Review Category : Mortgage

According to recent figures published by the Bank of England, banks have failed to cut interest rates last month, to mortgage borrowers, but slashed interest due to savers.

In early December 2007, banks have cut interest rates by a full percentage point, in response to the escalating credit crisis of the autumn and most mortgage borrowers paid only a part of that, while savers were hit hard by cuts in the interest paid on their deposits.

Bank of England’s survey of quoted rates showed, in most common form of borrowing ie., interest rates on two-year fixed rate mortgages for homes purchased with a deposit of 25%,fell to 4.79% from 5.1%, in November 2007. This has been the lowest since April 2006, but still much higher than in the bank rate, currently 1.5%.

Tracker mortgage borrowers benefitted from rate cut, which on average fell to 4.95% from 5.78%, the lowest level since January 2004. Interest rates for ISAs were cut by 1.7 percentage points, and on savings with a specified time length of deposit by 1.5 percentage points.

Banks refuse to lower interest rates, in spite of their £37bn re-capitalization using public money. The other reasons, banks are being demanded by the government that they should lend more, they are also unable to pass on rate cuts because their costs of funding remain elevated.

Council of Mortgage Lenders showed in its recent data, gross mortgage lending fell by more than half in the 12 months to November of last year.

According to Vicky Redwood of Capital Economics, banks do not want to increase lending because of the risk of rising debt defaults due to the collapse in present economy.

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In Midtown and the City, there was no overhang of new stock directed at the investment market, but rather a collection of niche or boutique developments aimed at owner-occupiers. Even in the recession, proportionally fewer office jobs were lost in the greater diversity of sectors present in Midtown and the City fringes compared to the City Core and Canary Wharf. As a result the demand side saw less of a downturn in these two sub-markets and the evidence indicates that demand from owner-occupiers has recovered most rapidly here. In Bloomsbury, the sale of three bedroom mansion block flats has been particularly strong between £650,000 and £1 million.

Another factor, related to the availability of cash or equity, is the ageprofile of typical buyers in the three sub-markets. In our experience, have had less time to build up cash savings, inheritances or to generate equity through past price increases in the property market. Docklands was a mortgage-driven market, whether for owneroccupiers or investors, and mortgages in the first half of 2009 were like gold dust. Docklands is not likely to significantly recover until the banks begin to offer mass-market mortgage products at attractive rates.

On the other hand, the profile of Midtown and City buyers has tended to be older. Often these buyers have substantial cash savings that can be combined with equity from other property and other sources to purchase property outright, or with very limited borrowings. They are not risk-laden first-time or investor buyers, but rather established individuals, couples and families undertaking their third or fourth purchase of a principal private residence. This demand profile helped to sustain transaction levels in the first half of 2009.

The fact that the City’s residential market has been less affected than other areas by the downturn in the current cycle, demonstrates the growing maturity of the residential market. It is worth remembering that when Hurford Salvi Carr first opened in Clerkenwell in 1996, there was only a limited number of homes in the City, predominantly in the Barbican. 13 years later, over 10,000 people live within a short walk of St Paul’s Cathedral and demand for homes outstrips supply. buyers in Docklands have tended to be younger. As a result, they

More information about area

  • Limehouse Basin Property Guide
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Upad, an online company launched in 2008 is fast growing in popularity amongst landlords and renters alike. The CEO of Upad James Davis mentioned that he began the company after identifying a need in the market for a service that took the hassle out of property rental for tenants and landlords.

Upad has released the following list of free helpful tips for landlords in 2009.

• Improve your property
Using simple, low cost measures such as installing energy saving light bulbs, checking the thickness of loft insulation, fitting lagging to pipes and water tanks, draught proofing and turning down thermostats, landlords can improve their properties which would save their money as well as the tenant’s money.

