House price increase seen in March

Figures released by the High Street lender, Nationwide, have indicated that there was an increase on property prices for the month of March, with property prices increasing by more than £3000 according to the figures. Officials from Nationwide have added, however, that the annual rate of inflation on house prices is set to slow down from its current 9 percent.

In the month of February average property prices fell by 0.8 percent according to Nationwide, but in the month of March property values bounded back with an increase of 0.7 percent. In price terms this reflected an actual rise of 2 percent before any seasonal adjustments were taken into account.

The decrease in property prices that was seen in February resulted from a slowdown in demand and a drop in the number of mortgage approvals. This was partly attributed to the end of the stamp duty holiday, which had caused more people to push through property sales at the end of last year and caused an unusually profound dip at the start of this year.

Nationwide has stated that the average property price in the UK is now £164,519, and compared to February of 2009 this was £16,733 higher. However, quarterly house price inflation has fallen from 3.8 percent seen in September to 1.6 percent in March.

An economist from Nationwide stated: ‘The last two months are consistent with a relatively flat profile for house prices, and in line with the recent drops seen in buyer enquiries and house sales. Preliminary figures show that the number of loans taken out for house purchases failed to recover from January’s large dip, suggesting that weakness in house sales at the start of the year may have been due to more than just the snowy weather.’

Tags: annual rate, prices, property, stamp, rise, price inflation, nationwide, house

Stamp duty holiday affects mortgage lending figures for January

It has been revealed in a recent report that the level of mortgage lending for the month of January has been badly affected by the end of the stamp duty holiday, which came to an end on 31st December last year. Read more

Tags: council of mortgage lenders, mortgage, stamp, duty holiday, percent drop, mortgage lending, stamp duty, advanced warning

London property purchasers being hit hard by stamp duty

A recent report has highlighted just how hard property purchasers in the London area are being hit when it comes to stamp duty.

The extortionate cost of buying a property in London means that buyers have to also pay more for their stamp duty, as well as for their deposit, and it is estimated that the average upfront fee required by first time buyers in the city comes to over £20,000. This covers just the deposit and the stamp duty, and does not include additional fees such as legal costs and removal fees.

Figures indicate that London stamp duty costs have rise by over 800% in the space of just ten years, which equates to an 80% rise per year in the cost of stamp duty. With the average apartment price in London standing at around £263,000 the 3% stamp duty comes in at a shocking £8000. Coupled with the 5% deposit of just over £13,000, this brings the cost of just the deposit and stamp duty on an apartment with an average value to around £21,000.

The survey was carried out by Zoomf.com and shows the difference between the average apartment price and stamp duty costs in 1997 compared to today. In 1997, a decade ago, the average value of a flat in London was around £87,000, which meant that the stamp duty cost would have been under £900. In just ten years potential property purchasers for the London area – as well as other areas – have had to deal with rising property prices, rising stamp duty costs, increased interest rates, and increased additional costs such as legal fees.

Zoomf.com reported that it has tens of thousands of properties listed for the central London area, but only several of them fell under the £125,000 value, which is the threshold for stamp duty.

Tom Smith
20th October 2007

Tags: apartment, charges, prices, hme, taxes, cost, london, fees, property

First-time buyers must look at mortgage ‘options’

People buying a property for the first time are urged to look at the options available to them, said FirstRungNow today.

The property advisors said that, while fixed rate mortgages provide a risk free service, first-time buyers have a range of possibilities available to consider.

Helen Adams, managing director of FirstRungNow, said: “I’m not a great fan of interest only mortgages, myself, because it doesn’t actually help you invest towards your own home – you just pay off a loan.

“But certainly there are some other shared equity or shared appreciation mortgages which offer a solution.”

She added that “long term payback periods” were beneficial because they allow repayment to take place over an extended length of time, taking pressure away.

However, she said, some people only look to the short term and want to be financially “mobile” adding that 100 per cent mortgages a good for people who are not able to provide a deposit or pay stamp duty.

