www.mortgagestrategy.co.uk NEWS
IN BRIEF
�Number of mortgage
deals up 3% in April
TrigoldCrystal’s latest
product index shows the
number of live mortgage
deals in April reached
2,858, up 3% from
March.
�Accord cuts fixed rates
in semi-exclusive range
Accord Mortgages is
reducing the majority of
fixed rates in its
semi-exclusive range.
�Mortgage Intelligence
signs up to utilities deal
Mortgage Intelligence
has become an
authorised distributor of
the Utility Warehouse
Discount Club.
�Equity release clients
find products online
Research from Equity
Release Solicitors’
Alliance has found that
35% of equity release
customers shopped for
their product online.
�Assurant appoints
Gavin Patman as BDM
Assurant Intermediary
has appointed Gavin
Patman as BDM.
�Annual inflation rate
drops to 2.3%
The annual rate of
inflation slowed in April,
falling to 2.3% from
2.9% in March.
�Vision hosts business
forums for brokers
Vision Network is
hosting a series of
forums to help brokers
boost business.
PROPERTY
Asking prices up 2.4% as sellers
try to boost equity in their homes
● NATALIE HOLT
Sellers pushed asking prices up 2.4%
in May as they looked to boost equity
in their property.
The latest house price index from
Rightmove shows that the average
asking price climbed £5,364 to
£227,441 during May, up from £222,077
in April.
The property website says sellers
may be setting higher asking prices
because they fear their equity could
fall further, meaning they won’t be
able to find an affordable mortgage
when it comes to their purchase.
The number of new sellers coming
to the market has fallen significantly,
dropping from 135,000 in May
2008 to just 61,000 this month.
Miles Shipside, commercial director
at Rightmove, is worried that sell-
LENDERS
● NATALIE HOLT
ers will be unable to move and housing
supply will be limited for years.
He says: “Many home owners who
might have wanted to take advantage
of the spring selling season to trade
up will be victims of equity immobility.
The choice of when and how
to move is now out of their hands.
“While some of the impetus behind
the increase of over £5,000 in
asking prices will be due to ambition
or optimism, it will also be out of
necessity as sellers attempt to scrape
together enough equity to move.”
The National Association of
Estate Agents has reported more
optimistic figures, showing that
property sales hit an 18-month high
in April.
Estate agents sold an average of
Paragon profits fall by over £10m
Paragon Group posted a pre-tax
profit of £15.9m for the six months
to March 31, down over £10m from
£26.4m at the same time last year.
The lender reported an underlying
profit of £18.9m compared with
£38.4m in the first half of 2008.
The lender says the fall in profits
was linked to lower levels of lending,
having withdrawn from new
business at the end of February last
year. It also attributes the drop in
income to a smaller loan book and
a higher charge for loss provisions.
Total advances fell from a mas-
sive £987.6m in the first half of last
year to just £69m at the end of
March, while loan assets dropped
12.4% from 10.86bn to £9.51bn.
Gross three-month arrears at the
end of March were 1.74%, much
lower than the comparable industry
figure from the Council of Mortgage
Lenders of 3.48%.
Nigel Terrington, chief executive
of Paragon, says: “While the period
has been challenging, we have seen
positive indicators as a result of
improved affordability following the
reduction in interest rates.”
PRODUCTS
Cost of fixed rate deals goes up
The cost of the average fixed rate
deal has risen in the last month,
with borrowers wanting long-term
deals seeing rate rises of up to
0.20%.
Data from Moneyfacts.co.uk
shows that 10-year fixed rate deals
have gone up by an average of 0.04%
over the last month, from 5.74% to
5.78%.
Two-year fixes have risen from
an average of 4.61% to 4.64%.
Borrowers with an LTV of over
85% have been the hardest hit by
rate rises in the last month.
Those wanting a 10-year fixed
rate at 85% LTV have seen rates go
up 0.20%, while two-year fixes at
90% LTV have gone up 0.12%.
Michelle Slade, analyst at Moneyfacts.co.uk,
says: “Borrowers hoping
to take advantage of low interest
rates and lock into a long-term fixed
are going to be disappointed.”
10 properties in April, compared
with a low of five last August.
Peter Bolton King, chief executive
of the NAEA, says: “We are beginning
to see consistent positive indicators
that have held firm or improved
since the beginning of the
year.
“The NAEA has always said that
demand for property remains strong,
but confidence in the market has
gone. These figures show that confidence
is returning.”
Estate agency network Cluttons is
also cautiously optimistic. It has
revised its central London forecast
and predicts house prices will fall
10% this year and level off in 2010 in
time for positive house price growth
in 2011.
PAST TIMES
This week in...
2008
2007
2006
2005
2004
2003
2002
Lord Adair Turner is
appointed chairman of
the Financial Services
Authority
Hipstar, a subsidiary
of Network Data, says
it remains committed
to providing HIPs
Brian Pitt, sales and
marketing director at
Beacon Homeloans,
resigns from the firm
Abbey National is fined
£800,000 by the FSA
for mishandling
endowment complaints
SPML warns against
being complacent on
arrears and
repossessions levels
Monthly gross
mortgage lending
reaches £13.7bn, BBA
figures reveal
Birmingham Midshires
offers a 10-year fixed
rate at 5.85% through
branches
MORTGAGE STRATEGY May 25, 2009 11
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