In the last month of 2011 mortgage applications were still higher than their year on year average with 20% of people applying for new home loans, but compared to the high figures seen in November of 2011 they still fell by a whopping 43%.  The fact that many banks started to increase their mortgage rates during December is likely a factor, but the weakening economy and the instability that was heavily predicted during the month for the year 2012 is also likely a factor as potential lenders wearily took a look at the housing market.

Also rising in December of 2011 compared to figures from 2010 was the amount of applicants that had fixed mortgages in mind with almost 76% choosing a fixed rate product over any other type of deal.  This indicates that homeowners are no longer willing to take a chance with variable products as the housing market starts to shift and potentially fall back down over the course of 2012.  Interestingly enough, despite warning that house prices will start to fall back down again the average loan size also increase by about 4.62% with the average loan itself valued at about £132,800.

The MAB also reported that the average age of those applying for mortgages increased up to 39 over the course of December which is the highest it has reached since the MAB started to compile and release its monthly National Mortgage Index.  Remortgage activity also slowed drastically when compared to November’s figures falling by about 39% at the close of the month. However, year on year remortgages showed a 55% increase displaying that lower mortgage rates and more stability is still present in the market then there was a year ago.

The average December LTV increased as well up to 59% compared to 57% in November suggesting that homeowners are willing or required to pay a higher deposit in order to get the mortgage rate that they want.  The highest average mortgage loan was seen in London for the month of December 2011 where the average home loan was worth £251,000.  Conversely, the smallest home loan was seen in Wales where it sat at £84,000.  LTV’s on the other hand were the lowest in London at an average of 66% and highest in Yorkshire and Humberside sitting at 80%.

Landlords and those looking to purchase more property before the mortgage rates jump up even more than they have already done so may want to take a look at a new range of buy to let mortgage rates that come with associated flat fees.  The new range of products come after dozens of years of landlords and property investors being forced to purchase products that have high percentage based fees attached to them that sometimes can cost as much as 3.5% of the loan.

Over the past year the competition within the buy to let mortgage rates market has been intense with more lenders coming back into the market as it slowly recovers or choosing to increase the LTV (loan to value) ratio that they have made available to potential lenders.  Due to this fact, there has been a large amount of growth in the type of products that landlords can choose from since the competition for property lenders has increased.  This is subsequently also led to a range of fee options for potential investors to mull over and choose from before picking a lender.

In fact, there are now 24 lenders that offer a grand total of 450 different buy to let deals that each comes with their own mortgage rates and their own fee options.  This is almost a 75% increase when compared to the 18 lenders that were able to offer 250 products during the course of 2010 according to a statistic from Mortgages for Business a brokering service.  Over the course of 2010 most of these products also were offered with a percentage based fee added on to any mortgage according to figures from specialist broker Landlord Centre.  However, the same broker also reports that the number of fee based products have decreased.

The new figures show that 50% of the buy to let deals on the market come with the other 42% actually come with a flat fee which most investors find more appealing.  A small 8% are very appealing to those with excellent credit as they come without any arrangement fees.  Chief executive for Landlord Center Andy Young stated that the lending market is now displaying a wide array of options when it comes to arrangement fees and buy to let mortgages with some rates themselves set as low as 3.29%.

With tracker mortgages looking more appealing than ever due to the fact that the overall mortgage rates are remaining low despite small shifts in the economy and the Eurozone crisis many people are wondering if there is actually any benefit to rushing down the bank and dealing with the hassle or switching products.  However, while it may seem as if now is the time to stick to a tracker, there are still millions of home owners who have raced to take advantage of the low bank rate which means there must be something to leaving loans at the standard variable rate.

Before the credit crisis hit back in 2007 it was almost never a great deal to stick to the standard variable rate offered by a bank as it almost always was more expensive than tracker deals and fixed mortgages. However, ever since the bank rate was slashed down to just .5% in March of 2009 by Sir Mervyn King and the rest of the Monetary Policy Committee the reverse actually became true with those who borrowed funds on the SVR actually making out for a nice change.  In fact, most SVR borrowers are paying about £2,600 less every year that those that were still in a fixed or tracker deal.

However, at the moment fixed mortgages and tracker rates are also at the lowest levels that have been seen on the mortgage market over the last twenty years as well making them tempting to buyers as well.  In fact, savvy borrowers should heavily consider choosing one of these deals before the Bank of England raises the interest rate to continue their savings for the next several years since once this happens the SVR rates are not going to be as attractive as they are right now.

According to figures from the Council of Mortgage Lenders published this year, about 1.8 million mortgage holders have chosen to let their fixed rate deals run out option instead to stay on the standard variable rate offered by their lenders.  Experts are now predicting that by 2013 the bank rate will increase so for those it may be profitable to hang onto the SVR for another year and then make the switch in order to secure the best deal.  However, there is a risk as the base rate could increase at any time so borrowers need to judge what type of risk they are willing to take.

