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Research has revealed that Standard Variable Rate (SVR) mortgage deals are now charging 4.7% on average, a reduction of just 0.98% in twelve months compared to a 2.5% fall in Bank Base Rate over the same period. Read the rest of this entry »

Abbey for Intermediaries will introduce new mortgage products today, revising its current range.

It will launch a new two year tracker at 2.69% and lower other tracker products by up to 0.30%. Abbey will also launch a new five year fixed rate mortgage at 5.99%

The new product changes are as follows:

Trackers

* A new two year tracker at 70% LTV, at 2.69% (2.19% difference to base rate) with a £995 booking fee and the homebuyer plus solution (free legal fees and valuation).

* Two year tracker Homebuyer mortgage at 75% LTV, down by 0.25% to 2.94% with a £995 booking fee.

* Two year tracker Remortgage product at 75% LTV, down by 0.30% to 2.99% with a £995 booking fee.

Fixed Rates

* A new five year fixed rate (Homebuyer), 75% LTV, at 5.49% with a £799 booking fee.

Commenting, Ricky Okey, managing director of Abbey for Intermediaries, said: “As competition starts to return to the market, we will aim to ensure that we continually keep our rates under review to ensure that we offer intermediaries competitive products across our mortgage range.”

THE volume of mortgages approved by most of the high street banks rose to its highest level for nearly two years last month.

The British Bankers’ Association announced that 42,238 mortgages were approved in October – nearly double the number seen last October at the height of the crisis. This was a slight increase on the September figure of 42,073.

Net mortgage lending, held firm at £3.1bn, but unsecured lending remained subdued as consumers focused on paying down their debts and building up savings.

Demand for personal loans has been low, with outstanding balances falling by £2.9bn in the first three quarters of the year.

David Dooks, BBA statistics director, said: “The longer it takes to emerge from recession, the longer we will see households and businesses continue to borrow with caution.”

Howard Archer, chief UK economist at IHS Global Insight, said he suspected that the recent firming in house prices would fizzle out before long.

“This will be even more likely if recently higher house prices lead to more properties coming on to the market,” he said.

As further evidence that the mortgage freeze is starting to improve slightly, Cheltenham & Gloucester, part of Lloyds Banking Group, has cut the cost of it’s range of mortgage products and introduced a ‘Best Buy’ product, while Abbey has also launched a market-leading product. Read the rest of this entry »

Coventry Building Society has introduced new criteria which allows existing borrowers up to  a maximum LTV of 125% to move home.

The new package will apply to existing customers who have an “excellent credit history”, but have been unable to move home as lower house prices have pushed down the level of equity they have available.

Coventry has introduced the system to revisit individual cases where borrowers need to move, for example to relocate for work, but where falling house prices have pushed these borrowers outside of the building society’s normal lending criteria.

No additional borrowing will be allowed but members who qualify will be able to move to a new property at their current LTV up to a maximum LTV of 125%.

Colin Franklin, sales and marketing director at Coventry, says “As a mutual this is what our members expect of us. 

“We are offering a sensible level of support to people we have a relationship with who are facing real difficulty in moving home.

“The Coventry is known for its responsible lending and for treating customers fairly and while this move may only affect a few of our members it is a great example of where we are doing both.”

Nationwide introduced a similar deal for its customer back in July, which allowed existing customers in negative equity to take out a mortgage with an LTV of up to 95%, with a rate of 6.73% fixed for three years or 7.48% fixed for five years.

Customers could then borrow up to an additional 30% with increased rates of 7.23% and 7.98%.

Barratt Developments have announced that problems in securing mortgages on flats was making sales difficult and causing the company to build less of such developments.

“We need to build what we know we can sell,” Mark Clare, chief executive.

According to Mr Clare, the same buyer is likely to have to pay a larger deposit on an flat than a house. A buyer being offered around a 90% LTV mortgage on a typical new house is likely to receive a 75% LTV on a new flat.

Mr Clare said there was “absolutely no issue” with demand for living in apartments – citing Barratt schemes in Milton Keynes, Leeds and Birmingham where apartments are selling at a rate of four or five a week.

However, he indicated that banks, whose mortgage lending has been severely constrained following the credit crisis, were cautious of exposing themselves to apartments because such properties have endured falls in value of more than 50% in the last two years due to the demise of buy-to-let market especially in the North.

The CML said: “We are in a market where lenders are risk averse and we have seen an oversupply of apartments.” A larger deposit means “the lender and borrower are protected”.

