While the extension of the Stamp Duty holiday for homes priced below ?250,000 was thought by many to encourage first-time buyers across the country to take advantage of both this tax break along with the record low mortgage rates allowed due to the central bank’s low interest rate in all actuality this has proven to not be the case. Rather than hitting the market and looking for a new home many people are instead simply remaining tenants in their neighbourhoods, waiting to both accumulate more funds as well as for the property market to cool down some.

One of the primary reasons for this trend lies in the fact that most banking regulations set forth to protect lending institutions from defaulting loans has caused home owners to simply be unable to afford homes in their local areas. In places where homes can cost as little as ?100,000 for example, this is generally due to the fact that the local economy also is relatively weaker than usual and residents may only earn ?15,000 per year. In this case while lending institutions require a minimum of a 20% deposit in most cases this essentially means that local residents simply cannot afford homes in their own towns.

Alternatively many banks are more willing to approve loans in areas that they feel are less likely to suffer further house price declines, making London a prime market for prospective buyers. Unfortunately due to the fact that the average home in the city is priced well over ?250,00 (and, indeed, most people looking to purchase a home in the metropolitan zone today are looking at spending a minimum of ?300,000 for even less-than-desirable neighbourhoods) this effectively makes the extended Stamp Duty holiday useless.

To cope with this higher demands many families have turned to even taking out re-mortgages on their homes in order to provide additional funding for their children – bringing about a new wave of debt for the older generation in a time where this simply may not be the best possible course of action.

April has seen a number of positive trends in the housing market throughout the UK, with both home values and sales numbers increasing across the country. In fact, according to the Royal Institute of Chartered Surveyors as many as 17% more of all surveyors across the country had reported a positive trends, an 8% increase over the same figures in March.

The recent positive trend has been attributed to a number of different factors, the least of which has been a continued level of good mortgage rates offered by lending institutions across the board where both existing home owners and prospective first-time buyers have been able to realise a number of favourable conditions on both fixed-rate and tracker mortgages. These encouraging figures have been primarily based upon the continued record low interest rate set by the Bank of England towards the end of last year and maintained through current months in order to help provide additional support for many home owners in need.

Another major factor contributing to the increase in both home value and sales demand is also seen by many to be, quite simply, the weather. As the year wears on and the days become warmer more people are historically seen out and about seeking new homes, with home sales and values generally peaking around summer months where the number of both houses available as well as prospective buyers in the market is the heaviest.

Regardless of the current positive trends, however, many experts warn that the continued optimistic market conditions are still not certain given the current state of the economy and existing and prospective home owners alike should still exercise caution when entering into the market. Proper financial handling in order to ensure that you are able to afford a home no matter what issues may arise is one of the keys to long-term success as an owner and something that need to be considered carefully before committing to a purchase.

While it is true that many banks throughout the UK have reduced their overall charges for unauthorized overdraft fees the fact now stands that the current rates offered by lending institutions for authorized overdrafts are at the highest they have been in the decade, essentially meaning a roughly £100 more needing to be paid now in extra interest for a £2,000 overdraft than what may have needed to be paid even a year ago.

For most people this new situation may be easy enough to avoid given the fact that the new fees apply to agreed upon overdraft rates only and not unauthorized charges, however for those looking to secure a few more funds necessary to lock-in a good mortgage rate – and especially those who need the money for a bad credit mortgage – the additional charges can mean a world of difference. Having to already deal with some hefty necessary initial down-payments for loans the additional charges that may be necessary to free up additional funds for loans could potentially mean even less liquid finances existing in the market – a dangerous situation for many people to be in that could easily lead to a continuation of the economic recession that many areas are just starting to recover from.

On a plus side, however, this may mean renewed interest by any existing home owners in various re-mortgage offerings that have been made available on the market as the lower interest rates along with flexible repayment schemes could help save substantial sums of money and free up additional funds for use in other areas – including cleaning up residual debt that may still be present thanks to credit cards and other credit associations.

As of right now the highest mortgage rate on record is brought to us by Barclays Bank and clocks in at roughly 19.3%, while a close second is Clydesdale Bank with an impressive rate of 18.85%.

Recent reports indicate that roughly 25% of all pensioners maintain a mortgage on their home, with the average debt still owed by most people in the age range totaling roughly £45,000. While a number of different factors have worked to contribute to this figure many experts believe it is still considerably higher than what they would normally expect in a healthy economy.

