However, despite the apparent pick-up in transactions, the number of sales in the first 11 months of the year [...]]]> Property sales hit their highest monthly level of the year so far in November figures from HM Revenue and Customs (HMRC) have shown.There were 85,000 property sales during the month, up from 79,000 in October, it said.

However, despite the apparent pick-up in transactions, the number of sales in the first 11 months of the year was lower than the same period in 2010.

The property market has been subdued for some time.

Since 2007 sales have been weighed down by the continued rationing of mortgages and the initial reluctance of sellers to drop their asking prices.

There have also been concerns among potential buyers about the state of the economy and the outlook for their jobs.

The HMRC figures show that there were 9,000 more property sales in November, compared with the same month the previous year.

The new monthly total was the highest since July 2010.

However, in the first 11 months of 2011, there were 787,000 sales compared with 810,000 in the same period of 2010.

Lenders are being told they must assess the affordability of loans [...]]]> New rules to stop a resurgence in risky mortgage lending are likely to be imposed in 2013 by the Financial Services Authority (FSA).The regulator’s revised proposals still intend to bring in “common sense” standards that will stop home buyers borrowing more than they can afford.

Lenders are being told they must assess the affordability of loans better.  But some flexibility is being allowed for existing customers who might have been prevented from remortgaging.

Lord Turner, chairman of the FSA, said: “While the excesses of the pre-crisis period have largely disappeared from the current market, it is important to ensure that better practice endures in future when memories of the crisis recede and the dangers of poor practice return.”

The regulator wants to stop any possibility of a return to the early years of the past decade, in which some lenders handed out mortgages with only cursory checks on borrowers’ real ability to repay.

The most notorious examples were the “Together” mortgages offered by the Northern Rock bank, which granted loans worth 125% of the value of homes.

In some other extreme cases, lenders offered mortgages worth seven times a borrower’s income, or allowed them to exaggerate their real income, especially in the case of “self-certified” mortgages.

The thrust of the FSA’s proposals, which are now going out to a further round of public consultation, is still that lenders must judge properly the ability of individual borrowers to repay.

“The proposals will see prospective borrowers – whether they are first-time buyers, right-to-buy tenants or home movers – get the right information and advice, at the right time, and ensure mortgage lenders will be properly checking each applicant’s realistic ability to repay their mortgage,” the FSA said.

Specifically, when lenders assess a mortgage application, they will have to:

• assume interest rates may rise from their current low levels.
• not let borrowers rely on the possibility of rising house prices to claim they can eventually repay.
• assess interest-only mortgages as repayment ones, unless there is a “believable” source of money to pay off the loan.

Although lenders will still have to check income details in each mortgage application, the FSA is no longer proposing that a borrower undergoes a detailed check of how they spend their money, but only be given a broad assessment of their “committed and essential household expenditure” instead.

Under the proposed new rules, interest-only mortgages can still be offered if there is a “credible” plan to repay the loan, which does not involve a borrower assuming he or she can eventually cash in on the rising value of their home.

However, a tenant still typically paid 3.5% – or £25 – more in rent [...]]]> The cost of renting a home in England and Wales fell for the first time in 10 months in November, a survey has found.Rent at a typical property dropped by 0.4% compared with October, to £717 a month, LSL Property Services said.

However, a tenant still typically paid 3.5% – or £25 – more in rent than a year earlier, the survey found.

The changes seen last month showed regional variations, with prices rising the sharpest in Yorkshire and the Humber, as well as in Wales.

LSL, which owns lettings agents including Your Move and Reeds Rains, said that prices did tend to fall at this time of year.

x The biggest drop was in the East Midlands, which recorded a 2.2% monthly fall.

“Following their relentless march upward throughout the year, rent rises have taken a pause for breath,” said LSL director David Newnes.

“Landlords are looking to avoid having properties vacant over the Christmas period, and can be less aggressive with pricing as tenant activity slows in the run-up to the new year.”

However, rents in London, Yorkshire and the Humber, Wales and the West Midlands still rose in November compared with the previous month. Mr Newnes said he expected average rents to rise again at the start of 2012.

