London region continues to lead UK housing market
With mortgage lending generally flat during September according to the Council of Mortgage Lenders (CML), the trade body representing building societies, other data released by the UK Land Registry showed that the London region continued to lead the UK property market, with average values growing by 8.8% in the year to September.
New data released by the CML also shows the buy-to-let lending market rising for a second consecutive quarter, buoyed by continuing demand for rental properties.
Figures from the CML show that new loans for buy-to-let properties rose 12 per cent in value and 8 per cent by business volume during the third quarter of 2010, representing 26,900 new loans, worth £2.8bn.
Commenting on the figures, Erica Evans of expatriate property search agents Expatfindaproperty.com said, “With demand in the UK slowing, many expatriates and overseas buyers have realised that now is a good time to start or to add to a property portfolio in London. Prices have recovered strongly from their lows of around a year ago and rental yields are generally exceeding mortgage costs for good quality properties in key areas such as Westminster, Wandsworth and Wimbledon.”
The number of loans for first-time buyers increased slightly in September to 18,600, and were worth £2.2bn, but these were 6 per cent lower by volume and 4 per cent lower by value than in September last year. Loans for remortgages increased from 25,000 (worth £3.2 billion) in August to 29,000 (worth £3.6 billion) in September. Remortgaging accounted for 29% of total lending in September, the first proportionate increase since May.
According to Tim Harvey, managing director of UK regulated discount brokers Offshoreonline.org who specialise in providing mortgages for the expatriate market, lending conditions have eased considerably, but the market is still tough. “Loans of up to 70% of a property’s value are readily available, with interest rates below 4%. However, banks are now insisting on minimum loan sizes of £100,000, which implies a purchase price of around £143,000. Offshoreonline.org report continuing strong demand for variable rate loans, as fixed rate products for expatriates remain stubbornly high at over 6.50% in many cases for 5 year funds.
According to Land Registry data, Brighton and Hove experienced the highest growth rate during the year, with average values increasing by 12.9%
For more information on UK property search for expatriates and overseas residents, visit expatfindaproperty.com.