RBS Agrees 1,080 Mortgages Through UK's 'Help to Buy' Scheme

This article by The Star Online on November 11th, 2013 tells us that RBS agrees mortgages with 1080 customers through Help to Buy scheme.

LONDON: State-backed Royal Bank of Scotland has agreed in principle mortgages with 1,080 customers since Britain's flagship 'Help to Buy' housing stimulus programme was launched a month ago.

The Conservative government is pushing the plan, with a 2015 election in mind, as a way to help people move onto, or up, the property ladder, and stimulate growth after three years of economic stagnation.

RBS, which owns NatWest, said 73 percent of the mortgages were for first-time buyers. If all of the applications are approved, the bank will be lending 171.6 million pounds under the scheme.

It said the average amount its customers wanted to borrow was 159,000 pounds and the average price of the home they wanted to buy was 167,565 pounds.

"These are majority young first-time buyers who, without 'Help to Buy', wouldn't have been able to consider a mortgage or buy a home," said Lloyd Cochrane, head of mortgages at NatWest and RBS.

Meanwhile Halifax, owned by RBS's part-nationalised rival Lloyds Banking Group, said it had received 1,309 mortgage applications from home buyers across the UK who have found a property to purchase.Halifax said the applications were for mortgages worth a total of 194 million pounds.

Critics say that unless the three-year scheme is properly scrutinised it could drive up house prices in sought-after areas like London and create a housing bubble that might burst when interest rates start to rise later this decade.

RBS is allowing customers to draw down the funds before the scheme officially launches in January and said 5 customers had already purchased new homes through the scheme.- Reuters

Article Source: http://www.thestar.com.my/Business/Business-News/2013/11/11/RBS-Agrees-1080-Mortgages-Through-UKs-Help-To-Buy-Scheme.aspx

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MPC Member Plays Down Fear of Increase in Interest Rates

According to Ben Broadbent interest can rise continuously before homeowners may have difficulty paying their mortgages as revealed on this article by Delphine Strauss of FT Economy on October 21st, 2013.

 

Interest rates could rise significantly before UK homeowners found it difficult to meet mortgage repayments, Ben Broadbent, a member of the Bank of England’s Monetary Policy Committee, said on Sunday.

An upswing in the UK housing market has sparked fears that the government’s Help to Buy scheme – a combination of equity loans and guarantees for higher-risk mortgages – will help to inflate prices and burden people with debt they might later struggle to repay. 

However, the BoE’s Financial Policy Committee said last month that the housing market’s recovery did not pose a risk to financial stability, with activity still below its historical average and debt servicing costs low. 

“Although interest rates will at some point start to rise, you’ve got to remember quite how low a level we are starting from,” said Mr Broadbent in an interview on Sky News.
Although he said the BoE would not raise rates until the recovery was “on a secure footing”, he added: “I think there is a fair amount they could go up before borrowers got into great difficulties.”

Other MPC members take a similar view. Paul Tucker, the BoE’s outgoing deputy governor, told the Financial Times last week that the BoE did not need to address “every boom or boomlet”. His successor, Sir Jon Cunliffe, told a parliamentary committee: “From where I am now, it doesn’t look like we are in a bubble.” 

However, a survey published on Monday by Rightmove, the property website, underlines the divergence between a resurgent London property market and the more muted recovery seen in other parts of the country.

Asking prices in October were on average 13.8 per cent higher in Greater London than a year earlier, after fluctuating over the summer, Rightmove said, against an average national increase of 3.8 per cent.

The survey mirrors data published last week by the Office for National Statistics showing that house prices in London rose 8.7 per cent in the year to August, compared with a national rise of 3.8 per cent.

Article Source: http://www.ft.com/intl/cms/s/0/0d0c7148-3996-11e3-a3a4-00144feab7de.html#axzz2iJz6eRHW

London Wealthy Leave for Country Life as Prices Rise

This article by Patrick Gower of Bloomberg on October 14th, 2013 reveals how wealthy left London to be living in a country life when house prices rise.

