Assetz® News - Property outlook varies across the UK

Property outlook varies across the UK

7th March 2005 |

The UK property market is far from uniform across regions, with reports from different areas signalling different trends.

It has been revealed that Wales has the highest proportion of homeowners in the UK, with research by the Royal Bank of Scotland finding that more than a third of Welsh homeowners have paid off their mortgages. The average age of people who had settled their debt was 50, slightly younger than the rest of the UK and the youngest age since 1979.

The total time that Welsh homeowners spend paying off their mortgages is now down to 24 years, a year shorter than the average mortgage term. In Southgate near Swansea, 56 per cent of homes are owned outright, the highest percentage in the country.

Almost half of those with mortgages surveyed by RBS Offset said security was their main motivation for paying off their mortgage. Meanwhile, 91 per cent of holders said they wanted to pay off their mortgage as soon as possible, 24 per cent higher than six months ago.

A spokesman for RBS said, "We are now seeing a wave of people who took out their mortgages in the 1980s and are benefiting from an uplift in house prices." First-time buyers are now struggling to raise the funds to purchase a home and are facing a 25-year mortgage when they are older.

Further north, reports from Dunfermline Building Society suggest that customers may be looking for more long term relationships with the sector, with total lending having soared by 55 per cent during 2004. According to figures the company saw new lending to individuals increase to £369 million, while lending to housing associations and property developers rose to £150 million last year.

"We now have the lion's share of new lending in social housing," said chief executive Graeme Dalziel. "We have a strong affinity for the sector because of our mutual status."

Market share of lending to housing associations in Scotland rose 70 per cent, partly due to an increase in Dunfermline's maximum loan limit from £5 million to £20 million, The Sunday Herald reports. Commercial loans included £18 million to AWG's Ocean Point development in Leith, and loans to Sundial Properties and FM Developments.

Despite slowdown in the property market, Dunfermline grew total assets 9.5 per cent to £2.05 billion, though pre-tax profits fell by 14.7 per cent to £6.94 million. The company claims profits fell as a result of investments in new technology and product improvements.

"Our game is not to sell commodities but to build a longer, happier relationship," Mr Dalziel said. "There's a great opportunity to grow our business on the back of providing members with good quality, competitive products and being closer to the customer. Big is not necessarily beautiful." The Dunfermline spokesman said he did not see a crash in the Scottish housing market, due to "shortage of supply, strong demand, and a high aspiration to home ownership" and accused economists predicting a 30 per cent fall in house prices of "scaremongering".