http://www.londonmortgageadvice.co.uk/news/article/626 Rising from £5,290 in 2001 to £8,922 last year, the total cost of moving home has increased by 69% in the last decade,. That outstrips the 64% rise in average house prices over the same period, according to research carried out by Lloyds TSB. This now shows that the cost of moving is now equal to 27% of average earnings before tax. This takes into account 6 house moving expenditure categories: average estate agency fees have gone up by £1,318 in the last decade; mortgage fees up £770, Stamp Duty up £732; conveyancing up £366; removal service up £305 and surveying up £140. According to the research only twenty four per cent of people who have moved home in the last three years budgeted adequately for these increased costs. Of the remaining 76%, 61% relied on savings to cover the cost of moving home, 18% fell back on friends and family, 16% used their credit card and just 14% were able to use existing equity. "With the costs associated with completing a home move in the UK rising substantially over the past decade, the task for those looking to move home has undoubtedly become more challenging. The significant rise in home moving costs is particularly concerning at a time when demand in the UK housing market is weak." Stephen Noakes, director of mortgages at Lloyds TSB commented: "With the cost of moving at its highest level since 2007, consumers struggling to cover the costs should look to make savings wherever they can. With mortgage fees making up around 12% of the overall outlay, considerable savings could be made by looking for a fee free mortgage option." 2012-02-03 http://www.londonmortgageadvice.co.uk/news/article/625 Moneyfacts has found that mortgage fees have risen by 68.5% over the last 12 months despite interest rates at a historic low of 0.50%. Whilst the fees on 90% and 95% loans have risen by 11%, the average fee for a 60% LTV mortgage has risen by 42%. “When making regular purchases it is easy to spot a bargain or disregard less competitive deals but this is much more difficult when making a very large one-off purchase such as a new home.In the excitement of buying a house it is easy to ignore arrangement fees but this could be a costly mistake especially if the fee is added to the mortgage loan.” Sylvia Waycot, spokesperson for Moneyfacts said that buyers need to ensure they add fees to their mortgage loan. “Last year there was a choice of 283 mortgages across the range of LTVs that did not charge arrangement fees, today that number has risen to 343, however, very little is for free and no arrangement fee could mean a higher overall loan rate.“The only way for buyers to properly compare is to ask their adviser for a ‘true cost’ projection which takes into account all payments over the life of the mortgage." Waycot added that when buyers are researching the best mortgage deal, they should not just include the headline rate but also set up charges and the incentives such as free legal fees. 2012-01-26 http://www.londonmortgageadvice.co.uk/news/article/624 Homeowners surveyed by Zoopla said they expected house prices to rise over the following quarter.In October, this was 59%. Down from 2.7% predicted over the past three months. This compares with figures from Halifax’s December House Price Index revealed that house prices dropped 0.1% in the three months to December. Whilst 29% expect house prices in their area to fall, only 24% of homeowners said they expect the value of their own property to fall over the coming six months Up from 68% last quarter,London homeowners were more optimistic about the housing market with 72% of Londoners expecting average values in the capital to rise over the next six months. What the surviey shows is that owners in the capital now predict property prices to grow by 4.7% over the first half of 2012. But there is a need for mortgage availability to improve. However barely more than 10% of the homeowners surveyed by Zoopla said they reckoned it was now easier to obtain mortgage finance than it was three months ago. 2012-01-12 http://www.londonmortgageadvice.co.uk/news/article/623 According to the Bank of England mortgage approvals are still less than half the level recorded in the run up to the banking crisis in 2007. Further more house lending rose by £0.6bn, less than the previous six-month average of £0.7bn. Whereas gross lending secured on dwellings was £12.6bn in November, higher than the previous six-month average of £11.7bn. Looking at the figures for November they were £11.6bn, higher than the previous six-month average of £11.2bn. Swithcing to remortgages the number of approvals decreased in November to 31,154, lower than the previous six-month average of 32,448. this shows that the mortgage market stunted The drop in the number of remortgages may possibly reflect how people are confident that interest rates are going nowhere for quite some time. 2012-01-05 http://www.londonmortgageadvice.co.uk/news/article/622 According to the latest statistics from property website Zoopla.co.uk, buying now is more attractive than renting in 47 of the 50 largest towns across the country. This has been caused by the continued mortgage drought and the rising demand for rental properties has led to renting now costing 15% more on average than buying, up from only 10% more this time last year. Comparing the rental cost to the cost of ownership based on servicing an interest-only mortgage at 5% p.a.,Zoopla analysed the current asking prices and rents of over 78,000 two-bedroom flats currently on the market. The most significant display of the margins involved is in London, where the average asking price for 2-bedroom flats currently stands at £442,036, buying also trumps renting by a big margin. With average monthly rents in the capital at £2,416, renting is 31% more expensive than the cost of ownership, leaving renters paying an extra £6,888 annually on average compared to owners. "Although buying may be more cost-effective than ever compared to renting, many potential buyers arenít able to take advantage because they can't access mortgage finance. "The shortage of financing, especially to first time buyers, has pushed demand for rental property through the roof. But for those lucky enough to be in a position to get a mortgage, there may never have been a better time to buy."Nicholas Leeming of Zoopla.co.uk, said: 2011-12-14 http://www.londonmortgageadvice.co.uk/news/article/621 According to the CML and as low interest rates continue to persist, monthly mortgage payments for first-time buyers are at their most affordable level for nearly eight years. With monthly mortgage payments taking up an average of 9.2% of their income, affordability for home movers alsois at its lowest level since CML records began in 2002. Down 1% year-on-year, however, loans to first-time buyers dropped 10% in October to 16,400 compared to the previous month. As with first-time buyers, home mover loans dropped by 7% to 28,000, down 8% in value to £4.5bn compared to September. Year-on-year, numbers were down 8% and 6% in value. Down 5% in number and 4% in value year-on-year, house purchase loans dropped 8% in number and value in October to 44,500 loans worth £6.5bn. When it comes to remortgages, loans slumped 15% in October to 28,900 compared to 34,200 loans in September, but were down just 1% on the same period of 2010. The value of remortgage loans was down 16% to £3.6bn. "Despite the fall in lending in October, it is possible that we will see signs of increased activity by first-time buyers in the early months of next year, as we approach the end of the government's Stamp Duty concession at the end of March. "The underlying picture of the market overall, however, is level, albeit at low levels of lending activity." Paul Smee, director general of the CML, said. 2011-12-09 http://www.londonmortgageadvice.co.uk/news/article/620 According to the latest housing market activity report by Connells, first-time buyer demand drove a monthly increase in mortgage market activity in November. Following a slight monthly dip in the previous month, the total number of valuations conducted during the month grew by 3% in comparison to October. A major factor in the increased level of mortgage activity in November, was the uplift in first-time buyer activity. The highest proportion since August and representing 29% of all Connells’ valuations, in November, the number of valuations conducted for first-timers increased 7% compared to October. “In November, first-time buyers exploited a short window of opportunity as rates for higher LTV mortgages improved briefly. “With house prices steadily declining, affordability has improved for new buyers, many of those able to secure mortgages have been acting quickly to complete before Christmas, John Bagshaw, corporate services director of Connells Survey and Valuation, commented. “Following the Chancellor’s decision not to extend to stamp duty holiday for first-time buyers, activity will be elevated in the short-term as buyers look to move before March. 2011-12-07 http://www.londonmortgageadvice.co.uk/news/article/619 The launch of a Sharia compliant Buy to Let Purchase Plan (BTLPP). has been announced by Islamic Bank of Britain (IBB However is can be said that Landlords of any faith can access IBB’s BTLPP with a deposit of 25%. It is a variable rate product available at a rental rate of 5.49% with an arrangement fee of 1% In order to kick start the new offering IBB is offering intermediaries a promotional procuration fee of 0.5% (gross) payable on referrals that drawdown prior to 31 March 2012. Some restrictions and benefits are that finance is limited for landlords with a portfolio of up to five properties, additional payments can be made and the mortgage can be paid in full at any point without an early payment charge. It has a maximum loan of £500,000 per property and £750,000 for properties in London. Finance above £500,000 will require a 35% deposit. “Buy-to-let is proving to be popular with investors again. Rental yields are increasing and property is seen as a good long-term investment. IBB’s Sharia compliant Buy to Let Purchase Plan will help fuel this growing sector by catering for landlords looking for Sharia compliant finance. IBB anticipates a strong demand for the newly launched product.” Simon Walker, head of sales, said. This is a description of the Sharia compliant product. The IBB’s BTLPP is based on joint ownership and rent. The customer and the bank buy the property jointly and the monthly payment increases the customer’s share in the property and includes rent on the share that the bank owns. At the end of the term the customer will own the property outright. It can be confirmed that th source of funds for IBB’s BTLPP is 100% Sharia compliant. IBB does not use any interest bearing instruments like bonds or derivatives. Instead it uses its own funds and deposits from customers, all managed entirely in accordance with Sharia principles. 2011-12-02 http://www.londonmortgageadvice.co.uk/news/article/618 To boost the hopes of first time buyers the Government's has announced in its autumn statement that the maximum liability the government will face as a result of the new build mortgage indemnity scheme will be £1bn. This potentially will benefit up to 100,000 new build mortgages to 95% LTV on new build properties, alongside putting £400m towards re-energising the construction industry. What this statement shows is that, for each new build property sold under the scheme, the home builder will contribute 3.5% towards the indemnity fund, while the government will provide a further 5.5% to a total of 9% of the property value. How this works is that the fund will pay out if the mortgaged property is repossessed and there is a shortfall in price. The home builders will take the first hit in such a scenario, while the government will only have to pay up once the builder's fund has been exhausted. It states in the repoert that : "The government will take on a contingent liability which will build up in line with purchases under the scheme, to a maximum of £1bn. "This will help up to 100,000 families and young people to buy their own home." 2011-11-29 http://www.londonmortgageadvice.co.uk/news/article/617 A report form the National Association of Estate Agents(NAEA) show that the number of sales to to this category fell to its lowest level in nearly three years last month. The NAEA report shows that against 22% sales in September to this sector only 16% sales were achieved in October. It is clear that first time buyers need more government help. And it can be noted that this is the biggest slump recorded by the NAEA in nearly three years. The previous lowest month was December 2008 when first time buyers made up just 10% of the market share. With 305 per branch in October compared with 308 in September, the number of house hunters registering at branches across the country also decreased slightly. According to NAEA President Wendy Evans-Scott there is still a lending barrier facing those entering the housing market for the first time. 2011-11-25 http://www.londonmortgageadvice.co.uk/news/article/616 Although lending volumes are still low and affordability is still a big worry, when compared to pre credit crunch times, the number of mortgage products has hit a new high. At ninety per cent, loan numbers have jumped from 72 to 253, although the greatest number of new launches have been in the 75% LTV range to 839. Mortgages offered at 95% Loan-to-Value (LTV) have risen from three in April 2009 to 37 today. However the biggest mover is 85% LTV which saw the biggest climb in products available over the last year. "75% LTV offers the most choice, therefore suggesting it is the one that lenders want to push. Sylvia Waycot, spokesperson for Moneyfacts.co.uk, said: She continued "Sadly, though, increased availability of mortgage products does not mean increased mortgage lending," she added. 2011-11-16 http://www.londonmortgageadvice.co.uk/news/article/615 Brokers are warning that mortgage rates could start to rise again as a result of the turmoil in the eurozone. Rates for new borrowers have been push up by Woolwich, Halifax and Santander. Libor, the rate that banks lend to one another has been inching higher amid worries over the eurozone crisis, to confirm that banks are less confident about lending to each other. Chelsea Building Society put up the cost of some of its most competitive tracker mortgages by 0.2%. Halifax raised its two-year tracker by 0.15% to 3.34%, while Woolwich increased the rate its trackers revert to after two years by 0.4%.Santander pushed up its Abbey-branded lifetime tracker in two moves from 2.95% to 3.09%. Nationwide and ING have also raised some rates as well. 2011-11-15 http://www.londonmortgageadvice.co.uk/news/article/614 HSBC research has relealed that first time movers who amount to approx 360,000 mortgages who bought property in 2007 would need around £27,000 to trade up the property ladder. it found that unless 2007's first-time buyers have made substantial savings or overpayments on their mortgage, it could be impossible for them to move up the property ladder because of falling house prices. Having fallen to 7% in value since, to £151.061, a typical first-time buyer in 2007 paid an average price of £162,423 on their home. If you had been a First-time buyers four years ago who put down a 10% deposit, you would have started with £16,000 equity in your home. But the £11,000 fall in property values since then will have left you with just £5,000 of your original deposit. First time movers need to raise £27,000 to cover the cost of selling their first home, raising a 10% deposit and paying Stamp Duty. in order to move up the ladder, HSBC said. “These findings highlight the need to save or pay down an existing mortgage in order to fund that second step on the property ladder. First-time buyers can no longer rely on rising house prices to provide them with the deposit needed for their second purchase. Pete Dockar, head of mortgages at HSBC, said: “Making overpayments on the mortgage is one way that these movers can help build up their finances to take the next step up the property ladder. This increases the equity in their first home, and bolsters the deposit available to them for their onward move.” 2011-11-14 http://www.londonmortgageadvice.co.uk/news/article/613 The number of residential mortgages available grew to 2,784 in October, up 10% on August's figure, research from Precise Mortgages reveals showing that there are more mortgages available through advisers. Residential mortgages available only through intermediaries in that time rose by 25% compared to those on offer direct from lenders. This was discovered after close analysis of the mortgage market. Whilst 39.7% of these products were only available through mortgage intermediaries, up 0.8% from 38.9%, in the meantime 1,007 or 36.2% were only available direct - a drop of just over 2%. 2011-11-11 http://www.londonmortgageadvice.co.uk/news/article/612 Up by over a third compared with September 2010, according to the Building Society Association (BSA), Mortgage approvals made by building societies and other mutual lenders experienced a bumper month in September. There has been an 18% rise in mortgage approvals for the first nine months of 2011 by mutual lenders,when September mortgage approvals were up by nearly a quarter to £2.5 billion from £2.1 billion in August. For the first nine months of 2011, there has been a 14% increase in gross lending compared with the same time period last year. There has also been a 4% rise in gross mortgage lending in September on the year previous, now at £2.3 billion from £2.2 billion in September 2010. Since January 2010 when the BSA first started reporting, mortgage approvals and gross lending was at the highest level in September 2011. Compared to an outflow of the same amount in September last year, savings balances with building societies grew by £0.6 billion in September, . "Although the UK economic outlook remains challenging, mutual lenders continue to support homebuyers by providing attractive mortgage products, Adrian Coles, director-general of the association, comments. And he continued to say "Mortgage approvals indicate how gross lending will change in coming months. Over the first three quarters of the year gross lending by mutuals was up 14% on the previous year, and the growth in approvals suggests that this trend will continue into the final quarter of 2011." 2011-11-09 http://www.londonmortgageadvice.co.uk/news/article/611 Lower inflation next year should both give a stimulus to the mortgage market, Deputy governor for Monetary Policy at the Bank of England Charlie Bean has said. This will help with saving for a deposit. The mortgage market is in a transition from high loan to values to a less risky environment. It is expected that inflation will fall back sharply next year, he said, easing the squeeze on household incomes and supporting consumer spending and mortgage demand. 2011-11-08 http://www.londonmortgageadvice.co.uk/news/article/610 New research shows, nearly seven millions Brits have mortgages that are not covered by life insurance, equating to an unprotected value of around £245 billion. According to research from Sainsbury's Finance, the 40% British mortgage holders without life insurance each have an average outstanding balance of £36,000. Nearly 40% of 25 to 34-year-olds and almost a third of 35 to 54-year-olds don't have their mortgage payments protected, meaning that if they were to die the people left behind could be left struggling to maintain finances, at an age when they will typically have dependents. "Mortgage repayments are one of the biggest financial commitments in many peoples' lives but, as our research shows, unfortunately it is not something that enough mortgage holders have taken steps to protect.Helen Williams, head of Sainsbury's life insurance, says. She continued, "There could be many reasons for this, perhaps some may feel it is less of a priority than other items on their household budget however, being unprotected could have serious implications." Life cover is not necessarily expensive, with policies starting from £5 a month, and it can provide peace of mind about finances, such as mortgage repayments, being taken care of should the worst happen. Deciding on the correct policy is important so it is best to see an advisor. 2011-11-03 http://www.londonmortgageadvice.co.uk/news/article/609 From 3rd November, Barclays, through its mortgage arm Woolwich, is extending its range of buy to let mortgages to 75% loan to value (LTV) Increased from 60% LTV, the 75% LTV range, includes a five-year at 4.99%, a two year at 4.39% and a lifetime tracker at base at + 3.49%. At 60% loan to value, the 2-year fixed rate of 3.88% will be maintained. The new deals come with a £1,999 application fee. Speaking as the head of mortgages for Barclays, Andy Gray said: "The demand from buy-to-let investors has picked up in recent months as many people in the UK opt to rent for longer. We've also seen increased appetite from investors looking to remortgage." The minimum loan available at 75% LTV is £50,000 up to a maximum of £1m. Barclays said the move was intended to support the market further. Barclays will apply its standard lending policy, which is a 125% rental calculation of the annual mortgage interest. 2011-11-02 http://www.londonmortgageadvice.co.uk/news/article/608 According to the latest figures from the Council of Mortgage Lenders (CML), Mortgage lending is still subdued. Up 4% on September last year, total lending stood at £12.9bn in September, which was 2% lower than in August. While still 2% down on a year ago third quarter of the year total lending was 15% higher than in the second quarter. "The housing market is very sensitive to wider household confidence, and this seems likely to weaken over the coming months in response to the latest spike in consumer prices and headline unemployment figures," said the CML's chief economist Bob Pannell. The latest quarterly Bank of England publication Trends in Lending contains a warning that mortgages may become more expensive if banks continue to find it hard to raise fresh funds on the wholesale financial markets."Funding costs for wholesale debt had increased according to some major UK lenders, which they reported primarily reflected concerns about the vulnerabilities associated with the indebtedness of several euro-area governments and banks," the Bank said. "Lenders noted, however, that if current conditions in term wholesale funding markets did not improve then higher funding costs were likely to be passed through to loan pricing in the coming months." lenders are moving away again from lending to people with small deposits as they play it safe and target borrowers with big deposits. 2011-10-31 http://www.londonmortgageadvice.co.uk/news/article/607 According to the council of mortgage lenders (CML), almost 200,000 home owners are significantly behind on their mortgage payments, Of these £200,000 home owners with mortgages most if not all could be or have been hit with excessive mortgage arrears charges from their lenders. As an example if it costs £10 to send a letter but the lender then charges £35. to confirm that excessive fees are where the charge is higher than the administrative cost to the lender, There are elements or unfair charging when for example a lender will a find sneaky way in which to incorporate extra charges such as charging non direct debit payment fees when no payment has been made. Research has found that more than 46,000 mortgage account holders have been charged a £15 monthly direct debit fee for non payment, whilst they were in arrears. This came from BBC 4’s money box programme which found that Barclays charged borrowers in arrears with their mortgage a monthly fee of £40, whilst Lloyds charged £31 for a follow up arrears letter and the Nationwide building society charged £95 for arrears counselling. Even though borrowers make an arrangement to repay their arrears these ‘extra’ charges keep mounting up. It has been agreed that mMany experts and borrowers would like to see the financial service authority take up the case on behalf of the British borrowers. It is felt that it is about time that regulators took steps to ban unfair penalties, charges and fines once and for all. 2011-10-26 http://www.londonmortgageadvice.co.uk/news/article/606 According to the latest figures, up 7% on the same period of 2010 and £0.1bn ahead of August’s total, high street banks recorded £8.4bn of gross mortgage lending in September, as buy-to-let lending drove activity, On the other hand , while the rise in gross lending reflected the stronger mortgage approvals of recent months,the British Bankers Association (BBA) revealed September mortgage approvals fell across all categories compared to August. Up 8% year-on-year, while the average value of £142,600 was roughly the same as a year earlier, house purchase approvals fell 5.5% in September to 33,130 compared to 35,069 in August.. The BBA figures showed that numbers were down 8% on August to 24,498, while remortgage approvals in September were much the same as that seen in 2010. "Households are limiting their borrowing in the face of unemployment concerns and pressure on household finances amid general economic uncertainty.BBA statistics director David Dooks said: "A modest stimulus to gross mortgage lending is coming from the buy-to-let sector as rental yields continue to improve." 2011-10-25 http://www.londonmortgageadvice.co.uk/news/article/605 According to the Council of Mortgage Lenders there are 1.8m mortgage holders whose fixed rate deals have come to an end and who are paying on average £2,600 a year less on their lender's standard variable rate (SVR). It is estimated that more than half of the 1.8m borrowers on SVR have more than 10% equity and could potentially remortgage if they wanted to. There is and expectation that the base rate will rise from 0.5% to around 0.9% by the end of 2012 and 2% by the end of 2014. UIf we take this as our guide, it estimates that 85% of those borrowers on SVR will still pay less than their original mortgage payment by the end of 2012, and around 58% will still pay less than their original payment throughout 2014. "Most households appear to be able to absorb anticipated interest rate rises over the next few years without seeing the cost of their monthly mortgage payment rise above its original level. Paul Smee, director-general of the CML, said. And he continued "Many households have seen a significant windfall from reverting onto variable rates over the past few years, although this will be less true for those coming off short-term fixed rates in the near future." In a further addition to what he had already said "The choice of whether or not to fix, and for how long, involves taking a view about the likely direction of future interest rates, along with a personal consideration of how much rate risk is acceptable to a household. "Given the economic uncertainty, it is not surprising that for the time being many of those who have reverted onto variable rates and could remortgage are choosing to wait before they decide what to do next." 2011-10-21 http://www.londonmortgageadvice.co.uk/news/article/604 According to research by FindaProperty.com, for those in rented accommodation the cost of renting private property now accounts for almost half of the average British family's take home pay Taking the typical asking price for rent to £890 a month, its research revealed the average monthly rent rose by 1.6% in September. Adding £468 pounds to the average annual rental bill, rental asking prices have risen every month in 2011 so far and increased 4.6% in the past 12 months,. A typical renting household can expect to spend 46.2% of their monthly net earnings on accommodation it has been revealed. With average rents accounting for 76.3% of average earnings a month, Londoners are hit worst. Despite earning on average 41% more than those in other areas, London households' rents cancel out the benefits, While the typical household brings in £2,721 in net monthly income, FindaProperty.com revealed landlords in the capital charge on average £2,075 a month in rent. "Rental prices are increasing at an alarming rate, with the increases being primarily driven by a bottleneck in the first-time buyer market, Samantha Baden, property analyst at FindaProperty.com, said. continuing she said "Accommodation at this price means that a place of your own is simply unfeasible for many people and there is a growing trend towards young professionals flat sharing for longer in an attempt to save a deposit to help them get onto the property ladder." 2011-10-20 http://www.londonmortgageadvice.co.uk/news/article/603 According to e.surv Chartered Surveyors,the number of first-time buyers in September was at it lowest level since November 2010. As lending conditions tightened and lenders targeted equity-rich buyers,strict lending conditions were seen as taking the activity out of the first time buyer sector. The chartered surveyors said that for those with a deposit of 25% or less, approvals were at their lowest since February and accounted for less than half of all lending compared to almost two-thirds in September 2007. This meant that with mortgage approvals in the highest loan-to-value (LTV) brackets falling at more than double the pace of the total market. Compared to 30% of the market in 2006, E.surv revealed approvals for typical first-time buyer properties fell to 22% of the total market, its lowest level since November last year. It is reckoned by them that wealthier buyers continue to represent a "disproportionate share" of the total market. "Even throughout the summer when banks increased their lending to meet short-term targets and garner market share, high LTV lending was still painfully depressed compared to pre-2008."Now with the economy in peril from every angle, lenders are playing it safe and training their sights on wealthier borrowers." Richard Sexton, business development director of e.surv, said:"But for those who can access mortgage finance, life is particularly sweet."Lenders are falling over themselves trying to offer the lowest fixed rate deals, and the good news is that they look odds on to remain particularly cheap for the foreseeable future. 2011-10-19 http://www.londonmortgageadvice.co.uk/news/article/602 Brokers look beyond the headline rate and take into account loan to value and the fees attached. Brokers understand there’s much more to mortgages than just headline rates. They can point the client towards a huge amount of choice and alternatives that borrowers should be aware of when searching for a loan. Broker personalise their recommendation whereas a bank can lead consumers to disappointment as in a number of instances they simply don't meet the qualifying criteria for those ‘best buy’ mortgages. Consumers need rounded and full advice from experienced and qualified advisers who will make a full assessment of needs and desires and tailor recommendations accordingly. The best buys from the banks can be indicative, but independent mortgage advice can only be offered by an intermediary and this comes with wider benefits such as comprehensive choice from a significantly wider lender selection. 2011-10-18 http://www.londonmortgageadvice.co.uk/news/article/601 Fix your rate now to get the best deals. thats what mortgage holders are being advised who want one a cheap mortgage deal on offer at the moment before they disappear, to be replaced with pricier deals. We have low mortgage rates now but the latest deals may prove to be the last. Libor rates have increased recently. Libor is the rate at which banks lend money to each other. This has resulted in tracker deals rising in price. And thanks to the eurozone debt crisis, a report by Capital Economics warned that the supply of money for mortgages will be restricted and possibly more expensive. And what this could mean to all those delaying a decision is that fixed and tracker rate mortgages could be more expensive even if there is no increase in base rate from its current level of 0.5%.. Be wary of hidden costs though, as some lenders with headline low rates have increase their arrangement fees. So with a small mortgage, you're better off taking a higher rate with lower fees than the headline cheap rate with hefty upfront fees. 2011-10-13 http://www.londonmortgageadvice.co.uk/news/article/600 Remortgages were more than 30% higher than August 2010 in both value and voulme, with 34,100 loans taken out (worth £4.2 billion), There were 52,000 loans advanced (worth £7.9 billion), up from 48,700 (worth £7.2 billion) in July and from 51,000 (worth £7.7 billion) in August 2010.House purchase lending also rose in August according to the CML data. The number of loans to first-time buyers rose 5% both from last month and August last year, while the value rose by 4% from July and a larger 9% from August 2010.House purchase lending is spread across both first-time buyers, and home movers and both contributed to the rise. Lending to both first-time buyers and home movers was at its highest for over a year. Home movers took out 33,000 loans in August (worth £5.5 billion), an 8% increase (10% by value) on July and up 1% (2% by value) from August 2010. Lending criteria for both groups in August showed little change from the previous months. First-time buyers continued to put down on average 20% of their property’s value as a deposit and borrowed 3.20 times their income, slightly up from 3.17 times in July. The lowest since monthly records began in 2002, typical deposits for home movers stayed at 31% for a second month but in August home movers on average paid 9.4% of their income on mortgage interest payments – This is likely to reflect the low interest rates currently available to borrowers with a large amount of equity, typically home movers. As existing first-time buyers themselves begin to move home or remortgage, the likelihood is that they will retain a preference for repayment mortgages which will increase the overall popularity of this type of business.Around 96% of first-time buyers in August took out a repayment mortgage, unchanged from July and out of 33,000 home movers, 82% (26,900) did the same, up from 80% in July. 2011-10-11 http://www.londonmortgageadvice.co.uk/news/article/599 According to Mortgage Brain.The number of mortgage products increased for the tenth consecutive month in September, up by more than 500 for intermediaries to a 41-month high of 14,361. Having increased 96% on October last year and grown 38% in the last six months, its figures showed that total product numbers are at their highest level since April 2008. While buy-to-let mortgages have also performed well as lenders have returned to the sector, deals with an LTV of 80% and above have increased 30% in the last six months. Rising 3% during September,fixed rate deals remain the most popular, accounting for 8,524 of all products. When compared with tracker rates, tracker mortgages fell 6% in September to 3,613. Nevertheless, compared to October 2010, trackers are up 117%. "The past few years have been incredibly challenging for the UK mortgage market and for mortgage brokers in particular.Mark Lofthouse, chief executive of Mortgage Brain, said. "However, the data from our product analysis over the last few months has been extremely positive and this continues to be the case." In addition to this, he proposed: "What is crystal clear, however, is the fact that mortgage intermediaries, with access to the biggest range of mortgage products available in one place, should be the first port of call for homebuyers looking to secure their first mortgage or discuss possible remortgage opportunities." 2011-10-07 http://www.londonmortgageadvice.co.uk/news/article/598 According to Moneyfacts, the average interest rate for a 90% LTV two-year fixed rate deal has dropped to its lowest level since January 2008, at 5.39%. As lenders have begun to bring out more competitive deals, its figures showed current rates are down from 6.05% six months ago and 5.97% one year ago. As well as this , average five-year fixed rate at 90% LTV has dropped to 5.87%, 1% less than six months ago and down from 6.66% a year ago. "Substantial rate reductions in the higher LTV market will be encouraging news for borrowers."The availability of higher LTV mortgage products has increased over the past couple of years. Lenders have begun to launch more competitive products to borrowers who, during the height of the credit crisis, had pretty much given up on the prospect of owning their own property." She added: "Interest rates are predicted to stay at the historical low of 0.50% for the foreseeable future,Louise Holmes, spokesperson for Moneyfacts.co.uk, commented: And further went on "Borrowers would be wise, however, to take advantage of low fixed mortgage rates while they can as lenders will increase product rates once interest rates begin to rise." 2011-10-06 http://www.londonmortgageadvice.co.uk/news/article/597 According to Unbiased.co.uk, standard variable rate (SVR) mortgages are still the preferred option among homeowners. Rather than remortgage to a fixed rate, the professional advice website revealed that the number of homeowners opting to stay on their SVR has risen from 35% in January to 37%. Dropping from 4.0% in January 2009, it found that the average rate homeowners would be prepared to fix at is 3.4%. 16% believe the base rate is so low they do not need to worry about reviewing although research also showed that 46% of homeowners have not reviewed their mortgage since March 2009 when the base rate first hit 0.5%. Homeowners are potentially missing out on the best fixed rate mortgage deals, Unbiased said, with fixed rates falling below 5% for the first time in decades and the threat of future interest rate rises becoming more real. "Once rates begin to rise, so will the price of fixed rates, meaning now could be the perfect time for homeowners to review their mortgage finances and move to guard against the potential of increased payments in the future. Karen Barrett, chief executive of unbiased.co.uk, said: \he went on to say the following "The low base rate has also had a dramatic effect on homeowners' rate expectations with our research showing a stark contrast between what consumers would be willing to fix their mortgage to and the average rate available." Dropping from an average of 0.4% in January 2009 they also found that the rate homeowners would be prepared to fix at is 3.4%. 2011-10-04 http://www.londonmortgageadvice.co.uk/news/article/596 A rise of 10% on July and up 17% on August 2010, mortgage lending by mutuals continued to strengthen in August with £2.1 billion of mortgages approved. Gross lending is at its highest level for 11 months.Both mortgage approvals and gross lending for the year to date are up 16% compared to the same period in 2010. On a monthly basis there was an 8% rise in gross mortgage lending by mutuals in August, up to £2.1 billion from £2.0 billion in August 2010.Mortgage approvals rose to £14.6 billion for the first eight months of 2011 while gross lending stood at £14.5 billion. “Lending by mutuals has held up well over the summer months, and in August gross lending reached an 11 month high. Approval figures continue to look promising as consumers take advantage of the competitive mortgage rates currently offered by mutuals. Adrian Coles, director-general of the Building Societies Association, said:“However, the outlook for the economy has deteriorated over the past month as has consumer confidence, which could well spill into the housing market, causing further weakness. “The amount deposited in savings accounts at mutuals over August roughly equaled the amount withdrawn, meaning there was no additional saving in the month. However, this represents a big improvement on August last year when there was a net withdrawal from mutuals of more than £1 billion. “Labour market conditions continue to be difficult, and inflation relatively high, so the relatively strong levels of savings at mutuals may well reflect households pulling out of equity investments in the face of continuing volatility in the markets.” 2011-09-29 http://www.londonmortgageadvice.co.uk/news/article/595 Although seasonal factors were key to the rise, lenders have said, UK mortgage lending rose by 6% in August compared with July. The Council of Mortgage Lenders (CML) said that gross mortgage lending stood at £13.4bn in August, a 10% increase compared with the same month a year ago. Bob Pannell, CML chief economist said,July had seen a drop of 6% in mortgage lending compared with a year earlier, so said that the rise in August offset this "weaker than expected" July figure."Taking July and August together, lending has shown little change on the same months of 2009 and 2010," he said. "Once seasonal factors are stripped away, the underlying position for the housing and mortgage markets is broadly stable, but with subdued levels of activity and downside vulnerability to bad economic news." And it is difficult to see fixed-rate and tracker mortgages getting any cheaper. Lending institutions trying to get more business by increasing demand for their services and mortgages continue to get slightly lower, bu they will not stay this low for ever. 2011-09-26 http://www.londonmortgageadvice.co.uk/news/article/594 According to the Council of Mortgage Lenders (CML),gross mortgage lending up 10% on year Gross mortgage lending reached an estimated £13.4bn in August, a 10% rise from £12.1bn in August 2010, "Much of the recent variation in monthly lending figures appears to have reflected seasonal factors, with the underlying picture being one of activity levels that continue to be subdued but broadly stable. CML chief economist Bob Pannell said, the lending figure for August is also a 6% increase on the £12.6bn lent in July. "The August performance more or less offset the weaker than expected July figure. Taking July and August together, lending has shown little change on the same months of 2009 and 2010." It looks like mortgage interest rates are likely to remain low and static for some time and so this has stimulated people to buy. More mortgages are being taken out because rate have become much more attractive 2011-09-21 http://www.londonmortgageadvice.co.uk/news/article/593 The FSA recently released figures claiming there has been a decline in the proportion of mortgages sold through intermediaries since Q2 2010. In specialist sectors, the intermediary share of the market is as high as ever. Intermediaries do their best work where homeowners are experiencing difficulty with the major high street lenders. Here the intermediary will work hard to find the right lender that offers the very best rate. It is so that there are a multitude of examples of individuals who thought they could not buy a home or thought they could not move because they were rejected by a high street lender. A professional mortgage adviser will make sure that every avenue is exhausted and, in the vast majority of cases, will find a solution. The intermediary remains unchallenged, in the specialist markets in particular. For people seeking a mortgage who have experienced some minor level of adverse credit but are now on an even keel, the regular mortgage market is shut out. A mortgage broker has access to both specialist lenders and more enlightened mainstream building societies and banks that will take a view. In the same way buy to let remains largely the province of intermediaries. When it comes to Landlords' needs, they are more complex and the choice of lender and product can only be resolved after an exhaustive review of the detail of the property type, the tenancy and the landlords own circumstances. 2011-09-13 http://www.londonmortgageadvice.co.uk/news/article/592 According to data released today by the Council of Mortgage Lenders, overall lending for house purchase rose by both volume and value in July compared to the previous month, Both were at their highest since last August, though lower than July 2010.The value increased from £6.9 billion to £7.3 billion and the volume from 47,800 to 48,800. There were 31,500 remortgages worth £4 billion in July, up from 31,300 worth £3.8 billion in June.By contrast, remortgaging rose both on a monthly basis, and on the same month last year. The value rose to £2.3 billion, from £2.2 billion in June and was the highest monthly total since last July (£2.4 billion) Lending to first-time buyers hit its highest level in a year in July. Both the number and value of loans to home movers increased in July. 30,600 loans were advanced – up by 4% compared to the previous month, while the value totalled £5 billion – up by 6% compared to June. By number, there were fewer loans to first-time buyers - 18,200 first-time buyer loans, down from 18,500 in June and 19,500 in July 2010 Average deposits for first-time buyers have held steady at 20% for most of 2011 and they typically borrowed 3.18 times their income in July, down from 3.22 in June. For another month both first-time buyers and home movers experienced little change in lending criteria. Compared to July last year lending to home-movers was down by 15% (17% by value). According to the figures, home movers borrowed on average 69% of their property’s value in July, down from 70% in June, but this figure has fluctuated by no more than three percentage points for nearly three years. One thing you can say is the popularity of fixed-rate mortgages is beginning to recede after hitting a 18-month high in April. In July, 60% of borrowers took out a fixed-rate product, down from 62% in June. There increasing expectation that there will be no rise in bank rates in the near future. Hoeverver the path of interest rates into next year is far from certain and many borrowers may continue to opt for fixed rates to avoid the uncertainty. It is shown that most borrowers are continuing to opt for repayment mortgages. 42,200 loans for house purchase (86%) and 24,300 remortgage loans (77%) were taken out on a repayment basis in July. "The UK mortgage market is currently holding steady. But August saw global financial turmoil and unrest closer to home and recent Bank of England approvals figures do not necessarily suggest a continuing upturn in lending in coming months. "However, it is likely that this reflects weak consumer appetite for borrowing, more than any additional constraints on the availability of mortgages." CML director general Paul Smee said commenting on the data. 2011-09-12 http://www.londonmortgageadvice.co.uk/news/article/591 According to the latest figures from the Bank of England, mortgage lending to house buyers is starting to pick up. Approved, but not yet lent, to house buyers, in July, a further 49,239 mortgages were arranged. Approvals were 3% higher than in July last year, that was the third monthly increase in a row. This bodes well and the figures suggest that sales may start to rise gently in the coming months. The pick-up in approvals had been reflected in increased lending by building societies and mutually owned banks, Adrian Coles, director-general of the Building Societies Association (BSA), said. "In the first seven months of the year, mutuals have approved an additional 16% worth of mortgages compared to the same period last year," he said. As far as completed sales are concerned they have stagnated, so far this year. Last week, figures from HM Revenue and Customs (HMRC) showed that 79,000 homes were sold in July in the UK. "With consumer confidence weak and the economic outlook currently looking pretty grim, we see little reason to change our view that modest falls in house prices are more likely than not over the coming months," Howard Archer, at IHS Global Insight, said activity in the housing market was still very low compared with "long-term norms". 2011-09-06 http://www.londonmortgageadvice.co.uk/news/article/590 As the threat of an imminent interest rate rise eased,July saw a 10% fall in fixed rate mortgage applications compared to June It has come about that the popularity of fixed rate mortgages has steadily dropped month on month this year from its peak in March, when 80% of all mortgage applications were fixed rate deals. Having said that, fixed rate deals still made up just under 75% of all applications in July. Mortgage applications in July were still 23% higher than the corresponding month in 2010. And the good news is that mortgage applications for the year to date are 17% higher than for the corresponding period in 2010. Compared to £138,965 in June, a drop of 2.2%, the average loan size on mortgage applications in July was £135,873 Compared to 71.3% in June, the average LTV on mortgage applications in July was 69.1% The total number of applications in the year to date are still 34% higher than the corresponding period in 2010, although remortgage applications fell by 18% in July. London Mortgages in July saw a massive swing in the popularity of fixed rate mortgages. Whereas in June, the majority of applicants (59%) chose fixed rate deals, in July, the majority of applications (55%) were for variable rate products. This is further proof that fear over rate rises has abated. 2011-08-18 http://www.londonmortgageadvice.co.uk/news/article/589 With new home owners paying out an average deposit of 20%, the number of first-time buyers getting onto the housing ladder jumped 24% year-on-year in June, according to the Council of Mortgage Lenders (CML). Although the CML admits its calculations may include up to 20% of market returnees, its latest figures showed that first-time buyer deposits are down on the high of 25% seen throughout 2009, but twice that of the historic norm of 10%. By buying homes worth less than £250,000. Home movers took out a mortgage worth 70% of their property's value for the second month and 89% of first-time buyers avoided Stamp Duty. Down on the previous year's figures of 32,800 loans worth £5.3bn.There were 18,100 loans to first-time buyers, worth £2.2bn in June, equivalent to the most recent peak in August last year, whereas home movers took out 28,600 loans, worth £4.6bn. Up 10% in number and 9% in value on the same period of last year, remortgaging figures remained unchanged month-on-month in June at 30,700 worth £3.8bn. Lending also rose for house purchase quarter-on-quarter, with 122,000 loans for house purchase in Q2, worth £17.6bn, up from 97,200, worth £14.1bn, in the first quarter. In Q2 last year, lenders advanced £20bn for 138,300 house purchase loans.However, lending for house purchase from April to June this year was notably down on 2010. Worth £11.2bn in the first quarter, remortgage cases fell in Q2 compared to Q1, totalling 87,600 loans worth £10.8bn, down from 92,700 loans, With 63% of borrowers opting for a fixed rate in Q2, up from 60% in Q1 and 46% in the second quarter of last year, fixed rates continued to rise in popularity once more. Interestingly, interest-only mortgages continued to fade from the market, with 87% of house purchase loans taken our on a repayment basis in June, up 1% on the previous month. 2011-08-12 http://www.londonmortgageadvice.co.uk/news/article/588 Placing the "vast majority though brokers." Coventry, the UK's third largest building society lent £1.9bn in gross mortgage advances in H1, or 3% of all UK loans and 19% of all lending from the mutual sector. Over the same period last year, this is an increase of 19% after reporting £1.6bn The Coventry reports an average Loan to Value of 53.6% on its lending this year and an average LTV of less than 50%, including house price variations. The mutual also launched its first public covered bond issue in April this year, raising £750m on the capitalmarkets.Coventry reports profits before tax of £45m, against £43.5m in H1 2010 and grew savings balances to a record £17.7bn, up £7bn since 30 June 2007. "Coventry Building Society continues to perform extremely strongly. Underlying profit before tax increased by 10% to £51.1m, during a period when the society's net mortgage lending was equivalent to 25% of the market as a whole."David Stewart, Coventry chief executive, said. He continued "These excellent results demonstrate Coventry's consistent strength in what remains an uncertain environment."The society said it is confident it will continue to attract savings in a competitive market and was upgraded on the strength of its assets by Moody's earlier this week. Declining to confirm the distribution split, a Coventry spokesperson said the "vast majority" of its lending went through brokers. "This is why we work so closely with intermediaries," she added. 2011-08-05 http://www.londonmortgageadvice.co.uk/news/article/587 As the number of sales agreed increased so the number of people selling their home rose in June to its highest level in more than two years. This is the highest figure since April 2009, which saw an average of 76 homes for sale per branch, according to the National Association of Estate Agents the average number of properties for sale per branch increased from 68 in May to 74 in June. The number of sales agreed also increased, from an average of eight per branch to nine. This suggests that the increase in sellers reflected confidence in the market rather than a glut of unsold properties. “The leap in available housing stock suggests increased confidence amongst sellers. They think there is a much better chance that their home will sell. For house-hunters this is welcome news as it offers a wider choice of properties to pick from. President of the NAEA, Wendy Evans-Scott, said. “However, efforts are still required to assist those looking to get onto the housing ladder if we are to see buyer activity match that on the sale side.” 2011-07-27 http://www.londonmortgageadvice.co.uk/news/article/586 Glasgow Credit Union has found that an increasing number of couples are choosing to of a wedding. 56% of couples would choose saving for a home over their dream wedding, as saving for both would be too costly, its research revealed. "As the economic downturn continues to bite, young couples are increasingly being forced to choose between their dream wedding and their dream home. Paul Mcfarlane, head of operations at Glasgow Credit Union, said. "The current climate means that couples have to make sacrifices, especially with demand for a minimum 10% deposit on mortgages. Scottish couples need to save an average of £15,800 to get a foot on the property ladder." The average deposit required by a first-time buyer is around 15%, according to recent research by the Council of Mortgage Lenders. And furthermore, its report suggested that, with the average salary in the UK £25,900, the required 15% deposit rate would be £1,100 more than a year's salary. "This shows just how difficult it can be for couples to save for a home and why they are sacrificing their wedding day to save for these huge deposits." Mcfarlane added. 2011-07-26 http://www.londonmortgageadvice.co.uk/news/article/585 According to the Association of Mortgage Intermediaries the mortgage road ahead is bumpy despite a more stable mortgage market.e In its latest Quarterly Economic Bulletin looking at the economy, housing and mortgage markets it concludes that the mortgage market is “stable” but with tough times ahead. It predicts that gross lending for the year may fall slightly below the Council of Mortgage Lender’s target of £140bn. However, it highlights that significant risk remains on balance sheets as over a third of Lloyds’, Santander and RBS’ lending is at high or very high loan to value. Also identified was that house prices continue to fall in most parts of the UK outside of London and renting is more expensive than buying in eight out of ten British cities, with the gap as much as 30% in cities as diverse as York, Birmingham and Milton Keynes. Speaking about the report the director of AMI Robert Sinclair, said: "The squeeze on household incomes is depressing demand despite the fact it is now clearly cheaper to buy than rent in most parts of the UK. With interest rate rises off the agenda for some time, borrowers have little to fear in the short term from rising mortgage costs. “Each quarter, we push back later and later our expectations for rate rises. Swap rates suggest February 2012 is when the Bank will increase them, but we think it could be even later than that now. “Figures from the Bank of England’s Financial Stability Review also show there are still significant risks on bank balance sheets, with some demonstrating substantial exposure to high and very high LTV secured debt. “Dealing with this level of exposure will make it more difficult for them to expand their balance sheets and comes at a time when they are under political pressure to lend more. “However, despite the obvious difficulties, we’ve now had three years of dealing with a fragile market. “While there are likely to be bumps in the road ahead, we should be encouraged that a level of stability has crept back into the market.” 2011-07-21 http://www.londonmortgageadvice.co.uk/news/article/584 Mortgage activity has increased so much lately that nearly 9,000 mortgage products have been launched or updated in the last three months, report Defaqto. 