News Headlines: Wednesday 15th January


Yesterday saw the announcement that inflation fell to the government target level of 2% in the last month, for the first time in four years. Inflation came in 0.1% lower than in November 2013, helped by the falling cost of recreational goods and services. But slower inflation was partially offset by an increase in motor fuel process, according to the ONS. (Guardian p.20 Metro p.46)

Personal Finance

Research from housing charity Shelter reveals tens of thousands of people are taking out payday loans to cover their mortgages and rent, with one in 50 using high interest credit in the past year. The charity warned that in total, one in five have use overdrafts, credit cards or cash borrowed from family and friends in order to pay for housing in the last 12 months. Shelter surveyed homeowners on their financial worries, and also discovered that a quarter of people would feel too ashamed to get help with housing repayments. The charity also revealed a 30% increase in calls to its helpline over the past year. (Metro p.4)


Released in tandem with the ONS inflation statistics yesterday, the latest house price index from the ONS showed the price of the average UK house rose 5.4% to £248,000 in the 12 months to November. In London, the price rise was more than double that, with the capital seeing a year-on-year increase of 11.6%.

The Metro reacted to this news by heralding housing misery for first-time buyers, with the average first time buyer forced to pay £187,000 – or 6% more than a year ago. Peter Rollings of Marsh & Parsons said: “House price growth has washed over every corner of the UK” but in the Daily Telegraph, Richard Sexton of e.surv warned: “We desperately need more construction in order to prevent the bottom of the market being priced out entirely.” (Daily Telegraph B4, Metro p.47, Daily Express p.28, Guardian p.21, The Sun p.38, The Times p.35)

The Independent Editorial lead with a sceptical view of the ONS figures, arguing that expensive housing distorts the UK economy: “House-builders find themselves in the spotlight. Housing completions have been abysmally low for decades. And whatever David Cameron says, it is difficult to see the Government’s Help to Buy mortgage subsidies boosting supply sufficiently to keep house prices anchored. That is dangerous.” It argued that ultimately, even middle-class homeowners could ‘lose out’ from rising prices (Independent p.2)


‘Skinflint’ bosses who fail to pay workers the minimum wage will face penalties of up to £20,000 from next month say the government – a £15,000 increase on current fines. Business Secretary Vince Cable also said that ministers had made it easier to ‘name and shame’ bosses paying under the minimum wage, and that all calls to the free pay and work rights help line would be investigated. (Metro p.47)


House Purchase Loans hit a Six Year High, but High LTV Lending dips in December


December was the best month for home lending in six years, according to the latest Mortgage Monitor from e.surv, the UK’s largest chartered surveyor.

There were 77,918 loans advanced to homebuyers in December, the highest number since November 2007. It marked a 40% increase in home loans over the past year, a jump of more than 22,000 approvals from 55,501 in December 2012. Compared to November, home loans increased 10% from 70,758. It was the tenth monthly increase in a row and the largest monthly increase in two years.

Despite an increase in total lending, the volume of lending to high LTV borrowers dipped in December. In the final month of 2013 there were 9,038 loans to borrowers with deposits worth 15% or less of the total value of their property, a 5% decrease from 9,493 in November.

However, high LTV lending is still far higher than this time last year. While total lending has increased by 40% over the last 12 months, high LTV lending has increased at an even faster rate, rising by 60% from 5,661 high LTV loans in December 2012. The figures also show there is still a way to go before high LTV lending will come close to pre-recession levels, with four times as many monthly high LTV loans before the recession, suggesting lending to borrowers with smaller deposits could still be ramped up significantly.

Richard Sexton, director of e.surv chartered surveyors, explains: “There is still a long road to travel before the mortgage market is fully recovered from the hangover of the financial crisis. But the recovery is quickening, and the end is beginning to appear on the horizon. High LTV lending has exploded in the past 12 months, and it is now far easier to take out a mortgage with a smaller deposit saved. There has been something of a festive dip in high LTV lending in the last month, likely to be the result of lower equity borrowers paying for Christmas and delaying their move until the New Year. High LTV lending should continue its recovery in the coming months, but it’s important that Help to Buy remains in place to help support borrowers in building a deposit, enabling them to access better rates, and cheaper deals.”


