Bank of England may intervene with access to credit
August 30, 2010
It has been reported that the Bank of England may take measures to restrict access to mortgage loans capping them to stop lenders giving out risky loans. The claim comes from a senior official from the Bank of England. Charlie Bean, the Deputy Governor from the Bank of England, said that ‘direct constraints’ may be required to restrict access to risky mortgage loans.
According to the report home buyers looking to take out mortgages could be forced to put down higher deposits of at least 10-15 percent of the property value. Whilst many lenders have been demanding higher deposits from borrowers for some time this sort of intervention from the Bank of England could make it mandatory for lenders to demand higher deposits.
This is said to be the first time that a senior official from the Bank of England has indicated that the central bank may take action to directly intervene and reduce the chances of borrowers taking out risky mortgage loans. The measure could be taken as part of new powers that are set to be given to the central bank under the government’s restructuring of the Financial Services Bill, which is set to take place later on this year.
However, there are concerns that this move could further damage the property market, which is already experiencing difficulties as a result of many would be buyers being unable or unwilling to take on mortgages in the current climate.
A broker from London and Country Mortgages said: “The mortgage market is still very slow and the biggest hurdle at the moment is boosting the availability of home loans not restricting them. Very few first time buyers can afford a big deposit so it is important that they are not excluded.”
Getting a mortgage still a struggle for first time buyers
August 18, 2010
Officials from a leading mortgage broker have said that many first time buyers in the UK are still struggling enormously when it comes to getting a mortgage loan. Industry experts from John Charcol have said that most first time buyers are still finding it a real struggle to get a mortgage loan and to afford a mortgage, which means that the dream of homeownership is still out of reach.
One senior official from the company, Ray Boulger, said that the main obstacle that was hindering first time buyers when it came to being able to afford a mortgage was the size of the deposit that lenders were asking them to put down. He said that the deposit levels that were being asked for were out of the reach of many first time buyers, as lenders have really increased the amount of deposit that they are looking for from tenants.
He also said that things for first time buyers were far harder than they were for home movers, as those that were just moving already had property often with equity in it that can be used for a deposit but first time buyers do not have this luxury and have to rely on savings or family to try and pay the deposit required be lenders require.
Boulger said that market conditions are still extremely difficult for first time buyers, and this backed up another recent report from the Chartered Institute of Housing, which claimed that homeownership was out of reach for many people in the current climate.
One would be buyer said:”Trying to find the deposit that most lenders are looking for has been impossible, so trying to get onto the property ladder will have to remain a dream for me for the moment.”
Switching mortgage provider could save consumers money
July 16, 2010
One High Street lender has recently stated that many homeowners in the UK are stuck in mortgage limbo, where they are stuck with a variable rate mortgage that is more expensive than the best buy mortgages that are on the market. The home finance spokesperson from Yorkshire Building Society said that consumers could save a fortune simply by switching their mortgage.
Tom Girling, the mortgage product manager at the building society said that many homeowners were stuck on standard variable rate mortgages with various lenders, but that they could get far better deals elsewhere. He said that this was known as being stuck in mortgage limbo.
Girling stated that there was a significant difference in the cost of some of the best buy mortgage products on the market and the price that many consumers were paying on their mortgages. The building society conducted research showing that homeowners in the UK would be able to save around £1.8 billion a year collectively simply by changing their mortgage provider.
Switching mortgages has been made far easier over recent years as a result of mortgage comparison sites and various internet websites that allow consumers to quickly compare mortgage products and determine which ones are best suited to their needs and their budget.
However, many people fail to take action to switch their mortgages or other services and products that could be cheaper with another provider, such as insurance cover or utilities.
In the meantime Yorkshire Building Society has launched a new five year fixed rate mortgage with a rate of just 3.99 percent, which is the lowest it has ever offered on this type of mortgage.
Mr Girling said: “Our analysis shows that the vast majority could make significant savings by switching to a better rate mortgage.”
Steps to take if you are struggling with your mortgage repayments
June 26, 2010
Whilst the recession may officially be over and the base interest rate may be at its lowest level in the history of the Bank of England, which spans over three centuries, many homeowners are still struggling to keep up with their mortgage repayments, which means that they are at increased risk of losing their homes.
