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The plight of first time buyers is again in the spotlight as schemes to boost the housing market come under scrutiny.
HSBC has urged the government and private sector to “come up with innovative schemes,” after three quarters of potential buyers questioned said they did not think they would be able to afford their first home within five years. Responding to a survey by the bank, a majority named the difficulty of raising a large deposit as the biggest obstacle to their aspirations.
(more…)It has to be said, UK property prices are once again failing to live down to expectations. March figures from Nationwide headline a 0.5% increase – that’s hardly evidence of a boom, but it does belie the gloomier forecasts of a few months back.
Nationwide economist Robert Gardner noted that prices had now risen “albeit modestly” in three of the past four months. But he cautioned, “The outlook remains uncertain, but all things considered, this is unlikely to mark the beginning of a strong upturn in prices.” The rise leaves average prices just 0.1% higher than they were a year ago, and economic pressures look set to keep the market fairly subdued in coming months.
(more…)The debate over interest rate rises remains finely poised, with some calling for a rise now and others warning about the risks for the economy.
According to Reuters, economists are pretty evenly split about which way the Bank of England will jump. Their latest poll shows a small majority of forecasters expect no increase until the third quarter of the year. Others believe a May increase remains on the cards. A few even think that borrowers can rest easy until 2012.
(more…)Remortgaging continues to grow, while overall mortgage lending remains subdued – that’s according to figures from the BBA (British Bankers’ Association).
Continuing speculation about a rise in Bank of England base rate is thought to have encouraged more borrowers to consider remortgaging and the option of a fixed-rate deal in particular. Some homeowners have also sought to take advantage of interest rates at historically low levels, to re-gear household finances and minimize monthly repayments.
(more…)The Bank of England’s chief economist has called for a rise in interest rates to curb inflation, in a speech to financial leaders.
With the likelihood of the inflation rate staying high, Spencer Dale noted that by mid-2012 it would have been above the official target for more than six years. Higher interest rates were needed to stop rising costs becoming ingrained and continuing to push up prices.
(more…)Some mortgage deals could become cheaper after recent movements in the money markets. Longer term fixed-rate deals in particular may become more competitive.
At the start of the year there was something of a race to remortgage – with fixed- rate deals attracting particular attention. As speculation grew that interest rate rises were on the way, such deals became relatively more expensive, with some fearing they had missed the boat as far as the lowest rates were concerned.
(more…)Inflation is up again – fuelling expectations of a rise in interest rates this summer. The news that the Consumer Prices Index surged in February to 4.4% came like a dash of cold water for the Chancellor as he launched plans to boost the economy in the Budget.
With inflation heading remorselessly towards 5%, it’s not surprising that many mortgage borrowers have been seeking security against potential rate rises and opting for fixed-rate deals. On the other hand, some are being attracted by falling rates on trackers. Either way, it looks likely that the trend towards remortgaging seen in recent figures will continue.
(more…)Mortgage lending held steady in February, according to latest figures from the Council of Mortgage Lenders (CML). At an estimated £9.5 billion, total lending was a shade up on the amount for January. Nevertheless, the figures show levels of activity which according to the organisation remain “very subdued.”
Remortgaging was once again the bright spot. The CML cite Bank of England data showing 33,000 remortgage approvals in January, and suggest the strengthening performance will have continued in February.
Recent figures present a snapshot of today’s mortgage and housing markets.
Surveyors Connells report an upturn in activity, particularly focused on remortgaging. Their figures for February show an increase of no less than 107% in the number of valuation surveys for remortgage purposes compared with a year ago.
George Osborne has identified housing, along with education and climate change, as one of three areas for action in his second budget.
The remarks came as part of the Chancellor’s attempt to move the policy agenda from spending cuts to the promotion of “growth” – increasing the value of what the UK produces – and creating jobs.
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