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The number of homeowner loans, mortgages, that were approved in December 2006, was down to 113,000 approvals from 129,000 in November.

Alone, these figures may be interpreted as evidence that the property market is about to slow, except for the fact that demand still outstrips supply, especially in the area of buy-to-let, and eco-friendly homes.

The Nationwide building society said that house price growth slowed in January, following recent interest rate rises. However, it still grew 1.8 per cent, maintaining an annual 10 per cent increase.

However, people who are anticipating putting their home on the market are still enjoying a ‘seller’s market.’  December is traditionally a quiet month for house buying..

However, approvals are regarded as an important indicator of short-term trends in the housing market. The market expected a short term drop after the Bank of England increased interest rates four times in approximately six months.

Investors are not worried. They still point to the fact that interest rates are still far below historical numbers, and that they are still below the ‘wealth building’ break-off point of six percent.

At £10.6bn the money lent in the form of homeowner loans during December was another record, even though the banks approved less loans, reflecting the strong rise in house prices in the past few months.

The investors are not worried. There is still plenty of room to take out a secured loan to improve a home, or prepare it for the buy-to-let market, and make a substantial profit, especially in the London areas.

If you are searching for a mortgage that is suitable for you and your needs, there is one type of mortgage that you may want to consider, a discount mortgage.  A discount mortgage is a mortgage with an interest rate where a discount is applied to the rate on the loan.  The discount is applied to the lender’s standard variable rate for a set length of time.  The length of time can vary from three months to several years.  Because it is a variable rate, the interest will rise and fall with the Bank of England’s base rate.  As the standard variable rate fluctuates up and down, so will the discounted rate.  A lender will offer you various discounts on the interest rate of the mortgage.

A discount mortgage can be beneficial if you are purchasing a home for the first time, as you can use the money that you are saving with the discounted interest rate to purchase new furniture or to help you redecorate your home.  The longer the discounted rate period is, the more you will benefit, so it would be wise to ask around to ensure you receive the best rate as well as the best discount on the mortgage.

With discount mortgages, early redemption penalties almost always apply and could extend beyond the discounted period.  This means that you could end up tied into a mortgage with uncompetitive rates once the discount on the interest rate expires and it reverts back to the lender’s standard variable rate.  If you change your mortgage during the early redemption penalty period, you will have to pay a fee that can be as much as six months repayments on the mortgage.  It will pay off to search around and compare offers from various lenders.

There are new reports that indicate there is a risk that the UK’s housing market is overvalued and heading for a “downward adjustment”, according to the International Monetary Fund (IMF).

The IMF stated that they used several indicators that suggest that the house price growth will continue to increase and that properties are “likely overvalued”.

“In light of estimates that house prices are already overvalued, this would increase the subsequent risk of an abrupt downward adjustment,” the IMF stated.

Nationwide claims that the average house price in the UK has reached £174,706 in February.  The annual house price inflation rose to 10.2 per cent.

A spokesman for the Treasury said that the economy has experienced economic growth for 58 successive quarters and that the UK continues to meet “strict” fiscal rules, according to a report in the Telegraph.

There are several intangible indicators that will have an impact on the housing market. The most prevalent indicator is the introduction of environmentally friendly homes.

The introduction of these new homes will have a direct impact on the types of homes that will continue to increase in value.  These news homes emit less emissions and fewer product waste.

Britain has already seen the introduction of eco-towns that are hailed as prototypes for future developments.  Currently, 45 councils have already instigated plans to create eco-homes.

Consumers who are interested in building wealth are looking at methods of improving their current homes, before selling them, so they will receive the bonus sale’s value of having an eco-home.

There are certain mortgages that are aimed to first time buyers.  These mortgages offer deals to first time buyers that they can benefit from.  However, anyone looking into a mortgage for the first time should look over the terms of what is being offered to ensure they are receiving the best value and a mortgage that is right for them.

One type of mortgage that is typically offered to first time buyers is a cashback mortgage.  A cashback mortgage is a mortgage where the lender will give the applicant a sum of money upon the completion of the mortgage.  This sum of money can be used by the applicant for various things, such as solicitor fees, furnishing for the new home, or other expenses involved in a new purchase.  A cashback mortgage can be extremely useful for first time buyers, as they may not have the mean to pay for these additional expenses.  However, with a cashback mortgage there are prepayment penalties that are charged by the lender should the borrower pay off the mortgage early.  These prepayment penalties can be as much as six months repayments on the loan.  Because of the prepayment penalties, a cashback mortgage will mean that the borrower will be locked in to a mortgage for a set number of years with an uncompetitive rate.

