Interest rates unlikely to increase this year

A recent poll has suggested that the base interest rate is unlikely to be increased over the course of this year, which is something that will bring relief to many homeowners and borrowers who are already struggling to make ends meet due to soaring costs and bills. The data comes from the latest Reuters poll of economists, which reveal that there is now only a 30 percent chance that the Monetary Policy Committee will increase the base rate from its current record low of just 0.5 percent where it has been for well over two years.

However, economists are predicting that there will be a base rate increase in the first quarter of next year although some believe that the next rate hike could be at least one year away, perhaps even longer. One industry official welcomed the news of the unlikelihood of a rate rise, stating that there were many households and individuals that would not be able to cope with a rate increase in the current climate due to overstretched finances, soaring living costs and rocketing bills.

He said: “Given that many people in the UK are currently struggling to make ends meet, an interest rate rise which will push up mortgage payments will cause a huge increase in families facing financial difficulty. The longer that interest rates are left unchanged the better from a personal debt point of view.”

The MPC has faced a difficult decision over recent months when it comes to increase interest rates, as members have been under pressure to vote for an increase due to soaring inflation levels but have also been under pressure to keep the rate on hold because of the concerns about the economy and affordability.

Tags: quarter, mortgage, committee, uk, course, Business Finance, something, reuters poll

Record levels reached for rents

Over the past year getting a mortgage has remained difficult for the many non-homeowners who are desperate to get onto the property ladder. This has led to an increasing number of people that may normally have opted for a mortgage to buy their own place having no other option but to rent. The demand for rental homes has rocketed as a result of this, which has pushed up rental costs.

It has now been revealed that rents are at their highest level since they last reached record highs back in November of last year. The average rent being paid has now soared to £692 per month, reflecting an increase of 0.8 percent compared to the previous month and a rise of 4.4 percent compared to the same period last year.

The landlords of private rented properties are, on average, raking in around £30 per tenant more each month as a result of these increases. Whilst the rent increases are good news for landlords, as they have a huge demand for their properties, it is not so good for tenants who are already struggling financially and do not have to option in many cases of being able to invest in their own property because of the financial restrictions in the mortgage market.

There are concerns amongst landlords about increased levels of arrears and missed or late payments recently. One official said: “The final bank holiday of the month delayed many rental payments, but on top of this, thousands of tenants took advantage of the opportunity and booked holidays, which has impacted on the timely payment of rent. Nevertheless, despite the short-term factors, landlords need to remain especially vigilant over the medium-term. We are yet to see the true picture emerge from public sector spending cuts, and changing employment situations will hamper many tenants’ ability to meet their monthly rent cheque on time.”

Tags: result, payment, top, Record levels, mortgage

First time buyers could benefit if banks were protected with insurance

For many first time buyers in the UK the dream of homeownership is one that has slipped from their grasp completely, with lenders either demanding huge deposits that first time buyers simply don’t have or refusing to offer a mortgage loan at all. Many first time buyers have been frozen out of the market by cautious banks who do not want to take on the risk of defaults with a high loan to value loan.

However, one major banking group has said that the number of loans granted to first time buyers with high loan to value ratios could increase hugely if insurance companies would offer banks cover that would protect them against defaults. The claim was made by officials at Lloyds Banking Group, who said that the number of first time buyers could double if this sort of insurance cover was made available.

An official from the Council of Mortgage Lenders, Michael Coogan, said recently that he had previously urged the housing minister, Grant Shapps, to look at making improvements by encouraging a ‘more active mortgage insurance market’ which would provide protection to lenders and make them more able to extend low deposit mortgage borrowing for first time buyers. The cover would be mortgage indemnity insurance and would allow the borrower to claim back part of the loss if a person defaults, is repossessed, and then the property is sold for less than the amount owed on it.

One official from Lloyds TSB said: “There’s been a lot of conversation recently about mortgage indemnity and whether it’s a way to manage the transference of risk. You could be missing an opportunity to double the first-time buyer market.”

Tags: value loan, lloyds tsb, claim, tsb, mortgage, mortgage borrowing, lloyds, property

Officials say mortgage interest rates must stay low

Earlier this month the Bank of England announced once again that the base interest rate was to stay at its all time low level of just 0.5 percent, where it has stood since the first quarter of 2008. This is the lowest level in the history of the central bank, which spans over three centuries. For many borrowers and homeowners this low rate has come as a relief, as it has kept down their repayments.

Economist from the Ernst & Young ITEM Club have now said that it is important that interest rates remain at this low level over the course of this year, despite the fact that inflation is spiralling out of control. Officials said that there is a very tough year ahead, but although many believe that interest rate will and should increase economist from Ernst & Young said that they needed to stay on hold.

The report that was released by the economists indicated that this year was going to be a gloomy, tough, and very challenging one, with inflation possibly rising to 4 percent as early as February. House prices are set to fall by 5 percent over the course of this year, according to the report, and only slight improvement is expected in 2012.

One economist from the Ernst & Young ITEM Club said: ‘It’s going to be a tense start to 2011. The fiscal retrenchment will keep GDP subdued while commodity price rises and the VAT hike will push inflation close to 4% and leave the MPC agonising over whether to increase the Bank base rate. However, it’s vital that the MPC stands firm. A premature rate rise would boost the pound, weakening the UK’s ability to increase its exports – particularly into the emerging markets – which we have long maintained hold the key to the UK’s economic recovery.’

Tags: lowest level, mortgage, improvement, gdp, house prices, slight improvement, course, relief

Property prices end 2010 on low

It has been revealed by a major High Street lender that property prices in the UK ended last year on a low, having slid from the start of the year. The price of property in the UK was said to be around 1.6 percent lower at the end of 2010 than at the start of the year. The data was released by the banking giant Halifax, which said that property prices fell by 1.3 percent in December compared to the previous month.

It is thought that property prices have been driven down by a number of factors. One of these is that many homeowners are flocking to sell their homes whereas there is a distinct lack of interest from buyers. This is because many buyers are unable to get the mortgage finance that they need due to continued restrictions in the mortgage market, and many others simply don’t want to make a huge financial commitment in the current financial climate and with the uncertain future with regards to jobs.

A spokesperson from the Halifax said that if homeowners become more reluctant to sell this year the falling property price trend could be halted. He also said that it was unlikely that there would be much change in terms of movement in the property market over the course of this year, and this was because interest rates were unlikely to change.

The Halifax said: “Current signs that homeowners are becoming more reluctant to sell would, if continued, help reverse the imbalance between buyers and sellers. Nonetheless, uncertainty about the economy, weak earnings growth and higher taxes could put some downward pressure on demand.”

Another mortgage expert added: “While there has been an easing down of prices, as supply has come through and demand has weakened, in certain towns and cities, not least the capital, the right type of property is still commanding the right sort of price.”

Tags: end, Real estate, climate, earnings growth, percent

House prices still set to fall in 2011

According to recent figures the property market in the UK did edge up a little over the course of 2010, and the average property price in December was up by around 0.4 percent compared to the same month a year earlier. The figures were released by High Street lender, Nationwide, with officials from the building society stating that despite this year’s slight increase property prices were still set to drop in the first half of next year.

Nationwide said that property prices in 2010 had declined in the second half of the year compared to the first half, and that in the first half of 2011 prices would continue to fall. Nationwide said that demand for property remained weak, which would contribute to the slump in property prices. One economist from the building society said that there were two few buyers interested in property and too many properties available.

The lender also said that although property prices had edged up in December, prices had fallen in four of the last six months and were likely to continue doing so. Property prices have been falling as a result of lack of mortgage availability, increased caution from potential buyers who are steering clear of the market at present, and an over-supply of properties for sale.

An official from Nationwide said: ‘At the moment, there are probably still too few buyers chasing too many properties. As a result, the slow drift down in house prices is likely to persist in 2011, at least for the first half of the year. Whether it continues into the second half will depend on the flow of new property on to the market.’

He added: ‘Despite December’s increase, house prices have fallen in four out of the last six months and it would be premature to suggest that the recent downward trend has been broken on the basis of one month’s figures.’

Tags: building society, Irish property bubble, Business and Economy, Mortgage loan, slump, result

Mortgage rationing to continue next year

Officials from the Council of Mortgage Lenders have stated in a recent report that mortgage rationing is set to continue next year, and consumers that are hoping to get mortgage finance in order to get onto the property ladder may still face disappointment as banks continue to slash their lending.

One of the problems facing the banking industry is repayment of some of the bailout money that they took at the height of the global financial crisis, which needs to be repaid. Sadly, it is likely to be consumers that pay the price once again, as this will result in further restrictions on mortgage and other types of lending, making things more difficult for those that need to take out finance.

The CML has also said that repossession numbers are likely to increase next year, although the increase is likely to be modest. There are a number of factors that may affect repossession numbers, and this includes the government Spending Review and cuts, which could affect people’s jobs. Buyers are also likely to be put off from taking out mortgage finance even if they are able to get it, and this is due to the fragile state of the economy.

The CML said: “Given the continuing economic uncertainties, there is little to encourage buyers. First-time buyers will continue to find it difficult to get into the market. With funding in short supply, the availability of mortgages for first-time buyers will remain limited.”

The Council of Mortgage Lenders concluded: “Activity in housing and mortgage markets is set to remain broadly flat in 2011 and we do not envisage a return to the lending levels that characterised the middle of the last decade for many years to come.”

Tags: property, cml, economics, report, disappointment, mortgage, money, bank

Another decade for first time buyer mortgages to stabilise

It has been claimed in a recent report that it could take another decade before mortgages for first time buyers stabilise and reach the level that they were at prior to the global financial crisis. Before the credit crunch first time buyers were usually easily able to get a mortgage, and often did not have to even put down any deposit. However, this has all changed and these days those looking to get onto the property ladder feel that they are hanging on to an impossible dream.

Over the past couple of years things have become increasingly more difficult for first time buyers. Restrictions in the mortgage markets resulting from the financial crisis have resulted in more buyers being turned down by lenders when they apply for a mortgage. Those with damaged or poor credit history are also charged high rates of interest or turned down for a mortgage altogether.

Another huge hurdle that has faced first time buyers over the past couple of years is the matter of the deposit that lenders want in order to get a mortgage. In the past first time buyers were able to get a mortgage without even putting down any deposit, and could even borrow over and above the value of the property with a 125 percent mortgage.

