Property dives but first time home buyers think 'It's a good time to buy.'

Hopeful first-time home buyers think it is a good time to buy their first property despite prices falling 1.7pc in April. Around 57pc of people hoping to get on to the property ladder said they thought house prices would either stay the same or increase during the coming 12 months, while 69pc thought now was a good time to buy, even though the facts say otherwise.
One in five first-time buyers even said they thought it would be more difficult to buy their first home in a year's time, viewing the current market as a window of opportunity for people with a substantial deposit.
The group said the shortage of buyers able to get a mortgage and the increase in forced sellers meant that some first-time buyers had been able to purchase properties at 25pc less than their peak price.
The optimism comes as the Halifax said that house prices in Britain fell by a bigger-than-expected 1.7pc in April and by 17.7 pc in the three months to April compared with a year earlier.
Miles Shipside of Rightmove said: "It's a clear sign that the mood is swinging from negative to positive when first-time buyers are looking to re-enter the market. Canny investors have been snapping up some bargains, and now first-time buyers reckon prices are reaching a floor too."Some will be frustrated by the size of deposit that lenders are demanding to get the best mortgage deals, however.

The average first-time buyer questioned had £31,650 saved for a deposit, the
equivalent of around 20pc of the average house price in England and Wales.

The majority of lenders continue to require a 40pc deposit in order for borrowers to qualify for their best deals, and there is very little choice for people with only a 10pc down payment.However, competition in the mortgage market has been increasing in recent weeks for people looking to borrow 75pc or 80pc of their home's value.Mr Shipside urged lenders to take the plight of first-time buyers seriously and offer more loans to people with smaller deposits.

The British aspiration of property ownership remains high and
aspiring first-time buyers cannot be condemned to renting forever.

"We need to think about the long-term effects of the continuing mortgage famine and current lending policies." Around 62pc of first-time buyers are planning to buy a property with their partner, while 33pc are buying on their own and 5pc are buying with friends or family.
Six out of 10 people hoping to buy their first property are currently renting privately, with 30pc living with their parents and 6pc in council or local authority accommodation.
Four out of 10 potential first-time buyers said they would consider buying a property through a shared ownership scheme.

Mortgages: UK bank Lloyds offers new lifeline to first-time buyers with 95pc loan with a hook

First-time buyers will need a deposit of only five percent [plus costs] if they take out a new mortgage just announced by Lloyds TSB. But maybe this is a hot air offer, because first home buyers will also need mum and dad to put up a 20 percent lien. [How many parents do you know with a big slab of idle money?] First home buyers are a valuable part of the market mix, as first home buyers help on average four homes to change hands in a domino effect.Home loans for 95 percent of the property value have been virtually unobtainable recently as lenders responded to the economic crisis by tightening lending criteria, and anticipating property value slides. This period of uncertainty is not over.The new mortgage, called Lend a Hand, offers a three-year fixed rate of 4.39 percent. As mentioned, borrowers will need their parents to deposit a sum equal to an additional 20 percent of the property value in a savings account with the bank. This money will not be accessible until the outstanding loan falls below 90 percent of the property value.And even worse for Mum and Dad, what happens to the money if their kids can’t meet the mortgage repayments? The savings account will pay a competitive fixed interest rate of 3.5 percent. Although the bank will take a legal charge on the savings account, the parents retain ownership of their savings.Lloyds TSB said "If, at the end of the deal, the combination of mortgage repayments and rising house prices has moved the mortgage from 95 percent to 90 percent of the property value, the legal charge on the savings account can be removed and the first time buyer can operate their mortgage account independently, either on Lloyds TSB's standard variable rate, by switching products or remortgaging."Borrowers would save almost £100 a month by comparison with the industry's average rate for a 90 percent mortgage of 5.98 percent, the bank added.Stephen Noakes, commercial director of mortgages at Lloyds Banking Group, said: "First-time buyers are essential to returning the housing market back to good health because every first-time buyer helps, on average, four other households move."As the UK's largest mortgage lender we're committed to help first-time buyers onto the housing ladder and this includes finding innovative ways to lower the first rung so that it is within reach for more people.He added: "Market conditions mean virtually no 95 percent loan to value mortgages are available at the moment, while the few that are come at a high price with stringent credit requirements."The legal charge on the parents' savings account means we can offset the risk of lending at this level to offer a realistic and affordable option for first time buyers. It also gives parents a way of helping their children without actually having to write the cheque."The new loan charges a fee of £995.
If you are a Llyods banker, it gets better all the time.

home loan and mortgage refi rise on low interest rates

Mortgage Bankers Assoc says home loan activity on the rise with mortgage refinance leading the way on the back of low interest rates.
Lower interest rates appear to be luring more homeowners to the table to refinance.
The number of mortgage applications rose by a seasonally adjusted 2.3 percent for the week ended May 15, according to the Mortgage Bankers Association.
The Market Composite Index, a measure of mortgage loan application volume, rose to 915.9 from 895.6 one week earlier.The Refinance Index increased 4.5 percent, to 4,794.4 from 4,588.6 the previous week.
The refinance share of mortgage activity increased to 73.6 percent of total applications from 71.9 percent the previous week.
The average interest rate for 30-year fixed-rate mortgages decreased to 4.69 percent from 4.76 percent, with points decreasing to 1.13 from 1.18.The average interest rate for 15-year fixed-rate mortgages decreased to 4.44 percent from 4.5 percent, with points decreasing to 1.01 from 1.08.The average interest rate for one-year adjustable rate mortgages decreased to 6.38 percent from 6.41 percent, with points decreasing to 0.1 from 0.11.

Credit card cash advances and EFTPOS use rise in Australia

Credit card transactions, climbed nearly 10 per cent in March, according to the Reserve Bank of Australia (RBA).
Australians spent $18.775 billion on their credit and charge cards in May, up from $17.130 billion the previous month and the second straight monthly increase.
The good news is that the increase in spending was matched by increased repayments, the RBA's says.
Credit-card repayments rose 17.5 per cent in March to $19.720 billion - the highest level since December.
Australians are paying out their credit cards
Total credit and charge-card balances outstanding fell by 1.0 per cent to $44.358 billion, from $44.799 billion in February.
Balances accruing interest rose slightly to $32.689 billion in March, from $32.651 billion the previous month.
By value, credit and charge card purchases increased 9.7 per cent to $17.741 billion in March, from $16.167 billion in February.
A disturbing trend is that cash advances on credit and charge cards increased by 7.4 per cent to $1.034 billion in March, from $963 million in February.
The number of cash advances on credit and charge cards rose by 6.8 per cent in the month.
The number of credit and charge accounts increased by 11,000 in March, while the number of purchases using credit cards rose by 13.3 per cent.
Total credit and charge card balances outstanding rose by 4.3 per cent over the past 12 months, compared with an average of 12.6 per cent over the preceding five years.
Total credit card repayments rose by 11.6 per cent over the past 12 months, compared with an average of 9.2 per cent over the preceding five years.
Total EFTPOS purchases rose to 161.998 million worth $11.213 billion in March, compared with 146.722 million worth $9.912 billion in the previous month.
The value of EFTPOS purchases rose by 18.7 per cent over the past 12 months, compared with an average of 12.3 per cent over the preceding five years.