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 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.

For the first six months of the year, total mortgage lending was only slightly [...]]]> Mortgage lending picked up in June but was still lower than a year ago the Council of Mortgage Lenders (CML) say.Total lending to home owners was £12.9 billion last month, up by 16% from May but 3% down on June last year.

For the first six months of the year, total mortgage lending was only slightly down on last year’s figure, at £63.7 billion.

The CML said the subdued state of lending reflected the poor state of the economy and household finances.

“The UK economy continues to experience disappointing economic growth, strong consumer price pressures, falling disposable incomes and an uncertain jobs market,” said the CML’s chief economist Bob Pannell.

“Recent emotive headlines on repossession prospects appear overplayed, given that the state of our economy does not warrant large interest rate rises for the foreseeable future.

“But we do expect to see moderately higher arrears and possessions through the second half and into 2012, as we have previously forecast,” he added.

More than 40% of mortgage borrowers are now on standard variable rates- which generally start after cheap introductory mortgage deals [...]]]> The consumer group Which? has accused banks and building societies of raising interest rates on homeowners who have standard variable rate mortgages.
Which? warns that thousands will be pushed into financial difficulty when interest rates go up.

More than 40% of mortgage borrowers are now on standard variable rates- which generally start after cheap introductory mortgage deals expire.

The highest are around 6%- double the cost of the best value mortgages.

Which? research suggested that 95% of lenders had failed to pass on cuts to standard variable rate customers in full when the Bank of England reduced interest rates.

Examples of standard variable rates (SVRs)

• Newcastle BS: 5.99%
• Birmingham Midshires: 4.84%
• Clydesdale: 4.59%
• Natwest: 4.00%
• Royal Bank of Scotland: 4.00%
• Nationwide: 3.99%
• Halifax: 3.99%
• HSBC: 3.94%

Source: Moneyfacts

Since then, 20% of lenders have actually put their rates up, while the Bank’s rate has stayed at a record low of 0.5%.

The Council of Mortgage Lenders said that the standard variable rate, or SVR, is dependent on the cost of attracting deposits from savers, rather than the Bank of England.

But its director general, Michael Coogan, said that lenders have been widening their profit margins after losing heavily during the crisis.

An increasing number of families with large loans are trapped on their lender’s standard variable rate because other banks and building societies don’t want their business.

These financially stretched households could suffer badly when the Bank England starts to push interest rates higher.

The figure is 17% higher than the same month a year ago.

Home loans for house [...]]]> There were 33,900 remortgage loans advanced last month – up 16% compared with the previous month, the Council of Mortgage Lenders (CML) say.
Expectations of interest rate increases led to larger numbers of homeowners remortgaging in March, UK lenders say.

The figure is 17% higher than the same month a year ago.

Home loans for house purchases also proved to be more popular, although the lenders’ body said the market remained “subdued”.

The number of home loans was up 24% compared with the previous month. However, it was 17% down on March 2010, and the CML warned against reading too much into one month’s figures.

Remortgaging accounted for 37% of all lending during the first three months, up from 30% during the previous quarter.

The CML said it was likely that this was linked to expectations of an interest rate rise in the coming months, making mortgages more expensive, even if this increase was only small.

The number of home loans made in March to first time buyers was 28% higher than in February, but 17% lower than a year earlier.

Typically, buyers now have to provide a 21% deposit to get on the property ladder for the first time. This is a little less difficult than the 24% typical deposit required a year ago, the CML figures show.

Only 4% of first time buyers now choose an interest only mortgage compared with 30% before the financial crisis, when these loans were much more available from lenders.

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.

Millions of homeowners will be [...]]]> Mortgage interest rates have been held at a record low for 25 months now- should you fix your rate or stick on a variable rate?
With the Bank of England’s Monetary Policy Committee voting on interest rates many think that it is a question of when, not if, rates will go up.

Millions of homeowners will be affected when they do change- and they have to decide if switching to a fixed rate deal would be a better option.

About 69% of people with mortgages are on variable rates, according to industry figures.

That means many of them, who are enjoying unusually low monthly payments now, could be affected immediately when interest rates do rise.

With predictions that the base rate will be at 2% by the end of 2012, maybe rising to 3% after that.

