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Friday, 3 July 2009
Mortgage holders repaid a record amount of their mortgages in the first quarter of 2009. The total in the first three months was £8.1bn, taking repayments to £76bn for the year to end of March 09.
The credit crunch and low savings rates are obviously encouranging people to start paying down their mortgages. It also reflected the larger deposits required by lenders for mortgages.
Monday, 29 June 2009
Mortgage approvals were up in May, for the fourth month in a row. There were 43,414 approvals in the month - however, this was up just 223 on April. Net lending for house buying by lenders grew by just £324m in May, the smallest increase on record.
In comparison to last May, lending is 35% lower. The market appears to have recovered from its slump, but activity still remains depressed compared with last year.
Building societies are also reporting that savers are wtihdrawing more money than they are depositing funds, for the thrid month in a row, which may limit how much banks and building societies can lend.
Thursday, 18 June 2009
According to estate agents, the number of house buyers registering their interest is increasing, with an average of 299 potential buyers registered per agent in May, up from 265 in April. This is the highest level since Sept 2007 and up from the low in Nov 08 of 186.
With the shortage in supply of houses, this suggest that there is potentially 4 buyers per house available.
The big lenders have all been increasing the interest rate on the fixed rate mortgages this week, despite the record low level of base rates. They have blamed the the rise in swap rates.
This week, Abbey, the UK's second largest mortgage lender, increased its fixed-rate deals by between 0.25% and 0.5%. Lloyds Banking Group has also increased some of its fixed rate deals this week.
With base rates at an historic low, fixed rate deals have become very popular recently - during April, 69% of all new mortgage lending were at fixed rates. The expectation from mortgage experts, such as Savills, is that now is a good time to fix, with base rates only likely to rise from current levels.
Currently, the average 2 year fixed rate mortgage with a minimum 25% deposit is 4.28%.
Mortgage lending fell in May, to £10.3bn, a fall of 2% on April, and 58% lower than May 08.
Lending for home buyers appears to have been rising but lending for remortgaging or people changing their mortgage provider, has fallen.
According to the Council of Mortgage Lenders, the volume of lending has mortgage lending has stabilised, but at a very low level.
Thursday, 11 June 2009
Mortgage lending was up by 16% in April compared with March. Although this figure is down 28% on April 08, experts say it points to a sign of a spring bounce in the housing market and provides more evidence that the bottom of the market may have been reached.
48% of mortgages taken out in April were on fixed rate deals, with an average rate of 4.83%, the lowest since Jan 04.
Wednesday, 10 June 2009
New figures from the Council of Mortgage Lenders (CML) shows that buy to let landlords are having their properties repossesed at a rate three times great than other homeowners.
1,700 buy to let properties were repossesed in the first quarter of 2009. 4,100 properties were lost when including case of lenders appointing a 'receiver of rent' (appointed by the mortgage lender when a landlord defaults on mortgage payments).
In the first quarter of 2008, just 300 receivers of rent were appointed - this figure was 2,400 in the same period of 2009.
Buy to let mortgage are now also much more difficult to obtain. At the peak of the boom in Sept 2007, there were 3,662 different buy to let mortgages available - now there are just 218! for those getting a mortgage, the deposit required is now usually 25%, up from the previous norm of 15%.
Many landlords are struggling from a flooded market, reduced rents that don't cover their mortgages, and falling prices which means they struggle to sell or certainly can't cover their mortgage if they do sell.
If you're a buy to let investor struggling to make your mortgage payments and needing to sell your property quickly, then call quickmovenow.com - we may be able to help you.
Tuesday, 9 June 2009
Are we seeing some signs of the housing market beginning to stabilise? This morning, RICs reports enquiries from new buyers increasing for the 7th month in a row in May, reaching their highest level since August 1999. The number of properties sold also continues to increase, with an average of 11.8 per agent in May, up from 10.6. RICS also shows the proportion of surveyors reporting price falls dropping from 58.7% to 44.1% in May. 40% of surveyors expect sales levels to rise over the next few months, the highest level in the quesiton was first asked in 1998.
A separate report from the local government office shows the average cost of a home rose by 1.1% in April, with house prices declining at a lower rate of 13%, down from 13.6% in March.
Some agents urge caution into reading too much into these reports, with lack of supply being highlighted as a critical support of house prices.
