Latest Property News around Barry, Cardiff, Bridgend

Average rental incomes increased to £10,718 in September – up from £10,626 in August according to Paragon Mortgages monthly buy-to-let index.

Over the past year the company estimates rents have increased by an average of 6.9 percent.

Regions achieving the highest rents were London (£20,392), the South Wes (£11,328) and the South East (£10,900).

Yields have remained stable at or above 6.0 percent for over a year. The North West (6.5 percent) the West Midlands (6.5 percent), Wales (6.4 percent) and the East Midlands (6.4 percent) achieved the highest yields.

Total annual returns on a property purchased 12 months ago stands at 14.2 percent in September, with London achieving the best returns at 25.1 percent.

In another report, the Council of Mortgage Lenders (CML) predicts that house price inflation is likely to remain positive, property transactions are set to remain above one million, interest rates are set to fall by three-quarters of one per cent, and gross lending will decline but is still set to exceed 2005 levels.

These predictions were set out in the CML 2008 housing market forecasts published this week.

In an environment where much of the recent comment and analysis has focused on the credit crunch and its negative impacts, the CML emphasises that publishing forecasts is an even more uncertain process than usual.

As a result, the organisation is at present only issuing forecasts to the end of 2008, but plans to issue forecasts for 2009 in the first quarter of next year.

The effect of the credit crunch has been to exacerbate trends that were already emerging in terms of a slowdown in the house purchase market. With the effect of the interest rate rises since summer 2006, and the effect of the estimated 1.4 million households whose short-term fixed rate deals are due to expire in 2008, the CML was already expecting arrears and possessions to rise.

But this trend will be worse than previously expected because of the funding constraints and tightening of lending criteria, resulting in reduced remortgaging opportunities across the lending spectrum but particularly for borrowers in the adverse credit (sub-prime) sector.

CML director general Michael Coogan said: “The housing and mortgage markets are facing their most challenging period since Labour came to power a decade ago. Luckily, the credit crunch occurred at a time when the UK economy was robust, but even so the effects on the financial sector are significant, and the mortgage market is not immune from them.

“ We now expect a slower mortgage market next year, although by no means a stagnant one. Most borrowers will cope, but not everyone will escape unharmed from the effects of a slower market, so the government should make it a policy priority to overhaul the system of state support for home-owners, which has lagged pitifully behind the times.”