“This means that those with both a mortgage and savings often face a double whammy, while the banks cream up the difference,” he says.

“People should claim this cash for themselves. It’s time to power up the megaphone and blare out: don’t save, use the money to pay down your mortgage.  Although before you start to contemplate knocking off the noughts, make sure you work out if your mortgage deal allows it.  In many ways, working out if you’re excluded is the most important decision. In other words, everyone should be doing it – except those who shouldn’t…”

Overpayment penalties can effectively reverse gains, he points out.  Some lenders punish those who try to repay their mortgage more quickly, especially if they have a fixed special offer or a discount rate deal.

Thankfully, many do let you overpay up to 10 per cent annually without penalties, but double check. If there are penalties, overpaying is rarely a good idea.

However, if the period where penalties apply is due to end soon, put the cash away and be ready to pounce.

Repay costlier debts first.  The golden rule is to focus all spare cash on clearing the highest interest debts first, as they’re the fastest growing, while minimising repayments of all others.  Therefore if you have costly credit cards (not 0 per cent deals), put cash towards clearing those before your mortgage.

Overpay On Your Mortgage! is a post from: TheAdvisory.co.uk - Impartial Expert Advice For House Sellers

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The activity was driven by strong positive expectations for both capital growth and income returns for the year ahead.

London clearly leads the way with 85.1 per cent of respondents expecting rents in the capital to continue to rise throughout 2012, while 100 per cent of landlords predict that property values in London will be at current levels or higher by the end of the year.

Interest rates are widely expected to remain low.  Just over half of landlords expect the Bank of England base rate to remain static throughout 2012.  Of those who do see a rise on the horizon, their average prediction for Q4 2012 is less than half a percentage point higher than the current all time low of 0.5%, at 0.78%.

Undoubtedly, current low costs of finance represent a short term fillip but landlords clearly see the Private Rented Sector as a long term investment class.  Data from Young Index Q4 2011 show that 36.9 per cent of landlords intend to hold their property until 2031.  The average future hold period across all respondents was 15.4 years.

Neil Young, CEO of The Young Group comments: “The appetite from private investors in the PRS for additional investments is extremely strong.  The London rental market is particularly strong and demand from tenants seeking quality PRS accommodation shows no sign of abating, buoyed by a population that is spending longer than ever living in rented homes and increasingly living in solo households.”

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Landlords Bought Additional Properties in 2011 is a post from: TheAdvisory.co.uk - Impartial Expert Advice For House Sellers

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Lenders will make it much tougher to take out cheap interest-only loans, which have helped prop up the property market.  This is a reduction in credit and will exert downward pressure on prices.

The second problem is that lenders are still cash-strapped and the Eurozone debt crisis is weighing heavily on the banking sector – it may have contributed to a dramatic fall in swap rate money market costs and the fixed rate mortgages that these heavily influence, but if things get worse banks will find their balance sheets in trouble.

Government cuts will also start to filter through soon, as the UK tries to balance the books. That will mean public sector job losses, higher taxes and a dip in confidence.

The cost of moving house is also exorbitant. Those buying family homes in areas where a relatively modest property of this kind costs more than £250,000 face a stamp duty bill of at least £7,500, add estate agent and solicitors’ fees and moving can set a normal family back £15,000 or more, without even having to find the extra cash for a 25 per cent deposit on a more expensive home.

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Average mortgage payments for new borrowers, including first-time buyers and home movers, were 27 per cent of disposable earnings in the fourth quarter of 2011.

This is the lowest proportion since spring 1997 when payments were 26 per cent of income – well below the 37 per cent average over the past 27 years.

The study also highlighted a “clear North/South divide”, with the least affordable areas located in London and the South East.

Kensington and Chelsea in London was named as the least affordable local authority district, with mortgage payments taking up 78 per cent of disposable local earnings.

The Scottish areas of East Ayrshire, where mortgage payments take up 15.7 per cent of take home pay, and West Dunbartonshire and North Ayrshire, where payments account for 16.2 per cent of disposable earnings, were found to be the top three most affordable local authority districts in the UK.

Across the UK, mortgage payments have nearly halved as a proportion of income from their 2007 peak of 48 per cent, as house prices have dropped along with mortgage rates.

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1. Property prices rose 0.2% to £220,385 in December, but fell 0.5% annually

2. London’s property values are 3.1% higher than last year

3. Wales joins London as the only other region to show annual house price growth

4. Transactions in 2011 fell 2.1% year on year, but activity in the second half of 2011 was faster than the year before

5. UK Average House Price: £220,385

6. Monthly Price Change: Up 0.2%

7. Annual Price Change: Down -0.5%

Richard Sexton, director of e.surv commented: “The final month of 2011 saw a modest rise in prices, which rounded off a year of economic turmoil in which the property market showed remarkable resilience.  Despite the growing fears of a debt crisis in the Eurozone, prices rose 0.7 per cent in the second half of 2011 and, with high inflation and reasonably static prices, this has helped make property more and more affordable.