The biggest benefit of switching to a fixed-rate mortgage is that it gives you peace of mind. You know exactly how much you need to pay each month, and so you can budget accordingly.

However it might not be the cheapest option.

Many companies charge expensive fees for swapping from one mortgage deal to another and the new rates are not always particularly attractive.

So the fixed-rate deal would not save them any money until base rate had gone up several times, to 1.75%.

Home-owners could in fact find it difficult to switch to cheap fixed-rate deals.

The best ones are only available for people who can pay big deposits, or have large chunks of equity in their homes.

Here are some steps you can take to boost your chances of getting the best possible rates.

• The first thing to do is overpay. Reduce the amount you owe as much as possible.

• Check your credit history, make sure there are no mistakes on there.

• Pay any debt you have. So, if you’ve got any debts on your credit card, pay that down first.

Recent surveys have shown that house prices have changed very little in [...]]]> Mortgage lending is still running at very low levels according to the Council of Mortgage Lenders (CML).
There were just 32,300 mortgages arranged with house buyers in February – 8% more than in January but still 12% down on the same month a year ago.

Recent surveys have shown that house prices have changed very little in the past six months.

The CML said that cash sales, now accounting for about 40% of all sales, were helping to prop up the market.

“The February fall in lending compared to last year was despite the fact that lending in the early months of 2010 was itself depressed following the end of the earlier stamp-duty concession,” said the CML’s chief economist Bob Pannell.

“But research suggests cash purchases have remained steady since the credit crunch, indicating that the housing market may be holding up better than the low mortgage lending levels suggest.”

They returned £7 billion in the final three months of the year, [...]]]> UK homeowners paid off more of their mortgage borrowings last year than they had done in any other single year official Bank of England figures show.
Mortgage borrowers paid back more than £24 billion to lenders in 2010, the highest since records began in 1970.

They returned £7 billion in the final three months of the year, a record amount during any quarter since the Bank started collecting the figures.

The figures also include money paid as deposits by homebuyers.

Lenders demanding higher deposits and rationing home loans would also increase the financial stake that homeowners have in their properties.

In the boom, people used extra mortgage borrowing to cover other spending. From July 1998 to March 2008 homeowners borrowed an extra £328bn 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.

Now the opposite is happening, as families try to reduce their debts and lenders demand higher mortgage deposits.

Borrowers have also taken advantage of low interest rates to pay back more of their home loans while mortgage costs are low.

There has been an injection of housing equity for 11 quarters in a row, the figures show.

Homeowners have now collectively injected £57.4 billion into their housing equity since the second quarter of 2008, when the trend switched from withdrawal.

Lenders demanding higher deposits has also increased first-time buyers’ financial stake in their homes.

The latest figures show that households spent the equivalent of 2.7% of their post-tax income on reducing their mortgages.

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

Mortgage rationing through demands for higher deposits has contributed to the trend in equity injection.

It says many sellers are refusing to drop their prices, with the price of newly-advertised properties in fact rising by 3% in January to [...]]]> Most of the UK property market faces “paralysis” this year  says the estate agency website Rightmove.
The company claims to advertise 90% of all properties for sale on behalf of local estate agents.

It says many sellers are refusing to drop their prices, with the price of newly-advertised properties in fact rising by 3% in January to £230,000.

That was £65,000 above the average selling price of £165,000, according to the England and Wales Land Registry.

Rightmove said the seizing up of the market was mainly due to a lack of mortgage finance for would-be buyers, and the erosion of equity in their homes due to falling prices.

But Miles Shipside, Rightmove spokesman, said another factor was the reluctance of sellers to drop their prices, despite the lack of demand for their homes.

“Unwilling or unable to drop their asking prices to bargain basement levels – this helps explain why new sellers’ average asking prices remain broadly static year-on-year,” Mr Shipside said.

“New sellers see comparable properties to theirs on the market so they and their agents try a similar asking price.

“Without a really pressing need to sell you can see why price re-adjustments seem painfully slow in many local markets and they will not fall by enough to really assist the return of mass market affordability,” he added.

Rightmove predicts that 2011 will see many buyers continue to be locked out of the market.

