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/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 proves houses have become more affordable, even though market conditions are likely to remain tough with the potential of further falls. However, it can be argued that it's now more difficult for them to get on the property ladder. A couple of years ago they could get 90 or 100 per cent mortgages, but the available loans-to-value have shifted downwards. The reductions in interest rates are now having an effect and people are beginning to realise you can now buy a property cheaper than you can rent one. The advantages of buying now are that interest rates are extraordinarily low, which means mortgages are generally more affordable, while it's also possible to drive a hard bargain as those needing to move are struggling to attract potential buyers. It could actually be a good time to climb up the property ladder, becuase if you're trading up then, theoretically, things ought to be moving in your favour because 20 per cent off a £500,000 house is more than the same percentage off one worth £250,000." The tightening of lending criteria during the credit crunch is also starting to be relaxed now which will help the market However, the more money buyers can put down, the cheaper the rate they will pay. Ideally, they will need to have a deposit of at least 15 per cent and even more attractive deals are available for those who can stretch to 25 per cent. 2009-07-22 http://www.londonmortgageadvice.co.uk/news/article/341 The Bank of England said,U.K. mortgage approvals by the nation’s six biggest banks increased in June in a sign real- estate lending may strengthen. According to a sample from the central bank’s lending panel released today in London, the number of loans granted by the institutions rose to 51,100, the highest since records began in December, from 45,000 in May, Suggesting that mortgage lending for house purchase may continue to strengthen in coming months major U.K. lenders reported a further rise in approval for house purchase in June, ,” the bank said in the report. The housing market is showing signs of recovery from the worst economic contraction in a generation after officials rescued banks and started printing money and British home sellers raised asking prices this month to meet increased demand from buyers, Accounting for about 70 percent of mortgage lending at the end of 2008 the Bank of England’s sample covers data from Banco Santander, Barclays Plc, HSBC Holdings Plc, Lloyds Banking Group Plc, Nationwide Building Society and Royal Bank of Scotland Group Plc. . Hopefully the banks may also loosen mortgage criteria in coming months to allow higher loan-to-value ratios and smaller deposits, the central bank said. “Some major U.K. lenders have reported that signs of stabilization in housing market activity and prices, and the margins prevailing on higher LTV products, have slightly increased their appetite to lend at higher LTVs,” the central bank said. 2009-07-21 http://www.londonmortgageadvice.co.uk/news/article/340 The cost of wholesale funding will make mortgage even more expensive in the near future, lenders have warned. The return of high loan to value mortgages are unlikely in the current climate, experts say. Despite the fact that many consumers are holding out for cheap credit, it seems that those days may have passed. The Council of Mortgage Lenders pointed out that lenders in the UK face constrained credit circumstances. "The underlying problem is that we don't have access to the range and type of funding we used to have, the CML reportedly commented Government intervention (namely through lending agreements with semi-nationalised banks) has improved the situation but the constraints on lenders are real." It is expected that lenders will concentrate on building up core, good credit lending books. In other news ,..............................; the Liberal Democrats will this morning call for Lloyds Banking Group and Royal Bank of Scotland to be broken up before they are returned to private ownership. Shadow chancellor for the Liberal Democrats,Vince Cable, in a speech about reform of banking regulation at the London Stock Exchange, ,called also for the details of highly paid bankers to be published. But he also wants the Financial Services Authority to remain as a unitary regulator and a long-term role for state banking, rather than the quick sale of state-owned banks. Plus he also wants to see the scrapping of what he terms the ‘woefully misconceived’ Asset Protection Scheme.Cable says: “The government has yet to grapple with the challenge posed by the Governor of the Bank of England: that if a bank is too big to fail it is too big. One approach is to make it easier for big institutions to fail.“Some aspects of the financial services industry are simply too big for the British economy to manage safely. The large, failed, British banks are the financial equivalent of Chernobyl. Like the former Soviet Union, the UK became over reliant on dangerous financial reactors." He adds: “Britain has the highest share of banking assets in GDP of any major country, four times as high as the US. To prevent Britain from becoming the next Iceland, radical safety measures, like ones I have set out, are required." 2009-07-20 http://www.londonmortgageadvice.co.uk/news/article/339 A total of 5,328 new equity release customers were recorded by trade body SHIP.Demand for equity release rose five per cent in the second quarter of 2009, data from the industry revealed today.However, the level of those turning to their homes is down 22 per cent from a year ago.House price falls have also seen the value of equity release deals fall five per cent.Andrea Rozario, SHIP director general, said: “While the equity release market is still suffering along with the mainstream mortgage market, it is encouraging to see that the equity release market is starting to see evidence of some positive movement."The quarter on quarter increase in the number of plans shows that consumers are once more starting to believe in the UK housing market.”She added barriers still remained over equity release, there remained "a clear need for equity release products – especially in the current economic environment". Dominic Fraser-Smith, group product manager for UK Life at Aviva, said the figures "heralded the first glimmers of a recovery for the UK equity release market". The SHIP data also pointed towards growth in drawdown mortgages – where access to equity in a property can be more flexible than traditional equity release – with sales up 14 per cent to account for 51 per cent of the market."The flexibility offered by this product is ideally suited to how many of today’s consumers want to access their housing wealth and we expect that its market share will continue to increase in the future," said Mr Fraser. laire Barker, chairman of the Equity Release Solicitors’ Alliance (ERSA), explained drawdown products were seeing gains as people were reticent about leaving large amounts of cash in bank accounts earning little interest. “It will be interesting to see if the trend for smaller amounts continues, as more homeowners seek to use equity release products to repay existing mortgages or to consolidate their debts, as survival in retirement becomes increasingly challenging," she said.“The findings confirm that homeowners are increasingly comfortable with the concept of equity release and, provided that they are properly financially and legally advised by specialists in this sector, more and more homeowners are likely to see their properties as a safe, convenient and independent way of funding their retirement.” 2009-07-17 http://www.londonmortgageadvice.co.uk/news/article/338 Lenders should resume normal risk-based lending and to increase loan-to-value amounts (LTVs) to a minimum of 90%. First-time buyers hold the key to building the momentum behind a sustainable recovery. However, this will never happen if lenders do not step up to the plate and start lending at higher LTVs. It is now time to resume normal risk-based lending and to move back to the core competency of assessing risk and demonstrating underwriting skills. Government-owned banks have recently made some effort to lend at higher LTVs, but what is really needed is a widespread commitment by all lenders to increase to a minimum of 90% LTV, including through intermediaries. 90% LTV had been the entry point for customers in the not too distant past. This provided a sensible commitment to the property and for the lender to respect that commitment and price accordingly.So, the message to all lenders is that we know how tough the pressures are on balance sheets, capital and profits. But housing, and the supply of credit to potential homeowners, is fundamental to our society. In this country we have a culture of long-term home ownership, a framework of regulation of advisers and quality processes. We need you to step up the flow of mortgage funding to first-time buyers, and higher loan to value products. Not a return to the heady days of 2007, but sensible lending to sensible borrowers - at sensible prices. 2009-07-16 http://www.londonmortgageadvice.co.uk/news/article/337 According to the Royal Institution of Chartered Surveyors (RICS). price expectations rose for the first time since May 2007, supported by low levels of stocks on surveyors' books and increasing buyer enquiries There is increased surveyor optimism., evidencing that activity in the housing market is picking up, albeit from very low levels. The rise in optimism has been driven by the continuing up-turn in buyer enquiries and falling levels of fresh supply. The net balance of surveyors expecting price increases rose for the first time since May 2007 with 6% more chartered surveyors expecting house prices to rise over the next three months compared to a negative reading of 11% in May. The number of chartered surveyors reporting an increase in new enquiries rose again in June, with a net balance of 67% reporting a rise rather than a fall, the eighth consecutive monthly gain and the highest figure since the series began in April 1999. the amount of properties on surveyors' books has declined by around one third over the past year. Consequently, the net balance of surveyors reporting a fall in house prices rose from a negative balance of 43.8 to 18.1%, the highest reading since September 2007. The level of stocks on surveyors’ books continued to provide some support for property prices while new instructions remain marginally in negative territory. The average numbers of properties sold over the past three months rose to 12.7, up from 11.7. The survey also contains more definitive signs that the rebound in enquiries is now feeding thorough into increased transactions. Sales rose again but from very depressed levels. Newly agreed sales, measured on a net balance basis, increased sharply, reaching the highest level since August 1999. “Although the market is showing signs of improvement, it is unlikely that there will be a sustained upturn while mortgage lenders remain risk adverse. A lack of stock on the market is providing a platform for modest price increases. RICS spokesperson Jeremy Leaf said.“While supply remains tight, the market may continue to show tentative signs of firming but instructions are starting to increase in some regions and this could dampen any meaningful recovery as long as economic conditions remain quite so uncertain.” 2009-07-15 http://www.londonmortgageadvice.co.uk/news/article/336 By hiking their margins on loans to an all-time high, mortgage lenders are cashing in on a resurgence in buyer demand. Even as lenders have seen their borrowing costs tumble, the cost of fixed-rate mortgages has continued to rise in recent weeks, according to the financial analyst Moneyfacts. Royal Bank of Scotland and the nationalised Northern Rock are among the banks to have increased their rates. Lenders say high demand for the cheapest mortgage deals has forced them to hike costs, or face being swamped by applications. But experts say the rising cost of lending is harming the prospects of a housing market recovery. The average two-year, fixed-rate mortgage is now 5.18 per cent, up from 4.67 per cent at the beginning of June, Moneyfacts said. However, the two-year swap rates have dropped from a peak of 2.51 per cent on 11 June to 2.05 per cent at the end of last week. Fixed-rate mortgage costs have been rising steadily since early last month, a trend lenders attributed to the increasing cost of swap rates – the rates at which lenders borrow from each other to fund fixed-rate deals. This gives lenders a margin of 3.11 per cent on the average two-year fixed rate, compared with 0.86 per cent a year ago and 0.05 per cent in July 2007. The differential being charged by lenders is very high at the moment and it is no longer necessarily a good time for borrowers to take one out. In additionLenders are also widening their margins on five-year, fixed-rate mortgages. The average five-year fixed rate of 6.12 per cent is now 2.64 percentage points above the borrowing cost. Among the lenders to have hiked their five-year costs is RBS, which raised its five-year, fixed-rate loans by 0.6 points, although it reduced the cost of some of its tracker mortgages. Worried by the prospect of unmanageable business levels, lenders claim they have been forced to hike mortgage rates because of excessive demand. 2009-07-14 http://www.londonmortgageadvice.co.uk/news/article/335 Even though swap rates have continued to fall during the past month, the cost of fixed-rate mortgages continues to rise, At just over a half percent higher than 4.67% at the beginning of June, te average two-year fixed-rate mortgage now (July 10) stands at 5.18%, After a period where we have witnessed two year swap rates fall from its latest peak of 2.51% on 11 June to only 2.04% on July 10, the margin between the average two-year fixed-rate mortgage and swap rates now exceeds a full 3% and stands at 3.15% today. This shows that fixed-rate mortgages are continuing to be in high demand as any future Bank Base Rate changes should only be an upward movement. The fear is that the closer we get to a position where sentiment is stronger that the Bank Base Rate will be going up, the likelihood is that fixed rate deals will follow suit and become even more expensive. With average rates rising quickly, the good news is that there are still currently 42 two-year fixed-rate deals under 4%. But customers might need to act fast before these better deals get sold out. 2009-07-13 http://www.londonmortgageadvice.co.uk/news/article/334 Figures released by the National Association of Estate Agents show that 22.5 per cent of homeowners said they could not secure a new deal for a home loan. Nearly one-in-four borrowers believe they are unable to secure a mortgage because of stricter lending criteria imposed by banks and building societies. Half of respondents believed that they would have more chance of getting a mortgage if lenders relaxed tough restrictions on new applications and accepted lower deposits. Of the 1,800 individuals surveyed, about 58 per cent said that improving the availability of mortgages was crucial to stop the collapse in property prices. There was a warning from Peter Bolton King, chief executive of the NAEA, that banks risked stifling the market’s recovery and that the Government should pressure them into lending. “We cannot let the banks convince us that shutting up shop when it comes to mortgage lending is a responsible move, he said. “The decision to restrict mortgages so severely is rooted in self interest. The Government must do more to put pressure on those banks that are refusing to lend, while highlighting those banks that are easing restrictions to help get the economy moving again.” On tne other hand, another survey, released yesterday, suggested some confusion amongst homeowners about the tightening of lending criteria in the wake of the credit crunch. The advice website,Unbiased.co.uk,found that a third of homeowners assumed lending conditions were far tighter than in reality. It said that individuals believed that banks and building societies would cap new mortgage lending at 2.5 times income. Some lenders are still willing to lend up to 4 times income. David Elms, chief executive of Unbiased.co.uk, said: "There is a lot of consumer confusion out there. It is not surprising that many potential homeowners have taken a pessimistic view of lending criteria and what income multiples are available to them," David Elms, chief executive of Unbiased.co.uk, said. The mortgage drought has shown no sign of easing after figures released showing that the number of mortgages available to new borrowers has crashed to an all-time low. Moneysupermarket.com, the comparison site, said that just 2,282 deals were listed yesterday, compared to 27,962 two years ago at the height of the housing boom. And what is more, high street banks that have taken billions of pounds from the taxpayer are charging the highest mortgage rates on the market as the total number of deals available sinks to the lowest on record. Lloyds Banking Group, which has taken £11.5 billion from the UK Government, requires customers to pay an eye-watering interest rate of 7.89 per cent for a five-year fixed-rate mortgage. The deal is available to borrowers with only a 10 per cent deposit, with a fee of £99. Buyers who turn to Royal Bank of Scotland, which was rescued and part-nationalised at a cost of £27 billion in taxpayer cash, are charged 7.25 per cent for a similar deal. Mortgages offered by the two banks are considerably more expensive than those from banks and building societies that have never been forced to go cap in hand to the taxpayer. Halifax released have released figures today showing that the slump in housing prices could be easing after house prices fell by 0.5 per cent in June. In the three months to the end of June, house prices declined by 1.9 per cent, the smallest quarterly fall since the first three months of 2008. 2009-07-10 http://www.londonmortgageadvice.co.uk/news/article/333 Britain’s biggest building society has now reintroduced the 125% mortgage, calling it a “very niche” product. The 125% mortgage was seen as one of the products on the more foolish side of the pre-crunch deals, and largely attributed to the downfall of Northern Rock. The mortgage is only available to existing customers in negative equity who want to move home and borrow more, Nationwide has said. This is how it will work. These customers would be offered the building society’s 95% LTV deals, with rates of 6.73% fixed for three years or 7.48% fixed for five years. Interest rates for the additional borrowing of up to another 30% then rise to 7.23% and 7.98% respectively. Defending the deal a Nationwide spokeswoman said, “All we are doing is allowing them to carry across the negative equity they already have. It's not about additional borrowing or additional risk. The maximum borrowing we would consider is 125% overall, but that doesn't mean someone can automatically get that. We would go through our normal procedures, looking at income, outgoings and so on. 2009-07-09 http://www.londonmortgageadvice.co.uk/news/article/332 According to Unbiased the public believes they are unable to get a suitable mortgage due to lenders low income multiples. Tightening of lending criteria over the last six months has had a lasting effect on the public. Perceptions of lending criteria and income multiples have worsened since Q1 2009, with the average income multiple currently being placed at just 3.1 times an individual's salary, which has dropped slightly compared to 3.2 times an individual's salary at the start of the year. There has been a shift in perceptions for the worse amongst the public - 33% of Brits now think they can only get between 0.5 times and 2.5 times their salary, compared 31% of Brits at the start of the year. Similarly, only 24% of Brits think they could borrow over 4 times their salary now, compared to 28% of Brits at the start of the year. Whilst lenders are still being more conservative than before, as a basic guide most lenders will now offer around 4 times an individual's annual income. Those looking for a mortgage also need to ensure they understand deposit sizes, as well as income multiples, as in the current market to get a good rate they will also need at least a 20% deposit. Perceptions of income multiples by those living in Wales and the South East have shifted even further than the UK average since the beginning of the year. 32% of those living in Wales and the South West now believe they can only get a maximum of up to 2.5 times their income, compared to a lesser 28% at the start of the year. Similarly, only 25% of those living in Wales and the South West believe they can get 4 times or more their income now, compared to 33% of those at the start of the year. 2009-07-08 http://www.londonmortgageadvice.co.uk/news/article/331 Lenders expect to make credit more readily available to households and businesses over the next three months, after increasing lending over the last quarter, the Bank of England’s (BoE) latest Credit Conditions Survey has revealed . Lower funding costs had boosted the availability of secured credit to households in the second quarter for the first time since the third quarter of 2007, the BoE’s quarterly report showed . The report said. “While concerns about the economic outlook had continued to bear down on credit availability, the impact had been smaller than in previous surveys.” Lenders expected that demand for secured lending would remain broadly unchanged over the next three months.Demand for secured lending for house purchase was reported to have increased over the past three months while demand for secured lending for remortgaging declined further. With lenders expecting a further increase in both default rates and losses given default, default rates on lending to households and to private non-financial corporations rose over the same period. 2009-07-07 http://www.londonmortgageadvice.co.uk/news/article/330 The benefits of an historically low Bank Base Rate have not been passed on to many borrowers with some existing borrower rates as high as 5.5%. 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. Is a fixed rate 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? What will determine the rise in the cost of mortgages will be the cost of funding for the lenders. 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. Another matter is the cost of wholesale funding. 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. 2009-07-06 http://www.londonmortgageadvice.co.uk/news/article/329 Since April 2008, sold signs have been sprouting across the country, increasing to their highest number. The number of Sold signs instructed by agents in June rose to the highest level for 14 months, and showed a 19.2% increase on May, according to estate agency sign supplier Agency Express. There were 36.3% more Sold signs in June than June 2008, year-on-year. The West Midlands was region showing the greatest monthly increase in the number of boards moving from For Sale to Sold, with a 58.7% rise, followed by the East Midlands (35.1%) and Yorkshire (28.8%). The regions experiencing the lowest increase in sales were Wales, which remained static, London where there was a 7.6% increase and the North-East where 8.3% more Sold signs were instructed,were the regions experiencing the lowest increase in sales. Agency Express points out, however,that there is still some way to go: the latest June figure is 34% lower than the monthly average for 2007. While the number of new For Sale boards has crept up this year, from the lowest recorded level in December 2008, the lack of new instructions is also apparent: June’s new For Sale board activity is 32.9% down on last June. It is also 56.1% down on the highest recorded month in the last two years, which was May 2007. East Midlands (37.4%), Yorkshire (26%) and London (25.4%) are the regions showing the greatest monthly increase in the number of For Sale boards being put up are the. The regions showing the smallest monthly rises in the erection of For Sale boards were Scotland (2.1%), the North-East (13.9%) and the South-East (15.4%). “There are grounds for continuing optimism that we have seen the bottom of the market. Confidence is definitely returning and we have seen a step-change in the number of properties being sold right across the UK.Stephen Watson, former estate agent and managing director of Agency Express, said. “This in turn is likely to encourage more people to put their houses up for sale and we have certainly seen evidence of this happening already. But we are not out of the woods yet.“The number of properties sold in June is still significantly behind the monthly average we saw in 2007 and I would suggest that it’s likely to take another couple of years for a full recovery to take place.” 