Finance Matters

• 14Sep

  Mortgage rates fall back to where they were before credit crunch

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  From The Telegraph:

  Mortgage rates have fallen back to the level they were before the credit crisis sent the price of home loans soaring last year.The average interest rate on a two-year fixed-rate mortgage – the most popular deal taken out by home owners – has dropped from a peak of 7.08 per cent at the beginning of July to 6.39 per cent, according to Moneyfacts.co.uk, the financial website.Two-year rates have not been this low since July 2007, before Northern Rock was forced to borrow £26 billion from the Bank of England and the phrase “credit crunch” entered everyday use.advertisementThe figures confirm that while the economy and the housing market continue to slide downwards, the worst seems to be over in the mortgage market.It follows two months of steady rate-cutting from the UK’s leading banks.Lloyds TSB and its mortgage lending arm Cheltenham & Gloucester as well as Abbey and the Royal Bank of Scotland are cutting fixed rates this week and other leading providers are expected to follow s…

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• 14Sep

  House prices are falling at fastest rate since the Great Depression

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  From The Telegraph:

  House prices are falling at the fastest rate since the Great Depression new figures show, with the number of home owners in negative equity trebling in the last month alone.
  David Owen, chief European economist at investment bank Dresdner Kleinwort, said: “It is a major collapse. The last correction in house prices was around 20 per cent from peak to trough.
  While the number of people currently in negative equity is well below the level hit in the early 1990s, when two million fell into that predicament, the speed of the deterioration has shocked many experts.
  “In the early 1990s, the peak-trough decline in house prices was 13.1 per cent, and this occurred over 74 months, from May 1989 to July 1995.
  Jeremy Leaf, a north London estate agent, and spokesperson for the Royal Institution of Chartered Surveyors, said: “People will carry on pulling out of deals until they are confident that we have hit the bottom.
  Equally, some sellers are being shocked to discover that m…

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• 14Sep

  Higher earners now hit by mortgage repossessions

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  From The Telegraph:

  Mortgage arrears and home repossessions are rising fast among higher earning households, a report by a credit rating agency suggests.The finding indicates that serious housing debt problems caused by the credit crisis are not limited to those on low incomes.The study, by Moody’s, examined the situation of people who on average owed 66 per cent of the value of their home – far less than millions of riskier borrowers. The proportion of homeowners in arrears for 90 days or more had risen by half, the report found. It stood at 0.9 per cent at the end of June, compared with 0.6 per cent at the same point in 2007.advertisementHouse prices are falling at fastest rate since the Great Depression More on construction and propertyMeanwhile the number of homes repossessed among the group more than doubled, rising to 0.082 per cent from 0.037 per cent last year. Daron Kularatnam, a co-author of the report, said: “The percentage of mortgage loans greater than 90 days in arrears has reached the highe…

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• 14Sep

  Dead Cat bounce or a sign of better times ahead?

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  From The Telegraph:

  At the start of the week there was finally some good news for stock market investors, when the US Government announced the all-but nationalisation of mortgage finance companies Fannie Mae and Freddie Mac.
  For those who want to embrace risk and possibly benefit from this rally, Gilligan suggests buying an exchange traded fund such as the DB X-Trackers DJ Stoxx 600 Banks, run by Deutsche Bank.
  Not everyone is optimistic that the market rally is a sign of better things ahead. Andy Parsons, Advice and Fund Team Manager at the Share Centre, said the market “is going to be rough for some time”.
  When asked what fund he would choose in the current market, he replied ‘cash’. “It is hard to see an upside at the moment, and quite easy to see a downside” he said….

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• 02Sep

  Gordon Brown’s stamp duty rescue plan dismissed as ‘symbolic’ gesture

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  From The Telegraph:

  Gordon Brown’s plan to revive the housing market was greeted with almost universal condemnation amid warnings it is unlikely to help homebuyers.
  Senior figures in the property industry called the measure “a political sticking plaster” that would not make “one iota of difference” particularly to housebuyers in London and the South East. One described it as a “drop in the ocean”.
  Mr Brown said: “Homeowners need to know that we will do everything we can to keep the housing market moving forward.
  “These are the things a government should do to help us come through what is a difficult situation and show that our economy is resilient and will come through these problems.”
  Michael White, a property lawyer at London-based law firm Dawsons, said: “The stamp duty proposals will not make one iota of difference to the state of the UK housing market.
  He said: “If Gordon Brown tries to borrow his way out of trouble and wreck the public finances in the long term for his short term survival then I don…

