IMDNE

Base Rate Held At 0.5% & No Extension To QE

Gary Howe — Thu, 10 May 2012 11:36:30 +0000

The Bank of England’s Monetary Policy Committee has held the base rate at 0.5% with no extention to quantitative easing. The Bank’s total asset purchase programme remains at £325bn.

Rates Held & More QE

Gary Howe — Thu, 09 Feb 2012 12:26:33 +0000

The Bank of England’s Monetary Policy Committee (MPC) has increased its quantitative easing programme by £50bn as it looks to shore up the UK’s ailing economy. Its widely expected decision to pump more money into the economy takes the quantitative easing (QE) programme to £325bn. The last time the Bank extended QE was back in October, when it raised the asset purchasing scheme from £200bn to £275bn. Minutes from last month’s MPC meeting revealed a growing consensus from members for a new round of QE, while markets have been factoring in a £50bn boost this month after the Bank held back from acting in January. Meanwhile, the Bank has also opted to hold interest rates for the 35th consecutive month at 0.5%, where they have remained since March 2009.

House Prices Increase In January

Gary Howe — Tue, 07 Feb 2012 10:15:15 +0000

House prices increased in January, despite an underlying trend of falling values in the mortgage market. Prices rose by 0.9% last month, figures from Halifax show, with the average price of a property around £161,000. Prices in the three months to January were 1.8% lower than in the same period a year earlier. The measure has edged lower in the last two months, from -1.0% in November, although it is still comfortably above the recent low point of -4.2% in May 2011. Prospects for house prices over the coming months will, to a large extent, depend on events in the Eurozone and the repercussions of developments there for the UK economy.

Bank Of England Resists More QE And Holds Base Rate

Gary Howe — Thu, 12 Jan 2012 12:19:31 +0000

The Bank of England’s Monetary Policy Committee (MPC) has held fire on its quantitative easing (QE) programme and kept interest rates at the historical low of 0.5%. The MPC, which was widely expected to hold interest rates for the 34th consecutive month, maintained its asset purchase programme at £275bn, but economists have pencilled in a further round of QE in February amid the ongoing eurozone debt crisis. Minutes from the MPC’s December meeting indicated a further round of QE could be imminent. The last time the Bank extended its quantitative easing programme was back in October 2011, raising it from £200bn to £275bn.

House Prices Up 1% In 2011

Gary Howe — Tue, 03 Jan 2012 10:48:04 +0000

House prices have proven to be ’surprisingly resilient’ in 2011, with an average rise of 1%. Figures show that the average property in the UK ended the year worth £163,822, a 0.2% fall from November when the figure was £165,798. However, prices have improved from the same point last year, when they were £162,249. The 1% rise in house prices recorded over the past 12 months could hardly be described as a strong performance, but against a backdrop of anaemic economic growth and a deteriorating labour market, UK house prices were surprisingly resilient in 2011.

Property Sales Jump To 2011 High In November

Gary Howe — Thu, 22 Dec 2011 15:43:40 +0000

More homes were sold in November than any other month this year, figures from HM Revenue and Customs (HMRC) have revealed. Despite a struggling economy, some 85,000 properties were sold in the month, a clear improvement on October when 79,000 homes were sold and on November last year when 76,000 property transactions were completed. Last month’s figure was the highest recorded in the sector since July last year. But despite the short-term pick-up in the housing market, 2011 has still failed to match up to the previous 12 months. In the first 11 months of last year, there were 810,000 sales; well up on the 787,000 that have been sold so far this year.

Darkening Economy Held Rates At 0.5% With More QE On Way

Gary Howe — Wed, 21 Dec 2011 14:15:45 +0000

Fears over the deteriorating outlook, weakened labour market and strained credit supply unanimously convinced Monetary Policy Committee (MPC) members to keep rates and QE on hold at £275bn in December. However, the Committee also hinted at further Quantitative Easing early next year. In October, the Bank ramped up its QE scheme by £75bn amid turbulent economic conditions. Members resisted a new round of stimulus this month, but the minutes noted a further expansion of QE may be warranted soon. According to this month’s Minutes the euro continued to present substantial challenges for the United Kingdom. The members felt the worst risks had not materialised yet, but the possibility they will was reflected in continuing strains in bank funding markets and market volatility.

Asking Prices Rise In 2011

Gary Howe — Mon, 19 Dec 2011 12:47:02 +0000

Property asking prices have ended 2011 slightly higher than at the start of the year, despite falling by 2.7% in December. According to the latest data from Rightmove, average asking prices have increased by 1.5% over the past 12 months, although with retail prices inflation at 5.2%, this represents a fall of nearly 4% in real terms. Looking ahead to next year, the property website forecasts asking prices will rise by around 2% in 2012, thanks largely to an anticipated drop in the number of properties that will come to market. The shortage of new sellers in some locations, and improving investor yields on rental properties, will help underpin prices and stave off a price collapse except in exceptionally adverse market conditions.

Buying Cheaper Than Renting In 94% Of Towns

Gary Howe — Wed, 14 Dec 2011 20:57:04 +0000

Buying property is now more cost-effective than it has ever been compared to renting, proving cheaper in 47 out of 50 British towns, compared to 40 out of 50 this time last year, according to research. A study showed that renting is 15% more expensive on average than owning across the country, up from a 10% premium last year. Prices and rents were examined of 78,000 two-bed flats currently on the market, comparing rental costs to the payments on an interest-only mortgage at 5% a year. It was found that Swansea, Plymouth and Bournemouth were the only towns where renting was a better option than buying, with rents proving cheaper by 9.3%, 6.6% and 5.7% respectively. By comparison, renters in Milton Keynes are worst off, with rents 36% more expensive than the cost of owning, leaving them an average of £2,436 a year worse off. Warrington and Walsall came second and third with rental premiums of 33% and 32% respectively. In addition, renting in London is 31% more expensive than owning, despite the average cost of a two-bedroom flat standing at £442,036. Tenants in London will pay an average of £6,888 more a year than home owners.

Although buying may be more cost-effective than ever compared to renting, many potential buyers aren’t able to take advantage because they can’t access mortgage finance. The shortage of financing, especially to first-time buyers, has pushed demand for rental property through the roof. But for those lucky enough to be in a position to get a mortgage, there may never have been a better time to buy.

Mortgage Lending At Three Year High

Gary Howe — Wed, 14 Dec 2011 14:29:40 +0000

Gross mortgage lending reached its highest level since the end of 2008 in the third quarter of the year, according to the latest lending data from the Financial Services Authority. The regulator revealed new advances amounted to £44 billion in the three month period, 19% higher than in the second quarter and 7% up on a year earlier. At the same time, the overall average rate on new advances fell back to a series low of 3.59%, compared with 3.81% in the previous quarter, with reductions seen in the rates for both fixed and variable rate products. The proportion of new lending accounted for by fixed rate mortgages fell back to 52% from 56% in the previous quarter, while less than 2% of new lending was approved at a loan-to-value of 90% or more.