The Bank of England cut interest rates to a new record low of 1% on Thursday. While the Halifax reported that house prices rose 1.9% during January. This is in contrast with Nationwide’s figures last week which showed 1.3% drop in house prices. As the credit-crunch has shown, the supply of finance has driven up house prices. There will be no full scale recovery in the UK property market until finance becomes easier to obtain, especially for first-time buyers. And with rising unemployment, who knows what the future will bring!
Archive for the ‘Mortgages’ Category
Base rate falls while house prices rise
Friday, February 6th, 2009Overpay your mortgage to save thousands
Wednesday, February 4th, 2009
Borrowers can save thousands of pounds in interest and trim years off the life of their mortgages by making regular overpayments. Even a lump sum overpayment can make a difference. Banks are currently pushing for overpayment as it helps to build their capital bases.
HSBC and Lloyds TSB are writing to all their customers informing them how to make overpayments after thousands have asked how to do this. But make sure the lender reduces the term of your mortgage, not your monthly repayments.
Repossession orders rise by 24%
Friday, August 15th, 2008
Official figures show 28,658 mortgage possession orders were made in England and Wales during the second quarter of the year, up 24% on the same period a year ago. In London, the number of court orders rose by 12% to 4,052. There were large increases at several county courts including Edmonton, 34% to 395, Kingston-upon-Thames, 22 per cent to 93, and Brentford, 20 per cent to 191. A mortgage repossession order, granted by a court, entitles the claimant - usually a lender - to apply to have the occupier evicted. But a significant number of homeowners issued with an order manage to avoid being forced out.
Councils are also looking at a safety net scheme where they would take over the mortgage, or part of it, of people falling into arrears and then rent back the property.
Abbey is new top UK mortgage lender
Saturday, August 9th, 2008
Abbey has toppled Halifax as the UK’s biggest mortgage lender by taking more than a quarter of all business in the first six months of the year. Chief executive Antonio Horta-Osorio said that while other lenders were withdrawing from the market, it was increasing mortgage lending to low-risk customers. However, he warned Abbey is unlikely to continue at such a rate for the rest of the year as other lenders return to the market. It came as Abbey, which is owned by Spanish giant Santander, reported a 20% rise in first-half profits to £485m. Santander, which has agreed to buy struggling Abbey rival Alliance & Leicester, said group profits jumped 22% to €4.73bn (£3.73bn).
Repossessions on the rise
Friday, August 8th, 2008The number of homes being repossessed leapt by 41% in the first half of the year to hit the highest level since the mid-1990s and by 48% compared to the same period in 2007. During the 1990s house price crash repossessions peaked at 38,900 in the second half of 1991, with a total of 75,500 homes seized that year. However, the Council of Mortgage Lenders has predicted repossessions to accelerate further that it’s current figure of 18,900 and hit 45,000 this year. The CML said it expected 170,000 mortgages to be in arrears of more than three months by the end of the year, however the numbers remained small in context of the 11.74 million mortgage borrowers in the UK.
Northern Rock offers first decent mortgage rate
Wednesday, July 9th, 2008
Northern rock has issued its first competitive mortgage rates since a run on the bank almost brought it to its knees last summer. It has two-year fixed-rate loans that, while not the very best on the market, are good enough to bring in new customers. For buyers there is a rate of 6.39% and for remortgagers a rate of 6.49%. Both have a £995 fee. The lowest rates for two-year fixed deals are available from First Direct and Yorkshire BS.
Northern Rock has been trying to move existing customers to rivals since last September. Its rates have got progressively more expensive as it tried to price itself out of the market to avoid taking on new business. These new rates are not available for existing customers. While these rates are not the very best, where they have a big advantage is that they are fully flexible, meaning you can overpay as much as you like without penalty.
Sweenter offered to borrowers to move on
Tuesday, July 8th, 2008
Former specialist mortgage lender Edeus is offering cash sweeteners to encourage its borrowers to redeem their mortgages early. It is also waiving early repayment charges and will not charge borrowers exit fees. The incentives are available to selected clients over an undisclosed period. Edeus will be encouraging the selected borrowers to contact the brokers that originally introduced the loan to Edeus in order to source a suitable deal with another lender. The firm, launched less than two years ago, was a specialist lender at the forefront of the UK’s subp
Lloyds TSB and Northern Rock in mortgage deal
Sunday, June 15th, 2008
Lloyds TSB has struck a three-year deal to take on Northern Rock customers who are coming to the end of fixed rate mortgage deals. Certain mortgage customers will be offered the opportunity to switch to a Lloyds from July. The deal will assist Northern Rock in reducing the size of its balance sheet. Lloyds has set a maximum loan to value ratio of about 80% for the mortgages it will take on, but it said this will be flexible. The tax payers obviously have the rough end of the deal here - as Northern Rock which is now state owned will be left with the riskiest borrowers, just as housing repossessions are expected to rise. Northern Rock itself warned last month that arrears were rising and shifting customers could become more difficult as the economy worsens and rivals cut back on lending.
Repossessions to soar by a quarter
Monday, April 28th, 2008Home repossessions will soar by almost a quarter this year as the credit crunch bites, a leading economic consultant has warned. Around 33,400 people could lose their homes during 2008 - 23% ahead of last year - the Centre for Economics and Business Research (CEBR) said. Mortgage deals are also set to remain expensive until the pressure in money markets eases, according to the group’s latest consumer and housing prospects report. The warning comes despite the Bank of England’s £50bn bid to tackle the crisis last week by allowing banks to swap their riskier assets for safer ones in an attempt to kick-start credit markets. Until the mortgage finance starts to flow again, the outcome will be a reduction in house prices and an increase in repossessions.
