Tag Archives: mortgage

House prices take a slight fall but will still be rising in the next year

May 4, 2012

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House prices seem to be fluctuating widely at the moment, Halifax have commented.

The mortgage lender and bank have said there was a 2.4% drop in April, this may have something to do with the stamp duty deduction as sales dropped after rising with the deduction.

With the drop in April it took the average house price down to £159.883 which is slightly lower than last year by 0.5%.

Halifax have warned that house prices are still rising even with this small dip.

“Prices in the three months to April were 0.3% higher than in the previous quarter, marking the first rise in this measure for seven months,” The Halifax’s housing economist, Martin Ellis, has commented.

“The ending of the stamp duty holiday for first-time buyers in late March appears to have boosted home sales early this year as buyers strove to beat the deadline, and has probably contributed to the volatility in house prices in the last few months,” he added.*

Nationwide have given a slightly different percentage to Halifax, but as the different mortgage lenders use information from their own lending it isn’t surprising that they all have different numbers.

Nationwide have put the annual fall at 0.9%.

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Property sales rose in March

May 1, 2012

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March 2012 saw a rise in property sales which HM Revenue And Customs have called a ‘typical spring bounce’.

February saw 63,000 sales and March sales rose to 74,000. This also shows that many buyers were taking advantage of the stamp duty deduction.

The stamp duty deduction may also be why mortgage lending rose in March, unfortunately the stamp duty is back in place so from now on many lenders and estate agents may see a drop in numbers.

Property sales and lending are still nowhere near what they were in March 2007 when the UK saw a property boom.*

 

*Source BBC News

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Rise in mortgage lending may only be temporary say CML

April 17, 2012

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The CML (Council of mortgage lenders) have spoken of a mortgage lending rise in February.

In February last year mortgage lending for house purchases were down 17% on January this year (in January loans rose by 4% to 36,600).

First time buyer loans have also taken a rise, up by 8% in Januaty to 14,100. Making that 18% up on last year.

 The CML (Council of mortgage lenders) have spoken of a mortgage lending rise in February.

The CML (Council of mortgage lenders) have spoken of a mortgage lending rise in February.

The director general of CML has warned however that this rise in loans may only be temporary.

He said: “It is encouraging to see the continuing year-on-year improvement in house purchase lending.

“However it is not clear whether the end of the stamp duty concession will lead to a falling off in first-time buyer numbers and how much this may be offset by the government’s New Buy scheme, available to all buying a new build property.”*

Lending and sales are still far behind those before the banking crisis in 2008, they may even fall behind in activity again even with the New Buy scheme.

*Quote from BBC News

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Landlords may be looking at bleaker time, but still being told to invest

April 4, 2012

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Landlords are now facing bleaker times with rent prices dipping and also the cost of mortgages rising.

In February the average cost of monthly rent was down 1.6%, in England and Wales the price went from £719 (at its highest in October 2011) and went down to £707.

The big mortgage giants are now upping the cost of borrowing. The Daily Mail have reported that Santander and Leeds BS have now increased their mortgage rates, they are blaming the Euro zone crisis for this price hike.

Landlords have been told to keep investing as price of renting is staying high and house prices are expected to stay where they are for the next few years.

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Nationwide announce drop in house prices in March

March 29, 2012

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Nationwide have reported a 1% drop in house prices in March compared to prices in February.

The building society have said that the average home has now gone down by 0.9% in price compared to a year earlier. The average price now being £163,327 it is the biggest annual fall since June 2011.

Nationwide have commented on the stamp duty changes and have blamed the slowdown on this.

Nationwide’s Chief Economist, Robert Gardner had said: “In our view the changing economic back drop is likely to continue to act as a drag, with house prices moving sideways or modestly lower over the next 12 months”.

 

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Renting boom can be a great income for landlords

March 16, 2012

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If you have recently brought a property and would like to become a landlord, great!

Renting property at the moment is a good earner as more and more people are unable to afford a mortgage deposit and monthly payments.

Landlords should make the most of this opportunity especially in this economic climate.

