Only five% of first-time buyers used 100% plus mortgages

Despite being “very good” for first-time buyers, only five percent of them used the 100 per cent plus mortgages to get themselves onto the property ladder, one financial expert has claimed.

According to Firstrung these 100 per cent plus products were “niche products” which never became as popular as people made out.

Paul Holmes, chief executive officer of Firstrung, said that the media tried “to portray that people went out and had a hundred per cent mortgage on their property … they didn’t. They had a 95 per cent mortgage, and could take a loan up to 30 per cent or £30,000 – whichever was greatest”.

Firstrung said that the majority of first-time buyers who took 100 per cent-plus mortgage product took a 95 per cent mortgage and a ten per cent personal loan.

Mortgage lenders Northern Rock, Alliance & Leicester, Birmingham Midshires and Abbey have all withdrawn from the 100 per cent mortgage market.

These lenders have begun to require borrowers to supply the deposit on a new home themselves.

Tags: abbey, ladder, loan, cent plus mortgages, alliance, Paul Holmes, Birmingham, plus

Mortgage lenders try and pull in retail deposits

Mortgage lenders across the UK are trying to pull in deposits from savers after facing difficulties with borrowing money in the short term wholesale market.
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Tags: Mortgages, Bond, Sage, Birmingham, savings, number, banks, interest rates

Brits unprepared for money crisis

Millions of us are not handling our banking very well, meaning that we are not prepared for a financial crisis.

According to Birmingham Midshires, a large majority of us are not putting money aside in preparation for a change in out circumstances.

The firm carried out research into the matter and found that a staggering 95 per cent of us fear we would be financially crippled if we had to care for an elderly relative in old age.

The unexpected birth of a child would also leave many of us struggling, with 86 per cent saying that they would not be able to afford to bring up a child.

Redundancy is another area of concern, with 80 per cent admitting to being financially unprepared should the worst happen.

London is the region that would be most affected by redundancy as 82 per cent claim that they could not support their family in the short-term without their regular wage.

“It is alarming that so many people could struggle if hit by a financial emergency or unforeseen cost,” warned Jason Robinson from Birmingham Midshires.

“We are concerned about people’s liquid wealth – the money that should be available to them in a financial emergency.

“Much is talked about the need for saving for the long-term, but without an accessible savings pot set aside for that rainy day, short-term financial costs can leave families with severe difficulties,” he added.

The best advice for building up your liquid finances is to put a little aside from each pay cheque and do not use it until necessary.

Tags: accessible savings pot, pot, need, money, Birmingham, crisis, Business Finance, Pound sterling

Buy-to-let is growing

The buy-to-let market is set to grow in 2007, with the latest figures showing that around one fifth of mortgages will be taken out on homes which will then be rented.

According to Birmingham Midshires, the UK’s biggest buy-to-let mortgage lender, the coming year is likely to see a surge in lending for buy-to-let properties.

The lender carried out a survey of around 2,000 Britons and found that people of all ages are now looking to buy a property as an investment.

It found that 40 per cent of people in their 20s want to invest in a buy-to-let property at some point during 2007, while a quarter of single parents also want to do the same.

“The buy-to-let market has grown consistently over the past decade. When you consider the returns available, in terms of both capital appreciation and rental yield, it’s easy to understand why property investment continues to grow in popularity,” said Tim Hague from Birmingham Midshires.

“A growing number of people see property as an important part of a balanced investment portfolio.”

The buy-to-let market has consistently out-performed other investment opportunities in recent years and, with weekly rents having increased by 1.3 times the rate of inflation in the past ten years, it is understandable why many people are choosing to buy in this way.

Tags: Business Finance, buy-to-let market, investment, mortgage lender, Birmingham