Archive for February, 2007

Information from the British Banker’s association shows that mortgage lending for house purchases in January was just slightly lower in number than January last year, but nearly 16% higher in value. The average rose from £126,800 to £146,700, while volume dropped from 45,039 to 44,804.

David Dooks, Statistics Director at the BBA, said “January saw a continued stable demand for mortgages. Actual borrowing on mortgages remains strong compared with this time last year, so the impact of higher interest rates has yet to feature.”

So at the moment it appears as if the three recent rises in the base rate have had little effect on general demand for property.

Property markets, as with other markets, rise and fall in value, but is a change in people’s living habits creating a permanent increase in property prices? Is the ratio of house prices to salaries rising for good? Let us know what you think.

Ing Direct and Future Foundation have announced results of research into factors pointing to growth potential in property values. The bank interviewed 200 estate agents in order to compile the list of factors. The three main factors were:

1. Improving school results (79%)
2. Skips and scaffolding (70%)
3. Planning application notices (57%)

• more traffic wardens
• busier public transport
• more burglar alarms
• neighbourhood watch schemes
• graffiti removal
• ethnic food in local shops
• a growing telephone directory

ING estimates that if an area is displaying at least six of the factors, it should outperform the national average by over 13% for the next ten years.

ING Direct’s chief executive Lindsay Sinclair said “Traffic wardens and more crowded public transport are not things you would normally welcome, but it appears that such annoyances do come with a silver lining.”

Despite some suggestion that the rate may have risen again this month, the Bank of England has today voted to keep the base rate at 5.25%.

This should please those on variable rate mortgages, while those soon coming to the end of 3yr fixed rate deals may have to find more money each month since the base rate was at 3.75% 3 years ago.

The Bank will release minutes from the meeting on 21st Feb, which will contain the vote spread across the members of the rate setting committee. This is often a good indicator for which way the rate is likely to head in the future.