Mortgage market could suffer over next quarter

Over the past couple of years things in the mortgage market have been tough, and availability of mortgages has become very restrained as a result of the global credit crisis and the recession. This has left many people unable to get their hands on a mortgage loan, and has had a serious impact on the property market.

The Bank of England has now issued a warning stating that there could be fresh restrictions in the mortgage market over the next few months, blaming the tightening of wholesale funding for the expected squeeze on mortgages. This will create additional difficulties for those that are looking to get a mortgage, and will reverse the recent trend of increased availability of mortgages.

The data comes from the Bank of England’s Credit Conditions Survey, and a number of economists have also agreed that the availability and affordability of mortgages could fall over the next few months as banks struggle with tightened wholesale funding.

Over the past quarter the availability of mortgages has actually increase after a couple of years of serious difficulties, but this is something that is set to go into reverse according to the Bank of England. Figures have also shown that over the past quarter demand for mortgages has fallen even though mortgage availability has been increasing.

Dougald Middleton, head of capital and debt advisory at Ernst and Young, said: “While the survey shows that costs of borrowing have eased over the last quarter, we think credit conditions have turned over the last three or four weeks.”

The good news from the Bank of England report was that the rate at which mortgage borrowers and businesses were defaulting on loan took an unexpected fall, which will come as good news for banks.

Tags: market, Impact, Mortgage loan, bank of england, availability, demand, finance, mortgage

Out of date food savings consumers money

With many households still reeling from the financial impact of the credit crunch and the recession in the UK many are still looking for ways to reduce their outgoings. Read more

Tags: food, supermarket, demand, Grocery store, service, date items, Food industry, Shelf life

More lenders starting to look at lower deposits

Over the past couple of years things have been very difficult for first time buyers, and one of the things that has really affected the abilities of first time buyers to get onto the property ladder is the huge deposits that lenders have been demanding since the onset of the global credit crunch. Read more

Tags: cry, interest rate, demand, 5% mortgages, low deposit mortgages, Mortgages, property

Consumers receive better news about mortgages

After a year of tough times for those looking for a mortgage, consumers have finally received some good news over recent week. Read more

Tags: free mortgage, income borrowers, demand, banks, Mortgages, history, association costs, offer

RBS announced higher number of branches to open on Saturday

The Royal Bank of Scotland, which also owns NatWest, has recently announced that there will be a greater number of branches for both RBS and NatWest opening on a Saturday, which will provide consumers with increased ease and convenience if they need to visit their bank. Officials from RBS said that the decision to increase the number of stores opening on a Saturday was down to increased demand from its customers. Read more

Tags: Ulster Bank, Banking, Financial services, whilst, royal, Banking Services

Banks raking in millions through sneaky overdraft tactics

According to a recent report banks in the UK have been raking in a fortune recently by sneakily increasing the interest rates on agreed overdrafts on customers’ bank accounts. Banks have lost millions of pounds over the past couple of years due to overdraft charge claims, and it is thought that this move is designed to try and claw back some of revenue that has been lost through reimbursing these charges to customers. Read more

Tags: demand, bank accounts, Non-sufficient funds, suit customers, bank of england, Treasury spokesman, ripped off, matter

Rise in the supply of rental properties coming onto market

Homeowners that have been keen to sell their homes before house prices plummet further have found themselves hitting a brick wall over recent months, as a number of factors have contributed to the housing market facing its worse slump in decades. Estate agents have reported very poor sales figures for properties, and many homeowners have found that they simply cannot sell their properties. Read more

Tags: Royal Institute of Chartered Surveyors, duty, first time buyers, rental property, uk, slump, purchase, demand

Make your money work hard for you, advises expert

Newcastle Building Society has urged consumers to ensure that “their money is working as hard as possible for them”. Read more

Tags: Steve Urwin, Newcastle Building Society, demand, last september, Banking, Cooperatives, money

Housing market ‘in worst slump since 1992′

The housing market in the UK has fallen to its worst economic slump since 1992 when it last came out of a financial recession, according to the Royal Institute of Chartered Surveyors (RICS).

