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Lloyds hikes Standard Variable Rate for new C&G customers
A new Homeowner Variable Rate is being introduced for new Lloyds
TSB and Cheltenham & Gloucester mortgages from 1 June 2010.
No
existing mortgages are affected by the introduction of this rate, they will remain on the existing Standard Variable Mortgage
Rate which is currently 2.50%.
The Homeowner Variable Rate of 3.99% will apply to new
Lloyds TSB and Cheltenham & Gloucester mortgages from 1 June.
The rate does not have
a cap nor is it directly linked to Bank of England base rate.
When new mortgages revert to the new Homeowner
Variable Rate at the end of the initial product period, in June 2012 at the earliest, customers can switch to a new product
without paying an early repayment charge.
Any customer taking out a further advance or product transfer
will do so under the new Homeowner Variable Rate policy.
The new rate will then only apply to the amount
being transferred or the additional amount being borrowed.
Lloyds says the new policy is being implemented
in the light of market conditions and balances the interests of customers with the commercial imperative of managing the business
in a sustainable and prudent fashion.
It says the new rate enables the Group to continue to offer a competitive
and innovative range of products across Lloyds TSB and Cheltenham & Gloucester.
The new rate does not
apply to any of the other mortgage brands within Lloyds Banking Group, including Halifax.
Stephen Noakes,
commercial director of mortgages, Lloyds Banking Group, says; “The new rate balances the needs of our customers with
the commercial needs of the business. In the light of market conditions, particularly ongoing higher funding costs, we have
introduced this new rate for new mortgages only.
“No customers will revert to the new rate until June
2012 at the earliest. The Homeowner Variable Rate is priced very competitively and below the average of other major lenders.
It means that we can continue to offer a wide range of competitive and innovative products.”
House price inflation reaches double digits29 April 2010
House prices increased by 1.0% month-on-month in April,
annual rate of price inflation moves into double digits for first time since June 2007, house prices are 10.0% below the October
2007 peak, reveals the latest Nationwide House Price Index.
Commenting on the figures Martin Gahbauer, Nationwide's Chief Economist, said:
“The price of a typical UK property rose by a seasonally adjusted 1.0% month-on-month (m/m) in April, leaving house
prices 10.5% higher than a year earlier. Over the lifetime of the last Parliament (May 2005 to April 2010), house prices have
risen by 6.7%. This compares to a 13.5% increase in the consumer price index, the official target measure of inflation.
“April's figures show the first double-digit annual growth in UK house prices since June 2007. The year-on-year rate in this
month's figures, however, received an additional boost from the fact that April 2009 was one of the weaker months last
year.
"Given the very strong performance of house prices from May 2009 onwards, it will take monthly increases
in excess of 1% for the annual rate of inflation to be maintained in double digits going forward.
"The smoother
three month on three month rate of inflation edged down further from 1.5% in March to 1.1% in April, which primarily reflects
the impact of February's 1.0% decline in house prices. April's figures leave UK house prices exactly 10% below the
October 2007 peak.
What role are cash transactions playing?
“The
strong rebound in house prices over the last year has taken place within the context of a subdued mortgage market, with the
number of mortgage advances across the industry still well down on precrisis 'norms.' A natural question which therefore
arises is whether cash buyers have helped to boost the market and bid up prices?
“Over the course of 2008
– when the credit crunch was at its most severe – there was indeed an increase in the estimated proportion of
total housing transactions completed in cash. Cash transactions (i.e. non-mortgaged purchases) are estimated to have averaged
43% of the total in 2008 against 37% in 2007.
"This suggests that cash buyers did make some contribution
to clearing the excess stock of housing on the market during the period in which mortgage finance was least available.
“However, since the beginning of 2009 the proportion of cash transactions has declined to a level only slightly
higher than the average for 2007. Even in absolute terms, there was a decline in the number of cash buyers between 2008 and
2009.
"As such, the importance of cash buyers in the market started to decline at exactly the same time as
house prices began the strong rebound that has lasted up until the present day. It is in fact the recovery in mortgaged transactions
that has played a greater role in boosting total market activity since the early 2009 trough.
“Rather than
a surge in cash buyers, the more important driver of rising house prices has been the
low level of stock for sale, as
many homeowners and buy-to-let landlords continue to wait for prices to recover to peak 2007 levels before deciding to sell
up or move. The very low level of interest rates has been supportive of this wait-and-see approach, particularly in the buy-to-let
sector.
