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Home Repossessions Fall

[ Posted May 30th, 2010 ]

According to the latest figures from lenders, the number of repossessed homes in the UK dropped by 7.5% during the first quarter of this year. The figures have shown that the total number of repossessed homes in the UK fell from 10,600 during the final quarter of 2009 to a figure of 9,800 in the opening quarter of this year. This figure was lower than the figure of 13,200 recorded at the same point last year, according to the CML.

The Council added that many homeowners are still vulnerable to the threat of falling into mortgage arrears, and has said that it might revise its overall forecast of 53,000 total repossessions during this year – and has described this figure as ‘pessimistic’ assuming that there are no more economic ructions.

The number of repossessed homes stood at its lowest level for two years, falling 7.5% on the previous quarter and an overall 26% lower than during the opening three months of last year.

The Council stated that the principal factor behind the falling repossession figures is the low interest  that has allowed people, even those made redundant, to avoid the threat of losing their homes as a result of low monthly mortgage bills thanks to the consistently low interest rate.

The latest figures also show that the percentage of mortgage holders experiencing difficulties in paying their mortgages also dropped during the first quarter of 2010.

The overall number of home loans standing in arrears has also dropped, although the director general of the Council of Mortgage Lenders, Michael Coogan, has insisted that the figures give no cause to relax at this stage.

Through England’s Mortgage Rescue Scheme homeowners are able to sell their properties to local authorities or housing associations and subsequently stay living in it by paying monthly rental fees, or to sell a part of the property in what is called a shared equity deal that results in lower mortgage payments. According to the CML, such government help for homeowners had worked to curtail repossessions and figures are still far lower than during the slump in the housing market during the early 1990s.

Scottish recovery lagging behind UK

[ Posted May 28th, 2010 ]

Figures for property lending in Scotland showed that Scotland mirrored the rest of the UK, as its lending figures dropped by 33% for the opening three months of this year. The figures, which came from new data released by the Council for Mortgage Lenders, showed that, during the final three months of 2009, there were 9,700 loans made to home buyers, down from 14,400, representing a fall of £1.6 billion. This trend mirrored the general trend throughout the UK.

The drop in lending is generally indicative of the fact that a large number of buyers that would ordinarily have purchased homes in the early months of this year rushed through their purchased in order to avail themselves of the benefits of the stamp duty holiday on property purchases valued at less than £175,000 before it came to a close in December 2009, according to the  Council. Even despite this, the total number of home buyer loans in Scotland for the first quarter of 2010 was up by 28% by volume, by 36% by value on the lows of 7,600 worth £784 million experienced in the opening quarter of last year.

The share of purchase loans in Scotland rose back to 9% during the first three months of 2010, which comes on the back of a slight dip for the previous quarter. The figures show that there were 3,900 loans made to first-time buyers worth a total of £326 million for the first quarter of this year, which represents a 28% decline on the figure seen during the last three months of last year, but a 39% rise on the trough seen in 2008.

First time buyers, however, made up some 40% of all property purchases in Scotland during the opening three months of this year, a figure that is 2% more than during the final three months of last year and also 2% higher that the average UK figure.  The figures also indicate that the average deposit put down by first-time buyers in Scotland for the first three months of 2010 was 23%. This figure represents the first time that average deposits for this group of house buyers has dipped below 25% since the end of 2008. The CML has pointed to it offering evidence that affordability has eased for first-time buyers in Scotland.

UK property owners benefit from lower loan-to-value ratios

[ Posted May 26th, 2010 ]

New research indicates that between the marked low and high points experienced by the real estate market in the UK, property values fell from month to month, thereby eating into the deposits and equities held by many owners in their home or homes.

Many in the industry often suggest that homeowners that are simply not interested in liquidating their properties see house price variations and fluctuations are irrelevant. Instead, the actual value of their property and what it is worth – irrespective of whether or not they are looking to sell – is always the focus of great interest. This factor is also of great relevance for those home owners looking to find a reasonable re-mortgage for their houses, as the value they will be able to get for their property will depend greatly upon the total amount of home equity they have.