Many people have seen their hours and income reduced, or in some cases have lost their jobs, over the course of the recession, and there are still job losses to come according to industry experts even though the recession has officially wanted. Many people are worried about keeping up with mortgage repayments, and it is important to ensure that if you are struggling with mortgage repayments you do not ignore the problem and hope that it will sort itself out, as the chances are that the problem will simply spiral out of control.
In some cases problems with making mortgage repayments can be sorted out with something as simple as going through your finances and making cutbacks. If you find that you are struggling to make ends meet financially always ensure that your mortgage is the first thing that you pay, and you can worry about the rest afterwards. The last thing you want is to lose your home, so always prioritise on your mortgage and other loans that are secured on your home.
It is a good idea to go through your finances carefully to see where you can make cutbacks, as you may be surprised at how much you can shave off your outgoings simply by shaving a fiver or tenner off here and there, and all of the money that you save can then go towards easing your mortgage repayment problems.
However, there are also people that find that they really cannot keep up with repayments on their mortgage even if they make cutbacks and this is when you need to ensure that you get advice as quickly as possible. It is advisable to contact your mortgage lender as soon as possible when you realise that you can no longer meet repayments, as the earlier you do this the more likely it is that they will be able to help you.
There are a number of options that your lender may be able to look at to help you to avoid repossession action, so immediate action is vital before you fall into arrears. If you are not confident about approaching your lender or feel that your lender is not treating your case fairly it is worth contacting the Citizen’s Advice Bureau or a debt charity for advice.
Openwork encourages borrowers to switch to repayment mortgages
June 26, 2010
Mortgage introducer Openwork has launched a new campaign aimed at trying to get homeowners that are currently on interest only mortgages to switch to capital and interest mortgages, also known as repayment mortgages. This comes after a number of lenders decided to crackdown on interest only mortgage loans, which are far higher risk than repayment mortgages.
With interest only mortgages the repayments made by the borrower cover only the interest on the loan over the mortgage term, which means that at the end of the term the borrower has to find the money to pay off the actual loan balance. For this reason the borrower is meant to make provisions, such as a sideline investment, to ensure that the actual loan amount can be raised by the end of the mortgage term.
Officials from Openwork are concerned that many borrowers with interest only deals do not have any adequate investment in place to ensure that this could be done, and is working with its key lenders, which include many big name lenders, to find a way to make it easy and affordable for borrowers to switch to a repayment mortgage.
Lenders that are involved in the scheme with Openwork include Nationwide, Halifax, C&G, Scottish Widows, Lloyds TSB Scotland and Woolwich.
An official from Openwork said: “At least 20 per cent of UK borrowers have an interest-only mortgage and FSA figures show the vast majority of them do not have a suitable repayment vehicle in place to pay the total outstanding debt. That is a huge concern to borrowers and lenders alike. We believe this campaign is a win-win for all concerned. It helps de-risk banks’ loan portfolios while confirming clients are on track - or helping them to get on track - to repay their loan in full.”
Affordable first time buyer mortgages launched by post office
May 14, 2010
Over recent years first time buyers have experienced many difficulties when it comes to getting onto the property ladder, and with everything from high property prices to mortgage restrictions and high deposit levels to hinder their chances of getting onto the property ladder many have had to give up on the dream of homeownership, at least for now.
However, the Post Office is hoping that it can offer some first time buyers a helping hand after launching a range of mortgages that are designed to suit the needs and pockets of first time buyers. At a time when many lenders are demanding huge deposits from first time buyers the Post Office has launched deals that require a relatively low deposit.
The mortgages, which are targeted towards first time buyers, are available with just a 10 percent deposit, and whilst this is far higher than the deposits required three or four years ago, which stood at just 5 percent or in some cases 0 percent, it is still much lower than the deposits of 15 percent and more that many other lenders are now demanding.
