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Monday, 30 July 2007

Demand for Property Dampens

House prices increased at their slowest rate for 18 months during July as higher interest rates continue to dampen demand for property.

Property website Hometrack found the average cost of a home in England and Wales rose by 0.1% bringing the average property price to £176,300.

Meanwhile, the annual rate of house price inflation also slowed for a third month in a row, dropping from 6.4% in June to 5.9% in July.

Hometrack also said that London, a stalwart of the property sector is now starting to feel the pinch from interest rate rises. Prices in the capital rose by just 0.2% during July.

There were only three regions where house prices rose during the month - London, the South East and Wales, while prices remained static in five regions.

Prices fell in both the East Midlands and Yorkshire and Humberside during the month, dropping by 0.2% and 0.1% respectively.

Hometrack's director of research, Richard Donnell said: "It was inevitable that the steady increase in interest rates which began last year would ultimately impact on levels of housing demand right across the market - a trend that has been exacerbated by the seasonal slowdown in activity over the summer.

However, the slowdown has been accelerated by a rise in the supply of housing for sale over recent months. While the growth in supply across the country appears to have moderated, we expect demand to remain weak over the second half of the year as the impact of higher interest rates continues to feed into the market."

Mr Donnell added that the increase in the number of homes being put up for sale was probably due to estate agents encouraging people to market their homes ahead of the previous date for the introduction of Home Information Packs, which was originally June 1st, but now August 1st.

posted by Quick Move at 15:14 Comments - Links to this post

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Friday, 27 July 2007

House Sales - House Prices Stall

Higher interest rates may be hitting the house market as house price growth stalled in July, bringing annual growth back down into single digits.

Fionnuala Earley, Nationwide's Chief Economist said: "After surprisingly picking up steam in June, house prices were almost unchanged in July, and their underlying trend growth resumed a downward path."

House prices managed a seasonally adjusted gain of only 0.1% in July, the slowest pace of growth since April 2006.

The marked slowdown brought the annual rate of house price inflation down to 9.9%, following three consecutive months of double-digit growth, with a typical UK property cost an average of £184,270 in July.

Nationwide added that The Bank of England now faces a tough balancing act in the months ahead, with tightening consumer finances on the one hand and resilient economic growth on the other. Fundamentals do suggest that household finances are coming under considerable pressure, and that house prices and consumer spending will both see a slowdown in the second half of the year.

On the impact of interest rate rises for borrowers, Fionnuala Earley said: "Since the August 2005 rate cut, close to 70% of borrowers have taken out fixed-rate mortgages, with most of these deals lasting for 2-3 years. It is estimated that over the next 18 months, nearly two million borrowers will see their fixed rate deals expire, leaving them with the choice of reverting to the standard variable rate or re-mortgaging onto a new fixed rate deal or tracker mortgage. Most borrowers are likely to take the option of switching to a fixed rate, given that these are considerably below the standard variable rate.

A borrower looking to refinance a 2-year fixed rate mortgage from the mid-2005 to mid-2006 period is likely to bear nearly the full brunt of the MPC's recent tightening in one go. For example, a homebuyer who bought a typical flat at a 75% loan-to-value ratio in August 2005 would see a £78 increase in monthly payments when re-mortgaging, excluding the effects of any fees. Assuming the borrower earns the UK average income, the payment shock from re-mortgaging would eat up about two thirds of the increase in monthly take-home pay that the individual has seen in the last two years.

When the effects of inflation over this period are added, the squeeze on finances becomes even more acute and further highlights the risk of monetary overkill."

posted by Quick Move at 15:10 Comments - Links to this post

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Friday, 13 July 2007

Nationwide Offers 25 year Fixed Rate Mortgage

Following on from the Prime Minster's announcement on Wednesday, Nationwide is relaunching its 25-year fixed-rate mortgage.

The 25 year fixed rate mortgage comes with a rate of 6.39% and will be available from Tuesday 17 July.

Nationwide first launched the 25 year fix rate loan in March 2007 and at the time, sold out in five weeks.