It took more than a year for Mark Hudson to find his six-bedroom home in the English countryside. Within weeks of moving in, he got a bid that topped the 1.75 million pounds ($2.8 million) the property cost.

“Somebody called offering a significantly higher sum,” said Hudson, a 55-year-old manager at a publishing company, who in August swapped his home in Clapham, a London district favored by young bankers and lawyers, for Dorset, the farm-dotted county 125 miles (202 kilometers) southwest of London that was the setting for Thomas Hardy’s Tess of the D’Urbervilles. “It looks like we caught it just at the right time,” he said.

Country homes are coming back into fashion, after lagging behind urban locations such as London’s West End since the 2007 financial crisis when banks cut off mortgages. Prices for manor houses, farmhouses and cottages valued at more than 750,000 pounds climbed at the fastest rate in more than three years in the third quarter, Knight Frank LLP said in a report today, as Prime Minister David Cameron makes reviving the housing market central to his efforts to pull the economy out of recession.

“It’s U.K. economic growth and broader housing-market confidence,” said Liam Bailey, global head of residential research at the London-based property broker.

The government last week introduced the second phase of its Help to Buy program, which offers mortgage guarantees that allow purchases with down payments as low as 5 percent. The first phase, which began in April, provided interest-free loans for buyers of newly built homes. The program has contributed to the strongest housing market since the financial crisis, even as two thirds of 31 economists surveyed by Bloomberg described it as “bad” policy.

Bigger Appetite 

“Help to Buy has obviously been a catalyst that has encouraged people,” Bailey said by phone. “It’s stimulated appetite to get into the market and that’s not only the lower-end first-time buyers -- it’s right through into the prime sector.”

In July, homebuyers took out 3,900 loans of 500,000 pounds or more, the most since September 2007, according to the Council of Mortgage Lenders. There’s also more willingness to lend at higher loan-to-value ratios, according to Henry Knight, managing director at mortgage broker Springtide Capital Ltd.
 
Two years ago, Barclays Plc (BARC)’s Woolwich unit, Nationwide Building Society and Lloyds Banking Group Plc (LLOY)’s Halifax “stopped agreeing mortgages for more than about 1 million pounds, but now they’ve moved up to 2 million pounds and some have gone to 3 million,” Knight said by phone. “There are just more lenders playing in that market now.”

Prime Country 

Knight Frank’s prime country-house index, based on data from the firm’s U.K. branches, shows that prices rose 0.8 percent in the third quarter from the previous three months. Gains were led by Virginia Water, Berkhamsted and Cobham, just outside London. Prices climbed 0.4 percent on an annual basis.

The measure includes manor houses, defined by Knight Frank as a large property standing in extensive grounds; farmhouses, which typically have six bedrooms and several acres of land including garden, paddock and barns; and cottages, which normally have four bedrooms and about an acre of land.

While demand for properties within commuting distance of London was strongest, prime country homes in every region of England climbed for the first time in two-and-a-half years during the quarter, according to a reported published by Savills Plc (SVS) last week.

“This is your last chance to buy before stock goes down and prices really start to rise,” Yolande Barnes, director of residential research at the London-based broker, said by phone.

Queen’s Castle 

Current offerings of theirs include Park Place, an eight-bedroom period house on the edge of Windsor Great Park with cottages and stables on about 15 acres. The property, about an hour’s walk from Queen Elizabeth II’s Windsor Castle and close to English private school Eton College, is priced at 20 million pounds.

Savills, along with Hamptons International, is also selling Bayfields Farm, a country house in Hampshire, about 30 miles from Highclere Castle, where TV show “Downton Abbey” is filmed, for 2 million pounds.

The value of U.K. luxury homes had plunged in the wake of the 2008 collapse of Lehman Brothers Holdings Inc. and the ensuing credit freeze and recession. Average prices of homes in London’s most expensive neighborhoods fell 25 percent in 2008, while those in the countryside fell 20 percent, Knight Frank’s Bailey said.

