YourMortgage News

This is the news items from Mar 2009, kindly provided by YourMortgage.co.uk.

March News

Consumer confidence on the up 4 Mar 2009

Confidence among UK consumers rose in February despite the weakening economic conditions, according to the latest Nationwide consumer confidence survey. The index rose by 2 points to 43 in February, representing its first rise since last October, with consumers showing that they were more optimistic about future economic conditions.

Fionnuala Earley, chief economist at Nationwide, said: "Consumers' views about the current economic and labour market conditions are in line with the recessionary climate in the UK.

"However, their increased optimism about the future is encouraging. Spending confidence continues to be resilient, which could reflect the effect of sharp falls in interest rates on consumers' disposable incomes, but is also likely to reflect significant discounts available."

Bank of England cuts interest rates to 0.5% 5 Mar 2009

The Bank of England's Monetary Policy Committee (MPC) has slashed interest rates from 1% to 0.5%. The reduction means rates have now fallen almost 5% in the last year, having stood at 5.25% in February 2008.

Miles Shipside, commercial director, of Rightmove, said: "The Bank Base Rate cut is obviously good news for both those homeowners on tracker mortgages and those looking to move. However, for the market to return to a state of normality we would repeat the need for sensible loan-to-value ratios and income multiples to be made available to buyers, at reasonable interest rates."

Michael Coogan, director general of the Council of Mortgage Lenders, said: "This latest cut presents immense challenges for lenders whose margins are already squeezed as a result of previous reductions, leaving little scope to lower discretionary mortgage rates further. "Savings are the lifeblood of mortgage lending, and unless lenders can offer competitive rates to savers their ability to offer new mortgages is restricted.

"National Savings and Investments this week reported record inflows of savings, sucking more money out of the mortgage market, so today's cut represents a double whammy for prospective mortgage borrowers."

Asking prices show slight recovery 17th Mar 2009

The latest Rightmove house price index shows that the average property asking price rose slightly to £218,081 in March. Unsurprisingly, the majority of prospective spring sellers are being deterred by the conditions attached to doing a deal in the current market. There is evidence of buyer appetite at around 25% below peak prices and this level of discount is likely to be a major factor preventing many aspiring sellers from coming to market.

Numbers are down 57%, with only 78,901 new sellers this month compared to 181,840 in the same month last year. In addition, those sellers who have marketed in the last four weeks are showing resistance to the new reality by starting at prices £1,918 (0.9%) higher than the previous month.

Miles Shipside, commercial director at Rightmove, said: "Some sellers are still pricing wishfully high, though it is encouraging that elements of the market have adapted relatively quickly to find a new price floor at a discount of around 25% from peak.

"We are seeing a big jump in enquires, looking for those best buys. However, it is disappointingly predictable that the banking sector is still in the early stages of coming clean about its levels of toxic debt, limiting funding for one of the few bright spots of consumer demand in the economy.

"Until banks get their own houses in order, the active minority of sellers and agents who have drastically adjusted pricing will remain frustrated by the limited functioning of the financial services sector.

"Against the backdrop of the worst housing market for 50 years, buyers and sellers can be successfully brought together. Some buyers, sellers and those in the property industry have adapted relatively quickly. Estate agents have shed thousands of staff, cut out non-essential expenditure and expanded into lettings. Cut-throat competition to put more deals together will force more innovative approaches within the industry, and it is a shame this is not being matched by the mortgage providers."

Woolwich cuts rates by up to 0.5% 26 Mar 2009

Woolwich is to cut rates by up to 0.5% on its fixed and tracker mortgages, as well as its offset mortgage. The new range features two, three and four-year fixed rates all below 4%. The largest fall is in the five-year fixed mortgage range, with a 0.5% cut. Woolwich said it is retaining its cap on tracker rate increases, as it enables customers to know exactly how much their rate could rise in the future. The rate caps are being reduced in line with the tracker and offset rates by 0.4%.

Andy Gray, head of mortgages at Woolwich, said: "What we are seeing is what customers have been hoping for all along - more affordable mortgages. There are two main causes for the change - increasing competition in the market and reduced longer term fixed rates thanks to lower interest rate expectations. The last three months have seen an increase in mortgage activity across the UK, and our more competitive mortgage range can only help."

House prices recover in February 31 Mar 2009

By Imogen Crouch-Hyde

The average price of a new home rose by 2.8% in February 2009, the first monthly increase since May 2008, according to SmartNewHomes.com. The fluctuation is a result of historically low interest rates, decreasing availability of stock and intense buyer interest at the start of the year.

David Bexon, managing director of SmartNewHomes.com, said: "Many of the UK house price indices are now recording erratic fluctuations in their monthly data. One month's worth of positive growth does not indicate an emergence from the downward price trend, however, renewed interest from homebuyers and investors at the start of 2009 has put the brakes on price reductions from many developers, and resulted in more positive pricing for new homes coming onto the market. "

"While it is certainly too early to call a turnaround in the current price correction, the tide is now starting to turn."

Bargain hunters have also caused an apartment surge as investors have sensed competition for these homes, particularly in city centres, due to the significant lowering of prices over the past six months. Yet the number of detached and semi-detached properties coming onto the market has fallen significantly by 76% and 73% respectively.

Bexon continued: "The price bounce recorded in February is reflected across the regions, with major monthly price rises in several regions, particularly in the south. Prices will continue to fluctuate in this way as we approach the bottom of the downturn. It will be some time yet before we see any stability or continued price growth from any region."