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Property asking prices soar upwards

Property asking prices soar upwards

Category: Mortgages

Updated: 18/02/2011
First Published: 21/02/2011

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

House sellers have raised their asking prices by almost £7,000 this month to leave prices at virtually the same level as a year earlier.

The latest survey by Rightmove revealed that new sellers coming to the market had mimicked those of February last year by increasing asking prices by 3.1% over the month to £230,030.

With lenders stating that they expect mortgage lending to remain static at around 2010 levels throughout 2011 and new seller numbers practically unchanged year-on-year, the property website said that what might have been seen as a passing phase of low transaction levels in the housing market now looks set to be the norm for the foreseeable future.

As a consequence, it is feared that the so-called 'Mr Average' will once again be frozen out of the housing market, unless they somehow come into a large sum of money.

"The current subdued market volumes are set to be the new norm unless the seemingly never ending discussions between Government and mortgage lenders find some way of increasing 'Mr Average's' access to lower deposit mortgages without pricing them out of the market ," said Miles Shipside, director of Rightmove.

Despite the warning, recent research by Moneyfacts.co.uk showed that lenders have been gradually reintroducing higher loan-to-value (LTV) mortgages to the market.

The total number of mortgage deals available at 90% LTV, which require a 10% deposit, currently stands at 214, up from 144 in February last year.

Meanwhile, 560 deals are now available to those with at least a 15% deposit (85% LTV), compared with 310 a year ago.

At the same time, Moneyfacts.co.uk said that the average cost of mortgage deals has been falling.

At present, the average rate on a two year fixed rate mortgage at 90% LTV stands at 6.09%, compared with 6.48% a year earlier.

HSBC is one lender which is currently offering mortgages to borrowers with only a 10% deposit.

Its variable rate deal has a rate of 4.29% for the remaining term of the mortgage, while a rate of 5.49% applies to its two year fixed rate mortgage.

Northern Rock, ING Direct and Woolwich are amongst other lenders willing to lend to borrowers with a limited deposit.

All three offer mortgages to customers who have a loan-to-value of 85%, the equivalent of at least a 15% deposit.

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