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Abbey for Intermediaries lauches new 90% LTV mortgage. 

The two-year fixed rate of 6.19% has a £599 fee, available with the Homebuyer Solution. It has also reduced the arrangemnet fee on its three-year fixed rate mortgage at 90% LTV to £495.

The mortgage has a rate of 6.89% and also comes with the Homebuyer Solution, which offers borrowers a free basic mortgage valuation and £250 cashback on completion.
Alan Mathewson, managing director of Abbey for Intermediaries, says: “We are committed to supporting the housing market and first-time buyers, and expect there to be strong demand from intermediaries and their clients for this highly competitive new deal.
’Borrowers looking to take advantage of a longer-term fixed rate will also be able to benefit from the £500 fee reduction on our three-year fix.”

Bank of England minutes released today, for the MPC meeting on the 12th and 13th January 2011, continue to reveal that the majority of members on the Committee believe that the base rate should remain on hold at 0.5%.

Six members of the Committee voted in favour of keeping interest rates on hold. Martin Weale joined Andrew Sentence in favour of increasing the Bank Rate by 25 basis points, while Adam Posen continued to vote in favour of increasing the size of the Bank of England’s asset purchase programme (“quantitative easing”) by £50 billion.

The release of the minutes comes a day after preliminary estimates of growth in the fourth quarter of 2010 showed a 0.5% quarter-on-quarter contraction in the UK economy. Even if the effects of the snow on growth are excluded, the data point to zero growth, suggesting the recovery lost all momentum at the end of 2010.

The release also comes a day after Bank of England Governor Mervyn King delivered a sombre speech in Newcastle, which explained how UK households are currently going through the longest fall in real incomes since the 1920s and that there is very little policymakers can do to rectify this in the short-term.

With respect to inflation, the minutes released today suggest the majority view within the MPC remains that price growth is being largely driven by short-term and external factors – VAT rises and short-term commodity price shocks – rather than an overheating economy. This suggests there is limited taste for a rate rise within the MPC, despite December’s surprisingly high annual consumer price index (CPI) inflation rate of 3.7%.

Although the minutes show the number of MPC members voting in favour of a rate rise increasing from one to two, the vote was undertaken before members knew how bad economic growth in Q4 2010 would be.

 Renewed concerns about the state of the UK economy should now keep further rate-risers at bay. Indeed, we anticipate a renewed focus by policymakers on “going for growth”, and would not rule out further quantitative easing by the Bank of England this summer.

Home owners may soon start to feel the pain of an increase in interest rates that hasn’t even happened yet as lenders withdraw their cheap fixed rate mortgages ahead of an expected rise, warn economists.

One lender from the high street withdrew some of its most competitive mortgages last week, replacing them yesterday with higher mortgage rates. The move will cost some borrowers, who are keen to lock into a new fixed-rate deal and guard against future interest rate rises, an extra £1,050 a year on their mortgage payments.

Inflation figures released today are expected to show an increase in the Consumer Prices Index, the Government’s preferred measure of inflation.

The Bank of England has yet to increase interest rates, having kept the Bank Rate on hold at 0.5 per cent last week. But some financial analysts forecast that it will introduce an increase this year, possibly as early as June.

The Bank of England’s Monetary Policy Committee today voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%.

The Committee also voted to maintain the stock of asset purchases financed by the issuance of central bank reserves at £200 billion.

The minutes of the meeting will be published at 9.30am on Wednesday 26 January.

Leeds Building Society has lowered the rate on its two-year discounted buy-to-let mortgage by 0.30% to 4.59%.This rate is available up to 70% LTV and allows the flexibility of 10% capital repayments each year, without penalty.

Kim Rebecchi, Leeds Building Society’s sales and marketing director, said, “We have looked carefully at the Buy-to-let market and reduced this 2 year discount, available up to 70%, by 0.30%. This highly competitive rate compliments our existing 2 year discount available up to 65% LTV, at only 4.29%.
“These buy-to-let options have been specifically designed to offer landlords greater choice and flexibility. They have no higher lending charge and 10% capital repayments are allowed each year without penalty.”

