Housing round up: Surveys show house price rises, another lender increases their SVR


Housing & mortgage round upTwo house price surveys published this week have shown a rise in prices.

The data will leave many people confused after last week’s survey from the Nationwide which showed a fall in prices, read on to discover why there might be a difference.

Another mortgage lender has increased their Standard Variable Rate for existing borrowers, whilst those people looking for a new mortgage could see the choice of mortgage products reduced.

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Halifax: 2.2% rise in house prices in March

Last week the Nationwide said house prices fell by 1% in March, this week the Halifax have said they rose by 2.2%.

It’s hardly surprising homebuyers and mortgage customers are confused!

The Halifax believes that the current volatility in house prices, with no overall trend upwards or indeed downwards, is due to low sales volumes.

Despite the rise in March, the Halifax say house prices have still fallen by 0.6% over the past year taking the value of the average home to ��163,803; which is broadly echoed by Nationwide figures.

Martin Ellis, Housing Economist at the Halifax, said: “The underlying trend therefore indicates broad stability in UK house prices.

He continued: “Efforts by first-time buyers to beat the expiry of the stamp duty holiday at the end of March have probably increased sales in recent months and may have helped to support prices.

“We continue to expect little overall movement in prices this year, provided that the UK economy does not suffer a pronounced weakening.”

Second survey confirms house price rise

A second house price survey, this time from Hometrack, has said that house prices rose in March, although by a smaller amount than the Halifax figures show.

Hometrack’s figures, which are based on data from 1,500 estate agents and surveyors, conclude that house prices rose by 0.2% in March. This is the first rise the survey has shown for 20 months.

Richard Donnell of Hometrack, said: “All the evidence points to a continuing firming in prices in the next few months as demand increases and supply remains repressed.”

However, many property experts believe that all house price data should be treated with extreme caution because of the low levels of sales and one off events, such as the end of the Stamp Duty amnesty, which have clearly had an impact on the market.

Co-Operative Bank increases their Standard Variable Rate

The Co-Operative Bank has become the latest mortgage lender to increase their Standard Variable Rate following the likes of Santander, Halifax and the Yorkshire Bank, who have all made similar changes in recent weeks.

The Co-Operative Bank’s Standard Variable Rate will increase by 0.5%, from 4.24% to 4.74% from 1st May and has says the move has been necessary due to “changing conditions in the mortgage market and the increased cost of funding”.

However, in a move designed to appease existing borrowers the Co-Operative has said that borrowers can move onto any of their current mortgage products before the change, providing the borrower qualifies.

Number of mortgage products fall

The number of mortgage products available to homebuyers and people wanting to remortgage has dropped sharply.

After rising steadily over the past few months the number of mortgage products available peaked in February at 2,757, since then the number has fallen to 2,288 in April.

Some mortgage experts have suggested that the peak in February could have been due to mortgage lenders increasing the availability of mortgage products to catch the end of the Stamp Duty holiday for first time buyers.

Others have suggested that the increase in the number of mortgage products was due to lenders looking to offer more high loan to value mortgages, which are more profitable to them, and then withdrawing deals once lending targets had been met.

Whatever the reasons, fewer mortgage products will mean less choice for mortgage borrowers, which is unlikely to be good news for the already stagnant housing market.

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