However, these days lenders are demanding huge deposits from first time buyers such as 20 percent or more, which is leaving many people out in the cold when it comes to getting onto the property ladder.

One official from the homeless charity Shelter said: “The failure of successive governments to tackle Britain’s housing crisis has left an entire generation of young people with little hope of ever accessing a secure and affordable place to live. The impact both on them and on wider society is already becoming clear, with rising numbers of young people delaying having children, unable to move for job opportunities and spending longer and longer living with their parents because of the crippling cost of housing.”

Tags: Financial crisis of 2007–2009, business, value, crisis, little hope, percent mortgage

Mortgage lending in UK to remain subdued

According to a mortgage industry group mortgage lending in the UK is likely to remain subdued and could go into decline as the year comes to an end. Lenders are said to have loosened up on their restrictions over mortgage lending over recent months following the financial chaos caused by the credit crisis and the recession, but many are still struggling to get the finance that they need to buy a property.

The Council of Mortgage Lenders claims that the mortgage market is likely to continue its decline, with the number of loans approved for the month of October this year down by 9 percent for the same month last year. This was also the lowest total for the month of October since 2000. The group said that year on year lending levels for mortgages are likely to continue their decline over the coming months.

The Council of Mortgage Lenders has also stated that the total gross mortgage lending figure for the whole of this year is likely to reach £137 billion, which is thought to be the lowest since 2001. Many first time buyers are still struggling to get a mortgage at the moment, which has left many unable to get onto the property ladder, forcing them to have to rent and driving up the cost of renting a property.

However, in a separate study that was carried out by Sainsbury’s Finance it was claimed that the rock bottom base interest rate, which still stands at just 0.5 percent, is resulting in homeowners’ mortgage repayments plummeting, with the average cost of mortgage repayments said to have fallen by around 27.67 percent since 2008. This takes the figure for mortgage repayments to an average of £8059 per year according to the figures from the supermarket giant.

Tags: decline, finance, Banking, mortgage industry group, Loans, credit, Subprime crisis impact timeline

Lack of mortgages leads to increased demand for rental property in London

The financial crisis is still having severe repercussions when it comes to the mortgage and property markets, and getting a mortgage these days can be very difficult for first time buyers because of the restrictions that are still in place amongst lenders and the high deposit levels that lenders are demanding from would be buyers in order to stand a chance of getting the mortgage loan that they need.

For those that are looking to live in London things are even more difficult, and the high cost of property in the capital coupled with the problems with getting a mortgage and lack of 100 percent mortgages has made it impossible for many people that need to or wish to live in the city to actually buy a place of their own. This has led to an increase in the number of people looking to rent property in London.

The surge in applications for rental properties in London has led to experts advising those looking to rent in London to look sooner rather than later, as the demand for property in the area is set to increase. In fact, it has now got to a point where demand has reached a level that enables some landlords to accept sealed bids from interested parties.

One official said that there was a revival in the city and a large number of students looking for accommodation, all of which had added to the high demand for rental property in the area. Another official said that landlords in London needed to consider not increasing the rent on their properties, as this would encourage existing tenants to stay on and could cut costs.

Tags: mortgage, sealed bids, economics, rental properties in london, Demand (economics), personal finance, interested parties

PPI bill for UK banks could hit £5 billion

An analysis group has claimed that the UK’s major banks could be facing a bill of around £5 billion in relation to PPI claims from customers that believe that they were mis-sold this cover. US investment bank officials from Morgan Stanley claims that this could be the bill that UK banks are facing over the next five years, with the estimates cost of dealing with these claims continuing to increase.

Barclay’s Banks, Lloyds TSB, and HSBC are amongst those that may be footing some of this huge compensation bill. The prediction comes after American banking giant, the Bank of America, had to set aside $592 million to deal with forecast claims over Payment Protection Insurance. Officials believe that the cost to UK banks will be even higher.

Morgan Stanley has said that at the very least, as a base case scenario, the bill for UK banks is likely to be just over £2.6 billion. However, this is based on only a quarter of PPI policyholders making a claim, and also on fewer than half of these claims being upheld. Should the claims and approvals be higher than this the cost of dealing with claims could be considerably higher.

The average payout to each successful applicant is likely to be around £2000. PPI came under fire after investigations showed that over the years banks and financial institutions had been involved in mis-selling the cover, and this has resulted in many people finding themselves eligible to make a claim for compensation.

The Financial Services Authority has been trying to clamp down on PPI sales, and has brought in new proposals. However, these are being appealed by the British Bankers’ Association, which claims that the financial regulator is trying to apply new rules and standards to old sales.

 

Tags: protection, Primary dealers, Business Finance, PPI sales, bank

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

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

Mortgage affordability in UK level with other countries

According to industry officials affordability on mortgages in the UK is pretty much on level with that in other countries. A study was carried out by Capital Economics, and suggested that when it came to mortgage affordability the UK was no worse off than other countries.

The company conducted research which looked at mortgage affordability in nine major Western economies, and this included Australia, Denmark, France, Ireland, Netherlands, Spain, Sweden, the USA and the UK. The average amount of take home pay that was used for mortgage repayments on a repayment mortgages in these countries came to 48 percent.

Over the past forty years the level of take home pay going on mortgage repayments in the UK has been around 50 percent. The highest level of take home pay going on mortgage repayments was found to be in Sweden, where 56 percent of pay went on mortgage repayments. The cheapest was in Spain, where 39 percent of take home pay went on mortgage repayments.

One economist involved in the research said that many may have expected the level of take home pay that was being spent on mortgage repayments in the UK to be higher due to high population density and undersupply of housing, but he stated that this was not the case.

He stated: “Our analysis shows that over the past 40 years, long-run average UK mortgage affordability is unremarkable in an international context. To our minds, this casts doubt on the popular view that a chronic undersupply of homes in the UK supports high prices.”

At present the actual level of take home pay going on mortgage repayments in the UK is 44 percent, and this comes from the record low base rate of 0.5 percent, which has reduced mortgage repayments considerably for those on variable rate mortgages.

Tags: Mortgage loan, record, Repayment mortgage, mortgage, variable rate mortgages, Major, past 40 years

Half of young Brits think renting is a waste of money

It has been revealed in a recent survey that around half of young Brits believe that renting a property is a waste of money. However, despite this opinion many are being forced to rent because they are unable to get a mortgage in the current climate to get onto the property ladder and get a place of their own.

Recently released figures have shown how restrictions in the mortgage market are driving up the cost of renting, and whilst many non-homeowners believe that renting is a waste of money more and more are having to do this and pay more for the privilege. With so many would be first time buyers unable to get a mortgages the demand for rental properties is high, and this is driving property rental prices up further.

Recent research has shown that the amount that buyers are now expected to pay out by way of a deposit is unmanageable for many people, and whilst buyers may have no problem affording the repayments on a mortgage, especially with the base rate at an all time low, many simply cannot raise the deposit required by lenders, which is running into tens of thousands of pounds in some cases.

The level of deposit required in London has reached nearly £30,000 for first time buyers, which means that many are relegated to renting or living with friends and family. However, with the cost of rents having also rocketed some people in the London area would be looking at paying close to £1000 a month just for a one bedroom flat, with the average rent across the UK having now increased to nearly £700.

Tags: Renting, mortgage, tens of thousands, climate, research, first time buyer

Interest only loans do serve a purpose

An industry expert has stated recently that interest only loans do serve a purpose and can prove invaluable for some borrowers. Her comments came as lenders clamp down on interest only loans and the UK’s finance regulator, the Financial Services Authority sets up new proposals that could wipe out these interest only loans altogether.

The FSA is putting together proposals that would see interest only mortgage loans coming to an end, with lenders being told that they will have to continue asking for large deposits and other measures being proposed that could seriously affect the ability of many people to get a mortgage.

Paula John from Your Mortgage said that the FSA was right in trying to put together regulations to stop irresponsible lending and reduce the risk of consumers taking out loans that they could not afford to repay. However, she also said that it was important to take into consideration that interest only loans did serve a purpose and could prove invaluable for some people.

Her comments came after a statement was made by the Intermediary Mortgage Lenders Association, which said that if the FSA regulations were put into force interest only loans could be made obsolete.

Ms John added that whilst it was right of the FSA to express concern over borrowers taking on mortgages and loans that they could not repay it was also a valid point by the IMLA that it could be a mistake to get rid of interest only mortgages altogether because some people could really benefit from them.                               

She stated: “I think [the IMLA] is right in sounding a warning bell that we could throw the baby out with the bath water and see the end of interest-only mortgages altogether.”

Tags: FSA regulations, Interest-only loan, mortgage loans, Financial Services Authority, whilst, mortgage, business, finance

Mortgage borrowers can get help with energy costs

These days mortgage loans are far more restricted than they were prior to the global financial crisis, and many people who want to get a loan for a property find themselves being refused, as lender continue to be extra cautious over who they lend to, how much they lend, and what sort of deposit they are likely to accept.

However, one mortgage lender has decided to buck the trend by offering an incentive to consumers who are taking out a mortgage. The High Street banking giant, Halifax, has decided to try and tempt eligible consumers to take out a mortgage or remortgage through the bank by offering an incentive that could save the borrower a significant amount of cash on the cost of their energy bills.

As part of the new offer customers that take out a mortgage loan or decide to remortgage through Halifax could be eligible to get £500 off their gas and electricity bills, enabling them to save a small fortune on the cost of their energy usage. This could be particularly useful with the winter months fast approaching, when many people find that their energy bills soar.

An official from the banking giant said that the company was committed to encouraging homeownership, and with consumers facing such financial difficulties in the current climate the offer would help them to enjoy making at least some savings when moving into a new home or remortgaging on their old property.

He added that as part of the offer consumers may be able to save between four and six months worth of energy costs, which would help them to enjoy better value for money on their mortgage borrowing and help them to tackle the high cost of energy usage.

Tags: remortgage, electricity bills, better value, halifax, cost

Mortgage rates cut by HSBC to help consumers

Officials from the High Street banking giant HSBC have said that the lender has cut some of its mortgage interest rates in a bid to help struggling consumers in the current financial climate. One official from the firm said that it had cut rates in order to try and help those that were struggling with their finances.

