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Take a year off mortgage payments with Nationwide competition

Tue, 29 Jul 2008 15:17:34 GMT

Homeowners will be given the opportunity to go without paying their mortgage for a year should they win a new building society competition.

According to Nationwide, any customer who has a mortgage interview in a branch or over the phone between July 28th and September 30th will be entered in a prize draw.

Ten winners will then be picked randomly from the hat and given one year where they do not have to pay their mortgage.

It feels "great to be in a position to launch this prize draw", remarked Matthew Carter, Nationwide director of mortgages.

The official remarked: "If customers get a mortgage interview before the end of September, they stand a chance of being mortgage free for a year - an added incentive to find a new deal before their current one runs out."

Last year, Nationwide released Better Society 2007, its fifth sustainability report.

Dream home 'kept in mind by 60 per cent of Brits'

Fri, 25 Apr 2008 15:51:59 GMT

Buying a dream home is an ambition held by close to half of the people in the UK, according to new survey results.

The Home Sweet Home study conducted by Legal & General shows that a village is the top spot for an ideal property among Britons, which 25 per cent of people picking it.

A further 22 per cent would choose a property by the sea for their perfect house, while 20 per cent stated that the countryside would be good for them.

Cornwall, Devon, Greater London, Surrey and Yorkshire were found to be the most popular counties for such a property, the company added.

"The survey would indicate that people are still quite positive about the future housing market given the number of respondents who still wish to live in their dream home," said firm marketing director for general insurance Gary Skelton.

Meanwhile, figures from the British Bankers Association show that 46.2 per cent fewer mortgages were taken out last month compared to March 2007.

Property 'key goal for under 30s'

Thu, 27 Mar 2008 14:50:50 GMT

More than half of Britons under 30 have identified owning a home as a major priority, according to a new study.

Alliance & Leicester research has found that 57 per cent of 18 to 29-year-olds believe buying a property is an achievable goal before they hit 30.

Getting married was another big priority picked out by close to half (49 per cent) of people in the demographic, the study found.

Richard Taylor, head of mortgage products at Alliance & Leicester, commented that Britons see 30 as a "landmark age".

He said that it is "a deadline for some major life events, like owning a property, getting married or starting a family".

This comes as the Bath Chronicle has reported that that it has teamed up with Find A Property to offer a comprehensive search facility for people looking to buy or rent a house.

Most property buyers 'would look abroad to purchase'

Tue, 25 Mar 2008 15:23:41 GMT

Buying property abroad is a likely option for an increasing number of people looking to get on the housing ladder, it has been reported.

According to statistics from National Savings and Investment cited by Fair Investment Company, 52 per cent of first-time buyers would either head overseas to pick up a property or already have.

James Caldwell, director at Fair Investment Company, stated that sunnier weather and economic conditions in the UK are partial factors in such activity.

"First-time buyers are being driven to sunnier climes for a route onto the property ladder as a result of the credit crisis, which has been shaking the foundations of the UK property market," said the official.

This comes as research from Rightmove has suggested that property prices in the UK will drop by half over the next 50 per cent if steps are not taken to keep them steady.

Parents 'spend more time helping first-borns on ladder'

Mon, 4 Feb 2008 15:32:05 GMT

First-born children receive more help getting onto the housing ladder than their siblings, new research indicates.

According to Abbey Mortgages, 17 per cent of first-borns receive money for their initial purchase from their parents compared to 12 per cent of second-borns.

However, while older children have a higher likelihood of receiving such a handout, their siblings often get more money if their parents help them.

Nicci Audhlam-Gardiner, head of mortgages at Abbey, comments that this may be because mums and dads have more disposable income in later life, so the youngest child may get the best deal.

She said: "Most parents tend to think they are very fair when it comes to financial gifts to their children, but what’s fair in one circumstance may not be fair in another."

Meanwhile, the BBC reports that the Council of Mortgage Lenders has warned buyers against mortgage fraud in the wake of a slowing market.

House prices hold during January

Thu, 31 Jan 2008 15:32:42 GMT

The price of buying a house in the UK slowed over the month of January, according to a high street bank.

Statistics released by Nationwide show that there was a monthly change of - 0.1 per cent over the course of the month and a drop of 0.4 per cent from December 2007.

This means that the average house price in January 2008 was £180,473 compared to £182,080 last month.

Nationwide senior economist Martin Gahbauer commented that market conditions are in-line with the figures.

"The weakening trend in house prices during the last three months is consistent with the loosening in housing market conditions that has become increasingly evident in the data," said the official.

Nationwide Building Society has close to 13 million members and 20 million accounts.

The firm employs 19,000 people and was first founded in 1884.

Its headquarters can be found in Swindon.

