January 2009

Mortgage deals require larger deposits
28 January 2009

While banks and building societies are offering new mortgage products they all are aimed at the lower Loan to Value market i.e. you require a large deposit to be able to apply for them.

“In the past month the proportion of new mortgage deals requiring at least a 25% deposit has risen, from 54% to 60%, and 25% of all deals on offer in fact require a 40% deposit”

These figures explain the problems first time buyers face when trying to obtain competitive mortgage rates.

Source – BBC News

Government attempts to boost new lending
19 January 2009

Details have been released this morning that the government intends to increase the £250 billion credit scheme, agreed in October last year, to offer a new facility which will guarantee new loans and mortgages issued by banks.

Mortgage lending continues to decline
15 January 2009

Figures released by the Council of Mortgage Lenders show that new home loans are down by 60% when compared with last year. With customer sentiment seemingly swayed from buying property, twinned with a decrease in the availability of mortgage deals for customers, it could be expected that these figures will to continue to decline.

Source: Times Online

January’s Base Rate Reduction13 January 2009

On Thursday last week the Bank of England chose to cut the base rate by a further half a percent to an all time low of 1.5%1.

All those on tracker rates without collars will once again benefit from the cuts. If your lender passes on the full half percent cut, a mortgage of £150,000 would see monthly payments fall by over £60.

However it is unlikely to have too much of an effect on new mortgage loan figures and as such is unlikely to provide much stimulus for new homeowners in the struggling housing market.

Savers will not be so happy to hear of the rate reduction as this cut is also likely to be passed on to them via reduced returns on their savings.

This leads one to ponder the effectiveness of such a decision. It isn’t likely to help the housing market, new mortgage rates aren’t likely to improve, savers are suffering and the regular rate cuts adversely affect the Pound and reduce confidence in the economy in general. Aside from the increase in disposable income for those already on tracker rates, it is questionable as to how this helps the economy at all.

1. Bank of England

Mortgage Products Becoming Harder to Come By!
7 January 2008

It has been widely reported that the number of mortgages on offer has shrunk by 65% in the past year. Within these figures it needs to be noted that more than half of the actual mortgages available require a 25% deposit.

For people looking to purchase a house with only a 5% deposit, there are approximately only 20 mortgages on offer. In the past, people only having a 5% deposit was quite normal, but this once again highlights the problems posed to first time buyers as many do not have access to sizeable deposits.

Sources – Moneyfacts.co.uk & Trigold.

What next for interest rates?
2 January 2009

The Bank of England’s (BOE) monitory policy committee meets next week to make their monthly decision on whether or not any alterations need to be made to the base rate. It will be interesting to see what approach they take. Before Christmas we saw another 1% cut and now many are predicting a further 0.5% cut.

One concern over these cuts is that some lenders have stated they will not pass further rate cuts on to borrowers currently on a tracker mortgage. Their reasoning behind this is that if they do pass on further cuts to their mortgage borrowers they will in turn have to slash the interest rates on their savings products.

If this is the case then the benefit of the BOE rate reduction is eliminated for many borrowers. We must now watch with anticipation to see what happens with rates and how lenders react to any decisions taken.

Debt Advice
2 January 2009

Figures released by the National Debt Helpline show that 23,000 people called seeking help in November 2008. This is 40% more than in November 2007.

In light of this information, it is important that individuals seek professional advice for help as there are many options available when it comes to debt consolidation.

Source – Introducer Today

‘Your home may be repossessed if you do not keep up repayments on your mortgage’