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.

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.

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 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.

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.

The committee cited a sharp deterioration in the international outlook as a key factor.

The vote [...]]]> The Bank of England’s Monetary Policy Committee (MPC) was unanimous in voting for another £75 billion of quantitative easing (QE) to support the weak UK economy.Minutes from the MPC’s meeting earlier show members considered injecting between £50 billion and £100 billion.

The committee cited a sharp deterioration in the international outlook as a key factor.

The vote for more QE marked a sharp turnaround in the members’ positions.

At the previous meeting in September only one MPC member, Adam Posen, had pushed for more QE.

All members voted to keep interest rates unchanged at their record low of 0.5%, despite inflation running well above the 2% target rate.

Figures released on Tuesday showed consumer price inflation rose to 5.2% last month.

The MPC’s minutes showed that the committee was expecting inflation to be above 5% in the near term, boosted by increases in energy prices.

But its view is that domestically generated inflation had remained contained and would fall back next year.

In a speech on Tuesday evening, the governor of the Bank of England, Mervyn King, said inflation would fall sharply in 2012 when the January 2011 rise in VAT dropped out of the data and the effect of past oil price rises started to fade.

The MPC minutes echoed this, saying that there was “little further upside news” on the outlook for inflation. In fact, the Bank was more concerned that without extra QE, that could fall below target.

They also pointed out that financial markets were trading on the expectation that UK and US interest rates would remain unchanged for two years.

The MPC said it did not expect the impact of this round of QE to be materially different to the £200 billion of purchases made between March 2009 and February 2010.

A Bank report into the effect of the first round of QE found the stimulus measure helped gross domestic product increase by about 1.5% to 2%

More surveyors reported price falls than price [...]]]> Economic uncertainty and a lack of mortgage lending led to the sluggish housing market, the Royal Institution of Chartered Surveyors (Rics) said.Fourteen homes were sold per UK estate agent in the three months to August – the lowest total for more than two years, a survey has found.

More surveyors reported price falls than price rises in August, Rics said.

And an increasing proportion expected prices to drop further in the next three months.

“The risk is that the worsening economic picture will gradually begin to have a more material impact on sentiment and discourage potential house purchasers, even where mortgage finance is available,” said Alan Collett, housing spokesman for Rics.

The Rics report reported that surveyors regarded economic uncertainty as the biggest factor affecting activity in the housing market, followed by a lack of mortgage finance.

A smaller number considered that buyers and sellers were staying away from the market because of fears over further house price falls.

The Council of Mortgage Lenders said last week that first time buyers were typically having to find a deposit of 20% of the purchase price to get a home loan.
School effect

House prices in year to July

• Wales: down 0.1%
• England: down 1.5%
• Scotland: down 1.8%
• Northern Ireland: down 4.1%

Source: Department for Communities and Local Government

Often this was because they had bought at the height of the market, had found it easy to get a 100% mortgage, but now needed a bigger home having had children or found a partner.

Nationally, Rics said that prices continued to increase in London, with prices falling the most in East Anglia and the West Midlands. Scotland and Northern Ireland also recorded house price falls, the survey said.

In the last year, prices have fallen the most sharply in Northern Ireland (down by 4.1%), according to the government’s own house price survey.

Property prices fell by 1.8% in Scotland in the year to July, and dropped by 1.5% in England and 0.1% in Wales, the Department for Communities and Local Government (DCLG) said.

It said that UK house prices fell by 1.5% over the year to July.

However, it said prices rose by 0.3% compared with June, making the average home worth £207,690.

Prices paid by first-time buyers were 0.5% lower on average compared with a year earlier and prices paid by former owner occupiers decreased by 1.9% over the same period.

The monthly drop was the first recorded by [...]]]> House prices fell by 1.2% in August compared with the previous month with property values expected to remain stable, Halifax said.The lender, now part of nationalised Lloyds Banking Group, said that the average home was 2.6% lower in value than a year ago at an average of £161,743.

The monthly drop was the first recorded by Halifax for four months.

It said low interest rates, coupled with a lack of demand, meant there would not be a pick-up in activity.

The month-on-month drop is similar to the drop recorded from July to August by the Nationwide Building Society a week ago.