Providers 'get tougher' on mortgages

Mon, 14 Jan 2008 17:23:51 GMT

Mortgage lenders are getting tougher by cutting the maximum loan-to-values they offer, new research has indicated.

According to Moneyfacts.co.uk, this trend can be traced back to December 2007, when 11 providers decreased amounts.

David Knight, mortgage analyst at Moneyfacts.co.uk, commented that people may find the amount of options open to them limited in the future if this "conservative approach" continues.

In addition, putting away for a deposit will cut interest rates in the future, the company added.

"Anyone looking to take their first step onto the property ladder should carefully consider the risks of taking a high loan to value product. Plan and save for a deposit," he said.

Meanwhile, research from money charity Credit Action has revealed the total amount of debt the UK is currently in.

According to the finance group, national arrears have reached more than £1.3 trillion.

More assistance for first-time buyers

Tue, 30 Oct 2007 15:34:32 GMT

People are likely to increasingly rely on help from their families when looking to get onto the property ladder for the first time, it has been claimed.

Dominic Mansley, managing director of Key Financial Consultants, said that if property prices continue to increase but average salaries do not, then families are increasingly likely to provide assistance to first-time buyers.

Additionally, 100 per cent mortgages are growing in popularity as property prices become less affordable, Mr Mansley claimed.

"I'd always try to investigate a 100 per cent loan-to-value mortgage if savings aren't available," he commented.

According to statistics published by the Council of Mortgage Lenders for the second quarter of 2007, the average first-time buyer is aged 28 and on a salary of £35,000.

The organisation said that the average first-time buyer typically takes out a mortgage for 90 per cent of their chosen property's value.

Aberdeenshire residents 'enjoy best quality of life in Scotland'

Wed, 17 Oct 2007 13:01:33 GMT

People who live in Aberdeenshire have a better quality of life than anyone else in Scotland, according to new research.

Bank of Scotland statistics show that they live in some of the most expensive houses in the country and have enjoyed a 29 per cent increase in property costs over the last year.

The money institution added that the area was followed by East Dunbartonshire and the Orkney Islands, although East Renfrewshire, which finished seventh overall, enjoyed the highest average house price.

"A strong, long economy, along with good schools and a low crime rate has helped Aberdeenshire to become the area with the best quality of life in Scotland in 2007," commented Tim Crawford, group economist for the firm.

In England, the average house price currently stands at £210,578, which marks an increase of 0.2 per cent over the last quarter.

Nearly half of Britons 'looking to buy abroad'

Wed, 10 Oct 2007 15:42:42 GMT

Close to half of people in Britain are considering buying property in sunnier climates, according to a financial institution.

Research from Yorkshire Bank has found that 43 per cent are thinking about buying outside on the UK, although 44 per cent fear being ripped off.

Sunnier weather is the big draw to leaving the British property market for most, the firm found, as 66 per cent wanted to purchase a place in a hotter environment.

It added that what people saw as a more relaxing pace of life abroad was also a big attraction for 55 per cent of respondents.

"Buying a house, let alone buying one in a foreign country, can be a challenging business. Despite this, Brits are still convinced that owning property in Spain is a financial decision worth pursuing," said director of retail banking at the firm Steve Reid.

Meanwhile, BuyAssociation has commented that it is easier to make money in European property than through purchasing in the UK.

Interest rates slowing housing market

Thu, 23 Aug 2007 14:32:22 GMT

According to new figures from the National Association of Estate Agents (NAEA), interest rate hikes have finally slowed the housing market.

Numbers of registered buyers, properties on estate agents' books and sales per agent all fell during July and some figures were similar to those normally seen during the quiet Christmas period.

Fewer people are looking to buy a home, with numbers dropping by 2.5 per cent in the same period.

Estate agents reported that an average of 314 buyers registered, compared to the 322 recorded in June and 387 seen in July 2006.

They also said there were not as many properties for sale, with an average of 45, compared to 68 properties in June.

NAEA president Stewart Lilly described the figures as "dramatic" and worrying and said that the summer season and interest rates were to blame.

A recent study by GE Money showed that first-time buyers struggling to get on the property ladder were willing to compromise on space and other preferences in order to do so.

Buy-to-let property 'could see studying child save'

Thu, 16 Aug 2007 11:04:29 GMT

Investing in a buy-to-let property in order to allow a child to live there while at university may help young people save money, according to new research.

Britannia has pointed out that the average student runs up debts of around £14,000 while at university and much of that goes on the cost of accommodation.

However, if a parent were to invest in a property and then act as landlord to their child while they study, they could help them offset some of their arrears in the future.

"This is a great way of giving your child a solid financial start in life and a safe place to live while at university," said Neville Richardson, group chief executive at the firm.

Later today, A-level results will be posted at schools and colleges around the UK.

The outcome of the courses will decide which universities some students attend.