The Council of Mortgage Lenders released the results of their research this week that suggests staying on a standard variable mortgage, more commonly referred to as fixed mortgages, is actually a huge risk.

The news is surprising given the fact that for most of modern history a fixed mortgage has been considered to be a more secure mortgage product when compared to tracker or variable mortgages that are based on the change in the interest rate.  A new survey by Which? took a closer look at the debate and revealed who should stay on a SVR and who would benefit from switching.

Figures from the CML estimate that about 1.8m of the current owners of fixed mortgages chose to stay on their lender’s SVR’s ,and on average most of these people are paying about £2,600 less than they were when they were still paying their fixed amount.  Out of those included in the large figure, the CML is also estimating that more than half have over 10% of equity in their property allowing them to choose to remortgage their property if they wished to do so which means they do not have to stay on SVR’s.

However, despite the fact that many people could switch to the low mortgage rates that are available right now, it seems that most people are weary about signing into any type of contract and most people are choosing to wait and see just what happens.  Experts themselves seem baffled as they keep warning of the impending Bank of England base rate hike that has yet to occur and that eventually mortgages will reach rock bottom and start to inch back up.

In fact, this week it seems that the rates may be starting to inch up, but it generally must occur for more than three weeks before an increase is marked as a trend. Which? however took a closer look at the mortgage market and found that most people would struggle to meet their SVR payments if the base rate were to increase by just a small amount.

According to research from Which? if there was an increase of £50 or more every month on mortgage payments, about 75% of all mortgage holders would suffer from the increase.  Out of these, 37% would most likely need to trim their regular spending while another 20% would have to decrease the amount they save each month and an additional 9% would find that they could no longer afford essentials.

 The current housing market is still far from booming, but despite the dreary conditions of a difficult market, you have the ability to sell your house if you think creatively enough. Everything can change in an instant if you know what to do to sell your property.

 When it comes to selling property you should consider all the selling and marketing options. With the majority of people in the UK choosing to sell property through an estate agent, you may be surprised that there are many alternative successful ways to sell a property which in difficult market could make all the difference.

For instance, you may find it prudent to look into the cost of sale. Selling with an estate agent will cost you anything between 1 percent and 3 percent in commission fees when you come to completion. In a difficult property market you may have to sell your property slightly cheaper than you may have wanted to. However, as we will describe below, there are some alternative methods to sell your property some of which do not incur the significant extra costs of the estate agents commission fees and may help you find the buyer you are looking for.

 Online Property Auctions

 Consider online property auctions. Online property auctions are rapidly increasing in popularity and have the obvious advantage that bidders do not have to physically be in the house to place a bid.  

 If you are in a hurry to sell your property, then the great thing about an auction is that once you have accepted an offer the sale has to complete within twenty working days. However, it is always advisable to set a limit price on your property as otherwise it will be sold to the highest bidder.

 Online Estate Agents

 Search for online estate agents and you will find a number of professional companies that will market your property for a fixed fee. Typically you will be charged around £350 and your property will be advertised on Rightmove and the UK’s other main property portals. The catch is that you have to show the potential buyers round the property and be take a more direct involvement in the sale negotiation.

 If you’re not afraid to get stuck in, online estate agents are well worth it.

 Traditional Auctions

Like online auctions, traditional auctions are a quick and relatively straight forward way to sell your property. You will pay a commission but the advantage is if you are in a rush to sell your property an auction will guarantee the sale. Traditional actions are still the most popular method and still attract serious bidders a lot of which may be cash buyers so are likely to complete quickly. 

 So these are a few alternative ways you may want to consider if you’re struggling to sell your property though the traditional estate agent route. They’re nearly all cheaper than a traditional estate agent so if you need to lower your price, or your estate agent isn’t finding the right buyer then perhaps one of these methods is the answer.

With housing prices continuing to drop, mortgage deals becoming more affordable, and the average rent on the rise, many investors are now looking at rental property as a great way to make some extra cash.  In fact, due to the low buy to let mortgage rates and the promise of increase in house prices in the future as they are practically at rock bottom now, the prospects of buy to let mortgages are now looking better than they were before.  Add in the fact that this generation is now being coined as Generation Rent, and you have a wide open market to explore if you have the capital to invest in a buy to let mortgage.

In fact, already brokers, mortgage lenders, and estate agents are already stating that there has been a large amount of activity in the buy to let mortgage investment market as smart investors are starting to take advantage of the increase in renters who cannot get approved for their own home mortgages due potential to poor credit problems or a lack of the needed deposit.  Confusion over the potential for an increase in the mortgage rate has also led many to back away from investing in a mortgage instead choosing to play it safe and rent.

