Mortgage markets still look bleak

According to a leading industry group the mortgage market in the UK still looks bleak, with the lenders stating that it has become ’stuck in a rut’. Over the course of February it is claimed that the low levels of lending have continued. Officials have said that the level of lending for the month of February were nearly as low as they were for January, with around £9.5 billion of gross lending.

The Council of Mortgage Lenders released the figures, and they have stated that it is likely that this year will continue to be a challenging and difficult one when it comes to the mortgage and property sectors. Another survey has revealed how the cost of renting has shot up as a result of so many people being unable or unwilling to get a mortgage, which has resulted in a higher demand for rented property.

The Council of Mortgage Lenders has said that part of the problem stems from restrictions amongst lenders when it comes to granting mortgage finance. However, the group also said that there was a definite drop in consumer appetite for new borrowing, with many people too worried about their financial situations and their job security to risk taking on a huge mortgage.

One official also commented on the increase in rents and demand for rented property, stating: “The fierce competition among renters in many areas of the country has cut short the traditional lull we tend to see between December and February. The consistently constrained level of lending to home buyers has bolstered demand – and rents – in the private rental sector during what is typically a slower period. With the mortgage market even more sluggish since the start of 2011, this backlog of frustrated buyers has increased even further and rents have risen correspondingly.”

Tags: result, council of mortgage lenders, job security, Mortgages, huge mortgage

September figures indicate that mortgage market will remain subdued

Industry officials have said that the mortgage lending figures that were recently released for September of this year indicate that mortgage lending levels are set to remain subdued for some time to come. Officials from the British Bankers’ Association said that a further fall in mortgage approvals in September was indicative of a continued slump in the mortgage sector.

September saw mortgage lending levels in the UK plunge to their lowest leve in ten years, and the number of mortgages that were approved also nosedived, falling to their lowest level in around eighteen months. The figures, which were released by the British Bankers’ Association, showed that net mortgage lending by the major banks came to around £1.6 billion for the month, which was its lowest since October 2006.

Industry experts have said that the figures that have been released seem to suggest that mortgage lending will continue to be slow and the market will remain subdued over the coming months. Officials have also said that potential buyers will remain cautious over the coming months which will further hamper the mortgage market.

Figures that were recently released by the Council of Mortgage Lenders mirrored the bleak outlook suggested by the BBA reports, and HM Revenue & Customs also released date showing that the number of property sales had also taken a hit. HMRC said that August saw the first significant property sales fall this year, with the sale of property said to have fallen.

In further bad news for the property market property prices are also set to fall further, with figures showing that they have already experienced another fall in September, which has taken the annual rate of gain down to just 2.6 percent.

Tags: mortgage lending, mortgage lending levels, british bankers association, market property prices, council of mortgage lenders, mortgage, finance, leve

Financial regulator defends plans over mortgage lending

The UK’s financial regulator, the Financial Services Authority has recently been defending its plans and proposals with regards to the mortgage and property markets, stating that something has to be done in order to avoid another crisis like the one seen over the past couple of years since the onset of the global financial crisis.

The FSA has taken a lot of flack from group such as the Council of Mortgage Lenders over the plans and proposals that it made relating to the mortgage sector. The regulator wants to put an end to the interest only mortgage, which the CML believes will eliminate any chance of some people getting onto the property ladder. It is also thought that plans to reduce the LTV levels that can be offered by lenders could further decrease affordability for potential buyers.

The FSA has now said that individual affordability needs to be carefully assessed to help the industry from experiencing the chaos that has been seen over the past couple of years. He said that in the past it was assumed that lenders were being responsible when it came to mortgage lending and taking risks, and that’s why these measures had not been required in place at the time. However, he added that times had changed especially in the financial market and measures were now needed to increased security.

She said: “We believe that a robust and effective assessment of individual affordability has to underpin any sustainable lending model. When developing the current regime, we assumed that lenders would have a prudential self-interest to manage their credit risk responsibly and, therefore, prescriptive conduct requirements were not required. That has been shown to be a mistake and we are therefore proposing to be much more explicit about the standards we expect.”

