After last week’s bumper round up, including the house price figures from the Halifax and Nationwide, this week has been relatively quiet for housing news. We have however managed to find a few interesting stories for those of you who need your weekly fix of housing and mortgage news.
Mortgage lenders cut interest rates again
As the effects of the government’s Funding for Lending Scheme (FLS) kicks, 10 mortgage lenders have reduced the interest rates on many of their deals.
Amongst the lenders dropping their rates ING Direct has cut their two and five year fixed rates, whilst Nationwide are cutting their two year fixed rate.
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Experts believe that the cuts are a direct result of the FLS, which is giving mortgage lenders access to cheaper wholesale finance. Whilst it was hoped that the scheme would increase the number of mortgage deals available for first time buyers and people with smaller deposits, this doesn’t seem to be the case, with such loans still hard to come by, whilst rates are reducing for people who could get mortgages before the scheme was introduced.
The FLS has also affected savers as banks have taken advantage of the scheme they have needed to raise less money from savers, allowing them to reduce interest rates on savings accounts.
‘Tesco law’ to help reduce cost of buying a house
The effects of so called ‘Tesco law’ were seen this week with a new entrant into the conveyancing market.
‘Tesco law’ allows non-lawyers to own and run legal firms, and was introduced with the aim of reducing costs for certain legal services, such as conveyancing.
Although Tesco are yet to enter the legal market, Saga has this week started to offer fixed price conveyancing, irrespective of the purchase price.
In a recent survey, conducted by Saga, 60% of the 10,000 people who took part said they were unhappy with traditional conveyancing services.
Roger Ramsden, Saga Chief Executive, said: “Fees are traditionally calculated based on the value of the property being bought or sold, yet selling a house worth £1 million generally involves the same amount of legal work as selling one worth £100,000. So why should conveyancers, such as those employed by large estate agencies, cream off more in fees?”
He continued: “The conveyancing market is long overdue for a shake-up, people are simply not happy with the value for money or service provided. People want certainty of price, with no hidden extras and access to their conveyancer when they need them.”
Reacting to the move, some mortgage experts were concerned that whilst the price might be cheaper, it isn’t hugely cheaper than using a more traditional Solicitor and that using a large company might reduce the level of personal service available. However, Saga will provide greater access, opening seven days a week, than is possible with a traditional firm of lawyers.
A bright end to the year for the housing market?
After a year of stagnant house prices and mortgage lending, new figures from The Royal Institution of Chartered Surveyors (RICS) show that surveyors and estate agents are more positive about the level of house sales than at any time in the past two years.
Whilst still expecting house prices to fall over the next three months, the respondents to the survey were more bullish about house prices than in previous months.
Peter Bolton King, Global Residential Director at RICS, said: “The housing market was relatively flat during September but surveyors are optimistic that the run in to Christmas could see an increase in activity in many areas of the country. Prices are still dipping but at a much lower rate than seen in previous months.”
He continued: “Despite this, problems still exist and more needs to be done to get the market moving. Unrealistic expectations on the part of vendors seem to be stalling the transaction process.”
“Meanwhile, although the Funding for Lending scheme appears to be improving mortgage availability, those at the very bottom of the housing ladder are still struggling.”
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
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