Warning over joint mortgages

Tue, 24 Jul 2007 14:19:21 GMT

People considering taking out a joint mortgage are being urged to ensure that they know the people they are choosing the product with.

Neil Johnson, PR policy manager at the Building Societies Association, said that there are a number of factors people should consider before taking out such a mortgage.

Although lenders tend to have different terms, providers usually stipulate that all parties are liable if the loan goes unpaid, Mr Johnson suggested.

"Hopefully people have a plan for what they would do should somebody decide to move, because the implications if you don't have that agreement in place can be quite severe for the people concerned," he remarked.

The Council of Mortgage Lenders recently reported that gross mortgage lending reached a new record of £34.2 billion last month, compared with £31.4 billion in May.

However, the organisation's director general Michael Coogan said that borrowers should be "thinking seriously" about the possibility of higher mortgage payments if interest rates rise again.

Average house price reaches £211,056

Tue, 17 Jul 2007 14:19:30 GMT

The latest figures produced by the Department of Communities and Local Government have revealed that the average property price in the UK reached £211,056 in May.

According to the department, the UK's annual rate of house price inflation in May fell from 11.3 per cent in April to 10.9 per cent during the following month.

However, first-time buyers in London saw the rate of inflation reach 14.5 per cent – higher than the 14 per cent recorded in April.

Responding to the figures, David Stubbs, senior economist at the Royal Institution of Chartered Surveyors, said that the report showed the UK's housing market was continuing to grow at a significant pace.

"House prices should show a further gradual slowing over the coming months but interest rate increases have produced a rapid deterioration in affordability and the prospect of six per cent interest rates by the end of the year will dampen confidence and activity further," he remarked.

Michael Coogan, director general of the Council of Mortgage Lenders, recently warned that many mortgage borrowers would be coming-off fixed-rate loans and could face higher repayments following recent rate rises.

Stamp duty 'a barrier for FTBs'

Wed, 11 Jul 2007 17:20:08 GMT

Rising interest rates and house prices means that affordability is becoming increasingly stretched for potential first-time buyers (FTBs), according to a new report that suggests stamp duty is creating further pressure.

Research by Bradford & Bingley reveals that 68 per cent of FTBs have already paid stamp duty or will be liable to do so for their property purchase.

Andy Wiggans, director of mortgages for the firm, said that the average FTB is now expected to pay £1,000 in stamp duty, when most are "struggling" to save for a deposit.

"Stamp duty was never designed to be a tax on first-time buyers, yet it now affects a vast proportion of them and is seriously hampering their ability to get a foothold on the property ladder," he remarked.

Earlier in the month, the Council of Mortgage Lenders stated that it had been urging the government to introduce a graduated stamp duty system, under which the tax would be applied to the proportion of the property value above the thresholds.

CML: Fixed-rates continue to be popular

Tue, 10 Jul 2007 17:33:55 GMT

New figures have shown that short-term fixed-rate mortgage deals continue to be popular with first-time buyers (FTBs) and people moving home.

A report by the Council of Mortgage Lenders (CML) found that 89 per cent of FTBs chose fixed-rate mortgages in May, compared with 88 per cent in April.

Similarly, the number of home movers choosing to take out fixed-rate deals increased from 72 per cent to 73 per cent during the same period.

CML director general Michael Coogan said: "Taking out short-term fixed-rate mortgages may provide some reassurance, but eventually the loans will revert to a variable rate and the risk of a payment shock is real."

Householders ought to plan ahead to ensure they are able to cope with higher borrowing costs further down the line, he added.

Commenting on the CML's findings, Oliver Gilmartin, senior economist at the Royal Institution of Chartered Surveyors, said that the stamp duty threshold ought to be raised to help ease affordability pressures for FTBs.

Homeowners hit by interest rate rise 'should seek help'

Fri, 11 May 2007 15:55:04 GMT

People who think they may struggle as a result of the increase in the interest rate should look to get help, it has been claimed.

Yesterday, the Bank of England's monetary policy committee voted to raise the base rate to 5.5 per cent - the fourth time the level has gone up since August 2006.

And homeowners reeling in the wake of the decision should contact their mortgage provider as "a matter of urgency", according to the director-general of the Building Societies Association, Adrian Coles.

"Talking to your building society is particularly important as further rate rises are still a possibility," he said.

He added that those with a fixed-rate deal are unlikely to be affected, but those on a variable rate should seriously consider taking counsel or risk potentially losing their home.

The latest increase in the interest rate comes after January's shock hike to 5.25 per cent.

People in the UK 'quick at choosing dwelling'

Thu, 10 May 2007 16:20:17 GMT

When it comes to picking a place to live, Britons take an hour and a half, according to new research.

This is faster than the time it takes most to choose a holiday, Abbey Mortgages has stated.

