It’s enough to leave us all thinking that anything else is a little mundane, however it is far from it. If anything it tells us to make the most of everyday life, to worry only about the things we can control, to rejoice in the mundane and make it as fun and worthwhile as we possibly can.

One of those mundane things is the UK property market. It seems that this will be flat for a while, with only growing regional differences to write about as London continues to exist within its’ own bubble.

But we have to deal with what we are faced by and whilst it may seem tough, there are always positives. With funding rates at an all time low there is an opportunity for many to finally make that move or to remortgage to protect themselves against the future.
Being able to borrow at just 1.90% would have seemed laughable a few years ago, whilst being able to fix for 2 years at just 2.49%, 3 years at 3.15% or 5 years at 3.64% a mere pipe dream.

With the unpredictable nature of things we also need to ensure that we all do all we can to protect ourselves. With fixed rates at an all time low, those of us who are more sensitive to future rate rises can act to secure payments. Those that have put off taking out the essential protection policies to ensure financial security should life take a nasty turn, well now is a good time to look into it again.

It never ceases to amaze me how many leave themselves and their families open to potential hardship by refusing to find the extra few quid it would take to secure their futures. After all, this is cash that is probably spent in the pub, or over a nice meal each month without thinking. Many of us spend more a month on coffee, (he says staring at a Starbucks cup), than we do on insurances that could literally save our home.

Whatever else is happening in the world, UK lenders seem hungry again for action and we should all be making the most of this. After all, there is not much point in us all going Back To Black.

RIP Amy.

Among the many voices trying to shout out different things at once, recent reports that the UK economy has been “running out of steam” seem to have done enough in the short term at least, to convince the MPC to hold their nerve.

The National Institute of Economic and Social Research (NIESR), for example, suggested that the recovery is faltering despite the economy growing by an estimated 0.7% in the first quarter of this year.

Meanwhile, figures from the Office for National Statistics showed a 1.2% drop in British industrial output in February, while manufacturing output was flat month-on-month, disappointing City analysts who expected growth of around 0.6%.

Taken together with reports that consumer confidence remains weak and consumer spending tight, you can understand this latest decision.

However, as ever, this is only part of the story. The European Central Bank faces a monumental decision this afternoon as to whether they will raise rates, with the majority expecting they will, which if followed through will heap more pressure on the Bank of England to follow suit.

While some argue inflation is being used to happily munch away at our public debt, others suggest that this makes matters worse as it is hampering our recovery and that the Bank must be seen to act to tackle the problem.

Charles Goodhart of the London School of Economics stated that high inflation was “raising the deficit and cutting consumption by reducing real incomes.” He was backed by, amongst others, Sir John Gieve, a former Deputy Governor of the Bank of England who said that the recovery, whether smooth or not, was still under way and therefore “the Bank can now afford to show it still cares about inflation”.

Meanwhile the interest rates being paid on short term Fixed Rate Bonds have been steadily rising, signalling an expectation of a Bank Base rate rise in the next few months.

As far as the mortgage market is concerned, there has been some concern that the cost of funding is about to get more expensive again. In the meantime there has been a return of some semblance of competition to the market, with reports stating that there are now more than 10,000 mortgage products available once more.

Fixes at 2.79%, (4.20% APR) for 2 years, 3.59% (4.80% APR) for 3 years and 4.39% (4.30% APR) for 5 years are still available for the time being, whilst tracker products with no penalties are available at just 2.35%, (2.40% APR).

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UPDATE 13:08 on April 7th 2011

Interesting to see that the European Central Bank, (ECB) have indeed INCREASED their Base Rate by 0.25% to now stand at 1.25% for the first time in 3 years as they react to higher inflation.

With the very public issues in Portugal some believed that the expected rise would be delayed, but even though this is likely to hurt countries such as Portugal worse as borrowing costs rise, this shows the ECB’s determination to take action before inflation begins to filter through into wage rises.

As mentioned above, this is likely to add further pressure  on the Bank of England to also take action sooner rather than later.

Given the amount of activity we have seen in the last few weeks, I would expect to see this figure increase further in the coming months as the traditional Spring uplift filters through.

