Mortgages Uncovered

As mentioned in a previous article, the buy to let sector in the housing market is perhaps the only area that has held firm, and even made some slight growth during this period of credit crunch. Although nothing is safe it seems. As pressure mounts on the economy it is possible that some tenants may find that they are unable to pay their rent on time and this would in turn up the pressure on property investors. Many of the buy to let companies or landlords with a chain of properties rely their earnings from existing properties to invest in new properties and for general maintenance. So if enough tenants are late with their rent this may have a knock on effect across a chain of properties and investments.

Beyond the buy to let sector, the buoyancy in house markets that the UK had witnessed for so many years has finally started to topple along with the country’s credit problems. More and more investors in the UK are moving out of property markets because of problems with finance and arranging loans for new purchases.

Whether all this results in the housing crisis some experts have been predicting remains to be seen, but one thing is certain, this situation is unlikely to improve as long as high rates and lender uncertainty continues to squeeze UK investors out of the property market.

Alliance & Leicester have launched two new mortgage products.

The first is a two year fixed deal at 5.99 percent and the second is a two year base rate tracker.  The base rate tracker starts at 5.89 per cent then moves to 1.49 per cent above base rate.

Both deals offer a maximum of 75 per cent loan to value ratio (see Jargon page for what this means) and have a maximum loan of £1 million (not a problem for me then!)

Shareholders in Abbey will be delighted at this week’s news that their shares have trebled in price at a time when Abbey’s rivals are suffering from the effects of the credit crunch.

Abbey has grabbed almost 1 in 6 of the new mortgages that have gone through in the first quarter of 2008.  The majority of these were remortgages according to a spokeman for the bank, with new customers unable to satisfy their credit criterion in most cases.

During the housing boom, Abbey did not borrow as much on the wholesale markets as its rivals and is now reaping the rewards. Although Abbey did scrap its 100 percent loans and its buy to let mortgages, it has still been able to do some prime mortgages whilst its rivals had to stop altogether in many cases.

According to Rhiannon Davies, director of ShelterOffshore.com, any potential or current expats are struggling to raise money for international mortgages because of the current mortgage market an credit crunch. Read the rest of this entry »

According to the Building Societies Association, there is still a “very wide range” of options available for those looking for a new mortgage deal.  Although it is true that there are far less products available on the market, there are still some excellent ‘competitive’ products, in particular those on offer from building societies, which consistently appear on the best buy tables. Read the rest of this entry »

Brokers can no longer get the Abbey range of buy to let mortgages as they have withdrawn them and are only offering them direct.  The buy to let range left is a two year fixed rate mortgage and a two year tracker mortgage deal, both of which require a minimum of 15 percent deposit.  All other buy to let mortgages have been withdrawn. Read the rest of this entry »

That’s the advice according to research from Abbey Mortgages last week.  According to the bank, first time buyers are putting off buying their house and getting a mortgage because of the current crisis and many have said they will put it off for at least twelve months.

Apparently, 67 percent of first time buyers said they would wait for twelve months or more.  Collectively, the 1.1 million first time buyers have around £31 million saved up for deposits. Read the rest of this entry »

At a time when many mortgage lenders are closing their doors to new mortgage applications, Barclays has stepped forward to say not only are they still welcoming new mortgage applications but their processing time has reduced from 11 days down to a mere 5 days because of improvements they have made internally.

Frits Seegers, chief executive of Barclays’ global retail and commercial banking division, told investors yesterday that the bank was well positioned to take advantage of the opportunity.

In the final six months of 2007, Barclays took a whopping 9.3% of all net new mortgage business – compare that with the 4.5% they achieved in the latter half of 2006 and that looks a pretty good growth in market share.  With this recent announcement it will be interesting to see what they can achieve in the second half of 2008.

Paragon is a specialist lender, dealing mainly with landlords and buy-to-let mortgages only.  It would seem that Paragon is dangerously close to collapsing and it has announced that it is to axe a third of its staff in the coming months.  They have also all but stopped approving any new mortgage loans at all.

Capital Home Loans and Mortgages have announced that they have stopped buy-to-let mortgages completely and withdrawn all their offerings from the market.

Other mortgage lenders which have either made their landlord Read the rest of this entry »

As a customer of Northern Rock, yesterday I received a letter from them thanking me for sticking with them (I’m stuck with them, I’m tied into a five year deal) and to confirm that despite all the recent changes, it’s business as usual as far as they’re concerned (they can’t really change anything on my mortgage, it’s a fixed rate deal so there).  It took them a full page of A4 to tell me that.  There was a lot of waffle, I don’t know why, but that was the general gist of it.  In fact, when I first opened it, I half expected it to tell me that they’d sold my mortgage deal to another lender. Read the rest of this entry »