Buyers know that current market situation can bring their dream house into reality. If sellers do not take advantage of it at this moment, they will have to sit idle for buyers for a long time. It is a wise thing to sell the property at the best possible price instead of blocking money.
With great optimism about exchange and interest rates in 2015, property market in the UK looks forward to a carnival!