London homes distort prices

Rapidly rising London house prices are distorting the nation's property market, according to new figures released today.

Independent property research firm Hometrack said house prices were growing at their fastest level for two years – but a lack of homes for sale and robust demand in the capital was driving the mini-boom.

The Hometrack study for October showed that the cost of the average home grew by almost £700, or 0.4%, during the month to reach £168,600. The value of London homes rose by almost 1% during the month, leaving the average property costing £287,600 - £2,560 more than in September.

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Property 'out of reach' for many

More than 17 million people can not afford or do not want to own a property, research has suggested.

Lack of cash was the predominant reason given for renting rather than owning a home, followed by a desire not to financially over-commit.

The next most common reason for shunning property ownership was people banking on house prices falling soon.

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More mates sharing dreams of home

With house prices continuing to defy gravity, growing numbers of financially-stretched young professionals are clubbing together to join the home-owning classes.

Many seem to have taken the view that a toe on the property ladder is better than nothing, and we are now seeing the emergence of a new breed of home loan to cater for this need.

These so-called group mortgages - perhaps they should be dubbed "mates mortgages" or "This Life loans" after the cult BBC2 house-sharing show - typically allow up to four people to buy together, and take everyone's incomes into account when calculating how much they can borrow. They might be former university mates, a group of friends who work together, or siblings.

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Navigating the mortgage maze

The battle for Britain's homeloans has stepped up a gear, but while borrowers have never had so much choice the homeloans market has never been more complicated.

In a bid to keep up with the competition for eye-catching interest rates, more often banks and building societies will try to claw money back via higher fees and charges.

The average fixed-rate mortgage arrangement fee rose by 22% over the past year to £494 according to price comparison site Money Expert. And exit fees, which typically stood at around £75, have in many cases risen to more than £200.

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The eternal mortgage trap

Millions of borrowers are heading for a retirement haunted by debt - because they have failed to pay off their mortgages in time. Around 70% of homebuyers start with a traditional 25-year mortgage. But with the average borrower now remortgaging every five years and one in three increasing the loan term at the same time, homeowners are running the risk of never clearing the debt and paying thousands of pounds in extra interest.

Research by comparison website moneysupermarket.com suggests that the majority of borrowers increase the term of their mortgage to reduce monthly payments - often because at the time of remortgaging they are also increasing the size of their mortgage because they have moved to a bigger home or are consolidating other debts. But some borrowers simply do it to keep down costs and experts say this is an expensive error.

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Over half of first-time buyers pay stamp duty

More than half of first-time buyers paid stamp duty on their new properties as house prices continue to rise, the Council of Mortgage Lenders said today.

The proportion of people buying their first home who paid the tax has risen to 56%, up from 48% a year ago, while this year only 15% of home movers did not pay stamp duty.

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The history of your house

Have you ever wondered who lived in your house before you? Piecing together the history of where they live has become increasingly popular among homeowners following the surge in interest in tracing family trees over the past decade.

Discovering the tale behind a property can be a major selling point, with prospective buyers likely to be drawn to your home if you can tell them a bit more about its past.

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