8,968 mortgages were either brought to market or updated by providers between 1st April and the end of June this year, according to independent financial research company Defaqto. A total of 414 new mortgages were launched within the three month period, and providers had made 8,554 changes to existing products, including amendments to their Loan-to-Values and interest rates. Defaqto data shows that, 186 brand new fixed rate mortgages were introduced, there were 4,815 changes to existing fixed rate deals and 309 fixed rate products were removed from the market by lenders. In addition 80 standard tracker rate mortgages were launched, providers had made 1,687 changes to existing products and 108 of these mortgages were pulled by providers Furthermore, 99 buy-to-let mortgages were brought to market, with lenders making a total of 715 changes to existing products and removing 66 from the market. Brian Brown, Defaqto's Head of Consulting, said:Providers in the banking sector are facing a number of significant challenges, including rapidly changing and crowded product markets and consumers with increasingly complex and individualised needs. "The pace of change within the banking sector is phenomenal, particularly when it comes to mortgages. Banks need to stay ahead of the competition to capture and retain market share. However, there are significant challenges involved in putting the right type of product together."Competitor intelligence is central to success within a rapidly changing market - knowing what's changed as soon as it happens, being able to respond quickly and understanding how to communicate a product's USP to really hit home with target consumers. "Technology as an enabler to this process is becoming increasing critical. Defaqto Matrix provides access to independent, accurate and comprehensive financial product data. It is a key enabler to help firms stand out from their competitors and grasp opportunities head on." 2011-07-18 http://www.londonmortgageadvice.co.uk/news/article/583 According to a new report by one of the country's leading surveying firms, Mortgage approvals surged in June. However, says Esurv, the underlying picture, is mortgage market growing even tougher for first-time buyers and of continuing weakness. Making up for depressed activity earlier in the year and with banks anxious to meet their planned lending targets, e.surv estimate that approvals were up 6.7 per cent between May and June, based on some 21,000 residential property valuations, about 45 per cent of the total market Banks remain cautious about risk. Those getting their first foot on the housing ladder accounted for only 22 per cent of approvals in June, down from 23 per cent in May. This contrasts to early 2008 when they accounted for 30 per cent of all approvals. Approvals rose fastest in London, which saw a 12.3 per cent increase, reinforcing the capital's increasing disconnect from the rest of the UK market. Few low-income first- time buyers were actually able to qualify, e.surv said, criteria being restrictive on some new high loan-to-value mortgage products. "Lenders still have to deal with significant risks to their balance sheets so, after a concerted effort to meet lending targets for the first half of the year, the next few months could see a return to a lower level of activity as they ration funds cautiously in the third quarter." said Richard Sexton, the business development director of E.surv. 2011-07-15 http://www.londonmortgageadvice.co.uk/news/article/582 The Bank of England Monetary Policy Committee voted to keep the base rate at at the historically low level of 0.5%. The last change in bank rate was a reduction of from 1.0% to 0.5% on 5 March 2009. The market is saying that an interest rate rise would not occur until at least 2012. It is unlikely also from what some experts in the industry are saying that rates will stay unchanged for the remainder of this year and in all likelihood won't rise much anytime soon, as the expectation is that inflation to fall back sharply next year. For those that have a mortgage there has probably never been a better time to overpay on a mortgage and reduce outstanding debt. For those that are able and willing to buy, it appears as though current cracking deals will be around for a while yet. However, whilst ever it is difficult for first time buyers to get on to the mortgage ladder the housing market is going to continue to go through tough times. 2011-07-08 http://www.londonmortgageadvice.co.uk/news/article/581 According to unbiased.co.uk,the demand for advice from first-time buyers has hit the highest levels seen since April 2010. Up from 36% for the same period last year, its figures showed that, in June, first-time buyers accounted for 40% of all searches for independent financial advice on its IFA search tool. While 39% of searches were for personal retirement planning and 26% sought independent investment and savings advice, 19% of searches were for buy-to-let advice. Confidence appears to be returning to the mortgage market, with lenders offering increasingly competitive deals at higher LTVs,Karen Barrett, chief executive of unbiased.co.uk, said."This has led to an increase in the demand for whole of market mortgage advice from first-time buyers. It's really good to see that they are looking for this type of advice to ensure they get a complete overview of all the products which are currently available to them and make the best choice according to their financial position." 2011-07-07 http://www.londonmortgageadvice.co.uk/news/article/580 Figures show that the number of different mortgage products available in the UK market has risen to the highest level since November 2008. According to Moneyfacts the increased competition has contributed to falls in the interest rates for new mortgage deals. Moneyfacts say that availability was rising for those offering a deposit of just 10%, whilst there are only a handful of mortgages remain on the market for those offering a deposit of less than 10%. From 176 a year ago to 261 at the start of July,there has been a rise in the number of mortgage products at the 10% deposit level. The largest category of a total of 808 mortgage products still require a deposit of 25%, as lending institutions remain strict about who they lend to - such as checking applicants' credit history. Helping to reduce the cost of home loans, the increased availability has created more competition with Moneyfacts reporting a week ago that interest rates on new mortgage deals had fallen to their lowest level, on average, in 23 years. Moneyfacts said that the average two-year fixed rate deal were at 4.32%, three-year fixed deals now averaged 4.92%, five-year fixes were at 5.29% and the average two-year tracker deal was now at 3.37%. 2011-07-06 http://www.londonmortgageadvice.co.uk/news/article/579 According to CHL Mortgages, landlords are more positive about the buy-to-let sector than they were a year ago., Slightly up on twelve months ago when the result was 64%, its annual Landlord Survey revealed the growing positivity from sector participants about the outlook for Buy-to-let. Of those asked, 67% of respondents said they were positive about the future of buy-to-let. Suggesting it is now better than six months ago and it is sufficient to cover mortgage repayments, maintenance and cost - up from 35% last year, landlords were particularly positive about rental demand with 43%. 2011-07-05 http://www.londonmortgageadvice.co.uk/news/article/578 According to the Bank of England, mortgage borrowers continued to pump money back into their homes in the first quarter of 2011, despite a marked slow down on the previous quarter. Down from £7.1bn in Q4 2010,its latest figures for housing equity withdrawal revealed that mortgage holders put £5.8bn of equity back into their homes in the first three months of the year. Compared to a drop of 2.8% in the last quarter of 2010, this was a drop of 2.3% as a percentage of post-tax income. Not withstanding this, the amount of equity households repaid in Q1 was up year-on-year from £5.05bn of equity injected in Q1 2010. With housing equity withdrawal remaining negative since Q2 2008, the Bank of England said that borrowers' investment in housing remains strong against net mortgage lending. With little sign that households as a whole are actively seeking to pay down mortgages more quickly than in the past,it noted that the fall in equity withdrawal since the beginning of the financial crisis was most likely a reflection of the drop in housing transactions. 2011-07-04 http://www.londonmortgageadvice.co.uk/news/article/577 Figures from the Bank of England suggest that the UK property market is set to remain subdued in the coming months, with new mortgage approvals for house purchase, but not yet lent, rising to 45,940 in May from 45,447 in April. May's approval figure was lower than the average for the previous six months, despite the slight increase. House sales, which have been running at half their pre-2007 levels, will also stay low in the coming months, the data suggests. Whilst this is the case, building societies have complained again that National Savings & Investments (NS&I) is being too agressive in trying to attract savers' money. 2011-07-01 http://www.londonmortgageadvice.co.uk/news/article/576 According to Hometrack, homebuyer numbers rose by 11% in June. Sales will carry on increasing this summer, if predicts. Thanks to house prices which it reports are down 3.9% over the year, this has resulted in the highest numbers of sales in three months. Moneyfacts has found that typical fixed and tracker mortgage rates are at their lowest level since it started following rates in 1988. In the last weeks, lenders have been cutting mortgage rates - both tracker and fixed rate deals. their figues show that the average two year fixed rate mortgage deal is 4.32% - and for three years it's 4.92%.The typical five year fixed rate mortgage is 5.29%. For tracker mortgage deals, which follow the base rate, the average pay rate on a two year tracker is 3.37%. It could be however that although cuts are currently being applied across all loan to values, this will not continue and instead, lenders may choose to introduce more competitive deals for those with smaller deposits, says Moneyfacts. 2011-06-29 http://www.londonmortgageadvice.co.uk/news/article/575 According to Which? Money, ninety five per cent of lenders failed to fully pass on cuts in the base interest rate to their Standard Variable Rate mortgage customers and the consumer champion warned that a rate increase could leave thousands of households in financial difficulty, with many borrowers trapped on SVR mortgages. Which? research shows that seven in ten people are worried about mortgage rates and two in ten fear repossession. A 1% increase to the base rate would add over £50 to the monthly repayments of someone with a £100,000, 20-year mortgage. More than a fifth of lenders have increased their SVR since the base rate hit an all time low of 0.5% in March 2009. At 6.08%, KRBS has the highest SVR on the market – more than 12 times the base rate. The five other direct lenders with the highest SVRs are all building societies.The average SVR is now 3.48% above the base rate, compared with 1.95% in September 2008. “Millions of people are on variable rate mortgage deals and for many a rate hike could mean they’re facing real financial difficulties. Which? chief executive Peter Vicary-Smith, said. He continued,“Banks have enjoyed increased margins on mortgages for the last few years and when the base rate rises again, few lenders will be able to justify passing the full amount onto their SVR customers.” In response to this, the CML said that mortgage markets have changed fundamentally as a result of the financial crisis, reinforcing that base rate is no proxy for the cost to lenders of raising funding.Since 2008, lenders have been operating in market conditions that have changed significantly, with a shortage of funds, new requirements to hold more capital and liquidity, and increased pressures to help borrowers in difficulty while mortgage arrears are expected to increase. There have been a number of factors that have affected the the base rate that lenders used since base rate reached its historical low point in March 2009. · New requirements to hold capital and liquidity, which have increased their operating costs. · Wholesale funding markets that have recovered only partially (and which remain closed to many lenders), reinforcing the dependence of lenders on retail deposits. · Competitive pressures in the market for retail deposits, as savers seek better returns in response to higher inflation. · Pressures to extend greater forbearance to borrowers in difficulty at a time when mortgage arrears are expected to rise. · Pressures to make more mortgage lending available to new borrowers at a time when an increasing number of existing borrowers are reverting to lenders' standard variable rates. "Lending rates are fundamentally driven by the cost of funds, not the base rate, although the two were more closely correlated before 2008. But this apparent historical relationship has been blown apart by the move to an unprecedented low base rate since March 2009. Commented Michael Coogan, CML director general Michael Coogan said on the market conditions for lenders, "Since the onset of the financial crisis, firms have been operating in lending and funding markets that have changed dramatically, and we have been reinforcing the message that base rate is not a proxy for the funding costs for lenders. "For borrowers anticipating difficulty, however, the message remains unchanged. They should speak to their lender as soon as possible if they are struggling to meet their repayments, and lenders are committed to helping them wherever they can do so." 2011-06-22 http://www.londonmortgageadvice.co.uk/news/article/574 According to Moneyfacts,Short-to-medium term fixed rate deals have hit their lowest ever level With three year rates at the lowest on record at 4.95%. The average two-year fixed rate in the UK was 4.36% in June. The five year rate, at 5.37% is at its lowest since January 2011 and swap rate trends suggest all fixed rates could go lower still. "A fall in fixed mortgage rates is great news for borrowers who have wrestled with high rates for many months. Lenders appear to be launching more competitive deals and expanding their product ranges, with lower rates and more high loan-to-value deals, however, strict lending criteria and thorough credit checks remain in place." Louise Holmes, Moneyfacts said. In comparison with pre-credit crunch norms, lenders are also achieving high margins with just a 0.10% difference between swap rates and average two-year fixed rates in June 2007, compared with 2.94% this month. This is down from the four-year high of 3.28% which peaked in October 2009. According to one of the biggest voices in the industry, Ray Boulger ,fixed rates are hitting record lows because the view is increasingly that Base Rates won't change until next year. "But I still think it makes sense to go for a five-year fixed rate to buy security for a reasonable term. I still think the tipping point will be when a good selection of five year fixes sit below 4%," he said. 2011-06-20 http://www.londonmortgageadvice.co.uk/news/article/573 "There appears to be a little less negativity in consumers' opinions on the housing market, but it remains to be seen whether this is just a blip or the start of a trend. People are a slightly less nervous about the outlook for the jobs market, and are less inclined to think that house prices are going to fall. For the first time since September last year a greater proportion of respondents think that house prices will rise rather than fall in the following 12 months. Paul Broadhead, head of mortgage policy at the BSA, said. And continued, "And more people think that raising a deposit is a barrier to buying property, which though unsurprising when considered against the ongoing squeeze on household finances could indicate that more people are looking at getting into the market. This barrier to potential buyers might reduce in the months ahead as a greater number of higher LTV products come onto the market." This comes with the news that the proportion that did not think that it is currently a good time to buy dropped to 21% from 29% in March. 41% think it is a good time to buy, the same proportion as in March. One of the main reasons that remains, holding back people going for a mortgage, the proportion selecting a lack of job security fell by 9 percentage points compared to the previous survey, being chosen by 48% of respondents in June. And the proportion concerned about future falls in property prices reduced by 5 percentage points to 19%. Meanwhile, raising a deposit attracted the highest proportion this barrier has achieved since the Property Tracker began, being selected by 62% of respondents. Obtaining a sufficiently large mortgage was also a significant barrier, with 53% of respondents saying this was an impediment. 2011-06-16 http://www.londonmortgageadvice.co.uk/news/article/572 New borrowers taking their first mortgage could be interested in a range of deals from The Mortgage Works (TMW). Along with alterations to a number of residential mortgage rates, the lender has announced plans to launch a series of new products.Available to potential buyers from last Friday (June 10th ), the building society has unveiled a new two-year fixed-rate deal at 2.99 per cent, available at a 70 per cent loan to value (LTV)In addition, customers have been given the opportunity to select a three-year fixed-rate with 70 per cent LTV and rates of 3.69 per cent.Tracie Pearce, head of product management at TMW, said: "We've also improved our existing products to enhance our competitive position with rate improvements and a simplified fee structure across the range."Last month, the mortgage lender reduced insurance rates on its five-year fixed-rate products by up to 0.55 per cent, with extended end dates across a number of ranges. 2011-06-14 http://www.londonmortgageadvice.co.uk/news/article/571 According to financial information group Moneyfacts, the average rate on a two year fixed rate mortgage is now 4.41% compared with 4.5% in May. This is the lowest level seen since January. Moneyfacts says that a number of lenders including Halifax, Nationwide, Lloyds TSB and NatWest have all cut rates.Five year fixed rate deals are also experiencing the same movement. Last month the rate fell from 5.6% to 5.41% this month. And here is some encouraging news, there's also an increase in the number of mortgages on offer for those with small deposits, including first-time buyers. Pleasingly, there are now 31 different mortgage deals for those with 5% deposits compared with 24 at the start of the year and this is the highest level since December 2008. Here are some more interesting facts. Borrowers with 10% deposits also have a choice of 244 mortgages compared with 199 since the start of the year. There are now 545 mortgages for those with 15% deposits compared with 480 at the start of the year. For those mortgage holders on trackers deals or on the standard variable rate, base rate was left at 0.5% this week, which means that anyone with a tracker deal or on a standard variable rate will not see any change in their repayments. 2011-06-13 http://www.londonmortgageadvice.co.uk/news/article/570 According to a report by Moneyfacts.co.uk, the number of mortgage products available to first-time buyers has almost trebled since June 2009. Compared to just 62 in June 2009, there are currently 183 deals designed for those taking their first steps onto the property ladder. And the average rate has reduced, as the number of first-time buyer deals has increased over the past two years. Commenting on these finding,Louise Holmes, spokesperson for Moneyfacts.co.uk, said "First-time buyers are often considered to be the life-blood of the housing market. As well as high mortgage rates, many borrowers have found it incredibly difficult to find funds for large deposits, often entirely beyond their financial capabilities.Higher loan-to-value mortgages have made a return to the market over recent months, suggesting lenders are taking positive steps to help the first-time buyer market. In fact there are currently 31 deals with 95% loan-to-values, an increase from just six deals in June 2009.These positive figures should offer some hope to those who dream of owning their own home." 2011-06-09 http://www.londonmortgageadvice.co.uk/news/article/569 Despite the uncertainty facing the UK's economic recovery mortgage lending conditions continue to improve. Having said that credit availability remains tight but it has eased a little. This is the opinion of the Council of Mortgage Lenders (CML), which has updated its mortgage and housing market forecasts. The increasingly stable environment has given the body the confidence to extend its forecast horizon to the end of 2012. While buy-to-let is likely to perform well compared to the overall market, activity in the housing and mortgage markets is expected to remain stable over the aforementioned period, says the CML. This reflects strong rental demand. "Despite the pressure on household finances, we expect the vast majority of households to keep up with their mortgage payments, helped by a relatively gentle trajectory for interest rates," the council adds in its report.Nevertheless, arrears and possessions are set to rise and to remain at higher levels this year and next." Unlikely to change for most of 2011, forecasts the CML, borrowers have been enjoying low repayment requirements over the last two years thanks to an historically low base lending rate of 0.5%. Meanwhile, gross mortgage lending fell to an estimated £9.8 billion in April. 2011-06-08 http://www.londonmortgageadvice.co.uk/news/article/568 Following more weak mortgage lending numbers from the Bank of England, further falls in house prices are predicted. After having edged slightly higher to 47,145 in March, the Bank yesterday reported that mortgage approvals for house purchases fell back to a four-month low of 45,166 in April. From a recent low of 42,859, recorded in December, the latest figure represents just a slight improvement. Related articles It hss been estimated by some that the long bank holiday weekends and the royal wedding celebrations as reasons for a possible slanted view in the numbers. However the trend remains poor. Historically, monthly lending numbers of 70,000 to 90,000 are considered normal, but some four years after the onset of the credit crunch, mortgage lending is nowhere near strong enough to maintain a normal, healthy market with even gently rising prices. Compared with long-term norms and taking into account the still-elevated level of house values, in cash terms the picture is equally downbeat. Net mortgage lending amounted to just £700m in April, up from £500m in March. 2011-06-03 http://www.londonmortgageadvice.co.uk/news/article/567 The Institute for Public Policy Research (IPPR) urges mortgage lenders to stick to the new stringent mortgage rules a new report published them proposes. With many public sector workers facing redundancy, repayments on 100% mortgages will become impossible.The respected think tank points to the misery and fear of eviction faced by homeowners who have not been able to sustain mortgage repayments during the recent economic downturn. At 81% compared to lower levels in both the US and the Netherlands,the IPP has carried out research that demonstrates that the UK has the highest level of mortgage lending as a proportion of GDP - For those trying to get a foot on the housing ladder, this report will not be popular . Suggestions from both banks, government and the IPPR that lending is capped at 3.5% of salary means that for many the years of saving for a massive deposit from a mediocre wage makes property owning a dream rather than a reality. The typical first-time buyer will have spent £81,300 on rent before they buy their first home, according to the Financial Times. It says that long term renting will become the norm for most young Britons. 2011-06-02 http://www.londonmortgageadvice.co.uk/news/article/566 According to data released by the Financial Services Authority (FSA),up to 300,000 households and sixty billion pounds worth of mortgages have been switched over the last 3 years to interest-only. This has come about because with the average UK mortgage at £109,000 and average borrowing costs at 3.5%, switching from repayment to interest-only saves households roughly £230 a month. Running against the FSA's advice, concerns have been raised about how the debts will be repaid and it has threatened to hold back future interest-only lending, branding much of it unsustainable. They disclosed that, between the onset of the financial crisis in the third quarter of 2007 and the final three months of last year, the value of interest-only mortgages increased by £99bn and the number of borrowers by 369,370. Whilst some of the household restructuring has come from new deals, the FSA confirmed the bulk were due to "forbearance" - as banks move homeowners on to more affordable payment plans to avoid defaults. Its data shows around two-thirds of the increase came from struggling households. The figures show that over the three years, the proportion of loans classified as interest-only rose from 40.04% to 42.95% but the proportion of interest-only deals available fell from 49.51% to 31.41% as banks cut the supply of higher risk products. 2011-06-01 http://www.londonmortgageadvice.co.uk/news/article/565 As part of the huge Lloyds Banking Group, Halifax Intermediaries is to demand that borrowers show they are taking out a repayment plan before the lender will approve an interest-only mortgage. This, means that homebuyers will have to prove they are saving towards a way of paying back their home loan when it matures. This could be from savings (or perhaps regular savings) into share ISAs. The majority of mortgage holders these days take out repayment mortgages, which means over the term of the loan they repay both interest and the original amount borrowed. When it comes to an interest-only mortgage, the borrower only pays back interest during the term of the loan. When it matures, they have to pay back the principle. Previously, endowment policies were often sold as repayment vehicles - but really bad investment returns and charges have made them unattractive for most homebuyers. What tiss means for existing customers wishing to convert all or part of their mortgage to interest-only is that they will have to show they've got a suitable repayment plan. However, more than 75% of the mortgages arranged in the first three months of this year were on a repayment basis.The proportion of repayment mortgages was up from 71% recorded during the final quarter of 2010. It has been steadily risings since the third quarter of 2007, when it hit a six-year low of 57%. In contrast just 14% of mortgages arranged during the quarter were interest-only, the lowest proportion since the first quarter of 2004 and down from a high of 28% recorded during the third quarter of 2007. The Financial Services Authority began the reduction of interest-only through the the Mortgage Market Review and lenders are looking to change their criteria in anticipation of regulatory changes. 2011-05-27 http://www.londonmortgageadvice.co.uk/news/article/564 With or without a mortgage, Homeowners expect price rises over next five years This is in a report by Your Move where almost 80% of homeowners still expect prices to rise in the next five years. "Slowing house price growth has clearly taken its toll on homeowners' confidence and alongside the clear risks to the UK's long-term economic health, this has made prices fall. But cash buyers and those able to obtain mortgage finance with large deposits are able to gets great value as a result. "The strongest downward force on property prices is how hard it is to get a mortgage and while it may be some time before lenders loosen their purse-strings, homeowners know that once finance becomes more readily available, prices will recover."Gareth Samples, managing director of Your Move, said. 2011-05-26 http://www.londonmortgageadvice.co.uk/news/article/563 The Council of Mortgage Lenders, CML reports that mortgage lending slumped by 14%in April blaming the late Easter and extra bank holidays for the reduction in mortgage lending. The Cpouncil of Mortgage Lenders said that mortgage lending plummeted in April to £9.8bn, down 14% from the £11.4bn advanced in March and 5% below the £10.3bn lent in April 2010. The CML reckoned that "taken at face value, the underlying picture is one of considerable weakness – revisiting levels seen briefly at the start of 2010". But it blamed the "slight seasonal decline" on Easter falling in April this year, coupled with the extra bank holiday for the royal wedding. "Statistical noise, associated with extended holidays and the royal wedding, makes it harder to read the immediate market situation. This represents an unfortunate temporary loss of signal at a time when it would be useful to gauge the resilience of house purchase demand to economic uncertainties and the pressure on household incomes.Levels of activity look set to remain broadly flat over the near term. It now seems unlikely that interest rates will rise much, if at all, this year, and this should help keep the market on an even keel. Nothing immediately suggests that housing demand is waning." CML chief economist Bob Pannell said. Pannell also acknowledged the average house price figures from Halifax and Nationwide – showing 1.4% and 0.2% falls in April respectively – are consistent with the UK "experiencing a modest downwards drift of house prices. We would not be surprised if interest in remortgaging wanes a little as expectations of higher interest rates fade and, as a result, activity tails off over the next few months." Nationwide building society has reduced the rate on its two-year fixed mortgages by 0.3 percentage points, and its three- and five-year fixed mortgage rates by 0.1 percentage points. This takes its best-buy three-year fixed-rate mortgage to 3.69% (up to 70% loan-to-value), but there is a £400 product fee (rising to £900 for those remortgaging) and a £99 booking fee.Santander, meanwhile, has launched a two-year fixed-rate mortgage at 90% loan-to-value at 5.29% with a £495 fee, although homebuyers must be a Santander First Home Saver account customer. This pays 5% to non-homeowners aged between 16 and 35 who deposit between £100 and £300 a month by standing order. 2011-05-25 http://www.londonmortgageadvice.co.uk/news/article/562 According to research, almost a third of Britons have no desire to purchase property in the near future. Up to 5% of Britons have saved for a deposit to purchase a property, 49% are in the process of saving for a deposit, while 31% said they have no intention to purchase a property at all, a survey conducted by price comparison website moneysupermarket.com revealed. "It's easy to see why nearly a third of Britons do not intend to set foot on the property ladder, Clare Francis, spokesperson at moneysupermarket.com said. "House prices may have fallen in many areas but they are still high. This coupled with the need for such a high cash deposit is pushing many people out of the market. There is still limited choice if you have a deposit of less than 10% and the rates on these mortgages are around 5.30%, which is significantly higher than the most competitive rates."This also means that the monthly repayments that first-time buyers face are often higher than for those who have larger deposits to put down." In addition to this the comparison website also found that the number of mortgage products available to first-time buyers stands at 1,581, a fraction of the 14,940 available in pre-crunch Britain in July 2007. It has been shown that last year, the number of first time buyer products has risen by almost 200, there has also been a 47% increase in the number of mortgages available up to 90% LTV, and the average interest rate has dropped by 2.43% since July 2007.The average LTV for products available to new buyers is 77%, meaning someone taking out a mortgage on a £150,000 property would need a deposit of £34,500, found the website. 2011-05-23 http://www.londonmortgageadvice.co.uk/news/article/561 According to surveyors, good weather in April led to an increased number of viewings from potential UK house buyers. There were lower procies but only those with plenty of cash were abel to take advantage with the difficulty in securing a mortgage hindering many of these potential buyers, the Royal Institution of Chartered Surveyors (Rics) said. More surveyors expect house prices to fall in the next three months than those expecting values to rise. The Rics report said sales, as well as supply and demand of properties, all edged up in April but this was only from a relatively low base, according to Rics housing spokesman Michael Newey. "The return of sellers to the market is positive, but activity still remains subdued and it is difficult to see it picking up materially over the coming months," he said. "Although there are signs that some lenders may be reducing their grip on the purse strings, in particular with mortgages aimed at first-time buyers, there is still a long way to go before lending levels increase enough to have any real impact. "Economic uncertainty may also continue to weigh on sentiment for a while to come." 2011-05-18 http://www.londonmortgageadvice.co.uk/news/article/560 It is encouraging to note that banks and building societies are starting to re-enter the market for first-time buyer specific mortgages. There have been new incentives and mortgages available, in recent weeks, up to 95 per cent loan to value from smoe lenders. Also research shows that the number of 90 per cent LTV mortgages has more than doubled in the last two years. However, it is not going to be easy to get such a mortgage. Although lenders know that the first-time buyer market is essential if there is to be a revival in the housing market, regulatory conditions mean that banks have to place in reserve up to six times more capital for low deposit loans. The first time buyer is forced to pay a much higher interest rate for a high loan to value mortgage. Despite this, a would be mortgage holder may still find a mortgage a preferable option to lining their landlords' pockets. However, for lots of people affording the mortgage has not been the issue, it has been the difficulty in putting together the doposit which is proving an onerous task. 2011-05-17 http://www.londonmortgageadvice.co.uk/news/article/559 The Council of Mortgage Lenders (CML) said there were 33,900 remortgage loans advanced during the month - up 16% compared with the previous month, with expectations of interest rate increases leading to larger numbers of homeowners remortgaging in March. This is compared with a figure that is 17% higher than the same month a year ago. Home loans for house purchases also proved to be more popular, although the lenders' body said the market remained "subdued". An what is more, the number of these loans was up 24% compared with the previous month. However, it was 17% down on March 2010, and the CML warned against reading too much into one month's figures. "We saw a significant increase in both house purchase and remortgage lending in March but, over the first quarter of the year as a whole, the picture was subdued and that is unlikely to change for the foreseeable future," said CML director general Michael Coogan. Up from 30% during the previous quarter, remortgaging accounted for 37% of all lending during the first three months. It is thought that it was likely that this was linked to expectations of an interest rate rise in the coming months, making mortgages more expensive, even if this increase was only small. In terms of numbers of home loans made in March to first-time buyers, they were 28% higher than in February, but 17% lower than a year earlier. As an expample, buyers now have to provide a 21% deposit to get on the property ladder for the first time. This is a little less difficult than the 24% typical deposit required a year ago, the CML figures show. As few as 4% of first-time buyers now choose an interest-only mortgage compared with 30% before the financial crisis, when these loans were much more available from lenders. The result of this is that this has meant buyers have be forced to save up before buying a home which, in turn, has pushed up the cost of renting. 2011-05-16 http://www.londonmortgageadvice.co.uk/news/article/558 According to one of the country's leading mortgage broking firms,the rates on five-year mortgage deals are set to fall soon. They have said that recent forecasts that a rise in interest rates was on the cards had proven to be groundless. The Bank of England chose last week to keep interest rates on hold at 0.5 per cent. Said Ray Boulger, the technical director of Charcol,"The City has belatedly recognised that there are far too many problems in the economy for the monetary policy committee to increase the bank rate in the next few months, and for the second time in as many months the majority of economists have yet again put back by a further three months their expectation as to when bank rate will increase," "November now appears to be the majority view, but with an increasing number acknowledging the year may well end with bank rate still at 0.5 per cent." Despite the low bank rate, lenders were still holding five-year fixed rate mortgage deals at a high level, Mr Boulger added. "There has been little or no reduction over the past month in the rates, and so borrowers should go on a buyers' strike until lenders cut rates sufficiently to reflect the changed mood in the market," he said. 2011-05-11 http://www.londonmortgageadvice.co.uk/news/article/557 Mortgage holders face a tough decision on this, as fixed rates still remain comparatively expensive by comparison with tracker deals. That leaves the big question: when will interest rates rise? It is generally believed that there will be no dramatic increases for a year. However, these forecasts are no guarantee that rates won't rise - and when they do trackers will get more expensive. Borrowers needing security should consider the extra cost of a fix as worthwhile. If you are taking a tracker because you couldn't afford the equivalent fixed rate then you are putting yourself in a very dangerous position. It can be argued that for those remortgaging, or buying and able to take their mortgage with them, if you don't need to act right now, ie you are on an existing low tracker rate or standard variable rate, it might be worth biding your time. Arguably even if the base rate did rise, fixed rates could still get cheaper. To begin with, fixed mortgage rates are not directly linked to the base rate, they are more closely aligned with swap rates, the cost of fixed term funding on the money markets. Typically a rising base rate would indicate rising swap rates and thus more expensive fixed rate mortgages. But, and here's the rub, if the base rate did rise it would indicate that the economy and banking system was in better shape and crucially therefore more competition could mean cheaper fixed rates anyway. Alternatively what about a tracker mortgage? Think about this.Tracker rates look good right now. They are substantially cheaper than fixes and have surged in popularity, but they should come with a massive warning sign attached, as essentially they are a gamble. However a bargain rate now, could soon get very expensive when interest rates rise. It must not be forgotten that even the best trackers are at about 2% above base rate. That's fine when base rate is 0.5%, but a whole a lot more expensive if it rises to just 2.5%, which would still be a historically low level. It is imperitive that anyone considering a tracker needs to make sure they are not just storing up a problem for the future. If the tracker comes with an early redemption penalty that would make it expensive to jump ship, then make sure your finances could take a rise of at least 2% to 3% in interest rates. If inflation hits hard, this is a plausible scenario for interest rates. This particular view may not happen, of course. Inflation may subside, the UK may remain mired in economic gloom and rates may stay below 1% for some time to come. If that happens a tracker looks a good bet, but just remember it is a gamble. 2011-05-10 http://www.londonmortgageadvice.co.uk/news/article/556 According to the Building Societies Association (BSA), mutuals approved £2.1bn worth of mortgages in March 2011, up 29% on the £1.7bn approved in March and February 2010. Mortgage lending gross by mutuals totalled £1.7bn in March 2011, up 8% compared to £1.6bn in March 2010, and up from £1.5bn of lending in February this year. "Across the first quarter of 201, mortgage approvals by mutuals were 28% greater than in the same period a year earlier, Adrian Coles, director-general of the BSA, said. "However, these are mortgage increases from very low mortgage levels and compared to previous times, activity in the mortgage market remains subdued. This is largely because economic uncertainty continues to affect confidence in the housing market." 2011-05-05 http://www.londonmortgageadvice.co.uk/news/article/555 Mortgage industry insiders have said that those planning to remortgage or fund a house purchase may find that the deals on offer get cheaper over the coming weeks and months. Some lenders have cut rate following the release of the minutes of the April meeting of the Bank of England's Monetary Policy Committee last week that has quashed rumours of an imminent rise in base rate. The money markets having priced a more immediate Bank rate rise into the cost of mortgages have now gone the other way now thatit seems that this may not take place until August or even next year. It is hope that the downward pressure could continue. But be warned against gambling too much on rates going much lower as rates are already low and those locking their rate in now are definitely getting the deal near the bottom of the market. Tracker mortgages are also becoming more keenly priced. And what is more those with smaller deposits – such as first-time buyers – will also be cheered by the latest moves in the mortgage market where some lenders have cut their rates on higher loan-to-value mortgages, making the price differential between higher and lower loan-to-values narrower. 2011-05-04 http://www.londonmortgageadvice.co.uk/news/article/554 The average monthly costs associated with buying a three bedroom house in the UK stood at £608 in March 2011 - 14% (£98) lower than the average monthly rent paid on the same property type of £706, according to new research by Halifax. The average cost of buying was 43% more than the typical rent paid, 3 years ago. This change has come about through the decline in the average mortgage rate since 2008. The mortgage rate for a new borrower has fallen to an average of 3.59% from 5.82% in March 2008, helping to reduce the average monthly mortgage payment by 39%. The cost of buying currently accounts for a smaller proportion of average UK disposable income (27%) than rental payments (31%).Whereas in 2008, buying costs accounted for a greater proportion of average disposable income than rent (56% against 39%). Even with this improvement in the affordability of buying relative to renting, the tightening in lending criteria since 2007 has meant that many potential buyers have not attempted to enter the market. However, data form the market place shows that the average deposit paid as a percentage of the purchase price has been broadly stable since early in 2009 at around 27%, following a marked rise in 2008. "The typical monthly mortgage payment has declined by over a third since 2008 as a consequence of falling mortgage rates and lower house prices. Suren Thiru, housing economist at Halifax, commented. “As such, the fall in the cost of buying a property compared to the average rent paid by tenants has been significant. “Such a marked decline in mortgage costs has improved affordability for those able to enter the market as well as helping to ease the pressure on existing homeowners' disposable income. “Although the current trade-off between buying and renting is expected to narrow when interest rates start to rise again, the long-term benefits associated with investing in bricks and mortar are likely to ensure that buying will continue to be viewed favourably by many." 2011-04-26 http://www.londonmortgageadvice.co.uk/news/article/553 Just 10,500 people bought their first home in the month of January; the lowest number for two years. First time buyers who get no help from their families have to wait until they are, on average, 37 before they buy a property. First time buyers who do receive family assistance typically buy their first property at 29. Equity release is one method parents use to help children out with the purchase of their first house. However, this type of scheme is not straightforward and people should understand exactly what they're getting into. Another way parents can help their offspring onto the property ladder is to take out a guarantor mortgage. This means that the parents guarantee the mortgage payments, which are paid from their bank accounts, but the property is in the child’s name. It is expected that the property owner will take over the mortgage at a later date. 2011-04-20 http://www.londonmortgageadvice.co.uk/news/article/552 According to the latest figures, the number of house purchase applications rose 11.6% in March as remortgage applications dipped 1.9% after a strong February. On the same period of last year, the index by Mortgage Advice Bureau and Coreco Group revealed that house purchase applications were 20% up in March Also, while demand for remortgage deals abated in March after a surge in February, application numbers were 31.9% higher than March 2010. While remortgage transactions for March were at their highest level in any one month since April 2008, the brokers noted that,figures appear to have reached a plateau. Chosen by 80% and 73% respectively, fixed rate deals continued to be the overwhelming product of choice for purchase and remortgage clients in March. At the same time, the average loan size for house purchase increased in March to £127,546 from £123,508 the previous month, compared to a 7.1% in loan size for remortgage applications. It fell from £142,466 to £132,341. While the average age of a mortgage applicant was 37 years 7 months,the average loan to value for house purchase also dropped slightly to 69.9% in March compared to 71.4% in February. "March figures are encouraging and continue the positive start to the year with another month-on-month increase in borrower activity. This reinforces the belief that a more stable market is slowly returning." Brian Murphy, head of lending at Mortgage Advice Bureau, said. And he went on to say : "Although remortgages are still significantly up on 12 months ago, with transaction levels in March at their highest level in any one month since April 2008, numbers do appear to have reached a plateau. We may well see remortgage transactions dropping off further in April with inflationary pressures easing, making it less likely that we will see a rate rise before the summer." "Following a slight rise in the cost of the average two- and five-year fixed rates during March, pricing has fallen back marginally this month, although conversely average two-year tracker rates have ticked back up a little. "Importantly, average rates for two-year trackers and two- and five-year fixed rates are below the corresponding average rates that were being offered 12 months ago, further demonstrating that mortgage product pricing continues to offer good value relative to historic levels." 2011-04-19 http://www.londonmortgageadvice.co.uk/news/article/551 The rate of inflation haveing gone up, it is looking exceedingly likely that a small interest rate rise over the the next couple of months with further rises likely later this year and early next is on the cards. This will bring joy to suffering savers, while most mortgage holders should be able to cope – provided the rises aren't too large or sudden. However there undoubtedly will be borrowers who find even a relatively small rise in rates hard to take. Of these the most vulnerable – according to debt charities and mortgage industry insiders – are the millions of homeowners who decided to go for an interest-only mortgages.Those on interest-only mortgages are more likely to be on lower incomes, reflecting the relatively smaller monthly mortgage payments required, and therefore are less able to withstand these budget pressures," said Una Farrell from the Consumer Credit Counselling Service, a debt charity. Originally interest-only mortgages were directed at buy-to-let investors as they could offset some of the interest against tax on rental income. However, during the final years of the housing market boom, interest-only mortgages were taken out by many first-time buyers. In 2006, a staggering 31 per cent of new mortgages were interest-only. This means that potentially millions of borrowers are in deals which require them to pay only the interest on the mortgage rather than the capital. And with rates set to rise and the housing market and economy in the doldrums, there could be hard times ahead for interest-only borrowers. it is important, if you have an interest-only mortgage, that you adequately fund a suitable repayment vehicle, such as an individual savings account. You should also review it regularly – and adjust the amount that you are saving if necessary – to ensure that it remains on track to pay off the mortgage at the end of the mortgage term," said David Black, Defaqto's banking analyst. "No one knows when and how quickly the bank base rate will increase and many borrowers with variable rate mortgages, and indeed those with an impending maturing fixed-rate mortgages, could be in for a nasty financial shock when their monthly mortgage payment is increased." It istrue that some borrowers have been making higher than required repayments on their mortgages. The Bank of England said last week that it was seeing substantial repayment of mortgage debt, but after a splurge lasting well over a decade borrowers have a long way to go. Interest-only mortgages are much harder to obtain than they were during the market boom. And of late, several major providers have tightened lending criteria even further. "Borrowers will need to provide evidence of an acceptable repayment vehicle and lenders will limit the loan to value to 75 per cent of the property value," said Mr Hollingworth. "Nationwide is just the latest to take this approach, following a similar move by Halifax which also takes effect this week. This should all make interest-only borrowers think now about what they are doing to cope with a higher interest rate world. 2011-04-14 http://www.londonmortgageadvice.co.uk/news/article/550 New figures show that there was a slight improvement in the amount lent through mortgage loans during February. Up eight per cent on January, data from the Council of Mortgage Lenders (CML) reveals that there were 32,300 loans for house purchases made during the month. During this period, the value of these loans reached £4.6 billion, a five per cent rise compared to the previous month. It must be pointed out however, that January was a particularly poor month for mortgage lending and both the volume and value of loans were 12 per cent down on February 2010. Increasing five per cent by volume during the month,remortgaging went from 23,200 to 24,300 loans, but the value of remortgaging deals remained the same as in January. While the average loan-to-value of a mortgage also rose,according to recent data from chartered surveyors eSurv, mortgage approvals rose by 4.3 per cent in March - the third consecutive month of growth. 2011-04-12 http://www.londonmortgageadvice.co.uk/news/article/549 Should their monthly payments increase, many homeowners coming to the end of their mortgage deals would seek to find another provider. A rise in monthly payments is a bigger concern for mortgage holders than a probable increase in the base rate of interest by the Bank of England, that is according to a survey by first direct.Of those polled, ten per cent of homeowners who have come to the end of their current mortgage deal and are ‘free to leave' would definitely look if interest rates rose by one per cent. As it is, 41 per cent of those on the lookout to move mortgage in the next 12 months would definitely look for a new deal if their monthly payments rose by £100, as would 35 per cent of people who were not otherwise planning to move mortgage. The highest since records began in 1970, the study comes the same week as new figures from the Bank of England revealed that mortgage borrowers paid back more than £24 billion to lenders in 2010. 2011-04-06 http://www.londonmortgageadvice.co.uk/news/article/548 It has been announced that Barclays is cutting the rates on its range of offset Woolwich mortgages by up to 0.50% from today. At 70 per cent loan to value, the rate has been reduced to 2.48% above base from 2.59%.The largest rate cut is at 75% loan to value, reducing 0.50% to 2.79% above base (currently 3.29%). At 75% loan to value, the rate is now 2.59% above base, down from 2.99% and is the lowest rate ever offered on this product.Offset trackers in the loyalty range have also been cut with the lowest rate now 2.28% above base, down from 2.39% at 70% loan to value. An interesting calculation would be for homeowners with savings of £20,000 who switch to the new rate of 2.48% could save £47.36 a month or £14,208 over the loan term with a £150k repayment mortgage. If they also saved £50 a month, they could pay off their mortgage nearly three years earlier by offsetting, according to Barclays. Another great benefit is that offset mortgages could also benefit a range of tax payers by helping to limit the impact of tax and inflation. A 20% taxpayer would need to find an equivalent savings rate of above 3.10%, a 40% taxpayer will need 4.13% in interest, and at 50% tax would need to earn 4.96% in interest to get the same savings as offsetting their mortgage (when compared with the 2.48% offset rate). Head of mortgage products at Barclays, Laoiseach Lynch commenting on the new rates, said: "As the tax year draws to a close, now is a great time for borrowers to take stock and assess how they can make their mortgages and savings work together to limit the impact of tax and inflation. Offsetting is the most tax efficient way to manage both savings and a mortgage so it makes sense for borrowers to look at these options. Also, the added benefit of repaying your mortgage earlier could save you money in the long run, which is good news in any economic climate." In summary, offset mortgages are suitable for anyone who pays tax, or has at least 5 per cent of their mortgage balance in savings or is self employed or invests in Individual Savings Accounts (ISAs). Other benefits also include keeping the savings accessible, as many customers don't want to commit to a long term bond or a traditional mortgage where you have to overpay. With offset, the money is always accessible but cuts the mortgage interest rate automatically. 2011-04-05 http://www.londonmortgageadvice.co.uk/news/article/547 Because of the difficulties in raising a deposit and securing a mortgage, would-be homeowners are being prevented from buying a house. Over 80 per cent of non-homeowning adults aspire to be a first-time buyer but less than a quarter of these expect to be able to purchase within the next five years, a survey by HSBC reveals. While 59 per cent pointed to having insufficient income to support the mortgage, when asked what key reasons were preventing them from buying a home, 69 per cent cited difficulties raising the required deposit. The current average house price of a first-time buyer is £136,842 - 6.6 times a young single persons average earnings, according to HSBC. This leaves an 'affordability gap' of 2.6 times income, equivalent to £53,700 or 39 per cent of the house price, with most lenders unlikely to offer a mortgage more than four times income. the news give above comes as Nationwide revealed this week that house prices rose by 0.5 per cent in March to reach an average of £164,751. 2011-04-04 http://www.londonmortgageadvice.co.uk/news/article/546 Figures show that consumers took a slightly bolder approach to debt in February with increases in mortgage and unsecured borrowing. The Bank of England said that there were 46,967 mortgages approved for house purchases during the month, up 815 on January whilst remortgaging rose to a 26-month high as people looked to secure cheap deals. the amount of unsecured debt rose by £768m in February, driven by an increase in personal loans and overdrafts. On the other hand, the debt increases and mortgage activity remain relatively low compared with before the recession. The Bank's figures show that the number of remortgaging loans approved stood at 35,725 in February.This was up from 33,972 the previous month, slightly up on a previous high in November, and higher than the average of the previous six months of 31,674. Offered at relatively low interest rates at present, the figures signal that some homeowners have been signing up to new fixed-rate deals. One reason for this might be because their current deals have come to an end, but many would be considering the potential of interest rate rises later in the year. It has been predicted by some that the Bank of England will increase the Bank rate from its record low of 0.5% in order to control the rising rate of inflation. 