House Price Spy Blog

Property prices have risen for the third month running and will continue to rise for the next few months at least, the big test will be what happens when the summer rush is over and we come back to earth. Still its nice to have some good news for a change!

Other good news is that lenders have been criticized for their high charges, adding an average of 2.6% onto most mortgages. Chancellor Alistair Darling has pledged to take action against lenders breaking agreements to ease the problems caused by the financial crisis, small businesses and home owners have been particularly hit and now the Chancellor has grilled bank bosses about high rates. We should be in a good bargaining position since the UK taxpayer owns significant chunks of the industry now!

With the low mortgage rate, lenders are complaining that they are making less money than ever but have been criticised for profits that are well up on this time last year. The actual cost of lending has risen and 4 out of 10 lenders are complainig that their margins are lowere than ever before and they cannot pass on the low mortgage rate with cutting something else. At least the government is taking up the consumers point of view at last!!

100% mortgages were singled out as being the single greatest cause of the financial mire we are ALL paying for at the moment. Collapsing banks, false growth, and a generally unregulated mess of inter bank lending across the world, were secondary causes.

This you know, but did you know that lenders are now giving first time buyers loans to cover their deposit? 16% of 1st time buyers are considering taking out a loan to cover their deposit. The FSA have to act now to prevent us sliding back into the chaos of 2008, after we have pumped billions into the financial sector and every single consumer in the UK is still paying the price, never mind job losses, home repossesions and negative equity!!!

100% mortgages were the main origin of negative equity in the first place, which caused defaults on homes which saw lenders to crash. The government have made big noises about ensuring that we never returned to over lending, now it looks like its only a matter of time!

First time buyers banking on property prices falling further to be able to afford to get into the market will be taking a real risk, as many in the industry are expecting a rise-slump and then gradual rise before market recovery.

Considering how regulated the mortgage market is now I would have thought that this practice would be outlawed, but 100% mortgages are still available if you want to take the risk. The general public will end up paying the bill…

Profits made on Fixed Rate Mortgages by UK lenders are hitting record heights as low Bank Of England rates persist and cautious Brits play it safe. The finance industry’s main money maker seemed to be in trouble just a year ago with a dominos game of banks and financial institutions falling into public hands like never before now record profits and unprecedented recovery stats are prompting many consumer watchdogs to question the huge hike in the average rate for fixed mortgages to over 5.1%.

Even the Royal Bank of Scotland which is 70% public owned raised their rate even though the mortgage rate remains lower than ever before. Being immune to market changes comes at a high price for borrowers who have seen the mortgage rate fall in successive months to just 0.5% for the first time.

At some point the government and FSA will have to step in and see that consumers are protected against the finance industry. Bringing the industry back to life after the scare of 2008, and sensible legislation on inter bank lending should be something that benefits the customer…

Below is a snapshot of what the press is saying about the housing market, there mixed messages-mostly upbeat from the finance industry and downbeat from official government sources.

The Land Registry has raised the prices it charges property buyers by up to £220, this is the first rise since 1993.

The number of approved mortgages rose by 6,000 to 51,000 during last month.

There were 75,000 propeties worth over £40,000 sold in June was up by 15%, from HMRC Tax records.

Roll on 2010, with the market picking up around the country and some sense returning to the finance sector we may see some sort of recovery-however it appears as though the job losses may not be over. It looks like the finance industry has been holding job losses to prevent them look like they are clearing the decks, with more staff laid off last week and many fearing for their jobs this may be the real problem. If people fear for their jobs, mortgages they are not spending. All to pay for the ‘untouchable’ bonuses of executives sunning themselves at our expense.

The British public have shown the government how its done by wiping £8.4 Billion from their mortgage debts in the last 3 months. This is due to the financial situation and dropping house price putting home owners off re-mortaging meaning more money has been put into mortgages than was taken out for the third successive month. This is despite the Bank of England‘s policy of promoting growth by dropping mortgage rates to the lowest rate ever, making some see the folly of paying off their mortgage when they are paying less than ever

Despute this the public have chosen to put money into their mortgages, staying in their comfort zone rather than put money into the economy. Either way this is good for the finance industry

Contrast this with figures for just a year ago when the public withdrew over £6.7 Billion from their mortgages plunging the finance sector deeper into crisis. Whether this will be a significant point in the turn around will remain to be seen.

The only question will we manage to survive Swine Flu long enough to see a recovery! The media are now saying that the current death toll of 273 will rise to over 65,000 which sound bad but you need to remember that over 20,000 people die of flu related illness every year! At least this takes their attention from ruining the economy!

Just a quick blog to let everyone know that our data has been updated in the last week, millions of results are added plus some timely corrections passed to us from The Land Registry and the Registers of Scotland.

House Price Spy is one of a select few websites chosen and regulated by the official government bodies that produce the data to reproduce the information to the public, only a handfull of companies are officially licensed to pass the data to the public and all are heavily regulated and controlled. All this means that you know the data is complete, accurate and official, dont settle for any less.

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One step forward and one step back…

Leading lender Nationwide have brought back 125% mortgages claiming that they are essential for anyone affected by negative equity in the last year should they wish to move home. Irresponsible lending almost brought the UK and world to its knees in a house of cards which fell leaving the tax payer and regular customer to pay for instutions and irresponsible borrowers alike.

These packages have not been advertised due to the backlash they would have caused for good reason, but borrowers with serious negative equity on their home have been offered these deals.

Were the FSA not meant to ban these loans? Will the tax payer and borrower be forced to pay up again in 10 years time, Alistair Darling has been on the TV all week saying how he has a plan in place to make sure the current troubles never happend again he wants to look at this!

Lending people more money to get out of debt is a short term solution, it simply encourages people to move who cannot afford it. The market is sure to pick up in a year or so and anyone in that situation who waits will start to come back to their former position. We are looking at more people losing their home before the crisis is over, purely so lenders can lend and the market can be stimulated…

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The average property price for England and Scotland rose by £6k in the last month whereas the average for Wales rose by just £2k. Demand for property has risen significantly and asking prices are also on the rise, if you are to enter the property market this could be the time to do it! The Bank Of Englands new property specialist Professor David Miles seems to think that we are now at the bottom of the slump and that the rebound curve should be sharp (meaning we will not spend more than a year getting back to where we were!)

Renting property is one of the boom businesses of recent times and is no longer the preserve of students and those on low earnings, with many assessing their lifestyles rather than their earning potential renting has seen a steep rise. Whether rented property will still have a big chunk of the UK property market will remain to be seen after the market returns to pre-2008 figures. At the moment it is seen as a good way to hold onto the value of the property while the market recovers. Will we still want to rent once mortgages are easier to get and the market has more bounce?

Before WW2 over 70% of the UK population rented and now almost 65% of the population has ownership.