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Suffering homeowners were offered a ray of hope yesterday with a prediction that house prices are likely to rise by 25 per cent over the next five years.

In defiance of a welter of doom-laden figures on the property market, research for the National Housing Federation claimed the downturn would be over by 2010, leading to a return of rising prices.

Its optimism was based on the shortage of property being so acute that the decline will not become a full-blown bust.

read the whole article here

Now may not be the best time to buy a home but it certainly isn’t the worst.

In spite of the dramatic slowdown in the housing market with house prices having lost virtually all the gains of the past 12 months, evidence is beginning to emerge that when confidence returns to the market, the upturn could be sharp, releasing considerable pent up demand from buyers.

Read the rest of this article here

Strong demand has pushed the cost of renting a home through the £1,000-a-month barrier for the first time, figures showed yesterday.

The average cost of renting a property in England and Wales reached £1,003 a month in March, a rise of 4 per cent during the past quarter and 12 per cent during the past six months, according to specialist lender Paragon.

The group said rents were rising because of extra demand from those who were renting because they were unable to get a mortgage or did not want to buy because of the state of the property market. The trend was likely to continue. (more…)

Mortgage lenders are being heavily criticised for withdrawing products without notice and have been accused of profiteering as rates continue to rise well above Bank Base Rate. 

But are they taking advantage of desperate borrowers? And are they to blame for the shortage of funds? The short answer is that while most lenders are taking the opportunity to repair their profit margins, most are not profiteering.  

With LIBOR, the rate at which banks borrow in the money markets, currently standing at around 6%, mortgage lenders would have to charge around 7.5% to new borrowers to cover their costs and make a small profit. Most are charging around 6% and are making nothing at all.  

If they are having to refund existing mortgages – where they lent out at an average rate of around 5% over the past couple of years – at 6%, they are actually losing money on large chunks of their business. They can currently do little about the shortage of funds to lend to homebuyers, which is a major factor in the repricing of mortgage products at higher rates. Go here to read the full article.

“The credit crisis has nothing to do with escalating losses on sub-prime mortgages or risky loans.”

Read this fascinating article here:

http://business.timesonline.co.uk/tol/business/columnists/article3607495.ece

Home Information Packs have been savaged in a report commissioned by the Government.The study said homebuyers either ignored or mistrusted the documents. Ministers had delayed until yesterday publication of the report, which was an evaluation of a trial of HIPs which ended nearly a year ago.

Around 80 per cent of buyers were found not to have asked for a pack before making an offer for a property.

Nearly 60 per cent disagreed with the statement that “having the HIP sped up the buying process”.

Asked whether they trusted the dossier, some 20 per cent said “very little” or “not at all”.

(more…)

from BBC news24 26th Feb 08 

The buy-to-let property market is still thriving, according to the Council of Mortgage Lenders (CML). The number of buy-to-let loans rose by 23% last year, taking their number to 1,038,000 and accounting for 10.3% of all outstanding mortgages.