The value of property in Camberley went up last week and then it went down…What.. Talk about confusing.

First of all Nationwide Building Society put out a press release saying that property prices were up 0.9%. Wow we all thought as we listened to the news, things are bottoming out, meaning house prices have got to their lowest value since the recession began and now they are starting to rise.

Now where’s that copy of the Star newspaper, I’ve got to buy me some houses…

But then the following day, The Halifax came out with an opposing story saying that prices had fallen 1.9% in March..Who do you believe?

The Facts of Life

The sad fact is and I have said it before, the public relations machines of these large institutions have to justify their existence by putting out the odd story that gets the attention of the media.

Of course I haven’t read up on where Nationwide get their information from, they do have a lot of statistics to go on, as they give out quite a number of mortgages each year. But statistics can be interpreted many different ways and The Nationwide Pr/Media department, took one “headline” statistic and that became their story.

Over the last few years, during the lead up to the recession, Nationwide were always coming out with sensationalist stories, (they must have a very imaginative head of media who came from the School of Media Sensationalism).

Of course, we all want the value of property to rise and Nationwide wants to put out positive stories, but they have been premature.

The Halifax Building society came out the day after Nationwide’s sensational 0.9% story saying that property prices are down 1.9%, so who do you believe.

What local estate Agents are saying

Well I can tell you the there is definitley movement in the market, more people are looking at property locally. My friends who are estate agents tell me that there has been an increase in the number of people registering for property alerts in Camberley, Frimley Farnborough and Aldershot.

Also people are becoming more realistic about their selling prices.

I have been in the property related business for 20 years starting off as an estate agent, before moving into the financial sector 12 years ago.

In my opinion, people are waiting for the the value of property to “Bottom Out”, before they get involved in the buying and selling of property again and my estate agent friends are saying that this is happening, that prices are not falling like they were two or three months ago and that now is a good time to buy…But they would say that wouldn’t they.

Conclusion

When the headlines say the value of property is up 0.9% or down 1.9%, they are talking about the national picture, which does not relate to surrey and hampshire.

My advice is talk to a good estate agent who knows his stuff, yes there are plenty of good ones out there and not one who waffles the same old sales lines, that they are famous for.
I can recommend a number of local ones if you wish,  just drop me an email

In the meantime take care and don’t believe everything you hear in the news.

Michael Usher

01276 670777

Them national media boys are at it again, beating us all up with lots of bad news about the economy. But will be as bad in Surrey or Hampshire.

Of course statistics don’t lie, although they can be manipulated to suit the cause especially in the politics game.

Look at unemployment, up to over 2 million and it could get worse with some economists saying 3 million is likely, even a spokesman for the TUC acknowledged  that 3 mill. could be possible.

Most of the jobs lost are not local and its far worse up north, especially in the former industrial areas. But let’s not get complacent down south. I know quite a few people who have lots their jobs and others who are also very concerned about theirs.

Lord Turner, he’s the guy who has been given the job of reviewing the role of the FSA (the Financial Services Authority), has said that mortgages may become harder to get, with the loan to value of the mortgages having a minimum of 10-15% deposit required.

I don’t see that as a bad thing, its good that a buyer shows some commitment to buying a property by working harder to save for a deposit. But mortgage companies, banks and building societies should not make it tremendously hard and difficult to get a mortgage. There has to be a balance.

So I hope the government and the FSA do not go over the top, after all this is the same government that was talking about allowing mortgages with 7 times your salary.

International Monetary Fund report.

Yikes more bad news… according to the IMF the Uk is in a worse financial position than most of it G20 partners in fact it has said “Britain will take longer to recover from the recession than any other major economy”

Hold on to your hats, but don’t panic.

Need to Remortgage

There is no doubt mortgages are cheaper at the moment, but still people are not taking advantage of this.

I recently agreed a 250k remortgage for a couple who were on a 6.5% loan down to 3.9%…can you imagine the savings they made monthly, but more about that in another blog post.

If I can be of service please call me 01276 670777

Bye for now

Michael Usher

0.5% Bank Rate is good, but…..

Home owners in Surrey and Hampshire have seen their mortgage payments slashed in the last 5 months, well those that have a tracker mortgage or those we have helped recently to secure low mortgage rates.

Now the Bank of England have decided to print more money as well, (what a good idea, I wish I could do that) what we need now….is more lending please and all we can hope is that the banks do start to make funds available for desperate house buyers.