Chancellor Alistair Darling recently announced proposals to assist lenders in providing more ten-year fixed rate mortgages.

Tags: Mortgage loan, fixed rate mortgage, stamp, today.The property advisors, rate mortgages, property, cent mortgages, Chancellor Alistair Darling

Mortgage Fees Go Through The Roof

Homebuyers are being neatly trapped into taking out what are on the face of it good value deals only to be knocked with sky-high fees. These have soared so much that some lenders have hiked arrangement fees by over 600% in the last two years.

By seeming to have low interest rates mortgage lenders can push themselves further up best-buy tables, but in fact they are making money by charging ever-higher arrangement fees.

Intelligent Finance, a subsidiary of biggest mortgage lender Halifax, now charges an arrangement fee of £2,999 in some cases – up by an incredible 601% on its maximum charge two years ago. The actual cost of arranging a mortgage can’t have gone up by £2,500 in the last two years! In fact, costs are likely to have gone down thanks to computerisation. The huge increase finds its way straight into the provider’s coffers.

Finance experts say that the practice tricks borrowers, in a period when interest rates have hit their highest level since March 2001. Lenders use the headline interest rate to attract customers, and then use arrangement fees to make their money.

Scottish Widows, part of Lloyds TSB, now has a maximum fee of £1,999, up from £295 two years ago and Abbey, Nationwide, Northern Rock and Woolwich, part of Barclays, have all increased their fees dramatically too.

Some lenders charge an arrangement fee as a percentage of the loan, so someone borrowing £300,000 would have to pay an arrangement fee three times higher than someone taking out a £100,000 loan. This is scarcely justifiable as the work involved is just the same.

Homebuyers are advised not be lured by the appealing low headline rates, but to verify all fees and include them in calculations to get the true cost of a loan. For first-time buyers houses are more unaffordable than the last housing market crash 16 years ago, and. Stamp duty is capturing more people than ever before, and it is obvious why so many people are having financial problems with the increasing cost of moving, or simply owning a home.

In May 60% of first-time buyers had to pay stamp duty, as the average price of a home reached £155,000, and the zero stamp duty threshold is well below that at £125,000. An average first-time buyer now has to spend four years eleven months saving for stamp duty, legal fees and a 5% deposit to come up with the £9,844 needed. In 2005 the time needed was eleven months less.

An interesting statistic in the current environment is that the number of mortgage approvals has risen again, according to the Bank of England’s data, with 114,000 loans approved in May compared with 109,000 in April. That will only make a further rise in interest rates highly likely.

On the other hand, house price growth did cool in May. The average home in the UK cost £211,056 in the year to the end of May, up 10.9%. This is down from a rate of increase of 11.3% for the same period to April.

Tom Smith
25th Septmeber 2007

Tags: Mortgages, rates, charges, stamp, costs, Loans, introductory

Brown’s budget 2007

Gordon Brown has delivered his 11th and, almost certainly, his final Budget as Chancellor of the Exchequer.

Mr Brown, widely expected to become prime minister when Tony Blair steps down later this year, gave an eventful speech in which he announced that the basic rate of income tax would be brought down from 22p to 20p.

Those of you looking to get a mortgage on an environmentally-friendly home will be delighted to hear that Mr Brown has completely removed stamp duty from carbon neutral properties up to a value of £500,000.

People interested in using an Isa to help them with their banking can now invest £3,600 in an account without paying tax on it.

The biggest announcement was to with income tax and is one that is likely to help millions of people as they struggle with debt from credit cards and loans.

Mr Brown has completely scrapped the 10p band of tax, reduced the basic rate band from 22p to 20p and raised the point at which 40 per cent income tax is paid to £43,000 from 2009.

The Budget was not received well by everyone of course, with Sir Menzies Campbell calling it “a budget of missed opportunities” that is “asking the poor to subsidise the rich”.

Tags: Govan, tax, prime minister, Brown, stamp, Menzies Campbell

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, property, higher duty, house prices, stamp, stamp duty, percentage