Thu, 09 Sep 2010 13:59:24 GMT2010-09-09T14:34:49Z
Standard & Poor's ratings agency says planned spending cuts and tax rises may lead to many more house repossessionsThe government's planned spending cuts and tax rises could trigger a fresh wave of house repossessions as hard-pressed borrowers find it impossible to meet their mortgage payments, the ratings agency Standard & Poor's said today.In a downbeat assessment of the UK property market, S&P stressed that house prices remained overvalued and many families were vulnerable to George Osborne's budgetary squeeze.The Treasury has acknowledged that attempts to reduce Britain's deficit during this parliament will cost hundreds of thousands of jobs in the public sector, with knock-on effects in the private sector as well."We expect house price movements to remain uncertain in the near term, and we note that a high percentage of non-conforming borrowers remain in severe arrears. Therefore, possible future increases in unemployment or interest rates may cause a further wave of repossessions," said S&P credit analyst Neil Monro.The ratings agency added: "The looming fiscal austerity package and the possibility of interest rates rising again could significantly test some borrowers' ability to make their mortgage payments, in our opinion."This is particularly true in the context of still severely curtailed refinancing options, due to lender-initiated tightening of their criteria, as well as potential future changes to regulation resulting from the Financial Services Authority's Mortgage Market Review."S&P said fiscal tightening could lead to a second wave of deterioration in UK prime and non-conforming residential mortgage-backed security (RMBS) collateral performance and it remained cautious about the longevity of the bounce-back in UK house prices."In our view, UK housing remains overvalued on a fundamental basis," it said. "For example, the average house-price-to-income affordability ratio for first-time buyers is still stretched at 4.3 times, relative to the long-term average of 3.3 times."Ratings agenciesRecessionFinancial sectorHouse pricesPropertyGeorge OsborneEconomic policyEconomicsLarry Elliottguardian.co.uk © Guardian News & Media Limited 2010 | Use of this content is subject to our Terms & Conditions | More Feeds

Wed, 08 Sep 2010 10:26:06 GMT2010-09-08T10:26:06Z
Halifax says house prices rose slightly in August and should end the year at the same level seen 12 months previouslyHouse prices edged ahead by 0.2% during August as activity in the market remained subdued, figures showed today.The latest increase follows one of 0.7% in July and reverses most of the falls seen during the previous three months, leaving house prices at a similar level to the end of last year, the Halifax said.The group said activity in the market had been "largely static" since the start of 2010, enabling house price inflation to cool after prices were pushed up last year by a shortage of supply. It added that it expected house prices to end the year at around the same level at which they started it.The figures contrast with statistics reported by Nationwide last week, which showed that house prices had fallen by 0.9% during August, following a drop of 0.5% in July. Recent data from the Bank of England also showed that only 48,722 mortgages were approved for house purchases during July, a level economists consider to be consistent with house price falls.The gloomy figures caused some commentators to predict the housing market was heading for a double dip, with one economist warning that prices could fall by as much as 25% between the start of this year and the end of 2012.But other commentators said the recent dip in house prices was not unhealthy as the recovery in the housing market had got ahead of improvements in the wider economy.Martin Ellis, Halifax's housing economist, said: "The market is broadly stable with house price inflation having cooled since last year when supply shortages helped to push up prices. The improved economy, strengthening labour market and low interest rates are all supporting housing demand. We expect UK house prices will remain static overall in 2010."But others are less optimistic, pointing out that the lack of mortgage finance is limiting the number of buyers able to enter the market. Many potential buyers have also adopted a "wait and see approach" due to concerns about the state of the economy, job security and the impact of future tax rises.Howard Archer, chief European and UK economist for analysts IHS Global Insight, said: "On balance, while we believe that a sharp correction in house prices is unlikely, we do expect them to soften by around 3% over the final months of 2010. Furthermore, it is hard at this stage to be optimistic about house prices in 2011 as the fiscal squeeze will increasingly kick in, which will hit people's pockets and lead to serious job losses in the public sector."Consequently, a further drop of around 5% in house prices looks highly possible in 2011, and the drop could well be steeper still. Much will depend on mortgage availability and the number of houses coming on to the market, as well as how well the economy holds up. Therefore, we suspect that house prices will be some 10% lower by the end of 2011."Halifax said annual house price inflation had fallen slightly to 4.6% during the three months to the end of August ? the third consecutive month during which it has declined. The average home now costs £167,953, 9% above the low reached in April last year, but 16% below the August 2007 peak.House pricesPropertyHousing marketguardian.co.uk © Guardian News & Media Limited 2010 | Use of this content is subject to our Terms & Conditions | More Feeds

