Finance Matters

• 24Sep

  First house prices rise in two years: Rics

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  From This is Money:

  The closely watched property market study showed 11% more chartered surveyor estate agents reporting rising than falling house prices in August ? the highest number since May 2007.
  Rics pointed to house prices beginning to rise again earlier this year when it said a lead indicator the sales to stock ratio, which measures sales against available property was edging up.
  The Government’s Department of Communities and Local Government report which lags others reported today that house prices rose by 1.4% in July.
  The reports follows figures from the Council of Mortgage Lenders yesterday showing the first year-on-year increase in homebuyer mortgage approvals since early 2007.
  Rics said that the South of England was leading the revival in the property market with 43% more members in London reporting price rises than falls and a reading of 39% across the South East.
  A shortage of supply of new properties coming on to the market combined with demand from cash-rich buyers has been cre…

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• 24Sep

  Property shortage puts off home movers

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  From This is Money:

  Average asking prices rise by 0.6% in September, according to the property listing website, which said a dwindling supply of property on agent’s books was deterring homeowners from trading up.
  The average asking price was £223,996, down 1.5% on last year.
  Rightmove said that estate agents had the lowest numbers of homes per sale per branch for 18 months, with almost a third more coming off their books than coming to the market.
  The difficulty in finding good quality new homes to buy combined with the need to raise large deposits to get good mortgage rates, is putting off those who would otherwise consider moving.
  A North South divide is well established, the study says, with property scarcity leaving the four regions in the south with higher or close to break-even asking prices than this time last year, but the northern regions remain in negative territory.
  Miles Shipside, commercial director of Rightmove, comments: ‘There’s an autumn window for new sellers where a sensible…

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• 24Sep

  Property to fall as ‘irrational’ rally ends

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  From This is Money:

  The bounce in the market that has seen prices rise by 8.4% since February, on the Nationwide measure, will fall away towards the end of the year, says James Thomas, head of the residential department at Jones Lang LaSalle.
  The ‘seemingly irrational’ rise in prices is likely to prove only temporary, according to Thomas, who said a double-dip W-shaped outlook for the market is likely.
  He said: ‘The unforeseen and seemingly irrational pick-up in prices has altered the outlook for UK house prices but it is likely that this recovery will prove temporary.
  ‘The economic fundamentals that have supported the upturn, most notably the constrained supply of housing for sale, will be eroded as unemployment hits a peak and mortgage lending remains weak.
  ‘While the recent improvement in the market is encouraging, it is impossible to ignore the short-term risks posed to the UK residential sector by rising unemployment and poor credit availability.
  ‘We anticipate the current market revival t…

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• 24Sep

  No rivals for HSBC’s 1.99% mortgage

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  From This is Money:

  Previously, if a lender unveiled a clear, market-leading rate, other banks and building societies would follow.
  But although HSBC’s attractive deal captured headlines, it has not resulted in a rush of competing offers.
  David Hollingworth at independent mortgage broker London & Country says that in the current climate lenders remain risk averse and want to keep their ‘heads below the parapet’.
  ‘Short-term borrowing costs for the banks dipped again last week and are at their lowest level this year,’ he says.
  ‘Normally when this happens we’d expect some easing in mortgage rates, but lenders simply don’t want the business.’
  Nationwide Building Society and Alliance & Leicester tweaked some of their mortgage deals downwards last week by a maximum of 0.16 and 0.1 of a percentage point respectively. But some of Nationwide’s fixed remortgage rates rose.
  HSBC’s 1.99% two-year discounted rate loan is only available to borrowers with at least 40% equity or deposit and there is…

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• 24Sep

  Borrowers fail to overpay on mortgages

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  From This is Money:

  The figures, compiled by professional advice website Unbiased.co.uk, show that just 20% of those with tracker mortgages have held their repayments at the same level they were at before interest rates started to fall.

  Instead 19% of the 2,026 people surveyed said they were spending the extra cash on day-to-day expenses or treats, while 24% said they were using the cash to repay other debts.

  One in five people said they were paying the money into a savings account and 7% said they were leaving it in their current account to build up a surplus.

  ‘Such action would enable many thousands of borrowers to take years off their mortgage repayment term, or enjoy a greater level of repayment comfort down the line, should the economy take longer to recover….

