Hampshire Trust

One of the UK’s largest house building firms, Barratt Homes, has welcomed the relaxation of mortgage lending terms, and particularly the emergence of the 95 per cent mortgages on new build homes.

“The key thing about the return of 95 per cent mortgages on new-build homes is that people will no longer need huge deposits of up to 20 per cent of the price of the property,” explained Regional Sales Director, Gary Patrick. He added that this allows many more first-time buyers to get onto the housing ladder, which, in turn, boosts the wider economy.

New build homes are now being snapped up much more quickly than before the 95 per cent loans were launched, added Mr Patrick: “Now the banks have agreed to start lending again on new-build homes at 95 per cent loan to value, so homebuyers will only need a deposit of five per cent.”

The five per cent deposit scheme is part of the wider effort to increase access to housing for those who previously thought they might not ever have enough of a deposit to buy a home. For a number of years it been difficult to even find mortgages offering 90 per cent loan to value terms.

New figures show that the construction industry expanded in November as a result of an increase in housing construction for the first time in six months.

The increase was measured on the CIPS/Markit Purchasing Managers’ Index, which showed a figure of 52.3, indicating expansion in the market. New house building orders rose and more people were employed in the house-building sector than at any time since May 2011.

Deutsche Bank’s George Buckley spoke to the Financial Times about the increase in activity, stating: “We can take heart that it doesn’t look as though we’re going to see a contraction on the scale seen in 2008 and 2009.”

IHS Global Insight’s analyst, Howard Archer, also spoke to the FT, stating, “It’s a relief in the current environment to see any evidence that part of the economy is growing.”

However, although the market for house building and construction does seem to be expanding, the Purchasing Manager’s Index showed that the November score was down from the October score, showing that the growth fell slightly, despite the house building increase.

Bridging lender and mortgage broker Fastmoney has been fined £28,000 by the Financial Services Authority for treating customers unfairly.

The firm arranged mortgage contracts and bridging loans between 2005 and 2010 and has been found to have arranged 18 regulated bridging loans in that time. The FSA said they found problems with Fastmoney’s sale process in that they failed to convey the risks of taking the products out to their customers.

They were also found to have failed to outline the full costs to their customers and did not inform them about all their options in a fair way.

These failings were seen as severe as the customers Fastmoney was lending too tended to be more vulnerable with poor credit ratings and less understanding of financial issues and responsibilities. Some were desperately in need of funding to stop their homes being repossessed.

The FSA said that bridging lenders have a responsibility to their customers to “Ensure communications with customers are clear, fair and not misleading and that they do not sell a product which is inappropriate for that customer.”

The Prime Minister David Cameron is to announce his new £400 million Housing Building Fund at a meeting today with the Confederation of British Industry.

The scheme is intended to stimulate house building by enabling first-time buyers to borrow mortgages of up to 95 per cent loan-to-value.

Cameron and Deputy Prime Minister Nick Clegg issued a statement in advance of the announcement, stating, ‘The housing market is one of the biggest victims of the credit crunch: lenders won’t lend, so builders can’t build and buyers can’t buy. That lack of confidence is visible in derelict building sites and endless For Sale signs.’

A new Mortgage Indemnity Scheme is intended to help buyers onto the housing ladder by taking on part of the risk when mortgage lenders lend 95 per cent loan-to-value on new-build properties. This is intended to prompt more young people to buy a home for the first time.

The government said, ‘We’ll be making it easier for people to secure mortgages on new homes, help people get on the property ladder, address unfairness in social housing and ensure homes that have been left empty for years are lived in once again.’

House sales are picking up, according to one of the UK’s largest house builders, Persimmon.

The figures have reassured the house building market that some stability has returned after a period of poor sales.

Persimmon is the second largest house builder in the UK and has reported sales growth of 19 per cent since the beginning of September 2011. The growth in sales has been attributed to several factors, including a government scheme to incentivise first-time buying.

Some 9,300 homes were sold by the developer in the last building year and it claims that forward-looking sales are also strong. The increase in mortgage availability has also been cited as a reason for the sales pick-up.

Mike Farley, the chief executive of Persimmon, stated, “It’s a bounce back for the group as a whole but slightly stronger in the north which is pleasing for us.”