2009-07-03 http://www.londonmortgageadvice.co.uk/news/article/328 There has been reaction by property experts to yesterday's Nationwide Monthly House Price Index which saw a 0.9% in June. Some say that it highlighted renewed buyer enthusiasm for the best properties with very thin house sales volumes. The best locations and most desirable properties are seeing price stabilisation at the moment, whereas less desirable areas and homes are still seeing big annual price falls. Could be though that this renewed confidence and the increased buyer interest that estate agents are reporting will not last beyond the summer. Wtih mortgage rationing is set to continue, as the banks struggle to recover from the credit crunch, this is causing a clear disconnect between property viewings and buying figures. In addition, unemployment figures are getting worse daily and the wider recession continues apace. Massive national and personal debt problems will see much more house price pain when interest rates start their inevitable increases next year. An alternative view however is that the three-month rate of change has turned positive for the first time since December 2007 and is a sure sign of better things to come. However, transactions are still historically low, as we wait for the fundamental drivers of mortgage availability and consumer confidence to make a more assertive return. It could be that Nationwide's figures bring further evidence that the housing market is on an upward curve, with price rises expected to continue throughout the rest of the year. As the shortage of homes grows more severe and the competition for existing properties increases, so property prices could be forced up. 2009-07-02 http://www.londonmortgageadvice.co.uk/news/article/327 The latest news from NATIONWIDE regarding the cost of buying a house has now been publshed and it makes interesting reading. House prices increased by 0.9% in June, raising the average price to £156,442, according to the latest Nationwide index. The three month rate of change turned positive for the first time since December 2007 and the annual rate of change has improved to -9.3% from -11.3% in May the latest statistics also show. “If the pattern of price movements seen in the first half of the year is repeated over the second half, then prices could show only a small single digit fall for 2009 as a whole. This would represent a stark shift from trends seen at the turn of the year, when most indicators were pointing to a repeat of the large declines seen in 2008, Martin Gahbauer, Nationwide’s chief economist, said. “House prices have now risen in three of the last four months, suggesting that the improvement that began to show up in March represents more than just statistical noise. What is unusual about the recent trend reversal, however, is that it has taken place against a background of transactions activity that is still very low by historical standards. “Although it has risen from the all-time record low reached in November 2008, the industry-wide number of mortgages approved for house purchases is still 55% below its long-run average and 33% below the trough reached in the 1990s downturn. Normally, such a low level of house purchases would be associated with falling house prices.“Alongside the low level of mortgage approvals, however, there continues to be a relentless drop in the stock of property available for sale, as potential sellers and builders have responded to depressed demand conditions by reducing the supply of property coming onto the market. As a result, prices have been able to stabilise even in the face of very low demand. “On balance, the stabilisation of house prices is a welcome surprise that did not seem likely at the beginning of the year. However, there are still considerable headwinds facing the demand side and until we see a more robust recovery in house purchase activity, it is too early to be confident about a full-scale recovery of prices.” 2009-07-01 http://www.londonmortgageadvice.co.uk/news/article/326 87 per cent of home owners opting for this type of product as fixed-rate mortgages are dominating this sector of the loans market. In the second quarter of 2009 there was a 16 per cent rise in consumers opting for fixed-rate mortgages, according to Legal and General's Mortgage Purchase Index. "Who could blame [consumers]? Margins on these products are high and it's almost a cast-iron certainty that when the base rate next moves, it will be upwards." says Stephen Smith of Legal and General. Adding that fixed-rate mortgages will give home owners "valuable peace of mind" in "turbulent" economic times and warned that with rates on the rise now could be the time to seize such products. To glean an overall picture of the market, Legal and General's Mortgage Purchase Index tracks trends from thousands of mortgage providers around the UK. Barclays announced that it is raising the cost of fixed-rate mortgages for new customers, reported the Daily Telegraph, earlier this month. Depending on the type of fixed-rate mortgage being taken out, rates on this kind of product at Barclays were raised from between 0.2 and 0.7 of a percentage point,. 2009-06-30 http://www.londonmortgageadvice.co.uk/news/article/325 Research shows buy-to-let landlords are losing their properties at over three times the rate of other homeowners. 1,700 buy-to-let properties were repossessed by lenders in the first three months of this year, Council of Mortgage Lenders figures show. Buy-to-let mortgages much harder to come by, caused by the recession. Lenders are appointing more receivers of rent.In this process, a tenant is allowed to remain in a property instead of losing their home. It also gives the lender time to decide what to do with the property, whilst offsetting the mortgage interest against the rent. That in turn can help reduce the arrears faced by the landlord. 0.35% of buy-to-let properties were taken back by lenders - more than three times the rate in the owner occupier markets where 0.11% of mortgaged properties were lost. This has come about as many landlords got into trouble after paying too much for buy-to-let flats. Rents have often not lived up to expectations, and landlords have struggled to pay the mortgage. And with falling house prices - which have often hit city centre flats especially hard -many could not afford to sell either. The situation has been made more difficult by lenders getting tougher over mortgages, with buy-to-let loans particularly badly affected. At the beginning of last year it was easy to get a buy to let mortgage with a 15% deposit. Now borrowers need a 25% deposit to have any chance. And now what is happening is this is hitting the number of buy-to- let mortgages taken out. In the first three months of this year there were 22,400 new buy to let mortgages. Whereas at the height of the boom two years ago - when 346,000 buy to let mortgages were snapped up in just twelve months. 2009-06-29 http://www.londonmortgageadvice.co.uk/news/article/324 A study said on Wednesday says that European house prices sinking in the global economic crisis are likely to fall further next year although the British market may steady Standard & Poor's (S&P) estimated that British house prices may "stabilise" in the last three months of this year.This may leave them at about seven percent below the level in December last year, and they may remain "roughly stable" in 2010. Ireland would fall 13 percent this year and a further 10 percent in 2010. Spanish housing market is poised for an extended period of adjustment, with prices declining until 2012," it said. France, prices "will drop by about 10 pgrcent in 2009, and by two percent in 2010." "Given the magnitude of past increases on one hand, and the severity of the current economic recession on the other", many people were wondering how much longer the downward correction of prices would last. Jean-Michel Six,the agency's chief economist for Europe,said: "Since the beginning of the current downturn in mid-2007, price declines have been much steeper than in the 1980s-1990s."This pointed to two possible outcomes, he said: a fall lasting "four to five years -- and leading to a dramatic cumulative price fall", or a much quicker correction given the speed of price falls so far. Affordability had improved rapidly. But house prices had fallen far more quickly than during previous downturns and this had brought about a sharp loering of the cost of homes relative to incomes. On this measure, the price fall could "reach its end in the next year or so." Iin part, the crisis was caused by excessive debt taken on by households and companies, and the correction of this factor would take time.However, the level of household debt differed from country to country and was "much higher in Spain and in the UK than in France or Italy", suggesting that the housing downturn might last longest in highly leveraged countries. 2009-06-25 http://www.londonmortgageadvice.co.uk/news/article/323 It has been claimed that the majority of mortgage borrowers chose to fix their mortgage deal in the first quarter of this year, Some 87 per cent chose a fixed-rate mortgage product during the second quarter of 2009 according to Legal & General. And this is an increase from 71 per cent who chose to fix their mortgage repayments in the first three months of the year. It is claimed by Legal & General that while average two-year fixed-rate mortgage rates climbed from 4.78 per cent in quarter one to 5.46 per cent in the second quarter, average three and five-year deals actually got cheaper. "Borrowers who are prepared to take out variable rates have been few and far between. And who could blame them? says Stephen Smith, director of housing at Legal & General."Margins on these products are high and it's almost a cast iron certainty that when the base rate next moves, it will be upwards." Acording to Moneyfacts,however the average two-year fixed-rate mortgage costs 5.04 per cent – while that is still an increase it is a substantially smaller one than that observed by Legal & General. 2009-06-24 http://www.londonmortgageadvice.co.uk/news/article/322 Approvals for house purchases rose to 31,162 in May, up 15.8% compared with the same month a year ago as mortgage approvals by the UK's major banks have continued the steady rise of the last six months, figures show. Data also shows that borrowing on credit cards has dropped owing to householders' economic uncertainty as various lenders have raised the cost of fixed-rate mortgages in recent days. Whilst there are rising number of approvals - a signal of future activity in the housing market - the BBA said that the mortgage picture remained subdued overall. The modest recovery in the housing market is in danger of being nipped in the bud Some experts think that High Street banks were loosening their lending constraints and offering mortgages to people who did not have a large deposit to give. Others says that consumers' appetite to borrow had been hit by uncertainty over jobs, house prices and the state of the economy in general. This also meant that demand for new loans was contracting, and spending on credit cards was down 11.4% on a year ago. With interest rates still at a record low, the number of people remortgaging has continued to fall. Approvals were down 60% to 24,847 in May as many householders simply stuck with their lenders' variable rates. With the Bank rate still at 0.5% - Low interest rates were also hitting savings, with the BBA seeing a low level of new deposits being made by customers, who are likely to be searching elsewhere for higher returns. Negative equity stops home moves However, the capacity of banks to lend remains tight and so this has caused them to put up the cost of home loans. Nationwide and Barclays announced this week that they were raising the cost of their fixed-rate mortgages. This comes after the cost of inter-bank borrowing led most lenders to raise rates a week ago. The modest recovery in the housing market is in danger of being nipped in the bud," he said. In a report by ratings agency Fitch has suggested that, owing to falling prices, 23% of borrowers in the UK could face negative equity by the time property values hit their trough. Negative equity is the situation where someone's house has become worth less than their mortgage. If its peak-to-trough prediction of a 35% drop in house prices was correct, Fitch said that - by value - a third of all home loans would be in negative equity. A separate survey by website Findaproperty.com found that average rents in the UK increased for the first time since August 2008. They went up by 0.5% month-on-month to £823, the research found. 2009-06-23 http://www.londonmortgageadvice.co.uk/news/article/320 Following news that one in six homes is at risk as rainfall across the country increases with many potentially facing the insurance nightmare of affordable insurance cover being withdrawn, the property industry is echoing calls for the government to double flood prevention spending. Spending must increase from £570 million a year to £1 billion per year to avoid around £4 billion of yearly damage from flooding, the Environment Agency said last week. The governmentmust act now, believes the British Property Federation (BPF), which represents developers, investors and agents, and that not doing so could not only impact new development but also insurance for existing homes and businesses. There is a very real possibility of affordable cover being withdrawn in areas of high flood risk, it says. As valid property insurance is one of the terms set out by lenders, no insurance cover would mean no mortgages,. “These figures are a wake up call to the Government to increase the resources they dedicate to fighting the risk of flooding,says former head of property at insurance firm Aon, Bill Gloyn, who chairs the BPF’s insurance group, this will reduce the chances, and severity, or future flood events but also provide much needed confidence to the insurance industry to continue to provide flood cover for households and businesses 2009-06-22 http://www.londonmortgageadvice.co.uk/news/article/321 House purchases rose to 31,162 in May, up 15.8% compared with the same month a year ago as mortgage approvals by the UK's major banks continued the steady rise of the last six months. Hoever at the same time data also shows that borrowing on credit cards has dropped owing to householders' economic uncertainty. Various lenders have raised the cost of fixed-rate mortgages in recent days. The BBA said that the mortgage picture remained subdued overall, despite the rising number of approvals - a signal of future activity in the housing market . The modest recovery in the housing market is in danger of being nipped in the bud Some say that that High Street banks were loosening their lending constraints and offering mortgages to people who did not have a large deposit to give. Whilst other say that consumers' appetite to borrow had been hit by uncertainty over jobs, house prices and the state of the economy in general. This also meant that demand for new loans was contracting, and spending on credit cards was down 11.4% on a year ago. With interest rates still at a record low, the number of people remortgaging has continued to fall. Approvals were down 60% to 24,847 in May as many householders simply stuck with their lenders' variable rates. Low interest rates - with the Bank rate still at 0.5% - were also hitting savings, with the BBA seeing a low level of new deposits being made by customers, who are likely to be searching elsewhere for higher returns. Raising rates The recent drop in house prices and low interest rates has tempted some people back into the housing market. AREAS FACING NEGATIVE EQUITY Northampton: 16.9% of borrowers in negative equity Nottingham: 16.2% Derby: 15.1% Cardiff: 14.7% Wigan/Manchester: 14.5% Source: Fitch Ratings Negative equity stops home moves However, the capacity of banks to lend remains tight and so this has caused them to put up the cost of home loans, according to Ray Boulger, of mortgage broker John Charcol. Nationwide and Barclays announced this week that they were raising the cost of their fixed-rate mortgages. This comes after the cost of inter-bank borrowing led most lenders to raise rates a week ago. But Mr Boulger warned that any recovery of demand in the housing market could be stunted if the Bank rate rose, as predicted, in the coming months. "The modest recovery in the housing market is in danger of being nipped in the bud," he said. Negative equity A report by ratings agency Fitch has suggested that, owing to falling prices, 23% of borrowers in the UK could face negative equity by the time property values hit their trough. Negative equity is the situation where someone's house has become worth less than their mortgage. If its peak-to-trough prediction of a 35% drop in house prices was correct, Fitch said that - by value - a third of all home loans would be in negative equity. The areas already most affected were Northampton, Nottingham and Derby, the ratings agency said. A separate survey by website Findaproperty.com found that average rents in the UK increased for the first time since August 2008. They went up by 0.5% month-on-month to £823, the research found. 2009-06-22 http://www.londonmortgageadvice.co.uk/news/article/319 One in ten agents believed that the number of people selling would DOUBLE if HIPs were taken off the market a survey of members by the National Association of Estate Agents (NAEA) reveals. 20% of all agents believed that the number of sellers would increase by a fifth to on equarter. And an amazing 91 per cent of agents were adamant that customers paid little or no attention to the controversial packs anyway. In April, the average estate agent had 67 properties available to sell, compared with 84 in April 2008 and 100 in December. Chief executive of the National Association of Estate Agents, Peter Bolton King said: “The housing market has seen a number of positive signs in 2009, particularly an increased demand for property and more sales being completed.However this will be unsustainable without a steady supply of housing. HIPs are controversial and in the NAEA’s opinion, relatively useless. That is bad enough, but these figures suggest that professional agents believe that they are actively harming the market.The figures are significant because of fears that housing market recovery is being stunted because increased demand for property among buyers is not being matched by a supply of houses for sale.The Government should look at scrapping these packs, at the very least until the market has recovered. At that stage they should be reviewed. The NAEA would be happy to offer its professional opinion as to the best way forward.” 2009-06-19 http://www.londonmortgageadvice.co.uk/news/article/318 Facing their first rise in mortgage rates for a year homebuyers in a move by banks and building societies could extinguish the recent recovery in the housing market. For one, Nationwide has hiked the cost of its most popular deals, with others likely to follow suit in the coming days. Lenders are increasing the cost of their fixed-rate mortgages, the type of deal that around 80% of homebuyers are opting for at the moment. Nationwide has upped the cost of its fixed-rate deals by up to 0.86%, and state-owned Northern Rock has raised its five-year fixed rates by 0.2%, both with effect from tomorrow. If rates rise too far, too fast, it could very easily nip the recovery in the housing market in the bud. Here is the explanation. Banks are raising mortgage costs after an increase in their own funding driven by government bond yields. As investors have become more optimistic about the health of the UK economy, they have begun to fret about the return of inflation. That has prompted them to sell government bonds, known as gilts, whose long-term value is eroded by high inflation. When the price of gilts falls, their yield – the interest rate the government must pay to borrow – goes up. Today the yield on 10-year gilts hit a seven-month high of 4.01%. Since many other interest rates across the economy are set with reference to gilt yields, this increase is feeding through to borrowing costs for ordinary families and businesses. And with the news that mortgage costs are rising came as the Bank of England announced that up to 1.1 million households have been plunged into negative equity by the property crash. With prices down by 20% from their peak in autumn 2007, research by the Bank published tomorrow suggests that between 700,000 and 1.1 million homeowners now owe more on their mortgage than their house is worth. Bank of England's monetary policy committee will be concerned at the rise in mortgage costs. After slashing interest rates to just 0.5%, their lowest level ever, they embarked on the drastic policy of quantitative easing – buying up billions of pounds worth of government bonds – to bring down borrowing costs and boost lending to cash-strapped families and businesses. Could it be we are experiencing a spring bounce. Figures issued by the Council of Mortgage Lenders today showed a 16% jump in mortgage lending to people buying a home during April. Mortgage rates have been at all-time lows, and at the end of such a period there always comes a change of direction. It looks as though we're now there, and all the signs suggest fixed-rate mortgage rates are only heading one way – upwards. The fear is that once interest rates start rising, they will go up quite rapidly. When a few lenders start raising rates, the rest of the market are quick to follow. 2009-06-17 http://www.londonmortgageadvice.co.uk/news/article/317 Within the current mortgage market it even more difficult for first-time buyers to get on the property ladder where.In just two-and-a-half years, mortgages requiring a 10% deposit have almost vanished. It is difficult for existing homeowners to move up the ladder acknowledging that first-time buyers have long since been described as a core part of the property market. Without having a significant deposit,and since the onset of the credit crunch, mortgages have been harder to secure . According to research from price comparison website moneysupermarket.com there are now just 102 mortgages for people borrowing up to 90% of their home’s value, this is down from more than 3,000 different deals at the start of 2007. Moreover, first-time buyers are being hit with high interest rates with the average rate on a 90% loan-to-value (LTV) mortgage currently at 6.23%. What conclusions can we draw from this? The Government has failed to get mortgage lenders to open their books to first-time buyers. A 10% deposit is all most first-time buyers can expect to afford, so by pulling 90% LTV deals, and increasing rates on the remaining deals, lenders are keeping first-time buyers out of the house buying process - which simply creates a stagnant housing market. The Council of Mortgage Lenders (CML) said last week that the number of loans approved for house purchases in the UK rose by 16% in April compared with March. At the same time, the Royal Institution of Chartered Surveyors (Rics) reported that new buyer enquiries rose for the seventh consecutive month in May, while completed sales were at their highest since August 2008. 