November 18, 2009
Mortgage lending holding steady
Story link: Mortgage lending holding steady
Mortgage lending is remaining steady at present, but while much has been made of the recent rise in mortgages being taken out, volume is still far below the averages before the credit crunch hit.
Mortgage lending holds up in September
Latest figures from the Council of Mortgage Lenders (CML) show that in September, one third of first-time buyers benefited from the current stamp duty holiday.
There were 6,200 first-time buyer loans for properties priced between the old starting rate of £125,000 and the temporary threshold of £175,000, representing 32% of 19,700 first-time buyer loans approved.
September 2009 saw lenders sanction 50,600 loans for house purchases in total, up 2% on August and 43% on September 2008; remortgage volumes rose 10% on August, to 33,000, but were down 48% on a year earlier.
While the mortgage market is relaxing back more, many lenders are still demanding a 25% deposit, with a recent survey suggesting that at least two-thirds of all mortgage products currently on the market require this as a minimum deposit.
One lender that is bucking the trend is the Nationwide Building Society, which recently announced a raft of upsell measures, offering discounts on a variety of financial products to existing customers at a discount.
One key feature of this is mortgages available with just a 5% deposit, which is certainly a good sign, not least because the Nationwide is the second largest mortgage lender:
* From 30 October, Nationwide will reward existing customers who use FlexAccount as their main current account, with access to competitive mortgages up to 90% LTV.
* The range of competitive mortgages will support first time buyers and home movers without a large deposit.
* For existing mortgage customers moving home, the offer represents a discount of 0.70% off the current range of mortgages available to them at 90% LTV (existing customers moving home range, 85-95% LTV tier).
* Each of these products are available with and without free legal fees, covering the conveyancer’s professional charges relating to the house purchase.
* Rate and reservation fee is identical for each of these options.
* These offers are available to eligible existing customers moving home and first time buyers.
* These offers are available through the Nationwide branch network only.
The question is, how many other lenders will follow suit? Especially considering that the RBS and Lloyds Group are getting direct funding from the UK government to lend, but are still lending more restrictively than non-nationalised banks.
March 3, 2009
Mortgage approvals are stable
Story link: Mortgage approvals are stable
Mortgage approvals are now stabilizing around the 31,000 per month mark, which they have done for the last 6 months now. The problem is, since hitting and becoming stable at the 31,000 per month mark, the property market has seen no signs of recovery, so
The number of mortgage approvals in January for house purchases held steady at 31,000 the Bank of England has said.
And although approvals are still less than half the level of a year ago, they have now averaged 31,000 a month for the past six months.
How much can you save?
Story link: How much can you save?
There are literally hundreds of ways to save money and I’m not talking about sticking it in a high street account and earning 0-1% interest either!
Many homeowners that got on the property ladder before the crunch, while they may be losing value on their properties they are paying stupidly low mortgages, so really it has been offset and works out for the better.
This is equivalent to £9,000 a year, or even more when interest savings are taken into account, which will help home owners maintain their equity as house prices fall.
The average interest rate on a tracker mortgage on July 1, 2007 was 5.98pc (0.48 of a percentage point above base rate, which then stood at 5.5pc), according to moneyfacts.co.uk, which collects financial information. A borrower whose entire mortgage repayment consisted of interest would therefore have been paying £996.67 a month.
Nothern Rock feel the pinch
Story link: Nothern Rock feel the pinch
Northern Rock are definitely getting the brunt of the credit crunch, reporting huge losses of around £1.4bn for 2008 and now this.
So far the nationalised lender has seen 63% increase in repossessions, with that figure looking like it will inflate even more as the economy turns for the worse.
Repossessions by nationalised lender Northern Rock soared 63% last year, figures have revealed.
The firm held 3,620 repossessed homes at the end of 2008 compared with 2,215 a year earlier, the group’s annual report showed.
Property is no longer suitable for long term savings
Story link: Property is no longer suitable for long term savings
With news releases suggesting that 100’s of people every week are loosing value on property, which they originally purchased as a method of long term saving, it is clear why many are steering clear, especially in the current climate.
At the moment, the best option is the likes of Cash ISA’s, although this year should represent a great year to get back on the ladder.
Property is no longer suitable for long term savings
According to Gordon Greig, head of savings and investments at Scottish Widows, there has been a decline in the number of people using property for their long-term savings, a move which he supports given the recent decline in the property market and house prices.
In the last 12 months, 8 per cent of people said they were using property for their long-term savings, compared with 38 per cent the year before. This is according to the findings of Scottish Widows savings and investment report 2009.
Average house drops £35k a year
Story link: Average house drops £35k a year
It is not a nice thought to think that your house is dropping at such a rate. With the average house dropping around £2,500 last month alone, that means that even a person above the average wage is effectively working for nothing. Earnings are basically offset by the drop in house prices, meaning that the average earner, is effectively earning nothing!
Average house drops £35k a year
House prices in London have fallen by £35,300 on average in the past 12 months, new figures show today.
Property values slumped by at least £2,500 last month alone, according to price monitor Hometrack.
Mortgage lending decreases
Story link: Mortgage lending decreases
Mortgage lending just over 12 months ago was sitting at around 10 times the current amount, with a dive of a huge 60% in January .
Hopefully, the pressure Northern Rock is putting on other banks to lend more, will spur some of the main competitors into action.
Mortgage lending dived by more than 60% during January to just one 10th of its level 12 months ago, figures showed today.
Net mortgage lending, which strips out redemptions and repayments, was £690 million during the month, down from £1.79 billion in December, according to the Bank of England.
Late mortgage repayments hit new lows
Story link: Late mortgage repayments hit new lows
Mortgage repayments defaults are at the highest ever, with a huge increase in the number of sub prime mortgage lenders slowly increasing, now at their highest levels ever.
Financial companies can use the repayment levels as an indicator as to whether the individual will default the payment in the long term, so they can begin to gauge their losses for 2009!
Late mortgage repayments hit new highs
Households are finding it harder to pay debts on time, with the number of subprime mortgage holders falling behind on payments at its highest ever.
Standard & Poor’s, the credit rating agency, examined the performance of loans bundled into securities – bonds or notes – and sold to investors. The rate of delinquent or overdue payments, particularly those late by 90 days or more, are a leading indicator of the losses that lenders are likely to make on those loans.
There is hope for the housing market
Story link: There is hope for the housing market
While the demand is increasing within the property market, the supply is so over flooded, it is not allowing house prices to stabilise to their original state.
The good news for homeowners is that banks, led forward by Northern Rock, are increasing their lending, by freeing up the criteria, which is obviously good for the future of property prices.
There is hope for the housing market
More homes are 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.
This reinforces the message coming from all parts of the property market — that househunters are demanding bargains amid forecasts of further price subsidence.
February 25, 2009
£2m home and a squatter
Story link: £2m home and a squatter
The banks overlooked the fact that the property owner and of course the person who applied for the loan had no form of steady income, but still wanted take over repayments on a £1.2m loan. We wonder why the banks and the financial industry as a whole are in the current situation.
What makes me laugh, is a friend who earns a very respectable and steady wage, was refused an overdraft increase from £100 up to £200, due to the fact that he has to be out of his overdraft completely for three months, yet they will lend £1.2m to someone with no form of income.
Aged 71 and the daughter of a millionaire property tycoon, she’s not your average squatter. But Rosalie Reeves-Fisher says she has no choice.
The spinster inherited her £2.2million home from her mother, who bought it in 1973 after the death of her husband, a millionaire property developer.