Consumers set for £100m mortgage refund

Manchester casino to support property market says Nationwide

East London yet to really benefit from Olympics

Bank of England keeps rates on hold at 5.25%

Consumers set for £100m mortgage refund

The Financial Services Authority (FSA) has told mortgage lenders that have hiked their mortgage exit administration fees to repay customers who complain. If you switched mortgage recently, you may be owed hundreds of pounds.

Some mortgage companies were charging up to three times the mortgage exit administration fee that was listed on the original documents when the person signed up for the loan. Now the FSA has finished its investigations into Mortgage Administration Exit Fees (MEAFs) and has concluded that those charged by many lenders are unfair.

The FSA has now told lenders that they have to decide by 28 February 2007 which of the following outcomes they will adopt for their current customers: charge no MEAF; charge the original MEAF; charge a revised MEAF or charge their current increased MEAF. Lenders are expected to either charge the original MEAF shown in the loan documents, or a lower fee, if they want to avoid potential complaints and compensation. Any lender that decides to continue charging their current increased MEAF is likely to be asked to justify their decision to the FSA.

Anyone who has redeemed a mortgage since 2003 can use the ruling to go back to their lender and demand a refund of the amount by which the MEAF they paid exceeded what was shown in their original loan documents.

So, if you switched loan any time after 2003, dig out your paperwork and find out if the MEAF you paid was more than that in your original loan documentation. If it was, write to your lender citing the FSA’s statement of the 26th January on MEAFs and ask for a refund of the difference between the original fee and the higher amount you actually paid. The longer you’ve had your mortgage, the lower the fee shown in the agreement will be and the bigger the refund you’ll be due.

Clive Briault, FSA managing director of Retail Markets, said: “We expect that these measures, agreed with the Council of Mortgage Lenders, will stop borrowers from being surprised by unexpected increases in these fees. People will now know when they sign up for a mortgage what fee they will pay on exit, or should be given a clear idea of how the fee might be increased fairly.”

Estimates of the total amount of compensation that might be claimed are £50-100m.

Manchester casino to support property market says Nationwide

Following the announcement last week that Manchester is to play host to the UK’s first 'super-casino', Nationwide Building Society's chief economist, Fionnuala Earley, says: “This could be good news for house prices in Manchester. It will bring new jobs to the city and the decision clearly represents a vote of confidence in Manchester's infrastructure and the city's ability to support a new super-casino. New jobs will lead to an increased need for housing which will support local demand and house prices.

“Many people have taken a gamble buying property in Manchester in the past and this has paid off with house prices increasing by more than 250% in the last 10 years. However, depending on the location of the casino, there could still be some negative impact on local prices if factors, like noise, for example, become an issue. The average house price in the city is £197,391 and homeowners have seen house prices rise by almost 3% over the last year and 101% over the last 5 years.”

East London yet to really benefit from Olympics

With around 2,000 days to go until the Olympics start, research from Halifax Estate Agents shows London postal districts close to the 2012 Olympics site have risen by 15-20% on average since the International Olympic Committee awarded the games to the British capital in mid-2004. The rise equates to 7-8% a year, which is in line with London averages and around half the growth rate witnessed in prime London during the same period.

Since the announcement, Leytonstone, which rose by 23%, has been the fastest riser, adding £50,714 to the price of an average property. Hackney comes second with a 21% rise (£48,578) and Clapton picked up the bronze medal with an 18% (£38,895) increase.

However, Halifax Estate Agents economist Tim Crawford says: "Despite recent rises, there are eight postal districts close to the Games site where house prices are more than 25% below the London average.”

The cheapest place to buy near the 2012 Olympic site is Plaistow - with an average house price of £196,263. East Ham is second cheapest at £207,543 and Leyton comes in third at £210,599.

Bank of England keeps rates on hold at 5.25%

The Bank of England today voted to keep interest rates on hold at 5.25%, after the surprise rise last month.  

Tony McGough, head of forecasting at Jones Lang LaSalle commented: “The move last month was pre-emptive, and the Bank will want to see how that decision will impact on the economy. Figures released in January, for Q4 GDP and retail sales, are in line with the decision the Bank made and therefore no further changes are needed as there have been no further surprises.

The Bank would have had to have seen high numbers in next week’s inflation rate announcement to have been forced to move the rates again. In addition, we suspect that the Bank wants to see the level of the wage settlements coming through in the current round before it makes another decision, and doesn't want to surprise the financial markets again unless it has too. Consequently an interest rate rise in March or April was always much more likely.”