Make sure you have taken out a landlord insurance policy, this is very important as the consequences may be a very high price.

When the household isn’t occupied you must do regular checks on the property and if any maintainance work needs to be carried out it must be done before the tenants move in.

Landlords should abide by the gas safety regulations 1998 and prove that all gas appliances are safe. If you do not abide by the regulations you may face a big fine and have a vacant property for a period of time, making you lose out on the tenants rental payments.

Abide by gas safety rules or face the consequences...

Abide by gas safety rules or face the consequences...

Fire safety is paramount, the London fire brigade released a report of figures which showed that six out of ten people who died in a house fire in 2009 didn’t have smoke alarms fitted in the home. Get your tenants to test the smoke alarms weekly and if there are any problems sort them out as soon as possible.

If you are advertising your property to be let out it must look clean, attractive and be well maintained. It doesn’t cost much to freshen up a home with paint and small extras, what you spend will be paid back when your property has tenants.

Keep your property looking fresh and clean...

Keep your property looking fresh and clean...

Check for faulty electrics, broken boilers and if you have any pipes that are uninsulated rectify this! The cost of a burst pipe and no tenants is high, fix the situation before it becomes a problem.

Obviously keeping you property secure is also important. Always have a burglar alarm fitted in the home and keep padlocks on garages and any other external buildings that may hold expensive items.

Renting can be a fantastic income, make sure you follow the above and you portfolio may expand in the future.

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Newbuy, Government backed scheme to help first-time buyers get their feet onto the property ladder

March 13, 2012

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Most first-time buyers are struggling to raise a deposit for a mortgage so they can own their own home. Some deposits can be around £20,000 or even £40,000 which would take years of saving to get.

Now the government backed scheme ‘Newbuy’ is allowing first-time buyers to have the chance to own their own property and they may even only have to raise a deposit of 5%.

On new build homes (flats & houses) the buyer can get a mortgage of up to 95% of the purchase price and it is only available in England only.

If you are interested in a new build property and you already have at least a 5% deposit saved, you can go to a developer, mortgage lender or IFA (independent financial advisor) to see if you’re eligible for the new buy scheme.

Any mortgage applications will go through the normal process and will be assessed in the usual way.

If you pass all the steps to be accepted to get a mortgage (lenders affordability & credit criteria) you may be able to get up to 95% of the purchase price.

Direct Gov have added information on how you need to qualify on their website…

  • You must be a UK citizen or have the right to remain indefinitely in the country.

Newbuy properties must be:

  • New Build – Residential properties being sold for the first time or for the first time in the current form.
  • Priced up to £500,000 – but there will be no cap on income.
  • Full ownership – Newbuy is not available for shared ownership or shared equity purchases.
  • Primary homes – Newbuy will not be available for the purchase of second homes or for buy-to-let purchases.

If you are going to use the Newbuy scheme you cannot use and other publicly funded mortgage scheme or have an interest-only mortgage.

Grant Shapps, Housing Minister has said because younger people cannot afford deposits the average age of the first-time buyer has risen.

“I’m not prepared to stand by, and nor is the Government, to watch an entire generation of people be locked out of the housing market when they can afford proper mortgages” He commented.

For more information CLICK HERE to go to the Newbuy Government backed website.

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First time buyer numbers are picking up

February 13, 2012

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By the end of 2011 the number of mortgages for first-time buyers that were agreed rose according to the CML (the council of mortgage lenders).

The BBC has reported that there were 18,700 home loans for first-time buyers in December, making a 7% rise from November and 14% up on December 2012*

CML have released the percentages of mortgages for home buyers, in 2011 these fell by 6% to 509,500 of agreed mortgages. They also said that first time buyers may be making the most of the 1% stamp duty holiday.

"With the eurozone problems still rumbling on, however, we believe there is still a real risk that this year's lending levels will be lower than those seen in 2011."

“We have been expecting a flow of first-time buyers on to the market, as the stamp duty exemption ends in March, and December’s figures appear to show this has now begun,” said Paul Smee, the CML’s director general.

