Docklands News

The amount of money lent on new mortgages fell by a third in June. Mortgage debt fell by 33.75% compared to May and now sits at £5.3bn, although it remains above pre-pandemic levels of £4.3bn, according to figures from the Bank of England. The data suggests that the cost of living crisis is dampening the housing market. Increasing inflation is also driving up the interest charged on mortgages. The 'effective' interest rate – the actual interest rate paid – on new mortgages also increased by 20 basis points to 2.15% in June. The rate on existing mortgages ticked up 4 basis points to 2.11% as the Bank of England raised interest rates. There are also signs of a slowdown in the housing market with approvals for house purchases, down to 63,700 in June, from 65,700 in May, below the 12-month pre-pandemic average up to February 2020 of 66,700. The figures reflect house purchases which were agreed several months ago, which suggests that appetite for new mortgages could continue to decrease. 

Daily Mail (29/07/2022)   Evening Standard (29/07/2022)   The Guardian (29/07/2022)   The Times (29/07/2022)  

A quarter of grandparents have assisted – or are planning to help – their grandchildren become first-time buyers, a new study suggests. The proportion of grandparents helping out financially has risen by a third since 2016 when the research was last carried out by insurer Aviva. The average amount given by grandparents has also increased to around £31,000 – 25% higher than six years ago. Grandparents who help their grandchildren to buy a property typically do so using their own savings or by releasing value from their own home, Aviva says. 

Daily Mail (03/08/2022)  

The falling value of the pound has spurred the global super-rich into buying 61 luxury London properties each worth more than £10m in the first half of 2022 – the highest number in ten years. The total value of £10m-plus homes changing hands so far this year has topped £1bn as international buyers continue to be attracted to London despite Brexit. The sales include a 12-bedroom mansion on Belgrave Square that sold for more than £90m. The sale has not yet been recorded by the Land Registry, but both the selling and buying agents confirmed that the transaction took place last month. Belgrave Square, which is about equidistant between Buckingham Palace and Harrods, is popular with wealthy overseas families as it is home to a number of foreign embassies. Other ultra-luxury homes sold so far this year, according to Land Registry filings analysed by property service LonRes, include a mansion on The Boltons in Chelsea that sold for £42m, a King's Road property for £40m and a Mayfair home near Hyde Park for £40m. Anthony Payne, managing director of LonRes, said there was “a hell of a lot of money around chasing very few properties, and of course that is pumping up prices”. He said the drop in the value of the pound, which has fallen by 11% since the start of the year to $1.20, had attracted overseas buyers looking for “a deal”. “The rich have a lot of money at the moment,” he added. 

Evening Standard   The Guardian  

As the UK’s authorities have cracked down on Russian oligarchs and their property empires in London, Chinese buyers have been filling the void. "Russian money is pretty much yesterday," says Beauchamp Estates' Paul Finch. The number of new Russian buyers has tumbled over the past four or five years, with scrutiny having increased gradually after the Skripal poisonings and then massively after the invasion of Ukraine. "The Chinese have definitely taken up the slack. They have been quite prolific, especially the Hong Kong Chinese, in buying up properties in London," he adds. "They want trophies. And with that you get all the bells and whistles - the amenities and the facilities." In 2021, all of the city's top five super-prime property deals - or those worth £20m or more - involved Chinese billionaires, according to research by Beauchamp. That was ahead of Russians, Americans, Britons and Africans, who made up the rest of the list. As ever, one of London's big draws is its private schools and cultural offering.

The Sunday Telegraph  

Property prices have risen to nearly nine times the average household disposable income, according to Office for National Statistics (ONS) data. In the year to the end of March, the average property in England sold for £275,000, with this 8.7 times the average annual disposable household income of £31,800. In Wales, the median house price was £176,000 – six times the average income of £29,400, while the ratio in Scotland was 5.5 as house prices averaged £166,000 compared to a £30,300 salary. London is the least affordable region, with those in the lowest 10% of earners having to work 40 years to buy an average house. At the other end of the scale, an average-priced home in the North East cost the equivalent of almost 12 years of income. The ONS data shows that UK house prices rose by 12.8% in May, up from 11.9% the month before, hitting an average of £283,000. This is £32,000 higher than the typical price a year earlier. 

The Daily Telegraph   City A.M.   Evening Standard  

First-time buyer house prices and rents have risen three times faster in the past two years, according to Rightmove. Monthly rental payments are soaring at unprecedented rates data from the property site has revealed - increasing by 17% since 2020, compared to 5% in the two years before that. Wages rose by 14% in the same period, meaning income has failed to keep up. The average 10% deposit now stands at £22,493, 13% higher than two years ago, Rightmove found. Average monthly mortgage payments have climbed 22%. A new first-time buyer now typically pays £973 a month based on the average mortgage rate, up £173. In the previous two years the increase was just £41. Tim Bannister, of Rightmove, said that chasing soaring house prices had put first-time buyers at a disadvantage if they were unable to live with parents or family members while saving. The average monthly rental payment is up £128 over the last two years, with a tax crackdown on landlords driving many out of the market and reducing supply. A survey conducted by Rightmove found those planning to buy their first home said the biggest challenges they face are rising house prices and soaring energy bills. Fewer than half (43%) said they hoped to be able to afford a home within the next three years. Two-thirds of respondents had already started saving towards a deposit, the survey found. However, Rightmove said demand for first-time buyer properties is up by 35% compared to 2019, suggesting many are still determined to get on the ladder despite stretched affordability. 

The Daily Telegraph