Tags: fsa, prescriptive conduct requirements, interest, council of mortgage lenders, Financial Services Authority, onset, mortgage, finance

Mortgage drought could affect many people

Industry experts have said that under current plans that have been proposed by the UK’s financial regulator, the Financial Services Authority, many people could be facing a mortgage drought that could leave them unable to get the mortgage finance that they need in order to get onto the property ladder.

The mortgage market is already very restricted, as it has been since the onset of the global financial crisis several years ago which almost brought the banking and financial systems to their knees. However, experts from the Council of Mortgage Lenders have said that things could get even worse under new rules from the FSA.

The Council of Mortgage Lenders has said that if these regulations had been in place over the past four years over 50 percent of mortgages that were granted over this period would have been refused, causing huge problems for those that were looking to buy a property and get onto the property ladder.

The CML claims that this would have equated to around four millions additional mortgage loan rejections if the FSA had its regulations in place in 2005. The group said that this shows just what a negative impact the rules could have in the current financial climate. A review by the CML suggests that under the new proposed regime millions more people a year could be turned down for a mortgage loan.

Figures show that the number of mortgage approvals in the UK have already plunged, with numbers having fallen to around 50,000 per month compared to 135,000 a months before the credit crisis hit. This has been made worse due to the strict restrictions that banks have put in place when it comes to lending, as well as the higher deposit levels being demanded.

Tags: council of mortgage lenders, market, property ladder, Financial Services Authority, mortgage, UK's financial regulator, Mortgage loan, financial

Mortgage lending hits ten year low for August

Recent figures released by the Council of Mortgage Lenders has shown that mortgage lending levels for August fell to the lowest levels in ten years for the month. The CML said that activity in the housing market remained ‘exceptionally’ low for the month, with lending levels for the month making for gloomy reading.

The CML has now stated that the second half of the year is likely to be a difficult one, with lending levels expected to be below the level seen during the final months of last year. This is partly due to the fact that activity was more buoyant in the final months of last year due to the fact that the stamp duty holiday provided by the former Labour government was coming to an end at the end of the year.

The group did state that there was a slight drop in average mortgage rates for the month of August, as competition in the mortgage market increased, driving interest rates down slightly. However, restrictions still remained tough amongst the various lenders who were being cautious about lending.

Banks and financial institutions have also continued to demand high deposit levels from groups such as first time buyers, which is still having an effect on lending levels, as it means that many are unable to apply for a mortgage because they do not have the necessary deposit to back it up.

Net6 lending for the month of September is set to remain subdued, as lenders have reported a slight fall in the number of mortgages that have been approved for property purchases for the month of August.

In the meantime the Bank of England has stated in its most recent quarterly bulletin report that lenders have been failing to pass on base rate cuts to consumers, partly due to the fact that they faced higher borrowing costs themselves.

Tags: mortgage market, finance, borrowing, council of mortgage lenders, gloomy reading, mortgage, Mortgage loan

Mortgage market in Scotland sees improvement

Recently released data has shown that the property and mortgage markets in Scotland have shown surprising improvement in the second quarter of this year, with officials expressing surprise over the figures that have been released by industry groups.

Figures were released by the Council of Mortgage Lenders, and it appears that things have improved with both first time buyers and home movers in Scotland. Officials have said that they will be keeping a close eye on the property and mortgage markets in Scotland for the remainder of the year, and could find that the markets outperform those in the rest of the UK if the performance continues as it has done so far.

The Council of Mortgage Lenders said that in the second quarter of this year the number of mortgage agreements for first time buyers increased by an impressive 18 percent, bringing the total for the second quarter to 4700. The total value of these mortgages came to £419 million, and this reflected an increase in total value of 27 percent compared to the first quarter of the year.

The figures from the Council of Mortgage Lenders also showed great improvements in the mortgage and property markets for those that were moving house. Over the course of the second quarter of the year 8000 loans were taken out, and this reflected an increase of 36 percent, which has surprised many experts.

It is thought that part of the reason behind the improvements in these markets is that lenders in Scotland appear to be getting more relaxed when it comes to granting and approving mortgage loans. The average deposit requirement for first time buyers has fallen from 23 percent to 21 percent, and some think that this may have helped to renew hope and confidence amongst buyers.

