Some home truths

On the one hand, a string of headlines has brought the news house prices have reached record highs.

On the other, a wave of reports suggests demand in the market is calming down amid a growing mood of house hunter caution.

Another aspect of the market which appears pretty contradictory is mortgage rates.

In recent months, speculation has grown over the prospect of the Bank of England starting to increase from its historic 0.5 per cent low, which will eventually push up costs for borrowers.

But as this debate has raged, a mortgage price war has broken out, with many lenders actually making their rates cheaper.

All this can make for confusing reading for people trying to keep track of the housing market.

So, to cut through any confusion, firstly let's deal with the new mortgage price war.

A string of lenders, including Halifax, Metro Bank, Barclays, Nationwide Building Society, HSBC, and Virgin Money have all sharpened up their prices recently.

So what's behind the fresh wave of mortgage rate cuts?

Well, experts offer various possible clues.

They suggest some lenders may be looking to meet particular end-of-year targets, so they're ramping up their efforts to pull customers in by polishing up their mortgage deals.

Secondly, swap rates, which lenders use to price their loans, have been declining, meaning lenders' own funding costs have reduced slightly.

Thirdly, some analysts have suggested some lenders may still be sitting on cash they received as part of a Government scheme called Funding for Lending.

This scheme launched in 2012 and gave lenders access to cheap finance - on the condition they passed on the benefits of getting this money to borrowers.

The initiative was re-focused in 2014 away from households and towards helping businesses.

It's also been suggested the mortgage price war is a sign of lenders getting to grips with stricter mortgage lending rules.

Launched in April, the new rules introduced under the Mortgage Market Review (MMR) force lenders to demand more evidence from people applying for a mortgage to back up what the applicant says about their spending habits.

This is so that the lender can make sure that the borrower can truly afford their home loan, both now and when interest rates rise. The market saw some disruption around the time the rules came into force.

And now to tackle another seemingly contradictory message - why have some reports shown house prices hitting new records as others have pointed to the market cooling off?

Well, this is not necessarily a case of who's right and who's wrong.

Many house price reports have a time lag of a couple of months, while other property market surveys give a more up-to-date "snapshot" of current trends.

This means sometimes you need to piece various bits of information together like a jigsaw to get the full picture.

So, for example, some figures released last week by the Land Registry showed London house prices have leapt by 21.6 per cent annually in the strongest annual growth seen in the capital for 14 years.

As this news emerged, a separate report from property analyst Hometrack said the London market is seeing a pronounced slowdown.

But the Land Registry figures were for the month of August, whereas Hometrack's were covering September.

The Land Registry records the prices of houses which have actually sold.

Hometrack asks estate agents and surveyors about achievable selling prices, making its survey more of a forward-looking indicator of what is likely to happen next.

When taken together, the two reports point to the pace of house price growth cooling in the coming months in the wake of some previous strong gains.

This chimes with a recent prediction from the Bank of England, which expects the pace of house price growth across the UK to halve by next spring.

And this trend of a calmer housing market which has been seen in the more immediate "snapshot" surveys is also now starting to filter through into some house price studies, with Nationwide Building Society reporting this week that house prices edged down slightly in September from an all-time high seen in August.

:: WHO'S MOST LIKELY TO SAY: 'I'M IN' TO WORKPLACE PENSION SAVING?

This week marks two years since the Government's landmark scheme to place people automatically into workplace pension schemes was launched.

Up to nine million people will eventually be newly saving or saving more as a result of the reforms.

So far, a much higher-than-expected rate of nine in ten people are staying in the pension scheme they have been placed into.

In some new research, which sheds further light on take-up, pension scheme Nest has found a "generational split".

It says that people aged under 30 are the most likely to embrace the scheme, while the highest opt-out rates taking place among older workers.

Just one in every 20 workers aged between 22 and 29 is choosing to opt out of the Government's automatic enrolment scheme, leaving the remaining 95 per cent saying:"I'm in".

This compares with a much higher rate of more than one in four people aged between 60 and 65 according to Nest, which took the data from its 1.5 million members.