The fall in the cost of renting coincided with a decrease in the number of tenants getting behind on rent payments.

“We are still also seeing the impact of a changed tenant mix, which is helping keep arrears below historic levels,” Mr Newnes said.

“A large proportion of current renters are would-be credit-worthy buyers, were they able to provide a big enough deposit to satisfy tight mortgage lending criteria. These tenants are typically financially sound, and less likely to experience payment issues.”

However, the economic climate and the risk to jobs meant tenant arrears were likely to rise again next year, he added.

However, the latest Rics survey shows a slight rise in buyer demand [...]]]> A growing proportion of surveyors and estate agents believe that economic uncertainty is holding back housing market activity.This was considered to be a bigger reason than the availability of mortgages and worries about house price falls, the Royal Institution of Chartered Surveyors (Rics) said.

However, the latest Rics survey shows a slight rise in buyer demand and sales in November with price changes continue to show regional variations.

New buyer enquiries “increased modestly” for a third consecutive month, the Rics survey showed.

The average number of sales per surveyor branch climbed to 15.4 in the three months to the end of November, compared with 15 a month earlier. This was the highest level since last September.

Slightly more surveyors expected sales to increase in the coming months than the number who expected sales to fall.

However, these slight rises were coming after a sustained period of subdued activity. More surveyors expect prices to fall in the coming months, than the number who expected prices to rise.

Annual house price changes

• England: down 0.2%
• Wales: down 0.5%
• Scotland: down 1.5%
• Northern Ireland: down 12.1%

“A meaningful recovery still seems some way off,” said Alan Collett, Rics’ housing spokesman.

On a regional basis, London registered a rise in annual house prices of 3.9%, whereas prices dropped by 4.6% over the same period in the north east of England.

It says the programme, which costs £400 million a year, is unsustainable.

The Support for Mortgage Interest [...]]]> Mortgage lenders have raised concerns about potential changes to the way support is given to those struggling to pay their mortgage.The government is reviewing the Support for Mortgage Interest Scheme, where homeowners who lose their jobs may receive financial help.

It says the programme, which costs £400 million a year, is unsustainable.

The Support for Mortgage Interest (SMI) scheme, which helps people receiving some benefits, operates across the UK.

Under the SMI, those who lose their jobs receive financial help with mortgage interest payments. This comes 13 weeks after losing their job, a timescale previously cut from 39 weeks. However, the assistance only lasts for up to two years.

Chancellor George Osborne said in this year’s Budget that the scheme would operate until at least January 2013.

Support for Mortgage Interest is a UK scheme aimed at helping those with a sudden change of circumstances make mortgage payments rather than be thrown out of their home.

Some people on benefits are eligible and can receive help to make mortgage interest payments 13 weeks after losing their job.

Now Lord Freud, the minister for welfare reform, has launched a review of the scheme.

These changes could see a charge put on the property of anyone who receives the assistance, which is recovered when the house is sold.

The suggestion was welcomed by the Council of Mortgage Lenders (CML) and the Building Societies Association (BSA).

Two other proposals have raised worries from the CML, which represents those who give home loans.

The first is a plan to make the payment to the homeowners themselves, rather than straight from the government to the lender. Lord Freud said the current system did not encourage people to get on top of their own finances.

The CML is also concerned that the qualifying period may return to 39 weeks after somebody has lost their job.

The BSA is calling for the amount received in SMI payments to reflect the actual rate the borrower is paying, rather than a set standard rate.

Since 2008, London has been the most traded real estate market in the world [...]]]> The London property market has seen a huge increase in global capital flight- as it is seen by many as a safe haven during the eurozone credit crunch.On the high end of this scale of capital investment is the commercial property market.

Since 2008, London has been the most traded real estate market in the world with 60% of the total investment from foreign investors.

The system in London is very investor friendly with transparent legal structures and it has fiscal benefits in terms of tax and capital gains which give it a certain advantage.

International corporations use London as a base for Europe, Africa and the Middle East- and London also responds quickly to global market pressures.

