News Review: Property


Statistics , statistics and yet more statistics


nationwide have produced an interesting graph (see below).


by Nigel Stockton, financial services director, Countrywide


With the unexpected dips in cPi and rPi figures to 4.2% and 5.0% (down from 4.5% and 5.2% respectively) at the beginning of the month, there were signals that inflationary pressures have started to ease. However, as i mentioned last month, experts suggest it is just a temporary dip before the consumers really start feeling the pinch. rightmove’s July index


offered another declining statistic, supplying a glimmer of hope that the gap between sellers’ and buyers’ expectations was starting to shrink. the property website claimed that sellers had dropped their prices for the first time this year, reducing the average price tag on a house by 1.6% (£3,797). unfortunately this glimmer


proved to be short lived as the indices became typically confused with Halifax claiming house prices rose by 1.2% in the month, taking the average property price to £163,049. nationwide went with an unchanged month- on-month figure, with prices flat at £168,205. However, nationwide’s


quarterly


index did uncover an annual decline of house prices in all regions except London, where properties values have increased by 2.9%. drawing parallels between house prices in Wales, the east midlands and the north, and the local communities’ reliance on the manufacturing sector,


Gloomy picture rightmove painted the gloomiest picture of all this month though, claiming that 70% of properties put on the market remain unsold, whilst they’ve measured the largest number of properties for sale ever in a July. as the largest estate agent we would sort of subscribe to this. London is going really well, but there is a need for both buyers and sellers to be more realistic outside of the capital. on a more positive note,


council of mortgage Lenders’ latest stats have shown an upward trend on gross mortgage lending for June as figures increased to an estimated £12.6bn, up 16% (£1.8bn) month-on-month, but still 3% down annually. the £60bn gross figure for the first 6 months of this year is extremely disappointing though; the question is - can we get to £135bn in 2011? Looks like a tall ask now with the flat interest rate outlook. this monthly rise is good


news however, probably aided by increased competition in the sector and the fact that product availability continues


to gradually improve. there is a still a need for enhanced accessibility for buyers (or wouldbe buyers and movers), especially in the availability of 90-95% LtV deals, but as lender competition continues to heat up, deals are literally being launched or improved on a daily basis. defaqto has carried out some analysis in this area – with some very interesting results. they’ve found that nearly 9,000 mortgage products have been launched to market or updated in last three months, with just under 5% of these being new products and 8,554 products seeing their interest rates or LtVs amended. according to defaqto’s


research, 186 new fixed-rate mortgages were introduced to attract buyers and home- owners to take advantage of low interest rates. this seems to have worked to a point, as maB measured that remort- gage applications rose 28% in June (month-on-month) and were 65% higher annually (albeit from a very low base). However whether remortgage numbers will be boosted further remains to be seen, as not many expect interest rates to change until 2012.


Buy-to-let the buy-to-let sector is a definite area of growth as landlords snap up bargains and expand their portfolios. over the coming months, we expect to see more product, entrants and increased competition. recent stats suggest the number of Buy-to- let products that are available has increased by 35% in the last quarter. as


i’ve mentioned


previously, affordability and confidence are not the only factors restricting buyers at the moment – deposits remain the most important factor. in a climate of rising rents, large deposits are increasingly difficult to gather together. the positive news this month is that we are seeing an upward trend in the number of 90% LtV products out there. i just hope this continues and lenders keep dropping the rates as they compete with each other. it would be great to see more first-time buyers back in the market. on the subject of product


Source: Nationwide House Price Index Q2 2011 (http://www.nationwide.co.uk/hpi/historical/Q2_2011.pdf) 6 mortgage introducer AUGUST 2011


rate cuts, we’ve seen rates slashed and new deals brought in across the market this month in a bid to attract larger volumes. Halifax inter- mediaries has dropped its rates, Skipton has reduced its buy-to-let and residential rates, Barclays has improved its deals again and Kensington has extended its range by doubling its maximum loan size to £1m at 75% LtV for high earners. Kensington really is succeeding at catering for the high end of the market and has extended its maximum loan for first- time buyers to £500,000 this month too.


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