Tags: mortgage markets, mortgage, scotland, council of mortgage lenders, value, time buyers

Improvement in mortgage lending continues

For the past couple of years many people have found it increasingly difficult to get a mortgage loan, with many unable to get the finance that they need from the lenders in the UK, who have been exercising more caution when it comes to lending money.

However, over recent months the end of the recession has marked an easing in the financial markets, and lenders have become more relaxed about handing out finance to consumers. This could help people to obtain mortgage loans more easily, and could enable those struggling to get onto the property ladder to finally get the loan that will enable them to live their dream.

The Council of Mortgage Lenders has recently confirmed that mortgage lending levels have already increased, with the level of mortgage lending having increased by around 7 percent last month. However, the CML has said that whilst the level of mortgage lending has increased it is still far lower than the level of lending that was seen last year.

The CML has said that mortgage lending is still subdued in the UK, and despite the fact that the recession is over and financial markets are meant to have improved the market remains difficult and challenging. In fact, the CML believes that the total level of lending for this year could fall short of the forecast total of £150 billion.

The CML also said that a number of factors would affect the housing and mortgage markets such as consumer confidence levels in the mortgage and financial markets, and also household finances. Credit conditions are still said to be tight when it comes to getting a mortgage loan, and it is thought that many consumers, especially first time buyers, will continue to experience difficulties.

Tags: business, mortgage, Mortgage loan, forecast total, council of mortgage lenders, interest rates, Council, finance

April sees drop in mortgage lending

The mortgage lending figures for April in the UK have suffered a fall according to recently released figures. The figures were released by the Council of Mortgage Lenders earlier this week, and showed that in April gross mortgage lending fell by 12 percent.

The figures from the Council of Mortgage Lenders showed that the level of mortgage lending for the month reached a value of £10.2 billion. This marks the lowest level of mortgage lending in the UK during April for ten years according to reports. The figure reflected a £1.4 billion drop compared to the previous month, with mortgage lending levels for the month of March coming in at £11.6 billion.

The level of mortgage lending this April was also down by 1 percent compared to April of last year, when the mortgage and property markets were still severely depressed. Officials from the Council of Mortgage Lenders said that there were expectations of a slight decline in mortgage lending for the month of April due to a number of factors, including when the Easter holiday fell this year.

However, despite the discouraging figures the Council of Mortgage Lenders has said that the mortgage market is still on target at present to reach its aim of lending £150 billion in mortgage loans over the course of the year.

Whilst the mortgage market has seen some level of recovery over recent months there are still a number of problems facing groups such as first time buyers. Many are still being expected to raise a fairly sizeable deposit by lenders, which is hampering their efforts to get onto the property ladder, and these demands are being made due to the financial difficulties that are still affecting some of the banks themselves as they try to recover from the financial crisis.

Tags: financial crisis, council of mortgage lenders, finance, Business Finance, mortgage, property markets, gross mortgage lending

Stamp duty holiday affects mortgage lending figures for January

It has been revealed in a recent report that the level of mortgage lending for the month of January has been badly affected by the end of the stamp duty holiday, which came to an end on 31st December last year. Read more

Tags: percent drop, council of mortgage lenders, advanced warning, mortgage, mortgage lending, stamp duty, stamp, duty holiday

FSA slated over its treatment of lenders

According to recent reports the Council of Mortgage Lenders has accused the UK’s financial regulator, the Financial Services Authority, of treating banks and other lenders like ‘drug dealers at the school gates’. Read more

Tags: mortgage, Matthew Wyles, council of mortgage lenders, Financial services, Financial Services Authority, Economy of the United Kingdom

CML revises repossession forecasts again

It has been reported that the Council of Mortgage Lenders has once again cut its forecasts for repossession numbers in the UK, having taken more recent industry figures and market conditions into consideration. Read more

Tags: Business Finance, cml, time, quarter, council of mortgage lenders, Mortgages, CML revises repossession, repossessions

First Time Homebuyers in Scotland Being Frozen Out of the Market

Due to the recession and the slump in the housing market, lenders are requiring higher deposits on mortgages before they will approve a loan for a person interested in purchasing a new home. Read more

Tags: finance, council of mortgage lenders, 25% deposit mortgages, first time home, palpable increase

More first time buyers try and get mortgage advice

According to a recent report more first time buyers are now looking to get mortgage advice, as the market continues to throw hurdles in the way of the average first time buyer. Read more

Tags: latest figures, first time buyers, low, Mortgages, whilst, business, mortgage advice, council of mortgage lenders

Will banking industry reforms results in higher loan and mortgage costs?