The UK's largest building society said that the product not only offers good value and the security of fixed payments but also provides flexibility - there are no early repayment charges after the first 10 years and it is fully portable - making it an attractive option for first time buyers or borrowers moving home who still have a term of at least 25 years.

posted by Quick Move at 08:58 Comments - Links to this post

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UK Housing Market Shows Signs of Slowing

The UK property market is showing more signs of slowing down with a key survey showing that price gains are getting harder to achieve after the latest series of interest rate rises.

The Royal Institution of Chartered Surveyors said only a net balance of 10.6 pct of surveyors reported price gains in June, well down on the 22.5 pct seen in May and the long run average of 21.6 pct. The latest figure is the lowest since Jan 2006.

Analysts polled by Thomson Financial News had predicted a more moderate slowing down, to 20 pct.

New buyer enquires declined at the fastest pace since Feb 2006 as the interest rate cycle began to weigh heavily on first time buyer affordability. Enquiries fell across all regions, except for Wales, the West Midlands and Scotland.

New instructions to sell property fell sharply after many sellers brought forward their instructions to May, in order to avoid the up-front cost of Home Information Packs.

At the same time the ratio of completed sales compared with the stock of available property on the market fell for the third consecutive month indicating that market conditions continue to loosen, RICS said.

Confidence levels were also dented. Surveyor confidence in the sales outlook almost halved, falling to the lowest level since June 2004.

RICS spokesman, Ian Perry, said: 'House prices have finally started to cool significantly for the first time since the recent mini boom in the housing market got underway in 2006.'

'Interest rate hikes have begun to affect the psychology of the market with potential new buyers starting to think twice before buying a home,' he added.

'A softer landing for the housing market is in store as we move into the autumn.'

posted by Quick Move at 08:53 Comments - Links to this post

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Thursday, 12 July 2007

Government Makes Housing a Priority

In setting out his policy focus, Gordon Brown yesterday pledged to make housing a priority area, pledging to do more to provide greater levels of home ownership and to make it easier for first-time buyers.

The Government has set a new target of building 3 million new homes by 2020. He also announced plans to speed up the planning process and bring surplus public land into housing use, while keeping exisitng protections on the Green Belt.

The Government is again looking at the financing of house purchases, looking at 20-25 year fixed rate mortgages.

posted by Quick Move at 11:12 Comments - Links to this post

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Home Repossession

Typical of some of the enquiries we receive regarding home repossessions, is a person we've just spoken with.

The person has run up 6 months of mortgage arrears, has ignored all contact with the mortgage company and is now facing a court order for eviction. The person in question didn't know who could help her - thankfully, even at this late stage, we can.

This is typical of the type of enquiries we receive - people not facing up to their situation because they just don't know who to turn to and how they can solve their problem, while getting themselves deeper into mortgage arrears.

How can Quick Move help?

Quite simply, we can buy your house from you, often within 7 days. What many people don't realise is that we can help at any point up to eviction - even after a mortgage company has the eviction order.

The crucial thing though, is don't delay. To ensure you don't lose your home, call us today on 01793 840 915.

posted by Quick Move at 10:50 Comments - Links to this post

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Sub Prime Mortgages

There's been a lot in the press recently above the growth of sub prime mortgages, with reports that the subprime market is set to grow faster than conventional home mortgages due to the number of people with financial difficulties.

Market analyst Datamonitor said gross sub-prime lending rose 28 percent to 24.6 billion pounds in 2006. It said it expects the market to keep growing by 4.7 percent per year to reach 31.5 billion pounds in 2011. That compares with annual growth of just 2.6 percent in the mainstream market.

Britons have amassed a record persoanl debt of £1 trillion, and this coupled with the rising costs of borrowing, is leading to more persoanl bankruptcies and home repossessions. People are therefore increasingly turning to subprime mortgages as their only hope financing their home purchase.

So what is a subprime mortgage?

