The latest information from  John Charcol Index showed the number of remortgage applications being submitted has increased month on month in the last quarter.
Purchases accounted for 47.3% of mortgages sold by John Charcol in February, down from it’s height of 58.5% in November 2009.
The February figure is the lowest market share taken by purchases since for almost a year.

Ray Boulger at John Charcol, says: “After the normal seasonal lull in December John Charcol placed significantly more business in January and February, adding to the other evidence that the downturn in mortgage approvals and lending reported by the Bank of England and the Council of Mortgage Lenders for January will be reversed when the February figures are released. Both purchase and remortgage activity has increased this year, but remortgages have increased more.However, detailed analysis of the figures shows that all of the increase in remortgage activity over the last two months is due to a particularly sharp increase in buy-to-let remortgages.”
Boulger says mortgage rates have been steadily improving over the last few months, and in the residential market there are now even pretty good rates available up to 85% LTV - which makes remortgaging worthwhile for many more people - it is too early to be confident of an ongoing increase in remortgage activity.

Abbey is to reduce the rate on its four-year fixed mortgage by up to 0.4% later this week.
The latest mortgages include a four-year fixed rate at 4.49% with a £994 fee at up to 70% LTV available for purchases and remortgages.
No fee options include a four-year fixed rate deal at 4.99% at up to 75% LTV for purchases, and another four-year fixed rate deal at 5.29% at up to 75% LTV for remortgages.

Abbey for Intermediaries has also reduced the fee on its two-year tracker at 4.74% by £500 to £495.

The product is available at a maximum LTV of 85%.

Ricky Okey, managing director at Abbey for Intermediaries, says: “Our latest rate reductions mean that brokers can now offer their clients a more competitive range of four-year fixes, ideal for borrowers looking for the peace of mind provided by a longer term fix.
“Those borrowers wanting the flexibility of a tracker rate, meanwhile, can take advantage of the reduced fee available on our two-year tracker.”  �

Mortgage availability in the UK  for home purchases has improved over the past month, according to figures from  Moneyfacts.
At the start of March there were 1,798 mortgages available which required deposits of between 0% and 40%.
That was 6% more availability than a month ago and 68% more over the last 12 months.
There are still hardly any mortgages available with just 0% or 5% deposits, but there are now 489 mortgages available at 10% or 15% deposit.
That is 90% more than last year when there were just 258 such loans available.
There are more mortgage providers who are becoming a little more accommodating with their credit criteria and this bodes well for consumers who will benefit from a growing competitive mortgage market,” said Michelle Slade of Moneyfacts.

“It is pleasing to see that the average mortgage rate is falling at the same time as deposit requirements are getting smaller,” she added.
Among the lenders to cut the interest rates across their mortgage ranges in recent weeks have been Lloyds, RBS, Cheltenham & Gloucester, Northern Rock and Alliance & Leicester.

RBS has raised its maximum advance for first time buyers from £150,000 to £300,000, which is good news for the market.
“The biggest reductions in interest rates have tended to be at the highest loan-to-value (LTV) levels, at 85% in particular,” said Ray Boulger of mortgage brokers John Charcol.
“It tells us partly that lenders have more money to lend,” he added.
House prices have risen in the UK over the past year, which means that lenders are again lending against appreciating assets and not ones that are going down in value.
“Increasingly in the last few weeks, some lenders have improved their offerings over 75% LTV, which is down to the consideration that it is more commercially viable - the risk is that much less,” said Mr Boulger.
Despite the recent trends, the proportion of new mortgage deals that require a deposit of at least 25% is still very high - 57% compared to 65% in March 2009.
Back in August 2007, just before on the onset of the credit crunch, only 16% of the deals on offer asked for such large down payments.

The Bank of England’s Monetary Policy Committee has voted to keep base rate at 0.5%, marking the one-year anniversary of record low rates.

The MPC has also decided not to extend its quantitative easing programme beyond the £200bn it has already spent on buying up assets to boost the economy.
Minutes published by the Committee last month show that the Bank may look to spend more on quantitative easing in the future, but wants to judge how effective its purchases have been before it commits more money to the programme.

With the current base rate at 0.50%, it is fair to assume that interest rates can only go up up, the hard part to predict is when.
The majority of opinions from economists is that when the Bank of England does start to increase base rates, they will do so cautiously, desperate not to douse the flames of econiomic growth.
Although no one is arguing that interest rates are likely to hit double figures anytime soon, some economists are estimating that Bank of England base rates could reach 6.5% sometime over the next 5 years.

The reality is over the next four years, the £300 billion in support to lenders in the form of the Special Liquidity Scheme and Credit Guarantee Scheme needs to be repaid. It is hard to imagine that this process will not add to volatility in mortgage pricing for homeowners Martijn van der Heijden, head of mortgages at HSBC commented: “The next few years are going to be difficult to predict in terms of mortgage rates and some volatility for borrowers may well be unavoidable. The message for borrowers is that if you couldn’t afford an increase of up to 3% on your mortgage, you should seriously look to fix your payments.”
Over the first seven years of this decade mortgage borrowing grew by £180 billion more than retail deposits. If retail deposits cannot replace this funding gap and wholesale markets do not open up sufficiently, lenders will be left facing a choice of higher funding costs or the need to reduce lending.
Although mortgage standard variable rates may look attractive at the moment, they are one of the few pressure valves lenders can turn to when facing higher funding costs or the need to reduce lending. Both could be a real possibility for the next few years.