In the current financial climate most people are already struggling to keep on top of their borrowing costs, and most can ill afford to cope with even higher borrowing and mortgage costs. Read more

Tags: council of mortgage lenders, banking reforms, loan costs, consumers, mortgage customers, mortgage costs, sweeping reforms, billions

CML releases repossession figures

The Council of Mortgage Lenders released figures last week that showed the level of repossessions in the UK had increased by 50% in the first three months of this year compared to the first quarter of the previous year. The number of repossession is said to have soared to 12,800 in the first three months of the year, and this was up from 10,400 in the previous quarter and from 8,500 in the first three months of 2008. Read more

Tags: house market, council of mortgage lenders, repossessions, final three months, Mortgages, Lenders released figures, buy-to-let, repossession numbers

Mortgage Approval Rates are on the Rise – Is the Recession Coming to a Close?

According to the figures from the mortgage industry for the month of March, it seems that lenders are once again starting to approve mortgages for homeowners. An increase of 16% in the number of mortgages approved in March seems to send a signal that the recession in the UK housing market may have bottomed out and is finally starting to rise once again. Read more

Tags: housing market, director general, council of mortgage lenders, Chartered Surveyors, recession

More breathing space over stamp duty

Following his recent budget, Alistair Darling, the Chancellor of the Exchequer, revealed that the break on stamp duty on properties up to a certain value was to be extended until the end of this year. Read more

Tags: stamp duty, term impact, new-build housing market, house buying, council of mortgage lenders, london, step

Home loans are not going to become more readily available yet

Industry experts have recently confirmed what most people have already worked out for themselves – that the availability of home loans in the UK is not likely to increase anytime soon. Read more

Tags: council of mortgage lenders, market, mortgage deals, mortgage, official

Consumers’ hopes were falsely raised over assistance with mortgages

According to officials from the Conservative Party, the hopes of consumers across the UK were falsely raised by the Prime Minister, Gordon Brown, due to the delay with the Homeowner’s Support Scheme. Read more

Tags: leader, council of mortgage lenders, homeowner, officials, nick clegg, family, shadow housing minister, Homeowner Mortgage Support Scheme

Mortgage lending hits lowest level in thirty four years

According to a recent report mortgage lending levels last year hit their lowest point in thirty four years, with figures at their lowest since 1974. Read more

Tags: Mortgage broker, massacre, Credit (finance), Mortgages, mortgage lending, wreak havoc, council of mortgage lenders

Repossessions increase by 92 percent in a year

According to a recent report the number of homeowners that were losing their homes through repossession in the third quarter of last year rocketed by 92 percent. Read more

Tags: repossession, business, council of mortgage lenders, Financial Services Authority, total mortgage debt, homeowners

Increased popularity for cheaper fixed rate mortgages

Recently released figures have suggested that new lower fixed rate mortgages may be gaining popularity again, with borrowers keen to take up lower rate deals yet enjoy stable repayments for a fixed period of time to help them to budget more easily in the current difficult financial climate. Read more

Tags: bank of england, rate deals, Mortgages, finance, council of mortgage lenders, deal

Mortgage arrears to rocket

According to recent reports the level of mortgage arrears in the UK is set to rocket, with some industry reports claiming that there could be a huge rise in the number of people in arrears in 2009 despite the aggressive base interest rate cuts that have been applied by the Bank of England. In fact, around half a million households are set to fall behind with mortgage repayments in the coming year according to the reports, which come from the Council of Mortgage Lenders. Read more

Tags: year's figure, mortgage arrears, council of mortgage lenders, lending, mortgage, intervention, top

Should you pay your rent upfront to save money?

