More than 100,000 homes snapped up last month before ‘prices slip out of reach’

The number of homes changing hands jumped by 30 per cent during the past year as the property market continued to recover, Government figures showed today.

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A total of 106,070 properties were sold for more than £40,000 in the UK during March, according to HM Revenue & Customs.

The number was 30 per cent higher than in the same month of 2013 and the second highest figure recorded since December 2007.

But the total was slightly down on the number of homes that were sold during February, when 111,120 residential transactions were completed on a seasonally adjusted basis.

The slight dip in month-on-month sales had been expected following a fall in mortgage approvals for house purchase reported by the Bank of England for February.

The decrease should help to calm fears that a bubble is developing in the property market following recent strong house price gains.

Halifax said property values rose at their fastest rate for nearly six-and-a-half years during the first quarter of 2014, with prices up 8.7 per cent year-on-year.

The National Association of Estate Agents also reported that demand among potential buyers was so strong in March that one in five people paid more than the asking price in order to secure a home.

Recent gains have left the average property in England costing £259,745, according to Zoopla.

A total of 321,150 properties were sold in the UK during the first quarter of the year, the highest quarterly total since the final three months of 2007, according HMRC.

But it pointed out that although residential property transactions had increased significantly year-on-year, they still remained well down on the peak of nearly 150,000 homes changing hands each month in late 2006 and early 2007 before the credit crisis struck.

Meanwhile, separate research showed that homeowners remain bullish about house price gains going forward.

Consumers who own a property expect values to rise by an average of 8.8 per cent between now and September – nearly twice the rate of increase they predicted this time last year, according to research carried out by Zoopla.

A record 95 per cent of homeowners expect house prices to rise in the coming six months, with just 2 per cent predicting they will fall, significantly down on the 13 per cent who expected losses in 2013.

People in the South East are most upbeat about prospects for the property market, with 98 per cent expecting house price rises, while those in London anticipate the biggest gains of 12 per cent in the coming six months.

But in all regions of Great Britain more than 89 per cent of homeowners think the value of their property will increase in the months ahead.

Homeowners in the South West are predicting the lowest growth at just over 7 per cent, but even this would equate to an annual rate of more than 14 per cent.

Zoopla’s Lawrence Hall said: “Homeowners are expecting house prices to rise at a higher rate than ever before, and this confidence in the property market recovery is finally filtering out of London and across the UK.

Lawrence_Hall_Zoopla

Lawrence Hall

“With prospective sellers eager to take advantage of a buoyant market and buyers wanting to snap up the best properties before they slip out of reach, indications suggest the market will remain strong over the coming months as increased supply and buoyed confidence drives activity on all rungs of the ladder.”

 

April 23, 2014 at 11:12 AM Leave a comment

See Britain’s smallest properties for sale currently available on Zoopla

Britain’s smallest £1m property for sale offered less space than a London Underground Tube carriage, it was revealed earlier this year. Zoopla looks at what other properties of a similar size are currently on the market to buy or rent.

To some, this property may be little more than a small one bedroom detached house in Bournemouth. To others, it is an immaculate ‘stately home’ with a large garden and parking.

The house is currently on the market for £69,950 via estate agents Dixon Kelley and is just a short drive away from the south coast.

22.04.14 Small 2

With eco holiday homes being de rigueur, this one bedroom detached property certainly has potential.

It is in the south west of Carlisle, next to the Cumbria Way cycle route, and has planning permission for a short-term holiday let.

Estate agents H&H suggest the brick building covers an area of 10 square meters but warns the measurements may ‘not…be wholly accurate’.

22.04.14 Small 1

Two bedrooms are included in this small detached house in Scunthorpe.

The property also has a living room, bathroom, kitchen and a conservatory.

It has no property chain and requires updating.

22.04.14 Small 4

Completely refurbished, this one bedroom home in Windsor requires less work.

It includes a lounge, refitted kitchen, refitted shower room and a double bedroom – all for £88,000.

It also has parking and a landscaped rear garden. Estate agents Horler is handling the sale.

22.04.14 Small 3

April 22, 2014 at 4:15 PM Leave a comment

Competitive mortgage deals will ‘not end’ under new lending rules

Tough new mortgage rules should not have an impact on the availability of competitive fixed rate loans, a mortgage trade body said today.

06.03.14 Mortgages

The tighter regulations, which come into force on April 26, require lenders to carry out a detailed assessment of borrowers’ ability to keep up with their loan before advancing them money.

The strong emphasis on affordability has sparked speculation that banks and building societies may scrap short-term fixed rate deals at low rates, as they focus on responsible, sustainable lending.

Under the new rules, known as the Mortgage Market Review, lenders will also be able to ask applicants for evidence on how much they spend on everything from food to childcare to debt repayments if they are concerned about affordability.

They will also carry out an interest rate ‘stress test’, to ensure borrowers can continue to meet their mortgage repayments even if the cost of borrowing rises.

But the Council of Mortgage Lenders (CML) today said there was nothing in the new rules that would lead to lenders pulling their fixed rate products or hiking the price of them.

BernardClarkeBernard Clarke CML communications manager, said: “There is a very strong attachment among consumers to two year fixes.

“They have proved extremely popular overtime and the mortgage market has a strong bias to consumer preference.

“There is nothing in the Mortgage Market Review that would bring them to an end.”

Just under nine out of 10 mortgages taken out during February were fixed rate deals, according to the CML.

The group attributed the strong preference for these loans to the fact that interest rates were likely to start rising sooner than previously expected on the back of the UK’s strengthening economy.

Only 6 per cent of borrowers opted for a tracker deal, which moves up and down in line with changes to the Bank of England Bank Rate, while just 2 per cent of homeowners took out a discounted rate.