• Maintain the property over the winter By preparing and making provisions for incidents such as leaking roofs, burst pipes etc

• Obtain a mortgage agreement up to six month prior to the current mortgage ending

• Maintain close contact with the tenant

• Be aware of the changes to household benefits payments

• Carry out market research

• Obtain Energy Performance Certificates(EPCs) as it is a legal requirement for all new lets

• Request references for new tenants

• Attempt to secure a longer tenancy period with good tenants where possible

• Inform tenant of emergency procedures and telephone numbers

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These days lots of persons are concerned regarding their mortgage debt issues and challenges they can trigger. And these worries aren’t raised on an bare spot. In reality, presently greater than the half of American population faces the issue of organizing their own funds so as to cover mortgage successfully. Even though mortgage liabilities are actually significant problem, it doesn’t imply that you need to be scared since there are loads of various mortgage debts plans that will help you reduce those difficulties. In event you need some info on ways to resolve your own home liability issues, internet could assist you greatly .

Firstly, you actually should know that mortgage online consulting is actually required. In case it happens that you neglect the normal payment, it is necessary for you to tell your own banker regarding this and enable creditor to discover precisely what option they can present you. You actually have to know that integrity and confidence you demonstrate when you tell your banker may help you refrain from property foreclosure. You actually should understand that once this comes to paying liabilities, honesty is your finest policy.  read more >>

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When we speak about Forex, often FSA appears as well. FSA stands for Financial Services Authority. This body is more like an in charge of all the financial services in the United Kingdom.

If you check out the scene in London per se, you will find how FSA is regulating all the financial providers in the area. In addition to this, FSA stands as an independent body, which means that you will not find it attached to any other body. It works on its own stated framework and it regulates all the services associated with financial markets, brokerages and exchanges in London.

As mentioned earlier, it has its own framework. This framework includes a set of rules, laws that are equal to all the providers on the financial market. Going by the rule, everyone under FSA regulated London brokerage needs to follow the standards set by this independent body.

One of the highlights of FSA is that it is one such body that doesn’t come on the same page of the offshore companies. This means, there is no room for the brokers to spend any of their client’s money. They have to keep the client’s money in segregated accounts and in banks that the FSA approves.

With such rules and regulations prescribed for brokers on the market, it often comes across as a secured means for the clients to invest their money and lay their trust in the chosen brokers.

You will find a list of FSA approved Forex brokers. Once you know that they are associated with FSA, it often gets easy to work with them.

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Price changes in the local market were mirrored at the national level. In the year to the end of May 2010, the Halifax reported an increase of 6.9%, the biggest rolling annualised increase since October 2007. Nationwide, meanwhile reported prices up 9.8% in the year to May 2010. 2010 London Property Market Overview

The data deriving from mortgage providers,however,hasbeenweakenedby the lowlevelof transactions fundedbymortgages, andare less likely toreflect localmarketswith a high proportion of cash buyers.

The inconclusive General Election was resolved by 12th May, seeing a Conservative-Liberal Democrat coalition led by David Cameron and Nick Clegg into Downing Street. There followed a period of “purdah” in the six weeks to the Emergency Budget of 22nd June, during which the Coalition engaged in horse-trading over policies and the press engaged in speculation. In terms of the housing market, the initial coalition agreement included a Liberal Democrat inspired policy to raise the level of CGT for non-business assets from 18% to “similar or close” the level of income tax. It was initially reported that this would mean in most meaningful instances of gain (such as in the sale of residential property assets) a rise to the new top rate of 50%. In the Budget the rate was increased to a significantly lower level of 28%, but the uncertainty during May and June deterred investors.

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According to Halifax, UK house prices have fallen 1.9% in March compared with the previous months. In the opinion of a lender, now part of Lloyds Banking Group, the current conditions in the housing market would be tough in the remaining months of year 2009. The average UK home now costs £157,226, at least £30,000 less than the previous year. Although there has been a slight rise in house prices in March as reported by the Nationwide, Halifax says the homebuyer confidence was still low.

The annual rate ( which is based on a three-month by three-month comparison) of decline was up slightly with house prices being down by 17.5% in March, compared with a record drop of 17.7% in February. When comparing the average house price from March 2009, compared with March 2008, the drop was 17.6%.