2011-04-01 http://www.londonmortgageadvice.co.uk/news/article/545 According to the Bank of England,the number of remortgage approvals increased in February by 35% year-on-year to 35,725 worth £4.7bn. Higher than the previous six-month average of 31,674, its latest figures showed that remortgage approvals were up from 26,469 in February 2010. Up from 98,906 in February 2010,total mortgage approvals for the month came in at 102,871 worth £11.9bn. With almost no change year-on-year,house purchase approvals remained relatively static at 46,967 in February. None the same, the month's total for house purchase was higher than the previous six-month average of 46,413. Down on the previous six-month average of 22,272,approvals for other purchases remained subdued at 20,180. 2011-03-31 http://www.londonmortgageadvice.co.uk/news/article/544 We have seen an increase in 'lender forebearance' whereby banks allow borrowers to extend the repayment period for their debt, switch a repayment mortgage to an interest-only product or take a holiday on interest payments. It has been warned that banks that are making an effort to help out struggling mortgage borrowers could be contributing to future problems for the financial system. This tactic is likely to end up costing banks in the long run, however, credit ratings agency Moody's has warned. This conclusion has been arrived at on the prediction that many mortgage borrowers under forebearance measures are likely to re-default, while house prices are expected to continue to fall meaning banks will lose their collateral. Elisabeth Rudman, a senior credit officer at Moody's, told the Daily Telegraph, "There is still high indebtedness on mortgages and there is potential for more borrowers to get into difficulty," "As the forebearance numbers are aggregated it is hard to know the scale of the issue for any individual bank, but it is a concern." To back up these thoughts, a recent report from the Financial Services Authority found that the number of mortgage borrowers who fell into arrears in the last quarter of 2010 rose by six per cent on the quarter before. 2011-03-30 http://www.londonmortgageadvice.co.uk/news/article/543 According to estate agents, the UK housing market in February saw a jump in the number of people putting their house up for sale. The market report from The National Association of Estate Agents for February shows a year-on-year rise of 25 per cent in the level of available housing stock. The highest level for seven months, the number of house hunters registering with an agent across the country also rose to 268 reported in February compared with 252 in January per branch – Sales increased across the property market in February, growing from an average of 6 to 8 per branch month on month, despite continuing consumer concern regarding interest rate rises. And what is also encouraging is that the percentage of sales made to first time buyers also increased slightly from 24 per cent in January to 25 per cent in February. NAEA President Michael Jones said: “To see such a significant boost in activity amongst sellers compared with this time last year is encouraging news for the UK property market. The signs are that they are being more realistic about the price they can expect to achieve when they put their house on the market. "This means that, on the whole, supply can meet demand levels, meaning a more stable market, for the short term at least. “However, the picture is still very variable across the UK with agents reporting much higher growth in enquiries and stock availability in some regions than others. "Undoubtedly, broader economic constraints on spending continue to impact on consumer confidence, especially at a First Time Buyer level, and the effect of the public sector cuts has yet to be fully felt. "With limited mortgage availability and the concern about a likely rise in interest rates still putting off many of the people who otherwise would be looking to buy, it is important that the government does everything it can to encourage growth at this crucial stage of the recovery process.” 2011-03-24 http://www.londonmortgageadvice.co.uk/news/article/542 Recent figures were pubished that put the retail prices index (RPI) measure of inflation at 5.5%, the biggest annual increase in the cost of living since 1991. This means that people are being punished by the highest rate of inflation for two decades amid fears of an interest rate rise Looking at it another way, inflation is higher in Britain than any other European country - except Estonia, Bulgaria and Romania. In some part the rise in inflation is being partly blamed on January's sharp rise in VAT from 17.5% to 20%. This has increased the cost of food, fuel and clothes. It has been suggested by the experts that pay deals are failing to keep pace with the soaring cost of living. The average worker is getting a rise of 2.1% and state workers paid £21,000 or more are enduring a two-year pay freeze. Unfortunately this soaring inflation increases the likelyhood of the Bank of England hiking rates within months from the historic low of 0.5%. Most people with a mortgage have a variable mortgage, which means their monthly mortgage payments will jump. The inflation figures are 'truly dread ful'. Dr Ros Altmann, the director general of Saga, said. The consumer prices index (CPI), an alternative measure of inflation, also rose sharply, from 4% in January to 4.4% in February. What makes this so bad is that this is more than double the Government's two per cent target, and the 15th month that it has stubbornly stayed above the target. However there are many experts urging the Bank to resist the temptation to raise interest rates at such a fragile time for the economy, as it would further crank up the pressure on embattled households. 2011-03-23 http://www.londonmortgageadvice.co.uk/news/article/541 A property spokesman, says, banks need to return to old-fashioned lending interviews to solve the first-time buyer crisis and stimulate the housing market. The Budget on 23 March should implement a return to traditional-style lending practices which focus on risk and ability to repay the loan, rather than lenders placing emphasis on the size of a first-time buyers' deposit, according to residential property firm Move with Us. Speculation about the Budget has suggested that the first-time buyer crisis may be addressed through Stamp Duty initiatives, but such a move would have little impact on solving the problem in the sector, said Robin King, director at Move with Us. "Short-term initiatives like a Stamp Duty holiday do not address the fact that first-time buyers require a large deposit. Instead, we would like the Budget to focus on lender-focused initiatives, forcing banks to become more sophisticated and change the way they lend." he said. "The current mortgage lending system is too simple. Banks are placing too much emphasis on the size of first-time buyers' deposit - and grouping them together as one risk category." He added: "We would like lenders to judge these borrowers on a case-by-case basis, bringing actuarial evidence at the forefront of decisions. If you have a good credit history, a steady employment record and can demonstrate that you pay your debts on time, you should be able to get a 95% mortgage," he explained. 2011-03-22 http://www.londonmortgageadvice.co.uk/news/article/540 Of the mortgage population in this country only 15% are taking the chance to reduce the mortgage term. Such is the research by Barclays showing that 85% of homeowners are missing out on the opportunity to slash their mortgage term by overpaying their mortgage every month. Even with the low interest rates, Barclays found that only 10% of homeowners are overpaying on their mortgage, while 6% said they planned to start doing so this year. Howevever, what can be revealed is that 24% of those surveyed aim to pay off their mortgage early, with more than half of these hoping to reduce their mortgage term to 15 years or under. It is interesting to note that research showed that the average overpayment is £200.82, which on an average mortgage of £150,000 over 25 years could reduce the term by seven years and three months. Speaking about these findings, Andy Gray, head of mortgages at Barclays, said: "We've seen just a modest increase in the amount borrowers are overpaying on their mortgage in the first two months of this year compared to the same period last year. "We are still experiencing low interest rates and mortgage affordability is at its best levels for more than a decade so we would urge borrowers who can afford it to start overpaying now, as putting an extra £100 to their mortgage each month will pay off their mortgage four years earlier and reduce the amount of interest that is paid." He further added that, even when interest rates rise, buyers are still likely to be able to afford more than they think. "A homeowner on a typical £150,000 mortgage tracking at 2.49% above base rate would see their monthly mortgage payments increase by around £20 a month for each 0.25% increase in base rate. Borrowers will therefore benefit overpaying by as little as £50." "I'd urge all homeowners to review their current mortgage arrangements to ensure their repayments remain affordable throughout 2011 and beyond and to ensure they have a contingency plan when interest rates start to increase. This could be as simple as remortgaging," he explained. 2011-03-21 http://www.londonmortgageadvice.co.uk/news/article/539 It is expected that rising inflation and the potential of a Bank of England base rate rise to have a positive effect on remortgage business over the next three months. Influences such as rising inflation rates and the potential knock on effect to the Bank of England base rate will affect remortgage business in the next 3 months. It is expected that interest rates will rise this year. This year fixed rate products have been the most popular or better value product for clients. But tracker rates had been also been popular. It is the remortgage market is one which has shown signs of life in recent months and will continue to grow thanks to a number of market influences. It has been predicted by the British Chambers of Commerce that interest rates could rise as soon as May and if this is the case it will have a big effect on the remortgage market and the levels of remortgage business being written. 2011-03-16 http://www.londonmortgageadvice.co.uk/news/article/538 New figures reveal, January saw an unexpected fall in mortgage lending levels. House purchase loans dropped by 26 per cent during the first month of the year compared to December 2010, according to the Council of Mortgage Lenders. Though a drop in January is expected, the fall is much greater than seasonal factors could explain, they said. And to explain it al they put the drop in lending down to an "unusual combination of factors", such as the government's spending cuts beginning to bite, rising inflation and tax measures putting pressure on household budgets. And what is more, December's extreme winter weather and uncertainty over future interest rate rises has led to a lack of movement in the mortgage market, said the industry body. "Pressures on household budgets have been increasing both in terms of take home pay, and indirect tax measures such as the VAT increase and recent inflationary pressures, so we were expecting a fall in transactions early in the year, and a flat mortgage market underpins our forecasts for 2011." CML director general Michael Coogan said. A recent survey by moneysupermarket.com revealed that fear over interest rate rises could be putting off potential homebuyers, with 42 per cent of people worried about the effect a future rise will have on their mortgage repayments and overall finances . 2011-03-15 http://www.londonmortgageadvice.co.uk/news/article/537 Optimism in the mortgage market seems to be rising! The Mortgage Alliance's Distribution Indicator for December found that 86% of brokers expected business volumes to rise in 2011. This is backed up by the National Association of Estate Agents stating that in January 2011 the housing market saw a surge in the level of enquiries, both for buyers and sellers. Also, research from Clydesdale & Yorkshire Bank revealed that 30% of people in the UK are planning to move home in 2011. And all of this seems to means that confidence is starting to return, and this means demand for property and mortgages will grow once more. The national media is encouraging people to review their mortgages as rate rises become a hot topic and as soon as we do have a rate rise, borrowers are likely to seek to remortgage. There will then be a fantastic opportunity to deal with increased levels of mortgage enquiries. Does the typical borrower want to visit three or four high street banks to find out which offers them the best deal and which will actually lend to them? This is all very time consuming and confusing for the customer. Compare that to the experience a customer will have with a broker - the opportunity to be advised on the products of multiple lenders, a full financial review if required, and a personal service. 2011-03-09 http://www.londonmortgageadvice.co.uk/news/article/536 Mortgage affordability is about the ability to get or take further steps on the property ladder and measuring affordability against current levels of mortgage payments. The Centre for Economics and Business Research (CEBR) think tank suggested that affordability for first-time buyers will reach an eight-year high this year, thanks to low mortgage rates and weakening house price growth. This is because it expects the housing market recovery to stall in 2011, leaving house prices 1.7% lower by the end of the year, which it believes could be good news for first-time buyers if they can come up with the appropriate deposits required by most lenders. In a recent statement the CML said those aged under 30 are now heavily reliant on parents and other relatives for financial support. It estimated that, in 2005, 38% of first-time buyers aged under 30 required help with their deposit. By 2009, this had reached an estimated 84%. And they also revealed that the typical age of first-time buyers who did not receive assistance and were unlikely to be former owner-occupiers returning to the market increased from 28 in 2005 to 31 in 2010. It is encouraging that new research by Barclays suggests that general mortgage affordability has hit its best level for ten years. After assessing more than one million customers' accounts, the study found that, on average, people paid out 15.4% of their take home pay at the end of December 2010 to cover their monthly mortgage payment, the lowest level since analysis began in 2001. And moreover, a poll of more than 2,500 homeowners also found that 13% say they can easily afford their current mortgage repayments and are not worried if interest rates rise. Meanwhile 39% class themselves as comfortable, with some room for manoeuvre, and 28% are stretched but still have disposable income available to help them navigate a rising interest rate environment.Of those who said their mortgage was less affordable than a year ago, more than a third (36%) cited lower salaries as the cause, while an additional 29% said their other outgoings had increased. Of course, it stands to reason that, with interest rates at an historic low, this type of mortgage affordability has improved. However, it is crucial that homeowners are not complacent. Yet, homeowners who are not already thinking about their mortgage certainly need to be. Barclays estimates there are still around 800,000 borrowers sitting on their current lender's SVR who could benefit from escaping and switching to a more competitive mortgage deal. 2011-03-08 http://www.londonmortgageadvice.co.uk/news/article/535 The average interest rate for a two-year tracker mortgage has fallen to 3.40%, according to Moneyfacts.co.uk, the lowest level since it started monitoring rates in 1988. Moneyfacts.co.uk said that the last month has seen ten lenders reduce their rates on tracker deals, including Nationwide, Northern Rock, Platform and Woolwich from Barclays. By comparison, Moneyfacts.co.uk found that the average rate on a two-year fixed rate mortgage has increased to 4.59%, its highest level in ten months. It added that, over the last year, the time that fixed rate deals are on the market has nearly halved from 27 days to 14 days. Meanwhile, demand for mortgages among visitors to Moneyfacts.co.uk has risen to 28% in last 12 months from 16%. Michelle Slade, a spokeswoman for Moneyfacts.co.uk, said: “Some borrowers have taken a wait-and-see approach over the last two years, preferring to remain on a lender's SVR rather than move to a more expensive mortgage deal. “Talk of an imminent base rate rise has caused a surge in demand for new mortgage deals. Lenders appear to be trying to tempt borrowers off record low SVRs on to new tracker deals instead.” ADVERTISEMENT However, she added: "The rise in swap rates appears to have plateaued, but the rise in fixed rates continues, albeit at a slower pace than a few months ago. “Borrowers looking for a fixed rate mortgage need to act fast as deals are only in the market for an average of two weeks.” 2011-03-05 http://www.londonmortgageadvice.co.uk/news/article/533 According to Zoopla.co.uk. the cost of owning a home is cheaper than renting in 80% of Britain’s towns and cities. Rising steadily since the middle of last year, when renting was 8.7% more expensive, its research revealed the difference in cost. To service an interest-mortgage with an interest rate of 5%, Zoopla.co.uk figures showed that tenants are paying on average 10.5% more in rent than a homeowner spends Renting would become more cost-effective in 78% of locations, it noted that, if interest rates were to increase by 1% and rents remained the same. In several cities, with Milton Keynes, Walsall and Birmingham showing the largest differences, the cost of renting was significantly higher as Zoopla.co.uk looked at the asking prices of two-bedroom flats for sale in the 50 largest cities and towns around the country and the subsequent mortgage payments. Walsall and Birmingham rents were 38% and 35% higher than mortgages espectively.Milton Keynes rents were on average 42% higher than mortgages at £785, meaning renters would pay £2,772 more a year than a homeowner. It was also found by Zoopla.co.uk that a further nine of the 50 towns and cities had average rents that exceeded mortgage payments by more than 20%. Despite the high price of housing, London was also cheaper to rent than buy. Average rents in the city are £2,252 per month with buyers saving on average £4,656 a year. "While lenders maintain their vice-like grip on the mortgage market, more and more would-be buyers are forced to rent instead of getting onto the housing ladder."Rents will likely rise further as a result and renters will continue to pay a significant premium for being stuck in the sector." Nicholas Leeming, business development director of Zoopla.co.uk, said. 2011-03-03 http://www.londonmortgageadvice.co.uk/news/article/532 Aaccording to new research released today from Barclay, mortgage affordability has hit its best level for 10 years, , but the lender is urging homeowners to look ahead and be prepared for any increase in their payments. It found that, on average, people paid out 15.4% of their take home pay at the end of December 2010 to cover their monthly mortgage payment, the lowest level registered as part of the analysis, which is now in its tenth year, in an analysis of more than one million customers' accounts. Attributed largely to the low interest rate environment, the trend, is despite the average house price having increased by 68% over the same period and the average salary increasing by just 37%. Supporting opinion research commissioned by Barclays found the majority of homeowners say they are comfortable with their current payment levels. 13% say they can easily afford their current mortgage repayments and are not worried if interest rates rise the poll of over 1,000 homeowners who have bought their home with a mortgage found ; 39% class themselves as comfortable, and with some room for manoeuvre, and 28% are stretched but still have disposable income available to help them navigate a rising interest rate environment. Of those who said their mortgage was actually less affordable than a year ago, over a third (36%) cited lower salaries as the main cause, while an additional 29% said their other outgoings had increased. Barclays is urging homeowners to ensure they keep their mortgage repayment levels under review, with commentators predicting an uplift in interest rates this year - and 74% of those polled agreeing that interest rates will increase in 2011 - "It stands to reason that with interest rates at an historic low, mortgage affordability is at its best in a decade, but it is crucial that homeowners are not complacent.Andy Gray, head of mortgages at Barclays, said. “When asked specifically about coping with rising interest rates, it was great to hear that 71% say they either already have a plan in place to manage increased monthly mortgage repayments, or that they will be unaffected as they are on fixed rates. But homeowners who are not already thinking about their mortgage certainly need to be, to ensure they have a contingency plan when interest rates start to increase."When asked about their budgeting for 2011, a third of people (33%) said the cost of petrol was their main concern, while an additional 15% said they were most concerned about rising energy bills. Mortgages came third on the list of priorities, with 14% citing it as the main focus of their budgeting for this year. Andy Gray added: "We know that other financial factors are likely to bite this year, but homeowners can't afford to forget about their mortgage. The cost of petrol or rising energy bills may be beyond their control, but homeowners have a golden opportunity now to ensure they have made plans to ensure their mortgage remains affordable through 2011 and beyond. This could be as simple as remortgaging which could also help with their other rising household costs." 2011-03-02 http://www.londonmortgageadvice.co.uk/news/article/534 In an encouraging sign for the mortgage market could some green shoots have been spotted in last month’s housing market? After three months of decline, 38.3% more For Sale signs had the magic word ‘Sold’ splashed across them than in January. We mustn’t get too excited. Sales were still down 26.5% on last February (which was an exceptionally high month for sales in 2010). However, they were 14.0% up on February 2009. The figures also provide encouragement for the months ahead as the number of house sales was 25.1% higher than the monthly average over the last 50 months. Again, we mustn’t get carried away, as they are still 59% lower than the market peak in May 2007. However, the Agency Express teams were kept busy across all parts of the UK in February. Leading the way was Scotland with a hike in sales of 62.1% followed by Greater London (61.4%), the North-West (52.3%), West Midlands (43.4%) and the South-East (43.1%). Free mortgage advice.The region with the lowest improvement in house sales was the North-East but even here there was an increase of 15.1%. Three cities at least doubled the amount of house sales they achieved last month. In February, Leicester’s went up a massive 140%, Glasgow saw a rise of 114.3% and Coventry 100%. Three cities that bucked the Mortgage broker londonUK trend with declines in house sales were Edinburgh, Colchester and Nottingham. The number of new For Sale signs that went up in February rose 27.7% on January, but still historically low. The number of houses put up ‘For Sale’ was 48% down on the market peak in May 2007 and 6.4% lower that the monthly average over the last 50 months. tephen Watson, managing director of Agency Express and a former estate agent, said: “Better weather conditions certainly helped the situation in February and we could be seeing people moving and securing a fixed rate mortgage now before interest rates start to go up as expected in the next few months.“One of the more telling figures from our index is that the level of sales achieved in February was significantly higher than the average monthly level we have seen over the 50 months that the index has been running, suggesting that we are seeing a recovery, albeit a slow one.”Never let it be said that EAT only reports bad news. See our next story and have a busy weekend, with a spring in your step. 2011-03-01 http://www.londonmortgageadvice.co.uk/news/article/531 According to broker the Mortgage Advice Bureau (MAB,75% of borrowers opt for fixed rates.Three-quarters of all mortgage applications, excluding remortgages, were for fixed rate products last month, Its research showed that 75% of borrowers chose to apply for fixed rate deals in January 2011, compared to 45% in January 2010. "With a variety of fairly negative economic news, rising inflation and an increase in unemployment levels, borrowers who are active in the market, are erring on the side of caution and increasingly opting to fix their repayments." Said MAB. So, it's not surprising January saw borrowers migrate to the safety that fixed rate deals offer. In January, the average loan-to-value on mortgage applications rose to 72%, compared to 70.9% in December 2010. Meanwhile, the number of mortgage applications in January 2011 increased by 23.3% on December 2010 and 18.4% year-on-year. Murphy said that the rise in mortgage applications was due to adverse weather conditions in December resulting in transactions being carried over into the new year. On the remortgage front, MAB said that there had been an uplift in activity since the end of 2010 and, despite a predictably quiet December, January 2011 saw remortgage applications back up to pre-December 2010 levels.Murphy aid: "Remortgage activity has definitely picked up and interest rate uncertainty is a key factor driving this uplift, as borrowers on standard variable rates take uncertainty out of the equation." 2011-02-23 http://www.londonmortgageadvice.co.uk/news/article/530 Today’s government summit on first time buyers will debate ways to tackle the problems faced by first time buyers, Housing Minister Grant Shapps says. How to step up efforts to help aspiring first time buyers get a foot on the ladder will be debated by leading industry figures, including Michael Coogan, the CML director general, and Paul Broadhead, the BSA's head of mortgage policy and Key house builders, lenders, insurers, councils and consumer groups will also attend. They will cover amongst other issues the key barriers and scale of the problems facing first time buyers and also how to improve the availability of mortgages, including devising new mortgage products that understand the challenges faced by first time buyers - such as innovative schemes for parents to support their children into home ownership - for example, the Lloyds Lend a Hand scheme or the Hitachi loan deal. As part of a longer term framework of regulation, new and creative local approaches to increasing shared ownership or equity loans are also on the agenda as well as the role mortgage insurance could take to support increased sustainable lending to first time buyers, "The greatest threat to the aspirations of first time buyers is the unprecedented national debt faced by the country – the Government has taken immediate steps to tackle that, so we avoid pulling up the housing ladder and cutting off a whole generation of young people who want to buy their own home,Grant Shapps said. "But we want to do more to help aspiring first time buyers - the average age of the first time buyer with no support from their family is now 37, and there are 1.4 million households who aspire to own a home but are simply unable to do so because of house prices and mortgage availability. "So I’m calling together key figures from across industry to discuss how we can tackle this problem. This cannot be achieved simply by top down diktats from Government – there will need to be a unified effort and creative solutions from across the board to make sure we do not lock young people out of the housing market." Coogan added: "It is good to see Ministers taking the initiative to discuss how we can look to improve market conditions for first-time buyers. But no-one will be surprised to learn that there is no simple quick fix for a market that has changed fundamentally since the credit crunch. Creative approaches have a role to play in helping to turn market stability into market recovery, and lenders look forward to working constructively both with government and the housebuilding industry as we look to help create the kind of conditions conducive to responsible innovation." 2011-02-15 http://www.londonmortgageadvice.co.uk/news/article/529 Remortgaging hit a 13-year low even though mortgage lending was steady in 2010 following sharp falls in 2008 and 2009. Down 23% on 2009, only 313,200 homeowners moved their mortgage to another lender or renewed their deal last year. How soon and by how much interest rates move and how competitive mortgage lending rates become, will hinge the how the remortgaging market this year will be. With a jump of 11% by value against 2009, last year the home buyer market performed better than the remortgage market, with 529,300 borrowers taking out £77.1bn of loans. The market continues to suffer with just 14,500 loans to new buyers in December worth £1.7bn, slightly down on November and 42% down on 2009.In 2010 as a whole, first-time buyer mortgage borrowers fell 1% against the previous year, but new buyers borrowed £23.3bn a rise of 6% year-on-year. The lowest proportion since February 2004, the average first-time buyer in December 2010 had a deposit of 23%, up from 21% in November, borrowed 3.23 times their income and spent 12.9% of their income on interest payments. In December only 6% of first-time buyer loans were interest only, against 30% pre-2007 as interest-only mortgage lending dropped substantially since 2007, particularly for first-time buyers. 2011-02-11 http://www.londonmortgageadvice.co.uk/news/article/528 As lenders pass on rising funding costs to borrowers, the average cost of a fixed rate mortgage stands at its highest level in six months. In recent months, the cost to lenders of raising funding on the swap rate market has soared. The two-year swap rate stood at 1.35% at the end of November, and today it stands at 1.98%. This is a rise of 47%. "The majority of lenders have increased rates since the start of the year, with some mortgage deals seeing rate rises of more than 0.50%, Michelle Slade, spokesperson for Moneyfacts.co.uk, said. "Borrowers who have delayed the decision to commit to a new fixed deal will now find themselves having to pay higher monthly payments," she said. A 0.50% increase in rate would add £42 per month to a borrower's repayments, on a mortgage of £150,000. Whilst there is a difference of perhaps 1% betwwen the best tracker rates and the best fixed rates some people may be tempted to take a risk on interest rates not rising significantly. But this would be a big gamble. 2011-02-09 http://www.londonmortgageadvice.co.uk/news/article/527 In the last two years mortgage applicants with a 20% deposit have seen a threefold increase in the number of deals on offer. Up from 97 two years ago,the number of deals on offer in February rose to 390. Reports from financial information firm Moneyfacts show that the keenest rates are still only available to those with a 25% deposit but the number of deals demanding a 40% deposit also fell 28% to 187. The number of mortgages available now has more than doubled to 2,447, but two years ago the number of prime residential mortgage products fell to an all time low of 1,097. With 85% deals rising to 560, from 159 in 2009, the number of deals available to 90% deposit holders jumped from 94 in February 2009 to 214 in 2011. Lenders' poor appetites to lend and the rising costs of fixed rate loans continue to hold back the market, whilst product numbers continue to improve said Michelle Slade, spokesperson for Moneyfacts, but warned other factors including falling mortgage approvals. "The increase in the number of mortgage deals for those with smaller deposits is encouraging, but only a limited number of such mortgages are likely to be approved," said Slade.However, she added: "Increases in fixed mortgage rates combined with talk of a base rate rise sooner rather than later have resulted in heightened activity amongst existing borrowers looking for a new deal." 2011-02-08 http://www.londonmortgageadvice.co.uk/news/article/526 Only 46% of mortgages on offer now ask for a deposit of 75%, according to Moneyfacts,as the proportion of mortgage deals needing more than a 25% deposit has fallen to a two-year low. The BBC reports that the figures indicate some lenders may be relaxing their strict mortgage rationing of the past two years, Having said that, lenders have warned they still face severe restrictions on their ability to lend to home buyers. "The availability of mortgages continues to improve and encouragingly it is borrowers with a smaller deposit that are seeing the biggest increase in numbers," Michelle Slade, of Moneyfacts, pointed out. Also saying that the size of a deposit is also no longer the only method which lenders use to allocate mortgage funds. She continued. "However, just because lenders have increased the number of deals available, it doesn't mean that more mortgages are being approved." Meanwhile, according to the BBC, separate research from Lloyds bank suggests falling house prices will continue to choke activity in the market, with the bank saying nearly a fifth of first-time owners did not have enough equity in their properties to move. What is more, and emphasises the point is that research among its own mortgage customers by Lloyds, which owns Halifax, found 9% of so-called "second steppers" - those who want to sell their first home and move up the property ladder - are unable to do so because house prices have fallen since they first bought. 2011-02-02 http://www.londonmortgageadvice.co.uk/news/article/525 According to Paragon Mortgages half of mortgage brokers are expecting to increase the level of buy-to-let business they introduce during 2011. they say that, 46 per cent of intermediaries expect to introduce more buy-to-let mortgage business during the year. What is more encouraging is that nearly two out of ten (17 per cent) expect to witness an increase in buy-to-let business of ten per cent or more during 2011. Commented John Heron, Paragon Mortgages' managing director,"Intermediaries are encouraged by the growing number of lenders in the sector, which is stimulating much-needed competition and product innovation," Carrying on he noted: "Meanwhile, there is a clear shift in UK housing trends towards privately renting and landlords are looking to benefit from the excellent levels of tenant demand and strong rental yields." 2011-02-01 http://www.londonmortgageadvice.co.uk/news/article/524 A fall of 10% was recorded by for the number of mortgages approved for house buyers by the UK's main banksby 10% in 2010. Just 400,000 mortgages between them were approved says, The British Bankers' Association (BBA) of its members. Apart from 2008, that meant the number of approvals was at its lowest level in 11 years, Unsecured lending, such as credit cards and bank loans, was also depressed The BBA said. The BBA said, mortgage demand was weak throughout the year,""Unsecured credit demand was also weak during last year, with net lending reducing by £2bn as households adopted a lower appetite for credit due to the uncertain environment for employment and the economy." what this shows is that the BBA's figures underline the subdued state of the UK property market. Including remortgaging and equity withdrawal, the Council of Mortgage Lenders reported last week that the value all new mortgage lending, , fell to its lowest level for nine years in 2010. At the same time, HM Revenue & Customs said that the number of homes sold in the UK during 2010 stood at just 885,000. 2011-01-31 http://www.londonmortgageadvice.co.uk/news/article/523 According to new research by unbiased.co.uk, over seven million homeowners have not reviewed their mortgage since the base rate first fell to 0.5% back in March 2009. Mortgage payers have been lulled into a false sense of security and as a result have failed to review their mortgage rates, with the base rate remaining at 0.5% for a record 22 months. Almost one in five (18%) of those on a standard variable rate mortgage over half (52%) have failed to review their mortgage since the base rate hit its all time low of 0.5% saying this was because the base rate was so low they felt they didn’t have to worry about their mortgage at the moment. On a typical £150,000 mortgage would add £375 to the annual interest with a mere quarter point rise in interest rates –from 0.5% to 0.75%. One in ten homeowners (9%) said they have never reviewed their mortgage situation at all. The survey showed that of the 48% of homeowners who have not reviewed their mortgage since March 2009, only 19% said they hadn’t because they were already tied into a deal. 7% of those who had reviewed their mortgage were able to move to a better deal in the current low interest rate environment. 4% of those who have reviewed their mortgage stated they failed to take any action on this because they did not understand what effect any change in base rate would have on them.Two fifths of homeowners (41%) have reassessed their mortgage situation since the base rate fell to 0.5%. From this, 15% said they hadn’t moved their mortgage as they could not find a better deal in the market than the one they were already on. 2011-01-27 http://www.londonmortgageadvice.co.uk/news/article/522 New measures announced today by The Financial Secretary to the Treasury, Mark Hoban are • transfer the regulation of new and existing second charge residential mortgages from the Office of Fair Trading (OFT) to the Financial Services Authority (FSA), to ensure consistent standards of consumer protection and simplify the regulatory environment for lenders and borrowers; • ensure consumer protections are maintained when a mortgage book is sold by a mortgage lender to an unregulated firm; and • extend the current regulation of the sale and rent back market to all providers, to ensure appropriate protection for consumers. Commenting, Mark Hoban, said: “The Government believes that this package of measures will enhance protection for consumers in the mortgage market. “Giving the FSA responsibility for the whole residential mortgage market will simplify the mortgage regulation landscape for consumers and lenders. This will ensure that existing second charge mortgage borrowers who fall into arrears or face repossession on both first and second charge mortgages benefit from being regulated by a single organisation, maximising consumer protection and ensuring a more coordinated approach between lenders. “The measures on mortgage books and sale and rent back have been introduced to address a genuine gap in the regulatory architecture, and will ensure consumers will be better protected in the mortgage market.” The statutory instruments will be published later in 2011. In advance of this, the Government expects the FSA to begin work immediately to implement these measures. The Council of Mortgage Lenders has broadly welcomed the Treasury's announcement that the regulation of second charge lending will be transferred to the FSA; that mortgage protections will be maintained when a mortgage book is sold to an unregulated entity; and that all sale and rent back providers will need to conform to the same standards of consumer protection. However, it did say that this further extension of regulation adds to the already onerous burden of implementing the new mortgage regulatory requirements that will fall to the FSA and its successor, the CPMA. Commenting, CML director general Michael Coogan said: "With yet more mortgage activities to become regulated, as well as the Mortgage Market Review to finalise, it is more important than ever to focus on the key outcomes that regulation needs to deliver, otherwise implementation could become unmanageable for both firms and the regulator. We are working closely with the FSA to try to construct an effective regulatory system that brings the right results for consumers, firms and the financial system." 2011-01-26 http://www.londonmortgageadvice.co.uk/news/article/521 According to the latest annual Halifax First Time Buyer Review, mortgage affordability for those looking to take their first steps onto the property ladder is at its most favourable for 12 years. The lowest since December 1998 and almost half of the peak level of 50 per cent in September 2007, the proportion of disposable earnings devoted to mortgage payments by a potential new first time buyer stood at 27 per cent in September 2010. Mainly driven by a combination of lower house prices and declining mortgage rates, this is a significant improvement in affordability over the past three years. A considerable improvement from 2007, when only six per cent of areas were affordable, although this is less than half the proportion of the affordable LADs in 2000 (82 per cent), in 2010, 40 per cent of local authority districts (LAD) across the UK were ‘affordable' for the average first time purchaser. More than in any other region, the North East is the most affordable region in the UK for first time buyers, 83 per cent of local authority districts here are affordable to FTBs. As a result of the temporary increase in the stamp duty threshold for FTBs from £125,000 to £250,000 announced in March,only five per cent of first time buyers paid stamp duty between April and November 2010. Over the country as a whole, 39 per cent of home purchases made by FTBs have benefitted from the increased allowance. First time buyers in the South East have benefited most from the change, almost three quarters (73 per cent) of FTBs in the region not paying stamp duty due to the increase. 2011-01-21 http://www.londonmortgageadvice.co.uk/news/article/520 There is little evidence to suggest the economy is overheating. Indeed, today's figures highlight the spare capacity that remains in the UK economy. However, yesterday's higher than expected inflation data has stoked calls for the Bank of England's Monetary Policy Committee (MPC) to raise interest rates sooner rather than later. But this may be ill-advised. What shoul dbe taken into account is that, the price rises experienced to date have not prompted increased wages, so there is little evidence of the inflation spirals seen in earlier inflationary episodes. A rate rise now would be a further headwind to UK consumers and businesses in a year which is already likely to be characterised by caution. It is thought that inflation is likely to fall sharply in 2012, meaning the MPC should stick to its guns and keep rates on hold. A lower than expected Q4 2010 GDP figure next Tuesday is likely to challenge talk of a rate rise for the time being. 2011-01-19 http://www.londonmortgageadvice.co.uk/news/article/519 Compared to 2009, new figures show that purchase mortgage applications rose by a third (33.2 per cent) in 2010. 58.5 per cent of borrowers chose fixed-rate purchase mortgages the latest Mortgage Advice Bureau/Coreco National Mortgage Index found which contrasts with the start of the year when most were applying for variable rates (54.9 per cent). While December saw the highest percentage of fixed versus variable rate mortgages applied for (70.9 per cent) since September 2009, in the fourth quarter, fixed-rate mortgages were the product of choice. It could be that the increase in mortgage applications has been helped by a renewed appetite by lenders to lend, although the majority of products on the market are at loan-to-values below 75 per cent, which means applicants will need to have large deposits to secure mortgage finance 2011-01-17 http://www.londonmortgageadvice.co.uk/news/article/518 Lenders predict that mortgage demand is set to dip in the next three months. As home buyers remain cautious, lenders have predicted that demand for home loans will continue to fall in the first quarter. Despite a small rise in the previous quarter, the views are reported in the Bank of England's (BoE) Credit Conditions Survey, with lenders also expecting remortgaging demand to stall in the first quarter. With further falls in house prices and tighter wholesale funding conditions, the report said that the availability of mortgages failed to improve significantly during the final quarter of 2010. Lenders expect the level of loans on offer to remain broadly unchanged in the months ahead, s a result of this. For people borrowing more than 75% of their home's value and in a further blow to first-time buyers, the BoE also said that the recent house price falls had led to a slight decrease in the availability of mortgages. Lenders reported that lower risk appetite had limited availability in the fourth quarter of 2010.Lenders reported that the amount of unsecured credit made available to households had fallen slightly over the previous quarter, but was expected to increase over the next quarter.Lenders revealed that the availability of credit to small businesses had increased a little from the last three months, for the third consecutive quarter, and expected a further increase over the coming quarter. 2011-01-12 http://www.londonmortgageadvice.co.uk/news/article/517 It has been claimed,that the record long run of low interest rates has resulted in homeowners becoming increasingly unrealistic about the rate they are willing to pay for their mortgage. Down from 4% in January 2009, research for Unbiased, co.uk has revealed that the average fixed rate homeowners are prepared to fix at is now just 3.3%. 16% of more than 2,150 homeowners polled said that they would only be happy with a fixed rate of 2% or less for the next three years,in addition. There is an aloternative picture howver as this contrasts with reality. Personal finance website Moneyfacts, reveals that the most recent best buy three-year fixed rate mortgages have an interest rate of around 5.1%. Historical figures show that fixed rate deals have never been so low after reaching an average of around 7.8% as recently as the end of 2007 as unbiased.co.uk highlighted. While 22% of homeowners have recently tied into another fixed rate deal rather than go onto SVR, the survey also found that 31% of homeowners are currently on their lender's standard variable rate (SVR) and have no plans to switch from this, up from 26% in January 2009. At the same time, a quarter of people coming to the end of their current fixed rate mortgage plan said that they will move onto another deal instead of SVR. "Homeowners' ideas of what is a reasonable fixed rate mortgage have become distorted in the low-interest rate environment and they need to ensure that their mortgage expectations are realistic,Karen Barrett, chief executive of unbiased.co.uk, said. "Record numbers of homeowners remain on their lender's SVR instead of tying into another deal and, with many predictions for rate rises during 2011, homeowners need to be alert to ensure they don't miss out on getting the best deals before it's too late." 2011-01-11 http://www.londonmortgageadvice.co.uk/news/article/516 Research by Shelter has revealed that more than two million people have used credit cards to pay their mortgage or rent in the last 12 months, a leap of 46% in a year. Up from 3.8% in November 2009, equivalent to 2.6m people, the YouGov poll for Shelter of more than 2000 people showed that 5.6% of respondents had resorted to using credit cards to meet their housing payments. Many people could be facing homelessness if they default on credit card payments,as the charity warned that using credit cards to meet mortgage and rent payments was an unsustainable situation. "This research brings into sharp focus how keeping a roof over their head has become a daily struggle for millions across the country, Campbell Robb, chief executive of Shelter said. "This is a totally unsustainable situation and one which we fear could see thousands more families pushed into the spiral of debt, eviction or repossession and ultimately homelessness.Using credit cards to pay the rent or mortgage is simply robbing Peter to pay Paul. With the average credit card interest rate now standing at over 16%, it is the worst possible course of action." Up from 2% in November 2009, the North West of England was particularly affected, with 5%, more than 295,000 people in the region, using credit cards for housing costs. 2011-01-07 http://www.londonmortgageadvice.co.uk/news/article/515 According to the Bank of England's latest quarterly figures, mortgage holders are continuing to pay down their loans. For the third quarter of the year figures show borrowers cut their collective debt by £6.1bn. These figures are backed up by stating that it is the 10th quarter in a row that homeowners have put more money into their home than they took out. On a different tack, Halifax released a report showing first-time buyers would need an average deposit of £29,000 to buy a property. However and what is encouraging is that the mortgage lender added that the proportion of disposable income needed for mortgage payments was now the lowest for 12 years, at 27%. This contrast to their behaviour during the housing boom ie to pay down their mortgages, when they unlocked a record £17.1bn during the last quarter of 2003. Figures released recently from the Council of Mortgage Lenders (CML) showed mortgage lending fell 5% in November compared with the previous month and was down 10% on a year ago, lenders say. The uncertain housing market means it is more difficult not only to get a mortgage, but to increase the size of an existing one. The CML said mortgage lending remained weak owing to a lack of interest from buyers and rationing of home loans from lenders 2011-01-05 http://www.londonmortgageadvice.co.uk/news/article/514 is it a good opportunity for homeowners to remortgage to a cheaper homeloan now and take advantage of lower monthly payments before this Christmas's bills hit their pocket. January is the time for tightening belts when consumers are hit with the consequences of a Merry Christmas.In December 2009 total spending on credit cards was £10.7 billion, an increase of £400 million or 3.9 per cent in just one month on November 2009's £10.3 billion. So, is now a great time to give finances a lift by wrapping up a mortgage deal for in some cases no fees at all. Homeowners could be enjoying lower monthly mortgage payments by the time their festive bills need paying. If a customer were to remortgage now they could be benefiting from lower mortgage payments from February, when Christmas credit card repayments need to be made. For a £150,000 25 year mortgage reducing the rate by just 1 per cent could reduce monthly payments by over £75** in the first month. 2010-12-15 http://www.londonmortgageadvice.co.uk/news/article/513 According to figures produced by the Council of Mortgage Lenders (CML), Mortgage lending dropped in October. Down four per cent on September and 16 per cent lower than a year ago, there were 46,000 home loans advanced for purchases. However and quite interestingly, despite this, the council said that the deposit needed to be found by the average first-time buyer dropped to 20 per cent, from 24 per cent in September. "With 2009 lending levels artificially inflated by the end of the stamp duty holiday, we expected to see a decline in lending year-on-year," commented Michael Coogan, director general of the CML. "Consumer confidence has also been affected by October's Spending Review, despite the relative affordability of monthly mortgage payments, and so a stable but small lending market will continue for some time to come." 2010-12-14 http://www.londonmortgageadvice.co.uk/news/article/512 Marking a shift from the pre-2007 norm of three in 10 first time buyers choosing interest-only mortgages, some 93% of first time buyers chose repayment mortgages in October, the highest proportion since records began in 1974. Down 4% in number and 6% in value from the month before, gross lending in October was 12% lower this year than last with 46,000 loans for house purchase made worth £6.7 billion. Falling 11% from September and 24% from October 2009 in value to 26,000 loans worth £3.1 billion, remortgaging did worse. A decrease of 5% by volume and 9% by value from September, and 19% by volume and 17% by value on a year ago, first time buyers were hit hard too with just 17,000 loans worth £2 billion made in October. Representing a 3% drop by volume, 6% by value from September and a 14% reduction by volume and 10% by value compared to October 2009, home movers were advanced 29,400 loans worth £4.7 billion. 2010-12-13 http://www.londonmortgageadvice.co.uk/news/article/511 Private Banks target high net worth professionals who accrue irregular income such as lump sum bonuses. They take overall income and wealth into account rather than just the value of an individual’s property and their regular monthly income. They aim at the top end of the market, with loans available exclusively to individuals with high sustainable overall earnings per year and hgih established personal net worth. These individuals are typically purchasing properties worth in excess of £1.5m. This source of finance is expected to be particularly popular among City professionals, many of whom are set to receive sizeable bonuses over the coming months as part of their overall remuneration packages. However, a many struggle to get mortgages and other personal loans approved as many banks can only cope with far less flexible lending criteria. they are unable usually to create bespoke mortgages for individuals. Bonus levels may be returning to pre-credit crunch levels for many City professionals however they may still find it difficult to secure a mortgage elsewhere. These bespoke mortgages can usually be secured against a variety of assets including property, deferred shares, investment holdings and offshore deposits. 2010-12-08 http://www.londonmortgageadvice.co.uk/news/article/510 In another nail going into the coffin of interest only mortgages, the Royal Bank of Scotland Group, which includes NatWest Intermediary Solutions, has announced that it will no longer offer interest-only mortgages to first-time buyers. And not wasting any time, first-time buyers looking for a mortgage from the RBS Group will need to take out a capital repayment deal with immediate effect. These mortgage deals will still be available for borrowers who are not first-time buyers up to 75% LTV. With the FSA showing continued interest in this type of mortgage the move marks a further step in the restriction of interest-only by lenders. "As a responsible lender, it is prudent for first-time buyers to build up equity in their property by reducing their capital from day one, particularly in times of economic uncertainty. "Repaying capital from the outset will help to protect first-time buyers from the possible threat of negative equity in the future and ultimately help them to move up the property ladder." A spokesperson for NatWest Intermediary Solutions said. 2010-12-06 http://www.londonmortgageadvice.co.uk/news/article/509 It is reckoned that millions of home buyers are wondering what to do with their mortgage. With interests rates at a record low of 0.5 per cent, the only way the cost of borrowing can now go is up. We know that mortgage interest rates will not remain as low as they are today and as soon as there is any hint of the Bank of England raising the cost of borrowing, the cost of fixed-rate deals will jump. It could pay to lock into a fixed rate deal today if there is any doubt in your mind that you may not be able to afford your mortgage if rates start rising. If you wait until they start rising you may end up paying a lot more than today. So, this is a decision that will have to be faced sooner or later. 2010-12-03 http://www.londonmortgageadvice.co.uk/news/article/508 Whilst interest rates have remained low, it hs been reported in some quarters that there is an increase in demand for offset mortgage deals. The thing to remember about an offset mortgage is that it allows a borrower to link their current, savings or deposit accounts to their mortgage, so that the positive account balances are offset against the mortgage resulting in a reduced interest payment. Figures from the Council of Mortgage Lenders' (CML), which show that offset mortgages made up almost 11% of new mortgages between April and June 2010 compared to 8.5% three years ago, reflecting the rising demand for offset deals. Quite possibley this trend will continue, especially if the base rates stays at its historic low. As increasing numbers of borrowers have had to think more about their financial situation and the long-term value of particular mortgage products, the popularity of offset has grown. This is possibly this is because borrowers have become better educated on how best to manage their finances in order to keep the potential costs of interest rate exposure down Whilst offset is a geat product it cannot be suitable for everyone as it requires an element of financial discipline and obviously applies to those with a decent level of savings. 