Mortgages of more than 500,000 pounds to home buyers dropped by almost 50 percent between 2007 and 2008, according to the Council of Mortgage Lenders.

Affluent Foreigners 

London’s property market began to recover in 2009, in part because of affluent foreigners seeking a haven from turmoil in the Middle East and the wider European debt crisis.

These buyers, attracted by mansions a short walk from Harrods and Buckingham Palace, helped push the price of luxury homes in central London up 23 percent since their last peak in Autumn 2007. Prices of prime country homes remain down 20 percent, according to Knight Frank.

Now the recovery is spreading beyond London. The number of homes sold in the U.K. reached the most in nearly four years in July, according to the Royal Institute of Chartered Surveyors. That helped push the value of prime country homes up for the third consecutive quarter, Knight Frank said. House prices in affluent areas about an hour from London climbed 1.6 percent during the three months, while those in the remainder of the south of England climbed 1.2 percent, according to Savills.

Homebuilders Rise 

U.K.’s homebuilders have been among the biggest beneficiaries of revived housing demand, with an index of the companies gaining 47 percent this year, compared with the 10 percent advance for the FTSE 100 Index. Persimmon Plc (PSN), the largest U.K. builder by market value, rose the most in almost two months on Oct. 9 after Goldman Sachs Group Inc. (GS) said the stock may increase by 70 percent within six months.

Homebuilders are increasing productivity to satisfy new demand, which may be a mixed blessing for country estates.

“Prices are moving up against a background of four years of low supply in the country-house market,” Bailey said. “If this positive sentiment pulls in more supply, that will hang a question mark over the sustainability of this growth.”

For Hudson, waiting to sell his London home proved fortunate as prices rose in the capital, while he said they fell last year where he was looking.

“You’d see a house listed and a few months later it would still be on the market and the price had dropped,” Hudson said. “When we finally bought it was more of a lifestyle choice, we were never sure it was going to be a good investment.”

After selling the home in Clapham for 1.3 million pounds, with an extra 475,000 pounds he could afford the six-bedroom country house with a cottage, swimming pool and eight acres of land.

“I had a feeling the time was right and London’s housing market was coming to a peak,” he said. “Maybe I was wrong on that point, because in fact that peak seems to go on getting higher and higher.”

Article Source: http://www.bloomberg.com/news/2013-10-13/london-wealthy-leave-for-country-life-as-prices-rise.html

One city's house price surge

This article by Kevin Peachey of BBC News Business on October 6th, 2013 reveals data from NBS that house prices has doubled in the past 10 years.

Two cities in the UK - one is a centre of commerce, has runaway house prices, and welcomes a constant stream of overseas property buyers. The other is London.

House prices in and around Aberdeen have more than doubled in the past 10 years, according to data from the Nationwide Building Society.

That increase is only matched by the trendy north London borough of Islington, and by Westminster in the heart of the capital of the UK.

Recent figures show that Scotland's third city is recording a fresh surge in property prices. One estate agent describes the area as a property force field.

"Everywhere outside is doom and gloom, but it is boom time here," says Brian Sutton, of James and George Collie solicitors and estate agents.

Silver city
 
Take a closer look at Aberdeen, and its picturesque, shimmering granite homes, and you can see the complexity of the UK property market.

The city has demand from first-time buyers willing to pay above valuation levels, interest from workers moving to the area, investors keen to get in on the act, and a lack of homes for sale.

All this pushes up prices. Yet, in Scotland as a whole, prices are only creeping up after years of stagnation.

It shows that averages can be misleading and that local areas can have very different trends to neighbouring regions, for reasons ranging from the quality of local schools to employment levels.

It also questions a widely held belief that the London property market is unique - that soaring prices in the south-east of England are unequalled in the rest of the country.

Oil money
 
At the mouth of Aberdeen Harbour, next to the fishermen's village of Footdee, is a landmark called the Roundhouse.

The Shoremaster's accounts for 1797-98 show that more than £225 was spent on the new house and telescope on the site.

