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May 2011
23rd March 2011
First-time buyers will be offered a deposit contribution of up to 20%, under the new FirstBuy programme announced in today's Budget
The scheme will earmark £250m to help first-time buyers' if they buy new-build property, thanks to the Government and house-builders jointly boosting their deposits.
Chancellor George Osborne said that the scheme will help 10,000 first-time buyers to get on the housing ladder.
The deposit contribution will allow borrowers to increase their initial deposit and then hopefully access a traditional residential mortgage, with lenders expected to support the scheme.
For more details on this new scheme and the mortgage products it may allow you to access please call us now on 020 7484 9208 for an initial chat.
March 2011.
HOUSE PRICES FALL BY 0.2% IN APRIL 2011
NATIONWIDE PRICE INDEX REPORTS….
- House prices fell by 0.2% in April
- Price of a typical home in April is 1.3% lower than one year ago
Headlines | Mar 11 | Apr 11 |
Monthly Index* | 329.9 | 329.1 |
Monthly Change* | 0.5% | -0.2% |
Annual Change | 0.1% | -1.3% |
Average Price | £164,751 | £165,609 |
* Seasonally adjusted figure (Note that monthly % changes are revised when seasonal adjustment factors are re-estimated)
Commenting on the figures, Robert Gardner, Nationwide's Chief Economist, said:
“The price of a typical house fell by 0.2% in April, which left prices 1.3% lower than the same period of 2010. The three month on three month measure of house prices, a better measure of the underlying trend, showed a modest rise of 0.6%.
“Since November 2010 house prices have increased in three months and fallen in three months. However, it is not unusual to see a pattern of modest monthly increases and decreases when the market is fairly static, as has been the case since last summer.
“There is still little evidence to suggest that price declines will accelerate in the months ahead. While the
For further information please download the April 2011 report.
Kind Regards
The Team at LMI
23rd March 2011
BUDGET BREAKING NEWS…
First-time buyers get 20% deposit loans
First-time buyers will be offered a deposit contribution of up to 20%, under the new FirstBuy programme announced in today's Budget
The scheme will earmark £250m to help first-time buyers' if they buy new-build property, thanks to the Government and house-builders jointly boosting their deposits.
Chancellor George Osborne said that the scheme will help 10,000 first-time buyers to get on the housing ladder.
It will also help prop up the house-building industry and demand for new-build properties.
The deposit contribution will allow borrowers to increase their initial deposit and then hopefully access a traditional residential mortgage, with lenders expected to support the scheme.
For more details on this new scheme and the mortgage products it may allow you to access please call us now on 020 7484 9208 for an initial chat.
March 2011.
Mortgage Market Update.
In the mortgage market the last couple of months of 2010 ended with a pathetic whimper rather than the bang that might normally accompany the Christmas and end of year activities. Of course heavy snow slowed the already slow housing market almost to a stop in December.
2011 has got off to a similarly slow start, as did the last 2 years in terms of our own experience of mortgage transactions and we are now heading firmly towards the Spring and Easter, which is often the start of increased activity in the market. With very little new money in the market as a whole, it is unlikely that housing transaction levels will increase beyond the levels we have become used to over the last couple of years.
For some weeks now there has been much discussion over the likelihood that interest rates will be forced to rise to combat the rising levels of inflation as the year progresses. As of the 10th March the Bank of England decided that it was still not the right time to raise rates and so for 24 months we have enjoyed the lowest Bank Base Rate on record. The concerns about possible interest rate rises have produced more enquiries from borrowers about the benefits of fixed rates over recent weeks, but for those of you with lifetime tracking loans with rates of 0.75% to 1.75% over Base, the monthly cost now of moving to a 5 year fixed rate at around 4.75% would represent at least a doubling of interest costs for you - which is a heavy price to pay for some interest rate protection. For those of you who may be paying 4% or more as a variable rate at the moment then a switch to a long term fixed rate could make considerable sense.
The issue troubling most commentators and economists is how high will rates rise, and when, much of the inflation figure has been effected by the rise in VAT and the hike in oil prices which has been exacerbated by the unrest in N Africa and parts of the Gulf. Both of these elements might not be considered to have long term effects on inflation and so the pressure to raise rates may not be as great as some think. Meanwhile with the effects of the current economic pressures producing a drop in retail sales values in February 2011 prompting the following comments from The Director General of the British Retail Consortium “Apart from a bit of help from half-term for some retailers, February’s sales were weak. Other than the negative figures last April (caused by the year-to-year movement of Easter), this February's 1.1 per cent total sales growth is the poorest since May 2009 – even poorer when the impact of the VAT rise on inflation is taken into account.
