Your Right Move » Lending

House repossession

Zanet — Tue, 14 Feb 2012 11:43:05 +0000

The one thing no one wants to hear is house repossession in there neighborhood. Its bad for so many reasons. How good it is to read that house repossession is at its lowest for 4 years.

The Council of Mortgage Lenders (CML) recently showed the dramatic drop. A recent CML report showed the number of repossessions by mortgage lenders last year amounted to 36,200. This is the lowest annual total since 2007.

We are all well aware that the recent UK recession has made things very difficult for home owners. It’s common to hear of worsening unemployment and other pressures to inflate figures this year. The reality is, if you are behind on your mortgage, the mortgage company can start proceedings for house repossession.

But it seems that unlike previous recessions, this one is heading a different way. If we have rapid inflation then you have the situation we had in the early 1980s where owners paid off a generation’s mortgages.

Those who bought a home in the 1980s to early 1990s, and then held on through double-digit interest rates and the 1990s crash, have emerged with properties that have risen to be worth five to ten times their mortgage.

While falling property prices has brought tough times for those who have seen equity slashed, fallen into negative equity or even had their homes repossessed, there are others who are pleased that prices are falling.

Lower property prices are a boon to first-time buyers and those moving up the property ladder, but only if they can raise the substantial deposit needed to take advantage.

House repossession is back for 2012

Sadly the expectations aren’t good for 2012 when it comes to house repossession. CML anticipates around 45,000 repossessions and around 180,000 mortgages in arrears of 2.5% or more by the end of 2012.

Paul Smee, director general at the CML says, ”Low interest rates and good arrears management by lenders are helping the vast majority of those borrowers who face difficulties to keep their homes and get back on track”

Sadly house prices remain at a stable rate. This means those on the verge of house repossession are not going to be in a position to increase to a point where they can sell any time soon. For others their repayment will continue to cover only the interest on their mortgage. While interest rates remain low, they will be merely propping up the lender’s balance sheet. When interest rates rise, they will be in difficulty as house prices will be forced down by forced sales further reducing any equity that they have gained.

Chelsea building society fixed rate savings

Zanet — Mon, 06 Feb 2012 13:50:56 +0000

Chelsea Building Society fixed rate savings could spark another price war for mortgage offers.

Chelsea Building Society is offering a five-year, fix-rate deal at an all-time low rate of 3.19 per cent.

The offer, which massively undercuts competitors in the five-year market, is available to borrowers below 70 per cent loan-to-value (LTV) with the arrangement fee of £1,495.

“The fee aside, Chelsea Building Society fixed rate savings is the lowest-priced, five-year, fix-rate mortgage deal we have ever seen. It signifies a fresh battle in the mortgage marketplace,” said Andrew Hagger from Moneynet.

Chelsea Building Society has launched the lowest ever five year fixed rate deal. But its worth noting that although Chelsea’s offer is cheaply priced, it doesn’t mean a 5 year fix is the right product for everyone.

Chelsea building society fixed rate savings may not be the best product for you

As the Bank of England base rate iscurrently 0.5 per cent, It is likely to stay very low for the forseeable future. So it may be wise to look at the range of base-rate trackers out there at the moment.

Borrowers wanting a mortgage of up to 70 per cent LTV can benefit from a rate of 3.19 per cent, or 3.39 per cent for the offset option. Both mortgages have a hefty arrangement fee of £1,495.

“This is the lowest five year fixed rate mortgage ever to come to the market, which is great for customers wanting longer term security in fixing what is likely to be their biggest monthly outgoing,” said Chelsea Building Society product manager

Chelsea Building Society was the fourth largest Building Society in the United Kingdom with total assets in excess of £13 billion at 31 December 2007. It is a member of the Building Societies Association. Operating mainly in South East England with its network of 35 branches, its head office is based in Cheltenham employing over a 800 staff. The society was established in 1875 as the London & Camberwell Building Society.

Affordable Mortgages

Zanet — Mon, 16 Jan 2012 13:38:51 +0000

Affordable mortgages aren’t a thing of the past. According to the Telegraph today, Mortgages are at their most affordable for 14 years.

The claim is based on the average mortgage payments for new borrowers, first-time buyers and home movers. The Telegraph speak of only 27% of disposable earnings needed for mortgages in the fourth quarter of 2011. Mortgage payments for a new borrower are now at their lowest in proportion to earnings since 1997.

