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Nationwide  announced thet house prices in the UK fell during the month of February, a combination of extreme weather and the end of the stamp duty holiday were to blame.
Their House Price Index fell 1.0% on the month to stand up 9.2% on the year. This was the largest monthly drop since February 2009.
Martin Gahbauer, Nationwide’s Chief Economist, said it was difficult to gauge “whether February’s fall in prices is just a temporary blip or the start of a new trend.”
On a quarterly basis house prices were up 1.6% in February, down from up 2.0% on the same basis in January.
Gahbauer said there was “evidence from a range of indicators that the market may have lost momentum in early 2010 as the stamp duty holiday ended and house hunters were obstructed by the icy weather.”
He said that new customer enquiries had dropped since the turn of the year and there was a fall in the number of new mortgages taken out in January.

Bank of England Monetary Policy Committee member Kate Barker warned of headwinds in the UK housing market in evidence Tuesday to the Treasury Select Committee.
She said it was “possible the housing sector will be quite weak through this year.”
Barker said people may have delayed decisions to put their houses up for sale and warned that mortgage finance availability would not return to pre-credit crunch level”

Halifax plans to stop offering its guarantor mortgages next month, because of a lack of demand for the mortgage product.
The guarantor mortgage allowed parents to act as guarantors for their children when buying their first house.
Halifax says other products, such as its Lloyds TSB Lend a Hand mortgage has overtaken the popularity of guarantor mortgages.

The Lend a Hand mortgage, borrowers only need a 5% deposit, plus the backing of someone who will need savings equal to 20% of the value of the property.
The borrower’s deposit and the savings must equal 25% of the property value.
However, the offer is only available in branch.
A spokeswoman for Halifax, says: “We were a strong supporter of the first-time buyer market in 2009, representing nearly 50% of the shared equity, shared ownership market and driving new innovation like the Lloyds TSB Lend a Hand scheme which enables customers to get 95% lending through taking a charge on a parent or grandparents savings account.
This drive continues in 2010 as we look to provide more support in new build and find ways to extend the Lend a Hand activity which already accounts for a third of first-time buyer lending in the LTSB channel.
“Given this new activity we are finding that the demand for guarantor mortgages is reducing and now represents a tiny proportion of new business’.”

The financial advisory business of the Towergate Partnership, has announced the acquisition of John Charcol, the independent mortgage advisory business.
All John Charcol staff and directors will be making the move to Towergate Financial. John Charcol CEO John Garfield will work closely with Towergate Financial CEO Ian Darby – a former chairman of John Charcol - to grow the business alongside his current team.
John Charcol is one of the UK’s best known independent advisers and a key element of Towergate Financial’s growth strategy is to establish a high net worth mortgage advisory proposition to complement its private client and corporate solutions businesses.
Towergate Financial attaches great importance to the skills and experience of the advisers and staff of John Charcol and believes that they will be vital for the continuing success of the business.
Ian Darby said: “We believe there is an excellent fit between our business and John Charcol. John Charcol has an incredibly strong brand built over many years, based on top quality advisers and great advice. We jointly have a great opportunity to offer financial planning and solutions to Charcol’s clients and vice versa.”
John Garfield said, “Joining forces with the team at Towergate Financial will provide our business and people excellent opportunities to work with Towergate’s businesses to our mutual benefit and to thrive in what is a very exciting time for the mortgage market.”

Newcastle Building Society has joined the 90% LTV market by launching a two-year fixed rate mortgage and a two-year tracker mortgage. The fixed-rate mortgage is available at 5.95% with a £499 completion fee and a £195 reservation fee while the tracker is available at 4.60%, or Bank of England base rate plus 4.10%, with the same fees applicable.
Both deals are for purchase only, and will be available via the Newcastle’s branches and through its direct mortgage operations centre.

The products allows multiples of up to 3.25 times an individual’s annual salary, or three times the joint salary of a couple.
Steve Urwin, senior sales and marketing executive at Newcastle Building Society, says: “We know there is still the demand throughout the UK from many consumers that want to buy their first home.
“With house prices beginning to recover and a lot of homes remaining affordable to many first-time buyers, we have created these products to give them the opportunity to get onto the property ladder, while encouraging both responsible borrowing and lending practices.”
“The terms and rates we’re offering compare extremely favourably with other products currently on the market without demanding the applicant take other products to qualify for the deal.

