Some recent statistics show that the lending situation is starting to recover.  The Council of Mortgage Lenders has released figures that show a 20% increase in lending from February to March, and although the lending figures are down from a year previously.

Throughout the recession house prices and mortgage lending dropped consistently over a number of months, and consequently the market place becoming stagnant.  So if these figures show that things are starting to recover it has to be good news, not only for the residential market but also for commercial and buy-to-let borrowers.

A spokesman from the Council of Mortgage Lenders confirmed that it would appear that the mortgage market is moving again, with more people finding that they can now obtain the financing that they require in order to help pull themselves out of their own financial crises.

Mortgage Application Fees Going Up.

In a separate report it has been revealed that the application fees associated with mortgage and remortgage lending have increased considerably over the last 18 months.  If you are considering a remortgage, it is essential that you fully research the total cost implications of switching lender – not just the headline rate.

Between September 2009 and March 2011 the average application fee charged on mortgage and remortgage products in the UK increased by just under £100. That’s the findings of recent research from a leading price comparison website and featured in the specialist finance publication Mortgage Strategy.

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Read more about this subject here: Mortgage Lending – Some positive news

Some Confusion over the state of the housing market in England.

This is not really news, after all anyone actually involved in either buying or refinancing property recently will instinctively know that the situation has not improved (or got worse) in the last few months.

It’s to early to say whether the governments latest attempts to kick start the property market is going to have an effect.  One can only hope!

Under a headline that “UK house prices surprisingly resilient” the BBC are reporting that..

UK house prices have remained “surprisingly resilient” in recent months, with values rising again in November, the Nationwide has said.

It said the average home rose in value by 0.4% in November to £165,798.

This was a 1.6% year-on-year increase, according to the figures based on Nationwide’s own mortgage data.

The full story is here and it goes on to explain that mortgage approvals are also on the up.

However, the land registry figures are telling a different story:

• They show that the average price of a home in England is £159,999
• This is a monthly change downwards -0.9%
• Annual equivalent  -3.2%

You can read the full land registry report here, but the overall message appears to be that whether house prices are going up or down the change is not really significant enough to be overly concerned.

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Read more about this subject here: Anyone’s guess what house prices are doing.

According to the latest Rightmove House Price Index for May 2011, the UK property Market is remaining in a state of limbo. A lack of proceedable buyers is not helping, and a it would appear that most new sellers are marketing under forced sale conditions, sometimes holding out for unrealistic asking prices. Although there is also conflicting data from other sources.

London property prices buck the trend.

Some London based agents are reporting that the average price of a house in North London is now £367,594 – around 1.2% higher compared to last year. The average price of a house in South London is £305,249, which is an annual increase of only 0.2%.

According to the latest Chesterton Humberts/cebr APRIL 2011 House Price Poll of Polls, this makes North London house prices £62,345 more expensive on average compared to South London. The gulf between the two areas has continued to widen, from last years’ gap of £58,595.

Whereas the latest data from the Communities and Local Government department show UK house prices fell slightly in the first three months of the year.

Apparently From January through to the end of March this year house prices were 0.5% lower than for the previous three months.

Gross mortgage lending tumbled by 14% in April to an estimated £9.8 billion, according to the Council of Mortgage Lenders.

Interest Rates are not the only factor

According to research by the Halifax many homeowners may have benefitted from low interest rates, but they are currently facing their highest household costs for three years.

They say that Over the past year, the average annual cost associated with owning and running a home rose by 1.4% (£127) from £8956 in March 2010 to £9083 in March 2011.

So once again there are conflicting news items about property prices, and it’s not all bad news all of the time. This has to be good news for property developers.

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Read more about this subject here: Property prices ups and downs, again.

According to the latest Rightmove House Price Index for May 2011, the UK property Market is remaining in a state of limbo. A lack of proceedable buyers is not helping, and a it would appear that most new sellers are marketing under forced sale conditions, sometimes holding out for unrealistic asking prices. Although there is also conflicting data from other sources.

London property prices buck the trend.

Some London based agents are reporting that the average price of a house in North London is now £367,594 – around 1.2% higher compared to last year. The average price of a house in South London is £305,249, which is an annual increase of only 0.2%.

According to the latest Chesterton Humberts/cebr APRIL 2011 House Price Poll of Polls, this makes North London house prices £62,345 more expensive on average compared to South London. The gulf between the two areas has continued to widen, from last years’ gap of £58,595.

Whereas the latest data from the Communities and Local Government department show UK house prices fell slightly in the first three months of the year.

Apparently From January through to the end of March this year house prices were 0.5% lower than for the previous three months.

Gross mortgage lending tumbled by 14% in April to an estimated £9.8 billion, according to the Council of Mortgage Lenders.

Interest Rates are not the only factor

According to research by the Halifax many homeowners may have benefitted from low interest rates, but they are currently facing their highest household costs for three years.

