Housing estateMore than a million home owners will see the cost of their mortgage payments increase from Tuesday.

The majority of those affected are Halifax customers, who could typically find themselves paying nearly £200 extra a year, following a series of recent rate rise announcements from lenders.

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The Co-operative Bank, Clydesdale Bank and Yorkshire Bank are also among those raising rates, blaming the weak economy and the increased cost of funding a mortgage.

Fears have been raised that people could struggle to switch to a better deal as lenders have already started tightening their borrowing criteria, triggering a fall in the proportion of mortgages being approved.

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Halifax is raising its standard variable rate (SVR) from 3.5% to 3.99%, affecting 850,000 home owners. Borrowers revert to paying an SVR when their fixed rate deal ends.

The average balance of those affected is £67,500, meaning payments would increase by nearly £16.40 a month to £498.95 on a capital repayment mortgage with 15 years remaining. This equates to nearly £200 extra a year. Someone with a higher balance of £100,000 would pay £24.30 extra a month, with monthly repayments going up to £739.19, the equivalent of nearly £300 more annually.

Around 54,000 Co-operative Bank customers will see SVR rates go up by 0.5% to 4.74%, meaning payments will typically increase by £15 a month, or £180 a year.

Clydesdale and Yorkshire Banks' SVR rate will rise from 4.59% to 4.95%, affecting 30,000 customers, whose payments will typically go up by less than £30 a month.

RBS-Natwest is also pushing up the rate on its One Account, a non-SVR product, by 0.25%, affecting around 100,000 customers. For the majority of these customers, the new rate will be 4%.

Borrowers who have not managed to pay off much of their loan or are in negative equity could find themselves stuck with their existing lender and unable to switch to another provider. They will face more probing questions to prove they can pay back loans when stricter mortgage rules are introduced from next year.

Things that damage property value

Factors damaging property value

  • Repossessions
    <p> Pre-recession, homeowners would give little thought to the idea that local repossessions could affect the value of their home. 101 repossessions were recorded every day during the third quarter of 2011 and it has become a real concern.</p>
    Repossessions
  • Crime
    <p> A new crime map introduced in March 2011 was welcomed by buyers, but approached with trepidation by homeowners concerned about the impact on local property values. The map allows users to view crime statistics online by postcode to find out the crime rates and types of crime in any area.</p>
    Crime
  • Local closures
    <p> It is widely recognized that schools with a good reputation increase competition and property demand within a local area, which in turn increases the values of property within the catchment area. Lose the school and the demand will cease too.</p>
    Local closures
  • Flood risk
    <p> The devastation caused by flooding in recent years doesn't appear to paint a positive picture for homeowners faced with the financial and emotion cost of a huge clean up, insurance complications and the potential damaging effect on property values.</p>
    Flood risk
  • Transport
    <p> The proposed high speed rail link is depressing house prices for thousands of homeowners on the route and many homeowners feel helpless to stop tumbling property values.</p>
    Transport

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