Nowadays, first-time buyers in the city can expect to pay up to £140,000 for a one-bedroom flat, or up to £500,000 for a bigger property.

Competition for homes means many buyers are paying 5% to 10% over valuation at the moment, says Bill Barclay, partner at Raeburns solicitors and estate agents.
Often sales go to sealed bids, with first-timers stretching their savings to compete with buy-to-let investors.

Spend a few minutes standing by the harbour and the reason for this active property market is clear - North Sea oil.

"It drives the local economy," says Mr Barclay. "Big companies are making long-term financial plans for the area, so we are not going to see much changing."

Overheating market?

The area was not immune to the financial crisis. Banks were not lending at the levels they had been before 2008, but Mr Barclay says Glasgow and Edinburgh suffered much more.

Now, he says - using a phrase apt for an oil-producing region - the banks are "starting to open the taps" again to fund mortgages.

Figures published by the University of Aberdeen show a 25% increase in the volume of sales in the second quarter of the year compared with the same three months in 2011. Prices were up by 5.5% in the city and its suburbs over the same period.

Sales volumes of flats were up by 53% in that time, as buy-to-let investors find the finance and predict demand from tenants
.
All this is gloomy news for potential first-time buyers. One 32-year-old tells the BBC he has been renting on the south coast of England and then Aberdeen over the past 15 years and is unable to save anything close to what is needed as a deposit.

You hardly see a sale sign erected within the city's sought-after areas, with supply low and competition picking up. But the market is far from overheating, as it was in 2007, according to estate agent Brian Sutton.

"We had people in their early 20s buying property, with 10 to 20 bidding for one property. Competition has come back, but it is three to four people bidding," he says.

"First-time buyers are in their early 30s, not their 20s, often with their parents helping."

Bubble fears?

He predicts the housing market will continue to rise at a "sustainable rate", especially as the oil companies build headquarters in the area and continue to relocate staff to the region.  

Prices may grow by single figures year-on-year, he says, but nobody wants to return to the days of 20% a year increases.

Much the same point was made by Business Secretary Vince Cable when he raised concerns about a property bubble potentially being inflated by government schemes to kick-start the market.

"In London and the south east, in the north-east of Scotland, in other areas, there are serious housing inflationary pressures," he said.

Despite his warning, the second phase of the Help to Buy scheme has been brought forward by three months in England, and the Scottish government has announced the start of its own scheme.

The UK and Scottish governments both argue that Help to Buy, which includes allowing buyers to apply for a shared equity loan for part of the property, are vital to give people the chance to secure a mortgage from risk-averse lenders.

Buyers only qualify under the Scottish scheme if they are buying a newly built property.
Critics might argue that they should encourage the developers to follow the example of the fishermen's cottages at Footdee - where the front doors face inwards to protect occupants from incoming storms.

 Article Source: http://www.bbc.co.uk/news/business-24348196

Help to Buy: Let the Property Scramble Begin

This article by Rupert Jones of theguardian on October 5th, 2013 tells us the criticism from experts regarding the second part of the government's help to buy scheme.

A range of government-backed 95% mortgages are set to go on sale next week after ministers fired the starting gun on a new property scramble.

Two partially state-owned banks, Royal Bank of Scotland and the Lloyds Banking Group, will offer the loans initially, and millions of people will potentially be eligible to sign up.

Under the controversial Help to Buy scheme, homebuyers will only need to put down a 5% deposit – and it is open to existing owners as well as first-time buyers. What is more, there are no limits on how much you can earn and it applies to both old and new-build properties costing up to a generous £600,000.

RBS and its NatWest arm seem to think this second part of the Help to Buy scheme, which is being launched three months earlier than planned, has the potential to be the financial equivalent of the Harrods sale. They say customers will be able to visit any of their 2,000 branches or ring up, and add that opening hours will be extended at peak times "to help with customer demand".

Homebuyers were this week awaiting details of the deals – in particular, how attractive the pricing will be – amid speculation that the scheme could push down rates on 95% mortgages from their current levels of between 5% and 6% to perhaps as low as 4.5%, as well as increasing the choice of products available. That could lop almost £100 a month off the typical payments of someone taking out a £160,000 mortgage.

