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Analysis by Moneysupermarket have revealed more products are now available to mortgage borrowers with lower deposits. Read the rest of this entry »

Homeowners in England and Wales saw a 20% reduction in the proportion of their take-home pay spent on monthly mortgage repayments last year, according to the latest mortgage figures released by Woolwich. In December 2008, homeowners in England and Wales were spending on average £196 of every £1000 of their take home pay each month on their mortgages. A year later this had dropped to £157. In cash terms this equates to a saving of £110 per month on average in England and Wales. The average monthly mortgage payments for homeowners now stands at £497, compared to £607 in December 2008. Andy Gray, head of mortgages at Barclays said: “For the 11 million UK households who have a mortgage there is a silver lining to the recession – a substantial reduction in mortgage payments right when they need it most. For them it’s a chance to save in a way they might not have been able to before, or to overpay their mortgage and cut years from it.

 The Woolwich Mortgage Affordability research measures the proportion of homeowners’ that is spent on mortgage repayments. It is based on data from a representative sample of nearly two million Barclays bank account holders making mortgage payments from the full range of UK lenders Regionally, the largest fall was in London where the proportion of pay spent on mortgage repayments has decreased by 23%, with the smallest decrease in the North East, at 15.5%. Of the ten regions analysed, the Welsh spend the smallest proportion of their take home pay – £143 in every £1000 – on monthly repayments. Londoners spend the most – £189 Despite Londoners spending the most, they have also experienced the biggest payment reductions [£228] while homeowners in the North East saved on average £80 a month.

Confidence is returning to the the buy-to-let market. landlords are now talking about expanding their portfolios. This is according to TBMC latest Landlord Profile Tracking Index for last quarter of 2009. The Index tracks and monitors changes in landlord demographics and identifies trends in the buy-to-let market. The index is based on data collected by TBMC’s specialist mortgage processing unit and is compiled on a quarterly basis Commenting, Andy Young, chief executive officer of TBMC, said: “The results for the last quarter show that the majority of landlords are applying for buy-to-let mortgages in order to expand their portfolios with 69% of applications being for purchases, demonstrating that confidence in the market remains strong. However, we also know that with interest rates so low, many landlords are choosing to stay on their reversionary rates rather than remortgage. Young continued: “There has been a significant change in the type of product being chosen by landlords. In Q4 2009 70% of applications were for tracker rates compared with only 45% in the previous quarter. This indicates that in Q3 2009 there was a fairly even split in the views of landlords about what would happen to interest rates, whereas now a greater proportion believe that interest rates will stay low for some time to come.”

Figures due out at 9.30am today are expected to show that the UK came out of recession in the last quarter of 2009.The UK recession began in the second quarter of 2008 and since then the economy has contracted by 6%. Many experts had been expecting us to exit the recession in the third quarter of 2009, but the quarter showed a 0.2% contraction.The UK is one of the last of the European economies to exit the recession.

Last  Friday 22nd January, Alliance & Leicester launched a number of new mortgages at 85% LTV.

Fixed rate products with fees that can be added on completion:
3 year Fixed rate Remortgage and Homebuyer products, 5.39% with a 2% fee 3 year Fixed rate Remortgage and Homebuyer products, 5.69% with a £1,495 fee 3 year Fixed rate Remortgage and Homebuyer products, 5.89% with a £495 fee

4 year Fixed rate Remortgage and Homebuyer products, 5.49% with a 2% fee4 year Fixed rate Remortgage and Homebuyer products, 5.69% with a £1,495 fee 4 year Fixed rate Remortgage and Homebuyer products, 5.85% with a £495 feeWe are also reducing the rate on our 85% LTV 4 year Fixed rate, First Time Buyer only product with no booking fee to 5.89%.

Two High Street lenders last night cut their mortgage rates. Taxpayer-owned Northern Rock and the Post Office both launched a range of cheaper mortgage products that along with Skipton’s shock decision on Wednesday to increase its standard variable rate (SVR) from 3.5pc to 4.95pc, ripping up an agreement they made  that this rate would not be more than 3% above the Bank of England base rate. Skipton, Britain’s fifth biggest building society, claimed ‘exceptional circumstances’ forced it to renege on the deal with thousands of loyal mortgage customers But such circumstances have not affected the Bank of Ireland, which offers mortgages for Post Office customers.
On Thursday, it dropped the cost of both its lifetime tracker deals. They have fallen from 3.29% to 2.99% and from 3.59%to 3.49% depending on the size of customers’ deposit. Bank of Ireland also dropped its competitive five-year fixed rate by 0.5% to 5.25% at the same time Northern Rock has adjusted its rates. It has a two-year fixed rate deal of 3.69 %, down from 3.89% Ray Boulger, at John Charcol, said: ‘There will be a lot of disgruntled Skipton customers heading for the door.’