2010-11-29 http://www.londonmortgageadvice.co.uk/news/article/507 Says the British Bankers Association (BBA), despite a 3.5% increase in net lending, mortgage approvals are running at their lowest level since 2001. A substantial increase on the 0.8% reported in September for the whole of the mortgage market, but gross mortgage lending for October was just £7.6bn, the lowest since February 2001, the high street banks' annual growth in net mortgage lending was 3.5% in October. With the average value of house purchase approvals 2% up on a year ago at £144,900, house purchase approvals were at 30,766 in October, reflecting the weak activity in the mortgage market, While equity withdrawal remained weak, the number of remortgaging approvals was stronger than the recent six-month average of 22,573 at 24,112. "Activity in the mortgage and consumer credit markets continued to be subdued in October, reflecting uncertain prospects for households and lower consumer confidence. "Credit availability for viable businesses has improved, so a continued contraction in net lending growth reflects repayment behaviour, particularly by larger companies." David Dooks, statistics director at the BBA, said. "Beneath the surface there is a real two-speed market in operation. Approvals are actually up for the most expensive properties. Wealthy buyers are using large deposits to side-step lending restrictions and they are more likely to be in parts of the country, like prime London, which have been more insulated from wider market weakness. "The flip side is that approvals for cheaper properties have fallen dramatically. It's hard to foresee a significant improvement in mortgage lending." Richard Sexton, business development director at e.surv - provider of residential valuation services, said. 2010-11-23 http://www.londonmortgageadvice.co.uk/news/article/505 Focusing on enhancing the mortgage sales process, the role of intermediaries and improving disclosure of information for customers, The Financial Services Authority (FSA) has outlined proposals for its Mortgage Market Review. One of the key elements of the proposals is requiring that those selling mortgages ensure that each one sold is ‘appropriate' for the customer's needs and circumstances. With this, the FSA believes that the role of the mortgage seller will be clarified. "This next step of the Mortgage Market Review recognises the importance of the intermediary and ensuring the quality of every mortgage sale. "It also indicates how the intermediary and other sales staff fit into our vision of a sustainable mortgage market that works well for consumers." Sheila Nicoll, the FSA's director of conduct policy, commented. In an associated piece of news,the value of lending to the buy-to-let sector in the last quarter increased by 12 per cent and totalled 26,900 loans, figures recently announced by the Council of Mortgage Lenders show. 2010-11-22 http://www.londonmortgageadvice.co.uk/news/article/504 According to Council of Mortgage Lender (CML) chairman Matthew Wyles speaking at the trade body's conference today,the outlook for mortgage lending is likely to stay subdued. According to lender data,gross mortgage advances in October were an estimated £12.4bn, unchanged from September but down 9% from £13.6bn in October 2009. Since lending fell to £9.9bn in 2000, the CML said these are the lowest October lending figures for ten years Because lending volumes rose sharply in the latter part of 2009 as borrowers rushed to take up the Stamp Duty concession before the end of the year, the month-on-month annual comparison is likely to fall further, said the trade body, . Compared with nearly £143bn in 2009 and just over £254bn in 2008, Wyles predicts mortgage lenders will advance £137bn in gross lending, or £9bn net lending by the end of 2010. The implication from Bank of England's November Inflation Report is that that interest rates would remain at relatively low levels for some time yet. The Bank's forecasts predict a steady, but modest, growth in output with inflation expected to remain below its 2% target rate through 2012 and 2013. 2010-11-18 http://www.londonmortgageadvice.co.uk/news/article/503 According to Rightmove, new sellers in November have reduced their average asking prices by 3.2%, the largest monthly fall recorded since December 2007, Down 9.1% on previous month yet still outstripping muted mortgage approvals by a factor of two,Rightmove has now reported falls in four out of the last five months. Miles Shipside, director of Rightmove, said: "Agents report that the Christmas slowdown has come early this year, as both would-be buyers and sellers are adopting a ‘wait and see’ policy until the direction of next year’s housing market becomes apparent. The combination of high unsold stocks, the mortgage famine, a shaky economy and the normal winter slowdown gives an ideal scenario for bargain-hunting buyers. The bleak mid-winter is always the best time to catch desperate sellers, and those buyers who are currently lying in wait may wish to pounce this winter rather than next. "First-time buyers and buy-to-let investors both appear to have gone missing from estate agents’ books. Perhaps they are keeping their hands in their pockets in case their budgets go further in a few months’ time. "Those buying as well as selling may have to reduce their price aspirations, but if they get 10% less on theirs whilst achieving a 10% drop on their purchase then they will come out ahead. However, if a lower price means that your equity won’t fund both your moving expenses and a large deposit, then you may be forced to stay on the sidelines. It takes two to tango, because if you expect the person from whom you are buying to cave in while still demanding the top price for your own property, your Christmas cards are unlikely to need a change of address." 2010-11-15 http://www.londonmortgageadvice.co.uk/news/article/502 According to the latest figures from the Mortgage Advice Bureau/Coreco National Mortgage Index, remortgage applications in October were up 19.7% on September, These figures suggest borrowers are keen to seek the sanctuary of fixed deals before the New Year, with lenders currently offering five-year fixed deals at rates below 4%, and continuing concerns over economic stability and future interest rate and house price movements. However on the other hand for purchase mortgage applications, which, after rising 14% in September compared to the previous month, dropped off dramatically in October, down 11.4% on September. However again, despite this drop off in purchase mortgage applications in October, total mortgage applications (purchase and remortgage) are actually up by a quarter (24.5%) for the year to date compared to the same period in 2009. According to the figuures average LTV on purchase mortgage applications remained at 70.4%, the same level as in September, while the average loan size for purchase mortgage applications fell again, from £127,591 in September to £123,982 in October, a drop of 2.8%. The majority of purchase and remortgage applicants continued to select fixed over variable rates, with 63.6% choosing fixed products compared to 62.8% in September. This is actually the highest % of applicants choosing fixed rates in any one month since September 2009. If we look at London it shows that total mortgage applications (purchase and remortgage) were down 14.4% in October compared to September. Purchase mortgage applications fared particularly badly, down 19.1% on September, and at their lowest level since April 2010, a month before the General Election.Of those purchase mortgages arranged in October, the average LTV actually rose to 69.5% from 64.3% in September, the highest LTV level since February 2010, suggesting that the lack of mortgage applications was not simply due to tough lending conditions, but that wider concerns about the economy and housing market played a major role. When it comes to remortgaging, the average LTV on remortgage applications in October was 56.4% compared to 52.2% in September, while the average loan size rose from £233,731 in September to £287,521 in October, an increase of 23.0% The average age of a purchase mortgage applicant in London in October was 37 years 9 months compared to 36 years 6 months in September. 2010-11-11 http://www.londonmortgageadvice.co.uk/news/article/501 It seems that more people are looking to remortgage. Figures from a few sources are saying that the number of borrowers asking to remortgage jumped in October against the previous month. This appears to inform us that people are now thinking about their options and are no longer content to simply sit on their lender's Standard Variable Rate. It could be that with some excellent mortgages now around now might be a good time for many to move their mortgage. One of the major questions facing mortgage holders is whether or not to fix as they decide whether rates have reached their bottom and what the future movement of interest rates looks like. It could still be too early to switch to a fixed rate if a borrower is comfortable waiting a little longer. If interest rates stay low for several more years, as they might, then moving to a fixed rate now will prove costly in the long run. On the other hand a sudden movement upwards, then fixing soon would be a wise move. Mortgage borrowers need to think about their own circumstance and their attitude to risk and take advice before making any decisions. 2010-11-10 http://www.londonmortgageadvice.co.uk/news/article/500 Many creditworthy homeowners risk being unfairly labelled and unable to get finance. The bulk of the high-street lenders. are ignoring borrowers with irregular incomes, or imperfect credit ratings, with any history of missed credit payments. This was the province of the sub prime market mortgage. It is a well know fact that sub-prime was seen as one of the main causes of the credit crisis and, as the riskiest type of lending, it was one of the first markets to disappear. Although many lenders would have once forgiven a few blemishes on a credit record, now only pristine borrowers are getting the best rates. Because the high-street banks are cherry-picking the safest borrowers, this has left a gap for smaller lenders entering the market to concentrate on those who just miss out. This week, specialist lender Precise Mortgages gained approval from the Financial Services Authority (FSA) to provide residential mortgage finance. It will launch a series of mortgage products to homeowners from November and, crucially, the lender has said it will focus on borrowers who do not meet the strict criteria of the main high-street banks. Specialist lenders like Precise can step in, for those who fall just outside of this strict definition, such as the self employed, those working to a commission or bonuses, or those with an incomplete credit history, but who can still prove themselves to be responsible, creditworthy individuals. Mortgage rates for this type of mortgage are higher but the only other option for borrowers struggling to get finance is to hold tight and try to improve their creditworthiness before applying again. 2010-11-03 http://www.londonmortgageadvice.co.uk/news/article/499 Proposals by the Financial Services Authority (FSA), to encourage responsible lending, could mean even more buyers are locked out of the market The Council of Mortgage Lenders (CML) has today warned. To prevent reckless borrowing,City Watchdog, the FSA, has previously announced plans to restrict mortgage lending. Apart from it proposing affordability tests for all mortgages to ensure that lenders get “back to the basics of responsible lending”, the FSA also wants mortgage customers to verify their income and this could see the end of self-certification loans – where no proof of income is required. About half of all mortgages would have been blocked, however, according to the CML, if these restrictions would have been in place from 2005 to 2009. In the four year period to March 2009, approximately 3.8 million mortgages would not have been approved if banks and building societies had been forced to adopt these restrictions, according to the Council. The CML argues that the restrictions would be far too strict and are, therefore, unnecessary, while the FSA has defended the proposals.The CML’s comments come just a week after the Bank of England’s Credit Conditions report revealed that home loans will continue to be less readily available in the coming months. 2010-10-21 http://www.londonmortgageadvice.co.uk/news/article/498 According to the CML, just a quarter of all new home loans in August were remortgages which is the lowest proportion in 10 years. Worth an estimated £3bn, around 25,000 remortgage loans were advanced by lenders in August - The number of loans was down 13% and their value down 14% from July; a drop of 19% compared to the year before. A fall of 8% compared to July, there were 51,600 house purchase loans in August 2010 and in contrast against last year, purchase loans saw an increase of 3% in volume and 12% by value from August 2009, showing that lenders are still more active this year than last. "August is a traditionally slow month for mortgage lending and it was no different this year. While we do not know what the impact of the comprehensive spending review will be on our sector, it will clearly contain austerity measures that will likely further dampen consumers' appetite to borrow. CML director general Michael Coogan says. And continues, "We would expect lending to slow more significantly, year on year, as we head towards the end of the year, and it is unlikely that the uncertain environment will encourage a tick up of mortgage activity in 2011. “With some uncertainty surrounding future house price trends, we would expect a muted market in the next few years. The problem of excess capital, that led to record lending and borrowing in 2007, has self corrected and will not return." Representing a decline of 5% by volume and 4% by value,the survey also revealed 18,300 loans were advanced to first-time buyers in August.First-time buyer loans were also down 3% by number, but up 5% by value, compared with August last year. Home movers suffered more than first-time buyers from the summer lull in August with the 33,200 loans advanced down 10% on July, and average deposits up from 33% in July to 34%. This saw movers in August borrowing at the lowest loan-to-value ratio for six years.However, in terms of lending levels there was some improvement on a year ago, with home-mover loans 7% up by volume and 13% up by value from August 2009. 2010-10-19 http://www.londonmortgageadvice.co.uk/news/article/497 Mortgage lenders have warned that they will have no choice but to withdraw from the interest only mortgage market if the planned tighter comes into force. Ten of thousands of borrowers took out interest only mortgages at the height of the property boom as a way of borrowing more money to buy expensive properties. But now tighter regulation means that these types of mortgages will disappear. This will effect both lenders business and customer choice making it even harder for some to get onto the property ladder. The Financial Services Authority has plans to introduce new measures which will force lenders to toughen up their assessment criteria for interest only mortgages. Part of these new rules will make banks and building societies test a customers affordability on a repayment basis instead of an interest only basis. Mortgage lenders will be expected to carry out affordability checks on an annual basis and reviews of the mortgage every five years, although the full extent of the new regulations have not yet been published, Last month Michael Coogan, director general at the Council of Mortgage Lenders (CML) said: “We do not want to see measures that would effectively regulate them out of the market, and we believe it is possible to address the FSA’s concerns, without imposing costs and requirements on lenders and borrowers that are likely to prove to be unacceptable.” The CML warned that introducing these measures would mean an end to interest only mortgages and a further reduction in choice for customers. Lloyds banking group plans to introduce spot checks on interest only mortgage which will see them select applications at random and ask brokers to supply evidence that a repayment plan is in place. They are contacting mortgage brokers to tell them to introduce checks to make sure that customer that apply for an interest only mortgage have a way of repaying the loan. 2010-10-18 http://www.londonmortgageadvice.co.uk/news/article/496 According to the latest figures from the Mortgage Advice Bureau/Coreco National Mortgage Index, new mortgage applications for house purchase are at their highest level since February 2008. Purchase mortgage applications jumped 14% in September, with remortgage applications jumping by 14.3% in September compared to the previous month. Purchase mortgage applications are still up almost a third, 31.2%, on September 2009. The average loan size for purchase mortgage applications dropped 1.3% from £129,270 in August to £127,591 in September, while the average LTV on purchase mortgage applications rose slightly from 70.2% in August to 70.4% in September. The average remortgage application loan size actually increased 10.8% in the same period, from £134,416 to £148,934, while the average LTV on remortgage applications dropped to 53.1% in September from 56.9% in August. Compared to August, the South West and East Anglia saw a 56.3% and 50% rise in purchase mortgage applications respectively in September . Compared to 58.5% of applicants choosing fixed rates in August,looking at the types of mortgage products arranged in September, the majority of purchase and remortgage applicants, 62%, chose fixed rates over variable. 2010-10-11 http://www.londonmortgageadvice.co.uk/news/article/495 The Financial Services Authority (FSA) wants to force lenders to be much more careful about to whom they lend. However. plans by the City regulator to restrict mortgage lending would "sacrifice" many good borrowers, the Council of Mortgage Lenders (CML) says. The FSA say that new rules are essential to "protect vulnerable customers". However the CML says that if the suggested new rules had been in place from 2005 to 2009, about half of all mortgages would not have been granted. They believe that these proposals sacrifice far too many borrowers. The FSA wants to stop the sort of excessive mortgage lending that characterised the run-up to the credit crunch in 2007. But the CML believes that the suggested restrictions would be far too strict. The CML has already warned that one part of the FSA's proposed rules, insisting that lenders verify the income of all borrowers, would lead to house prices falling. But it has turned its attention to other aspects of the rules. Taking all the new changes together, the CML concludes that 51% of all mortgages lent in the four years it examined would not have been made. The FSA said that its proposals were designed to address the "major failures" that have occurred in the mortgage market - failures that it said are still affecting customers today. According to the FSA their evidence shows that 16% of borrowers are already financially overstretched and they are facing problems now as a result of their lenders' practices in the past. And at the momendt borrowers are also benefiting from historically low interest rates and house price inflation - which cannot go on forever. If the FSA's restrictions had been place in the past few years, many borrowers would simply have had to change their plans according to the CML. 2010-10-06 http://www.londonmortgageadvice.co.uk/news/article/494 The Bank of England warned yesterday that Britain's mortgage squeeze is getting worse, as concerns about a fresh housing market slump continue. Lending policies combined with the current economic conditions will continue to make it extremely tough for first-time buyers to secure mortgages over the next three months. the Bank's Credit Conditions survey said. The survey, which covers all the major lenders, said credit-scoring criteria, used to decide whether an applicant is worthy of a mortgage, have tightened up. The "special liquidity scheme" for banks will not be extended when it expires at the end of 2012, a further sign that the supply of credit to the economy will be severely limited over the coming months, Paul Fisher, a member of the Bank's Monetary Policy Committee, warned. Because it has provided funding to banks, in particular troubled banks such as Lloyds and Royal Bank of Scotland, which dried up from other sources during the financial crisis, the scheme is important. Many lenders are predicting that the loan approval rate will fall in the fourth quarter (October-December), the first time this has happened since early in 2009, the Bank's credit report says. The 95 per cent mortgage rates required by many first-time buyers remain all but impossible to find – last week the Skipton Building Society withdrew its offering. The recent data on house prices has been contradictory, but most measures show either that prices are falling, or that they are poised to fall. Many big lenders require deposits of 15 per cent, or even 20 per cent, of the value of a new house. 2010-10-01 http://www.londonmortgageadvice.co.uk/news/article/493 Proposals by the Financial Services Authority (FSA), to encourage responsible lending, will cause house price falls warns, The Council of Mortgage Lenders (CML). In a bid to prevent reckless borrowing of mortgages, the City Watchdog has previously announced plans to restrict mortgage lending. To ensure that lenders get “back to the basics of responsible lending”, the FSA has already proposed affordability tests for all mortgages. Where no proof of income is required, it also wants mortgage customers to verify their income and this could see the end of self-certification loans. In its Mortgage Market Review, it wants to ensure that lenders only lent money to those who could afford it. As a consequence of this the CML has described it as a well-meaning but misguided proposal and it believes more people willnot qualify for a mortgage and so lose out on home ownership, as a result. The argument put forward by the CML is that if house prices slump again, mortgage rationing would continue and these proposed new restrictions will not help people meet their aspirations to become homeowners. 2010-09-29 http://www.londonmortgageadvice.co.uk/news/article/492 Rather than being attracted by what looks like a seductive headline interest rate, mortgage borrowers should look beyond this to the overall cost of a mortgage deal, including arrangement fees. With arrangement fees can varying from zero to thousands of pounds, this can have a huge impact on the true cost of a deal. Depending on the size of the loan you are borrowing,it can work out more cost effective to opt for a higher interest rate with a lower fee. Borrowers mustn't be blinded by attractive looking headline rates, when it comes to looking for a mortgage. The impact of the arrangement fees often means a deal isn't quite as good as it first appears. Very low mortgage rate can mask high fees and this enables lenders to make a marketing impact without affecting their profit margins. When looking for a mortgage the best thing for the borrower to do is to calculate the deal over the term of the loan and not the short term- in this way they will identify which product will be best value for their circumstances. 2010-09-28 http://www.londonmortgageadvice.co.uk/news/article/491 Underlining the subdued state of the UK property market are new figures. The Council of Mortgage Lenders (CML) said that total mortgage lending fell again in August, for the second month in a row. HM Revenue & Customs reported the number of homes sold in the UK also fell last month, by 5,000 to 85,000,. Asking prices in England and Wales dropped for the third month in a row in September sai the property website Rightmove of estate agents. Said the CML's chief economist Bob Pannell, "We face the prospect of a difficult second half of the year," "However, the Bank of England is likely to keep interest rates at record lows for longer to support the economy. This will continue to alleviate payment pressures for many borrowers," Suggesting that prices were likely to fall in the coming months,last week, the Royal Institution of Chartered Surveyors (Rics) said the market continued to be affected by a combination of more sellers returning to the market but fewer would-be buyers. activity Due to th esummer holidays mortgage activity almost always falls August on July, but the decline this year is particulartly high. 2010-09-23 http://www.londonmortgageadvice.co.uk/news/article/490 The undeniable case for the existence of the mortgage broker was made for them by the research carried out by First Direct that found that 92% don't understand mortgages. It found that 92% of those planning on taking out a mortgage during the course of the next year don't understand the difference between the types of deal on offer. The research reveals that only 8% are confident that they understand how the different major mortgage types work, while 11% admit that they don’t understand mortgage at all. What is even more of concern is that, only 26% of existing mortgage borrowers said they completely understand the difference. More than 2,000 respondents were asked by First Direct whether they understood the difference between fixed rates, variable deals and tracker mortgages. 22% completely grasped the difference on average. Taken across the country the greatest understanding was displayed by those in the East of England and Yorkshire (26%), while only 18% of those living in the East Midlands and Wales got it. Men are more likely to appreciate the difference between types of mortgage deal than women, at 26% compared to 18%, the research also concluded. "This highlights a worrying trend. It’s really important that people do their research into which is the best mortgage product for them, taking into consideration their stage in life and current financial circumstances. They should always try to compare like for like and bear in mind that fees can play a large part in how a mortgage stacks up against the competition,” Richard Tolchard, senior mortgage product manager at First Direct, said. 2010-09-16 http://www.londonmortgageadvice.co.uk/news/article/489 According to figures from Moneyfacts, the cost of mortgages is continuing to fall and they are becoming more accessible to some borrowers. Availability has dropped for those offering 40%, but data from September shows that the number of home loans available with a 20% deposit has risen. However, this is contrary to the trend seen in recent months which has seen the best rates offered to those able to pay the largest deposits. Despite this the numbers of people taking up new loans is moderate. The number of mortgages available to people offering a deposit of 10% or less remained small, Moneyfacts, a financial information service, said. Being very different to the situation seen during the housing boom earlier in the decade, this has ruled some potential first-time buyers out of entering the property market. However, , compared with 326 in the previous month and 166 at the start of the year, those able to raise a deposit of 20%, the choice rose sharply to 352 mortgage products in September. 2010-09-09 http://www.londonmortgageadvice.co.uk/news/article/488 According to new figures out recently, mortgage holders who bought at the height of the property boom face another four years of negative equity before they recover what they paid. Borrowers who bought a property at the height of the market will have to wait until 2014 before the price of their home is higher than the value of their mortgage, The National Housing Federation (NHF) has claimed. On average people who bought a home pai £216,800 for a property in 2007, the NHF said. And these homebuyers will have to wait until 2014 for a recovery, when average prices will reach £226,900. "There's a very real risk that an entire generation will be locked out of the housing market for the foreseeable future and people will increasingly look to buy or rent an affordable home instead." David Orr, chief executive of the NHF, warned. In the light of these figures it amy be sensible to secure a fixed-rate mortgage while base rates are still low. Whilst rates which are fixed historically have not offered the cheapest rates, they may be a good alternative as the economic picture is not predictable. 2010-09-02 http://www.londonmortgageadvice.co.uk/news/article/487 In the three months from April to June 2010, interest in 10-year fixed rates surged, with the number of internet searches for fixed rate mortgages ballooning by 888%. This is evidence of a growing desire among mortgage borrowers to secure the interest rate they are paying before the Bank Base Rate rises from its current historic low of 0.5%. This is according to credit reference agency Experian’s data Over the internet searches for ‘fixed rate mortgages 5 years’ rose by 602% compared to a year ago, while on line searches for ‘tracker mortgages’ only saw an increase of 16%. The conclusion to be drown from this is that the security offered by fixed rate deals is becoming more appealing. Computation of the various data obtained also showed that searches for property for sale rose by 25% in the second quarter of 2010 compared to the same period in 2009, while searches for rental property were up 22%. These trends indicate strong buyer interest combined with improved affordability due to the low interest rate environment, Experian said. Charlotte Hogg, managing director of Experian UK and Ireland said. “Internet searches for fixed rate mortgages have increased dramatically compared to last year. Although interest rates are still at a record low, our analysis shows that consumers are thinking about how they can capitalise in the long term by minimising the effect of future rate increases and taking action now to protect themselves.” 2010-08-31 http://www.londonmortgageadvice.co.uk/news/article/486 According to research carried out by Halifax mortgages are now twice as affordable as 2007. They say that when compared to the peak of 2007t average mortgage is twice as affordable for borrowers today. The research looked at lower house prices and record low interest rates. This meant that that the typical mortgage payment for a new buyer is now nearly half what it was three years ago. Compared to 50% in June 2007, average monthly mortgage repayments in June 2010 accounted for 28% of disposable income. An additional reason for this is that since the Stamp Duty threshold for first-time buyers was increased to £250,000, 94% are now exempt from this payment. Lack of affordability as the main obstacle to getting a mortgage is cited by more than 50% of aspiring first-time buyers today with only 94,600 people getting their first home in the first half of 2010, compared with double that number in the corresponding period in 2007. Lenders today demand bigger deposits and squeaky-clean credit records before agreeing to advance money to first-time buyers results in the lack of first-time buyer activity. In other words tighter mortgage criteria. "We believe it’s important that first-time buyers understand that whilst there are still challenges in raising deposits, other market conditions are more positive. Affordability has significantly improved, meaning the amount of a typical first-time buyer’s monthly pay packet that needs to be dedicated to their mortgage is now below the 25 year average and importantly, despite perceptions, eight out of ten first-time buyer mortgages are approved.” Stephen Noakes, commercial director for mortgages, commented. 2010-08-24 http://www.londonmortgageadvice.co.uk/news/article/485 Lenders of mortgages continue to ration the size of their loans to home buyers and people remortgaging. Says the financial information service Moneyfacts, the number of deals on offer has risen by 66% this year, from 1,414 in January to 2,351 now. A downpayment of at least 25% of the value of the home being boughtfor 58% of the deals available. Of all the mortgages currently on offer the proportion requiring only a 10% deposit still stands at just 8% Explained Michelle Slade of Moneyfacts. "There has been no real movement in the overall number of new mortgages available on the market [in the past month], but those that are available continue to be more competitive," "Many of the best deals are now available for a 25% deposit, having previously only been available for those with a 40% deposit." Of mortgage deals requiring smaller deposits, the average interest rate being charged on them has drifted down, although there has been little change this year in the proportion.However these figures disguise the very wide difference in the interest being charged according to the size of the deposit being put down. The average first-time buyer is now putting down a deposit of £35,000 to buy a home according to statistics from the Council of Mortgage Lenders (CML). 2010-08-10 http://www.londonmortgageadvice.co.uk/news/article/484 The size of the average homeloan requested by those looking to buy property in the rocketed by £45,000 in the month of July alone to £269,478, according to Leadbay, a company which puts mortgage borrowers in touch with advisers. The average size of a mortgage applied for in London and the South East has undergone a record leap. Breaking the £200,000 barrier in the region for the first time, in the South East requested borrowing rose 21%, Grant Stevens, managing director of Leadbay, warned that the increases are unsustainable, putting further downward pressure on prices The only region to exceed this average figure before is London. He said: "Our experience flies in the face of some of the most recent property price statistics, which could mean that either prices are about to rise again or that many mortgage approvals will be lower than the amounts originally requested. "One thing is for sure, these amounts are unsustainable, so it will be very interesting to see what happens in the months to come." The increase could be explained by borrowers asking for bigger loans, either because house prices have genuinely risen significantly in the capital, or because mortgage borrowers are over-estimating how much they need and requesting more before they put an offer in on a property. 2010-08-05 http://www.londonmortgageadvice.co.uk/news/article/483 Mortgage lenders continue to apply stringent criteria. with borrowers still struggling to secure a mortgage without a large deposit. The number of homeloans available has increased by two-thirds since the start of the year, rising from 1,414 products in January to 2,351 today calculates Moneyfacts, the financial data service. But, 58% of today’s mortgage offers still demand a minimum deposit of 25% of the property’s value. Accounting for just 8% of the mortgages on the market, more mortgage deals however are available at 90 % loan to value, requiring a 10% deposit. Explained Michelle Slade of Moneyfacts, "There has been no real movement in the overall number of new mortgages available on the market [in the past month], but those that are available continue to be more competitive," "Many of the best deals are now available for a 25% deposit, having previously only been available for those with a 40% deposit." The average two-year fixed rate deal now comes with an interest rate of 4.5% compared to 4.9% in January. Three-year fixed rates now cost on average 5.2% instead of 5.5% at the start of the year, and five-year deals now cost 5.6% instead of the 6.1% charged in January, according to Moneyfacts, Given this information, these average rates mask a wide range of prices, which vary according to deposit size. The journal also says that a two-year fixed deal with a 10% deposit is charged at an average 6.2%, but a 25% deposit brings that down to 4.1% while a 40% deposit attracts an interest charge of just 4%. 2010-08-04 http://www.londonmortgageadvice.co.uk/news/article/482 The Bank of England has reported that mortgage lending was down in June, This brings lending back down to the levels of May 2009 when the economy was still in recession. This has made for fierce criticisms by brokers that lenders have become sluggish. The dip in lending was below forecasts made by the industry itself, and the Council of Mortgage Lenders said that the mortgage industry would be 'quiet' well into autumn. Thse figures are further confirmation that banks are still not lending in sufficient quantities. It has led to frustration felt by many would-be borrowers. While mortgage lending has become more profitable for many lenders, first-time buyers have every right to feel discriminated against, as it is too often targeted at those customers who are already well catered for. Lenders are lending to safe bets. Lenders need to revitalise the mortgage market place. More competition and thinking outside the box is required to meet current levels of demand, which are most probably is higher than the banks would tell us. 2010-07-30 http://www.londonmortgageadvice.co.uk/news/article/481 If you are looking for an interesting deal then you might want to trythe new Woolwich rates. They will cut the interest rates it charges on mortgages up to 80% loan to value by up to 0.21% as of today. As part of Barclays, the price reductions mean the rate at which a Woolwich two-year fixed rate at 80% LTV is charged will fall from 4.59% to 4.38%, while its three- and five-year fixed rates will come down slightly by 0.1% to be charged at 4.79% and 5.39% respectively. Not resting on their laurels, they will at the same time the lender will launch a lifetime tracker mortgage available up to 80% LTV, which is charged at Base Rate plus 3.38%, giving a current pay rate of 3.88%. Not only that, the same lender will also introduce a ‘drop-lock’ facility for all new borrowers taking out its tracker and offset mortgages. A ‘drop-lock’ gives borrowers the option to switch from a variable rate onto a fixed rate at no extra cost, which can be very useful if interest rates start to rise. “With speculation this week that UK interest rates are set to stay at record lows until 2014, the drop lock facility provides customers with peace of mind that they can go into a low tracker rate now and switch at a point in the future when they need greater security.” Andy Gray, head of mortgages for Barclays, said. Afterwards, all fixed rate mortgages revert to a lifetime tracker rate at base plus 2.49% after the fixed rate period. 2010-07-29 http://www.londonmortgageadvice.co.uk/news/article/480 Mortgage advice has never been so needed as today at a time when the mortgage company's lending criteria has become ever more tight. A mortgage broker has all the lenders at his disposal to find the anxious buyer the best mortgage deal given the individual needs of the applicant. A mortgage adviser or mortgage broker uses mortgage sourcing software that is updated daily to find the best deals. But it is not always the lowest rates that count, it is often the lender that can meet the individual needs of the mortgage applicant that is the main need. Mortgage brokers come under strict regulation and therefore they can be expected to be honest and trustworthy and place the interests of the applicant first. Some mortgage brokers and mortgage advisers do not charge fees for their time but get paid by the mortgage. London Mortgage Advice Ltd is one such mortgage brokers. And this Company advises on all types of mortgage, such as first time buyers mortgages, next time buyers mortgages, home mover mortgages, buy to let mortgages, let to buy mortgages, equity release mortgages(introducers only) and commercial mortgages. 2010-07-27 http://www.londonmortgageadvice.co.uk/news/article/479 Mortgage lending picked up in June according to the Council of Mortgage Lenders (CML). Lending to people remortgaging as well as house buyers, rose by 15% in June to £13.1bn. 7% higher than a year ago and also the biggest monthly figure so far this year. CML said June's increase was just a seasonal pick-up and that lending remained subdued. CML's economist CML Paul Samter, said, "There are signs of house prices stabilising and more properties coming onto the market following the abolition of home information packs" "This may improve liquidity in the market, but transaction levels are subdued and likely to remain so while access to credit remains constrained," he added. Others have said "The major UK lenders expected demand for secured lending to be flat over the rest of the year, partly reflecting weak confidence "Data from the major UK lenders indicated that their mortgage approvals for house purchase decreased slightly in June."With looming public sector cuts, taxation rises, a freeze on wage increases and inflationary pressures, we are likely to see lending tail off during the second half of 2010, with buyers likely to take a wait-and-see approach,". 2010-07-20 http://www.londonmortgageadvice.co.uk/news/article/478 Rightmove reported this morning that new sellers now outnumber new mortgage approvals by 5.2, while at the same time unsold numbers of properties remining on agents’ lists has leapt by almost 25% in the first six months of this year. More than 30,000 new properties are coming to the market each week, up by 45% on last July they report. Rightmove reports that over the last month, they have come down by 0.6% – the first fall this year.Asking prices for properties new to the market are, however, finally dropping. There is still a huge gap between sellers’ expectations and the reality of mortgage-approved prices as reported by Halifax and Nationwide. Halifax is quoting £166,203 and Nationwide £170,111. The average asking price now £236,332, However, as the year goes on, Rightmove isforecasting more falls in asking prices,. 2010-07-19 http://www.londonmortgageadvice.co.uk/news/article/477 With the idea of bringing in new rules the FSA has laid out plans to halt the reckless lending that has seen half of mortgages dished out without checks that borrowers can actually repay them. The Financial Services Authority wants lenders to impose tougher new affordability checks on all borrowers, in a move that would sound the death knell for self-cert mortgages and make securing cheap interest-only loans much harder. As this was found to be the biggest warning sign that borrowers may in future fail to meet their mortgage payments, it will also require lenders to take far more care when assessing those with a poor credit history, But it also said that borrowers need to take more responsibility and stop chasing bigger mortgages at all costs. Whilst they would still be able to push through low risk borrowers on the proviso that they then passed affordability checks, mortgage brokers and lenders have argued that a crackdown would also effectively kill off fast-track mortgage applications. Following the credit crunch, the watchdog's inquest into the mortgage market has revealed that at the tail end of the boom in 2008, 52% of mortgages were issued without lenders checking up on borrowers' income. Even now this figure stands at 43%. With three-quarters of those borrowers seemingly simply relying on their property rising in value to eventually pay them off, this problem has been compounded by the rise of interest-only mortgages, which reached 30% of all loans. However, that being said,the FSA said it had no plans to ban high loan-to-value mortgages, 'When you get to high loan-to-value, there can be an increase in the levels of default but nowhere near as important as a credit impaired status of a borrower,' said the FSA's Ms Titcomb. 'We want to get back to responsible lending and borrowing.' The FSA said its key proposals were: • Imposing affordability tests for all mortgages and making lenders ultimately responsible for assessing a consumer's ability to pay; • Requiring verification of borrowers' income in every case to prevent over inflation of income and to prevent mortgage fraud; • Extra protection for vulnerable customers with a credit-impaired history. 2010-07-16 http://www.londonmortgageadvice.co.uk/news/article/476 According to the British Bankers' Association (BBA), mortgage lending continued rising in May. So far this year, the number of mortgages approved for house purchases rose to its highest level. For people buying a property during the month, a total of 36,709 loans were approved by the major banks. However for the past three months, figures from HM Revenue & Customs (HMRC) show that completed property sales have been flat.Sales in May stood at 73,000, just 1,000 up on the number sold in both March and April. The figures mean that sales so far this year are still running at less than half the level recorded in the same period during 2006, 2007 or 2008, though higher than a year ago. It was the third month in a row of rising mortgage approvals, The BBA, whose members account for 75% of new mortgage lending, said. Households continue to pay off debts, according to the BBA. "The low interest rate environment is resulting in customers choosing to reduce or pay off borrowing, particularly personal loans, rather than saving," said the BBA's director of statistics, David Dooks. Re-mortgaging accounted for the lion's share of loan approvals with 24,626 taking out new or replacement loans on their existing property. 2010-07-02 http://www.londonmortgageadvice.co.uk/news/article/475 The UK mortgage market needs to be restructured so says The Financial Services Authority (FSA). "We need to rebuild our mortgage market so that we end up with one that's more sustainable for everyone and works better for consumers". Lesley Titcomb, director of small firms and contact centre for the FSA, said when addressing the Council of Mortgage Lenders prior to the publication of the regulator’s latest paper on mortgage reform. The FSA promised to ensure better conduct of business rules, intervene in interest-only mortgages where it feels the affordability should be assessed on a capital repayment basis, and ensure that lending is responsible. However, the mortgage industry has called for greater clarity on how the regulator proposes to do this. Bob Pannell and Paul Samter, authors of the latest CML lending figures survey, called for clarity over how the mortgage market will be regulated. "While we now know that the FSA will be disbanded, there is still little hard information over how the financial system will be regulated. "The Chancellor has announced that he will hand regulatory responsibility to the Bank of England. This includes monitoring the health of individual firms [although how firms deal with customers will fall under the Consumer Protection and Markets Authority's remit] and the strength of the system as a whole. "There has been speculation that this "macro-prudential" role may include limiting at what loan-to-value ratio some firms can lend. "But, beyond the governor hinting at varying core capital requirements over the economic cycle, there has been no detail yet on what tools the Bank will be given to achieve industry-wide financial stability." Their report said. -------- "There is still some concern around clarity, such as income verification and affordability that needs to be given, but we welcome the announcement that everyone dealing with mortgages will need approved person status." Robert Sinclair, director for the Association of Mortgage Intermediaries, said. And he continued, "While BoE will be the ultimate regulator, but as yet we do not even know who will be leading the CPMA, and we would not even want to speculate on who that person might be." 2010-06-30 http://www.londonmortgageadvice.co.uk/news/article/474 Michelle Slade, spokesperson for Moneyfacts.co.uk, the provider of personal finance information said fixed mortgage rates had been falling since September 2009 as lenders tried to tempt borrowers off record low standard variable rates.Many borrowers were opting to remain on record low standard variable rates and overpaying their mortgage rather than securing a new deal at a higher rate. It is true to say that "Lenders are trying to incentivise borrowers onto new fixed rate deals by making significant cuts to rates, she continued. Further more she pointed out"A fifth of lenders have moved to increase their standard variable rate since the bank rate was kept on hold after finding their previous level unsustainable. Carrying on with the same theme she stated that "Competition for a limited amount of mortgage business continues to increase amongst lenders, who are once again actively competing to be top of best buy tables."The platform has been set for the mortgage market to return to some sort of normality, while still applying the lessons learnt over the last few years." 2010-06-22 http://www.londonmortgageadvice.co.uk/news/article/473 It is a suggestion that a very small lift in mortgage lending in April is not necessarily positive news for the housing market. The number of mortgages approved rose from 49,008 in March to 49,871 in April, the equivalent of two per cent, according to figures produced by the Bank of England. Any suggestions that this small uplift shows positivity for the UK housing market should be refuted. We are still close on 50 or 60 per cent down on where we were at the peak of the housing boom when the property market was at its most frenzied in terms of mortgage approvals and house sale transactions. So the latest mortgage figures from the Bank of England are nothing to be jumping up and down about. 2010-06-14 http://www.londonmortgageadvice.co.uk/news/article/472 Having reached a low of 2,177 in July 2009, what has now happenned is that the number of different mortgage products available to borrowers has passed the 3,000 mark. Yes,3000+ mortgage deals are now on the market. The mortgage market peaked in June 2007 when there were 28,413 different mortgage products for borrowers to choose from on the UK market, according to data compiled by price comparison website Moneysupermarket .com. Following the credit crunch until July 2009, that number then fell quickly and steadily Remaining 90% lower than the June 2007 high mark, product numbers have picked up by 42% since then. As a for instance, the number of five year fixed rates have increased by 10 times the number on offer in June 2009. "After a period of uncertainty in the market, in 2010 we have started to see confidence return, and although we are still a long way off the highs of 2007, it is encouraging for consumers that banks and building societies are starting to return to the market."The financial crisis really hit the mortgage market hard with the number of products falling by a massive 92%."Over the past couple of months we have also started to see some relaxation in the number of products for borrowers with small deposits, with a number of lenders reintroducing products offering 85 and 90 per cent mortgages. This is good news, particularly for first-time buyers." Hannah-Mercedes Skenfield, mortgage manager at moneysupermarket.com, said. 2010-06-08 http://www.londonmortgageadvice.co.uk/news/article/471 The latest lender to announce restrictions on interest only mortgages is Northern Rock. Relying on inheritance, dividends or bonuses will not suffice,borrowers must own at least 25% of the value of their property and they must give concrete evidence as to how they intend to repay the capital. Northern Rock will demand that you have a minimum of £150,000 equity in your home which must be 40% of its value – so the property must be worth at least £375,000. Those included who have stopped offering interest-only are Yorkshire Bank and Scottish Widows Bank. Others charge extra: Lloyds, which also sells mortgages through Halifax and Cheltenham & Gloucester, charges 0.2% above its standard rates. Is this the end of intetrest only mortgages, we ask Maybe we will see lenders offering short-term interest-only mortgages which will convert to a repayment loan after a set time. If you have an interest-only deal this can reduce monthly repayments by about a third compared with a repayment mortgage. For example, a repayment mortgage for £150,000 over 25 years at 4.5% would cost £833 a month, while an interest-only loan would be £562. 2010-06-03 http://www.londonmortgageadvice.co.uk/news/article/470 Between February and March,the number of loans made to home buyers rose by 25% , to 45,000. has said, the Council of Mortgage Lenders (CML) with borrowing by first-time buyers rebounding faster than that by existing home owners. But, unless the new government helped lenders raise finance, it warned that mortgage rationing might continue for many years. CML's director general Michael Coogan, said, "Today's figures indicate there is currently some momentum to house purchase lending," "But for the sake of the future health of the housing and mortgage markets, the new government will need to focus on the critical issue of funding and how to address the issues arising from the repayment of the emergency support provided during the financial crisis," he added. "The UK is at risk of a chronic under-supply of credit - and the rationing of mortgages for customers - for years to come." Lending to all house buyers in the first quarter of the year was still 35% less than in the last three months of last year. The CML argued that year on year, lending to house buyers had now risen for the ninth month in a row. And it pointed to an improvement in the position of first-time buyers. For the second month in a row, the average deposit they had to put down stood at 24% of the purchase price, slightly less than the average 25% they have had to put down since the start of 2009. "Only time will tell if this genuinely reflects a tentative sign of easing, but for the time being deposit constraints remain tight in all areas of lending," the CML said. Between February and March, the number of loans made to first-timers rose by 27%, compared with a 24% increase for existing home owners With house prices rising over the past year, lenders have become slightly less wary about lending. Banks and some larger building societies have to work out how to repay more than £300bn in emergency funding given to them by the government during the banking crisis in 2008. The need to repay that money is likely to mean continued rationing of funds for mortgage borrowers. So far, no plans have been forthcoming, either from within the banking industry or from the UK's financial authorities, to deal with the matter. 2010-05-25 http://www.londonmortgageadvice.co.uk/news/article/469 Hips are being suspended and they are suspending the requirement for homeowners to provide a Home Information Pack when selling their homes, Eric Pickles Communities Secretary and Housing Minister Grant Shapps today announced that with immediate effect. Pending primary legislation for a permanent abolition.Pickles today laid an Order suspending HIPs in England and Wales with immediate effect. This action has been taken in order to avoid uncertainty and prevent a slump in an already fragile housing market. HIPs are currently holding back the housing market because sellers are having to fork-out extra cash, sometimes hundreds of pounds, just to be able to put their home up for sale. It is believed by the government that suspending HIPs will reduce the cost of selling a home, remove a layer of regulation from the process and provide a welcome help to the housing market during the recovery. It will still be such that sellers will still be required to commission, but won’t need to have received, an EPC before marketing their property, and the government will consider how the EPC can play its part in the new drive for a low carbon and eco-friendly economy. “The expensive and unnecessary Home Information Pack has increased the cost and hassle of selling homes and is stifling a fragile housing market.Pickles says He goes on tho say “That’s why I am taking emergency action to suspend the HIP, bringing down the cost of selling a home and removing unnecessary regulation from the home buying process. He ontinues “This swift and decisive action will send a strong message to the fragile housing market and prevent uncertainty for both home sellers and buyers. He carries on saying “HIPs are history. This action will encourage sellers back into the market, and help the market as a whole and the economy recover.” In addition Housing minister, Shapps, says: “This is a great example of how this new government is getting straight down to work by cutting away pointless red-tape that is strangling the market. Rather than shelling out hundreds of pounds for nothing in return we’re stripping away bureaucracy and letting home owners sell their properties. Futhermore he points out “But we’re also showing our commitment to a greener housing market by keeping Energy Performance Certificates and making them more relevant in helping buyers make informed decisions on the energy costs of their new home.” 2010-05-20 http://www.londonmortgageadvice.co.uk/news/article/468 Borrowing costs are slowly coming down, indicating an improvement in mortgage conditions says Bernard Clarke, spokesperson at the Council of Mortgage Lenders. The cost of a fixed-rate mortgage has fallen to its lowest level since records began in 1995 asis comments come in response to new data from the Bank of England, which showing this. Marking a decline from the previous month when the figure stood at 3.92 per cent, in April, a 75 per cent loan-to-value two-year fixed-rate mortgage would have an interest rate of 3.83 per cent. There are still problems that need to be addressed in the housing market Mr Clarke believes however. He states: "There is still a longer-term problem in terms of filling a funding gap that will be created by the removal of the various Bank and government support measures." According to the Bank of England, some 48,901 new mortgages were approved in March, in comparison to February's figure of 46,882. 