FinanceBAM News

The June 24, 2007 edition of The Mail on Sunday featured on article on the presence of negative equity appearing more and more these days. Negative equity is a result of a homeowner’s mortgage being greater than the value of their property and is the result of borrower’s taking out new, bigger loans.

Lenders are also contributing to the trend by of (more…)

On the site of Yahoo Finance of UK ‘Alice Lilley’ highlighted Housing Market Crash. Its analyzed that the year 2006 saw a high rise of 9.9% in house prices until 1%downfall in December of the same year according to the most recent figures from mortgage lender Halifax

The latest Royal Institute of Chartered Surveyors monthly survey reported a sharp drop in the pace of increase in new buyer enquiries in November, suggesting that the market upturn may be losing momentum. But according to most commentators these kind of surveys don’t prove anything in particular. For example, Estate agent Savills is forecasting 7% growth in 2007 on the other hand the mortgage lender Nationwide expects the prices to rise between 5% and 8%.

This will prove the predictions from the Council of Mortgage Lenders(CML) to be true. According to them the prices will rise about 7% in 2007 and 5% in 2008. On the other hand Howard Archer, a chief economist at Global Insight is also predicting a 6% increase in 2007. He said “Ongoing strong mortgage activity and a shortage of supply suggests that house prices could well see further buoyancy in the near term”. However, the Royal Institution of Chartered Surveyors believes prices will climb by just 3% this year, while Halifax is forecasting a 4% rise.

Halifax concluded there results for the year 2006 from the strong growth in areas such as London, where the average price paid for a property hit £287,176 at the end of the year, and the South West, where the average home now costs £200,931 (more…)

Rising house prices and interest rates are responsible for the 8% per year drop in first time homebuyers as these increases keep young people out of the market states Telegraph. This figure is likely to fall even further if rates keep increases as expected.

Experts have encouraged homeowners to take the great mortgages deals still on the market, of which aren’t many. This is particularly true if they are interested in the security of a fixed rate as these rates with low interest percentages are becoming almost impossible to find. Fixed rate deals are becoming more sought after as homeowners are opting for set payments. In March, 88% of first time homebuyers chose this option and fixed rate deals accounted for 78% of all loans which was up from the previous month. This is often the method of choice due to the security fixed loans provide. (more…)

According to Yahoo Finance, there has been a trend in the recent months of property purchasing. Property companies have been appearing on the scene buying homes from homeowners who are finding mortgage payments too hard to maintain. There are now more than 200 companies buying houses at lower than market value. In some circumstances, they are even renting them back to the seller. (more…)

According to a BBC report on Thursday 7^th June, house prices are all set to increase to

10 times the average annual salary by 2026, these findings were made by a newly established government think tank.

To avoid such a surge in house prices, new homes are required to be built to boost supply. At the moment, house prices are equivalent to seven times the annual salary of an average person..

This estimate depends on how many houses are now built within the next year, the national target is 190,000 homes per year and approx 168,000 homes are being constructed at the moment.

The figures for affordability are calculated by taking the average of the lowest 25% earning income band and the lowest 25% of value of house prices.

Because first time buyers now have to put together larger deposits for their homes, it takes them longer to do this with the increasing prices of homes. They also are becoming less likely to get a mortgage because the figures would not stack up where the majority of mortgage lenders will only lend to a maximum of 5 times their income. (more…)

The much awaited HIP’s , Home Information Pack, which would be required to include various information about a property, basically like an MOT test certificate, seemingly will never be enforced legislation.

The government, on the last minute, back tracked the need for such information packs for selling a house. The “hips” was introduced to protect buyers, and the seller would have to carry out the survey for their customers, whereas before, the survey was carried out by the customer. Just 10 days prior to the implementation of the law, MP Ruth Kelly, the governments communities secretary rolled back the HIPS program as essential for home seller. However, the legislation was revised and was made mandatory for home that are four bedrooms or larger to require the information pack. This would only be 18% of the housing market that needed these packs and the remaining sector of the market i.e. three bedroom homes and under would not require the information but the minister promised it would be implemented at some time in the future. (more…)

Daily Mails brought an impressive article written by Becky Barrow on 3 May 2007.

Article discussed the rate mortgage offered by a major building society but scrapped five weeks after its launch.

In fact the deal of 5.63% remained too popular with borrowers and now at 5.25% , it can be sell like hot cakes ………………… Go and click on the link to know the details:

http://www.mailonsunday.co.uk/pages/dmstandard/frame.html?in_bottom=http%3A%2F%2Fwww.thisismoney.co.uk%2Fmortgages%2Fmortgages%2Farticle.html%3Fin_article_id%3D420000%26in_page_id%3D58%26ct%3D5

This news artilce was previously written for Financebam last May

With another quarter percent increase in the Bank of England interest rates, home owners are becoming stretched further than ever before for over four years. According to market analysts, the property market has boomed and remains lucrative after great speculation of a property crash and a sudden decline in the property market. But this has ye to be seen, as lending is still above average as reported by the banks quarterly reports.

But the latest increase in the interest may star to prove some of the skeptics correct as these are testing times for home owners. With another increase in the pipeline within the next three months, it doesn’t look promising. With growth in the property market on a decline, the property market has certainly cooled down, and does not look to rise until the interest rates make a downwards move. (more…)

The Times newspaper has reported that the Royal Institute of Chartered Surveyors was seeking a review of the new HIP pack the government wants to enforce.
The HIP pack stands for House Information pack and will cost home sellers something between £150 to £300 s an estimate, to present to potential home buyers. The HIP pack will include certain land searches and an energy performance certificate, to aid in the purchase of that property.
The Times stated that the RICS had only been given 8 weeks consultation instead of 12 and the thousands of assessors did not require a criminal record check. (more…)