Officials say mortgage interest rates must stay low

Earlier this month the Bank of England announced once again that the base interest rate was to stay at its all time low level of just 0.5 percent, where it has stood since the first quarter of 2008. This is the lowest level in the history of the central bank, which spans over three centuries. For many borrowers and homeowners this low rate has come as a relief, as it has kept down their repayments.

Economist from the Ernst & Young ITEM Club have now said that it is important that interest rates remain at this low level over the course of this year, despite the fact that inflation is spiralling out of control. Officials said that there is a very tough year ahead, but although many believe that interest rate will and should increase economist from Ernst & Young said that they needed to stay on hold.

The report that was released by the economists indicated that this year was going to be a gloomy, tough, and very challenging one, with inflation possibly rising to 4 percent as early as February. House prices are set to fall by 5 percent over the course of this year, according to the report, and only slight improvement is expected in 2012.

One economist from the Ernst & Young ITEM Club said: ‘It’s going to be a tense start to 2011. The fiscal retrenchment will keep GDP subdued while commodity price rises and the VAT hike will push inflation close to 4% and leave the MPC agonising over whether to increase the Bank base rate. However, it’s vital that the MPC stands firm. A premature rate rise would boost the pound, weakening the UK’s ability to increase its exports – particularly into the emerging markets – which we have long maintained hold the key to the UK’s economic recovery.’

Tags: slight improvement, gdp, relief, course, lowest level, house prices, mortgage, improvement

Trends in Lending report claims house prices and mortgage lending will remain steady

The Bank of England has recently released its Trends in Lending report, which has shown that mortgage lending levels have remained steady over the first quarter of this year, and that whilst there may be a slight increase in mortgage lending over the course of the year lending levels will remain pretty steady overall.

The Bank of England report also indicated that property prices would remain flat over the course of this year, having increased slightly over recent months. Mortgage availability is expected to increase but only by a slight amount, and Loan to Value ratios are also expected to increase slightly over the course of this year.

Whilst the data from the report reflects improvement compared to last year, when the recession and the financial crisis were still taking their toll heavily on the property and mortgage markets, the climate is still expected to remain challenging for many people that are looking to get onto the property ladder or take out a mortgage for a new property.

Lenders are still likely to be looking for higher deposits, although there has been an increase in the number of lenders that are offering 10 percent deposit mortgages, which has provided some degree of relief for cash strapped first time buyers who have suffered hugely over the past couple of years since the onset of the global credit crisis.

One first time buyer said: “I hope to see the amount of deposit that lenders are looking for to come down over this year, although I’m not sure that it will. I would love to be able to get a mortgage and buy a property but until the deposit level comes down I’m stuck with renting, which is just money down the drain.”

Tags: time buyer, economics, mortgage, percent deposit mortgages, house prices, finance, deposit, Mortgage loan

93 percent of asking price being achieved for properties

Recently released data has suggested that the property market is once more swinging in favour of sellers, as an increased number of homes are achieving almost the full asking price when they are sold. Read more

Tags: Home.co.uk, Real estate economics, house prices, property market, swinging, Real estate broker, asking price

House prices could take years to recover according to Bloomberg survey

A survey from Bloomberg has suggested that property prices in the UK could take a number of years to recover back to the level that they were at back in 2007, before the credit crunch hit. Since around October of 2007 house prices have plunged in the UK, although the last few months have seen some nominal increases in property values. Read more

Tags: Bloomberg, house prices, economics, housing market, Real estate

High demand for property creates house price bubble

According to a recent report the high demand for property from potential buyers has resulted in a house price bubble being formed in the UK. Read more

Tags: property demand, housing bubble, estate, potential buyers, property, house prices

Problems in housing market for younger Scots

It has been claimed that in the current financial climate many younger Scots are suffering problems when it comes to getting onto the property ladder. Read more

Tags: first time buyers, percentage rate, deposit problems, first time buyer, scottish housing market, house prices, housing market

Fall in property rents noted by RICS

According to recently released reports the Royal Institute of Chartered Surveyors has noted a fall in rents in the UK in the three months leading up to April. Read more

Tags: Rent control, scotland, suitable tenants, property prices, mortgage

RICS makes prediction on house prices

Recently the Royal Institute of Chartered Surveyors has made some predictions with regards to house price movement in the UK. Read more

Tags: RICS, intervention, house prices, Royal Institute of Chartered Surveyors, downturn

Prices of UK Homes Still Falling

With the increases in mortgage lending that occurred in the UK during the month of March, many homeowners felt that the recession was nearing an end and that they would soon start to see an increase in house prices. Read more

Tags: duty, real earnings, Mortgages, house prices, fact, April, home buyers, housing market

How much will your property be worth by the end of this year?