The mortgages offer fixed rates set at between 5.45 percent and 5.99 percent, and the fixed periods are for two, three, or five years. There is also a tracker mortgage available from the Post Office with an interest rate of 5.49 percent. There are some 10 percent mortgage deals now returning to the market for first time buyers, but the interest rates attached to these can be very high.
The Post Office stated: “Whilst there are existing 90% deals available, many remain out of reach for most borrowers because the rates are too high. We’re offering more affordable rates that will allow more borrowers the opportunity to take out a mortgage with a smaller deposit. This should particularly help first time buyers.”
Mixed news for first time buyers
May 7, 2010
Whilst first time buyers have experienced extreme difficulties over the past couple of years when it comes to being able to get onto the property ladder a number of changes have taken place over recent months that have eased the situation for many people within this group. Read more
More people being encouraged to use spare cash towards mortgages
April 27, 2010
According to a recent report a rising number of homeowners are being encouraged to use any spare money that they have to pay towards their mortgage loans, which could see many people save a fortune in interest and cut the amount of time over which they will have to make repayments drastically.
Some lenders are encouraging their borrowers to take advantage of the rock bottom rate of interest and put any surplus cash towards paying extra on their mortgages. With continued uncertainty over jobs and finances consumers are being advised to clear as much debt as possible, and recent reports have suggested that many consumers are using their cash to pay off mortgage debt and other debts rather than spending it on luxuries.
David Dooks from the British Banker’s Association said that homeowners were taking advantage of the savings that they were making on their mortgage repayments as a result of the lower rate of interest and were using these savings to make additional payments on their mortgage loans in order to reduce the debt more quickly. Many were also using this surplus cash to repay other debts such as loans and credit cards to unburden themselves from large debt levels.
The BBA said that lenders were also become more active in the mortgage market again, after a particularly turbulent couple of years since the onset of the global credit crisis. Another industry group said that lenders seemed to be opening their doors for business again. Mr Dooks said that many banks were now actively encouraging their mortgage borrowers to pay their extra cash towards their mortgage loan.
He said: “Homeowners are reducing mortgage debt by making, or maintaining, higher repayments using the extra cash generated by lower mortgage rates.”
Mortgage choice for first time buyers on the increase
April 12, 2010
A recent report has shown that the number of mortgage now available on the market for first time buyers has increased, which means that first time buyers can enjoy boosting their chances of getting a better deal on their mortgage because of the increase in the number of deals that are available. Read more
First time buyers may still need to find over £50,000
March 29, 2010
A recent report has shown that the number of mortgages that are available for first time buyers that have just a 15 percent deposit available has been increasing, and that there are now around four hundred mortgages on the market that could prove ideal for first time buyers. Read more
Mortgage borrowing falls due to stamp duty
March 9, 2010
According to a mortgage industry group the level of mortgage borrowing for the month of January has been affected by the increased threshold when it comes to stamp duty in the UK. Read more
Mortgage fraud costing UK one billion a year
March 4, 2010
Mortgage related fraud is a problem that has caused concern for some time, but over recent years, with the credit crunch and mortgage drought causing so many problems, this type of fraud along with some other types of fraud has become increasingly prevalent. 
It has been estimated recently that total losses that can be attributed to some form of fraud in the UK come in at a whopping £30 billion, and out of this around £1 billion is lost in mortgage related fraud alone.
The data was released by the National Fraud Authority released the data, and officials from the group said that the estimate was more comprehensive than the last estimate, which was released in 2007. The new estimate relating to fraud costs included previously unpublished fraud figures, which officials believe make the figures more accurate than those that were estimated in 2007.
Over the hardest hit industry in terms of fraud was the financial sector, which will come as no surprise to many given the chaos that has been caused by the credit crunch, recession, and difficulties in the mortgage and financial markets. Around £3.8 billion in losses is said to have been seen by the financial sector, and this includes £1 billion if mortgage related fraud and £2 billion in insurance related fraud.
The Commissioner of the City of London Police stated: “We always believed that the true cost of fraud could be much higher than previous estimates. It is vital that we ensure that the methodology used to measure the cost of fraud on the UK economy is as up to date and as comprehensive as is possible. As head of the national lead force for the investigation of fraud I know the destructive effects that this type of crime can have. We look forward to continuing our work with the NFA and the rest of the UK’s Counter Fraud community and building upon our recent successes.”
