Housing round up: More Standard Variable Rate increases and house prices fall


Housing & mortgage round upIn this week’s housing round up we look at another rise in a lender’s Standard Variable Rate and bring you figures from the latest Halifax house price survey.

Finally we highlight research from Unbiased.co.uk which shows some of us have an alarming lack of interest in our mortgage.

More lenders increase their Standard Variable Rate

The Clydesdale and Yorkshire Bank are the latest mortgage lenders to announce an increase to their Standard Variable Rate (SVR).

30,000 mortgage customers of the two banks will see the SVR rise from 4.59% to 4.99% on 1st May.

The move comes after similar increases from Natwest RBS, Halifax, Bank of Ireland, Bristol & West and Santander.

The lenders have all cited increased costs, especially higher interest rates for borrowing money on the wholesale markets, and the need to offer competitive rates of interest to savers, who are are struggling to find the best buy savings accounts.

However critics have pointed out that the banks are often making considerable profits and are simply increasing costs for existing customers to offer new customers, whether they are borrowers or savers, more competitive deals.

Halifax: house prices falling

The latest figures from the Halifax house price survey have shown that on a monthly, three monthly and annual basis house prices are still falling.

The Survey showed that house prices fell by 0.5% in February and by 1.9% over the last 12 months.

The rolling three monthly average, which may experts believe is the best indicator of the current direction of house prices, fell by 1.1%.

According the Halifax the average UK property is now worth £160,118.

Martin Ellis of the Halifax said: “Overall, prices nationally are at broadly the same level as last spring. This stability in prices is explained by the fact that market conditions have changed very little over this period with demand supported by low interest rates and supply remaining tight.”

He continued: “Falling inflation should relieve some of the pressure on household finances over the coming months. Many of the economic statistics released in recent weeks have also been encouraging, suggesting that the UK may avoid slipping back into recession.”

Half of all borrowers fail to review their mortgage

Hardly a day has gone by without a new lender announcing a rise to their Standard Variable Rate (SVR), however new research shows many people are still not reviewing their mortgage deal.

Figures from Unbiased.co.uk, the financial information website, show that 49% of people have not reviewed their mortgage deal in the past three years. Shockingly the research also found that 56% of borrowers did not know the interest rate they were paying on their mortgage.

Mortgage experts suggest that borrowers review their mortgage deals on a regular basis to make sure their deal is as competitive as possible; the recent increases in the SVR’s of some lenders makes the need for a review even more urgent.

Karen Barrett, chief executive of Unbiased agrees: “If the recent decision by Halifax and RBS to increase their SVR is an indication of the direction of the market then we will see more increases to the rates that consumers are paying on their mortgages, making it more important than ever for people to shop around for a better deal.”

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