Thursday, 4 June 2009
According to new figures from the Halifax, house prices rose by 2.6% in May, after 3 months of falling prices. As usual it's necessary to add the caveat that not too much should be read into one month's results.
However, figures based over 3 months months shows the rate of decline falling. There were consistently falls of between 5 - 6% experienced in the second half of 2008. By contrast, the figures for the quarter to May this year showed a fall of 3.1% so there is some hope that price falls are slowing.
Tuesday, 2 June 2009
The nunber of new mortgage approvals rose in April, for the 3rd month in a row. 43,210 new mortgages were approved.
Completed sales also rose in March and April, up 35% from February. Experts say that this is the start of a recovery in housing market activity, but doesn't necessairly herald an end to falling house prices.
They also point to the actual availability of funds available for lending still be limited by lenders, with 25% of new mortgage deals requiring a 40% deposit from borrrowers.
Monday, 1 June 2009
Land Registry figures show that house prices fell in April by 0.3%, with the annual rate of decline remaining at 16.2%, the same as March.
Although prices are still falling, the rate of decline has been firly staitc over the past couple of months. The average house price in England and Wales is now £152,898, down by £29,659 in the year.
The figures go on to show that the number of house sales between Nov 08 and Feb 09 averaged 31,315 per month, down by 42% on the same period 12 months previously.
According to david Smith, of Carter Jones, the figures herald the stabilising of the UK property market and that the bottom of the market has been reached. However, Howard Archer of Global Insight is sceptical that house prices have bottomed out.
Many people choose to buy a new home every year and there are many benefits in doing so. The market is dominated by large national and international new home builders who build the majority of private new homes.
When the market was good, house builders benefited from rising prices, profits and share prices. They also struggled to keep up with demand and government targets for new homes.
In 2007 the top 5 builders built 64,573 homes between them.
Ordered by units completed:
1) Taylor Wimpey-20,690
2) Persimmon Homes-15,905
3) Barratt Homes-15,517
4) Bellway-7,638
5) Redrow-4,823
Since the well documented credit crunch and associated property crash the fortunes of builders has changed dramatically.
Builders have found the value of completed homes fall rapidly, which has eaten into precious margins. As the value of land has collapsed there have been huge write downs on land banks. Most of the big builders are listed on the stock market and share values have been hammered over the last 18 months.
Despite huge losses and write downs most of the builders have restructured their debts and are hanging on by the skin of their teeth.
The result of all this instability has been an 18.5% fall in homes completed in 2008 (52,665) by the top five builders.
This now make Barratt Homes the UK’s biggest builder by volume:
1) Barratt Homes- 18,588
2) Taylor Wimpey- 13,394
3) Persimmon- 10,202
4) Bellway-6,556
5) Redrow- 3,925
Overall there were 72,114 private sector builds started in 2008, showing a 56 per cent decrease on 2007 (163,535). The expectation is for even fewer properties to be completed in 2009.
What is the effect on the average house buyer?
Property prices have fallen across the country making new build homes more affordable. However job security and difficulties obtaining mortgages are keeping many buyers out of the market, even though prices have fallen drastically.
Builders are desperate to complete and get cash and therefore are more flexible on sale price and are offering more incentives. Some very good deals are available if you are in strong position to negotiate.
Unless you are an investor or first time buyers the chances are you will have a house to sell. With such difficult market conditions this may be a big hurdle to buying a new home and getting a good deal.
One option which is often considered is part exchange. Certain developers will offer to buy your house in order for you to purchase their new home. However in the current market many part exchange schemes have been withdrawn or are severely limited. This leaves many people with no option other than to stay put.
Fortunately Quick Move Now’s part exchange service is independent of the builder and is still fully available. The service is flexible and allows you to sell your house and buy either a new or second-hand house.
*Data compiled from company annual reports/accounts for 2008.
Wednesday, 27 May 2009
Net mortgage lending in April was down again, to its lowest level in 8 years.
While the number of mortgages approved for house purchases rose slightly (but still 15.5% lower than April 2008), the value of the lending was down to £2.7bn, down from £3.4bn in March.
According to the British Bankers Assoc (BBA), it is householders' continuing financial uncertainty that is holding back borrowing.
There also appears to be a decline in the number of people remortaging, perhaps waiting for better fixed rate deals. The number of remortgage approvals in April was 25,418, its lowest since December 1999.