Pensions expert Ros Altmann, who was recently appointed by the Government as business champion for older workers, said: "I certainly think it is encouraging that many younger workers are remaining in their employer pension scheme.

"It is of great concern, though, that so many older people are opting to leave.

"In light of the new pension freedoms, older workers are turning down free money and perhaps don't realise that, although it's best to start saving early, it's never too late and auto enrolment is a very attractive proposition for most people."

:: POUNDNOTES

Financial dictionary: Write-off (related to car insurance following an accident)

A car is deemed a "write-off" if it it beyond economic repair.

This happens in cases where the estimated repair cost is more than its pre-accident value, less any costs that could be recovered from its salvage.

A vehicle can also be a write-off because the vehicle is so badly damaged that it cannot be repaired.

:: STAMP DUTY SEES £1.5 BILLION SURGE IN A YEAR

Stamp duty takings from the sales of UK homes have surged by more than £1.5bn year-on-year as the property market has moved into recovery, official figures show.

The total Stamp Duty Land Tax (SDLT) yield from sales of residential properties in 2013/14 was £6.45bn, marking a 31 per cent increase on a total of £4.90bn in 2012/13, according to HM Revenue and Customs (HMRC) data.

Of the total revenue for 2013/14, 95 per cent came from transactions taking place in England, with Scotland accounting for 3.3 per cent, Wales 1.4 per cent and 0.3 per cent in Northern Ireland.

:: SMALLEST COIN IN ALMOST 1,000 YEARS HAS BEEN STRUCK

A tiny coin measuring 8mm across has been unveiled as the smallest created by the Royal Mint in nearly 1,000 years.

Available in gold or silver, the delicate coin weighs a 40th of an ounce and has been minted as part of a wider collection produced to celebrate Britannia, who first appeared on coins in Roman times.

The coin - the smallest the Mint has produced since the Norman Conquest in 1066 - is just under half the diameter of a 5p piece, which measures 1.8cm.

:: REVIEW INTO ACCOUNT SWITCHING SERVICE LAUNCHED

An investigation into whether more people could be tempted into switching their current account if they were allowed to take their existing account number with them has been launched by the City regulator.

The Financial Conduct Authority (FCA) is looking at how effective a new service, launched to take the fear factor out of moving banks, has been and whether more can be done to encourage current account customers to break free from a provider they're unhappy with.

The new current account switching service was launched across the industry last September, and while its aim is to take much of the pain and nuisance out of switching providers, it does not go as far as allowing people to carry their existing account number over to their new provider.

HIGH FIVE SAVERS

:: Phone/Website Rate Account Period Deposit Interest Paid

Secure Trust Bank www.securetrustbank.com 3.52%(F) FixedRate 30.09.21(B) £1,000 Yly

Secure Trust Bank www.securetrustbank.com 3.22%(F) FixedRate 30.09.19(B) £1,000 Yly

Vanquis Bank www.highyieldaccount.co.uk 3.21%(F) High Yield 5YrBnd(W) £1,000 Yly

Shawbrook Bank www.shawbrook.co.uk 3.20%(F) FixedRate 5YrBnd(K) £5,000 Yly

Islamic Bank of Britain 0845 6060 786 1.81% NoticeCashIsa 120Day £250 Mly

TOP FIVE MORTGAGE RATES

:: Phone No Rate Period Max% Adv Fee Incentive

Norwich&Peterborough BS 0845 300 2522 1.89%F For 2Yrs 65% £195 Yes

Norwich&Peterborough BS 0845 300 2522 3.54%F For2Yrs 90% £195 Yes

Yorkshire BS 0845 120 0874 2.89%F to 31.10.19 65% £975 Yes

Yorkshire BS 0845 120 0874 4.24%F to 31.10.19 90% £975 Yes

Post Office 0800 077 8033 4.99%F to 31.12.16 95% - Yes

Code:

* - Introductory rate for a limited period F - Fixed H - Operated by internet or telephone K - Operated by internet, telephone or post B - Operated by post or telephone W - Operated by internet P - Operated by post D - Discounted rate V - Variable rate

:: Source: Moneyfacts moneyfacts.co.uk. 01603 476 476 (All rates subject to change without notice)

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