Homeowners looking to make their homes more environmentally friendly will be offered a wide range of new government incentives. Read the rest of this entry »

Connells Surevey and Valuation latest figures show that the amount of valuations being instructed on residential properties grew 61% in February.
The positive statistic is that of year-on-year increases also continued, with the number of valuations conducted in February up nearly 25% on the number a year ago.
The increase in valuations has been fuelled by first-time buyers. In February, 63% more first-timers requested a valuation than in January - boosting the number above levels seen a year ago. There was also a substantial month-on-month rise in valuations conducted for current home owners looking to move up 43%.

Valuations for buy-to-let investors rose buy 81%, and remortgaging levels doubled compared to January.
However, this was from a low start. With mortgages still difficult to obtain, remortgaging valuations were less than 30% their level in February 2008. Buy-to-let was 30% lower than 2008.
Ross Bowen, managing director of Connells Survey and Valuation, says: “Traditionally, the valuations market begins to see a boost in activity in January following the Christmas lull. January witnessed a hangover from re-instating the lower Stamp Duty threshold while the arctic weather conditions disrupted some buying activity. However, February saw househunters back on to the streets in force, with activity bouncing back as a result.”
He adds: “In January, we saw first-time buyer activity drop off slightly compared to December. Many first-timers had rushed to make their transactions before stamp duty holiday ended. In February, demand bounced back.
“Consumer confidence has been buoyed by nine months of rising house prices, and more and more people are considering buying a home. Homeowners have seen their properties reclaim much of the value lost during the downturn. Many who previously delayed see now as the right time to move properties”

Nationwide  announced thet house prices in the UK fell during the month of February, a combination of extreme weather and the end of the stamp duty holiday were to blame.
Their House Price Index fell 1.0% on the month to stand up 9.2% on the year. This was the largest monthly drop since February 2009.
Martin Gahbauer, Nationwide’s Chief Economist, said it was difficult to gauge “whether February’s fall in prices is just a temporary blip or the start of a new trend.”
On a quarterly basis house prices were up 1.6% in February, down from up 2.0% on the same basis in January.
Gahbauer said there was “evidence from a range of indicators that the market may have lost momentum in early 2010 as the stamp duty holiday ended and house hunters were obstructed by the icy weather.”
He said that new customer enquiries had dropped since the turn of the year and there was a fall in the number of new mortgages taken out in January.

Bank of England Monetary Policy Committee member Kate Barker warned of headwinds in the UK housing market in evidence Tuesday to the Treasury Select Committee.
She said it was “possible the housing sector will be quite weak through this year.”
Barker said people may have delayed decisions to put their houses up for sale and warned that mortgage finance availability would not return to pre-credit crunch level”

Halifax plans to stop offering its guarantor mortgages next month, because of a lack of demand for the mortgage product.
The guarantor mortgage allowed parents to act as guarantors for their children when buying their first house.
Halifax says other products, such as its Lloyds TSB Lend a Hand mortgage has overtaken the popularity of guarantor mortgages.

The Lend a Hand mortgage, borrowers only need a 5% deposit, plus the backing of someone who will need savings equal to 20% of the value of the property.
The borrower’s deposit and the savings must equal 25% of the property value.
However, the offer is only available in branch.
A spokeswoman for Halifax, says: “We were a strong supporter of the first-time buyer market in 2009, representing nearly 50% of the shared equity, shared ownership market and driving new innovation like the Lloyds TSB Lend a Hand scheme which enables customers to get 95% lending through taking a charge on a parent or grandparents savings account.
This drive continues in 2010 as we look to provide more support in new build and find ways to extend the Lend a Hand activity which already accounts for a third of first-time buyer lending in the LTSB channel.
“Given this new activity we are finding that the demand for guarantor mortgages is reducing and now represents a tiny proportion of new business’.”

The financial advisory business of the Towergate Partnership, has announced the acquisition of John Charcol, the independent mortgage advisory business.
All John Charcol staff and directors will be making the move to Towergate Financial. John Charcol CEO John Garfield will work closely with Towergate Financial CEO Ian Darby – a former chairman of John Charcol - to grow the business alongside his current team.
John Charcol is one of the UK’s best known independent advisers and a key element of Towergate Financial’s growth strategy is to establish a high net worth mortgage advisory proposition to complement its private client and corporate solutions businesses.
Towergate Financial attaches great importance to the skills and experience of the advisers and staff of John Charcol and believes that they will be vital for the continuing success of the business.
Ian Darby said: “We believe there is an excellent fit between our business and John Charcol. John Charcol has an incredibly strong brand built over many years, based on top quality advisers and great advice. We jointly have a great opportunity to offer financial planning and solutions to Charcol’s clients and vice versa.”
John Garfield said, “Joining forces with the team at Towergate Financial will provide our business and people excellent opportunities to work with Towergate’s businesses to our mutual benefit and to thrive in what is a very exciting time for the mortgage market.”