The claim was made by Martijn van der Heijden, head of lending at the company, and came after the banking giant decided to cut the interest rates on all of its 80 percent loan to value mortgages, with cuts of up to 0.4 percent on these mortgage loans. This includes a number of two and five year fixed rate mortgages, a discount mortgage that comes with a £99 fee, and two tracker mortgages.

Hejden said that many people were facing difficulties in the current financial climate, and these mortgages were aimed at helping such people. He said that because the bank had cut rates in this way it would allow more people that had a limited budget to apply for a mortgage loan with HSBC.

At present many consumers have little choice when it come to finding the best lender, and this is due to the many restrictions that lenders have in place as well as the higher rates that are charges on some mortgages, making it difficult for some to afford a mortgage loan.

Hejden said: “Our 2.79 per cent discount mortgage is designed to help homeowners, many of which are facing a tough time.” He added: “As research shows more and more lenders are now reserving their lowest rates for either existing customers or those happy to deal with them directly.”

Tags: giant, mortgage, finance, consumers, bank

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: property ladder, Mortgage loan, Financial Services Authority, UK's financial regulator, 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, council of mortgage lenders, gloomy reading, Mortgage loan, group did state, borrowing, mortgage market, finance

Cutbacks in mortgage benefits could pose risk to vulnerable homeowners

Industry groups and campaigners are expressing concern over the effect that mortgage benefit cutbacks by the government may have on vulnerable homeowners. There are concerns that some homeowners that are in a vulnerable position, such as disabled homeowners, could be at heightened risk of repossession because of the cutbacks put into place by the coalition government.

In its recent emergency budget the coalition government revealed the details of a range of cutbacks designed to cut public spending and bring the public deficit under control. This included a range of cutbacks to benefits and to various programmes that had been put into place such as mortgage schemes.

The National Housing Federation has launched a scathing attack, stating that there are now around 64,000 homeowners with disabilities that receive assistance through the Support for Mortgage Interest scheme, known as the SMI. However, many will experience difficulties if this assistance is reduced or cut.

According to reports the SMI is to be recalculated for thousands of people with disabilities, and officials believe that around five thousand people with serious mental and physical disabilities could end up financially worse off under the system, and could face difficulties in making repayments, which could mean an increased risk of repossession.

An official from the National Housing Federation said: “This policy will hit thousands of people with disabilities, cutting off many from the prospect of owning their own home. The fact that ministers have not carried out a comprehensive impact assessment into such a major decision is very disquieting.”

The Sheffield Centre for Independent Living added: “There’s an inconsistent response from different local authorities because there are no national guidelines on how payments are made. Now we have to help a lot of people who are finding it harder to get these grants as councils review spending.”

Tags: councils review spending, National Housing Federation, Government spending, mortgage, homeowners, emergency

Homeowners being moved from interest only mortgages to repayment mortgages

The fears over a double dip recession in the UK are causing havoc for many homeowners who are finding themselves being shifted from interest only mortgages with smaller monthly repayments to capital and interest mortgages that require them to make much higher monthly repayments on their mortgages. For many this will cause serious financial problems, as it will really impact on their outgoings and ability to make repayments.

A number of lenders are said to have brought in new rules and regulations with regards to this issue, and this includes the Spanish owned Santander and the banking giant Halifax. Many borrowers who do not have enough equity in their homes and are coming to the end of an interest only special deal are being shifted onto the more costly repayment mortgage by these lenders.

The move comes following concerns that the UK could be heading for a double dip recession, and a number of industry experts have said that homeowners could lose the equivalent of the average salary from the value of their homes, which will see equity levels plunge further for many homeowners. Santander has revealed that anyone that has less than 25 percent equity in their homes will be moved from their interest only mortgage onto a repayment one.

One mortgage expert said: “For home owners with interest-only mortgages, a forced switch onto a repayment deal by their lender at the end of their fixed or discounted period would lead to a significant rise in their monthly payments. For those saddled with big mortgages, it may well be an unaffordable increase, making it difficult for them to make ends meet. Lenders are worried about a further downturn in prices and are introducing these changes to protect themselves, as well as borrowers. But hard-pressed homeowners may find it’s an extra cost too far.”

Tags: fears, Many borrowers, Mortgage loan, mortgage, santander, Repayment mortgage, Interest-only loan

Is a ‘friends’ mortgage’ a good idea?

In the past most people that were buying a home either did so alone or with a partner/husband, which was the traditional way of getting a first home. However, things have really changed over recent years, and these days many people cannot afford to buy a home on their own.

This means that many have had to look at alternatives when it comes to moving out from their parents or from rented accommodation and trying to get their foot onto the property ladder, and things aren’t always easy, particularly given the difficulties that many face when it comes to raising a deposit and getting a mortgage in the current financial climate.

One of the solutions that some people have considered is to get a mortgage out with a friend, whereby both friends – or a group – are all in on the mortgage and they buy the property between them. This can certainly solve a few problems, such as being able to raise the amount needed for the deposit and being able to borrow the amount required for the property.

However, this can cause issues in the event that one of the friends involved wants to sell up and move on, as it means that they would have to get rid of their share of the mortgage. Another problem is if there is a falling out, and whilst most friends hope that they will never come to blows to a degree where things cannot be resolved this can happen.

Whilst a friends’ mortgage can be a good way of getting onto the property ladder in the current financial climate it is important for anyone getting involved to ensure that they consider both the pros and cons before making any firm decision or commitment, as things otherwise turn very sour very quickly – and it could end up being a costly mistake.

For those that do not really want to get involved in a mortgage with someone else but do want to get onto the property ladder another solution is to look at shared ownership, where only part of the property is purchased and the remainder is rented through a housing association and can be purchased in stages at a later date as and when the buyer is in a financial position to buy further shares in the home. The buyer then has the choice of buying the remainder of the home until it has all been purchased or remaining a part owner and selling their share when they decide to move on.

Tags: share, Mortgage loan, property, mortgage, friends

Making money from your home

These days many people are finding it difficult to sell their homes, largely because there is a shortage of buyers fuelled by lack of mortgage availability and low consumer confidence amongst would be buyers. The scrapping of the controversial Home Information Packs by the coalition government resulted in more people wanting to put their properties up for sale, but the low level of interest from buyers may have put many sellers in a difficult position.

Whilst it may be difficult for sellers to actually get their properties sold in the current climate there are ways in which it may be possible to make some money from the property if a decision is made to take it off the market until conditions improve. For some people this could be a viable way to clear some more of the mortgage whilst the property market improves.

Hiring out a room to a friend

Many people probably know of a friend, colleague, or even a family member who may be looking for a place to live, and offering a room out to such a person could help out the friend or family member and bring in some more money to pay the bills and mortgage. For many this is a great solution because they are sharing with someone that they know rather than a complete stranger but at the same time will still be able to make some money to make the mortgage and bill payments each month.

Taking in a lodger

In the current climate many people are struggling to afford a mortgage or even to rent a property of their own, and this has resulted in many looking for just a room to rent. If you do not have a problem offering up a room to someone that you do not know personally then taking in a lodger could be a good way to make money on your property. You could advertise your room, or you may find that there are people that place adverts to say that they are looking for a room.

Look at local amenities

It is a good idea to look at local amenities in your area, as you may find that there are colleges, universities, schools, or hospitals nearby where students, teachers, or doctors and nurses may be looking for local accommodation close to their work. Again, it may be a good idea to advertise if you are willing to rent out a room or you may find that those looking for accommodation place adverts themselves, enabling you to contact them.

Tags: mortgage, month, money, scrapping, room, position, accommodation, property

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, value, time buyers, confidence, scotland, mortgage, Mortgage loan, council of mortgage lenders

Lenders cut fixed rate mortgage rates

According to industry reports a number of lenders have slashed the rates on their fixed rate mortgage offerings even though the Bank of England decided to keep the base interest rate on hold again this month at its record low of 0.5 percent. A number of building societies and banks have cut the rates on their fixed rate deals.

High Street banking giant HSBC recently launched its lowest ever five year fixed rate deal, and last week saw Coventry Building Society and Nationwide Building Society reduce their fixed rate deals. One industry expert said that the reason why lenders were slashing their fixed rates even though the base rate had remained static was because they wanted to try and entice people off going for low standard variable rates. With banks already struggling the situation is being made worse by people opting for low standard variable rates, and this has led the banks to start taking action.

She said that many people that had come off special fixed rate deals had then moved onto standard variable rates, and with the base rate being so low this had been their cheapest option. This has resulted in lenders struggling, and many are now working on the hope that by cutting their fixed rate deals they can tempt people into remortgaging and taking out a fixed rate deal rather than a standard variable rate one.

Financial expert Michelle Slade stated: ‘Millions of customers who have come off short-term fixed-rate and tracker deals in recent years have gone on to their lender’s standard variable rate as it has been cheaper than fixing again. For example, Nationwide’s base mortgage rate is just 2.5%.’ She added: ‘The new fixed rates are certainly mouth-watering and could be worth grabbing for some borrowers.’

Tags: mortgage, fixed rate mortgage, variable rate mortgage, interest, interest rates

Lloyds Banking Group retains position in UK mortgage lending market

Figures that have recently been released have shown that banking giant Lloyds Banking Group has managed to retain its position in the UK market when it comes to mortgage lending levels. This comes despite the problems that the mortgage markets have experienced since the onset of the global financial crisis and the recession.

The figures show that Lloyds Banking Group managed to retain a 23 percent share of the gross mortgage market in the UK, despite the fact that the markets have remained subdued. The large market share of the mortgage market that has been taken by the group means that it remains as one of the leading mortgage lenders in the UK.

Lloyds Banking Group has also enjoyed success when it comes to profits, having announced profits of £1.6 billion for the first six months of this year. For the same period a year ago the bank reported losses of £4 billion, which means that the banking group’s fortunes have really turned around, as have those of a number of other banks in the UK. The money that Lloyds Banking Group has set aside to cover bad debt is also said to have fallen, and has gone from £13.4 billion to £6.5 billion.

Despite the profits that Lloyds and other banks have reported industry groups have expressed concern that mortgage lending is still restricted, as banks are still being cautious and many are still demanding high deposit from those looking to take out a mortgage.