The Council of Mortgage Lenders  has announced that mortgage lending in the UK will pick up in before the end of this year. This comes despite the fact that 2010 has begun rather slowly for the UK mortgage market  although this is due in the main to the ending of the stamp duty concession on 31 December 2009.
Despite the fact ot the lack of competition in the UK mortgage market it does believe this will increase slowly and build up throughout 2010. Interestingly 58% of mortgage brokers believe that mortgage enquiries should improve in the first quarter of 2010 with an average anticipated increase in activity of 7.1%.

This is a sector which needs some good news after a rocky few months during which time hopes of a significant firming of the marketplace have been weakened somewhat. The first quarter and the second quarter of 2010 are vital for the UK mortgage arena and the UK property market and all eyes will be on this area of the economy in the next 3 -6 months.

Gross mortgage borrowing dropped by 21 % year-on-year to £9.1 billion  in January this year, the Council of Mortgage Lenders said yesterday.

That showed a 32% drop from December’s level and was the lowest monthly total since February 2000.

The CML said the larger than average drop in January suggested house purchase activity was boosted in December by borrowers rushing to complete house purchases before the end of the stamp duty holiday.

“We remain in a period of uncertainty for the housing market and the economy at large,” said CML economist Paul Samter.

“The market certainly improved over the second half of last year and started 2010 in better shape than most would have predicted twelve months ago.”

HSBC has launched a new range of fixed mortgage and tracker deals. The new products have mortgages up to 90% LTV.
The mortgages include a two-year fixed rate mortgage at 3.69% up to 75% LTV with a booking fee of £999, and a 5 year fixed rate mortgage at 4.64% at max 60% LTV with a £999 booking fee.
HSBC has also launched a discounted mortgage at 3.59% for 2 years at up to 80% LTV and no booking fee.

There is also a fee-free lifetime tracker at 4.99% at 90% LTV.
Martijn van der Heijden, head of mortgages at HSBC, says: “As house prices have stabilised and in most cases increased over the last year, it’s clear that lenders are returning to the market with confidence and more competitive mortgages.”

The Scotland’s housing market is in recovery as nearly all areas showed encouraging quarterly house price increases, according to Lloyds TSB Scotland.

Their Scottish house price monitor showed that in the three months to 31 January 2010, the average house price went up  by 5.9% on the previous three months. The average price reached £160,074 following seasonal and mix adjusting pricing.

Almost all areas experienced a rise in prices, with the highest increases recorded in Dundee with 16.3% and Edinburgh with 11.4%.

However, all areas continue to report an annual fall in prices. Prices in Dundee fell by 2% while prices in Glasgow fell by 12%. On an annual basis, Scottish house prices have now fallen by an average of 6.8%.
Professor Donald MacRae, chief economist at Lloyds Banking Group Scotland, said business surveys point to an exit from recession in early 2010, despite five consecutive quarterly falls in output in the Scottish economy He added: “The level of mortgage availability including for first-time buyers has increased while the cost of borrowing remains low for many mortgage holders. The Scottish housing market is now into recovery.”

