Diary of a Property Investor

Mortgage conditions 'more favourable for house buyers'

28 May 2010

The UK mortgage market is significantly more favourable to house buyers now than it has been on average over the last 14 months, new figures have shown.

Statistics from Moneyfacts.co.uk reveal that the average rates for two-year, three-year and five-year fixed-rate mortgages are between 0.31 and 0.6 percentage points lower at the moment compared with the average since the Bank of England's base rate reached 0.5 per cent in March 2009.

Furthermore, there are signs that it is becoming easier for people to borrow.

"Lenders are easing their criteria and competition is returning to the market, which should be a perfect platform for a resurgent mortgage market," said the website's spokesperson, Darren Cook.

However, he added that there is currently "little incentive" for homeowners to remortgage to a different deal.

Earlier this week, David Dooks of the British Bankers' Association indicated that uncertainty about the economy and the new government will continue to "influence decision-making" in the mortgage market.

Written by Fiona Mayers

Safestore.co.uk

Lloyds sees rise in mortgage overpayments

Lloyds Banking Group, which is the UK’s largest mortgage lender, said historically low interest rates has led to a rise in mortgage overpayments.

Borrowers on a variable rate mortgage have benefited from low interest rates but have opted to pay more than the minimum amount on their mortgage last year.

According to Lloyds, 14% of its customers paid more than the minimum amount - up from 7% in 2008.

Borrowers on a £100,000 mortgage will have seen their monthly repayments fall by around £275 a month as the Bank of England lowered interest rates from 5% two years ago to the current record low of 0.5%, said Lloyds.

An overpayment of just £50 a month for a borrower with a mortgage of £100,000 paying 3.5% interest could result in a saving of more than £7,500 and thereby, reducing their mortgage term by three and a half years.

Stephen Noakes of Lloyds Banking Group, comments: “The data shows that more and more borrowers are seizing the opportunity to overpay whilst in a low base rate environment.

“Not only does overpaying help homeowners take years off their mortgage but it also makes significant savings over the long term,” he added.

Earlier this year, Lloyds invited its standard variable rate (SVR) mortgage customers to increase their monthly repayments.

Under a new scheme that will run for a year, borrowers can overpay by up to 20% without incurring a financial penalty.

Lloyds see rise in mortgage overpayments

by Kay Murchie 

Mortgage lending climbs 25% in March

By myfinances.co.uk staff

Mortgage approvals rose by 25% in March compared with the previous month as the market built some momentum heading into spring and summer.

According to the latest figures from the Council of Mortgage Lenders (CML), there were 45,000 loans for housing purchase given the green light during the month worth a total of around £6.3 billion.

It added that the number of mortgages going to first-time buyers was 27 per cent higher compared with February at 17,300 deals worth £2 billion.

Meanwhile, loans to owner-occupiers moving home rose by 11 per cent to 27,500 deals worth £4.3 billion.

Over the first three months of 2010, the CML said that there were 112,000 mortgages approved by lenders worth a total of £16.1 billion.

Commenting on the figures, the organisation's director-general Michael Coogan said that the key issue going forward is how the government will support continued activity in the market when lenders have to repay the emergency support extended to them during the financial crisis.

"The UK is at risk of a chronic under-supply of credit - and the rationing of mortgages for customers - for years to come," he warned.

According to Nationwide, the average UK home cost £164,519 during March.

Myfinances.co.uk

Mortgage market 'recovering' as consumer confidence grows

The UK mortgage market is continuing to show signs of recovery, despite being some way off the level of three years ago.

That is the suggestion of Hannah-Mercedes Skenfield, mortgages channel manager at moneysupermarket.com, who was commenting after the Council of Mortgage Lenders (CML) identified growth in home loans in March.

She noted the number of deals at 85 per cent loan-to-value is at its highest since October 2008, with the rise in the number of products available likely to bring about further increases in approvals.

"Consumer confidence is growing as homebuyers feel a little more assured about their own finances," said Ms Skenfield. "The best deals, however, are still reserved for those with the biggest deposits."

According to the CML, loans for house purchase were up 25 per cent in March, compared to the previous month, with the total standing at 45,000.

And first-time buyers accounted for 17,300 of these - a 27 per cent rise on February.

Houseladder Ltd

Post Office set to shake up the UK mortgage market

Wednesday 12th May 2010

It is been revealed that from tomorrow the Post Office will offer 90% mortgages for first-time buyers with rates of between 5.45% and 5.99%. It is believed that tracker and mortgage deals of up to 90% will also be available in a move which is certain to be replicated across the board. So is this the start of more competition in the UK mortgage market?

There is no doubt that the Post Office will attract significant attention from UK first-time buyers who are in many ways the lifeblood of the UK property market. It is hoped the other players in the UK mortgage market will follow suit and we will they see an improvement in competition and better terms available for both first-time buyers and those looking to move homes.

This is a major expansion of the UK Post Office network which is set to play a major role in the UK financial services sector in years to come. The UK government has put aside nearly £2 billion since 2007 to improve the appeal of the UK Post Office network. While mortgage markets have shown signs of improvement over the last few days, hopefully now the election is out of the way we will see further progress.

http://www.financialadvice.co.uk/news/mortgages/88628-post-office-set-to-shake-up-the-uk-mortgage-market.html

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