“With the eurozone problems still rumbling on, however, we believe there is still a real risk that this year’s lending levels will be lower than those seen in 2011.”*

*Quotes from BBC

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Landlords are re-mortgaging to keep up with rental demand

December 5, 2011

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The demand for rental property is rising more and more, to keep up with this landlords are re-mortgaging so they can add more properties to their portfolios.

Buy-to-let properties seem to be dominating the market at the moment and tenants will be pleased to see more rental properties become available due to the actions taken by landlords.

Director general of the CML, Paul Smee, said :  “With tenant demand remaining strong in the rental sector, some existing BTL landlords have been expanding their portfolios and the growth that returned to the sector in the preceding quarter has continued. The recovery of BTL from its low point in 2009 has helped improve supply and choice in the rental market. Despite recent improvements, however, BTL lending volumes are still only around one-third of their former peaks.”*

Mortgage deposits are sill in some cases impossible to find, so the demand for rental property will keep rising for the forseeable future.

 

*Quote from – remortgage.com

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Affordable new housing made possible for first-time buyers?

November 21, 2011

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The Government have revealed a new scheme to deal with an increasing shortage of affordable homes. This means there are plans to allow first-time buyers of new homes to borrow up to 95% of the property value, then the Government will underwrite part of the risk.

Starting from July 2012, this scheme will build up to 16,000 new homes which then will create up to 32,000 jobs. This initiative is going to be for England only. The Government are adding a £400m fund to this which they are hoping will help schemes that are ready to go but need financial backing.

The ‘radical’ new plans, the Government call them, have been shunned down by the Labour party who think David Cameron and ministers have failed to deliver on housing.

With the economic climate being the way it is at the moment, the Government have made building more homes one of their economic priorities. House priced and rents remain high at the end of 2011, the average first-time buyer is now very close to 43 years old, this being because mortgage lending is so strict and restricted.

Between 2010-11 6% fewer houses were made available than the previous year.

Labour have said the Government should have got to grips with this in their first year of power, and now the situation is getting worse in parts of the country.

Projects that have had funding problems will now get help from ministers to stop this housing decline.

Developers will have to fight for funding to take their projects forward but they must meet a certain criteria, the main one is to provide affordable homes. The Government are calling this the ‘Get Britain building fund’. By 2015, the Government are hoping that around 450,000 affordable homes will be built and available. Many of which will be on publicly owned Brownfield sites.

With moved echoing the Thatcher Government in the 1980’s – potential buyers will get help by letting tenants of social housing have the right to buy their home. The price of the property will be halved and the money from that will be used to build even more affordable housing.

A mortgage indemnity scheme is expected to be offered to first-time buyers, they will be able to borrow up to 95% of the property value.

Grant Shapps, Housing Minister has told BBC Breakfast* that the Government are not ‘pumping up’ the housing market but they want to help people get on the property ladder in a ‘responsible’ way.

“What we want to do is to make it easier for first-time buyers who say the biggest problem is the amount of deposit we have to get together”, he said “This is the biggest blockage”.

The UK could be facing a domino effect situation, David Cameron has been quoted saying that “Lenders won’t lend, so builder can’t build and buyers can’t buy”.

David Cameron and Nick Clegg, his deputy, have said, “That the lack of confidence is visible in derelict building sites and endless for sale signs”, they added, “With that this is doing huge damage to the economy and society”.

The Prime Minister will reveal his plans when he delivers a speech at the CBI annual conference, then will make a statement to parliament.

John Cridland, CBI Director General, said that the UK needs a ‘bold package to get the housing market going again’.

First-time buyers at the moment cannot rely on help from their parents for their deposits and they needed assistance to ‘bridge the gap’, the gap being what banks will lend and the market value of houses.

As mentioned previously, Labour have said that this strategy has come too late and does not go far enough.

Labour have asked ministers to levy a £2bn tax on bank bonuses, this would pay for 25,000 homes and would create 100,000 new construction jobs for the younger generation. This is part of their five-point plan for boosting growth.

 

*Source- BBC

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