In late 2008, there was a 40% drop in values post the Lehman Brothers crash and as Sterling weakened. Bizarrely, perhaps, this huge markdown did little to dampen investor sentiment. In contrast to the fortunes of the US and other real estate markets, it led to a substantial increase in overseas interest.

As such, London stole the crown from New York in 2008 as the most traded real estate market in the world.

During the 2008-2011 period, some 42% of sales were from UK owners to foreign investors, with just 6% being traded the other way.

These foreign investors are discerning and are focusing on prime assets.

UK buyers are still the biggest group, holding 48% of all property here, followed by German investors which own 16%, US investors which own 10% and Middle Eastern investors which own 6%.

Japanese investment has fallen two percentage points from a high of 11% in 1995, while and European investment excluding Germany has fallen to 5% from a high of 8% in 1995.

There has also been a growing trend towards the super-rich, often labelled high net worth individuals, buying property.

The super-rich are also buying in the City. Officially they own some 6% of the office space there, but many think that could be an underestimate as it is difficult to trace ownership and there is a culture of secrecy.

The firm confirmed strong demand [...]]]> Homebuilder Berkeley has seen a strong rise in profits to £101 million for the six months to the end of October.This was 64% up on the same period last year, but included a £30 million windfall due to the sale of Berkeley’s share in a project for Imperial College in London.

The firm confirmed strong demand for high quality homes in London and the South East, but said its overall market was affected by short-term volatility.

Berkeley said it was on target to meet its full-year forecasts.

“Looking forward, the further increase in forward sales and the strong balance sheet, which remains ungeared without debt, means Berkeley is increasingly well positioned to capitalise on the current market conditions,” said chairman Tony Pidgley.

Berkeley sold 1,506 homes in the half year at an average selling price of £254,000 compared with 1,249 homes sold at £262,000 a year earlier.

The construction company welcomed the government’s recent announcement of measures to boost home building, including a £400 million scheme to kick start stalled construction projects in England and a mortgage indemnity scheme to help up to 100,000 people buy homes with a 5% deposit.

November saw a rise in new contracts and [...]]]> Growth in the UK building sector fell back in November after a surprise gain in October new research suggests.The Markit/Cips Construction Purchasing Managers Index, which is based on a monthly survey of building firms, fell to 52.3, down from 53.9 in October. A value above 50 indicates growth.

November saw a rise in new contracts and the first increase in residential construction for six months.

Markit described growth as modest due to economic head-winds in the industry.

“Raw materials, energy and fuel prices continue to hinder the sector, construction companies cite these as the main contributing factors for high input prices which have increased for the 22nd month running,” said David Noble, chief executive at the Chartered Institute of

On Thursday, Markit/Cips data showed that the UK’s manufacturing sector shrank at its fastest pace in 18 months.

The OBR also predicted that house prices would rise at levels above inflation from the same year, [...]]]> Housing market activity will improve in 2013 after a stagnant few years according to forecasts from the Office for Budget Responsibility (OBR).It said there would be a 20% rise in transactions in 2013/ 14, compared with the previous year.

The OBR also predicted that house prices would rise at levels above inflation from the same year, reaching annual growth of 4.5% in 2015-16.

Sales have been at comparatively low levels during the period of economic turmoil, owing in part to lenders’ caution when handing out mortgages, buyers’ worries about their jobs, and sellers’ unwillingness to reduce asking prices.

The latest figures from HM Revenue & Customs showed that 76,000 homes were sold in October, which was 1,000 more than in September, but still 3,000 fewer than in October last year.

It means that sales for the year so far have been 5% down on 2010.

However, the OBR – the independent, but government-funded, economic forecaster – said that this would change in a few years.

It predicted that transactions would fall by 3% in 2011-12, grow by 1.5% the following year, but then surge by 20.7% in 2013-14.

Meanwhile, house prices will fall by 0.9% in 2011-12, dip by 0.1% the following year, then rise by 2.7% in 2013-14, and increase by more than 4% in each of the next three years.