People in the UK may be decisive, but 49 per cent of respondents to the survey reported an initial setback after buying the property - a problem that may have been addressed if they had taken more time.

Similarly, the report added that some people found other problems, such as the neighbours (14 per cent) or decor that was not to a particularly high standard (21 per cent).

"It really is crucial that home-buyers do as much research as possible before making an offer on a new property," said Abbey head of mortgages, Nicci Audhlam-Gardiner.

Meanwhile, today's interest rate decision could see one in seven homeowners struggle to make payments, according to a report from Firstrung.

First-time buyers affected by high interest rates

Tue, 8 May 2007 15:42:10 GMT

More income is being spent on mortgage payments by first-time buyers (FTBs) in the face of higher interest rates, it has been reported.

According to the Council of Mortgage Lenders (CML), FTBs spent an average of 18.3 per cent of their finances on mortgage interest payments in March 2007.

It added that this is an increase on figures from February 2007 (18 per cent) and February 2006 (16 per cent).

Income multiples have also increased for FTBs, up to 3.31 in March compared to 3.30 one month previous.

But many homeowners may have already protected themselves against such rises by picking up fixed-rate products.

"It is encouraging that those first-time buyers who are getting a foot on the property ladder are opting for fixed-rate products," said CML director general Michael Coogan.

A report from Rightmove last month found that house prices went up by £8,000 over March.

Increase in interest rates 'could see millions refinance'

Fri, 4 May 2007 15:42:11 GMT

Millions of homeowners may look to refinance if the interest rate goes up this month, it has been claimed.

If the last interest rate saw mortgage holders becoming stretched, a further one this month could see some selling or remortgaging, according to moneysupermarket.com.

A £100 increase in mortgage payments would make over seven million people look at remortgaging, it claimed, while 2.6 million would consider it in the event of a £50 rise.

"Anyone finding it difficult to make their mortgage repayments already (or who think they might after the next rate rise) should try to remortgage to a better deal before next Thursday," said Louise Cuming, head of mortgages for the consumer organisation.

On Thursday, the Bank of England's monetary policy committee will meet in order to decide on the appropriate base level of interest.

Currently, it stands at 5.25 - its highest value since July 2001.

Interest rate rise hitting homeowner applicants

Tue, 17 Apr 2007 14:17:09 GMT

Nearly half a million people have been turned down when applying for a mortgage - largely due to increasing rates of interest, a consumer site has claimed.

Lending capital has been refused to 460,000 people over the last six months, when the Bank has seen fit to up the level of the base rate by three-quarters of a point, according to Moneyexpert.

This means that since the hikes began in August 2006, 77,000 people have been turned down each month, it added.

And with some experts predicting a further rate rise, first-time buyers may have to work harder to get on the property ladder's first step, according to the company's chief executive, Sean Gardner.

"Anyone taking their first step on to the property ladder needs to take advice and research the market before making an application," he said.

In January, the interest rate went up to 5.25 - the highest level the UK has seen since July 2001.

March house price increase 'massive'

Mon, 16 Apr 2007 16:06:14 GMT

The price of housing in England and Wales grew by a larger amount in March than at any other point over the last four years, according to a property expert.

Figures from Rightmove show that the cost of the average property went up by an average of £8,307 - 3.6 per cent - in the four weeks previous to April 7th 2007.

The company has claimed that this is the highest increase since April 2002.

Similarly, it added that the year-on-year increase is now 15 per cent - a four-year high - elevating the average asking price to £236,490.

"While a boost is expected around Easter, £8,000 in a month is the largest amount we have ever recorded," said Miles Shipside, Rightmove's commercial director.

Scotland's house price inflation has seen a similar hike, according to Glasgow Solicitor's Property Centre.

It has reported that inflation in the west central region of the country is now 10.7 per cent, according to the Herald.

Base rate freeze 'a relief for borrowers'

Fri, 9 Feb 2007 19:02:47 GMT

Mortgage borrowers could be breathing a collective sigh of relief following the Bank of England's recent decision to freeze interest rates at 5.25 per cent.
It had previously been speculated that the bank's monetary policy committee would vote for another base rate increase, following the surprise increase that took place last month.

Some commentators argue that the MPC is holding back on another base rate increase in order to assess the impact of the last increase.

However, concerns over consumer inflation could lead to further base rate increases in the coming months, as speculated by many experts.

"Having surprised financial markets and commentators by raising rates to a five-year high in January, it seems likely that the members of the MPC might have wanted to pause to see what effects their pre-emptive strike had," explained Barry Naisbitt of Abbey.

Though the base rate remains frozen for the time being some mortgage lenders have decided to increase fees on their fixed-rate deals, according to MoneyExpert.