Friday, 15 May 2009
First time buyers look to be returning to the housing market, with them accounting for the highest proportion of those looking for homes in 4 years.
The Council of Mortgage Lenders also found that borrowers are paying the least amount on their monthly mortgages in a decade.
The CML found that first-time borrowers accounted for 40% of house buying lending, the highest proportion since 2005. However, levels are still very low with only 12,500 buyers compared with 17,800 in March last year.
The number of house repossesions in the UK has risen by 50% in one year, with 12,800 repossessions in the first quarter of 2009. This figure is up 23% on the previous quarter.
The Council of Mortgage Lenders has previously predicted that 75,000 homes will be repossessed this year, but despite these figures released today, it has described this forecast as pessimistic and may revise its forecast in the summer.
The number of home loans in arrears of more than 2.5% was up by 12% in the first quarter to 205,300. This is up 62% on the first quarter of 2008.
Thursday, 14 May 2009
The number of mortgage approvals rose sharply in March, with 31,000 new mortgages granted, up 29% on February. However, this figure is still 33% down on the previous year.
HM Revenue and Customs also reported that completed property sales rose by 40$ in February and March.
Depite these incerases, the property market still remains subdued with levels of sales and lending still far lower than last year.
Wednesday, 6 May 2009
The Halifax house price survey published today shows another fall in house prices last month, with prices falling by 1.7% in April, rushing the annual rate of delcine to 17.7%. The average UK property is now worth £33,264 less than a year ago.
The Halifax goes on to warn that prices are likely to continue to fall over the coming months, which reflects our thoughts on house prices - see our thoughts on how long the property crash will last.
Looking for positive signs, Halifax does highlight that mortgage approvals are rising and estate agents have reported a rise in interest from potential buyers.
Many property owners, buyers, sellers and investors are asking this question. Unfortunately the complex factors influencing the property market make it very difficult to predict the timing of any recovery.
After analysis of past slowdowns we believe that some of the trends identified during the property crash of the early 1990’s may well be repeated in the current cycle.
We have used the Nationwide Property Price Index to provide average property prices since 1998 and then based on this trend estimated what could happen during this boom/bust cycle.
The data shows that during the crash of the early 90’s the price boom was followed by a rapid fall in prices and then a more gradual long-term decline. It actually took 12 years for average house prices to recover to pre-1989 levels.
Over the last 2 years we have had a similar rate of decline as experienced in 1990. If history is repeated price falls may become less dramatic over coming months. Although still in their infancy this trend may be supported by recent statistics showing some improvements in the market.
Although the worst of the crash may be over, that doesn’t mean prices will immediately rebound. We are much more likely to witness continuing price falls, just at a slower rate, before any eventual recovery. Indeed we expect the bottom of the market is several years away, and we may not see average prices rebound until 2014.
Following the historic trend you could find that the value of a house bought at the peak of the market in 2007 may not recover to its original purchase level until 2021!
Click graph above to enlarge
Although these timescales and price fluctuations may seem extreme it is believed that the current economic conditions are worse than at any time since the great depression of the 1930’s.
Therefore the depth of the slowdown and the pace of any recovery may be worse than anything experienced by recent generations. Indeed without cheap, freely available and unregulated credit the booms experienced during previous cycles may not be as exaggerated in future.
Thursday, 30 April 2009
Nationwide reports today that house prices fell by 0.4% in April, reversing some of the gains seen in March. The figures show a slow down in price declines, but an average home has still seen its value fall by 15% over the past year.
Prices fell by 3.1% in the quarter to end of April compared with the previous quarter.
Wednesday, 29 April 2009
Signs of a slight revival in the housing market were seen this morning, with a 19% jump in mortgage approvals in February.
A total of 37,937 loans were approved for people buying a home during the month, the highest level since May last year, according to the Bank of England.
Today's figures, which beat economists expectations and are well up on the recent six month average of 31,495, suggest sales may be picking up again.
Vicky Redwood, UK economist at Capital Economics, said: "February's household borrowing figures suggest that housing market activity may finally have turned a corner.
"The rise in the number of mortgage approvals for new house purchase... might suggest that the pickup in new buyer inquiries is feeding through into actual activity. With new buyer inquiries still rising, this is clearly quite promising."
But she added that approvals levels would need to broadly double before they were no longer consistent with falling house prices.
Despite the pickup, approvals for house purchase were still 44 per cent lower than in February 2008.
