Archive for the 'Property Information' Category
The Bank of England’s Monetary Policy Committee opted to leave rates unchanged after weighing up the twin threat of rising inflation and the sharp slowdown in the British economy, which is increasingly at risk of sliding into recession.
The decision to hold rates was widely expected by economists, who argue that a rate hike would have sent the struggling economy into a deep downturn, while a cut would indicate that the Bank is less worried about inflation, even though it stands at 3.8pc, way ahead of its 2pc target.
House price slump continued in July according to the latest monthly report from the Halifax.
The lender said prices fell another 1.7% last month, taking the annual rate of decline down from 6.1% to 8.8%.
The Halifax calculates that the average house in the UK is now worth £177,351, back to the value seen in June 2006.
The bank said demand from home buyers had been “significantly curbed” by the lack of mortgage funds, high prices and the squeeze on household finances.
“Pressure on householders’ income, together with a very significant reduction in mortgage finance due to the global financial markets crisis, is constraining potential house buyers’ ability to enter the market,” said the Halifax’s economist Suren Thiru.
“This is resulting in both lower prices and activity levels,” he added.
The Halifax’s survey chimes with that of rival mortgage lender Nationwide, which recently calculated that UK property prices had fallen by 8.1% in the year to July.
According to the BoE, mortgage approvals have dived by almost 70% in the past year. Just 36,000 new loans arranged for people moving home during June - that is 69% fewer than in the same month last year and 12% lower than May’s figure, according to the Bank of England.
Mortgage lending also dropped steeply during the month, with net advances hitting a near eight-year low of £3.1bn.
The number of home loans approved has now fallen for 14 consecutive months and is at its lowest since the BoE first issued figures in 1993.
Lenders have tightened their criteria because of the credit crunch, reducing the availability of mortgages, especially to would-be buyers with small deposits.
The BoE figures come as a report for the Treasury warned there is no quick fix for the problems in the mortgage market.
The Crosby Review, which is being carried out by the former head of the Halifax Bank of Scotland Group (HBOS), Sir James Crosby, says funding of home loans should be left to the market.
Sir James says Britain should avoid setting up US-style government-backed agencies to tackle the funding crisis.
But his independent report stops short of making recommendations on how to tackle the problems caused by the credit crunch.
It moots the idea of possible further support from the Treasury to help kick-start mortgage lending
The Bank of England data shows a fall in all types of mortgage approval, with just 165,000 new loans agreed during June, down from 214,000 just three months earlier.
Retailers are facing tough conditions on the High Street, analysts say
Rising food and fuel costs pushed UK inflation up to an 11-year high of 3.8% in June from 3.3% in May, figures show.
The rise means inflation is now well above the government’s 2% target, and may reduce the chance of a UK rate cut.
The Bank of England, which has already said inflation may top 4% this year, has to balance the need to control inflation with worries over growth.
The RPI inflation measure - often used as a benchmark in pay negotiations - rose to 4.6% in June from 4.3% in May.
The Bank of England kept British interest rates at 5.0 percent today but analysts say a slowing economy will force it to cut borrowing costs next month, even though inflation is heading higher.
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.
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.
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
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.
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 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.
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”.
Homeowners refinancing their mortgages are in for a rude awakening as they face the highest fixed-rates deals since the start of the decade…
Hccording to figures compiled by MoneyFacts, the average rate for a two-year loan has hit 6.64% - up from just 4.34% two years ago, which means that someone coming to the end of a mortgage on a £150,000 house they took out in 2005, will see their average repayments jump by £206 a month to £1,025.
MoneyFacts’ figures show that someone taking a typical five-year deal in 2003 on a £250,000 home loan will have to stump up almost £500 more when it comes to their new deal. Typical fixed rates are the highest since 2000.
It is estimated that around 1.4 million homeowners will see their fixed deals expire this year.
In the latest survey from the Royal Institution of Chartered Surveyors (RICS), 95.1% of surveyors saw house prices fall than rise in April.
That figure is up from 79.4% in March, with all surveyors in East Anglia, and the North and North West of England, reporting price falls. There has also been a continued fall in enquiries from prospective buyers.
The RICS shows price falls are far more widespread than at any time since 1978 and is further confirmation that house prices in the UK are now declining after a decade long boom.
The Council of Mortgage Lenders said 27,100 homes, the highest figure since 1999, were taken over by lenders after people fell behind with repayments.
The figure for the UK is more than the 22,400 in 2006, but not as extreme as the CML had forecast. It is still a sharp rise on the 8,500 of 2003.
The CML warned that the number of repossessions was likely to rise again in 2008 as the credit crunch tightened.
Meanwhile, the numbers of mortgages behind on payments rose by 8.6% compared to 2006, the organisation, which represents mortgage lenders, said.