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• 02Sep

  Chancellor raises stamp duty threshold to £175,000

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  From The Telegraph:

  Among several other experts, Sue Anderson, a spokesman for the Council of Mortgage Lenders, said the move would do little to ease the impact of the credit squeeze.
  Howard Archer, the chief UK economist at Global Insight, said: “The public finances are taking a bit of a kicking from all directions at the moment.” He added there was “no way” that the Chancellor could meet the Government’s rules on borrowing, which are currently under review by the Treasury.
  About half of the 90,000 home purchases completed each month are on properties worth £175,000 or less, but deals below £125,000 are already exempt from stamp duty….

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• 02Sep

  Stamp duty threshold raised to £175,000 to help first-time buyers

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  From The Telegraph:

  Buyers of homes worth up to £175,000 will not have to pay stamp duty, the Chancellor has announced in a surprise move to try to revive the housing market. Alistair Darling said the £125,000 threshold at which buyers pay 1 per cent stamp duty will be raised from tomorrow. Telegraph TV: Hazel Blears on the Government’s attempt to revive the housing market It will be frozen at the new level for one year. It is the first major move in Gordon Brown’s attempt at an autumn relaunch. He also announced a range of measures to try and help home owners who face having their properties repossessed because of the credit crisis. Mr Brown said: “Homeowners need to know that we will do everything we can to keep the housing market moving forward. Help with stamp duty, help for first-time buyers, help to build more social housing, help to take unsold properties off the housing market and help for people who get into difficulties. “These are the things a government should do to help…

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• 01Sep

  Mortgage approvals tumble to record low

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  From The Telegraph:

  The number of mortgages approvals has dropped by 70 per cent to a record low in July, the Bank of England has said.Just 33,000 loans were agreed in July – six per cent down on the previous month and down from 114,000 in July last year.The number of remortgages has also decreased dramatically as consumers seek to tighten their belts and reign in debt in the harsh economic climate. They dropped by 14 per cent in July compared with the previous month to just 69,000.advertisementHouse prices fall as buyers scent bargainsThe news follows a revelation last week that house prices are now falling at their fastest rate for nearly 20 years. Values have dropped by 10.5 per cent in the last year, the first time that the percentage fall has reached double figures since 1990, according to the Nationwide Building Society.Nearly £20,000 has been wiped off the value of the average property – which now stands at £164,654 – as buyers stay away from the market.Although housing stock is now che…

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• 30Aug

  Personal account: debt danger is felt by all

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  From The Telegraph:

  Dangers of debt are beginning to be felt among all age groups – not just the young, writes Ian Cowie.
  Although there is no cause for panic, as personal debt is well covered by the United Kingdom’s housing stock, the figures clearly illustrate the continuing problem of growing personal debt.
  To return to where I began, most of us are wearily familiar with predictions that thousands of young and middle-aged people are set for financial pain in the months ahead. But the daunting news this week is that the outlook could be even worse for older borrowers.
  Is this proof that we British are barking mad?
  Ewan McNeil, a former president of the society of practising veterinary surgeons, muses: “We are a nation of animal lovers, and many of us regard our pet as part of the family.”…

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• 30Aug

  Mortgages fall by two thirds in the last year

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  From The Telegraph:

  The number of mortgages approved by lenders has fallen by two-thirds over the last year, figures released by a leading banking organisation show. Value of mortgages has hit a 10-year lowThis July, 22,448 new loans for people buying a home were approved during the month, 65 per cent fewer than in July 2007 when 64,184 were recorded. The value of mortgages approved for house purchase hit a 10-year low during the month, at just £3.2 billion, 69 per cent below July 2007’s figure of £10.3 billion, the British Bankers Association said. The total value of all mortgages approved also dropped by seven per cent during the month to £11.8 billion, 44 per cent lower than 12 months ago, and well down on the recent six-month average of £16 billion.Bovis Homes profits tumbleThe mortgage approval figures released by the BBA were similar to those recorded in June this year when 22,369 mortgages were approved. But the dramatic long term fall was another illustration of the ef…

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