Just when it seemed that mortgage rates were as low as they can go the Bank of England is now considering negative interest rates. With the Government's funding for lending scheme rates have fallen through the floor in the last few months hitting jaw-dropping lows on two and five-year fixed rates.
The number of new homes starting to be built in 2012 fell by 11%, compared to 2011. This comes from the findings of the property builders Barratt, who also claim that the number of new homes finished this year, has only risen by 1% from 2011.
Pensioners in Britain are among the ‘worst in the world’ when it comes to preparing for retirement. A global survey by HSBC found that British would-be pensioners have only saved enough money to live comfortably for 37% of their retirement years. The survey looked at 15 nations in the developed and developing world included the USA, Singapore, Australia, UAE and Malaysia.
The Liberal Democrats are to consider the extension of their ‘mansion tax’ policy to include multiple properties. This could mean that those with second homes, holiday lets and buy-to-let properties may get tied into paying this additional tax.
Since June 2012, the mortgage market has seen a significant increase in fixed and tracker rate mortgage deals being offered, and at record low interest rates. However, according to the price comparison website Moneysupermarket.com, the falling interest rates have come at a cost of increasing fees.
January saw approvals for mortgages reach a four year high, according to research from e.surv. The Chartered Surveyors, put the rise down to a combination of falling mortgage rates, a wider range of mortgages available and an improvement in lender confidence.
e.surv's latest Mortgage Monitor shows mortgage approvals climbed 17% from 55,785 in December to 65,184 in January, making it the strongest month for house purchase lending since February 2008 – pre- financial crisis.
A high number of borrowers on interest only mortgages are in danger of being unable to pay off their remaining debt when their mortgage term ends. Recent findings by the market research consultancy company, BDRC Continental, reported that 39% of borrowers on interest only loans do not have concrete plans for repaying their debt. This equates to 700,000 homeowners, or £75billion worth of property loans.
The Chancellor, George Osborne, has recently announced plans to make the housing market more competitive, and the banking system easier to manoeuvre. At the launch of the Organisation for Economic Co-operation and Development’s (OECD) report on the state of the UK economy, the Chancellor called for the Bank of England to loosen its money lending criteria. It is hoped that this will encourage lenders to offer lower interest rates, thus creating economic growth through increased lending.
Figures released by HM Revenue and Customs (HMRC) have revealed a 5% rise in the number of successful house sales last year. A total of 932,000 properties were sold during 2012, up from the 885,000 recorded in 2011, which reflects the highest level of sales seen for five years.
HMRC believes the Funding for Lending Scheme (FLS) has provided a significant boost to the mortgage and housing sectors, with a wider availability of lower mortgage rates. Chief economist at the Royal Institution of Chartered Surveyors (RICS), Simon Rubinsohn, said: "What we have had is a decent recovery in the second half of the year, helped by a little more confidence due to the FLS, which has helped give a bit more accessibility to mortgage funds."