"Green loans" to make homes more energy efficient

Homeowners will be offered “green loans” to cover the cost of making
their properties more energy efficient, under plans unveiled by the
Government today.

The cash can be used to buy solar panels or other technology to generate
electricity, spreading the upfront cost over a number of years. Households
can also use the money to better insulate their property, cutting energy
bills.

Some six million homes will be insulated by 2011 under the Green Strategy
claimed Ed Miliband, the Energy Secretary. All lofts and cavity walls, where
it is practical to do so, will be insulated by 2015 and seven million
“eco-upgrades” will be offered to householders by 2020.

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Sterling tumbles amid growing fears of hung Parliament

Sterling plummeted to a nine-month low against the dollar today and could
tumble further, analysts warned, as fears mounted that the general election
could result in a hung parliament.

Sterling fell 2 per cent to $1.4943 at one point, its lowest since early May.
It also plunged against the euro, to €1.0991, its lowest since the end of
November.

Investors‘ concern was fuelled by weekend opinion polls indicating that a hung
parliament looked more likely. They fear that the lack of a clear majority
in the House of Commons could lead to political deadlock over a solution to
the country’s ballooning debt problems.

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House price slide could be start of longer downturn

The UK’s largest building society said a second downturn in house prices may
be on its way, after it recorded the first fall in average values for 10
months.

The average house price fell 1% to £161,320 in January, according to the
Nationwide building society house prices index published last week. This is
13% lower than the peak of £186,044 in October 2007, although values have
recovered 9% from the trough of £147,746 in February 2009.

Nationwide said it was “too early to say” if the fall was the start of a
trend, triggering yet more uncertainty for borrowers. Martin Gahbauer,
Nationwide’s chief economist, said: “There is evidence from a range of
indicators that the market may have lost momentum in early 2010 as the stamp
duty holiday ended and house hunters were obstructed by the icy weather.”

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House price dip may be good news in the end for economy

The first fall in house prices for ten months could be a “positive
development” that prevents the housing market from racing ahead of the
general economy, Britain’s biggest building society has said.

House prices went into reverse in February, falling 1 per cent on the previous
month, as factors such as the snow and the expiry of the stamp duty holiday
discouraged buyers and pushed down prices, according to Nationwide. The
average price of a property in February was £161,320.

House prices rose by 1.4 per cent in January. However, Martin Gahbauer,
Nationwide’s chief economist, said it would have been surprising if house
prices had maintained the upward momentum seen for most of last year.

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Santander gives first-time buyers new hope

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Santander will today open its doors to first-time buyers of new-build property for the first time since the banking crisis began.
The UK’s second-biggest mortgage bank — formerly Abbey — will increase the maximum loan sizes for first-time buyers who want new apartments or houses in a move designed to stoke activity at the bottom of the housing ladder.
The limit for first-time buyers of new apartments will rise from 70 per cent of the property’s value to 80 per cent, while for those buying houses the limit will rise from 80 per cent to 90 per cent. The bank’s loan-to-value (LTV) limits for non-first-time buyers of newly built property will remain at 70 per cent for apartments and 80 per cent for houses.
The decision will slice thousands of pounds off the savings pot that first-time buyers need to get a loan. The move was welcomed by housebuilders, which have struggled to sell one and two-bedroom properties — typical first-time buyer purchases — because of the huge deposits that lenders have required.