2009-06-16 http://www.londonmortgageadvice.co.uk/news/article/316 The Confederation of British Industries,CBI predicts that UK GDP, supported by low interest rates and quantitative easing, should flatten out during the second half of 2009, with quarter-on-quarter figures of -0.1% and 0% in Q3 and Q4, and modest quarter-on-quarter growth of 0.1% and 0.3% in Q1 and Q2 of 2010 The UK’s leading business group expects modest growth to resume during the first three months of 2010, with the pace of growth gradually picking up during next year. . Director-General, Richard Lambert, CBI said: "The world recession has deepened, so it is not surprising that the UK economy has continued to suffer. However, the harshest period of the recession looks to be behind us, the economy is stabilising and this should continue during the second half of this year. "The return to growth is likely to be a slow and gradual one; difficult credit conditions are still affecting business behaviour. For positive growth to return, lenders need to feel more confident so that credit can start flowing again."Some commentators have been carried away by recent tentative indicators as evidence of ‘green shoots’. It will take some time before we can be sure these shoots have roots we can depend on for sustainable growth and, in the meantime, the government must do everything it can to help firms get access to credit." They reckon, by the end of the recession, the economy will have shrunk by a cumulative 4.8% - not as severe as the 5.9% seen in the early 1980s - after five consecutive quarters of falling GDP. Also they expect there to be very slight growth from the start of 2010, with the pace picking up slowly, such that trend growth rates are restored only by the end of the year. For 2010 as a whole, this profile yields an average annual GDP growth of a modest 0.7%. This follows a fall this year in GDP of 3.9%.CPI inflation is expected to fall below the Bank of England’s target of 2% in 2009 Q3 and remain there throughout the forecast period to the end of 2010. Quantitative easing is expected to continue for some months yet, but by the spring of next year, the Bank is expected to wish to return monetary policy gradually towards a more normal footing, with very modest increases in the official rate of interest from its current 0.5%. Importantly, the labour market is proving to be even more flexible than hoped, with many more private sector employees accepting wage freezes and short-time working than in previous downturns. This should help limit the pace of job losses through 2009, and the CBI now expects unemployment to peak at a slightly lower level than previously thought. Unemployment is still expected to continue to rise until Q2 2010, to a peak of 3.03 million (9.6%), before edging lower during the remainder of 2010. Public spending will be constrained not only by the rise in unemployment, but also a more elevated savings ratio and only modest increases in incomes. Through 2009 and 2010, the savings ratio is forecast to remain at a similar level to the two-year high of Q4 2008. Meanwhile, average earnings (including bonuses) should continue to fall on a year ago during Q2 and Q3 2009, followed by weak growth from Q4 and into 2010. The CBI’s figures show household consumption shrinking by 2.9% in 2009, and growing only modestly in 2010 (0.5%). The weakness of construction investment over the early part of 2009 has led to a modest revision in the outlook for business investment. Business investment is expected to shrink by 12.4% this year, from the -9.3% expected in April, and by a further 1.4% in 2010. Firms have reduced their stock at a rapid pace at the start of this year, this should now begin to ease and firms should start re-building their stocks next year. The public finances are expected to be under growing pressure from the recession and net borrowing is expected to reach £172.3 billion in 2009/10 and £182.2 billion in 2010/11, representing 12.2% and 12.6% of GDP respectively. There is still have some way to go before the UK economy is truly out of the woods and we see sustainable growth. For consumers, some of the worst fears of earlier in the year may now not be realised, but they will still face tough times as higher saving and lower income eat in to their ability to spend.However, the restraint shown by businesses and their staff in setting pay awards and accepting short-time working should help to curb the pace of job losses, lessening the pain for some, and shows the real strength of Britain's flexible labour market 2009-06-15 http://www.londonmortgageadvice.co.uk/news/article/315 Latest statistics from RICS show a further increase in both new buyer enquiries and sales, as well as a reduction in the level of stocks on surveyors books has begun to provide some support for property prices. New enquiries edged up again in May, as witnessed bu a number of chartered surveyors, with 48 percent reporting a rise rather than a fall, the seventh consecutive monthly gain. Sales also rose, albeit from very depressed levels, indicating that the increase in footfall of potential buyers is steadily improving activity in the housing market. The average numbers of properties sold over the past three months rose to 11.8, up from 10.6. At the same time the net balance of surveyors reporting a fall in house prices rose from a negative balance of 58.7 to 44.1 percent. As a result of new instructions continuing to fall,the average number of properties on surveyor’s books has dropped in the past month to 58.4 from 69.4 (they have fallen by more than one third over the past year). The lack of new supply, coupled with the increase in activity, is now providing some support for house prices. This is being most visibly reflected in the sales-to-stock ratio, widely seen as a key indicator of market slack, which saw a sharp increase from 15.2 to 20.1 percent. As to the outlook for both house prices and sales, this improved significantly in May, with a net balance of 40 percent more Chartered Surveyors expecting sales levels to increase, the highest figure in the survey’s history (1998). Only 11 percent more surveyors are expecting prices to fall rather than rise. This compares to 42 percent last month and represents the best reading since July 2007. One might deduce form the above that the housing market does appear to be close to bottoming out. Activity is picking up and prices noew stabilising. However the lack of supply has been important in underpinning prices. And with unemployment set to continue, and finance for first time buyers still in short supply, there are a number of major impediments for the market to overcome for the rest of the year. 2009-06-10 http://www.londonmortgageadvice.co.uk/news/article/314 With the closure of all its 160 UK Cheltenham & Gloucester (C&G) branches with the loss of 1,500 jobs, Lloyds Banking Group is announcing further job losses today. Lloyds Since April, has axed almost 3,000 jobs. According to the union, Unite 20,000 jobs have been axed in the finance industry in the first four months of 2009, with Lloyds making up over 10% of the losses. Analysts said, at the time of its merger with HBOS,that it was inevitable that the integration of the two banking giants was bound to create thousands of jobs losses because of the level of overlap between the two banks. A spokesperson for Lloyds said that C&G was an important brand to the group and “would continue to be so”. So, according to the BBC, the C&G brand will be kept for mortgages and savings. In related news, yesterday it was reported that 87% of new shares offered by Lloyds Banking Group have been bought by the bank’s shareholders. Lloyds announced the cash call in order to replace the £4 billion of preference shares held by the Government in the bank for equity. Lloyds will become the first bank to repay some of the Government’s £37 billion bailout of the UK banking sector and therefore returning money to taxpayers. Lloyds TSB (as it was previously known) made a profit of £807 million - an 80% fall compared with the previous year, while HBOS made a loss for the full year of £11 billion. The two banks together are expected to be in loss this year. For the full 2008 year. 2009-06-09 http://www.londonmortgageadvice.co.uk/news/article/313 According to the Halifax House Price Index, UK property prices increased by more than £4,000 in May, with the average house price rising by 2.6% during the month, the biggest monthly rise since 2002. This indicates a stabilisation in the property market. Following the latest data from Nationwide, which recorded a 1.2% increase in house prices in May, the second consecutive monthly increase, thesw figures semm ot back that one up. Halifax calculates that the average property is now worth £158,565, a similar level to mid-2004. Halifax housing economist, Nitesh Patel,said: "It is always important not to place too much weight on any one month's figures.Historically, house prices have not moved in the same direction month after month even during a pronounced downturn. For example, prices fell by 11% nationally during 1991 and 1992, but there were five monthly price rises in this period. House sales remain substantially below their long term average and market conditions are expected to remain difficult with housing activity continuing at low levels over the coming months.” however despite these rises there a re many observers who believe that, while activity in the property market may be picking up, prices have further to fall this year. 2009-06-05 http://www.londonmortgageadvice.co.uk/news/article/312 There were genuine fears that we could be about to see a collapse of the financial system. But the government predicts there will be growth next year There is a fresh optimism in the air and some economists suggest it could be time to start talking about having reached the bottom of the recession. What sort of recovery should we expect? It has been consumer spending that has led the recovery inthe past, but personal debt was a part of what started this downturn. Even if there is not a big rise in spending, retailers could still boost growth by boosting their stock in the near future. Retailers will have to restock their shelves at some point soon, which will make the recovery look better than the growth in demand would suggest. Nonetheless, consumer spending is unlikely to be the leading factor in the recovery. Some have suggested it could be an export-led recovery. Exporters are already benefiting from the weak pound against the euro and the dollar, which makes their products cheaper to their overseas customers. The problem with an export-led recovery is that it means we would have to wait for other countries to have their recoveries before we can. However, is the UK manufacturing sector in any state to lead the UK economy's recovery? Some companies will have been forced by the recession to lose a significant chunk of their workforce and some of those will be highly skilled people who they've reluctantly had to let go because of the pressure they're under. In the past, what was keeping the pound strong was the earnings from financial institutions. A possible source of growth in the recovery could be green technology. It is not just the manufacturing sector that could see an upturn in exports - the service sector could also benefit. The UK tourist industry is expected to benefit from the weak pound encouraging visitors from overseas. There may even be some growth from the financial services sector. And, there has also been some talk of an inflation-led recovery. The thinking is that if debt is the big problem for both the government and individuals, some controlled inflation would reduce the value of that debt. Well,it looks as if we may be relying on exports and investment when the recovery comes, but perhaps we should not raise our hopes too high. 2009-06-04 http://www.londonmortgageadvice.co.uk/news/article/311 The annual rate of house price falls eased from 15% in April to 11.3%, with a typical home now costing £154,016. House prices fell by 0.5% compared with the previous three-month period, the lowest quarterly drop since January last year. During the downturn of the early 1990s, there were many months during which prices rose, only to fall back down again in subsequent periods. The combination of rapidly rising unemployment and tight access to credit implies that the last of the price declines has probably not been seen yet. Less properties are coming onto the market as many sellers choose to rent their properties to tenants, rather than try to sell them in a depressed market. It has helped stabilise the ratio of sales to the unsold stock of properties on estate agents' books. More reasons for the price rises could include potential sellers holding back, fearing that they would not be able to get the price they wanted in the current economic conditions, and fewer homes being built. Some sellers might not be able to hold off for long, particularly if they have lost their job and their income has fallen. Reports of increased interest from new buyers might also tempt some potential sellers back into the market. Volatility is typical of a housing market dragging along the bottom and mirrors the testing economic conditions What happens with UK rents could affect house prices.If the supply of homes onto the market does increase, the recent moderation in the pace of house price falls may not be sustained. Now, however, it is unclear how the balance between supply and demand will ultimately work through in the coming months. Estate agents and others have given the latest figures a guarded welcome. Volatility is typical of a housing market dragging along the bottom and mirrors the testing economic conditions. Some estate agents have reported an increase in activity among first-time buyers, but levels of lending still remain low and people, especially first-time buyers, still need a large deposit. First time buyers should not be unduly worried at this point, as there is a good chance prices will fall again slightly in the quieter summer months. However, anyone seriously considering getting onto the property ladder needs to commit in the next six to nine months or they could well miss the bottom. 2009-06-03 http://www.londonmortgageadvice.co.uk/news/article/310 In the UK property market, for those investing, there have been different levels of optimism among recent indicators. News around the turn of the year that buyer enquiries were on the up was a particularly low level, given that prices and transactions were still falling, but something stronger and higher has begun to appear since. To begin with, signs emerged that mortgage lending was starting to grow again, while transactions stopped declining and began to rise again. To this may be added a few hints that the wider UK economy has seen the worst of the recession, such as improved readings in the Organisation for Economic Co-operation and Development's Composite Leading Indicators. People that commentate on these things have urged caution over any conclusion that there may be a big rebound in the market soon - suggesting that the historic levels of lending and transactions are still low - but recently appear to have brought reason for the highest level yet. As recently as last week Nationwide recorded a 1.2 per cent rise during May, the second time in three months that its index has seen an increase. Now may have tilted the balance much more in favour of the optimists, who may consequently see now as a very good time to invest. Firstly, housing website Hometrack recorded that the average UK house price remained the same in May as it did in April - the first time in 20 months it has not fallen. However, in the context of one survey showing prices rise and another staying put, those looking for positive signs may be cheered by the latest Land Registry statistics. April's data revealed saw a drop of 0.3 per cent, compared with 0.4 per cent in March and two per cent in February. Could this reveal a pattern of a slowing decline, rather than an end to the slide and for that reason more solid conclusions must be kept on hold until May's survey arrives. It may be noted that had the level of price decline increased in April, this would form a counter-argument to any suggestion that the market really is bottoming out. Instead, a slowing decline may be seen as a precursor to a stabilising of prices in May. London saw the highest rise in April at 1.4 per cent, adding weight to the assertion of that London the capital is already seeing the price stabilisation that other parts of the country will experience later this year, from the third quarter onwards. 2009-06-02 http://www.londonmortgageadvice.co.uk/news/article/309 In a sign the housing market may be stabilising after a very sharp slide, the BBA said the number of mortgages approved for house purchase rose to a seasonally adjusted 27,685 in April from 26,671 in March. Down 15.5 percent on the year, this was the smallest annual decline since August 2007, when the credit crunch hit and the housing market started to come off the boil. Could this be that the figures suggest that the mortgage market may be stabilising? Despite record low interest rates and the Bank of England's efforts to pump money into the economy, analysts cautioned that lending conditions remained tight, and that the housing market was still a long way from recovery. One must not forget that the improvement is from a such a low base and the fact that approvals haven't really increased at all this month is a worrying signal of credit conditions.The BBA figures showed net mortgage lending rose by 2.7 billion pounds compared with a downwardly revised 3.4 billion pound rise in March -- the smallest increase in 8 years. The average value of the loan stood at 129,100 pounds. It has been suggested that interest from prospective homebuyers may be improving as Britons slowly regain confidence in the economic outlook. House prices also seem to be falling at a slower rate than last year. However, banks remain cautious about lending while the economy remains deep in recession and unemployment is climbing, and this could hamper a pick-up in housing market activity. The BBA said the number of re-mortgaging approvals fell to 25,418 last month, down 63 percent on the year and its lowest since December 1999. Approvals for housing equity withdrawal were down nearly 39 percent on the year to 19,409. 2009-05-29 http://www.londonmortgageadvice.co.uk/news/article/307 Tighter lending criteria mean that homeowners may struggle to remortgage, according to some experts. Millions of homeowners with mortgage deals that expire over the next year are in for a horrible shock. Fears are growing of a sharp rise in defaults and home repossessions when the Bank of England begins to increase the cost of borrowing as the economy recovers.Economists forecast that interest rates will rise as early as next year; any increase is likely to be passed on quickly by lenders in the form of higher SVRs. While interest rates are low, borrowers will be fine to sit on SVRs but once rates start to rise, which are expected to happen next year, payments could become unaffordable and lead to repossession for those who can’t cope. With a £150,000 interest-only mortgage on the current average SVR of 4.61 per cent, a borrower is paying £576 a month. But if interest rates rise by 2 percentage points over the next 18 months, as some economists expect, monthly repayments will increase by £250, or £3,000 over the course of the year. A rise of 4 points, predicted by 2012, will lead to repayments soaring by £5,000 a year. The chronic shortage of mortgage funding means that borrowers with even the slightest question mark over their financial or employment history are being rejected for new deals.The restrictions are unlikely to ease over the next year as banks continue to pick and choose the best borrowers. However, there are nearly 4 million who have seen their wages cut, face redundancy, have moved frequently, are self-employed, or face high levels of debt. A further one million borrowers are in negative equity, according to the Council of Mortgage Lenders (CML). These borrowers, who are trapped with a home loan that is worth more than the value of their property, will find it impossible to secure a new mortgage deal from most lenders. Another 1.3 million homeowners are considered bad risk because they have missed mortgage payments or credit card bills, have been repossessed, or were given a county court judgment. And, this group is set to double over the next 12 months as unemployment passes three million. At least half a million borrowers will be three months in arrears by the end of the year, according to the CML. Mortgages for borrowers considered credit-impaired have vanished from the market in the past two years. At the peak of the housing boom, there were more than 7,000 mortgage deals for borrowers with less than perfect credit histories.Another group of borrowers who will struggle to secure mortgage finance are those with a self-certification mortgage.Matt Andrews, of MoneyWorkout, the broker, says: “Without proving their income, families were allowed to stretch to a slightly larger property by securing a mortgage outside their income capability. 2009-05-27 http://www.londonmortgageadvice.co.uk/news/article/308 The British Bankers' Association (BBA) said today, mortgage lending from high street banks slumped to an eight-year low in April, but there were also signs of an increase in homebuying activity.Net lending, which takes into account repayments, increased by £2.7bn over the month, down from £3.4bn in March. Gross mortgage lending stood at £7.9bn in April compared with £8.7bn in March and a six-month average of £9.9bn. The figure is 52.4% lower than in the same month last year. However, there was some evidence that activity among homebuyers had picked up as gross lending for house purchases crept up to £3.5bn against a six-month average of £2.9bn. This was up on the previous month's £3.4bn, but 29.7% lower than the amount lent in the same month last year.The number of mortgages approved for house purchases also edged upwards to 27,685, around 1,000 more than in March and well above a six-month average of 23,812. The average home loan for a purchase had a value of £129,100, 16.7% lower than last April.Borrowing on credit cards, meanwhile, increased very slightly in April with £6.1bn in new spending going on to plastic compared with a six-month average of £6bn, but down 10.8% compared with last April. However, the value of repayments matched the amount spent at £6.1bn. Lending through personal loans and overdrafts remained steady at £1.5bn, down 39.3% compared with the same month last year. While there is evidence that people are being relatively conservative in their borrowing, figures published today by comparison site Confused.com suggested worrying levels of consumer debt. Research by the firm showed that on average for every £1 earned an individual will owe £1.02. According to the study, the area of the UK with the biggest discrepancy between borrowing and income is Kingston upon Thames in Surrey, where debts were equivalent to 169% of annual income, followed by Watford, with 166%. People in Manchester fared much better with debts equalling 51% of income. Clip Contact us Article history EmailClose Recipient's email address Your first name Your surname Add a note (optional) Mortgage lending from high street banks slumped to an eight-year low in April, the British Bankers' Association (BBA) said today, but there were also signs of an increase in homebuying activity. bang banks should never have been allowed to lend money as mortgages. 2009-05-26 http://www.londonmortgageadvice.co.uk/news/article/306 As part of a new government and banking initiative,homeowners struggling to meet their mortgage debt could be offered lower monthly repayments With other institutions lined up to join the scheme soon, the Homeowners Mortgage Support (HMS) scheme is being offered by 10 banking groups and building societies, The scheme means that borrowers who suffer a temporary loss of income could cut their mortgage interest payments by up to 70% for up to two years. The Council of Mortgage Lenders (CML) currently forecasts 75,000 repossessions this year with as many as 500,000 mortgages in arrears of three months or more by the end of 2009. The roll-out of HMS comes amid rising repossessions and levels of arrears among borrowers, with many struggling to cope after losing their jobs. Many families are worried about how to pay the mortgage right now, and there is a determinatio to ensure there is real help available for them. Borrowers must contact there lender straight away if they are concerned about how to pay the mortgage as often a solution can be found. HMS provides borrowers with breathing space, with interest payments deferred for up to two years. The government is keen to stress that HMS is not a payment holiday and does not allow people to dodge their debt. Repossession is a last resort. It is not yet clear what impact the HMS scheme will have asit will be some months before it will be possible to assess the impact of the various industry and government measures. The CML expects to be able to update its forecasts on arrears and repossessions, taking into account these measures as well as the prospects for employment and the wider economy, over the summer. Lloyds Banking Group (which includes Halifax and Bank of Scotland), Northern Rock, the Royal Bank of Scotland (which includes NatWest and Ulster Bank), Bradford & Bingley, Cumberland Building Society, and the National Australia Bank Group (which includes Clydesdale and Yorkshire Bank) have all confirmed their full participation in the scheme and will offer HMS from today (21 April). The following, Barclays (including First Plus), HSBC, Nationwide and Santander (including Abbey and Alliance & Leicester) have all confirmed they will offer comparable arrangements to HMS to their customers, but will not take up the government scheme. This means that customers should receive a similar level of support as people with banks offering HMS. Bank of Ireland (which includes Bristol & West), GMAC, GE Money, Kensington Mortgages, the Post Office and Standard Life Bank, meanwhile, have confirmed they will offer customers HMS as soon as possible. Lenders fully recognise their responsibility to keep people in their homes where repossession can be avoided, The fact that some lenders are utilising the new scheme and others are not indicates simply a difference in their approach not in their commitment to it. The following circumstances qualify:- You have suffered a temporary loss of income. For example, you or your partner may have been made redundant, have had your hours cut or are no longer able to work overtime. * You have no insurance policies in place protecting your mortgage payments. You are not eligible * If you own more than one home. * If your income is unlikely to return to its previous level. For example, you might have a long-term illness preventing your from working. * If you have insurance in place that protects your mortgage payments. * If you would still be unable to keep up with repayments even if they were reduced. * If you are claiming Jobseeker's Allowance - in this case you can claim support for mortgage interest instead. If you qualify for HMS, then the first step is to contact your lender and explain your situation clearly. In most cases you will then be referred to an independent money adviser, such as the Consumer Credit Counselling Service, to discuss your situation further. It will also explain how HMS works, outlining the risks as well as the benefits. If you and your lender agree that you are suitable for HMS then you can expect the following help: * Renegotiated monthly repayments. You and your lender will agree how much you can realistically afford to pay back each month. Under the scheme, you must be able to pay at least 30% of the interest due on your mortgage each month. * After 12 months, you are required to meet with your lender to review your circumstances. * You will benefit from lower monthly repayments for up to two years or until your situation changes. If your income does change during this time, then you must inform your lender. If your income returns to previous levels you are likely to no longer be offered HMS. * After two years (or if your situation changes) the interest payments you have deferred over the period will be added to your mortgage balance. You will, therefore, have to repay back this money, with interest. How you pay this back, and over what timeframe, will be decided between you and your lender. However, bear in mind that your monthly repayments are likely to increase. While HMS allows you reduced monthly mortgage interest payments for up to two years, this scheme does not allow you to avoid paying this money back altogether. After two years (or if you are no longer eligible for HMS) you will be required to pay back the interest payments missed. Your lender will add this to your total mortgage debt, and this will attract interest as your overall mortgage rate. It will be up to your lender how your monthly payments will change as a result. 