The Bank of England kept British interest rates at 5.0 percent today but analysts say a slowing economy will force it to cut borrowing costs next month, even though inflation is heading higher.
House prices in the UK have recorded their first annual fall for 12 years (i.e. since year 1996).
Prices fell by 1.1% in April, the sixth monthly decline in a row, and were down 1% from the levels seen in April 2007, the building society said.
Nationwide said the price falls reflected a weakening market which had been hit by “poor affordability and tighter financial market conditions”.
An average home now costs £178,555 which is £1,759 lower than April 2007.
As of midnight on Tuesday 22nd April 2008 Mortgage Express no longer accepts any remortgage business where the borrower has owned the mortgaged property for less than six months.
From the same date, the Extended Criteria 110% rental cover option and all 2 year deals for BTL deals will be withdrawn!
In spite of the Bank of England decision to cut interest rates from 5.25% to 5% last Thursday, mortgage lenders appear not to have passed the cut to borrowers.
This is increasing speculation that the Bank of England has lost control over the actual interest rates faced by borrowers.
Alistair Darling, commenting in Washington, says that he will do everything in his power to resolve the mortgage crisis, for first-time buyers and the economy at large.
He also pointed to an inevitable slowdown in house prices. Confidence in the mortgages market is at a low, and with lenders making mortgage more expensive despite base rate cuts, many borrowers are dreading remortgage costs when their fixed, tracker or variable rate deal comes to an end.
The latest monthly figures from Halifax, the UK’s largest mortgage lender, reveal that house prices fell by 2.5% in March, the biggest monthly decline since September 1992. Prices are now just 1.1% higher than they were a year ago, the slowest annual growth rate for 12 years.
The Halifax has also revised its predictions and now expects prices to fall over the course of this year. The Nationwide took a similar stance earlier this month after reporting that prices had fallen for five months in a row.
Numerous mortgage providers have removed mortgage deals from the market or increased rates to discourage new business over the last month, with First Direct taking the shocking action of suspending its entire range of products.
The Co-operative Bank has recently withdrawn its two-year mortgage deals, and the US investment bank Lehman Brothers is withdrawing from the UK mortgage market with immediate effect.
Up to 6.5 million people have been forced to consolidate their debts in the past three years in a bid to keep borrowing under control.
And 1.29 million of them have moved debts of more than £20,000 run up on loans, credit cards, store cards and overdrafts to one lender, the independent financial comparison website says.
The study shows 14 per cent of people have moved debts to one lender in the past three years and it is younger people who are most likely to have consolidated - 23 per cent of 25 to 34-year-olds have moved all borrowing to one lender.
House prices fell for the sixth month in a row over March, according to Hometrack’s national housing market survey.
Average prices were down by 0.2% over the month with the annual rate of growth slipping to +0.4%, the lowest level for two years since March 2006. The survey highlighted a continued improvement in both levels of demand and transaction levels although pricing levels are likely to remain under pressure over the coming months.
Citizens Advice (CAB) has seen a dramatic surge in consumers seeking help with mortgage arrears in 2008.
In the first two months of the year, Citizens Advice Bureaux across England and Wales saw mortgage arrears enquiries climb by 35 per cent compared to early 2007 - with the total number of debt problems dealt with amounting to 215,000 across three-quarters of Bureaux.
Meeting other household bills such as water, gas and electricity and council tax, was also seen to be a growing issue.
Debts is top priority for consumers contacting Citizens Advice, accounting for one in three enquiries, with those relating to credit, store and charge cards forming the largest individual category.
However the figures for plastic debt bucked the trend usually seen at this time of year, falling by 9 per cent, with overdraft issues up 7 per cent to fill the gap.
Teresa Perchard, director of policy for Citizens Advice said: “These latest figures paint a worrying picture - the combination of big increases in household bills, especially fuel, and rising housing costs is putting additional pressure on people’s finances when they are already stretched to the limit.”
Property price panic has seen a raft of high-value properties come to market, pushing up asking prices, Home.co.uk research has shown.
City workers cashing in on their investments were pinpointed by the firm’s Asking Price Index Report as key drivers of this national trend, with the impact particularly being felt within Greater London.
Indeed 23 per cent of the current stock up for sale in Greater London was rushed to market in the last 14 days.
This has had a significant impact on both the average asking price in the region, which has risen by 3.4 per cent since February to £361,414, and on a wider scale in England and Wales - pushing it up by 1.4 per cent. The average asking price in England and Wales in now £259,026.
The increasingly uncertain economic outlook, driven by fluctuations within the financial markets over the last month and the threat of redundancy, has led a number of investors to cut their losses with the hope of selling up before the Chancellor’s changes to capital gains tax legislation take effect.
FTBs are being squeezed out of the housing market by unaffordable mortgage deposits…
Katie Tucker of Online mortgage Broker Charcol, revealed: “A tend towards larger deposits could signal a shift in the mortgage market and, consequently, the housing market. The mortgage market is readjusting and the housing market will follow.