According to Martin Ellis, Halifax Housing Economist, conditions in the UK housing market may be tough during the remainder of 2009, despite the improvements in affordability. He said that due to rising unemployment, low consumer confidence and the squeeze on mortgage finance could be the main causes for the exertion of the “downward pressure” on the housing market over the coming months.

The month-on-month change is in contrast to the sudden bounce in the house prices by 0.9% in March as reported by the Nationwide Building Society, UK. They say that it is too early to forecast that the bottom of the house market had been reached, according to their short term rise price figures.

Stability

Nationwide points out that the average UK property price dropped by 4.2% in the first three months of 2009 compared with the last quarter of 2008, according to the less volatile three-month on three-month measure.

Halifax’s suggested house prices had fallen by 2.7% over the last quarter, a much smaller decrease than the 5% to 6% falls it recorded in each of the three previous quarters, ie., in year 2008. Mr. Ellis says that because of more mortgages being approved by banks and building societies recently, houses are more affordable now than at any time since early 2003 and at its toughest in July 2007. He thinks that the existing mortgage-holders were benefitting from the falling bank interest rates.

Mr. Ellis adds that the average existing mortgage borrower was devoting to home loan repayments which fell from a peak of 26.9% of household income in October 2008 to 22.6% in February 2009.

David Smith, senior partner at Dreweatt Neate estate agents, is of opinion that there is an inherent volatility to house price right now and because of this it has become a sideways moving market – with the odd spike up or down – and will remain so most likely for the rest of 2009.

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If you are considering remortgaging your home so as to generate needed cash, you will want to first calculate the exact amount of interest and a monthly payment due the loan will remove from your monthly budget. Credit Choices, England’s leading personal finance website has made available a free remortgage calculator tool expressly for this purpose. Once you have used the tool and determined how the repayment will affect your budget, you will want to read any of the helpful articles at Credit Choices relative to mortgage protection. A payment for mortgage protection cover added to your per month remortgage payback may be a wise idea dependant upon your source of income and health status. Mortgage protection will make the payment on your home for up to one year should you lose your employment or become physically ill. Once your budget plan is in place you will find contact information at Credit Choices for all of the UK’s leading home loan lenders including financial mainstay Abbey Mortgages. Before you even consider a home remortgage make good use of the free knowledge and helpful tools available at creditchoices.co.uk.

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According to Halifax, UK house prices have fallen 1.9% in March compared with the previous months. In the opinion of a lender, now part of Lloyds Banking Group, the current conditions in the housing market would be tough in the remaining months of year 2009. The average UK home now costs £157,226, at least £30,000 less than the previous year. Although there has been a slight rise in house prices in March as reported by the Nationwide, Halifax says the homebuyer confidence was still low.

The annual rate ( which is based on a three-month by three-month comparison) of decline was up slightly with house prices being down by 17.5% in March, compared with a record drop of 17.7% in February. When comparing the average house price from March 2009, compared with March 2008, the drop was 17.6%.  House prices ‘drop 1.9%

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comments on the 2009 Budget

Key Highlights:

* Stamp duty holiday for properties under £175,000 extended until the end of 2009
* Homeowner Mortgage Support Scheme widened to include those in negative equity
* £400m gap-equity funding to restart stalled developments
* Extension to HomeBuy Direct shared equity scheme by 10,000 properties
* Additional funding for social housing including £100m for local authority building

(1) Impact of the 2009 Budget on the UK housing market

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Interest from home buyers is starting to gain “real momentum”, although sales remain low, UK surveyors say  last month.

New enquiries in the housing market increased for the 5th consecutive month from December 2008, the Royal Institution of Chartered Surveyors (Rics) poll found.

However, surveyors were still selling fewer than 10 homes on average each over the last three months.

There was increased optimism that sales would pick up during the year, but it remained tough for first-time buyers.

“Buyer interest is starting to gain real momentum, but will remain frustrated while mortgage finance is scarce,” said Rics spokesman Ian Perry.

