Finance Matters

• 11Mar

  AA gives homeowners a hand

  Mortgages No Comments

  From This is Money:

  It pits the AA against domestic service companies such as HomeServe and British Gas. The first product is an insurance plan called Home Emergency Response, launched with insurer RSA. Annual cover costs £119.40 for AA members, or £143.40 for non-members.
  It can help with emergencies such as pest infestations, lost keys, burst pipes or broken windows. Adding cover for boiler breakdown costs an extra £3 a month.
  The emergency help will not be delivered by AA employees, but come from a network of specialist suppliers.
  A second service called Home Assist is on trial in Hampshire and south-west London. Here, a uniformed AA employee will turn up at your home for an appointment to do plumbing or electrical work and you pay for the job by the hour.
  The AA is also piloting a ‘handyman’ service in London aimed at homeowners who AA president Edmund King says ‘have jobs they never get round to doing, from putting up shelves to painting the garden fence’.
  Finally, it is…

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• 11Mar

  Estate agents told to end solicitor bribery

  Mortgages No Comments

  From This is Money:

  Some law firms are paying fees of nearly £300 to win jobs from their rivals. But many find the practice ethically indefensible, because it often results in partial, commercially-motivated advice paid for by unwitting homebuyers and sellers.
  Mail on Sunday Property Editor, Sebastian O’Kelly, takes a closer look at an ongoing issue…
  Since I wrote last month about estate agents demanding referral fees from solicitors – bribes in ordinary language – to pass on their services to home buyers or sellers, I have been deluged with letters from aggrieved readers.
  Many have been the victims of rotten service, loaded charges or downright sharp practice.
  Much of the correspondence comes from solicitors themselves, who in some parts of the country are in a position of such dependency on estate agents that their advice to homebuyers is utterly compromised.
  Plenty of other complaints came in about estate agency mortgage brokers, home information pack providers and structural surveyors….

  Click to read the full article »
• 11Mar

  What next for mortgage rates?

  Mortgages No Comments

  From This is Money:

  Commentary from This is Money’s mortgages editor Simon Lambert

  Mortgage rates have continued to inch down, with lenders nibbling away at their fixed rates in particular.

  Santander has cut the rate on its five-year fixed rate mortgage to below 5%, but once again you’ll need a hefty deposit to get it – the deal for homebuyers is now available at 4.99%, but only for those who can raise a 30% deposit.

  Meanwhile, Nationwide cut the deposit needed for its best tracker remortgages.

  While most SVR borrowers should be sheltered from a rate rise, smaller building societies are deciding to risk bad press by raising SVRs without the base rate increasing. (Check your SVR here).
  This move is aimed at forcing borrowers enjoying low SVRs into remortgaging.

  The outlook for fixed rates coming down further looks good. The UK’s crawl out of recession has helped confidence slightly, and the cost of borrowing fixed rate funding on the money markets for lenders (swap rates) is falling…

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• 11Mar

  Surge in sellers to ‘ease’ house price rises

  Mortgages No Comments

  From This is Money:

  The number of people putting properties up for sale rose more than twice as fast as those looking to buy in February, indicating that house price rises could begin to slow.
  The mismatch between supply and demand, which had previously seen a greater number of new potential buyers compared to sellers, had been seen as a key factor in supporting house price recovery.
  As more sellers enter the marketplace, though, house price rises could be held back ? at least in the short term.
  Rics reported that 15% more of its member estate agents said they had seen a rise rather than fall in sales instructions from homeowners, while only 7% more recorded a rise than fall in potential buyers.
  February marked the second month when the supply of properties for sale has outstripped demand from new buyers, although both measures have turned positive after January’s -5% and -20% respective balances.
  A balance of 17% more surveyors reported rising than falling prices during February, although this…

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• 11Mar

  First Direct 3.99% first-time buyer tracker

  Mortgages No Comments

  From This is Money:

  Unlike most of First Direct’s other mortgages this does not have an offset facility, however, it does come with no early repayment charges.

  Its real advantage is that it comes with no early repayment charges, so when the base rate starts to rise borrowers can jump ship at minimal cost.
  It’s just a shame this doesn’t have the offset facility that most First Direct mortgages have.
  The mortgage is a useful addition to the range of mortgages on offer for those with deposits of 15%. Borrowers looking for loans at this level may also want to check out those on offer from Yorkshire Building Society which has some good cashback deals available.

