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Property prices inch forward despite difficult conditions

Nationwide reports 'surprisingly resilient' 1% year-on-year rise in UK house prices and more than 5% in London.

Household finances might be in the doldrums but property prices still managed to creep up by 1% in 2011, according to the latest figures from the Nationwide.The building society said that, while prices had dropped by 0.2% in December, over the year the value of the average house has risen to £165,798. Meanwhile separate data from the Land Registry put the average price of a property at £160,780.

"The 1% rise in house prices recorded over the past 12 months could hardly be described as a strong performance, but against a backdrop of anaemic economic growth and a deteriorating labour market, UK house prices were surprisingly resilient in 2011," Robert Gardner, Nationwide's chief economist, said.The London housing market continued to show a life of its own, with prices rising by 5.5% over the course of the year. By contrast, prices in Northern Ireland fell by 8.7%. The only English regions to see prices fall were the north and north-west, with average prices down 1% and 1.2% respectively


 


 

Borrowers rush to fix their mortgage as rates tumble


Two out of three borrowers are choosing the certainty of a fixed-rate mortgage – in contrast to a year ago, when tracker mortgages were more popular.

The Council of Mortgage Lenders reported 62% of new mortgages taken out in May were fixed rate deals, compared with 22pc of borrowers choosing tracker mortgages. This compared with only 46% of mortgages being fixed a year ago.

This follow a number of lenders offering new fixed rate mortgages at record low prices, Accord Mortgages said it would reduce the cost of its fixed-rate mortgages by up to 0.3 of a percentage point with a two-year fixed-rate mortgage at 2.79pc on loans of up to 75% of the property value and a five-year fixed at 3.84%
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Green shoots of recovery for FTBs in mortgage market


First time buyers and borrowers with smaller deposits are enjoying the first signs of recovery in the UK mortgage market
The number of mortgages available with only a 10% deposit needed has risen dramatically  over the last few month and the average rate on 90 per cent mortgages has also begun to fall.

The average rate on fixed rate mortgages has dropped 0.53 per cent in the past year to 5.87 per cent this month and whilst tracker mortgages at 90 per cent LTV are now more expensive than this time last year, the average rate is now 5.5 per cent.

Clare Francis, mortgage spokesperson at moneysupermarket.com said:

"There is a severe shortage of first time buyers at the moment and one of the reasons for this is down to the fact that it's been so difficult to get a mortgage unless you've had a deposit of 25 per cent or more. It's therefore encouraging to see an increase in the number of 90% mortgages available.It's good to see things are moving in the right direction though as this should make it slightly easier for people to take that first step onto the property ladder."



43% of landlords report rising rental demand

Landlords have seen rental demand increase compared to six months ago, a recent survey found
Overall, the survey by CHL found that 67% of landlords are positive about the outlook of the buy-to-let sector, with 33% of landlords said they are looking to buy more investment properties in the next 12 months.

However, lack of finance continues to be the biggest constraint on investment, followed by high deposit requirements.

Bob Young, managing director at CHL Mortgages, said: "Landlords are clearly positive about the future of buy to let and they have good reason to feel this way with rental demand growing as a result of a number of underlying drivers.

"Clearly, a lack of credit, tougher lending criteria and higher deposit requirements are suppressing residential property ownership for many, which is resulting in considerable pent-up rental demand - a real positive for the private rental sector.



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At MAPS, we are committed to helping people find the right mortgage for their needs. In today's market place, with lenders being much more cautious in what they will lend and who they will lend to, there's never been a greater need for experienced , independent advice to help you through the 'mortgage maze'

 

MAPS are truly independent. Regulated directly by the Financial Services Authority rather than via a network, we are not owned by or tied to any bank, building society, insurance company or other large company. We are 'whole of market' brokers, which means we have access to virtually every lender out there, many of whom you will not be familiar with. Last year alone, we placed loans with more than 40 lenders. Putting this into perspective, many mortgage brokers in the high street will only deal with around 15-20 lenders while many of the big estate agent chains will only work with as little as 12, limiting their clients potential.