At the moment, the average amount of a return on a buy to let return is 10% or even more depending on the market without counting the increase in house prices that make the investment worthwhile in terms of long haul investment activity.  However, heavy deposits are still required in order to invest in a buy to let mortgage making this type of investment only practical for a select few.  It is also important to look at the right areas as not all homes and regions are set up for a high demand of rental properties.

Outside of rental tenants, the buy to let market is also doing well in the commercial sector as many small businesses are finding it impossible to get approved for a commercial mortgage and are forced to rent space.  This type of investment often carries with it a larger return as the shortage in available office space due to stalled construction projects has led to high rental prices for most commercial spaces leading to a quick short term payoff in most cases.

The Forum of Private Business presented its unique view on how businesses can help fund their growth to become more profitable highlighting the option that small businesses with a commercial mortgage can take advantage of.  The business organization also introduced its new Business Growth Fund to members and the public which is a new initiative that is valued at £2.5 billion and is part of the deal that was made between the top banks and the government last year during the autumn months.  The aim of the fund is to help out medium businesses valued to be worth between £10 and £100 million.

Senior policy adviser Alex Jackman said that the new imitative is welcome, but that it should not be viewed as a solution to the problem of a shortage of lending that is available to small businesses from banks.  Many small businesses are finding it hard to secure commercial mortgage rates that make purchasing a property worthwhile while others are finding as a result of the credit crisis that they cannot even get approved for funding from the banks creating a problem that has dominated the government and business news for the past two years.

However, for businesses that can find lending options a commercial mortgage is a great way to secure an asset that can later be used as collateral.  In addition, it is a great way for small businesses to get out from paying rent that is a straight loss for any business.  By getting a commercial loan it may be possible to consolidate business debt into the mortgage via a remortgage or terms or even to use the new available equity to help up date equipment or invest in new products.

Therefore, the Forum of Private Business suggests that small businesses that cannot get the upfront lending they need to expend to consider getting a remortgage of their commercial mortgage if doing so is possible to help fuel proper growth so that capital is available for expansion.  At the very least, this could be a way to get a lower interest rate on debt than the small business owner may be currently paying helping to decrease the amount of debt that the business is operating under to help widen the profitability of the company in question.

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.

Many experts along side the British Property Foundation (BPF) have warned against a potentially dangerous move that could set back the real estate industry throughout the UK should the government move in its favor – the removal of debt relief from many banks offering affordable lending for many individuals that have suffered as of late due to the ongoing economic crisis. Word of this possible shift has caused great concern today with the vote on whether or not to follow through with the plan to cut the relief plan set to go to vote tomorrow (Tuesday) in parliament.

Should the bill pass many lenders anticipate that they would be forced to call in thousands of debt claims in order to maintain solvency, forcing many individuals out of house and home (and in many cases into even worse situations) should they need to follow through with drastic actions in order to stay afloat. This would mean a major blow in particular to those who are currently relying upon debt relief laws in order to maintain a decent (though still troublesome) bad-credit mortgage on their home to cover other debt despite the continued record low mortgage rates offered by many lending institutions throughout the country.

Residential property would not be the only affected, however – in fact, according to recent reports roughly £55 billion in commercial property debt is looking at coming up for refinancing this year in light of many businesses looking to refinance following the recent economic rebound that has occurred over the first half of the year. A change now in financing could potentially mean a major blow to many sectors that are just now beginning to recover, and many eyes are on the upcoming decision to see just how they may fair in the coming months and years financially should the debt relief be removed or even restructured away from its current regulations.

The average age of the UK is increasing. In 2008 the average age was 39, up from 37 in 98. While this doesn’t look like a big increase, it represents a large increase in the age to which people are living to, compared to the 70’s people are living around 10 years longer. So what does this mean for the property markets?

Although each person is different, the behaviour of both house buying and selling and its associated processes is changing. One of the key processes is that of the elderly and their ability to keep up with home payments, usually the gap between retirement and death is about 10-15 years and most people plan as such, however as a people live longer a gap is appearing in peoples finances and some uncertainty is being faced as to how to tackle this problem.

One of the main assets many elderly people is their home. A house represents a massive amount of equity that can be tapped by selling or renting it out. However for those who still wish to live in their houses this isn’t an option.

One of the solutions that people are turning to is equity release or reverse mortgages.

Essentially these solutions are policies wherein equity rich (but cash poor) people decide to either completely sell or partly release the value locked up in their property meaning they can stay in their home till the end of their lives, being able to sustain themselves more comfortably, or alternatively making arrangements for the home to pay for nursing homes or care should they need it, indeed more and more are turning to this option; the equity release market is currently booming, growing at an average of 13% per annum according the department of national statistics.

While for many this is a great solution, it is not for everyone. One must think about the term of the required cash. If it is long term, such as a nursing home then this is a good idea, however for quick cash releases it may not be fiscally sound thinking as the premiums and charges on this kind of plan can be steep. It is also worth checking the specifics of some contracts, make sure they are government approved as they may have small print that may not be to your liking.