Buyers 'will take risks' to set foot on ladder

Mon, 29 Jan 2007 16:35:54 GMT

More risks will be taken by first-time buyers in order to get themselves on the property ladder, new research has shown.

Findings from Yorkshire Bank indicate that approximately 80 per cent of purchasers would accept a mortgage that would take 25 years to pay off, with more than half taking on deals worth five times more than their salary.

Furthermore, the group has revealed that more than one infour initial investors will offer above the asking price with their first bid - an increase of 19 per cent compared to January 2006.

And Gary Lumby, Yorkshire Bank's head of retail, claimed such behaviour is risky and could cost buyers thousands of pounds - despite the rise in interest rates.

"Although house prices continued to rise following last year's two interest rate increases - January's rise was so unexpected it may take a while to see how the market reads," he said.

Last month's interest rate change to 5.25 per cent sees the figure at its highest level since July 2001.

UK house price inflation continues

Mon, 15 Jan 2007 16:11:41 GMT

The rate of house price growth increased in November last year, new government figures have revealed.

According to the Department for Communities and Local Government, annual house price inflation in the UK rose from 8.6 per cent in October to 8.9 per cent the following month.

Prices rose at their fastest rate in Northern Ireland, going up by 36.6 per cent in the year up to November, more than four times the national average.

This means that the average house price in the UK in November 2006 stood at £199,467, up from £197,987 a month earlier.

Howard Archer, chief economist at Global Insight, said that the "ongoing buoyancy" of house prices was probably a contributory factor in the Bank of England's recent decision to raise interest rates to 5.25 per cent.

"If house prices continue to post sharp rises over the coming months, it will increase the chances of interest rates rising even higher," he added.

Fixed-rate mortgages 'may suit cautious borrowers'

Fri, 8 Dec 2006 16:55:12 GMT

A property expert has speculated that fixed-rate mortgages will suit more cautious borrowers on the grounds that they offer a guaranteed, predetermined return irrespective of base rate changes.

The Bank of England recently decided to leave interest rates unchanged at five per cent, following successive increases.

Mehrdad Yousefi, head of intermediary mortgages at Alliance & Leicester, said that cautious borrowers will be suited to a fixed-rate mortgage deal that will not be affected by any further increases.

"Despite two recent rate rises, there are some competitive fixed rates and trackers available for borrowers," stated the expert.

"For the more cautious, opting for a fixed rate makes sense especially as a further base rate rise may be around the corner."

Recent reports from Mortgages Direct found that fixed rate mortgages account for 97 per cent of the mortgage market.

It was also reported that the number of borrowers choosing five-year fixed-rate deals jumped by 20 per cent last month compared to figures for October.

June mortgage lending breaks records

Fri, 21 Jul 2006 17:16:26 GMT

June mortgage lending broke all previous records reaching £32.2 billion, new figures from the Council of Mortgage Lenders (CML) have revealed.

The previous monthly record, of £29.1 billion, was set in May. The figure is up from £25.7 billion during June 2005.

June is traditionally one of the most active months of the year for mortgage activity, with the 11 per cent increase around historical levels for the month.

"Record levels of lending have been achieved in nine of the past twelve months," said director general of the CML Michael Coogan.

"Today's figure reflects the seasonal rise in house buying, strong house price growth and high levels of remortgaging activity.

"The level of mortgage approvals shows that demand for houses and remortgages remains strong, so we expect to see continued robust lending during the summer."

The CML has warned that rapidly rising fuel prices and unexpectedly high house price growth could cause inflationary pressures however, leading to an interest rate rise.

A rise in the base rate of borrowing would deter first time buyers and cool the market towards the end of the year, it added.

"With inflation above the Bank of England's target, the risk of an interest rate rise seems more real than earlier in the year," said Mr Coogan.

"This may moderate lending and demand towards the end of the year."

First time buyers face record debts

Mon, 19 Jun 2006 17:00:59 GMT

First time buyers now face greater mortgage debts than at any time since records began, new Council of Mortgage Lenders (CML) figures have shown.

New home owners can now look forward to an average mortgage of £106,400 when they take their first step on the property ladder, almost £12,000 up on the same time last year.

Annual salaries are now less than a third of the average mortgage – the widest income gap since figures were first gathered more than 30 years ago.

The CML warned that mortgage costs are now putting pressure on previous older homeowners, with the average mortgage now worth £123,350 another record figure.

"Consumers have been bingeing on cheap credit for several years," Simon Tyler of Chase de Vere Mortgage Management told the Daily Mail.

"But now they are being forced to think about how they will cope if rates rise."

While first time buyers and others are still able to bridge the gap due to the low cost of borrowing, rising interest rates could be bad news for many, said the CML.

Affordability gap finally closing says A&L

Mon, 5 Jun 2006 17:42:00 GMT

The yawning affordability gap in the UK property market is finally beginning to close as cheaper mortgages and rising wages bridge the divide, claims Alliance & Leicester.