2009-05-26 http://www.londonmortgageadvice.co.uk/news/article/305 Offsetting like this reduces the amount of interest you need to pay the lender each month. So you can either simply pay less each month, or keep payments the same and pay off your mortgage earlier. You won’t receive interest on your savings as a result, but you’ll still have access to them when you need them. So really, it gives you the opportunity to manage your money as it suits you. As you’ll see on page 6, to save more interest you can also make overpayments on your mortgage if it suits you. We calculate your interest daily, so anything you put in your savings or current account starts working immediately to reduce interest on your mortgage. Term reduction We will collect the monthly mortgage payment as normal. We will deduct any offset benefit from the capital balance, thus reducing the mortgage term. Although the default option is to reduce the term, you can switch between term and payment reduction at any time with no fee – just contact London Mortgage Advice to find out how. Payment reduction Your monthly mortgage interest payment is reduced to reflect the credit balances in the offset arrangement. Depending on how much you’re able to offset over the course of the mortgage you could save thousands of pounds in interest payments – contact your Financial Adviser to find out how. If you have a mortgage of £120,000, but have £10,000 in savings and current accounts, by offsetting, you will only pay the mortgage interest on the £110,000 difference. You can then choose to either pay less each month as you are only charged interest on £110,000 or you can choose to overpay, without incurring early repayment charges, each month to reduce the term of the mortgage. Is an Offset Mortgage right for you? It could be particularly useful if you: have excess funds left in your current a • ccount to put in your savings • already have savings - as you can have these effectively working for you at the full mortgage rate by offsetting them • are looking to reduce your mortgage – you can do this by either regularly saving and offsetting or make as many capital overpayments as you like • require flexibility to access your Barclays savings and current accounts whenever you want - you can dip in and dip out as you need, and even transfer money online between accounts • are a higher rate tax payer - you will not pay any tax on interest you would have earned on your savings or current accounts • have unpredictable cash flow - if you are self-employed, receive occasional large bonuses or commission, or work on highly-paid short-term contracts, any large sums you receive will start working hard for you immediately, as your interest is calculated daily. This could also be the case with other sources of income such as rent • save regularly towards your annual tax bill - as you can have this money working efficiently all year to reduce your mortgage payments. If you have savings or a little left over each month, an Offset Mortgage could suit you. That applies whether you’re remortgaging or buying a new home. Unlimited overpayments available Unlike many Offset Mortgages, ours lets you overpay as much as you like, whenever you are able.* We calculate interest daily - so your money works harder Anything you put in your savings or current account starts working immediately to reduce the interest payable on your mortgage. * Fees may apply on full redemption You can choose from many eligible accounts, and view and manage them online You choose up to 12 of your eligible Barclays current and savings accounts - see page 9 for a list of eligible accounts. You can then see all your accounts online, alongside your mortgage account, and make transfers when it suits you. You keep any historical ISA allowances If you’ve saved money in an ISA in the past you can offset this. But if in the future you don’t need to offset your ISA accounts, you will have retained your historical tax-fee savings capability. Your savings offset at the whole mortgage rate By offsetting with Woolwich, you are effectively getting interest on your savings at the full mortgage rate. For example, if your mortgage rate is at 6%, your savings and current account will offset the mortgage interest at that rate. You can also reduce your tax bill. Even though your current and savings accounts do not earn interest, they do reduce what you pay on your mortgage - and you won’t pay tax on your savings because it’s not earning any interest. This is particularly efficient if you’re a higher rate tax payer because you won’t pay tax on savings interest earned. 7How can an Offset Mortgage reduce the length of my mortgage? If you choose term reduction, we’ll collect your full monthly mortgage payment, and the benefit from offsetting your savings will be used to reduce the capital part of your mortgage, thus helping to pay it off sooner. If I have chosen to reduce my monthly payments, how will I know what I’m paying each month? We’ll send you a monthly statement showing a daily breakdown of the benefit you receive from your linked accounts, and the monthly direct debit payment we will collect. How and when do I choose which accounts to offset? To ensure you make the most of your savings and current account balances, pick the accounts you want to offset as soon as you set up your Offset Mortgage. If you open new accounts after that time, you can add them when you do - up to the maximum of 12 eligible accounts. What do I get when I open my offset account? As part of your Offset Mortgage, we will open a Mortgage Current Account and a savings account for you. They will both be linked to your mortgage and you can keep your funds in one of the accounts or separate into the two accounts. The credit balance is offset against the mortgage which reduces the amount of interest charged on the mortgage. How many people can be part of an Offset Mortgage? The maximum number of applicants is two. Can we offset joint savings accounts? You can offset a joint account against a joint mortgage for the same names, but you can’t use a joint savings account to offset an individual’s mortgage. Your questions answered 8Can I offset an individual named account on a joint mortgage? Yes, you can use the savings or current account of an individual named on the mortgage to offset a joint mortgage they have. Please note that account information for their individual account will appear on the joint monthly mortgage statement. When will my reduced payments show on my account? This will not show on your first mortgage payment - this debit interest is always collected in full in the first month. Offsetting credit balances will begin to show in arrears, from the following month onwards. What interest rate will I pay? All Woolwich Offset Mortgages are tracker mortgages and so the interest rate moves up and down in line with Barclays Bank Base Rate. Which accounts can I use to offset? Please use the following table to see which types of accounts you can use. If you hold any other account, please ask and we can advise you of the best way to move funds, or open a new account. If you do not have a Barclays account, we can set up a suitable one for you. 9 Eligible Current Account Types Barclays Bank Account Additions Platinum Flexible Current Account Staff Current Account Premier Life Current Accounts Plus Additions Active Eligible Savings Account Types Openplan Savings Reserve Openplan Savings Pot 1 Openplan Savings Pot 2-12 Barclays Mini cash ISA Barclays Flexible Savings Pot 1 Barclays Flexible Savings Pots 2-12 Barclays Cash ISA Tax Haven ISA Tax Beater Cash ISA What happens if I have more in savings balances than I have outstanding on my mortgage? Because of the way the Offset Mortgage is structured, you wouldn’t receive any credit interest. If this becomes the case, you would be better off transferring the surplus into a savings account not linked to the Offset Mortgage. If I have exactly the same in savings as I have on my mortgage, will I pay or receive any interest? This is called 100% offset, and theoretically it will mean you pay no interest on your mortgage and receive no interest on your savings. In reality there will be slight anomalies as credit interest uses the actual number of days in the calendar month, while debit interest simply divides the year into 12 (so each ‘month’ is 30.4 days). For example, in a 28 day February, the credit interest applied in March will be for 28 days whilst the debit charged will be for a twelfth of the year i.e. 30.4 days, there will therefore be a difference. Will I get credit interest on my savings? No, your savings will instead be use to reduce your mortgage interest. But it also means you won’t pay tax on any savings interest you may otherwise have earned. Can I withdraw an account from the offset arrangement? Yes. Simply let us know which account you no longer wish to offset and we can arrange this for you. Please see the question below for the effect of this withdrawal. What happens if I withdraw an account from the offset arrangement? Any account you chose to withdraw from the offset arrangement will continue to operate under the terms and conditions of that particular product. You will earn interest (if applicable) on any credit balances held in that account in accordance with the terms and conditions for that particular account. Any credit balances held in the withdrawn account will not form part of the offset calculation. You can opt to return any eligible account to the offset arrangement at any time. 10 6 2009-05-22 http://www.londonmortgageadvice.co.uk/news/article/304 After the Financial Services Authority admitted that allowing their growth was one of the key mistakes made during the housing boom, self-certification mortgages, often branded in the worlst light could face a ban,. Self-certification loans give borrowers the chance to verify their income, ideal for those in self-employment or freelancing. However, retail markets managing director, Jon Pain, admitted that the FSA could have made a mistake in allowing this side of the mortgage industry to flourish.Many borrowers inflated their salaries to get larger mortgage loans . Many of the specialist lenders heavily marketed and sold self-certified products, and a large percentage of these have led to correspondingly high levels of arrears and fraud.2007 was a boom year for self-cert, with as many as 45% of all mortgages approved with no check on income. 2009-05-21 http://www.londonmortgageadvice.co.uk/news/article/303 The National Association of Estate Agents (NAEA) reported that property sales in April were at their highest since October 2007 which gives further evidence that the housing market may be recovering. The average estate agent sold 10 properties last month, up from 8 the previous month and a record low of 5 last August, according to the NAEA. Peter Bolton King, chief executive of the National Association of Estate Agents commenting on the findings, said: “What we are beginning to see now are consistent positive indicators that have held firm or improved since the beginning of the year. Six months ago people were talking about how British people’s attitude to owning property had changed in the recession. The NAEA always said that this was nonsense, and that demand for property remained strong, but confidence in the market had gone. These figures show that this confidence is returning.” Meanwhile property website Rightmove revealed that property asking prices are up for the fourth month in a row by 2.4%. The average asking price of a home increased by £5,000 to £227,441, during the four weeks to May 9 - the largest percentage rise since May 2003 in the midst of the housing boom according to Rightmove. There is a word of caution however, that as vendors see their equity dwindling away due to falling house prices, they may be pricing their homes at unrealistic levels. There is a worry that the lack of supply of good housing stock could delay the recovery of the housing market. And it is widely reported new buyer enquiries continued to rise in April - the sixth consecutive monthly rise and the fastest pace since August 1999. 2009-05-20 http://www.londonmortgageadvice.co.uk/news/article/301 Britons are reluctantly taking the decision to return to Britain from Spain. Many are saying that they cannot make it work any more financially and that although would love to stay, things are so hard there that they cannot last any longer. Their Spanish dream over. With the low value of the pound, the end of Spain’s decade-long building bonanza and the global financial meltdown have conspired to make Britain a more attractive place to many expatriates, despite the deepening recession at home. And the Spanish sunshine and way of life cannot hide the dire recession into which Spain is falling. Unemployment stands at 17.4 per cent — more than double the European average — and more than four million people are out of work. The property market, which had employed large numbers of Britons in southern Spain, is stagnant. No new homes have been built for four months by any big developer. Whilst the sun is nice but it doesn’t pay your bills. And opportunities are very thin on the ground there. In England there are still more opportunities and you have the support of family and friends. Applying for state benefits in Spain might prove difficult for many British expatriates, many of whom speak little Spanish. If you want to get help from the authorities you have to wade through red tape. Official figures do not exist for how many are heading home. The British Embassy estimates that one million Britons live at least part of the year in Spain. And for those hunting for jobs in Britain, the idea of swapping the Spanish sun to start again in the gloom of Britain in recession may seem strange. However, many returning expatriates say that although things are tough in Britain, competing for jobs with Spaniards who have the advantage of the language and family contacts often makes it harder in Spain. 2009-05-19 http://www.londonmortgageadvice.co.uk/news/article/300 Despite the fact that house prices have fallen, analysis from moneysupermarket.com has revealed ,frst time buyers continue to be priced out of the mortgage market. Just six per cent of mortgage products fall into this category but lots of first itme buyers are looking for a 90% mortgage If they are lucky enough to get 90 per cent LTV mortgage, they face an interest rate that is 30 per cent more expensive than a 75 per cent LTV mortgage deal. Despite falling house prices, finding a large deposit is no mean feat, we're generally talking about many thousands of pounds. Lenders should not be so focussed on the wquity – if an applicant can prove they are able to afford repayments, they should be trusted with the mortgage. Yesterday Abbey mortgages announced that it was increasing the LTV on all of its fixed rate mortgages from 60 per cent, to 70 per cent. This is a good example of a bank trying to help its customers – others should follow their lead. Whilst 70 per cent is still high, it will reduce the thousands of pounds required upfront for a deposit, and as house prices have dropped it will open more doors for those looking to remortgage if they have lost equity in their property. But with a mojority of firt time buyers looking for a 90% deal lets hope things get better. 2009-05-18 http://www.londonmortgageadvice.co.uk/news/article/299 According to the latest monthly lending survey from the Council of Mortgage Lenders, First-time buyers and home movers are benefiting from the lowest debt servicing costs since 2004,despite borrowers still needing large deposits to be able to enter the market, and overall lending remains constrained. Uup from 31% in February and the highest proportion since December 2007,house purchase lending accounted for 35% of all mortgage lending in March, On the other hand, remortgaging, still accounted for a higher number of loans in March, but the number was only 8% higher than in February and 45% lower than in March 2008. Because of attractive reversionary rates automatically cutting in for many borrowers as they come out of their existing deals, and because of reduced remortgaging opportunities for those with reduced levels of equity as a result of falling house prices the CML expects remortgaging to remain muted. First-time buyers accounted for an increasing share - 40% of loans, up from 38% the previous month. First-time buyers on average borrowed three times their income and 75% of the value of their property in March. Both these average measures were unchanged from February. The combination of low interest rates and lower house prices mean that their monthly interest payment now equates to only 15.1% of their income, the lowest proportion since June 2004 (15.1%),for those with deposits large enough to enable them to buy.Because the flow of lending is still constrained, there is a sharp dividing line in the housing and mortgage markets between those who can raise a substantial deposit and those who can't. For those who can, the burden of debt payments is low and mortgage interest is consuming proportionately less income than for a number of years. This is good news for now. Even so, a mortgage is a long term commitment. People borrowing now should be mindful of the years ahead when interest rates eventually rise, as they will. 2009-05-15 http://www.londonmortgageadvice.co.uk/news/article/298 Landlords are struggling to meet their mortgage repayments in thier thousands as the economic downturn devastates the buy-to-let market. Many are months behind with mortgage payments and repossessions of buy-to-let loans had also risen. According to the Council of Mortgage Lenders there are about a million buy-to-let landlords in the UK. There is a concern thatsern that that the buy-to-let market may produce significantly higher arrears and defaults than the owner-occupier segment. On another front is the era of self-certification mortgages coming to an end. Self-cert loans, in which homeowners were not required to provide proof of income, were aimed at self-employed borrowers but were open to abuse. About 45 per cent of loans were approved in 2007 without a check on the borrowers’ income. There is evidence of irresponsible self-cert lending that it would address by requiring all applications to be accompanied by proof of income. Figures suggested that the pace of house price falls could be easing. House prices fell by 1.3 per cent in March, after a sharper drop of 2.8 per cent in February, figures from the Department for Communities and Local Government show.However, the annual decline in house prices widened to 13.6 per cent from 12.3 per cent. The figures, which are based on a sample of completed sales from 60 lenders, show that flat-owners were the hardest hit, seeing the value of their property falling by 1.9 per cent in March. Terraced houses held their value the best, falling by only 1.1 per cent during the month.Prime London asking prices have edged up for the fourth time in five months in April, suggesting that sellers are confident that buyers are returning to the market. The average asking price in prime London rose by £4,462, according to primelocation.com, the property website, an increase of 0.34 per cent. South West London showed the biggest improvement, with a monthly increase of 1.36 per cent. Wimbledon prices have risen by 4.4 per cent since March. . 2009-05-14 http://www.londonmortgageadvice.co.uk/news/article/297 Britain's battered economy is seeing sterling surged to a four month high amid further signs of life. Manufacturing and jobless figures were better than traders expected,who took heart from the smallest drop in manufacturing for 13 months and the most modest rise in jobless benefit claims since October. The indicators do suggest the downturn is close to bottoming out, although the recession is not over. Oil prices jumped above $60-abarrel on optimism the global economy may also be past its worst. Sterling pound gained as much as 1.2% to $1.53 against the greenback, its strongest level since 9 January. It also rose to 89.29p against the euro. It might suggest the economy as a whole will bottom out in the third quarter of the year. On the jobs front it is better than earlier this year and better than expected. It suggests the labour market could stabilise a little earlier than financial markets are thinking. However, the chances of seeing a durable recovery will depend, in part, on efforts to restore the banking sector to health. There is clear evidence of thawing in the markets. 2009-05-13 http://www.londonmortgageadvice.co.uk/news/article/296 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? 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 so the question belomes more relevant. There is growing optimism that the pace of the decline in values has slowed right 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 proves houses have become more affordable, even though market conditions are likely to remain tough with the potential of further falls. However, it can be argued that it's now more difficult for them to get on the property ladder. A couple of years ago they could get 90 or 100 per cent mortgages, but the available loans-to-value have shifted downwards. The reductions in interest rates are now having an effect and people are beginning to realise you can now buy a property cheaper than you can rent one. The advantages of buying now are that interest rates are extraordinarily low, which means mortgages are generally more affordable, while it's also possible to drive a hard bargain as those needing to move are struggling to attract potential buyers. It could actually be a good time to climb up the property ladder, becuase if you're trading up then, theoretically, things ought to be moving in your favour because 20 per cent off a £500,000 house is more than the same percentage off one worth £250,000." The tightening of lending criteria during the credit crunch is also starting to be relaxed now which will help the market However, the more money buyers can put down, the cheaper the rate they will pay. Ideally, they will need to have a deposit of at least 15 per cent and even more attractive deals are available for those who can stretch to 25 per cent. 2009-05-12 http://www.londonmortgageadvice.co.uk/news/article/295 Over the last two months,average fixed-rate mortgage deals have increased, even though the Bank of England kept interest rates at an historic low of 0.5 per cent this week and pumped a further £50 billion into the system. MoneyFacts, the personal finance publisher, says average two-year fixed rate mortgage, still the most popular deal, was 4.87 per cent at the start of March, just before the Bank cut bank rate from 1 per cent to 0.5 per cent. Following that, fixed rates started to come down and fell to 4.60 per cent in April, but since then have started to creep back up and yesterday were ate 4.62 per cent. They are likely to climb higher once the latest increases are taken into account. The profits lenders were making from home loans were now the highest for a very long time, with banks and building societies putting up their rates to protect their profits ahead of the expected surge in repossessions later this year. Lenders are creaming profits with the hardest hit being first time buyers. Those who have just a 10 per cent deposit – the case for most people trying to get on the housing ladder – have seen rates drop from 6.38 per cent to 5.97 per cent before climbing back up to 6.13 per cent. The big worry is that fragile signs of a potential recovery in the housing market could be squashed if first time buyers are shut out altogether from buying a property. Recentlythere have ben signs that the fall in house prices is slowing down, while there are reports that the number of potential house buyers has been increasing. The pick up in activity is being constrained by the availability of finance for buyers, especially those with small deposits. It is sad that rates are climbing back up. And especially hard on first time buyers. 