2010-05-14 http://www.londonmortgageadvice.co.uk/news/article/467 In its Quarterly Economic Bulletin, the trade body, The Association of Mortgage Intermediaries (AMI) has warned that the cost of mortgage borrowing could be set to rise slightly this year. It suggests that inter-bank rates (the rates banks charge each other to borrow money from one another) will increase this year, and that mortgage lenders will have to pass on their increased cost of borrowing to mortgage customers in order to maintain profit margins. Many borrowers will be coming to the end of very low fixed and tracker rate mortgage deals, and will see their monthly repayments increase, at the same time AMI points out. The Bank of England might be forced to increase the Bank Base Rate from its current historic low of 0.5%, which in turn would increase the cost of mortgages for many thousands of borrowers, It also says, if house price inflation takes off. The association also believes that activity in the housing market will slow down as a result of the economic squeeze, and actually predicts that the rate of house price inflation will fall in the latter half of the year due to rising taxes and mortgage costs. “Whoever forms the next Government must put in place real debt reduction plans. The cost of funding the current levels of borrowing will be a continual drain on the economy and drives up the cost of lending between banks.Robert Sinclair, Director of AMI, said. Continuing along the same line,“This continues to make new mortgages look less attractive than the current default rates many consumers are enjoying after their fixed term deals end. However, this equilibrium in mortgage markets will only last while base rates stay very low. And saying further, “Of concern to the Treasury must be house price inflation running towards double digits, but latest trends are that this is slowing considerably.” 2010-05-11 http://www.londonmortgageadvice.co.uk/news/article/466 UK lenders are now loading some of their mortgages and other loans with bigger margins then ever before. Banks have more than doubled the profit margin they make on mortgages over the last 18 months. They have done this in a bid to rebuild their decimated balance sheets, and in the case of the all- or part-State-owned banks, an attempt to return to profit and pay back the taxpayer. The rates charged on certain mortgages, particularly at higher loan-to values, are not that much cheaper than those available when Bank Base Rate was 5%. While at the same time, the rates of interest offered on savings accounts are at an all-time low. The margin lenders charge on mortgages has soared from 0% to 1% at the end of 2008 to 3% today, research carried out by financial analyst Citigroup Global Markets reveals that. They suggest that a lack of competition in the mortgage marketplace could be to blame. While prior to the credit crunch, there were well over 100 mortgage lenders operating in the UK, that number has now reduced dramatically, and the smaller players are doing less and less business as a proportion of the market. The top six lenders (Lloyds, Santander, Barclays, HSBC, RBS and Nationwide) now account for more than 80% of all mortgage lending, compared with 55% in 2006. “The mortgage market has undergone a complete about-face over the past few years. “Mortgage availability is still severely limited, and as lenders repair their balance sheet, it is borrowers that lose out due to the higher margins on mortgage rates.” David Hollingworth of London & Country said. “For most people, mortgages from banks are cheaper than they have been for some time: the vast majority on base rate trackers and standard variable rates (SVRs) have seen their monthly payments in the past two years. “But rates can no longer track Bank of England base rate as closely as they did in the era before the credit crunch. Now required to finance more lending from deposits, and the wholesale market, so the market rate - reflected by less of a factor in mortgage than the rates banks pay “In short, money is harder to come by for banks as well as for customers, and they can no longer offer the unsustainable rates of that easy credit era.” A spokesman for the British Bankers' Association said. 2010-05-06 http://www.londonmortgageadvice.co.uk/news/article/465 The Bank of England figures still suggest that mortgage lending has had a slow start to the year. The number of mortgages approved for home buyers rose slightly in March, the Bank of England has said as the property market has got off to a slow start this year. The mortgage total increased to 48,901 in March from 46,882 the month before, and the figure was 17% higher than in March 2009. Approvals in the first three months were the lowest on record for the first quarter of any year, apart from 2009. The housing market is finding it difficult to regain momentum after flagging at the start of 2010. Meanwhile building societies experienced another outflow of savers' money, with a net £318m being removed in March. Lending figures show that there is only a slight improvement in the market It was the 12th time in the past 13 months that savers have taken out more money than they have put in from their accounts with building societies. Despite this, Adrian Coles of the Building Societies Association was optimistic. "The mutual sector continues to offer some of the most consistently competitive savings rates, but people may instead consider making additional mortgage payments or using savings to support their incomes in this challenging economic climate, or they may be looking to invest in the equity markets," he said."The mortgage market will remain fragile as there is uncertainty in relation to employment, interest rates, house price inflation, mortgage availability and, conceivably even after the election, the political outlook." Despite the recent revival in profitability of the UK banking system, lenders are still demanding deposits from borrowers averaging 25% of the value of the homes being purchased. A key factor still restraining mortgage lending has been the continued level of mortgage rationing due to the credit crunch and the banking crisis. Mortgage rationing will continue for several years, though the availability of funds has been thawing slightly in recent months, according to the financial information service Moneyfacts. Moneyfacts said that the number of mortgage deals available at the start of May was up by 12% from a month ago to 1,928, which was also 36% more than at the start of the year. There are still very few deals requiring just a 0% or 5% deposit, but the number asking for a 10% or 15% downpayment went up from 461 to 520. As a proportion of the market they accounted for 27% of all deals on offer - the same as a month ago - while the proportion of deals asking for at least a 25% deposit was also steady, remaining at 57% of all mortgages. "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," said Darren Cook of Moneyfacts. "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," he added. 2010-05-04 http://www.londonmortgageadvice.co.uk/news/article/464 House prices are 10.0% below the October 2007 peak, reveals the latest Nationwide House Price Index as house prices increased by 1.0% month-on-month in April, annual rate of price inflation moves into double digits for first time since June 2007. “April's figures show the first double-digit annual growth in UK house prices since June 2007. The year-on-year rate in this month's figures, however, received an additional boost from the fact that April 2009 was one of the weaker months last year. Commented Martin Gahbauer, Nationwide's Chief Economist. “The price of a typical UK property rose by a seasonally adjusted 1.0% month-on-month (m/m) in April, leaving house prices 10.5% higher than a year earlier. Over the lifetime of the last Parliament (May 2005 to April 2010), house prices have risen by 6.7%. This compares to a 13.5% increase in the consumer price index, the official target measure of inflation. "The smoother three month on three month rate of inflation edged down further from 1.5% in March to 1.1% in April, which primarily reflects the impact of February's 1.0% decline in house prices. April's figures leave UK house prices exactly 10% below the October 2007 peak. "Given the very strong performance of house prices from May 2009 onwards, it will take monthly increases in excess of 1% for the annual rate of inflation to be maintained in double digits going forward. “The strong rebound in house prices over the last year has taken place within the context of a subdued mortgage market, with the number of mortgage advances across the industry still well down on precrisis 'norms.' A natural question which therefore arises is whether cash buyers have helped to boost the market and bid up prices? “Over the course of 2008 – when the credit crunch was at its most severe – there was indeed an increase in the estimated proportion of total housing transactions completed in cash. Cash transactions (i.e. non-mortgaged purchases) are estimated to have averaged 43% of the total in 2008 against 37% in 2007. "This suggests that cash buyers did make some contribution to clearing the excess stock of housing on the market during the period in which mortgage finance was least available. "Many landlords have seen their mortgages revert to base rate trackers and are now earning significantly higher net rental income than a few years ago. As a result, most can easily afford to wait for prices to recover further before selling. “Nonetheless, there has recently been evidence of a slight shift in the supply-demand balance. While the recovery in new buyer enquiries at estate agent offices appears to have petered out, the last few months have seen an increase in the level of new instructions from sellers. "All else equal, this should lead to a gradual flattening out of the recent upward price momentum, and this is indeed what the 3 month trend in April's figures shows.” “However, since the beginning of 2009 the proportion of cash transactions has declined to a level only slightly higher than the average for 2007. Even in absolute terms, there was a decline in the number of cash buyers between 2008 and 2009. "As such, the importance of cash buyers in the market started to decline at exactly the same time as house prices began the strong rebound that has lasted up until the present day. It is in fact the recovery in mortgaged transactions that has played a greater role in boosting total market activity since the early 2009 trough. “Rather than a surge in cash buyers, the more important driver of rising house prices has been the low level of stock for sale, as many homeowners and buy-to-let landlords continue to wait for prices to recover to peak 2007 levels before deciding to sell up or move. The very low level of interest rates has been supportive of this wait-and-see approach, particularly in the buy-to-let sector. 2010-04-29 http://www.londonmortgageadvice.co.uk/news/article/463 The Bank of England’s Trends In Lending report show that the major UK lenders expect house prices to be broadly flat over the coming year and for mortgage lending to increase moderately. Most lenders reported that the amount of new mortgage lending available to households was broadly unchanged in 2010 Q1. Within that, mortgage availability increased slightly for borrowers with high LTV ratios. Demand for remortgaging was reported to have fallen in 2010 Q1, for a fifth consecutive quarter. Findings from the survey also shows that gross lending for house purchases increased in March to £9.9bn, up from £9.6bn in February. Although an increase in remortgaging activity was expected in the Credit Conditions Survey, in recent discussions the major UK lenders expected such activity to remain low, which some lenders saw as partly reflecting a lack of incentive to move from low standard variable rate mortgages, to which many shorter fixed-term mortgages had reverted on expiry. The availability and pricing of new mortgages was broadly unchanged in 2010 Q1, according to lenders in the Credit Conditions Survey. The flow of net mortgage lending by all UK-resident mortgage lenders was little changed in February at £1.6bn. Both the annual and three-monthly rates of growth of the stock of lending were stable. Demand for secured credit for house purchase was reported to have fallen over the same period, largely reflecting one-off factors, but was expected to increase in Q2 Lending Panel data provide a split of gross lending between house purchase and the refinancing of existing mortgages. According to Lending Panel data, net mortgage lending by the major UK lenders was broadly unchanged in March.Gross mortgage lending for house purchase rose slightly in March, though remained below monthly flows seen towards the end of 2009. Remortgaging activity remained weak. 2010-04-22 http://www.londonmortgageadvice.co.uk/news/article/462 The best way forward for seeking mortgage advice is via a mortgage broker. If you consult independent mortgage brokers rather than mortgage lenders direct, they will have a much larger range of mortgages to choose from. In some cases they may represent a panel of lenders so there is some limitation there, but in most cases independent mortgage brokers will have access to all the mortgage products on the UK market. The giving of personal financial and mortgage advice has been governed by the Financial Services Authority. Companies or individuals offering personal financial or mortgage advice must comply with the Financial Services Act or they are breaking the law. Mortgage brokers may charge up front for their services or they may earn their commission from the mortgages and ancilliary services they sell. These days, top mortgage brokers will carry out a consultation using email, the phone and in person. There is a trend towards online mortgage brokers. They will carry out in-depth questioning about your regular income and outgoings so they can establish what your level of affordability is. They need to know about any outstanding debts and loans. Mortgage brokers are professionally qualified and although it is in their interest to offer you a loan on behalf of one of the lenders, they want to make sure you will be able to keep up the payments. What type of information is required for a mortgage application?Your lender will require to see the following: Your passport and national insurance number; Your employer's name, address and details, also a contact number; Any documentation relating to income and outgoings, such as salary or wages slip, pension details, alimony or child maintenance payments, income from investments.All documentation relating to outgoings such as bills and bank statements; Details of any assets including bank account balances, deposits or any properties or other investments; Details of all liabilities including student or other debt, credit cards, car loans and other loans. Remember that all this documentation has to be repeated if you are applying for a joint mortgage, as all applicants must provide the same level of information. Your lender will then make an assessment based on all the information received before deciding how much money they are willing to lend. There will also be legal, valuation and mortgage administration fees to take into account so make sure you are aware of ALL costs before proceeding. 2010-04-20 http://www.londonmortgageadvice.co.uk/news/article/461 Gone are the days when a first time buyer could simply multiply an annual salary by two-and-a-half and see what first time buyer mortgage that would secure him! First time buyer mortgages are not what they were! As UK property prices have risen then dropped, first time home buyers have found it harder and harder to get onto the first rung of the property ladder. These days it will be almost impossible to ecure a mortgage without some sort of deposit. Finding out what your first mortgage will be and how much it will cost, is an important factor in seeing if you can afford your first property. If you have access to a deposit then you should seek mortgage advice on first time buyer mortgages from our network of advisors.In fact, the market has become so ‘tough' for those lenders selling first time buyer mortgages that they have had to be uncharacteristically cautious. This means we will see more guarantor mortgages, mortgages with parents or parent helping with the deposits to reduce the amount of mortgage required. Your first and most important step is to seek specialist first time buyer mortgage advice. Good mortgage advisors will know about all the UK first time buyer mortgage deals going at any one time. Mortgage lenders who have risen to the challenge now offer a whole raft of innovative first time buyer mortgages. Examples are: first time mortgages based on how much rent you've been paying, a mortgage which takes into account potential lodger income, mortgages for parents buying with or helping to financing a child, shared ownership mortgages – there is a vast array of first time buyer mortgages for those looking for a first mortgage. We have listed all our favourites in our Best First Time Buyer Mortgages Comparison Table. In this table we run through the features as well as the pros and cons of each type of mortgage. This 'best first time buyers mortgages comparison table' should be used in conjunction with the sort of mortgage comparison table used by a mortgage advisor as they will also compare the rates at which the first time buyer mortgage lender will charge for the mortgage as well as the paying back terms. ACTION: Request no-commitment, independent, first time buyer mortgage advice Features, advantages and disavantages of specific first time buyer mortgages: 100% Mortgages l Cashback Mortgages l High LTV Mortgages l Graduate Mortgages l Professional Mortgages l Mortgages with Parents l Guarantor Mortgages l Family Offset Mortgages l Mortgages with Friends or Family l Mortgages at University l Rent a Room Mortgages l Affordable Mortgages l Interest only Mortgages l Part Repayment Part Interest Mortgages l Interest-free Start Mortgages l Shared Ownership Mortgages l Poor, Adverse or Poor Credit Mortgages l Key Worker Mortgages l Shared Equity Mortgages l 30, 35, 40 Year Term Mortgages Other mortgage guides, advice and useful pages: Mortgage Comparison - About First Time Buyer Mortgage Advice - First Time Buyer Mortgage Brokers - Buy to Let Mortgages for First Time Buyers - Remortgages for First Time Buyers - Shared Ownership Mortgages - Help with Mortgages for First Time Buyers - Mortgages for Parents of First Time Buyers - Shared Appreciation Mortgages - Shared Equity Mortgages - Joint Mortgages - Financial Advice for First Time Buyers - Overseas Mortgages for First Time Buyers - Request First Time Buyer Mortgage Advice - Find your First Property - New-Build Gifted Deposit Deals - Best First Mortgages Comparison Table Useful websites: www.cml.org.uk – council of mortgage lenders. •Find a conveyancing solicitor to help you through the process •Locate a families solicitor to help you draw up wills and ownership agreements •Find a mortgage advisor to help you find the right mortgage 2010-04-19 http://www.londonmortgageadvice.co.uk/news/article/460 Last month’s budget, has, as yet, failed to translate into sales.With estate agents seeing an increase in inquiries, prompted in part by the stamp duty exemption. The househunting season is off to a slow start as mortgage lenders frustrate borrowers’ attempts to buy. It is not your usual spring market. All year, inquiries have been rising, searches are up 10% in the past six weeks, but transactions aren’t following. Lack of mortgages is a critical problem for the market Higher rates on mortgages for first-time buyers and buy-to-let borrowers, and the need for bigger deposits to get the best deals, could keep house prices low for the next five years. Some of Britain’s biggest lenders are again tightening lending criteria. For example, Lloyds Banking Group, the taxpayer-backed bank facing a looming funding shortage, has made it difficult for first-timers and buy-to-let borrowers in recent weeks. Halifax,increased its best two-year fix for first-timers from leaving anyone needing more than 80% of the purchase price. Abbey and Alliance & Leicester, that looked to increase its share of the market at the start of the credit crunch, is becoming more cautious. A lot of people are being turned down by Abbey and A&L lately, even where borrowers have a deposit of 25%. In some cases they’re being over-cautious. However, private banking arms of high street lenders are stepping into the breach. For example, Barclays Wealth has recently launched into the mortgage market, offering cheap trackers even to first-time buyers. We look at where homebuyers should turn. Lenders are competing the most fiercely for borrowers with large deposits — or lots of equity in their homes. This means a deposit of at least 40%. Lloyds is scaling back on lending to those who choose to take a loan beyond their standard retirement age. Previously, if the customer was more than five years from retirement, their current income was used to assess affordability. The changes mean that customers who choose a term that exceeds their anticipated retirement age and are more than five years away from retirement will have only two-thirds of their current income taken into account, plus a single person’s state pension income. Lloyds has announced that it will no longer lend to under-25s looking for a buy-to-let deal. Aldermore, formerly known as Ruffler bank, said it will offer loans to self-employed borrowers who are being excluded by high street banks when it launches its residential mortgages later this year. Kensington, owned by Investec, the South African bank, said last week that it will consider customers who have had up to two county court judgments against them totalling no more than £750 as long as these have been repaid for more than six months. 2010-04-15 http://www.londonmortgageadvice.co.uk/news/article/459 It has been claimed,an increase in the number of loans advanced for house purchase signals a 'modest recovery' in the mortgage market. 35,000 house purchase loans were approved in the second month of 2010,figures released by the Council of Mortgage Lenders show Although the end of the stamp duty holiday and cold weather meant the mortgage market was particularly subdued that month, this constitutes a 12 per cent improvement on the level seen in January,. "With the supply of credit still tight and the upcoming election causing political uncertainty, we are unlikely to see much change in the near future although the new stamp duty exemption for first-time buyers could boost the market somewhat and we hope to see the traditional seasonal pick-up as the weather gets warmer and the days get longer," confirmed Bob Pannell, head of research at the CML. Meanwhile, on a seasonally-adjusted basis,figures released by Communities and Local Government show house prices were 0.1 per cent lower in February than they were in January 2010-04-14 http://www.londonmortgageadvice.co.uk/news/article/458 According to the latest data compiled by Acadametrics this is £748 higher than the previous record set in February 2008, before the housing market slumped. The average price of a property in London reached a record £376,605 in March this year. Widely acknowledged to be one of the most reliable indicators of true price movements, the Acadametrics House Price Index is a weighted index of the other major indices The latest index chimed exactly with figures from Halifax in calculating that average UK property prices increased by 1.1% in March, although according to Acadametrics this was the 11th consecutive month in which house prices have gained (Halifax recorded a dip in February). Its compilers believe that the latest London statistics are evidence of the unique dynamics of the London property market, which has led the housing market out of depressions in the past. According to the index, there were approximately 10,000 more houses sold in February than in January. It says that average prices have increased by 13.4% in the last year. However, the estimated level of 45,000 transactions in February is below the average of 51,570 homes sold per month during 2009, with the market remaining subdued. “The average price of a home rose again in March 2010 and, at £227,788, is back where it was in August 2007, some two and a half years ago. “The increase of 1.1% is the eleventh month in succession in which prices have increased. “However transaction numbers remain relatively low such that small pockets of demand can exert a higher influence on price than one would see in a more active market. “This might also explain some of the differences between this index and mortgage based indices. “We have noted that in all the high value areas prices have increased but transaction levels have remained fairly constant. “This would either suggest that prices in these areas have actually increased, or that the higher value properties in these areas have been changing hands more frequently than is the norm - it may well be a combination of the two factors.” Dr Peter Williams, chairman of Acadametrics, said. 2010-04-12 http://www.londonmortgageadvice.co.uk/news/article/457 Spring usually sees a boost in house-buying, and with the new stamp duty break things could be busier than in recent years. The Stamp Duty threshold was increased for first-time buyers from £125,000 to £250,000 to try and invigorate sales. According to mortgages news, many first-time buyers are coming out of the woodwork and looking for new mortgage loans "There has been much debate over the past week as to what impact Darling's measures will have on the housing market, and while the jury's still out on that one, it's clear that those most affected have welcomed it if numbers to our site are anything to go by. Having just had one of the busiest weekends of the year for house-hunting, the first-time buyer could well be back out after months of hibernation." Hannah-Mercedes Skenfield was reported as saying. Moneysupermarket reported a 15 per cent increased in first-time buyers seeking mortgage deals "Easter is traditionally the busiest time of year for the housing market and the Chancellor's stamp duty exemption for first-time buyers has provided a further boost. We have seen a pick up in inquiries from first-time buyers keen to take advantage of the tax break and buoyed at the prospect of saving up to 2,500 pounds." Melanie Bien, the director of mortgage broker Savills Private Finance, reportedly commented. 2010-04-07 http://www.londonmortgageadvice.co.uk/news/article/456 Two-thirds of properties in the UK are exempt from the tax when purchased by first-time buyers, since the threshold at which Stamp Duty becomes payable increased to £250,000 at midnight, 43% of homes currently up for sale cost between £125,000 (the former starting threshold) and £250,000, and first-time buyers purchasing in this range will make substantial savings, according to property website FindaProperty.com. Across the UK, all regions exempt London and the South East have average house prices of under £250,000. The website calculates that the total saved as a result of the increase in the threshold will add up to £320,625,000. “We applaud this much sought after change to the Stamp Duty threshold which will not only benefit first time buyers but, because the property market is cyclical, will also benefit those at other stages of the property ladder in many regions. "This is a significant move which will aid the ongoing property market recovery into 2010 and beyond and make a significant difference to the affordability of first time buyers.” Nigel Lewis, property expert at FindaProperty.com, said. The rate payable on purchase of a £1m property will increase from 4% to 5% next April. Up to 1.5% of the properties in the UK housing stock could be affected by the increase in Stamp Duty payable on properties valued at £1m or over. e.surv Chartered Surveyors, the UK’s biggest property valuer, revealed. “No doubt the proposed increase of Stamp Duty to 5% on properties worth over £1 million will have an impact on the upper end of the market. "However, this is a beneficial tactic for encouraging first-time buyers onto the property ladder. “The reintroduction of the Stamp Duty exemption for first-time buyers is a very welcome initiative. We know from the previous Stamp Duty suspension that this did drive transactions at the lower end of the scale and these are fundamental to supporting the whole market. "The measure will encourage new buyers into the market and increase activity levels; if there is any corresponding improvement in the availability of mortgage funds, this could set the market more firmly on the route to recovery.” Alison Traversoni, Chief Operating Officer at e.surv, said. As so many properties in these areas cost more than £250,000,first-time buyers in London and the South East will benefit least from the increase in the starting threshold for Stamp Duty. 2010-03-29 http://www.londonmortgageadvice.co.uk/news/article/455 31% of homeowners are on a standard variable rate mortgage compared to only 23% in January 2009 tracking data from professional advice website unbiased.co.uk, shows. 29% of homeowners state they are on their lender’s SVR mortgage and have no plans to change this. This has increased from just a quarter who said this in May 2009.When describing their current mortgage situation. Research also shows there are only 10% of homeowners moving to another mortgage deal once their discounted, fixed or tracker rate deal comes to an end, compared to a slightly higher 12% in January 2009. "With the base rate now remaining at a record low of 0.5% for a full year, an increasing number of homeowners believe that staying on their lender’s SVR is the best option for them. However, with the number of mortgage deals slowly increasing homeowners need to make sure they aren’t missing out on getting the best deals before the base rate starts to rise again, especially when in recent weeks some providers have been changing the SVR on their mortgages meaning not all of them are now as competitive as they once were. There is also a stark difference between homeowner’s ideal fixed rate deal and what they could actually get in the current environment, Karen Barrett, chief executive of Unbiased.co.uk, said."It can be very confusing for homeowners to keep track of which is the best mortgage for them and when is the best time for them to move onto a new deal. In the past, staying on your lender’s SVR was financially crippling, and while this has certainly changed, homeowners need to stay alert and active to ensure they don’t miss the best deals and see their monthly payments rocket. Homeowners should seek mortgage advice from a whole of market mortgage adviser or an independent mortgage broker to ensure they get the best deal at the right time. Only a whole of market mortgage adviser and independent mortgage broker can source products from the whole of the market place." 2010-03-23 http://www.londonmortgageadvice.co.uk/news/article/454 According to new data published by the Council of Mortgage Lenders, gross mortgage lending in February increased to an estimated £9.2 billion, a 6% rise from £8.7 billion in January. Given that the end of the stamp duty holiday distorted lending figures considerably in both December and January, an increase in lending in the shortest month is unusual but unsurprising this year.Lending in February was down 6% on £9.7 billion a year earlier, but the first two months of this year are broadly in line with our forecast for lending of £150 billion for 2010 as a whole. "As we look forward, we expect emerging signs of improvement as confidence in the economy grows and we move past the election. However, the need for the authorities to address fiscal deficit will inevitably slow the economy. At the same time the funding markets, while certainly better than a year ago, remain difficult and will limit the flow of available housing finance. "Given the short-term weakness and distortions in the housing market, as well as more properties coming onto the market, it was perhaps unsurprising to see falls in some of the monthly house price indices in February. With activity unlikely to pick up much in the short term, we would expect to see continuing price fluctuation in the coming months." CML economist Paul Samter commented. 2010-03-18 http://www.londonmortgageadvice.co.uk/news/article/453 Last year, at the height of the mortgage drought on April 1st there were just 1,209 products out there, compared to over 13,000 before the credit crisis hit in 2007, according to data website Moneyfacts.There are currently 70% more mortgage deals on offer than there were at the market's nadir last April. A 70% increase since last April and a 28% increase since the start of this year alone,today there are 2,053 deals on offer. As lenders continue to relax their credit criteria.Moneyfacts says that the types of mortgage products which have seen the biggest percentage change are the higher loan-to-value deals. “Increased availability brings increased competition and the mortgage market is finally seeing some of the most competitive deals of the last few years. By increasing the numbers of mortgages, lenders are showing that they are open for business. “Lenders are becoming more accommodating with their lending criteria, which bodes well for increasing the competitiveness of the mortgage market. “It is pleasing to see that the average mortgage rate continues to fall, while at the same time deposit requirements are easing. “House prices appear to have bottomed out, meaning higher LTV mortgages are a less risky option for lenders. “For a long time, borrowers with a small deposit have had few options. Many will be hoping the positive trend continues, with increased competition reducing the cost of high LTV mortgages. “Only then will first-time buyers, many of whom are currently priced out of the market, be able to return.” Michelle Slade, spokesperson for Moneyfacts.co.uk said. 2010-03-17 http://www.londonmortgageadvice.co.uk/news/article/452 According to property website Zoopla, mortgages now more affordable than at any time since in 2003. UK housing affordability at its highest level since 2003,as research released today reveals falls in house prices and mortgage rates over the past couple of years. The current levels were last seen in 2003 when the affordability rate was 56%, leaving UK property more affordable now than at any time in the past 7 years according to the Zoopla research. The average UK income earner can now afford to buy 58% of all homes, up significantly in comparison to the property market peak in 2007 when just 34% of homes were affordable. Over the past 10 years, affordability levels reached their highest point in 2002 at 66% and then fell steadily over the next 5 years. In 2002 using one third of income to meet mortgage repayments allowed a purchase of £118,934 whereas today, given the current low financing costs and increased incomes, the same proportion of income finances a purchase of £188,423.Zoopla has calculated the affordability rate using median incomes and average house prices in each geographic area along with prevailing mortgage rates. It judges a home to be ‘affordable’ if one third of the median income is sufficient to cover mortgage repayments. “Affordability rates have improved substantially over the past couple of years as a result of lower mortgage rates and falling house prices that have now begun to stabilise. We are at levels of affordability not seen in the UK housing market for almost seven years which makes it a great time to buy, especially if current low interest rates can be locked in by the borrower.” Nicholas Leeming, commercial director of Zoopla.co.uk, commented. Across the UK, affordability rates vary greatly by area with the most affordable markets generally in the north and the least affordable in the south, despite the higher income levels. 2010-03-10 http://www.londonmortgageadvice.co.uk/news/article/451 According to property website Rightmove, the number of first-time buyers who expect to enter the market in 2010 has declined, which is a worrying development. In their Q1 2010 Consumer Confidence Survey, a quarterly survey which measures the public's property market views,Rightmove revealed that the number of projected first-time buyers for the year ahead has dropped for the third consecutive quarter. A drop from 28% in Q4 2009 and 31% in Q3 2009, only 26% of those who expect to buy in the next 12 months will be first-time buyers. London is the only region which has projected first-time buyer levels close to the typical, healthy market norm of 40%.The proportion of those who believe now is a good time to buy also fell for the fourth consecutive quarter to 58%. "First-time buyers play a crucial role in keeping the market moving by helping to complete chains and their continued absence delays any prospect of a meaningful market recovery. Even more concerning is that this comes as part of an emerging trend showing the percentage of projected first-time buyers has been decreasing over the last three quarters." Miles Shipside, commercial director at Rightmove, said."Deposits are the greatest hurdle for first-time buyers to get over. In the aftermath of the banking crisis, lenders have increased the deposits required but by doing so have severely restricted the number of first-time buyers. This in turn affects total sales volumes as first-time buyers are typically responsible for around two in five of all property transactions." This represents a new concern because now that prices have stabilised, these market conditions appear to be preventing first-time buyers from entering the market with mortgage lending now highly restrictive. 2010-03-09 http://www.londonmortgageadvice.co.uk/news/article/450 According to figures from Mortgage Brain, the number of mortgage products available to brokers is at its highest since December 2008. Up 9% from the 4,457 available products in February, the total number of broker products listed on Mortgage Brain’s sourcing system hit 4,876 as at March 1,. For eight consecutive months broker product numbers have now risen. Compared to this time last year, and is up by a massive 95% from six months ago, product availability has improved by 79%.The number of fixed rate products has continued to rise, up 8% last month to reach 2,884 products.Variable rate products are up slightly, going from 359 in February to 369 currently.Having stayedstagnant for a year. Long-term analysis shows the number of trackers has shot up 200% compared to the same time last year. Up from 1,434 in February, there are 1,623 trackers available to brokers. “The current, mid and long-term analysis of our data is really starting to show a clear picture of market stability and the forward movement that is been made in the mortgage industry.“We are now regularly seeing increases in product availability in all areas, which is particularly encouraging.”Mark Lofthouse, CEO of Mortgage Brain, said. 2010-03-05 http://www.londonmortgageadvice.co.uk/news/article/449 Saying they expect the value of their home to increase by an average of 1.5% over the next six months, UK homeowners expressed increasing confidence in the property market in February. That’s according to Nationwide’s Consumer Confidence Index, which reported consumers anticipating a 1.1% house price increase when asked the same question in January. Index shows that confidence has doubled in the last year. 25% of people now believe there to be many or some jobs available - up three percentage points from January - while the proportion who believe there to be not many or few jobs available fell by six percentage points to 61% during the month. The lowest level for 18 months, the number of consumers who think the economic situation is bad dropped to 65% in February – This feeling for the future is even higher, with 39% of people believing the economy will be in better shape in six months’ time, and only 43% believing there will be not many or few jobs available - the first time this figure has dropped below 50% since September 2008. As for future household income, 88% of people now think they will be bringing home the same amount of money or more in six months. "Following a small dip at the end of 2009, consumers have started this year in a more optimistic fashion with February's figures showing a surge in confidence in both the present and future situation. “A strong influencing factor behind this uplift is likely to be the news that the UK has come out of its longest recession on record following six consecutive quarters of contraction beginning in 2008. “By comparison, it would seem that consumers are perhaps feeling the pinch in their spending power as confidence declines in this area, and we may now be seeing the effects of the withdrawal of government driven incentives, such as the Stamp Duty holiday and lower VAT, impact on the index. “Consumer confidence is crucial to a strong and sustainable recovery and, while confidence is likely to remain fragile for some months to come, the early signs do look positive." Martin Gahbauer, Nationwide's chief economist, said. 2010-03-04 http://www.londonmortgageadvice.co.uk/news/article/447 Compared to the figures for 2008, despite the continued slowdown in mortgage lending, The incidence of attempted mortgage frauds increased in 2009. Fraudulent activity in the mortgage sector had been declining in line with the number of mortgage transactions for a couple of years, but ticked upwards sharply last year, increasing by 10% during 2009, according to a report published by CIFAS, the UK’s fraud prevention service,. “The last few years have seen a steady decline in the number of mortgage fraud cases that have been identified. This coincided with the decline in the housing market, one of the most prominent features of the recession. “Declining house prices had the effect of deterring serious fraudsters from attempting to obtain property for profit and those individual fraudsters attempting to obtain a mortgage that they may not be able to afford (fraud for property). “2009, however, has seen an increase in the number of mortgage frauds attempted. Notably, the increases are in identity fraud and misuse of facility fraud, while application fraud continues to decline.” the report, entitled Fraudscape, which details the frauds recorded by the 265 members of CIFAS during last year, says. The report records a 32% increase in mortgage identity fraud, where a fraudster applies in the name of an innocent party or an entirely fictitious name. Application fraud has fallen by 25%, but the indications are that it could rise again. CIFAS reckons the decline in application fraud is down to property opportunists being loath to overstretch themselves in the current uncertain economic climate, but its figures show that fraudsters’ confidence is increasing as confidence in the market itself recovers. "At a time when every responsible member of society feels the strain of current economic conditions, the findings presented in Fraudscape not only reveal the true nature of the frauds identified but also reveal many of the problems and challenges ahead. “This, however, is only the tip of the iceberg. Over and above the frauds recorded by CIFAS members, there is an additional and unquantifiable volume of fraud that, due to tighter lending criteria, never got as far as the fraud department.” Peter Hurst, CIFAS chief executive, says. 2010-03-01 http://www.londonmortgageadvice.co.uk/news/article/448 Rise in mortgage fraud The incidence of attempted mortgage frauds increased in 2009, compared to the figures for 2008, despite the continued slowdown in mortgage lending. According to a report published by CIFAS, the UK’s fraud prevention service, fraudulent activity in the mortgage sector had been declining in line with the number of mortgage transactions for a couple of years, but ticked upwards sharply last year, increasing by 10% during 2009. The report, entitled Fraudscape, which details the frauds recorded by the 265 members of CIFAS during last year, says: “The last few years have seen a steady decline in the number of mortgage fraud cases that have been identified. This coincided with the decline in the housing market, one of the most prominent features of the recession. “Declining house prices had the effect of deterring serious fraudsters from attempting to obtain property for profit and those individual fraudsters attempting to obtain a mortgage that they may not be able to afford (fraud for property). “2009, however, has seen an increase in the number of mortgage frauds attempted. Notably, the increases are in identity fraud and misuse of facility fraud, while application fraud continues to decline.” The report records a 32% increase in identity fraud, where a fraudster applies in the name of an innocent party or an entirely fictitious name. Application fraud has fallen by 25%, but the indications are that it could rise again. CIFAS reckons the decline in application fraud is down to property opportunists being loath to overstretch themselves in the current uncertain economic climate, but its figures show that fraudsters’ confidence is increasing as confidence in the market itself recovers. Peter Hurst, CIFAS chief executive, says: "At a time when every responsible member of society feels the strain of current economic conditions, the findings presented in Fraudscape not only reveal the true nature of the frauds identified but also reveal many of the problems and challenges ahead. “This, however, is only the tip of the iceberg. Over and above the frauds recorded by CIFAS members, there is an additional and unquantifiable volume of fraud that, due to tighter lending criteria, never got as far as the fraud department.” 2010-03-01 http://www.londonmortgageadvice.co.uk/news/article/446 Halifax launched its first fixed rate in November 1988, with other products coming onto the market throughout 1989. By 2009, according to CML figures, 68% of new mortgage lending was on fixed rate products. So,Halifax has published research into the fixed rate mortgage as its just over 21 years since the launch of the fixed rate mortgage.By February 1989, there were 12 fixed rate products from 12 lenders, compared to over 1300 fixed rates from 69 lenders today. Over 1500 fixed rate products were available at the peak of the market in 2007.In 1989, there was a difference of 1.05% between the highest available fixed rate and the lowest rate. That compares to 4.84% in today’s market. In the early months of the fixed rate mortgage, terms of two years were the standard option, with just three or five year options occasionally available. The average fixed rate in February 1989 stood at 12.55%. In 2007, when the availability of fixed products was at an all time high, this was at 6.33% - compared to 5.38% in 2010.The first fixed rate mortgage offered a rate of 12.75% when it was launched by Halifax in late 1988. The highest ever Halifax fixed rate stood at 13.85%, launched in 1990, compared to the lowest ever fixed rate at 1.99% in February 2007.To mark the coming of age of the fixed rate mortgage, Halifax has launched a new 21 month fixed rate product. "In today’s market, borrowers can select their product based on a number of factors - including the term, type and rate. It’s easy for us to take that level of choice for granted, but before the introduction of fixed rates, borrowers simply didn’t have access to the same options. Ever since their introduction 21 years ago, fixed rate mortgages have been fundamental for homeowners looking for certainty and stability in managing their household expenses, and this is an important milestone to mark." Stephen Noakes, mortgages commercial director at Halifax, said. 2010-02-22 http://www.londonmortgageadvice.co.uk/news/article/445 As more homeowners struggle to recover from unemployment and mounting debts,repossessions and arrears problems could last for a very long time. The number of borrowers in arrears will rise to 205,000 this year, from 188,000, it predicts.The Council of Mortgage Lenders (CML) expects the number of repossessions to rise by 15 per cent this year, from 46,000 in 2009 to 53,000, and believes that repayment problems could persist long after the recession. “The pattern of the early 1990s — in which the annual number of possessions exceeded 40,000 for seven consecutive years — suggests that we should expect only a slow recovery from the peak of mortgage payment problems in this cycle.The number of borrowers affected by arrears and possessions will subside only slowly.Rate movements and progress to economic recovery will play a crucial role in shaping the final outcome.Recent price gains had cut the number of homeowners in negative equity from 900,000 in April last year to 650,000. Figures from the Bank of England show the cost of mortgage finance to be softening. 2010-02-19 http://www.londonmortgageadvice.co.uk/news/article/444 Data from the Council of Mortgage Lenders (CML) reveal that this is the lowest gross lending figure recorded since February 2000 (£7.9bn), with total amount of money advanced by UK mortgage lenders dropped by £9.1bn in January, a decrease of 32% from the £13.4bn lent in December and 21% lower than the figure for January 2009. Forcing many buyers to rush their transactions through before the end of the year,there is usually a drop off between December and January, but this unusually large decline was attributed to the Stamp Duty holiday which expired at the end of December, “We remain in a period of uncertainty for the housing market and economy at large. The market certainly improved over the second half of last year and started 2010 in better shape than most would have predicted 12 months ago. “More recent developments have been influenced by the end of the Stamp Duty holiday, and are likely to foreshadow a larger than usual seasonal drop off in activity in the early part of this year. “However, the Bank of England is likely to keep rates low which should continue to mitigate mortgage payment problems and help cushion borrowers from the worst of the recession.” CML economist Paul Samter says. 2010-02-18 http://www.londonmortgageadvice.co.uk/news/article/442 Mortgage rates on tracker products are at their lowest since 1997, Bank of England figures show. The average tracker mortgage was at 3.63 per, compared with 3.92 per cent in December, with the base rate still at 0.5 per cent, The lowest it has been in six years,the average two-year fixed rate deal also fell to 3.97 per cent, Legal and General's Mortgage Purchase Index showed that borrowers are increasingly opting for tracker products. Compared to 17 per cent in the third quarter, in the last quarter of 2009, 43 per cent of mortgages were of the tracker variety, "There has been a distinct shift towards tracker rates, most likely because fixed rates are looking relatively expensive and because fears of imminent base rate rises are receding,Stephen Smith, Legal and General's director of housing, said.The proportion of buy-to-let landlords remortgaging their buy-to-let deals kept on falling in Q4 2009. According to research carried out by buy-to-let lender Paragon Mortgages via its Financial Adviser Confidence Tracker (FACT), 30% of landlords in the private rental sector got a buy-to-let mortgage via a broker for remortgage purposes in Q4, down from 39% in Q3. That is the fourth quarter in a row which has seen buy-to-let remortgaging decline, and the lowest proportion since Q3 2006. There is very little incentive for buy-to-let mortgage borrowers to remortgage in the current economic conditions, as with Bank Base Rate remaining at an historic low, and lender’s Standard Variable Rates (SVRs) staying correspondingly affordable, most landlords are better off just sitting on SVR than switching to a new deal. What’s more, with most lenders having quit the buy-to-let sector there is very little competition and few products to choose from in the buy-to-let space. Figures from the Council of Mortgage Lenders (CML) support the evidence from FACT. According to the CML, the number of buy-to-let gross advances fell by 72% from 83,400 in the final quarter of 2007 to 23,700 in the third quarter of 2009, with the value of those gross advances falling from £11.3bn to £2.1bn, an 81% decrease. The number of gross advances for house purchase has halved over the period, from 32,650 to 14,460, whilst remortgage business has been harder hit, with the number of gross advances falling 78% from 37,920 to 8,420. John Heron, Paragon Mortgages’ managing director, said:‘Buy-to-let remortgaging activity continues to decline and we can see it only going one way until competition starts to increase. "At the moment, in the majority of cases the landlord’s reversion rate is typically better than anything they can secure in the mortgage market, so there is little incentive to switch.’"However, the proportion of landlords borrowing new buy-to-let mortgages in order to buy more rental property increased substantially in Q4, with 52% of landlords arranging new finance to extend their property portfolios, up from 48% in Q3. he proportion of first-time landlords taking out buy-to-let deals through financial advisers also rose slightly, from 10% in Q3 to 16% in Q4. 2010-02-15 http://www.londonmortgageadvice.co.uk/news/article/443 According to figures from the Council of Mortgage Lenders (CML),the amount of new buy-to-let borrowing increased for the second quarter in a row in Q4 2009. However that was a significant fall on the 38,000 buy-to-let mortgages advanced in Q4 2008There were 25,800 new loans taken out by residential property investors in the quarter, up from 23,700 in Q3, Most buy-to-let mortgage lenders have shut up shop or stopped lending to investors, and what was a boom industry is now far more muted.The recovery in the buy-to-let sector is modest and started from a very low base. For 2009 in total, there were 93,500 buy-to-let mortgages advanced, compared to 222,700 in 2008 – a 58% drop. Buy-to-let lending represented only 5.9% of all lending in 2009 (10.7% in 2008), but the total value of outstanding buy-to-let loans still represented around 11.8% of the mortgage market despite the recent shrinkage in new business. Buy-to-let gross lending was £8.5 billion, down from £27.2 billion in 2008. On the whole, buy-to-let borrowers usually take out their mortgages on an interest-only basis, and pay off the capital amount outstanding when they sell the property in the future. Therefore such investors have particularly enjoyed the benefits of the low interest rates which have prevailed for the past year. This has helped those who have fallen into arrears as a result of non-payment of rent by tenants, or rental voids, to recover their position relatively quickly. The number of landlords in arrears to the tune of 1.5% of the balance of their mortgage or more remained static in Q4 at 20,700, but that is a 37% drop on the 32,900 in arrears a year before. The number of buy-to-let properties repossessed in Q4 fell by 25% from Q3 to stand at 1,200 properties – just 0.10% of the total buy-to-let book. Overall in 2009, there were 5,700 repossessions (0.46% of the total book). This is similar to the 0.42% annual possession rate for the wider mortgage market. TCML’s director general Michael Coogan said: "The figures show that the buy-to-let market continued to improve, albeit slowly, throughout 2009, and we are encouraged by this recovery. The new business market remains well below previous levels though, and below the level of activity which is needed to enhance a vibrant private rental sector in the UK. "We are concerned that future, wrongly directed, regulation may actually prevent buy-to-let playing its vital role in providing good quality homes and wider housing choices for people who cannot afford home ownership or do not qualify for social housing. “Trends in arrears and possession, and the suggestion that there is potential for consumer detriment to arise from buy-to-let mortgages, are relevant to the current consultation by the Treasury on whether the FSA should be given power to regulate these transactions, and we will be responding on this shortly.” Simon Gordon, Head of Communications, at the National Landlords Association, added: "Clearly, the figures suggest the buy-to-let market is far more robust than originally feared. The government should take note of this when considering whether regulation is really necessary. Rather than wasting effort on further legislation they should be encouraging lenders to get credit flowing again." 