Wed, 08 Sep 2010 05:25:57 GMT2010-09-08T05:25:57Z
Q We bought a house with a £220,000 mortgage last October and went for a flexible rate, which is currently 2.98%. We are reading predictions about interest rate rises with great interest at the moment. We could afford our mortgage if rates rise over the next few years by 3%-4%, but are wondering if we should go for a fixed-rate mortgage now, such as a five-year fix set at 4.5%-5%. It is all about when and how fast interest rates will rise over the next few years. What would your advice be? EBA The trouble with trying to predict what will happen to interest rates is that you can't. However, I would be tempted to stick with your current deal. This is partly because you say that you can afford a pretty big hike in interest rates before your variable rate would start to stretch you. And partly because if interest rates continue to not go up, as they have for quite a while now, you would kick yourself if you took a fixed-rate deal and ended up paying 2%-2.5% more in interest every month as a result. If you want to hedge your bets against future interest rate rises I suggest overpaying your mortgage to reduce the amount of the loan on which interest is charged.Mortgage ratesMortgagesPropertyVirginia Wallisguardian.co.uk © Guardian News & Media Limited 2010 | Use of this content is subject to our Terms & Conditions | More Feeds

Wed, 08 Sep 2010 05:24:57 GMT2010-09-08T05:24:57Z
Q We are looking to buy our first house. When we went to the housing development in which we are interested we were advised that, at this moment in time, the HomeBuy Direct scheme is only running on properties where completion will take place before the end of September. The house we are looking at may not be due for completion prior to that cut off date. With the new government being in place is this something we should be worried about, or is it likely the HomeBuy Direct scheme will carry on after September? KJA The communities and local government department is looking at the HomeBuy Direct scheme as part of its overall review of the low-cost homeownership programme. This will feed into the government's comprehensive spending review due to be published on 20 October. So it won't be known whether it will continue to fund HomeBuy Direct until it publishes its spending plans for 2011-12.However, as you have discovered, many individual HomeBuy Direct developments will close at the end of September. That decision is up to the developer of each scheme: HomeBuy Direct funding should continue to be available on other properties so you don't currently need to worry. The best thing to do is talk to your local HomeBuy agent and the developer who is working on the house you are looking at.PropertyVirginia Wallisguardian.co.uk © Guardian News & Media Limited 2010 | Use of this content is subject to our Terms & Conditions | More Feeds

Wed, 08 Sep 2010 05:01:57 GMT2010-09-08T05:01:57Z
From a cottage in Kent to the Turkish mountainsAnna Tims

Tue, 07 Sep 2010 16:00:00 GMT2010-09-08T16:08:14Z
Trace the ups and downs of UK house prices since May 2006

