Savers Can Enjoy Increased Interest Rates

In an effort to fund new mortgages, building societies and banks have started to raise the interest they pay on savings accounts in an effort to raise the monies they need to be able to offer new mortgages to their customers. Read more

Tags: interest rates, Financial services, saving rates, savings accounts, length of time, wholesale funds, repay mortgage, funding

Recession results in increase in liquidations

Officials from the Insolvency Service have recently reported that there was a sharp increase in the number of companies that went bust in the last three months of last year, as the recession and the global financial crisis continued to take a grip in the UK. Read more

Tags: funding, sector, industry, recession, year one, credit crunch, grip

Interest rate cuts do not impress all

Following the most recent Monetary Policy Committee meeting earlier this month the Bank of England announced that it was cutting the base interest rate for the fifth time in a row, taking it to a new historic low of just 1 percent, which is the lowest in the history of the Bank of England. Read more

Tags: desired effect, low level, bank of england, consumer, lows, interest rate cuts, funding, monthly repayments

Bradford & Bingley: Arrears on the up

UK lender Bradford & Bingley has said that mortgage arrears are continuing to rise as more borrowers are facing difficulties in repaying their loans.

Britain’s ninth-biggest listed bank said that it expect increased payment strain and falling house prices to result in higher impairment provisions, according to Reuters.

Hours after meeting with Alistair Darling, the mortgage lender, which makes over 50 per cent of its home loans to buy-to-let landlords, said its margins were under pressure and it is starting to pass the higher costs on to customers.

Yet the bank also said that the buy-to-let area of its business is performing well, suggesting that it is homeowners who are being hit hardest by the credit crunch.

Those faced with arrears will be pleased with Abbey National’s announcement earlier this week that it will cut rates on its two-year tracker and flexible mortgages by 0.1 per cent.

“We will continue to review the cost of funding and will look to reflect further changes in our mortgage range going forward,” said a spokesman for the bank, adding that it hopes other lenders will follow suit and take action to stimulate the mortgage market.

Tags: Alistair Darling, crunch, house, funding, announcement, range, loan, credit crunch

Mortgage market “still buoyant”

The mortgage market is “still buoyant” despite the recent financial crisis due to the amount of remortgage business available, claims one expert.

Despite the market being healthy, Bestinvest said that it is becoming increasingly harder and more expensive to look at remortgaging property. .

Peter O’Donovan, mortgage manager for Bestinvest, said: “There are still plenty of people looking to buy houses, it’s just the cost of doing so, and once again making sure they understand exactly what it is they are entering into.”

Previously a remortgage would only cost a couple of hundred pounds but now the average fee is a £1,000, he added.

According to the Council of Mortgage Lenders, the credit crunch has resulted in funding difficulties for a number of mortgage lenders, reducing their capacity to lend.

Lenders have responded by reappraising the risks involved in lending, resulting in a tightening in lending criteria and a widening in mortgage margins to parts of the market.

Tags: mortgage manager, UK mortgage terminology, expert, lending, amount, manager, crisis

Over 9m Brits have no pension provision

Over 9 million Brits have no pension provision yet expect to retire when they reach the age of 62 according to new findings.

Research from Baring Asset Management found that of those adults yet to retire, 24 per cent have no pension provision at all.

The target age of retirement for those between 18 and 34 is 61, in spite of government recommendations stating that it is set to rise to 68 by 2044.

Rob Lay, Barings’ head of European sales, said; “People have to start taking a more proactive approach to planning for their retirement.

“These figures reveal a worrying trend of UK adults assuming that they will be in a position to retire without having made the necessary arrangements for funding that retirement,” he added.

The research also showed that 21 per cent of people expect to be able to retire before 50 with a defined contribution scheme, and 17 per cent expect to be able to retire on a defined benefit.

According to figures from the Government Actuary’s Department, life expectancy for men and women is set to rise to 86 years and 89 years respectively by 2050.

Tags: contribution, government, Pension, funding, Financial services, position, personal finance, Department

Building societies attract record savings

Building societies attracted record savings of more than £16 billion over the course of 2007 according to the latest figures.

The Building Societies Association (BSA) said that this figure was double the £8.3 billion inflow of 2006.

The previous record was in 1988, when £13.6 billion was deposited as savers reacted to the stock market crash of October 1987.

Adrian Coles, director-general of the BSA, said: “2007 was a bumper year for building society savings. The majority of the deposits came in the latter months of 2007, so a significant proportion is almost certainly funds withdrawn from Northern Rock bank.

He added that a “considerable amount” would be from households increasing the amount they saved in order to prepare for an uncertain year ahead.

Societies also raised a net funding of £19.1 billion in the wholesale markets in 2007 compared with £13.5 billion in the previous year.

Much of the cash was received in the last quarter of the year following the Northern Rock crisis.

Meanwhile the Council of Mortgage Lenders’ revealed record lending in 2007.

Tags: northern rock, bumper, building society, mortgage, funding, proportion, societies attracted record, inflow

100% plus LTV mortgages set to grow in popularity

The 100 per cent mortgage market is set to grow, according to industry experts.

Brokers were polled by Alliance & Leicester, which reveals today, with 78 per cent predicting that increasing amounts will be taken out in future.

Almost three quarters said that they had already advised clients on the product, which is at present only offered by five lenders.

Mortgages of 100 per cent or more LTV (loan to value), the purchase of which means that no lump sum or deposit need initially be paid, might prove especially popular with first-time buyers.

Jeremy Claridge, head of specialist mortgages at Alliance & Leicester, said: “We are pleased to see that most brokers predict this market will grow within the next two years as these products offer a great opportunity for borrowers who need some additional funding.

“The mortgage market is continually changing and there is an ever-growing need to find more flexible products to allow people to get on the housing ladder or to manage their existing borrowings in a better and more efficient way.”

The rise in popularity could be seen as a consumer response to runaway increases in house prices. The latest government figures, released earlier this week, show that the average house in London was almost 15 per cent more expensive than this time last year.

The data also revealed that the overall year-on-year inflation rate for house prices stood at 10.9 per cent.

Tags: funding, LTV, opportunity, london, housing ladder, Mortgage loan, week