2010-02-11 http://www.londonmortgageadvice.co.uk/news/article/441 Most SVR borrowers ‘should consider switching' Hundreds of thousands of mortgage borrowers currently sitting on their lenders' Standard Variable Rates (SVRs) could benefit financially from moving their mortgage to a new deal and/or lender. That is the conclusion drawn by price comparison website moneysupermarket.com. It points out that, with a number of building societies, including Skipton and Norwich & Peterborough, raising their SVRs, and more expected to follow suit, now is the time for many to remortgage. Hannah-Mercedes Skenfield, mortgages channel manager at moneysupermarket.com, said; “Since the start of the credit crunch the remortgage market has, essentially, been closed. Most borrowers on SVR had been enjoying a better rate than that on offer to new borrowers and the increasing of LTV criteria meant people couldn't remortgage anyway. “Over the last month or so we've seen the market shift. SVRs have increased, rates for new borrowers have been falling and we've seen an increase in the availability of mortgages even at higher LTVs. The remortgage market is open for business once again.” Many borrowers on SVRs are discouraged from switching to a new deal as they invariably have to pay an arrangement fee to do so. These fees typically range from around £499 to £1499. However, if borrowers do their maths, they might find that the cost of the fees is recouped fairly quickly if the interest rate is right. For example, moneysupermarket.com figures show that the best two-year fixed rate mortgage on offer is a 3.29% deal from First Direct, which comes with a £998 fee. Over two years, the real cost of the mortgage over two years works out at 3.8%, which is only beaten by 13 out of 85 SVR deals. For borrowers looking at a tracker mortgage, moneysupermarket.com’s said the best deal is Alliance & Leicester’s two-year offering, priced at 2.49% with a £995 fee. The true cost of this deal over two years is 3.07% – which beats all but seven SVR deals currently available. Skenfield said: “In some ways the case for a tracker mortgage over an SVR deal is even more compelling than for a fixed rate. The only reasons you might consider staying on an SVR over a fixed rate is either your current SVR is cheaper than the best fixed rate deal or that you believe SVR rates will remain low for some time to come – recent increases show this may no longer be the case for many borrowers. “Neither of these arguments really applies to tracker mortgages, with only seven cheaper SVR deals than the best tracker it is unlikely you are making a saving by remaining on your current SVR deal. "And if SVRs are going to remain low for a while, then the same can be said of trackers. In fact the added value of a tracker is that lenders can’t re-price them independently of a static Base Rate – something which is already happening with SVRs. “In short, if you believe rates will be going up shortly and want the security of a fixed monthly payment you’re best to fix now; and if you believe they’ll be staying low for a while, you may be best to move on to a tracker. Either way you’ll be lucky to be on an SVR that’s worth sticking with. ” 2010-02-08 http://www.londonmortgageadvice.co.uk/news/article/439 A £300bn shortfall in the amount of funds they have available to lend out to mortgage borrowers in the future is faced by mortgage lenders they have warned. Lenders are having to rely on the money they get in from savers, along with the billions of pounds made available by a variety of Government bail-out schemes, to provide the funds they lend out as mortgages, with the securitization (or ‘wholesale’) markets where lenders traditionally went for money now almost completely closed. There will be a £300bn funding gap, which could significantly reduce mortgage product choice for borrowers, once the Government schemes end in 2014, the Council of Mortgage Lenders (CML) calculates. As loans would be restricted to those who could offer a large deposit, it could also impact first-time buyers. The CML said, "The UK [could be] at risk of a chronic under-supply of credit - and the rationing of mortgages for customers - for many years to come." Forcing the Government to fill the void with programmes such as the special liquidity scheme and the credit guarantee scheme, the securitization markets closed after the credit crunch set in in 2007. Despite a little recent activity on the wholesale markets, the CML is concerned that, they will never return to the levels seen before the credit crunch, and the gap will not be filled by deposits from savers. "We are likely to see a long-term decline in choice for UK mortgage customers unless there is a policy approach intended to encourage the development of wholesale funding," the CML said. A "clear strategy" was required to put the UK mortgage markets back on a "sustainable footing" immediately after the general election. 2010-02-04 http://www.londonmortgageadvice.co.uk/news/article/438 The following is an article taken from the Best Advice.net Colin Snowdon of Aldermore argues that Skipton’s move is to the benefit of a sustainable mortgage Bringing into sharp focus a fundamental issue for lenders and building societies and small banks in particular is Skipton’s recent announcement that it intends to undo its deal with borrowers and raise its SVR from 3.50% to 4.95% from 1 March. And the issue we are talking about is that of funding costs. With little activity in the wholesale markets and lenders under pressure from the FSA not to use them anyway, most lenders are dependant on retail funding (preferably term deposits) to fund their mortgage activities. As a result, competition for retail deposits is intense; a situation which has, ironically, been exacerbated by the government competing in the very same markets via National Savings. I wonder how many mortgage customers realise that one effect of mushrooming government debt is upward pressure on their mortgage rates? And of course the taxpayer owned lenders have access to subsidised, cheap funding from the Bank of England’s operations – yet more competition from the government. The problem for lenders such as Skipton is a simple but profound one; competing at 4-5% in a finite UK pool of retail fixed rate savings and promising an SVR of 3.5% simply doesn’t stack up financially. The truth is that the days of lender SVRs being linked to Bank Base Rate or Libor are numbered. What increasingly matters to lenders is the overall real cost of money. In the future, an increasing number of lenders will set mortgage rates with reference to actual funding costs; not external and theoretical reference rates such as BBR or LIBOR. In this way mortgage finance will come to operate in isolation from the interbank and capital markets. Sound familiar? Those of you who have been in the mortgage market as long as I have will remember the good (or was it bad?) old days when building societies set ‘the mortgage rate’ themselves as a cartel each month. There’s nothing new in this world – what goes around, comes around! Maybe when Alistair Darling wished for a return to ‘good old fashioned banking’ this is what he had in mind. There have been comments in the press from mortgage brokers who say that if the Skipton’s move becomes the start of a trend, it will knock consumer confidence and hamper any recovery in the housing market. They also have concerns that other lenders may well take advantage of the Skipton’s move and push up mortgage costs. Brokers concerns are understandable and we will no doubt see yet more sensational headlines about profiteering and greedy lenders. However, mortgage finance needs to be put on a viable footing if the supply of funding is to be increased (which is surely a good thing for the market?). Perhaps, just as in the 1970s, we need a debate not only about the cost of mortgages, but about their supply and availability. Is it to be cheap mortgages for those lucky enough already to have them (particularly from the state owned banks), or a plentiful supply of mortgages so that our children can get on the housing ladder? It has been said that the only thing we learn from history is that we can learn nothing from history. And yet, as we stumble forward into a new world of mortgage finance, perhaps there are more than a few signposts and lessons we should take note of from the past. 2010-02-03 http://www.londonmortgageadvice.co.uk/news/article/437 Constrained by the lack of available mortgage finance, half of buy-to-let landlords want to buy more residential property to rent out privately. 49% believe the conditions are currently right for them to expand their property portfolios, a survey conducted by LSL Property Services, which owns the UK's largest lettings agent network, including national chains Your Move and Reeds Rains,revealed. Because the supply of deals is so restricted and criteria are so stringent, only 27% said they will be able to access mortgage funds in the next year.In the past, buy-to-let investors could get a mortgage from one of dozens of lenders with a deposit of 15%, and interest rates were very competitive.Today only a handful of lenders are operating in this sector, most demand a 35% deposit and the interest rates on offer are relatively high. “2009 saw the buy-to-let market return as a viable investment. Landlords recognise this, despite the rough ride they have had to endure over the last couple of years. “The average landlord made losses in 2007-8, but 2009 marked a return to form for property investment. “But the availability – or lack of - of mortgage finance is holding the sector back. Even experienced landlords who are keen to take advantage of lucrative returns and improving market conditions can’t get access to the cash they need.” David Brown, commercial director of LSL Property Services, said. 2010-02-02 http://www.londonmortgageadvice.co.uk/news/article/435 It has been revealed, that the lack of mortgage finance that is available to first-time buyers is forcing the group into the rental market. There has been a rise in the number of reluctant tenants, with 54 per cent of landlords stating that many consumers were being forced to rent, rather than buy, a property, new statistics from the Association of Residential Letting Agents (Arla) reveal. Maybe renting at this stage could be best for people who need to adapt to changes in their working life as it give you the ability to change direction without being tied down with household chores and costs. It is not necessarily any lack of mortgage finance that is the primary reason why first-time buyers are struggling to get on to the property ladder,it is the difficulty in raising the minimum 10% deposit coupled with the fact that job insecurities are preventing would-be homeowners from taking on the commitment of a mortgage. 2010-01-29 http://www.londonmortgageadvice.co.uk/news/article/436 The lack of mortgage finance that is available to first-time buyers is forcing the group into the rental market, it has been revealed. New statistics from the Association of Residential Letting Agents (Arla) reveal that there has been a rise in the number of reluctant tenants, with 54 per cent of landlords stating that many consumers were being forced to rent, rather than buy, a property. James Davis, chief executive of upad.co.uk, says that renting could in fact be the "smart choice" for people who need to react to an increasingly adaptable working lifestyle. "It gives you that flexibility to upgrade when you want and not being burdened with boiler and roof repairs and it makes sense for an easier living," he adds. Mr Davis believes that the lack of mortgage finance is the primary reason why first-time buyers are struggling to get on to the property ladder, coupled with the fact that job insecurities are preventing would-be homeowners from taking on the commitment of a mortgage. During the fourth quarter of 2009, some 41 per cent of members surveyed by Arla stated that there were more tenants than properties in the rental market. © Houseladder Ltd 2010-01-29 http://www.londonmortgageadvice.co.uk/news/article/434 Compared with November, to £13.7bn.The Council of Mortgage Lenders (CML) said UK mortgage lending increased by 14% in December. However Skipton Building Society reported that thousands of its customers would see a hike in their mortgage bill, with its standard variable rate rising from 3.5% to 4.95% on 1 March. As it removes the ceiling on the standard variable rate (SVR) that guaranteed the rate would be no more than 3% above the Bank rate - which is currently at a record low of 0.5%. Skipton - the fourth largest building society in the UK - said that it was enacting the clause in contracts which allowed it to remove the ceiling "in exceptional circumstances". Some 29,000 Skipton customers will see rates rise in March, with another 35,000 on deals that will revert to the SVR in future months. Relatively few lenders have similar ceiling promises in place for existing borrowers. The customers affected will receive a letter from the lender, explaining the decision. They will have a 90-day window to sign up for other Skipton fixed rate or tracker deals without having to pay the normal fee, although none of these rates are as attractive as the SVR. The latest figures from the CML show that UK mortgage lending was up 3% in December compared with the same month a year earlier. CML economist Paul Samter said that the December lending figure was "surprisingly strong" as seasonal factors usually meant a slowdown compared with November. "Evidence suggests that the rise was driven by a surge in house purchase completions," he said."The most likely explanation is that buyers of cheaper property wanted to complete their transactions before the end of the year to beat the end of the stamp duty holiday." 2010-01-28 http://www.londonmortgageadvice.co.uk/news/article/433 In partnership with auctioneers Real Estate Disposition corporation (REDC), Buyers will be able to bid online for properties via a live property auction site introduced by Zoopla. Followed by regular four-day slots throughout the year, the initial auction of around 150 residential properties will run over four days from February 11th,. Allowing them to market the properties on their books in an alternative way, while still offering them to market in the usual way, to begin with the site will feature repossessed properties, but it will also be rolled out to estate agents across the country,. Many may be attracted to the site in a market characterised by lack of supply, where speed of transaction is of the essence, as unlike traditional property websites, Zoopla.co.uk won't charge estate agents for listing their properties and it will also offer them 0.25% of the sale price on top of their usual commission. During which period prospective buyers can arrange viewings via the agent and carry out due-diligence, Properties may be added to the auction service up to 30 days prior to the auction commencing. Before the property is entered into the online auction, Estate agents and property sellers will agree a reserve price and successful bids will be binding on the buyer, who must have their mortgage finance arranged in advance. Private sellers will not be able to participate.Only properties represented by estate agents, lenders and developers will be permitted on the auction platform located at Zoopla.co.uk/auctions. "We see live online bidding as the future of property auctions and our innovative offering as one of the most exciting developments for estate agents in the UK for years. "We are delighted to be partnering with REDC, the world's leading player in property auctions, and their expertise in online property auctions combined with the Zoopla.co.uk audience creates a unique and transformational opportunity for our agent members to maximise the price achieved, reduce the time on market and significantly increase their fee potential." Alex Chesterman, CEO of Zoopla.co.uk, said. 2010-01-27 http://www.londonmortgageadvice.co.uk/news/article/432 More products are now available to mortgage borrowers with lower deposits, analysis by Moneysupermarket has revealed There are now 384 products available to those with a 15% deposit as deals with an 85% loan to value (LTV) have seen the biggest rise in availability since December 2009 - an increase of 22%.Those with a 10% deposit are also in luck as the figures show there has been an increase of nearly 11% since December 09 with 165 products now available. Rates for 80% LTVs have fallen hardest, with the average rate now sitting at 4.97%, 0.77% lower than in October last year. Rates across all mortgage products have begun to creep down since October last year. "Lenders seem to have started 2010 with their doors open and are clearly more open to mortgage lending than they have been for some time. The increase in products available at 85 and 90% is particularly encouraging for first-time buyers, as scraping together a large deposit is not easy, and was the reason many prospective first-time buyers deserted the market in their droves last year,Hannah-Mercedes Skenfield, mortgages channel manager at Moneysupermarket, said. She continued "While rates are obviously lower for those with a higher cash deposit, it is encouraging to see rates starting to drop across all LTV products. Although there are only nine products available at 95% LTV, the average rate has fallen by 0.71% since October. She further suggested, "It is not all good news though as last week's announcement by Skipton Building Society increasing their standard variable rate (SVR) indicates we might see an increase in rates elsewhere in the mortgage market. This coupled with the sharp increase in inflation could lead to a reversal in this trend." 2010-01-26 http://www.londonmortgageadvice.co.uk/news/article/431 According to the latest figures from the Mortgage Advice Bureau, the average LTV on residential purchase mortgages arranged in December 2009 nudged 70%, the first time it has reached this level since April 2009. Providing evidence that banks are starting to relax their lending criteria and tentatively lending at higher levels again, the average LTV in December 2009 was 3% higher than the corresponding figure for November 2009 - 67%,The average LTV on new residential purchase mortgages arranged in Q4 2009 was 68%, the same figure as the previous quarter. The percentage of variable rate mortgage transactions was 60%in December 2009 compared to 53% of transactions in November 2009 following the latest Mortgage Advice Bureau figures also reveal that more borrowers chose variable rate products over fixed rate mortgages, for the second consecutive month. With borrowers backing interest rates to stay low for the foreseeable future and happy to take a shorter term view, variable rate mortgages are now the overwhelming choice amongst new borrowers, with the number of new fixed rate mortgage transactions 50% lower in December 2009, compared to six months earlier. As they back interest rates to stay low for the foreseeable future,only 40% of mortgages arranged in December 2009 were on fixed rates compared to 80% in April 2009, clear evidence that variable rate mortgages are now the overwhelming choice amongst new borrowers, as they back interest rates to stay low for the foreseeable future.The average mortgage loan in December was £130,971up from £119,415 in November, a 9.7% increase, while the average remortgage loan in December was £154,863 compared to £155,334 in November. “Although we have seen a number of more positive reports concerning the health of the economy, the economic outlook is still far from clear and this uncertainty could stall any short term recovery. However, we still anticipate that lenders will continue to support the house purchase market with a continuing supply of competitively priced mortgage products, enabling those buyers and movers to take advantage of some very attractive buying opportunities.” Brian Murphy, head of lending, Mortgage Advice Bureau, says. 2010-01-25 http://www.londonmortgageadvice.co.uk/news/article/430 According to research from Abbey for Intermediaries (AfI),people coming to the end of their deals in the next six months are increasingly disinclined to choose trackers due to expectations of rate rises this year. Compared to 33% just two months ago, research released this week from the lender shows that only 13% of homeowners due to remortgage in the next six months will opt for a tracker. Increasing from 20% to 23% over the last month, those likely to opt for a fixed-rate deal has gone up. Half of these people favour a two year fixed-rate product rather than a three or a five year deal. "Borrowers have seen a large number of highly competitive fixed-rate deals come on to the market recently and with many commentators predicting a base rate rise this year, homeowners now seem more inclined to play it safe with a fixed rate deal." Ricky Okey, managing director of AfI, explained. Equating to some 4,848 potential remortgages each day over the next six months, of which 31% said that they would seek advice from a mortgage broker or IFA, research showed that over 880,000 UK homeowners on tracker or fixed-rate mortgages, could be looking to remortgage in the next six months.Over half (51%) of homeowners who will be remortgaging in the next six months say the opportunity to take advantage of a good rate is the factor that will most influence their decision on which deal to take. This shows that there is still a significant amount of business in the market and that consumer confidence in the advice received from intermediaries remains high. 2010-01-22 http://www.londonmortgageadvice.co.uk/news/article/429 0ver the last 50 years, the average UK house price has grown by 273% The average home in 1959 cost £2,507 compared to to £162,085 last year, according to research carried out by the country's biggest mortgage lender, Halifax, The worst performing decade was the 1990s when prices fell by 22%. The research revealed that prices increased the most steeply during the 2000s, rocketing by 62%. on average. Each short-lived boom period was followed by falls in real house prices (allowing for inflation). The most rapid average property price rises were witnessed in four periods: 1971-73, 1977-80, 1985-89 and 1998-2007. The Right-to-Buy scheme for council house tenants introduced in the eighties by the Thatcher Government is attributed with much of the increase.Owner-occupation increased steadily over the period, although it has declined slightly in the last two years. 43% of people owned their own homes in 1961, compared to 68% in 2008. Although with the introduction of buy-to-let mortgages around that time the private rental sector has seen strong growth since, accounting for 14% of housing in 2008, the proportion of homes which were privately rented fell from 33% in 1961 to just 9% in 1991.The size of the socially rented sector in 2008 at 18% was smaller than in 1961 at 25% as a sharp reduction in local authority house building and the sale of council houses contributed to the sector's contraction since the early 1980s. The average percentage difference between the highest and lowest priced UK region has increased from 84% in 1959 to 104% in 2009. The North/South house price divide has widened significantly since 1969, with prices rising much faster in the South. All the developments in the UK housing market over the last 50 years were remarkable, Martin Ellis, housing economist at Halifax, said. He added: "No doubt, there will be further dramatic changes over the coming years, most likely including ways that we are currently unable to foresee." 2010-01-21 http://www.londonmortgageadvice.co.uk/news/article/428 According to Halifax, the average UK house price has increased by 273% over the last 50 years from £2,507 in 1959 to £162,085 in 2009,. Prices experienced their biggest rise, increasing by 62%. The worst performing decade was the 1990s when prices fell by 22%, it says in its latest housing market analysis.Halifax said that there have been four distinct periods of rapid real house price growth, which were 1971-73, 1977-80, 1985-89 and 1998-2007 and each period was followed by a significant fall in real house prices.There has been a steady rise in owner-occupation rates since 1959, which have increased by 25% from 43% in 1961 to 68% in 2008 following the introduction of the Right to Buy scheme. Due to the increase, the proportion of homes which were privately rented fell from 33% in 1961 to 14% in 2008. However, there has been a more recent increase in the private rented sector from 9% in 1991 to 14% in 2008.The size of the socially rented sector in 2008 at 18% was smaller than in 1961 at 25% as a sharp reduction in local authority house building and the sale of council houses contributed to the sector's contraction since the early 1980s.The North/South house price divide has widened since 1969 as prices have increased more quickly in the South. The average percentage difference between the highest and lowest priced UK region has increased from 84% in 1959 to 104% in 2009.Martin Ellis, housing economist at Halifax, said all the developments in the UK housing market over the last 50 years were remarkable.He added: "No doubt, there will be further dramatic changes over the coming years, most likely including ways that we are currently unable to foresee." 2010-01-19 http://www.londonmortgageadvice.co.uk/news/article/427 Mortgage borrowers are looking at a difficult choice on this. This is because fixed rate mortgages continue to be comparatively expensive by comparison with tracker deals. That poses the question: when will interest rates rise? It is generally agreed that there will be no dramatic increases in 2010, above 1.5% for example. However, these forecasts are no guarantee that mortgage rates won't rise and when they do mortgage trackers will get more expensive. Mortgage borrowers looking for advice and security would do well to consider the extra cost of a fix as worthwhile, or at least opt for a mortage tracker deal that would not lock them into rising mortgage rates. If you are a potential mortgage borrower you might willing to take a gamble and decide that even if the base rate did rise, this would indicate that the economy and banking system was in better shape and crucially therefore more competition could mean cheaper fixed rates anyway.As an example of this,the advice from London Mortgage Advice might be that the current two-year swap rate is 1.90%, meaning that lenders asking 4% for a fixed rate mortgage are charging a healthy margin that could be trimmed. These margins are being maintained by the difficulty in raising funding, meaning that no lender is willing to break ranks, cut margins and benefit from a huge amount of business. There is no easy answer, but if you are looking for a mortgage make sure you do your homework. These links should help. 2010-01-18 http://www.londonmortgageadvice.co.uk/news/article/426 According to data released by the Council of Mortgage Lenders, home buyers in November needed to use less of their income to cover their mortgage interest than at any time for more than five years. Home movers,in particular, are experiencing a low debt burden by historical standards. They typically needed only 10.6% of gross income in November 2009 to cover mortgage interest payments, down from 11.1% in October. This is the lowest debt burden on home movers since the CML started recording this data in 1974,other than a brief low of 10.2% in the middle of 1996, For first-time buyers also,the debt burden reduced, with 14.4% of gross income needed in November, down from 15.1% in October - the lowest it has been since May 2004. There was a seasonal dip in lending volumes in November. However so, although the 53,000 house purchase loans represented a 4% decline on October, the number was an emphatic 66% increase on November 2008. On the other hand, the 31,000 loans for remortgage fell 6% from October with a drop of 39% year on year, showing a continuation of the "two speed" market for house purchase and remortgaging. As the highest proportion since 2001, loans for house purchase in November accounted for 60% of total new lending. While the share of house purchase activity has grown considerably from the record low of 27% seen at the start of 2009, low interest rates and tight lending criteria have meant that remortgage demand has gone in the opposite direction. From January 2009, the percentage of loans for remortgage has dropped from 53% to 31% in November. "It is encouraging to see that mortgage interest payments are so affordable for home movers and first-time buyers. But with substantial deposits still needed to secure a mortgage, the market will continue to be relatively restrained for some time to come,said CML director general Michael Coogan, commenting on the data. "With refinancing still unattractive or unnecessary for many borrowers due to continuing low rates, we are now seeing a much more house purchase-focussed market, a profile much more like the beginning of the Noughties than its latter years." 2010-01-15 http://www.londonmortgageadvice.co.uk/news/article/425 The return of competition in the mortgage market is hotting up as lenders are wooing borrowers with cheaper deals. Figures release by The Bank of England show a marginal fall in the cost of the average two-year fixed-rate deal for borrowers with a 25 per cent deposit. Rates fell 0.04 per cent during December to 4.06 per cent, the lowest level since May last year. The cost of five-year deals has also fallen in the last month. According to the Bank of England there is increased competition in the fixed-rate mortgage market during December, following a steep rise in borrowing costs earlier in the year. In the summer mortgage rates climbed rapidly to reflect a sharp rise in swap rates, the wholesale moneymarkets, which lenders partly use to fund new mortgage lending. The average two-year fixed rate was 4.47 per cent in September. Most major lenders cut the interest they charged on fixed-rate mortgages in December, particularly for people borrowing a higher proportion of the value of their home, such as first time buyers. One lender is cutting its base-rate trackers by up to half a point and introducing a new deal for borrowers with a ten per cent deposit. It will charge 4.99 per cent for a two-year tracker worth up to 90 per cent of a properties value, with a £995 fee. While another lender cut its fix and tracker deals by up to 0.6 percentage points yesterday. It is offering a two-year fixed-rate deal available up to 75 per cent of a properties value with a rate of 3.79 per cent. London Mortgage Advice welcomes the flurry of interest rate changes as lenders battle to top the tables for the most competitive deals. 2010-01-14 http://www.londonmortgageadvice.co.uk/news/article/424 Some existing borrower rates as high as 5.5%.as the benefits of an historically low Bank Base Rate have not been passed on to many borrowers with What is potentially more worrying is that some commentators have been saying that now is a good time for borrowers to get on to a fixed-rate mortgage as interest rates may rise in the coming months. All this whilst we are in an environment of historically low interest rates, with the Bank of England Base Rate held steady at 0.5% for quite a few months now. We are asking whether a fixed rate mortgage is the correct thing for you? Borrowers can obtain a variable rate mortgage with a rate of under 3%. The cheapest three-year fixed-rate product is 3.90% and the cheapest five-year fix is 4.45%. That is a significantly higher rate to pay, costing an extra £81 per month for the three year and £127 per month for the five-year mortgage on a £150,000 home loan (capital and interest with a 25-year term). This is a high price to pay for the peace of mind of knowing what your mortgage payment is going to be each month. The question is, is it likely that interest rates on mortgages will increase in the next six months? It is the cost of funding for the lenders that will determine the rise in the cost of mortgages. This is a reflection partly of general interest rates and partly of the cost of wholesale funding. In the short term there is unlikely to be upward pressure on general interest rates. The Bank of England has indicated recently that it expects rates to remain low going into 2010. The small positive signs that we have seen in the housing market will not outweigh the depressing effect of continued job losses. The fragile state of the economy is likely to prevent a rate rise from being announced by the Bank anytime soon. And the cost of wholesale funding is another matter entirely. In the months after the Bank of England started to make meaningful cuts in interest rates, the London Interbank Offered Rate (LIBOR) remained stubbornly high. The reasons given for this related mainly to the lack of trust banks had for each other. But we have moved on a great deal from this. There is much greater visibility over what the banks have exposure to. A number of banks have taken up the Bank of England scheme to swap out poor quality assets. So there is greater clarity now but the cost of wholesale funding has been moving about.SWAP rates (the rate at which lenders do business with each other) increased slightly at the beginning of June, but this seems to have been a blip with all but ultra-long (30 year) rates being lower than they were a month ago. Given this, what would be the reason for an increase in rates? If anything mortgage rates could get cheaper as more lenders come back to the market with competitive products. At present too few lenders are lending but with the encouragement from the Government and indeed with the margins to be made, the second half of the year may see some lenders who have not been active in the first six months being a bit more competitive.There is a choice to be made. Sign up to a fixed-rate deal now at what could be a high price or sit and wait for a few months to see what happens. One thing is for certain. A borrower who has not reviewed their mortgage deal for a while and is sitting on an interest rate of more than 4% may well be able to find a cheaper mortgage elsewhere, whether it is a fix or not. Homeowners need to make sure that they search the whole of the market to get the best deal possible. 2010-01-13 http://www.londonmortgageadvice.co.uk/news/article/423 Over the course of the last year, over a million families in the UK have resorted to using a credit card in order to pay their mortgage or rent. Householders and private rental tenants from across a spectrum of income brackets were forced to put their payments on credit in order to keep the roof over their heads, research carried out by homeless charity Shelter revealed. Shelter used the data and concluded that it indicated more than a million households were forced down this undesirable path of action in 2009, from a survey that was carried out on a sample of 2,022 people. It showed that 6% of respondents had used a credit card to meet their mortgage or rent obligations. For lower social groups, the number of people resorting to using their credit cards over the past 12 months rose to 8%, while the figure for middle class people totalled 4%. With one in 12 residents in the capital admitting they had resorted to flashing the plastic to make their monthly mortgage repayment or rent, the problem was notably more common in London, "This is a shocking discovery, that over a million households in Britain are in such desperate circumstances that they need to borrow money on credit cards to pay for basic housing costs,” said Kay Boycott, director of policy and campaigns at Shelter. "If people are already struggling to the extent that they fear losing their home, increasing credit card debt cannot be the answer." Building up debt in order to pay for fixed costs such as housing could eventually lead to many of those families affected damaging their credit records and ultimately losing their homes Shelter warns. Plastic providers can covert unsecured debt on credit cards into secured debt (held against property) by using something known as a charging order - which allows them to obtain a court possession order to force a sale to recover the debt.Credit card companies are not subject to the same rules and regulations as mortgage lenders and have more options available to them when it comes to recovering their debts. "It is absolutely vital that every single person using credit cards in this way seeks advice urgently to get the help they need to ensure they don't lose their home.” Boycott said 2010-01-12 http://www.londonmortgageadvice.co.uk/news/article/422 We are in for an interesting year as interest rates have now been kept at their record low for almost a year in a bid to help stimulate the housing market and general economy, as the Bank of England’s Monetary Policy Committee has voted to maintain the official interest rate at 0.5%. Making comments on this decision, Stuart Law, Chief Executive of Assetz, said: "It is no surprise that the Bank of England has decided to keep interest rates at the all-time low of 0.5% this month. However, there remains a possibility that there may be some movement on interest rates this year, but probably not until well after September at the very earliest, if at all this year. If rates do rise this year, we expect the end of the year base rate to be no higher than 2%. "Rates are likely to remain low for a considerable period of time in order to allow the economy to start to grow again significantly. This may well lead to a period of excess inflation above the current target of 2% but there is unlikely to be any intervention by the Bank of England straight away. "Growth in the economy will lead to increased taxes, and this will enable repayment of the National debt, so there is a plus side to the Bank of England driving the economy forwards in another credit driven boom cycle and this is why we think base rate policy will remain cautious in the medium term at least." However Nick Hopkinson, Director of Property Portfolio Rescue (PPR), warned: "While the Bank of England has chosen to take no action this month, it won’t be able to continue to do so indefinitely as it strives to manage the consequences of its recent fiscal policy. The problems of national debt and monetary tightening aside, the Bank will soon be forced to raise the Base Rate as the money poured into the economy via the Quantitative Easing programme drives up inflation and causes yet another investment bubble. "This time bomb will inevitably cause significant pain for many households as mortgage and borrowing costs increase again against an already troubled backdrop of unemployment and higher taxes." 2010-01-08 http://www.londonmortgageadvice.co.uk/news/article/421 According to figures from Haart estate agency, asking prices for residential property across London increased by 3.5% during December 2009. Using statistics from 83 of its London branches,Haart compiled the survey . With key growth areas in Thornton Heath (with an 4.8% increase), Chigwell (2.8% growth) and Walthamstow (1.8% growth), the average asking price is now up to £407,156 from £302,632 . With the average completion taking around 97 days, the survey also revealed that London properties are now selling, on average, 12 days quicker compared with November 2009 "Overall, the number of properties sold and listed are down because Christmas is a notoriously quiet period for the property market, Russell Jervis, managing director of haart, said. "However, the good news is the statistics show a marked increase in the asking price. A 3% increase shows steady and sustainable growth and we anticipate increased stability in the London property market over the coming months. This is good news for those looking to buy and sell property during 2010." 2010-01-06 http://www.londonmortgageadvice.co.uk/news/article/420 Following its sale to Barclays, Standard Life Bank will no longer be accepting mortgage applications from mortgage brokers, They agreed a deal to buy Standard Life Bank from parent Standard Life for £226m in October. It says in an email to mortgage brokers : “Whilst there will be no further sales of SLB Mortgage products to intermediaries or directly, new and further borrowing requests will continue to be accepted from existing SLB customers. “Existing customers will be able to continue servicing their mortgage in the same way, either over the phone or online. “There are also no changes to the availability of certain features for existing customers, such as cash reserve, borrow back, payment holidays and offsetting.” Barclays formally completed its acquisition today. Barclays had a total mortgage book of approximately 824,000 accounts worth £84.4bn as at June 30 2009. The average LTV of its mortgage book was 44% and the average LTV of new mortgage lending was 46%. Net new mortgage lending stood at £2.2bn for the six months to June 30, and three-month arrears accounted for 1.16% of Barclays’ book. Meanwhile at the same time Standard Life Bank had approximately 78,000 mortgage accounts and a total mortgage book of £8.8bn. The average indexed LTV was 48% and three-month arrears represented 0.68% of Standard Life Bank’s book. 2010-01-04 http://www.londonmortgageadvice.co.uk/news/article/419 According to Hometrack, the property data company, a lack of new buyers caused a significant setback for the housing market this month, raising the prospect of further falls in house prices next year, Hometrack predicts a further 1 per cent fall in prices over the next 12 months. Other companies in the property sector shared the gloom. Despite concerns about economic recovery and a predicted rise in unemployment. the Centre for Economics and Business Research (CEBR), the forecaster, takes a different stand and will reveal today that it believes prices will be 2 per cent to 4 per cent higher by the end of the year, Ben Read, managing economist, said: “We still expect house prices to be around 15 per cent higher at the end of 2012 than today.” Pessimissm came as new-buyer registrations in December dropped 2.2 per cent — the first fall since January. The number of sales agreed also dropped by 0.5 per cent and prices were up in only 11.2 per cent of postcodes, compared with 17.6 per cent in November. In East Anglia, the East Midlands, the North East, North West and Wales house price increases have stalled. Hometrack says that the housing market was strongest in Surrey and Hertfordshire, where 96.1 per cent and 95.7 per cent of properties were achieving their asking price. The weakest areas were Staffordshire, Lancashire and Mid Wales. While the prospects for 2010 are uncertain, this year has certainly seen a marked improvement in the property market. Twelve months ago house prices had fallen 9.3 per cent in little more than a year and were still sliding in almost two thirds of postcodes. With few buyers to be found, transactions were so low that it equated, notionally, to people moving home every 31 years. Homes lingered on the market for an average of 12 weeks before a buyer could be secured — and then an average discount on the asking price of 11.4 per cent was being demanded. In contrast to the spreading “turmoil” reported in December last year, “unexpectedly buoyant demand” has proved to be the theme of 2009, according to Mr Donnell. He said: “Over the last year agents across the country registered a 41 per cent rise in demand, while in London this figure reached 70 per cent. In contrast, the volume of homes for sale across the country grew by just 7 per cent.” He added: “Such major imbalances between supply and demand were bound to have an impact on pricing.” As a result of the strengthening market, the average price of a house in Britain is now £156,900 — down only 1.9 per cent from last year — and an average of 93.3 per cent of properties are achieving their asking price. The average time to sell a property has fallen to 8.3 weeks. 2010-01-01 http://www.londonmortgageadvice.co.uk/news/article/506 Despite a 3.5% increase in net lending, mortgage approvals are running at their lowest level since 2001, says the British Bankers Association (BBA). The high street banks' annual growth in net mortgage lending was 3.5% in October, a substantial increase on the 0.8% reported in September for the whole of the mortgage market, but gross mortgage lending for October was just £7.6bn, the lowest since February 2001. House purchase approvals were at 30,766 in October, reflecting the weak activity in the mortgage market, with the average value of house purchase approvals 2% up on a year ago at £144,900. Meanwhile, the number of remortgaging approvals was stronger than the recent six-month average of 22,573 at 24,112, while equity withdrawal remained weak. David Dooks, statistics director at the BBA, said: "Activity in the mortgage and consumer credit markets continued to be subdued in October, reflecting uncertain prospects for households and lower consumer confidence. "Credit availability for viable businesses has improved, so a continued contraction in net lending growth reflects repayment behaviour, particularly by larger companies." Richard Sexton, business development director at e.surv - provider of residential valuation services, said "Beneath the surface there is a real two-speed market in operation. Approvals are actually up for the most expensive properties. Wealthy buyers are using large deposits to side-step lending restrictions and they are more likely to be in parts of the country, like prime London, which have been more insulated from wider market weakness. "The flip side is that approvals for cheaper properties have fallen dramatically. It's hard to foresee a significant improvement in mortgage lending." 2009-12-23 http://www.londonmortgageadvice.co.uk/news/article/417 It has been claimed that figures which show mortgage lending declined in November are "surprising", Changes to the stamp duty threshold on January 1st should have heightened housing market activity in November and December according to Ray Boulger, senior technical manager at independent mortgage advisor John Charcol,. Lending slipped by ten per cent in November on levels seen in the previous month research conducted by the Council of Mortgage Lenders (CML) shows. Mr Boulger confirmed, "One would have expected, if anything, that [mortgage lending] would slightly increase in November and December as people aimed to complete before the end of the year." The stamp duty threshold will be reduced from £175,000 to £125,000 at the beginning of the new year.This means that first-time buyers will have to find more money to climb onto the first rung of the property ladder as they will no longer benefit from the tax break introduced by the chancellor of the exchequer in September 2008.This news comes soon after the National Association of Estate Agents reported that just 19 per cent of those who registered to purchase a home in November were first-time buyers. 2009-12-22 http://www.londonmortgageadvice.co.uk/news/article/418 Ian McCafferty, CBI chief economic adviser, said: " The UK Bank rate is forecast to start rising in spring 2010, as the Bank of England withdraws some of the monetary stimulus in order to minimise the risk of undesirable inflationary pressure in the medium term. The Bank rate is expected to reach 2% by the end of next year, with no further rises during 2011, to assist the sustainability of the recovery as fiscal policy begins to tighten." The CBI said tomorrow, The UK economy is expected to exit the recession in the fourth quarter of 2009, but thereafter growth will remain subdued and GDP is unlikely to have reached pre-recession levels by the end of 2011, Its latest economic forecast predicts that the recession will end when UK growth resumes in the fourth quarter of this year (0.5% quarter-on-quarter), helped by consumers bringing their spending forward to beat the VAT rise. Subsequent growth in the first two quarters of 2010 will be weak at 0.3%, but this should strengthen as the global economic recovery gathers pace, businesses rebuild stocks and household spending recovers. Growth in the range of 0.5% to 0.7% is expected to be maintained through to the end of 2011, according to the CBI. As a result, the CBI predicts annual UK GDP growth of 2.5% in 2011, following 1.2% in 2010. However, despite two years of economic expansion, UK GDP will still not have returned to its pre-recession level by the end of 2011, which illustrates the depth of the recession and the weakness of the economic recovery. John Cridland, CBI deputy director-general, said: "The outlook is brightening as the global economy finds its feet, although we will need to keep our nerve during early 2010, and there is no sign of a clear driver of strong economic growth. In the spring many staff will face another cycle of wage freezes, and job losses will continue rising until the autumn. "Although the first few months of 2010 will be difficult, growth will gradually pick up and increasing confidence and demand will lead the UK into a more positive 2011. Consumer spending looks to be slightly more resilient than we first thought, and a weaker pound will help to support export growth. "However, the economy will be on a fragile path of very slow growth, as we continue to feel the lasting effects of the financial crisis. And it remains vital that government sets out clearer plans to address the fiscal deficit at its next opportunity in order to help shore up future UK economic prospects." 2009-12-21 http://www.londonmortgageadvice.co.uk/news/article/416 A number of homeowners have requested a temporary move to interest only mortgage arrangements although there appears to be resistance within the UK mortgage industry to allow this particular strategy at the moment. Over the last few days there have been stories in the press regarding couples who are finding it difficult to keep up with their mortgage repayments, with many on capital and interest repayment deals. So should mortgage companies help troubled homeowners? You would be mistaken for assuming that the UK government is putting pressure on mortgage lenders to assist UK homeowners who are experiencing financial difficulties at the moment, if you have read the financial press over the last six months . However, in reality a number of major mortgage lenders in the UK are refusing to even consider short-term changes to mortgage deals even though they could in many cases save homes from repossession. Under the surface there is a feeling that more and more mortgage lenders are pulling up the ladder and unwilling to compromise in many areas, while the official line in the mortgage industry at least be one of assistance and consideration. Whether the UK government can step in and place more pressure on the sector, with any success, is debatable but one thing is for sure, despite many people believing the worst is over in the UK property sector there are still problems aplenty for many. 2009-12-17 http://www.londonmortgageadvice.co.uk/news/article/415 Will proces continue to rise? A run of positive data on the housing market during the past few months, with a number of key house price indexes showing price rises and mortgage lending also picking up has been prevalent. However in a special report on the housing market, the Ernst & Young Item Club predicts that prices are likely to drop again in the first half of next year. They forecast the dip would be followed by two years of stagnation before picking up again only gradually as the wider economy strengthens and credit conditions ease.Hetal Mehta, senior economic adviser to the Item Club, said the thinktank "believes the current stabilisation in the housing market is a false dawn".Price rises largely reflect the acute shortage of available properties, with many homeowners either trapped in negative equity or reluctant to sell for fear of locking in the losses of the past two years."A small number of cash-rich buyers have supported prices but the supply of these funds is limited, which means prices are likely to dip again in the first half of next year.It would be difficult to make a case for a sustained pick-up in prices without a recovery in mortgage lending, which still appears to be some way off.Banks are continuing to restrict the amount of money that they are willing to lend, with them looking to strengthen, rather than expand, their balance sheets," she said. Tough lending criteria and the scarcity of mortgage supply is making it particularly difficult for first-time buyers to enter the market.Given that they typically buy cheaper properties, that will have significant implications for homeowners looking to trade up, limiting the number of transactions taking place.With prices and the volume of transactions closely correlated, the dearth of first-time buyers will curb the usual chain of events, where rising prices provide homeowners with the equity to trade up, which itself pushes up prices, according to the report. 2009-12-15 http://www.londonmortgageadvice.co.uk/news/article/413 According to new data released by the Council of Mortgage Lenders, the number of loans for house purchase in the UK reached 55,000 in October, its highest level since December 2007 The amount of buyers has risen from a trough in January 2009 when only 23,000 loans were advanced. It is now up 140% from that low point. On the other hand loans for remortgaging which have stayed static for two months at 33,000. Apart from a total of 30,000 in August 2009, remortgaging is at its lowest level since this run of data began in 2002. Tracker mortgages, however, are on the rise with 21% of all new loans being trackers, compared to July's low of 12%.Fixed mortgages are continuing their downward trend from a high in July, when 80% of all new loans taken out were fixed. In October, this had decreased by 14% to 66%. Mortgage holders are turning to trackers mainly because they now have greater expectation that interest rates will stay at, or near, their current low for a while to come. That, coupled with lenders pricing their trackers at lower rates than their fixes, makes trackers very appealing to those able to meet the criteria necessary to take advantage of them. "We are still in a two-speed mortgage market. It appears that low interest rates for those with substantial deposits, coupled with this year’s sustained increases in house prices, are encouraging more people to buy or move home, said CML director general Michael Coogan. "But the same low interest rates that are driving house purchase activity provide little incentive for borrowers to refinance their loans. This, coupled with ongoing tightness in lending criteria, continues to hold back the remortgage market." "With the number of loans for house purchase up nearly 10% on October and over a third compared to the year before, the lending market has taken another big step along the road of recovery. "We’ve seen the impact of gradual improvement in confidence in the housing market as the year has gone on – loans for house purchase are over double their January levels. Lenders just need to keep offering more affordable products to first-time buyers and property investors to keep up the progress into the New Year.First-time buyers are finally starting to get hold of the mortgage finance they need to get on the property ladder – a third more have secured loans than this time last year.That’s great news for them, but it’s also great news for anyone looking for a room or flat to rent – anyone who doesn’t want, or can’t afford, to take the plunge and buy property yet. With fewer potential tenants trying to rent properties, there will be less competition for the best accommodation as buyers move out of the private rented sector. This should make it much easier for people to barter down rents when they’re negotiating with letting agents." 