Diary of a Property Investor

UK mortgage rates moving down

2009-11-10T12:00:19+00:00

Despite the fact that the Bank of England’s monetary policy committee decided to leave UK base rates unchanged, we have seen a number of UK mortgage providers reduce their rates. Indeed we saw Nationwide reduce its fixed rate by 0.31% and tracker rate by 0.2%, Northern Rock reduce its tracker mortgage by 0.5% and its fixed rate by 0.3% with Alliance & Leicester also following suit with a 0.4% tracker mortgage rate cut. So what next?

It would appear that finally UK mortgage lenders are starting to see some valid interest in the UK property market despite the fact that many people believe it is very patchy and there are a number of "hot spots" throughout the country. Quite why we have seen this sea change in the attitude of mortgage lenders this week remains to be seen but it would appear that competition is slowly but surely getting back into the market and we should see more competitive rates introduced in the short to medium term.

Whether it is the threat of the UK government introducing further penalties to those who do not increase their liquidity and their business to the consumer and business markets, or indeed it is time to go out there and compete for customers remains to be seen but hopefully both consumers and UK businesses will benefit in the end.

Source: FinancialAdvice.co.uk

Halifax Reports a 1.2% Rise in UK House Prices

2009-11-05T08:24:41+00:00

UK mortgage lender – Halifax – has just published its latest overview of UK house prices for October 2009, which marked the 4th successive month of house price rises. Moreover, the research of the market showed that the increase registered in October was almost twice as expected.

Let us remind that UK house prices increased by 2.9% since January 2009; market analysts expected to see a 0.7% rise in house prices last month; however, house prices jumped by 1.2%, leaving an average British house priced at £165,528.

Meanwhile, housing economist at Halifax, Mr. Martin Ellis, highlighted that house prices in the 3rd quarter of 2009 were still 4.7% lower than during the same period last year. He also added that the lender mainly attributed house price increases to lack of property supply and increased consumer demand rather than to market recovery.

Commenting on the yearly changes in UK house prices, Mr. Ellis marked that house prices grew by 7.1% from the level they stood in April 2009, and that increased consumer demand can be easily explained by low mortgage rates and house prices. Mr. Ellis also claimed that Halifax has evidence suggesting that more homeowners are planning to put their houses on sale in the near future, and this will definitely change the pace, at which house prices are rising.

Earlier, we have reported that Nationwide – another British lender – said that UK house prices grew by 0.4% in October 2009; the fact is not surprising as the figures published by Nationwide and Halifax rarely coincide. As such, Nationwide has been reporting house price rises for the past 7 months, which compares to only 4 months, reported by Halifax.

Halifax findings got proof in the data recently published by the Royal Institute of Chartered Surveyors and by the Chartered Institute of Purchasing & Supply.

Source: E1 BTL Finance News

UK mortgage approvals up 76.8 pct y/y in Sept-BBA

2009-10-24T09:33:08+01:00

LONDON, Oct 23 (Reuters) - The number of home purchase loans approved by British banks in September jumped 76.8 percent on the same month a year ago, a survey showed on Friday.

The British Bankers' Association said 42,088 mortgage applications were approved last month. That was slightly more than the 40,841 approved in August but 76.8 percent up from last year when activity ground to a halt due to the credit crisis.

The figures chime with other surveys showing record low interest rates have helped stabilise Britain's housing market after sharp price declines last year.

"Mortgage lending by the high street banks is continuing to improve from the lows seen earlier this year and the number of house purchase approvals continues to recover. Housing market activity will depend, however, on more properties coming on to the market," said BBA Director of Statistics David Dooks.

Source: Reuters

UK Mortgage Approvals Rise Further: BoE

2009-09-03T14:52:31+01:00

The numbers of loan approvals for house purchase in the UK stood at 50,123 in July, up from 47,891 in June, the Bank of England reported Tuesday. Economists were expecting a level of 50,100 for July.

Loans approved for remortgaging totaled 35,206 in July compared to 35,137 in June. Meanwhile, the number of loans approved for other purposes came in at 27,278, which was lower than in June and below the previous six-month average.

Source: RTTNews

UK mortgage agreements rise to 17 month high

2009-08-27T08:18:12+01:00

The number of UK mortgage arrangements confirmed in July this year rose to 38,181 which is a significant increase from June which saw 35,564 mortgage arrangements agreed. This is the highest monthly mortgage count since February 2008 and while the figures alone are very encouraging it was interesting to note that the average loan size has also increased by 1% to just under £140,000. So what next?

When you consider the increase in mortgage arrangements, positive comments by UK housebuilders and a feeling that the UK banking industry is ready to pump more mortgage liquidity into the system it seems that the UK housebuilding sector has turned the corner. However, it is surprising to see that over the last few weeks there have been a number of downbeat statements on the UK housing sector with some claiming a short-term rally will run out of steam and subsequently prices will fall further in 2010. Even though there is a feeling that the UK sector has bottomed out there is still concern as to why so many people are still remaining so negative for 2010.

Until the vast majority of analysts, mortgage lenders and homebuyers are singing from the same hymn sheet there will be volatility in the sector and there will be changing opinions over the coming weeks and months.

Source: FinancialAdvice.co.uk

UK mortgage approvals up almost a quarter

2009-08-27T08:15:49+01:00

The volume of mortgage applications approved for a residential property purchase, including that of new home builds, leapt by 23% in June, compared to the preceding month, according to the Council of Mortgage Lenders (CML).

CML data shows that this is the fifth successive monthly rise in mortgage approvals and the highest level achieved for a year.

There was also a sharp increase in the number of first-time buyers, who are seen as a key to the revival of the housing market, getting on to the property ladder. Many first time buyers are looking to take advantage of the recent market slump and buy cheap property, or a shared ownership home, which is becoming ever more popular.