New research from HSBC, however, indicates that house prices fluctuations may be very relevant indeed. Between September of 2007 and April of 2009 where the market saw high and low points for house prices in the UK, the values of properties dropped, month-on-month, thereby eating away at deposits and equities held by owners across the country in their homes. The figures come from the Land Registry.

Despite the fact that lenders throughout the country have always offered varied levelled mortgage rates in terms of both tracker and fixed-rate offers to their customers with varying levels of equity held in their homes, recent house price volatility as well as what is seen as the associated risk attributed to approving a mortgage for customers at a high loan to value amount has led to an ever-growing gap between rates actually on offer to house owners with small and large deposits.

As a result whether or not a homeowner is looking to sell their property taking the current market conditions into account the amount of real equity they hold in their homes is more important now than ever before -particularly for those homeowners looking to re-mortgage.

Change in property buying urged for UK market

[ Posted May 25th, 2010 ]

Consultants in the property industry have welcomed the new UK coalition government’s commitment to abolish the much-reviled home information packs (HIPs), although they also signalled that it could do a lot more besides to aid the real estate recovery. Many believe that the scrapping of HIPs merely travels half way towards bringing the more speculative sellers to the market as well as cutting down on wasted consumer spending, according to the head of residential research at Knight Frank, Liam Bailey.

Mr  Bailey pointed out that the reason for this is that a seller still requires the Energy Performance Certificate before they can put their property on the market. He added that despite the fact that the certificate is a requirement under an EU (European Union) directive, it is only required in other European Union countries when the terms for purchase are agreed and finalised.

Mr Bailey further called for changes to the directive itself, also stating that the process of getting papers and undertaking searches before the sales could also be refined and improved, especially with regards to what he described as the ’slow and cumbersome’ process of undertaking and completing local authority searches as well as confirming planning problems.

Mr Bailey stated that introducing compulsory time limits on local authorities would be a good first measure, along with the possibility of sharing best practices from excelling authorities in this area of performance. He further  suggested that the licensing of estate agents and lettings agents would aid consumer protection as well as increase general consumer confidence in the market. This should help bolster both the commercial and overseas interests as well by helping to stimulate personal financing and purchases. Many are also calling for the reform of the Stamp Duty system which has a current ’slab structure’ that results in a soaring tax bill in the event that an emptor spends just £1 in excess over the £250,000, £500,000 or , from next April, the £1 million thresholds.

Scottish Housing Prices Show Weak Recovery

[ Posted May 23rd, 2010 ]

Scotland’s residential housing market remains weak, although it is starting to show certain signs of recovery, according to the results of the newest property index published on May 18th. The average property price rose by 0.7% during the first quarter of 2010, as compared to the final quarter of last year. The average house price in Scotland currently stands at £157,801, according to the Scottish House Price Monitor from Lloyds TSB Scotland.

Although there have been price rises in the last three consecutive quarters thanks to continuing low mortgage rates and strong financing offers for domestic and overseas mortgages alike in respect to the underlying annual basis, house prices in Scotland have actually dropped by 3.3%, with the rise in the last quarter being far lower than the 5.9% figure seen in the previous quarter, the figure show.

The actual number of house buying transactions is still low, with the market seeing 19% fewer such transactions than were seen in the final quarter of last year. This figure shows that, in general, the overall market remains rather weak – particularly due to financing troubles facing first-time buyers in the market in obtaining new homes.

House purchasing numbers reached a nadir in February, although they subsequently recovered in March and April, although the number still stands at roughly half the level witnessed pre-recession.

Price changes during the last quarter are also volatile, and show considerable regional variation. As an example, Dundee prices have shown as large yearly rise of 10.7% which masks the volatility witnessed in quarterly alterations changing from +16.3% to -10.8% for the last two quarters.

House prices in Dundee currently stand at levels last witnesed 21 months ago. Edinburgh has witnessed an annual 6.9% drop in house prices, despite a quarterly rise of 3.9%. Glasgow experienced an annual price drop of 8.2% and a quarterly rise of 14.7%. The  majority of areas, however, have been reporting continuing annual house prices falls which range between 2.5% to 8.2%.

Donald MacRae, chief economist with Lloyds Banking Group Scotland believes that recovery will be gradual and that the local Scottish housing market will continue to recover, albeit slowly.