Even online, the growth in sales of non-food items slowed to an 18-month low. Customers are cautious and cutting back in a big way on non-essential spending. Against this background of deteriorating sales, the BRC has written to the Chancellor urging him to use his Budget to support retail's essential contribution to jobs and growth by avoiding new burdens and removing existing ones."
So in our opinion, and looking simply at the housing market, if interest rates rise too far spending on the high streets will be further damaged due to the reduction in disposable income and our fragile economy could be thrown back into further recessionary problems.
2012 with the benefits of the Diamond Jubilee and the Olympics (now 500 days away) allied to the continuance of low interest rates could see a more positive and thriving economy as we head into 2013 and if new lenders arrive in the UK market over the next 18 months to join the few who have started lending since the end of 2009, a stronger housing and mortgage market should await us in another 2 years or so.
Every time we try to look into the future another issue clouds the economic view, the latest being the series of catastrophes to hit Japan which will certainly have an effect on the world’s economic recovery given their significant position in the Motoring and Semiconductor Markets and of course the abundance of Electronic Goods Manufacturers based in Japan. We can only hope for some good news from Japan shortly.
Given the lack of funding still in the UK Mortgage Market lenders continue to be very challenging to deal with for both borrowers and brokers alike, particularly if your financial circumstances do not exactly fit the ideal model of lenders who do not want to take the tiniest element of risk. We continue to benefit from our long term relationships with many key decision makers , which often gives us the opportunity to get a more favourable response for our potential clients than they can manage themselves. We continue to live in frustrating times for Lenders, Regulators, Borrowers and Brokers but the need for the intermediary’s skills has never been higher.
For more personalised comment and for advice about your own mortgage requirements do please pick up the phone and call Philip on 020 7484 9208 or Peter on 020 7484 9207.
Please do take the time to register your details on the website so that we can keep you abreast of changes in the mortgage market.
9th September 2010
Base rates remain unchanged at 0.5%...but for how long?
New Lenders enter the fray.
Several private banks gained permission this month to offer residential loans to wealthy borrowers.
Most of these banks would require borrowers to have at least £1m in investable assets and would want a significant proportion of those assets placed with the private bank straight away.
They will lend mortgages at the higher end of the market, from £6m to £20m and primarily for existing clients.
Private bank deals are typically more competitively priced than high street loans for purchases of more than £1m. Private banks will offer the right type of client rates as low as 1.25 per cent over Libor, the rate at which banks lend to each other.
Budget March 2010
Good news for first time buyers with an abolition on stamp duty for purchases up to £250,000 for the next 2 years. The grey area however, is definining a "first-time buyer" (FTB) and this will be interesting area to watch.
Clearly, someone buying their first property is the normally understood definition, however, in the current market those that may have sold their property 3,5,10 years ago and have rented may qualify as FTB's as may those couples that have since split up, so it will be interesting to see how this develops. It may have been simpler to just exempt properties purchased up to £250,000!
At the other end of the scale buyers of properties over £1M will face a hike in stamp duty from 4% to 5% so an additional 1%, which experts calculate will result in an additional £250m of revenue more than covering the loss expected from the FTB abolition. This increase however does not take effect until next April so it will be interesting to see if this results in an increase of larger home purchases to avoid the additional tax.
- HOUSE PRICES FALL BY 0.2%
MAY 2011
HOUSE PRICES FALL BY 0.2% IN APRIL 2011NATIONWIDE PRICE INDEX REPORTS….
- House prices fell by 0.2% in April
- Price of a typical home in April is 1.3% lower than one year ago
Headlines
Mar 11
Apr 11
Monthly Index*
329.9
329.1
Monthly Change*
0.5%
-0.2%
Annual Change
0.1%
-1.3%
Average Price
£164,751
£165,609
* Seasonally adjusted figure (Note that monthly % changes are revised when seasonal adjustment factors are re-estimated)
Commenting on the figures, Robert Gardner, Nationwide's Chief Economist, said:
“The price of a typical house fell by 0.2% in April, which left prices 1.3% lower than the same period of 2010. The three month on three month measure of house prices, a better measure of the underlying trend, showed a modest rise of 0.6%.