But of course we will all have to pay for it in the end. You can’t just print more money like its going out of fashion and not worry that this kind of action will not come back and bite you on the bum, because it surely well.

But, like the government, let’s not worry about that now, lets get the economy going again and worry about those other things in the future.

The local housing market.

I have been talking to quite a number of estate agents in Camberley, Frimley and Farnborough and they have all been saying that they are busier now than in the last 12 months and in some areas and with certain types of properties, prices are stablising.

But the banks and buiding societies are making things tougher all round. They are still insisting 0n 15, 20, or even 25% deposits, in fact its said that the government are contemplating on making it a law that there should be a deposit of at least 15%. Not sure about that.

10% deposit would seem fair and indeed workable. My first mortgage in the 80′s required 10% and yes it was hard to find that money, but I worked harder, did a job on the side and finally saved enough money to get my first house.

Prices of houses are higher now, but we all earn a lot more now.

Houses are also more affordable than they were this time last year and I know I keep saying it, but you can still get an even better bargain if you negotiate!!!!

So now its a case of saying hooray to 0.5% interest rates if you have a certain mortgage, but boo!!!  if you are a saver. Swings and roundabouts comes to mind. After all some savers had it good for so long.

As Forrest Gump said “Life’s like a box of chocolates. You never know what you’re gonna get.”

If I can help you in any way with you mortgage, please email me through the website or just pick up the phone, I wont bite.

Michael 01276 670777

website

Here is the news that home owners in Surrey and Hampshire have been looking forward to reading about. This will also be great news for 1st time buyers locally too.

Northern Rock is leading the way, but now all the building societies and banks will have to follow (if they want to retain their market share), as the Government backed Northern Rock is going to make £14Billion available for the mortgage market.

Finally some “Balls” is the market, this just what’s needed to get the housing market going again.

Here’s the full story from the Financial Times

N Rock to lend £14bn to revive housing market

By Martin Arnold and George Parker

Published: February 22 2009 22:05 | Last updated: February 23 2009 07:57

Northern Rock is to embark on a £14bn mortgage sales drive to resuscitate Britain’s sluggish housing market, fuelled by a hefty injection of fresh government funding for the state-owned lender to be announced on Monday.

The Newcastle-based lender will split into a “good bank/bad bank” structure, allowing it to lend about £5bn of new mortgages in 2009 and £9bn from 2010, depending on market demand and funding, the government said on Sunday night.

EDITOR’S CHOICE

Buy-to-let mortgage advances hit five-year low – Feb-21

Alistair Darling, the chancellor, will present the move as an effort by the government to help responsible, hard-working families get mortgages, arguing that even those with a 20 per cent deposit are struggling to get finance.

Northern Rock’s new mort­gage lending will be a far cry from the aggressive policy it pursued before its crash, a business model decried on Sunday by Gordon Brown, the prime minister, who said he wanted to see an end to 100 per cent mortgages.

The Treasury has been informally discussing the Northern Rock plan with the European Commission, which last year insisted the bank quickly repay its £27bn taxpayer loan to minimise distortion to competition.

But Mr Darling argues that much has changed since February 2008, when Northern Rock’s nationalisation was a rare event in European banking and when Brussels took a much tougher line on state aid.

The government hopes that by giving Northern Rock – once the UK’s biggest mortgage lender – the firepower to increase significantly its lending to homeowners it will halt the slide in new mortgages, which hit a 34-year low last year.

By the end of December it had repaid £18bn of its £27bn government loan, allowing it to end its policy of encouraging mortgage redemptions in order to shrink its loan book.

Mr Darling has been surprised at how quickly the bank has fulfilled its commitments to Brussels and now wants to reverse that process to fill the gap in mortgage funding.

The old mortgage book will be split from its other businesses, allowing it to focus on using fresh capital from the government to finance new lending, rather than covering losses on older loans. The “good bank/bad bank” split will leave the worst parts of Northern Rock’s mortgage book in a separate vehicle, expected to managed alongside the book of the nationalised Bradford & Bingley, which is being run down.

Both are expected to come under the auspices of UK Financial Investments, the arm’s length body handling the government’s banking interests. The aim is to position the “good” Northern Rock for an eventual sale to the private sector.

The new mortgage lending will be financed by a fresh government loan of up to £10bn, as well as a longer repayment schedule for state loans still outstanding and income from the bank’s deposits and repayments.

Last year gross mortgage lending was £258bn, down from £364bn in 2007, according to the Council of Mortgage Lenders. There were 516,000 mortgages last year, down 49 per cent from 2007 and the lowest since 1974.