Subprime mortgages are those granted to a borrower who is considered to be a high-risk, that is, a person with a less-than-perfect credit report. Subprime borrowers have either missed payments on a debt or have been late with payments. Lenders charge a higher interest rate to compensate for potential losses from customers who may run into trouble or default.

The higher risk to lenders is illustrated by the fact that mortgage arrears in the sub-prime sector are currently 20 times those of conventional mortgages.

How can Quick Move help?

If you have a bad credit risk and are haivng difficulty in securing an affordable re-mortgage rate, give us a call. We offer a sale and leaseback scheme, enabling you to sell your house to us, while continuing to live in it. Call us today on 01793 840 915.

posted by Quick Move at 10:28 Comments - Links to this post

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Tuesday, 10 July 2007

Mortgage burden at record levels

The burden of taking out a mortgage has reached record levels, according to the Council of Mortgage Lenders (CML).

In May, first-time buyers had to borrow 3.37 times their incomes to afford a mortgage, while other movers had to borrow 3.03 times their income.

Due to rising interest rates, interest payments for first-timers took up 19.1% of their incomes, the highest proportion since 1992.

Other home movers saw interest payments taking 16.6% of their incomes.

This latest data does not take into account the latest rates rises so pressures of affordability are expected to rise still further.

Interest rates are expected to rise further, above the current 5.75% base rate set by the Bank of England, and therefore fixed-rate mortgages are still proving very popular.

The CML said that 89% of first-time buyers and 73% of home movers took out a fixed-rate deal in May.

posted by Quick Move at 14:11 Comments - Links to this post

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Thursday, 5 July 2007

Another Interest Rate Rise

As widely predicted, the Bank of England has just announced another rise in interest rates today to 5.75%, the fifth rate rise since last August. The increase had been widely expected with inflation still above the government's target rate of 2%.

The latest rise will add £16 a month to an average £100,000 repayment mortgage.

Charities have expressed concern that higher mortgage costs will leave many borrowers facing difficulties. "We're seeing more and more people coming in for help with mortgage arrears," said Sue Edwards from Citizens Advice.

"People are really stretching themselves to the limit to buy a house and take on a mortgage, so a small increase in interest rates could just tip them over the edge," she told the BBC.

If this latest interest rate rise could mean financial difficulty for you and your family, then give us a call - we could help, particularly if you are facing mortgage arrears.

posted by Quick Move at 11:11 Comments - Links to this post

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Wednesday, 4 July 2007

House prices up slightly in June

House prices rose slightly across the UK last month, according to the latest survey from the Halifax .

It says prices rose by 0.4% in June, pushing up the annual rate of house price inflation from 10.6% to 10.7%, with the average house now costing £197,461.

Although prices are still going up, the recent pace of growth has been slowing down.

The Halifax suggests that the latest string in interest rate rises will help to slow this increase further in the coming months. "House prices increased by 0.4% in June, marking the second successive monthly rise of less than 0.5%," said the Halifax's chief economist Martin Ellis.

House price inflation is different across different parts of the country. For instance, in Northern Ireland prices are still shooting up, rising by 8.5% in the past three months alone. London prices are still rising sharply, up by 4.9% in the same period.

But the Halifax suggests that prices have actually fallen slightly in the past three months in the South West, West Midlands and also Wales, where they have gone down by nearly 3%.

posted by Quick Move at 14:11 Comments - Links to this post

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Tuesday, 3 July 2007

Price of Flats Lagging Houses

The prices of flats in most parts of England and Wales are not keeping up with those of houses, according to figures from the Land Registry.

The figures show that outside London, flats enjoyed a bigger surge in prices over the past decade than houses, but are now underperforming.

In the first quarter of 2007, flat prices in nine out of 10 regions fell below those of houses. And flats in those areas are often falling in price in real terms.

One explanation might be that the supply of flats has grown enormously over the last decade. In England, only about one in six dwellings is a flat - but of new-built properties, it's not far short of one in two.

posted by Quick Move at 21:45 Comments - Links to this post

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