A 14 year high for Affordable Mortgages in UK

Affordable Mortgages for new borrowers have reached their most inexpensive levels for 14 years! Typical payments in some areas of Scotland and northern England are taking up less than a fifth of disposable incomes.
The details were released from Halifax this week. So although most families are feeling the pinch,the figures are implying a different situation. Halifax claim it marks the lowest proportion since spring 1997 when a 26% proportion was recorded. This stands well below the 37% average over the past 27 years.

Once again the study highlighted a North, South divide. The least affordable areas located in London and the South East.
Kensington and Chelsea in London were named as the least affordable local authority district. Here mortgage payments are taking up 78% of disposable income.

Martin Ellis, housing economist at Halifax, said:

“The cuts in mortgage rates in the last few years have resulted in a significant improvement in housing affordability for those able to raise the necessary deposit to enter the market.. The marked improvement in affordability was a key factor supporting housing demand in 2011. The prospect of an exceptionally low Bank of England base rate over the foreseeable future should maintain affordability at favourable levels in 2012. This should support the market over the coming 12 months, helping to offset the impact of the downward pressures on demand from the ongoing difficulties faced by households regarding their finances and uncertainty about economic prospects.”

Do you feel these figures are truly representative of things changing? Will affordable mortgages remain or are these clever figures from Halifax?

End stamp duty holiday looms

Zanet — Tue, 18 Oct 2011 09:12:18 +0000

It’s noteworthy that the end of the stamp duty holiday looms for first-time buyers with just 5 months to go, sellers with homes worth £250,000 or less should acknowledge call to action

First-time buyers should be aware that the 25th October marks just five months to go until the stamp duty holiday ends. Under current arrangements, first-time buyers purchasing a property under £250,000 don’t have to pay any stamp duty. After 25th March 2012, all properties between £125,000 and £250,000 will incur a stamp duty levy of 1% of the purchase price, reports a spokesman from The Robinson Jackson Group

Stamp Duty Exemption Set to Continue

Stamp duty holiday?- £250,000 buys you a lot of property!

Estate agent Robinson Jackson says the deadline is particularly important to buyers in South East London, North Kent and the Medway as there are plenty of starter homes in this catchment: “We’re incredibly lucky that almost 900 of the properties we have for sale at the moment are priced at less than £250,000. In many instances, a budget of just £100,000 to £150,000 can buy you a good sized flat or small house. Not many London and Home Counties estate agents can say that so we’re telling first-time buyers to pick up the phone to us now as we want to help them make the most of their budget,” says Peter Jackson, co-founder of the estate agents that has 30 branches and departments in London and Kent.

Thinking of selling? Act now

And it’s not just first-time buyers who should sit up and take notice of the 25th March deadline. Sellers should also appreciate that now is the time to sell a property that would make a good starter home. Peter goes on to say: “If your home is worth £250,000 or less, now it the time to think about selling. We’re anticipating an influx of buyers looking to squeeze in a purchase before the stamp duty holiday ends but they’re going to be disappointed unless there’s more starter homeson our books. We have a ready-made audience out there looking to complete by March 2012.”

Time is of the essence

Peter Jackson says that the stamp duty holiday could bypass first-time buyers: “We are urging those wishing to take the first step onto the property ladder to start their search now. People have to factor in the time it takes to find, view and complete on a property. Once an offer has been made it’s not usual for completion to take two or three months, especially if there is an associated chain. Now is the ideal time to start looking and making serious offers.”

The stamp duty holiday was introduced to stimulate the property market but it’s not until now that mortgage lending conditions are starting to improve. Peter says that with the right guarantees and flexible approach, first-time buyers can secure a mortgage of up to 95%: “Property prices are stable, we’re still in the stamp duty holiday period and there are some better mortgage products coming to market so it’s a good time to pay us a visit and find out what’s within your budget. However, first-time buyers who fail to make offers in the next two months might find they miss the boat and will end up paying a 1% stamp duty fee. So please act now!”

Peter concludes by saying: “There’s a small window of real opportunity here for first-time buyers and sellers of starter homes worth less than £250,000.

Pick up the phone or visit us in branch to find out how we can help you before the deadline is upon us.”

The stamp duty holiday has certainly helped many – do you think it should extend into next year?

Mortgage rates may rise from eurozone crisis

Zanet — Mon, 26 Sep 2011 08:15:58 +0000

It seems that the low mortgage rates may change. After 3 years of low mortgage rates, analysts are reporting they may rise due to the so-called eurozone crisis, which has seen protests and unrest in recent months. Yet the Bank of England is planning another reduction!