When asked about the impact of the Eurozone crisis, he told the Financial Times, “The man on the street is not worried about Greek debt. The only worry for us is mortgage availability and this has gradually improved.”

Slow house building growth and continued caution over the future of the economy have contributed to claims that the housing market is still “subdued” despite small price gains.

Figures from Nationwide show that house prices rose by an average of 0.4 per cent last month. However, areas in London and the South East, which are classed as regions where “wealthy high achievers” live, saw higher house price increases – with average prices rising by 3 per cent since 2008.

The shortage of housing in these regions is contributing to the house price gains, as fewer homes for sale results in more interest in the ones that do come onto the market.

In the year to October 2011, the average house prices have risen by 0.8 per cent, to £165,650. Despite the gains, Robert Gardner, the chief economist at Nationwide, said, “The outlook remains uncertain but, with the UK economic recovery expected to remain sluggish, house price growth is likely to remain soft in the period ahead, with prices moving sideways or drifting modestly lower over the next 12 months.”

The government risks allowing a ‘house building ice age’ to occur if it does not continue with its commitment to helping the industry build more homes through changes to the planning regulations.

This is according to the Home Builders Federation (HBF), representatives of which spoke at the Housing Marketing Intelligence Conference. The organisation’s executive chairman, Stewart Baseley, took the opportunity to urge the government against pandering to the “complete and utter nonsense” of the anti-development lobbyists, or risk an even worse housing shortage in the future.

Currently, the government’s plans, known as the National Planning and Policy Framework, are in consultation and are coming up against some heavy campaigning from anti-development groups who are concerned about the impact the looser planning regulations could have on the countryside, among other things.

Mr Baseley claimed that delaying the implementation of the planning changes, as the campaigners are requesting, would be short-sighted. He explained, “[Delaying] will prolong the limbo that has existed since the 2010 General Election with the old system dead but yet to be replaced. The result in too many places would be a continued failure to plan for growth or address the housing crisis in their areas.”

Savers that set clear goals are more likely to successfully put their desired amount of money aside each month, according to research from National Savings and Investments.

Around a fifth of the savers who set goals save more than £250 per month, compared with only 10 per cent of those who do not set savings goals.

The most common savings goal is currently a house deposit, while other popular goals include holidays, retirement, cars and children’s future.

A spokesperson for NS&I, John Prout, said, “We would encourage people to think carefully about their daily expenditure, and use a goal to motivate them to help boost their savings pot.”

He added that there are now a range of online tools to help households budget and track their spending to try to free up more cash for their savings accounts or bonds.

The level of saving on average is falling as a result of the ongoing tough economic climate. The latest figures show that one in five of us has less than £1,000 in savings, while 13 per cent do not have any savings at all.

Housing Minister Grant Schapps has told Radio 4 listeners that the government needs to build a total of at least 200,000 homes per year to keep up with demand.

He said that the measures being taken by the government to provide extra housing were necessary to avoid rents increasing even further and to make sure there is enough affordable housing for those who want to buy.

Speaking on the Today programme, he said that the government will be releasing its own land to developers who want to ‘build now, pay later.’ He also outlined plans to launch the Right to Buy scheme again, which will give people the right to buy their council houses.

Schapps explained, “We think there has to be a couple of hundred thousand new homes created each year – something in that kind of order.”

He went on to add how several steps need to be taken at once to try to help fill the housing gap: “Overall, you have to get all things working in tandem – there is not one single thing you can do to solve a housing crisis that has been building up over years and years.”

Some good news about UK savers has emerged, which suggests that Brits are investing more cash in their savings accounts.

The Savings’ Snap Shot from Santander found that the average Briton is now saving 12 per cent more than they were a year ago – suggesting that we are finally wising up to the importance of having a savings account to fall back on.

The average saved each month is £114, with men still saving more than women, at an average of £132, compared with just £98 for women.

A year ago, almost a third (30 per cent) of people asked said they had no savings. This percentage has now fallen to just 21 per cent, which is a good sign for the UK economy. The average amount held in savings accounts among those questioned was £20,604, with 9 per cent holding their money in a savings bond.

As for the amount paid into savings each month, a quarter of people said they hope to increase the amount they save each month within the coming three to six months.