“The accommodating lending criteria of the last decade has allowed many people to buy who otherwise wouldn’t have been able to, which has helped push property prices through the roof.
“Following last weeks mass withdrawal of all mortgages that allowed you to borrow more than the value of your property, first time buyers with no deposit, or existing debt will find it difficult to buy now”.
“The move could mean that the market becomes more attractive to high-end investors, who can raise the capital needed to secure a property, particularly if the cost of borrowing falls as many are predicting in light of widespread economic uncertainty.”
Struggling homebuyers were given no relief by the Chancellor who failed to increase stamp duty thresholds, although there will be some help for those in shared ownership schemes.
The Chancellor announced that buyers who purchase 80 per cent of the value of their home through one of the government’s shared ownership schemes will not pay stamp duty land tax.
While mortgage experts initially welcomed the move, it has been described as “confusing”, because it is unclear how this would actually work in practice.
For example, when the buyer wants to buy the remaining part of the property, do they pay it on the price of the property when they initially bought it or at its current value? And if the house prices increases and the equity naturally increases, what happens then - will they then have to pay this tax bill?”
CLOUDS are gathering over the UK property market, according to the estate agent Savills, but the ensuing storm should be shortlived. The agent predicts a turbulent half-year ahead, with prime Central London property to suffer falls of 3 per cent and the rest of the country stagnating.
But the difficulties, caused by the credit squeeze and worries about bonus sizes, will be swiftly followed by a return to growth. Across the market, prices across the UK will be up 3 per cent by the end of the year, with London, the South East and Scotland outperforming.
The North, Yorkshire, Wales and the Midlands will underperform, according to the Savills weather map, pictured right.
This turbulence will affect the enthusiasm of both buyers and sellers and turnover will drop significantly. Some may be cheered by an interest-rate cut – Savills expects one next year, but says that, in the current economic environment, it will be 2010 before the base rate again drops to 5 per cent.
The balance of surveyors reporting house price falls increased again in January, says RICS’ UK housing market survey published today.
It is reported that the RICS house price balance dropped for the sixth month in succession signalling half a year of negative market sentiment.
Almost 55 percent more Chartered Surveyors reported a fall than a rise in house prices an increase from just over 49 percent in December.
According to surveyors, the only part of the UK where prices continue to rise is Scotland with the net balance of surveyors in that country reporting price rises edging up from 3% to 7%.
In the housing market, prices fell again in November by 1.1%. This is the first time that has happened since 1995, and mortgage approvals have slumped by almost a third. Squeezed credit is likely to prove a big problem for an estimated 1.5m next year who need to remortgage and will find it difficult, if not impossible to find an affordable deal.
The number of mortgage products available to British borrowers has fallen by 40 per cent over the past three months, as lenders have tightened their criteria and withdrawn large numbers of riskier home-loan deals due to the global credit crisis.
Sub-prime mortgages, advances made to those with poor credit ratings, have been the most commonly withdrawn products, Moneyfacts, the personal finance analyst said. It revealed 54 per cent of regular sub-prime home loans have been pulled since July, with 72 per cent of sub-prime buy-to let loans not available.
House prices growth turned negative for the first time since October 2005. 1.8% more Chartered Surveyors reported a fall than rise in house prices, down from 10.8 reporting a rise in July.
Demand continued to weaken as rising interest rates weighed on buyer affordability.
The trend was most prevalent in the West Midlands, the North West and East Anglia.
New buyer enquiries declined for the ninth consecutive month and at the fastest pace since August 2004 with potential buyers remaining cautious as the effect of interest rate rises filters through.
Interest rate rises start to bite, new buyer enquires declined at their fastest pace since August 2004, with stock of unsold property on surveyors’ books increasing to the highest level since January 2007 says the RICS UK housing market survey.
There are many different avenues for making money in property (bricks & mortar)…
- Buy to Let (BTL).
- Buy to Sell (BTS) - Refurbishment or Renovation.
- Land Development (Commercial/Residential).
- Below Market Value (BMV) - Motivated Sellers (Repossession, Divorce, Quick Sale etc.)
- Property Finding - Earn a fee for finding a property for another investor.
The list above is far from exhaustive, the combinations of schemes to make money in property are almost infinate…
I‘ve found there are a number of outlets available to promote essential networking, finding contacts and building long lasting business relationships.
- Property Network Club (PNC) - (Ipswich, Birmingham, London, Windsor & Brighton).
- Business Network International (BNI) - Worldwide.
- Chamber Of Commerce - UK.
Specifically to property the PNC is the most beneficial, holding regular meeting with presentations from property experts. A regular feature of the PNC is speed networking, allowing all PNC members to become familiar with the experience and speciality of all other PNC member.
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