October 2014 - First 4 Commercial
31Oct2014

House Price update October 2014

House Price Update October 2014

A recent house price survey has found that the average property in the UK has risen £15,300 in value in the last year. Latest figures from the Office for National Statistics show that the average UK house was worth £274,000 in August 2014.

Prices in Cambridge have grown the fastest, climbing 32.5 per cent to an average of £348,300. Oxford has experienced a 10.5% rise, Bristol; 14.1%, whilst Portsmouth has seen gains of 10.4% over the past year. The average price of a house in London house still outstrips everywhere else in the UK, with an increase of 18.1 per cent, or £61,000 over the year to September. Yet the surge in prices in the South is thought to be a direct result of Londoners abandoning the Capital for cheaper housing elsewhere.

Rental inflation has also risen by 4.6%, with the average monthly rent in the UK standing at £728 outside of London, and £1,466 in the Capital. However, the rental market appears to be slowing, as eight regions in the UK have seen price falls.

According to the Centre for Economics and Business Research (CEBR), overall, house prices are expected to fall very slightly in 2015, dipping by around 0.8% Property website Rightmove, however, are forecasting house prices to rise by a massive 30% over the next five years.

Demand for property within the rental market remains strong due to rising house prices, yet as buy-to-let mortgage payments have become more expensive in the past 12 months, yield could be reduced.

For more help and useful information go to www.first4commercial.com or contact the team.

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T: 01277 620083 F: 01277 658900 E: info@first4commercial.com

A: 5 Alyssum Walk, Billericay Essex CM12 0SS

1Oct2014

EU Directive for Buy to Let mortgages

EU Directive Could Change Buy to Let Opportunities

Tougher new mortgage lending rules set up as part of the Government’s plans to adhere to the European Mortgage Credit Directive will mean that buy-to-let borrowers could face a tougher time obtaining buy-to-let finance from 2016.

As things stand currently, buy-to-let mortgages are not subject to the same regulations that apply to mainstream, owner-occupier mortgages. Those over 65 for example are able to apply for buy-to-let mortgages, and the mortgages themselves are available on an interest-only basis.

The new regulations are designed to target those who become ‘accidental landlords.’ This is defined as someone who has become a landlord through circumstance rather than design. This for instance, could be a person who intends to let a property they have previously used as their home or to rent a home that they have inherited.

The regulations have arisen because landlords have always been generally viewed as ‘business’ borrowers, needing little supervision, whereas owner-occupiers who find themselves letting, are deemed ‘consumers.’ The Treasury has stated that accidental landlords have not made the business decision to purchase a property to rent it out. As such, they are seen as not acting in a business capacity, and therefore require regulation. As a result, it’s thought that as a result buy-to-let borrowers will have to pass more compliance tests and jump through more hoops in order to borrow.

EU Member States are able to choose not to apply the entire Directive to bridging loans, so unless the UK decides to apply the directive to bridging finance, this should remain unaffected.

For more help and useful information go to www.first4commercial.com

first4commercial.com

f4c

T: 01277 620083 F: 01277 658900 E: info@first4commercial.com

A: 5 Alyssum Walk, Billericay Essex CM12 0SS

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