March 20th, 2007 - Buy to let reaches younger audience...
March 14th, 2007 - Fixed rate mortgages attract first time buyers...
March 13th, 2007 - Give up smoking to save on mortgage...
March 9th, 2007 - Bank leaves rate unchanged...
March 2nd, 2007 - House Prices increase by 0.9% in January...

Mortgage News Archive...

February 26th, 2007 - 100 per cent mortgages gain popularity...
February 1st, 2007 - First time buyers are more likey to take risks...
February 1st, 2007 - The property market begins to cool down...

March 20th, 2007 - Buy to let reaches younger audience...

Perceptions of buy-to-let investors being older individuals has been shattered by the latest research undertaken by Mortgage Trust.

The intermediary-focused, specialist mortgage lender has discovered that over a quarter (26 per cent) of new investors moving into the property market with one buy-to-let mortgage are between the ages of 26 and 35.

When the number of properties in the UK moves up to three, Mortgage Trust found that the amount of buy-to-let mortgages purchased by this age group fell to 16 per cent but this still represents a two per cent rise on last year.

John Heron, managing director of Mortgage Trust, stated: "Traditionally buy-to-let has been perceived as something for the more mature investor. However, recently we have been witnessing an increase in the number of younger professionals choosing to make a considered and long-term investment in property."

The age group found to make up the largest percentage of the buy-to-let mortgage market was the 46 to 55-year-old group when the individual had two or three houses of this nature.

March 14th, 2007 - Fixed rate mortgages attract first time buyers...

First-time-buyers, spurred on by the possibility of interest rates rising even further, are increasingly looking toward a fixed-rate mortgage, new figures suggest.

According to the Council of Mortgage Lenders (CML), 85 per cent of first-time-buyers plumped for this type of mortgage product during January.

In general, fixed-rate products made up the bulk of all UK mortgages during the first month of 2007, with a total of 72 per cent of this type of loan being acquired, a rise of three per cent on the previous month.

CML director general Michael Coogan said: "Each month it seems that the prospect of another interest rate rise is balanced on a knife edge.

"More and more borrowers are protecting themselves against this risk and choosing the certainty of fixing their monthly mortgage payments, which allows them to plan ahead with confidence".

In terms of fixed-rate loans, the average rate was found to be 5.27 per cent in the UK, which represented an increase on the 5.23 per cent average of December 2006.

March 13th, 2007 - Give up smoking to save on mortgage...

Ahead of National Smoking Day tomorrow, John Charcol has emphasised the great financial gains that can be had by quitting smoking, namely, saving thousands on mortgage repayments.

The mortgage broker states that by stubbing out your fags, a person with a standard 25-year mortgage could knock eight years off their loan term as well as saving themselves more than £27,000 in the process!

With the amount to be saved on a mortgage varying along with the number of cigarettes smoked each day, should an individual choose to spend there smoking money on paying off the mortgage when they have a 40 a day habit, the savings could be as much as £45,084 on a £100,000 mortgage.

Kate Tucker of charcolonline, stated: "Coupled with savings on life assurance premiums and even some home contents insurance policies, there really is a great financial argument for not lighting-up, as well as the obvious benefit to your health."

Rather than literally smoking money away, John Charcol urges smokers to kick the habit and find a mortgage that allows overpayments so the savings begin to add up immediately.

March 9th, 2007 - Bank leaves rate unchanged...

Despite recent figures showing that a slow down in property prices is yet to occur, the Bank of England has decided to keep the base rate at 5.25 per cent.

Some forecasters are predicting another quarter point rise (which will be the fourth since last August) to happen at some point in the coming months to counteract the fact that house price inflation is currently 1.8 per cent.

Graeme Leach of the Institute of Directors of Halifax, stated: "Recent stock market turbulence has played its part in today's decision but we still think a further quarter-point interest rate rise is likely next month."

Chris Coates, of house builder Linden Homes was in a positive mood after the monetary policy committee's decision to freeze the base rate, saying that the homeowners will be relieved at the news following "increased mortgage repayments since last August".

