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.

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 figures suggest that this year’s modest revival in sales has ended and that mortgage [...]]]> The number of new mortgages approved for home buyers, but not yet lent, fell in September for the first time in five months.The Bank of England said approvals for home buyers were 50,967 in September, down 1,380 or 3% from August.

The figures suggest that this year’s modest revival in sales has ended and that mortgage related sales may fall again in the coming months.

In September, completed sales fell for the second month in a row, to 72,000.

The figures from HM Revenue & Customs (HMRC) showed that sales last month had fallen by 11,000 from the July peak of 83,000.

Prices are likely to trend down over the coming months in the face of very low consumer confidence amid persistently weak economic activity, markedly rising unemployment and muted earnings growth.

The announcement came as Kingfisher reported [...]]]> Kingfisher plc- the owner of B&Q and Screwfix has announced that it is creating 1,200 jobs across the UK this year.Kingfisher said that its growing business would take on 230 staff at 29 former Focus DIY stores. One thousand new jobs are also being created at trade tools supplier Screwfix.

The announcement came as Kingfisher reported sharply higher profits.

Pre-tax profits at the group rose 24% to £439 million in the six months to the end of July.

Kingfisher said it was investing £130 million in the UK this year, four times the previous year.

That includes £20 million it is spending refurbishing the Focus DIY stores it bought earlier this year.

It has already opened 13 new Screwfix outlets this year. It expects to have opened another 40 by January 2012.

“Although the economic outlook is uncertain, this investment demonstrates our confidence in the UK’s longer-term growth prospects,” said Kingfisher chief executive Ian Cheshire.

Shares in Kingfisher jumped 5% at the start of trading on Thursday, as markets responded to the unexpectedly strong profits figure.

The company saw a 6% rise in profits at its UK and Irish Republic business – including a 25% jump at Screwfix – despite a 1% fall in sales in its home market.

Kingfisher’s overseas business was even more robust, with profits in France up by a quarter, and Germany, Spain, Turkey and Poland all putting in a strong showing.

“With around two-thirds of our profit coming from outside the UK, these results clearly show the value of geographic spread,” said Mr Cheshire.

“Looking ahead, economic uncertainty throughout Europe is likely to impact consumer confidence, meaning conditions will remain challenging for retailers.  However, our plans already assumed little help from our markets.”

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.

Redrow posted a pre-tax profit of £25.3m in the 12 months to the end of June, compared with £700,000 [...]]]> House builder Redrow Plc has reported a better than expected annual pre-tax profit, on the back of a 12% rise in its house sale prices.But the Ewloe-based firm warned the outlook for the property market was challenging.

Redrow posted a pre-tax profit of £25.3m in the 12 months to the end of June, compared with £700,000 for the same period last year.

Redrow said its average house price was up from £154,800 last year to £174,100.

Redrow, run by its founder Steve Morgan who returned to the group more than two years ago at the bottom of the property crash, said the market remained uncertain as sales rates were flat year-on-year.

“The nature of our land acquisitions over recent times will continue to drive the average selling price in an upwards direction,” said Mr Morgan, who also chairs Premier League football club Wolverhampton Wanderers.

He added that the company delivered a robust performance “in spite of the difficulties facing the home-building industry”.

Redrow said the improvements were driven by strong sales of its New Heritage Collection, a range of two to four-bedroom houses launched in February 2010.

These homes made up 41% of total sales in the second half of the year for the firm.

Redrow’s pre-tax profit of £700,000 last year came a year after the company made a pre-tax loss of £44.2m.

The company is one of the UK’s largest house builders.

It was founded in 1974 when it was a small civil engineering concern specialising in drainage sub-contracting.

The firm moved into house building in the 1980s.

The lender explained that over the last three months prices had been 0.5% higher than in the [...]]]> House prices have gone up for the third month in a row according to the Halifax mortgage lender.Its latest monthly survey says they rose in July by just 0.3%, leaving them 2.6% lower than a year ago at £163,981.

The lender explained that over the last three months prices had been 0.5% higher than in the previous three.

That was the first such increase in 14 months, indicating that prices were stabilising, according to its housing economist Martin Ellis.

“Overall, there has been little change in either the level of house sales or the number of properties on the market for sale since late 2010,” he said.

“These steady market conditions have helped to stabilise house prices in 2011 following last year’s modest decline.

“This pattern is expected to continue over the rest of the year with little genuine direction in either house prices or sales,” Mr Ellis added.

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.”

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.

With the average life of a windmill farm estimated at 20 years, this could add up to [...]]]> Local communities in England which agree to host a windmill farm will receive payments from the government.
Renewable UK, the renewable energy trade association, will launch a “wind energy industry guarantee” that will average £20,000 per year per project.

With the average life of a windmill farm estimated at 20 years, this could add up to £400,000.

There are also plans to offer other benefits.

There will be a commitment to pay £1,000 per megawatt (MW) of installed capacity each year for the lifetime of a wind farm whose average output is expected to be 20MW.