They say that Over the past year, the average annual cost associated with owning and running a home rose by 1.4% (£127) from £8956 in March 2010 to £9083 in March 2011.

So once again there are conflicting news items about property prices, and it’s not all bad news all of the time. This has to be good news for property developers.

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Read more about this subject here: Property prices ups and downs, again.

The Second Reading of the Energy Bill was delivered on 10 May, and it contains some interesting bits for landlords, and yes, even small landlords.

The Energy Bill is intended to be a change in the provision of energy efficiency measures to homes, and to encourage improvements to enable low carbon energy supplies.

In the second reading new proposals included amongst other things:

• From April 2016 landlords will not be able to refuse reasonable requests from tenants, or local authorities acting on behalf of tenants, to improve their property
• From April 2018 the government will make it unlawful to rent out a house or business premise which has less than an “E” energy efficiency rating.

Chris Huhne claims that

“Our proposals provide a voice for tenants living in poorly insulated, draughty homes. The Green Deal is a win-win opportunity for landlords by removing the upfront cost of work to upgrade the property making it cheaper to run, more environmentally friendly and ultimately more attractive to rent.

For those landlords who don’t take up the Green Deal then we will get tough so that by 2018 the poorest performing rented housing stock is brought up to a decent standard.”

There has been talk about financial support for landlords in making these changes, but nothing specific and nothing that you could write a cheque with.

So it looks like the pressure will be on the providers of EPC’s to make sure that rented properties do not fall below an E rating.  And who knows what will constitute a “reasonable request” from a tenant to improve a property.

Oh, and of course any landlord receiving such a request would still be free to use section 21 to end the tenancy, wouldn’t they?

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Read more about this subject here: Who would have thought that the Energy Bill would impact landlords

Looks like the doom and gloom merchants are out in force again.  But who should property developers believe? We take a look at some of the property press over the last week for hints as to where the property development finance opportunities may be hiding.

Predictions of falling house prices:

On 13th July 2010 popular money website Thisismoney.co.uk reported that prices are set to fall.  They quote four leading economic “gurus” each predicting varying degrees of badness. They included:

• accountants PricewaterhouseCoopers
• the Royal Institution of Chartered Surveyors
• the Council of Mortgage Lenders.

The prediction in the thisismoney article is that property prices could remain depressed for at least the next 10 years, possibly even seeing £40,000 taken off the price of an average house by the end of 2012.  The cause of this continued depression is apparently the lack of employment and the prospect of higher interest rates.  No affordability to sustain current prices let alone any increase.

Actual falls in property values:

on 19th July 2010 the largest property website on the web, rightmove.co.uk reported a drop in asking prices of 0.6% from June’s figures.  Rightmove state that mortgage approvals are running at about half the number of new properties being placed on the market.  Supply is outstripping demand.  Rightmove predicted that house prices would end the year at the same value as January 2010, therefore they expect to see the gains early in the year completely wiped out.

Property Development Funding still an option?

The general public and policy makers are naturally fascinated by the reports with some people accusing the media of talking the market down, to others saying that the basics of economics still hold true and the market has to be correct before things improve.

Property development funders are obviously concerned that they are not funding development ideas that will sit unsold for months, but believe it or not there are still quite a few funding opportunities out there for good quality developments.

There are still regional hotspots where local conditions are ripe for development opportunities.  So don’t be too despondent about reports of a falling market, keep looking and keep asking lenders to consider proposals.

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Read more about this subject here: Property Development Finance in amongst Predictions of doom for property prices

Consumers now have instant access to their credit reports after an agreement was struck between the Government and the credit reference industry.

As a result of the new agreement, people can now access their statutory credit report online for a nominal fee of only £2 from all three major UK credit reference agencies: Experian, Equifax, and Callcredit. Previously, statutory credit reports for £2 were only available by post, which could take seven days to arrive.

An individual credit report contains information such as credit commitments and any late payments.  In addition, continued free access to credit reports for victims of ID fraud and the financially vulnerable has also been introduced.

Anyone thinking of taking out finance in any form, whether it is a credit card, mortgage or bridging loan should be aware of what information is on their credit report, and this is a great way to find out for just £2 – or £6 if you check all three.

Consumer Minister Edward Davey said

“All consumers now have easier access to their £2 statutory credit reports, with victims of ID fraud and the financially vulnerable receiving free access to their reports. These significant improvements will help consumers take better control of their finances.”

Peter Vicary-Smith, Which? Chief Executive, said

“the move should provide quicker and more convenient access for consumers to their credit file, and could encourage more people to check their file more regularly. This is a welcome initiative in the battle against fraud and the elimination of faulty data,”

The reports can be accessed from each of the three providers:

• Experian
• Equifax
• Callcredit

A word of caution, all of the above providers are trying to sell a continuous subscription service in one form or another.  The statutory report should be a one-off payment of £2 – if you’re signing up for anything else then you may have clicked the wrong “button”.