2009-05-11 http://www.londonmortgageadvice.co.uk/news/article/302 A woman in the Lone Star State of Texas was sentenced to 99 years in prison for mortgage fraud. Yes, you read that correctly: nearly a century in jail. Though other recent Texas mortgage fraud convictions have seen prison sentences of between 18 months and five years, Kandace Yancy Marriott of Gun Barrel City, Texas, got the maximum sentence possible after being found guilty of orchestrating a complex mortgage fraud scheme where she received monthly mortgage payments from her clients, failed to remit those payments to the mortgage lender and embezzled the homeowners' funds, causing her clients to default on their home loans. How did Marriott get the book thrown at her? Apparently, being convicted of committing multiple felonies in Texas gives the judge discretion to add years of jail time for each one. Now, according to the state attorney general, she and her husband, Darrell L. Marriott, sold manufactured homes through their company, One Way Home & Land, illegally forged homebuyers' signatures, inaccurately completed loan applications and falsified supporting documents, including the buyers' rent payment verification statements, proof of employment and Social Security Administration benefits data. Predominantly, the scheme involved low-income purchasers whose residential loans were guaranteed by the Department of Housing and Urban Development. As a result, when the unqualified buyers defaulted on their home loans, their mortgage lenders did not suffer financial losses. Instead, HUD had to cover the default costs, meaning taxpayers ultimately will pay. And according to the Texas AG's office, HUD lost more than $4 million due to Marriott's actions. Her husband and Marriot closed the One Way Home & Land after litigation and investigations ensued in late 2005. According to the AG, they then opened a Kaufman County firm under the name Torenia, where they continued engaging in fraudulent activity. In March, retired senior district judge Robert Dohoney, who presided after the acting judge recused himself due to knowing the defendant, sentenced Marriott to 99 years. Where you have real estate sales, comps (comparable sales) are often used to determine value. So, what are the comps for this kind of fraud in Texas? According to the U.S. attorney's office for the Northern District of Texas, a former title company escrow officer from Commerce, Texas, was sentenced to 42 months in prison the same month for defrauding her employer of more than $1.2 million. In January, three Dallas businessmen who were found guilty of running a massive mortgage fraud scheme were each sentenced to prison terms ranging between 18 and 60 months. this begs the question how did Marriott wind up being sentenced to nearly a century in prison? Although Tom Kelley, a spokesman for the Texas AG's office, was surprised at the judge's ruling, saying he was "shocked" when he heard the sentence, one of the reasons is simply that the state can be - and often is - very harsh in doling out sentences to people convicted of multiple felonies. The state's prhosecuting attorney, David Glickler,said that these are the rules in the Texas legal system. "That's the beauty of Texas punishment," he said. "We go from five to 99 years." He added that during the trial, he pointed out that every false statement made is a second-degree felony and proved to the jury that Marriott had made hundreds of false statements, each being a first- or second-degree felony. In part, the harsh sentence was also due to the prosecution revealing at the trial that Marriott ran a massive organized fraudulent operation for years. "It was a criminal enterprise," said Mr. Kelley. "This crime was part and parcel of the everyday course of business. She trained all of her staff on how to manipulate and massage documents," Mr. Glickler said. "They manipulated and tricked buyers into not even knowing who owned homes. She was instrumental to the whole process; she didn't just run the company that did this." Linda Howard, a former saleswoman who worked for Marriott,during the trial testified about how the company manufactured Social Security Administration letters and verifications of employment every single day. Mr. Glickler said the witness' demeanor was so nonchalant and matter-of-fact about the company's daily fraudulent activities, the jury found it shocking, which the prosecuting attorney supposed might have gone a long way toward handing down the maximum sentence. Marriott apparently didn't win the jury over with her behavior during the trial. Mr. Glickler said that she was caught lying multiple times in her testimony, not just over the case itself - although she did testify she wasn't hands-on with the business when multiple witnesses claimed she was - but over trivial and tangential matters. During the trial,for example it came up that she and others opened an events hall in downtown Corsicana and got a liquor license for the property. Marriott testified that when they opened the events hall, the hall owner insisted the license be in Marriott's name to expedite the process. She said in her testimony that she was unhappy to do this, as she was a fundamentalist Christian who didn't drink, but complied. However, the prosecution proved that the license wasn't in Marriott's name. "So, why would she lie about something as silly as that? I think she wanted to see if jurors were religious and they could bond over the topic," said Mr. Glickler. Amazingly, Marriott is appealing, though not on the grounds of cruel and unusual punishment. In fact, her notice of appeal is on the grounds that the evidence was factually insufficient. Her appeal, which is going to the 10th Court of Appeals in Waco, will take up to a year before the prosecution sees a brief on it. Marriott's defense attorney, Ed Mason, did not return calls requesting comment. Her husband has been indicted in the case, as has their daughter, Kally, and Karen Hayes, Marriott's sister. As of May 15 they were all awaiting trial. Marriott's 99-year prison sentence was ultimately due to the constant and malicious nature of the crimes,according to the Texas AG's office, which primarily targeted low-income victims, and the prerogative of the Texas judicial system. "Every little thing was a felony and things piled up," said Mr. Glickler. "She committed felonies like we breathe air." 2009-05-10 http://www.londonmortgageadvice.co.uk/news/article/294 Halifax has reported a significant improvement in the mortgage payments to earnings ratio in its latest First Time Buyer Affordability Review. Mortgage repayments account for 31% of average income, down from a peak of 48% in 2007 and below the long-term average of 37% recorded over the past 25 years, for the average first-time buyer,. What is more, the house price to average earnings ratio is down 26% from a peak of 5.84 in July 2007, to an estimated 4.34 in March 2009. A leading spokeman for Halifax, Martin Ellis says: “There has been a marked improvement in housing affordability for potential first-time buyers in many parts of the UK over the past 18 months. This trend continued in the first three months of 2009. The significant reductions in house prices, relative to average earnings, has resulted largely from the decline in house prices.” But first time buyer levels are low. This is due to tighter lending criteria which has been reflected in “a much reduced availability in mortgages at high loan to value ratios. Conditions in the housing market are likely to be tough during the remainder of 2009 despite the improvements in affordability.” It is expected that increasing unemployment, low consumer confidence and the turmoil in the financial markets to continue to put downward pressure on house prices during 2009 and that prospective first-time buyers should take acclunt of this when doing their calculations. 2009-05-08 http://www.londonmortgageadvice.co.uk/news/article/293 If you have a 40 per cent deposit,first time buyers and and existing borrowers have their pick of mortgage deals. In the past six months,, the number of new mortgage products which require a minimum deposit of 40 per cent has increased by almost two thirds,according to Moneyfacts At the same time,the number of mortgages which require a ten per cent deposit have decreased by the same amount. Darren Cook, analyst at Moneyfacts.co.uk, said: "Banks are far from predicting the end of the housing slump and are hedging their bets by increasing the number of their best mortgages to those who are fortunate to have a 40 per cent deposit." He added that with a ten per cent deposit consumers will be paying interest at an average rate of 5.98 per cent. But here is the good news, Abbey has said that the mortgage market is set to grow this year. Abbey have nnouncement that profit at the bank jumped by 25 per cent in the first quarter of 2009. So maybe mortgage availability is about to take a turn for the better 2009-05-07 http://www.londonmortgageadvice.co.uk/news/article/292 The Association of Residential Letting Agents (Arla) is introducing a licensing scheme for its UK members and a code of practice for letting agents. In a separate measure, ministers were planning a registration scheme for private landlords in England and Wales. The Arla scheme will mean the following:- Hold a professional qualification relating to lettings Take part in continuing professional development Have professional indemnity insurance Have plans in place to protect any money they are holding for clients Have an annual independent audit carried out on clients' funds. Under the scheme, if an Arla licensed agent went out of business, any money it owed to clients would be protected. "Lettings agencies are going out of business and owing their landlord clients thousands of pounds, or even tens of thousands of pounds, in rent," said Peter Bolton-King, Arla's chief executive. "So this offers protection to landlords in the worst-case scenario." "For too long the rental sector has been seen as the black sheep of the property market, with a lack of regulation and a requirement for redress to protect the consumer when the agent's failings are to the financial detriment of that consumer," said Ruth Lilley, head of membership and professional development at Arla. Tenants in England can expect: A tenancy agreement That deposits be held by a tenancy deposit scheme That landlords should carry out repairs That landlords should give notice of inspecting or entering a property That rented properties should have a gas safety certificate That they should not be harassed or illegally evicted The National Association of Estate Agents plans to introduce its own licensing scheme later this year. "This recent development will surely come as a wake-up call to anybody operating in the sector that is not part of a regulatory organisation and cannot demonstrate to the consumer that they meet industry standards in the operation of their business," said Caroline Pickering, who chairs NALS. Landlords who did not keep their property in good condition could be struck off and have their licence revoked if property was not kept in good condition. The paper said the reforms would be outlined in a Green Paper within 10 days. Private landlords in Scotland are already required to register. However, last week, the charity Shelter Scotland said that rogue landlords were continuing to operate there three years after the scheme was introduced. 2009-05-06 http://www.londonmortgageadvice.co.uk/news/article/291 Time for a recap! Mortgage repayment refers to the process of repaying a loan taken out to buy a property. The amount to be repaid is usually measured in tens or hundreds of thousands of pounds. Mortgage repayments will be necessary for anyone who does not have the cash to buy a property outright, which is the vast majority of people in the UK. However, there are a number of different ways of tackling mortgage repayments. Some may be better for you than others, but this will depend on your circumstances and the risks you wish to take. A standard repayment mortgage: You pay a regular amount which covers both the interest on the mortgage and the repayment of the borrowed capital. Repayment terms are usually between 15-25 years. An interest-only mortgage: You only pay the interest on the money you borrow. You invest money separately, with the aim of repaying the borrowed capital in one lump sum at the end of the mortgage term. Within these two methods, there are a number of different options and products that can be used. Variable rate: The interest rate of the borrowed capital follows the changes in a variable rate set by the lender. This can change at any time. The rate you are charged is set at a level either above or below this Standard Variable Rate (SVR). Tracker rate: The interest rate follows an external tracker, such as the Bank of England Base Rate or the London InterBank Offered Rate (LIBOR). Any change made to those rates is applied instantly to your own mortgage rate. Fixed rate: Your interest rate remains at a fixed amount, and does not change. These methods can either be permanent or change after a set period of the mortgage i.e. a mortgage that tracks the Bank of England Base Rate for five years before changing to the SVR of the lender. Additional options and deals can also be applied in conjunction with the above or as entirely separate products, these include: Capped rate: The interest rate has a set upper limit, and sometimes a lower limit, beyond which it cannot pass. An upper limit provides security both for the borrower, preventing tracker or variable rate mortgages from moving up to a level they cannot afford. A lower limit provides security for lenders, preventing a mortgage from dropping to a level where they could potentially be losing money. Discount rate: A discount rate mortgage offers a lower interest rate for a set period over the start of a mortgage. This period can be anything from six months to ten years long in some cases. After this period, the interest rate reverts to a higher Standard Variable or tracker rate. Flexible mortgage: A flexible mortgage is an increasingly popular product that allows more flexibility in mortgage repayments. Overpayments, underpayments and payment holidays are all available subject to conditions. Regular overpayments can significantly shorten the overall length of a mortgage. Underpayments and payment holidays can allow breaks in repayment when needed. Offset mortgage: An offset mortgage takes into account your savings when determining the interest on your mortgage. Any savings held are deducted from your mortgage borrowing, leading to lower interest repayments. Current Account Mortgage (CAM): A CAM is similar to an offset mortgage, but in this case your mortgage and current account are merged together. Your income is usually required to be paid into this new account, with the any savings in the account deducted from the total of your mortgage. This can lead to lower interest repayments for disciplined savers, and therefore a mortgage that is paid off earlier. For those who plan to invest their money separately and pay off their mortgage in one large lump sum, there are a number of options: Endowments: The now largely discredited endowment mortgages are still offered by some providers. Regular payments are made into the endowment over the course of the investment, with any returns reinvested. Money cannot be accessed until maturity, with the time until maturity set to a period over which the money is expected to grow large enough to pay off the borrowed mortgage capital. However, endowment underperformance over the past decade has lead to 80% of endowment mortgages not reaching their targets, according to government figures. Individual Savings Accounts (ISAs): Money is paid regularly into mini or maxi ISAs. This money is invested into the stock market, with the usual range of choices that an ISA provides. ISAs are designed to provide tax free saving, which is another advantage. However, investors in the stock market should be aware that the value of their investments can both rise and fall. While an ISA mortgage can offer a faster method of repaying your mortgage, it can also do exactly the opposite. Pensions: This option allows you to repay a mortgage through capital raised in a pension scheme. This will only be a viable option for a select group of house buyers, and it is worth consulting with your accountant or independent financial adviser before seriously considering this course of action. What are the average costs of a mortgage repayment? Over time, you will have repaid more the amount you have borrowed. This is due to the interest charged on the mortgage, which is used by the lender for a number of reasons, including paying off bad debts from other borrowers. Interest payments on your mortgage will become smaller as you repay more and more of the capital, which for a standard repayment mortgage will mean the borrowed capital will shrink far faster towards the end of the mortgage period. Overcoming early interest payments is the major part of mortgage agreements, which is why early overpayments can make a large difference in later years. Choosing between different mortgage products will largely depend on your personal and financial circumstances. Different factors you should take into account are: How much can you repay per month? Bear in mind that should the interest rate of your mortgage go up, you will be required to pay more. For those on tight budgets, a fixed rate mortgage may be better over the long term. It is also possible to remortgage to another product if rates become too high, but that itself comes with its own fees and charges. Interest rates, length of repayment and repayment amounts all improve depending on how much money is put in. While there are a number of 100% loan-to-value (LTV) mortgages available, it is far more preferable to have some sort of deposit. Mortgage lenders will allow you to borrow up to a certain amount depending on your income. The maximum currently offered by some providers is four to five times your yearly income, but most offer amounts between three to four times your income. Borrowing more increases your monthly repayments and takes longer to pay off. A longer period of repayment can offer lower monthly payments but will also mean you pay more in interest over the course of the mortgage. The sooner the mortgage is paid off, the less you pay overall in most cases. If you’re not confident in your job or feel your income might fluctuate for other reasons, then it may be worth either delaying taking out a mortgage or arranging a flexible mortgage that will allow more leeway in both good times and bad. If in doubt, you can always consult external advice such as your accountant or an independent financial adviser. Those with spotty or impaired credit histories may find it difficult to find an appropriate mortgage. There are a number of options here. One is to repair your credit history before taking on a mortgage agreement, while another is to obtain a credit repair mortgage or similar product. Those with significant other savings that they do not wish to invest directly in the mortgage may want to consider an offset mortgage or CAM. If You are going to have the time to be on the lookout for the best deals, say by taking advantage of discount mortgages and swapping to better deals when their discounted rates expire, be sure to arrange terms and conditions that allow you to do that. Some local building societies and specialist mortgage providers offer preferential deals to those who live locally. It may be worth including this in any comparison you make. Mortgages are provided through banks, building societies and specialist mortgage companies and also work through third party organisations such as brokers or intermediaries. Unbiased and qualified advice on mortgages can be obtained from registered mortgage brokers who specialise in this market. 2009-05-05 http://www.londonmortgageadvice.co.uk/news/article/290 According to research recently conducted ti is revealed that fixed-rate mortgage products may become popular in the near future, thanks to the currently low base rate. It has been found by Abbey, which conducted the research, found that the number of people who believe that the base rate has reached its lowest ebb has nearly doubled over the course of two months. The number of people, according to the mortgage lender, holding out for a lower base rate has fallen from 17 per cent of people to seven per cent in the same period of time. Nici Audhlam-Gardiner, director of mortgages at Abbey, explained that the bank has launched a new range of mortgages to deal with the possibility of increased demand. Speaking to a very interested audience she added: "In the last few weeks, we have extended our range so there is something to suit every borrower whether they are remortgaging, moving house or making their first step onto the ladder." The base rate, which is set by the Bank of England, is currently 0.5 per cent. 2009-05-01 http://www.londonmortgageadvice.co.uk/news/article/288 Fionnuala Earley, Nationwide's Chief Economist, said: “The price of a typical house fell by 0.4% in April. This reverses some of the rise seen in March, but is in line with our expectations, given the current economic conditions. April’s decline leaves the average price of a typical house at £151,861, down 15% from 12 months ago. The 3-month on 3-month rate of change, generally a smoother indicator of the short-term trend in prices, improved to -3.1% in April from -4.1% in March. “The chancellor announced several measures aimed at boosting the housing market in his Budget. The scheme for government guarantees for new, high-quality residential mortgage backed securities are welcome and may help to boost the amount of mortgage credit available. However, since the availability of credit is only part of the reason why the housing market is in the doldrums it is unlikely to lead to a swift turnaround in its fortunes. Lenders have already indicated that the availability of credit is less of an issue than it has been, but at the same time expect that the demand for secured lending will fall further. Given the weakness of the economy and the expected further increase in unemployment this comes as no surprise. “The extension of the stamp duty holiday is also welcome in so far as it reduces the transactions costs for borrowers at the least expensive end of the market. While there has been no further increase in the amount of the tax free threshold, the impact of falling prices since the initial extension was announced in September 2008 means that more buyers could now benefit. Prior to the increase in the threshold the typical house price was above the old £125k limit everywhere except the Northern region. consequently, as house prices have come down, the typical house price is now below the new £175k threshold everywhere but in London and the Outer Metropolitan region. And for first-time buyers, only London has a typical house price above the threshold. She continued “It is possible that the extended period of the higher threshold will be more of an incentive for firsttime buyers to enter the market now that affordability has improved due to falling interest rates and house prices. But it seems more likely that, for the most part, buyers will remain cautious as long as they think that prices will continue to fall. The latest data from Nationwide’s Consumer Confidence Survey shows that consumers still think that prices will fall over the next six months. However, there has been a significant moderation in the rate at which they think prices will fall. This, along with the recent pick up in buyer enquiries and the increase in house purchase approvals in February, has encouraged some to suggest that this is the turning point in the market. And, while affordability is indeed more favourable and there does seem to be some cautious optimism from some quarters, it is still far too soon to say that this is the start of a solid revival in the market. “The housing market is very sensitive to income and, as a result, conditions in the labour market are crucial to its performance. The economy is now in the deepest recession since the Second World War and unemployment is continuing to increase, with the latest data showing that it breached the two million mark. ven though negative inflation will mean that real earnings will be increasing, it is likely to be some time before this feeds into a strong enough change in sentiment to encourage a full scale revival in the housing market. That said, the correction in house prices and improved affordability conditions provide a good grounding forthe market once domestic and global economic conditions once again become more favourable.” 2009-04-30 http://www.londonmortgageadvice.co.uk/news/article/287 After tumbling for every month since October 2007, British homeowners were treated to a rare respite on Thursday. House prices finally rose, albeit by a tiny amount, in March, according to data by the Nationwide thrift. Based on the Bank of England's latest survey, there could be more good news around the corner. The price of a typical house, yhe Nationwide figures showed, that increased by 0.9%, slowing the annual rate of decline from 17.6% to 15.7% and making the average home worth 150,946 pounds ($221,580). In addition and not least the survey also showed mortgage approvals rose in March, up 5,000 to 37,900, their highest level in nearly a year. The news follows months of aggressive interest rate cutting by the Bank of England, which has reduced the base rate to 0.5%. In March, the Bank went further, instigating a quantitative easing policy in a bid to get credit flowing. The data shouldn't be taken as evidence that the bottom had finally been reached, according to Fionnuala Earley, chief economist with Nationwide."The current upturn in activity is more likely to reflect the return of buyers who have delayed purchasing through the worst of the financial turbulence," she said. "These are only month- on-month figures and it is wise not to get too excited about them in the general trend of things. I wouldn’t suggest that we are seeing green shoots yet." Following on form this news is the possibility of more good news to come. Also on Thursday, the Bank of England said it expected credit conditions to improve over the next three months, as its quarterly survey found that a narrow majority of lenders said they expected a small increase in credit availability in that period. The drying up of credit has been a big force behind the plummet in the housing market. "Improvements in the cost and availability of funds were expected to support increased credit availability over the next three months," said the central bank. The Bank of England's survey suggests that the various policy measures taken by the central bank and government to boost lending were finally beginning to have an impact. according to IHS Global Insight economist Howard Archer, "It raises hopes that credit conditions will increasingly become less of a constraint on economic activity over the coming months." 2009-04-29 http://www.londonmortgageadvice.co.uk/news/article/286 Although promising that Nationwide mortgage holders would never pay more than 2% above the Bank of England base rate, one of the U.K.'s best-known mortgage providers has turned about face this evening. From 30th April those applying for a mortgage with Nationwide will not be able to take the base mortgage rate which is currently 2.5% and will instead be passed onto a new standard mortgage rate which will start at 3.99%. It is a substantial change of attitude by one of the U.K.'s best-known mortgage companies and there are serious concerns that others will follow suit in the short to medium term. This could also severely hamper any potential recovery in the UK property market at a time when hopes have been growing and confidence appeared to be improving. The company has also announced that there will be no guarantees attached to the new standard mortgage rate which will effectively allow the company to move the rate upwards and downwards without any formal connection to UK base rates. As to why Nationwide has chosen to take this route at this moment in time is something of a mystery although the company claims to be rebalancing the difference between savers and mortgage holders. 