The temporary exemption meant first time buyers were free from the [...]]]> First time buyers will no longer receive an exemption from stamp duty from March 2012 as the government says the relief is “ineffective”.Documents with Chancellor George Osborne’s Autumn Statement reveal the view that the tax relief failed to get more people on the property ladder.

The temporary exemption meant first time buyers were free from the 1% stamp duty on homes costing under £250,000.

A lenders’ group described the decision as “disappointing”.

The Council of Mortgage Lenders (CML) said first-time buyers’ purchases could be bunched up at the start of next year before the concession is scrapped on 24 March.

The documents show that the Office for Budget Responsibility (OBR) believes that the UK housing market will remain relatively stagnant.

It predicts that, even without the relief for first-time buyers, stamp duty land tax receipts will only grow marginally from £6bn in 2010-11 to £6.4bn in 2012-13, before rising more sharply to £7.5bn in 2013-14, and accelerating to £11.4bn in 2016-17.

Stamp duty thresholds

• 1%: Properties of £125,000 to £250,000, but first-time buyers are currently exempt
• 3%: £250,000 to £500,000
• 4%: More than £500,000
• 5%: More than £1m, residential property only

In the Autumn Statement documents, the government said: “The government is publishing analysis showing that the stamp duty land tax relief for first-time buyers has been ineffective in increasing the number of first time buyers entering the market.

The government’s housing strategy, announced earlier in the month, included a mortgage guarantee scheme to encourage lenders to offer 95% mortgages to buyers of new homes.

Paul Smee, director general of the CML, said: “While the stamp duty concession may not have stimulated additional demand, it was a significant help to home-owners entering the market and its removal runs counter to the themes of the new housing strategy.

“It is likely that we will see a bunching of eligible first-time buyer transactions early next March to beat the expiry date on the concession.”

Meanwhile, the number of mortgages [...]]]> UK house prices have remained “surprisingly resilient” in recent months with values rising again in November- the Nationwide has found.It said the average home rose in value by 0.4% in November to £165,798.  This was a 1.6% year on year increase, according to the figures based on Nationwide’s own mortgage data.

Meanwhile, the number of mortgages approved for house purchase but not yet completed  has risen slightly to its highest level for nearly two years.

The Bank of England said there were 52,743 approvals in October, up from 51,193 the previous month and the highest monthly total since December 2009.

The fact that approvals last month were higher than the average for the previous six months suggests that sales may pick up slightly in the coming months.

The Nationwide’s house price figures differ with those from the Land Registry published on Monday which showed that prices in England and Wales had slipped slightly in the past year.

The Nationwide predicted that prices would stay the same or fall in the next 12 months.

“House prices have remained surprisingly resilient in recent months, despite the deterioration in the economic outlook,” said Robert Gardner, the Nationwide’s chief economist.

“But, with the UK economic recovery expected to remain sluggish well into 2012, house price growth is likely to remain soft, with prices moving sideways or drifting modestly lower over the next twelve months.”

The best measure of current trends in house prices is to compare the average price of the past three months with the average price of the previous three months.

On the Nationwide’s data this three-month on three-month comparison shows a rise of 0.2%.

Mr Gardner said the apparent resilience of house prices reflected a lack of supply in the market.

He welcomed the latest announcement from the government on encouraging first-time buyer activity, but said that any action should also include measures to increase housing supply.

The government’s housing strategy, announced earlier in the month, included a mortgage guarantee scheme to encourage lenders to offer 95% mortgages to buyers of new homes.

The report, which looks at 16 million transactions, said prices fell 0.9% versus a month earlier, faster than the 0.3% rate decline [...]]]> The pace of house price falls in England and Wales increased in October- down 3.2% on a year ago according to the Land Registry.The average house price fell £2,020 to £160,000 in the month.

The report, which looks at 16 million transactions, said prices fell 0.9% versus a month earlier, faster than the 0.3% rate decline seen in September.

Prices also dipped in London by 1.6% in October, although they were still up 0.3% for the year.

That made the capital still the only region in the survey to have seen prices rise over the last 12 months.

The biggest year-on-year falls – of more than 7% – were in the North West and North East. Here too, prices fell more quickly in the last month, down 2.9% and 1.8% versus September.

