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Mortgage Lending Up £1.7 Billion (GBP)

Mortgage Lending Up £1.7 Billion (GBP)

UK Mortgage Lending Up £1.7 Billion (GBP)

The latest mortgage lending figures released by the Bank of England show that lending secured on residential property increased by £1.7 Billion (GBP) in December 2013, compared to the average monthly increase of £1.1Billion (GBP) observed during the previous six months of the year.

The increase is generally being credited to the success of the Government’s Help-To-Buy scheme, with London leading the way on residential property price rises, but what is the real situation affecting the UK?

Director of e.surv chartered surveyors, Richard Sexton, explained: “Mortgage lending in the UK is improving at lightning-speed. Lending has hit a six year high, as banks continue to offer cheap loans and interest rates, and repayments remain low. Mortgage lenders have dramatically increased lending to borrowers with smaller deposits, which has encouraged more first-time buyers to the market. And the government’s Help-To-Buy scheme has given consumers a huge confidence boost, which has increased lending volumes further. But the heart of the market remains in London and the South East. In other areas of the country the recovery is far slower. House prices may be increasing quickly, particularly in the capital, but it’s important not to withdraw Help-To-Buy too soon. In London, buyers need the scheme to get on the ladder. In many other areas, wage growth has been comatose since the economic crash, would-be property buyers simply don’t have enough income to save for a deposit. Building more houses would be a far more prudent approach to capping price rises than trimming down the Help-To-Buy scheme prematurely.”

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Paragon, the UK Buy to let mortgage specialists, have released the results of their first quarterly rental yield survey of 2012
.…and the figures are still promising for UK PRS landlords.

The survey, which quizzes over 500 landlords across the UK, shows that the average rental yield is still holding steady in many regions, with the average currently standing at 6.2% – an increase of 0.3% from Q4 of 2011.

Regions in the North dominated the top spots with the North West, and particularly areas such as Liverpool, reporting average yields of 6.6%.

The North East followed closely with averages of 6.5% and the South West came in third with 6.4%.

Also this week, Mortgages for Business, a rival of Paragon, released their first quarter finding, and understandably the figures were very similar.

Mortgages for Business however also looked into the average rental yields for HMOs and found that at 10.7% the average rental yield is at an all-time high, and especially in cities with large populations of university students.

Such reports are very promising for UK PRS landlords and when coupled with the growth in buy to let mortgage products, (442 buy to let mortgage products are available at the time of writing), despite media reports to the contrary it seems the UK private rental market remains one of the top investment opportunities currently available.

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