The latest House Price Index report from Land Registry shows a positive monthly change of 0.9 per cent. Annual house price change currently stands at -5.6 per cent, which marks the fifth month in a row in which the rate of decline has eased. The average home in England and Wales is now worth £158,377.

Transaction numbers have fallen from last year. In April to July 2009, sales averaged 48,109 per month. The year before, the average was 59,677 per month.

London was the region with the strongest monthly growth in September, with a change of 1.3 per cent. This is now the fifth month in a row in which London’s monthly change has been positive. The capital also experienced the smallest annual price fall, at -3.2 per cent.

August’s House Price Index report from the Land Registry shows that annual house price change is still falling, although the fall is much less steep than in previous months. For example, in last month’s report, the decline was recorded at -11.7 per cent. The monthly change is fairly flat at -0.1 per cent, which changes the average value of a property in England and Wales to £155,968.

London, along with the West Midlands, is displaying the strongest monthly growth in the latest data, with a change of 0.8 per cent. The capital is also experiencing the smallest fall in annual house price change of any region in England and Wales at -6.2 per cent. The North West, on the other hand, has both the sharpest monthly fall and the sharpest annual fall.

Sales volumes in England and Wales have fallen over the last year, from 60,997 transactions per month in March June 2008 to 41,911 in the same period this year.

The current environment for UK Mortgage Lenders is still hostile. They are required, simultaneously, to strengthen profitability, to manage the existing and forthcoming inevitable losses from arrears and repossessions, and the costs associated with enforced and voluntary forbearance, to accommodate increasingly onerous regulatory capital requirements and maintain lending levels to pay for it. These pressures originate from all sides; the Government, the FSA and consumers.

This is a vast shift from the benign environment which prevailed for the 12 years until 2007, and so there are many executives with only limited experience of capital rationing during a recession.

Such is the intensity of these pressures, that many of the current stresses are likely to persist for much of the next decade…

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Management Issues, Planning and Quantitative Modelling for UK Mortgage Providers

Calnea Analytics estimates the distribution of Loan to Value (LTV) ratios as part of its whole market loss forecasting1. This study also includes a breakdown for the unregulated sector.

The analysis concentrates on establishing the distribution of mortgage loans at 70% of the current value of the property and above because these are the loans that are most likely to generate losses for both lenders and borrowers upon repossession and sale of the property. The study focuses upon outstanding mortgages at 1st January 2009, for which there is comprehensive data. As the movement in house prices between 1st January and 30th June 2009 has been virtually static, the LTV distribution at 30th June is likely to be essentially the same as at the beginning of the year.

Other recent studies of the current LTV distribution have focussed mainly upon negative equity for first charge, regulated mortgages. This study has been extended to cover the LTV distribution for the whole market and thereby illustrates the difference between the regulated and unregulated market sectors.

The base data for this study has been taken from the FSA, Bank of England and CML…

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UK Loan to Value Distribution Analysis of Unregulated Loans

A review of Calnea’s mortgage market estimates following publication on 15th September of the FSA’s MLAR statistics for the second quarter suggests that the future loss potential embedded in the balance sheets of UK mortgage lenders stands at £27.1bn1.

This is the expected cost of repossessions that will emerge over the next ten years. It represents 69.2% of the estimated Pillar 1 capital base and 2.53% of total outstanding mortgage loans.

Although house prices have stabilised recently, 47% of all mortgage loans are potentially “at risk” from loss on repossession because the outstanding loan is currently more than 70% of the current value of the property. This figure includes second mortgages and other secured borrowing, but excludes other forms of unsecured debt that mortgagees may be exposed to…

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Calnea Analytics – The UK Mortgage Market – Outlook and Commentary 2nd Quarter 2009

The Land Registry House Price Index report for July 2009 shows an annual movement of -11.7 per cent, which follows the pattern observed over the last few months of a slowing in the rate of house price falls. The monthly price movement is 1.7 per cent. This is the third month in a row where the monthly change has been positive. The average property value in England and Wales is now £155,885.

The average number of property transactions has decreased over the last year. In February to May 2009 sales volumes averaged 35,848 per month. In the same period last year, they averaged 61,743. This is a fall of almost 42 per cent.

In July, the region with the greatest monthly change was Wales, with a movement of 3.1 per cent. Wales also experienced the smallest annual house price fall of any of the regions, with a change of -8.3 per cent. Every region in England and Wales had positive monthly movements in July.

The June data from Land Registry shows a monthly house price movement of 0.1 per cent, which is the first positive figure in well over a year. The annual movement now stands at -14 per cent, which signals a flattening in house price change, although values are continuing to fall. The average property value in England and Wales is now £153,046.

Sales volumes have continued to decline, from an average of 59,948 transactions per month in January to April 2008, to 30,997 transactions per month in the same period a year later.

London experienced the greatest monthly change of any of the regions, with a movement of 2 per cent. Half of the regions in England and Wales had positive monthly changes in June.

The latest House Price Index Report from Land Registry shows that the rate of decline in annual house price change is easing slightly. However, the figure now stands at -15.9 per cent, showing that property prices are continuing to decrease in value.

The monthly change in England and Wales is now -0.2 per cent, changing the average value to £152,497. Wales is the region with the greatest monthly change, with a movement of 1.2 per cent. Half of the regions in England and Wales have positive monthly changes.

The number of transactions has fallen from last year. While in December 2007 to March 2008, transaction volumes averaged 64,674 transactions per month, in the same period a year later, the average had fallen to 31,091 sales.

The Land Registry House Price Index for April 2009 shows that the speed of the fall in house prices has started to slow, although property values are continuing to decrease. The annual change for England and Wales is currently -16.2 per cent, while the monthly change stands at -0.3 per cent. An average property is now worth £152,898.

Over the last 12 months, every region in England and Wales has experienced a decrease in average property values. However, the monthly change in London is a positive 1.4 per cent, making it the region with the greatest monthly movement. The average value of a property in London is currently £302,411. In April there were only 4 regions with negative monthly changes.

Sales volumes have continued to decline, from an average of 75,374 transactions per month in November 2007 to February 2008 to 31,315 transactions per month in the same period a year later.

The latest data from the Land Registry shows the rate of fall in house prices to be easing, with an annual change of -16.2 per cent. The monthly change this month is -0.4 per cent, which reduces the average price to £152,895.

London experienced a positive monthly change of 0.6 per cent, which takes the figure for annual change to -15.4 per cent, similar to the figure for England and Wales, despite London’s outperformance during the previous period of house price growth. London’s average house price is now £299,613.

Transaction numbers are still falling, with an average of just 35,480 sales per month in the months October 2008 to January 2009. In the same period last year, sales volumes averaged 85,610 per month.