News

Estate Agents Close Branches

According to recent research around one hundred and fifty branches of estate agents are closing on a weekly basis. So far about one thousand have closed.

It was said that the problem has arisen from the fact that many homeowners were unable to move because they could not get a mortgage. The Bank of England state the number of new mortgages approved in March was the lowest since their records began in 1999.

It was also having a knock on effect to DIY and removal companies.

It was considered that the housing market boom of recent years has led to many more Estate Agents branches than would normally be expected. Now with the fall in the number of houses being sold they have to close some branches. This could be reversed if and when more mortgages were approved.

The British Association of Removers say this is normally the quietest months of the year and they are generally not worried about the present situation as they had no signs of job losses or closures.

2007 Strong Year for Mortgage Lending

2007 bought gross mortgage lending its strongest year according to the Council of Mortgage Lenders. It reached as estimated £362bn giving a 5% rise from 2006.

December’s gross lending declined to an estimated £22.6bn the lowest since May 2005.

The credit crunch and the availability of funds cut the amount of products available from lenders during December.

Suspended lending by Swift

It has been confirmed that lending by the Swift Group on first charge and buy to let range of products has been suspended.

The group have stated that it needs to review how it prices products and they intend to redesign the entire range. They add that their tables of interest rates on their first charge products have been based on loan size not on the customer’s circumstances and they now need to use a more risk based method of rating.

All first charge and buy to let products were withdrawn from the 19th February 2008 and no new applications will be processed until new products are launched.

They consider this to be the most efficient time to deal with the matter and will cause less disruption to brokers rather than change products when the market is more buoyant.

Lenders Withdraw Deals

Lenders in the UK have withdrawn 40% of their mortgage products in the last three months according to financial information.

The majority of that has been due to the collapse of the sub-prime market with 54% products having been removed.

Mainstream mortgage deals have also dropped by around 16%. This may not seem much but in a market with a historical steady market it is unusual to say the least.

Northern Rock has slashed 230 products leaving only 70 and this plus the Nationwide and Portman merger have certainly made an impression on the market.

House prices have reached peak levels and attained a level of unaffordability.

Surveys are now showing a slowing of the housing market and the number of borrowers has also dropped which has been reflected in the number of new approved mortgages.

Lenders are being far more careful about lending large amounts of money for those with adverse credit history especially if the price of their property may fall over the next few years.

Some lenders are removing from the market, their high risk products like those over 100% loan to value or self-certification. Others are just trimming their products.

Some lenders have found it difficult to borrow money to lend on as home loans especially for the sub-prime buy to let mortgages where the number of deals have dropped by 72% since July.

Farmland

In the three months up to September 2007, farmland prices rose by almost 10% according to a market review.

3rd Jobs.

Around 16% of potential first time buyers are looking for a third job in order to earn enough to be able to afford a home.

Energy Bills

The best way to reduce energy bills is to replace boilers that are over fifteen years old. The more modern systems are more effective and run on less fuel with condensing A boilers using 30% to 40% less energy.

Graduates

A recent survey of graduates found that 56% of those who graduated in the past ten years are not homeowners.

Exodus of l million First Time Buyers

Over one million first time buyers have had to put off buying a property for the time being according to Abbey. This equates to 67% of the first time buyers market.

Abbey say that investing money for a deposit could mean that the money is likely to grow faster than house prices giving first time buyers a chance to get onto the property ladder next year. They would stand an even better chance if the money were to be deposited in high interest savings accounts.

Christie Scotts, the Surrey based mortgage adviser, state that there are concerns about property prices dropping and because many first time buyers are unable to put down large deposits there is the possibility of negative equity.

Also with lenders offering products with higher rates for low deposits it is felt it would be wiser to build up a good deposit first.