The total lending rose by £0.4 billion – although this was less that the previous 6 months average of £0.9 billion. This was however the end of quite a turbulent year.

Within the overall lending to individuals, that secured on dwellings/property also rose, but by £0.7 billion and this was slightly higher than the previous 6 month average of £0.6 billion. The 3 month annualised rate increase was also up to 0.9% and 12 month figure up to 0.8%.

The gross lending secured on dwellings was therefore reported at £13.0 billion with repayments at £11.4 billion roughly in line with the previous 6 month average.

The number of actual loans approved was pretty much unchanged at 52,939 and those loans for remortgages increased slightly to 32,422.

The Bank was widely expected to take some form of action either this month or next month after further economic data was released.

However it looks like the data for the UK economony, showing that it grew by 0.1% – less than previously thought, caused a decision this month.

“In the United Kingdom, the path of output has been affected by a number of temporary factors, but the available indicators suggest that the underlying rate of growth has also moderated,” the Bank said in a statement.

Interest Rates

The Bank also decided that it would keep the historic low interest rates at 0.5%, something at the beginning of the year many had predicted would start to increase towards the end of 2011.

The European Central Bank today also announced to maintain it’s interest rates at the relatively high levels of 1.5%. On top of this it has announced 40bn euros of emergency loans for eurozone banks.

The lending secured on dwellings did rise in July by £0.7 billion, which on the face of it is good news this was lower than the 6 month average of £0.9 billion.

Yet the 3 month annualised growth rate actually decreased by -0.1% to 0.5%, although the 12 month growth rate increased by 0.1% to 0.8%

Against a backdrop of 0% change in the lending secured on dwellings in the month of June, these figures are positive, although continues the widely known trend of a flat economy.

The actual number of loans approved for house purchases did however increase to 49,239, having increased consistently over at least the last 4 months. The loans approved for mortgages also increased for at least the 4 month.

Bank of England Keeps Interest Rates Low!

The Bank of England (BoE) again today decided to keep UK interest rates at their record low of 0.5%.

The Monetary Policy Committe has kept rates at this low level continuously since March 2009, and it was widely expected that it would do so again this month.

This was heavily to do with the continued subdued economy with GDP figures only showing  a tony 0.2% growth.

“Unchanged interest rates were always a nailed-on certainty”, said Howard Archer, chief UK economist at IHS Global Insight.

The Banks’ programme of quantaitative easing (or Asset Purchase Programme) was also kept at £200bn.

The overall forecast still seems to be that the Bank will increase from this record low, yet the timing is off much speculation. Some forcasters have predicted there will be no rate change until 2013.

“There is a certain amount of inflationary inertia in the UK. The Bank of England has explained it often in terms of one-off shocks, but at the end of the day these one-off shocks keep materialising, such as higher utility bills this year,” said Sean Malony a bond strategist at Nomura

Lending remains as flat as a pancake!

The Bank Of England (BoE) lending to individuals for June 2011 remains flat. Although the overall lending saw a slight rise by £0.4bn, this was lower that the previous six-month average increase.

Over the whole year (12 months) the growth rate remained totally unchanged.

Within this the lending secured on Dwellings actually fell in June by £0.1bn in comparison with an actual increase in July and the past 6 month average of £0.8bn.

Again the 12 month growth rate remained unchanged, continuing the flat rate of growth from the view of total value of lending.

However the actual number of loan approvals for house purchase increased in June and was also up on the more accurate previous six-month average figure. The approvals for re-mortgaging also increased in June but were lower than the six-month average.

The Bank of England (BoE) this week again decided to keep the bank’s interest rate at 0.5%, the historical low initiated in March 2009.

It has also decided to maintain the size of the Asset Purchase Programme, aka quantitative easing.

There has been some calls for the interest rate to rise by members of the Monetary Policy Committee over the last few months due to the pressure on the economy by increasing inflation.

However the Bank has previously indicated that it believes the inflationary pressures to be temporary and skewed by various one off factors.