2013 has been something of a tale of two halves, with the recovery in lending stepping into a new gear in the second half of 2013. House purchase lending increased just 6% in H1 2013, going on to increase by 32% in H2 2013. The recovery in high LTV lending was more evenly spread throughout the year. High LTV lending increased 26% in H1 2013, and a further 27% in H2 2013.

Richard Sexton, director of e.surv chartered surveyors, explains: “The mortgage market had a bumpy beginning to 2013, as fears of a triple-dip recession reigned supreme, and banks were cautious about lending. But while the first half of the year witnessed a moderate uptick in lending, with the seeds of the economic recovery beginning to sprout, the second half of 2013 saw the mortgage market grow at an electric rate.”

More first-time buyers

The number of loan approvals on properties up to the value of £125,000 has increased by 34% in the last year, with 15,584 loans on properties valued £125,000 or under in December 2013, compared to 11,655 in December 2012. It reflects a pick-up in the market, and an increase in the number of lower equity borrowers choosing to move-home or buy for the first-time.

The number of first-time buyers in November 2013 was 28% higher than in November 2012, according to the latest LSL First Time Buyer Tracker, as mortgage rates fell to 3.93% – the lowest on record. But there are warning signs ahead. The average first-time buyer purchase price rose 11% over the year to November, to £149,404.

Richard Sexton, director of e.surv chartered surveyors, explains: “More high LTV borrowers and first-time buyers are looking to buy property now than any other time post financial-crisis. But they are having to fork out more than ever, as prices are driven up by the intense competition for property. Traditionally, first-time buyers have turned to their parents for help building the cash for a deposit – a deposit that is growing larger as prices rise. But inflation has eaten away at many parent’s cash reserves, and this well is beginning to dry up. In order to keep the market accessible for everybody, house building must be ramped up, to prevent the challenge of saving for a deposit form becoming even more difficult.”

November Best Month for House Purchase Lending since January 2008


The number of loans advanced to homebuyers in November climbed above 70,000 for the first time since January 2008, according to the latest Mortgage Monitor from e.surv, the UK’s largest chartered surveyor.

There were 71,920 house purchase approvals in November, a 6% increase on October, in a sign of growing lender and consumer confidence. Lending to home-buyers was 34% higher than a year ago, when the number of loans approvals came in at just 53,539.

In November, more than an eighth (13%) of all house purchase approvals were to high LTV borrowers, as lenders increased support to borrowers with deposits worth 15% or less of the total value of their property. There were 9,493 high LTV loans in November, 3% higher than in October, and almost double the number of high LTV loans than in November last year (4,872). It was the highest number of LTV loans advanced in a single month since April 2008.

The increase in approvals follows the release of new data from the Bank of England showing that net lending through the Funding for Lending Scheme tripled in the third quarter of this year. Net lending by banks using the scheme climbed to £5.8 billion between July and September, compared to just £1.6 billion between April and June.

Richard Sexton, director of e.surv chartered surveyors, explains: “The mortgage market is making definite strides back to its pre-crisis health. Between the tail-end of the summer and this autumn, lenders tapped the Funding for Lending Scheme for almost £6 billion worth of funds, and that honeypot is now filtering through to homeowners, in the form of more loans and cheaper rates. Despite the changes to FLS, the mortgage market will continue to thrive. Funding for Lending spurred a limping market into action at the beginning this year, but since then Help to Buy has taken the lead in driving the market forwards.

“November is defying expectations with a continued acceleration in house purchase lending. It comes amid good news of growing GDP and falling unemployment. Positivity is sweeping through the economy and encouraging more prospective homebuyers to the market. And lenders are extending more loans using FLS as a safety valve to release the pressure of lending to riskier high LTV borrowers.”

Increased lending in the South

Total lending improved in every region of the UK aside from Northern Ireland and the South West & South Wales in November, with the South showing a strong monthly pick-up in lending. The number of loans advanced to homebuyers in London rose 9% on October. And in neighbouring region the South East, approvals rose 8% on October.

High LTV loans are becoming more available across the country. In London, high LTV lending picked up sharply, rising 30% in a month to 827 high LTV loans. This trend was echoed in the South West & South Wales, where high LTV loans increased by 9% compared to October.