Copyright The Financial Times Limited 2009

Good news in all the newspapers

Great news for some house owners in Surrey and Hampshire.

Nationwide has announced interest rate cuts on a number of its fixed-rate mortgages, and has launched a new range of tracker mortgages.

As of 17th  February, new fixed-rate mortgage customers at the building society will be able to sign up for deals 0.2% lower than current rates.

The lower rates will also be available on remortgages and to current Nationwide customers renewing their mortgage contract.

Nationwide’s re-launched range of new tracker mortgages include two and three year deals. Two year tracker products start at 3.98%.

Andy McQueen, mortgage director, said: “We are increasing our mortgage product range with the re-launch of a two year tracker and a new three year tracker for those customers who are looking for a longer term tracker deal.”

Nationwide subsidiaries Cheshire and Derbyshire Building Societies recently launched a new range of fixed-rate bonds.

The housing and mortgage market is changing and there definitley more interest from buyers at the moment.

I’m not saying that the housing market has bottomed, but the scares from the media saying house prices would fall another 20% this year seem to be totally at odds with whats going on in the market,

I believe this is truly a good time to buy a property…for the long term, but also as an investment.

The Bank of England has reduced interest rates to a record low of 1% from 1.5%.

Back in October last year, the Bank of England rate was 5%.

Great news for house buyers, especially with tracker mortgages, but of course bad news for savers.

Of course this is the 5th interest rate cut in five months and I believe this will help to stimulate the housing market.

Already I have seen some loosening in the market and some banks are willing to listen and offer mortgages.

The media/press continue to churn out the bad news, which is not helping, but we as independent mortgage brokers are making headway and getting mortgages for our clients, today, this week, YES THIS WEEK.

I’m not saying its easy, but we are constantly in contact, on a daily basis with banks and building societies checking on the latest deals around.

It may suprise you to know that certain banks and building societies put out offers for just a couple of days, before withdrawing them after selling the multiple that they wanted… Thats where we come in and win as independents, because we hunt out the latest deals.

I do feel sorry for the savers, but with interest rates lower, those on tracker mortgages especially,  have benefitted by having reduced mortgages, meaning these mortgage holders will have more money to spend in the local and national economy, which is good for us all.

So with all the savings you have made on your mortgage, go spend some in the local restaurants and shops and do your bit, but don’t spend it all, save some, put it into Gold, prices still going up and you can invest in a gold bar for less that £80….

If you would like to change your mortgage to a tracker or fixed rate, give me a call 01276 670777

Michael

Visit our website

Hi,

I thought I would publish something that appeared in one of the mortgage business trade journal “Mortgage Introducer”.

I think it goes to show that money is still being lent for mortgages, despite what we hear consistenly in the TV News

“27 January, 2009

In December, net mortgage lending by banks rose by £2.9 billion according to the British Bankers Association (BBA).

This was lower than in November and below the average of the previous six months. Consumer credit remained subdued, falling by £0.4 billion net, while personal deposits rose by £4.0 billion. However, the significant falls in Bank Rate and the financial sector turmoil affected both lender and customer activity in November and December, so monthly movements are less indicative than usual of trends, according to the BBA.

BBA statistics director, David Dooks, said of the latest data: “This first opportunity to compare 2008 with 2007 shows that gross mortgage lending by the main high street banks totalled £170 billion, some 23% below 2007’s total of £221 billion.

However, lending by the rest of the mortgage market was half the previous year’s total, showing how mortgage lending became much more concentrated during the year. The banks approved less than half the 2007 number of loans for house purchase, reflecting falling demand from households facing greater economic uncertainty and double-digit falls in house prices over the year which led to a wait-and-see mentality.

“Consumer credit was very weak in December as people reined in their credit card spending, despite early Sales and heavy discounting by retailers. This consumer caution was also reflected in personal deposits, which rose strongly.”

The annual growth rate for net mortgage lending was still in double digits at end-year and reflects the main banks replacing other lenders in the market. During 2008, banks’ net lending rose by £48 billion, compared with £62 billion in 2007. In 2008 as a whole, gross lending was £170 billion, some 23% lower than in 2007.

Approval activity appeared to increase slightly during December, but was more likely to reflect delayed activity from November. In 2008, house purchase approvals were 52% lower than in 2007. Approvals for remortgaging were 14% lower than 2007. Approvals for equity withdrawal & other purposes were 33% lower in 2008 than 2007″

A lot of technical info, but interesting never the less.