Sat, 04 Sep 2010 23:06:41 GMT2010-09-06T07:58:49Z
Reductions to interest payments may leave the neediest struggling to cover their mortgagesDisability and housing organisations are accusing the government of potentially forcing thousands of disabled homeowners into arrears or even having their properties repossessed because of cutbacks in mortgage benefits and care packages.The most scathing attack comes from the National Housing Federation (NHF). It says some 64,000 people with disabilities now get monthly help through the Support for Mortgage Interest (SMI) system. This is a complex calculation, paid directly every four weeks by the government to mortgage lenders on behalf of disabled borrowers, currently at the rate of 6.08%.If the 6.08% is in excess of the interest payable on a disabled person's mortgage, the "extra" goes towards paying off the principal debt; if it is less, the borrower must make up the difference or slide into arrears.But the method of calculating the SMI ? which is also paid to people who have lost their jobs ? is changing and from October the amount will be set at a level equal to the Bank of England's published monthly average mortgage interest rate, currently 3.63%. This is still well above some current mortgage interest rates but far below others, even before expected base rate rises in late 2010 or in 2011.Ministers announced the SMI change in the June emergency budget, but campaigners have only recently realised the effect. .Some SMI beneficiaries are first-time buyers while others are existing owners who may have recently suffered a physical or mental impairment and whose properties now require substantial modification. Potential SMI income is considered by some lenders when they decide whether to grant a loan to a disabled applicant.It is thought that the SMI recalculation will hit about 5,000 owners with profound physical and mental disabilities who have used the payments to secure niche ? and expensive ? mortgages on shared ownership homes. For these properties, the mortgage covers a share of 25% to 75% and the owner pays rent to a housing association for the remaining share of the property."This policy will hit thousands of people with disabilities, cutting off many from the prospect of owning their own home. The fact that ministers have not carried out a comprehensive impact assessment into such a major decision is very disquieting," says NHF chief executive David Orr.Ray Boulger of mortgage broker John Charcol says the government may be financially justified in making the change, but believes the process is being mishandled."The 6.08% figure existed in 2008 when typical interest rates were running at 5% so there is an argument for change given the sharp reduction in rates since that time. But by not tailoring the SMI rate to the individuals' needs, there will always be some who get too much and some too little. It's disappointing that the coalition has just changed the figure and not changed the process into one that's fairer," says Boulger.Disability Alliance, a charity working to help disabled people out of poverty, says it is discussing the SMI change with the government. "The reality is that this is just one of a series of disadvantages that disabled people have. First, it's difficult for them to find appropriately accessible property, then it's very hard to obtain a mortgage because there may be reduced earning potential," says its policy director, Neil Coyne.Some disabled home owners and their families are now suffering additional financial problems thanks to council cutbacks. As part of attempts to cut public spending, many authorities are reviewing their facilities grants. These are discretionary sums, often a few hundred pounds, paid to owners who must install ramps or fit stairlifts when a household member becomes disabled.Anastasia Kelly, executive director of the Sheffield Centre for Independent Living, an advice body for the disabled and their carers, says: "There's an inconsistent response from different local authorities because there are no national guidelines on how payments are made. Now we have to help a lot of people who are finding it harder to get these grants as councils review spending,".The proposed SMI changes will also worsen the problems of those with disabilities who rent their homes."Because of the high cost of housing and the difficulty in getting a mortgage, especially if the earning potential is limited through disability, the majority of disabled people rent rather than own. The lower SMI payments mean even fewer disabled will secure mortgages, so the pressure on the rented sector will rise still further," says Conrad Hodgkinson of the Accessible Property Register.He set up the register in 2003 to publicise homes on sale that have modifications for physically impaired owners, but he says the crisis for many is in the "pretty dire" rented sector."There's a lack of supply of homes to rent to begin with, plus a lack of information about whether the homes are adapted for disabled residents. Now there's the severe financial problems, made worse by the SMI issue and other cutbacks," he says. "The picture is absolutely desperate for many disabled people."MortgagesRepossessionsDisabilityPropertyGraham Norwoodguardian.co.uk © Guardian News & Media Limited 2010 | Use of this content is subject to our Terms & Conditions | More Feeds

Fri, 03 Sep 2010 23:01:56 GMT2010-09-03T23:01:56Z
From an old piano factory to a Georgian mansion