The Bank of England will monitor whether [...]]]> A long awaited banking agreement with the largest UK banks on lending, pay and bonuses has been announced entitled Merlin.Under Project Merlin, banks will lend about £190bn to businesses this year – including £76bn to small firms – curb bonuses and reveal some salary details of their top earners.

The Bank of England will monitor whether loans targets are being met.

However, Chancellor George Osborne formally ruled out imposing a bonus tax.

Mr Osborne acknowledged that the package would not be enough to assuage public discontent with the banks’ role in the financial crisis, saying: “The anger will remain”.

Treasury sources said that the time had come to move on from “retribution to recovery” – focusing on the lending boost from banks rather than issues over bonuses.

However, groups representing small businesses said that despite the increased lending, they feared the cost of borrowing would remain prohibitively expensive for many firms.

HSBC, Barclays, Royal Bank of Scotland (RBS) and Lloyds Banking Group have signed up to the Project Merlin agreement, while Santander has agreed to the lending parts of the deal.

Other pledges include providing £200m of capital for David Cameron’s Big Society Bank, which is supposed to finance community projects.

However, while banks have also been asked to show restraint in bonus payments, these are expected to total more than £6bn this year.

Banks loaned £179bn to businesses last year and the government wanted a commitment that this would increase.

They are also going to be providing £1bn of risk capital over three years for small businesses in parts of the UK worst hit by spending cuts.

The government said that the measure of whether banks were providing the promised credit to business would be among the performance targets used to determine bonuses of bank chief executives.

The £76bn to be loaned to small business is up 15% from 2010 levels.

However, the provision of credit to UK businesses will be on commercial terms.

Some 80% of those asked were unsure which benefits and allowances they were entitled to.

Others struggled [...]]]> Two thirds of those asked in a UK survey found financial matters too confusing to make the best choices with their money.
The results of the have raised concerns about financial know-how at a time when family budgets are being squeezed.

Some 80% of those asked were unsure which benefits and allowances they were entitled to.

Others struggled to get value for money or understand small print.

More than a quarter of those asked said they struggled to work out how to shop around for the best electricity, gas, mobile phone and television packages.

“Citizens Advice Bureaux are seeing more and more people coming to us for debt advice, and with money worries.

“We know there is a need out there for people to have the skills to manage their cash,” said John Rhodes, head of financial capability at Citizens Advice.

A range of advice organisations have been calling for more financial education in schools.

There were 44,000 loans provided for house purchases – the same as the previous month.

This was down 15% on [...]]]> The quiet mortgage market continued in November with the number of loans advanced to people buying a home unchanged, official mortgage lenders found.
Detailed data from the Council of Mortgage Lenders (CML) confirmed the market’s relatively stagnant nature.

There were 44,000 loans provided for house purchases – the same as the previous month.

This was down 15% on November 2009 when some buyers were trying to beat the end of the stamp duty holiday.

The report also showed a 4% rise in the number of people remortgaging during November, with 26,000 loans advanced to people switching deals, although this was still 12% down on a year earlier.

And there was a slight rise in the number of first time buyers entering the market, although this was also well down on a year earlier, with those getting onto the property ladder paying an average of a 20% deposit.

“It is encouraging to see credit criteria becoming a little more liberal for first-time buyers,” said Michael Coogan, director general of the CML.

“But the funding and capital constraints on lenders will continue to exert a dampening effect on lending, and criteria are unlikely to loosen substantially.”

Quantitative Easing (QE) is the Bank’s policy of putting new money into the financial system to try [...]]]> Last week the Bank of England’s Monetary Policy Committee (MPC) voted to keep interest rates on hold with no increase in Quantitative Easing.But re-mortgager asks with rising unemployment and government cutbacks- should more be done to stimulate the economy?

Quantitative Easing (QE) is the Bank’s policy of putting new money into the financial system to try to stimulate the economy.

Mr Posen- a member of the MPC wants an extra £50bn to be added to QE programme.

Economists have warned that while putting up interest rates may help reduce inflation, it would also restrict the spending power of homeowners with tracker mortgages and people repaying other debts – further endangering the recovery.

Consumers’ spending power is already being squeezed, because pay packets are not keeping up with inflation – with a report by Vocalink on Thursday suggesting that the growth of take-home pay had fallen sharply in the past three months.