Mortgage brokers have a more optimistic view, and many have predicted that they will be doing increased levels of business as the year goes on, as more and more mortgage products become available on the market.

Tags: Mortgage broker, uk, Mortgage loan, bank, mortgage, percent, Lloyds Banking Group

Why first time buyers could benefit from shared ownership

Buying a property has become an almost impossible feat for many first time buyers in the UK these days, not least because getting a mortgage loan has become so difficult. Whilst property prices have fallen since their peak they are still very high in the UK, and with lenders demanding a large percentage of the property value by way of a deposit many first time buyers still find themselves priced out of the market.

In some cases lenders are demanding in excess of 15 percent of the property value by way of a deposit, and this is something that most first time buyers cannot manage, as they have no pervious property from which to take equity. As a result of this many first time buyers are having to move into rented accommodation, which makes it even more difficult to save a deposit to get themselves onto the property ladder.

However, there is another option that could prove ideal for many first time buyers in the UK and this is an option known as shared ownership. With a shared ownership property buyers only get a mortgage for a set percentage of the property value, and the they then pay rent on the remaining share to a housing association. Because they are only buying a share of the property initially they will need a lower mortgage and a lower deposit, but can still get themselves on the property ladder, albeit more gradually than in the traditional way.

The share of the property that first time buyers can get will vary based on the property and the housing association, and could be anything from between 25 percent and 75 percent. Often the houses that are sold as shared ownership are new build, which means that buyers can get their hands on a brand new property without having to find a huge mortgage and deposit upfront.

The great thing about shared ownership is that you will not have to rent the remaining share of the property forever, as you can ‘staircase’. This means that over time you can buy additional shares of the property as and when finances allow until eventually you own 100 percent of the home. Alternatively you may wish to continue on a shared ownership basis and then sell your share of the home to another person that wants shared ownership when you want to move on.

A number of housing associations deal with shared ownership properties, and there are both new build properties available as well as resales from those that want to sell their own shares in these properties. Whilst there may not be a huge difference in the amount that you pay out monthly with shared ownership compared to getting an outright mortgage (although it is generally cheaper) the key advantage is that you will not need a huge mortgage or deposit to start off with and can buy the remainder of the home as and when it is viable for you.

Tags: Equity sharing, property, property ladder, mortgage, first time buyer

Mortgage default levels falling

Over the past few years problems with finances, higher mortgage rates, and the global financial crisis has plunged many people into severe financial difficulties, and as a result of this many homeowners have been unable to keep on top of their mortgage repayments.

The high level of mortgage defaults over recent years has resulted in many people having their homes repossessed, which naturally caused a great deal of concern amongst consumers and officials. The recession also took its toll on the ability of homeowners to make repayments on their mortgages, with many people losing their jobs as a result of the recession.

However, with the recession now over and the financial markets easing up the level of mortgage repayment defaults has been falling recently. The Bank of England has issued figures showing the fall in the level of mortgage repayment defaults in the UK, which will come as good news for banks and industry groups.

The fall in mortgage defaults has been occurring for a while now, and industry experts have said that in the latter part of 2010 it will remain largely flat. Some have even predicted that in the short to medium term mortgage repayment defaults could actually start to increase again as a result in an economic slowdown caused by changes made in the recent emergency budget by the new Chancellor of the Exchequer, George Osborne.

Further job losses are also expected to occur as a result of the budget changes, and this could affect the ability of more people to make their mortgage repayments. Officials advise those that feel that they are in danger of falling behind with mortgage repayment to contact their lender or a debt advice group as early as possible so that the problem can be sorted out before banks have to resort to repossession action.

Tags: loan, default, homeowners, mortgage, crisis, Mortgage loan, chancellor of the exchequer

Lack of awareness about mortgage rates amongst UK consumers

It has been claimed in a recent report that there is a severe lack of awareness amongst UK consumers when it comes to their mortgage interest rates. The data comes from a study that was carried out for the Consumer Financial Education Body, and involved polling over two thousand consumers about their mortgage interest rates.

The results of the study indicated that a massive three quarters of mortgage holders in the UK had no idea how an interest rate rise of 1 percent would affect their mortgage repayments and their budgets. The poll also found that many mortgage holders did not know what type of mortgage they had, and many also had no idea when their mortgage would expire.

The survey looked into a number of different mortgage related issues. The base interest rate has been kept on hold at its lowest level on record for sixteen months now, standing at just 0.5 percent. However, the survey results showed that over 50 percent of consumers thought that in the next nine months the base interest rate would increase.

Around 15 percent of those polled did not know what sort of mortgage product they had, such as a fixed, tracker, discounted, or standard variable rate mortgage. Around 8.6 million people out of 14.6 million had mortgages that formed part of a time limited deal. However, 15 percent of these mortgage holders did not know when their deals came to an end.

One industry official said: “Interest rates have been at record lows for some while now. Although there is uncertainty about when this will change, it is clear from our research that many people with mortgages have not thought about what it would mean for their monthly payments, or where they would find the extra money in their household budget if their mortgage rate was to go up. Lack of time means many of us often put off reviewing our finances.”

Tags: deal, finance, mortgage, interest, Mortgage loan

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: demand, Impact, availability, mortgage, finance

Is renting more viable than getting a mortgage?

 

Homeownership is a dream that many people hope to achieve, but over recent years many have experienced a range of hurdles when it comes to getting onto the property ladder. First time buyers in particular have experienced many difficulties from sky high property prices to lack of mortgage available, crippling deposit demands, and more.

 

One recent report has now questioned whether first time buyers are better off renting a property rather than trying to buy in the current climate. In the recent emergency budget it was announced that the new government was looking into scrapping the stamp duty holiday extension for first time buyers, creating further financial difficulties for those that were looking to buy.

 

In addition to this the new chancellor, George Osborne, announced that the Financial Services Authority would no longer exist in its current form and that the Bank of England would be given greater powers to regulate the banking sector, which could mean that a cap is placed on the amount that banks can lend, creating further difficulties for first time buyers.

 

Officials have said that this means first time buyers could face difficulties in finding an affordable property, getting an affordable mortgage, borrowing the amount that they need for the purchase, raising a deposit, and affording the repayments. If they rented, on the other hand, they would only have to pay a month’s rent and a deposit upfront and would not have to worry about repairs because this would be dealt with by the landlord.

An official from the National Landlord’s Association said: “At a time when government funding is strapped, it is private investment that will enable essential housing needs to be met. Rather than being seen as a last resort, private tenancies are becoming the choice of many people who need the freedom to choose homes where they need and for as long as they need.”

Tags: first time buyer, property, home, mortgage, Renting

Spring bounce continues for mortgage lending

Recently released figures have suggested that the spring bounce seen in mortgage lending has continued, with the increase in mortgage lending continuing in May. According to the figures mortgage lending for the month of May was at its highest level so far this year.

The figures have been released by the British Banker’s Association, with the data showing that 36,709 mortgage loans were approved by major banks during the month of May for those that were buying a property. However, despite this encouraging data HM Revenue and Customs has released figures showing that for the past three months the number of completed property sales has remained flat.

The number of sales for May came in at 73,000, and this equates to around 1000 more than the numbers seen in March and April. These figures are higher than those seen a year ago, but are still far lower than figures from 2006, 2007, and 2008.

With regards to the increase in mortgage approvals members of the BBA have said that this is the third month in a row that mortgage approvals have increased, indicating that the spring bounce in mortgage lending is set to continue.

The BBA also said that in the current climate, with the base rate still at its record low of just 0.5 percent, many people were still focussing on paying off their debts rather than trying to save money, as they were able to save more on borrowing interest than they were able to earn on savings interest, making this a more favourable option.

David Dooks, Director of Statistics at the BBA, said: “The low interest rate environment is resulting in customers choosing to reduce or pay off borrowing, particularly personal loans, rather than saving.”

Tags: Mortgage loan, british bankers association, mortgage, finance, data, Director of Statistics, borrowing, debts

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

Long term fixed rate mortgage option from Yorkshire Building Society

With the base interest rate in the UK still at its lowest level in the history of the Bank of England, at just 0.5 percent, many are now wondering when the base rate will start to increase again, and this is causing many people to wonder whether they should fix their rate over a period of time when taking out a mortgage.

There are different options available for those that want to fix their mortgages, and whilst the choice is not as great as it was prior to the financial crisis more and more lenders are becoming more lenient when it comes to offering a good choice of mortgages, although these are often to those that have a higher deposit level.

It has now been announced that the Yorkshire Building Society is offering a long terms fixed rate mortgage, with those considering buying a home or remortgaging now able to benefit from a ten year fixed rate mortgage. The deposit required on the mortgage is 25 percent, and borrowers will benefit from a rate of 4.99 percent.

The mortgage also has an arrangement fee that borrowers will have to pay, and this comes to £995. Whilst a ten year fix will provide many people with increased stability and peace of mind there are also some that may feel that this is too long a period to fix for.

An official from the building society said: “This product presents a fantastic opportunity for borrowers looking for long-term value, protection from future interest rate rises and piece of mind when it comes to their mortgage payments. Over the last ten years the average mortgage standard variable rate across the market has been 6.2%* so our new range of ten-year products offer great value.”

Tags: mortgage, Mortgage loan, Yorkshire Building Society, fixed rate mortgage, finance

Using a financial advisor to get a mortgage

There is little doubt that getting a mortgage these days has become increasingly difficult, and with this in mind many people may end up making the wrong choice when it comes to determining which is the right mortgage product for them. First time buyers in particular could experience difficulties when it comes to getting a mortgage, and in many cases could really do with some professional and independent assistance from an expert in the field.

Most estate agents will have someone at the branch that can offer assistance with getting a mortgage, and this is something that many people looking for help with finding a mortgage opt for. However, it is important to remember that the selection of lenders that these advisors have on their books will be limited, which means that you could effectively miss out on a better offer.

There are also many independent financial advisors in operation that offer advice and assistance on finding mortgages without charging any upfront fee to the buyer, as these advisors get their payments from the mortgage lender that they refer the borrower to. However, whilst the choice of lenders that these independent financial advisors have is generally quite good there is always a danger that you could be hooked up with a mortgage based on the amount of commission that the lender is going to pay the advisor.

