The cost of buying or remortgaging a property. Halifax, the country's largest mortgage lender, introduced a £245 borrowers' fee on Monday, making buying a home or remortgaging more expensive. All new customers will be charged the "mortgage account fee", which will incorporate tariffs a borrower might incur, such as a charge for sending out duplicate statements. Introducing extra costs in the current climate may seem harsh, and will displease Chancellor Alistair Darling, who has appealed for lenders not to penalise borrowers with punitive fees. Which begs the question: what is he going to do about it?
The number of properties sold in the UK has fallen by 32 per cent this year. According to HM Revenue and Customs, the number of houses sold dropped to 504,000 between January and May, down from 743,000in the same period last year. The HMRC's figures show that in May alone sales were down by 37 per cent on last year at just 98,000. With house prices falling and the cost of borrowing continuing to rise, buyers are simply sitting on their hands. Property website Rightmove reports that sellers now outweigh buyers by a ratio of 15 to 1.
GO FIGURE... £10,500
It still makes financial sense to buy than to rent long term in all but three regions of the UK. Research from Abbey calculates people renting for 25 years lose £10,500 on average compared with those who buy – in South-east England that differential can be as great as £60,000. Apparently the cost benefit of buying versus renting increased in the last year, as house prices fall and rents rise – six months ago, it was £5,800 more expensive to rent than buy on average. Exceptions are Northern Ireland, West Scotland and the North West, where property values and rental yields indicate you could be worse off buying than renting.
Paula John is editor-in-chief of Your MortgageReuse content