"Many landlords have seen their mortgages revert to base rate trackers and are now earning significantly
higher net rental income than a few years ago. As a result, most can easily afford to wait for prices to recover further before
selling.
“Nonetheless, there has recently been evidence of a slight shift in the supply-demand balance. While
the recovery in new buyer enquiries at estate agent offices appears to have petered out, the last few months have seen an
increase in the level of new instructions from sellers.
"All else equal, this should lead to a gradual flattening
out of the recent upward price momentum, and this is indeed what the 3 month trend in April's figures shows.”
Rising house prices hit first-time buyer affordability13 April 2010
Asking prices rose for the third consecutive
month, with a 0.7% increase to £218,475. Since April 2009, they have risen by 2.3%, the highest annual rise recorded
by the FindaProperty.com House Price Index.
First-Time Buyer Homes
First time buyer homes also increased for the third month in a row, with a
0.3% rise this month, following the 0.4% increase in March. The average entry level home is on the market at £155,242,
which is 1.0% more than a year ago (£153,643) and the highest level since February 2009.
First-Time Buyer Affordability
The combination of rising first time buyer property values and lower
income multiples offered by lenders (based on CML data) led to a significant deterioration in affordability his month.
The average entry level home is now almost 4.9 times gross household earnings.
This compares favourably with 5.5
times at the end of 2008. In terms of the deposit needed, first time buyers must find £5,000 more than last month. The
'affordability gap' is now £56,740, or almost 1.8 times average household earnings. At end December 2008, it
was over £70,000, or 2.4 times income.
Home Mover Prices
Following declines since October last year, home mover prices rose by 1.2% this month to £278,024. They are 1.2% higher
than a year ago.
Differences Between Flats And Houses
Houses
were up 0.9% and flats 0.7%, after three months when houses performed relatively less well.
Prices By Property Size
The stronger performance of houses was led by a surge in prices commanded
by larger 5+ bed houses (+2.2% this month, and +6.4% annually) as well as 4 beds (+0.9% monthly, +2.7% annually).
Smaller houses and flats recorded more modest rises this month, of between +0.1% and +0.6%.
Supply
Stocks grew by 4.2% in April, after rises of 5.6% and 3.6% in the previous two months. First
time buyer property stocks were up 3.5% this month. There is now almost as much stock available as in early summer 2009.
Nigel Lewis, property analyst at FindaProperty.com, comments:
“There has been a gradual recovery in the housing market over recent months, but it's
worrying that home purchase is becoming more of a stretch for first-time buyers, as property prices rise and lenders become
more restrictive with the loans they offer. First-time buyers are the true lifeblood of the market, and they deserve
more help to get on the ladder.
“There has been a significant increase in the number of properties coming
onto the market, with stocks up 14% over the past quarter. That means there's an increasingly good choice of homes for
sale, the Government has doubled the stamp duty threshold for first-time buyers, and consumer confidence is rising as summer
approaches.
"The building blocks are present for a sustained recovery, but we do need lenders to step up to
the plate and free the purse strings for first-time buyers. That will not only help the buyers themselves, but also the market
overall and the wider economy.”
Are you receiving harassing phone calls from Banks and
Creditors in particular HSBC?
If you receive harassing phone calls from Banks and Creditors
there are a number of things you can do.
First, keep a log of the times of the calls and the telephone number that
called you. This can be easily done by dialing 1471 after the call. Get the callers name.
Secondly, go to the website
www.WhoCallsMe.com and enter in the number that called you. There you can see others who have received similar calls. Register an entry and get
your experience heard. Remember, you are only one of thousands of people each day receiving such calls. To see a perfect
example of harassing phone calls enter the number 0800 783 1573, the results about HSBC may surprise you.
Third,
make a written complaint to your Bankers or Creditors. Under FSA Rules they must respond in a reasonable time. You can make
a verbal complaint to the caller but we are aware that calls made from Call Centres outside of the UK are stating that they
do not have to comply to UK FSA rules. This is NOT true!
Finally, write to your local Member of Parliament detailing
the problems. If it is severe enough a report will be sent to The Minister for the Treasury.
Remember, you are
not alone with your problem.