Prices in Wales fell 3% in the month.

The price falls follow a summer in which transaction volumes rose, according to the Land Registry data, which records all actual home sales in England and Wales.

In August – the last month for which sales volumes are available – transactions rose slightly, with 62,000 properties changing hands, up 1% on August the year before.

But sales numbers slipped for higher-priced properties. The number sold for more than £1m in August fell by 7% to 714 from 764 in August 2010.

The Land Registry records completed property sales and features the end of the buying process when a transaction is registered.

It only measures the change in the price of properties that have been sold before, to ensure a proper comparison.

The National Association of Estate Agents (NAEA) said [...]]]> First time buyers are “rarely seen”, estate agents warn with their share of the UK housing market having fallen to a three year low.Sales to those buying their first home fell from a 22% share of the market in September to a 16% share in October, figures suggest.

The National Association of Estate Agents (NAEA) said this was the lowest proportion since December 2008.

One economic research company has also scaled back its price growth forecast.

The level of sales and homes going on the market in the UK was little changed in October compared with September, according to the NAEA.

However, it said that first time buyers had suffered a “heavy blow” to their share of the overall housing market.

The association said that, despite some evidence of mortgages being approved by banks, there remained significant lending barriers for those trying to buy their first home.

“The first time buyer is rarely seen as they struggle to get mortgages and over-optimistic vendors with a lack of motivation continue to stifle certain areas of the market,” said Martyn Baum, who represents the NAEA in the Midlands.

It still believes that house prices will rise from next year.

The research company also said that the government’s housing strategy could initially push up prices slightly but would have no effect on values after the first year.

That figure represented a [...]]]> Mortgage lending in Scotland rose in the third quarter – but at a much lower rate than the UK as a whole, according to the latest data released by mortgage lenders.The Council of Mortgage Lenders (CML) Scotland said 12,400 loans were taken out, which was 900 more than in the previous quarter.

That figure represented a rise of 8% for the period.

In the UK as a whole, lending for house purchase increased by 16%.

Loans to first time buyers and home movers in Scotland increased in the third quarter.

A total of 4,600 loans worth £429 million were advanced to first time buyers, which was a rise of 7% by volume and 10% by value.

CML Scotland said there were “small improvements” in lending criteria for all Scottish house purchasers in the quarter.

First time buyers typically borrowed 80% of their property’s value, up from 79% in the second quarter – bringing the average loan-to-value ratio in Scotland in line with the UK average.

Home movers borrowed on average slightly less of their property’s value from July to September than April to June – 70% compared to 71% – but they spent 8.8% of their income on mortgage interest payments, the lowest since records began in 2005.

A total of 9,600 remortgage loans worth £900 million were taken out, a 5% increase on the previous quarter.

CML Scotland policy consultant Kennedy Foster said: “The mortgage market in Scotland is currently stable, albeit at a low level.

“We anticipate growth is likely to remain slow going forward, although welcome developments – such as smaller deposits – have emerged and a Scottish mortgage indemnity scheme for new-build properties is being introduced.

“The uncertain economic outlook and low levels of consumer confidence will likely result in a continuing constrained mortgage market in Scotland, as in the UK in general.”

London was the only region where house prices had risen, with prices up by 2.8% in the [...]]]> Average UK house prices fell by 0.7% in September  according to official figures from the Department for Communities and Local Government (DCLG).The fall took the average UK house price to £207,326. Prices were 1.4% lower from a year ago.

London was the only region where house prices had risen, with prices up by 2.8% in the year to September.

By contrast, the largest price falls were in Northern Ireland, where prices were down by 12%.

The DCLG figures chime with the results of other monthly house price surveys from organisations such as the Halifax and the Nationwide.

These have also shown that prices have changed little in the past year, in a market subdued by the continued rationing of mortgage funds by lenders.

Experts have explained that the resilience of house prices in the capital has been due to a combination of factors, including the relatively buoyant level of employment and the continued influence of rich foreigners who continue to view houses in London as a good investment.

