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Property sales finally starting to stabilize

[ Posted May 25th, 2011 ]

Over the month of April property sales have shown some signs of finally starting to stabilize but still the average number of property sales have continued to be well below normal levels.  In fact, according to the NAEA (National Association of Estate Agents), most estate agents sold eight properties per each banking branch which is the same amount of commercial mortgage sales that were completed over the months of March and February.  During the first part of the month as a lead up to Easter there was a bit more activity, but the heightened interest fell again over the bank holiday.

This is disappointing to the many real estate agents who are used to seeing a large pickup in property sales during the months of April and May and the figures for May although not released officially do not seem to be much more promising.  Yet, most were still in a better mood stating that they had seen a bit of an uplift in the commercial mortgage market in terms of interest and expect to see a steady stream of customers returning to their doors even if they are not able to see much of an increase.  Given the market over the past several years, a low steady rate of sales is still better than non-existent sales.

Compared to their market peak in 2007, transaction volumes are still much lower when they were as high as 14 sales for month which can be attributed to the steady economy and the excellent commercial mortgage rates that were available to buyers.  During April more homes were also placed on the market with estate agents seeing about 69 homes on the block per agent compared to the 68 seen in March and the 62 they saw back in April of 2010.

President of NAEA, Michael Jones, stated that in the face of the lull of activity that was expected to occur during the royal wedding festivities, sales still seemed to stay stable which is good news for the housing market in general.  Despite all of this good news, there was still a significant drop in the amount of first time buyers that purchased a home with first time buyers accounting for only 21% of sales in April versus the 23% that they accounted for during March.  Jones added that concessions for first time buyers have not yet seemed to affect the market.

Jumping to fixed mortgages may not be the smart move..yet

[ Posted May 21st, 2011 ]

As homeowners are continuing to return to the banks in record numbers to refinance their homes and switch from variable mortgages to fixed mortgages some experts are warning that they are actually hurting their budgets by leaping too soon and following the trend.  This is due to the fact that this week alone many lenders have introduced new deals to draw people back towards the housing market causing the average cost of such a mortgage to drop.  Those with loans based on a deposit on at least 25% or more have seen the largest drop meaning that those who jumped to remortgage may have missed out on some great deals.

The decision of when to make the move however is a hard one as the Bank of England’s inflation reports have been threatening for the past six months making many homeowners notably nervous about the potential rise in the mortgage rate along with it.  The basic truth however is that by jumping ship so early many mortgage owners signed into higher fixed rate mortgages then they would have had they waited until this month do so when banks are rolling out new deals to attract first time home buyers back into their doors.

Over the month of March, the Council of Mortgage Lenders saw remortgage applications increase by about 16% when compared to February and the marked increase is expected to be revealed for the month of April as well once the figures are compiled as most homeowners see fixed mortgages as the solution to being hit by the bank interest increase.  Director for the Glasgow Mortgageforce, Hearry McGeough, stated that many people are jumping on the many fixed rate mortgages that are being introduced by the banks because there are some great deals out there right now.

At the same time, those without too much equity in their home may not fair to well when it comes time to apply for a remortgage as most of the deals are only good for those who have around 20% equity in their home with higher equity promising more lucrative rates.  Keep in mind that as the retail house price index continues to fall you may not be accurate about the value of your home anymore which will also change the amount of equity that you also have in a home when it comes time to reviewing a banks loan to value restrictions.

Landlords taking advantage of the economic climate

[ Posted May 12th, 2011 ]

While the housing market may look threatening to first time home buyers who cannot get the credit or high deposit needed to secure their own home, savvy landlords are taking advantage of the downfall this month in order to secure great deals on new properties.  In fact, while most first time home buyers are balking at mortgage rates that are threatening to increase again along with the bank rate, landlords are swooping in to grab properties that they otherwise may have once ignored which should help jumpstart the property market once again.

Part of the reason for the sudden uptake in buy to let properties is the fact that it is a buyers market right now, and the only people who can afford to take advantage of the low house prices are investment firms looking at commerical mortgage opportunities to let out or landlords that want to get in on the increased renting action.  With more and more home owners and businesses choosing to rent instead of buy due to the credit crisis and the high deposit requirements landlords are able to achieve higher rents than previously making the properties very appealing.

Also appealing is the fact that house prices continue to fall as mortgage uptake is low and many of the homes that first time home buyers would generally secure remain empty and open to those who are searching out BTL properties.  In addition, those that are not looking for short term investments are aware of the fact that when house prices increase they will have a long term investment that pays off with the potential to secure high rents on the property in the meantime making the attraction hard to deny.

Lenders are also starting to take a second look at the BTL market with many offering the most attractive buy to let mortgage rates that have been seen since 2007 when the housing market first tumbled.  In fact, in the last year alone the amount of BTL lending opportunities doubled in size with 463 different choices available on the market now compared to the limited 215 that were available to potential investors at the start of 2010 and even the 330 that were available during last year showing a large jump in interest in just over the last yea

Green Deal forces landlords to make properties efficient for renters

[ Posted May 10th, 2011 ]

The government announced yesterday that they are going to add new measures to the Energy Bill to make sure that landlords are forced into altering any homes that may be inefficient when it comes to the new Green Deal.