First time buyers could be affected by return of buy to let landlords
February 26, 2010
According to a recent report a rising number of lenders are starting to approve mortgage deals for buy to let borrowers following a rocky period when fewer and fewer of these deals were being approved. Read more
Building society hikes up rates for mortgage customers
February 20, 2010
A building society has recently announced that it is hiking up its standard variable interest rates for customers despite the fact that the base interest rate still stands at its all time low of just 0.5 percent. Read more
Mortgage approvals increased at the end of last year
February 18, 2010
According to recent figures the end of last year saw the level of mortgage approvals in the UK increase, although approval levels were still far lower than they were the previous year. Figures have been released by the UK’s major banks, and have shown that mortgage approval levels increase towards the end of last year, with nearly 46,000 loans for new home purchases being approved in December of 2009. Read more
Mortgage approvals double in twelve months
February 13, 2010
Recently released figures have shown that the level of mortgage approvals in the UK actually doubled in the twelve months to November of 2009. The figures were released recently by the Bank of England, and officials from the central bank have said that the increase in mortgage approvals over the twelve months period is a further sign of recovery in the property and mortgage markets. Read more
Average Buyers Still Unable To Afford Property
January 21, 2010
It has been revealed that the average buyer may still find that property prices are out of their reach, with house prices becoming unaffordable again for the first time since the property slump began at the end of 2007, according to a recent report. Read more
Slowdown in house price increase for December
January 14, 2010
Recently released figures have shown that house prices increases in the UK have seen a slowdown for the month of December, with growth in properties across both England and Wales slowing down for the month. Read more
Buyers Being Forced Into Mortgage Loans By Estate Agents
January 9, 2010
A recent study that was carried out by Times Money has suggested that in many cases potential property buyers in the UK are being forced into taking costly mortgage loans through the estate agency that they go with. Read more
Deposit scheme suffers according to landlords
January 5, 2010
According to a recent report many landlords and tenants are concerned that a government deposit scheme that is supposed to protect the deposits of tenants will end up suffering as a result of measures brought in to try and cut costs. Read more
Mixed news for those with low deposits for mortgages
December 18, 2009
In the past getting an affordable mortgage with only a low deposit of 5 percent, or even with no deposits at all in some cases, was not a big problem, as many mortgage lenders offering 95 percent loan to value mortgages, 100 percent mortgages, and even 125 percent mortgages. Read more
BSA warns that mortgage costs could increase
November 30, 2009
The Building Societies Association has recently warned that the cost of mortgages could rise despite the record low base rate, and this is because of increasingly stringent regulations with regards to mortgage lending coupled with a battle to attract more retail deposits. Read more
Buyers rush to get properties completed before stamp duty holiday ends
November 26, 2009
Last year saw the government take steps to try and revive the struggling property market in the UK, and one of the measures that was put into place to do this was to suspend stamp duty on properties up to the value of £175,000. Previous to this stamp duty had to be paid on properties over £125,000 so the move involved increasing this threshold by £50,000 on a temporary basis. Read more
Cable comments on new FSA regulations
November 22, 2009
Following the announcement by the Financial Services Authority with regards to changes to mortgage lending regulations to prevent another financial meltdown a number of industry groups and officials have given their opinions on the measures. Read more
Mortgage default levels haven’t peaked yet
November 16, 2009
Over recent years a rising number of people have fallen behind on their mortgage repayments, with financial problems being fuelled by the global credit crunch and the recession. Read more
Mortgage lending sees a drop
October 19, 2009
According to a recent report there was a drop in mortgage lending for the month of August, with lending levels falling by around 13 percent. These figures were released by the Council of Mortgage Lenders, which said that mortgage lending for the months of August fell to around £12.6 billion from the £14.5 billion seen in July. Read more
Thirty percent rise in mortgage arrears
October 13, 2009
A recent report has shown that although the base interest rate has fallen to its lowest level in history, at just 0.5 percent, the level of mortgage arrears in the UK has soared by 30 percent over the past year. Read more
