£1 million pound plus mortgages in England and Wales have increased from 2,249 in June 2002 to 6,170 in June of this year, with London accounting for the highest proportion of sales at 58%.

Halifax Estate Agents surveyed 2,098 postcode districts across England and Wales, and found that 33% had recorded at least one £1 million pound property sale in the last year.

Their survey also showed that sales of million pound mortgages have more than doubled in the North of England, with the majority of these being in Cheshire.

Colin Kemp of Halifax Estate Agents, said: “Million pound property sales are now taking place right across England and Wales and not just in inner London.

“At the same time, million pound property clusters are emerging. In London, million pound sales are centred in Kensington and Chelsea, while other clusters are emerging around Cobham in Surrey and Altrincham in Cheshire”.

Available at up to 90% loan to value, the lifetime tracker follows the Bank of England’s base rate at 0.69% above.

The new mortgage has been given a seal of approval from What Mortgage, and Rob Chesters, head of mortgages at HSBC, said: “We are delighted our fee-free lifetime tracker mortgage has received What Mortgage’s first-ever seal of approval.

“To celebrate, we have lowered the rate on the loan, making it even more attractive to home buyers.”

Halifax figures show that nearly 25% of homeowners who carried out DIY in the last year do so in the hope that it would help increase the value of their home.

In addition, over 50% of those that did DIY believe that their work could add up to £5,000 to the value of their property.

The Halifax research found that mortgage holders think that refurbished kitchens and extensions are the most valuable changes that you can make to a property.

Patrick Sawdon of Halifax Valuers, said: “Our research shows that Britain has become a nation of movers and improvers. It’s great to see that so many people are investing time and effort in improving their home.”

However, he also warned that major alterations to your property could end up harming its value rather then helping it. He stated that consulting with professionals is the best idea in such circumstances.

Gus Parks of Bradford & Bingley subsidiary Mortgage Express said that the bank had funding from a £2 billion mortgage book sale before the current crisis, but could suffer if the low level of demand for mortgage-backed securities continued in the longer term.

A spokesman for Alliance & Leicester also denied that recent increases in its near-prime rate were related to its borrowing costs.

First-time buyers can opt for Woolwich’s new 2 year fixed rate mortgage with a rate of 6.29%, which reverts to 0.95% above the base rate.

People interested in a larger mortgage could opt for the option available for up to 85% of the property price worth up to £2 million. This mortgage tracks above the base rate by 0.17%

The Woolwich head of mortgages Andy Gray said: “First-time buyers are looking for complete stability if rates continue to rise and consumers taking out larger loans are looking for a competitive rate combined with the ultimate flexibility to enable them to reduce their mortgage.”

Jeremy Claridge, the head of specialist mortgages at Alliance & Leicester said:  “When innovative products come onto the market, it’s important they actually fill a gap and help those who need it most.  Rising interest rates and house prices mean first-time buyers need flexible products that will help them get onto the housing ladder.”
The PlusMortgage package combines a 100% LTV mortgage with a personal loan, which allows borrowers to make unlimited overpayments on the loan.

According to their research, Alliance and Leicester says that 73% of mortgage brokers believe a bundled product such as the PlusMortgage is of real benefit to first time buyers.

Abbey recently claimed that a growing number of first-time buyers are using brokers for advice on what mortgage is best for them; with 28% of those aged between 25 and 34 speaking to intermediaries before buying, compared to 2% of those aged over 65.

However, various building societies said the Bank of England’s monetary tightening campaign was beginning to reduce buyer demand.

The BBA said mortgage lending rose £5.7 billion last month, up from £5.4 billion in June and above the recent monthly average.

July’s strong rise was surprising, given the expected cumulative impact of higher interest rates,” said David Dooks, BBA director of statistics. “This resilience shows the popularity of home ownership and also reflects more remortgaging activity.”

The Council of Mortgage Lenders (CML) also said gross lending hit a July record of £34.4 billion. “Mortgage lending remains robust despite the five interest rate rises since last August — although we have yet to see the full impact of higher rates,” the CML said in a statement.

But Building Societies Association figures showed mortgage lending growth easing with building societies accounting for just less than 20% of residential mortgages.

The BSA said seasonally-adjusted mortgage approvals (a more forward-looking indicator of housing demand), amounted to £3.6 billion in July, down from £3.9 billion in June and £4.9 billion in the same month last year.

The lender edeus carried out research that showed almost 60% of consumers would go to their own bank or building society, or a mainstream lender, for mortgage advice.  Only 40% would use a professional mortgage adviser or IFA.
Of those opting for a high street lender, 26% said it was due to the wider range of mortgages available, 21% said it was easier than using a broker or adviser, and 18% said it was because their bank or building society already knew about their personal financial history.

In addition, 14% believed that they would be offered a favourable rate by using a mainstream lender and 12% said they opted for a lender because it had a well known brand name.

The survey also revealed the huge confusion over the advice services provided by both mainstream lenders and intermediaries.

•    78% didn’t know that mortgage intermediaries could provide access to mortgage products that were not available directly from a lender
•    43% did not know that the high street lenders would only provide advice about their own mortgages
•    35% of people thought that mortgage intermediaries and IFAs always charged a fee
•    20% didn’t understand how the process of using a mortgage intermediary actually worked

Nicola Severn, spokesperson for edeus, says: “We know from lending statistics that the majority of borrowers come via the intermediary route, but these findings clearly show that there is sub section of society who is confused about the role intermediaries play.

“With huge marketing budgets, and a high street presence that mortgage intermediary firms are unable to match, it is no wonder that mainstream lenders are able to persuade consumers to visit their branches”

Clubcard holders are being offered a two-year tracker mortgage, with a variable mortgage rate tracking at 0.26% below the Bank of England’s base rate for the first two years. After that, the mortgage rate is set at 0.95% above the base rate, giving an APR of 6.7%.

With an initial set-up fee of £599, the offer includes the legal work and a refundable evaluation.

The AMI said that the full impact of recent interest rate rises will not be felt for some months as borrowers begin to realise the effects that rates are having on their wallets.

The AMI further added that unless a recession happens then the market should not suffer the same problems as seen in the early 1990’s.

Chris Cummings, director general of AMI, says: “Another increase in base rates to 6% is inevitable given the strength of the key indicators. If rates rise as soon as August, then another increase, possibly in November, to 6.25% would become more likely.”

Cummins also added that that low unemployment, supply problems and strong GDP will underpin the demand in the housing market as a whole, thus enabling a major crash from happening.

The AMI report also claims the UK won’t suffer the same sub-prime problems which have dominated the US economy in recent months.

“The investors who finance the sub-prime lenders are becoming increasingly risk averse and so expect a higher return for investing in sub-prime. However, there will always be a market for credit-impaired borrowers. The key is for the risk to be priced appropriately and the credit criteria to be strict enough to protect the customers”, said Cummins.

A survey by Propertyfinder.com also found that 19% of mortgage borrowers would consider taking a lodger but don’t have enough space to do so. They estimate that as many as 26 million bedrooms lie unused in Britain.

In addition, if interest rates rise to 6% then the average mortgage repayment will have risen by £79 per month since the rates began rising; leading to borrowers needing to find new ways to supplement their incomes.

Warren Bright, chief executive of Propertyfinder.com, says “it’s a huge change to consider taking a stranger into your home so in practice, only a tiny proportion of homeowners would do it”.

“However, for many people, especially for younger homeowners, those who live alone or who don’t have children, it can be a very attractive option.  What’s more, there is tax relief available too”, he added.

Homeowners taking on a lodger can receive £4,250 of income tax free, equivalent to £82 per week.