House building boost to UK construction
The construction activity index rose more than expected helped by a surge in house building in the UK.
According to the Markit purchasing managers index the sector rose by 62.6 compared to October which was 59.4 and a figure above 50 indicates stronger growth activity.
House building rose at the fastest rate since 2003 last month and Tim Moore, from Markit said construction activity continues to spring back to life during the final months of 2013.
House starts increasing
New house building is now at 40,000 per quarter compared to 28,000 at the end of last year.This figure is still 30% below the high of 57,000 per quarter reached at the beginning of the financial crisis and below the 50,000 to 60,000 per quarter need to meet the rise in the UK population according to Markit.
The lack of suitable properties on the market at an affordable price for first time buyers and home movers means they must continue renting and saving for a bigger deposit.
Tim Moore has said the rise in building is from a low base after many years of shrinkage resulting from the credit crisis that was sparked in 2007.
Help to Buy driving demand
The government’s Help to Buy scheme has assisted in driving demand higher from first time buyers and home movers.Phase two of the scheme offers an equity loan guarantee from the government of 15% in addition to a 5% deposit from the homebuyer available on properties valued up to £600,000.
The Help to Buy scheme will continue, however, last week the Bank of England ended mortgage lending for the Funding for Lending scheme.
The scheme promotes new homeownership for people that are renting and is not available to switching remortgage buyers or buy-to-let investors.
Evidence showed that mortgage availability had significantly increased and the Bank decided to restrict the Funding for Lending scheme to small business loans only.
Help for first time buyers can come from family members as the equity release buyer can access money using a lifetime mortgage and gift the deposit to children or grandchildren to buy their property.
What are your next steps?
Call our LCM mortgage brokers for advice if you are a first time buyer, want to remortgage your existing home for the best mortgage deal, moving home or are a buy-to-let investor.Learn more by using the property value tracker chart, mortgage monthly cost calculator and equity release calculator. Start with a free mortgage quote or call us and we can take your details.
For equity release buyers our London City Mortgage advisers can recommend lifetime mortgages allowing you to receive cash from your property for home improvements, holidays or even gift to a family member or friend.
Use your dashboard to access online mortgage quotes, money off vouchers and start your mortgage application online 24/7 on desktop, tablet or smartphone.
Mortgage Best Buys
These are examples of mortgage products we can approach with many more offering interest rates and flexibility to meet your needs.
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Equity Release may involve a Lifetime Mortgage or a Home Reversion Scheme. To understand the features and risks, please ask for a personalised illustration. Equity Release may affect your entitlement to means tested state benefits and will impact on the size of your estate. For Equity Release London City Mortgages charge a fixed fee upon completion of £695. For Mortgages a fixed fee is charged on application. Typically this is from £295 up to £495 for the services selected.
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