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UK housing market more stable

says Council of Mortgage Lenders

Council of Mortgage Lenders Expect 2013 to be Positive for UK Property Market

Council of Mortgage Lenders Expect 2013 to be Positive for UK Property Market

C2013 is expected to be a more stable and positive year for the UK housing and mortgage markets, the Council of Mortgage Lenders (CML) has said.

The CML have said a steady increase in lending for house purchases has signalled more activity in the UK property market.

However, first-time buyers are still required to provide a substantial deposit averaging 20% of the property value, in order to get a foot on the property ladder.

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Residential Property Values Fall Again

UK Property Market Still Recovering From 2007 Financial Meltdown

UK Property Market Still Recovering From 2007 Financial Meltdown

UK property values fell faster than expected in November 2012, attracting many more first time and new buyers according to the Royal Institute of Chartered Surveyors (RICS).

In its latest analysis of the UK residential property market, RICS reportedthat 9% more surveyors reported property price falls rather than rises, as enquiries from potential buyers has picked up steadily across the country since the end of the summer.

Meanwhile the number of mortgages taken out by first time buyers increased by 14% in October, following a quiet September, according to figures from the Council of Mortgage Lenders (CML).

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The Bank of England said that successful mortgage approvals have dropped below the six-month average, according to new data.

The previous six-month mortgage approval average was 53,000 leading up to April 2012 but the figures only amounted to 51,823 successful mortgage applications being recorded, despite lending approvals being up by 1.5% from March to April of this year.

The stamp duty exemption that ended on March 24th 2012 is thought to have boosted the UK residential property sales market with many First-Time Buyers (FTBs) keen to snap up residential property and reap the benefits before the deadline date.

Figures also showed that more people remortgaged their homes in April 2012 with over 30,000 successful applications going through, which is above the recent average.

However, the UK property sales market is now expected to slow again, as banks become more reluctant to approve residential property mortgages and many have increased the criteria required for a successful mortgage application.

This has been put down to the difficult position the banks find themselves in amidst the current Eurozone crisis, the unstable UK and global economy and further regulations for the banks when it comes to lending.

The UK mortgage market is warning potential borrowers that there has been a sudden surge in the number of mortgage providers lowering how much they will lend for an interest-only mortgage deal.

Nationwide, Santander, and Coventry Building Society are among the mainstream mortgage lenders that have reduced their Loan-To-Value (LTV) ratios on their interest-only mortgages to just 50%.

The announcement comes as little surprise to seasoned property professional who have seen the pattern repeatedly. The reduced LTV values will immediately affect new borrowers, however, changes will come into effect if homeowners need to borrow additional money against the value of their property to fund home improvements, as they will be treated as new loans and the amount will be limited to approximately 50% of the property value

Moneyfacts spokesperson, Sylvia Waycot, said “The development applies to new borrowers only, so anyone with existing interest-only deals at higher LTVs need not worry. However, the end result is that many people who chose an interest-only mortgage because it was cheap, are at their maximum monthly outgoings and will find themselves unable to move should they need to, or borrow for improvements – which means they are in fact under a form of house arrest.”

The Halifax have revealed that the end of the stamp duty holiday and a rise in first-time buyers rushing to jump on the property ladder, helped push up UK residential property values by 2.2% in March.

The lender said property values averaged £163,803 in March 2012

The average residential property value was 2.2% higher than in February but still 0.1% lower on a quarter-by-quarter basis and 0.6% down on 2011 property values.

Halifax housing economist, Martin Ellis, said: “Efforts by first-time buyers to beat the expiry of the stamp duty holiday at the end of March have probably increased sales in recent months and may have helped to support prices.”

Research by the bank revealed that around 4 in 10 first-time buyers benefited from the stamp duty concession before the threshold for stamp duty fell from £250,000 to £125,000 at the end of March 2012.

The HMRC have confirmed the number of residential property sales in January and February was 14% higher than in the same period of 2011, its highest level since 2009.

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