The other type of mortgage that lenders offer first time buyers is an introductory discounted rate offer.  This type of mortgage has a low fixed interest rate for a specified amount of time.  This can be beneficial for first time buyers, as the low fixed rate will ensure that the monthly repayments are constant as well as easy to manage during the start of the mortgage.  However, if you do not take advantage of the low interest rate by saving up the additional savings, you may find it difficult to meet the payments once the higher interest rate kicks in.  Be aware of what rate you will be charged once the introductory period is over, and also know when you will have to start making higher payments.  This way you can prepare yourself for when the time comes.

Both realtors and mortgage lenders have preyed on prospective homeowners.  The fact is, there is nothing in the current housing market, or national debt, that gives any solid indication that the housing market will crash – or peak – in the near future.

While many analysts have consistently, year in, year out, announced that a crash was imminent, based solely on earnings to house prices, the crash has not hit.

The facts are simple. Despite increases in interest rates, UK house prices are nowhere near the unaffordable levels they hit in the early 1990’s.  In fact, housing prices could double before the housing market hits the levels hit the levels seen in the 1990s.

The ratio that determines the housing market includes several variables, such as the level of new build construction, levels of affordable housing, supply and demand, growth in households, employment levels etc..

Basically in a simple 3 variable chart the MarketOracle House price ratio can explain why house prices are still growing, and will grow despite the slump in house prices in the USA.

During 2001 countless economists suggested that UK house prices were over valued and expensive. This caused many UK consumers to miss the opportunity of a lifetime, buying when houses were at the lowest they’ve been since 1985.

However, the recent interest rate increase to 5.25 per cent, has pushed the index out of the comfort zone. However, the annual house price growth is expected to increase through the region of 5 per cent.  Interest rates must top 6 per cent before they will impact the housing market.

A study by SAGA and Principal International shows that half of their survey group,  aged over 50 will consider buying abroad with Spain as the favourite location.

Spain’s proximity to the UK, its climate and its slow pace of life are the determining factors.

However, realtors do warn consumers to avoid combining a holiday with property shopping.  George and Eleanor Whillock  set up Keyhole Property Search in Mallorca.

Whillock said: “You have an absolutely beautiful island with a vibrant property scene, but it is very competitive. It’s easy to get it wrong. People make the mistake of combining a holiday with buying a house. The combination of sun and wine can lead to the wrong decision, [especially] with some agents who can be a bit pushy. That was our experience when we were buying, so we got involved in helping people into the marketplace.”

However, moving to Spain is not cheap.  Apartments cost up to £1m and villas can cost as much as £13.4m in Mallorca.

But, Spain does have investment potential. “People are looking at high inflation on property prices,” Whillock explains. “As an average across the island in 2005, prices rose by about 15 per cent. We bought our apartment in June 2005 and paid €430,000 [£288,000] for it. Today it’s worth €650,000 [£435,000].”

Recent reports reveal that many UK consumers are purchasing homes around the world for their retirement partially for the investment, and partially to provide a variety of options.

The number one draw for the content is the lower interest rates.  Homeowner loans are cheaper in Spain, but like all things, consumers are warned to get a reputable agent and do not rush into anything.

The Halifax Bank of Scotland (HBOS) expects to see a striking housing market downfall in the next year.  It claims that the pending interest rate hike in February by the Bank of England will make it difficult, or not financially feasible, for consumers to purchase a home.  However, it also admits that no town will see the average house price drop below £100,000.

London will continue lead the country in house price inflation, as the “Olympic effect” drives prices in east London.

HBOS announces that the UK economic growth will continue for its 60th successive quarter in 2007. This is a record period, unmatched by any other developed nations.

HBOS claims growth will slow to 2.3 per cent from 2.6 per cent last year as the softer global growth, particularly in the US, pulled at the UK economy. As a result, interest rates will return to 5 per cent by the end of 2007, according to the bank.

Higher interest rates will slow the pace of UK growth by increasing pressure on consumer spending. This is echoed by Nationwide’s consumer confidence index, which fell for the second consecutive month to 83, a drop from 100 when it began in 2004.