RBS and NatWest say they will offer "a range of competitive 95% mortgages" to first- and next-time buyers. These will initially be available in branches and over the telephone, and later via mortgage brokers. Halifax, part of the Lloyds group, will also be offering deals from launch; these will be available via branches and brokers. Lloyds Bank will participate from January, while other lenders such as Santander and Nationwide have yet to confirm whether they will take part.

While the scheme won't become fully operational until January, people will be able to start applying from next week, and once their mortgage is approved the funds will be available straightaway – they won't have to wait until the new year to complete on their home purchase.

There has been fierce debate about whether the scheme will hand a vital lifeline to homebuyers or simply drive house prices even higher, but what is undeniable is that this is a huge and potentially risky venture for the government. It is partially guaranteeing £130bn of low-deposit mortgages, which ministers have claimed could translate into assistance for well in excess of 500,000 homebuyers over three years.

That is a lot of people potentially being helped but, even so, there are fears demand could massively exceed supply. Santander issued research yesterday claiming 10% of Britons – equivalent to 5.1 million people – believe they are likely to buy a property in the next 12 months. A third of these, 1.7 million, said they planned to use Help to Buy.

In reality, some of these people would be locked out of the scheme because, for example, they are buying a property to rent out, or a second home, both of which are excluded from Help to Buy, or they don't meet the requirements on income and past credit history – but this still suggests that fears of a stampede of applicants may not be misplaced.

Phase two of Help to Buy is about encouraging banks and building societies to offer more mortgages that only require a small deposit (at least 5%) by giving them the opportunity to buy a guarantee on the "top slice" of the home loan – the bit between 80% and 95%. If a borrower gets into financial difficulty and their property is repossessed, the government will cover a chunk of the lender's losses.

Ministers are making available £12bn of guarantees to lenders, but the latter will have to pay a fee for each mortgage underwritten.

The scheme has come in for harsh criticism from some commentators. On Thursday, Howard Archer, chief UK economist at IHS Global Insight, warned: "There is a mounting danger that house prices could really take off over the coming months." He was speaking after figures from Halifax revealed that house prices are rising at their fastest annual pace for more than three years.

• A free Help to Buy show is taking place today (5 October) at the Glow events venue at the Bluewater shopping centre, Kent, between 10am and 4pm. The event is aimed at people in Essex, Kent, Sussex and south London. Go to glowbluewater.co.uk for more.

Article Source: http://www.theguardian.com/money/2013/oct/05/help-to-buy-property-scramble

House Prices Rises in South-West London Beat Capital's Centre for First Time

This article by Anna White of The Telegraph on September 26th, 2013 shows that for the first time escalating house prices in south-west London have outpaced property values in the capital's centre.

“Prime” property (the top five to 10pc of the housing market by price) in the affluent south-west London belt, which stretches from Fulham to Wimbledon, increased by a record 11.8pc over the past year.

Prices in central London continued to show steady year-on-year growth of 5.6pc but were overshadowed by a burgeoning "domestic market" with the city's south west, north (7.4pc) and east (6.5pc) all experiencing an uptick, according to new research from Savills.

The real estate adviser’s report quashes criticism of the Conservative’s Help to Buy scheme, the second stage of which starts in January.

At this week’s Labour Party Conference, shadow chancellor Ed Balls warned the programme, in which the Government guarantees 95pc mortgages on all properties worth up to £600,000, could push up prices forcing young buyers out of the market.

However, the residential property recovery is being driven by equity rich Londoners and foreign investors, as opposed to Help to Buy expectations.

Lucian Cook, head of research at Savills, said: “In the south-west belt there is still a store of wealth from bonuses earned before the credit crunch and money made recently by hedge fund managers. Europeans are also moving into the areas like Fulham, in which prices have jumped 114pc over the past eight years.”

