Lunchtime news Tuesday 8 July 2015



The Council of Mortgage Lenders released figures for May showing that the number of loans for home purchases remains low at 52,700. This is a slight rise of 4 per cent from April, but 44 per cent down in the year since May 2014. Figures for remortgaging are also down – 14 per cent on the previous month and 23 per cent year on year.

The department for Communities and Local Government also released figures this morning, showing that the price of the average property fell by £724 between April and May, a drop of 0.3 per cent. In year on year figures, house prices grew 3.7 per cent to May 2015 compared with 4.9 per cent for the year to April 2015.

And Moneyfacts has published a review of mortgages showing deals are getting more expensive. Fixed rate mortgages continue to rise, with the average standing at 7.07 per cent. A spokesman said that ‘lenders needed to start playing the game fairly and pass on the cut in rates quickly’ to stimulate the market.





Second home investors should be stopped from buying properties in eco-towns, according to the chief executive of the National Association of Estate Agents. Peter King said that planning controls should ensure local buyers were not priced out of the market by buyers from outside the area or buy-to-let investors. NAEA believes that despite recent criticism of eco-towns, demand for properties will be high.

In Wales, a scheme to increase the number of affordable homes in all new developments was unveiled. Included in the plans was an announcement to allow local planning authorities to encourage ‘low impact development’ in farming areas.

Meanwhile in London house prices have fallen by around 7.5 per cent in the first six months of the year, while property transactions have fallen by 45 per cent since the same time last year. The figures from Savills show that rental growth is also slowing even though tenant demand remains strong, while houses costing more than £5 million are ‘relatively immune’ to the downturn affecting everyone else.

Yesterday the Royal Bank of Scotland published research predicting a 70 per cent fall in land prices, which is seen as a direct threat to housebuilders’ futures. Housebuilders are already in turmoil after analysts suggested that the downturn in the property market was to be ‘significantly’ worse than the 1990s. Persimmon, Barratt Developments and Taylor Wimpey have recently announced the axing of almsot 3,000 staff between them, while trading results for Bovis and Redrow are due this week and are expected to be bleak. Stock values have tumbled by as much as 14 per cent.