However, the Renewable Energy Foundation (REF) said the payment was not enough, as it reflected just 0.5% of the total annual income of the average wind farm.

It said the average turbine generated an income of about £500,000 a year, half of which is subsidised by consumer energy bills.

Under the new scheme, the community benefit would be £2,300 per turbine.

REF said “more generous and less divisive forms of community reparation would be preferable”.

Windmill farms have been controversial in some areas, with some campaigners saying they are noisy and spoil the landscape.

LSL said unpaid rent now amounted to £276m, the highest level since December [...]]]> The finances of private tenants deteriorated in December, with nearly 12% of all rent unpaid or paid late.
The arrears were calculated as part of a monthly survey by the property firm LSL, and were up from total rent arrears in November of 10%.

LSL said unpaid rent now amounted to £276m, the highest level since December 2009.

It said tenants’ finances were being squeezed by higher unemployment and warned that arrears would become worse.

“Arrears have been rising since October as public sector spending cuts start to bite in many areas of the country,” said David Newnes of LSL.

“With unemployment set to increase this year, and rents likely to rise once more in the spring, more tenants will be at risk of falling behind with rent payments.”

Average rents charged by private landlords fell back in December, for the first time since January 2010.

The LSL buy-to-let rental index shows that average rents dropped by 1.2% in December, to £684 a month.

The drop was mainly due to landlords reducing their rents to tempt new tenants during the Christmas holidays.

“Landlords offering properties during the holiday season often lower the asking rent to avoid a costly void period,” said David Newnes of LSL.

“If a landlord cuts the rental price by 5% to fill a property immediately, he will save £275 over the year rather than seeing their property vacant for the duration of the month.

“Nevertheless, with the supply of mortgage finance to both first-time buyers and would-be landlords still constrained, we are likely to see rents re-start their upwards march before the spring,” Mr Newnes added.

LSL owns letting agents such as Your Move and Reeds Rains and says rents are now 3.8% higher than a year ago, despite the drop in December.

However it warned that falling house prices were undermining the return that buy-to-let landlords could expect in the short term.

“If property prices continue to decline at the same rate of the last quarter, an investor entering the market now could expect to make a total annual return of £3,259 per rental property – equivalent to £8,211 in rent, and capital losses of £4,953,” LSL said.

One in seven of the 12,000 investors complained about [...]]]> Thousands of people investing their retirement savings were given poor advice by Barclays, which must now pay them sixty millions pounds in compensation.
The bank has been fined £7.7m by the Financial Services Authority (FSA) and will pay up to £60m compensation to customers of two investment funds.

One in seven of the 12,000 investors complained about the advice received from July 2006 to November 2008.

Barclays accepted it had “let customers down” and has apologised.

Barclays sold Aviva’s Global Balanced Income Fund – the Balanced Fund – and the Global Cautious Income Fund – the Cautious Fund – to 12,331 people with investments totalling £692m.

Many of these customers were retired or nearing retirement, and 1,730 of them complained about the advice they were given.

Many were exposed to more risk than they were comfortable with, and found they lost money when the economic crisis struck.

Although Barclays identified potentially unsuitable sales as early as June 2008, it failed to take appropriate action to stop it, the FSA found.

Barclays has already paid £17m in compensation and the FSA has estimated that a further £42m could be paid to customers who received unsuitable advice.

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.”

The findings by property websites Trulia and [...]]]> 58% of Americans expect the US housing market to stay depressed for two or more years, a new survey has suggested.
Even worse- in the survey, 48% of respondents said they would consider walking away from their mortgage if they were in negative equity – up from 41% since May.

The findings by property websites Trulia and RealtyTrac come as house prices have begun falling again.

They suggest the market may face a new wave of mortgage defaults as Americans lose respect for scandal-hit banks.

The attorneys general of all 50 US states are carrying out a joint investigation into foreclosures – the repossession of US homes by mortgage lenders – after it emerged that unqualified “robo-signers” had been used to produce fraudulent documentation to present to US courts.

“As a result of the recent robo-signing debacle, half of US adults expressed that they now have less faith in mortgage lenders, banks and the government,” the two companies said in a statement presenting their report.

The two real estate websites themselves were even more pessimistic than their survey respondents, predicting that the housing market would recover only in 2014.

Some 47,185 mortgages were approved by banks and building societies in October, an eight month low.

This is down [...]]]> The UK housing market seems set to remain in the doldrums for some months yet, with the latest Bank of England figures on home loans showing few signs of life. New statistics on consumer confidence are alos falling.

Some 47,185 mortgages were approved by banks and building societies in October, an eight month low.

This is down from 47,639 in September and the recent peak of 59,215 reached in November last year.

Analysts say this is “highly likely” to maintain the downward pressure on prices that has emerged recently.

Putting this is context- mortgage approvals at the rate of 70,000 a month are regarded as consistent with a healthy market.

Despite the weakness in approval numbers, the value of lending rose to £1bn, from £200m the month before.

However such monthly figures are volatile.

The Bank’s favoured measure of money supply barely shifted – just 0.1 per cent up on the month.