The 95% LTV mortgage market has changed dramatically since the Help to Buy Mortgage Guarantee scheme was introduced two years ago, with product numbers rising and rates falling significantly since its October 2013 launch. Our figures show that the number of 95% products available has risen by almost 600% in the last two years - up from 42 in October 2013 to 241 today - and at the same time, the average two-year 95% LTV mortgage rate has fallen by 0.65% (down from 5.05% to 4.40%). The average five-year rate has also fallen, albeit not quite to the same extent, down from 5.20% to 4.89% over the same two-year period. Charlotte Nelson, finance expert at Moneyfacts, said that Help to Buy acted as a "crucial catalyst" for this sector of the market, by "promoting the acceptability of lending at this level again". She added that the scheme, which was initially designed to boost lending at 95% LTV, has been an undoubted success, with official Treasury figures showing that the number of homes sold as a result of the scheme has hit 56,401. However, despite the scheme fuelling the high level of competition in the sector - both from participating lenders and those outside of the scheme - there are concerns that this may not be the case for much longer. "The scheme is due to end next year, and only time will tell whether its removal will extinguish the competitive flame in the 95% mortgage market," concluded Charlotte, while the ongoing speculation over a rise to base rate has the potential to raise mortgage rates in the sector even sooner.
London house price leap set to lift regional gloom: Property prices are set to increase this autumn after a surge in London was forecast to ripple out across the country on the back of a worsening imbalance between supply and demand.
The final gross domestic product (GDP) in the UK advanced 2.40% on an annual basis in 2Q 2015, lower than market expectations for an advance of 2.60%. The preliminary figures had recorded an advance of 2.60%. GDP had registered a rise of 2.90% in the prior quarter
UK house prices rose more than expected in September
On a monthly basis, the seasonally adjusted house prices in the UK climbed 0.50% in September, compared to a revised advance of 0.40% in the prior month. Market anticipation was for house prices to climb 0.40%.
UK house prices advanced as expected in September
The non-seasonally adjusted house prices in the UK recorded a rise of 3.80% in September on an annual basis, meeting market expectations. House prices had advanced 3.20% in the previous month.
Buy a house for just £56 per week say MJ Gleeson: MJ Gleeson, the Northern-based builder of affordable homes, has reported a 42% jump in profits. Jolyon Harrison, its Chief Executive, said the mission for the company was simple: “To build low-cost homes for people on low salaries in socially deprived areas that we believe will benefit from regeneration.” The company increased the number of homes it built during the year by 190 to 751, and the average price across all its homes was £123,750, just 2% up from £121,500 last year. For comparison, Barratt, one of the U.K.’s largest housebuilders, has an average selling price of £235,000. Gleeson reported revenue up 44% to £118 million and pretax profit up 42% at £17.3 million for the year ended June. The majority of the performance came from the Gleeson housing division, which reported operating profit up from £9.4 million to £17.4 million. This was largely due to selling those 190 more homes. The company suffered in 2008 when its southern-focused housebuilding was hit, sending shares down from about 400p, to 52p. Gleeson has now completed its recovery, and it moved to the main market at the end of last year, where its shares have gained more than 30% so far this year. Given the lack of affordable housing, the shares look good over the long term, and we retain our “hold” recommendation. MJ Gleeson at 466p-0.625p. Questor says “Hold”.
UK number of mortgage approvals for house purchases rose in August
Number of mortgage approvals for house purchases in the UK rose to a level of 71.00 K in August, higher than market expectations of a rise to 69.80 K. Number of mortgage approvals for house purchases had recorded a revised reading of 69.00 K in the previous month.
UK net lending secured on dwellings rose more than expected in August
Net lending secured on dwellings recorded a rise of £3.40 billion in the UK in August, compared to a revised advance of £2.80 billion in the prior month. Market anticipation was for net lending secured on dwellings to climb £2.90 billion.
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