Over the past year renting has become increasingly popular, as many people have struggled to get a mortgage and buy a home, making the option of renting far more appealing. Also, difficulties that sellers have had in selling their properties in the current financial climate has resulted in an increase in the number of properties coming up for rent, which has resulted in increased choice and better value for money for many consumers. Read more

Tags: landlords, Council, rent payments, council of mortgage lenders, tenants, Real property law, best deal

CML said mortgage lending fell again in August

According to officials from the Council of Mortgage Lenders mortgage lending levels fell in August, with the value of mortgage lending having fallen by 12 percent compared to July and by 36 percent compared to August of the previous year. The total amount of new mortgage lending for the month came to just £21.8 billion. This was the lowest level of mortgage lending since 2005 and the lowest level of mortgage lending in August since 2002. Read more

Tags: industry, property transactions, amount, new mortgage lending, long house prices, council of mortgage lenders, economics, mortgage lending

Banks need to reduce their mortgage arrangement fees

At a time when borrowing has become increasingly expensive, and when household finances have become tighter and tighter due to the global credit crunch, higher bills, increasing living costs, and higher petrol prices, the UK’s mortgage lenders have decided to deal borrowers another blow by hiking up mortgage arrangement fees, making it even more difficult for the average struggling consumers to take out a mortgage or remortgage. In fact, in the current climate some poor consumers could find themselves facing fees of thousands of pounds to remortgage or take out a mortgage, making the whole process impossible for some who simply cannot cope with that sort of fee. Read more

Tags: fsa, issue, Mortgages, council of mortgage lenders, matter, UK's financial regulator

Expert highlights need to help those struggling with mortgages

Helping homeowners who are struggling with mortgage repayments is one of the key housing issues in Northern Ireland, according to an industry expert. Read more

Tags: Mortgages, mortgage help, Department, price, council of mortgage lenders, business, expert, position

It’s ‘always worth’ comparing mortgages, says expert

Independent website Your Mortgage has told consumers not to be content with their current mortgages deals because it is “always worth” comparing mortgages from different lenders to try to get a better one. Read more

Tags: Mortgages, Super jumbo mortgage, Association, finance, compare mortgages, council of mortgage lenders, different lenders, Mortgage loan

Homeowners facing arrears advised to speak to lenders

Homeowners who think they are getting into difficulties with their mortgage repayments should speak to their lender as soon as possible, an industry expert has advised. Read more

Tags: mortgage lending, mortgage payments, council of mortgage lenders, option, plan

Building society lending down

The number of loans being handed out by building societies has fallen, according to the Building Societies Association (BSA).

Adrian Coles, director-general of the BSA, said: “Lending at building societies was down year on year. This is partly due to building societies withdrawing products and increasing rates on new lending so that they do not become overly competitive.”

He added that some building societies have found themselves “inundated with applications” and were forced to limit their lending to preserve “high levels of service” as other lenders withdrew from the market.

Mr Coles also believes that the situation may be a product of the “greater level of uncertainty in the housing market” causing prospective buyers to wait.

The announcement comes as the Council of Mortgage Lenders (CML) praised HSBC’s recent offer to match the interest rate of any borrower coming to the end of a fixed rate deal as “a good example of market innovation”.

A spokesperson for the CML said that the offer highlighted that “there is still competition in the market despite obvious pressures”.

Tags: council of mortgage lenders, market innovation, Mortgage loan, borrower, building societies association, market, innovation, new lending

UK mortgage market worst in 30 years, warns expert

British home buyers are facing the toughest conditions in the mortgage market the country has seen for 30 years, the UK’s largest house builder, Persimmon, has warned. Read more

Tags: uk, Darling revealed plans, house, council of mortgage lenders, Mortgages

Tracker mortgages growing in popularity

Tracker mortgages are growing more popular than fixed-rate mortgages as a result of expectations that the base rate of interest will fall, it has emerged.

A total of 35 per cent of borrowers opted for a tracker mortgage last month, up from 33 per cent in January, according to new research from the Council of Mortgage Lenders (CML). This figure was up from 14 per cent a year ago.

Meanwhile, fixed-rate mortgages fell to their lowest level of popularity since March 2005.

“The trend away from fixed-rate products continues as expectations of further bank base rate reductions, probably starting this week, have increased,” commented Michael Coogan, director general of the CML.