After two years in the wilderness, the mortgage market’s heart is starting to beat again. House price in some parts of the UK are recovering and it seems that lenders are starting to lend. For the first time in a long time, we are seeing new mortgage products becoming available. Meanwhile, many borrowers who have been sitting pretty on low standard variable rates have started to see their repayments rise as lenders look to restore their profit margins. So what does this mean for people with a mortgage? In short, remortgaging – moving from one lender to another with a better a rate – is back.
In May 2007, shortly before the credit crunch, 117,774 remortgages went through. In December 2009, the number had dropped to a measly 23,220. Homeowners have had the odds stacked against them. Those who had seen the equity in their properties falling had been unable to remortgage, finding higher loan-to-value (LTV) deals considerably harder to find and more expensive. With 100 % LTV extint, those in negative equity would have had no choice but to stay put. There has also been a limited supply of products on the market and, with standard variable rates so low, little incentive to switch to a product which would invariably be more expensive. However, things are changing. “Life goes on despite recession and people need to move,” says Andrew Montlake, a director of mortgage broker Coreco Group. “If they find a good quality property, people are paying the going rate. This is keeping house prices up.” Rising valuations are pulling people out of the equity slump, nudging homeowners towards the affordable end of the LTV scale. “A lot of people had slipped beneath the LTV line who can now remortgage,” says Mr Montlake. “That’s one reason why we’re going to see levels increasing “Remortgaging is definitely in the air,” says Darren Cook, a spokesman for online financial information service Moneyfacts.co.uk. “Competition is slowly coming back to the market. Lenders are changing products and competing for business and there are banks out there that are looking to lend.” In February alone, the number of mortgage products available has increased by more than 300 and the total for January increased by 1,000. The number of products for the 85-95 % LTV levels has also risen, opening up possibilities for those with less equity. In August 2008, there were 475 mortgages at 90 per cent LTV, dropping to a low of 71 in May 2009. Since then, the number has more than doubled to 144 in February 2010. More competition gives homeowners more options and better rates. “Competition in the market is driving down costs of mortgages,” says Ray Boulger, a spokesman for mortgage broker John Charcol. “This is making it more viable for people to switch. This time last year, it was not worth remortgaging unless you were switching to a fixed rate.”
Rates are improving, but few stand up to the ultra-low SVRs that many continue to take advantage of. Figures show that an average of 50 per cent of mortgage customers are staying on SVRs compared with an average of 30 per cent before the crash. Reluctance to switch has been a factor in the stagnation of the remortgaging market, but changes to lending policy are shaking things up. No longer able to afford customers riding on low SVRs, several building societies, including Skipton, Cambridge, Nationwide and Norwich & Peterborough, have cited exceptional circumstances and boosted their SVRs by more than 1 per cent. Some have claimed that it is in order to protect their savers, but Skipton, the first to act, admitted its business was unsustainable with a 3.5 per cent SVR, demonstrating it is profits and not savers lenders are looking to protect. Higher SVRs are pushing homeowners back into the mortgage market to review their options. “Those who have at least 25 per cent equity can switch to a lifetime tracker that would be sufficiently cheaper than any SVR from 3.5 per cent upwards,” says Mr Boulger.
Much of the reticence in the mortgage market has been prompted by uncertainty. However, some homeowners have seen the base rate in the doldrums for 10 consecutive months and are betting on an imminent rise. At the moment, First Direct has a two-year fixed-rate at 3.29 per cent with a £998 fee (3.7 per cent APR) and ING is offering 4.29 per cent fixed until 2013 with a £795 fee (3.8 per cent APR) both up to 75 per cent LTV. HSBC also has a five-year fixed rate at 4.73 per cent with a £999 fee (4.4 per cent APR), up to 60 per cent LTV.
Others believe base rate will stay low for the foreseeable future and wish to continue paying a low rate, but in order to do so they must remortgage on to a tracker or discount as banks sever the connection between the Bank of England decisions and SVRs. They are looking at lifetime tracker deals like the strong offerings from the Woolwich at base rate plus 2.13 per cent for those with at least 70 per cent LTV and base rate plus 2.39 per cent for 75 per cent LTV. For both of these camps, it appears as if it is just a matter of time. “As soon as we see base-rate movement the remortgage market will come back responsibly,” says Mr Cook. “Banks had their arms twisted to reduce their SVRs so low, but government aid is coming to an end and we’ll see this reflected.” Whichever path homeowners take, they lead to remortgage.
That is unless you fall into a third camp that is unable to remortgage. House prices are rising, but slowly. “For growth to continue, we would need to see an increase in prices of over 1 per cent each month,” says Martin Gahbauer, the chief economist at Nationwide. “Prices are still more than 10 per cent down on the 2007 figures, so although outlook is positive, recovery is still tempered. Homeowners who took out a 90 or 100 per cent mortgage shortly before the crash or have lost their jobs may have difficulty finding a deal. “Although there is definitely a significant increase in the higher LTVs available you still pay a big premium,” says Mr Boulger. “Unless you’ve got 20 per cent there’s not much point in remortgaging.” The option for those with less equity is going to their existing lender. Halifax, Nationwide, Santander and others have competitive products, but Mr Montlake says there are no promises. “There is still a massive chunk of people for whom remortgaging is still a good 12 months away.”

The amount of new buy-to-let mortgages increased for the second quarter in a row in the last quarter of 2009. Read the rest of this entry »