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YourMortgage News

This is the news items from June 2007, kindly provided by YourMortgage.co.uk.

June News

House prices continue to soar

House prices are increasing more than twice as fast as last year, according to Nationwide.

Research by the lender shows property prices are rising at the equivalent of £50 per day.

June saw a greater than anticipated rise of 1.1%, which brought house price inflation to its highest level since January 2005.

Fionnuala Earley, chief economist at Nationwide, said the unexpected size of this increase may lead to an interest rate rise that is both higher and earlier than expected.

She cautioned first-time buyers: "If you want to enter the housing market, the most important thing to think about is whether you can afford it, not only now but in the future."

However, she also predicted that house price growth will eventually slow in 2007.

Savvy homebuyers use the internet

Jun 26 2007

Increasing numbers of homebuyers are turning to the internet to find their dream home, according to Halifax Estate Agency.

One in ten homeowners started the search for their current property online, and that figure is set to rise - almost one third of respondents intend to trawl the internet for their next property.

Colin Kemp, Managing Director of Halifax Estate Agents, ascribed the increased popularity of web property searches to "the ease of searching from your own home and the ability to search thousands of properties at a click of a button".

However, estate agency offices remain more popular that the virtual world, with nearly two in five of those surveyed intending to use them for their next property hunt.

The survey also revealed a generational divide: 43% of 18-24-year-old homeowners had started their property search online, compared with just 1% of the over 65s.

Remortgaging can prove expensive

More and more people are using the equity tied up in their homes to consolidate their debts, research by Moneyextra.com shows.

The average remortgage is now £122,5411, a 7% increase on last year.

Robin Amlôt, senior editor of Moneyextra.com, said, "It seems many people are opting to consolidate expensive credit card debt and overdrafts into their mortgage debt.

"This can reduce immediate monthly outgoings, but means borrowers are likely to pay far more interest in the long run."

Housing market starting to cool

The UK housing market is cooling down, according to latest figures from the Council of Mortgage Lenders (CML).

Gross mortgage lending in May was up by 5% on last year's figure. However, the rate of year-on-year growth is not as high as has been in so far this year, when typically the increase was around 12% to 15%.

CML director general Michael Coogan said: "While today's lending figure is a new record, it does indicate that the market is slowing down following the rapid and sustained growth we saw last year."

He added that he believes the market will remain in good shape going forward, however.

"Although further interest rate rises will continue to dampen demand, we are still on course to meet our prediction of a record £360bn of lending during 2007."

Moving home costs over £20,000

The average household in Britain spends £23,800 on the ‘hidden' costs of moving house over their lifetime, according to a new study by The Co-operative Bank.

These ‘hidden' costs, which include all the extra expenses apart from the actual house price - such as solicitors fees, stamp duty, removal costs and estate agents fees - can often be often underestimated, despite the fact that collectively they add up to more than £10bn for the total population.

John Barker, Head of Mortgages at The Co-operative Bank, said: "As house prices have continued to increase it is important for people to look at the bigger picture in terms of costs.

"Hidden costs that are not budgeted for can soon mount up and by having a contingency fund in place it will enable people to be fully prepared for any eventuality. "

Worryingly, despite all the hidden expenses involved with moving, only half of those questioned by the bank (56%) had a contingency fund in place to meet these costs.

Other home movers get themselves deeper into debt by taking out further loans or borrowing on credit cards (15%), whilst some people are still relying on relatives for that extra help (5%).

Although house prices are continuing to rise it seems that the majority of people today are not prepared to make sacrifices in order to afford the house that they want (57%).  Where people are making sacrifices, over a quarter forgo holidays abroad (28%), whilst a fifth give up eating out (21%) or buying new clothes (18%).  However one in ten people are so determined to afford the property of their dreams that they make much larger personal sacrifices, such as changing careers, or putting off starting a family.

To help home movers during this stressful time The Co-operative Bank is launching a new website, www.co-operativebank.co.uk/movinghome, which will provide help and advice for people who are looking to move.

The new site contains the latest information and links on everything to do with moving house - from mortgage rates and legal advice to finding out how much your house is worth and where to find a local removal firm.

John Barker adds, " As moving house is such a complex process, it pays for buyers and sellers to do their research beforehand and make themselves aware of the various sources and organisations available for advice. Becoming more informed about the options available should lead to healthier finances in the longer term."

DIY websites are the way forward

Savvy homeowners use the Internet to see their homes, according to research by Alliance & Leicester Mortgages.

It claims internet websites sell homes in less than two months, on average - compared to more than three months using traditional sales processes, such as estate agents.

Despite this, four out of five people still favour estate agents to sell their homes, while just 17 per cent hedge their bets by using more than one agent.

Stephen Leonard, director of mortgages at Alliance & Leicester, said: "Using an estate agent to sell your home is generally viewed as part and parcel of the moving process with many homeowners continuing to use them to sell their home.

"But the research suggests that DIY methods such as using the internet to sell a home are becoming more popular."

The survey found that the most popular DIY methods people use when selling their homes include word of mouth, local newspaper advertising and a home-made ‘For Sale' sign, as well as DIY property sale websites.

The research also found that more than half of property vendors rely on just one estate agent alone to put a value of their home.

Leonard added: "This seems rather surprising given that, when making other significant purchases, people will shop around and carefully look at what's on offer to get the best bargain.

"In order to get a realistic valuation for their property, homeowners should be prepared to hunt around to ensure they get an accurate figure."

Estate agents and homeowners disagree about home improvements

Estate agents and homeowners disagree about the type of home improvement that adds value to a home, GE Money has found.

Loft conversions and extensions each add around £20,000 to the price tag of a property, according to estate agents, who view new flooring and garden decking as the least profitable DIY projects.

By contrast, homeowners believe a new kitchen and new bathroom will add the most value to a property. According to estate agents, this would add on average only £13,400 in total.

Giacomo Gigantiello, spokesperson for GE Money Home Lending, said: "Homeowners planning improvements to their homes this summer to increase the value of their property could be missing out on the most valuable additions."

Best value home improvements differ considerably, both in type and value, depending on region and style of property.

In the more metropolitan and densely-populated areas of London and the South East, loft conversions on average offer the best potential increase to a property's value, adding as much as £44,500.

However, in Yorkshire, conservatories backing out onto open spaces benefit properties most, adding almost £25,000.

Estate agents' widely considered least profitable improvement, outdoor decking, varies hugely on location. In built-up areas such as London, where making the most of any outdoor space is important, decking can easily add around £2,350 to the value of a home. In the countryside of the South East, however, a decked or terraced area adds only £470.