The Bank of England’s Monetary Policy Committee will meet on Thursday (April 10th) amid predictions that the current base rate of 5.25 per cent will be reduced.

However, expectations of a cut in official rates have also prompted lenders to increase their rates on tracker mortgages.

The CML also reported that the number of loans for house purchase dropped by 3.5 per cent from last month to 49,200, the lowest quantity since records began in 2002.

Tags: CML.The Bank, council of mortgage lenders, Bank of England's Monetary Policy Committee, lowest quantity, cent, base rate

2008 will be a ‘double-edged sword’ for first-time buyers

Falling house prices and uncertain times will make next year a “double-edged sword”, according to the Council of Mortgage Lenders (CML).

Sue Anderson, head of external affairs at the CML, said: “On one hand, if the prices come down or even if they just stabilise, to a degree, that is good news for first time buyers.”

It is expected that consumers’ earnings will close the gap between that and house price inflation.

On the other hand consumers may “feel a bit wobbly in light of what has been going on in the market,” said Ms Anderson.

First-time buyers will be subject to confidence issues in relation to predicting behaviours in the housing markets, she concluded.

The Halifax House Price Index detailing the month of November stated that prices dropped by 1.1 per cent, yet prices are 6.3 per cent higher in annual terms.

Overall growth in house prices has slowed over recent months as the increase in interest rates between July 2006 and July 2007 has taken effect.

Tags: increase, council of mortgage lenders, house, mortgage, time, sue anderson, loan, time buyers."It

CML: FSA findings a ‘wake-up call’

The Council of Mortgage Lenders (CML) has responded to the Financial Services Authority’s (FSA) publication of case studies of good and bad practise in mortgage brokers’ treatment of consumers.

It welcomed the publication, saying that it would act to help improve the quality of overall service.

The CML will support any action against brokers who fall short of targets outlined by the FSA and brought to their attention.

It states that good brokers’ practise is undermined by those who fail to meet industry standards.

Director general of the CML, Michael Coogan, commented: “After three years of regulation, the FSA is right to expect its regulatory standards to be in place across the whole market. These findings are a wake-up call to those brokers who are behind the pace.”

He added that the FSA must ensure its expectations are explained with clarity, a stipulation especially important for small broking firms.

Banks, building societies and other lenders make up the membership of the CML, which supervises 98 per cent of all residential mortgage lending in the UK.

Tags: loan, uk, practise, council of mortgage lenders, industry, pace

Mortgage tightening to ease next year

The tightening of the mortgage market will ease somewhat going into the new year, according to the Council of Mortgage Lenders.

Sarah Robson, a spokesperson for the trade association, explained that interest rate falls would take some pressure off the market making it less tricky for borrowers to obtain adverse credit mortgages.

Interest rates are predicted to fall to five per cent by the middle of next year, offering some hope to borrowers

Ms Robson explained that homeowners with poor credit history may be able to improve their status.

She said: “If they did have a good credit history for five years straight, that would be taken into consideration – but their previous record would still be there.”

The next decision on the Bank of England base rate, currently at 5.75 per cent, will take place on December 6th this year.

Yesterday, the BBC report that a range of its adverse credit mortgages will be withdrawn today, due to market tightening.

Tags: New Year's Day, adverse credit mortgages.Interest, record, economics, council of mortgage lenders

Brits’ confusion over interest rates ‘worrying’

It is “worrying” how few people in the UK fully comprehend the impact of rising interest on their mortgage repayments, said CreditExpert.

According the credit report monitoring service’s Personal Credit Index survey, as many as 70 per cent of people asked, were not clear of the implications of the effect of interest on an example given to them and gave the wrong answer.

Respondents were asked to estimate the effect of a 0.5 per cent interest rise on monthly repayments for an interest-only mortgage of £100,000. Almost a fifth (19 per cent) guessed at £80 while 17 per cent estimated it at no more than £10. In fact, the correct answer was a £40 increase.

Furthermore, around eight in every ten mortgage holders were unaware of the meaning of annual percentage rate (APR).

