Housing Shortage Creates Downsizing Woes

A shortage of small properties is making it harder for retirees to downsize, equity release adviser Responsible Life has claimed. According to the firm's research, the downsizing dilemma is so bad that there is double the number of four bedroom properties for every two-bedroom house in 16 per cent of places. Responsible Life surveyed the number of four-bed and two-bed houses for sale in 120 major UK towns and cities and found Cambridge and Rugby to be the worst affected areas, where there are three four-bed houses for every one two-bed. Overall, in two thirds of areas the number of four bedroom properties outweighs two-bed houses, the adviser stated. Read more on the Financial Times website.

https://www.ftadviser.com/mortgages/2019/04/08/housing-shortage-creates-downsizing-woes/

UK Homeowners Rush To Remortgage Amid Brexit Uncertainty

Remortgaging activity has surged to a near-decade high as Britain’s homeowners rush to lock into low-rate loans amid uncertainty over Brexit. Homeowners remortgaged loans to the value of £9.2bn in October, the highest monthly total since November 2008, when it hit £9.3bn, according to figures this week from UK Finance, which represents mortgage lenders. The number of loans they remortgaged — at 50,500 — also hit a 10-year peak since November 2008, when 68,500 were remortgaged. The remortgage market has grown sharply in recent years, filling a gap for lenders left by a dwindling appetite for new loans for home purchase in a cooling housing market. Read more on the Financial Times website.

https://www.ft.com/content/323dfa6e-feed-11e8-ac00-57a2a826423e

Help To Buy Scheme Is Being Used For ‘Upsizing’

One in five households on the government’s Help to Buy scheme have used it to upgrade their property rather than get on the housing ladder, according to new analysis. More than 32,000 households are believed to have used the programme, which was designed to make buying a first property affordable, to trade up to a bigger home in the past five years. The analysis, by the estate agents Hamptons International, also showed that the rate of non-first-time buyers using the scheme is rising and that they are purchasing more expensive homes than first-time buyers.

https://www.ft.com/content/d8bf0b14-a78e-11e8-8ecf-a7ae1beff35b

First ‘Concrete Signs’ Of A Buy-To-Let Slowdown

The first evidence has emerged that buy-to-let landlords are increasingly selling properties or paying down their mortgage debt following a barrage of tax and regulatory changes. Data from UK Finance, the industry body, show that growth in outstanding buy-to-let mortgages is failing to keep pace with new mortgages being granted, in a reversal of the broad relationship between the two over the past decade. This strongly suggests some buy-to-let mortgages are being redeemed as investors sell rental properties. Read more on the Financial Times website.

Osborne Reveals Record Sale Of Public Housing Debt To Private Investors

George Osborne has announced the sale of £13bn of mortgage debt to private investors, in what is said to be the largest ever sale of financial assets by any European government. In a separate development, the Financial Times has reported that Osborne is considering selling off around £44bn of historic housing association debt. This inevitably prompted a flurry of alarm across the housing industry, with many calling it the privatisation of social housing assets. The Treasury announced that the Chancellor has authorised the sale of the mortgages, which were acquired by the Government during the financial crisis from Northern Rock, the mortgage assets are being sold to capital management firm, Cerberus.  According to the Treasury, the mortgage portfolio is being sold for £280 million more than their “book value”. Read more on the Housing Excellence website.

Another Inglorious Failure

The New Homes Bonus scheme was meant to be a reward to councils that encouraged housebuilding. There was some Treasury funding at first but the main method of funding was to ‘top slice’ normal council grants. There was therefore always going to be a redistributive effect from some councils and to others. Analysis in the Financial Times concludes that the NHB ‘has shifted cash from poor northern councils to rich areas in the south with little evidence that it has boosted homebuilding.’ The FT quotes the National Audit Office finding that there is ‘little evidence’ that the bonus has change councils’ behaviour in terms of planning, contradicting ex Minister Mark Prisk’s claim that it would bring about ‘at least 400,000 additional homes’. According to the authors, NHB has cost £2.2 billion so far – which happens to be 50% more than the annual affordable grant programme. For that money, to justify itself the policy should be delivering major improvements in housing approvals and delivery. It plainly isn’t. Read more on the Red Brick blog.