He added that a static base rate would begin to offer "stability" to the housing market, which will benefit first-time-buyers who are struggling to afford a mortgage.

According to the Halifax, demand is outstripping supply in terms of housing in the UK and so the property market remains under "upward pressure".

March 2nd, 2007 - House Prices increase by 0.9% in January...

House prices increased by 0.9 per cent in January 2007, according to the latest figures released by the Land Registry.

The government body shows that January's growth meant that annual house price growth increased to 7.7 per cent, the first time since May 2005 that year-on-year growth had broken the seven per cent barrier for two months in a row.

The monthly change means that the average price of a property in England and Wales amounts to £174,827.

The Land Registry's figures also show that growth in London continues to outperform the rest of the country, with Yorkshire and Humberside and the south-east also experiencing solid growth.

A spokesperson for the Land Registry said that the 9.9 per cent annual growth experienced in the capital had been higher than that experienced in England and Wales since March 2006.

Annual house price growth rose to 10.3 per cent in February 2007, from 9.3 per cent the previous month, according to Nationwide's latest house price survey.

February 26th, 2007 - 100 per cent mortgages gain popularity...

More and more people are taking out 100 per cent mortgage products, with the number doubling in 12 months, according to a top broker.

The aim of these types of mortgages is to give housebuyers a step up onto the property ladder but with some mortgages of 125 per cent now being offered. Some people in Britain are finding themselves facing the prospect of very large mortgage repayments.

Mortgages that are over 100 per cent have been subject to a 95 per cent rise in the last year, says London & Country, in addition to the more than doubling of the amount of 100 per cent products being offered.

First-time buyers are the group that the 100 per cent mortgage primarily appeal to along with divorcees who may have paid out money in a settlement as well as losing their home.

According to research conducted by the Council of Mortgage Lenders, approximately 22,000 Britains last year took out a 100 per cent mortgage.

February 1st, 2007 - First time buyers are more likey to take risks...

First-time buyers (also known as FTBs) are prepared to take greater financial risks than ever before just to get on the property ladder. Research from Yorkshire Bank has revealed that

the bank has found more than 80% of FTBs are willing to take out mortgages with terms lasting more over 25 years.

The bank has also discovered that FTBs are twice as likely to offer above the asking price on a property compared to more experienced buyers. Just two out of five would rule out a home loan which was five times their income.

Gary Lumby, Yorkshire Bank’s head of retail, said:
“With the average house price nearing £200,000, this year may feel like the last chance saloon for FTBs already finding it hard to buy.”

One in four FTBs are so determined to buy their dream home that they will offer above the asking price straight away on the house they want. This is up by nearly 10% since January 2006, and is far greater than the 12% of existing homewoners who are willing to pay over the asking price.

“Buyers need to be wary of offering above the asking price straight away as a bit of bargaining could save them thousands of pounds,” said Lumby.

February 1st, 2007 - The property market begins to cool down...

House price growth is starting to slow down following repeated rate increases from the Bank of England over the past six months, according to the UK’s largest building society, Nationwide.

Nationwide reported that house prices rose by only 0.3% in January which is the smallest monthly rise since May last year. Fionnuala Earley, Nationwide chief economist said:
“The number of newly agreed sales is rising more slowly and the length of time properties are on the market seems to be getting longer."

" Estate agents reported some easing of demand in December and January and the number of new buyer enquiries fell for the first time in 19 months.”

She added that house prices in 2007 are expected to remain firm in spite of the Bank Rate rises.

1st February, 2007 - Borrowers with poor credit will pay more...

Borrowers with a bad credit history are being charged higher fees for mortgages. Research from the price comparison website MoneyExpert.com reveals.

The website claims the average fee on a sub-prime or adverse credit mortgage has increased by nearly 14% since July 2006 to a whopping £923!

It also found that the number of sub-prime mortgages with a fee of over £1,000 has gone up by nearly 50%, and the number of these mortgages that do not charge any fee whatsoever has decreased by 81% to only 13% of deals.