“Since November 2010 house prices have increased in three months and fallen in three months. However, it is not unusual to see a pattern of modest monthly increases and decreases when the market is fairly static, as has been the case since last summer.
“There is still little evidence to suggest that price declines will accelerate in the months ahead. While the
For further information please download the April 2011 report.
Kind Regards
The Team at LMI
- House prices fell by 0.2% in April
- Rising the Interest rate rollercoaster........
- Riding the interest rate roller coaster…I would like to take this opportunity of wishing you a very prosperous and peaceful 2011. Welcome to our first mortgage update of 2011 and to kick off this new year I thought I would tackle a question that is probably on most peoples minds at present……In 22 years of mortgage broking, should I take a fixed or variable rate is a question I have heard almost every day. It does not matter if you are new to home buying or about to move - or indeed coming to the end of a current mortgage product.Whether to fix your interest rate, or let it remain variable, is a key issue. The Bank of England base rate remains at a 300-year low of 0.5%. So it does seem reasonable to suggest that the next movement in the base rate is more likely to be upwards than downwards. During most of 2004 until late 2008, the base rate averaged about 5%.The key advantage with fixed rates however is that as the base rate increases then your budget remains unaffected by the rise. Any pay rise you get over the two, three or five years will be yours to spend and not just handed over to your lender.We have however seen the cost of 5 year swap rates (the means by which lenders raise fixed rate funds on the money markets) rise substantially, from a low of 1.94% in October 2010 to a current high of over 3% last week. The net result of this has been the removal and re-introduction by lenders of more expensive 5 year fixed rates. The best deals are still at just under 4% which given some lenders are charging variable rates in excess of 4.5% looks extremely good value. It is however almost inevitable that those five fixed rates below 4% will be repriced in the very near future….so my advice is to act now if you want to secure a sub 4% five year fixed rate.With the prospect of base rates rising this year, now is the time to review the fixed rate options on offer, from our experience, once base rates start to rise, there is a rush for fixed rates and with the lack of liquidity in the market, the probable outcome is that fixed rates will become more expensive as demand outstrips their supply.As always we are here to guide you through the mortgage maze so please do not hesitate to call or email me at any time to discuss your options. In some cases we can even reserve your fixed rate 3-6 months before your current rate ends, providing some security and peace of mind in a very uncertain market.I can be reached direct on 020 7484 9208 or at Philip@letsmortgageit.com
- NOVEMBER NEWSLETTER
- As we enter the last 6 weeks of 2009 it is an opportune time to review some recently released statistics about our marketover the latter part of this year.One of the more positive indicators from data just released by the Council of Mortgage Lenders (CML) was the increase in number of mortgages granted to first time buyers. Their data suggests that a total of 19,700 people bought their first home during September 2009, up 5% on August 2009 and a massive increase of 45% on September 2008, maybe this marks the return of the elusive first time buyer!However, one of the factors that seems to be contributing to this increase in first time buyer activity was the Government’s temporary abolishment of stamp duty for all properties purchased up to £175,000. This concession will expire on 31st December 2009 and despite numerous calls to extend it the Government has not responded on the subject, so it is likely that from 1st January stamp duty will be back to its previous levels.Whilst the Bank of England warns of a “long and hard recovery” in its quarterly inflation report, it also comments that UK output is unlikely to return to its pre crunch peak of £1.4 trillion level until 2011 and that interest rates may have to rise, possibly sooner rather than later. If that was to be the case all those borrowers currently enjoying low base rate tracker mortgages could start to feel the pinch.There were also reports of the first growth in “buy to let” lending for over 2 years. According to the CML lending of £2.1 billion in the third quarter of this year was 10% higher than in the previous three months, while the number of loans advanced also improved. Despite the upturn, the CML said the recovery was from a low base, with lending volumes still much lower than their 2007 peak. "The recovery is modest but the figures show that buy-to-let is here to stay," said the CML's Michael Coogan. "Buy-to-let lenders are among those facing some of the biggest challenges in raising mortgage funding, so the improved figures are all the more welcome."So as we edge towards the end of 2009 we are happy to report that the mood in our market is more positive than at the start of the year and if current trends continue we expect 2010 to bring more competitive mortgage products both for the owner occupation and “buy to let” market, so if you are planning to move, refinance or increase your “buy to let” portfolio please do call or email us so we can provide you with the details of the most up to date mortgage rates. As always, you can reach us on 020 7484 9208 or email me at info@letsmortgageit.com
