Welcome...kkk. to Buyabetterhome fgdfhgdfgdfgdfgdfgdf According to the Halifax, house prices went up a shock 1.9% in January, meaning that the average house price rose by £3,000 to £163,966. This is a contradiction of Britain’s other big mortgage lender, Nationwide, who said that house prices had taken a fall of 1.3% in the month, to an average of £150,501. Despite the rise, the bank indicated that prices were down 17.2% on 12 months ago.
Commenting on the figures, Halifax’s housing economist, Martin Ellis cautioned against reading too much into the rise, stating that the more accurate three-monthly figure showed a fall of 5.1%: “Historically house prices have not moved in the same direction month after month even during a pronounced downturn.” He then goes on to quote an example from 1990 where house prices rose for three out of the first ten months of the year, even though they had fallen for seven successive months in 1989.
These figures have led Halifax to suggest the market is starting to stabilize. Further evidence to that effect comes from the Bank of England, whose figures show a rise in mortgages for house purchase in December 2008; 31,000 – up from 27,000 in November. Yet more evidence of a recovery comes from the National Association of Estate Agents who indicates that the first time buyer is coming back into the market. It reports that the proportion of first time buyers more than doubled in the first two weeks of 2009 – up to 22.5% of registered buyers, compared to 10% in December.
Despite the latest cut in interest rates, with the Bank of England base rate down to a record-breaking 1%, the economic and financial analysis company, IHS Global Insight, do not agree with this sentiment. Their chief UK economist, Howard Archer, described the rise in house prices as “completely unexpected and somewhat incredible”. He also goes on to express the belief that the housing market will continue to come under pressure from recession, rising unemployment, waning income growth, tight credit conditions and a general lack of confidence in the market.
This is the term that experts are now using to describe the huge gulf in interest rates that borrowers are paying on their mortgages. Some borrowers on tracker mortgages are paying next to nothing whilst other borrowers on fixed rates are paying somewhere between 6% and 9%. It is believed that this trend is a sign of a dysfunctional market and will continue to intensify. Borrowers who are servicing mortgages with high interest rates aren’t just those stuck on fixed rates; recently acquired loans have been coming with a high SVR (standard variable rate) of around 6%, which is six times the current base rate.