Taken together with the latest report from the Royal Institute of Chartered Surveyors, (RICS), that says that the number of sellers has hit the highest level since May 2007 it would seem that a healthy property market is returning.

However,  the fact that many people seem a little non-plussed about the forthcoming General Election has caused a fair amount of uncertainty in the property market, which means we may see figures tail off slightly in the immediate run-up and aftermath of the election.

The good news, however, is that competition is returning to the market and there are now some very competitive rate offerings especially where fixed rates are concerned which are starting to attract remortgage customers back into the market. With 2 year fixed rates now available from as low as 2.98% and with the lowest Bank Variable Rate at 2.5% it is more than realistic to expect that rates will have to rise by more than 0.5% over the next 2 years.

Once the election, and the World Cup, is out of the way, whilst I do not expect activity to jump significantly, I do expect moderate growth in activity for the remainder of the year as long as mortgage funding remains no less available than it is at present.

No doubt the recent changes in stamp duty for First-Time Buyers will assist and it is this key demographic that needs to be nourished in order for the housing market as a whole to flourish.

With the General Election looming these figures suggest that property purchases will continue to tail off until a new government is firmly in place and people know who, and what, they are dealing with.

While we may see a slight uplift due to stamp duty changes for first time buyers and people buying property above £1m wanting to move before the year is out, this is unlikely to occur until after the next Budget.

It’s encouraging to see that remortgages are up. More and more homeowners, who have been sitting on an SVR for some time, are starting to remortgage while rates are still as low as they are. In many cases, increased lender competition has pushed rates down to levels that are below many SVRs, so it makes sense to remortgage.

Borrowers are aware that the current low interest rate environment will not go on forever and that it may be good to remortgage now while they are still ahead.

Looking forward, we’re not expecting borrowing levels to accelerate significantly in the run-up to the General Election, and they may even fall back slightly post-Election.

Come the second half of the year we’ll know far more about how the mortgage and residential property markets are likely to fare in the short term.

While it’s considerably easier to get a mortgage than it was a year ago, it is still considerably more difficult — and rightly so — than three years ago.

There has been a slight improvement in product availability and rates in the 80%-85% LTV range, although at 90% loan to value the market is still very limited.

Borrowers need to be aware that the days of sitting pretty on an SVR are coming to an end, as we have seen most tellingly with the recent increase in Skipton Building Society’s standard variable rate.

As far as interest rates are concerned you could argue, as I have said before, that Bank Base has now entered a new phase – I call it “the expectation phase”. This is where many people expect a change but are not quite sure when, or by how much, and it is this expectation that can be a driver for all manner of decisions.

The real issue is how all of us are going to be affected as the artificial stimulus is slowly removed. As the end of QE, the car scrappage scheme, VAT concessions, etc, begin there are some real questions to be answered, not least is that the possibility of a second mortgage shortage is rearing its head as lenders struggle to find the cash to lend out.

I have always thought that this year will be “front-end loaded”, in other words that there will be better mortgage products, lower rates and more mortgage availability in the first half of the year than the latter.

This means that whilst it feels like things are improving now, with property prices recovering and lenders looking to lend at higher Loan-To-Values do not be surprised if it all turns around again after the election and the hiatus of the World Cup.

However, whilst things will remain tough for the remainder of the year, the positive signs and shifting in attitudes is everywhere to be seen and just as it will not take much to tip into the dark again, likewise it may not take too much to grab the reigns of a recovery. A decisive election, or rather whoever is elected, (hung parliament or not), delivering a decisive budget, together with a successful World Cup to harness the good feeling would help inordinately.

We have seen a massive rise in enquiry levels, from purchasers wanting to take advantage of low rates and competitive house prices, to remortgage customers looking at fixing before variable rates inevitably rise. As soon as there is any decisive action on rates, or the mere sniff of it, I expect fixed rates to burst with popularity and rise accordingly.

For first time buyers I do not see much change in the current status quo. Whilst there will be more availability of products aimed at the lifeblood of the housing market, a decent deposit, a good credit history and a sensible level of borrowing to income will remain for a long time yet. This means that without the Bank of Mum & Dad stepping in to assist those looking enviously at the property market now need to carry on saving like crazy.