With the balance dropping for the sixth month in succession, 54.7 per cent more chartered surveyors reported a fall rather than a rise in house prices, the highest number for 15 years.

Jeremy Leaf, a spokesman for the RICS, said: “A lack of demand and confidence in the housing market is clearly behind the recent price slowdown.”

He added that tightening mortgage lending criteria is a block to many who are keen to take the “housing market plunge” while sellers are struggling to market properties to consumers content to “watch the current economic theatre from the wings”.

According to surveyors, the only part of the UK where prices continue to rise is Scotland with the net balance of surveyors in that country reporting price rises edging up from three per cent to seven per cent.

Meanwhile, a man who did not make any mortgage repayments for 15 years has had his debt erased by judge in an appeal court.

Tags: consumers, Real estate, Mortgage loan, demand, RICS, Surveying

Mortgage lending ‘drops to lowest levels for 2 years’

Mortgage lending dropped to its lowest level for over two years last month, according to figures from the Council of Mortgage Lenders (CML).

The statistics show a 25 per cent drop on gross mortgage lending compared with November and 21 per cent fall from the same figure recorded for the month last year.

Gross lending only reached £22.5 billion, the lowest amount since May 2005 and down from the £29.9 billion recorded in November.

Simon Rubinsohn, senior economist at the Royal Institution of Chartered Surveyors, said: “2007 may have been a banner year for the mortgage market as the CML data suggests, but the most timely indicators point to a sharp slowdown in demand for property-related loans.”

However, despite the effects of the credit crunch gross mortgage lending during 2007 reached an estimated £362 billion, an increase of five per cent from the £345 billion in 2006.

Meanwhile, mortgage lenders are putting increasing pressure on the Bank of England to help them raise funds to provide potential homeowners with loans reports the Financial Times.

Tags: gross mortgage lending, bank of england, Chartered, crunch, Council, mortgage market, data, demand

Tide turns on fixed rates, according to GMAC-RFC

Mortgage lender GMAC-RFC predicted a shift back towards customer preference for alternative mortgages such as tracker mortgage and discount deals in the coming year.

The provider claims that fixed-rate deals are “already priced high” in preparation for further interest rate increases, which might lead to customers to change to other options

Consumers are fearful of rising interest rates, meaning big rate hikes on variable mortgages.

Julie Gaskin, corporate relations manager at GMAC-RFC conceded that “in a rate-rising environment it often makes sense for borrowers to take out a fixed-rate deal”, but argued that “the tide is now turning, as [fixed-rate deals] are factoring in for one or more future rate rises, making tracker and discounted deals look increasingly attractive, and in many cases cheaper”.

“Now is the time for intermediaries to harness the change and look towards tracker and discounted products to drive business growth as demand for this type of product will inevitably increase in the foreseeable future. Those that shy away from this may be missing a trick with consumer hungry for a good deal”, she added.

Latest figures from the Council of Mortgage Lenders (CML) show around 75 per cent of new mortgage loans being fixed-rate deals.

Tags: tide, mortgage lenders, rising interest rates, good deal, foreseeable future, mortgage lender, rate deals, demand

International medical insurance growing

Demand for international medical insurance is strengthening, according to the private healthcare company Bupa.

With more and more Brits flush with cash from selling their houses in the current UK house price boom and choosing to retire abroad, private healthcare can prove an affordable option for many.

Coupled with the growing number of “internationally mobile” employees working for businesses relocating to the strengthening economies of Russia and India, for example, the market is expanding.

Bupa spokesperson Thomas Flygare said: “We have done research that shows that the number of internationally mobile employees will continue to grow over the next five years. Add to this an extra 2.3 million Brits who are set to retire abroad and by 2020, one in five older people who will be living outside the UK.

“So, naturally the number of companies providing international medical insurance has increased.”

He also advised that customers research the market place to find the insurance that best meets their needs.

“Experience has shown that peace of mind wins when choosing a provider”, Mr Flygare concluded.

Tags: demand, affordable option, finance, next five years, Russia, cash, choosing

Private health insurance recovering

The number of private health insurance holders has risen for the first time in five years.

Last year, numbers rose by 1.5 per cent, taking the total close to the all-time peak of 2002.

