Housing & mortgage round up: 2013 starts with a bang


Housing & mortgage round up_istockphotoOnly three working days this week but after a quiet December the property and mortgage markets have really come to life with a huge amount news to catch up on.

We start with two house price surveys from the Land Registry and Nationwide and then move on to look at why mortgages might be easier to come by in 2013, as well as good news for buy to let landlords, tenants and would-be home buyers with a small deposit.

Nationwide: house prices fell in 2012

The first Nationwide House Price Index of the New Year reported that house prices fell by 1% in 2012, offsetting the 1% gain in 2011.

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According to the Nationwide house prices also fell by 0.1% in December, taking the average house price to £162,262.

Looking at Nationwide’s figures for the past 12 months, only London and the South-East showed an increase in house prices, although the rises were small, at 0.7% and 0.2% respectively. All other regions saw prices fall, with Northern Ireland seeing a large drop of 8.2%.

The figures also highlighted the differences between various regions in the UK, Robert Gardener, Chief Economist at the Nationwide, said: “Within England, the North/South divide in property prices continued to widen, with the price of a typical home in the South now around £95,000 more than in the North, a new high and around 2% more than at the close of 2011”.

Read more about the latest figures from the Nationwide by clicking here.

Land Registry: house prices rose in November

The latest Land Registry house price figures were also published this week.

According to the Land Registry, house prices rose in November by 0.30%, in the same month Halifax reported a 1% rise, whilst the Nationwide said they were unchanged.

Over the 12 months to November, the Land Registry report that house prices rose by 0.90%, at odds with the Halifax and Nationwide surveys, which showed small reductions of 1.30% and 1.20% respectively.

The small rise takes the value of the average home in England and Wales to £161,490,

The Land Registry data includes all housing transactions in England and Wales and takes longer to compile that other surveys.

Read more about the latest figures from the Land Registry.

Funding for Lending Scheme starting to work?

We’ve been very critical about the effect the Funding for Lending Scheme has had on the best savings interest rates but according to the Bank of England it does now seem to be having a positive impact on the mortgage market.

The Funding for Lending Scheme was launched jointly by the Treasury and the Bank of England in August of last year. It will make up to £60 billion of money available to banks and building societies at cheap rates, providing it is then lent on to homeowners and businesses.

The latest Credit Conditions Survey from the Bank shows that lending picked up in the final three months of 2012 and predicted further improvements as we head into 2013.

The Bank said: “In the three months to mid-December, lenders reported a significant increase in the amount of credit made available to the secured household and corporate sectors, and a slight increase in the availability of unsecured credit to households”.

The Bank continued: “The Funding for Lending Scheme was widely cited as contributing towards the increase in secured and corporate credit availability. Lenders expected a further increase in the availability of credit to all sectors over the coming quarter.”

However, the report was not all good news, with some lenders indicating that they will tighten their requirements and credit scoring as we move into 2013.

Level of rental arrears falls

In positive news for both buy to let investors and renters, the level of tenants with severe rent arrears has fallen for the first time in seven months.

New figures from Chartered Surveyors, Templeton LPA, have shown that the percentage of tenants with severe arrears, of two months or more, has fallen by 15.6%.

The figures show that the number of tenants in severe arrears, defined as being two months or more behind with their rent, fell by 16,000 in the final quarter of 2013, taking the percentage of all tenants in England and Wales, in severe arrears, to 2.2%, down by 0.3% on the previous three months.

The figures from Templeton LPA have been backed up by LSL’s Buy to Let Index, which also showed a fall in tenant arrears; whilst financial experts believe that the lower number of tenants in arrears is mainly due to improvements in the job market, with unemployment rates falling over recent months.

Nationwide extends 95% mortgage scheme

In a potential boost for home movers with a small deposit, the Nationwide has made their ’Save to Buy’ scheme available to home movers as well as first time buyers.

Over the past few years, most high loan to value mortgage deals have disappeared, as lenders became concerned about falling house prices and negative equity. This has caused problems for many would-be first time buyers, as well as those people with little or no equity in their home. Some of the more innovative mortgage lenders, such as the Nationwide, have looked at offering schemes, to try and alleviate the problem.

However, until this week the Nationwide’s ‘Save to Buy’ scheme was only available to first time buyers, it has now been extended and is available to home movers.

The ‘Save to Buy’ mortgage requires a deposit of just 5% of the purchase price. To qualify, potential borrowers must save at least £50 per month, for a minimum of six months, into a Nationwide ‘Save to Buy’ savings account. Once this criteria has been met, the would-be be borrower can then apply for a Nationwide ‘Save to Buy’ mortgage, which requires a deposit of just 5%.

Whilst the loan to value on offer is attractive to borrowers with only a small deposit, critics point out the interest rate charged is relatively high, although it does reflect the added risk in higher loan to value lending, and that there is no guarantee an applicant will be offered a mortgage, even if they have the ‘Save to Buy’ savings account.

The Nationwide’s ‘Save to Buy’ mortgage is not available via mortgage brokers and can only be applied for by visiting a branch. More details can be found by visiting the Nationwide’s website by clicking here .

Our mortgage adviser, Linda Wood , is here to help you. If you would like advice on your options or you are affected by any of the stories in this week’s housing round up please call Linda today on 0115 933 8433, alternatively enquire online or email linda.wood@investmentsense.co.uk

Your home may be repossessed if you do not keep up repayments on your mortgage.

For providing mortgage advice we will charge an application fee of £300 and we may also be paid a fee from the lender, any fee paid by the lender will be disclosed to you. Alternatively we will charge an arrangement fee of 0.5% of the loan and refund to you any payment received by us from the lender.