Mortgage approvals reach ‘record low’ in May

The number of mortgage approvals for house purchases reached a record low last month, according to an industry body.

Figures for May show that remortgaging levels held up, accounting for a record 53 per cent of all mortgages approved, reported the British Bankers’ Association (BBA).

It also found that consumers spent more on their credit cards last month but repayment levels on credit cards were lower.

BBA statistics director David Dooks suggested mortgage activity was lower in May as a result of tighter lending criteria and economic pressures on households.

He added: “Only remortgaging business is holding up, where people need or want to take advantage of deals with other lenders.”

Separate research released last week by the housing charity Shelter suggests that more than four million households used credit cards to help meet rent or mortgage costs in the past 12 months.

It also found that over two million households are spending in excess of half their income on rent or mortgage payments.

Tags: BBA, lending, number, repayment, result, finance, economic pressures

Homeowners facing arrears advised to speak to lenders

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

Tags: council of mortgage lenders, plan, problem, credit, Mr Clarke, mortgage lending, option, mortgage payments

Government help for mortgages “too slow”

The government should act more quickly when providing aid for mortgages to people in financial difficulties facing repossession, says National Homebuyers. Read more

Tags: Mortgages, economic conditions, mortgage help, Mr Coogan, lender, mortgage payments, large lenders, mortgage lenders

Consumer wellbeing ‘worsening’

Many consumers are facing increasing strain on their day-to-day living costs and spiralling levels of debt, according to research from financial experts.

Findings from the Financial Reality Index from the Alliance Trust, which analyses factors underlying consumer wellbeing, has revealed its biggest fall in 18 months.

The index decreased by 10 per cent, from 88.6 in the previous quarter to 79.7 per cent in the fourth, one of the lowest levels in the study’s 11 year history.

Shona Dobbie, head of the Alliance Trust Research Centre, said: “Our measure of consumer wellbeing shows a worsening picture not only for household budgets, but for consumers’ net wealth and the economy as well.”

She added that, although consumer spending does not appear to have taken stock of the financial reality, “we expect consumer spending to slow further over the next year”.

Over spending for the past two years is supposedly to blame for the current pressures upon budgets with higher food and fuel prices and heavy levels of debt and mortgage payments.

Meanwhile research from the Alliance Trust has shown that the over-75s and under 30s suffer the worst rates of inflation.

Tags: picture, trust research, debt, factors underlying consumer, lowest levels, mortgage payments, household budgets

BOE warns mortgage defaults to increase

Defaults on mortgage payments are expected to increase this year, according to the latest research from the Bank of England.

The Bank’s Credit Conditions survey revealed that borrowers and small-to-medium-enterprises are expected to find it increasingly difficult to source loans after the tightening of lenders’ belts due to the effects of the credit crunch.

The Council of Mortgage Lenders said that the findings increase the likelihood of a further cut in interest rates.

Bob Pannell, head of research at the CML, said: “This survey corroborates other evidence of worsening market sentiment. This may increase the chances of interest rate cuts sooner rather than later if inflation remains subdued.”

He recommended that consumers should re-evaluate their finances to avoid coming financially unstuck.

The number of borrowers who default on their payments is expected to the rise as a number of fixed rate mortgages expire over the next few months.

The Bank cut interest rates to 5.5 per cent last month, the first cut for two years.

Tags: head, Financial crisis of 2007–2009, economics, loan, finance, belts, source

Man steals from boss to pay mortgage

A North West shop worker has admitted to magistrates that he stole money from his boss to make his mortgage payments, the Wirral Globe reports.

John Griffiths, who previously worked for the Carpet Company outlet in Birkenhead, has admitted to stealing £1,821 from the business.

The court heard how the acts were discovered by fellow employees after discrepancies on sales documents were investigated.

It was revealed that, on around fifty occasions, he had made illegal transactions, all in cash.

Mr Griffiths apologised to the court, and said that he felt at the time that he had no choice but to steal, if he was to keep his home. He had been suffering from mortgage problems for some time.

The newspaper added that he had admitted to having “let himself down”.

He has been sentenced to 180 hours community work and is to pay £500 towards compensation.

Tags: mortgage payments, West shop worker, Globe, fifty, John Griffiths, compensation, mortgage, discrepancies

Property shortage fuels price rises

A new report says that house prices are rising due to a lack of property for sale on the market.

The Rightmove Price Index has found that prices in Britain have risen from an average of £221,751 in December, to £222,859 in January.

That means annual house price inflation is up to 13.5 per cent and the rise is being put down to a lack of housing.

The index says that housing stock is 18 per cent lower than it was at the same time last year, with Rightmove citing this as a major factor in the price rises.

“Where there are shortages of property, prices will keep increasing and properties will keep selling, in spite of the latest interest rate rise,” said Miles Shipside, Rightmove commercial director.

“The reason house prices are defying the gravity of a six-year high in interest rates is because the number of new households is growing by 50,000 a year, more than the supply of new build.”

The Bank of England has recently raised interest rates in a bid to bring the housing market under control, but Mr Shipside pointed out that this may be a risky strategy.

“Slowing property prices by raising interest rates several times in quick succession is not only incredibly painful for existing and potential homeowners’ mortgage payments, it’s a high-risk strategy for the economy given the possibility of rates going too high,” he said.

Rightmove has revealed that it expects to see property prices rise by six per cent this year.

Tags: Rightmove, property prices, mortgage payments, Business Finance, major factor