Archive for the 'Main' Category

Latest figures from the HMRC show that 60,000 homes (worth over £40,000) were sold in March, compared with 43,000 in February. Whilst sales in March would normally be expected to be higher than February, the increase is still a sizeable amount on seasonally adjusted figures, i.e. 54,000 in Feb to 61,000 in March or 13%. This might come as good news for those looking to move in the near future, but obtaining a mortgage is still much tougher than it was just a few months ago. The Council of Mortgage Lenders reports that in February, first time buyers had to put down an average deposit of 25%. With the average first time buyer loan being £95,000, that means an average deposit of just under £32,000 – a significant amount for all but the most affluent buyers. The CML also reports that 2 million households would be unable to move now due to negative equity or inability to raise a deposit on a new property.

Figures from the Bank of England show that mortgage approvals saw a surprise increase in February, rising to almost 38,000, from less than 32,000 in January. The increase is a positive move back towards a more active property market. However, it is still well down on what would be considered normal levels of activity. Normal levels would be around 70,000 mortgage approvals per month.

Figures released from the Land Registry show that property prices fell by 2% in February. This means the annual rate of decline increases from 15.1% to 16.5%. The average house is now worth just under £154,000, more than £30,000 less than a year ago. Decline in house prices in the North West was significantly higher than average, with house prices dropping by 4.1% in February. However, in the South West, prices dropped by only 1%. Figures for London show that property prices dropped slightly less than the average over the last year, falling by 15.6% to £298,563. Sales have also dropped significantly over the last year. There were 81,300 completions in December 2007, but only 36,341 in December 2008.

Readers should be aware that The Abbey has recently removed over 7,000 solicitors from its list of approved members. The move came as a complete surprise to the solicitors who were removed. Whilst we as customers pay the solicitors conveyancing fee, the mortgage lender normally lets the solicitor handle its side of the conveyancing process. For customers who are setting up an Abbey mortgage and attempt to use one of the solicitors who has been removed, they will be asked to pay for a different solicitor to cover the bank’s interests. The Law Society, which represents solicitors, is meeting with the Abbey to raise its concerns with the bank. For the moment, it would be wise for potential Abbey customers to check whether their intended conveyancer is currently on the Abbey’s list of approved solicitors.

The Bank of England has reduced the base rate to a new all time low of 0.5%. The further drop (from 1% in February) was widely expected. The Bank has also promised to use £75bn of funds to buy assets from the government and other banks. This will increase the amount of money in circulation, hopefully making lending more easily accessible.