Mortgages Uncovered

YouGov have conducted a poll which shows that a massive 75% of first time buyers believe that banks should lend responsibly, even if that means some people will be refused loans.

The poll was carried out on behalf of the charity Shelter, which is trying to persuade the FSA to implement reforms which would result in stronger mortgage regulation.

Just under 80% of those questioned think that banks acted irresponsibly before the credit crunch; almost a third feel they shouldn’t be trusted to lend in a responsible manner in the future.
Shelter’s CE, Campbell Robb, said:

It’s high time the housing minister stopped bowing to the banking lobby and ignoring the advice of economic experts and consumers who have sent clear signals that mortgage lenders need to clean their act up.

We are set for some really tough times ahead as repossessions are already starting to rise and more and more people struggle under the combined pressures of VAT rises, increasing unemployment and sky high living costs. If we compound this by allowing irresponsible lending to make a return to the market, it will spell disaster for our fragile housing market and will undoubtedly result in many more people across the country needlessly losing their homes.

Interest rates in the UK are currently at the exceptionally low rate of 0.5%, and yet analysts are now warning that these interest rates are set to rise as high as 5%, or potentially, even higher.

These could see new home-buyers spending more than half of their take-home pay on mortgage repayments.

For existing mortgages and remortgage deals, the rise in interest rates would also see a significant increase in the amount to be repaid.

This doesn’t bode well for those who are already struggling, although the Bank Rate is not expected to change before 2013.

The last quarter of 2010 saw 7,900 reposessions, while this figure had risen to 9,100 for the first quarter of 2011.

According to UK lenders, March saw an increase in the numbers of new mortgage deals.

Remortgages in March were 16% higher than those in February, and 17% higher than the number approved in March 2010.

The rise in demand for fixed-rate mortgages is being linked to increased living costs and the fear of an increase to the base rate.

Well over a third of all lending in the first quarter of 2011 was for remortgage lending, which represents an increase of 30% on the last quarter of 2010.

The numbers of new mortgages increased by almost a quarter in March when compared with the previous month, although this was 17% lower than the same time last year.

‘Freedom to Fix’ is the new tracker mortgage on offer from Northern Rock that allows customers to change to a fixed rate mortgage at any time during the repayment period. They can do so without the risk of incurring charges or repayment penalties.

At the moment, interest rates are at an all-time low of 0.5% and so starting on a variable interest rate mortgage makes a lot of sense. This option, however, would allow buyers to take advantage of the current low rates without being put off by the potential interest rates in the future.

The Northern Rock commercial director Andy Tate said:

“Due to the low interest rate environment, many borrowers remain attracted to tracker mortgages. However, our research tells us that many customers are mindful of the possibility of base rate rises in the not too distant future and so would like to keep their options open.

“Our Freedom to Fix mortgages offer customers the best of both worlds – a competitive interest rate now with the added security of being able to fix their rate at any point during the tracker period.”

Is now the best time to buy a house?

To be honest it is hard to think that there is ever a right time to buy a house you just have to go for it when it feels right. The reasons being are that no matter how much the house is going to cost it is going to be allot of money in which you may have had to get a loan out to help finances.

At the moment i feel that allot of people are scared to but the time just does not seen right and everywhere you look there are for sale signs up and people wish to sell but there is no one buying.

I am going to move away from mortgage advice a little and show you a perspective that is affecting the housing market in a positive way. Although this is being a little a unfair as the people it affects are pretty much victims of bullying. Neighbors from hell are more and more common these days and they can start from simple arguments over:

• Aggressive behaviour
• Excessive noise
• Messy property or garden

Anti social neighbors can affect the property of your price by an average of £30000. These problems should be looked to be resolved as they more or less are normally a simple misunderstanding.

In February 2010 mortgage lending has risen by 6% to 9.2 billion pound. These figures come from the council of mortgage lenders. This is an unusual increase as February normally does not see any increases in fact these are possibly some of the harder time being the start of the year and being closely after the Christmas period.

These figures are encouraging for the recovery of economy in the UK and are expected to continue to improve. Provided house prices do not fluctuate too much the UK will find these figures continually rising, however this is a big ‘IF’ and could go the way we do not want it too.

Properties in the rental market are becoming harder to come by everyday. This means that tenants are now being faced with higher rental values and these impact houses for sale and the economy as a whole. Higher rental value means that first time buyers will struggle to buy properties. This also means that low paid work will not even be worth taking for a lot of people. The economy as a whole will become affected by this.

Either landlord’s are not finding the rental market to be as lucrative as it once used to be or they are not longer investing into further properties.

The number of houses for sales has now hit an 18 month high. Prices are falling again but speculators believe this sharp rise is due to the unexpected weather the UK has experienced this year. The typical asking price is now £230000 is up to 5.3% higher than March last year. First time buyers are still struggling a lot to even be approved for mortgages. This continues to get worse as house prices are very much fluctuating. The hardest hurdle for a first time buyer is the initial down payment.

Latest figures show that sales have halved at the start of the New Year.

The housing market in January 2010 saw large dip in activity so much so that lending fell by 17%. Mortgage advances also fell in the month of January y nearly £3 Billion. These figures come just as nationwide announced that house prices have fallen for the first time in ten months in February 2010.

This fall in house prices is according to Nationwide down to the harsh winter weather that the UK has been seeing. The following months will be very interesting to watch to see how the economy is continuing to recover from the recession and the house price demands.