Both lenders base their house price estimates on their own lending data.

The less volatile three-month on three-month measure showed that prices rose by 1% in the three months to the end of August compared with the previous quarter.

Prices remain slightly lower than the end of last year, the Halifax said, and – despite homes becoming more affordable – it saw little expectation of a strong lift in the market.

“A recent decline in average mortgage rates has further boosted home affordability for those able to raise a deposit to make a new purchase,” said Martin Ellis, Halifax’s housing economist.

“Low interest rates are likely to continue to support the market whilst increased uncertainty about the economic outlook and pressures on householders’ finances constrain demand.

“Overall, we expect broad stability in both prices and activity over the coming months.”

The average UK home was valued at £204,981, although prices were down 2% from a [...]]]> House prices rose in many areas of the UK in June compared with the previous month official government figures show.On average, prices increased by 0.6% in June compared with the previous month, the Department for Communities and Local Government (DCLG) said.

The average UK home was valued at £204,981, although prices were down 2% from a year ago.

But London again bucked the trend, with a year-on-year rise of 1.5%.

The annual change was sharpest in Northern Ireland, where prices fell by 8.1%, followed by Wales, down 5.6%, and Scotland, down 2.3%.

In England, year-on-year prices fell by 1.8%, with regional changes ranging from a 5.1% fall in the North West of England to the rise in the capital.

However, seven of the nine English regions showed month-on-month increases. This was greatest in London with a 1.6% rise in June compared with May. Only Yorkshire and the Humber (down 0.5%) and the North West (down 1.4%) recorded falls.

The DCLG figures have been published just after property website Rightmove said that house sellers had been dropping their asking prices.

It said asking prices fell by 2.1% this month after a 1.6% fall in July, but the gap between asking prices and selling prices remained wide.

This was lower than the record-breaking £7.1 billion in the [...]]]> Homeowners continued to inject equity into their homes at the start of 2011 – but not to the same degree as much of the previous year, figures show.Mortgage borrowers increased their financial stake in properties by £5.8 billion in the first three months of the year.

This was lower than the record-breaking £7.1 billion in the previous quarter, the Bank of England statistics show.

The Bank’s analysis suggests the trend was the result of lack of activity in the housing market.

The injection of equity reflected a fall in the number of sales, rather than householders making an active effort to pay off their mortgages more quickly, it said.

From July 1998 to March 2008 homeowners borrowed an extra £328 billion against the rising value of their homes.

This is known as housing equity withdrawal. Homeowners cashed in on the increasing value of their homes to buy cars and holidays.

But since March 2008, this has gone into reverse, with an injection – rather than a withdrawal – of equity into homes.

The total housing equity injection reached more than £6 billion in each of the last three quarters of 2010.

But the final three months of the year it reached £7.1 billion, the equivalent of 2.8% of post-tax income.

This fell to 2.3% of post-tax income in the first quarter of 2011.

During the boom times, equity withdrawal was providing homeowners with the equivalent of a 9% post-tax boost to their incomes.

The turnaround, according to recent analysis by the Bank, was because of what was occurring at the end of the housing chain.

The number of homes being sold has slumped to less than half of the levels seen before the banking crisis.

This means that with fewer chains of housing sales, there are fewer people cashing in at the end of a chain by trading down or selling without buying a new home at all.

This has been due to the expectation that the Bank of England is unlikely to raise its bank rate above [...]]]> Interest rates on new mortgage deals have fallen to their lowest level for 23 years since 1988, according to new research.
This is due to lenders finding it cheaper to raise funds in the wholesale financial markets.

This has been due to the expectation that the Bank of England is unlikely to raise its bank rate above 0.5% anytime soon.

However most mortgage deals still require buyers to put down at least a 20% deposit.

The intra bank swaps rate determines the cost of borrowing for banks and building societies when they want to borrow longer term money in the financial markets at a fixed rate to lend onto their customers.

The market provides an indication of when banks expect the Bank of England to raise short term interest rates.

Until recently, a rate rise had been expected as soon as September.

But following a set of weak economic data, as well as the decision by a new member of the Bank’s rate setting committee to vote for no change in rates, markets now do not expect a rate rise until well into next year.