2009-04-28 http://www.londonmortgageadvice.co.uk/news/article/285 Recently, the number of homeowners looking to swap their homes instead of selling them has increased dramatically as the housing downturn has deepened. Over 6,000 properties have been registered on www.homeswapper4sale.co.uk, the specialist website, since it was created in August last year. Those undertaking this practice are people who have to move and others are using the sites as a means of bypassing estate agent fees. Typically, estate agents charge about 2 per cent of the selling price - a hefty expense at a difficult time financially. However, even estate agents and developers are using the sites as they concede that buying and selling through the traditional channels is not working. You simply post details of your property, including pictures, and the location, price range and size of property you would like to move to. There are many reason for using this service. Some users are looking for a similar property, while others will be trying to downsize or find something more grand. Some want to move to far-flung parts of the country, while others may want to move only a few miles, especially in London. In addition, there is even the option of swapping with an overseas homeowner. Swappers are alerted by e-mail or text message when they are matched with someone. If the two sellers are interested in each other's homes, they can then arrange viewings and proceed in the same way as they would for any other house purchase. One of the key advantages of a home swap is that there is no chain, with your sale or purchase relying on the sale or purchase of one or more other properties. Because only two parties are involved in a house swap, it should allow people to move much more quickly, with less risk of a sale falling through. However, anyone who has tried home swapping will know that, like online dating, it is rarely as simple as it sounds. Home swapping first appeared in the UK in the 1990s, partly as a tax dodge. This was because, until a few years ago, most house swappers could avoid stamp duty. The Revenue cracked down on this relief in 2003 and once the exchange has been completed both parties now need to pay stamp duty on the full value of the property acquired and register the swap with the Land Registry. The valuation for each property should correspond to the price that they would be expected to fetch if they were being sold. If you find a match at the same price, you can do a direct swap, otherwise one party will need to make up the difference. Any attempt to fiddle the numbers to cut your stamp duty bill will be frowned upon by the taxman. As well as doing all the usual checks, your lawyer should draw up a contract of exchange that includes all terms of the transaction, including any cash payments. Some lawyers will charge double what they would for a normal house purchase because house swaps are out of the ordinary. They will need to do extra work to ensure that everything is above board and correct. It also makes sense to pay for a survey to make sure that everything is in working order in your new property. Swappers who advertise will need a home information pack (Hip), which costs about £300. Since April 6 all properties are required to have a Hip from the first day that they are put on the market. You might not even escape an estate agent's fees if you decide to keep your options open by advertising through a traditional estate agent and on a home-swap website. You must also talk to your mortgage lender before proceeding with a house exchange to make sure that it does not have any objections. Another drawback is the shortage of homes to swap. The number of swappers advertising is growing, but the concept is still in its infancy here, so the chances of finding a perfect match are slim. 2009-04-27 http://www.londonmortgageadvice.co.uk/news/article/284 London mortgage broker, london mortgage advice. Northern Rock, the nationalised mortgage lender, is planning a major mortgage initiative, lending up to £14 billion to prospective home buyers in the next two years. The news accompanies acknowledgement from the company that a higher than expected level of customers could be facing early debt repayment problems. Northern Rock, the northern mortgage lender will attempt to boost the ailing UK housing market, with the potential for a £5 billion boost to lending this year. Repayment arrears amongst customers of the bank have shot up in the last three months. Because of the bad economic climate, Northern Rock is expected to make a substantial loss this year, the bank warned. They also made it clear that they had anticipated the repayment problems faced by customers. In contrast to their earlier lending practices, Northern Rock now lend conservatively and apparently focus on risk management in their lending . 2009-04-24 http://www.londonmortgageadvice.co.uk/news/article/283 The Homeowner Mortgage Support Scheme, announced by Gordon Brown in December, was supposed to help all homeowners - however some of Britain’s biggest lenders have declined to participate. It is designed to give support to those who have experienced a sudden drop in income or if a homeowner has been made redundant. Households at risk of repossession can defer up to 70 per cent of the interest on their monthly mortgage payments for up to two years, if their lender has signed up to the scheme. Halifax, which is taking part in the scheme, said yesterday that a borrower with a mortgage of £100,000 with a fixed rate of 4.5 per cent who participates in the scheme could pay as little as £110 a month. The same mortgage would cost £630 a month on a full repayment basis. So far, taxpayer backed Lloyds Banking Group, which owns Halifax, and Royal Bank of Scotland, which includes Natwest, have signed up. Northern Rock, the nationalised bank, and Bradford and Bingley, which has had the government take over its mortgage business, are also on board and will offer the scheme from today. Other lenders have announced they will join the scheme at a later date, including Bank of Ireland, Kensington, GMAC, GE Money, the Post Office and Standard Life Bank. Lenders that participate will have the security of a Government guarantee if the borrower defaults. Borrowers who bought their home before December 1, 2008, are owner-occupiers, and have an outstanding mortgage of less than £400,000 and savings of less than £16,000. According to the Government, the scheme applies to “borrowers who suffer a temporary loss of income ... to help them get back on track with their finances.” You must also prove you have talked through “other options” with your lender, and have been making regular payments for at least five months and have sought independent financial advice. This is payment deferred, not cancelled. The money will be added back on to the debt at a later date. You can't apply if you own more than one home – for instance if you are a buy to let borrower. You are also disqualified if you are unlikely to ever again earn an income similar to your previous wage or if your lender believes you are unable to meet the reduced repayments. Those with mortgage payment protection insurance are also ineligible, as are those claiming Jobseeker's allowance, in which case you can claim for support for mortgage interest. Lenders that have chosen not to sign up to the scheme include HSBC and Abbey, which have significantly grown their share of the mortgage market since the start of the credit crunch. Nationwide, the UK’s biggest building society has also declined to take part, as has Barclays, owner of Woolwich and First Plus. They have pledged to make “comparable arrangements” and will be relying on their own procedures for helping those in trouble. 2009-04-23 http://www.londonmortgageadvice.co.uk/news/article/282 Homeowner Mortgage Support Scheme – a new Government initiative which allows households at risk of repossession to defer up to 70% of the interest on their monthly mortgage payments for up to two years – has gone live from today, though some major lenders have opted to offer their own alternative. Given the required green light by Brussels under EU state aid rules on Monday, the initiative is open to borrowers who bought their home before 1 December 2008, are owner-occupiers, and have an outstanding mortgage of less than £400,000 and savings of less than £16,000. Lenders offering the scheme will have the security of a Government guarantee if the borrower defaults. From today, the following major high street lenders will offer their customers the mortgage support: Lloyds Bank Group, Northern Rock, the Royal Bank of Scotland, Bradford and Bingley, Cumberland Building Society, and the National Australia Bank Group. In addition to the above specialist lenders and building societies, including Kensington and GMAC have also signed up, though Barclays, HSBC, Nationwide and Santander have all confirmed they will offer comparable arrangements to their customers, while opting not to take up the Government guarantee. Director general of the Council of Mortgage Lenders, Michael Coogan, commented: "Lenders are working strenuously to keep borrowers in their homes where they have a good prospect of being able to get back on track and sustain their home-ownership in the long term. The government is helping, through changes to Income Support for Mortgage Interest, the mortgage rescue scheme, and now the home-owner mortgage support scheme. "Lenders fully recognise their responsibility to keep people in their homes where repossession can be avoided. The fact that some lenders are utilising the new scheme and others are not indicates simply a difference in their approach to forbearance, not in their commitment to it." 2009-04-22 http://www.londonmortgageadvice.co.uk/news/article/281 Buy to let mortgages have soared In 2006, 10% of all mortgages taken out by UK homeowners (a record £17.5 billion) were buy-to-let mortgages - highlighting growing popularity. In fact, over 152,000 buy-to-let mortgages were issued in the just the first six months of 2006. The popularity of buy-to-let mortgages include: Long term investment Low interest rates - buy to let mortgages offer an attractive alternative investment High demand for rental accommodation due to a rise in the overall UK population, high divorce rLate, and a growing number of higher education students Competitive, specifically-designed, accessible buy to let mortgages by lenders to make life simple for the landlord. Buying a property to let can benefit the private landlord in two ways. Firstly, it can provide a stream of income. Secondly, many Buy to Let landlords purchase property because of the potential for long-term accumulation of capital growth. This section provides guidance about how to take out a successful buy to let mortgage, the pitfalls that may occur and the knowledge needed to avoid them. Click here for more buy-to-let FAQs. 3 main differences in buy to let mortgages: Rent Potential - the decision as to whether or not a mortgage will be offered is usually based on the rent you will earn as well as your income. In some cases your income is not ever considered. Interest Rate - buy to let mortgages have slightly higher interest rates. Larger Deposit - typically a minimum of 25% of the property's value is required as a deposit.Becoming a private landlord should not be seen as an easy way of making easy money. It can be riskier and more complicated. It can also be very time consuming, more than most forms of investment, and there is no guarantee that house prices will continue to rise. That said, having a second property to let to tenants could reap considerable financial rewards over time. Click here to find buy to let mortgage deals.When buying a second property to let you will need to decide whether your primary objective is income or capital growth. In other words, are you looking to make a profit month on month or are you looking to make a profit through increased equity from the second property as it increases in value over time? The decision may affect the type of property you purchase, and the location.When you manage a property there are many costs involved in addition to the monthly mortgage repayments. As a guide, you should be aiming to achieve a gross rent of about 135% of the rental property's interest only mortgage repayments in order to cover your costs should anything go wrong. Costs include: Property upkeep - maintenance costs for the property. Letting agent's fees - letting agents charge around 10% of the monthly rent for finding and vetting tenants with an additional cost of around 5% if you require a full management service. Ground rent / service charges - applicable to leasehold properties. Legal insurance - to cover costs from evicting tenants in the event of non-payment, very important, as this can be very expensive.Insurance - building insurance and contents insurance for the items provided as part of the rental agreement.Furnishings - the purchase of any furniture. If the property is to be let furnished, make sure you are covered for this by your home insurance. Gas / electrical appliances - cost of maintaining appliances and ensuring they comply with any regulations such as safety tests. Decorating costs - the property may require work ranging from painting, to a new bathroom suite before it is suitable for letting to tenants. Choosing a property to let it is wise to take advice from local letting agents to determine; what type of properties are in need, and in which parts of the town is best or most wanted. They can tell you if there is a University in the town, and if students are looking for somewhere to live. The Association of Residential Letting Agents (ARLA) state that a property needs to be in the right area, close to transport and other facilities, and in good condition. When choosing a letting agent to act on your behalf it is very sensible to choose one that is a member of the ARLA. The reason being, all members of the ARLA must join in a bonding scheme to protect rent and tenant's deposits. The bond provides total compensation of up to £2 million a year. here are a number of tax issues that need to be looked at in order to maximise your tax position, such as being able to offset your maintenance costs, letting agent fees etc as well as any interest paid on a buy to let mortgage against your tax. You can visit the ARLA website at www.arla.co.uk for further information on becoming a private landlord. 2009-04-21 http://www.londonmortgageadvice.co.uk/news/article/280 Is there going to be a battle over fixed rates? We ask this after Banks and building societies have begun cutting the cost of their mortgages following the Bank of England half-point interest-rate cut to 0.5%. Fixed rates have further to fall and some brokers have been advising borrowers to fix for five years to protect themselves from future rate rises. While most economists agree that the Bank of England is unlikely to cut rates again, mortgage experts are saying fixed-rate deals have further to fall. Some experts don’t expect the cost of two and three year deals to fall much further. However, the cost of funding five-year fixed-rate loans have fallen significantly. Long-term fixed-rate deals could come down to 3.5% later this year. The Bank of Engalnd has said it will pump £75 billion into the economy in this way over the next three months. Some high street banks have said that homeowners on cheap variable-rate deals should fix now. However following the Bank of England’s strategy on quantitative easing, swap rates will fall sharply and so you can expect to see many lenders, including Cheltenham & Gloucester, offer cheaper fixed rates next week, particularly over longer terms. It is not likely to return to the heady days of 2007, when banks offered deals below the cost of funding, the government’s instruction to taxpayer banks to lend more should help drive down the cost of mortgages further. But lenders are unlikely to offer better deals for those with small deposits. Lenders will remain cautious in terms of the criteria required to get the best deals — so some homeowners could get caught out by falling house prices if they wait to long. One problem though is as property values tumble, people who may have a comfortable amount of equity now could find they do not qualify for the best deals in a year’s time — an argument for getting a valuation and remortgaging as soon as possible. Those on their lender’s SVR, are unlikely to see their rate fall further because we may have had the last of the cuts. So if you can fix at around the same rate, so you may as well do so. However,if you’re on a super-low tracker, it’s a different story — you’re going to have to pay more. 2009-04-20 http://www.londonmortgageadvice.co.uk/news/article/279 About 900,000 homeowners are currently in negative equity says a new research article by James Tatch, senior statistician at the Council of Mortgage Lenders. But, the research suggests that around two-thirds face 'modest shortfalls' of less than 10%. And to put this into perpesctive, this equates to around £6,000 for those first-time buyers with negative equity, and £8,000 for other home-buyers. The ability of affected households to move house will be reduced. None the less, even in today's weaker market, the CML estimates that home-owners still have around £2.1 trillion of unmortgaged housing equity. "Although negative equity has resurfaced as house prices have fallen, one big difference from the early 1990s downturn is that it is less concentrated among young, first-time buyers, and more evenly spread across wider age groups and those at different points on the housing ladder. So said Bob Pannell, CML head of research. Commenting further he said,"Negative equity will contribute to subdued property turnover, but otherwise should have few adverse effects for the majority of households affected. Where people needs to move house for job or other priority reasons, lenders can often be flexible to existing borrowers with low or negative equity, as long as their financial position is sound and they have a good payment track record. Otherwise, sitting tight and building up savings or overpaying on the mortgage are the strategies most borrowers are likely to adopt. "It should be easier for households to rebuild their equity position than in the early 1990s, as low interest rates on their mortgage can help them to save or overpay more quickly." 2009-04-17 http://www.londonmortgageadvice.co.uk/news/article/278 The general features on offer from lenders who offer a range of different flexible mortgages in the UK, are as follows: -Change the regularity of your repayments -Make under or over repayments -Take repayment holidays -Borrow back some of the loan capital Often with the greater flexibility comes a slightly higher than average interest rate charge, but this is often recalculated on a daily basis. However, the main advantage of a flexible mortgage is that you have the ability to repay the mortgage capital early and save on interest rate charges. Many flexible mortgage interest rates are calculated daily meaning you make savings almost instantly after you make a capital repayment. In the same way, if you borrow back, you will be paying a larger interest rate straight away, if interest is calculated daily. One of the big advantages of being able to borrow back is that you can make use of the equity in your home, if it has increased. This may be a cheaper way to borrow compared with an unsecured loan. In the Uk the flexible mortgage has become one of the most popular ways of mortgaging in recent years. Lenders are increasing the flexibility and range of their mortgage products regularly to suit consumers. Some lenders offer a service where by the borrower combines their flexible mortgage with their current account. It is true to say that lenders often use their flexible mortgage deals to attract custom from mortgage holders looking to remortgage. 2009-04-16 http://www.londonmortgageadvice.co.uk/news/article/277 Recession could boost appetite for equity release.The equity release sector could potentially gain from the recession as income from savings is squeezed by unprecedented low interest rates and the slump in the availability of mainstream lending. Norwich Union predicts that current market conditionsare ripe for the equity release market to double from lastyear’s levels over the next five years. In 2007 retirees released £1.2bn through equity release and NorwichUnion thinks the market will hit £2.4bn by 2013. Tristam Carson Head of Intermediary Sales for AgePartnership commented, “The key drivers for growth in the equity release market are already in place and beginning to have an impact on clients and businesses like. The reality of clients in the 55+ egment nowfeeling the pinch of reduced ncome from their pension,coupled with increased energy costs is meaning there is a greater need than ever for good quality equity releasea advice. A poll by Hodge Equity Release found 73 per cent of IFA’s expect to see interest from consumers within their equity release business increase by at least 5% in the nextthree months and 60% predict at least a 5% increase in completed applications.Despite Britain's entry into an official recession, Hodge found 57% of IFA’s feltthere had been more interest in equity release among consumers during the last three months of 2008 than during the initialhalf of last year.Tim Loy, Chief Executive of Leeds-IFA Age Partnership,commented “There was a lot more interest in equity releasebut a lot of the conversations that werebeing had at this stage were tentative, early enquiries.” 2009-04-15 http://www.londonmortgageadvice.co.uk/news/article/276 Those who own their own home who have become landlords to avoid selling for a loss on their properties are taking serious risks if they let out their property without complying with the necessary rules. New landlords, especially those who hadn't planned on starting a lettings business, must make themselves aware of the rules and regulations so they can operate their tenancies successfully." There are more than 50 Acts of Parliament and 70 sets of regulations governing the private rental sector – and many new ‘accidental’ landlords are ignorant of these laws. The onus is on the landlord to make sure they comply with all regulations and they are liable if something goes wrong, even if they employ the services of a letting or managing agent. Ignorance of legislation is not a defence. And they also need to consider details like the terms of their mortgage before lending, as a specific buy-to-let mortgage is needed to allow for the leasing out of a property. When letting a property that is not a buy to let mortgage it is vital homes owners let their mortgage lender know, otherwise they are in breech of their mortgage contract. Plus another problem is home insurance – basic policies do not cover the rental of property and failing to disclose a change in occupancy will be looked upon a fraud. Owners need to let their insurance provider know they are renting or their insurance policy could be invalidated. What is more, a landlord is responsible for making sure the property complies with gas and fire safety requirement, providing an energy performance certificate, and protecting tenants deposits, according to the NLA. An owner will also be responsible for responding to tenant requests and maintenance problems. The only solution is for landlords - accidental or experienced - to ensure they have a thorough understanding of relevant regulations. Common regulations in the private rented sector: Electricity and gas: Boilers must be checked annually by a registered tradesman, who will issue a Gas Safety Certificate. Tenants should be given a copy when they begin the tenancy and within 28 days of an annual check. All electrical items and fittings should be checked regularly as landlords could be liable if a tenant is harmed by an electrical item provided. If the property was built after June 1992, tenants must have an adequate means of escape and a mains-operated inter-connected smoke alarm should be fitted on every floor. It the property is a furnished let, furniture and furnishings made after 1950 must meet fire resistance regulations. Landlords who own flats in a block are required to liaise with the managing agents and other homeowners to ensure that a fire risk assessment of the common parts is carried out. Energy Performance Certificates: From October 2008 it became a legal requirement for landlords to make an Energy Performance Certificate of the property available to prospective tenants when letting a property. Failure to do so can result in a £200 fine and the landlord being prevented from marketing the property until the EPC is obtained. From 6 April 2007, all deposits (for rent up to £25,000 per annum) taken by landlords and letting agents for Assured Shorthold Tenancies in England and Wales, must be protected by a tenancy deposit protection scheme. Rental homes spread over three stories or more and occupied by at least five tenants in two or more households are classed as Houses in Multiple Occupation and require a license by the local authority. 