Fri, 03 Sep 2010 23:01:49 GMT2010-09-03T23:01:49Z
You know what, it's exactly like it sounds on the Shipping ForecastWhat's going for it? "Never heard of it," said the petrol station attendant. Really? Really? He had a wicked gleam in his eye. I'm sure it must get annoying to be reminded of the Shipping Forecast by every bleeder up here on holiday. But that's Cromarty's fault for sounding ? and being ? so blinking romantic. From the radio, I'd always imagined it to be a salty, sea-scuffed town, streets of hard stone cottages, stuck out in the waves, Highland mountains in the distance, sandy coves, seals, dolphins and legends aplenty. And you know what? It is. As for the Black Isle, what could sound more Enid Blyton? Just needs lashings of ginger beer. Though it's not really an isle, but an isthmus, its waist pinched where it joins the mainland. Stand on the top of Mount Eagle, surrounded by woods, moorland and heath with Cromarty Firth to the north, Moray and Beauly Firths to the south, and oil rigs all around, and you might as well be on a magical island. I love this place. Mild, too, for this latitude. Important, that, come January.The case against Not one little thing. Distance? Bah! It's far away, but that sort of goes with the territory. Too quiet? Inverness and dancing till dawn are 15 minutes away. Stop moaning.Well connected? The A9 is the high street/lifeline. Cromarty Rose, the (no joke) two-car ferry goes from Cromarty to Nigg if you can't be bothered to drive all the way round the firth. The railway north to Wick, south to Inverness (20 minutes, several a day, but infrequently bunched) and beyond, is at the base of the peninsula at Muir of Ord.Schools Primaries: Culbokie mostly "very good", says HMIE, Newhall and Muirtown mostly "good" or "very good" and North Kessock mostly "good". Secondaries: Fortrose Academy mostly "very good".Hang out at... Sutor Creek, Cromarty, for pizza and Sunday lunch; The Anderson at Fortrose for whisky, oysters and general cosiness; and the Black Isle Brewery.Where to buy The small towns ? Cromarty, Fortrose, Rosemarkie, Avoch ? are delicious: traditional, stone cottages and town houses, crofts, etc. But even the uglier modern stuff looks fine against this magnificent landscape.Market values Period detacheds (old manses, town houses, etc), £230,000-£400,000. Modern detacheds and bungalows, £150,000-£250,000.Bargain of the week Lovely old white-painted, four-bed semi-detached Cromarty town house, £159,000, with Your Move.From the streetsJane Cooper "Go to the Sutor Creek for wood-fired pizza and fantastic condensed-milk crème brûlée."Karen Meikle and Kevin Davis "Cromarty is a quiet, peaceful town with Scottish vernacular architecture and a friendly atmosphere."Richard Robinson "Fortrose, on the Black Isle, is a good combination of not too remote but plenty of open space. The Anderson pub is the best ? a beer and whisky specialist."? Live in Cromarty? Join the debate below? Do you live in Clun, Shropshire? Do you have a favourite haunt or a pet hate? If so, please write, by Tuesday 7 September, to lets.move@guardian.co.ukPropertyHomesHouse pricesTom Dyckhoffguardian.co.uk © Guardian News & Media Limited 2010 | Use of this content is subject to our Terms & Conditions | More Feeds

Thu, 02 Sep 2010 23:05:22 GMT2010-09-02T23:05:24Z
By the turn of this year, the housing market was enjoying a very fragile recovery, but in the last few months it has begun to suffer a relapseLet us start with two propositions. First, house prices are going down. And second, that is a very good thing.The first proposition is riskier to make but rather more straightforward ? because if you want to see what a double-dip recession actually looks like, just take a look at a graph of house prices over the last few years. From around the time Northern Rock collapsed in 2007, prices went a long way south. At the tail end of 2008, after governments had contained the financial crisis and put the economy on life support, prices began to come off the floor. By the turn of this year, the housing market was enjoying a very fragile recovery, but in the last few months it has begun to suffer a relapse. That trend was confirmed by yesterday's survey from Nationwide. Crash followed by recovery followed by relapse: the housing market provides practically a textbook definition of a double dip.Nor is there likely to be a letup in the downturn. The coming spending cuts will cost both economic growth and hundreds of thousands of jobs ? not the assertion of a newspaper, but the admission of this Conservative-led government in its budget red book. It would be a brave and possibly foolhardy person who took out a stonking great home loan if they were anxious about their job.Sure enough, the surveys show that prospective new homebuyers are not registering with estate agents, even while surveyors report a big surge in sales instructions. That formula alone is enough to suggest that house prices are heading for a fall ? but throw in the fact that homebuilders have seen a slump in sales and, crucially, that banks and building societies are still loth to give first-time buyers mortgages, and all ingredients are present and correct for a fall in house prices. That may not mean a plunge, at least not yet ? that would probably only happen if droves of sellers had to flog their homes because of mass layoffs, say. What we are more likely to see over the next few months is an inching down in house prices as buyers cling to the sidelines and sellers refuse to do more than trim the asking price.Contrary to what you might read in some newspapers, falling house prices would be a blessing. The house bubble of the noughties has handed billions of pounds to the older generation from young people who have had to take on giant mortgages to buy their homes. That was unsafe both for the purchasers and for the wider economy. But runaway prices also served to reinforce the wealth gap as rich parents were able to bung their kids big deposits, while middle- and working-class children got no such leg-up. An end to that unfair, unsafe regime can only be a good thing.HousingHouse pricesPropertyguardian.co.uk © Guardian News & Media Limited 2010 | Use of this content is subject to our Terms & Conditions | More Feeds