Consumers have also been faced with record petrol prices in recent weeks, and VAT rose from 17.5% to 20% on 4 January pushing up the cost of many goods and services.

Recent data has suggested that manufacturing is the only section of the UK economy to be showing signs of strength.

Official figures released on Thursday showed that growth in car production and food processing had helped manufacturing increase by 0.6% in November – a little faster than expected. However industrial output was slower than predicted, according to the Office for National Statistics.

Meanwhile, business group the CBI said the Bank would come under pressure to increase rates later this year “as its anti-inflation credibility comes under greater pressure”.

It is the 10th quarter in a row that homeowners have put more money into their home than they took out.

Collectively, those with [...]]]> Mortgage holders are continuing to pay down their loans, according to the Bank of England’s latest quarterly figures.
Figures for the third quarter of the year show borrowers cut their collective debt by £6.1bn.

It is the 10th quarter in a row that homeowners have put more money into their home than they took out.

Collectively, those with mortgages have been reducing the amount outstanding since the second quarter of 2008 and have paid in £49.7bn since then.

The £6.1bn figure was the net injection of equity that people have put into their homes since the first quarter of 2009.

The recent trend among homeowners to pay down their mortgages contrasts with their behaviour during the housing boom, when they unlocked a record £17.1bn during the last quarter of 2003.

Recent figures from the Council of Mortgage Lenders (CML) showed mortgage lending fell 5% in November compared with the previous month and was down 10% on a year ago, lenders say.

The uncertain housing market means it is more difficult not only to get a mortgage, but to increase the size of an existing one.

In 2010 the property market took a downward turn after a brief recovery in prices that had started in 2009 ran out of steam.

The [...]]]> Re-mortgager asks what will happen to house prices in 2011?
There is quite a divergence of views about whether house prices will fall further, stabilise or even rise during the coming 12 months.

In 2010 the property market took a downward turn after a brief recovery in prices that had started in 2009 ran out of steam.

The severe rationing of mortgages continued and, combined with an influx of would-be sellers, this produced a surplus of sellers over buyers.

The result was that prices started going down again.

Whatever their forecast for prices in 2011, most observers are certain that mortgage borrowing, and completed sales, will stay at their current, very low levels.

One of the biggest factors at play is the continued dearth of mortgage funds.

Lenders continue to be ultra fussy about to whom they will lend, with only the most credit-worthy borrowers – and those with large deposits too – likely to be offered the mortgage they want.

The CML estimates that in 2011, banks and building societies will have to repay about £130bn of the emergency borrowing they took from the Bank of England and the Treasury during the height of the credit crunch.

So the rationing is going to continue, with first-time buyers still being forced to find the cash to put down deposits of between 20% and 25% of the value of the home they are buying.

As a result of this squeeze on the industry’s finances, most lending is now even more concentrated than before, in the hands of just five or six big lenders.

One of those is the Nationwide building society, by far the biggest lender in a sector where most societies are just ticking over.

The Nationwide’s chief economist, Martin Gahbauer, predicts that prices will decline gently for at least the first six months or so of 2011.

“There will be a recovery eventually, but cycles in housing are very long,” he points out.

“Households are still very indebted, the boom was a long boom, and it is not unreasonable to expect a period of digestion to take a long time.”

Some 29,991 of these home loans were approved during the month, the British Bankers’ Association (BBA) said.

The statistics [...]]]> The UK mortgage market has had a slow end to the year, various statistics have shown
The number of mortgages approved for house purchases by the major UK banks fell to a 20-month low in November, figures have shown.

Some 29,991 of these home loans were approved during the month, the British Bankers’ Association (BBA) said.

The statistics offer more evidence that the mortgage market has shown little life towards the end of the year.

The low level of mortgage approvals for house purchases also gives a clue that the number of home loans being taken out in the coming months is likely to remain low.

First time buyers have struggled to secure new loans, as banks retreat to lending to the safest of borrowers.

However, the BBA pointed out that the number of people remortgaging had picked up. There were 27,045 remortgage approvals in November, which was nearly 4,000 higher than the average of the previous six months.

“Remortgaging was strong in November as borrowers chose to replace maturing fixed-term mortgages,” said BBA statistics director David Dooks.