One of the primary factors that has helped contribute to continued home debt lies in the fact that many re-mortgages taken out on homes years ago offered considerably better interest rates in the long run to provide funding for various purchases than other credit sources. This has led many people to simply maintain home debt rather than pay it off early. Another factor that has contributed to the continuing debt burden has been the fact that many first-time buyers looking to get into their first home have relied upon family support for assistance – something that has caused many parents to take on additional debt in order to support their children.

Yet still another economic factor related to the issue of ongoing debt is the fact that society today allows for many more options for individuals to continue work beyond what has traditionally been considered retirement age, meaning that more and more people decide to differ their debt repayment until later times as they continue to work to support themselves and their households.

Regardless of the cause the residual debt held by many pensioner-aged households has become a primary issue of concern for many people and one that is hoping to be addressed in the near future in order to prevent further economic instability at a later date, potentially meaning a major upset for the property sector that is already working to recover after the economic downturn that has hit it particularly hard.

Ireland’s commercial property sector has shown the first positive growth for a quarter in roughly two years time, growing a meager but still positive 0.4% for the first few months of 2010. The recent gains, welcomed by developers throughout the area, has primarily been driven by quarterly capital depreciation amounts reaching as low as -1.8% – the lowest figure since 2007 lows in the final quarter of the year before the major economic recession set in fully.

Good news for tenants as well is the fact that rental pressure has also reached a two year low of roughly 3.3%, driven in no small part by the positive mortgage offerings for commercial dealings that has enabled many individuals to better develop previously unexplored locations as well as positive consumer demand for additional property usage. While it is true that there is still a large way for the commercial property sector to go still – having fallen a total of roughly 56.3% since its height in 2007 – the recent trend has been seen by many as a highly anticipated boon to developers throughout the island country.

Those looking to develop property in the buy-to-let sector have also seen some positive trends, with quarter-on-quarter depreciation trends being curbed from a major -6.8% towards the end of last year to a paltry -1.3% in the first three months of 2010. Many of these trends are driven by the fact that overall GDP growth trends anticipate a shift from what has been seen as a negative value over the past couple of years to a strong positive figure, spearheading growth that should hopefully bring about a much stronger overall recovery by the third or fourth quarters of 2010.

While many housing developments and economic trends are still, unfortunately, in merely a speculative stages due to the fact that the market’s overall recovery is still in the process of being solidified the fact remains that current figures are still strong and many believe that what has been seen as the worst property recession in Ireland’s recent history may finally have been put behind them.

According to the very latest figures from the Nationwide Building Society, one of the UK’s leading building societies, the rate of house price inflation in the UK has broken the double digit barrier for the first time since the beginning of the credit crunch, with house prices themselves rising by 1% during April, resulting in a yearly increase rate of 20.5%, the highest level seen since June 2007. The figures mean that the average house in the UK is currently worth £167,802 – good news to those looking to leverage good mortgage offerings for home purchases and maintain positive net worth growth.

Nationwide did caution, however, that such healthy gains would most likely stand to recede later in the year as the number of sellers entering the housing market begins to exceed the number of buyers. According to Martin Gahbauer, chief economist at Nationwide, the recent housing market evidence points to something of a change in the supply-demand balance. “While the recovery in new buyer inquiries at estate agent’s offices seems to have tailed off, the past few months have seen a rise in the level of new instructions from sellers.”

Mr Gahbauer stated that the result of this should be a gradual levelling out of the recent upward trend in prices, particularly with the added focus on lower-priced homes for first-time buyers. Nationwide’s three-month on three-month figures, which are widely seen as being a decent indicator of long-term trends, indicate that there was an average rise of just 1.1% in average property process between the end of January and the end of April. The annual increase was largely as a result of gains made during the property market re-bound during 2009.

Lower property price growth throughout this year has been put down to a range of factors, including uncertainty regarding the upcoming general election as well as an increase in property supply on the market. Some analysts believe that the recovery in house prices is being driven by fear and general uncertainty, rather than a recovery, decently-performing housing market. It is hoped that, once the general election is over, normality will return, and the housing market will begin to operate on the true values of properties rather than the current fears and uncertainty – particularly good news for those looking to curb losses if holding a bad credit mortgage. 

Although prices may fall in the short term, the long term should see a sustained recovery and steady growth, according to Tim Hammond, chief executive of the property search firm, The Buying Agents.

The general election has certainly stirred up strong feelings among the electorate, and many political slogans have been thrown around. One of the strongest, with regards to social fairness, is the so-called ‘mansion tax’ put forward by the Liberal Democrats, and despite capturing the public imagination, some at the high end of the property market predict that such a tax would have a negative, turbulent effect. The tax itself would introduce a levy of 1% of properties costing more than £2 million, and it has certainly provoked debate. Critics of the scheme believe that owners of such properties will be served with yearly tax bills of £20,000 in addition to any other mortgage payments they may need to make.