No fewer than 17,200 mortgages were issued to people buying their first abode, up 26% compared to May.

CML’s research acts as yet another sign that the UK property market is now on the road to recovery, owed partly to a shortage of residential properties for sale, further stressing the need for the construction of more new home developments.

Additional research by the Department of Communities and Local Government shows that the decline in property values slowed to 10.7% year-on-year in June, an improvement on the 12.7% annual fall recorded in May.

The medium price of a home in Britain stood at £191,423 in June.

Source: What House?

UK property transactions up 16.9 pct mm in July

2009-08-22T10:49:27+01:00

LONDON, Aug 21 (Reuters) - The number of properties changing hands in the UK jumped 16.9 percent on the month in July to a seasonally adjusted 76,000, government data showed on Friday.

That was 10 percent higher than a year ago, HM Revenue and Customs data showed.

While the figures are a lagging indicator of the housing market, economists view them as a useful guide to future trends in spending on household goods.

Source: London South East

UK Housing Market Shows Signs of Life

2009-08-22T10:45:46+01:00

Recent UK house market price and activity data lends weight to the view that the housing market may have bottomed out. In this post, we analyze the various data points and present our latest thinking.

The three main price indices in the UK housing market space are the Nationwide, Halifax and the Land Registry price data. We summarize the methodological differences amongst the various price series in the box below. Overall, there appears to be some support to the assertion that the UK property market is indeed recovering.

Source: RGE Monitor

UK Lenders Introduce Higher LTV Mortgage Deals

2009-08-15T08:43:43+01:00

British mortgage brokers say that they are starting to see lenders broadening the range of high LTV deals, which fact can be explained by the release of new data on house prices. Better mortgage deals mean that first-time buyers will have higher chances on climbing the property ladder.

One of the largest British lenders, the Lloyds TSB banks, which controls almost 30% of the UKmortgage market and which is owned by the Lloyds Banking Group, is expected to announce the launch of new deals for buyers with minimum deposits. The deals will expectedly include several 3-year fixed mortgage offers.

Another lender that made a concession for first-time buyers is the Coventry Building Society, which has cut its interest rate for buyers with a 15% deposit to 4.99%, 1% down from 5.99%. However, FTBs should realize that the previous rate was fixed for 5 years, while the new one is variable. The good news is that the newly launched mortgage offer comes with a fee of mere £499 and does not have any early repayment charges, which means that borrowers can easily switch to fixed deals in case interest rates start to rise.

Mortgage brokers warmly welcome the moves, undertaken by some of the British lenders. They add that the particular mortgage deal, launched by the Coventry Building Society, will be highly attractive to UK first-time buyers, who have been having hard time getting on a property ladder lately.

On the other hand, a wider range of high LTV mortgage deals does not mean that the banks have loosened their lending criteria. In fact, borrowers with low deposits wishing to qualify for a newly launched mortgage deal have to have a spotless credit history.

Let us remind that British lenders explain the introduction of new high LTV mortgage deals by the house price data, recently released by RICS and other organizations.

Although the data suggests that property prices are starting to stabilize, some of the British lenders, such as Abbey, Woolwich, Yorkshire and Chelsea building societies, chose to increase their interest rates in order to manage the increased inflow of mortgage applications.

Source: E1 BTL Finance

U.K. June Mortgage Approvals Rise to 14-Month High

2009-08-15T08:39:38+01:00

U.K. mortgage approvals climbed to a 14-month high in June, adding to signs the housing market is recovering as the recession eases and banks become more willing to lend.

Banks granted 47,584 home loans, compared with 44,169 in May, the Bank of England said today in London. Economists predicted 47,000, according to the median of 21 forecasts in a Bloomberg News survey House prices held their value for a third month in July, according to a survey of real-estate agents by Hometrack Ltd. Central bank policy maker Andrew Sentance said last week the bank may consider a pause in its 125 billion-pound ($207 billion) bond-purchase plan if economic forecasts published next month point to a recovery.

“We’re expecting to see mortgage approvals rise as the banking crisis begins to ameliorate,” said George Buckley, an economist at Deutsche Bank AG in London. “The bank will be mildly encouraged by these figures. I don’t see a change in the bond purchases or in rates.”

The pound was little changed after the report at $1.6361 as of 10:30 a.m. in London.

Net lending secured on dwellings rose to 343 million pounds from 331 million pounds in May, while net lending to consumers fell to 71 million pounds from 153 million pounds. Credit card lending rose by 167 million pounds.

Gross mortgage lending was 1.98 billion pounds in June, the highest level this year, the Building Societies Association said today in a separate report. That’s 30 percent more than in May and 40 percent lower than a year earlier.

Stable House Prices

The average house price in England and Wales held at 155,600 pounds this month, Hometrack Ltd., a London-based property research company, said July 27. The reading is still down an annual 7.7 percent.

Sentance said last week there may be “some evidence of positive growth in the second half of the year,” and the bank may shift to a “watching” stance next month on their plan to ease credit strains in the economy.

The bank kept the key interest rate at a record low of 0.5 percent this month and voted for no change in the asset-purchase arrangements. Policy makers make their next decision on the key rate and so-called quantitative easing on Aug. 6.

M4, the broadest measure of U.K. money supply, fell 0.2 percent in June and was 13.8 percent higher than a year earlier. The annual rate of increase was revised from a previous estimate of 14.2 percent.

The bank also reported a separate measure of M4 that excludes financial companies that specialize in intermediating between banks, such as bank holding companies and non-bank credit grantors.

On this measure, money supply shrank 0.6 percent in June compared with an expansion of 0.1 percent in May. For the three months through June, the growth rate fell to 2.4 percent from 4.4 percent in the period through May.

Source: Blomberg.com