2009-12-11 http://www.londonmortgageadvice.co.uk/news/article/412 This is the view of the Director of AMI Mr Robert Sinclair: "Government intervention has resulted in a consolidated mortgage market, with six groups responsible for around 90% of mortgages written. This artificial restriction on competition has meant lenders have kept new product costs high and some groups of consumers have been punished. It is essential that the Pre-Budget Report sets out plans to address these issues. This should include the easing of capital and regulatory requirements for Building Societies and non-banking institutions to encourage them to re-enter the market place. "Reform of the current Stamp Duty regime is an urgent requirement. The slab structure distorts the housing market with properties just above thresholds paying a significant amount of duty above that of properties just below them in value. Stamp Duty also places a disproportionate burden on first time buyers. Many are unable to extend their borrowing to cover the additional cost of stamp duty. The current holiday on the duty should be extended until the market has recovered. By helping more first time buyers onto the property ladder this extension can serve to revitalise the market. "In order to help more first time buyers into the market, the Government should increase incentives around shared ownership schemes. Tax incentives for housing associations and builders to enable them to concentrate on more shared ownership developments should be introduced. "The FSA's recent Mortgage Market Review (MMR) has severely underestimated the ability of the vast majority of people to make responsible decisions for themselves. Lending must be responsible, but consumers benefit from and appreciate lenders and intermediaries that treat them as adults. "There is a real danger that FSA will create a regime in which consumers feel they need to take no responsibility for their own financial decisions and consider borrowing to be risk free. The Government should re-examine the MMR proposals which concentrate on the 5% of the market who exhibit less favourable characteristics." 2009-12-10 http://www.londonmortgageadvice.co.uk/news/article/411 This year has seen a big rise in people making overpayments on their mortgage and it’s a trend that is likely to continue into 2010, with interest rates having been at an all-time low for most of 2009, One bank has just revealed a 56% year on year increase in the number of its customers making mortgage overpayments. The research coincided with a new pilot scheme that allows borrowers to make capital repayments of up to 50% of their mortgage without penalty. It’s an interesting step and it’s good to see a lender highlighting the benefits to its customers of making overpayments. Overpaying is a good option for some of that spare cash if you’re on a variable mortgage and have seen your monthly payments shrink over the last year or so. By paying your mortgage off quicker, you can save yourself a considerable amount of interest over the life of your loan. If unable to get a decent new deal due to lower house prices, then overpaying can help further as it allows you to reduce the amount you owe and therefore increase the amount of equity in your property. Check how much your lender will allow you to overpay without incurring a penalty. Typically, lenders will allow you to overpay up to 10% of your mortgage balance, but some are more generous – and if you’re paying your lender’s Standard Variable Rate, there’s a good chance that there’s no restriction on how much you can overpay. 2009-12-09 http://www.londonmortgageadvice.co.uk/news/article/410 Stamp tuty should be extended. And this view is also put forward by a of Labour backbenchers who have tabled an Early Day Motion for the extension of the Stamp Duty holiday beyond December 31 2009. The threshold at which Stamp Duty is charged is due to revert to its previous threshold of £125,000 on Jan 1st 2010 after this was changed last September when, properties costing less than £175,000 were made exempt from the tax. It is recognised that the current exemption has helped stimulate the housing market which has witnessed rising prices for the past seven months. And it should be noted the need to continue helping families and individuals to buy property in the current economic climate. The government should extend the Stamp Duty exemption in order to stimulate the housing market further and to help the economy grow in 2010. As the housing market is on the road to recovery it is an important aid to housing revcovery. In particular the return of first time buyers. If the Stamp Duty exemption is not extended at this fragile point of recovery, it is feared that months of work will instantly unravel causing a great deal of damage to the market. 2009-12-07 http://www.londonmortgageadvice.co.uk/news/article/409 According to Scottish Provident, one of the UK's leading protection providers, the British love affair with property ownership could be waning. Only 51% of Britons (around 24 million*) think owning their own home is critical/very important for a reasonable standard of living, a figure which appears to sharply contrast the property boom of the past 15-20 years. This is a decrease of 9 percentage points since the last time the "High Wire" report was commissioned in 2003, when 60% saw owning their home as critical/very important to having a reasonable standard of living. Perhaps reflecting the other demands they now have on their finances, such as supporting children and parents, it is those aged 55-64whose attitudes have changed the most. Forty four percent see owning their own home as very important for a reasonable standard of living, a drop of 17 percentage points from 2003 when the figure stood at nearly two thirds (61%). The independent research study, which was undertaken by market research specialists Ipsos MORI to investigate the changing lifestyles and attitudes of the UK population, also revealed how the recession has helped people re-evaluate the importance of saving up for the future. Despite record-low interest rate figures over half (60%) of respondents see it as critical/very important to have savings for a reasonable standard of living. The cumulative effect of large rises in the cost of properties together with people's fears of taking out huge loans during a recession has meant that many are put off making large purchases such as buying property. For most, entering the housing market will naturally mean taking on substantial debt, and the "High Wire" report appears to show that people would rather ensure they have financial stability for the future, as opposed to entering into large levels of repayments. Indeed, when planning a purchase of more than £1,000, over 30 million** (64%) of respondents will tend to save up to buy, rather than take out finance or credit, a rise of 6 percentage points from 2003. This is especially true of the 16-24 year olds, where 65 per cent would try to save up themselves rather than take out finance or credit. With the cost of a mortgage significantly reining in the spending power of homeowners, just 8% of them see going out on a Friday or Saturday night as critical/very important to a reasonable standard of living. Susan Barclay, Head of Marketing at Scottish Provident, said: "These findings underline how there is far less desire to get on the property ladder then there once was. With many thousands of people unable to afford what are still high house prices, despite the recession, they are instead seemingly looking to save their hard-earned money to safeguard their or their children's futures." *According to ONS - there are 47.2 million people in Britain aged 16+. Of these, 51% (24,072,000) believe that owning their own home is critical/very important for a reasonable standard of living. ** and 64% (30,208,000) will save up to buy, rather than take out finance or credit, when planning a purchase of £1,000 or more. 2009-12-04 http://www.londonmortgageadvice.co.uk/news/article/408 A Monthly Product Analysis from Mortgage Brain shows the total number of live mortgage schemes listed on its sourcing system jumped four per cent in the past month to 3,337 mortgage products, up from 3,222 a month ago. This mortgage analysis survey shows the number of mortgage products on offer to brokers has risen again for the fifth month in a row. 16 per cent more mortgages available compared to this time six months ago continuing the increase in product availability over the past five months. Fixed rate products held steady during November seeing a marginal rise of nine products to bring the total number of live Fixed rate products to 2,052.The number of tracker mortgages has risen 15 per cent in the last month, with providers bringing out more base rate trackers than any other type of mortgage, with 942 live on Brain’s sourcing system. In addition variable rate products continue their downward slide, however, dropping for the third month in a row to stand at 343 – down six per cent from November. Fixed rate products held steady during November seeing a marginal rise of nine products to bring the total number of live Fixed rate products to 2,052.“Total mortgage schemes are at their highest for 11 months, which considering the turbulent year we’ve had is fantastic news and a great way to draw in the end of 2009. “Total mortgage schemes are at their highest for 11 months, which considering the turbulent year we’ve had is fantastic news and a great way to draw in the end of 2009. “Everyone in the mortgage industry is well aware that there is still a long way to go on the road to recovery go but it’s nice to finish the year on a high and it will be even better if 2010 starts in the same way,” Mark Lofthouse, CEO of Mortgage Brain, said. 2009-12-03 http://www.londonmortgageadvice.co.uk/news/article/407 Using a mortgage adviser takes away the strain from the mortgage process. An adviser will know immediately if you are suitable or not for these best buy rates. He or she will save you time and money by searching the market for the top products you are suitable for, rather than you having to go to each lender individually. An adviser will also be able to do the sums for you – many products come with booking or administration fees which will add to the cost of the overall mortgage. Headline rates are just that and you will need an adviser to look at the overall financials to see if the mortgage does in fact make sense. Of course, an added benefit is that some mortgage advisers supply their services for free so you will not even have to pay for the advice you receive. Plus, of course, mortgage advisers are fully regulated and have to be fully-qualified meaning you will gain all the protection you would expect from a business authorised by the Financial Services Authority. There is nothing stopping you from being prepared and carrying out plenty of research into the mortgages that are currently available. However, only by using a fully-qualified mortgage adviser will you have peace of mind that all bases have been covered and that you have a specialist working on your behalf and in your best interest. Nobody wants to be left with a mortgage which was not the most suitable or competitive so using a professional will take away all the hassle of what is often the biggest financial decision you are likely to make in your lifetime. 2009-12-02 http://www.londonmortgageadvice.co.uk/news/article/406 The Nationwide Building Society said Tuesday that house prices rose for a seventh consecutive month in November, but they remain at levels last seen in early 2006 and the pace of the recovery has eased Following a revised 0.5% increase in October, the price of a typical home rose 0.5% on a seasonally adjusted basis to £162,764 ($267,779) in November, but those gains were smaller than in previous months. Martin Gahbauer, Nationwide's chief economist., said "This suggests that house prices are now rising at a more moderate pace than in the spring and summer months, when they experienced a very strong bounce from the early 2009 lows." But Nationwide said the average house price was still at a similar level to where it was in early 2006.The monthly gain means house prices are 2.7% higher than they were in November last year, the strongest annual gain since February 2008. But the market still has a long way to recover after being throttled by the global credit crisis and ensuing recession. Sales remain weak.House prices have been squeezed higher since the second quarter by a combination of pent-up demand and a shortage of property for sale on the market. Low interest rates have also helped support the market. Nationwide said the better-than-expected performance of the U.K. labour market had probably contributed to the surprise rebound in house prices this year, helping to limit the rise in repossessions and distressed sales. "Based on the latest labour market figures from September, it now looks unlikely that the jobless total will reach three million before the year is up," said Martin Gahbauer. 2009-12-01 http://www.londonmortgageadvice.co.uk/news/article/405 There are signs of a house price recovery so buy-to-let landlords are feeling their way back into the action in the property market for the first time in two years. After a period of near-hibernation for landlords, who were hit particularly hard by the mortgage drought, The Council of Mortgage Lenders (CML) reported yesterday that buy-to-let lending rose by 10 per cent in the three months to September, compared with the previous three months. The industry body believes the number of property transactions will reach 810,000 this year and 850,000 in 2010. It revised its expectation of the value of net lending this year from -£5 billion to £8 billion after a quicker than expected recovery. The CML said that buy-to-let demand for new purchases was “appreciably stronger” than for remortgages, amid continuing lending constraints that force landlords to stay on their existing deals. The number of buy-to-let loans granted rose from 21,600 in the second quarter to 23,700 in the three months to September.The Royal Institution of Chartered Surveyors last month reported an increase in the proportion of purchasers who are buy-to-let landlords, with 2 per cent more estate agents reporting a rise rather than a fall in investors hunting for property in the three months to September. 2009-11-30 http://www.londonmortgageadvice.co.uk/news/article/404 The process of re-mortgaging deals with paying off an existing mortgage and changing to a different lender that who is offering a more competitive rate or better terms. This should therefore provide a better deal to the borrower. However, it has become harder for borrowers because over the past two years, property prices have stopped rising and started falling, mortgage finance has dried up, and higher loan to value mortgages have gone. Now,lenders are asking for deposits of 25-30% to secure the best deals. And lenders are being extremely picky about which borrowers they will lend to. It is important to check your credit score and if it is poor then you need to start taking steps to improve it Your credit report is a crucial part of the lenders' decision-making processes, and poor credit scores are the biggest cause of rejected applications. No one is safe and an agreement in principle before a full application is made is sensible. Any missed missed payment on your credit cards or unsecured personal loans, then this will have left a footprint on your credit history, which will be picked up by lenders. However there are plenty of homeowners who have owned their properties for a number of years, and therefore despite the price drops in the past 12-18 months, are still likely to have built up a significant amount of equity in their homes. These are the ones who are in a great position to re-mortgage and take advantage of some very attractive fixed and tracker deals out there at the moment. With interest rates so low, a borrower may actually find that their lender's SVR is cheaper than the rate they are currently on. However, interest rates are bound to go up and when thy do you may not be able to get such a good fixed rate at that time. There lies the dilemma for all those in this position right now. 2009-11-27 http://www.londonmortgageadvice.co.uk/news/article/403 According to new proposals published by the Treasury today, the Government is proposing the expansion of the FSA's remit to include the regulation of buy-to-let and second-charge mortgages, The consultation document also includes possible legislation to protect borrowers whose mortgages are sold onto third parties. "Since the onset of the global financial crisis, the Government has worked hard to ensure mortgage borrowers are treated fairly by their banks. Our focus has been to do all we can to make sure people can stay in their homes and to limit repossessions as much as possible," said Exchequer secretary Sarah McCarthy-Fry. “But we are aware that this crisis has raised issues around the world about the regulation of the mortgage market. We are determined to reform the system for the future, to offer both stronger protection for consumers and greater stability in the housing market.” Along with a series of proposals to reform and strengthen financial regulation, and protect and support consumers, the consultation sets out the details of the proposed legislation and will close on 15 February 2010 and any final measures will be implemented through secondary legislation. It builds on announcements made in Reforming financial markets, which was published by HM Treasury in July of this year and set out the Government’s analysis of the causes of the financial crisis. These proposals will put in place by way of the Financial Services Bill that is currently being debated in Parliament. 2009-11-26 http://www.londonmortgageadvice.co.uk/news/article/402 40% of homeowners don't understand the basic idea of an offset mortgage research by First Direct has revealed. And what is more a further 35% only roughly know how they work. What this shows is that people are missing out on saving money and reducing the term of their mortgage with just two in 10 seeing offsets as a way they can save money on their mortgage. Changing to an offset mortgage could cut down the length of a £100,000, 25-year mortgage by four years and save £24,232 in interest payments over the lifetime of the mortgage. It is a concern that buyers are not aware of the benefits of an offset mortgage, so below is a reminder of how they work and the money they can save.If you own a home and have some savings, then an offset mortgage could make your savings work for you - and save you money into the bargain. An offset mortgage is one of a new kind of mortgage that offers flexibility to homeowners. Offset mortgages work by allowing you to offset your credit balances on some accounts against the debt balances on others. For example, if you have an outstanding mortgage loan of £100,000 and you have £10,000 in savings, offset mortgage providers will allow you to pay interest only on the total amount of debt. This means that you will pay interest on £90,000 instead of on the full amount as with a standard mortgage. Over the course of time, this can save you a great deal of money in interest payments.The same principle applies to credit card balances and current accounts. As part of an offset mortgage, with some lenders you can offset the credit balance in your current account against the debt balance on your credit card and pay interest only on the total amount of debt you owe. What is more, you can repay the interest at the lower mortgage interest rate rather then the standard annual percentage rate (APR) of the credit card. An offset mortgage is quite similar to a current account mortgage, which also allows you to roll all your debts up and offset any credit you have against them. However, there is one important difference. With a current account mortgage, your mortgage, credit cards and other debts are all part of your current account, effectively giving you a very large overdraft. In contrast, an offset mortgage allows you to keep all the accounts separate, while still retaining the offset benefits.Offset mortgage accounts are also similar to flexible mortgages. Many offset mortgage offers allow you to repay lump sums without penalty and to take payment holidays if you have overpaid within a particular period. Remember however underpayments and payment holidays could increase the mortgage term and/or the total amount payable.The price for all this flexibility comes in the offset mortgage rates, which are typically higher than those for standard mortgages. Rates are usually variable and fluctuate along with the Bank of England's base rate. However, it is worth doing your sums to see if this type of mortgage offer may be right for you. Offset mortgage holders who make the most of the offset account features usually repay their mortgages earlier than other mortgage holders by as much as Eight years and Eight Months** and also pay less in interest.Offset mortgage offers work best for people who are able to save. If your savings are small or intermittent, you may not be able to make the most of your offset mortgage deal, as the key is to use the flexibility to repay as much as possible and to pay as little interest as possible. People who get lump sums such as bonuses or dividends may also find that the flexible repayment scheme negates any higher offset mortgage rates.An offset scheme may also suit self-employed people, who may receive money intermittently and may benefit from the chance to repay less at some times and more at others. If you fit any of these profiles, consider an offset mortgage and keep your money in your pocket instead of the bank's. 2009-11-25 http://www.londonmortgageadvice.co.uk/news/article/401 It is going to be more difficult for self-employed borrowers to secure a mortgage after the last big lender of self-certification home loans pulled out of the market. Plans by the Financial Services Authority to ban the controversial deals were blamed by Platform Home Loans for its decision to pull out of the market.These loans were designed for self-employed borrowers with an irregular salary who found it hard to prove their income. However, at the height of the housing boom, they were dubbed “liars’ loans” as fears spread that regular borrowers in full-time employment were using the deals to inflate their income and boost the amount they could borrow. In 2007, half of all deals were approved without a check on the borrower’s income. If you can prove your income however, there should be no problem to get a mortgage from a mainstream lender. Self-employed homebuyers and those looking to remortgage can apply for mainstream mortgage deals, but the rules about proving income are more restrictive than for conventional borrowers.Lenders typically require accounts going back a number of years. People working in partnerships or unincorporated businesses may be asked to submit evidence of profits and turnover for the past three years. This is usually available in annual financial statements produced by an accountant or in information provided on a tax return. Many want 3 years accounts but not all lenders insist on three years’ accounts. Some will take just 1 years acclunts with proof of future earnings via long term contracts,for instance. It is often a mistake to depress profits to avaoid tax and it could affect the amount you can borrow. 2009-11-24 http://www.londonmortgageadvice.co.uk/news/article/400 On average,Standard Rate Mortgage Deals are now charging 4.7%, a reduction of just 0.98% in twelve months compared to a 2.5% fall in Bank Base Rate over the same period. What this means is that some lenders have increased their profit margins on SVR deals by not passing on the full Base Rate cuts or subsequently increasing their rates. Borrowers must consider that lenders are free to price their SVR as they please, and therefore an SVR deal might not be the best way to get the most benefit from the low Base Rate environment. It might be time therefore to look at remortgaging onto some attractive fixed rates. If you have built up at least 20% equity in their home, it is likely that you will be able to find a better rate on a two or three year three-year fixed deal, at which point the only real drawback from fixing is the arrangement fee, which can be anything up to £1000. If you do not have as much equity then you are in a more difficult position. Talk to a mortgage broker for the best all round advice. 2009-11-23 http://www.londonmortgageadvice.co.uk/news/article/399 Cheltenham & Gloucester, part of the mammoth Lloyds Banking Group, has cut the cost of a range of mortgage deals and introduced a ‘best buy' product, while Abbey has also launched a market-leading deal as we witness further evidence that the mortgage freeze is starting to thaw, a little. Available through mortgage intermediaries they have both been reduced by up to 0.5% on the interest rates charged on C&G’s two-year fixed rate mortgage and its tracker deal Coming with a fee of £995, C&G has also launched a two-year tracker mortgage, which charges 2.29% above the Bank Base Rate. Currently priced at 2.79%, although it is only available for borrowers with a 40% deposit and a good credit record. Available to people with only a 10% deposit, a welcome move for first-time buyers, C&G also introduced a two-year tracker priced at 5.99% and reduced the cost of a two-year fixed rate to 6.99%.At the same time Abbey launched a two-year fixed rate deal priced at 3.69% available up to 70% loan to value with a fee of 3.69%, the lowest fix on offer for those with 30% deposit. Northern Rock and Nationwide Building Society are among a number of other mortgage lenders that have reduced the interest rates charged on some of their products this month. It shows that competition beginning to creep back in to the UK mortgage market. 2009-11-20 http://www.londonmortgageadvice.co.uk/news/article/398 The take up of fixed rates has been steadily falling and been overtaken by trackers that track the Bank of England Base Rate These are currently proving by far the most popular with borrowers. According to the monthly mortgage index issued by mortgage brokerage John Charcol, About 75% of people are going for base rate tracker indicating that homebuyers believe that interest rates are unlikely to rise substantially in the foreseeable future. Where fixed rate dominated the market during the middle of the years so they have now fallen back to just 25% approximately of the mortgages being bought. There has been a fast change in mortgage pricing over the last few months and this has resulted in trackers being much more competitive than their fixed rate counterparts. With the outlook for interest rates little changed over the last month an even higher proportion of borrowers chose a variable rate mortgage, in most cases a tracker. With fixed rates stuck on such a high level there and with the climate for interest rates to be seemingly stable at a low comparative level there is no reason to look to fixed rates for the next year or so. It is hoped that lenders will introduce more high loan to value mortgage soon so that the mortgage market can be moved on to better things. 2009-11-18 http://www.londonmortgageadvice.co.uk/news/article/397 Trading conditions have improved as homebuyers are returning to the housing market reports Barrats, one of the country's largest housebuilders. Barratt inform us that the number of private reservations per site of land it holds had risen by a third as optimism about the recovery of the property market maintained its levels throughout the second half of the year. "While trading conditions in the housing market have improved, activity levels will remain constrained until the availability of mortgage finance increases, particularly at higher loan to value levels." Chief executive, Mark Clare, said. He continued saying that the market had 'improved' in the three months to November and overall prices had risen, but he warned that the ongoing drought of mortgage products continued to pose a threat to the recovery of the sector. Rival housebuilder Persimmon yesterday reported a healthy order book and reduced debt levels. Mike Farley, Persimmon chief executive, said interest from first-time buyers had improved, with 18% of sales across the group now being to those just getting onto the property ladder, compared to 10% in 2008. Their focus towards building houses rather than apartments has also helped them as they had seen more people wanting to live in family homes. But there was concern about the potential impact of rising unemployment and the potential impact of the upcoming general election, leading to uncertainty which could discourage people from investing in the property market. 2009-11-17 http://www.londonmortgageadvice.co.uk/news/article/396 As increased regulation and the battle for savers' deposits forces up costs for lenders so mortgage costs are likely to increase' The new and more onerous rules regarding the amount of capital building societies need to set aside against new lending will be costly and could damage the mortgage industry. In trying to compete against state-owned banks like Northen Rock and RBS, which can afford to offer high rates to savers because they have been bailed out to the tune of billions of pounds by the taxpayer building societies are having to fight hard to get people to increase their savings. The reaseon why this is important is that Building Societies rely heavily on saver’s deposits to fund their mortgage lending. They suffer unfair competition. For instance, National Savings & Investments, the Treasury-owned savings provider, is offering competitive returns on its savings accounts such as their newly launched market-leading interest rate of 3.95 per cent for a one-year fixed-rate bond. There is fierce competition for our savings that the rates offered are really uneconomic. It is inevitable that interest rt5es will be forced up to balance the books. In addition to this The Financial Services Authority’s new rules on the amount of capital lenders must set aside to act as a buffer to guard against future downturns in the economy will also bring more pressure to bear on the cost of mortgages, he warned. 2009-11-16 http://www.londonmortgageadvice.co.uk/news/article/395 Figures released by the Council of Mortgage Lenders (CML) reveal that gross buy-to-let lending for the quarter reached £2.1bn, a 10% increase on the previous quarter and so we can say that the buy-to-let mortgage market sector grew in the third quarter of 2009 for the first time in two years. The number of total buy-to-let mortgages outstanding increased to 1.2m, with the combined value of those loans rising by 2.5% to £144.2bn. That represents 11% of all mortgages. The number of buy-to-let mortgages advanced also rose for the first time in two years, from 21,600 to 23,700. The upswing was however from a very low base. Most existing buy-to-let investors are not remortgaging to a new deal at the end of their current arrangement, as the standard variable rate (SVR) they revert to with their existing lender is in most cases lower than the new buy-to-let rates available on the market. What’s more, there were no buy-to-let deals available over 80% loan to value in quarter three, so any borrower with less than 20% equity in their property had no option of remortgaging in any case. Buy-to-let new lending and remortgaging both grew in quarter three, but new lending dominated as with the mainstream market. In the last three months, the number of buy-to-let mortgages in arrears to the tune of more than 1.5% of the balance of the loan has fallen from 22,900 to 20,500, representing 1.7% of outstanding buy-to-let mortgages. Continued low interest rates are helping to improve the level of arrears on buy-to-let mortgages and the number of landlords facing enforcement action has fallen. "At this stage, the recovery is modest - but the figures show that buy-to-let is here to stay. Buy-to-let lenders are among those facing some of the biggest challenges in raising mortgage funding, so the improved figures are all the more welcome. CML director general Michael Coogan said. And continued,"Future demand for housing in all tenures supported by lenders will remain strong, despite mortgage funding constraints and low construction rates. With funding for social housing under pressure, the private rented sector has a strong future. Mortgage lenders will have an important role to play in it, and will continue to help improve choice and standards for private tenants." 2009-11-13 http://www.londonmortgageadvice.co.uk/news/article/394 As it continues to be difficult for first time buyers to get mortgage finance, the increased levels of activity recorded in the housing market in recent months are shown to be down to existing property owners moving home, rather than first-time buyers coming back to the market. Increasing optimism about the residential property sector is being reflected in a greater number of valuations for people moving home. This is mainly due to movers not first-timers,who in the main have been precluded through a lack of available mortgage finance. Transactions were up 26% in October 2009 compared with the previous year, and up 13% in the 3 month period. Ross Bowen, Managing Director for Connells Survey & Valuation said: “This upswing in the number of valuations for homeowners is further evidence of the gradually strengthening housing market. Sellers who have been sitting out the recent economic woes have seen double digit house price rises since the spring, are putting their homes on the market and are moving on. "The low level of activity over the past couple of years has created a lot of pent-up demand and people want to move - and established homeowners typically have more equity and are better placed to buy.We are seeing more positive sentiment in the housing market, but lending conditions are still proving very challenging particularly for first-time buyers. After recent corrections many people see this as a good window of opportunity to get a foot on the property ladder - and stop paying rent. But often they need to find a deposit of £30,000 which is out of reach for nine out of ten of them.Home ownership remains the goal of many people in their twenties and thirties, despite underlying concerns over how unemployment will play out in the economy over the next few years. The sooner we can get more lenders in the 90% LTV space on a consistent basis, without overly punitive criteria, the sooner we will see firmer footings in the housing market.” 2009-11-12 http://www.londonmortgageadvice.co.uk/news/article/393 There are signs that the UK mortgage market is beginning to stir with former sub-prime lender GE Money set to return to the market this week offering prime mortgage products. GE Money, having withdrawn from the market last year, will offer a one-year discount deal charged at 4.99% with a £995 fee, up to a maximum of 70% loan to value; a two-year fixed rate deal at 5.59% and a three-year fix at 6.04% with fees up to £1,995. Another is Tuita, known primarily for bridging loans, is also expected to announce plans to introduce new mortgage deals this week atthe annual Mortgage Expo in London. It has to be a welcome sight, lenders coming back in to the market as this can only put more pressure on the high street banks to lower rates. In other quarters there are signs that the great mortgage freeze is starting to thaw, albeit slowly. Northern Rock, which is to be split into a ‘good’ bank and a ‘bad’ bank as soon as possible, has revealed that its good bank will lend £9bn in mortgages next year. And then Woolwich have announced a new range of deals available at up to 75% loan to value for the first time in a year. The range includes two-year fixed rates at 3.99% and 4.09% and a lifetime tracker at 2.94% (Bank base rate + 2.44%) and 3.34% (Bank base rate +2.84%). In addition, the 70% loan to value tracker is being reduced from 2.79% to 2.77%. This is the fifth time they have lowered rates since the beginning of September and there appears to be a trend in the market for lower rates and more competition. 2009-11-11 http://www.londonmortgageadvice.co.uk/news/article/392 Thanks to the credit crisis and its knock-on effect on the UK housing market, 2.5m homeowners are remaining longer than planned living in their current homes Millions of property owners have put their plans to move on ice due to economic uncertainty and worries about their finances, according to research from advice website Unbiased.co.uk. 25% of those are trapped because they can’t achieve the asking price they want or need in order to move. That figure increases to one in three (37%) over 55s stuck in their existing home as a drop in property prices has meant they can’t get the price they want for it. Over 20% people stuck in their current home for longer than they had intended say they can’t afford the mortgage repayments on their next home, with 25% of 35 to 54 year olds claiming they can’t afford the next mortgage. And, 14% of all homeowners can’t afford the deposit required to buy their next home, with that figure rising to 23% of those between 18 and 24. “The recent property market volatility has had major implications on homeowners’ plans to move up the property ladder. Many have relied on their home either as an investment for the future or to help them to move onto the next rung of the housing ladder, says Karen Barrett, Chief Executive of Unbiased. "However, millions have now realised that their plans have been put on hold by the current state of the property market, and they now have to remain in their current house for longer than they had originally planned. “Being able to access an affordable mortgage for your next property is a vital part of the house buying process. With stricter lending criteria and larger deposits needed in the current environment homebuyers should ensure they seek professional advice when it comes to financing their property."It is important that those looking to move get the best advice possible, and only a whole of market mortgage adviser has access to the full range of deals on the market and can offer impartial advice on the best option for you. 2009-11-10 http://www.londonmortgageadvice.co.uk/news/article/391 For each available property in the month of October, an average of five house hunters were registered on estate agent's books. According to data from the National Association of Estate Agents (NAEA), this good level of interest failed to convert to sales, with agents selling an average of 7.7 properties each, compared to 8.5 in September. The actual number of homebuyers also went down to 287, falling from 294 in September. But according to data from the National Association of Estate Agents (NAEA), that figure is considerably more promising than the 196 househunters registered in the same month last year. Estate agents reported that the average number of properties available for sale per branch dropped from 62 in September to 57 in October.However, The NAEA attributes the apparent rise in demand per property to a fall in the number of homes for sale. Halifax reported this week that average property values rose 1.2% last month, boosting the average cost of a home to £165,500. And it is the lack of supply that has underpinned the house price increases we have witnessed since the summer. “There is strong demand for property and more optimism in the housing market than we have seen for months. This is good news for the recovery of the market and for the British economy in general.” Gary Smith, president of the NAEA. First-time buyers accounted for 22% of sales agreed during October, which is down from 26% the previous month, but more than double the 10% reported in October last year. The lack of property available means thats that even those who can obtain the necessary finance may not find a suitable property to buy. Homes for families are especially in short supply and prices are being sustained because of the demand for each property that comes onto the market. Until more properties become available and finance is more readily accessible to those with small deposits, the number of transactions will remain poor 2009-11-06 http://www.londonmortgageadvice.co.uk/news/article/390 Twenty per cent approximately, that is up to 19 lenders currently charge non-refundable booking fees on some of their mortgage products ranging from £100 to as much as £999. To cover their costs in processing applications and booking preferential rates -lenders are increasingly imposing non-refundable fees and if borrowers go through to complete the application they are not affected. If they reserve a product for a customer lenders will argue that they face costs in processing applications and that is alright in itself. However if customers are turned down for a mortgage or are forced to pull out of a deal it will be an extremely unpleasant surprise to find that not getting the mortgage you wanted is going to cost you a lot of money. The way to deal with this is to add the fee to the mortgage when applying and once you are certain that the mortgage will go thriough you can then arrange to pay the fee upfront if you wish or indeed leave it added to the loan. Using a mortgage broker will usually solve these problems 2009-11-03 http://www.londonmortgageadvice.co.uk/news/article/389 Over the next two years., house prices could fall 15% say some economists. They are predicting further substantial falls in average UK house prices. Some say that property prices will slump by 10% next year and 5% in 2001, thanks to a combination of increasing unemployment and its attendant problems, combined with a continued mortgage drought. Next year the Government will have no choice but to cut public sector spending, resulting in mass job cuts for civil servants. The current recovery in the housing market, with house prices indices show increasing prices for five successive months, is not sustainable as whichever party is in government Recovery will be slow and therefore one should not expect a hasty recovery. And when we do get stronger growth this may well be accompanied by higher interest rates. That would only add to the pressure for lower house prices. Some economists think that house prices will bump along the bottom next year as lack of stock for sale is propping up house prices, combined with an influx of cash buyers from abroad taking advantage of the weak pound. For a sustainable recovery the UK economy needs world trade to pick up and there is still not much sign of that happening. 2009-10-30 http://www.londonmortgageadvice.co.uk/news/article/388 Under new plans published by the Financial Services Authority (FSA), all borrowers will face stricter scrutiny of their mortgage applications . Of the proposals the most central is a ban on self-certified mortgages, which do not require borrowers to prove their income. If these proposals had been in force previously, some of those who had been given home loans at the height of the housing boom would not have been able to obtain them And consequently this poses the question as to whether people borrowed much more than they could ever afford, and whether lenders were irresponsible in granting those loans. The FSA have stated that they believe that irresponsible borrowing has been just as much a part of the problem in the mortgage market as irresponsible behaviour by firms. So the FSA has made suggestions aimed at preventing people getting in the same mess again. Under the plan, lenders would have to verify every borrower's income. This could be a problem for some self-employed borrowers, who might have overstated their income. When it comes to remortgaging, the lender might no longer agree to lend to them, or the borrower might be left to pay the standard variable rate. Self-certified mortgages accounted for 49% of home loans being offered at the peak of the housing boom, but the market has dwindled as a result of the credit crunch. Only two lenders were offering these types of loans in August 2009. For salaried boorowers it is proposed to require all lenders to assess the level of a consumer's expenditure in determining the affordability of a mortgage product, to ensure that lending decisions are based on a consumer's free disposable income. Lenders will be obliged to check what the would-be borrower tells them about their spending habits; they will not be allowed to take everything they are told at face value. 2009-10-27 http://www.londonmortgageadvice.co.uk/news/article/387 According to Lloyds TSB, parents are using their savings to help offspring buy property. With housing affordability at its best level for six years, 70% of parents with children over the age of 18 believe now is the right time for their children to get on the housing ladder. On average, they have a total of £41,000 saved in order to provide financial assistance to all of their children,with one in four of these parents planning to use their savings to help their children buy their first home. In January 2009 there were 8,600 first-time buyers compared to 19,200 in August. In the second quarter of 2009, first-time buyers accounted for 38% of house purchases.After a rapid decline of first-time buyers during 2008, the number returning to the market is gradually beginning to increase. However, just 8% felt they already had a savings pot large enough to help each of their children although parents said they were keen to help their adult children take advantage of the current market conditions One in five said that, while they were willing to provide financial assistance, their children also had to contribute to the deposit themselves. But one in seven parents admitted they will need to keep on saving. The vast majority of parednt say that helping each of their children equally is very important to them, with 93% intending to provide the same financial assistance to all of their children. Of those who don’t intend to help their children equally, 60% said it was because their children earned different salaries while 24% said their other children didn’t need help because they were buying with partners. Stephen Noakes, commercial director of mortgages at Lloyds TSB, said: “The current housing market presents a real opportunity for first-time buyers, as long as they are ready to buy with a deposit. Housing affordability is back to the level it was in 2003, so many parents with grown-up children want to help them take advantage by using their savings." 2009-10-23 http://www.londonmortgageadvice.co.uk/news/article/386 According to a survey from online credit information provider Equifax, many homebuyers are having difficulty getting a good mortgage deal at first request. In September 2008, it surveyed its consumer customers about mortgage applications and found that 23% had difficulty obtaining a good deal on first application. Neil Munroe, External Affairs Director, Equifax said, "The impact of the current financial climate seems to be continuing to hit those looking for a good mortgage deal." "it does indicate that lenders are still being very selective about who they extend the best deals to but this probably isn’t a surprise to many in the home buying market. Unlike last year when "a quarter of respondents to our survey thought that they probably couldn’t get a good deal first time round, because of past defaults on their credit file this year 17% of respondents put their difficulties in getting a mortgage down to not having a large enough deposit, compared to just 9% saying the same in 2008. This shows just how important it now is to have a reasonable deposit before making an application." While just 19% of respondents made two to three applications last year before being successful, this rose to 30% in 2009, highlighting the difficulties consumers continue to face in meeting lenders more stringent credit acceptance criteria. Mr Munroe continued, "Our survey clearly shows that borrowers are finding it difficult to secure good mortgage deals, although they appear to be reaping the benefits of lower interest rates to manage their finances better generally.Whilst lenders remain cautious, it’s important that homebuyers or those coming to the end of their current mortgage deals do as much as possible to keep their credit status as positive as possible." 2009-10-22 http://www.londonmortgageadvice.co.uk/news/article/385 To ensure that it works better for consumers and is sustainable for all market participants,the Financial Services Authority (FSA) today sets out proposals for the major reforms required in the UK mortgage market Theirs is changed approach to a more intrusive and interventionist style of regulation. The mains features are as follow:- • Imposing affordability tests for all mortgages. The DP proposes making the lender ultimately responsible in every sale for verifying affordability. It also proposes that in each case a lender should assess the consumer's ability to repay, i.e. calculate the free disposable income a consumer has to pay for the mortgage. • Banning ‘self-cert' mortgages through required verification of borrowers' income. • Banning the sale of products which contain certain ‘toxic combinations' of characteristics that put borrowers at risk. The DP discusses whether a type of product regulation likely to be more effective in protecting consumers would be to prohibit loans to borrowers that exhibit certain multiple high-risk characteristics, such as prohibiting loans to credit-impaired borrowers that are also at high loan-to-income. • Banning arrears charges when a borrower is already repaying and ensuring firms do not profit from people in arrears. The FSA will publish specific proposals in January to toughen up rules on arrears handling as well as banning administration charges where a borrower is adhering to an arrangement to repay arrears; and prohibiting the charging of early redemption charges on arrears fees. • Requiring all mortgage advisers to be personally accountable to the FSA. DP proposes extending the Approved Persons regime to mortgage advisers who deal with consumers and to advisers and/or arrangers who are responsible for overseeing compliance • Calling for the FSA's scope to cover buy-to-let and all lending secured on a home. It is recognised that the mortgage market has seen extraordinary upheaval over the last 18 months and that a change in regulation is required now to address the issues that have been identified. They want to ensure that firms only lend to people who can afford to pay the money back. The discussion paper is out for discussion until 30 January 2010 and the FSA will be actively seeking views from consumer groups and industry. A feedback statement will be published in March. Implementation will be phased, with the focus on speed for areas of high detriment, such as arrears. 2009-10-21 http://www.londonmortgageadvice.co.uk/news/article/383 Cautious lenders could turn down more mortgage applications,when the mortgage market clampdown by the Financial Services Authority FSA) comes into force. Sellers could face even longer delays if lenders take fright after the FSA’s mortgage market review. With the proposed ban on self-certified mortgages and new tougher rules on affordability, this could mean lenders being held responsible for loans going wrong. Homes owners sho are trying to sell their homes are taking on average nearly seven months to sell their houses and part of that is due to the cautious attitude of mortgage lenders. Many of them are clamping down on perfectly creditworthy borrowers and the fear is that they will now over-react again. Whilst it is right to clean up the mortgage market to avoid the excesses of the recent past there is now a atmosphere of responsible lending and what we do not want is any further tightening of mortgage lending. 2009-10-20 http://www.londonmortgageadvice.co.uk/news/article/382 The Government should extend its Stamp Duty holiday beyond December 31, and also to increase the threshold where the tax becomes payable. As the Stamp Duty break had cost the Chancellor just £200m in the year since it has been introduced, it seems a small proice to pay for getting the economy moving by helping first time buyers. Although the Stamp Duty holiday has meant that properties up to £175,000 have been exempt would it not be a great idea to raise the threshold to £250,000. This would make maybe up to 60% of all properties currently on the market exempt from Stamp Duty. In this way the Stamp Duty holiday would further benefit many first-time buyers and and contribute to the upturn in the housing market. Extending the holiday beyond December 31 and making it applicable to all properties under £250,000 would provide an important impetus to the fragile housing market and a welcome shot in the arm for the economy. This would be a positive move by the Government who must have the courage of their convictions and stand by this initiative. The housing market recovery is still in its early stages and the removal of this tax relief now could negate any headway that has been made over the past few months. The time has come to reassess Britain’s most unpopular tax. 2009-10-16 http://www.londonmortgageadvice.co.uk/news/article/381 It may be the end of self cert mortgages as we await the pupblication of the FSA mortgage review. And it could be a good thing if self-certification mortgages are prohibited. These mortgages do not require the purchaser to prove income and were designed for self employed people mainly who found it difficult to show there true earnings or sometimes employed people on high commission based employment. Most lenders have now shelved them since the credit crunch. Self-certification mortgages were treated as higher risk loans, similar to sub-prime deals. There was a place for this kind of product in the lending market, but often it was offered to the wrong type of person or those who did not in fact earn the figures that were stated on the application form and so it is probably best that it is consigned to the past. It may be that self-certification mortgages are one of the products that prompted the mortgage crisis and so these mortgages have are best consigned to history. However, used properly these mortgages are a superb vehicle for the right person to obtain a mortgage. Unfortunately the credit crunch may prove to be the final period for this type of lending. 2009-10-15 http://www.londonmortgageadvice.co.uk/news/article/380 Figures from the Council of Mortgage Lenders (CML) showed today that the mortgage market is operating on two levels, with the number of loans for house purchases rising over the past 12 months while the number of remortgages slumped. The value of remortgages was down by 63% year-on-year at £3.6bn as the number of remortgages dropped to 32,000 during the month, 22% down on July's figure and 57% lower than in the same month last year. 29% higher than in August last year, the number of mortgages granted to homebuyers dropped slightly during the month, dipping 5% to 53,000. Despite having more than doubled since the start of the year, house purchase loans remained significantly lower than the August average of 100,000 seen in the seven years before the credit crunch, The value of loans for house purchases accounted for 58% of mortgage activity – the largest slice of the market since 2002. The number of remortgages has dropped off sharply as a result of low interest rates and tighter lending criteria. Sticking with the current lender when moving off a special offer rate has proved cheaper than shopping around for a short-term fixed- or discount-rate deal. And indeed with the current news of rates staying at their very low levels for some years to come is likely to encourage more borrowers to sit tight rather than switching to a different lender. It is a sad state of affoairs that some borrowers have found they are unable to switch, as falling house prices have reduced the amount of equity in their property and made it impossible to find a new deal. A reluctance to lend at high loan-to-values has exacerbated the problem. 2009-10-14 http://www.londonmortgageadvice.co.uk/news/article/379 There is a vast majoity of homeowners who believe that home values will rise, over the next six months. And this rise confidence could push transaction volumes higher in the coming months. However, those who are currentloy renting do not share that optimism and think that house values in their area will either remain unchanged or decline in the coming six months. Renters are also least hopeful about the availability of mortgage finance saying it is no easier to obtain a mortgage now than three months ago. However, despite the problems in securing a mortgage, most are intent to try to buy in the next six months. Overall, homeowners believe that the clearest sign of a property market recovery is seeing the level of transaction activity in their area increase from the recent lows. The renewed confidence is the best we have seen since the credit crunch and it is confidence that creates the atmosphere for increased transactions. On the other hand, with lending remaining constrained, transaction volume cannot recover as strongly as demand suggests it should, and the inability of first-time buyers to get a toehold on the housing ladder is the biggest single risk to the housing market recovery. The majority of homeowners believe their own home will rise in value at a faster pace than the average home in their local area, most notably in London and the South East, where it seems an Englishman cannot escape the view of his home as his castle. 2009-10-13 http://www.londonmortgageadvice.co.uk/news/article/378 More and more mortgage providersare backing away from the first-time buyers' market by simply demanding deposits in excess of 10% and often in excess of 30%, recent changes in UK mortgage sector have seen . Not only has this reduced liquidity in this sub-sector but it has also reduced competition for first-time buyers, a situation which will see the cost of mortgages rise higher and higher for the foreseeable future. The UK property sector is central to the ongoing improvement in the UK economy and a setback in this particular area could have dire consequences for the UK economy as a whole.First-time buyers are the food and drink of the UK property sector and without their introduction in the short to medium term there will be difficulties. Unless the government is able to lean on the UK banking sector, with particular emphasis on Lloyds bank and Royal Bank of Scotland, or introduce more taxpayer funded incentives, the flood of first-time buyers to the marketplace could dry up very soon. While the UK government has in the past promised help for first-time buyers to climb onto the property ladder, so far this particular rescue package has been very ineffective. 