2009-04-14 http://www.londonmortgageadvice.co.uk/news/article/273 From today marketing a property is now illegal until most of a HIP – complete with an answered Property Information Questionnaire – has been compiled. For the HIP industry, it marks the end of a long, wearisome and, for some, ruinously expensive journey through a landscape pitted with political U-turns. For opponents, including many agents, this was the day they thought they would never see. There remains huge confusion as to how local authorities will charge personal search firms for access to information, and whether HIP prices will rise, by how much, and what the variations will be. There have been repeated calls right up to the last minutefor HIPs to be scrapped during the recession, and for the Government to re-examine their viability once the economy begins to grow again. There are fragile signs of recovery emerging in the housing market and the Government risks shattering these making sellers provide a HIP before they market their property. Sellers are already cautious in the current market and this could prevent people from testing the waters, and risks a drought of good saleable properties. Estate agents across the country can see HIPs are simply not delivering and want them abolished. Sellers don’t know what they are and buyers ignore them. A great deal of the latest controversy has centred around the Property Information Questionnaire, which must be completed by the vendor and included in a HIP. Perhap however the provision of simple, easy to understand, upfront information regarding a property will enable buyers to make a more informed decision, making them less likely to pull out later in the process. This could also raise consumer awareness and appetite for the HIP, as vendors completing the questionnaire are likely to request to see similarly completed forms for any properties they go on to view. However, the property cannot be marketed without an up-to-date Index. If there is an EPC, Sale statement, Land Registry office copy of title and plan, and a completed PIQ together with an Index showing these items, then the property can be marketed. 2009-04-06 http://www.londonmortgageadvice.co.uk/news/article/275 When dealing with estate agents in England, Wales and Northern Ireland, what rights do homebuyers have?Is the estate agent obliged to pass on if I have put an offer in on a flat? The estate agent must pass it to the seller when an offer is made for a property, promptly and in writing, except those which the seller has told the estate agent not to be passed on - for example, all those below a certain price.However,the estate agent does not have to give you details of other offers they have received.I have been told the seller has received a higher offer. Should I believe that?Badly-handled offers are one of the top complaints at the estate agents' ombudsman.People who try to increase the price of a property after accepting an offer can cause heartbreak for a buyer.But even if it is questionable ethically, if you are the vendor and are offered an extra £20,000, then you are likely to accept.But could a higher offer simply be a ruse to get you to part with more money? It can be difficult for the buyer to know.According to the Office of Fair Trading (OFT), an agent must not invent a bid or claim to have a cash or first-time buyer unless this is true. Nor can they state that they have a potential buyer unless this is true.The OFT suggests that people should demand to see evidence if they have suspicions.This can be difficult in practice, though, particularly if you want to keep on good terms with the agent.Can I force the estate agent or seller to take the house off the market, or stop advertising, after I have had my offer accepted? You can not force an estate agent or seller to take the property off the market, or stop advertising - just because you don't want to lose your dream home.You probably fear being gazumped. But the agent is working to get the best price for the seller, and is employed by him - not you.If you put in an offer to buy a house which is accepted by the seller, but then the seller decides to go back on the agreement and accept a higher offer from a different bidder, then you have been gazumped.However, some will offer to do so out of goodwill, or if you are seen as a good buyer, for example, because you are not in a chain.Can an estate agent demand a deposit? Yes, in England, Wales and Northern Ireland, but the estate agent should not hold a deposit or any other money unless they are covered by adequate insurance.And all money must be held in a separate client bank or building society account or accounts, as set out in the Estate Agents (Accounts) Regulations. Receipts for deposits must be provided. Estate agents can be known for using rather "creative" language to describe properties. Is this allowed? One of the most common gripes handled by the Ombudsman for Estate Agents are "inaccurate sales particulars". While some artistic licence may be acceptable, it is an offence for an estate agent to make certain statements about a property which are false or misleading.Can estate agents put for sale or sold signs outside empty homes? This is generally seen as an "undesirable practice" by the authorities, and estate agents can be prosecuted.Can the agent hit me with extra charges - and misleading contracts?Estate agents must state either the exact amount you will be charged, or when this is not possible, provide details about how the costs will be worked out or give an estimate. Find an agent which belongs to an Ombudsman's schemeBe aware of the agents' legal obligations Remember the agent is working for the seller, not the buyer Complaints about agents should be made to your local authority's trading standards officeIf the agent cannot sort out a problem and he is signed up to the OEA code of practice, you can take your complaint to the OmbudsmanDo not use the same legal adviser as the seller. It warns people to watch out for terms which could catch them out. For example, if you opt for sole selling rights, and then find a buyer yourself, you will still have to pay the estate agent.Another one to watch out for, if you are a seller, is a "ready, willing and able purchaser contract". You will have to pay once a buyer, who is able to exchange unconditional contracts, is found. This still applies if you withdraw your property before the sale is completed. In this scenario, you may also be charged for the cost of "For Sale" boards and advertising. Can an estate agent discriminate against me because I don't want its financial advice services?o. Estate agents must treat all buyers "fairly", under the terms of the Estate Agents Act 1979.So-called "preferential listing" is also not permitted. This is when buyers are told they will be put on an open and fast-track priority or preferential service list if they take financial services, such as insurance or a mortgage, offered by the estate agent. Estate agents are duty-bound to treat buyers and sellers "fairly" However, with limited sanctions in place, Which? believes it can be very difficult for consumers to challenge these sorts of practices when they occur. What about conflicts of interests an agent may have? If you are selling or buying a property that your estate agent or his/her close associates wants to buy, you must be told promptly and in writing.Who can I complain to, if it all goes wrong?For a long time, many consumers have been frustrated by the fact that the estate agency industry is self-regulated. 2009-04-05 http://www.londonmortgageadvice.co.uk/news/article/272 First time since October 2007,the price of a typical house increased in March rising by 0.9% during the month, according to the Nationwide. There are reasons to be positive about the news. The indicators suggest that we are now closing in on the bottom for house prices, and murmurings of a recovery are justified. Overall house prices are no longer falling at any significant level, and if things continue as they are, you can expect to see monthly price rises across the board after the summer. Behaviour by investors is a good early indicator of market recovery, and we are now seeing a dramatic shift in sentiment. As early as November it could be seen that distressed house prices were reaching their lowest point, which was the first sign of the market reaching the bottom. Cash buyers have been purchasing in volume since then, and we are now suddenly seeing an influx of anxious investors, worried that they may have already missed the best opportunity to enter the market. And what is more the next big phase will be anxious first-time buyers coming in to the market. Two years ago the average first-time buyer put down a 10% deposit, and there are signs that parents are willing to subsidise deposits if required." On the other hand na opposing view could be that the reported rise in house prices will not fool anybody who is struggling to sell their home or trying to obtain realistic mortgage finance in the ‘real world’. Sales volumes are currently so low that the monthly house price statistics from any one single lender are virtually meaningless and if you look at Nationwide’s latest quarterly data, it in fact shows a 4% decline on the previous quarter, with the latest annual price recorded to be 15.7% down. And repossession numbers and ‘real’ house price drops continue to increase daily. Today’s reported price increase could be a statistical blip - there will be little respite for anyone losing their job or needing to sell their home in 2009. Consumers will continue to be conservative about taking on more debt for the foreseeable future, until the economy shows a strong and consistent improvement. No one should delay selling in the hope of price rises, as they are set to fall a further 10 to 15% this year as the credit crunch and unemployment continue to bite. 2009-04-03 http://www.londonmortgageadvice.co.uk/news/article/271 Suppliers are to put up water rates, as millions of households are set to see their annual utilities bills rise still further Due to come into effect today (April 1st), The new changes will see the average water bill increase by 4.1 per cent, or £13 and were due to come into effect yesterday (April 1st). consequently, consumers can expect to pay £343 a year on water rates alone, taking total utilities costs - including heating and lighting - to an average of £1,595 a year, uSwitch.com has revealed. Will Marples or Uswitch reveals the following:- A £13 increase in water bills may not seem much, but it adds to the steady flow of money draining away from household budgets. Consumers will be shocked to find that they are now paying an extra £353 a year to cover the bare essentials of heating, lighting and water. At the beginning of 2008 these cost £104 a month or £1,242 a year. To ensure they are only charged for what they actually use householders could significantly reduce their bills by installing water meters. 2009-04-02 http://www.londonmortgageadvice.co.uk/news/article/270 The Bankd of England say that the number of mortgages approved for house purchase jumped by 19 per cent during February. Also consumers made the biggest net repayment of loans since records began in 1993 even though concerned about jobs. With Building Societies also reporting a surge in receipts last month as consumers saved more money. Some £1,595 million was deposited in building society accounts in February - the highest February net receipt on record. Despite the Bank Rate being so low people are still keen to save, probably in response to the uncertain economic outlook and reduced job security. Some are suggesting that the positive mortgage figures show that the worst could be over in the housing market as buyers re-enter the market to snap up property bargains. Although there would need to be a significantly bigger pick up in activity before house prices stop falling. House prices have tumbled by 20 per cent since the market peaked in summer 2007. Perhapsw housing market activity may finally have turned a corner. This might suggest that the pick-up in new buyer enquiries is feeding through into actual activity. With new buyer enquiries still rising, this is clearly quite hopeful. But there is still a long way to go. All this follows early signs that the US housing market, which has also been hit hard by the sub-prime crisis and resulting credit crunch, also showed signs of a pick up. Sales of existing homes jumped by 5.1 per cent last month, spurred on by first-time buyers snapping up foreclosure bargains. 2009-04-01 http://www.londonmortgageadvice.co.uk/news/article/269 The reduction in the Bank of England's Base Rate is lilely to benefit the private rented sector as cash rich investors look for alternatives to poor returning savings accounts. Residential investment property could potentially offer significantly better returns,with millions of savers on savings rates of less than 1%. But investors need to be careful about choosing the right property. There are opportunities for cash rich individuals to generate better returns in the current environment through residential investment property. Savings returns are poor because of the reduction in Bank of England Base Rate and equities remain unpredictable and erratic. Tenant demand is strong. Even though the outlook for house prices in the short-term is still uncertain, yields are strengthening and property investors are able to pick up bargains. Experienced buy-to-let investors already appear to be taking advantage of low property prices and are adding to their portfolios, but we may see investors that have never considered property before purchasing rental investments. But there is a the need for potential investors to thoroughly research their prospective market and to only buy property with proven sustainable rental demand. A good quality property that will let through economic cycles will always represent an attractive investment proposition. 2009-03-31 http://www.londonmortgageadvice.co.uk/news/article/268 Britain's larger building society, Nationwide is to buy core elements of the Dunfermline Building Society. It has taken over £2.4 million of retail deposits, representing the accounts of around 300,000 Dunfermline members, as well as Dunfermline's £1 million prime mortgage lending book. Ntionwide, has also acquired Dunfermline's 34 branches and retail sites, and all related employees, plus Dunfermline's head office at Dunfermline. It will continue to trade as Dunfermline Building Society and will complement the other regional brands operating in Nationwide's group - Cheshire Building Society and Derbyshire Building Society. Graham Beale, chief executive of Nationwide, said: "This is good news for the members of Dunfermline who are now joining the world's largest building society. As members of a solid, stable and dependable organisation, members of Dunfermline can be assured that their savings are safe. Nationwide has a strong association with Scotland and has been providing service to customers in this key market for many years. This transaction will enhance Nationwide's ability to operate nationally and locally, whilst recognising the goodwill attached to a historic and important Scottish brand. "Nationwide is in a unique position by virtue of its size and financial strength, to provide support to Dunfermline, and we regard it as both responsible and commercially beneficial to undertake this transaction. This transaction excludes high risk assets: commercial loans and some residential loans (including the acquired and equity release portfolios) were not transferred, and the transaction will enhance the overall value to Nationwide's membership over the medium term." And the Dunfermline brand will remain and Dunfermline's customers will continue to use their existing channels - branches, telephone and post - for transactions, as usual. With the combined business of Nationwide and Dunfermline there will be around 900 branches with a good geographical spread across the UK. In addition, it is also expected that upon completion of the transfer, Nationwide's market share of retail deposits will increase to around 11% and the combined business will have a member base of 15 million. 2009-03-30 http://www.londonmortgageadvice.co.uk/news/article/267 The value of family three and four-bedroom houses has been the worst hit in the housing market slump according to a report that comes form the National Association of Estate Agents. The association said that top-end, executive properties had increased in value between January and February. The same was true of smaller, two-bedroom homes. There appears to be a trend for people buying up smaller houses than they may have done previously, possibly because they can only get smaller mortgages. It may also reflect a trend of downsizing. Unfortunately sellers are consistently over-pricing properties. And to make matters worse and in another blow to would-be buyers, the UK's largest building society the Nationwide has announced it was increasing its mortgage rates for new borrowers by up to 0.3%. 2009-03-27 http://www.londonmortgageadvice.co.uk/news/article/266 Essentially there is little difference between the process that one follows for a buy to let mortgage in the UK than there is for any other type of mortgage. The lender still has to consider your credit worthiness, the value of the property, how much down payment you can afford and all of the other usual considerations. However, in addition, the lender will usually be interested in what the market is for letting properties in the same area as the one that you are thinking of investing in. The lender will look at property taxes and average rents for similar properties. Other than those particulars, however, the process moves along nearly the same. A buy to let mortgage can be arranged for either commercial or residential property. Terms can range from between five to forty-five years. There are fixed and variable interest schemes available, and the lender takes an interest in your property just like with any other mortgage so your property is still at risk if you fall into arrears. One difference is that a lender will consider your potential cash flow from rental income as part of your available money to repay the loan under some circumstances. Because not all lenders view buy to let mortgages as a risk that they are willing to take, your best route is to choose a mortgage broker who specializes in buy to let schemes. This way you have the best opportunity of getting you application reviewed by the largest number of lenders who are likely to make a decision in your favor. Since you do not have to pay a fee to engage the broker there is no reason not to take advantage of their services. Before you buy You should work with either a commercial or residential real state broker, depending upon the type of property you are looking to invest in, who understands the buy to let market in the area that you are considering. Choose an agent who is bonded and who has a large portfolio of potential properties for you to review. Have your broker help you choose areas that are compatible with the type of property that you want to buy. Choose property that matches the needs of the area. For example, you might find it hard to fully let an office building in an area that is used primarily for light manufacturing. Likewise, a warehouse might not go over well if it is surrounded by an office park complex. If you are thinking about purchasing residential property with your buy to let mortgage then make sure that you look in neighborhoods where there are already properties for let. It may be very hard to let a home in a neighborhood populated exclusively by high-income home owners. Planning your cash needs You should also determine the maximum that you are willing to spend to buy property. Besides considering the purchase price you will need to determine your available down payment and other expenses such as the services of a solicitor, stamp duty, survey/valuation fees, broker fees etc. You should also consider after-purchase expenses including remodeling to make the building fit for its intended usage, utility deposits and agent's fees if you plan to use a letting agent to attract and vet tenants. Other expenses are sure to include insurance, routine property maintenance plus ground rents (if applicable) and property taxes. Usually your tenant is responsible for utilities after they move in as well as any Council Tax, TV licence fees, and the like. Consult with your accountant In many cases there are tax allowances and deductions which can be taken against rent that you receive. Your usual and customary expenses, including maintenance, insurance, cleaning and landscaping, as well as other recurring expenses likely apply. While you may not deduct the actual cost of your initial improvements, subsequent repair and replacement of those improvements likely will be deductible. In some cases you can take a flat 10% of the rent as a deduction against normal wear and tear. The tax maze can be very complicated so be sure to let your accountant help you navigate it. During the buy to let mortgage loan process If you are using a mortgage broker then you will not have to jump at the first approval that you receive. The chances are you will be presented with multiple offers. Read each one over and set aside the ones that are so far away from your expectations that even intense negotiations could not make the offer better. Re-read the remaining offers and make a list that details the good and bad points of each one. Send the offers and your list to your solicitor and have him review the contract and your concerns. Once you are through with that step its time to negotiate. Depending upon the level of service that your broker provides you can either have them handle the negotiations, or you can hire your solicitor, or you can do it yourself. What can/should be negotiated? Anything from the term of the loan to interest rates, pre-payment or early cancellation fees, payment due dates, lender's fees, fixed and variable interest rates, items of concern found by your solicitor and anything else that doesn't strike your fancy the first time out. There is no risk to attempting to negotiate and you can always be sure that you will NEVER get what you want if you don't ask for it. Buy to let mortgages used to be very hard to obtain and only people who didn't really need the money were able to get approval. This is no longer the case. Competitive lenders, especially those lenders who work with buy to let mortgage brokers, realize that the market for residential and commercial property letting is on the rise again. Now is the right time to find a broker and get busy building your investment portfolio of properties. About the Author Commercial Lifeline are independent Commercial Mortgage brokers saving you money on your Commercial Mortgage and Bridging Finance through lender choice. Download our free Commercial Mortgage guides by visiting our Commercial Mortgage Guide page. This article comes with reprint rights. Feel free to reprint and distribute as you like. All that we ask is that you do not make any changes, that this resource text is include, and that the link above is intact. About the Author 2009-03-26 http://www.londonmortgageadvice.co.uk/news/article/274 Confused? what with falling house prices affecting loan-to-value (LTV) ratios, brokers calling the bottom of the fixed-rate market and risk-averse lenders rejecting loans. Six months after the Bank of England first began cutting interest rates, brokers believe that it is time to consider fixing before rates start to climb, particularly if you have enough equity in your home to qualify for the best deals. Brokers recommend locking in now because the Bank of England is likely to increase rates sharply next year to tackle an expected rise in inflation. Ratios of 90 per cent or more are rare and expensive. High-LTV borrowers who have reverted to cheap SVRs have two choices: to sit and wait or to lock in to a pricey fixed rate. Though ates are high, but remaining on an SVR could be risky. Falling house prices could push LTV ratios higher, making it harder to get a loan later in the year. =If you decide to remain on a SVR while rates are low, it is vital to use the money saved to overpay your loan, reducing the LTV ratio. Some SVRs have fallen in line with the base rate. Smaller building societies have consistently failed to pass on the Bank of England's monthly cuts. For example, Chelsea Building Society has an SVR of 6.45 per cent, while the Stroud & Swindon has an SVR of 6.29 per cent. If you have a smaller mortgages and a good credit record should waste no time remortgaging. Borrowers with less equity in their home may struggle to find a competitive new rate, but sitting on the SVR will only compound the situation. It is tempting to sit and wait to see if rates for homeowners with higher LTVs fall further. But could you cope financially if rates begin to rise? If not, it would be smart to pick a fix now. aSome lenders allow you to break your mortgage contract for a fee, known as an early repayment charge (ERC), typically a percentage of the total outstanding debt. Paying an ERC of 3 per cent on a £200,000 loan would cost £6,000. Houses buyers locked in to high rates for three or five years could still save by paying the charge and switching deals. However, do your calculations carefully and seek advice. Lenders are making a cautious return to the market for first-time buyers. Abbey unveiled a new deal this week, fixed for four years at 5.84 per cent. It requires a 15 per cent deposit and a fee of £495. To access cheaper rates, buyers need to raise at least a 25 per cent deposit - about £40,000 on the average house price. A government scheme designed to boost home ownership. HomeBuy Direct, a shared-equity scheme, allows first-time buyers to combine a traditional loan from a bank or building society with a joint loan from the Government and a property developer to purchase a new-build property. Schemes include NewBuild HomeBuy, a shared-ownership scheme that allows homebuyers to purchase a share of a property and then rent the rest, usually from a housing association. The share that you own can be increased gradually - a process known as “staircasing”. Lenders have pushed up the cost of larger mortgages recently. Best-buy deals are now frequently capped at £500,000 or even £250,000. C & G has restructured its range, grouping loans between £500,000 and £1 million with pricier deals for loans up to £2 million. Its cheapest fixes and trackers are now available only on loans up to £499,000. A two-year fix up to 60 per cent LTV has a rate of 3.89 per cent for loans below £499,000, or 4.89 per cent if you want to borrow more than £500,000. 