Property Renovations Ely Ltd

The average arrangement fee charged by 3 year base rate tracker mortgages has increased by 121%. In terms of rate increases the most significant increase has occurred in the two year fixed rate market were the average rate charged has increased from 5.42% eighteen months ago to 6.71% now.

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A panel of economists has delivered a worrying prediction about the future of UK house prices…

A survey of the Society of Business Economists (SBE) members conducted by ITV1’s Tonight programme found that 60 per cent of economists do not expect prices to recover to the pre-credit crunch peak for at least four years.

The majority of the poll identified 2009 as the year when house prices will hit rock bottom, with most of the sample predicting that they will have fallen by 20 per cent from the peak of the market by then. However, one in five forecast a falls of 30 per cent - which would see the value of a home cut by £60,000.

Heriot Watt University vice-chancellor Anton Muscatelli told MPs: “There is a risk that people will begin to see current inflation levels as the norm and demand pay increases to match. Unless we see inflation falling later on this year… we will see inflationary expectations stick at the current levels which are around 4%.”

Bronwyn Curtis, chairman of the SBE, said: “It doesn’t look like we’re going to see a fall, which is what we’re in the middle of, and a quick bounce back. It does look as though it’s going to go on, and we’ll have slow growth for some time.

“On top of that, house prices were overvalued, according to most economists, and so you have the situation where they remain undervalued for a long time. As the economy slows we will get unemployment … and there will be much less pressure pushing for wage hikes.”

Roger Bootle, of consultancy Capital Economics, added “If the Bank of England doesn’t cut rates quickly enough as inflation subsides there is a risk the economy will be extremely weak, perhaps in recession and said inflation could fall well below the Bank’s 2% target”.

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Rising food and energy prices have pushed UK consumer inflation up again, the Office for National Statistics (ONS) has said. The Consumer Prices Index (CPI) measure of annual inflation was 3.3% in May, up from 3% the previous month.

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A recent New Statesman article entitled ‘Crash: The housing crisis is just beginning’ contained the following alarming facts about house prices and the UK mortgage market:

- 250,000 UK households in negative equity
- 50% fall in net mortgage lending expected this year (£53bn)
- 12m mortgages outstanding in 2007
- 25% predicted average house-price drop during current crash
- 3,775 mortgage products available now
- 15,599 mortgage products available in July 2007

Source: New Statesman, 5th June 2008

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More than 23,200 people who took out 100% mortgages in the year to 31 March could face negative equity. Falling house prices mean the amount borrowed could be greater than the value of their properties. The data from the Council of Mortgage Lenders comes as figures show the housing market is slowing down further.

Separate housing figures suggest the number of transactions per estate agent has hit a 30-year low. These figures from the Royal Institution of Chartered Surveyors come as banks are imposing stricter requirements on borrowers, in the wake of the credit crisis.

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The Monetary Policy Committee’s decision came despite widespread worries about the state of the UK economy amid a global slowdown. However, rising fuel and food prices means that there are still worries over controlling inflation.

Property Renovations Ely Ltd

Property guru David Lee moved into the property industry in 2001 and used his professional training to develop new methods of property investment strategies that were unheard of in the UK at the time. He has pioneered and revolutionised the ‘Rent Now, Buy Later’ concept within the UK.

Tom Toumazou is the Project Manager for Raising Housing Standards in the East Midlands. He oversees Regional Landlord Accreditation and will be discussing this important requirement as well as answering questions about the current market and how landlords are being directly affected.

Property Renovations Ely Ltd

US investor Texas Pacific Group is to buy a 20% stake in Bradford & Bingley for £150 million.

It follows a profits warning by the buy-to-let lender, which announced that profits for the year would be down about £100 million.

The move comes as its chief executive, Stephen Crawshaw, resigned with immediate effect because of “a serious cardiovascular condition”.