The average house in the UK  has increased in price in real terms by 273% over the past 50 years, according to one of Britains largest mortgage lenders the Halifax. The worse performing decade was the 1990s when house prices prices fell by 22% in real terms. There have been pronounced cycles  of the housing market since 1959, The most rapid house price growth was between 1971-73, 1977-80, 1985-89 and 1998-2007. Each of these growth periods was followed by a significant fall in real house prices, the research found There has been a steady increase in owner-occupation rates, increasing from 43% in 1960 to 68% in 2008. The right to buy scheme introduced in the 1980s helped owner occupied As the idea took hold, the proportion of privately rented homes fell from 33% in 1961 to 14% in 2008 Perhaps due to the increase in property prices, which have acted as a barrier to people making their first step onto the housing ladder, the private rented sector has experienced a surge, up from 9% in 1991 to 14% in 2008 After the deflation of the housing market following the collapse of Northern Rock in August 2007 there were more than 3000 mortgage products, more than 12 times the number available today However, there are signs the housing market is experiencing a rebound as the number of mortgage products surpassed the 2,500 mark for the first time last week since May 2009

latest figures show the Consumer Price Index (CPI) leapt by 2.9% last month.

That compares to a 1.9% rise recorded in November 2009 and is much greater than the 2.4% forecast by city analysts.

The rise was due to a lack of discounting by retailers, general economic recovery and higher fuel prices – the cost of crude oil has doubled in the past 12 months.

The CPI is now comfortably above the Bank of England’s 2% target for the first time since May 2009.

As VAT returned from its discounted rate of 15% to the full rate of 17.5% in January, statistics for this month are likely to see inflation break the 3% mark.

That means the Governor of the Bank of England, Mervyn King, will have to write an open letter to the Chancellor, explaining why CPI is off target.

All of which means that the Bank of England is more likely to raise interest rates sooner rather than later, in order to control inflation.

Some economists had formerly been of the opinion that Bank Base Rate might remain at its current historic low of 0.5% until the end of this year and even into 2011.

That is now looking less likely.

“While the economy has been in recession the Bank of England hasn’t been focusing on inflation but it will become more of a concern,” said Michael Saunders, chief economist for western Europe at Citigroup.

“I think they’ll hike rates in the second or third quarter.”

“Today’s inflation figures will bring to an end the ‘rate complacency’ we have seen among borrowers over the past year or so,” added mortgage broker Andrew Montlake of Coreco.

“This is a real shot across the bows for borrowers, many of whom are quietly banking on a low interest rate environment in the short term. But this is a risky game to play.

“If rates rise to contain inflation then many borrowers will find themselves with significantly higher monthly payments.

“The prices of a mortgages have fallen due to an increase in competition although this trend is likely to reverse quite rapidly given today’s figures.”

Countrywide’s top 10  mortgages dropped by almost 0.5% in December to 4.29% .

The results are based on the average of the 800 Countrywide mortgage consultants throughout the UK. The overall volume of sales still swing slightly in the favour of fixed products, the percentage split between fixed and tracker products has changed dramatically over the last 12 months.

Tracker mortgages had a 3% market share of mortgage applications in May 09 to 47% in December 09 – with a jump of 10% in the last month alone.
Overall, interest rates for the most popular top 10 mortgages have fallen for five consecutive months, pushing down the average interest rate in the last 3 months of 2009 to 4.73% – a reduction of 0.74% compared to the previous 3 months.  Mortgage applications jumped by 27% in Q4, compared to the same period the previous year, while statistics also issued by Countrywide’s estate agency division reveal a 48% increase in new applicants during the same period. Mortgage providers also appear to be more competitive with higher LTV mortgage products resulting in two 90% LTV mortgages leading the Top 10 Mortgages Applied for in December 09 Grenville Turner, group chief executive at Countrywide, says:  “2009 was undoubtedly a difficult year for the mortgage market but by the second half of the year, we saw a return of confidence from both consumers and lenders, with increased applications and the re-introduction of competitively priced tracker products This confidence has caused a dramatic shift in the type of business written, with a near equal split between the percentage of fixed and tracker products applied for While lenders are becoming more competitive with their products, it’s important to note that many first time buyers are still struggling to raise the necessary deposits to achieve the best rates, which will continue to impact the market.”

At a meeting held by The Treasury Select Committee yesterday, Stephen Hester, chief executive of Royal Bank of Scotland, revealed that the bank says yes to 90% of all mortgage applications He said that 90% of people who ask for a mortgage from RBS get one.

Hester also says the bank is expected to do more mortgage lending than it originally forecast In February, RBS agreed to provide £9bn new mortgage lending in 2009 Hester says: “We expect to exceed our targets for mortgage lending. A lot of mortgage lenders have disappeared and we’re stepping in He says the bank is on track to return the bank to private ownership in around three to five years.