Jim Hodgkins, managing director at CreditExpert.co.uk, said: “Although the current Personal Credit Index shows that people generally are more confident than in the last quarter, the lack of understanding of key terms and the effect of interest rate changes is worrying.

“It’s important for people to be familiar with standard financial terms and stay on top of changes that affect their personal finances so they can make the best possible decisions and choices.”

Tags: monthly repayments, Brits, mortgage repayments, Credit Index survey, council of mortgage lenders

Mortgage lending hits record level, says CML

Mortgage lending has hit a new high, according to latest statistics from the Council of Mortgage Lenders (CML).

Gross lending hit an all-time July record of £34.4 billion, according to figures released by the industry body today.

Although the amount is slightly down on June’s results, this nevertheless represents a 13 per cent rise on the equivalent figures for 2006.

A CML spokesperson said that the record figures did not mean that the trend was set to increase: “As we move into the autumn the cumulative effects of [interest] rate rises will become more pronounced, and we expect this to feed through to lower levels of mortgage lending as the year progresses.”

Interest rates were raised by the Bank of England in July to 5.75 per cent, the fifth such increase in a year.

Commenting on the CML’s figures, chief economist at the Royal Institute of Chartered Surveyors (Rics), Simon Rubinsohn, also counselled caution, saying that “the turmoil in financial markets will push up mortgage costs for in vogue longer term fixed rate deals and will further slow the residential property market.

“With 90 per cent of borrowers opting for fixed rate security, those who are already financially stretched will find themselves paying a higher price for the added peace of mind,” he added.

Tags: record, year, peace, June, council of mortgage lenders, body

Savings gulf opens up in UK

New research from Alliance & Leicester, released today, shows that Britons hold six times more in savings and investments than they do in debt.

Property was totted up as being worth £4.3 trillion, savings at £820 billion, with other assets including pensions totalling £1.8 trillion. Total borrowings came to £1.3 trillion.

This impressive ratio – gleaned from figures from the Bank of England, the Council of Mortgage Lenders and the government by the pollster YouGov – hides a financial gulf splitting the populace.

While richer households enjoy the property boom and the strong economy, lower income households are saving less as belts are tightened.

Evidence for this is found in savings figures: while the national average comes to £31,300, almost one third of households have no savings at all – pointing to a big split between the “haves” and the “have nots”.

Alliance and Leicester pointed out a general decrease in savings, with the bank’s head of savings and investments Ewan Edwards pointing out that on average just 2.1 per cent of disposable income is currently saved by Britons, when the figure averages out at 6 per cent over the last decade.

“Britons are increasingly losing the savings habit”, he concluded.

Tags: split, splitting, Council, bank of england, belts, britons, council of mortgage lenders, income

Mortgage lending may be easing

Mortgage lending has continued to grow, with figures for May breaking records for the month.

The Council of Mortgage Lenders (CML) says that May lending figures reached £30.6 billion, a 12 per cent increase on the £27.4 billion that was lent in April.

The figure was also a five per cent increase on the £29 billion that was lent in May 2006 but the CML says that this shows that the market is easing.

Despite breaking records, the year-on-year growth of five per cent is well below the typical 12-15 per cent increase we are used to seeing.

Although this is a clear sign of the market easing up, the CML says that May’s figures remain very strong.

“While today’s lending figure is a new record for the month of May, it does indicate that the market is slowing down following the rapid and sustained growth we saw last year,” said Michael Coogan, director general of the CML.

“Going forward we expect lending to ease as we progress through the year, but the market will remain in good shape.

“Although further interest rate rises will continue to dampen demand, we are still on course to meet our prediction of a record £360 billion of lending during 2007,” he added.

Some experts are expecting the introduction of Home Information Packs into the property market from August of this year to help boost house prices.

Tags: General, month, good shape, home, course, council of mortgage lenders, progress, sustained growth

Mates rates for mortgages?

Taking out a mortgage with a group of friends is an increasingly attractive option for people looking to get onto the property ladder, according to Moneyfacts.

Moneyfacts is saying that while there are various concerns and pitfalls to ‘mate rate’ mortgages, this is nevertheless a form of lending that banks will now consider.

Over 60 per cent of mortgage lenders, including HSBC and Britannia will consider mortgages for a group of up to four individual salaries.