Like many homeowners there is a good chance that you are fretting over how far the value of your property is likely to fall over the course of this year, with house prices having already dropped by over 15 percent on an annual basis compared to a year ago. Read more

Tags: house prices, mortgage lenders, elephant, property sales levels, due, property value, property prices, real problems

Getting your dream home whilst house prices are down

For most homeowners the fact that property prices have been plummeting over the past year is not good news, as many people who saw the value of their homes rocket in the past decade have now seen equity levels coming back down by significant levels as house prices have spiralled downwards. However, the house price falls are not bad news for everyone, as those looking to purchase a property can now get their dream home for far less than they would have paid last year, making tens of thousands of pounds difference in some cases, and with higher priced properties even more. Read more

Tags: freefall, point, South-West, interest rates, cash, industry, house prices, Barnes

London rents fall faster than house prices

Recently released figures have indicated that rents in the London area have been falling faster than property prices, and this has occurred since the collapse of Lehman Bros earlier this year. Read more

Tags: house prices, property, Business and Economy, Renting, house

Interest only mortgages being affected by price falls

The house price falls that have been ongoing for over twelve months have had many adverse effects, and according to recent reports these price falls could result in real problems for those that have interest only mortgages. These are mortgages where the monthly repayments are all put towards the interest owed on the loan with the actual loan balance remaining the same until the end of the mortgage term, at which point it needs to be paid off. Read more

Tags: interest only mortgages, actual loan balance, official, money, house prices, property, Financial services

Warning on house prices from Nationwide

One of the UK’s major lenders, the Nationwide Building Society, recently sent out a stark warning with regards to house prices in the UK, painting a bleak and gloomy picture of what homeowners and the housing market in general has to face over the coming couple of years. Officials from the building society are expecting things to get markedly worse before they get better in the housing market. Read more

Tags: borrowers, building society, price, halifax, value mortgages

House price falls worse than last crash

In the 1990s, many people will remember that there was a house price crash that plunged many homeowners into negative equity, and a lot of people will have concerned memories of this time following the past year, when house prices have been tumbling month on month. However, according to officials from the Halifax, its records show that based on a peak to trough bases the current situation has already outstripped the 1990s crash. Read more

Tags: halifax, past year, house prices, negative equity, situation, prices, Real estate economics, finance

Could you save money by selling your home online?

Selling your home can be a very long winded, stressful, and expensive affair, and never more so than these days when the bottom has fallen out of the property market and finances are tighter than ever. Those looking to sell their homes at present face a number of hurdles. First is the fact that estate agents are reporting very poor sales figures, with the number of properties remaining unsold on estate agents’ books at the highest level of decades. Read more

Tags: average homeowner, online property sales, decades, present face, high street offices, Rightmove

What’s going on with house prices and mortgages?

There is no doubt that both the housing and the mortgage market have been going through a very turbulent time over the past year. House prices have been falling month on month, and mortgage availability has become increasingly tight. However, amidst all of the chaos that has been going on in these sectors many people may have become confused over what is actually going on in these markets. Read more

Tags: time, house prices, bedroom, three-bed home, economics, favour, Mortgages

Are sellers becoming more realistic about house prices?