With advisors that are being paid by the lender rather than by the borrower it can be difficult to determine whether the advisor truly has the best interests of the borrower at heart. This is why more and more people that want help with getting a mortgage are opting for an independent financial advisor that they pay themselves rather than one that is paid by the lender.

The benefit to choosing a paid independent financial advisor is that this means that the advisor will truly have your best interests at heart, as he or she will not be working on the basis of how much any particular lender will pay them in commission. This gives buyers the peace of mind that they need, as they know that the advisor will be looking for the best deal possible for them having no financial reason to do anything other than this.

There are a number of different financial advisors available that offer assistance with mortgages and other financial products. It is a good idea to check on the fees charged by each of these advisors and also check on their experience and testimonials wherever possible.

Tags: mortgage, financial advisors, advisor, finance, Mortgage loan

Thousands get extension to complain about PPI

It has been reported that tens of thousands of consumers who may be looking to make a complaint about PPI, or Payment Protection Insurance, have been given an extension to the deadline to make their complaint by the UK’s financial regulator, the Financial Services Authority.

The normal deadline for PPI complaints in relation to being mis-sold the cover is six months. However, the FSA has extended the deadline for five months for those whose complaints were rejected by firms between November 28^th last year April 28^th this year. It is thought that around fifty five thousand people could benefit from the extension.

The additional five month period that has been granted by the FSA means that the tens of thousands of people whose complaints were turned down between November last year and April this year now have until towards the end of October this year to complain.

There was a delay in the FSA’s own plans whilst it decided how companies should be made to deal with PPI complaints. However, the regulator did not want consumers to suffer as a result of the delays, and this is why it has decided that it should extend the complaint deadline.

PPI has been at the centre of controversy for some time, and there have been investigations carried out showing that many people were mis-sold these policies, which were often sold to those that did not want them or were under the impression that they had to have the insurance cover in order to get the finance that they wanted.

One consumer said: “I’m glad that the FSA decided to extend the deadline, as otherwise I would have missed out on my chance to complain and possibly get a refund on cover that I believe to have been mis-sold to me.”

Tags: ppi, delay, payment protection insurance, finance, year, investigations, mortgage, Financial Services Authority

Another drop in lending by banks to businesses

Recently released figures have shown that for the month of April the level of lending by UK banks to non financial businesses fell, with lending falling by £1.1 billion. The figures were released by the British Bankers’ Association, and officials said that whilst April marked another fall in business lending the level of the drop was smaller than those seen in the previous six months.

In the past six months the average decline seen over the period was £1.6 billion per months, so the April drop is significantly lower. Industry groups and government officials have been urging banks to lend more to businesses because of the importance to the economy, and the drop in lending seen in April has been put down to a number of factors.

The British Bankers’ Association has claimed that part of the reason that borrowing to businesses has fallen is because there is a lower demand for finance from UK businesses, as many are exercising caution when it comes to borrowing. The BBA said that figures from the Bank of England showed that corporate deposits had been rising sharply.

However, other industry official believe that it is not just lack of demand that is hindering lending from banks but also the fact that many businesses are struggling to get finance from banks even in cases where they need to borrow the money. On a separate note the level of net mortgage lending from banks also fell in April, dropping to £1.8 billion.

Economist, Ed Stansfield, stated: “April’s soft mortgage lending data add weight to the idea that last year’s upturn in approvals overstated the underlying health of the housing market. Moreover, since the looming fiscal austerity measures will keep a lid on mortgage demand while the uncertain funding outlook will limit the supply of mortgage credit, weak lending looks set to remain the norm for some time.”

Tags: mortgage, Business_Finance, bank, british bankers association, finance

Boost your chances of getting a mortgage as a first time buyer

As many people are already aware getting a mortgage can be difficult for anyone these days, with the banks exercising extreme caution over who they lend to and putting a range of restrictions in place with regards to mortgage loans. However, one of the groups most likely to experience difficulties when it comes to mortgage loans is first time buyers.

There are many first time buyers that are desperate to get onto the property ladder, and have been for some time. However, for many years these potential buyers have faced difficulties when it comes to getting a property. Until the global credit crisis swept the nation first time buyers could get mortgages without even having to put down a deposit in most cases, but many could not afford the extortionate house prices that resulted from the many years of house price inflation.

Once the credit crunch hit property prices began to tumble, which is what many first time buyers may have been waiting for. However, at the same time as this the banks started to really rein in their lending, wiping out the 0 percent deposit that so many first time buyers had come to rely on and demanding huge sums up money upfront before even considering granting a mortgage loan. This has left first time buyers out in the cold once again, albeit for different reasons.

Whilst there is no doubt that first time buyers still face many challenges when it comes to getting a property there are some steps that they can take to try and improve the chances of getting onto the property ladder. One important thing to remember is that lenders are being very cautious over who they lend to, so it is advisable for first time buyers to be prepared and be aware of their credit rating. Before applying for a mortgage buyers are advised to order a copy of their credit report and check how good the rating is, as this will provide an idea of how likely it is that a mortgage will be granted.

Another think to consider is the level of deposit that the lender will want. Before wasting time looking at properties and applying for mortgages first time buyers should plan their budgets and spend time saving as much as possible, as the higher the deposit the more likely it is that an affordable mortgage will be granted by lenders.

Finally, more and more first time buyers are now turning to shared equity schemes, where they get a mortgage out to purchase a percentage of a property and rent the remainder from a housing association until they can also afford to buy the remaining share, which can be done in stages. This is a more effective and affordable way for first time buyers to get onto the property ladder these days, and it is possible to get a brand new house without having to take out a huge mortgage by using this option.

Tags: money, check, potential buyers, Mortgage loan, finance, mortgage

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

Lloyds cracks down on interest only mortgages

Over the years interest only mortgages have become popular amongst certain property purchasers, such as first time buyers that want to keep repayments down and those on lower incomes. With interest only mortgages the borrower repays only the interest on the loan over the specified term, which means that at the end of the term the actual loan itself still needs to be repaid.

The idea is that when these mortgages are taken out the borrower also sets up another investment so that over the years they can raise the money to pay the loan off in full at the end of the term. However, officials believe that many people that took these mortgages out had no plans in place to save for repayments of the loan at the end of the term, and many were simply relying on the value of their property increasing sufficiently to sort out the loan.

Lenders have become far more cautious about taking risks over the past couple of years, since the onset of the global credit crisis, and according to recent reports have now started to crack down on risky interest only mortgages. Many lenders have been reluctant to deal with interest only mortgages for some time, but more and more are now set to become wary of these deals according to reports.

One banking giant, Lloyds TSB, is said to have already started its crackdown on interest only mortgages, and has placed a cap on the amount that customers can borrow without repaying the capital. It is now thought that other lenders will quickly follow suit in terms of clamping down on these mortgages.

An official from Savills Private Finance commented on these interest only mortgages, stating: ‘Lenders see them as being extremely risky, and they would much prefer everybody to have a repayment deal. There will be fewer and fewer of them, and they could eventually disappear.’

Tags: Mortgage loan, mortgage, risky, tsb, lloyds, Interest-only loan, finance

Have things improved for first time buyers?

Over recent years things have gone from bad to worse for many non-homeowners that may have been hoping to get onto the property ladder. After years of soaring property prices many would be first time buyers will have been pleased to learn that prices starting plummeting following the onset of the global credit crunch in the latter part of 2007.

However, just as things looked as though they were on the up first time buyers were hit with a plethora of new problems, with the global financial meltdown resulting in severe restrictions on mortgages. This also led to banks increasing the level of deposit that they wanted from first time buyers, making it impossible for many people within this group to scrape together the minimum deposit that lenders were demanding to get an affordable mortgage.

The global credit crunch and he recession left many first time buyers hoping that their luck had changed and that things would ease off. For many this marked the chance of being able to get a property at last. However, this is not what has happened according to recent reports. Despite the recession being over and reports that banks were being more relaxed over lending first time buyers are still in for a bad time.

A number of reports have claimed that the banks are being increasingly cautious about mortgage lending and are still only offering their best deals to those that have a fairly sizeable deposit. This means that first time buyers need to be able to stump up a fair amount of cash towards a property if they want to get a mortgage that is affordable.

A number of things are thought to be affecting the decision of banks to continue their caution when it comes to mortgage lending. One has been the uncertainty over the running of the country resulting from the hung parliament following the general election recently. Whilst this is some way to being sorted, with leader of the Conservative party, David Cameron, now named as Prime Minister the country still finds itself in a situation that it has not seen for decades in the form of a coalition government formed with the Liberal Democrats.

Another of the factors thought to be affecting mortgage lending is continued uncertainty over jobs, with banks loathe to take the risk of lending in a climate where the risk of job losses is high.

Tags: loan, finance, first time buyer, last, time buyers, Mortgage loan, mortgage, whilst

Mortgage approvals still slow

According to figures mortgage approvals in the UK for the start of this year have been sluggish despite optimism over improvements in the market. The Bank of England released data showing that the level of mortgage approvals in March did increase slightly from the previous month rising from 46,882 to 48,901.

The figure for mortgage approvals in March was also said to be 17 percent higher than the figure in March of last year, so there have been some signs of improvement. However, the bigger picture indicates that mortgage approvals remain sluggish for the first part of the year.

Apart from 2009 the number of mortgage approvals for the first quarter of this year was at its lowest on record according to the figures. One economist said that the Bank of England figures showed that the mortgage market and housing sector were finding it difficult to gain momentum following the turbulence of the last couple of years.

He added that over the coming months property prices in the UK were likely to be erratic, and for the remainder of the year it was most likely that property prices would be flat. The Building Societies Association added that the mortgage market remained fragile and was likely to remain so in the short term.

The group said that some of the factors that could contribute to this fragility included the uncertainty over leadership of the country, jobs, interest rates, and inflation on property prices.

One financial expert concluded: “It is good news for borrows that lenders are slowly acclimatising to a new landscape of the mortgage market and continue to improve on the competitiveness of new mortgage deals. But lending figures show that there is only a slight improvement in the market; we still have a way to go before the market returns to any sort of normality.”

Tags: bank of england, new landscape, slight improvement, month, finance, Banking

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

First time buyers fail to budget effectively

A recent report has indicated that many first time buyers fail to budget properly before they make the move into their new home, and often receive a shock when they realise that they outgoings are going to be far higher than they initially anticipated.