The deposit needed by a Santander customer on a typical first-time buyer new-build house costing £160,000 will now be £16,000, rather than £32,000.
Commentators said the decision was a sign that lenders had a renewed appetite to compete at the bottom end of the market, after banks all but shut out first-time buyers almost two years ago. The last time Abbey lent a 90 per cent mortgage on a new-build property was in March 2008.
It was also a sign that lenders’ confidence in new-build valuations was returning, after taking a knock as a result of falls in value of up to 50 per cent for some city centre apartments.
A senior figure at a large UK housebuilder said: “This is potentially very significant. This addresses the issues of selling new-builds to first-time buyers and that is where the real issues have been.”
Stewart Basely, executive chairman of the Home Builders’ Federation, said: “Provided the terms and conditions are competitive, we know there is a huge pent-up demand for such a product.”
Santander will offer a two-year tracker at 4.99 per cent with a £995 fee up to 90 per cent, or a 5.99 per cent three-year fixed rate with a £495 fee.
The announcement comes as the first signs of a double dip in the housing market began to emerge. Housing transactions plummeted by more than 30 per cent in January, from 100,000 in December to 67,000, according to HM Revenue & Customs. Meanwhile figures from the British Bankers’ Association showed that mortgage lending fell to its lowest level since May 2009 in January, down by 23 per cent from December to 35,083, because of the bad weather and the end of the stamp duty holiday. Separate figures on the new-build market showed a 0.9 per cent decline in the average price of a new build in January.
Brokers said that while the Santander deal would benefit first-time buyers and boost competition, other lenders including Woolwich and Northern Rock offer more generous LTVs on some deals.

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OFT warns letting agents to amend unfair terms

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Tens of thousands of landlords could be in line for refunds after the Office
of Fair Trading (OFT) confirmed that it was writing to a number of letting
agents warning of unfair contract terms.

The move follows a final ruling in the High Court yesterday regarding a case
brought against Foxtons by the OFT.

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Threatened Abbey Road studios to remain under EMI ownership

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The future of the Abbey Road recording studios was secured yesterday when EMI,
the struggling record label that owns the site, said that the historic music
venue was not for sale.

In an extraordinary u-turn, EMI said that the preservation of the studios,
where the Beatles made 90 per cent of their records, was a priority for the
company. It said in a statement: “We believe that Abbey Road should remain
in EMI’s ownership.”

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Skipton’s loan hike contested

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A FIRM of solicitors has said it will investigate the legality of Skipton building society’s controversial decision to break a guarantee to keep its standard variable mortgage rate within three percentage points of Bank rate.
Last month, Skipton raised its SVR to 4.95%, despite the fact that Bank rate has not moved from 0.5% in 11 months. The society used an “exceptional circumstances” clause in its terms and conditions to make the change.
Leon Kaye Solicitors, a London law firm, said it would investigate the legality of this clause. In a statement, the firm said: “These ‘exceptional circumstances’ clauses are normally submitted into contracts to ensure that the lender has an element of control if things turn bad. However such clauses can fall foul of the Unfair Contract Terms Act 1977.”
Tracy Fletcher, from Skipton, said: “We are not aware of any formal challenge being made but if one was to arise we would deal with it through our normal procedures.” She added that anyone subject to the SVR will be able to transfer their mortgage without any early redemption penalty.

David Hollingworth, from mortgage adviser L&C, said: “The SVR hike was terrible news … but Skipton did talk to the regulator before doing it — they have not done this lightly.”

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Property partnerships may cushion effects of tax rises

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Property companies are preparing to turn top earners into self-employed partners to minimise the impact of the Government’s impending higher tax regime.
Knight Frank and King Sturge, two of the biggest UK property consultants, are among the limited liability partnerships (LLPs) planning to alter the status of employees to cut their tax bill, before a rise in income tax to 50 per cent on earnings over £150,000.
Tax experts said that the move to turn salaried partners into equity partners would shave thousands of pounds off the national insurance bill for the staff member and the company and could also boost profitability as partners take a greater personal stake in the company’s performance.
Top earners in the property industry have a basic salary of about £100,000 a year, but can make up to £1 million including bonuses in a good year. Knight Frank has 300 salaried partners in the UK — a fifth of its UK employees, who stand to benefit.

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House prices jump 3.2 per cent in four weeks

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Asking prices increased by 3.2 per cent in the four weeks to February 6,
research indicated today. The jump was the biggest rise for homes in England
and Wales since April 2007, according to data from Rightmove.co.uk, the
property website.

It pushed the average cost of a home up to £229,398 – 6.1 per cent higher than
a year earlier – while asking prices in London climbed to a record high of
£427,987.

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