Stamp duty due to come back at end of year
October 6, 2009
Last year saw the UK government suspend stamp duty on properties between the values of £125,000 and £175,000 with the aim of making property purchases more affordable in the difficult financial climate and as a result reviving the property market, which has been experiencing severe problems. Read more
Further controversy arises over PPI
September 28, 2009
Over recent years PPI, or Payment Protection Insurance, has been at the centre of heated controversy and regulation changes. This insurance is a form of protection that is offered to consumers taking out finance such as credit card, loans, and the like, and the idea behind the cover is that if the policyholder is unable to make repayments for a specified period of time due to sickness, redundancy, or injury, the policy will then meet these repayments up to a certain period of time. Read more
Possible easing with mortgage situation
September 24, 2009
Following the most recent Monetary Policy Committee meeting, where it was decided that the base interest rate would stay on hold for a fifth month at 0.5 percent, the Bank of England also announced that it was pumping more money into the economy through quantitative easing. Read more
Mortgage decisions can be based on occupation
September 19, 2009
It has been revealed in a recent report that many mortgage lenders have been basing their decision on whether to grant mortgages to applicants on the occupation of the applicant. Read more
FSA too lax over repossessions
September 14, 2009
The UK’s financial regulator, the Financial Services Authority, has been accused of being too lax over the rising level of repossessions in the UK, according to a recent report. Read more
Drop in level of self cert mortgages
September 8, 2009
Since the onset of the global credit crunch in 2007 the mortgage market has undergone many changes, and this has been reflected in recent data that has been released in relation to self certification mortgages. Read more
Continued increase in property prices
September 4, 2009
Recently released figures have shown that there has been a continued increase in property prices in the UK Officials from the Nationwide Building Society have said that house prices have now risen for the fourth month in a row, and have climbed by around 1.6 percent. Read more
MPs think government mortgage plan will be a failure
August 14, 2009
MPs have recently stated that a government plan aimed at boosting the mortgage market is effectively doomed and will not have the desired effect. Officials from the Communities and Local Government (CLG) Committee said that the £50 billion scheme had been set to fail from the start, adding that in order to aid the mortgage market further measures had to be introduced. Read more
Fewer long term fixed rate mortgages available in UK
August 10, 2009
A recent report has claimed that there are fewer long term fixed rate mortgages now available, with a smaller selection of lenders now offering this type of mortgage loan. Read more
Consumer urged to be careful with eye catching mortgage deals
August 6, 2009
Industry experts have been urging consumers in the UK to be careful when going for mortgage deals that they think look too good to be true, as the chances are that they are too good to be true. Read more
Shared ownership hopes dashed for many people with damaged credit
August 4, 2009
Getting any sort of finance such as mortgage finance has always been difficult for those that have damaged credit, and in the past people with bad credit ratings that wanted to get a mortgage struggled for years, as lenders viewed them as high risk and therefore either refused them credit or charged them a very high rate of interest. Read more
Interest rates being kept static for fourth month
July 23, 2009
This month has seen the Bank of England announce that for the fourth month in a row the base interest rate is being kept on hold, at its all time low level of 0.5 percent. Read more
Mortgage repayment reductions not going to High Street
July 20, 2009
Over the past eight months or so many homeowners in the UK with variable rate mortgages have seen their monthly mortgage repayments plummet, with the base interest rate plunging to just a tenth of the level that it was at in October of last year. Read more
Some mortgage lenders paying off borrowers to refinance
July 10, 2009
According to a recent report a number of UK lenders are actually giving customers money to try and get them to refinance with another lender. Read more
Mortgage expert warns on fixed rate mortgage increases
July 2, 2009
As the turbulence in the mortgage and financial markets continues, and the ongoing recession continues to take its toll, one mortgage expert has recently warned that the rates on fixed mortgages will increase in the near future, and already his predictions have started to come true with a number of mortgage lenders having recently hiked up their fixed rate mortgage rates within a few days of his warning. Read more
Eight year low for mortgages in April