Chris Huhne, the Energy and Climate Change Secretary, stated that the new bill will impose new regulations on rented properties that will force them to confirm to a higher standard of energy efficiency which has added meaning now that renting is a much more popular option over home buying due to the heightened mortgage rates and the credit crunch that has made purchasing ahome too expensive to many.

Outside of adding new regulations onto to landlords and their respective properties, the new energy buill will make it illegal as of April of 2018 for any commerical mortgage owner or residential mortage owner to let out a business or home property that does not have an energy efficiency rating of at least E.  The deadline is set seven years in advance so that all landlords of the almost 700,000 properties that call below this rating to improve their properties and confirm to the new standards.

For green minded tenants this is also good news because after April 2016 landlords will not be able to deny any ‘reasonable requests’ from their tenants not to make green improvements to properties so that even those who are renting homes can make sure that they are reducing their carbon footprint by changing the way in which they live.  The change in regulations is also aimed at helping tenants who are worried about fuel poverty and the increased costs of heating and electricity by forcing landlords to make the necessary improvements to make homes more efficient.

Huhn added that the new Green Deal regulations set forth a great opportunity for landlords to reduce the upfront costs of improving properties so that they are cheaper to maintain, better for the environment, and overall a better choice for most renters who are looking for a great deal to avoid getting locked into fixed mortgages that they may not be able to afford.  He also stated that landlords that do not follow the new regulations come 2018 will be punished so that by 2018 even the worst rented homes are brought into the new standard accordingly.

House prices fall again over the month of April

[ Posted May 5th, 2011 ]

House prices continued to fall over the month of April as the property market remained in a volatile state according to new figures released this week from the Nationwide Building Society.  According tot these figures, the average home fell in price and worth by about .2% over the course of April with the average home now costing a total of £165,609.  The fall is a break in a slight increase over the past two months although the six month period still shows more of a decrease in house prices overall as the dominant trend which in return has many apprehensive about investing in buy to let mortgages.

The fact that house prices only increased in three of the last six months shows that the housing market is still largely unsettled with Nationwide’s chief economist Robert Gardner remarking that it is not unusual to see increases and decreases back to back during times when the market is static which is pretty much the best way to describe the housing market since the summer of 2010.  Unfortunately, gardener remarked that due to the threat of the base rate increase and following mortgage rate increase there is not much to suggest that house prices would start to increase over the summer.

Instead, Gardner pointed towards the success of the economic recovery stating that as it started to gain back some momentum budgets should start to be relieved of pressure which would help the housing market as more people will consider taking out fixed mortgages. He also added that if the interest rates stay down longer then the base rate indicates and the labour market continues to improve with a gradual decrease in the amount of unemployment then the housing market may finally begin to look up again.

He added though that even on an idea level if all of the above factors were to occur over the next three month it is unlikely that the housing market will rebound strongly because any recovery efforts are thought to be modest at most compared to historical trends.  He added that those seeking out the best mortgage rates may have to make do with what is available on the market now because there will not be a great deal of change over the summer months that will make waiting of any benefit to potential first time buyers.

House prices down making it an opportune time for first time home buyers

[ Posted May 2nd, 2011 ]

At some locations across the UK some property prices are down low enough to start to tempt first time buyers as they reach new lows as the housing market continues to fall in value.  While the potential threat of an increase in mortgage rates is not so welcoming, it is hard to deny the fact that property values are as depressed as they have been seen in a decade making the prices very appealing for those who are looking for a starter home so that they can get a leg onto the property ladder as home owners.

Research from the Clydesdale and Yorkshire Banks discovered that England’s south-east is the best spot for first time homers to head with the average price of a first home weighing in at a whopping £16,500 less than the price it was before the recession back in 2007 when the housing market was still at its peak.  Thus, while you may not be able to get your hands on the best mortgage rates any longer, now is the best time to get the best price on the same properties that were available on the market just three years ago due to the credit crunch and the lower rate of buyers seeking loans.

Outside of the South East, the bank survey also found that land in the east Midlands has fallen in price by about £15,500 per home making the area another great place to shop for a first time home.  Over all, Steve Reid the retail director for organizations within the bank explained that housing prices continue to vary in price throughout the UK but in some areas there is over a £16,000 difference in the costs of a first home compared to the housing market peak in 2007 making it a great time for buyers with the appropriate credit and ability to make a deposit to invest.

Reid added that there are a number of products on the market that will help those who need a mortgage secure it for their first home and that by taking advantage of these tools the market will stay active which will hopefully bring forth positive change.  Some banks are even offering a 95% mortgage which should making purchase fixed mortgages for the first time a bit more affordable for home buyers who are interested in investing in one of the depressed markets.

 
 
 
 
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