Meanwhile, the Bank of England’s Trends in Lending report showed further improvements in the mortgage market during the early part of the year.

The Bank said mortgage approvals for house purchase by all UK lenders had continued to rise during the three months to the end of February.

It added that although approvals fell slightly in February, they remained “considerably higher” than for the same period in 2013.

At the same time, interest rates on two year fixed rate mortgages have remained broadly unchanged since the start of the year, despite an increase in two year swap rates, upon which the deals are based.

But the cost of five year deals has started to edge up, as lenders pass on some of their higher funding costs to consumers.

Mark Harris, chief executive of mortgage broker SPF Private Clients, said: “The volume of mortgage lending continues to rise as more buyers take advantage of the cheap rates available to get on the housing ladder or move up it.

“Two year fixes were largely unchanged in the first quarter but five year fixes have started to edge up, partly as a result of higher swap rates which have doubled in the past year.

“However, there are still five year deals pegged at around 3 per cent for those with sizeable deposits, which is excellent value.”

He added that the new mortgage rules were likely to lead to a slowdown in mortgage processing while they “bedded in”, but once any glitches were ironed out, the mortgage market should continue to perform strongly for the rest of the year.

April 22, 2014 at 12:00 PM Leave a comment

The FCA’s new mortgage rules put affordability first

From Saturday 26 April, the Financial Conduct Authority (FCA) is giving mortgage lenders and advisers in the UK new rules to follow when you take out a home loan. The principle is that your mortgage should suit your circumstances – and that means it must be affordable, writes Linda Woodall, director of Mortgages and Consumer Lending at the FCA.

Linda Woodall

The FCA’s Linda Woodall says new mortgage rules put affordability first

We’ve brought in these rules after reviewing the mortgage market to see how it can work better for consumers. Before the financial crisis, more and more people were being given mortgages without any real evidence they could afford them – a trend fuelled by cheap credit and rising house prices. This led to some people falling into arrears or even losing their homes. Without historically low interest rates since then, many more may have been caught in the same trap. It was clear that something had to change.

A mortgage is the biggest financial commitment most of us will ever make, and it can be hard to make an informed choice from the wide range of deals available. We think everyone who needs it should have professional advice, so you get a loan you can realistically afford to pay back.

Under our new rules, lenders will have to be satisfied you can afford your mortgage. If you’re using a financial adviser or mortgage broker, they will have to discuss your needs and circumstances and make sure you meet the lender’s criteria when they recommend a mortgage for you.

There are exceptions to the rules – for example, some people can choose a mortgage deal without taking advice, and people remortgaging with their existing lender won’t always need to go through the same level of affordability checks. In most cases, though, your lender will have to check your income and basic spending, and any other financial commitments. They will also look at how predicted interest rate rises could affect your mortgage payments.

The point of this isn’t to examine every penny you spend on things you enjoy, or to stop you getting a mortgage. It’s to make sure you can afford what you need as well as your mortgage payments, as far as can be predicted. We’ve specified what lenders must check as a minimum, but each lender can decide for themselves how much more detail they want go into with you.

Many advisers and lenders are already doing these checks with their customers. We’re taking a common sense approach to avoid the problems of the past, and create a sustainable and healthy mortgage market that works well for both lenders and borrowers.

April 22, 2014 at 10:16 AM Leave a comment

Cost of moving increases to more than £8,000

The cost of moving home increased to more than £8,000 during 2013 on the back of rising house prices, research showed today.

Moving

The typical homebuyer spent £8,248 on the costs associated with acquiring a new property last year, 6 per cent more than in 2012, according to Lloyds Bank.

The increase was driven by a jump in the amount paid in Stamp Duty, estate agency fees and legal fees, which all rose by 7 per cent in 2013.

These fees, which are impacted by rising house prices, made up the bulk of the total, with Stamp Duty accounting for an average of £2,001, while estate agency typically came in at £3,601.

By contrast, there was no change in removal fees or solicitor’s fees.

The average cost of moving home has increased by 22 per cent in the 10 years since 2003, but average house prices have soared by 31 per cent during the same period.

At the same time, average annual earnings have risen by 29 per cent in the past 10 years, meaning the typical cost of moving as a percentage of earnings has actually fallen slightly to 25 per cent from 26 per cent in 2003.

Marc PageMarc Page, Lloyds Bank’s mortgages director, said: “The cost of moving can be an expensive one, and rising house prices have had an impact on this with more property sales now within higher Stamp Duty brackets.

“On top of the costs of moving, homemovers also need to consider the costs involved with changing mortgages, such as product and administration fees.

“However, as earnings have also risen in the last 10 years at a higher rate than the cost of moving, at a national level the relative cost of relocating to a new property is actually lower than it was in 2003.”

Unsurprisingly, London is the most expensive place in which to move home, with the average cost of relocating in the capital standing at £20,825.

The figure is largely due to the higher Stamp Duty and estate agency fees buyers in London pay as a result of higher house prices, with these coming in at £10,850 and £6,510 respectively.

The South East has the second highest cost of moving, while it has also seen the biggest increase during the past decade with the total nearly doubling from £8,773 to £16,187.

The jump has been driven by increases in property values, which pushed more homes into higher stamp duty bands.

The typical mover in the South East paid £8,157 in stamp duty last year, up from just £2,250 in 2003.

At the other end of the scale, the cost of moving is lowest in Northern Ireland at £4,253.

Northern Ireland is also the only region of the UK that has seen a fall in the cost of relocating during the past decade.

The decline has been caused by steep falls in property values, which has pushed the average house price below the level at which stamp duty is paid.

April 21, 2014 at 8:00 AM 1 comment

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