Another drop in house prices for October

October has seen another fall in house prices in the UK according to recently released figures. The figures have been released by Nationwide, and the High Street lender has said that the dearth of buyers in the UK has resulted in continued falls with house prices.

The average property price in the UK is said to have fallen by £2400 in October, with the Nationwide’s house price index falling by 0.7 percent over the course of the month due to buyers steering clear of the market. Over the course of the month the average property price has now fallen to £164,381.

Over recent months the pressure on house prices in the UK has been mounting, as buyers have shied away from the market for a variety of reasons. There are many would be buyers that simply cannot get a mortgage due to current restrictions in the market, and many others that could get a mortgage but cannot afford the high deposit levels that lenders are asking for.

Another factor that is likely to have a serious impact on buyer interest and property prices is the spending Review recently outlined by the coalition government. The sweeping spending cuts that have been proposed will have raised concerns amongst households and individuals who are now in fear of losing their jobs due to the cuts in the public sector, which could also have a knock on effect on the private sector.

An economist from Nationwide said: ‘If the recent trend in house prices were to continue through November and December, the annual rate of house price inflation would drop to between 0% and minus 1% by the end of 2010. This would compare to a rate of 5.9% at the end of 2009.’

Tags: Spending Review (United Kingdom), lenders, economist, average property price, finance, Nationwide Building Society, buyer

First-time buyers ‘undeterred’ by credit squeeze

Despite a significant tightening of the mortgage market following the US sub-prime crisis, many Brits are keener that ever to get their foot on the property ladder.

According to research by Fair Investment, despite the number of mortgage enquiries seeing an overall decrease in the past few months, the number of first-time buyer enquiries has gone up dramatically.

In the first three months of the year first they were at an average of 56 per cent, while in the last three months they have risen to 74 per cent.

Furthermore, the number of first-time buyer enquiries for 100 per cent mortgages has increased from 77 per cent in the first quarter to 92 per cent in the last three months.

James Caldwell, Director of Fairinvestment.co.uk explains: “Britain’s love affair with the property market is far from over, despite the recent dip and the gloomy forecasts for the next few years.

“Our figures suggest that…first time buyers are still keen to seek out a deal and are fully prepared to opt for 100 per cent mortgages if it means getting their own home.”

Meanwhile, demand for high-end mortgage products has grown, especially for multi-currency mortgages.

Tags: property ladder, First-time, first three months, credit squeeze, love, significant tightening, buyer

Many first time buyers taking a ‘wait and see’ stance

Over the past couple of years things have been extremely difficult for first time buyers in the UK.

Firstly there were problems being able to raise the money needed to purchase a property, with house prices soaring in the UK requiring buyers to obtain larger mortgages.

For first time buyers there is not equity from a previous property to rely on, which means that they have to take out a loan for all or the majority of the value of the property they wish to purchase. In order to address this problem many lenders have started offering increased income multiples and longer repayment periods on mortgages for first time buyers.

However, there is now a fresh problem for first time buyers to consider. Rising interest rates mean that in addition to having to take out a huge mortgage in order to buy a property these buyers also have to deal with huge repayments because of the increased interest rates, which have shot up by 1.25% in the past year.

Even those starting out on fixed rate mortgages have to put up with a high fixed rate, and will therefore be stuck with this high rate for a fixed period even if interest rates start to fall again in the near future.

Rumours of house prices falling towards the end of the year, combined with predictions of further interest rate rises, has now seen many first time buyers take a step back, with many deciding to rent and wait it out to see what happens before rushing to get onto the property ladder in the current economic climate.

One first time buyer stated: “I am desperate to get onto the property ladder, because I feel that the chances of ever getting my own place are getting slimmer and slimmer. But with all of these rumours about decreasing house prices and rising interest rates I want to see what happens before I make any long term commitment.”

Tom Smith
6th October 2007

Tags: interest, first, increase, rates, rise

Stamp duty ‘puts off’ first time buyers

Bradford & Bingley says that stamp duty, a charge which many buyers must pay on top of the fee for their new home, is putting off first time buyers (FTBs).

Terming stamp duty a ’stealth tax’ and ‘wholly unfair’, the mortgage lender points out that 68 per cent of FTBs currently either have paid or will pay the duty.

Using the monthly figures from the Council of Mortgage Lenders also released today, Bradford & Bingley’s report highlighted the finding that 11 per cent of FTBs had to reduce their deposit in order to cover stamp duty.

Andy Wiggans, director of mortgages for Bradford & Bingley, said that the tax “is seriously hampering [FTBs'] ability to get a foothold on the property ladder.

“The average first time buyer now has to find over £1,000 to pay this tax, at a time when most are struggling to even fund a deposit.”

He also drew attention to the finding that 11 per cent of FTBs had their stamp duty paid for by their parents.

Tags: charge, tax, Council, parents, buyer, GBP, percentage, ability

First-time buyers paying £150k

Tags: First-time, buyer, Supplies and Equipment, buyers paying £150k, first time buyers, time, Business Services, first time buyer