Housing & mortgage round up: House prices continue to fall but better news on repossessions


Housing & mortgage round upLast week it was the Nationwide, this week the Halifax release their latest house price data; it doesn’t make good reading for most homeowners.

Whilst house prices may be falling it appears that the number of repossessions has slowed, at least for the time being.

Read on for these stories and more.

Halifax: House prices fall

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Last week’s figures from the Nationwide, showing that house prices had fallen in July, have been confirmed by the latest data from the Halifax House Price Index.

The UK’s largest lender has said that house prices fell by 0.6% last month and are down by the same amount over the past 12 years; taking the value of the average home in the UK to £161,094.

The Halifax has made it clear they see little evidence for significant movement in house prices during the remainder of this year, unless the economy gets significantly worse, when prices could start to fall more sharply.

Martin Ellis of the Halifax said: “The underlying trend in house prices was flat in the three months to July compared with the previous three months.”

“At a national level, house prices have been very stable over the past year or so.”

“This can largely be explained by the static nature of supply and demand conditions during this period,”

Repossessions fall, but more are predicted

The number of homes being repossessed by mortgage lenders has fallen to the lowest level since the end of 2010.

New figures from the Council of Mortgage Lenders (CML) have shown that in the second quarter of 2012 8,500 homes were repossessed, down from 9,600 in the first three months of the year.

If the trend continues the number of repossessions is on track to be at their lowest level since before the start of the credit crunch in 2007. However, despite the encouraging figures and the news that arrears rates are showing no sign of rising, the CML are sticking to their original prediction of 45,000 repossessions in 2012.

The CML believes repossessions are currently falling due to the low interest rates we are continuing to see and the fact lenders are more willing to help people struggling to meet their mortgage payments.

Paul Smee, Director General of the CML, said: “The figures show that lenders, borrowers and debt advisers are working together to get through the current period of economic difficulty and keep mortgage possessions in check.”

The government’s Support for Mortgage Interest (SMI) scheme has helped many unemployed people and is one of the reasons why repossessions have fallen. The scheme covers the interest payments on up to £200,000 of a mortgage, for people who have been unemployed for more than 13 weeks. However, at the end of this year the scheme is due to revert back to its original 39 week waiting period, something which could cause severe financial hardship for many.

The CML believe that the SMI scheme has helped over 250,000 people and that if the government should take action to maintain the lower waiting period into 2013 if a rise in repossessions is to be avoided.

Buy to let lending rises

A busy week for the CML’s data department saw them release more figures, this time to show that buy to let lending has increased by nearly 20% over the past year.

During the last quarter, 33,000 buy to let mortgages were made, up 18% on the same period last year.

The increase seems to be down to a number of factors. Firstly house prices have fallen since this time last year, making property more affordable for investors and secondly, lending criteria for buy to lets has not tightened as much as it has for other types of mortgages.

Thirdly the rental sector is booming, partly because of tighter mortgage lending criteria, especially for first time buyers, and a limited supply of quality properties available for rent.

Finally with interest rates remaining low, savers and investors are constantly looking for better returns and see buy to let as an alternative.

Post Office to offer mortgages

The Post Office has announced that it will soon start to offer mortgages.

Initially the Post Office will place mortgage advisers in seven of its branches, but hopes to have more than 100 advisers if the pilot scheme is successful.

The advisers will only be able to recommend the Post Office’s own mortgage products, which since 2009 have been available online and over the phone.

The Post Office has stated that their aim is to become one of the UK’s top 10 largest mortgage lenders. With such big ambitions housing experts will hope that the mortgages they offer will help the groups who are currently finding it hardest to get a mortgage, particularly first time buyers, who already account for 40% of the Post Office’s mortgage lending.

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

For providing mortgage advice we will charge an application fee of £299 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.