Despite this, the Liberal Democrat manifesto specifies that the tax itself will only apply to  ‘the value of the property above the level of £2 million”. As a result, the restrictive effects on the prime market cited by critics of the scheme may not materialise. According to property analysts,estimates that homeowners that are faced with the tax will end up paying an average of £32,270 more per year in tax are somewhat hysterical.

Despite the fact that a Liberal Democrat election victory might be hard to imagine, a mansion tax of the type described will not be as dramatic as people fear in the event of a win for Nick Clegg of May 6th. Homeowners will, however, be faced with an additional £1,000 in tax for every £100,000 of the value of their property above £2 million – not so pleasant new for overseas investors holding hefty overseas mortgages or those home owners with recent re-mortgages to pay for further investments.

Some analysts feel that this could result in a market distortion as those owners with properties worth a little over the £2 million threshold will look to have them undervalued in order to circumvent the tax. Irrespective of the actual level of tax homeowners would need to pay, analysts are in agreement that, in regional terms, London and the South East of England would be most affected by the tax, with over three-quarters of the tax burden falling on homeowners in the Kensington and Chelsea areas alone.

The rapid-fire start to this year in the housing market has been fairly spectacular and seems to have reassured many people that the housing market has begun to fully recover at last. According to figures released this week by Hamptons International illustrated that March was the most successful month for house sales since the high-point of the market back in May 2007.

Research conducted online, however, has indicates that 8 percent of homeowners in the UK believe that house prices will climb during the course of the next half year. The belief seems to be that prices will be 5.7 percent higher by this Autumn. Other figures are also more measured.

One of the UK’s largest lenders, Nationwide, produced a report this month in which they cautioned that consumer confidence has rapidly fallen away, generally caused employment fears as well as overriding concerns about what will happen after the general election. In general, regional terms, those estate agents in areas without prime properties such as period homes, sleek apartments or prime London properties have reported that, according to their market activities, we are still very much in the downturn phase.

A range of market experts when quizzed about the extent of the recovery for the coming year largely seemed to agree that house prices for 2010 would either be flat or into negative territory. Martin Ellis, a housing economist at Halifax, clearly linked the fortunes of the housing market with the progress of the economy, as well as the supply of houses on the market. He expected largely flat price activity throughout 2010. Richard Donnel, director of research at Hometrack went still further, anticipating that price rises would drop 3% this year.

As compared to the start of the year, Martin Ellis believes that the market has, by and large, supported his original view of flat prices, with a combination of changes to stamp duty, as well as external factors such as poor weather and changing mortgage offerings. Richard Donnell still feels that prices will ease slightly, in line with his early year prediction, with the trend for large sales in the prime markets from both domestic and overseas purchasers, not translating into other areas of the market. He feels also that firmer pricing has attracted more sellers into the market, particularly with the record-low rates on fixed-rate mortgages, and that a further rise in supply will continue to ease price pressure.

A new banking reports by an independent financial research company called Defaqto has revealed interesting growth in direct-only mortgage products.

Mortgages that can be obtained directly either from a bank or a building society now make up more than half of all such products currently on the market. The report which was produced by Defaqto shows that direct deals, as opposed to product that are available via mortgage advisors have risen to record levels during the last two years. Before the credit crunch hit there were a far larger number of mortgage products that consumers could get access to through intermediaries, and such products included specialist, self-cert, buy-to-let and sub-prime mortgages.

Now, though, the majority of these types of mortgage products have vanished from the market, although mainstream lenders are using their branch networks to sell their mortgages products direct to their customers. They have also pushed their cheaper online and telephone channels.

The report by Defaqto indicates that, in 2007, direct-only mortgages made up less than 22% of all the various mortgage products found available on the market. This situation has now changed as a result of the fact that many providers are no longer in business, and other are struggling for funding, and direct products now dominate the mortgage market.

Insight Analyst for Banking, Mr. Kevin Bray, commented that the growth in direct-only products during the past two years has put mortgage brokers at a real disadvantage, stating that in the current market roughly 60% of all of the best fixed-rate mortgages available on the market today are available directly from providers, indicating that while this may not necessarily be the best news possible for many brokers in the business it does indicate a number of different options available for first-time buyers today.

Bray went on to confirm that mortgage intermediaries do still have an important position in guiding house buyers through the whole process, but he insisted that buyers still need to make certain that they use a broker that will give them the best advice as to all deals available, including direct only products.