February 2007 - Council tax rebates owed to millions...

Millions of people could be eligible for council tax rebates following allegations that the original method of valuing homes in the early 1990's is flawed.

Estate agents at that time were only given a few months to survey all the properties in Britain and, due to the time constraints many are believed to have valued properties while simply driving past homes in second gear!

These so-called ‘second gear valuations’ have dictated the council tax band of the property ever since which means anyone whose property is in the wrong band could be eligible for a council tax refund dating back to 1993.

Owners have a strong case for challenging their band if similar neighboring properties are in different bands.Valuation Office Agency (VOA) spokesperson Natalie Lintern said:
"People who have grounds to believe that their band is incorrect should contact their local Valuation Office. Information about council tax and how a banding is arrived at is available on our website at www.voa.gov.uk.”

She added that the agency which reports to the Treasury, is satisfied that the original bandings were done competently.

The next valuation of properties is due to take place soon. VOA inspectors are currently gearing up for this by photographing homes and creating a huge database of pictures.

January 23rd, 2006 - Regualtor asks mortgage lenders to lower mortgage exit fees...

Borrowers who pay off their mortgage or switch their mortgage should not have to pay for a higher exit fee than the lender originally told them they would have to pay, the Financial Services Authority (FSA) has ruled.

Lenders who charge customers higher mortgage exit fees than they expected will be forced to lower their rates or face investigation from the FSA.

Clive Briault, FSA managing director of retail markets, said:
“People will now know when they sign up for a mortgage what fee they will pay on exit, or should be given a clear idea of how the fee might be increased fairly.”

Lenders will have until 28th February this year to decide whether they plan to carry on charging any increased exit fees or whether to reduce the fees to their original level for older customers. Any lender which charges an exit fee that is higher than the original fee expected by the customer will have to justify their position to the FSA.

Past customers who have already paid higher fees than they expected can complain and should expect to receive a refund of the difference between the actual exit fee paid and the original exit fee expected.

“This is good news for the customer,” said Moneyfacts.co.uk head of mortgages, Darren Cook. “Fees have increased sharply over the last couple of years, at a rate much higher than inflation.

Lenders have been using exits fees as a means to deter customers switching to better mortgage deals, so it is encouraging to see the regulator acknowledging the problem and dealing with it in an effective manner,” he added.

19th January, 2007 - Lenders pull fixed rate mortgages...

Many of the best fixed rate mortgage deals were withdrawn this week following the increase in the Bank of England base Rate.

Many lenders replaced cheap fixed rate deals priced at under 5% with more expensive fixes priced at around 5.3%.

Katie Tucker, spokesperson for broker-firm John Charcol, said:
“Last’s week’s Bank Rate rise was unexpected, so many borrowers rushed to take fixed rates as economic indicators suggest that there is at least one more Bank Rate rise to come now that inflation is at the upper limits of what is acceptable to the Chancellor.”

In total 12 lenders withdrew their fixed rates following the rise but some lenders such as Chelsea Building Society and Bradford & Bingley, were still offering competitive 4.99% deals at the time of writing.

“Some lenders are still offering excellent fixed rates, although the best of these deals are unlikely to last beyond the end of this week. If you are on your lender’s SVR or if your existing mortgage deal is due to come to an end soon and you want a fixed rate, you should secure your new mortgage as soon as possible,” advised Tucker.

19th January, 2007 - Rate increases slow down property price growth...

Increases in the Bank of England Rate in November caused house price inflation to cool down, according to one of the most important housing organisations, the Royal Institution of Chartered Surveyors (RICS).

While house prices continued to rise in December, RICS claims the pace of the increase eased to August levels.

Just 37% of chartered surveyors reported a rise in house prices, compared to 47% in November.

RICS spokesperson Ian Perry said:
“Interest rates have started to cool the housing market and last week’s rise will have a further impact in the coming months, but the market remains strong. As we move further into the new year, consumers will begin to tighten their belts as finances come under pressure but rising wages and employment will continue to boost the economy and RICS expects interest rates to finish at 5.5% by year end.”