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Future generations may never own
Future generations may never own their own their own home with young people continuing to struggle to get on the property ladder, industry experts have warned.
In response to statistics documenting the trend of multiple families living in the same household in England and Wales experts have expressed grave doubts about the future of home ownership.
Research from the Office for National Statistics has documented the rise of so called “concealed families” following analysis of census data from 2011.
The research revealed a 70% increase in concealed families, i.e. a couple or lone parent living with another family, between 2001 and 2011. As such the number of such families in England and Wales reached a staggering 289,000.
Over the last 10 or 15 years house prices have decoupled from earnings growth and it’s getting harder and harder for young people to become first-time buyers.
During the recession certain groups of people also got themselves into financial difficulties and have elected to live with their parents again to get back on their feet financially.
New products from Nottingham Building Society
New products from Nottingham Building Society
- 2.20% discount for 3 years
- Max 80% LTV
- £300 application fee (can be added)
- £199 booking fee
- Unlimited overpayments
- Available for purchase & remortgage
- Free valuation for purchase and remortgage
- Free legal fees for remortgage
- Product code: MD0102
- Fixed until 01/09/2015
- Max 65% LTV
- £800 application fee (can be added)
- £199 booking fee
- Available for purchase & remortgage
- Free valuation for purchase and remortgage
- Free legal fees for remortgage
- Product code: MF011H
- Fixed until 01/09/2015
- Max 90% LTV
- £800 application fee (can be added)
- £199 booking fee
- Available for purchase & remortgage
- Free valuation for purchase and remortgage
- Free legal fees for remortgage
- Product code: MF0117
- Fixed until 01/09/2015
- Max 85% LTV
- £800 application fee (can be added)
- £199 booking fee
- Available for purchase & remortgage
- Free valuation for purchase and remortgage
- Free legal fees for remortgageProduct code: MF011A
- Fixed until 01/09/2015
- Max 70% LTV
- £800 application fee (can be added)
- £199 booking fee
- Available for purchase & remortgage
- Free valuation for purchase and remortgage
- Free legal fees for remortgage
- Product code: MF011F
- Fixed until 01/09/2015
- Max 80% LTV
- £800 application fee (can be added)
- £199 booking fee
- Available for purchase & remortgage
- Free valuation for purchase and remortgage
- Free legal fees for remortgage
- Product code: MF011C
- Fixed until 01/09/2018
- Max 80% LTV
- £800 application fee (can be added)
- £199 booking fee
- Available for purchase & remortgage
- Free valuation for purchase and remortgage
- Free legal fees for remortgage
- Product code: MF011E
- Fixed until 01/09/2018
- Max 70% LTV
- £800 application fee (can be added)
- £199 booking fee
- Available for purchase & remortgage
- Free valuation for purchase and remortgage
- Free legal fees for remortgage
- Product code: MF011G
- Fixed until 01/09/2015
- Max 75% LTV
- £1,500 application fee (can be added)
- £499 booking fee
- Available for purchase & remortgage
- Free valuation for purchase and remortgage
- Free legal fees for remortgage
- Product code: MBF10H
- Fixed until 01/09/2016
- Max 75% LTV
- £1,500 application fee (can be added)
- £499 booking fee
- Available for purchase & remortgage
- Free valuation for purchase and remortgage
- Free legal fees for remortgage
- Product code: MBF10K
- Fixed until 01/09/2015
- Max 75% LTV
- £1,200 application fee (can be added)
- £299 booking fee
- Available for purchase & remortgage
- Free valuation for purchase and remortgage
- Free legal fees for remortgage
- Product code: MBF10J
- Fixed until 01/09/2016
- Max 75% LTV
- £1,200 application fee (can be added)
- £299 booking fee
- Available for purchase & remortgage
- Free valuation for purchase and remortgage
- Free legal fees for remortgage
- Product code: MBF10L
High LTV lending hits highest level since Sept 2008
House purchase lending to high LTV borrowers hit a four and a half year high in June, according to the latest Mortgage Monitor from e.surv, the UK’s largest chartered surveyor.
High LTV lending reached a post-financial crisis record in June, hitting their highest level since September 2008. There were 7,046 loans advanced to borrowers with a deposit of less than 15% during the month, up 47% from 4,790 in June 2012.