The discrepancy between income and property prices has led to a small industry of pricy 100 per cent mortgages and other products designed for out-priced first time buyers.

The changing affordability ratings have seen a small surge of first time buyers considering entering the market and of homeowners remortgaging for the best deals.

"We are seeing greater confidence in the mortgage market from consumers," said Chris Rhodes, managing director of Alliance & Leicester retail banking.

"It's particularly pleasing to see the increased confidence amongst the under-30s. Increased first-time buyer activity enables others to move up the ladder."

The number of under-30s considering entering the property market has increased by a third since the beginning of the year, to 16 per cent.

The number of homeowners planning to remortgage their homes or move has doubled since January to 15 per cent.

"Affordability remains good," said Mr Rhodes.

"While household incomes have grown modestly, interest rates are lower than a year ago. Overall the cost of servicing a mortgage has therefore fallen slightly, despite gently rising house prices," he added.

Tracker rates come down while fixed rates go up says report

Wed, 17 May 2006 17:41:50 GMT

Fixed rate mortgages are becoming more expensive while trackers are coming down in cost, new Moneyfacts data has shown.

Over the last 18 months, fixed rate deals have provided better value, but that is changing as the calculations used by banks to determine the cost of borrowing have edged up.

At the same time, a price war in the tracker market is forcing rates downwards.

The general opinion among analysts over the past nine months was that interest rates were due to come down and banks gambled that cheaper fixed rate deals would make money back once the cost of borrowing dropped.

Expectations are shifting to an increase in the base rate of interest however, dragging fixed rate deals with them.

"With continued rumblings in the market of a base rate increase later this year, consumers may be choosing now to secure a fixed rate deal, but with swap rates rising they may need to be quick before the very low rates disappear," said Lisa Taylor of Moneyfacts.

"Historically tracker-rates have been lower than their fixed-rate counterparts, primarily reflecting the added uncertainty and potential risk to the borrower, while consumers are prepared to pay a premium for the peace of mind a fixed monthly repayment provides,"

Variable rate time comes again as fixed rates fixed up

Wed, 10 May 2006 17:11:42 GMT

Variable rate tracker mortgages are poised to become the best value deals as mortgage suppliers prepare to up their fixed rate prices, research for the Woolwich has claimed.

Fixed rate deals have been the cheapest offers available for around the past year, but changes in the way that banks calculate the cost of borrowing is soon to change that.

Fixed rate deals are dependent on a measurement called the swap rate, which goes up and down according to where analysts believe the base rate of interest is going to be set.

It establishes the cost for banks of borrowing to underpin the money they loan, and so has a direct influence on the cost of long term consumer borrowing.

"Rapidly increasing swap rates, pushed higher by a view that base rates will rise this year, are having the effect of making fixed-rate products increasingly expensive to put together, making the rates uncompetitive," said Andy Gray of Woolwich mortgages.

Nationwide offer first time buyers relief

Thu, 13 Apr 2006 17:50:28 GMT

Nationwide has increased the amount of money that it is prepared to loan to first time buyers struggling to get onto the property ladder.

The building society will now lend up to 4.25 times the income of a couple or single individual, an increase from 3.4 times income for a single income or 3.7 times for joint.

This means that an individual earning £25,000 can now borrow £106,250, £21,250 up on the previous maximum.

A couple with a £50,000 joint income can now borrow £27,500 more than before.

Nationwide said that higher multiples are part of an overall approach to calculating affordability and will not lead people into unaffordable debts.

Its move is calculated to offer some help to first time buyers who are now paying an average £154,000 for a property on an average income of £21,266.

First time buyers have also received some relief from Portman building society, which has scrapped higher lending fees, the charge normally made on people unable to scrape together a ten per cent deposit.

Graduate first time buyers face mountain

Fri, 17 Mar 2006 17:03:12 GMT

Graduate first time buyers struggling to get onto the property ladder are finding themselves dragged down by their university debts says a new survey.

Newcastle Building Society has warned that with potential top-up fees of £3,000 a year from September 2006, this year's freshers could face debts of £30,105 on graduation.

This will mean that all in all, the first time buyers of 2010 will already be facing a debt that eclipses the already steep costs of a mortgage deposit.

"Student debt is clearly a growing issue which has a knock on effect later in life," said Steve Urwin, of Newcastle Building Society.

"Higher tuition fees can only increase the burden on the younger generation and make it even harder for them to enter the property market."

The Newcastle report comes after Nationwide has revealed that the number of first time buyers in the UK is falling again as rising house prices hold them out of the market.