The analysis shows that £22 out of every £100 of equity in the UK housing market over the past year was spent in London. Therefore the total £146bn of equity applied to buying in the UK, £33bn was spent in London.

Mr Cook said: “This is a cash-driven phenomenon and completely unrelated to Help to Buy. It provides no evidence of a credit-fuelled boom in the wider market.”

The hike in house prices in south-west London is also due to a reluctance to move further out into commuter zones such as Guildford.

“This is a psychologically big move and often ties in with finding a new school. Following the recession people are not exploiting the pay gap between south-west London and the Surrey corridor. Mindful of job security, they’re staying put and therefore allocating more wealth towards housing,” he said.

There is a new build development pipeline around Canary Wharf, and continued appetite for warehouse conversions in Wapping. Gentrification of fashionable areas such as Shoreditch and Dulston is also driving up London prices.

“But talk of a housing boom is premature. Transaction levels are still very low at around 60pc - it is still not a fully functioning market,” Mr Cook concluded.

Despite this, at the top end, the cost of mansions in the capital's centre in the £10m plus bracket has increased by 38pc since 2007. The most expensive properties purchased in London over the past year include a Regent’s Park house for £80m and a luxury pad on Avenue Road, St John’s Wood, sold for close to £25m. While a house in Richmond went for £12m.

Article Source:  http://www.telegraph.co.uk/finance/newsbysector/constructionandproperty/10334345/House-prices-rises-in-south-west-London-beat-capitals-centre-for-first-time.html

Planning Permissions for Housing Rise 49%

This article by Alex Johnson of The Independent on September 24th, 2013 shows that 49% year-on-year increase in the number of planning approvals for new homes between April and June in 2013.

Figures from the Home Builder’s Federation show a 49% year-on-year increase in the number of planning approvals for new homes between April and June in 2013. Although this is a slight drop from the previous three months, there were 77,686 permissions granted in the first six months of the year, a 26% year-on-year increase.

Stewart Baseley, Executive Chairman of the HBF, said: “The overall trend in residential permissions is very positive. It reflects house builders’ increasing confidence in the market and also the positive principles of the new planning system. With Help to Buy forging ahead strongly and developers looking to increase output, we need to see the increase sustained.

“However, at a time when developers are looking to build more much needed homes, we are increasingly concerned by the conditions attached to many of these permissions that prevent actual work starting on site. Local Authorities must ensure planning conditions are not overly onerous or unrealistic otherwise despite the success of Help to Buy, the much needed increase in housing supply will be held back. Despite the increase in permissions granted, we are still well short of the 220,000 permissions required annually to meet housing need.”


House haggling

A study of 2,000 UK adults by Gocompare.com suggests that 89% of those who ask for a discount are successful in their negotiations. Cars and motorbikes (34%) top the list of goods and services people successfully haggled over, followed by electrical products (30%) and furniture (28%). Around a quarter said they had haggled over the price of a house.

New buy-to-let ranges

Virgin Money has launched a new range of buy-to-let mortgages with rates starting from 3.38% for a 2 year fixed rate with a £1,995 fee. Following the fixed or tracker period, all mortgages from the new range will revert to the Virgin Money Buy-To-Let Variable Rate, currently set at 4.99%.

Meanwhile, Accord Buy to Let has launched three new mortgages with zero completion fees, all available at a maximum of 75% loan to value with rates starting from 3.79%. They also offer £500 cashback on completion. The full details are:

* Two year fixed rate at 3.79% with £195 product fee and £500 cashback

* Three year fixed rate at 4.09% with £195 product fee and £500 cashback

* Five year fixed rates at 4.69% with £195 product fee and £500 cashback

Article Source: http://blogs.independent.co.uk/2013/09/24/planning-permissions-for-housing-rise-49/

West Bromwich Raises Interest Rates for Buy-to-let Mortgage Borrowers

This article by Rupert Jones of theguardian on September 23th, 2013 states that borrowers with tracker mortgages will see their rate rise by two percentage points.

Thousands of customers holding buy-to-let mortgages with West Bromwich building society will see their monthly costs rise sharply after the terms of their deals were changed.