The improvement in high LTV lending was the catalyst behind a 23% year-on-year increase in total house purchase lending. There were 58,321 house purchase approvals in June, up from just 47,422 in June last year, making it the strongest June for house purchase lending since 2007.
There were 3% more high LTV loans in June compared to May, continuing the trend of high LTV borrowers forming a bigger share of the house purchase market.
The sharp increase in the number of high LTV borrowers in June was the result of a significant and sustained improvement in the availability of high LTV mortgages since the start of the year. Lenders are more willing to grant house purchase loans to borrowers with small deposit, and have introduced a wider range of low rate mortgages into the market aimed at first-time buyers.
The Bank of England’s Credit Condition Survey revealed a sustained effort by lenders to increase their high LTV lending in Q2. And the survey revealed that lenders are planning to increase their lending levels to buyers with just a 10% deposit in the third quarter of the year. The survey also showed that demand for house purchase loans is picking up, as confidence grows amid an improving economic outlook.
The improvement in high LTV borrowers – most of which were first-time buyers – was reflecting in the growing number of loans on properties under £125,000 in value (typical first-time buyer property). There were 13,975 loans approvals for purchase of property worth under £`125,000, 34% more than this time last year, when there were just 10,433. While partly reflecting improving house prices, the increase does this reflect two changes in the market: The first – rising demand, as confidence in the economy returns. The second: more first-time buyer activity, and the wider availability of high LTV loans.
Home loan numbers were flat month-on-month in June, but in May lending levels reached a high not seen for 41 months. Sustained high levels this month confirm that it’s a trend rather than a freak high. The average monthly lending figure over the last twelve months was just 53,248 – June levels were 9% above that average.
New NatWest deals for first-time buyers
NatWest Intermediary Solutions is tomorrow (12 June) launching a number of new ‘no product fee’ higher LTV deals into its intermediary Core range, exclusively for first-time buyers.
The lender is also reducing rates across a number of other purchase and remortgage deals.
There are four new first-time buyer products: A pair of two-year fixed rate deals – a 3.49% at 80% LTV and a 3.99% at 85% LTV – and two five-year fixed rate deals – a 3.89% at 80% LTV and a 4.49% at 85% LTV. There are no product fees on these deals.
Meanwhile, NatWest is decreasing rates on a number of purchase and remortgage deals including a 20bps reduction on its five-year fixed rate, 80% LTV, product from 4.29% to 4.09%; a 14bps decrease to its two-year fixed rate, 80% LTV, product from 3.89% to 3.75%; and a 14bps reduction on its two-year tracker, 80% LTV, product from 3.89% to 3.75%.
Mark Bullard, head of sales at NatWest Intermediary Solutions, said: “Having recently launched a number of 90% LTV deals and entered the Help to Buy and NewBuy schemes, we have focused our attention next on bringing out some deals for first time buyers that have been able to save up for a good-sized deposit.
“We are very keen to provide support to the first time buyer market so this move gives intermediaries some additional deals to target their clients with.
“We have also sharpened up a number of our purchase and remortgage deals in the mid-LTV ranges enabling us to continue to offer a very attractive and extensive portfolio of mortgage for intermediaries.”
Teachers Building Society launch new market leading deal
New 1.99% 2 year market leading semi-exclusive
1.99% 2 year discounted variable rate
- Max 60% LTV
- £1,799 arrangement fee
- £99 Application fee
- Available for purchase and remortgage
- Free legals & refund of valuation for remortgages
Only available to property in Dorset or to those employed in the teaching profession anywhere in England, Scotland and Wales.
UK house prices see modest rise, says Nationwide BS.
UK house prices recorded a “modest” rise in May, increasing by 0.4%, according to the latest survey from the Nationwide building society.
It said the increase provided further support for “the view that the housing market is gradually gaining momentum”.
The annual rate of price growth rose to 1.1%, the fastest pace since November 2011.
The increases mean that the average house now costs £167,912,
Regional house price differences:
London: up 6.2%
South West of England: up 0.3%
East of England: 0.7%
North West of England: down 3.7%
South East of England: up 1.4%
Yorkshire and Humber: down 1.2%
West Midlands: up 0.5%
Wales: down 2%
East Midlands: down 1.2%
North East of England: down 5.7%
Source: Land Registry. Annual change to end of April
New record for asking prices
Property coming to market this month has set a new record national average asking price, according to the latest Rightmove House Price Index.