Richard Sexton, director of e.surv chartered surveyors, explains: “Help to Buy is taking up the mantle as Funding for Lending is phased out. It is an essential component in the nationwide recovery in lending. In London and the South East, house prices are rising rapidly, and many borrowers struggle putting together a reasonable sized deposit. Here, Help to Buy helps them access lower rates, with less of a deposit. In the North, there are fewer equity rich buyers, and more people are in need of a hand to get on the first rung of the housing ladder.

“But as lending to borrowers with smaller deposits increases, so does the risk of them defaulting on their mortgages, as rates rise. And with unemployment falling, a base rate rise could happen sooner than expected. A base rate rise of up to 1% at the tail-end of 2014 could be very realistic if the economy keeps recovering.  To combat this, lenders will inevitably increase stress testing, to ensure that loans are only issued to borrowers that can really afford them. Credit should be more accessible, but lending must be increased in a responsible manner to avoid revisiting the mistakes of the past.”

LOANS FOR HOUSE PURCHASE – seasonally adjusted



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UK Paper Summary: 25th November 2013

The front page of the Daily Mail says Britain’s two state-backed banks have been accused of running thousands of small firms by using “disgraceful” business practices.  RBS and Lloyds “harmed their customers through their decisions and caused their financial downfall” according to a bombshell report released today by Laurence Tomlinson.  The report claims RBS acted like a “hit squad” by deliberately causing healthy businesses to go bust for its own gain.


Personal Finance
Immigrants and the seriously ill are in line for “a fresh Tory welfare raid” according to Tom McTague, in the Daily Mirror.  More than 500,000 sufferers of long-term conditions such as cancer face losing benefits currently paid to them as they train for a return to work.


In the Daily Express, Sarah O’Grady reports that house prices jumped by £7430 last month – and are up £1,300 a week according to estate agency Sequence.  Richard Sexton, director of e.surv chartered surveyors said, “Help to Buy has opened a flood of new buyers, causing prices to surge upwards.”  The second phase of the Government’s Help to Buy scheme was launched in October and offers lenders a taxpayer-backed guarantee on 95 per cent mortgages on homes costing up to £600,000. In the first month, 2,000 sales were arranged.


Employment & Recruitment
The FT’s editorial looks at university degrees pointing out that, since the 1963 Robbins report, widening access to university has been a central aim of UK education policy.  Roughly half of young people now study for a degree, against 4 per cent when the report was written.  


But the FT’s stance is that rising participation is welcome only if the benefits justify the cost: “young people’s horizons will not be widened by pushing university for its own sake.”

High LTV lending rises 80% year-on-year in October


House purchase lending increased for the eighth month in a row in October, reaching the highest level in nearly six years, according to the latest Mortgage Monitor from e.surv, the UK’s largest chartered surveyor.

There were 68,996 house purchase loans in October, as approvals rose 3% from 66,735 in the previous month, pushing figures to a new post-financial-crisis record.  Compared to October last year, approvals were 32% higher, equal to 17,000 more approvals. Compared to in January 2013, approvals have risen 27%.

The sustained recovery in lending has been driven further forward by the increasing number of loans that are being approved to buyers with smaller deposits. In October, there were 9,176 loans to borrowers with a deposit of 15% or less of the total value of the property, an increase of 15% to September 2013, and an 80% increase year-on-year. This represents the highest number of high LTV loans since April 2008.

But despite the increase in high LTV lending, the number of affordable properties is decreasing as house prices are being pushed up by a supply some areas. There were just 13,799 loans on properties up to the value of £125,000 in October – typical first-time buyer stock – but this was 6% lower than in September.

Richard Sexton, director of e.surv chartered surveyors, explains: “The mortgage market is bustling with activity, as further buyers migrate back to the market. Winter may be approaching, but that’s not dampening the spirits of potential homeowners, who are moving house, or buying into property in their droves. The sense of economic positivity, arising from rising house prices, falling unemployment and increased lender confidence is catching on like the common cold, and more people are looking to move. It’s a merry-weather market, with positive sentiment to match the season.

“Help to Buy is needed more than ever, as rising house prices could push more borrowers into the high LTV bracket. House prices have risen 4.3% since last October, according to LSL, but that hasn’t been matched by savings rates, or wage growth. The size of a deposit needed to access the best rates has risen – and many borrowers are now forced to take out mortgages with just a small deposit saved. It’s had a huge effect on first-time buyers, who haven’t seen their equity share increased.