Many first time buyers are budgeting for things such as deposits, mortgage repayments, and shopping, but are failing to get prices for essentials such as utilities, insurance cover, and the like. In addition, many fail to account for costs such as petrol and general spending money when they are working out affordability, and this can come as a shock when they actually move in to the property and start paying out.

Buyers that are moving into a property for the first time and are therefore unaccustomed to the services they will need and the cost of these services are advised to seek advice prior to accepting any mortgage offer, otherwise they could find themselves in a property with a mortgage but may not be able to afford to live there.

Common things such as monthly or weekly shopping, home insurance cover, television licence, utilities, broadband or Internet costs, mobile phone usage costs, and general day to day spending money are amongst the things that many first time buyers fail to budget for when working out whether they can actually afford to buy and live in their own property.

One first time buyer who purchased a property last year said that it was a shock over the first month or so as she realised how many things she hadn’t budgeted for before moving in.

She said: “I’ve had to change my lifestyle completely because of the amount that I am actually paying out compared to the amount I had budgeted for. I wish I’d spent more time working out my budget rather than rushing to buy a property.”

Tags: budget, first time buyer, costs, finance, mortgage, Mortgage loan

Rules tightened on renting homes by banking industry

According to recent reports the banking industry has decided to clamp down and tighten the rules when it comes to renting out homes. Read more

Tags: fact, blasé, lenders, financial crisis, last ten years, short term basis

Renting out your home short term could be made more difficult

For many people in the past being able to rent out their homes when they are away for a period of time has been a great way to raise a little extra cash as well as to save leaving their property empty. Read more

Tags: time, order, property, climate, mortgage, consent, problems

Are we home and dry when it comes to repossessions?

The UK, like many other countries, has been through a tough time over the past couple of years in terms of finances, and one of the side effects of the financial crisis has been the soaring level of repossessions that have taken place. Read more

Tags: mortgage, financial crisis, personal finance, repossession, Financial Services Authority, homeowners

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

Interest rates and government intervention helped repossession levels

According to figures that were recently published there was a significant drop in the number of repossession in the UK in the final three months of last year. Read more

Tags: finance, United Kingdom, Labour, Subprime lending, government, general election, mortgage, economics

Increase in mortgage availability could spell good news for consumers

A recent report has indicated that the number of mortgages on offer to consumers could be on the increase, and access to these mortgage deals may be getting easier, even for first time buyers in some cases. Read more

Tags: lenders, Mortgage broker, mortgage, Mortgage loan, Subprime lending, deal, uk lenders, access

FSA cracks down on sale and rent back schemes

Over the past few years an increasing number of people have had to turn to sale and rent back companies to try and get themselves out of a sticky situation with their homes. Read more

Tags: Financial Services Authority, Renting, home insurance, Real estate, finance, mortgage, Economy of the United Kingdom, sale and rent back, Real property law

Are you hoping to get onto the property ladder this year?

Over the past couple of years first time buyers have been hit with a whole new problem. Following years of lack of affordability because of the sky high value of properties many first time buyers probably thought that their time had finally come when property prices started to plummet. Read more

Tags: mortgage, Subprime crisis impact timeline, Real estate, first time buyer, Mortgage loan

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

Mortgage fraud made possible with fake payslips from the Internet

Mortgage fraud is an issue that has been at the centre of a crackdown in the UK, with the difficult mortgage conditions that have been seen over the past couple of years resulting in a surge in mortgage related activity. An investigation was recently carried out by a national newspaper, the Observer, with one of its reporters finding out just how easy it can be to commit mortgage fraud. Read more

Tags: Mortgage fraud, worth, search, Observer, mortgage, mortgage related activity

Lenders consider lower deposits from borrowers

A number of recent reports have suggested that some lenders in the UK are now considering lower deposits from first time buyers. This comes after a particularly difficult couple of years where many first time buyers and low income families have been unable to get a mortgage because of the extortionate deposits that lenders have been demanding from customers. Read more

Tags: Super jumbo mortgage, Consumer fraud, Mortgages, United Kingdom, traditional mortgage, mortgage, extortionate deposits

New regulations from FSA spark comments from Cable

Spokesperson for the Liberal Democrats, Vince Cable, has recently commented on the changes that have been introduced by the Financial Service Authority with regards to mortgage lending. Read more

Tags: Association, something, fsa, building societies association, mortgage, FSA mortgage lending, Mortgages

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

Success for sale and rent back tenants

A couple who got involved in a sale and rent back scheme after selling their home to a sale and rent back company which then stopped making the mortgage repayments on the property have enjoyed victory recently, when courts decided that they could continue living at the property. Read more

Tags: homeowners, financial, sale and rent back, sales, campaigners

Fall in property rents noted by RICS

According to recently released reports the Royal Institute of Chartered Surveyors has noted a fall in rents in the UK in the three months leading up to April. Read more

Tags: house prices, property prices, london, mortgage, scotland, suitable tenants, rental market, Rent control

Buy to let investors to be hit hard by recession

It has been claimed that the buy to let industry is set to be hit hard as a result of the ongoing recession, with buy to let investors expected to lose money and take a real financial hit in the current economic and financial climate. Read more

Tags: mortgage, lending, potential pitfalls, Many investors, uy, Mortgages, finance, recessions

One year high for fixed rate mortgage lending

According to recently released figures fixed rate mortgage lending levels have recently hit their highest level in the space of around one year, as first time buyers and existing homeowners that are ready to refinance try and secure low rates clamour to take advantage of the all time low base rate, which still stands at 0.5 percent, which is the lowest level in the three hundred and fifteen year history of the Bank of England. Read more

Tags: Mortgages, first time buyers, lending, higher deposit levels, fixed rate mortgages, mortgage, council of mortgage lendres, personal finance

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, Mortgages, mortgage, mortgage deals, personal finance, availability, official, market

Ban on PPI by Competition Commission

For the past few years the insurance cover known as Payment Protection Insurance or PPI has been causing a great deal of controversy in the financial world. Read more

Tags: taken out, current economic downturn, mortgage, Competition Commission, meet repayments, selling, payment protection insurance

Woolwich launched cheapest mortgage since first loan

According to recent reports the Woolwich recently launched its cheapest mortgage deal since its first loan, which was made around one hundred and sixty years ago. Read more

Tags: first time buyers, woolwich, bank of england, confidence, cheap mortgages, fixed rate mortgage, low interest rates, mortgage

Many households could benefit from cut in energy prices

Over the past year many households in the UK have seen their finances take a battering for one reason or another. One of the things that has really impacted on household finances is the rising cost of energy, which soared twice last year. Read more

Tags: energy prices, mortgage, british gas, energy cuts, energy, reason, poverty, benefit

Mortgage rationing could get worse states CML

The Council of Mortgage Lenders has recently warned that mortgage rationing in the UK could continue to get worse, adding that mortgage lending has already been restricted for the past year due to the effects of the global credit crunch but that the restrictions on lending levels could get even worse over the coming year. A senior official from the CML, Michael Coogan, said that things could get increasingly difficult for many people as a result of the ongoing restrictions on mortgages. Read more

Tags: deposit requirements, loan, first time buyers, Banking, mortgage, whilst

£22 million in fines from FSA over 2008

Recently released figures have indicated that over the course of 2008 the Financial Services Authority handed down around £22 million in fines as it continued its crackdown against the mis-selling of payment protection insurance cover and tried to curb rising levels of mortgage related fraud. The UK’s financial regulator has been handing down record fines over the course of the year according to industry officials. Read more

Tags: fsa, disappointment, ongoing problem, payment protection insurance, financial

Lenders issued with deadline to prove fairness

The UK’s financial regulator, the Financial Service Authority, has been contacting lenders that deal with home loans, and has advised them that they have a deadline by which they must prove that they are exercising fairness when it comes to their customers. Lenders will have to prove that customers that have arrears or are facing repossession are being treated fairly, and they have until the end of January to prove that this is happening. Read more

Tags: loan afirness, fsa, Arrears, repayment, loan, mortgage, fairness

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

Low deposit mortgages increasingly difficult to get

Consumers that are hoping to take out a mortgage to buy a property are still facing a tough time according to officials, even thought house prices have been falling for the past year. Availability of mortgages is still very tight as a result of the ongoing global credit crunch, and many lenders continue to take some of their best deals off the market after very short periods of time. Read more

Tags: are, low deposit mortgages, mortgage, economics, traditional level

You don’t have to sell up to make money from your home

The years of the property boom seem like they were a long time ago, but in reality it has only been a couple of years since the property bubble exploded with a resounding bang. During the years of the boom many homeowners in the UK made a killing on their investments, having seen the price of property soar in the UK. However, with property prices having plunged many have lost some or all of the equity in their homes, and this has left them unable or unwilling to sell their homes. Read more

Tags: Real estate bubble, Real estate, home insurance, Loss mitigation, mortgage, Renting, advertising boards

Questions to ask before taking a secured loan

When an individual is taking out a secured loan, there are many questions to ask before taking the loan. Before you take that secured loan out, you should not be afraid to ask the lender questions. Within this article, we are going to tell you some questions that you may want to put on the list to ask the lenders of thatsecured loan. Read more

Tags: good credit, money, Hard money loan, percent, high points, secured loans, way, mortgage

Rate cut could benefit many homeowners

The latest interest rate cut, which was announced after the February 2008 Monetary Policy Committee meeting, could benefit many homeowners according to recent reports. This comes after nine out of the ten top mortgage providers in the UK announced that they would be passing on the full 0.25% rate cut to consumers. Many lenders rushed to announce their intention of passing on the full rate cut following the Bank of England’s announcement. Read more

Tags: recent reports, mortgage, mortgage repayments, rate mortgages, finance, borrowers, variable rate mortgage

Many people could find it even more difficult to sell their homes

A recent report has shown that many homeowners in the London area could find it increasingly difficult to sell their homes in the near future, as a result of new plans that may be introduced to force homeowners to inform potential buyers about the risk of flooding. It is already very difficult for many homeowners to sell their properties due to problems in the mortgage and housing markets, and this could matters even worse for many more. Read more

Tags: flooding, housing, risk, interest, housing markets, mortgage

UK asking prices getting lower

A recent report has shown how asking prices on properties in the UK are getting lower with a fall of an average 3.2% in asking prices over recent weeks. The data comes from property experts Right Move. Many experts have already predicted that the housing market will continue to cool down over the coming year, and there has already been much evidence that the housing market is far more subdued than it was earlier in the year, with a number of factors dampening the housing and mortgage sectors.

