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Northern Rock  has announced that it will lend around £5bn each year over the next 4 or 5 years.Ron Sandler this morning said he regards this strategy as sufficient to retain Northern Rock presence in the mortgage market.

He stated “We are going to continue to lend money but at nothing like the levels we were doing in the first half of 2007.”

Northern Rock today announced its full year results for 2007, which showed a £167m loss for the year and plans to increase its retail deposits, while not operating too competitively with state-backed products.

Sandler says: “We are determined not to compete on an unfair basis. There’s a difference between not competing unfairly and not competing at all. Read the rest of this entry »

The credit crunch is now fully underway and analysts have warned the public after new figures showed that 50% of loans taken out in recent months went to families coming off cheap fixed and tracker  deals onto more expensive higher interest rates.

The news was broken when  information arose suggesting the credit crisis is taking its toll on UK households, pushing high street spending even lower and causing the public’s confidence to plunge to the lowest level in 15 years.

Britain’s biggest building society the Nationwide  is set to withdraw all its cheap rate mortgage deals, as it attempts to balance  and repair the mortgage book.

The credit crunch is now starting to affect households and Lenders anre finding it increasingly more difficult to borrow money  themselves and  have passed the rate hikes on to the consumer.

With London’s interbank ( The rate banks lend money to each other) Borrowing rates are rising to new highs above 6pc yesterday, analysts warned that the credit crunch would intensify. Read the rest of this entry »

 New Mortgage loan  approvals from banks and building societies have dropped by over a third in the last year, totaling £7bn in February, according the latest figures from the BBA.

Overall mortgage lending dropped by 2.9% over the last 12 months, falling to £17.9bn in February.

Net mortgage lending  however strengthened, largly down to an increase in the banks market share as a result of strong remortgaging proposals. Net lending rose by 12% over the year.

The amount of remortgages approved by lenders rose by almost 5% year on year to 72,193 in February 2008, while the number of mortgages for house purchase fell by a third, falling to 43,000. Read the rest of this entry »

Remortgage Deals When the mortgage rate is lower than your existing mortgage interest rate, remortgaging  can provide you with much more free cash. However, along with these benefits can come some disadvantages, especially if you are tied in longer than the headline rate.
It is important to compare the best mortgage deals on the market in order to give you the best rates avalable.

Fixed rate or variable rate ?

There are two main types of remortgage deals that exist ion the market: a “fixed” rate or a “variable” rate. Both have advantages and disadvantages, and it is important to consider the options carefully to find the best mortgage to suit your cicumstances.

A fixed rate mortgage requires the customer to pay the agreed fixed rate of interest (which may be slightly above the normal rate) for the duration of the fixed term. In contrast, a “variable” rate  requires the customer to pay the current prevailing rate of interest in the market at any point in time.

Therefore, if the rate of interest goes down, the customer pays the lower mortgage that month, however, if the rate increases, the customer pays the higher rate. This is where both the advantages and disadvantages of both mortgages exist. Read the rest of this entry »

Fraud in UK hits  £20bn a year, the police stated, and they plan to expand their efforts to tackle the problem.

The City of London Police are currently recruiting for a national fraud crime enforcement team, claiming that the impact of mortgage fraud is second only to drug dealing.

The decision comes after a report by the Association of Chief Police Officers (Acpo) put UK mortgage fraud losses at  over £700m a year, and growing daily.

But the Council of Mortgage Lenders has disputed the police findings.

The Costs of Mortgage Fraud

The £20bn amount is based on the estimated figure to the UK of stolen assets, lost revenues, and the costs of prevention, policing and investigating the crime.

The new police enforecement  team will be based around the London force’s existing team who have expertise in tackling economic crime.

The teams role will include training public, assisting in investigations up and down the  country and drawing up crime prevention advice to the general product.

The police review of mortgage fraud said the high profits and relatively low risk was attracting organised gangs of criminals.

They called for a specialist mortgage fraud department to tackle the increasing number of  false valuations and deceitful mortgage applications used by fraudsters. Read the rest of this entry »

UK Mortgage Lenders have withdrawn over 2,000 mortgages over the last month, says eMoneyfacts.co.uk.Denise Harvey, mortgage analyst at eMoneyfacts.co.uk, says small building societies that had escaped much of the crisis are now being affected with full  withdrawals of complete product ranges.

She says: “It seems that there is no stopping it. Over the last two weeks, lenders have been even more ruthless in withdrawing products from the market and/or tightening their criteria.

In the last month there were 7726 mortgage products avalable to residential and Buy to let customers, now it has reduced to 5700 a drop of 2026 products in one month Read the rest of this entry »

Property Home Owners are not  to weighing up to the reality of the credit crunch by marketing their houses on the market at unbeleivable prices, according to the latest survey from Rightmove.

The UK’s biggest property website claimed that sellers, who are still looking for prices near to the peak of the boom in early 2007, need to price their properties more realistically now, rather than wait until  later this year, if the UK is to fend off a stagnant house market.

They also wanted  quick action from the Government to strengthen the funding markets and ease the credit crisis which is stopping some people from getting mortgages.

While sellers were firstly looking for similar prices to  the boom times, some deals can be struck at 10pc below peak boom prices, demonstrating that the difference between the amount sellers want and the amount buyers are willing to pay.

Rightmove said “the average asking price was £239,655 in March, an increase of 0.8pc compared with the previous month. However, the annual rate of actual selling prices fell from 5.8pc to 5pc.”

Miles Shipside, commercial director of Rightmove stated: “Most sellers coming to the market seem to be ignoring the increased competition from other unsold properties and the challenge buyers now face in obtaining a mortgage.”

“As many of these sellers are likely to be buyers themselves, they seem to be trying to bank a higher figure for their home but want a bargain when they buy. It’s human nature, but in the current market, sellers should price below their competition to achieve more interest now and avoid a larger price drop later in the year.” Read the rest of this entry »

Read the rest of this entry »

Borrowers in the south of England are paying up to 5 times more stamp duty than their counter parts in the north.

Smartnewhomes.com where the story originated claims the cost of stamp duty is driving people out of London and the South East and boosting purches in other areas of the country.

According to SmartNewHomes.com, the average stamp duty bill in the South is £7,533 higher than in the North.

The highest average cost of stamp duty is seen in Greater London, at £12,184, while the East Midlands has the lowest bills, with an average of £2,130.

“New home buyers in the South East are being penalised for living in the most expensive parts of the UK,” says David Bexon, managing director of SmartNewHomes.com. Read the rest of this entry »

The Majority of First-Time Buyers are now opting for tracker rate mortgages.

The security of having a fixed-rate mortgage is becoming less appealing to some borrowers as there is optimism that interest rates may fall this year.

First Time Buyer’s who are opting for a tracker mortgage stand to having their mortgage payments reduced if the Bank of England cuts interest rates later this year.

A survey carried out by Abbey Mortgages has revealed that almost 4 times as many potential first-time buyers are spending some or all of their deposit / savings, compared with this time last year. Read the rest of this entry »