“That’s where Help to Buy comes in. It provides a shortcut for buyers who lack the cash for chunky deposits to be backed by banks, by bolstering their deposits, so that they can access better rates. And it encourages lenders to support high LTV borrowers too. They have become less of a risk, because of the mortgage guarantee scheme, and are now more viable investments.”

Compared to the beginning of the year, the outlook for the mortgage market is far rosier. Approvals slid 2% between December 2012 and January 2013, and a further 4% in the month to February. But Help to Buy and Funding for Lending have busted that trend by encouraging banks to slash rates and boost lending, and the beginning of 2014 should see lending reach a fresh high. Approvals still fall far short of pre-2008, when they were consistently over the 100,000 mark, but they are increasing at a far more sustainable rate.

Nationwide recovery

High LTV lending increased in every region of Great Britain in October, aside for Scotland and the North East and Cumbria. The increase in high LTV lending had a big impact in Yorkshire, where the number of high LTV approvals rose 18%, with high LTV borrowers accounting for 21% of the market. In London, LTV borrowers accounted for just 5% of the market, but the number of approvals was 21% higher than in September.

The North West remained the region with the greatest total number of high LTV borrowers in October, with 1,447 loans to borrowers with a deposit of 15% or less.

But more repossessions in the North

Recent research from e.surv reveals that although the mortgage market is speeding to recovery, there remain severe regional disparities. Court ordered repossessions fell 33% in the year to July 2013, but they fell far more quickly in the South, which has led to a widening North-South divide in repossessions. 72% of towns in the North had more repossessions than the UK average.

Richard Sexton, director of e.surv chartered surveyors, explains: “Up until now, the recovery of the mortgage market has been focused in London and the South East, where the economic climate is picking up the fastest. Repossessions are falling more quickly in the South, and the bulk of lending is still to buyers who can afford larger deposits, and access lower rates.

“But even London and the South East aren’t immune to the difficulties caused by rising house prices. Climbing house prices spell good news for home-owners, who see their equity in a house dramatically increase. But there’s a flipside for first-time buyers, who struggle to save for a deposit. The biggest missing piece in the mortgage market recovery – and the piece which would help to resolve this – is house-building. Without greater construction, the imbalance between the supply of new houses and demand of new buyers will become all the more dramatic, competition for houses will drive prices further up, and more new buyers will be tipped out of the market.”



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Walker Fraser Steele Appoints New Chairman


Walker Fraser Steele, one of Scotland’s oldest chartered surveying firms, and sister company to the UK-wide firm e.surv chartered surveyors, has appointed Donald MacLellan as its new Chairman.

Donald brings over 30 years of experience in the Scottish property market to his new role at Walker Fraser Steele. He started his own Estate Agency business in Lanarkshire in 1982 which he subsequently sold in 1998 to General Accident Property Services, the precursor to Your Move. Donald occupied several senior management positions throughout the changes from General Accident to Your Move, including Sales Director and Statutory Director, before its eventual management buyout by Aviva, (formerly Norwich Union), in 2004.

Now living in Hamilton, he is proud to claim his parental heritage from Tiree and North Uist in the Western Isles.


Alan Penman, spokesperson for Walker Fraser Steele said: “I’m delighted to welcome in Donald MacLellan as Chairman of Walker Fraser Steele. Donald has exceptional knowledge of the Scottish housing market, and a stellar reputation, having run his own estate agency business and worked in several senior directorship roles. His deep-rooted understanding of the Scottish property market will be invaluable as we continue to grow the Walker-Fraser Steele brand in Scotland – with the help of more resources from e.surv.”

Walker Fraser Steele announced their collaboration with e.surv chartered surveyors in June, with 18 e.surv surveyors operating under the Walker Fraser Steele brand in Scotland, significantly expanding Walker Fraser Steele’s coverage across the market.

North-South Divide in Repossessions Widest in Six Years


The North-South divide in housing repossessions has widened to its largest in six years, with 33% more repossessions in the North than in the South, according to detailed research released this morning by e.surv chartered surveyors.

e.surv’s analysis of court-ordered repossessions in the year to Q2 2013, broken down by post code, found there were 3.2 repossessions per 1,000 households in the North, a third more than the South, which saw 2.4 repossessions per 1,000 households. This is the largest gap since the onset of the financial crisis. In the year to Q2 2007, there were 14% more repossessions in the North than in the South, a figure which has been steadily rising.

