New developments relying on LTV
The Housing market has been hit hard in the recent months, but this month has reported small falls in house prices by Halifax and Nationwide. Halifax stated that house prices are 3.7% less than the previous year in April and Nationwide stating only -1.3% changes since last year.
These smaller falls have been in certain regional variations. Out the regional variations the North West is growing again and London variation cannot is nowhere near the rest of the country. With the slight fall in house prices and the increase in options for mortgage products the estate agents of UK are likely to see boost in the market, But for this to boost the whole market mortgage providers need to be less discriminative against mortgaging new houses. At the present moment lenders are providing a lower loan to value for newly developed properties in comparison to second hand properties, which is creating a major impact on developers.
In regards to the residential market, the last few weeks have been flat and are continuing to stay like this. On a positive note we are able to notice that the availability of mortgage products is improving, but we do not know if buyers are taking advantage of this. In recent time’s mortgage provider are introducing new and better mortgage deals on the weekly basis and this has led to 12,000 mortgage products available on the market, only half this amount was available last year. Despite the knowing that mortgage products have grown we know that liquidity for lending has still stayed the same meaning the volume of lending has been offered over more products. Still it is good to know that mortgage providers are starting to increase the LTV, like Nationwide who has linked a saving product to its 95% LTV product.
The general mortgage market has reported an increase in lending in March by the Council of Mortgage Lenders which was £11.3bn worth of transactions, which is a 21% increase from February. This figure remains a positive figure when comparing it to the previous months but when comparing it to year on year it is still down, even though mortgage lending was only at £136bn in 2010. The re-mortgage market, year on year is increasing, but the figures are still small, when the base rate is at 0.5%.
In the Month of April we had seen many bank holidays and people who took 3 days leave from work ended up with an 11 day holiday. This left April with only 18 trading days which had much effect on the picture on the performance of the month, whereas May will be able to provide a clear understanding of the market position and the consumer behaviour.