National newspapaper The Daily Mail reports that the prime minister says mortgage lenders are being too cautious and preventing the housing market from progressing.
Speaking in Leicester, Cameron says it was vital for the economy that Britain’s housing market became more competitive.But the prime minister called on lenders to return to ’respectable’ lending in order to stimulate growth.
He says: “In a way the pendulum has now swung too far the other way.
“If you are a single person, you are earning a decent salary. You go to the bank or building society, you are actually quite a good risk – they won’t give you 80% of the value, they won’t give you four times your salary.
“The housing market has become very stuck and we’ve got to get it moving again.”
Housing minister Grant Shapps is set to meet Hector Sants, chief executive of the Financial Services Authority, this week to discuss the Mortgage Market Review.

The Council of Mortgage Lenders (CML) has published its predictions for 2011, trying to provide some insights into what we can expect next year in the mortgage and housing markets.

It expects activity in the economy to be `uneven`, but doesn`t think the long-threatened double-dip recession will take place after all.

Even though the recovery we`ve seen so far has been `patchy and weak`, the housing and mortgage markets – as well as the economy in general – do `now appear to be on a more stable footing`. However, the mortgage market is still facing funding issues and people are, on the whole, less confident about borrowing large amounts of money.

Looking forward to next year, the CML expects to see 0.86 million residential property transactions throughout the UK, down from the 0.89 million we`ll probably see this year. Prior to the financial crisis, there were over 1.6 million transactions per year.

The Council also predicts we`ll see 180,000 mortgages in arrears – a slight increase on the estimated 175,000 for this year, but still less than the totals for either 2008 or 2009. And the number of repossessions is also expected to rise from 36,000 this year, going back to the level of 40,000 we saw in 2008.

Best Mortgage Direct would like to wish all our friends, colleges and customers a very Merry Christmas and Happy New Year.  Office is closed 24th December 2011 untill 5th January 2011. Leave a message if important and out skeleton staff will deal with your enquiry.

House prices dropped in December, the fifth fall in the last six months.
Rightmove is also confident that house prices will continue to fall during 2011, the extent to which hinges upon whether base rates rise and/or forced sale numbers increase substantially.
It believes that at best prices will be flat in 2011, but a drop by as much as 5% is predicted if sorely stretched lender forbearance buckles as prices fall and repossession numbers jump as a consequence.

The key elements of the Rightmove 2011 forecast are:

Properties coming to market falling to circa 1.2 million, down around 10% on 2010.
Transaction levels of around 600,000, continuing to run at circa 50% below historic norms for the second consecutive year.
National average asking prices are forecast to fall by up to 5% during 2011 if repossessions increase substantially. Should lender forbearance continue to limit repossessions then prices could end the year closer to the price standstill Rightmove has recorded in 2010 Miles Shipside, director of Rightmove commented: “In 2011 we will see larger falls in weaker markets due to over-supply and forced sales. Conversely, pockets of the country where demand remains credit crunch resistant and supply is traditionally low will see prices underpinned and somewhat immune from the falls in other areas.
“The fact that many would-be buyers do not have the ability to proceed, and some homeowners may find themselves in a position where they are forced to sell, drives prices down. These negative factors are likely to outweigh the positive price pressures of pent-up demand for housing and a price under-pinning shortage of quality homes in popular locations.
“This makes forecasting more of a lottery than usual, though the net result is likely to see average national asking prices fall slightly. At best they could be close to flat and at worst down by 5% if repossession numbers jump up from 1 in every 15 sales.”

The amount of mortgages approved hit its highest level for almost 6 months in November as it grew by 3.5% to 48,846 , latest information from e.surv shows.

The figure is the first month-on-month increase since April.
The average LTV rose by almost 1% to 57.7% in November, the first increase since June, and is well up on the 53.0% from November 2009. 

Homes up to £125,000 have an average LTV of 65.1%, while houses between £126,000 and £250,000 have an LTV of 57.9% while those between £251,000 and £375,000 at 54.4%.
But properties over £750,000 have an LTV of just over 40.1%.
Richard Sexton, business development director of e.surv, says: “November was a rare bright spot for the mortgage market.  There were some very attractive products available and that stimulated a lot of demand from borrowers, both to buy homes and to remortgage.�
“Lenders are still more comfortable focusing on wealthier borrowers and are prepared to expand loan-to-value ratios more for these groups than the average, but there was also an unusually large improvement in credit conditions for the lowest value borrowers too.
“Such a strong month will be hard to beat from here, but tales of the renewed demise of the market are hard to reconcile with this sort of strength.  The market usually goes very quiet in December of course, so the next big test for the market will be in the new year.  January is the month to watch.”