In total, repossessions fell 17% in the year to July, with 66,544 repossession orders in 2012-13, as opposed to 77,856 in 2011-12. The average rate of orders per 1000 households fell from 3.3 to 2.8.

In the North, 72% of towns had more repossessions than the UK average, compared with just 24% of towns in the South. This trend is most accentuated in the North West, where eight in ten towns (79%) had above the UK average number of repossessions.


Although the North-South divide in repossessions is widening, the rate of repossessions is falling across the nation. There were 17% fewer repossessions in the South in 2012-13 compared to in 2011-12, but just 16% fewer in the North. This indicates that while Northern towns are recovering, they are doing so at a slower rate than the South.

This has been a consequence of continued economic hardship and job losses in these areas. The North West has shown the greatest rise in unemployment in the UK, with 9% of the working population out of work, according to the ONS, a 0.8% rise over the last quarter. This has forced more borrowers to struggle with mortgage repayments, which in turn has led to the higher than average rate of repossessions. Similarly, the North East and Yorkshire also have some of the highest levels of unemployment, with 10% and 9% of the working population idle in these regions.

Richard Sexton, director of e.surv chartered surveyors, explains: “On a national level, repossessions are falling, as the economy slowly crawls back to health. Mortgages are becoming cheaper, wages are slowly picking up, and the labour market is showing more vitality. But the recovery has been more pronounced in the South, driven forward by booming property and labour markets in the capital and home-counties. This has been slow to filter through to the North, where staggeringly, seven out of ten Northern towns are repossession hot-spots. In areas like Yorkshire and the North West, wages are recovering more slowly, and fewer jobs on offer. As a region, the North has traditionally depended on public sector jobs, but a squeeze in public sector funding has led to loss of jobs for many, and very slow pay increases for others. Pay increases that are consistently below the rate of inflation, have further tightened household budgets, and caused many to fall behind on mortgage repayments.”

There is still a long way to go before the Northern property market returns to its pre-recession health, and all the while the North is still playing catch-up, and falling further and further behind the South.”

Repossessions by postcode area

North-West towns suffered the most from court repossessions in the year to July 2013, with four of the worst five towns for repossessions in this region. In Chester, the town with the highest rate of repossessions in the UK, there were 8.4 repossessions per 1,000 households in the year to July 2013 – three times the UK average of 2.8 repossessions per 1,000 households. Blackpool, Oldham and Wigan were also among the five worst UK towns for repossessions, with 4.5, 4.3 and 4.2 repossessions per 1,000 households respectively.

Top Ten Repossession Postcodes

Postcode area

Repos/1,000 households

Total number in Year to Q2 2013































Lancaster (2.5), Liverpool (2.4) and Carlisle (2.0), were the only towns in the North West to have lower than the average number of repossessions.

Repossessions by region

Although the South West and the South East have below average rates of repossessions, they show some of the biggest annual increase in repossession rates. Taunton, Torquay and Plymouth all experienced a rise in repossessions in the year to July, with repossessions increasing by 34%, 30% and 28% respectively. In the South East, Brighton and Reading experienced repossession rises of 30% and 27%. But the town in which repossessions increased the most over the past year was Carlisle, where the rate of repossessions grew 37%.

Repossession Regions


Repossessions/1,000 households

North West




Yorkshire & the Humber


North East


East Midlands


West Midlands


UK Average




East of England


South East


South West




London not out of the woods

Despite being below the UK average, London shows a big disparity in repossessions. East Central London (0.7), West Central London (1.2), and West London (1.4) had the second, third and fourth lowest repossession rates, outpaced only by Galashiels in Scotland (0.3). But some areas in Greater London have far higher repossessions rates, with Croydon (4.1) the ninth worst town for repossessions in the UK, and Ilford (3.5) and Enfield (3.3) both with a rate of repossessions that is far higher than the average town.

Richard Sexton explains: “The London example shows it’s not as simple as purely North and South, as the capital also contains some areas where repossessions are high. House prices may be high in the capital, and the labour market may be stronger, but in such densely populated areas, there remain borrowers who are struggling. Many borrowers have seen their finances slowly eroded by high inflation and rising living costs. This has been particularly potent in the expensive capital, where less affluent borrowers – those who could only just afford to buy – have been badly affected.”