Tag Archives: Mortgage market news

A serious new blow to mortgage borrowers Guest Columns, Mortgage News

I read with interest an article in the Daily Mail this week based on an announcement by Santander that they are radically over-hauling their policy on interest only mortgages. Now you can’t get an interest only mortgage from Santander unless you have 50% deposit to put down.

Business as usual, they can run things as they see fit.

For those of you that may not know, interest only mortgages (monthly payments of interest but no capital) have soared over the past few years as people gambled on property price increases covering the outstanding capital by the time the mortgage finished or as cheaper monthly mortgages underpinned by a known future pension or inheritance payout. Continue reading A serious new blow to mortgage borrowers

Lloyds tightens interest only rules for landlords Buy to Let News, Latest Articles, Mortgage News

Lloyds is the latest bank to tighten up interest-only lending criteria following the lead of Santander.

Both banks are significantly restricting interest only borrowing for personal residential mortgages, but leaving buy to let options intact. Continue reading Lloyds tightens interest only rules for landlords

Property is a Pension for 80% of Landlords Buy to Let News, Latest Articles, Mortgage News, Property Market News

Eight out of 10 landlords plan to supplement their pension income from letting property, according to the latest research by the National Landlords Association.

Landlords see buy to let as a way to increase their wealth and as a key method of generating a retirement income as an alternative to mainstream pension savings. Continue reading Property is a Pension for 80% of Landlords

Buy to Let Mortgage Conditions Eased Buy to Let News, Latest Articles, Property Investment News, Property Market News

As the buy to let mortgage wars hot up, several lenders are easing their terms for landlords.

Yorkshire Building Society has decided to offer buy to let across England and Wales, instead of just London and the South East. Continue reading Buy to Let Mortgage Conditions Eased

Buy to Let Mortgage War Hots up with New Deals for Landlords Buy to Let News, Latest Articles, Lettings & Management, Mortgage News, Property Market News

Buy to let lenders have fired the first shots in the battle to win the hearts and minds of property investors.

Platform, the landlord loan subsidiary of the Co-operative Bank, is increasing funding in the sector by 33% from £450 million last year to £600 million in 2012. Continue reading Buy to Let Mortgage War Hots up with New Deals for Landlords

Brokers Slammed for Bridging Loan Abuse Financial Advice, Latest Articles, Mortgage News

Mortgage brokers have come under fire from consumer watchdogs for failing to advise customers about the risks of short-term borrowing to earn huge commissions.

After a mini-boom in lending over the year reported by bridging lenders, the Financial Services Authority (FSA) has warned that some brokers are doubling or trebling their fees by recommending bridging to customers rejected by banks and building societies. Continue reading Brokers Slammed for Bridging Loan Abuse

Mortgage Lending Recovers But Still Less Than a Year ago Latest Articles, Mortgage News

House on Calculator

"Mortgage lending is up, but not up to last year"

Mortgage lenders released the purse strings on home loans slightly in August, but this year looks unlikely to equal last year’s lending.

Remortgaging was up significantly, with 34,100 loans worth £4.2 billion, making both the number of loans and amount borrowed were more than 30% higher than August 2010.

The number and total value of home buyer loans also hit a high for 2011, with 52,000 mortgages worth £7.9 billion.

Nevertheless, lending for the year so far stands at just 329,000 loans to buy homes worth £48 billion when the totals for 2010 were 513,000 loans worth £75 billion. Lenders will have to advance substantially more funds for the rest of the year to reach last year’s levels.

The lack of home sales is reflected in a rising number of remortgages throughout the year.

Although the Council of Mortgage Lenders (CML) reports a massive increase in August, their statistics show that last year’s 865,000 remortgages worth £118 billion is unlikely to be matched, with this year’s totals currently standing at 230,000 remortgages worth £28 billion.

Paul Smee, director general of the CML, said: “Even though it is impossible to ignore the knocks to confidence emanating from the Euro zone, August lending showed welcome signs of life. With those moving house experiencing a record low in the proportion of their income needed to pay their mortgage interest, it is clear that the low rate environment is a benefit to those with mortgages, even against the backdrop of the gloom in the wider economy.

“Lending to both first-time buyers and home movers was at its highest for over a year.”

The outlook for first time buyers even bleaker as just 19,000 mortgages worth £2.4 billion were agreed in August – up 5% on July and 5% on 12 months earlier.

Most home buyers opted for repayment mortgages.

Cheap Buy to Let Mortgages Set to Disappear Buy to Let News, Latest Articles, Mortgage News, Property Investment News

Notes being squeezed into coins

"Buy to let mortgages to go up?"

Cheap fixed rate and tracker buy to let mortgages may be on the way out as the rate lenders pay for money has increased.

This is likely to lead to higher mortgage rates even if the Bank of England base rate stays at the record low of 0.5%.

Banks and building societies pay returns based on the London Inter Bank Offer Rate (LIBOR) for money they borrow – and the rate went up from 0.83 per cent in August to 0.95%.

The supply of money has also tightened due to the Euro-zone debt crisis.

Buy to let mortgage rates have dropped during the past 12 months, but are still higher than homeowner rates. Continue reading Cheap Buy to Let Mortgages Set to Disappear

Housing Market has Bottomed Out, Say Mortgage Lenders Latest Articles, Mortgage News, Property Investment News

Big red arrow pointing downwards

"The mortgage market has hit rock-bottom"

House prices and the state of the property market have probably hit rock bottom, according to banks and building societies.

Property values are about to level out and then show a modest increase, says the Council of Mortgage Lenders (CML), which speaks for all Britain’s major mortgage lenders.

Mortgage availability is also ‘broadly stable’ and has remained at around the same levels for two years, adds the CML.

The housing market analysis is based on the latest economic figures released by the government and the Bank of England.

The CML backs a Treasury forecast that suggest house prices have bottomed out and will stabilise over the next 18 months or so before beginning to rise in line with wage inflation.

“Despite the weakness of consumer sentiment associated with ongoing pressure on household incomes and the uncertain economic outlook, there are no signs of significant house price falls,” said CML chief economist Bob Pannell.

“Values continue to be strongly underpinned by the limited volumes of new build and forced sales. While current survey data suggests that house prices nationally may be drifting modestly lower in nominal terms, the prevailing view among economists is for house prices to stabilise through 2012 and then revert to growth of four to five per cent per year from 2014 onwards.”

Meanwhile, research by the Intermediary Mortgage Lenders Association (IMLA), the trade body representing lenders that market products through brokers, has revealed 34 per cent of intermediaries believe standard mortgage business levels will improve during the fourth quarter of the year, with 26 per cent expecting business levels to increase between three per cent and seven per cent.

IMLA chairman John Heron said: “This positive attitude from intermediaries is a reflection of the general improvement seen recently in the mortgage market. The pickup is slow but market conditions are gradually improving, particularly in the buy-to-let and remortgage markets.”

Biggest Mortgage Lenders Dominate 81% of the Market Latest Articles, Property Market News

Small house on mortgage application form

"New figures show gulf between major and minor buy to let lenders"

The Big Six mortgage lenders account for 81.5% of all buy to let and home buyer mortgages in the UK, according to figures from the Council of Mortgage Lenders.

The Big Six advanced £110.8 billion in 2010, while the 27 remaining lenders advanced £23.5 billion – an indication of the gulf between the major and minor players in mortgage lending.

For landlords, the figures are slightly skewed as Paragon Mortgages did not restart lending until October 2010, so the company’s results are missing from the figures. Continue reading Biggest Mortgage Lenders Dominate 81% of the Market

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