View more on these topics

Base rate rises fail to stem house prices

Increases in mortgage rates have failed to stop house price rises which went up by 1.6 per cent in February, with an annual house price inflation figure of 17.8 per cent, according to Halifax research.

The two Bank of England base rate rises since last November have had a modest affect on housing affordability, raising mortgage payments as a percentage of earnings from 13.9 per cent to 15.5 per cent, but Halifax says that figure is well below the long-term average of 21 per cent. The average house price is now £125,000.

The research shows that the Government&#39s failure to increase tax thresholds in line with house price inflation has increased the number of properties worth more than the inheritance tax threshold of £255,000 by 25 per cent from 1.55 million in the last 12 months to 1.94 million.

Inland Revenue figures show transactions in England and Wales rose by 5 per cent from 105,000 last December to 110,000 in January. Transactions in the three months to January were 1 per cent higher than in the preceding three months, suggesting that the level of activity in the housing market is rising following a 16 per cent fall in 2003.

Halifax general manager (group economics) Shane O&#39Riordain says: “The strength of the housing market is underpinned by the strong labour market, historically low interest rates and low mortgage payments in relation to earnings.”

Recommended

Talkback

“No. It could create a trend. Everybody could end up trying to escape their liabilities.”Peter Shorter,Shorter & Co “No, it seems they are trying to evade their responsibilities.”Ray Parker,Parker Financial Services “No. This has happened far too many times, one of the more notable cases being Towry Law.The FSA should take action now.”John MacLaren,John MacLaren […]

No bells and whistles for Woolwich

OOLWICH PLAN MANAGERS Woolwich Capital Growth Plan Type: Guaranteed equity bond Aim: Growth linked to the performance of the FTSE 100 index Minimum-maximum investment: £3,000-£500.000 Isa £7,000 Term: Six years Return: 25% growth on initial investment or 50% growth in the FTSE 100 index Guarantee: Original capital returned in full regardless of performance of index […]

CML calls for end to policy &#39schizophrenia&#39 on home ownership

The Council of Mortgage Lenders has just published an overview of the history and current state of the housing market. It has also published its own manifesto, as it believes current policies about home ownership sometimes contradict eachother. It is calling for active public policy promotion of home ownership, more help for those on the […]

Out of context

•”My finger has seized up… It&#39s just too much for me” – The Bureaux managing director Peter Quinton on thumbing through the FSA&#39s menu consultation paper. •”Hello, is that Clerical Minimal?” – Recent call taken by Clerical&#39s press team •”I&#39m pretty happy with where I am at the moment – as chief executive of a […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com