Michael mums

Don’t buy a mortgage today, that’s the message I am giving my clients.

I like most people was surprised by the 1.5% reduction of rates by the Bank of England. But the mortgage market is a little unstable and volatile at present and will be till at least the middle of next week.

All of the banks and building societies have withdrawn their tracker mortgages, which means that if you buy a fixed rate mortgage today and the bank rate goes down another .5% or even 1% then you will have a more expensive mortgage than you should.

On the pessimistic side, if you get a fixed mortgage at 5.5% and the economy goes tits up and we see interest rates up to 5,6, 7,8% or more, you will have been glad to obtain a “cheap” mortgage.

Hopefully next week the lenders will come to their collective senses and bring back trackers or lower fixed mortgages.

So until next wednesday or so, do not get talked into buying a mortgage until things settle and better deals come back to the market.

Have a great weekend.

Michael

Michael Usher Mortgage Services

I’ve got a feeling in my bones that this is going to be a good week for all of us. (well maybe not all of us but most of us)

A new world has just opened or so it seems with the election of Obama, the first black/mixed race president of America….

And finance has been off the front of the news bulletins for several days because of the American elections. Plus later this morning the Bank of England meet to decide what the interest rate should be. Its got to go down!!!

Its amazing that when there is no “Bad Financial News”, or its buried in page 5, people start to get more confidence about buying property.

I have had several brand new clients this week, who do not seem care about the credit crunch. The fact is that they have seen houses they want and they are going to buy them.

They have put in sensible offers, the owners understand that the market has shifted downward and have reduced prices and its a win win for all concerned.

Now of course the American elections are over, the media will do its best to shake our confidence by bringing us a daily drip of bad news. Already the news today is new car sales are down 23% on last year and there’s another report from the Halifax “The average price of a home in the UK was £168,176 in October, compared with almost £200,000 in the same month last year, representing a bigger annual fall than the 13.4pc drop recorded in September”.

Yes it just goes on and on…

Now I appreciate that news has to be reported but… its the number of “Experts” that comment on the market that shakes our confidence. The Newspapers have to fill their pages, the editors crack the whip and the journalists have to find a story…I know thinks, the journalist responsible for “house news” I’ll check my roladex and find one of my experts, phone him/her up, get a comment and build a story that’ll last a few days.

As I have said before, I know many people with businesses that are still doing OK, in fact some are doing great.

People still need to move, people have circumstances that change and need to sell their property, people want to buy a house to live in to call their own and all this hyping up in the media, just does not help anyone.

I still think that this is a good week and if interest rates go down by .5% or even 1.00% later today, it will be an even better week especially for all those people wanting to change mortgages or buy a new house.

In America, the Fed has cut its interest rates by half-point to 1 percent, there have also been cuts in China and Norway…..….Now that’s what I’m talking about.

I’m not an economist, but is seems daft that the bank of England are taking so long to cut interests rates in this country. At 4.5% with a review on 6th November.

Believe it or not, the number of new mortgages approved in September rose..(33,000 in fact) after an all time low on approvals in August. Some experts believe however that this could be down to the changes in stamp duty. We will see..

Now according to the Nationwide, house prices in the UK have now fallen for the twelfth consecutive month.

They say that property prices fell by 1.4% in the last month, taking the annual rate of fall up from 12.4% to 14.6%. As a result, £27,000 has been wiped off the value of a property, taking the average cost of a home to £158,872.

But…..the Land Registry has said that annual house prices in England and Wales have fallen 8%, while it posted a monthly fall of 2.2% in September.

This takes the average property to £168,814, according to the Land Registry.

SO WHO DO YOU BELIEVE…Too many experts… and Nationwide, like many other large companies have journalists, who feed other journalist from the newspapers with a drip of stories.

Why, because they have got to sell newspapers, mind you I think Nationwide do tend to whoop it up a bit, you know, sensationalise things more than most. They must have journalists sitting around brainstorming “How are we going to get in the papers tomorrow”

But to get this mortgage market going again, we need to see lower interest rates, I’m not suggesting an immediate cut of 1 or 2%, because that probably cause more problems than it solves. But over the next 4-6 month lets hope that Bank of England can do something in that direction.

After all, if your are on a tracker mortgage and many of my clients are, you could see your mortgage fall dramatically.Or if you get a new mortgage and are able to get it at a lower rate than it is now, you will have more money in your pocket.

And of course this means that you will have more  money over at the end of the month to spend in the shops, restaurants and other businesses to help get this economy going again.

Take care

Michael