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• 24Sep

  Bargain Hip providers hit by slump

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  From This is Money:

  Only last month, Promise was named in a survey by consumer group Whi ch? as one of the best value-for-money suppliers of Home Information Packs.

  Commenting on the group’s demise, a spokesperson for Promise Home Packs said: ‘The political environment at the current time makes it far from clear whether Hips will play a long term role in the housing market.

  In its research, Which? found that some groups, especially estate agents, were charging more than double to compile a pack than an independent specialist provider. It concluded that in some cases, home sellers could save hundreds if they shop around.

  The survey found that the average price for a Hip was £368 but many estate agents were also found to charge significantly more, with Spicerhaart and Countrywide each charging £401….

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• 11Sep

  Banks cash in with mortgage price rises

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  From This is Money:

  It means that for a £150,000 home loan, they are making up to an extra £780 a year on some deals compared with January.

  Meanwhile, the value of funds on the money markets – where banks go to get cash to lend as mortgages – fell to a record low.

  But the biggest gulf is in the cost of tracker mortgages. Banks pay 0.7% for this money, and then lend it to homeowners at 3.84%.

  Ed Stansfield, of researchers Capital Economics, said: ‘There is a desire from lenders to increase their profitability and a desire not to lend.

  The Council of Mortgage Lenders said that a variety of factors influenced the cost of mortgages, not just money market rates.

  Mortgage brokers blamed the high cost of home loans on a lack of competition.

  David Hollingworth, of brokers London & Country, said: ‘There is lots of demand for mortgages but no supply.’…

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• 11Sep

  Halifax: House prices up £6,000 since April

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  From This is Money:

  House prices are now up £6,000 from the low of £154,490 in April, and are now broadly similar to August 2004.
  Halifax said the three-month average, a less volatile figure than monthly figures, was now up 1.7%.
  The annual decline in prices has moderated sharply from a peak of 17.7% in April. Prices are down 19.5% on the August 2007 peak of £199,612.

  He said: ‘Demand for housing has increased since the start of the year due to better affordability and low interest rates. This, together with low levels of property available for sale, has boosted house prices over the last few months.’

  But Halifax highlighted that Bank of England mortgage figures showing 50,000 approvals for homebuyers in July were 55% lower than the level seen in July 2007.

  David Smith, senior partner at UK property consultancy, Carter Jonas, said: ‘Although transactions are rising and interest in the property market is up, the stabilisation in prices we are seeing sti…

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• 10Sep

  Rock and First Direct launch cheap trackers

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  From This is Money:

  For those who can afford to stump up a whopping 35% deposit, Northern Rock is paying 2.79 above base on a two-year tracker, making the current rate 3.29%.
  With a £995 fee, monthly repayments work out as £734.15 on a £150,000 homeloan.
  This compares unfavourably to the best two-year tracker offered by Alliance & Leicester. At 2.45% over base (making the current rate 2.95%), and available at 75% LTV, repayments are £707.42.
  Mortgage experts believe that this deal is fairly middle of the road. But on the plus side, Northern Rock does give you more flexibility on overpayments.
  Meanwhile, First Direct has launched a competitive lifetime tracker at 2.29% above base (so currently 2.79%) with a £999 fee. Again, it is available only to those with a 40% deposit. Monthly repayments are £695.
  HSBC’s offering for those with 40% deposits charging 2.24% above (2.74%) works out slightly cheaper, with monthly repayments of £691.
  For those with…

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• 10Sep

  Loyalty pays off for homeowners

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  From This is Money:

  And this is especially the case for those with a deposit of 15% or less. With the plunge in house prices, many owners have been left with tiny amounts of equity in their property.

  But the average for existing customers is 4.98% ? a difference of 1.29% points or £116 a month on a typical £150,000 loan.

  There are some key decisions you need to make before deciding on a new deal. For many, moving on to your lender’s standard variable rate (SVR) will be the best bet. For people pensionable are still working example, Nationwide’s at 2.5% is one of the lowest around, but the best two-year fix it can offer existing customers is 3.79% with a £995 fee.

  However, if you want to take out a bigger loan, or are moving home, then most lenders today will not let you do this on their SVR.

  All customers with up to a 25% deposit get offered the same rate of 4.39%, but the fee for existing customers is £500 cheaper.

  With a smaller deposit than this, there is n…

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