2009-03-25 http://www.londonmortgageadvice.co.uk/news/article/264 Lord Turner, chairman of the Financial Services Authority has highlighted that holding out for cheaper fixed mortgage deals could be a waste of precious time. According to his recent report,mortgage rates can stay high for six to nine years following the credit crunch. He wants banks to hold more cash but if they do then it is the customers who will pay, because it increases the banks' costs, which are in turn passed on to you and me in the form of a wider spread between the rates paid on our savings and the rates charged on our debt. The margins on tracker mortgages are now so large. Previously in the good times the margin between the Bank of England rate and a tracker was just say 0.1%-0.5% but now in the worst cases we can see margins of 4% plus for deposits of 15%. Customers should beware that bank rises could not be far away. there is renewed optimism from some qurters that suggests that inflation could be round the corner and what htis means is interest rates will go up. This will push the headline rate of some deals up to very high rates, above 8%. And these margins are inlikely to come down. This begs the question, should you be locking into a fix now to protect yourself from these big tracker margins? There are some attractive fixed rate deals out there for those with large deposits or those ready to remortgage with lots of equity available. But also if you have a small deposit there is also an argument to lock into a fixed rate. If you play the waiting game on a tracker and house prices fall further, you may find you don’t have enough equity when you try to switch to a fix in a year or so. However if you are an existing homeowner on your lender’s standard variable rate, you may not feel the time is right as the chances are the SVR is lower than the current fixed rates. However if short term loss is a price you’re willing to pay for long-term security, then it’s time to fix. 2009-03-25 http://www.londonmortgageadvice.co.uk/news/article/265 As the impact of the Credit Crunch reverberates through the economy the effects reach ever further, often taking individuals and companies unaware, no less an example can be found in the property letting market. It is estimated that in 2009 there will be over 150,000 repossession claims for private sector landlords, this represents around 5% of the private rental sector. One of the key factors to avoid such a predicament is continuity of rental income, and this requires adequate checking of tenants before letting a property. The impact of the credit crunch is going to have a severe effect on the financial situation of many people, and in particular those who have a poor credit history. We have carried out some research that we feel all landlords and letting agents should be made aware of: In 2009 there will be an estimated 880,000 CCJs issued for non payment of debts The actual figures are increasing from 1,990 per day in December last year to 2,430 per day in 2009. This is an increase of over 22% In 2009 there will be an estimated 150,000 people made bankrupt / insolvent Bankruptcies and Insolvencies will increase from 298 per day in December last year to 411 per day in 2009. This is an increase of over 37%. For every 10 tenants checked, on average one CCJ is found Credit-Check-Services.co.uk sampled 500 tenant reports during Q4, 2008 and found an average of 1 Count Court Judgement (CCJ) or Court Decree (CD) for every 10 tenants checked. With the projected increase in defaults we expect to see an increase in the number of tenants with CCJs awarded. The key message for landlords is don’t become a statistic, take action to help ensure you maximise rental incomes through adequate checking of tenants. Ask yourself this question, can a landlord afford not to check tenants for County Court Judgements / Court Decrees? 2009-03-25 http://www.londonmortgageadvice.co.uk/news/article/263 It is a fact that fixed rate pricing has only really stared to come down in the past few months, and even then only for those borrowers with a hefty deposit. There has been a great deal of market instability and this has led to much fluctuation in the amount of fixed rate mortgages taken out by investors and homebuyers in the UK. Over the last quarter nearly 3 quarter of mortages taken out have been taken out on a fixed rate. This is an increase on the 3 months previous. If we refer back to an earlier article we can see a pattern emerging. This is what was said then. "Borrowers are becoming more keen to take up lower rate deals yet enjoy stable repayments for a fixed period of time to help them to budget more easily in the current difficult financial climate. As such new lower fixed rate mortgages may be gaining popularity again. In the history of the Bank of England, standing at just half percent following a series of base rate cuts over the past five months, the base interest rate is now at its lowest. For those that do not want to have to worry about fluctuating mortgage repayments each month these mortgages are providing an effective alternative to the lenders’ standard variable rate mortgage deal. So, some banks have now launched competitive fixed rate mortgage deals in response to the recent rate cuts. There are a number of lenders launching competitive deals and the two year fixed rate mortgage is proving a popular choice. Now that the base rate is so low and a number of fixed rate deals for under 4 percent are coming onto the market, some homeowners are looking to fix their repayments at these competitive rates to make it easier to manage their finances. Up to now, many homeowners and property purchasers have been opting for the lenders’ standard variable rate mortgages since the base rate started to fall last October, with many hoping that they would benefit from the rapidly falling rate. Despite the falling interest rates, and expectations that the base rate could fall to as low as zero over the course of this year, over 50 percent of homeowners were still opting for the security of a fixed rate mortgage to ensure that they repayments remain stable each month for a period of time." 2009-03-24 http://www.londonmortgageadvice.co.uk/news/article/262 Could it be that the Financial Services Authority (FSA) imposes restrictions on the initial size of mortgages in the future? A review of banking regulation by Lord Turner says there is case for limiting the size of home loans to protect people from borrowing too much. What's more it might also protect banks from the dangers of excessive lending. Hovever of course ther are some potential disadvantages to any such restrictions, and so the FSA will consult on the issue this autumn. The rapid extension of mortgage credit is the key factor in the origins of the financial crisis in the US, the UK and several other countries. The FSA's September paper on the future of mortgage regulation is seen as a real opportunity to help shape a future regulatory landscape that will serve both lenders and consumers better. It would involve a fundamental change to its past policy if the FSA does decide to formally limit the size of mortgages. To be published in September, the FSA's consultation paper will look at various methods of regulating mortgages, including formal limits on either the LTV or LTI ratios, The FSA's consultation paper,. As well as protecting lenders and borrowers, limits on the mortgage market could also stop rising house prices exaggerating wider economic booms and busts. However, there were some serious potential disadvantages to such a policy. Because they would not be able to raise enough money for a larger deposit, thus preventing them from buying a house some people would be kept out of the property market.But restrictions on mortgage lending run the risk of stifling activity in the housing market and could cause more problems than they solve. 2009-03-23 http://www.londonmortgageadvice.co.uk/news/article/261 Could supermarkets pose a greater threat to the traditional financial services companies in the next decade than anything else. This might be the result if a survey was conducted among financial services providers including high street banks and building societies, specialist investment providers and insurers.If senior individuals in the organisations were asked to rank different sectors in terms of threat in the next decade supermarkets might come out on top. Supermarkets have been able to enter and achieve significant market growth for several reasons, including the fact that consumers have confidence in their brands and their almost fully outsourced operations mean costs are kept to the minimum. In addtition supermarkets also have a diverse product range spanning many financial sectors, as well as the ability to source products from a broad range of providers, without any perceived fears of conflict of interest which often inhibit some financial companies. The dynamics for distributing the standard financial products, that most people require, to meet basic protection, savings and investments, pension and insurance needs, have changed. Whilst people don't necessarily want a one stop shop, they also don't want to trawl around different providers. The more enlightened companies have used the same tactics as supermarkets to increase their product ranges. 2009-03-20 http://www.londonmortgageadvice.co.uk/news/article/260 Offsetting savings against their mortgage, could be a good idea for savers looking to make the most of their money. In the current economic climate offsetting savings against a mortgage can provide more lucrative returns in the environment of low interest rates. There could be large savings to be made and it could be that there are hundreds of thousand of mortgage payers who could benefit. Offsetting is different from overpaying as it allows customers to access their savings at any time. And for those mortgage holders who that are nervous about the current financial situation, this could offer the most lucrative and safest alternative to a low rate savings account. Many mortgage holders might be ignorant of the benfits of offsetting and other might think that the subject is too complicated. However if they were to see a mortgage broker then they would be in a good position to make an informed judgement. It is not necessary to have a high savings balance to benefit from offsetting, ss long as you have a mortgage rate that is higher than your savings rate after tax. Then you will be in pocket. 2009-03-17 http://www.londonmortgageadvice.co.uk/news/article/259 You may think doing without such mortgage payment protection will save you money each month, but if things do suddenly take a turn for the worse, you will soon realise what a false economy this is as you struggle to make ends meet. It is understandable that people are tightening their belts and trying to save money wherever they can, but it is important they do not make cuts they will later regret. With mortgage payment protection insurance you make sure that you are insuring homeloans. And it covers: accident, sickness and unemployment. It is easy to see the benefits of protecting yourself against possible redundancy and although it is what a lot of people are worrying about at the moment, people will still fall sick or have accidents that stop them from working and having the right insurance in place will help them deal with the problems that this could cause. It is best to go to a broker who can look at the whole market place for the most suitable and cost-effective option rather than plumping for the first thing you see. In the case of MPPI, your mortgage lender is likely to offer you its own cover when you arrange your homeloan, but don’t feel like you have to take out its policy. It may seem like one less thing to sort out having been through the arduous process that a mortgage application can be, but you can often save money by shopping around. There are other things to think about as a homeowner if you want to be covered for all eventualities. For instance – buildings insurance – isn’t optional as no lender will give you a mortgage without it. And you also need to think about protecting your possessions, particularly if you have valuable electrical equipment or expensive jewellery. Finally, but by no means least, is – life insurance. You may think it morbid to take out such a policy, but it makes sense to ensure your mortgage can be paid off in the event of your death, particularly if you have a family. 2009-03-16 http://www.londonmortgageadvice.co.uk/news/article/258 If you are in trouble with your mortgage payments, do not ignore the problem. When you fall into arrears, your lender should contact you, asking you to put the problem right. If they are not happy with your response, they should write to you, warning of court action There are some key pieces of advice that you should follow if you are in arrears and at risk of losing your home. Do not ignore your lender's warnings. You must consider the following Can I cut back on spending without hardship? Can I rent out a room or increase my income in any other way? Am I behind on other loans secured against my home? If you feel that you can't make savings, don't give up. Visit your local advice agency - Shelter, Citizens Advice Bureau (CAB) or Consumer Credit Counselling Service. Experts will advise on next steps and how best to negotiate with your lender. These organisations also have good advice on their websites. Then talk to your lender. While some lenders will still push for possession, most only take action if there is no alternative. And lenders must explore every avenue to keep people in their homes. If lenders cannot prove this, judges now have the powers to throw out the case. Be honest with your lender, be honest about your finances, the amount you can afford to pay and, importantly, don't try to overstretch yourself. The lender will be far more helpful if they know you're really trying to pay your mortgage. This could stave off repossession. If you ignore your lender, or cannot make payments they have asked for, the lender can apply to your local county court for a possession order. Do not ignore the problem and hope it goes away 2009-03-14 http://www.londonmortgageadvice.co.uk/news/article/257 In January as buyers were forced to come up with record deposits to secure a loan, mortgage lending slumped dramatically Lending criteria tightened further over the month in response to worsening market conditions,despithe the efforts of Government to pursuade lenders to ease the criteria. There were only 8,900 loans to first-time buyers, who on average raised a 24 per cent deposit for their home – the largest amount on record. There are still mortgages on the market available at 90 per cent,but industry experts do not believe that many buyers are actually accepted on these rates. The current withdrawal of many specialist, small and foreign lenders from new lending has created a huge gap in the capacity to fund mortgages to match consumer demand and this is continuing in 2009. Government schemes to restore the flow of funds are primarily focused on a few large banks and recent lending commitments by a few lenders cannot fill the gap overnight although it is hoped that we see more funds flowing into mortgage activity later in the year. Those who can get access to credit are reaping the benefits of low interest rates, however. A poll of chartered surveyors this week showed increasing interest in the housing markets but record sales lows. The Royal Institute of Chartered Surveyors (Rics) blamed a lack of available finance for frustrating potential buyers from entering the market. 2009-03-12 http://www.londonmortgageadvice.co.uk/news/article/255 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 2009-03-10 http://www.londonmortgageadvice.co.uk/news/article/253 Will there be a battle over fixed rate deals?I ask this after Banks and building societies have begun cutting the cost of their mortgages followings last week’s Bank of England half-point interest-rate cut to 0.5%. Some are saying that fixed rates have further to fall and some brokers have been advising borrowers to fix for five years to protect themselves from future rate rises. While most economists agree that the Bank of England is unlikely to cut rates again, mortgage experts are saying fixed-rate deals have further to fall. Experts don’t expect the cost of two and three year deals to fall much further. However, the cost of funding five-year fixed-rate loans fell 0.23 points on wholesale markets last week to 2.88%. Long-term fixed-rate deals could come down to 3.5% later this year. The Bank of Engalnd has said it will pump £75 billion into the economy in this way over the next three months. Some high street banks have said that homeowners on cheap variable-rate deals should fix now. However following the Bank of England’s strategy on quantitative easing, swap rates will fall sharply and so you can expect to see many lenders, including Cheltenham & Gloucester, offer cheaper fixed rates next week, particularly over longer terms. It is not likely to return to the heady days of 2007, when banks offered deals below the cost of funding, the government’s instruction to taxpayer banks to lend more should help drive down the cost of mortgages further. But lenders are unlikely to offer better deals for those with small deposits. Lenders will remain cautious in terms of the criteria required to get the best deals — so some homeowners could get caught out by falling house prices if they wait to long. One problem though is as property values tumble, people who may have a comfortable amount of equity now could find they do not qualify for the best deals in a year’s time — an argument for getting a valuation and remortgaging as soon as possible. Those on their lender’s SVR, are unlikely to see their rate fall further because we may have had the last of the cuts. So if you can fix at around the same rate, so you may as well do so. However,if you’re on a super-low tracker, it’s a different story — you’re going to have to pay more. 2009-03-08 http://www.londonmortgageadvice.co.uk/news/article/252 Borrowers are becoming more keen to take up lower rate deals yet enjoy stable repayments for a fixed period of time to help them to budget more easily in the current difficult financial climate. As such new lower fixed rate mortgages may be gaining popularity again. In the history of the Bank of England, standing at just half percent following a series of base rate cuts over the past five months, the base interest rate is now at its lowest. For those that do not want to have to worry about fluctuating mortgage repayments each month these mortgages are providing an effective alternative to the lenders’ standard variable rate mortgage deal. So, some banks have now launched competitive fixed rate mortgage deals in response to the recent rate cuts. There are a number of lenders launching competitive deals and the two year fixed rate mortgage is proving a popular choice. Now that the base rate is so low and a number of fixed rate deals for under 4 percent are coming onto the market, some homeowners are looking to fix their repayments at these competitive rates to make it easier to manage their finances. Up to now, many homeowners and property purchasers have been opting for the lenders’ standard variable rate mortgages since the base rate started to fall last October, with many hoping that they would benefit from the rapidly falling rate. Despite the falling interest rates, and expectations that the base rate could fall to as low as zero over the course of this year, over 50 percent of homeowners were still opting for the security of a fixed rate mortgage to ensure that they repayments remain stable each month for a period of time. 2009-03-06 http://www.londonmortgageadvice.co.uk/news/article/251 In the period from 2008 to 2009 there will be an estimated £32,900 bankruptcies as the recession bites harder. This represents a threefold increase on the period 2006 to 2007 In the first six months of this financial year alone - up to the end of October - 19,100 individuals or firms declared themselves penniless. At the same time, the number of companies going into administration owing money to HMRC could more than double, according to official Government figures. If the number of firms failing continues at the same rate, some 5,400 will have called in the administrators after being chased by HMRC by next March - a year-on-year rise of 132%. Is the Government failing small businesses. At the very time small businesses need the most help the Government is actually driving them under, hastening the rapid increase in bankruptcies. In his multi-billion-pound economic rescue package, Gordon Brown was supposed to be helping Britain on a path of recovery. 2009-03-05 http://www.londonmortgageadvice.co.uk/news/article/250 . People buying houses are demanding bargains as expectations continue for property prices to fall. There are homes being put up for sale and more are also finding buyers, but at prices well below sellers' expectations. As a result, the average sale price is now 88 per cent of the figure at which a property is first marketed, according to the latest survey from Hometrack, the housing data group However, these numbers suggest signs of activity in a market that was very slow before. And new buyer registrations are rising by 17 per cent and with agreed sales up by 36 per cent in February, after falls in the previous few months. There has also been word from Nationwide, which reported last week that there had been some evidence from estate agents and housebuilders that new buyer inquiries had picked up slightly as prices fall and interest rates are cut. While the percentage increase in activity may appear relatively high, the underlying transaction levels of market activity are about 60 per cent lower than they were a year ago. As such, this increase in market activity is off a very low base and falls well short of what could be classifed as ‘green shoots' of recovery. While demand for housing does exist, it was not at the levels of two to three years ago. The pick-up in buyer demand is strongest in southern England, with rises of more than 20 per cent in the number of people registering with estate agents in London, the South East and the South West. 2009-03-04 http://www.londonmortgageadvice.co.uk/news/article/249 Northern Rock is expected to reveal that more than 170,000 of its borrowers are in negative equity when it publishes its 2008 annual results this week. And what is more, Lloyds Banking Group conceded last week that 15% of its mortgage book before its takeover of HBOS — £17 billion of a total £113 billion — related to customers who owed more than their property’s value. Britain’s largest mortgage lender is Lloyds after it saved HBOS from collapse in January, predicted property prices would fall by another 15% this year — taking them down around 35% from their peak. Tumbling house prices, coupled with soaring unemployment, would cause Lloyds’ arrears and repossessions to surge this year, it said in its financial results. Mortgage hokders with little or no equity in their home will not be helped by moves to force lenders to pump billions into the mortgage markets. They will be stuck on lenders’ standard variable rates — which banks can change at will — as they are unlikely to be eligible for any new deals. In recent times lenders have restricted top deals to those with at least 25% equity in their home. There are no deals available for those with a deposit of less than 5%. Returning to the lending market last week, Northern Rock is pledging £14 billion of home loans to new and existing customers in the next two years. It will write some large loans — but only up to 90% of a property’s value. Another bank, Royal Bank of Scotland (RBS) will also lend more in return for further financial help from the government that could see up to 95% of the bank owned by the taxpayer. The government has a 68% stake now. They pledged to lend at least £9 billion to residential customers this year, and a total of £50 billion to homeowners and small businesses in the next two years. However, while the picture remains bleak for borrowers with little or negative equity, signs of life are returning to the market for homeowners with sizeable deposits. . Competition for business is hotting up, and the better rates we’re seeing puts pressure on other banks to lower theirs. Interest rates are unlikely to go up this year — and could well go down 0.5 percentage points next week. Northern Rock will write some loans at up to 90% of the value of a property. The Treasury said that would help first-time buyers and home movers looking to upsize to take advantage of lower house prices. But borrowers with less than 10% of equity in their home will not be helped, and will be stuck on their lenders’ standard variable rates. Northern Rock has one of the highest SVRs at 4.79%. 2009-03-03 http://www.londonmortgageadvice.co.uk/news/article/248 There has been a near doubling in the number of rental properties on the market. And this is driving down average rents. The rise in rental properties was being driven by people who had been unable to sell their home and deciding to rent it instead. The surge of rental homes coming on to the market was forcing rents down, as landlords had to compete for tenants. The average rent has come down by as much a £i50 per month. With mortgage lending down the number of new rental properties coming onto the market rising dramatically since the beginning of the year, t