June 29, 2009
A recent report released by the British Banker’s Association has shown that the level of net mortgage lending for the month of April from UK lenders slipped to its lowest level in eight years. Read more
Mortgage lenders try and boost markets by cutting costs
June 25, 2009
According to a recent report a number of mortgage lenders have recently been trying to boost the mortgage markets by cutting costs for those looking to purchase a property. Read more
No change in interest rates for June
June 20, 2009
Following the Monetary Policy Committee meeting, which was held earlier this week, the Bank of England has announced that the UK base rate is to be kept on hold for yet another month. Read more
Deposit level drop from Abbey
June 15, 2009
Earlier this month the High Street banking giant which has recently enjoyed taking a larger share of the mortgage market, Abbey, announced that it was cutting its deposit levels for access to its most competitive deals. Read more
Mortgage lenders attempt to cut costs
June 3, 2009
There has been evidence that competition in the mortgage market is hotting up again, with lenders striving to increase their share in the mortgage market by trying to cut costs for potential buyers. Read more
Monetary Policy Committee keeps rates on hold
June 1, 2009
The base interest rate in the UK is to stay on hold for the first time in seven months, with the Bank of England announcing that it is leaving the rate on hold at 0.5 percent following the April Monetary Policy Committee meeting earlier this week. Read more
RBS under fire over mortgage fee
May 14, 2009
Bailed out High Street bank, Royal Bank of Scotland has recently been under fire after announcing that it was charging a non-refundable and hefty fee on its mortgage. Read more
First time buyers spending fortune on deposit and mortgage
April 2, 2009
Data from a recent report has suggested that first time buyers are now spending a fortune on their mortgage deposit and their first year of mortgage repayments. Read more
A 15% deposit may become the minimum for property purchasers
March 30, 2009
As a result of sweeping reforms being considered by the UK’s financial regulator, the Financial Services Authority, consumers that are looking to purchase a property in the UK may be forced to put down a minimum deposit of at least 15 percent when taking out a mortgage. Read more
Supermarkets may axe plans to sell mortgages
March 21, 2009
As most people are aware the supermarket giants of today sell a lot more than just groceries and household goods, with many selling a range of financial products such as insurance, loans, and credit cards, and some even offering banking facilities. Read more
Central bank cuts rates and considers quantative easing
March 20, 2009
Following the March Monetary Policy Committee meeting the Bank of England has cut the UK base interest rate once again, slashing it by a further 0.5 percent and taking it to a fresh all time low of just 0.5%. This is the sixth month in a row that the base rate has fallen, and following a series of aggressive rate cuts the base rate has dropped from 5 percent in October to just 0.5 percent in March. Read more
Mortgage approvals up for second month in a row
March 18, 2009
According to industry reports mortgage approvals in the UK have increased for the second month in a row in January, with a slight increase compared to mortgage lending levels for December. Read more
Getting a mortgage has become more difficult
March 17, 2009
A recent report has suggested that getting a mortgage is becoming increasingly difficult, even though many had hoped that things would become easier following a very tough 2008 with regards to the mortgage market. Read more
Many lenders failing to pass on the base rate cut
March 16, 2009
According to a recent report there are many lenders that are refusing to pass on the base interest rate cut to those that are approaching them with a view to remortgaging. Read more
Five year low for buy to let mortgage loans
March 13, 2009
Recently released data has shown that mortgages for buy to let properties have now fallen to a five year low, as the market continues to restrict and mortgage lenders continue to try and reduce their risks when it comes to mortgage lending. Read more
Slight rise in mortgage approvals in December
March 13, 2009
Recently released figures from the Bank of England have indicated that there was a slight increase in mortgage lending for the month of December. Read more
PM accused of raising hopes over mortgages
March 12, 2009
In a recent attack the Conservative Party has accused the Prime Minister, Gordon Brown, of raising the hopes of consumers with regards to mortgage assistance. Read more
Criticism over mortgage arrears charges
March 11, 2009
Industry officials from the debt advisory sector have recently expressed their concern over charges that are imposed by lenders when homeowners fall into arrears with their mortgage loans. Reports show that when homeowners fall into arrears with their mortgages many are charged between £20 and £50. Read more