This month’s 2.1% (+£5,135) rise has left the national average just shy of a quarter of a million pounds at £249,841, surpassing the previous high by £3,606. London, the South East and East Anglia have also hit all-time highs, with buyers in the capital facing new sellers’ average asking prices in excess of £500,000 for the first time.
Rightmove said: “The tumbling of records is being driven by the equity-rich generation with a definite southern bias, though agents in most parts of the country are reporting strong demand for well-priced and decent-quality stock. Despite a new national record, it’s not ‘green-shoots of recovery’ across the board, especially for the deposit-strapped mass-market. They must wait patiently until January when the Help to Buy scheme extends to the resale market, unless new homes developers can increase building dramatically this year.”
The average price of property coming to market has risen by 9.1% (+£20,852) so far in 2013, the strongest start to a year since the 10.5% recorded in 2004. This is the fifth monthly rise in a row, with all regions in positive territory this month. However, sellers in two northern regions, Yorkshire & Humberside and the East Midlands, are still unable to come to market at higher prices than this time last year.
With London sprinting past the £500,000 milestone for the first time with a 3.1% monthly rise to £509,870, a typical home in the capital is more than twice as expensive as the national average. Outside London and some southern hotspots agents report that the market remains sensitive to price and quality, with buyers willing to take their time to find their ideal home.
Rightmove said: “The recession appears to have precipitated a change in buyer behaviour which has left them more choosy and less willing to settle for second-best. Not only are they looking for value and wary of paying over the odds, prospective buyers are also giving thought to ease of resale, a sign that the pain of this financial crisis has left them more mindful of the liquidity of their assets.”
Lenders are ‘cherry-picking’ in efforts to improve the quality of their future mortgage book by offering some tantalisingly cheap mortgage rates to those with decent deposits, courtesy of the Funding for Lending Scheme. There are fixed rates from 2.34% with a minimum 25% deposit, and even interest only options at 2.19% for those with a 50% deposit of at least £300,000 to put down.
The availability of cheap money is key to driving positive sentiment and, with 84% of respondents to Rightmove’s latest Consumer Confidence Survey stating that they felt prices would be the same or higher in 12 months’ time, this seems to be feeding through to home-movers. However, the pent-up demand is still being frustrated by the restricted supply of fresh property.
Bank of England holds base rate at 0.5%
The Bank of England has maintained the base rate at 0.5 per cent and the size of the asset purchase programme at £375bn.
The Monetary Policy Committee has voted to keep the base rate at the record low where it has remained since March 2009.
The quantitive easing programme has remained unchanged since July 2012 when it was raised by £50bn.
NatWest have new products out
1.95% 2 Year 60% Fixed
Fixed until 31/10/2015
Max 60% LTV
£1,495 product fee
2.75% 5 Year 60% Fixed
Fixed until 31/10/2018
Max 60% LTV
£1,495 product fee
3.39% 3 Year 80% Fixed
Fixed until 31/10/2016
Max 80% LTV
£995 product fee
4.59% 2 Year 90% Fixed
Fixed until 31/10/2015
Max 90% LTV
£995 product fee
All above products are available for purchase & remortgage, and have a free valuation & free legals for remortgages
Scottish Widows Bank – new products announced, including Professional range
Scottish Widows Bank have announced they are making changes to their Professional and Flexible mortgage product range.
All Fixed rate end dates are being extended to 31 August 2015 for 2 year products, and 31 August 2018 for 5 year products.
Professional product range
New 3.24%, 75.01% to 80% LTV, 2 Year Fixed Rate
New 3.94%, 80.01% to 85% LTV, 2 Year Fixed Rate
New 4.94%, 85.01% to 90% LTV, 2 Year Fixed Rate
Flexible product range
New 2.44%, up to 60% LTV, 2 Year Fixed Rate
New 3.04%, 60.01% to 75% LTV, 2 Year Fixed Rate
New 3.64%, 75.01% to 80% LTV, 2 Year Fixed Rate
New 4.24%, 80.01% to 85% LTV, 2Year Fixed Rate
All the above products are available on a Repayment basis only, and have a £1499 lenders arrangement fee, which can be added to the mortgage loan.