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On Friday 30th April Alliance & Leicester are reducing the rates by up to 0.20% on some of their Fixed rate mortgage products including
2 year Fixed rate, 70% LTV, Core product , 2.69% with a 2% fee
2 year Fixed rate, 70% LTV, Homebuyer and Remortgage products, 3.49% with a £1,495 fee
3 year Fixed rate, 70% LTV, Homebuyer and Remortgage products, 3.79% with a 2% fee
4 year Fixed rate, 75% LTV, Homebuyer product, 4.99% with no booking fee

House prices in the UK rose by 0.2% in April to stand at £158,400, the highest level seen since December 2008.

The Hometrack survey has now reported a rise in prices for nine months in a row.

Key to the latest improvement was a 0.6% increase in the price of properties in London.

However asking prices being achieved by home sellers remained unchanged at 94%, the first time the measure has failed to rise in just over a year.

The general election has been blamed for the recent slowdown in price rises, with buyers thought to be increasingly uncertain as to what the future holds.

As a result, the supply of homes for sale continues to outstrip demand, dragging down the prices that sellers are able to achieve.

“It was clear that given the strong end to 2009 that spring 2010 was unlikely to compare with a traditional start to the selling year,” said Richard Donnel, director of research at Hometrack.

“There has been evidence for some months that the supply/demand balance has been changing steadily but the buyer slowdown has been exacerbated by the announcement of a May election.

“The near term prospects for the housing market are intrinsically linked to demand which in turn is reliant on strong consumer confidence. The outlook for the economy and jobs market as well as household finances all impact on housing demand and buyer behaviour.

“With an election well under way, it is not surprising that buyers are currently hesitant in their decision making, the question is whether market sentiment will improve once the result of the election is known.”

Tesco Bank is  to launch a mortgage range by the end of this year. They are hoping to build it into a full retail bank.
They  aim to launch mortgage and savings products by the end of this year, with current accounts to follow next year.
Tesco made the statement in its annual accounts published today, which shows that subsidiary Tesco Bank reported a pre-tax profit of £114m, down 40% from 2008’s figures.

Profits at the supermarket’s banking arm, which rebranded from Tesco Personal Finance last October, took a hit following the acquisition of the remaining 50% stake in the business from Royal Bank of Scotland in 2008.
Tesco’s retail services division, which includes Tesco Bank, grew its customer accounts by more than 400,000 in the last year to over 6.2 million across all products.
It has seen a 27% growth in personal loans while the number of insurance policies has remained broadly flat.
Overall retail services made a £250m trading profit, compared to £221m for 2008/2009.
The company has also revealed it has secured new premises for banking and insurance services in Glasgow and Newcastle which are set to open around June this year.

Newly listed properties on the Rightmove website have jumped up 2.6% to reach an average of £229,614 in April.  The asking price is completely different from the actual selling prices. Halifax puts the average selling price at £168,614 and Nationwide at £164,519. The site also stated that there has been the highest influx of new sellers since before the Lehman Brothers collapse, the amount of unsold stock is the highest since last October. The number of new instructions has averaged over 25,000 per week for the last two months, However, the average unsold stock per agent has risen from 65 to 68 in the last month.

The National Association of Estate Agents has announced that the volume of properties put up for sale has hit a 6 month high.
The average number of properties for sale was 56 per branch in February. The figure for March has risen to 60 and the number of those looking for a home has also increased from 258 in February to 274 in March.

This means that there are 4 times the amount of house hunters looking for a  home compared to how may are up for sale.
The percentage of first-time buyers looking for a property has dropped to 23%.
A spokesman for the West Sussex area for the NAEA says: “There are certainly better signs but it is not as active as we would expect for this time of the year – everything seems to be running a month or so late.
“Many sellers are convinced that their price has gone up a lot over the last few months so the danger is that they will miss the boat by being too ambitious.”

The Royal Institution of Chartered Surveyors  says uncertainty over the forthcoming election has prompted some sellers to  put their homes on the market.
RICS says the jump in the number of sellers was the largest since May 2007.
It says new instructions outstripped enquiries from would-be buyers for the third month running.

“With the General Election approaching and uncertainty growing over the political direction of the country, many vendors who were previously inclined to sit on the sidelines now appear eager to put their properties on the market,” RICS spokesperson Ian Perry says.
“With stocks increasing and sales decreasing we may see some modest price falls in some regions, although London, the South-east and Scotland are continuing to perform well.”

The Bank of England Holds rates for the 13th consecutive month. 

This makes it the longest period without an increase or decrease since  between November 2001 and February 2003 when rates were held at 4%.
The Bank also decided not to pump any more money into the UK economy under its policy of quantitative easing.

 Simon Gammon, head of Knight Frank Finance, said: “The decision to keep the base rate on hold at a record low of 0.5% comes as no surprise, especially with a General Election due in a month’s time.
“Although some countries around the world continue to recover from the recession, such as Australia who increased its base rate again this week, the UK economy simply isn’t ready. Add a General Election into the mix and it is extremely unlikely that rates would be changed so close to polling day. Neither the economy, nor the country, could take it.
Rates are unlikely to change for the foreseeable future and the economic uncertainty brought about by a hung parliament – which many are starting to believe could be a possible outcome of the election – could push rate hikes even further into the distance.”

Over 80% of UK homeowners think that property prices will rise over the next six months, according to the latest Housing Market Sentiment Survey from property website, Zoopla.co.uk. Optimism has significantly improved over the last 12 months, when 30% expected house prices to rise.
According to the survey, only 9% of homeowners believe that property values will fall over the next six months whilst a further 10% expect prices to stagnate. The average growth predicted by those surveyed is for house prices to rise by 5.7% by October.

The current level of optimism bodes well for market activity, with transaction volumes expected to rise significantly over the coming months given the historically high correlation between the confidence level in the Survey and market activity approximately three months later.

Mortgages remain the main problem to a sustained improvement in the housing market with 78% of those surveyed saying that it is now easier to obtain a mortgage than it was three months ago.

86% of Scots are expecting house prices in their area to rise over the next six months, compared to 80% in England and 76% in Wales. The picture is somewhat less optimistic in Northern Ireland, with only 62% predicting house prices will rise over the next six months.

While average UK property prices are picking up slowly, values in the capital are increasing much faster. Read the rest of this entry »