According to Moneyfacts, the average two-year fixed rate deal is now at 4.32%, three year fixed deals now average 4.92%, five-year fixes are at 5.29% and the average two-year tracker deal is now at 3.37%.

Wadebridge in Cornwall, a few miles inland from [...]]]> The cost of owning a home by the sea has more that doubled over the past decade the Halifax bank has found.
It also found that property prices in seven out of 10 seaside towns in England and Wales have seen greater increases than the national average since 2001.

Wadebridge in Cornwall, a few miles inland from the coast, saw the biggest rise in average house prices where house prices in the town have risen from £100,406 to £370,902.

It is followed by Maryport in the Lake District, and Tenby in west Wales.

The Halifax found that six of the 10 seaside towns that have seen the biggest rise in prices since 2001 are in the north of England or Wales, with three in the south west of England, and one in East Anglia.

However, the 10 most expensive seaside towns remain in the south west of England, with property in Sandbanks in Dorset being the most expensive, followed by Padstow in Cornwall.

The average price of a house in Sandbanks is now £532,652, while in Padstow it is £381,916.

Outside of England, the Mumbles in Swansea has the highest average house prices, at £263,494.

Yet not all seaside towns have high house prices.

At Withernsea in the East Riding of Yorkshire, the average cost of a home is £99,153.

Rhyl on the north Wales coast has the lowest seaside house prices in Wales, with an average of £121,838.

The National Audit Office [...]]]> A scheme aimed at preventing people losing their homes in England proved to be below target but above budget new research finds.
The Mortgage Rescue Scheme enabled not for profit housing associations to buy a stake or all of a home and allow the residents to continue living there by renting it back.

The National Audit Office (NAO) said it helped 2,600 households avoid having their homes repossessed. However, the target was 6,000.

The rescues were also supposed to cost a total of £205m, but actually cost more than £240m, the NAO found.

“The scheme has helped fewer than half the number of households expected and each rescue has cost more than three times as much as expected, with overall costs sitting at £240m,” said Margaret Hodge, who chairs the Public Accounts Committee.

“Spending £35m more than planned yet not reaching all those in need does not represent value for money for taxpayers’ investment in this scheme.”

The scheme was launched by the Labour government in 2008, following a surge in the number of homes being repossessed because people were unable to continue with mortgage payments.

The NAO has studied the success of the scheme in England, which was separate from a scheme in Scotland, which started in 2003, and one in Wales.

It found that the DCLG “made the wrong call” when predicting how many people would choose to relinquish ownership of their home and rent it back from a housing association, compared with the numbers who would opt for shared ownership with the housing association.

Some 98.5% of those on the scheme chose to sell their home, whereas the original estimate was that only 15% of people on the scheme would do so.

The report said the DCLG did not have detailed, up-to-date information on its target group and whether they had sufficient equity to share ownership with a housing association.

The department also failed to draw sufficiently on data from the scheme in Scotland.

“The department made assumptions about the level of demand for the Mortgage Rescue Scheme and made the wrong call,” said Amyas Morse, head of the National Audit Office.

“There was more need than expected for more expensive support and less for the relatively low-cost rescue option. Spending more than expected and delivering less means that the department has not provided value for money.”

The data was weaker than expected and helped send the Pound to a 13 month low against the euro.

The euro [...]]]> Growth in the UK construction industry slowed sharply in April weighed down by a contraction in housing activity, data has shown.
The Purchasing Managers’ Index (PMI) for construction fell to 56.4 in March to 53.3 in April.

The data was weaker than expected and helped send the Pound to a 13 month low against the euro.

The euro rose to 90.28 pence, while the Pound also fell against the dollar to trade at $1.6467. Sterling did later recover against both currencies.

Analysts had expected a more modest slowdown in the index to 55.5. A figure above 50 indicates growth in the sector.

Although the Office for National Statistics (ONS) said the UK economy returned to growth in the first quarter, construction remained a particularly weak spot, with the sector shrinking by 4.7%.

But David Noble, chief executive at the Chartered Institute of Purchasing and Supply (CIPS), who collects the PMI data with research group Markit, said the sector was in better shape than the ONS figures suggested.