Buy to let boomed in 2005

Fri, 17 Feb 2006 17:20:50 GMT

The number of buy to let mortgages sold in the UK rocketed by 39 per cent in the second half of 2005, say new figures issued by the Council of Mortgage Lenders (CML).

Buy to let mortgages approved in the last half of the year hit 130,400, worth some £14.6 billion, an increase in value up 47 per cent on the first six months of the year.

"There was a notable pick-up in the buy-to-let sector in the second half of last year, so that lending in 2005 modestly exceeded the year before," said CML director general Michael Coogan.

"The strong buy-to-let data may partly reflect increased demand for rental property. Despite slowing house prices last year, residential property remains a popular investment, and this is set to continue in 2006."

Demand both increased in the second half of the year and lending criteria were relaxed as providers returned to the market.

Currently, many providers will provide up to 85 per cent of the value of a property and expect monthly rental income 25 per cent above mortgage payments.

Demise of first time buyers much exaggerated says CML

Thu, 16 Feb 2006 17:10:49 GMT

Rumours of the demise of first time buyers have been greatly exaggerated, the Council of Mortgage Lenders (CML) has claimed.

Previous research into the numbers of first time buyers may have seriously underestimated their numbers, the CML has claimed.

Under its new statistical number-crunching system, the CML says that 38 per cent of people entering the market during the last quarter of 2005 were first time buyers, with an average age of 29.

The new statistics offer a larger snapshot of the mortgage market and provide higher quality data, the association claimed.

"The RMS highlights many important changes from our previously reported figures - most notable is the large increase in the reported number of first-time buyers," said CML director general Michael Coogan.

This was not to claim that there had been an actual rise of first time buyers, he added, just that they had not been detected previously.

Record number of first time buyers forced to ask for family help

Tue, 14 Feb 2006 16:58:48 GMT

First time buyers are asking their families for help to get on the property ladder in record numbers, government figures have revealed.

Almost half of all young wannabe-property owners are forced to ask their parents to assist them with their deposits to bridge the still-yawning affordability gap.

In many cases, first time buyers require tens of thousands of pounds to make their dreams reality. The numbers needing help have soared almost 40 per cent since 1995.

"First time buyers need to save harder and for longer than ever before to put down a decent deposit on a house," Tim Crawford of Halifax told the Daily Mail.

"This explains why the number of first time buyers entering the market was close to a record low in 2005."

The average price paid for first time buyers of all ages is now £152,683, with more than eight out of ten towns in Britain now considered unaffordable.

Homeowners missing out on ££££ with mortgage protection insurance

Tue, 7 Feb 2006 17:58:09 GMT

Smart homeowners are able to save thousands on mortgage protection insurance, experts have claimed.

Millions are still blindly accepting the deal offered to them by their mortgage provider however, saving time but wasting much money in the process.

"By the time they've been through their mortgage application process - which can be a lengthy ordeal - clients may be tempted to sign up to the lender's own policy, just to save time," said mortgage analyst Rachel McKay.

"Consumers need to be made aware that shopping around for mortgage payment protection insurance cover, either direct or via their IFA, is an avenue that is well worth exploring.

"So by spending a little time at the mortgage application stage, they can save themselves a significant sum in the longer term," she added.

Finance advisors estimate that people can save up to a third of the cost of off-the-shelf mortgage protection insurance if they buy through a specialist.

Mortgage equity withdrawal declining

Tue, 3 Jan 2006 17:05:31 GMT

The mortgage equity withdrawal (MEW) market in the UK remains sluggish, official figures reveal

Brits are continuing to unlock cash from their homes at a relatively slow rate, despite recent signs of growth across the UK property market and a quarter point reduction in interest rates during the third quarter of last year.

Homeowners freed up just £8.28 billion from their homes via mortgage equity withdrawal in the third quarter of 2005, down 20 per cent from around £10 billion during the three months to June, according to data from the Bank of England.

The Bank of England report indicates a further downturn in the rate of borrowing against the value of property in the UK. The rate of mortgage equity withdrawal in Britain first started to fall in 2004, as interest rates started to climb. MEW reached a record £17.6 billion in the fourth quarter of 2003.

UK consumers have dramatically reduced their spending levels in recent years, in the face of higher mortgages, interest rates and levels of consumer debt. MEW enables homeowners to increase their mortgage in order to free up money from their property if it is worth more than the amount borrowed.

The amount of cash people chose to release from the value of their property during the three months to September 2005 represented just 3.9 per cent of their post-tax income, down from 4.8 per cent in the second quarter of the year.

Mortgages boom to second highest month on record

Tue, 20 Dec 2005 17:50:15 GMT

A series of the most well respected mortgage indicators in the UK have all reported a major boom in mortgages over November.

Statistics published by the Council of Mortgage Lenders (CML) the Building Society Association (BSA) and the British Bankers Association (BBA) have all reported healthy upturn in mortgage lending.