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Read more about this subject here: Consumers can now order their statutory credit report online

A property developer has won a High Court case against property investors forcing one to pay £133,000 after they backed out of an agreement to purchase flats “off plan”.

The High Court, in Bristol, has ordered the person to pay a whopping £133,282 in damages, costs and interest to Plymouth’s Prestige Homes South West Ltd, after pulling out of a deal to buy two Zero 4 flats in Plymouth.

This is one of a number of cases that this property developer is pursuing against people who paid deposits on a number of flats but then walked away from the deals once property prices started to fall.

It would appear that in addition to deposits being paid, contracts were exchanged on an “off plan” basis.  This was common practice during the height of the property boom where investors were agreeing to purchase a property (often at a discount) before the development had started.  The property developer would then secure ongoing finance against the security of knowing that the sales would complete.

The challenge for the hapless investors was that the property values were declining, loan to values were following and many of them were faced with no option other than to pull out of the deal.  Sadly for them, once you have exchanged contracts you are committed to the sale and liable for consequential loss if you fail to complete.

This is not the only case of its kind, among the developers reported to have filed claims are Ballymore, which has lodged more than 130 claims, Trelford Homes, which has filed 50, and Imagine Homes which issued 40 before it went into administration.

There appears to be two types of purchaser affected by this situation; the would be homeowner and the property investor.

However some would be purchasers are putting up a fight. One group has formed the Berkeley Homes Collective. They say they are private purchasers only and that they were ‘mugged by slick sales staff’. They claim Berkeley Homes used “high-pressure sales techniques”.

This could well turn out to be a tough lesson for property investors, one that could end up with many resorting to bankruptcy.

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Probably does not come as much of a surprise to anyone involved in UK property sales, but worth pointing out:

More than two thirds of UK property disposals last year were sold at prices below their valuations, according to the IPD/RICS Valuation and Sale Price Study 2009.

The study was published yesterday at the annual IPD/IPF Property Investment Conference in Brighton.

Rebecca Graham, senior analyst at IPD told delegates at the pre-conference briefing on property valuation accuracy that by contrast the three other major European markets in the study – France, Netherlands and Germany – all achieved a sale premium to valuation.

For more news from the IPD/IPF conference, check out the conference blog here.

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Read more about this subject here: Two thirds of UK properties sold below their valuations

The FSA has today launched a discussion paper on consumer responsibility and said that it wants to explore what steps it or others could take to help consumers understand and protect their own best interests more effectively.

The protection of consumers is one of the FSA’s four statutory objectives and the discussion paper aims to provoke debate and bring greater clarity to the FSA’s approach to consumer responsibility.

Dan Waters, FSA director of retail policy & conduct risk, said:

“Responsible and well managed firms that treat their customers fairly are crucial. Indeed, to this end, the FSA is strengthening its supervision of firms through the Supervision Enhancement Programme and its Enhanced Strategy for Small Firms. All firms have been warned that they face stronger and more intrusive regulation to ensure they are aware of their responsibilities to treat customers fairly.

“However, we also believe that markets will work more effectively if consumers are more involved, more capable and empowered. While we do not regulate consumers, we believe that we can work with firms, industry bodies and other stakeholders to encourage and enable consumers to consider their own interests more effectively in their decision making.

“We acknowledge that this is a debate that elicits strong feelings on both sides and we are keen to try to find common ground in order to contribute to better understanding and better outcomes for consumers in financial services markets.”

The Financial Services Consumer Panel (FSCP) questioned why the FSA is focusing on consumer responsibility at a time when it claims “large| sections of the industry are not giving consumers a fair deal It says that this is not the time for the FSA to be debating responsibilities for consumers.

Adam Phillips, the FSCP’s acting chairman said:

“Clearly, the industry has been putting pressure on the FSA to increase consumer obligations. While we are not arguing with the need for consumers to answer questions honestly and read key information, the FSA document provides an opportunity for the industry to attack consumers’ rights, when it is the industry itself which needs to get its house in order and take responsibility for its actions. Over the past few months we’ve seen consumer confidence fall to unprecedented low levels. It’s also a time when many firms have been exposed as not giving consumers a fair deal, from the selling of Personal Protection Insurance (PPI), to pension transfer advice and dealing with mortgage arrears.

“We have told the FSA that this is not the time to be discussing consumer responsibility, and we will continue to pursue this line vigorously with the FSA over the coming months.

Although it might seem odd that the FSA should be seeking opinions about how to “force” consumers to act responsibly it must be argued that consumers insatiable hunger for finance over the last few years has contributed to the problems we are having.  A better informed and educated consumer has to be good for all sides of the industry.

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Read more about this subject here: The FSA has today launched a discussion paper on consumer responsibility