There are indications that many homeowners that are looking to sell their homes are becoming more realistic about the value of their homes, which has been reflected in a stark drop in property asking prices in the London area. Property prices have been falling for some months now, but some of the asking prices on properties indicated that many were refusing to acknowledge that their properties were falling in value. Read more

Tags: availability, credit, house sales, house prices, new transport links, defeat, summer, peak

Toughest time in three decades for property sellers

There is little doubt that the housing market is going through some real challenges in the UK at the moment. Homes are losing value hand over fist, with prices going down on a monthly basis, and mortgage lending has become extremely restricted, which means that refinancing on a home or getting a mortgage to purchase a property has become very difficult for some people and nigh on impossible for others. Read more

Tags: three decades, huge 84%, Royal Institute of Chartered Surveyors, estate, Mortgages, Mortgage fraud, house prices

House prices have plunged over last year

Over recent months homeowners and industry officials have seen one report after another that has shown how house prices are falling steadily on a month on month basis, and there has already been a significant fall in the value of homes compared to last year before the housing bubble burst. It has now been said that property prices have started falling at the fastest pace since the 1990s, and thousands of pounds have been wiped off the value of the average house price over the past year. Read more

Tags: housing bubble burst, property prices, October, measures, house prices

What the experts think of falling house prices

It has now become pretty clear to most industry professionals and consumers that house prices in the UK have already dropped significantly compared to last year, and are set to keep falling over the course of this year. Some officials think that house prices could fall in excess of 20% whereas other think the house price falls are more likely to be around 5-10%. A number of officials have already expressed their opinions on recently released figures relating to falling house prices. Read more

Tags: interest, department of communities, support, finance, house prices, Payday, consumer confidence

Bridging loans “should not be employed”

Bridging loans should not be employed “unless absolutely unavoidable” claim a legal body.

AA Legal Services said that although broken property chains remain, they should never be considered a routine factor and if one is obtained as a last resort, it should only be used where the period is limited.

James Molloy, product manager for AA Legal Services, said that the market will never be rid of aborted transactions and broken chains.

“Certainly not without reform around making the commitment to proceed legally binding earlier in the process – as in the Scottish process,” he added.

However, in all cases, and with all financial products appropriate advice in individual circumstances is essential.”

Research from the Times estimated that one in three property chains is broken.

According to new research from Hometrack, house prices dipped for the fourth month running while the average time it takes to sell a property is on the rise.

Tags: house prices, chains, manager for AA Legal Services, Anthropology, month, research, rise

House price ‘correction’ of 35 per cent expected

The affordability of house prices are expected to correct themselves by 35 per cent, according to an economic expert.

Firstrung have said that inflation on property, “as a phenonmenon”, is over for the present generation of consumers.

However, some first time buyers who might have a good income are going to struggle in the wake of the credit crunch, despite having clean credit histories.

Paul Holmes, chief executive officer of Firstrung, said: “Last year first-time buyers watched prices go up on first-time buyer properties by an average of £19,000.”

“We’re now reverting back to the lending standards that the banks and building societies operated within in the 1980s. It’s become that bad.”

He estimated that prices will fall by 12 per cent over the course of the next year.

Just before Christmas it was announced by the Halifax that the average house in 96 per cent of towns are now not affordable for first time buyers, and that the number of first-time buyers was at the lowest level since 1980.

Tags: cent, first time buyers, buyers watched prices, Business Finance, house prices, price, Paul Holmes, officer

Tories call for limit as ‘immigrants push up house prices’

The Tories have called for a cap on yearly immigration as it is blamed as one reason for the increase in UK house prices.

Research by property finder.com revealed that one in five people feel that restricting the influx of foreigners to Britain was the best way to bring down inflated prices and demand.

The second biggest cause of higher housing costs was attributed to property investors.

However, chief executive of propertyfinder.com, Warren Bright, expressed concern of the general public’s “poor” understanding of the real causes of the high prices.

Speaking on the subject he said: “10 years of low interest rates have brought about Britain’s high house prices, but this is poorly understood by most people.

“Restrictive planning policy enthusiastically enforced by local councils has severely constrained the ability of developers to provide the number of homes needed by Britain’s rising number of households, and has exacerbated the rise in property values.”

He added that immigrants and property investors could not alone be blamed as they were “too small in number”.

The news comes as Yorkshire Bank research found 43 per cent of Brits considering buying property abroad.

Tags: low interest rates, house prices, cause, planning, uk

Negative equity from 110 per cent mortgages

So-called ‘110 per cent’ mortgages, which do not require an initial deposit from holders, are becoming an increasingly popular option among home buyers, with house prices in the UK growing fast.

First-time buyers in particular, who tend to be younger and have little or no savings, find them particularly appealing.

