A recent report by the Council of Mortgage Lenders has revealed that the number of homes repossessed in the UK fell by 7.5% in the first three months of 2010.
Home repossession is one of the ultimate fears for any homeowner, and the fact that the figure is falling is perhaps proof that the nation’s finances have recovered a little.
Repossessions fell from 10,600 homes in the final three months of 2009 to 9,800 in the first three months of 2010. Most encouragingly, that number was 26% lower than in the same period of 2009 when an enormous 13,200 people lost their homes.
The CML said that the main factor in the drop in repossessions was the drop in the interest rate. In March 2009, partially in response to the rising number of people losing their homes, the Bank of England dropped its base interest rate to 0.5% and has kept it there ever since.
That meant many people on the precipice of default, even those who became unemployed, managed to avoid losing their homes.
On the back of these positive figures, the CML has said it may revise its original forecast of 53,000 repossessions for the year should there be no further economic downturn.
The news did, however, come with a warning from the CML. If interest rates were to increase, it warned, many hundreds of thousands of people could struggle to meet higher repayment costs and face the prospect of repossession. It warned that the Bank of England needed to keep the rates low for as long as possible, even in the face of rising inflation.
Mortgage interest rates have, however, fallen to record lows for those customers with a sizeable deposit and good credit history. The personal loans market is also improving steadily; Santander’s flagship product for existing customers has a typical of 8.9%, and secured loan rates are falling to levels more in line with previous years.
This news from the CML is positive, though there is a warning that things could deteriorate at any moment, so we should not forget that even though the numbers are dropping, nearly 10,000 people lost their homes in the first three months of this year, the economic crisis, whatever the figures may say, is very much still with us.
Over the past few weeks new mortgage lenders have been popping up at quite a pace, with Platform Igroup and Kensington all returning to the market after considerable time away there is at last some possibility for clients with less than perfect credit history to obtain new mortgages although loan to value limits are still strict.
These lenders maintain adamantly in the press that they are lending to prime borrowers only however the truth is that they are lending to customers who would have been considered near prime or very light adverse in the days preceding the credit crunch.
To boot this week also saw the announcement that Aldermore mortgages had opened its doors to the main intermediary marketplace for both residential and buy to let loans, as well as Precise Mortgages adding further new options in the Buy to Let mortgage marketplace.
Kensington and Igroup in particular have filled the much needed whole between highly competitive high street residential mortgage rates and ultra high adverse rates offered by the likes of Platform and Cheshire Mortgage Corp. They have rates ranging between the 4-6% mark which are much more palatable than 8% plus offerings from the other two.
For further information on any of the products from these new lenders speak to one of our independent mortgage brokers on 0845 4594490
Mortgage Interest rates continue to creep slowly downwards towards the current bank base rate of 0.5% and it’s clear to mortgage brokers that while the range of products on offer in the market currently is still a major factor preventing true growth in the property sector particularly in buy to let, It is still very encouraging to see the mortgage works increase their maximum loan to value for buy to let mortgages to 80%.
The new products are quite competitively priced and so this reduction of minimum deposit size is one of the few examples of lenders returning to a competitive spirit since HSBC announced their 2% tracker rates more than a year ago.
Fixed rates are available from 4.69% with a 2.5% arrangement fee, 5.69% with a 1.5% fee and 5.79% with a £1795 arrangement fee and a 5% early repayment charge during the initial term of the product. Standard legal and valuation charges would apply.
A lending limit of £350,000 at this LTV will reduce the popularity of the product in the south east but should help to ensure that TMW are not saturated with new business, and it is likely that this too will be increased in the not too distant future.
For further information about these products please speak to one of our mortgage advisors on 0845454490.
Just a short post to announce that you can now get live online quotes direct from our main site for Life Insurance, income protection, Mortgage Protection and Critical Illness Insurance direct from the Rightmortgageadvice.co.uk website.
To get an instant quote today follow this link for Life Insurance Quotes.
If you have life insurance cover which was arranged prior to a marriage, or before increasing your mortgage value or mortgage term it may need to be reviewed. It’s crucial to ensure that your protection requirements are reviewed regularly to ensure that it is arranged in the most tax efficient manner and will benefit the people you intended it to.
To discuss protection requirements and products available call one of mortgage protection advisors on 03454594490 for advice.
A recurring theme when speaking with buy to let investors across the country at the moment is the difficulty being caused by the dire lack of realistic products for remortgaging or making new purchases.
With current requirements for a minimum deposit of at least 25% and interest rates beginning around the 4% mark for variable rates with deposits of 40% and over its easy to see how many think the current markets offerings are nothing more than a cynical attempt to recoup wider losses by the big banks. And with arrangements fee’s going at anything up to 3.5% I have to agree with them.
There is however another option for Landlords who hold several properties or who have a sizeable income aside from their rental. The private banking sector is increasingly taking up a larger share of this market and with potential interest rates starting from 2.5% or so above base rate and fees typically between 1-2% of the loan balance they make a very attractive proposition to the right clientele.
These lenders not only have the experience in dealing with larger loan sizes and non standard properties, but the human underwriting to look at individual cases which would not meet the standard criteria of high street buy to let mortgage lenders.
The downside is that they typically require assets of around £250,000+ without taking your main residential property into account and or an income of over £100,000 per annum. So while they could prove invaluable for those landlords with a decent portfolio gearing with 25% or more in equity or for the first time investor with a good main income they won’t provide any refuge for the many landlords who worked at maximum leverage and left themselves with less than 25% equity in the their overall portfolio.
If you have several buy to let properties on or about to come onto their standard variable or indeed of you have a significant income instead and would like to find out whether a private banking arrangement could be suitable contact speak to one of our mortgage advisors on 0845 4594490 for independent mortgage advice.