“While transactions fell slightly in 2011 compared to 2010, the last five months of 2011 all saw higher activity than 2010, boosted by the increasing number of buyers eager to make the most of the affordable – if hard to obtain – mortgage finance coming onto the market.

“But despite prices showing such astonishing staying power, 2012 is set to be another tough year.  With the global economy in a parlous state, the size of mortgage advances, which rose in the last 12 months by 3.5 per cent, could begin to decline.”

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Here is a top five best prospects for northern towns:

1. Edinburgh:
The Scottish capital may benefit from the potential independence vote in 2014, with a host of companies relocating to the city.  A vibrant, cultured and attractive city, Edinburgh is not cheap, but should at least hold its value and see rising yields.

2. Glasgow:
With a mixture of poorer neighbourhoods and grand old houses in some suburbs, Glasgow is far more attractive today than in recent decades.  The Commonwealth Games in 2014 should produce a regeneration bonus and improved transport links.

3. Chester:
Lovely restored and maintained city centre with Roman walls and Tudor buildings, Chester’s property prices are low by the standard of similar towns.  Close to the cities of Manchester and Liverpool, the river Dee flows through the city and it has a charming, relaxed air.

4. Bradford:
Renovated city centre and a cleaned up environment, Bradford has shed its grimy industrial reputation.  Near to Leeds and with its own airport, the city is attracting new families and young professionals.

5. Harrogate:
The gem of Yorkshire, Harrogate Spa is one of the most florid cities, host to a hundred conventions and full of stately stone houses and luxuriant gardens.  Prices have held up well and are likely to keep rising.

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“We can derive some encouragement from mortgage approvals holding firm in November.  By that stage, the escalation of the eurozone crisis had begun to exert pressure on the banking system so we could easily have seen approvals slip back,” said Andrew Goodwin, senior economic advisor to the Ernst & Young ITEM Club.

Despite the rise, mortgage approval levels remain significantly below the 88,000 monthly average since 1993.

Net mortgage lending came in below expectations, halving to £600 million in November from £1.2 billion in October.  Economists had forecast a more modest fall to £900 million.

However, the number of loans for remortgaging declined for the second month in a row to reach 31,154, worth £4.1 billion overall, the lowest figure since June last year.

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With house prices falling – but not fast enough to release first-time buyers into the market – credit stifled and rents rising, buy-to-let landlords were one of the very few groups who did okay out of the property market in 2011.

Even the banks treated them to favourable mortgage terms and new products aimed at the smaller investor.

But landlords still have to weather the same economic climate as the rest of us. Stalled wages and rising unemployment are in the forecast for 2012, and their effects are unlikely to leave landlords untouched.

There are real fears that borrowers will run into serious arrears as jobs are lost.  And rental properties are more likely to suffer arrears in payment than mortgages, since owner-occupiers have more to lose.

For many people, 2011 was the year in which renting became more expensive than servicing a mortgage.  According to research by Zoopla.co.uk, Swansea, Plymouth and Bournemouth are the three exceptions to the rule among the UK’s 50 biggest towns and cities.  In London, the difference is very high: it is 31 per cent more expensive to rent than to service a mortgage.

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“High prime demand” from equity-rich home buyers and relatively low supply of large homes had created 73 new property millionaires every day in 2011, according to Zoopla.  One in 108 homes is now worth £1 million or more.

There are now 253,118 homes valued at more than £1m in Britain and the biggest rise in the number of property millionaires was in London, where the number grew by 18 per cent during 2011.  Four in five homes worth more than £1 million in Britain are in London and the South East, with London accounting for more than half the national total (55 per cent).

“While 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, at the upper end of the market cash and equity rich buyers are enjoying some of the lowest mortgage rates in recent history,” says Nick Leeming of Zoopla.co.uk.

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The share of UK residential housing stock owned by private landlords has jumped more than 40 per cent since the financial crisis began in 2008.  It now makes up almost a fifth of the total, according to estate agent Savills.

Stricter lending standards introduced by Britain’s banks since the crisis have created opportunities for investors, as the number of potential homebuyers has fallen.

Savills claims that instead of the capital appreciation that attracted investors during the boom, the prospect of rising rental income is now the main prize.  The volume of mortgages handed to private landlords rose by 16 per cent to £3.8 billion in the third quarter of 2011, according to figures from the Council of Mortgage Lenders.

Even though there has been a fall in property prices since the onset of the recession, first-time buyers are still struggling to get onto the property ladder.

The US is also experiencing a booming rental market, after its housing market took a tumble in the past couple of years. Home ownership levels dropped to 66.9 per cent in 2011, down from 70 per cent in 2005.

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