“The market is still in a fragile state, but with demand continuing to pick up, there may be more signs of stabilisation in the coming months.”

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Finding a mortgage is one of the biggest and most important financial decisions you will ever have to make. It’s a huge financial commitment that will usually tie you down for at least 25 years – so it pays to make sure you are getting the best deals.

Here are some advantages of getting mortgage advice.

Advantages of mortgage advice

It’s impartial

When you speak to an expert mortgage adviser, you will be getting information on a range of mortgage deals from an impartial point of view. It’s not in your mortgage adviser’s interest to sell any one particular product to you – they simply aim to find you the best deal available, based on your financial situation.

Wide range of lenders

If you decide to go ahead, your mortgage adviser will call on a wide range of lenders to help find you the best deal possible. From there, they will give you advice on the lenders’ entire range of products, including all types of mortgage (fixed-rate, variable-rate, tracker etc.) with the best possible interest rates.

It’s possible to do all this yourself – but to get the same information on such a wide range of mortgages would require potentially hundreds of phonecalls, or a very long day on the High Street!

Get all the facts

Going it alone in the mortgage market means you are relying on your own knowledge – and with such a complicated subject, and such a range of deals, it makes sense to speak to someone who can give an impartial view on your best options.

A professional mortgage adviser will be able to give you advice on how much you can sensibly borrow, how much your payments will be, what type of mortgage is best for you, etc.

Think Money offer mortgages to suit various financial situations. Call us in confidence for impartial mortgage advice and access to a range of excellent mortgage deals from our well-established panel of lenders.

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The summer continues to be a waiting game for many of our vendors. Whilst there are some excellent buyers out viewing and offering, there is an incresing level of available property for buyers to get round and see. Vendors have varying degrees of fexibility in what they can either afford or are prepared to accept in terms of offers. Someone selling who bought 2 years ago, for example, is clearly going to have less flexibility than someone who has been in situ, say, 6 years or more and some buyers are finding this hard to accept.

Buyers, chasing that ‘bargain’, are finding themselves disappointed with vendors more inclined to rent their properties out or stay put, rather than accept below their ‘bottom line’. That said, most of our vendors are quite realistic about selling in the current market and are open to sensible negotiations. Starting offers of about 90% won’t offend, and we are agreeing sales between 90% and 96% of asking price.

Across the group we agreed just over double the amount of sales in July than we did in June so we are witnessing signs of both buyers and vendors getting used to and settling into the current market conditions.

The media continues to have field day with an everlasting supply of confusing and contradictory reports from numerous sources concerning both the housing market and the general economy, and addressing the arguments of both buyer and vendor in relation to these is often difficult.

Mortgage applications continue to be a concern, with record low numbers being approved but at the same time taking longer than ever to get through. Some surveys are taking up to 8 weeks to book in making the sale process a lot longer than everyone would like. The flip side of this that the more savvy buyers are helping push their sales through in case the deal they have been offered expires and a less favourable rate put to them, and, of course, people buying purely with cash have really come into their own.

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While the owner-occupier housing market is showing signs of quieting down, buying residential property to let has become an increasingly popular investment choice in the UK. According to the latest report by the Association of Residential Letting Agents (October 2004), the popularity of property as an investment is growing rapidly and almost 60% of buy-to-let investors are planning to buy another property in the next year.

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The Bank of England has cut interest rates by one percentage point, from 3% to 2% – the lowest level in more than half a century.

The move has been welcomed by many commentators who said the cut would help the slowing economy.

Hetal Mehta, of the Ernst & Young Item Club, said the cut was the “right medicine at the right time”.

The CBI, said it was “critical” that banks now passed on the reduction to businesses and other customers.

Before the interest rates decision, the Halifax said its customers with existing tracker mortgages, that follow moves in the Bank of England’s Base Rate, would benefit in full from any cuts.

This was despite a clause in the Halifax’s paperwork which would have allowed it to put a limit on the cuts it passed on to mortgage customers.