Angry borrowers are already pledging to fight the move after it emerged that about 6,700 customers will be hit by the society's decision to increase their interest rates by two percentage points on 1 December. This is despite the fact that the Bank of England base rate, which these mortgage deals track, has been at 0.5% since March 2009 and seems unlikely to rise for at least two years.

Some of those affected – for example, those currently paying a rate of 1.49% – will see their mortgage rate more than double at a stroke.

The change follows a similar move earlier this year involving 13,500 Bank of Ireland UK customers, which prompted an outcry and later led to the bank cutting the numbers of people affected.

The West Bromwich said the 6,700 borrowers were all BTL landlords with mortgages that track the base rate. The affected customers took out their deals from early 2006 onwards and are on a variety of different interest rates. They all signed up with the West Bromwich Mortgage Company, a division of the building society.

A spokesman for the society said: "The West Bromwich has advised a number of BTL borrowers who have tracker mortgage accounts with the West Bromwich Mortgage Company that their rates of interest will be increasing by 2% from 1 December 2013. All borrowers affected are landlords of multiple property portfolios.

"These changes, which are permitted under the terms and conditions of the accounts, are a reflection of market conditions and the need for us to carry out our business prudently, efficiently and competitively."

Customers have already started to post comments on websites. On the Property118 website Gavin Ewan said: "I will be phoning them on Monday to complain, as there is nothing in my acceptance of offer suggesting that they can increase it. Basically it is a tracker BOE [Bank of England] base rate +0.99%, ie 1.49% until the term end (25 years from November 2006)."
He added: "I expect there are going to be a lot of very unhappy people."

Another, Shaun McAllister, said: "I shall be fighting them all the way."

In February 2013, Bank of Ireland prompted fury after revealing it was triggering a "special condition" clause in loan agreements that allowed it to increase the "interest rate differential" on some of its UK base rate tracker mortgages.

The changes would have affected about 13,500 residential and BTL customers. However, in May the bank wrote to 1,200 of the borrowers to advise them they would not face the rise in payments after all, following a review of customer complaints.

Article Source: http://www.theguardian.com/money/2013/sep/23/west-bromwich-interest-rates-buy-to-let-mortgage

House Prices Rise Again Fuelling Fears of a 'Bubble'

Another house prices increase in addition to low mortgage interest rates could be mean economic crisis for the country according to this article by Eileen Kersey of Digital Journal on September 16th, 2013.

London - When the economic crisis hit in 2008 it had direct links to the housing market. The UK has experienced inflated house prices in the past and the "bubble" subsequently bursting. Could the introduction of a Government scheme to help buy homes be bad news? 

 

People buy homes for many reasons -- to get a step on the housing ladder, investment, to get a family home or as there is little alternative available. 

 

News that house prices in parts of the UK are rapidly increasing, added to low mortgage interest rates, may be a winner for householders but it could be bad economic news for the country. 

 

The UK is suffering a housing shortage. The ill-thought out "bedroom tax" was allegedly created to ease this shortage, but to date has failed. Householders faced with a reduction in benefit or moving to a smaller property faced "Catch 22" -- there were no properties available. 

 

The coalition government's Help To Buy Scheme offers a lifeline to would be homeowners. On the surface it sounds a good scheme but there are some possible pitfalls. One for the British economy is that it could create a "housing bubble" which sooner or later will burst. If that happens any short term monetary gains you may have made will soon be wiped out. 

 

Deputy Prime Minister, and leader of the Liberal Democrat party, Nick Clegg insits that the UK is not facing another "housing bubble". The Lib Dems are holding their annual conference and Monday the Irish Examiner reports: 

 

 Nick Clegg, Britain’s deputy prime minister, has said that the UK is nowhere near a house-price bubble and the Bank of England has tools to prevent it, amid growing concerns that government support for home-buying is stoking another boom. If there’s another bubble, the Bank of England and the government “have means by which we can anticipate that and make sure it doesn’t happen again,” Mr Clegg told the BBC. 