It is also clear that the maintenance of such a low interest rate is helping to keep some stability within the housing market, meaning that affordability of mortgage payments is now at 28%, down from the peak of 48% in mid-2007.

For more information visit: http://www.bankofengland.co.uk/publications/news/2011/067.htm

The basic idea behind investing in buy to let, is buying a property that you will be able to rent out, to either get an income from or pay off any borrowing taken out against the property when you buy it, and then enjoy the mid-term capital growth.

So where are the best places to invest in the UK for buy to let?

Well as with any investment, you are looking for the strongest return on investment. So with rental property you will generally be looking for highest rental return based on the property value i.e. the yield.

Let’s look at 2 examples…

Hartlepool

Average 2 bed house – £70,000 and rent is £425pcm i.e. a rental yield of 5100 per annum divided by 70000 i.e. 7.3%.

Cheltenham

Average value of a 2 bed house here is £180,000 and rent is £700pcm i.e. 8400 per annum divided by 180,000 i.e. 4.7%.

So based on rental return I will get 50% more return in Hartlepool than Cheltenham if I buy the average 2 bed house in the area.

Whether I am taking out a mortgage or not this rental return is very important clearly when defining your return on investment.

So in general we would recommend areas where you can get a rental yield of over 7%. Over 10 properties 2% difference makes a huge difference to your return.

E.g. on a 500k portfolio an extra 2% is £10,000 a year extra income.

This rules out quite a few parts of the UK, when deciding where to invest in Buy to Let even with prices dropping in some of these areas – unless you go for HMOs which come with plenty of headaches and voids and more hands on management.

We prefer 2 and 3 bed houses or tenement flats in Scotland often giving us 8-10% yield – they put far more money in your bank account every month than a couple of 200k houses in Cheltenham.

Click here to find out more

Spotlight on Hull

Another city that ourselves and many of our investors, either buying individual properties or as part of our Portfolio Building Programme (for more info in this click here) have seen some good returns in is Hull.

Hull has a lot going for it right now.

The city, with a population of around 250,000 and on the east coast of England, remains a busy port, handling 13 million tonnes of cargo per year. Freight handling at the port is projected to rise following Network Rail’s investment of £14.5 million in the rail link, which was completed in mid-2008. The port operations run by Associated British Ports and other companies in the port employ 5,000 people. A further 18,000 are employed as a direct result of the port’s activities. The port area of the city has diversified to compensate for the decline in fishing by the introduction of Roll-on Roll-off ferry services to the continent of Europe. These ferries now handle over a million passengers each year.

Hull has exploited the leisure industry by creating a marina from the old Humber Street Dock in the centre of the city. It opened in 1983 and has 270 berths for yachts and small sailing craft.

Industry in the city is focused on the chemical and health care sectors. Several well-known British companies, including BP, Smith & Nephew, Seven Seas, and Reckitt Benckiser, have facilities in Hull.  The health care sector is further enhanced by the research facilities provided by the University of Hull through the Institute of Woundcare and the Hull York Medical School partnerships. In August 2010 a 110% increase was reported in tourism enquiries to the city, with Hull becoming an increasingly popular destination for “staycation” short breaks.

Overlooking the Humber, the new £165 million Humber Quays development, which has now gained World Trade Centre status, is adding new high-quality office space to Hull’s waterfront.  Kingston upon Hull is also home to the University of Hull, which was founded in 1927 and received its Royal Charter in 1954. It now has a total student population of around 20,000 across its main campuses in Hull and Scarborough.

Click here to find out more

2011 has Continued to see strong Investment

Siemens’ decision to build an £80 million turbine factory in Hull marks a major milestone in the city’s history.  Industry on this scale has not been seen in the city for decades.

Full news article here.

The Siemens factory could generate up to 10,000 new jobs in the region and will feed into the biggest wind farms the world has ever seen.

It will be built on 130 acres of Associated British Ports (ABP) land at Alexandra Dock.

As part of this project ABP are to construct a £100 million riverside berth at the dock which represents the biggest investment by the company since they built the docks.