The number of mortgages taken out for house purchases was 48,200 in September, down 2% from the month [...]]]> Economic uncertainty makes the future of the UK mortgage market “difficult to call”, a mortgage lenders’ group has said.Paul Smee, director general of the Council of Mortgage Lenders (CML), said the market for home loans was currently stable.

The number of mortgages taken out for house purchases was 48,200 in September, down 2% from the month before, the CML said.

First time buyers needed an average deposit of 20% of a home’s value.

The number of mortgages approved for house purchases was 3% higher than in September 2010.

However, mortgage lenders have suggested that the cost of loans has started to rise because banks are charging more to lend to each other.

The rising cost has resulted from banks’ confidence in lending to each other being knocked by the eurozone crisis, and Mr Smee said this made the future for the mortgage market more difficult to predict.

“Although both house purchase and remortgage loans experienced a small drop in September the overall market to date shows a stable picture,” said Mr Smee.

“However, the backdrop of global and domestic instability makes the future more difficult to call.”

Over the third quarter of the year, the number of home loans advanced for house purchases was up 16% compared with the previous quarter at 144,200.

This was 6% lower than the number in the same period in 2010.

The number of homeowners remortgaging in the third quarter was up 23% on the same three months in 2010.

However, the latest figures show the steam might have come out of the remortgaging market, with the number of remortgaging loans approved in September down slightly on the previous month.

The number of loans taken out by first-time buyers rose slightly in September from a low base.

The level of deposit required remained unchanged compared with August, but had eased compared with a year earlier.

This increase follows a rise in the rate at which banks lend to each other – Libor – which has been [...]]]> Mortgage interest rates could start to rise again as a result of the turmoil in the eurozone brokers are warning.Some lenders, including Woolwich, Halifax and Santander, have pushed up their tracker rates for new borrowers.

This increase follows a rise in the rate at which banks lend to each other – Libor – which has been inching higher amid worries over the eurozone crisis.

The increase in Libor indicates that banks are less confident about lending to each other.

Although the average tracker rate has hardly altered since the summer, there are straws in the wind which suggest that the direction could be shifting from down to up.

On Wednesday, the Chelsea Building Society put up the cost of some of its most competitive tracker mortgages by 0.2%.

In recent weeks, the Halifax raised its two-year tracker by 0.15% to 3.34%, while Woolwich increased the rate its trackers revert to after two years by 0.4%.

Santander pushed up its Abbey-branded lifetime tracker in two moves from 2.95% to 3.09%. Nationwide and ING have also raised some rates as well.

One indication of the pressure on lenders comes from Libor – the London Interbank Offered Rate – the short-term interest rate at which banks will provide funds to each other.

While some lenders draw mostly on their customers’ savings to fund mortgages, others have to borrow large amounts on the money markets, hence the importance of rates such as Libor.

Since August, three month sterling Libor has risen from 0.83% to 1%.

This is a significant change compared with the Bank of England’s key rate, which has been stuck firmly at 0.5% since March 2009. On Thursday, the Bank said it would keep rates on hold again following the latest meeting of the Monetary Policy Committee.

However, the [...]]]> Activity in the UK housing market showed some signs of picking up in October, according to the latest poll of surveyors.Sales and new buyer inquiries edged up compared with the previous month, the Royal Institution of Chartered Surveyors (Rics) said.

One theory from the industry was that sellers were becoming more realistic about pricing homes.

However, the picture remained dark for first-time buyers’ prospects.

Economic conditions – including low wage growth, relatively high unemployment and restricted lending from banks – would have suggested that prices should have dropped sharply over the last year or two.

However, various surveys have shown that prices have remained relatively static. Nationwide Building Society recently described house prices in the UK as “treading water”.

Some surveyors have now reported that some sellers are becoming more willing to take lower offers to secure a sale. This meant 8% more surveyors reported a rise in newly agreed sales than those who reported a fall.

Although low compared with the boom years in the market, this was the highest level on this measure since April 2010.

Completed sales and new buyer enquiries rose compared with September, the Rics survey showed.

A greater proportion of surveyors reported that prices had fallen, rather than risen, and they expected this trend to continue.