2009-10-12 http://www.londonmortgageadvice.co.uk/news/article/377 Some high profile lenders have been significantly reducing their rates lately and indeed for this they should be praised. Nationwide, Northern Rock, Woolwich, Cheltenham and Gloucester and Abbey and have all announced rate reductions over the past week. This is a move forward and these positive steps certainly make for refreshing news following the barrage of criticism suffered by lenders over the past months. It suggests that the banks and building societies may be launching products with a view to competition, after a lengthy period focusing solely on risk.This indeed offers some hope to consumers who have struggled to find a decent mortgage rate. Although a full return to a competitive mortgage market is certainly a long way away off, these changes are a step in the right direction. Hoevever, the loan to values for most of the products remain low, meaning borrowers still need to raise a large deposit to secure the top deals. Lending is essentially based on risk alone at the moment, although it remains to be seen how long it will take for lenders to cut rates, whilst at the same time being a little more accommodating with their loan to values. 2009-10-09 http://www.londonmortgageadvice.co.uk/news/article/376 Fuelled by cheap borrowing rates and a shortage of homes coming on to the market, house prices continued to rise last month. For the third consecutive monthly rise and the fifth that the lender has recorded this year, Halifax has reported a 1.6 per cent increase in prices in September.Nationwide reported that prices had risen by 0.9 per cent last month and couple with yesterday’s figures there are hopes that this will accelerate a market recovery. Nevertheless there are many who remain remain unconvinced that prices will continue to rise to the same extent and have forecast flat growth with monthly fluctuations for the rest of this year and into next. This is because the combination of increased demand and a low level of properties available for sale has pushed up house prices in recent months. And of course the improvement in affordability due to the reduction in both property prices and interest rates since mid-2007 has been a key factor in stimulating higher demand. Due to the real concern over unemployment levels and the lack of access to mortgage finance, especially for first-time buyers there is a muted expectation that the market will carry on with the increase activity of recent weeks. 2009-10-07 http://www.londonmortgageadvice.co.uk/news/article/375 According to the National Association of Estate Agents (NAEA), more than one in four adults in some British cities no longer have any desire to own their own home, Thousands of adults have given up on owning a home as the recession, coupled with high house prices and a lack of mortgage lending mean that across swathes of British cities, have turned them off the idea. The survey show that inn Cardiff, 30% of adults no longer wish to own property, compared to 27.7% in Manchester and 25% in both Brighton and Belfast. However this is not the case in every city. Just 10% of adults in Southampton said that they did not want to own property, while 11% per cent of Londoners agreed. Nationally, 16% of adults say that they have no desire to own a property. Although tne reasons are as above the Government has so far not created a good climate for house hunters. In addition the major lenders are not doing enough to help responsible people borrow appropriately to finance house purchasing. 2009-10-05 http://www.londonmortgageadvice.co.uk/news/article/374 For the fifth month in a row house prices have risen during September, and this has pushed property values back up to levels of this time last year. According to Nationwide Building Society, the average cost of a UK home rose by 0.9% during the month to £161,816. Property prices are now more or less level with 12 months ago, and this means that September was the first month in which annual house price inflation has not been negative since March 2008. During the past three months, property prices have risen by 3.8% compared with the previous three-month period, the biggest increase on this measure for five years. Due to the ongoing problems in the mortgage market and rising unemployment, house prices may not continue to increase at their current rate. With high unemployment, restrictive credit conditions and an impending withdrawal of the stamp duty holiday, it will be difficult to see house prices continuing to increase at recent rates. 2009-10-02 http://www.londonmortgageadvice.co.uk/news/article/373 Bank of China is a relatively unknown bank providing low-rate mortgages at a time when many local lenders are hoarding cash, and shutting their doors to home-buyers eager to enter the property market. In contrast to many Western banks that have relied for their funding on international money markets that have dried up in the credit crunch, Bank of China, like other Chinese banks, has access to an enviably large deposit pool for lending purposes.And it sees a great opportunity to grow its retail banking business in the UK. They are receiving hundreds of calls every day and so the decision to promote its UK mortgage service through local brokers for the first time has proved a successful one. And by making itself better known locally, Bank of China UK aims to enlarge its customer circle beyond the Chinese community. The bank has recognised the need to recruit experienced UK employees, particularly for its risk management and loan origination teams. Throughout this period, BOC UK has been increasing its staff while other banks in the UK have been cutting back. 2009-10-01 http://www.londonmortgageadvice.co.uk/news/article/372 Mortgage lending bounced back during August after being negative for the first time on record during July, according to the latest figures from the Bank of England. The figures are based on net lending - which does not take into account redemptions and repayments. This rose by £0.7bn and was the highest level since February. In July homeowners repaid £203m more than was advanced. However the 12-month growth rate continued to fall by 0.1% to 0.8% and the three-month annualised growth rate remained at 0.2%. Within total secured lending, secured lending by banks excluding the effects of securitisations increased by £2.7bn, above the £2.3bn increase in July. The number of house purchase approvals stood at 52,317, in line with the July figure and above the previous six-month average. On the other hand, both remortgaging approvals and loans approved for other purposes fell. Remortgaging approvals dropped to 29,059 from July’s figure of 33,880 and loans approved for other purposes totalled 26,256. It is comforting to know that the negative reading recorded in July proved to be a one-off. In general the demand for mortgages is continuing to grow relatively strongly. However, what is making it difficult to satisfy demand is the scarcity of mortgage finance and the lack of appropriate properties in some parts of the country. 2009-09-30 http://www.londonmortgageadvice.co.uk/news/article/371 As a result of a surge in prices in London and the South East,house prices rose 0.2% during September figures from Hometrack show. Nationally house prices rose 0.2% over the last month, compared with a 0.1% increase in August the housing data company’s latest housing survey shows. But Hometrack says this trend is attributed to price rises of 0.4% in London and 0.3% in the South-East, This is essentially a London and South East story where house price are showing these increases by virtue of a general shortage of quality homes for sale In the very short term this trend is likely to continue with general shortgages propping up house prices. Concerning the rest of the country, house prices are likely to be somewhat stable although there will be pockets with there own individual performances. 2009-09-29 http://www.londonmortgageadvice.co.uk/news/article/370 UK house prices were reported as rising in the three months to September more than those reporting falling property values, surveyors said. For the first time for two years,The proportion turned positive the Royal Institution of Chartered Surveyors' (Rics) survey found. Shortages of homes for sale and price rises in the South East of England were responsible the report says. It appears that a lack of supply is underpinning the recovery in most parts of the country. Buyers are chasing homes that they thought they would have time to consider at a gentler pace Those who were buying were families wishing to upgrade or young couples needing a bigger house to raise a family were active in the market again perhaps. But surveyors revealed a general view that demand for homes was not matched by the number coming onto the market, and this lack of supply was the reason prices were rising. Meanwhile the FSA said the number of new mortgage accounts moving into arrears, defined as being behind by at least 1.5% or more of the mortgage loan, dropped for the second quarter in a row, down by 14% from the first quarter to 51,000 new arrears cases.But the FSA commented that low interest rates were slowing down the slide of more borrowers into arrears, but people already behind with their payments were still struggling to pay off their backlog of mortgage repayments. 2009-09-28 http://www.londonmortgageadvice.co.uk/news/article/369 It increasingly looks as if interest rates will remain low for at least two to three years on the back of a very slow economic recovery. It is therefore logical advise to clients to take a variable rate mortgage, as the differential between fixed and variable rate pricing is too high at present. And there is evidence in the market place that fewer borrowers elected to take a fixed rate in August. It seems that borrowers taking larger mortgages were particularly attracted by variable rates. However there are indications that the proportion of clients choosing a fixed rate is now stabilising. There are a number of people now taking discount mortgages rather than trackers reflecting in part some very cheap discounts but also a view on the relative merits between tracker and discount rates. Previously trackers were preferred to discounts off SVR, to provide borrowers with certainty that their mortgage rate would follow Bank Rate. This followed lenders increasingly failing to pass on Bank Rate cuts in full and has since been a major benefit to borrowers, especially over the last year. But what has been evident lately is that with most SVR rates now between 4% and 6%, and the most expensive at 6.45%, the spread above Bank Rate is so large that it is now more likely to narrow than widen from here, with discounts now likely to perform at least as well as trackers, and in some cases better over the medium term. 2009-09-25 http://www.londonmortgageadvice.co.uk/news/article/368 There has been an increase in the number of mortgages approved for buyers and this has encouraged hopes that signs of life are returning to the housing market. HM Revenue & Customs figures released this week show that there were 83,000 house sales in August, double the number sold in February this year and 19 per cent higher than in August last year. However, the figures indicated that sales suffered a seasonal fall compared with July, when 87,000 homes were sold. With mortgage lending stabilising last month rising approvals for house purchases were offset by falling levels of remortgage activity, figures released yesterday indicated. Compared with the same month last year, The British Bankers’ Association (BBA) said that approvals of loans for house purchases had fallen in August to 38,095, compared with 38,196 in July, but that the figure represented an 81 per cent rise. On the other hand, itt reported that demand for remortgages had continued to fall as low standard variable rates encouraged existing homeowners to put off the search for a new deal. Only 26,124 remortgages were approved in August, compared with 30,414 in July and 49,687 in the same month in the previous year. Gross lending remained 33 per cent lower than in the same month last year. However, net mortgage lending grew to £2.8 billion in August, up from £1.9 billion the month before and a rise of 4.6 per cent compared with the month last year. The largest banks it seemed had increased their share of the mortgage market at the expense of smaller lenders. The most significant aspect is that the increase in the number of mortgages approved for buyers has encouraged hopes that signs of life are returning to the housing market. 2009-09-24 http://www.londonmortgageadvice.co.uk/news/article/367 Despite the cost of funding to lenders falling 4.35%, potential mortgage borrowers with a 10% deposit have seen just a 0.12% drop in the average mortgage rate. Those with a 40% deposit, by comparison, have seen a 1.86% reduction in the average mortgage rate. Mortgage borrowers taking out a new two year deal on a £150,000 mortgage with a 10% deposit, will only see their monthly repayment fall £11 from £988 to £977, while those with a 40% deposit see a reduction of £165 per month from £998 to £833. This is because there is a higher margin for risk is expected on a 90% LTV deal. However, a 4.25% margin over the cost of funding is excessive and seems difficult to justify. If we look to mortgage borrowing two years ago, such was the competition that is led to 90% LTV deals being some of the most attractive rates on the market. Today, a 25% deposit remains the level where most lenders are willing to do business. Anything smaller than this and borrowers will pay a hefty price. Mortgage borrower are being teased with below 2% rates by lenders, but we have no way of knowing how many borrowers actually qualify for these deals. Having been tempted through the door, many are likely to be offered much higher rates. And first-time buyers, are now apparently being ignored as lenders continue to cherry pick lower risk borrowers. It appears borrowers searching out a new deal are paying a higher price to subsidise existing customers, many of which are paying record low rates 2009-09-23 http://www.londonmortgageadvice.co.uk/news/article/366 The Council of Mortgage Lenders (CML)is predictings that the value of new home loans approved for buyers in August is likely to be less than the previous month. They predict that gross mortgage lending totalled £12.6bn in August, less than the revised total of £14.5bn in July. Lending levels had actually stabilised during the summer, and they say that the decline was to be expected due to seasonal factors.In July, CML data showed it was the first month since the boom in the housing market started to fizzle out more than two years ago that the number and value of new mortgage loans grew. It is now hoped that with signs of a recovery in wholesale funding markets, there are hopes of a gradual easing in constraints on the supply of funding. However maybe any significant pick-up in lending is unlikely. With there being prudent demand from consumers and a prudent approach to lending criteria form the lenders, this is likely to mean that the market remains slow. However it is now hoped that despite the dip in August the residential market is very slowly returning to a normal state with more affordable mortgage products becoming available. 2009-09-21 http://www.londonmortgageadvice.co.uk/news/article/365 Dragon’s Den star James Caan, now wants to help ordinary people climb the property ladder.One of the country's leading entrepreneurs has launched a multi-million pound facility to kick-start the housing market - and estate agents will be at the heart of the solution. Access to the loans will be through a network of carefully selected estate agents across the UK. Caan claimed the scheme is all about getting liquidity back into the property market. Caan is backing a funding package to take the pain out of buying and selling a home. The fund will offer interest-free loans to cover unavoidable costs such as Stamp Duty and legal fees, which is a multi billion pound market. From now on, every home buyer in the UK is entitled to an interest-free loan, subject to status. All buyers need to do is to ask their local estate agent to arrange it for them as part of the offer they make on the property they wish to buy. Caan added: “This scheme gets rid of those financial obstacles which are holding up the housing market. This means that thousands of people who have been putting off moving or buying their first home can now climb up the property ladder without further delays.” Caan and his business partner in the venture, Aaron Turner, began negotiating funding for the plan last year after Caan bought a 25% stake in Turner’s online property portal, Look4AProperty.com. According to Turner the stress of finding the money to pay Stamp Duty is a major reason why many people aren’t moving house. It is one expense too far for many people. This exclusive fund is an excellent way to help people get across it. It creates a comfort zone which gives them room to move. “The benefits of this simple scheme are two-fold. Home buyers will have less pain and something to gain from not having to worry about finding the costs involved with moving. The interest-free loan will allow people to use the cash they save to pay for vital items for their new homes – and that will help the struggling high street.” 2009-09-18 http://www.londonmortgageadvice.co.uk/news/article/364 In the coming months due to the Bank of England's plans to pay banks less for their deposits, the cost of fixed rate mortgages could drop. Mervyn King, said yesterday he is considering lowering the interest rate he pays to High Street banks on their deposits, a move aimed at encourawging banks to lend rather than hoard cash.while this may not substantially boost lending it could bring down fixed rates, encouraging homeowners to fix before the base rate rises again. It would be a good idea for people who are coming out of fixed rate mortgages to refix their mortgage rate. Then, when the Bank of England rate goes up in future, people will have made a gain if they lock into fixed-rates now. The move to lower the rate paid on deposits to banks could have the knock-on effect of lowering swap rates - the rate at which banks can secure fixed term funding, which heavily influences the pricing of fixed rate mortgages. If banks earn less money from their deposits with the Bank of England, they will be forced into short-term Government bonds or gilts. This would push up the prices of these gilts and drag down the returns made from them in turn. If the return on gilts continues to fall, banks may be forced into lending more to each other, which would pull down inter-bank lending rates and swap rates. 2009-09-17 http://www.londonmortgageadvice.co.uk/news/article/363 In the latest evidence of an upturn in Britain's battered property market, the number of loans made to homebuyers showed its first annual growth in July for the first time in two years. The number of loans made to homebuyers in July totalled 56,000, a 24 per cent increase on June and a 19 per cent increase on the same month a year earlier, the Council of Mortgage Lenders (CML) said. The CML said July's This was the first annual gain rise since February 2007 when the number of mortgages rose by nearly 6 per cent on the previous year. Lending for home purchases and remortgaging -also rose for the second consecutive month to £14.5 billion. Optimism that the housing market was finally recovering would be tempered by remaining barriers to lending, said Paul Samter, chief economist of the CML."There is certainly concrete evidence that lending for house purchase is increasing. But there are still constraints affecting the lending industry's capacity to fund increased lending as well as less consumer motivation to remortgage for the time being," he said. "The overall lending picture is likely to stay relatively subdued for some time, especially as the wider economy is far from robust yet." The number of home loans grew year-on-year in May 2007. However because the rise was so small, just 0.2 per cent, the CML deems it immaterial. Potential optimism conflicts with a gloomy survey today from Ernst & Young's Item Club. It said house prices would not return to the peak reached in autumn 2007 for at least another five years and called the recent rise in property values a "false dawn". 2009-09-15 http://www.londonmortgageadvice.co.uk/news/article/362 According to a report published today,the current levelling off in Britain's housing market is a "false dawn" and prices will not reach their 2007 peak for at least another five years. A run of positive data on the housing market during the past few months, with a number of key house price indexes showing price rises and mortgage lending also picking up has been prevalent. However in a special report on the housing market, the Ernst & Young Item Club predicts that prices are likely to drop again in the first half of next year. They forecast the dip would be followed by two years of stagnation before picking up again only gradually as the wider economy strengthens and credit conditions ease.Hetal Mehta, senior economic adviser to the Item Club, said the thinktank "believes the current stabilisation in the housing market is a false dawn".Price rises largely reflect the acute shortage of available properties, with many homeowners either trapped in negative equity or reluctant to sell for fear of locking in the losses of the past two years."A small number of cash-rich buyers have supported prices but the supply of these funds is limited, which means prices are likely to dip again in the first half of next year.It would be difficult to make a case for a sustained pick-up in prices without a recovery in mortgage lending, which still appears to be some way off.Banks are continuing to restrict the amount of money that they are willing to lend, with them looking to strengthen, rather than expand, their balance sheets," she said. Tough lending criteria and the scarcity of mortgage supply is making it particularly difficult for first-time buyers to enter the market.Given that they typically buy cheaper properties, that will have significant implications for homeowners looking to trade up, limiting the number of transactions taking place.With prices and the volume of transactions closely correlated, the dearth of first-time buyers will curb the usual chain of events, where rising prices provide homeowners with the equity to trade up, which itself pushes up prices, according to the report. 2009-09-14 http://www.londonmortgageadvice.co.uk/news/article/361 According to Halifax figures, August saw a rise in the price of houses by 0.8 percent. This is the second month in a row that The U.K.’s largest lender has reported an increase.These new figures suggest that house price in the U.K. are now back to December 2008 levels. House prices have been boosted by low interest rates and better affordability combined with the fact that there is a low level of availability of houses on the market said Housing economist at Halifax, Martin Ellis. The problems lie in part with a lack of properties coming onto the market. Maybe a reason for this might be that many are wary of taking on the high cost of moving or trying to increase their mortgage borrowing. However mortgage approvals for the month of July did hit their highest level for 15 months. It will need a lot of care and attention if it is to fully recover. Some warn that a decision by the government to raise interest rates could once again lead to a price drop. even though the property market is definitely showing signs of being on the mend When it comes to house builders, they are not faring quite so well with some saying that are having to post their worst results ever. A number of house builders have said that they have decided to move away from building apartments and back to building the family style houses that seem to be selling better. 2009-09-11 http://www.londonmortgageadvice.co.uk/news/article/360 On New Year's Eve the UK government will restore the 1% stamp duty on the purchase of homes with a value between £125,000 and £175,000. This was originally instigated to inject interest into the marketplace and was was well received by property investors. However, the scheme is set to end on New Year's Eve 2009 with 1% stamp duty to be charged on properties with a value of over £125,000. As a consequence many estate agents are suggesting their clients "speed up the purchase process" ahead of the increase. But is this the correct advice? There is the potential for investors to rush in without taking due care. While obviously significant cost savings are available for those who are able to conclude a deal before New Year's Eve. Saving 1% on a property valued between £125,000 and £175,000 makes good sense but what happens if you buy the wrong property? Many potential property purchases may well be running out of time as we speak,when you also consider the timeline between looking for a property, finding a property, having a bid accepted and exchanging documents. As the UK property sector shows signs of recovery they will obviously be discussions and disagreements regarding property values which could in many cases impact upon the completion date. Buying a property is one of the biggest decisions in your life and needs to be treated with respect! 2009-09-10 http://www.londonmortgageadvice.co.uk/news/article/359 Even though the Bank of England Base Rate has been at 0.50% for six months consumers have not seen much benefit. Many consumers have suffered falling savings rates and rising costs on mortgages, savings, personal loans, credit cards and overdrafts. It appears that only providers are feeling any real benefit. New mortgage borrowers have been hardest hit, as lenders continue to look to repair their balance sheets through increased margins. Unsecured lending costs have also increased rather than fallen, as lenders fear future increases in the number of customers defaulting. To cover the minority of customers that will actually default, all customers are now paying a higher price for unsecured lending But not all is lost for borrowers as competition slowly seems to be returning to the mortgage market. And the number of mortgages available is slowly increasing and the average arrangement fee charged has decreased. This climate will hopefully spur other lenders on to reduce rates and bring much needed competition back to the market. Banks and building societies continue to look to their savings book to fund lending activities and increased demand for savers’ money has resulted in those looking for fixed rates being offered higher rates than they were six months ago.While variable savings rates have fallen over the last six months, they have started to go up again in recent weeks as providers look for other avenues to attract savers’ money. Consumers will be hoping that as more time passes competition will become an increasing factor and that they will be offered more attractive deals across all finance areas. 2009-09-09 http://www.londonmortgageadvice.co.uk/news/article/358 It has been found on research by MoneyExpert.com that 49% of fixed mortgage products come with a percentage fee as opposed to a flat fee. Percentage fees vary from as much as 2.5% of the mortgage loan to as little as 0.4%. The average percentage fee comes in at 0.89% and on a typical home loan of £150,000 this equates to a fee of £1,335 says the independent price comparison website. These fees can run into thousands of pounds, particularly as only 4% of products that charge a percentage fee impose a cap of the maximum fee, for those people with large home loans . In proportion the number of fixed rate mortgages charging a set fee has decreased as percentage of the market from 57% to 51%. There are currently 472 products charging a set fee. The highest charge on the market has increased significantly. Last year a number of lenders charged up to £1,999 but today the highest figure on the market is £2,499 from Bank of Scotland, one of the bailed-out banks, signifying an increase of 25% on the highest market fee. The Bank of Scotland product, its “large loan product transfer” which is a two-year fix, is open to those people looking to borrow up to 90% of the value of their home.Average fees have actually decreased slightly from £860 a year ago to £790, largely due to the introduction of a large number of mortgages charging a small set fee rather than a percentage fee. “Borrowers looking for a mortgage focus on rate, but fee has to be a consideration particularly when these can run into thousands of pounds. All too often we forget about the fee by rolling it straight into the loan,Pierre Williams, head of research at MoneyExpert.com, said.“Fees are often linked to loan to value ratios and anyone without a significant amount of equity in their house can expect to pay a hefty fee. “Borrowers need to make a calculation as to whether they opt for a fixed or percentage fee but with the introduction of large numbers of low fee mortgages this year borrowers do have options when it comes to choosing a mortgage.” 2009-09-08 http://www.londonmortgageadvice.co.uk/news/article/357 A number of factors are combining to make this the optimum time to buy a newbuild property. It is sighnificant that Newbuild prices are down nearly 20% on their peak in July 2007, and are now comparable with the second hand market, despite the superior energy efficiency, design standard and other cost-saving benefits unique to buying new. However, new home prices are now beginning to show strong signs of stabilising, with the rate of annual decline decreasing rapidly since May, as competition among buyers begins to intensify. It should be noted that new properties are being made available in September and October as developers look to capitalise on a strong summer market. However, the supply shortage is set to hit heavily in 2010, restricting the time remaining to secure the best new home prices. It would be a good idea for those who have been delaying a purchase, to get back into the market and take advantage of the low prices and attractive developer incentives while they are still available. With new home prices lower than they have been in years and a large number of developers set to release new stock following a surge in reservations this summer, autumn 2009 could be one of the best ever periods to secure a new home.Over the last two months newbuild prices have started to stabilise, but unlike the re-sale market, where asking prices have increased rapidly, developers remain cautious and are unlikely to introduce any significant rises in the final quarter of the year. What is more developer incentives are as readily available as ever, and the autumn supply boost will create new options for buyers to take advantage of improving mortgage availability. However, all industry voices continue to warn of an imminent stock shortfall, which will inevitably lead to strong positive price growth for new homes. What are the advantages in buy ing new. Well,newbuild not only gives homebuyers access to various incentives and deals, but also offers a range of benefits over re-sale properties that promote long-term cash savings. Buyers benefit from a home that is ready to move into, has a high quality finish and includes modern fittings and appliances throughout. You have alod got low maintenance and energy efficiency as their main reason for buying new. Other incentives include pick of developer deals from shared equity and stamp duty paid all the way through to part exchange and assisted saving schemes. For those concerned about any further short term price falls, a number of developers are even offering price protection schemes, typically guaranteeing the price buyers pay for up to three years. New homes are typically six times more energy efficient that older properties, with homebuyers benefitting from reduced carbon emissions and lower energy bills. However, the Home Builders Federation (HBF) has warned that new regulations in the Government’s Code for Sustainable Homes will see the cost of newbuild properties rise by an average of £7,000 as of April 2010. While any increase will pay for itself in the long-run, this may act as an additional incentive for autumn new home buyers. -------------------------------------------------------------------------------- Add this page to your favorite Social Bookmarking websites Set as favorite Bookmark Email this Trackback(0) TrackBack URI for this entry Comments (0) Subscribe to this comment's feed Write comment Name Email Website Title Comment smaller | bigger Subscribe via email (registered users only) I have read and agree to the Terms of Usage. 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Property web feed: http://is.gd/2YxMk (via @PropertyFeeds) PropertyTalkShelter: Win an apartment in Manchester http://tinyurl.com/n6gocm . 2009-09-07 http://www.londonmortgageadvice.co.uk/news/article/356 It seems that there is a growing number of analysts who believe house prices have bottomed out as estate agents are reporting greater activity. And what is more a third of adults believe now is a good time to invest in property and more than half believe property is a good long-term bet — despite the recent crash, research from Mintel has found. Only last week Nationwide building society said that the price of the average house rose for the third consecutive month in July, up 1.3% to £158,871. House prices are still 6.2% lower than 12 months ago but that is a sharp improvement on the 9.3% year-on-year decline reported in June. But what may be considered as more significant, the Land Registry index, which is considered a more comprehensive measure than the Nationwide and Halifax indexes, rose in June for the first time since January 2008, albeit by only 0.1%. Moreover, mortgage approvals for British house purchases hit their highest level in more than a year in June, Bank of England data showed last week, while Skipton building society said a 23% rise in activity at Connells, its estate agent subsidiary, helped it notch up profits of £17m in the first half, after a £20.6m loss in the second half of last year. Based on increasingly positive indicators, our house view is that the UK has reached the bottom in terms of house prices.” said David Cutter, the chief executive of Skipton.“With unemployment rising and average earnings growth so weak, sales volumes will pick up only very slowly this year and next — and not by enough to put a floor under house prices.” Seema Shah at Capital Economics said. 2009-09-04 http://www.londonmortgageadvice.co.uk/news/article/355 With house prices stablising is this signalling the market is likely in recovery mode? A report from the National Association of Estate Agents (NAEA) details that the number of house hunters with agents decreased from 292 in July to 238 in August and the number of sales per branch dropped from 8.6 to 7.6.As summer tends to be a slow season as potential home buyers take off on holiday this decline was expected. The level of enquires have slowly increased as the month has gone on and there is a real sense that the property market really is bottoming out.The market showed some other positive signs. The percentage of first-time buyers increased from 22 per cent to 36 per cent over the last month. Also, the average number of properties for sale rose from 59 to 64.Reports from around the region are very encouraging with levels of interest continuing to improve month on month. This is also helped by the positive press reports regarding the economy and the housing market in general. However and this is the rub, estate agencies are warning the good news will only continue if prices are reasonable and mortgage lenders continue to increase lending.Despite all the positive noises, overpriced homes remain unsold, some after months of stagnation. The right price leads to an early sale - wrong price gets no sale, said Des Rownson of NAEA Essex branch.We don't want unhealthy runaway value rises, we want steady and sustained growth that will last rather than collapse as another bubble bursts,” added Solent region’s Colin Sharp. Mr Sharp concluded: “I can see this continuing at least into September and October but it is reliant on mortgage lenders coming up with the funds. I hope they show a suitable response. 2009-09-03 http://www.londonmortgageadvice.co.uk/news/article/354 Surveyors say that there is little chance of a quick return to a housing boom despite the possibility of UK prices rising over the course of the year. The Royal Institution of Chartered Surveyors has changed its forecast of a price fall of 10-15% this year amid a "considerable shift" in the market. However there is a warning that tight credit, limited transactions and job losses could see prices slip back in 2010. They say that the forcast is overcast for the next 18 months. There is no doubt that the market is in a considerably stronger position than a year ago with recent surveys from the UK's two main mortgage lenders, Halifax and Nationwide, have also suggested that house prices are rising The return of buyer demand and the limited availability of housing on the market could be enough to support prices, so it wouldn't be surprising to actually see prices increase further from here in the short term. However, the outlook for 2010 was uncertain and there was a risk of prices falling again. Affordability is still stretched and mortgage finance, while improving, is fairly hard to come by. The number of mortgages approved for house purchases has grown in recent months, although the range of mortgages available has shrunk - with fewer providers in the market - and higher savings have been needed for potential homeowners to pay a deposit. On the other hand transaction levels remained well below the long-term average, said Rics. Increases in mortgage rates, rising unemployment or a prolonged weakness in the economy could all challenge the emerging recovery in the market, it warned. The number of homes being built has also been hit by the recession and this could also affect the affordability of homes in the future, it added. Estate agents expect a drop in activity over the summer months, but there is no doubt that the market is in a considerably stronger position than a year ago. Agents sold more [properties] in July than in any month last year. That is concrete evidence that the housing market, while not recovered, has potentially been through the worst. 2009-09-02 http://www.londonmortgageadvice.co.uk/news/article/353 As an indicator of just how much borrowers are paying for mistakes made by banks during the credit crunch, mortgage lenders are reaping huge profits on fixed-rate mortgages, with the difference between bank lending costs and mortgage rates hit a 21-year high. Despite rates remaining low and mortgage costs falling, mortgage lenders are increasingly raising rates on fixed-rate mortgages . Banks are facing growing criticism, and being asked to lower their margins and borrowing costs for individuals. For the Opposition, the shadow housing minister, Grant Shapps, was reported as commenting: "The Government’s failure to end the cycle of housing boom and bust means that at exactly the same time as hard-pressed families have been struggling to get a mortgage, news of record profits from lenders has surfaced. Sadly, all building blocks of the next housing boom are being created because the government’s failure to put into place a Bank of England -led system of financial regulation." 2009-08-28 http://www.londonmortgageadvice.co.uk/news/article/352 According to the latest Nationwide House Price Index house prices rose for the fourth month in a row during August as demand for properties continued to outweigh supply,The average price of a home has climbed by 1.6% in August to reach £160,224 from £158,871 in July.The monthly increase has also reduced the annual rate of decline in property values. This has now slowed sharply to 2.7%, compared with July’s 6.2% fall. The three-month on three-month comparison of property prices rose by 3.3% in August, up from 2.7% in July, which is the highest level of three-monthly growth since February 2007. “The fall in debt-serving costs has meant fewer homeowners are under immediate financial pressure to sell than might have been expected in a recessionary economic background with rising unemployment. Partly, as a result of this, fewer second-hand properties had come onto the market than is normally the case in recessions, which moved the balance of supply and demand more in favour of sellers over the course of 2009, said.Martin Gahbauer, chief economist at Nationwide.“The eventual exit from exceptionally loose monetary policy could make the recovery in the housing market bumpier than some might expect after the last few months of price increases.” “The doom mongers can no longer deny that all the evidence is pointing to a recovery in the housing market,Stuart Law, chief executive of Assetz,said. “With these increasing signs of house price stability we should see more lenders re-entering the market and improved loan-to-values over the remainder of the year. Overall house prices are poised for a return to positive annual growth by the end of 2009, with a possible rise of 5% or even higher, as the shortage of homes grows more severe and the competition among buyers for existing properties increases.” 2009-08-27 http://www.londonmortgageadvice.co.uk/news/article/351 A growing number of analysts believe prices have bottomed out as bricks and mortar activity picks up. A third of adults believe now is a good time to invest in property and more than half believe property is a good long-term bet — despite the recent crash, research from Mintel has found. Last week Nationwide building society said that the price of the average house rose for the third consecutive month in July, up 1.3% to £158,871. House prices are still 6.2% lower than 12 months ago but that is a sharp improvement on the 9.3% year-on-year decline reported in June. However and this may be more significant, the Land Registry index, which is considered a more comprehensive measure than the Nationwide and Halifax indexes, rose in June for the first time since January 2008, albeit by only 0.1%. Mortgage approvals for British house purchases hit their highest level in more than a year in June, Bank of England data showed last week, while Skipton building society said a 23% rise in activity at Connells, its estate agent subsidiary, helped it notch up profits of £17m in the first half, after a £20.6m loss in the second half of last year. “Based on increasingly positive indicators, our house view is that the UK has reached the bottom in terms of house prices.” said David Cutter, the chief executive of Skipton. “With unemployment rising and average earnings growth so weak, sales volumes will pick up only very slowly this year and next — and not by enough to put a floor under house prices.” Seema Shah at Capital Economics said. 2009-08-04 http://www.londonmortgageadvice.co.uk/news/article/350 According to the results of the latest Nationwide House Price Index, house prices rose for the third consecutive month in July. While the three-month figure increased from 1% in June to 2.6% in July, the lender’s figures show the average price of a property rose by 1.3% over the month from £156,442 to £158,871. Although house prices were still 6.2% lower than 12 months ago,the increase represented another sharp improvement from the 9.3% year-on-year decline in June. Martin Gahbauer, chief economist at the building society, said. “Even if prices were to remain unchanged for the rest of 2009, the year-on-year rate would continue to improve since prices were falling very sharply in the second half of last year. “For the first seven months of 2009 as a whole, prices have risen by a cumulative 1.3%, suggesting there is now a reasonable chance that prices could end the year slightly higher than where they started. Only a few months ago, such an outcome would have appeared unthinkable.” Athough new mortgage sales were still at low levels, some are sying that the market was seeing more encouraging signs in terms of purchase activity. Some commentators are acknowledging that since the start of the year, there has been a steady increase, month-on-month, in mortgage purchase sales, albeit from a very low base. This could be a reflection of the current low interest rate environment and renewed buyer confidence. 2009-07-31 http://www.londonmortgageadvice.co.uk/news/article/349 In the interest of ensuring the long term affordability of mortgage debts, Abbey's recent announcments regarding its new lending criteria should be greeted in a positve manner. They have reduced the maximum age for their mortgages from 85 to 75 They are taking a more conservative approach to mortgages into retirement and this can be regarded as a sensible move from Abbey, and one which may be expected by other providers to follow as lenders move to ensure the long term affordability of mortgage debts. Borrowers should take this as a jolt to make changes now to ensure their mortgage is repaid before retirement. This could be important as a growing number of people are facing a significant drop in income with inadequate pension provisions. With a typical first-time buyer being around 33 first-time buyers these days are older when they take out their first mortgage. If they stay in the same house, they’ll have reached 58 by the time they finish their 25-year mortgage term. But if they move home a couple of times taking the mortgage back to a 25-year term each time, quite soon the end will be nearer 70. With low interest rates at present homeowners should take advantage and put some sorely needed extra equity into their homes and think about shortening the requested term if they can afford to. By reducing repayments from 25 to 20 years, homeowners could save tens of thousands of pounds in interest and in addition it means borrowers are more likely to be able to clear their mortgage before retirement. 2009-07-30 http://www.londonmortgageadvice.co.uk/news/article/348 UK regulators are back in the news following the Daily Mail investigation which alleges that the average UK mortgage is now £1800 a year more expensive than it should be, due to the fact that UK banks have yet to pass on significant cost savings. While the UK government, and indirectly the UK taxpayer, continue to invest millions and millions of pounds into the regulatory regime governing the UK financial system, how is it that UK mortgage holders have yet to see any benefit? UK mortgage providers are in effect a law unto themselves and there is real concern at this despite significant investment into regulators such as the FSA.The fact that the UK government has had to go public with the arguments it is using now, and has used in the past, would indicate a lack of strength to push through any changes by itself. As we have mentioned on numerous occasions, UK mortgage providers very much hold the Ace cards with regards to the recovery of the UK economy although consumer demand will at some point see mortgage rates fall further back into line with base rates. We are unlikely to see any significant reduction in mortgage rates in the short term, with dramatically reduced mortgage applications, a property market which has yet to recover and a lack of depth in the money markets. 2009-07-29 http://www.londonmortgageadvice.co.uk/news/article/347 Fixed rate There follows a desacription of a fixed rate mortgage. With a fixed rate mortgage your monthly payment will not alter for the period of the fixed rate. If you are the kind of person that likes the reassurance of knowing exactly what your monthly payments will be, then a fixed rate may be the most suitable mortgage for you. A fixed rate has the advantage also of potentially saving you money if interest rates generally move higher during the fixed rate term. On the other hand if interest rates move downwards you might be regretting having tied yourself into a fixed rate term. Some lenders will lend more money if you take a long term fixed rate. At the end of the fixed rate period you will revert to the standard variable rate or another rate that that will last for the remainder of the mortgage term. Usually there will be a penalty charge covering the fixed rate period during which you will pay a charge for redeeming the loan. There are some fixed rate deals without redemption penalties. At the end of a fixed rate term, assuming there is no tie in period or penalty for going elsewhere it may be beneficial to re-mortgage to another lender 2009-07-28 http://www.londonmortgageadvice.co.uk/news/article/345 There is a significant rise in home insurance claims from accident prone Britons. Claims analysis accidental damage/loss by Greenbee Home Insurance (part of the John Lewis Partnership) has revealed a considerable (27%) year-on-year increase in the first three months of 2009. It appears we’re a nation of butter-fingers, when it comes to accidental damage in the home, as the top five incidents claimed for are made up of every day items damaged by breakages or spillages: 1 Lap-tops - damaged by a spilt drink; 2 Televisions - dropped or knocked over when moved for decorating purposes; 3 Carpets - spoilt by a permanent paint or wine spillage; 4 Reading glasses - damaged or lost; 5 Baths/showers - broken by owners suffering an awkward fall or slip-up. Additional research reveals that home-incident mishaps are surprisingly rated low on the list of consumers’ concerns, as Brits may have helped make accidental damage/loss account for almost half (46%) of home insurance claims in the first quarter of this year,.A DIY disaster - such as a paint spillage or foot through the ceiling - causes little household anxiety, with just 2% naming this as a home concern. Yet the actuality of this happening is much higher, with almost one-fifth (18%) party to a home maintenance job that’s gone wrong. Britain’s top three home accident drama zones are the kitchen, living room and bathroom. More than a quarter (27%) of those surveyed has suffered a kitchen calamity, a living room mishap has befallen more than a fifth (21%) and 14% admit to being victim to a bathroom disaster.The nation’s most accident-prone age group is the 45-54 year olds, who have experienced the most damage-causing incidents in each room. More than a quarter (28%) has endured a living room calamity, double that of 65+ year olds (14%), while almost one in five (18%) has had a bathroom blunder, compared to 12% of people aged 18-24. 2009-07-27 http://www.londonmortgageadvice.co.uk/news/article/344 According to various reports fixed rates remained popular last month. The proportion of buyer choosing fixed rates increased further to a record 3 quarters of all applicants choosing fixed rates taking figures over the last 4 months. But this could maybe prove to be the peak for fixed rates for the foreseeable future because after the sharp increase in fixed-rate pricing over the last few weeks, compared with little change in tracker rates, the relative attraction of fixed rates and trackers has moved towards trackers unless one expects interest rates to start increasing rapidly before 2011. Given that these are difficult times to predict the future fixed rates are likely to continue to be the choice of the majority of clients for some time because for many the security offered by a fixed rate is paramount, especially for those on higher LTVs. However, trackers may be attractive to more clients this month, with the focus on low or no early repayment charges (ERCs) as well as the obvious requirements of a good rate and fee combination and possibly an offset facility. The reason the size of the ERC is important, unless the mortgage offers a droplock option, is that many clients will want to consider switching to a fix when the time is right for them.As for first time buyers there does not seem to be any change in their proportion and remortgage activity, which includes clients effecting a product transfer with their lender, is holding up well. 2009-07-24 http://www.londonmortgageadvice.co.uk/news/article/343 Two separate surveys suggestthe sluggish UK economy is likely to mean that house prices will not see any "meaningful" recovery for some time. The Royal Institution of Chartered Surveyors (RICS) says.there will be no "sustained" upturn until mortgages become more available, the Royal Institution of Chartered Surveyors (RICS) says. PricewaterhouseCoopers has warned further price falls are likely in 2009 and 2010,meanwhile. More surveyors expect house prices to rise than fall With the Nationwide suggesting that UK house prices have risen in three of the past four months, leaving them nearly 6% higher than they were in February,one accountancy firm says house prices could be lower, in real terms, in 2020 than in 2008. PwC's economic outlook said that with mortgage levels subdued and UK unemployment looking likely to continue rising for some time, "average UK house prices are likely to fall further between 2009 and 2010". With an influential committee believes a scheme to kick-start mortgage lending is not working A survey shows the value of some types of homes are rising while others are falling Latest house price surveys suggest some stabilisation in the market.Despite some recent reports of rises, we are not out of the woods yet and buyers should take a long-term rather than a short-term view," it said. And it warned that by 2020, even if there had been five years of strong growth, house prices could be lower, in real terms, than 2008 levels. 'Uncertain conditions' The RICS monthly survey for June suggested that there was some short-term optimism - with more surveyors expecting property prices to rise than fall for the first time since May 2007.Some 6% more chartered surveyors expected price increases than price falls - compared with 11% more expecting falls during May's survey. The Department of Communities and Local Government (DCLG)survey showed that property values were continuing to fall, but at a slower rate than previously. Average prices in the UK in May were 12.5% lower than in the same month a year earlier, with the average home costing £188,991. Between April and May, prices dropped by 0.1%, primarily as a result of falling values for detached and semi-detached houses. This was partly offset by an increase in the average price of bungalows, terraced houses and flats.In the last year, prices have fallen the most in Northern Ireland (23.2%), with smaller falls seen in England (12.8%), Wales (8.8%) and Scotland (6.9%), the survey found. In the English regions, average prices were highest in London at £287,142 and lowest in the North East at £129,052. The average price paid by first-time buyers for a home in the UK was £137,013 in May, with the typical price paid by former owner-occupiers at £220.998. 2009-07-23 http://www.londonmortgageadvice.co.uk/news/article/342 Have you missed the opportunity to bag yourself a bargain? Is now the time to buy, or is it wiser to hold fire until concrete evidence emerges that house prices are finally starting to rise again? The question becomes more relevant as the average price of your home has slumped by a whopping 15 per cent to around £150,000 over the past year as the global recession and the credit crunch began to bite. The pace of the decline may have slowed and there is growing optimism with a string of interest rate cuts, an increase in the number of mortgages being approved, and measures introduced by the Government to stimulate the market. And so,what should people do? What will happen to house prices? We could expect prices to continue falling throughout this year and into 2010 as well.. This is largely based on the awful outlook as we expect the economy to continue contracting and for unemployment to rise quite sharply. House prices could fall a further 14 per cent, while the two previous property slumps have seen values falling for four years, and then stagnating, before rising. Being currently two years through this downturn, you're probably not going to miss out by holding off from buying for a bit longer. As long as buyers can strike an attractive deal, this should cushion the effect of any further price falls over the next couple of years. Maybe average values will stabilise over the next few months. We might then expect there a very small increase in average prices over the next couple of years amounting to between one and five per cent. But this will depend on your locality as some areas are still likely to suffer falls. For first time buyers, homes are more affordable than at any time in the past six years, according to Halifax, whose house price to earnings ratio has fallen 26 per cent from a peak of 5.84 in July 2007 to 4.34 in March 2009. Martin Ellis, housing economist at Halifax, says this prove