This is good news for homeowners who are interested in obtaining their first home. As housing prices stall, or start a downward trend, consumers can snatch up a home with the expectation of seeing interest rates return to 5 per cent by the end of the year.

This trend may save homeowners as much as £20 000 on their home.

The National Association of Estate Agents (NAEA) has taken steps to prepare its members for the introduction of home information packs with the launch of a number of courses in December 2006. The Association of Home Information Pack Providers (AHIPP) has welcomed the courses, which are designed to inform estate agents.

NAEA members have been invited to a series of courses on home information packs which will inform estate agency staff on how to deal with the packs. The courses will also give information on pack contents and possible areas of dispute.

The NAEA courses will run across the country. They will offer estate agents background information on home information packs, as well as advising agents on their roles and responsibility.

AHIPP’s deputy director general Paul Broadhead commented: ‘These courses are a vital step in the preparation of estate agents. I am pleased to see that NAEA is now focusing its energy on taking positive steps to inform and prepare its members about packs, rather than asking them to spend more time completing their endless questionnaires asking whether they support the introduction of packs, a pointless exercise when the decision to implement packs has already been made.’

He added: ‘NAEA are expecting there be a considerable take up with members urged to book early to secure one of the ‘limited spaces’ and I wish them every success. I would encourage estate agents that are still uncertain about the full implications of the packs or their involvement to attend one of these courses to ensure they are ready because as of 1st June next year HIPs will happen.’

Many professionals starting out at the beginning of their career will be all too aware of the time it takes for their career to start paying them dividends. Many of those in the country’s highest paid professions start out their careers on comparatively low salaries, as well as being straddled with the debts of years of study.

This fact has not been lost on HBOS, Britain’s largest mortgage lender which announced on the thirteenth of November that it will be launching a new mortgage lending up to 125% of the price of a new home to such cash strapped professionals.

It is expected that the loans will be used to help get young professionals onto the property ladder while also leaving them with enough cash to pay their stamp duty, legal fees and pay for furniture and improvements for their new homes.

Some however, fear that such large loans will make it ever more difficult to keep up with repayments and say that repossessions will increase as a result of such lending policies. A spokesperson for the Citizens Advice Bureau said that such mortgages could mean as much as half of a borrower’s monthly income will go towards mortgage payments and that such borrowers will be extremely vulnerable to increases in interest rates.

The new loans will only be offered through independent mortgage advisors and will not be offered in the banks branches. The bank has also said that it will operate extremely stringent criteria to ensure that only those borrowers who will be able to afford the products will be able to take them out. According to the bank this mortgage is a “niche product” and will only be targeted at appropriate customers.

The loan will require a 5% deposit on the cost of the home. Borrowers will then be able to borrow 95% of the house price on a secured basis, with a further 25% being offered as an unsecured loan. Both loans will be repaid in a single monthly payment.

Many have also criticised the high rates of the new loans,  which vary depending on the type of loan offered. Customers opting for a two year fixed rate will pay 5.89% for the first two years, which will revert to 7.09% thereafter. Many customers would be better served opting for a traditional loan and then seeking unsecured finance from more traditional sources at a lower rate.

Research firm unbiased.co.uk has revealed that almost four million parents (38%) across Britain have either put up the cash to help their children purchase a property or intend to do so in the future.  A quarter (25%) of these parents are contributing between £1,000 and £6,000, however 13% provide a whopping £20,000 or more in financial support.

Rather than children expecting a handout, the research indicates that it is parents who are happy to finance their children’s new nests. Parents expect their financial help to be used on a costly items involved in purchasing a new home, such as the initial deposit, legal fees and furniture.

Interestingly, more than three quarters of the parents (76%) don’t expect the money ‘lent’ to be repaid. However, this could have financial repercussions on the parents.

Karen Barrett of unbiased.co.uk comments:  “Parents need to ensure they can afford to make a contribution and consider how is best to raise the money. With such a large number of parents not expecting their children to repay them, they also need to consider whether they can replenish the funds.”

Ms. Barrett further advises: “Buying a home is one of the biggest financial decisions you will make. Even though our research shows parents are willing to help their children with this significant financial burden, the need for advice when making such a great financial commitment is clear.”

Unbiased.co.uk believes that both parents and children would benefit from independent financial advice, and urges both parties to visit an IFA when making a decision about buying a home. IFAs are the only advisers that look across a whole portfolio and provide specific IHT advice, and can therefore help parents make the most suitable decisions.