One of the factors that is thought to have affected the housing market is the roll out of Home Information Packs, which were rolled out to all residential properties being marketed for sale in England and Wales from the middle of December 2007. This has caused “further confusion at a sensitive time for the property market” according to some experts. However, experts from Right Move have added that there is always a slowdown at this time of year.

Asking price averages have also fallen because there are now more smaller, lower prices properties coming onto the market rather than larger, more expensive properties, state experts. There was an average fall in asking prices of 6.8% in the London area according to figures, and this has also been partly blamed on the level of smaller properties coming on the market rather than larger houses and apartments.

One Right Move expert stated that over the coming year house prices are more likely to stagnate than actually crash. He also said: “New listings are low at this time of year so the artificial wave of ‘low-end’ sellers has really distorted the average prices of properties new to the market.”

Recent Additions:

• 100% mortgage customers should watch out for negative equity
• Homeowners are not as well off as tenants
• Increasing number of first time buyers look to brokers for assistance
• Gazundering becoming more commonplace
• Unions angry over insurance job cuts

Tags: housing market, property price, evidence, mortgage, United States housing bubble, first time buyer

Mortgage lender offering some impressive rates on savings

According to a recent report a number of mortgage lenders have been offering some impressive interest rates on savings accounts in a bid to increase deposits from savers to aid funding. Many banks and lending institutions have experienced funding problems as a result of the credit crunch, which has swept across the country leaving a trail of turmoil in the financial markets. A number of high profile casualties, such as Northern Rock, have suffered terribly as a result of the problems in the financial sector, and mortgage lenders are desperate to avoid heading down the same route. Read more

Tags: bank, issue, mortgage, result, impressive rates

Homeowners are not as well off as tenants

Over the past year the benefits of owning a home as opposed to renting one have plummeted by 75% according to a recent report. This means that in many parts of the country people that are renting a home are actually better off than those that have bought their own home. According to the report tenants are actually faring better than homeowners in around 50% of the country’s regions.

This information was put together by the Abbey Bank in its latest Rent V Buy Index. The data indicates that those purchasing their property rather than renting a property saved around £24,000 last year. However, this year the figure has dropped dramatically to just £5800. Abbey official claim that this situation has been caused by rising property prices and sky high interest rates, which has resulted in rising costs for homeowners that have not necessarily affected those that rent.

As part of the study twelve regions were studies, and out of these it was found that tenants were better off than homeowner in six of the regions. The Abbey made these calculations based on a 90% LTV mortgage at an interest rate of 6.5%. Essential home maintenance costs were also taken into account in the survey. Read more

Tags: mortgage, interest rate, Renting, homeowner, renting a property

The ‘bulk’ of mortgage lending will be re-mortgaging

With fewer people applying for mortgages for new homes, an expert has predicted that the “bulk” of this year’s mortgage lending will be in the re-mortgaging area. Read more

Tags: Financial Services Authority, mortgage, Pauline McCallion, The, Business Finance, attractive mortgages, year's mortgage lending, first time buyer

House building halted as buyers struggle to get mortgages, says FMB

The number of new houses being built in the UK has dropped in recent months because property developers have backed out of projects as people struggle to find mortgages to buy property, according to the Federation of Master Builders (FMB). Read more

Tags: mortgage, lifestyle, Barratt, house builders, Mortgages, divorce

Demand for five-year fixed-rates ‘rises’

Demand has increased for fixed-rate mortgages lasting five years for the third month in a row, according to figures newly released by Abbey. Read more

Tags: base rate, Institution, fixed rate mortgages, director, periods, mortgage, Mortgages, bank's latest mortgage

CAB: People struggling to meet basic living costs

The Citizens’ Advice Bureau (CAB) has said that more people are seeking help because they are struggling to pay basic household bills as the credit crunch tightens.

A spokesperson for the charity said the combination of soaring household expenses and rising housing costs is putting extra pressure on people’s budgets.

The CAB said that the number of people approaching the organisation for advice on mortgage arrears problems rose by 35 per cent in the first two months of 2008 compared with the same period last year.

Many people are also having difficulties paying for essentials such as gas, electricity, water and council tax.

“We believe these trends reflect recent increases in the cost of living, suggesting a significant number of households are struggling to meet their most basic living costs,” said the spokesperson.

According to the Office for National Statistics, UK consumer inflation reached its highest level in 13 months in April due to high food and fuel costs.

Tags: mortgage, statistics uk, Citizen's Advice Bureau, credit crunch tightens, economics, office, number of households, spokesperson

Repossessions least likely for first-time buyers

The operations director of Firstrung has said that first-time buyers are the least likely group to have their homes repossessed under the current economic conditions.

Paul Holmes said this group is unlikely to face the same difficulties repaying their mortgages as families who have recently upgraded to larger houses.

First-time buyers have tended to take out mortgages that are “very manageable”, with the average loan being £115,000 over the past two years.

In contrast, buyers with mortgages in excess of £250,000 on a four or five bedroom property are likely to have “real problems”, Mr Holmes warned.

Mortgage possession claims, the first stage of the repossession process, increased by 16 per cent in the first quarter of this year, according to statistics from the Ministry of Justice.

“First time buyers who have recently climbed onto the first rung [of the property ladder] are least affected by the problems than any other buyer group,” Mr Holmes commented.

Tags: first time buyers, bedroom property, Justice, Ministry of Justice, average loan, mortgage

Mortgage finance working group launched to advise government

A group of industry experts has been established to provide advice to the government on how to improve the function of mortgage finance markets.

The group has been formed in response to the complex issues raised about the functioning of the mortgage-backed securities markets due to the ongoing crisis affecting global financial markets.

Its first job will be to assess the current state of the mortgage finance market.

Led by former HBOS chief executive Sir James Crosby, the working group will draw on the experience of lenders, investors the Treasury, the Bank of England and the Financial Services Authority.

Chancellor Alistair Darling said that the group’s “work will be an important contribution to stabilising the cost and supply of UK mortgages”.

Earlier this week, the news editor of moneywise.co.uk said that although there is still demand for new mortgages at the moment, it is difficult to tell whether it will last.

Rebecca Atkinson said that First Direct’s decision to stop selling mortgages to new customers shows that mortgage lenders are suffering from liquidity problems and also trying to attract good-quality borrowers rather than a high quantity of customers.

Tags: government, First Direct decision, hbos, job, mortgage, liquidity

Future Mortgages slashes loan-to-value ratio by 20%

Specialist lender Future Mortgages plans to slash the maximum loan-to-value ratio by up to 20 per cent today for its prime and near-prime products.

Future Mortgages has reviewed its lending due to soaring demand for mortgages as well as daily price increases from competitors, resulting in the decision to tighten lending criteria.

The latest research from the Abbey Mortgage Index confirms that mortgage lenders can expect a high demand for five-year fixed rate mortgages, despite recent reports that the mortgage market is declining.

Additionally, the number of people who would choose any type of fixed mortgage product has risen from 35 per cent last month to 53 per cent this month. However tracker mortgages are less popular with only five per cent of respondents opting for them compared to 12 per cent last quarter.

Commenting on Future Mortgages’ decision, a spokesman said: “We see these actions as prudent and a strong indication of our desire to retain a market position in chosen sectors while simultaneously maintaining our servicing proposition in these challenging times.”

Tags: loan, Abbey Mortgage, tracker, maximum, month, mortgage, daily price increases, tracker mortgages

Consumers should “research the market” when looking for a mortgage

It is important for consumers to shop around when looking for a mortgage, one property expert has claimed.

According to the Council of Mortgage Lenders (CML), buyers should do all the “obvious things” when looking for a mortgage with researching the market being one of them.

Sue Anderson, a spokesperson for CML, said: “Knowing the product range that is out there is obviously important for borrowers so that they can assess whether the person who is advising them is pushing them towards a product that looks suitable for them.”

Ms Anderson added that there are a number of ways that allow you to do this, such as checking the Financial Service Authority’s comparative tables, and the range of published sources on the web from various commercial providers”

In February 2008, the CML reported that there had been a move-away from fixed-rate products as consumers became increasingly attracted to tracker products.

Meanwhile, the mortgage market has been badly affected by the credit squeeze. In October last year, Moneyfacts reported that 40 per cent of mortgage products had “disappeared”.

Tags: Mortgage loan, credit, year, credit squeeze, mortgage

Fixed-rate mortgages proving popular

Despite predictions that interest rates will likely fall again in 2008, fixed-rate mortgages are continuing to grow more popular, new research suggests.

Data from Abbey reveals that 35 per cent of homeowners would choose a fixed-rate loan if they were re-mortgaging tomorrow, which is an increase from February’s figure of 31 per cent.

Nici Audhlam-Gardiner, director of Abbey Mortgages, said that the findings suggest that “the appetite for fixed-rate mortgages remains high”.

“We expect that economic uncertainty is contributing to this trend, as people try to take control over their outgoings,” she commented.

The survey also found that five-year fixed-rate deals were the most attractive to homeowners looking for a new mortgage, follwed by two and three-year deals.

Meanwhile, the Charcol Mortgage Monitor also recently revealed an increase in the uptake of fixed-rate mortgages, with 52 per cent of all borrowers choosing this option in February.

Tags: increase, mortgage, Charcol, rate deals, February

Mortgage borrowers urged to “think carefully”

Following the Bank of England’s decision to keep the base rate of interest on hold, one expert has advised borrowers to consider the possible downsides of taking out a variable-rate mortgage.

Mark Blackwell, director of intermediary sales at Alliance & Leicester, said that while those with variable-rate mortgages may have “benefited” from the rate cut announced last month, further rate reductions may not be so forthcoming.

According to Mr Blackwell, under present conditions borrowers ought to “think carefully” about the negative aspects of “locking” into a variable-rate product, particularly as the Bank may choose to tackle rising inflation with a rate hike.

“Fixed-rate products continue to remain a wise choice for first time buyers, people moving house or refinancing,” he said.

