The average rent fell by 0.8 per cent in the December

A recent survey has suggested that, in December, the price of renting a home – rather than buying a house with a mortgage – in England and Wales had fallen for the second month in a row.

According to this study – carried out by LSL Property Services – the average rent fell by 0.8 per cent in the December compared to November, to £711 a month.

Rent has been recorded as falling in all regions across England and Wales – except for Yorkshire and the Humber, the West Midlands and the East Midlands – with varying levels of decrease depending on the area in question.

The monthly falls seen in November and December are the first falls in 10 months, with rises occurring in each month prior to this.

The LSL has also stated that the seasonal decrease that has been seen is shallower than the previous year.

“The rental market was sheltered from the full impact of the seasonal lull by the strength of underlying tenant demand as many prospective renters took the opportunity to move in the run-up to Christmas at a time when the market is traditionally less competitive,” commented Mr David Newnes director of LSL.

However, when comparing this to the previous December, it would appear that the cost of renting is 4% more expensive than it was back in 2010.

LSL also added that their research had showed that, due to spending over the festive period, more tenants were getting behind on their rental payments.

They found that 10.7 per cent of all rent had either been late or unpaid at the end of December, compared to only 9.3 per cent the previous month.

But these difficulties haven’t just faced tenants, but also some landlords, according to The Association of Residential Letting Agents (ARLA).

Tim Hyatt, president of ARLA said: “It is more critical than ever to take references and conduct thorough research before signing a tenancy agreement,

“Seeking advice from a professional, licensed letting agent is the best way to ensure tenants and landlords’ rights are protected.”

Annually, rent has seen a rise in all but two regions – the South-West and North-East of England – in December.

Director of flat and house-share website Spareroom.co.uk, Matt Hutchinson, offered his comment on the current rental situation: “It may be premature to say the UK rental market has peaked and that we are about to see rents fall away. What we are probably seeing is a temporary blip, a natural cooling-off period for the rental market.

“The fact is the fundamentals have not changed. Demand is still significantly outstripping supply of new rental stock, and while December was a quieter month for the rental market, January and February are typically two of the busiest months.

“We would expect to see upward pressure on rents resume in early 2012.”

With renting looking to become more affordable over the course of the year, it is important for potential landlords to get the right buy-to-let mortgage to suit the property they wish to rent out.

With regards to how this company affects a critical illness insurance provider, it generally compares the majority of the insurance providers in the market within the United Kingdom. It looks at the level of covers that are offered by each individual insurance provider and assesses them and then they award the company with a star rating. This generally ranges from 1 to 5.

Not only does defaqto look at insurance companies, but they are responsible for comparing and researching, bank accounts, loans, mortgages and many others. They even have their own website to what show you what exactly they cover and exactly what they do not.

The scoring system that Defaqto uses to score critical illness insurance policies is called Data Numerical Analysis or for short DNA. Defaqto look at least one hundred and one features, benefits and parts of each cover provided. These are then scored from 1 to 5, 1 of which is the lowest level of the scoring and 5 of which is of the highest end of the scale. The reason behind this being done is to help customers decide upon which cover and provider best suits their needs.

There is however one thing to take into consideration, defaqto does not look at the premium of the plan because an applicant’s age, sex etc can affect this and this will of course change from one person to the next.

The Defaqto’s main aim is to be there to aid consumers and financial advisers in their decisions on looking for and choosing a provider when it comes down to financial aspects, these can be products such as mortgages, insurance etc. This will allow them to look before they actually buy a product and being able to see what they offer and if it suits theirs or their customers needs. If a customer is unsure about what cover they need or the insurance provider to go with, the defaqto star rating can help with their decisions because it rates the companies in accordance to how they fit into the financial market.

So if you have seen whilst possibly looking around for a form of critical illness insurance, even if it is on your existing policies paperwork or whilst shopping around for other type of products as mentioned above and if the provider you are looking at has a certain amount of stars then this is why. Defaqto have graded their policy that they offer and awarded it how they feel necessary the relevant star to coincide with the product they sell and have on offer. Defaqto are not a company that offers advice or can point you in the direction of where you need to go, however they can in fact provide you with factual information to enable you to make your own mind up on which insurance company to go with and which not to.

The aspects that Defaqto take into consideration when rating an insurance provider’s insurance are:

• The range of conditions that the provider covers.
• The exclusions that they have in force. The amount and type of standard exclusions that are applicable to all applicants that are in force are taken into account.
• If waiver of premium is available on their policy or not.
• If any buy back options are available by that specific provider.
• The services that insurance provider has available. These are support services such as a claims support line to help people cope with their illnesses.
• If they offer a guaranteed insurability option.
• If they offer sum assured indexation on their plans.

According to the British Bankers’ Association (BBA), The high street banks saw a rise in personal deposits and savings of £6.1bn in the first six months of the year.

However, the year on year rise over the same period in 2010 was more than double at £15.9bn, suggesting that an increase in the cost of bills may be to blame, the group said.

Mortgage and credit card activity also remained subdued, it added, after house prices continued to fall in recent times.

Different areas of household bills have been on the rise throughout the year, including fuel costs to drivers, as well as the cost of heating homes.

This has meant that consumers’ disposable income has been reduced, leaving less cash available to set aside for savings accounts, the BBA said.

David Dooks, the BBA’s statistics director, said:”Personal deposits are growing only slowly as some people may be using savings to pay higher household bills,” .

This trend is unlikely to improve any time soon, as three of the big six energy suppliers have recently  announced plans to roll out price rises which are due to come into effect in the coming weeks.