However, industry experts, including those at Baronworth Investment Services, counsel against seeing taking out such a mortgage as a risk-free endeavour.

Michael Brill, a director at the company, said that the ideal 110 per cent buyer was “The young professional… who hasn’t got a deposit and knows they are going to have a nice increase in salary in a couple of years time.”

However, he warned that “if we have a crash in property with a negative equity from a 110 per cent mortgage”, holders “could end up with further negative equity.

“That is one of the big disadvantages”, Mr Brill surmised.

The Council of Mortgage Lenders (CML) recently revealed that the proportion of first-time buyers in the UK rose from 48 per cent to 56 per cent in 2006.

Tags: couple, Economic history, house prices, proportion, professional, first time buyer, salary, increase

Brits emotionally detached from their homes

The majority of British homeowners are not living in their dream home and remain emotionally detached from their property.

Research by Alliance & Leicester shows that just 2.3 million UK adults have found their dream property, while the rest are simply making do.

Mortgage holders were asked, on a scale of one to ten, how emotionally attached they were to their homes, with the average rating being just 5.83.

This means that most Brits see their current home as a halfway house and most would rather live somewhere else.

Alliance & Leicester suggests that this may be down to the fact that many people are so desperate to get onto the property ladder that they will accept anything.

The firm also points to an increasing number of new-build flats that lack character and are primarily seen as an investment by young buyers.

“It seems people are happy to move into a property that isn’t their ideal, in order to move up the property ladder and reap the benefit of rising house prices,” said Stephen Leonard, director of mortgages at Alliance & Leicester.

“More and more people seem to be looking for property on the basis of an investment, rather than buying their dream home.”

The research also found that location is the most important factor when choosing a home, followed by price.

Tags: Stephen Leonard, house prices, benefit, basis, rest, first time buyer

Bank of mum and dad calls in its debts

University graduates are still reliant on their parents to help them get onto the property ladder but the bank of mum and dad is getting stricter.

According to new research, 39 per cent of graduates rely on money from their parents to get a deposit on a new home.

However, more and more parents now expect their children to pay them back rather than simply offering the money as a gift.

Scottish Widows Bank says that in 1996 38 per cent of parents gave their graduate children the money for a deposit as a gift but this has fallen to just 32 per cent today.

The reduction in charity from parents may be a symptom of poorer finances for most people and this is supported by the fact that the number graduates needing a loan has also increased.

In 1996, nine per cent needed to turn to their parents for money, while today that figure stands at 18 per cent.

Another contributing factor is high rental costs which Scottish Widows says are forcing many graduates to turn to their parents for financial help.

“Rental rates are so high for some that it is very difficult to put enough money aside to save for a deposit meaning many graduates have to rely on their parents to fund that first step onto the property ladder,” said Richard Clark from the bank.

“House prices and affordability are huge barriers for first time buyers but they should be aware that there are other options available to them – both lenders and the government need to keep working on ways to solve this ever growing problem.”

Tags: charity, Business Finance, loan, poorer finances, house prices

Fifth paying higher stamp duty

Almost a fifth of us are being forced to pay stamp duty at higher rates because house prices are soaring.

That is according to Halifax which says that the government should act by moving the stamp duty thresholds so that they better reflect the current housing market.

The bank says that in the past five years the number of homes in England and Wales which have been sold for more than £250,000 has increased fourfold.

Halifax points out that this means 19 per cent of homebuyers are paying at least three per cent tax, a vast increase compared to the six per cent who were doing so in 2001.

“Stamp duty revenue raised from home sales continues to rise rapidly,” said Tim Crawford from Halifax.

“Bracket creep has been a key factor as a growing percentage of property sales now occur above the higher stamp duty thresholds of £250,000 and £500,000, which have not been changed since their introduction in 1997.

“Nearly a quarter of postcode districts in England and Wales now have an average price above the three per cent stamp duty threshold of £250,000, compared to only one in 20 districts five years ago,” he added.

Stamp duty is only applicable to house sales above the £125,000 threshold, with buyers paying a one per cent tax. The higher duty comes in when a property is bought for £250,000, while an even higher duty of four per cent is levied on properties above £500,000.

Tags: england, finance, house prices, property, stamp duty, percentage