“Whilst growth in the construction sector has lost its pace compared to the start of the year, the PMI figures indicate that the situation is nowhere near as sluggish as latest ONS figures suggest,” he said.

But he added: “Low activity levels in the housing market, tighter government purse strings, rising input prices in fuel and materials, as well as poor cash flow in some cases, are clearly a worry.

“Confidence amongst UK constructors remains at a historically low level as the number of jobs continues to drop.”

The Markit/CIPS data showed weaker performances from both the housing and civil engineering subsectors.

The consultation will also cover mobile payments, tipped to be the main replacement for [...]]]> Banks are asking consumers for their views on new payment technologies that will replace cheques by the end of the decade.
The Payments Council, which oversees UK payments strategy, is seeking views for the blueprint on how cash, cards and electronic payments operate.

The consultation will also cover mobile payments, tipped to be the main replacement for chequebooks.

Banks want to phase out all cheques in 2018 under the Council’s plans to save money.

The 10-year plan for payments was launched in 2008 and is now being updated.

“Payments are sometimes described as the plumbing behind the economy. They are an essential part of our lives and rightly regarded as a critical national infrastructure so it is important that they do what we need them to do,” said Gary Hocking, acting chief executive of the Payments Council.

“Public consultation is a crucial part of updating the plan and we are looking for input from as wide a variety of organisations and interests as possible.”

Your opportunity to stop the end of cheques is open at:
http://www.paymentscouncil.org.uk/who_are_we/our_strategy/national_payments_plan_2011_consultation/

The Norwich and Peterborough (N&P) brand and its 46 branches will be retained for at least two years.

Yorkshire Building Society confirmed there would be no [...]]]> The Yorkshire Building Society has announced it is to merge with the Norwich and Peterborough Building Society.
The move will create a combined building society with three million members and 224 branches.

The Norwich and Peterborough (N&P) brand and its 46 branches will be retained for at least two years.

Yorkshire Building Society confirmed there would be no compulsory redundancies for N&P’s 360 branch staff for at least two years.

The Bradford based Yorkshire is the second largest building society in the UK with 2.6 million members.

During the past couple of years, Yorkshire has merged with the Barnsley Building Society and the Chelsea Building Society.

A key factor in the merger has been an investment scandal which engulfed the N&P in the past year when the society mis-sold high risk investment polices to 3,300 of its customers on behalf of the now defunct investment firm Keydata.

Many of the customers were pensioners who were exposed to considerable losses by being advised to put large chunks of their retirement savings in the Keydata policies, known as “death bonds”.

The N&P agreed in March to give those customers £51m in compensation, a figure which plunged it into the red for the last financial year.

Recently the society was fined £1.4m by the Financial Services Authority for the mis-selling the investments.

N&P, which has a 375-strong head office in Peterborough, has been holding discussions with a number of parties for several months.

N&P was formed on October 31 1986 when the Peterborough and the Norwich building societies merged. It dates back to 1860, when the Peterborough Provincial Benefit Building Society was formed by a group of railwaymen.

There was a 2% drop in gross [...]]]> UK mortgage lending rose in March when the amount lent in home loans rose by 21% compared with the previous month lenders have said.However the increase came after a dip in lending for home loans at the start of the year the Council of Mortgage Lenders (CML) figures show.

There was a 2% drop in gross mortgage lending compared with March 2010, the CML said.

A trend of remortgaging in recent months has continued, it added with gross mortgage lending reaching an estimated £11.3bn in March, the CML said.

However, the big month-on-month rise was the result of particularly low lending of £9.3bn in February.

A three month rolling comparison shows that gross lending for the first quarter of 2011 was £30.1bn, an 11% decline from the fourth quarter of 2010 and a 1% increase on the first three months of 2010.

Lenders expect mortgages to become more available in the coming months, and this could help to underpin house-buying activity, although still at low levels.

Remortgage demand, meanwhile, continues to firm, presumably linked to expectations of higher base rates.

Remortgage approvals in February were the highest for more than two years. Stronger remortgage activity looks set to continue propping up overall lending.