A further sign of the housing market showing some signs of improvement was proven by figures released from Hometrack showing a slowing in the rate of house price falls during March as activity in the market increased.
The group said house prices in England and Wales dropped by 0.6%, the lowest fall for 10 months, while both the number of potential buyers registering with agents and the number of sales agreed continued to rise.
Rents for flats have fallen for the 6th month in a row, in a further blow to buy to let landlords many of whom have seen sharp falls in the values of their properties. New build flats in city centres, which were especially popular with first-time buy to let investors, have seen sharp falls in their values, with many selling at half their original price.
The oversupply of rental flats is a major factor in the fall of rents with the supply of property increasing by 2.8% in April and by 132% than a year ago.
By contrast, the rental market for houses is faring better. The number of houses for let fell in April, with rents for larger houses rising for the 2nd month in a row.
Monday, 27 April 2009
Mortgage lending fell in March, the first such fall in 4 months, denting hopes of a recovery in the property market.
The number of mortgage approvals for purchases fell by 6.8% from February with 26,097 approvals. This figure was 25% down on March 2008.
Gross mortgage lending was down 47% on March 2008, at £8.9bn, the lowest level since April 2001.
According to the BBA, a recovery in the mortgage market is unrealistic in the current economic climate and that we are not yet at the bottom of the market for house price falls.
Wednesday, 22 April 2009
The number of homes sold in March increased by 40% on the February figures to 60,000 - this is compared with 43,000 in February. When adjusted for seasonal trends, there is still an increase in 13& on the month.
The data is in line with Bank of England figures showing an increase in mortgage approvals, and also findings from surveyors showing a rise in the number of enquiries from potential buyers.
Many experts are now beginning to call the bottom of the housing market, but with the caveat that the market has fallen a long way and that any recovery will be slow.
Mortgage lending rose in March, up 16% on February at £11.5bn. However this figure is half that lent in March 08. The Council of Mortgage Lenders also warned that this increase was merely a seasonal rise, reflecting the fact that more people start planning to move in the better weather.
Despite the March rise, lending in the first quarter was at its lowest since 2001.
Friday, 17 April 2009
The Council of Mortgage Lenders has warned that the rising level of negative equity is restricting houses sales in the UK. There are now 2 million homeowners with either negative equity or too little equity to finance a move.
Few lenders are currently willing to provide mortgages to those with a deposit of less than 10%. The CML estiamtes that there are 600,000 mortgage holders with less than 5% equity and another 500,000 with between 5% & 10%.
Monday, 6 April 2009
This week, new rules for Home Information Packs (HIPs) have come into force, meaning that home owners must have a HIP in place prior to putting their property on the market.
Previously sellers could market a property providing they had ordered a HIP.
The National Assoc Of Estate Agents claims that HIPs have been a waste of time, with their figures showing that 77% of buyers pay no attention to HIPs.
If you want to avoid the delays & costs of Home Informaiton Packs, considering selling your house to quickmovenow.com. As a private buyers of property, we don't require you to have a HIP in place, saving you time abnd money and allowing you to get on with your home move. For more details, call us on 0800 068 3366.
Friday, 3 April 2009
In yesterday's blog about a surprise rise in house prices in March, we warned not too read too much into the figures. Well a new house price report released today shows how mixed these reports can be.
The Halifax today reported that houses prices fell by 1.9% in March and warning that conditions would remain tough for the rest of this year.
Thursday, 2 April 2009
The housing market was surprised this morning with an announcement from Nationwide that house prices actually rose in March for the first time since 2007.
Prices rose by 0.9% compared with February, reducing the annual rate of falls to 15.7%.
We would not read too much into one months' figures and it cannot conclusively call the bottom of the market.
Wednesday, 1 April 2009
Home owners paid off a record amount of their mortgages in the last quarter of 2008reducing total home loans by £8 billion, the biggest cash payoff since 1970 when records began.
Record low interest rates and economic uncertainty has seen home owners rein in spending and focusing on reducing debts instead.
Monday, 30 March 2009
Mortgage approvals for house purchase rose in February with 38,000 approvals, up from 32,000. The figures suggest that low interest rates and falling house prices may be encouraging people back into the market.
Despite this larger than expected increase, mortgage lending has a long way to go to recover to previous levels that we saw prior tothe credit crunch and recession.
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