Housing & mortgage round upIn this week’s housing round up we review the latest house sales figures, look at property millionaires and a recent FSA report which says some mortgage holders are putting their homes at risk.

November house sales highest this year

HM Revenue and Customs (HMRC) have released figures which show November saw the highest level of property transactions so far this year.

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November saw 85,000 homes sold, up from 79,000 in October and the highest monthly figure since July 2010 when 89,000 properties were sold.
However, despite the rise in November the total number of sales so far in 2011 is still lower than at the same time last year.

Most of the growth in November’s figures came from England with the number of house sales in Scotland, Wales and Northern Ireland remaining broadly static.

Many property experts believe that despite low interest rates other factors such as rising unemployment, tight mortgage lending criteria and the relatively high deposits needed, will keep the number of transactions subdued in 2012. Indeed the Council for Mortgage Lenders (CML) expects the number of transactions to fall slightly next year.

The Royal Institution of Chartered Surveyors (RICS) said the number of homes sold might rise “a little” over the coming year, but in its Housing Market Forecast, it warned that prices would be unlikely to rise and may even fall.

RICS added: “Prices at a headline level will edge lower by around three per cent across the UK. However, the low level of supply should continue into the coming year, stabilizing prices and preventing significant declines,”

Some property experts have however predicted a “mini boom” in house sales before the end of the Stamp Duty holiday for first time buyers on 24th March 2012; others however believe this will have little effect at a time when it is so hard for first time buyers to raise the deposit needed to obtain a mortgage.

25,000 more property millionaires created in 2011

Property website Zoopla, says 26,744 more homes are now valued at £1 million or above, even though UK property values fell by 3% during 2011.

There are now 253,118 homes valued at more than £1 million in the UK.

Zoopla said: “High prime demand created 73 new property millionaires every day in 2011”. They explained the rise in demand was from equity rich buyers and was due to relatively low supply of such properties.

The average property valued at over £1 million, is now worth £1,688,379 compared to £1,657,858 at the end of 2010.

London saw the largest rise in property millionaires with the number rising by 18% over the past year. Four in five homes worth more than £1 million in Britain were located in London and the South East, with London representing 55% of the total.

Nick Leeming of Zoopla said: “Most of the market is suffering from the impact of inflation, stagnant wage growth, the inability to secure mortgage finance and nervousness about the future of the economy.”

He continued: “But at the upper end of the market, cash and equity rich buyers are enjoying some of the lowest mortgage rates in recent history. This data shows clearly how differently the top end of the market is performing from mainstream Britain.”

Homeowners risk loss of homes

The Financial Services Authority (FSA), the regulator for financial services in the UK, said that homeowners in the UK have put themselves at risk of repossession or mortgage arrears.

In their Mortgage Market Review, the FSA estimates that nearly half of all remortgages may be unable to access a better mortgage because their finances are already tight and they do not now meet the tougher mortgage lending criteria imposed by lenders since the credit crunch.

The FSA also notes that half the funds raised through mortgages over the past five years were not used to buy house and instead was used for other expenditure, for example on home improvements, to buy large capital items such as cars or repay unsecured debt.

Financial expert Ray Boulger said: “The FSA wants to try to put a stop to the trend of people using a rising market as an opportunity to remortgage every three years to fund a lavish lifestyle that they’ve run up through debt.”