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Due to the severe economic crisis more and more properties are being auctioned – many of them repossessions. Latest figures from the Financial Services Authority show the number of homes seized in the three months to June was 71% higher than in the comparable period last year.

Potential first time buyers, are wondering whether prices have fallen enough to make now the time to take the first step onto the ladder. They begin the search by browsing web-sites and looking in agents’ windows, but soon begin to realise there could be another way: buying at auction. The auction catalogues provides a large choice within each buyer’s price bracket. Full Article

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The British buy-to-let market is extremely competitive for both houses and flats and is creating a dog-eat-dog scenario, according to Landlord Action.

Offering an advice service to property investors with non-paying or difficult tenants, Landlord Action made the claim at a property show in Birmingham.

Referring to the buy-to-let market, Paul Shamplina told landlords: “It’s very competitive, it never used to be but there are more landlords now.

“Also in cities – like Birmingham and Manchester and city centres – there’s a lot of competition,” he added.

He said that those worrying about keeping up with their buy-to-let mortgage on a property that has been empty for a few weeks should not attempt to “cut corners” by quickly finding tenants.

Mr Shamplina said carrying out proper referencing was essential and the best way to do that was to get an estate agent to handle the situation.

According to the Residential Landlords Association, more than one million rental properties will be empty by the end of the year.

From – estateagenttoday.co.uk

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The National Landlords Association (NLA), has claimed that the new breed of reluctant landlords poses a major risk to the overall health of the British rental market.

Its research has shown that the number of new landlord instructions to let in quarter three 2008 has grown at the fastest pace since records began. Over 50% more surveyors reported a rise in new instructions than a fall, as compared to 45% in quarter two.

The research also shows that the growth in new instructions was significantly stronger for houses than flats. This glut of new landlords, letting out their own properties to avoid selling at a loss, enter the lettings business with some reluctance in the hope it will only be for the short-term.

However, given the current economic outlook, it is quite possible that these reluctant landlords may have to rent their properties for a much longer period in order to see decent capital growth. Before taking the plunge, potential landlords need to be well prepared. There a number of serious issues which, if not investigated properly, could leave them in financial difficulties as well as risking the well-being of their tenants.

Simon Gordon, spokesperson for the NLA, said: “Becoming a landlord in this market is not for the faint-hearted. New landlords, especially those who hadn’t planned on starting a lettings business, must make themselves aware of the rules and regulations so they can operate their tenancies successfully.

“The private-rented sector provides accommodation for almost three million households and there is a major risk that inexperienced landlords, although well-meaning, are not fully up-to-speed with their responsibilities and problems can arise.

“The ultimate responsibility for operating the tenancy lies with the landlord and, although a good letting agent is worth their weight in gold, reluctant landlords are obliged to be on top of their game. “If landlords are not properly prepared, the potential long-term wait for prices to come back up may prove to be a Pandora’s Box for the private-rented sector.”

From – yourmortgage co uk

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As many as 40 per cent of buy-to-let mortgage holders could be in negative equity by the middle of next year, a new report has claimed.

The Telegraph reports the research by credit agency Standard & Poor, which studied 200,000 securitised buy-to-let loans.

It found that 3.7 per cent were in arrears at the end of June.The newspaper explains how many borrowers tried to capitalise on booming property prices and increasing rental values in the years before the credit crisis.

But when lenders restricted mortgage deals, such as 100 per cent loan-to-value ones, owners still had to keep up the payments.

Writing in the Independent, David Prosser explains that short-term mortgage deals were at their cheapest at the height of the buy-to-let boom.As those offers reach their conclusion, the best deals now are twice the price.

Meanwhile, the Royal Institution of Chartered Surveyors (Rics) reports that would-be sellers “flooded” the rental market with properties that cannot be sold in the third quarter of the year.

This created a “glut of supply” that has caused rental prices to drop.

Rics reports “historical highs” of surveyors reporting new instructions to let flats and houses.

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