On closer analysis, the figures actually show a drop of 2.2 per cent in the number of people taking out private cover for themselves, however a larger growth of 3.4 per cent in health schemes provided by companies cancelled this out and caused the increase.

The news has surprised many, given that in recent times NHS spending has increased and waiting lists have fallen.

Analyst Philip Blackburn at Laing and Buisson told the FT that the sector “has a sense of optimism” and that it “can look to the future with some confidence”.

Private health giant Bupa welcomed news of the increase today, with managing director Fergus Kee saying that the rise in demand “confirms the continued relevance and importance of private healthcare”.

A total of 7.4 million Britons now hold some form of private health insurance, 12 per cent of the population.

Tags: form, cover, percentage, demand, health giant bupa, importance, optimism

Some people may never own their own home

According to recent reports future homebuyers could face house prices that are up to ten times the amount of their salaries, which means that many of today’s younger people could face the prospect of never being able to purchase their own home.

The research from the government backed National Housing and Planning Advice Unit (NHPAU) indicates that in order to avoid this situation many more homes will have to be build, otherwise millions of people will be left out in the cold when it comes to home ownership in the UK.

According to the research over a third of those that do not own their own home at the moment are doubtful that they will ever be able to afford to buy their own home. Another 20% of non-homeowners believe that they will have to wait a minimum of five years before they can afford to consider getting onto the property ladder. The purpose of the government run National Housing and Planning Advice Unit is to offer advice on improving affordability in the housing market.

The figures indicate that just seven years ago the average house prices was around four times the average salary of the consumers. However, with prices set to rise to ten times the average salary future generations face a very bleak future when it comes to the possibility of home ownership.

According to the chairman of the NHPAU: ‘First-time buyers have seen a big rise in the deposit needed to buy a home and the amount of their income spent on mortgages. Demand for housing is growing and unless action is taken, pressure on the market will only get worse.’

Tom Smith
4th July 2007

Tags: price, buyers, increase, wages, demand, first, young

Buy-to-let looking good

There is a continued high demand for rented properties and this is good news for people with a buy-to-let mortgage.

Figures published by Paragon show that rent has increased consistently over the last six months, as more and more people look to rent a home.

The average annual rent in England and Wales in May sat at £10,702, signalling a ten per cent increase of £1,037 compared to November figures when the average was £9,665.

A recent study shows that 63 per cent of residential property investors have seen tenant demand grow or remain stable and, as a result, they are looking to increase their buy-to-let portfolios.

“The private rented sector is buoyant as demand from tenants continues to be strong,” said Nigel Terrington, Paragon’s chief executive.

“Many parts of the community, such as students, migrants, people on housing benefit and first jobbers, rely on rented accommodation for their housing needs, and the sector is set to continue this growth over the next five to ten years.”

Mr Terrington went on to say that negative reports about the buy-to-let market are unfounded and said that affordability is playing a big part in keeping the market buoyant.

“Commentators forecasting a downturn in the buy-to-let market have overlooked the fundamental dynamic of the UK housing market – people need somewhere to live, and for many, house purchase is simply not an option,” he added.

Tags: chief executive, mortgage, Renting, executive, good news

Buy-to-let grows, so does rent

The number of people taking out a mortgage for a buy-to-let property has remained constant despite a series of interest rate rises in the last year.

Some experts had predicted that as the cost of borrowing increased, landlords would shy away from increasing the number of properties they own.

However, figures from specialist lender Paragon show that they are continuing to increase their portfolios and simply charging increased rent to cover the costs.

In the last three months alone, the average rent charged on a buy-to-let property grew by 6.5 per cent.

“The market remains buoyant for both intermediaries and lenders, with good volumes of business for both property purchase and for refinancing of existing portfolios,” said John Heron, managing director of Paragon.

“Investors are encouraged by the strength of tenant demand, which enables them to increase rents on existing tenancies when they are renewed and apply a higher rent to new tenants than they would have charged three or six months ago.”

Almost a third of landlords said that they had increased rent due to rising borrowing costs.

Tags: economics, refinancing, strength, year, demand, specialist lender, Financial economics