The market has been stimulated both by a wave of re-mortgaging and new homebuyers, say analysts, taking the total for the month to £28.5 billion, the second highest figure on record.

"After the doubts about the health of the housing market expressed by some commentators earlier this year, the latest figures show a robust market," said Adrian Coles, director general of the BSA.

"Loans advanced by building societies are up almost 20 per cent year-on-year and approvals, loans promised but not yet made, are up by over a third.

"The housing market has clearly recovered from the effects of the sharp increase in interest rates which peaked at 4.75 per cent in August 2004," he added.

First time buyers face tough choices

Tue, 13 Dec 2005 17:27:12 GMT

First time buyers have a greater range of mortgages than ever before to choose from, but many of these will come at a price.

To secure the best long term deals, buyers will have to put down a minimum five per cent deposit - and with the price of property staying high, first time buyers remain at the greatest disadvantage.

Many new mortgage products, such as the 100% mortgage, have been launched in recent years to help bridge the affordability gap for first time buyers.

But waiting to save a deposit, while house price inflation slows to under five per cent, may be the better option than some deals on the market for first time buyers.

"There are many deals that have been designed for the first-time buyer," mortgage analyst Louise Cuming told Myfinances.

"But the 95 per cent LTV (loan to value) option still opens up many more opportunities and the products are more competitive in the long run."

"Finding that deposit isn't always easy and saving for it can seem a daunting task.

"However, there is no doubt that the 95 percenters get the best deals, compared with first time buyers who go for the 100% mortgages or 97 per cent LTV option."

David and Goliath of mortgage comparison

Wed, 30 Nov 2005 19:12:00 GMT

Most people would say that the largest providers would come out best in a mortgage comparison.

Being biggest, they are likely to be able to pass on the most savings to consumers, the thinking runs. But quite a few mortgage comparisons can turn out be David and Goliath fights.

In fact, a mortgage comparison on a five year fixed rate deal between the 50th biggest provider and the fixed rate deal of the biggest provider on the high street shows the smaller provider has both a better fixed rate and lower fees.

Overall, 18 small and obscure lenders came out as providing the better deals on fixed rates and fees in a mortgage comparison against the largest provider.

"Whilst consumers may assume that the larger and well known lenders will offer the best deals, be more cost effective and generally pass on the benefits of their corporate wealth to their customers, this is certainly not always the case," mortgage comparison analyst Rachel Mckay told My Finances.

"It is important that the customer realises that there is a huge choice when it comes to mortgage providers, and as the information above shows, biggest doesn't always mean the best deal," she said.

Housing market 'resilient' as demand steady

Fri, 25 Nov 2005 17:04:56 GMT

Analysts have hailed the latest set of British Bankers Association (BBA) mortgage data as proof that the housing market has landed softly.

Mortgage advisors figures show that gross mortgage lending including remortgage customers and first time buyers stood at £17.5 billion in October.

Though this was slightly down on the figure for September, it was still the second highest monthly mortgage total since July 2004 and 16 per cent higher than in the same period of last year.

There were 19,731 mortgage approvals, including first time buyers and remortgage customers, with a total value of £18.8 billion. Approvals were three per cent down on the previous month but seven per cent higher than October 2004.

Net lending on homeowner loans and low interest credit card debt rose by £0.4 billion, following a £0.3 billion rise in September. Net credit card companies' lending rose by £0.2 billion, slightly above the £0.1 billion of the previous six months.

"At this time last year, the trend in net mortgage lending was on a clear downward path," said David Dooks of the BBA.

"Having stabilised in the Spring, the trend has hardly moved since, but with gross lending and approvals, particularly for house purchase, now seeing higher levels than corresponding months in 2004, the mortgage market seems particularly resilient as we enter what is usually a period of lower demand."

Leeds adds to 100% mortgages range

Mon, 21 Nov 2005 17:05:04 GMT

As the cost of homes, deposits and mortgage comparison has grown ever more expensive, so 100% mortgages have grown more popular.

To further assist aspirational homebuyers who may struggle to get onto the property ladder, Leeds building society has added a new product to its range of 100% mortgages.

Leeds will now be offering a cash back mortgage on the 100% mortgages basis, offering a return of one per cent of the home loan, and free valuation up to £335.

The 100% mortgages do not charge application or completion fees and are available on a 6.5 per cent variable rate with no early repayment charges or higher lending charges.

"This is a really simple product, enhanced with a cashback, which will help some people - who really need it - buy their first home," said Karen Wint of Leeds.

"It is easy to understand, gives excellent flexibility and assists with some of the expenses of moving into a new home," she added.

The 100% mortgages range also offers free mortgage payment protection for the first six months, and charges no early repayment fees except casback which must be returned if loan redeemed in first three months.