Low interest rates are also having an affect personal savings accounts, as the Bank of England base rate has failed to rise above its record low of just half a percentage point for the last two and a half years.

The number of approved mortgages offered on homes by High Street banks in June reached 31,747,  sightly up on May’s figures but 6% down from June 2010.

“Banks continue to lend for house purchase but the weak mortgage market is self-evident, although some growth is coming from the buy-to-let sector to meet demand for rental properties,” Mr Dooks said.

The figures also showed a slight improvement in remortgaging levels in June compared with May.

New research has shown that those who are searching for competitive home loans saw the average cost of residential properties in the UK fall slightly last month.

According to the latest Halifax house price index published last week (September 7th), prospective mortgage holders will now have to pay an average of £161,743 to purchase a home.

This shows us that there has been a 1.2 per cent decline when we compare August to July, as well as there being a 2.6 per cent drop against the corresponding period last year.

Nevertheless, those eager to sell their home in the near future may be uplifted to know that this figure is even more positive in terms of the housing market’s short-term outlook, as the quarterly change in prices has gone up one per cent.

This comes after Ben Wilkie, editor of What Mortgage, insisted that tracker mortgages attached to the base rate – which has been maintained at 0.5 per cent for the last 29 months in a row – may not be the most cost-effective option at present, despite the prospect of low interest rates.

Mr Wilkie went on to explain that many of the available fixed rate counterparts are “priced competitively” on the basis that, generally, homeowners will not be anticipating rapid interest increases in the near future.

The expert finished by concluding that personal circumstances should be taken into account when deciding what kind of home loan to take out, with those on a “very set budget” more likely to steer toward fixed rate loans over their tracker counterparts.

Further proving that the housing market is thriving; it appears that mortgage deals look set to remain very popular in London for the near future, thanks partially to a strong level of global demand.

This is the opinion of the chief executive at London Central Portfolio, Naomi Heaton, who has suggested that the home loan market in the capital will continue to be active for the foreseeable future as the city remains one of the “most desirable destinations in the world”.

Ms Heaton explained that various issues around the world – the economic health issues across Europe and the US being one example – have helped to portray residential property in London as being “more appealing than usual to foreign investors”.

She went on to say, “few people doubt that the long-term outlook in London central is anything other than bright.”

These comments came after the publication of a report by WA Ellis, which demonstrated that the number of lettings in the capital has increased 50 per cent year-on-year during August.

Lenders fix specific limits for particular types of loans. The most affordable terms and conditions are usually available with traditional mortgages. Fannie Mae fixes the lending limits for these loans. Though these restrictions can be modified, they suggest the costs of buying an affordable home in the US. Regions with higher livelihood expenses have higher restrictions.

Though you can exceed these restrictions and get into the domain of jumbo mortgages, if you wish to stay within the borrowing restrictions of traditional loans, you can’t surpass the limit set by Fannie Mae. To determine the most recent borrowing limits, you need to talk to your loan advisor and ask “mortgage how much can I borrow”.

Your trustworthiness

The amount that a lender would lend you is considerably dependent on your individual financial condition. Usually, it is simpler for you to qualify for a home loan if:

• You have a good credit score
• You make a hefty down payment
• You have a low debt to income ratio
• You have a stable job

All these elements are taken into consideration when the lenders decide how much they should lend you. If you ask “mortgage how much can I borrow”, you should also think about ways to better your finances so that you can qualify for the amount you need.

The house you want to buy

How much mortgage you can borrow is also dependent on the house you want to buy. Lenders hesitate to offer any amount that is more than the appraised value of the home. At a time when the number of foreclosures is at a record high, lenders are asking for bigger down payments rather than permitting borrowers to take out a loan that is more than the value of their homes.

Two useful techniques to find out how much mortgage you can borrow

For finding out how much mortgage you can borrow, you can follow two simple techniques that are given below:

• Become prequalified with a lender
• Use an online home affordability calculator

However, a calculator would only provide you with a ballpark figure. For getting the precise figure, you have to talk to a lender.

When you know how much mortgage you can borrow, then you wouldn’t have any problems to buy the home that fits your budget and pay off the loan.

Types of mortgage loans

Mortgage loans are short term as well as long term loans (generally over a period of 10 to 30 years) obtained to purchase properties. It requires a monthly or periodic payment .The principal or original loan amount is gradually paid down by amortization. There are two basic types of amortized mortgage loans.

• Fixed-rate mortgages: In fixed rate mortgages (FRMs), the interest rate and the monthly/periodic payment remain fixed for the entire term of the loan. Borrowers do not have to worry about the changing interest rates. FRMs are generally given for a term of 10 years, 15 years, and 20 years or even for 30 years. This type of mortgage is very affordable when the interest rates are low.During the early amortization period, a large percentage of the monthly payment is paid towards the interest. Fixed-rate mortgages are generally preferred by most due to its fixed interest charges and leveled periodic payments.

• Adjustable-rate mortgages: The interest rates in ARMs are generally fixed for a period of time after which it periodically increases or decreases at preset intervals as per the major market indexes. The rates charged for ARMs are lower in the initial period as compared to the fixed charges for FRMs. The initial period may vary from 1 month to 10 years.

Impact of down payment on mortgage loan

Most lenders require a cash down payment of 5 to 20 percent of the sale price of the property. A higher down payment enables the borrower to apply for a lower loan amount which in turn reduces his monthly payments. Borrowers may even obtain a private mortgage insurance incase they fall short on the down payment.

Lenders scrutinize the credit report of the borrower to determine the amount of the loan. A good credit score helps to qualify for a mortgage loan with an affordable rate of interest.