Siemens’ factory and export facility will supply the Dogger Bank, Hornsea and Norfolk Bank wind farms which all lie within 12 hours steaming time of Hull.

These round three North sea wind farms are set to be the biggest in the world with a combined total of 5000 wind turbines – more than the rest of the world put together.

Under the government’s targets for 20 per cent of energy to come from renewable sources by 2020 these wind farms will need to be up and running in less than ten years.

Several hundred construction jobs will be created during this period.

About 700 jobs will be available in the factory once it is up and running and it is thought that another 9000 could be created within supply chain and servicing industries.

It is hoped that with the world’s leading turbine manufacturer moving to the city, other related industries could follow transforming Hull and the Humber into a hub for renewable energy.

So we feel Hull is a good sized city to target, and has plenty of economic opportunities that can allow further growth from a very affordable starting point.

One of the concerns clients have investing out with their area is, who will manage the property?

And what if repairs need to be carried out?

Well here we have the perfect solution.

How about securing property at a minimum of 7% rental return, at a 20% discount to a current RICs valuation, fully refurbished including:

• New double glazing
• New central heating
• Replastered
• New bathroom
• New Kitchen
• New carpets or tiling

So maintenance issues are a minimum, for the foreseeable future.

Then the rental concern, what if no one moves into my property?

How about we also cover the mortgage payments until a tenant moves in? This should only take 4-6 weeks but gives you that extra confidence as well.

So you can build up a portfolio with confidence of properties providing a healthy monthly positive cashflow, below current market value and fully refurbished!

Hull provides us with some of the best value properties of any city in the UK, and with the ongoing investment going into the city this is expected to continue.

To find out more on our Portfolio Building Programme, with 10 new places becoming available in June, to book a Viewing Trip in Hull or to see all our Property Investment Deals Register your details here.

Article provided by Alan Forsyth

Economists had expected the decision with recent market data highlighting the continuing concerns over the strength of the UK recrovery. This is on the back of and despite the increase in inflation to 4.5%, up 0.5% from March.

In contrast signs from the European Central Bank are that interest rates may rise there next month after being held at 1.25% last Thursday.

It is believed that the continuing high inflation rate in the UK will mean it more likely that the BoE will increase rates at some time this year. This is backed by the continued pressure on the MPC  with three members voting for a rise over the last five months.

James Knightley, economist at ING stated:

“However, with inflation likely to move above 5% in the next three to four months on the back of rising utility bills and food prices and with employment and employment intentions surveys remaining firm, we feel that the balance of probabilities favours an earlier move,”

The quantative easing or Asset Purchase Programme was also kept at £200 billion.

Bank Interest Rates held.

The Bank of England (BoE) yesterday announced it would keep interest rates at the record low of 0.5% and maintin the asset purchase scheme.

The Monetary Policy Committee has been split for a while with wide speculation that interest rates could soon rise. With UK inflation higher than the agreed target a key mechanism to help recduce this is to increase interest rates.

But this has a knock on impact to the overall economy with companies and people having to pay more for their borrowing.

Their decision was likely to have been supported by data this week that pointed to a slowdown in growth in manufacturing, construction and services.

Seperately the European Central Bank decided to hold their interest rate at 1.25% after raising it last month from 1%.

Furture interest rates

“Our view remains that the Bank is likely to move away from the emergency 0.5% rate later this year,” Ian McCafferty, the CBI’s chief economic adviser, said.

This is in line with the predictions we have previously reported upon after update meetings from Bank of England members around the country.

The Bank of England lending statistics released yesterday show an increase in lending to individuals for dwellings of 0.3% to £11.1 billion.

Although a rise, this is in line with the previous 6 months average, which is normally seen as a more stable figure.

For more information visit: http://www.bankofengland.co.uk/statistics/li/2011/mar/index.htm

Do you want to know what 2011 has in store? Download the Just Do Property 2011 Property Market Predictions eBook: http://www.justdoproperty.co.uk/ebooks/expert-predictions-2011-property-2-3835