As interest rates and property prices both rise, more people may begin to consider this option.

Julia Harris, mortgage analyst at moneyfacts.co.uk, called the ‘mate rate’ mortgage a “relatively new option for first-time buyers which has not been explored”.

A spokesman from the Council of Mortgage Lenders told Moneyfacts: “Buying with friends can be a realistic way to get onto the housing ladder, and can be cheaper than renting.”

However, pitfalls include the possibility that one party might lose their income or decide to desert the house once the mortgage is up and running.

Tags: option, mortgage, mate, hsbc, council of mortgage lenders, pitfalls, britannia, mortgage analyst

First-time buyers taking risks

First-time buyers are prepared to take bigger financial risks to get on the property ladder as house prices continue to rise.

As the third interest rate rise in five months looks set to have just a minor impact on the price of a house, Yorkshire Bank says many consumers feel forced into taking big chances with their future.

According to the bank, three out of five first-time buyers would consider taking out a home loan that was five times their income.

In addition, 80 per cent would also consider getting a mortgage which is paid back over more than 25 years in order to make the monthly payments more manageable.

“With the average house price nearing £200,000, this year may feel like the last chance saloon for first-time buyers already finding it hard to buy,” said Gary Lumby from the bank.

“Saddling themselves with such huge debts isn’t wise as they could still be paying off their mortgage well into their sixties or even seventies.

“They may also face breaking point should interest rates increase again. Unfortunately for some, they feel it is their only option,” he added.

Yorkshire Bank has also found that 28 per cent of first-time buyers are so keen to get onto the property ladder that they are willing to offer above the asking price straight away for a house which they want.

In response to the current housing climate, 15 per cent of parents have started a home fund to help their children buy a house when they are older.

Tags: yorkshire bank, chance, bank, council of mortgage lenders, business

FSA makes MEAF statement

The Financial Services Authority (FSA) has released a statement on mortgage exit administration fees (MEAF).

The organisation was responding to recent concerns which have been raised about MEAFs which have been unfairly increased.

It means that some consumers have been charged higher exit fees than was originally agreed and has made switching mortgage lender and paying a mortgage off early more difficult.

FSA officials have now said that lenders have four options, one of which they must settle on by February 28th.

Lenders can either charge no MEAF whatsoever, charge the original MEAF, a revised MEAF or the current increased MEAF.

“We expect that these measures, agreed with the Council of Mortgage Lenders, will stop borrowers from being surprised by unexpected increases in these fees,” said Clive Briault, managing director of retail markets at FSA.

“People will now know when they sign up for a mortgage what fee they will pay on exit, or should be given a clear idea of how the fee might be increased fairly.”

FSA is also calling for previous customers to be given the same treatment as new customers, meaning if a customer has paid a higher MEAF than current borrowers, he or she should be refunded.

Tags: mortgage lenders, customer, clear idea, council of mortgage lenders, Financial Services Authority, meaf, administration, idea

2006 lending hit record levels

Lending in the UK reached record levels during 2006, with the Council of Mortgage Lenders (CML) saying there was a 20 per cent rise on 2005.

In total, £346 billion was lent, with November proving to be the year’s most popular month for borrowing.

In fact, November was a record-breaker itself, recording the highest lending figures ever at £33.1 billion.

The huge lending figures have been attributed to a number of factors, including annual house price growth (around seven per cent) and increased house sales (14 per cent).

“The commentators who thought the housing market would crash in 2006 were wrong,” said Michael Coogan, director general of the CML.

“Last year the market proved itself to be in robust shape and we expect it to remain so during 2007.

“Going forward, many of the key drivers of the market remain positive. The economy is healthy, demand for housing is strong, and house prices continue to rise. As a result, mortgage lending this year is expected to be even higher than in 2006.”

Despite Mr Coogan’s positive outlook for the housing market during 2007, he does have a word of warning in light of the recent interest rate rises.

“The recent increases in interest rates might make many aspiring home-owners think twice about getting on to the property ladder, and we expect to see levels of activity dampen as the year progresses,” he added.

Tags: council of mortgage lenders, house price, cent rise, Council, fact