  This is Money rating: Four out of five stars…

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• 11Mar

  Nationwide: House prices fall in February

  Mortgages No Comments

  From This is Money:

  After a sustained rally from recent lows seen last winter, the Nationwide’s house price index fell by 1% in February, with the average home losing just over £2,000.

  The building society said prices had dropped in February due to a combination of the severe winter weather during the early part of the year and the end of the Government’s stamp duty holiday.
  The fall brought to close nine months of successive monthly house price inflation, which had seen prices bounce back from 17.6% down on an annual basis a year ago to up 9.2% year-on-year today.
  However, the February dip meant that annual house price inflation failed to hit double digits, which Nationwide had forecast it would this month.
  The average property is now worth £161,320, according to Nationwide, up £13,500 on a year ago.
  Nationwide’s house price index is based on its mortgage approvals and its findings chimed with indications of a slowdown in property market activity in January, which would be expected…

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• 11Mar

  Can ‘flatmate mortgages’ help first-timers?

  Mortgages No Comments

  From This is Money:

  Lenders issuing mortgages are being urged by easyroommate.co.uk to take into account the income a borrower expects to generate from renting out a room.
  Effectively, this ‘flatmate mortgage’ concept would reduce the initial deposit young property hopefuls need to find or extend their borrowing potential.
  And if the new thinking becomes part of general lending practice, it could provide a boon to the whole housing market by reigniting the depressed first-time buyer market, some mortgage experts believe.
  Why is it so tough for first-time buyers?
  The situation is pretty dire for first-time buyers ? and the sort of assistance a flatmate mortgage could provide would be welcomed with open arms.
  Since the credit crunch, banks and building societies have raised their home loan deposit requirements. For example, many commentators now believe that a minimum of 20% loan-to-value (LTV) is needed to persuade lenders to offer an decent borrowing rate.
  And it’s hit first-time buyers particu…

  Click to read the full article »
• 11Mar

  Pensioners’ Sams mortgage battle falters

  Mortgages No Comments

  From This is Money:

  Hilary Messer, the respected solicitor fighting their case, has written to Sam borrowers warning that they will need to pay more if they want the battle to continue.
  Sams were sold to older homeowners during 1998. The lenders charge no interest but can claim most of the increase in value of borrowers’ homes on resale.
  Sams cause hardship because the rise in house prices means homeowners cannot afford to buy smaller properties as their share of equity in their home shrinks. Many remain trapped in big homes that they are unable to maintain or even heat.
  In 2008 Messer asked for £5,000 from borrowers to launch a group action against both banks and is thought to have raised a fund of about £1.6m.
  She won a significant pre-trial victory in 2009 when a judge agreed that Sams cases could come under a group litigation. However, both banks appealed and Messer says fighting the appeal has drained cash.
  ‘But for the appeal and attendant costs we would have had sufficient ca…

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• 11Mar

  Sell your home with Tesco for just £999

  Mortgages No Comments

  From This is Money:

  The supermarket giant has teamed up with estate agent Spicer Haart to launch iSold.com, potentially saving customers thousands of fees.

  Tesco’s move back into the property market follows its original venture Tesco Property Market, which offered people the chance to sell their own home for £199.
  But this had to be pulled after opposition from estate agents and existing property listing websites, which pointed out it was breaching rules on home sales, which meant it was responsible for details.

  The Office of Fair Trading wants to change this, but for the time being iSold.com checks will be carried out by Spicerhaart agents.
  The new Tesco move swiftly follows the OFT’s announcement that it wanted to shake up the home selling market and make it easier for rivals to traditional estate agents and people to sell their own homes.

  Typically agents charge between 1% and 2% of a property’s selling price as commission – so iSold.com’s flat fee could save thousands for those with l…

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• 11Mar

  FSA: Homes face repossession if rates rise

  Mortgages No Comments

  From This is Money:

  It fears that households who have failed to pay back debts could be pushed to the brink should the economic recovery falter.
  Under greatest threat are credit-hungry families who use credit cards and loans to keep up an affluent lifestyle, and young professionals who borrowed many times their income to get onto the property ladder.
  In a bleak analysis, the Financial Services Authority forecast that any rise in unemployment, interest rates or a further crash in property prices could drastically slash the already stretched incomes of many middle class families.
  This would lead to them missing mortgage repayments, and eventually losing their homes.
  It will come as a timely warning to thousands of homeowners. Yesterday, it was reported how more than a million desperate borrowers are applying for credit cards with interest rates as high as 60%.
  Many economists believe interest rates will start to rise at the end of this year. And this month Halifax and Nationwide both reported falls in…

  Click to read the full article »

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