 

 An increase in the value of your home is good news if you are a home-owner. House prices in the UK have stagnated, with some decreasing in value, since 2008. 

 

A false house price increase, stoked by a boom in the housing industry though, is bad news. In the past it meant that banks had expensive mortgages on properties that had reduced in value. 

 

This shortfall hit the banking industry in Spain and that economy has yet to recover.

 

The UK and US can pinpoint there financial woes to the banking sector, and housing industry. 

 

Getting a mortgage in the UK has been difficult since 2008 but this weekend Santander announced that it was offering a raft of new deals to open up the mortgage market. 

 

More good news but what about a possible housing bubble? Monday the Guardian reports: 

 

A leading estate agent has tripled its forecast for house price rises in 2013, stoking fears of a destabilising house price bubble. 

Online estate agent Rightmove has raised its 2013 house price forecast for the third time this year to more than double the rate of inflation. The chain expects the average property price to increase by 6% this year, up from the 4% it predicted just two months ago. At the start of the year it predicted prices would rise by 2%

On Wednesday the Bank of England's financial policy committee will meet to discuss the possibility of a property bubble, and what remedial measures can be taken. 

 

Calls for that committee to cap annual house price growth in the UK at 5% a year illustrate concerns about a housing bubble which could quickly form and rapidly burst. According to the Independent: 

 

 Britain’s leading chartered surveyors have made an unprecedented call for the Bank of England to put a cap on annual house price inflation in order to avoid a “dangerous” debt bubble. 

 

Surely, however, this will hit confidence in the UK housing market and deter those who buy property as an investment? 

 

With a north south divide in the UK house prices are already a hotch-potch across the country.

Read more: http://www.digitaljournal.com/article/358436#ixzz2f7dQ2Rsn

Mortgage Approvals Soar 33%

This July 24, 2013 of YourMortgage shows the number of mortgages approved by lenders has leapt by a third in the last 12 months.

High street banks provided £8.9bn-worth of mortgages last month and expect to crank up lending even further in July, British Bankers' Association (BBA) figures have revealed.

Gross mortgage lending was above the six-month average in June and 2% higher than in May. High street banks represented roughly two-thirds of all UK mortgage lending.

Lenders also approved £9bn of mortgages last month, with approvals for house purchase and remortgaging 33% higher than last year. Anderson Harris director Jonathan Harris said the mortgage market continued its upward trajectory:

“Help to Buy has already made a flying start in its first four months, according to house builders, and is expected to give first-time buyers, as well as second steppers a boost from January when the guarantee element of the scheme is rolled out.

“We eagerly await further details of the pricing of the second stage of thescheme with the Chancellor meeting lenders and house builders today.”

However, a sustained recovery in the housing market remained some way off, he added. While gross mortgage lending has risen over the past six months, the trend for net lending has remained more subdued. This was down to higher capital repayments by borrowers, including those by homeowners moving between lenders, the BBA suggested.

Dragonfly Property Finance chief executive Jonathan Samuels said the jump in mortgage approvals year-on-year underlined just how far the market had moved on:

"With the Council of Mortgage Lenders, Bank of England, British Bankers' Association and other sources reporting the same steady growth in transactions, the improvement of the mortgage market feels concrete and sustainable.

"Importantly, the way we borrow has changed in recent years. Pre-2007, people would borrow as much as they could, but now they are borrowing what they need. "The mindset of borrowers has changed and that is no bad thing."

Author: Paula John

Article Source: http://www.yourmortgage.co.uk/your-mortgage/news/2284438/mortgage-approvals-soar-33

European retail property investment volumes reached €10.3 billion during the first half of 2013, a 40 percent increase from the €7.3 billion reported for the same period last year, according to the latest data from Jones Lang LaSalle. - See more at: http://www.worldpropertychannel.com/europe-commercial-news/european-retail-property-investments-jones-lang-lasalle-kkr-retail-real-estate-investment-7123.php#sthash.5GzgyGZh.dpuf