As 1.4 million borrowers are likely to come to the end of their fixed-rate deals this year, a similar product may “help to manage the impact of higher monthly payments”, he added.

The Bank chose to maintain the base rate at 5.25 per cent yesterday, having reduced from 5.5 per cent a month earlier.

Tags: base, decision, base rate, director, mortgage, yesterday

Rates for secured loans are becoming as competitive as unsecured deals

Homeowners looking for a significant cash advance can now choose from secured loan deals which are even more competitive than the average unsecured loan rate, financial experts have claimed.

According to Moneyexpert.com, the average APR on a £15,000 unsecured loan is an estimated 8.44 per cent.

However, borrowers with the option of securing the loan against their property have been able to get interest rates as low as 5.9 per cent, almost 2.5 percentage points cheaper than the average unsecured loan rate on the market for balances of £15,000.

Sean Gardner, chief executive of MoneyExpert.com, said: “Historically secured loans were seen as something of a product of last resort.”

“But these days they are far more attractive to homeowners who are looking for a competitive rate of interest,” he added.

Findings from MoneyExpert.com reveal that demand has increased for secured loans in the past six months with an 85 per cent rise in the number of applications seen in the last quarter ending in January 2008.

Meanwhile, further research from finance experts have shown that 1.39 million have switched mortgage provider for a better deal in the past six months.

Tags: mortgage, Moneyexpert, loan, finance experts, Loans, cent rise

Parents can help children buy property

First-time buyers can receive financial help from their parents when paying for a property without any inheritance tax implications, one mortgage expert claimed.

Bestinvest said that if a child’s funding for purchasing a house is assisted by their parents, then they are “party” to the mortgage.

Because of this, parents would rather give them some money and ensure the mortgage is in the child’s name, stated the firm.

Peter O’Donovan, mortgage manager for Bestinvest, said there would be no inheritance tax implications if a property is in a child’s name.

“Even when the parent uses their income to assist [with mortgage payments], the mortgage might be in three names but the property will just be in the child’s name,” he added.

Research released by Abbey earlier this month found that first born children are more likely to receive financial help for a home purchase than their siblings.

Up to 17 per cent of first-borns are given money towards their first home compared with 12 per cent of second-born children.

Tags: help, month, mortgage expert, income, cent, personal finance, mortgage

Student debt “unlikely” to affect first time buyers

Having a student debt is “unlikely” to restrict students’ abilities to make their first steps onto the UK property market, one expert claims.

Financial solutions specialist Firstrung said that despite recent reports that student loans will be incorporated into people’s credit files, this is not likely to result in loans being turned down.

Paul Holmes, chief executive officer with company, said: “It’s unlikely to hamper students’ ability to buy, and secondly, I think quite frankly a lender would dismiss that kind of commitment in a month.”

He added that despite the figures the “media often likes to paint and shock and bore us with”, the reality of student debt is quite low when they come out of university.

However, although students’ ability to buy property is unlikely to be hampered, Firstrung expect finances to be “raked over a lot more intensely” due to the current economic climate.

Last week, mortgage company mform.co.uk warned that that more first-time buyers will be turned down for loans as student loans will be incorporated into people’s credit files.

Tags: shock, debt consolidation, mortgage, lot, student debt, week, Firstrung expect finances

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

Mortgages for ‘unconventional properties’ difficult to get

Borrowers can find it difficult to finance a mortgage for an unconventional property due to uncertainty over its value, claim financial experts.

Lansdown Place said that listed buildings, particularly those made from unusual materials or with a high protection rating, can be difficult to find funds for.

Simon Harris, spokesperson for Lansdown Place, said: “For listed buildings, the various restrictions on what can be done and the covenants that demand what must be done will potentially adversely affect the security in the eyes of a lender.”

He added that the main other issue is durability, which can also potentially apply to eco-friendly homes, an area of “potential growth” in the housing market.

According to English Heritage, there are 370,000 or so listed buildings currently protected in the UK. Of these over 92 per cent are Grade II – the lowest level of listing, for buildings “of special interest, warranting every effort to preserve them”.

Tags: Heritage, English Heritage, cent, financial experts, unconventional properties, Grade, mortgage

Mortgage lenders ‘targeting better qualified people’

The mortgage crunch has prompted mortgage lenders to target “better qualified people and lower risk people”, according to industry experts.

FirstRungNow.com said that products such as guarantor, professional, joint and graduate mortgages are now “coming to the fore”, as market conditions has made lenders keen to use these services.

Helen Adams, director of FirstRungNow.com, said: “The lenders aren’t necessarily put off by people being credit averse or being in debt despite the market conditions.”

Lenders have confidence that graduates and professionals will be able to pay their mortgages off, she said.

Ms Adams stated that lenders take a “holistic view” about earning versus debts and “won’t lend unless they think that the risk is reasonable to them.”

Scottish Widows, one of the leading banks in the graduate mortgage market, currently offers a 102 per cent mortgage to graduates.

This is open to all graduates of recognized universities under the age of 40.

Tags: mortgage, view, guarantor, averse, credit averse, debt

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: time, loan, mortgage, time buyers."It, house, council of mortgage lenders

Tips offered on mortgage protection

Don’t borrow more than you can afford and seek independent advice before buying are just two of the mortgage protection tips offered by industry experts, LifeSearch.

The guidance arrives as consumer confidence has been affected by the Northern Rock crisis. Interest rates are also near a six-year high at 5.5 per cent, despite coming down last week.

Matt Morris, LifeSearch policy adviser, said: “Many people consider protecting their mortgage, but they usually select a policy that will pay it for them when they can’t work.”

He added that what they actually should be protecting is their income, which not only pays the mortgage, but also pays all the other bills and the everyday cost of living.

LifeSearch also advises consumers to check employee benefits, not to buy Mortgage Payment Protection Insurance without considering Income Protection and ultimately take some form of action.

LifeSearch is a life insurance and protection specialist which was established in 1997. It currently has over 200,000 customers and more than £13 billion worth of cover arranged.

Tags: Many people, week, mortgage, Matt Morris, Financial economics, life, high

Uncapped mortgage charges ’skyrocketing’

The number of mortgages with uncapped upfront fees has risen dramatically in the past 12 months, it has emerged.

Now at 506, the number is five times what it was a year ago, with application fees rising as high as 3.25 per cent of the loan value, according to MoneyExpert.

Sean Gardner, chief executive of the website, commented: “Borrowers need to look carefully at mortgage deals and not just focus on the interest rate. What might look like a good deal will soon become a bad deal once fees are taken into account.

“Mortgage application fees are nothing new but lenders often won’t publicise a change to their fee structures, meaning some homeowners could be unaware of this huge shift to uncapped charges.”

Capped upfront fees have also gone up in the past year by an astonishing 63 per cent, with the average fee growing to £834 from £509 in November last year.

Mr Gardner concluded that those confused about fees should work out how much they are able to afford and then seek advice about whether the fees can be added onto the loan.

Tags: borrowers, chief executive, United States, executive, advice, mortgage, business, fee

Consumers unsure of rate change impact

The majority of Brits are unclear on the value of a one per cent mortgage rate difference, it has emerged.

Research by Nationwide Building Society has found that 75 per cent of people in the UK do not know how much real difference this would make to their mortgage, which could be up to £4,000 on a five year fixed rate mortgage deal.

Meanwhile, when told to compare two five year mortgage deals to compare, the largest proportion of respondents (28 per cent) said there would be a difference of £500 to £2,000 between a £120,000 mortgage with interest of 5.6 per cent and one with interest of 6.6 per cent.

In fact the difference would be £4,000, which was correctly identified by just 23 per cent of respondents.

“People’s lives are busier than ever in the run up to the festive season and, as a result, they may be less inclined to shop around for the best deal. The temptation may be to take a slightly higher rate as an easier, less hassle option,” said Matthew Carter, divisional director for mortgages at Nationwide Building Society.

Tags: mortgage, research, divisional director for mortgages, mortgage rate, Real estate, building, best deal, run

Secured loans market rocketing

The personal secured loan market in the UK is predicted to grow to in excess of £10 billion by 2011, it has emerged.

Information collected by Datamonitor revealed that the growth in this type of loan from £7.5 billion in 2006 is prompted largely by increased demand to consolidate debt.

This growth is remarkable particularly because some lenders have pulled out of the market following the sub-prime crisis that hit the US this year, making lending increasingly tight.

Maya Imberg, analyst with Datamonitor’s Financial Services practice, commented: “The US sub-prime mortgage crisis and global credit crunch will affect the market in the short term.

“However the UK secured personal loans market continues to portray an encouraging future in the long term.”

Among providers pulling out of the secured loan market are Kensington Personal Loans, the London Mortgage Company, Southern Pacific Personal and GMAC-RFC.

Meanwhile, those looking to take out a secured loan will find prices going up with tighter borrowing criteria, making it increasingly difficult to do so.

Tags: market, debt, Datamonitor's Financial Services, US, mortgage, sub prime mortgage crisis, secured loan market

Popularity of equity release in the rise

According to a recent report the popularity of equity release schemes is on the up, and experts state that the quality and service in this area is also improving.

Equity release schemes have gained a bad reputation and have been at the centre of controversy, with one equity release provider recently being fined by the Financial Services Authority for giving inaccurate advice to consumers. However, despite its poor reputation equity release is becoming a hit with older homeowners.

According to Norwich Union these equity release schemes are particularly popular with homeowners that are close to retirement. In a survey of 1600 people between the ages of 50 and 56 one in ten stated that they would consider equity release programmes in the future. These schemes were not as popular with those that had already retired, with survey results showing that only one in twenty retired consumers would look at equity release.

One equity release worker stated that the information provided to consumers these days is far more detailed and comprehensive.

She said: ‘The market today is very different. The paperwork given to customers before they sign goes so much further. It really shows what they’re getting into.’

A Prudential equity release customer also said: ‘I was afraid of the financial bits, but my neighbour sat in on one of the meetings. It told me how much I could draw down and I’ve taken about a third of an agreed maximum.’

She added: ‘The compound interest rate is the nasty bit. The man from the Pru worked out that on average I’m likely to live another 27 years. He then told me how much I’d owe, based on the interest rate, if I borrowed varying amounts over various times.’

Alan Wright
26th November 2007

Tags: property, equity, value, home, release, loan

Next Page »