Hated HIPs given the elbow

[ Posted May 22nd, 2010 ]

The much-disliked and controversial UK home information packs (HIPS) have now been suspended as the new UK coalition government ushers in new legislation to abolish them.

The packs themselves had to be put forward by the property seller prior to their home being put on the market, and they were widely reviled in the industry, with many stating that they hindered and stalled the recovery in the real estate market. The Conservatives pledged to expunge the packs, and Eric Pickles, the new Communities Secretary, suspended the packs yesterday in an act which he stated would bring down the cost of seling a home as well as taking away a layer of regulation from the whole process. He stated that the measure would also give a welcome shot in the arm to the property market as it recovers. An Energy Performance Certificate (EPC) is still required by both sellers and those renting their properties, but it is not necessary to have one in order to market a property. The government stressed that the certificate was a vital plank of its push for a low carbon, eco-friendly economy.

Pickles stated that the action was necessary in order to reduce the cost of selling a home and dismantling unnecessary regulation from the home-buying process. He added that the “swift and decisive action” from the new government would send out a powerful message to the market and would also prevent any uncertainty for both buyers and sellers in a fragile market.

The decision to abolish the packs has been widely applauded industry-wide, with Gillian Charlesworth from the Royal Institution of Chartered Surveyors saying that the government’s fast action would reduce the impact on the market generally, as well as making sure that those estate agents that play by the new rules will not be disadvantaged. Further, in line with other motions to maintain good mortgages rates and help encourage re-mortgages and new mortgages alike – particularly for first-time buyers – this could help to drive down prices and stimulate market growth significantly.

The action was also welcomed by the National Association of Estate Agents, with their chief executive, Peter Bolton King, agreeing that the measures would be warmly greeted by all.

UK Housing Stock Rises on Lending Stagnation

[ Posted May 20th, 2010 ]

The latest report from UK estate agents, Rightmove, has suggested a rapid rise in unsold stock within the housing market in the UK, largely due to a lack of lending which is serving to dampen down buying activity, coupled with the fact that, countrywide, house asking prices went up by just 0.7% during the course of the last month. The sudden increase of stock in London  has resulted in the fact that there are now twice the number of new properties on the market as compared to the same time last year. The report also details that asking prices dropped a little, by just 0.4%.

The largest rise in new sellers on the market was seen in the week prior to the May 6th General Election, and the increase was the largest since June 2008. There was also, however, a sudden rapid rise in unsold properties as a result of buyers getting less finance for mortgages according to Rightmove.

During the month of May, overall asking prices went up by 0.7%, as compared to 2.6% during the previous month, and represented the first price fall on the Rightmove index since December last year. The annual increase rate also fell from 6% to 4.3 % leading analysts to speculate that the UK real estate market is beginning to slow after consecutive months of price rises. The sudden surge in new sellers coming onto the market coupled with a crippling of demand as a result of the dearth of mortgage finance coupled with the slump in first-time buyer financing and even re-mortgage approvals has seen estate agents being lumbered with a larger number of unsold properties.

According to Miles Shipside, commercial director at Rightmove, first-time house buyers, as well as property investors have suffered in particular in regards to the perceived “famine” of financing now on the market, with sellers beginning to lower prices in order to attract lower-end buyers yet these lower-end buyers still being unable to afford many of the homes. He added that possible buyers were placed in an invidious situation as a result of lenders insisting on large deposits as well as high levels of ‘credit worthiness’.

Mr Shipside believes that the UK housing market must either work on reduced sales volumes or place faith in the possibility that sellers can sell to each other, a likely solution to an already difficult situation.

Mortgage approvals continue on the rise

[ Posted May 19th, 2010 ]

Mortgage lending has risen by roughly 25% in March over February figures, though quarterly trends are still less than ideal in many developers’ eyes. While March still showed a 45% increase on the year-on-year rates in terms of mortgages approvals the actual quarterly figures dropped from 171,000 at the end of 2009 down to a mere 112,000 for the first quarter of 2010.


The significant drop in mortgage approvals after December of 2009 is primarily attributed to the ending of the Stamp Duty holiday in January, with the re-instatement of the holiday for all first-time buyers purchasing a home valued £250,000 or less as well as the continual drop to record low mortgage rates for home purchases helping to buoy the overall market at the start of the year.


