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This is the news items from April 2007, kindly provided by YourMortgage.co.uk. To see more detailed features from YourMortgage click here.

April News

 Sellers put off by HIPs

The introduction of Home Information Packs (HIPs) in June will put thousands of sellers off placing their homes on the market, a report has found.

The National Association of Estate Agents says that nearly one in five homeowners are tempted to put their house up for sale to test the market - but warns that many of these homeowners will be put off by the need to fork out for a HIP.

Peter Bolton King, spokesperson for the association, said: "A significant percentage of sales that go through [to completion] start with a seller ‘testing the water'.

"The lack of ability to do this without paying for a HIP first is likely to put many sellers off.

"This will reduce the supply of property available, causing the market to slow down and leading to additional house price inflation."

HIPs, which become compulsory on 1 June, cost around £500. Vendors must meet this cost before they put their property on the market.

Buy to let landlords on the rise

Apr 27 2007

The number of buy to let property investors is set to double in the next three years, a report by Mintel has found.

The research predicts that, by 2010, one million extra people in the UK will have bought a second property as an investment, taking the total number of buy to let property owners to around two million.

Paul Davies, senior financial analyst at Mintel, told the Guardian: "It is clear that these days buy-to-let is no longer the exclusive domain of professional portfolio landlords.

"Increasingly, property owners are seeing the benefits of investing in bricks and mortar and often regard the second homes market as a good alternative means of saving for retirement.

"As long as these trends continue, future growth in this market should be guaranteed."

The survey comes as Paragon Mortgages claims tenant demand is at its highest ever level, with 92% of landlords reporting strong demand.

Birmingham Midshires also conducted research into the buy to let market and found that almost a third of property-buying singletons, divorcees and single parents are purchasing property as an investment.

Tim Hague, head of mortgages at Birmingham Midshires, said: "The Mintel predictions suggest that the recent growth that we have witnessed in the buy to let industry is set to continue and also confirms that people are increasingly looking at property as part of a balanced investment portfolio."

Rising house prices means interest rate hike likely

Apr 26 2007

House prices this month shot up almost twice as fast as last month, increasing the likelihood that interest rates will rise in May, Nationwide claims.

House price inflation increased from 0.5% in March to 0.9% in April, according to Nationwide figures.

The Bank of England held off hiking up interest rates earlier this month, but revelations that inflation has reached more than 3% and the strength of the sterling against the dollar, as well as rising house prices, has led Nationwide to predict that a Bank Rate increase next month is "a certainty".

Fionnuala Earley, Nationwide chief economist, said: "The price of a typical house is up to £180,314, which is £16,741 higher than at this time last year."

She added that, while too rapid an increase in interest rates could destabilise the property market, a house price crash remains unlikely.

Apathy costs mortgage borrowers millions

Apr 24 2007

Mortgage borrowers are wasting millions because they are too lazy to look around for the best deal, a report by Moneysupermarket.com has found.

It claims nearly one in five people are over-paying by languishing on their lender's Standard Variable Rate, which is usually around 2% higher than the most competitive rates that top the best buy tables.

Louise Cuming, mortgages spokesperson for Moneysupermarket.com, said: "It's unbelievable so many people are playing into the lenders' hands and paying the standard variable rate."

The research also shows that more than a quarter of borrowers now oft for the security of a two-to-five year fixed rate mortgage.

Lenders withdraw fixed rates

Apr 19 2007

Several lenders have withdrawn their current fixed rates, as mortgage borrowers rush to anchor down their payments now before an anticipated rise in interest rates next month.

Alliance & Leicester today withdrew its entire range of fixed rate mortgages, which included mortgages with market-leading rates below 5%. Skipton, Newcastle, Newbury and Principality building societies have also taken some of their fixed rate mortgages off the market.

Some housing market commentators believe the move is a reaction to the announcement on Tuesday that inflation had shot up to a fifteen-year high, leading to predictions that the Bank of England will increase interest rates shortly.

But Sally Lauder, Alliance & Leicester spokesperson, said the bank had withdrawn its fixed rates because it did not have sufficient funds to meet an unprecedented level of demand. It plans to offer new fixed rates to the market on 23 April.

Commenting on the temporary withdrawal of fixed-rate mortgages by some lenders, Louise Cuming, head of mortgages at moneysupermarket.com said: "It may seem like a rash decision to remove fixed rate deals from the market, but it probably would have happened anyway.

"Now that [some] fixed rate products have been withdrawn, we can expect lenders to announce a raft of new deals with increased fixed rates.

"In the light of this, people might also begin to think twice about moving."

Key workers cannot afford to buy houses

Apr 16 2007

Key public sector workers like nurses and firefighters cannot afford to live in the vast majority of towns in Britain, research from Halifax has found.

The typical nurse would now not be able to afford to get a mortgage on the average house in 99% of towns, while the average house price in 97% of towns was unaffordable for firefighters.

London and the South West present the greatest affordability problems for key workers, who cannot afford mortgages on houses in any of the 32 London boroughs surveyed and all 34 towns researched in the South West.

Tim Crawford, group economist at Halifax, said: "Housing affordability continues to deteriorate for key workers across the UK and it now clearly not a problem confined to the south of England."

Surrey is the least affordable county for key workers, but Buxton in Derbyshire and Matlock in the East Midlands saw some of the largest deteriorations in affordability for key workers.

Overall, the average house price was unaffordable for teachers, police officers, paramedics, nurses and firefighters in 70% of towns. Five years ago, the average house price in only 36% of towns was unaffordable for these key public sector workers.

Flats are the most affordable for key workers, with 70% of key workers able to get on the ladder by compromising on space and buying a flat.

Interest rates held at 5.25%

Apr 5 2007

Interest rates are to stay at their current level for another level, the Bank of England has announced.

After passing on three rate hikes to mortgage borrowers in the past nine months, the Monetary Policy Committee has today voted to maintain the Bank Rate at 5.25%.

David Bexon, managing director of SmartNewHomes.com, said: "Many vulnerable homewoners are still struggling following the earlier rises in 2006 and January this year. Is this a stay of execution or a show of confidence that there will be no further rises this year?"

Stephen Leonard, director of mortgages at Alliance & Leicester, said: "Many now expect a hike in May. The money markets have been pricing in at least one rise in the Bank Rate this quarter, with rates potentially being cut later in 2007, or in 2008, as inflation drops back towards the MPC target of 2%."

He added that borrowers looking for stability would do well to lock into a fixed rate, to avoid the impact of any further rate rises, while those with a bit more flexibility should look for Base Rate trackers.