The summer is typically a quiet time for property transactions and property funding news generally. Brexit never far from people’s minds with close attention being paid to interest rates and property transactions.
Countrywide rescue agreed
Countrywide has raised £140m from shareholders following approval for the purchase of new shares. The breakdown of how the money is to be spent is as follows:
- £115m is to be used towards debt payments
- £14m for general corporate purposes
- £11m on fees and expenses
Undoubtedly Countrywide have massive task ahead of them, but thanks to this cash injection they at least survive to fight on. Presumably in the hope that turnover will improve when the property market picks up again.
Rightmove May fall out of FTSE 100
A combination of slow sales and stronger competition from a variety of sources are taking their toll on some of the more well established property related businesses.
Rightmove are the UK’s largest online estate agent and saw its share price drop over the summer. The quarterly adjustment of the FTSE 100 index takes place in the first week of September and may see Rightmove dumped out of the FTSE 100
A hot summer but a cooling property market
The July report from the Mortgage Advice Bureau showed next to no change in the average residential mortgage. Likewise for the loan to values or ages of buyers remain static.
The National Association of Estate Agents report that the number of sales to first-time buyers rose to an eight month high in July. First time buyers are taking advantage of the slightly improved supply of available properties.
As September moves us into autumn the supply of properties may improve further along with more people looking to complete purchases before Christmas, slightly denting the first time buyer advantage.
Meanwhile the Bank of England reported a slight dip in the number of loans approved for purchases and remortgages in July.
Nationwide’s monthly house price index shows that prices fell by 0.5% from July to August. Although this is the biggest monthly fall since 2012 Nationwide are still predicting that house prices will rise by something in the region of 1% over 2018.
Talk of Brexit and a property crash
A Reuters poll of 30 property experts has predicted that London house prices are going to continue to fall well inti 2019.
This slight fall is likely to mature into a full blow “tumble” (if there is such a thing) in the event of a no-deal Brexit.
Hometrack figures show that London price had fallen by 0.1% in the year to July 2018.
Help to Buy future in question
The Help to Buy scheme was established during the financial crisis to try to stimulate house purchases. The current scheme is due to end in 2021. Seems unlikely that the treasury would pass up the opportunity to shave a little off the overall commitment. The Sunday Telegraph reports that the scheme will be replaced by one focused more on lower paid borrowers. Government figures show that 6,717 purchases (about 4% of the total) were completed by people earning over £100,000 per year.
Alternatively The Times has speculated that the scheme will continue, but in an altered form, possibly with a taper or income cap.
The scheme has undergone various criteria changes since it started, but is generally thought to have a positive effect.