Market confidence 'bouncing back'
81% of UK homeowners believe that property prices will continue to climb over the next
six months, according to the latest Housing Market Sentiment Survey from property website, Zoopla.co.uk.
This contrasts to a year ago when only 30% surveyed expected house prices
to rise.
According to the survey, only 9% of homeowners believe
that property values will fall over the next six months whilst a further 10% expect prices to remain flat. The average growth
predicted by those surveyed is for house prices to rise by 5.7% by October.
Zoopla expects transaction volumes to rise significantly over the coming months, citing the historically high
correlation between the confidence level in the Zoopla.co.uk Survey and market activity approximately three months later.
However, the availability of mortgage financing remains the main obstacle
to a sustained improvement in the housing market with four out of five (78%) of those surveyed saying that it is now easier
to obtain a mortgage than it was three months ago. And the upcoming election is also a clear factor in terms of current market
activity with 23% of those surveyed stating that they will wait to assess the outcome of the election before making any property-related
decisions.
Across the UK, the Scots are most upbeat
over the prospects for the local property market, with 86% expecting house prices in their area to rise over the next six
months, compared to 80% in England and 76% in Wales. The picture is somewhat less optimistic in Northern Ireland, with only
62% predicting house prices will rise over the next six months.
Nicholas Leeming, commercial director of Zoopla.co.uk, said: "With the bad weather behind us and the recent stamp duty
relief introduced for first-time buyers, confidence in the property market has bounced back well. Despite the optimism, significant
concerns remain around the supply of mortgages and whilst affordability levels are now higher than at any time in the past
few years the lack of mortgage funding, especially for first-time buyers, remains the single biggest threat to a full housing
market recovery."
BUDGET 2010: Stamp duty threshold doubled - rate hiked
for £1m homes
The Chancellor Alistair Darling is to double the stamp duty threshold from £125,000 to £250,000 for this
year and next but the rate for properties worth more than £1m is to increase to 5 per cent.
Delivering the Budget speech today, Darling said the move would mean nine out of 10 first-time buyers would
pay no stamp duty.
The move comes after a stamp duty holiday – which increased
the threshold from £125,000 to £175,000 – came to an end in January.
Kinleigh Folkard & Hayward
director Paul Master says: “The government’s announcement to scrap the stamp duty land tax below £250,000
is a welcome help for first time buyers. With 31 per cent currently registered with KFH being first time buyers this means
that there is a significant number who can save up to £2,500 in stamp duty charges.
“With over
a quarter of our stock currently at or under £250,000 this extra help could be the catalyst needed to kick start the
property market again.”
ex-HSBC employee reveals high pressure
sales culture
A former employee of HSBC has revealed that the sales culture
within her branch was so bad she was forced to move jobs into the bank’s head office.
During
Which?’s Future of Banking Commission in London yesterday, the consumer group put forward a panel of consumers forward
to give their opinion of the banking industry.
Gill Kirk, a former HSBC employee for 30 years worked for
both a branch and the head office of the bank. She left a decade ago and says the sales culture which existed then was so
bad she decided to move from her branch job to avoid the sales-orientated culture.
She said: “I think
the financial expertise of the branch employees is not as good as it used to be - the emphasis is on selling rather than on
financial expertise, they just have to sell and have targets to meet.” This was the second Commission hearing
and was chaired by Conservative MP for Haltemprice and Howden David Davis and included Treasury select committee chariman
John McFall and Shadow Chancellor Vince Cable.
Commission panel member former Schroders group managing director
Philip Auger wanted to know if Kirk had been pushed into sales and wanted to know about the branch staff’s incentives
to sell financial products. Kirk said: “It became more that you had to sell, and that’s not what I wanted
to do so I did a course and moved into the head office as I didn’t want to sell.
“We were incentivised
- we had targets to meet and if we met them we got points and prizes. The more you sold, the more prizes you got - we got
Hoovers, cameras things like that.”
Capital Economics chief economist Roger Bootle asked Kirk if her
bank had ever recognised it was wrong in pushing sales. She said no.
She said: “You had to sell, whether
it was for the customer or not. You’d like to think that if you knew the customer you could sell them the right product
but some people didn’t do that because they were trying to reach a target and they sold whatever they could.”
A HSBC spokesman says: “HSBC is well known for its quality level of service and its commitment to treat
customers fairly. The sales initiative that Mrs Kirk refers to was phased out by Midland Bank in the late 1980’s.”
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