The 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.
Posts Tagged ‘Mortgages’
Repossessions on the rise
Friday, August 8th, 2008Mortgage approval slumps as banks run out of cash
Wednesday, April 23rd, 2008In a year, mortgages for people buying a home have dived by 46% as Britain’s banks run out of money to lend. Figures from the British Bankers Association (BBA) showed mortgage approvals for house purchase in March tumbling to its lowest figure since records began in 1997. This shows the extent to which banks are tightening their belts as they find themselves unable to secure funding for mortgages. Borrowers needing to remortgage or purchase a home are finding lenders have raised rates to reflect their own higher borrowing costs and increase margins on mortgages. Many are also demanding higher deposits to protect against house price falls and to raise the quality of their loan books. The rising cost of securing funding on the money markets has seen the inter bank lending rate Libor rise to 0.9% above the bank rate of 5% - the historical average is 0.13%. This has substantially pushed up the cost of new tracker rate mortgages, which are heavily influenced by Libor. The BBA said it expected lending to continue to weaken due to the continuing decline in mortgage approvals.
Halifax defies plea by PM and raises its loan rates
Wednesday, April 16th, 2008
Britain’s biggest mortgage lender today defied Gordon Brown’s plea to cut mortgage rates. The Halifax is raising rates on some mortgage offers by 0.5% despite his calling bank chiefs to No10 to urge them to sign up to the Government’s strategy to tackle the global economic turmoil. The Prime Minister was also bluntly warned that a string of building societies could be forced out of the mortgage market by the looming crisis. Mr Brown is said to be prepared to offer banks help to raise funds but wants them to pass on interest rate cuts, do everything they can not to repossess the homes of people struggling to meet their mortgage payments, and to offer loans to first-time buyers. The Bank of England is injecting a further £15bn of liquidity into the markets, taking its total recent support to more than £50bn.
Government plans to grade mortgages
Wednesday, March 5th, 2008The Government is planning to use next week’s budget to introduce plans to grade all mortgages in a bid to kick start the wholesale money markets. Chancellor Alistair Darling is understood to be arranging the introduction of a new system under which all mortgages are graded, with the least risky awarded a gold standard ‘Kitemark’. Investors have been reluctant to buy mortgage-backed securities for fear they contain risky sub-prime loans and this has made it difficult for banks to remove mortgage assets from their books. It is hoped that by providing investors with greater reassurance about the quality of the loans they are taking on, it will make it easier for lenders to sell on mortgages to investors. The scheme could help re-vitalise the wholesale money markets and provide banks with access to cheaper funding, which subsequently could be passed on to consumers in lower mortgage rates.
Last lender pulls 125% mortgage deal
Saturday, February 23rd, 2008Lenders have completely pulled out of the 125% mortgage market as the credit crunch continues to bite. Birmingham Midshires Solutions said it was pulling its version of the product, which will lend people up to 125% of their property’s value, due to market conditions. The group had been the only provider to continue offering the deals after Alliance & Leicester, Abbey, Northern Rock, Coventry Building Society and Godiva Mortgages all said they were scrapping them earlier this week. Faced with only limited availability of funds, lenders are keen to concentrate on less risky mortgages, and the problem has been compounded by fears that house prices could fall. There are now just two mortgage providers who will advance more than 100% of a property’s value, with Scottish Widows offering loans of 110% to professionals only, while Dunfermline Building Society is offering 110% to professionals and 105% to graduates but only in Scotland.
How will banks recoup their dented profit margins?
Tuesday, December 18th, 2007The banks always find various ways to recoup losses through their customers. When credit card charges had to be reduced from as high as £39 to £12, some responded by tagging on an annual fee, some have already started fining customers who are in credit and other like RBS reduced the interest free period their customers have before payments are due. And there have been many others setbacks; mortgage exit fees, miss-sold Payment Protection Insurance (PPI), various bank account charges, and now the US sub-prime mortgage crisis. They have already started by increasing mortgage arrangement fees to as high as 4% of the loan. The banks are very shrewd in finding various ways to pass the buck!
Northern Rock entices savers and puts off borrowers
Friday, December 14th, 2007For the past two weeks, the bank has been offering loyalty bonuses to savers and increased rates to a range of savings accounts. But on the other hand, it has withdrawn mortgages, loans, credit card, and increased borrowing rates to rediculous highs with huge arrangement fees. Obvious signs that its trying to recoupe some of its loses after its savers decided to match away with their money in toe back in October. It has since then borrowed more money from the Bank of England to the tune of £29bn. The move has pushed some of its savings products up the best buy tables and deterred mortgage brokers with fixed rates starting from 6.79% on 90% LTV with arrangement fee of £1,995. As a good loyal Northern Rock mortgage customer, I will have to match off too unless they sort this out.