Thu, 02 Sep 2010 11:42:23 GMT2010-09-02T11:42:23Z
? This week's top news stories? Virginia Wallis answers your homebuying questions ? Table-turning is bad manners, diners sayThis week's top stories? House prices fell by 0.9% in August, the second consecutive monthly fall following July's 0.5% decline, taking the average price of a home in the UK to £166,507, according to the Nationwide building society.? Advertising rules being introduced today will make it harder for fee-charging debt management companies to mislead the public by advertising their services as "free".? Barclays is to launch a range of loyalty mortgages offering current account customers reductions of up to 0.54 percentage points off tracker, fixed rate and offset mortgages.? Do you have any feedback on any of these issues that you want to get off your chest? Email us at money.editor@guardianunlimited.co.ukFeatureTable-turning is bad manners, diners saySecond sittings at restaurants are increasingly common, and are increasingly annoying customers who want to to enjoy a relaxed meal. Should we accept this practice, asks Rebecca SmithersThe second sitting is an increasingly common wheeze used by restaurants to make more money. You ring to reserve a table at your favourite eaterie only to be told there is no question of lingering over a brandy or two at the end of your meal ? you will be unceremoniously turfed out when the next set of ravenous diners come through the door. Read the article in full hereAsk the experts: HomebuyingQuestion of the week: "I am a first-time buyer in the process of buying a house, but hear that the market may fall further. Should I pull out?"Our homebuying expert Virginia Wallis says: "I don't have a crystal ball so predicting the future is a bit of a problem. However, what is certain is that if you have already paid for a survey ? and possibly a mortgage booking fee ? you will lose that money by pulling out now ?" Read the answer in full here? Any questions? Email our panel of experts on financial concerns, consumer gripes, legal wrangles, debt worries and career-related problems at money.editor@guardianunlimited.co.ukToolsCompare broadband dealsSearch online or call for advice on the best broadband internet package for your needsHouse pricesPropertyConsumer affairsBorrowing & debtguardian.co.uk © Guardian News & Media Limited 2010 | Use of this content is subject to our Terms & Conditions | More Feeds

Thu, 02 Sep 2010 08:28:34 GMT2010-09-02T08:33:39Z
House prices fell by 0.9% in August, while the three-month rate of change fell from 1.2% to 0%, Nationwide's latest index showsPoll: Is this the beginning of a new slump?House prices fell by 0.9% in August, the second consecutive monthly fall following July's 0.5% decline, taking the average price of a home in the UK to £166,507, according to the Nationwide building society.The decline marks the first time since February last year that house prices have fallen in two consecutive months, and analysts claim the figures are evidence of continued weakness in the housing market.Martin Gahbauer, Nationwide's chief economist, said: "The three-month rate of change fell from 1.2% in July to 0% in August, suggesting that house prices have essentially stagnated over the summer."Unless house prices bounce back strongly in September the three month rate of change will turn negative next month."The annual rate of inflation remained in positive territory at 3.9%. However, it is down quite sharply from rates of 6.6% in July and 8.7% in June, and is the lowest year-on-year rise since November."As more sellers have returned to the market, buyers have a greater selection of properties to choose from and more bargaining power with which to bid down asking prices," Gahbauer said."There is little evidence of distressed selling, however, with the Council of Mortgage Lenders' second-quarter figures showing another drop in mortgage arrears and possessions. As such, the current period of price declines is likely to remain relatively modest. Given that the price increases of the last year had gotten ahead of the recovery in the wider economy, the current correction is not an unhealthy development."But the Nationwide figures come just days after Bank of England data showed mortgage lending falling sharply in July ? the second-lowest monthly figure since the Bank's records began in 1993. Only 48,722 mortgages were approved for house purchase during July, and net lending by mutuals remained in negative territory at -£379m in July compared with -£432m in June.Howard Archer of IHS Global Insight said: "The recent overall tone of housing market data and surveys has been consistently downbeat. We currently expect house prices to fall by 3% over the second half of the year, but there is a now a very real likelihood that the drop will be nearer 5%."It is hard at this stage to be optimistic about house prices in 2011 as the fiscal squeeze will increasingly kick in, which will hit people's pockets and lead to serious job losses in the public sector. Consequently, a further drop of around 5% in house prices looks highly possible in 2011, and the drop could well be steeper still."He added that much will depend on mortgage availability and the amount of houses coming on to the market as well as how well the economy holds up. "Therefore, we suspect that house prices will be at least 10% lower by the end of 2011 compared to their mid-2010 levels."House pricesPropertyHousing marketReal estateMark Kingguardian.co.uk © Guardian News & Media Limited 2010 | Use of this content is subject to our Terms & Conditions | More Feeds

