House Price Spy Blog

The Bank of England surprised everyone yesterday but cutting the rate by 1/4 of a percentage to 5%. The trend has been maintain, lower, maintain, lower but few were expecting another drop so soon.

You can’t have escaped the doom and gloom (and even a bit of panic) in the media in the last few days about the bottom falling out the property market, the state of play is that lenders have had a reality check in how much, and who, they lend to and in addition in the wake of the crisis in US finance the rates of lending between lenders has risen.

While the media will tell you this is all bad, there are up sides in that less people will get stupid over mortgages on overpriced homes and in fact with propety prices falling in some areas first time buyers are actually finding it easier to buy in some areas of the UK!

The facts are that if you do your homework on an area and buy in an everpopular area where property never stays on the market long, and never pay more than what you your head tells you should be paid and have a small deposit to spend you will never be in too much trouble. Since the property market goes in cycles you will never need to wait too long to be able to buy or sell.

If its a buyers market then you just sit it out, there are more people looking for property than ever before so property in good locations will never lose equity.

This will include mortgages, re-mortgages, secured loans for credit cards, overdrafts and business loans. Some mortgage offers and styles of mortgage will be withdrawn as not viable in the current financial climate.

Lenders have also stated that borrowers are happy to take longer duration fixed loans of up to 10 years without significant inducements due to the lack of consumer confidence.

First time buyers will need at least 15% to get onto the property ladder, and the days of 100% or even 100%+ mortgages are well and truly over!

Buy-to-let Mortgages seem to have taken a downturn due to the rise in property value of the last 10 years. With property on average cost double or 50+ what it was in 1997 the profits of buying to let have dropped and less investers are taking up this option.

With the recent policy changes at most lenders Buy-to-let Mortgages which were once given to as much as 90% of the property value is now a lot less and are seen as a less viable option.

The golden rule for buy-to-let mortgages is to buy such that you can charge at least 20% more on rent than your repayments are. The most important thing to bear in mind is buying in an area where you know is renting well and go as far as visiting a few properties for rent and checking out what they offer in terms of rooms, furnishings, local area etc Dont pay above what you would pay as a first property, just because someone will be paying your mortgage!

While average rent rose by 13% in England and Wales, the downturn in property prices has seen a check on new buy-to-letters. The Government policy on mortgages has seen the mortgage rate held for the past few months in an effort to keeping the housing market from falling…

There are still significant pockets of bargain Buy-to-let propeties available which are sure fire capital gains winners! Only your knowledge of your local area and property in general can get your money working.

Gordon Brown and Alistair Darling anounced their plans for the Budget 2008 with some interesting items relating to property:

Inheritance Tax - The allowance will be increased after the Budget 2008 to £324,000 per person.

Capital Gains Tax - The capital gains tax (CGT) annual exempt amount will be £9600, with a charge of 18% above that figure.

Stamp Duty - Duty will remain the same for the next year after Budget 2008. This will be good for the property market which has been fragile in the last quarter.

Get the full details with other details from the official DirectGov websiteBudget 2008!!!

The Bank Of England have left the mortgage rate unchanged for March 2008. The rate, as expected, was held at 5.25% with the announcement coming on the 6th.

After last months drop of 0.25% there was no change predicted for March and that is the way it has turned out with the government not wanting to affect the fragile house price market in the build up to the busy summer period.

Visit the official Bank Of England website to get all the latest news and details on this and future rulings.

The Bank Of England has reduced the mortgage rate for this months by a quarter of one percent to 5.25%.

This news follows concern that house prices in certain areas of the UK are falling with respect to the rest of the UK and the crisis in finance including Northern Rock.

See more detail and get next months changes direct ffrom The Bank Of England website.

Annual average property prices in the UK dropped for 2007 for the first ime since 1995. The average price in England was £174,000 which is down 11K on the prevfious year. The CEBR (Center For Economic Research)predicts a fall of 2.5% duing 2008.

This follows Northern Rock, US financial/lending crisis and last weeks stock market crash.

The lack of new available housing has not balanced out this trend, and people in new build housing and in outlying rural areas appear to be most affected.

Average property prices have not decreased since before New Labour took over and whether Gordon Brown is about to cut interest rates we will find out in the months to come.

With an election in the offing will Gordon Brown go medium term or short term? Average property prices will be determined by interest rates which there are predicted to be 4 this year….

The Scottish Parliament has put aside £24 million of tax payers to give first time buyers a step up on the housing ladder after a successful pilot scheme in Lothian.

Certain councils with higher than average property prices have been asked to join the scheme which allows buyers to buy a 60% to 80% stake in a property with a housing association paying the rest. The terms of this agreement have not been stated, is there a maximum spend or a minimum spend and are there any other restrictions? More as we get the details.

There was a 20 year low in first time buyers in 2007, with prices still rising in areas such as Glasgow and Edinburgh to record levels.

This scheme will most likely be extended to the rest of the UK in time, but for the moment places like Perth, Stirling and Aberdeen will see more first time buyers than previously.

The Bank Of England has maintained the rate of interest for mortgages at 5.5% for January 2008. The ruling was made on the 10th and follows a reduction in inflation to 2.1% with a target of 2%.

This will be good news for borrowers following a busy Christmas period and 5 consecutive increases in 2007!

Property prices are falling in some parts of the country and another raise in the the lending rate could have seen more pressure on sellers in terms of borrowers being put of by prohibitive rates of interest.

See all the trends and get details of the next change direct from The Bank Of England

The Nationwide Building Society claim that property Prices to level off in 2008. The slow down will be due to stricter lending conditions and less first time buyers being able to get on the property ladder.

Overall figures for the UK as a whole will see property prices fall by 5%, however if you live in Scotland they will rise by 4% and Northern Ireland’s increase will buck the trend of slowdown and rise by up to a third.

The mortgage rate was reduced this month to 5.5% down by 0.25%.

Get a full rundown on The Bank Of England Site.