On a positive note the recovery trends for the mortgage sector have continued to show positive growth rates for the ninth month in a row, showing constant solid growth domestically as opposed to a mere increase in overseas investment in the local real estate sector. This is a strong sign of recovery as stated by many experts as the continued growth of real estate has helped encourage many areas that have been facing particular hardship in recent months realize a much greater than expected turn around.


Commercial property has also seen a positive boost in recent years with many sectors showing positive rates in both investment interest as well as mortgage offerings in various areas. This has been a concern in past months when the commercial sector has shown particular weakness in developing itself and both overseas and domestic investors were losing confidence in many major commercial developments. Even London’s Canary Wharf at one point was facing a near collapse as commercial property values plummeted and debt skyrocketed in the wake of the economic impacts carried around the world, yet recovery trends are showing hope after all in recent days.

Interest only mortgages being taken off market

[ Posted May 18th, 2010 ]

Interest-only mortgages may soon be a thing of the past according to recent studies of the mortgage lending industry. While it may have been true that as early as a few short months ago making a change from a repayment mortgage to an interest-only mortgage (where monthly payments are substantially reduced as lenders need only pay for the interest accumulating on the loan) could have been done with either a quick phone call or the click of a mouse borrowers are finding it harder and harder to make the switch today.


The reason for this trend is due to the fact that while many borrowers may find interest-only mortgages appealing – especially due to the steady low mortgage rates offered by many lending institutions today – they are in fact extremely dangers from a number of perspectives. Borrowers taking out an interest-only bad credit mortgage, for instance, will only put themselves into greater debt while paying back a loan that had no principal reduction plan in place. Instead of helping to get themselves out of a high-debt burden they are instead working to put themselves even further into a difficult to recover from situation.


While it’s true that some lending companies today are still offering interest-only mortgages for some loans due to the inherent troubles associated with them they have been receiving somewhat of a makeover. Halifax, for instance, the nation’s leading mortgage provider, requires that interest be paid at 0.2% higher on an interest-only fixed-rate mortgage that is set at decent levels – requiring the borrower to already have a substantial financial base to begin with when applying for the loan in the first place.


Other lending organizations are simply not allowing borrowers to take out interest-only loans as the still unstable property market is causing many loans to be risky initially without adding to their potentially dangerous nature. For lending institutions this means greater security that may in turn be passed down to mortgage holders, though for borrowers it may mean the loss of a useful tool that could help them out in dire straights they may find themselves in otherwise.

Mortgage Rates on Continual Drop

[ Posted May 16th, 2010 ]

Earlier this year it was reported that mortgage rates on fixed-rate mortgages had hit a record low – dropping to prices that hadn’t been seen since 2007. Now, just a few months later, rates on mortgages across the board have continued to drop substantially, even re-mortgages on homes that had previously been refinanced during “less than desirable” mortgage periods.


The cause for this continual drop lies primarily in the fact that many lending institutions have found that the mortgage market has become substantially more stable in recent months following the strong real estate market trends as well as the continuation of the low base interest rate by the central Bank of England. These, among other factors, has helped to create a highly competitive lending market wherein many lending agencies are actively competing with each other to offer the most beneficial rates possible on their mortgage offerings.


For consumers this is excellent news as, naturally, higher competition results in significantly better offers for all those looking at sourcing out financing either for the purchase of a home for the first time or others who are simply looking to expand their housing portfolio.


Unfortunately to take full advantage of these rates as they stand on the market many prospective buyers may still need to provide a large amount of initial funding for a down-payment in order to secure the best rates possible on a loan. Some lending institutions may require up to a 25% down payment in order to secure the best rate possible, with others offering slightly less of a minimum down payment requirement to still realize some decent rates.


Whether or not the lending requirements for new purchases will adjust with the higher competition levels found in the market today is another matter of speculation, especially as recent figures indicate that housing supply is currently outpacing demand and could subsequently have a negative impact upon the overall lending industry. aims to provide every client with cheap, affordable and best mortgage loans in the UK market, however the actual mortgage rate available will depend on client's financial circumstances and credit history. Although, has made every effort to ensure that the mortgage rates listed are correct, it bears no responsibility in case of an error. 
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