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Property prices respond to interest rate medicine
August 21st, 2007
Five base rate rises in a year are now hitting house prices, says Moneyextra
Five rounds of base interest rate increases are taking their toll on the housing market. The average property value of £218,0331 in July was down by 4.65% on the month and up just 1.63% year-on-year. At the same time, the average mortgage being sought by first-time home buyers was £132,699; its lowest level since January 2006.
Robin Amlôt, Senior Editor of Moneyextra.com, said, "We're now seeing evidence that the rate rises we've already had are starting to have an impact. The reason it's taken so long for the housing market to reflect the higher cost of borrowing is the large number of people who were on fixed rate mortgages whose fixed rate periods are only now coming to an end.
"Turmoil in the stock market in recent weeks has reduced the likelihood of base interest rate rising in September as some commentators had predicted. That means we could be at the peak of the interest rate cycle now - the next move, when it comes, could be downwards although that could be as much as a year away."
The average value of mortgages actually completed by AWD Moneyextra customers in July was £151,488.09, down from an all-time high set in May this year of £166,732.43. The most popular mortgage lender in July was Halifax2.
For further information, please contact:
Robin Amlôt
Senior Editor, Moneyextra
Tel: 0870 191 5626
public.relations@moneyextra.com
NOTES TO EDITORS
Moneyextra.com's Compare and Buy Tool Searches July 2007
| Mortgages | FTB | Moving | Remortgage | All |
|---|---|---|---|---|
| Average Borrowed | £132,699.00 | £162,298.00 | £119,659.00 | £132,123.00 |
| Average LTV | 71.23% | 62.36% | 50.61% | 60.60% |
| Average Property Value | £186,287.00 | £260,263.00 | £236,431.00 | £218,033.00 |
| Average First Income | £43,849.00 | £45,736.00 | £41,459.00 | £43,798.00 |
| Average Second Income | £21,537.00 | £23,129.00 | £19,578.00 | £20,830 |
| % with dual incomes | 19.40% | 57.23% | 55.91% | 40.08% |
1Figures are based on the first 50,000 searches carried out on Moneyextra.com's Mortgage Comparison tool each month.
2Moneyextra.com's top mortgage lenders
| July 2007 | Jan-July 2007 |
|---|---|
| 1. Halifax | 1. Nationwide BS |
| 2. Abbey | 2. Halifax |
| 3. Woolwich | 3. Woolwich |
| 4. Alliance & Leicester | 4. Abbey |
| 5. Nationwide BS | 5. Cheltenham & Gloucester |
| 6. Paragon Mortgages | 6. Northern Rock |
| 7. Northern Rock | 7. Alliance & Leicester |
| 7. Coventry BS | 8. Coventry BS |
| 9. BM Solutions | 9. Mortgage Trust |
| 9. Cheltenham & Gloucester | 10. Mortgage Express |
| 9. First Active | |
| 9. Mortgage Express | |
| 9. UCB Home Loans |
Moneyextra.com regularly wins awards - in 2007
- Finalist Customer Focus, National Business Awards Wales/West Country Region
- Finalist Growth Strategy, National Business Awards Wales/West Country Region
- Money Marketing IFA of the Year 2007 - won as part of AWD Group
Moneyextra.com is one of the UK's longest-established personal finance websites. It has 536,000 unique users and delivers 5.5 million page views every month and has 513,000 registered users.
As at 25th June 2007, Moneyextra.com featured:
- More than 10,000 Mortgages from 126 providers
- 205 Personal Loans from 55 providers
- 211 Credit Cards from 63 providers
- 1,505 Stocks & Shares ISAs from 58 providers
- 173 Cash ISAs from 91 providers
- 123 Current accounts from 36 providers
- 876 Deposit accounts from 149 providers