Mortgage News Update April 2009

A lot of mortgage news at the moment. Here is a selection of mortgage news from UK today:

M2000 Mortgage Club makes payment pledgeM2000 Mortgage Club has increased its procuration fees across a range of products for all completions, provided the application was made after 2 March. M2000 – which was recently acquired Exclusive Connections – has also pledged to pay all fees on completion.

‘Surprise bounce’ in house pricesHouse prices rose in March for the first time since October 2007, according to the Nationwide. The building society said that property prices increased by 0.9% compared with the previous month.

Mortgage advice: finding the best remortgage rateWith the Bank of England`s base rate at an all-time low of 0.5% (as of 5th March 2009), there are many good remortgage deals out there, if you can just find the right one. Mortgage lenders everywhere have dropped the price of their deals, tempting many people to move from fixed-rate mortgages to variable-rate deals – or the other way around!

UK homeowners pay off £8bn of mortgage debtBritish homeowners are benefiting from the cuts in interest rates by paying off their mortgages in record amounts, figures showed today. A huge £8bn of mortgage debt was repaid in the fourth quarter of last year, according to Bank of England figures, as Britons with tracker mortgages responded to the sharp fall in interest repayments by pumping the spare cash into paying off their capital.

UK Islamic bank goes head to head with conventional lendersThe UK’s first Islamic fixed rate mortgage has been launched with the aim of offering ethical property finance in direct competition with conventional lenders. The new product from the Islamic Bank of Britain is a direct bid to win a bigger share of the UK’s mainstream mortgage market, the bank confirmed.

IBB announces assault on UK mortgage marketFollowing the launch of its Sharia’a-compliant fixed-term deposit account last month, Islamic Bank of Britain (IBB) has announced that it is intent on increasing its share of the UK mainstream mortgage market. The Islamic lender is offering a new House Purchase Plan at 3.99% plus a £299 administration fee.

Sam Dunn: ‘Can we get a better mortgage?’Question: My boyfriend and I have a £20,000 deposit – well above the 10 per cent deposit for a £186,500 house near our current rented flat – yet we don’t seem to qualify for any mortgage less than 7 per cent. I thought the Government help was meant to get the market moving. SY, Blackpool – Answer: Despite every financial lever yanked by the Government, and all the subsequent billions pouring into the banking system to try and unblock the credit markets, banks continue to thumb their nose at first-time buyers. The Council of Mortgage Lenders (CML) recently revealed that a paltry 8,900 home loans were taken out in January by those taking their first steps on to the property ladder – a record low.

Mortgage products on the up: Mortgage BrainThe number of live mortgage schemes has increased for the first time in eight months, according to Mortgage Brain’s Monthly Product Analysis. The total number of live mortgage schemes listed on its market leading sourcing system increased by 13% during March. Up from 2,731 on 2 March, to 3,091 at the end of the month.

Yahoo! Irish Mortgage Guides

Yahoo! has some great Mortgage / House Prices resources for people in Ireland.

Below is an index of the content.

All about Mortgages:
Your Insurance Options:
Costs and Budgets:
All about Mortgages:

Mortgage market remains subdued in June

The average homebuyer put down a 22% deposit in June, up from 20% in May, according to the Council of Mortgage Lenders. The majority of lending continues to be on conservative terms, as lending criteria have tightened in response to the shortage of funding and current market conditions.

The average first time-buyer borrowed 3.33 times their income, down from 3.35 in May. While the average home mover borrowed 2.94 times their income, down from 2.97 in May.

There were 18,100 loans to first-time buyers in June worth £2.3 billion, an 8% decline in volume and 9% decline in value from May. There were 29,100 loans to home movers worth £4.7 billion, down 9% in volume and value from May. The share of house purchase loans to first-time buyers and home movers remained stable at 38% and 62% respectively.

Gross lending decreased slightly to £23.6 billion in June, down 4% from May and 32% lower than June last year. The largest share of gross lending was remortgaging (44%) with 75,000 loans worth £10.3 billion in June. Loans for house purchase accounted for 30% of gross lending with 47,000 loans worth £7 billion.

Fixed-rate mortgages accounted for an increasing share of products taken out at 69%, up from 66% in May. This trend is likely to continue as fixed-rate prices have fallen in recent weeks in line with the decline in swap rates

While all parts the mortgage market are suffering a reduction in business volumes, the majority of mortgages continue to be obtained through an intermediary. The credit crunch had a particularly marked effect in the first quarter of 2008, when there was an increase in the proportion of borrowers seeking the advice of an intermediary. In the second quarter of 2008, 78% of first-time buyers and 61% of home movers used an intermediary to obtain their mortgage.

CML head of research, Bob Pannell commented:

“Mortgage lending activity remains relatively weak and will decline further in the coming months as a result of funding constraints and lower consumer demand.

“The majority of lending continues to be to people with larger deposits, which is prudent for borrowers and lenders in a slowing housing market.”

External Resources:

The Council of Mortgage Lenders

International Mortgage Institute

Hello and Welcome to the International Mortgage Institute blog.