Sellers drop their asking prices by almost £4,000 in a bid find buyers.

The latest house data from Rightmove shows that average asking prices across the UK were down £,3744 during October, 1.6% down on September’s house price levels.

The website says that house price will continue to fall in the run-up to Christmas.

 Miles Shipside, commercial director of Rightmove, says: “Many would-be sellers are still unwilling or unable to come to market, and with the number of new-build properties running at half of the levels required to satisfy anticipated demand, aspiring home movers are set for a frustrating time for years to come.

7 out of 10 areas reported that prices are actually up on an annual basis which is good news.

The South-East saw the largest increase in prices, with an average rise of 3.8% driven by the lowest average stock levels per estate agent.

The East Midlands was the worst performer with prices 1.6% below those of November 2008.

Rightmove has also found that the upcoming end to the Stamp Duty holiday is not causing a flood of sellers and buyers to come to the market.

Currently properties between £125,000 and £175,000 are exempt from paying the 1% levy, with the exemption coming to an end on December 31.

But Rightmove says this incentive that was meant to drive the housing market is “almost irrelevant” because of lenders’ high deposit requirements.

The number of buy-to-let mortgages available has increased from the all time low a couple of months ago.

The BTL market had almost become a thing of the past over the last two years, with 93% of all mortgages disappearing in that time. Landlords unable to find more than a 20% deposit can no longer find a new deal, despite deals requiring just a 10% or 15% deposit making up 64.8% of the market just over two years ago. Only four deals from Clydesdale and Yorkshire Bank remain for landlords with a 20% deposit. If landlords want a choice of deals then at least a 25% deposit is required.

Michelle Slade, spokesperson for Moneyfacts.co.uk said: “Numerous BTL lenders have pulled out of the sector, while many of the remaining lenders restricting the number of deals on offer, making it harder than ever for landlords to find a competitive mortgage.

“The number of deals available is a long way off the peak seen in August 2007, although in the last few months the sector has seen positive signs with the number of deals available increasing from the all time low of 179 in September 09 to 239 available today.

“Many landlords’ biggest problem in securing a competitive deal will be finding the deposit needed as previous house price falls are likely to have eaten into the equity available in their portfolio.

“At least a 25% deposit is needed, but in the residential market a 40% deposit is needed to secure a good deal.”

24,200 people lost their homes in the first half of 2009 after falling behind with their mortgage. the highest figure since 1996, according to the Council of Mortgage Lenders.

Repossessions are expected to begin climbing again due to rising unemployment in 2010.

However, it looks unlikely that the CML’s forecast that 65,000 people will have their home repossessed in 2009.

Over 20,000 people would have to lose their house before theend of the year for the predicted level to be reached – nearly double the number seen during each of the first half of the year.

The CML has already reduced its forecast for repossessions for 2009 from 75,000 due to a combination of low interest rates, Government initiatives.

The Government has launched a raft of schemes to help struggling homeowners, including the Mortgage Rescue Scheme, under which people can sell some or all of their home to a social landlord and rent it back, as well as the Homeowner Mortgage Support scheme, which enables people to defer paying interest on up to 70% of their mortgage for up to two years.

It also introduced a pre-action protocol in November last year, under which the courts can grant a repossession order only if all alternative measures to keep people in their homes have failed.

The Royal Instiution of Chartered Surveyors has predicted that house prices will continue to rise over the next quaerter.

House prices continued to rise in last month even though the number of  houses for sale increased.

The latest housing market survey from RICS shows that the net balance of surveyors reporting rises rather than falls in house prices climbed to 34% in October from 21% in September.

RICS says this is the highest result since December 2006.

The trade body predicts that that this trend will continue in the short-term, with the net balance of surveyors expecting
prices to increase rather than decrease jumping to 31% in October, from 25% in September.

The net balance of surveyors expecting sales to increase over the next three months also edged up, going from 28% in September to 30% in October.

RICS has also said  that sellers are beginning to return to the market.

A net balance of 15% of surveyors reported that new instructions had increased in October, compared to 5% in September.

All regions reported a rise in instructions for the first time since the onset of the credit crunch with the North, the South West and London seeing the biggest surge in the number of properties coming on the market.

A spokesman for RICS says: “Although the supply of property is beginning to pick up, it is still insufficient to keep pace with the increase in demand which points to further prices gains in the near term.

“Cheap money remains a critical prop for the market and this is being reflected in the continuing appetite for finance from first-time buyers despite the large deposits still being demanded by lenders.”