Trends in Lending report claims house prices and mortgage lending will remain steady

The Bank of England has recently released its Trends in Lending report, which has shown that mortgage lending levels have remained steady over the first quarter of this year, and that whilst there may be a slight increase in mortgage lending over the course of the year lending levels will remain pretty steady overall.

The Bank of England report also indicated that property prices would remain flat over the course of this year, having increased slightly over recent months. Mortgage availability is expected to increase but only by a slight amount, and Loan to Value ratios are also expected to increase slightly over the course of this year.

Whilst the data from the report reflects improvement compared to last year, when the recession and the financial crisis were still taking their toll heavily on the property and mortgage markets, the climate is still expected to remain challenging for many people that are looking to get onto the property ladder or take out a mortgage for a new property.

Lenders are still likely to be looking for higher deposits, although there has been an increase in the number of lenders that are offering 10 percent deposit mortgages, which has provided some degree of relief for cash strapped first time buyers who have suffered hugely over the past couple of years since the onset of the global credit crisis.

One first time buyer said: “I hope to see the amount of deposit that lenders are looking for to come down over this year, although I’m not sure that it will. I would love to be able to get a mortgage and buy a property but until the deposit level comes down I’m stuck with renting, which is just money down the drain.”

Tags: economics, house prices, percent deposit mortgages, Mortgage loan, mortgage, time buyer, deposit, finance

Possible lower deposits for first time buyers

It has been claimed that many first time buyers could find that they are able to get mortgages with lower deposits over the course of this summer, following a turbulent period where lenders have been demanding sky-high deposits that first time buyers simply cannot afford, which has further impacted on the downfall of the property market. Read more

Tags: credit, economics, low deposit mortgages, Banking, downfall, first time buyers, deposit

HSBC’s £1bn boost to first time buyer market

HSBC has allocated £1 billion to a new 90% loan to value product which it is hoped will give a much needed boost to the first time buyer market. Read more

Tags: United Kingdom, first time buyer, deposit, leading the way, support, hsbc, Mortgages

Your 100% savings guarantee could cover the first £50,000

Until late last year the government operated a savings guarantee of 100% on only the first couple of thousand pounds of a savers’ money deposited in a bank or savings account. However, the crisis surrounding the stricken bank Northern Rock changed all this. Following the onset of the global credit crunch Northern Rock, which was then the fifth largest mortgage lender in the nation, ran into massive funding problems and had to take an emergency loan of billions of pounds from the Bank of England. Read more

Tags: money, relief, uk, good news, deposit, Nationalisation of Northern Rock, lender, savings

RICS states only rich can afford to be landlords

Officials from the Royal Institute of Chartered Surveyors have stated that in the current economic climate only the rich can afford to become landlords, with investment properties being made inaccessible to many people because of the high level of deposit that many lenders are now demanding.

According to reports the level of deposit required on buy to let properties has increased by 500% since 2002, with the average deposit needed now being around 30% of the property value, equating to an average of around £65,600.

In the first quarter of 2002, according to the report, only around 8% or an average £10,100 was needed to invest in a buy to let property. RICS officials state that the high level of deposit needed means that many potential buy to let purchasers have been put off or simply cannot afford to get their foot on to the buy to let ladder.

However, the Institute states that the situation could ease somewhat next year, with interest rates likely to fall and house prices likely to drop or remain stable. This could see an increase in the number of consumers deciding to invest in buy to let.

One economist from the Royal Institute of Chartered Surveyors stated: “It takes more capital than ever to set up a buy-to-let investment. Would-be investors who have missed out on the impressive returns of previous years are now finding the hurdles to property investment are higher than they imagined. However, existing landlords should be able to use the equity in their past investment properties to fund the deposit needed for new ones, and this should ensure that demand from the buy-to-let sector does not dry up entirely.”

Tom Smith
18th November 2007

Tags: buy-to-let, equity, investment, deposit, Mortgages, surveyors, landlord

Uni sacrificed for mortgage

The difficulties associated with getting onto the property ladder are forcing many youngsters to abandon their education.

New research shows that ten per cent of 18-24 year olds are choosing not to go to university so that they can save some money towards their first home.

With house prices seemingly on an endless upward curve, it is now more difficult than ever to purchase a first home and the costs of university are an unwanted burden for many.

Lloyds TSB carried out the research which highlighted that many youngsters are making big sacrifices in order to get a mortgage.

One in five say that they have abandoned the dream of forging a career in their preferred sector, opting instead for a better paid job that they do not enjoy.

In addition, a further one in six say that they are doing two jobs to save some money, while 54 per cent are living at home indefinitely.

“The fact people are willing to forgo their education highlights the importance of homeownership to the younger generation,” said Alison Burns from Lloyds TSB. “However, these extreme measures may not always be necessary, as the research shows a number of misconceptions about the modern housing market.

“Almost 65 per cent of those we spoke to believe a ten per cent deposit is an essential requirement but this is not the case. Mortgage providers are becoming increasingly flexible to accommodate the changing circumstances of first time buyers.”

Tags: percentage, year, house, deposit, addition

Tenancy deposit shake up

A new scheme is being introduced which could change the face of property renting in England and Wales.

From April 6th many landlords will be required to protect the deposits of tenants by putting the money in one of three schemes.

The move has been made after homeless charity Shelter warned that too many people are not getting their money back with the landlord failing to provide a good reason.

With the average deposit now sitting at around £700, the withholding of the money can cause serious financial hardship for many and can leave people unable to get a mortgage, or forced to get a loan just to pay another deposit on a rented property.

“This money represents a sizeable chunk of cash for many tenants and losing it unfairly not only leaves thousands of people out of pocket but can lead to homelessness,” said Adam Sampson, chief executive of Shelter.

“The tenancy deposit protection schemes provide a vital safety net for both tenants and responsible landlords, making the private rental sector more professional and fairer for everyone.”

One of the available schemes will physically hold the deposits until the tenancy agreement reaches its conclusion, while the other two will provide insurance cover if a landlord does not return the money.

Tags: deposit, tenancy, mortgage, money, Leasehold estate

First-time buyers going it alone

First-time buyers are becoming less dependent on their parents when it comes to getting onto the property ladder.

That is according to new research from Abbey, which shows that the number of us expecting help from our parents to put down a deposit has fallen.

Just 9.7 per cent of first-time buyers expect any financial help at all from their parents when it comes to purchasing a property, compared to 23 per cent six months ago.

Despite the move away from parents when it comes to securing your first mortgage, many people (45 per cent – unchanged in six months) still expect help from their parents when it comes to moving into their new home.

“The decline in the number of potential homeowners relying on their parents is a positive indication that first-time buyers are finding alternative ways of funding their homes,” said Nici Audhlam-Gardiner, head of mortgages at Abbey.

“However, despite the decline parents still have a large role to play. With one in ten people still requiring parental help to buy and over half still needing help on moving day, it’s not just the children that feel the financial burden of buying a home.”

The survey also found that the ideal home for those taking their first steps onto the property ladder is a country cottage, followed by a townhouse and a penthouse.

Tags: indication, First-time, Audhlam, financial burden, deposit, number