Wed, 01 Sep 2010 14:53:38 GMT2010-09-02T11:39:14Z
From a listed cottage in Somerset to a villa on the French Riviera

Wed, 01 Sep 2010 08:06:37 GMT2010-09-01T08:06:37Z
Q The survey's been done, the price has been agreed but I'm really worried about the state of the market. We are first-time buyers. We were wondering if we should believe the troubling reports and pull out of the deal now and capitalise on a falling market by buying later on. I'm looking to buy in the south-east and the mortgage is really going to stretch us. I know you don't have a crystal ball but I would value a balanced opinion. SVA You are right that I don't have a crystal ball so predicting the future is a bit of a problem. However, what is certain is that if you have already paid for a survey ? and possibly a mortgage booking fee ? you will lose that money by pulling out now. If you have exchanged contracts and so paid a deposit, you'll lose even more. And potentially, you could lose yet more money if you wait for a falling market which doesn't actually happen and end up having to pay a higher price for your home. And note the word "home". Buying somewhere to live is not about playing the property market, it's about buying somewhere to live in at a price you can afford. Once you have moved in, the value of the property is largely irrelevant until you decide to move or remortgage which should be several years down the line.First-time buyersPropertyHouse pricesVirginia Wallisguardian.co.uk © Guardian News & Media Limited 2010 | Use of this content is subject to our Terms & Conditions | More Feeds

Wed, 01 Sep 2010 08:04:05 GMT2010-09-01T08:04:05Z
Q I am a 66-year-old retired teacher a little confused at the difficulty I have remortgaging a property at a decent rate of interest.I currently have two properties, one in Streatham and one in Forest Hill. The Streatham property is a four-bed Victorian house worth approximately £500,000. I have been letting it for five years and currently lease it out for £1,500 per month. £70,000 remains to be paid off on the mortgage.The Forest Hill property (worth around £650,000) is owned by me and my sister. The mortgage has been fully paid. I also have a pension that affords me £17,000 per year.I would like to remortgage the Streatham property to raise an additional £130,000. As it is let out I presume it would be a buy-to-let remortgage, hopefully one that takes into account the rental income I achieve for the property.However I am finding it difficult to locate a lender willing to lend to me due to a combination of my age, my income (£17,000 pension plus £18,000 rental income). I have also been informed that it would be easier to remortgage a property that was not being leased out such as my Forest Hill property. However, I have also been told that this is not possible as it is jointly owed with my sister who is resident in Australia. MEA Your age is a big factor in the difficulty you are having in finding a willing lender. Of all the buy-to-let mortgage lenders listed by Moneyfacts, the majority put a maximum age ? at the end of the mortgage term ? of 65, 70 or 75. However, several are prepared to be flexible about how old you are when the mortgage comes to an end and one, the Mortgage Works, puts the maximum age at 90 meaning that you could take out a 24-year-term mortgage. This lender, in common with the majority of buy-to-let lenders also takes only rental income into account when considering mortgage applications.Raising a mortgage on a property which is not generating an income ? such as your own home or the Forest Hill property ? would mean taking your pension income into account and it's unlikely that you would be able to raise a mortgage of £130,000 on your current income. By contrast, with a buy-to-let mortgage, it's the rental income that is considered and it usually needs to cover the mortgage payments by 125%. With a £200,000 interest-only buy-to-let mortgage charging a typical interest rate of 5%, the monthly mortgage repayment would be £835. Your rental income of £1,500 a month covers the mortgage by well more than 125%. The fact that you want to borrow only 40% of the value of the property should also work in your favour.RemortgagingMortgagesPropertyVirginia Wallisguardian.co.uk © Guardian News & Media Limited 2010 | Use of this content is subject to our Terms & Conditions | More Feeds