“It is encouraging that activity levels appear to have edged upwards over the past month. Indeed, chartered surveyors are generally upbeat about the near-term prospects for transactions,” said Ian Perry, housing spokesman for Rics.

However, Mr Perry warned that the effects of the eurozone crisis would mean any recovery in sales would be modest, and affect the ability of UK banks to lend. This could mean that first-time buyers will still need high deposits.

“This will inevitably leave many people who would like to own a home unable to access the market,” he said.

It said that the housing market had remained “highly resilient” despite weakness and a deteriorating [...]]]> UK house prices rose by 1.2% in October compared with September, but have fallen over the last year according to the Halifax.The lender, part of nationalised Lloyds Banking Group, said that values had fallen by 1.8% compared with a year ago.

It said that the housing market had remained “highly resilient” despite weakness and a deteriorating outlook for the UK economy.

The average home in the UK was valued at £163,311, the Halifax said.

Its house price survey is based on its own mortgage data.

The Halifax said that there was a 0.3% fall in prices in the three months to the end of October compared with the previous quarter. This was the first time this measure has recorded a fall since June.

Martin Ellis, Halifax’s housing economist, said that this was an indication of the general stability of prices, despite the month-on-month figures having shown some volatility during the year.

“The housing market has proved highly resilient in recent months, despite the weak economic recovery and the deterioration in the outlook for both the UK and global economies,” he said.

“The prospect of exceptionally low official interest rates over the foreseeable future is likely to continue to support the market in the face of a very difficult economic climate.

“Both prices and activity levels are expected to remain close to current levels over the coming few months.”

The survey’s findings are similar to the picture painted by the Nationwide Building Society. A week ago, it said that UK house prices were “treading water”.

The Nationwide said the annual change in October was a 0.8% rise.

However, the year-on-year comparison is calculated slightly differently by the two lenders. The Halifax compares the previous three months with the same three months a year earlier to give a smoother comparison, rather than a direct comparison of the equivalent months.

But HMRC is pursuing tax avoiders and law firms have issued warnings.

Homebuyers are legally [...]]]> HM Revenue and Customs (HMRC) says it is chasing unpaid tax of £35 million amid tax planning and “mitigation” schemes being offered on the internet.Dozens of websites are now advertising deals, for a fee, claiming there is a loophole in the law.

But HMRC is pursuing tax avoiders and law firms have issued warnings.

Homebuyers are legally required to pay a stamp duty land tax of between 1% and 5% of the value of a home they buy.

Buyers are liable for the tax when they spend more than £125,000 on a property.

The websites claim that tax specialists will use “stamp duty tax planning” to negate a homebuyers requirement to pay the duty. They charge a fee of around half of the amount that would have been paid in tax.

Online calculators aim to assist people to work out how much they can save. Those who sell the schemes say customers are attracted because of tough economic times and mortgage lenders’ requirements of higher deposits.

Stamp duty thresholds:

• 1%: Properties of £125,000 to £250,000, but first-time buyers are currently exempt
• 3%: £250,000 to £500,000
• 4%: More than £500,000
• 5%: More than £1m, residential property only

The main methos is to set up a limited liability company to buy the property, which then immediately sold it back to the individual.

Tax planners claim they are legally exploiting loopholes in the current law.

But an HMRC spokesman said: “The schemes rely on an interpretation of law that produces an outcome different from that envisaged when the law was enacted, and that HMRC does not accept.”

Anyone using an avoidance scheme was artificially reducing the tax due on property transactions, giving them an unfair financial advantage over the majority of property purchasers who played by the rules, he said.

The tax authority was investigating 1,200 people it believed had underpaid tax totalling £35m.

HMRC was gearing up to challenge the schemes through the courts, the spokesman said.

Law firms have warned against the internet schemes’ tactics.

When a property is purchased through a company, whether based offshore or in the UK, it pays the same rate of stamp duty as if it were an individual.

Stamp duty may be avoided by future purchasers when the company decides to sell the property. This is done by the owner selling shares in the company rather than the property itself, but the duty will be paid on the initial purchase.