Newsletter
Home›Newsletter
May 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
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.
LetsMortgageIt.com June 2010
LetsMortgageIt.com June 2010
With the emergency budget now finally delivered and the chancellor’s announcement of an increase in VAT to 20% from January 2011 as well as an increase in CGT from 18% to 28%, it brings to an end the months of speculation about the possible effects of the budget on the housing and property market. Overall it is as we expected with no major changes apart from the increase in CGT.
With the World Cup now in full swing and the “barbecue summer” promised last year, finally arriving, seems to have resulted in an increase in the number of housebuyers of late. We are also experiencing a big increase in the take up of fixed rates, especially from our existing clients that have been on low variable or tracker rates with the expectation of an increase in base rates sometime this year.
The launch in recent weeks of our market leading four year fixed rate of 3.79% has made the decision “whether to stay on variable or fix now” a lot easier. With base rates expected to rise over the next few years, then clearly any borrowers on standard variable rates of more than 2.5% would most likely benefit
MARCH NEWSLETTER FROM LETS MORTGAGE IT.COM
From the point of view of stability the Bank of England Base Rate has now remained unchanged for a year following the decision on 4th March to keep the Base Rate at 0.5% means we will reach the 8th April before any further change might be made (and 5 weeks before the inevitable General Election that seems unlikely) so we will have had the longest period without a change in base rate (based on Bank of England stats) since 1965/6 (rates remained at 6% from 3rd June 1965 until 14th July 1966 - maybe a positive omen for England World Cup followers?).
So we are now in the most “stable” period for interest rates for 45 years. The general feeling in the market is that the rate will not move significantly for some months yet, which does offer the housing market a chance to solidify its position and for homebuyers to consider making positive decisions, plus some good news yesterday for first time buyers in the Budget with the abolition of stamp duty for purchases up to £250,000.
Other new, and some previously active, lenders will be lending by the Summer and this small increase in choice and volumes can only be good for borrowers as it will mean a return of some competition to the market.
Despite all this potential better news the media took great delight in the latter part of February reporting a that in January Mortgage lending dropped 32% to the lowest total since February 2000 which was no great surprise as January is never a busy month and the removal of the increased Stamp Duty Threshold in December probably skewed the figures. Yet sellers of homes are feeling more aggressive as Rightmove reported that asking prices had risen over 3% over the latter part of January and early part of February. So are we on the cusp of a housing and lending boom? No we are not, our economy is too fragile to sustain a boom in both these areas and with “Double Dip” becoming the journalists latest buzz word we need to tread carefully.
Meanwhile if you are out of a fixed or discounted period and on your lender’s standard variable rate (SVR) it is worth checking with us if this the wisest choice as the difference between the lowest SVR and the highest SVR from some of the largest lenders are as much as 2%. Contact us to see if a switch of lender might offer you some significant savings even in this period of very low interest rates.
To see just how we can help you achieve your mortgage-linked aims simply email or call one of the team who you can select from the appropriate page on this site or call us on 0207 484 9207 or 020 7484 9208 – we look forward from hearing from you.
Lets Mortgage It.com launches new recession busting products
New criteria
2x CCJs up to £750
2x defaults in past two years
We have recently expanded our prime range, launching great new products to help our clients out of recession.
The new products are designed to help customers who have experienced a financial blip during the recession find a mortgage that meets their circumstances.
This means you have even more reasons to consider Lets Mortgage It.com:
· Have you received 2 CCJs in the past 2 years?
· Do you have 2 unsecured defaults in the last 24 months?
· Have you just failed a credit score? Do you want to include 100% of overtime bonus or commission?
So if the above applies to you, we may be able to help organise a new mortgage for you at very competitive rates. Funds are limited on this product so please do call us to discuss your particular circumstances on either 020 7484 9207 or 020 7484 9208.