Bank of England

The changes may occur with Banks offering incredible packages ahead of the crisis. All this despite the Bank of England base rate remaining at its 0.5 per cent record low and considering a reduction to another cut to base rate. The Bank of England is already known to be considering dropping rates to a new record low of 0.25 per cent following the publication of the minutes from its September meeting this week.

This month will see a series of meetings and important data releases which will go a long way to deciding the future of Europe’s troubled currency union and will no doubt impact the UK banks.

It’s presumed that the European discussions could push Britain’s rock-bottom mortgage rates upwards, borrowers are being warned. Private bank Barclays Wealth today became the first lender to make a major move, pushing its best tracker rates up by as much as 1.5 percentage points for new borrowers.

Mortgage for 10 year fixed

Zanet — Mon, 12 Sep 2011 13:21:27 +0000

Is it a good idea to fix your mortgage for 10 years?

The question is currently being asked, as home owners are now being offered this opportunity. I’ve not been aware until now that you could fix your mortgage payments for 10 years, but currently six lenders are offering such. Normally a 5 year fixed is as long as you can commit too, but banks and building societies are now looking to provide home owners more peace of mind with extremely long term commitments.

It said that the offers are in response to home owners asking for long term fixed, and thereby is a response to UK demand. A spokesman from Chelsea Building Society said ”

“This deal won’t be for everyone. Although it is portable, it’s best for those who are sure they want to stay in their home for 10 years, and some may be wary about locking in for a decade,” said Ray Boulger, senior technical manager at mortgage broker John Charcol, “But it will be popular. It’s easily the cheapest 10-year fix on the market, and despite the relatively high fee, for anyone happy to lock in, it offers very good value.”

Current 10 year mortgage deals

The Skipton building society has recently launched a 10 year fixed rate deal at a rate of 5.85% for up to 85% loan to value (LTV) with no fee.
The Yorkshire building society deal is fixed at 5.99% on a 75% loan to value (LTV)
The Britannia deal is fixed at 5.29% on a 75% (LTV)
The Chelsea building society has the lowest rate at 3.99% with a fee of £1,495 but is only available to those with at least a deposit of 30%.
The Co-operative deal is offered at a fixed rate of 5.69% also on a 75% (LTV)
The Leeds building society offer a 10 year deal on a fixed rate of 5.99% but on an 80% loan to value (LTV)

The fors on a 10 year mortgage

You can know what your payments are for the coming 10 years!
The rates aren’t too outrageous when you consider mortgage rates have been as high as 13 per cent in the past
Offers good value for home owners who are looking to change mortgage deals

The againsts – on a 10 year mortgage

You are paying more than the current variable for the priveldge of being fixed
Very long commitment
You may be in a deal where you can’t over pay the mortgage
Requires a loan to value (LTV)
May have a large exit fee
No benefit from Bank of England reductions

Conclusion:

To commit a mortgage deal for 10 years, may be the perfect deal for you under these difficult times, with the chance to budget for a longer period knowing the monthly amount. These deals do mean that with payments fixed till the end of the deal they will not be affected by interest rates going up or down. Personally a 5 year commitment still seems a balanced view, but if 10 years proves popular, then it may well become the choice of home owners in the coming years ahead.

Home Ownership down – Cost of Buying Up

Zanet — Tue, 30 Aug 2011 13:45:12 +0000

The big news after the Bank Holiday weekend is based on the recent report from the National Housing Federation regarding Home Ownership going down, while the cost of renting and Buying continues to spiral out of control.

They predict the number of home owners will drop to just 64% as house prices soar, compared to 73% in 2001.

David Orr, Chief Executive, National Housing Federation told reporters, “Home ownership is increasingly becoming the preserve of the wealthy”.

Home Ownership down - Cost of Buying and rental going Up

Due mto rising costs of renting and buying added to the huge deposits and a tightening of lending criteria are causing the property market to head back to the eighties. In addition to the confidence being low, there is also a shortage of properties as lees than predicted number are being built.

Rental market

The report also predicts prices in the rental market will increase sharply as people struggle to own their own home.
The group, which represents housing associations in England, says a shortage of homes in the UK is also to blame.

House Prices set to rise

Across the UK, home ownership is expected is presently 67% of the UK population are owner-occupiers.

Oxford Economics which produced the forecasts for NHF, predicts the average house price in England will rise by over a fifth in the next five years from £214,647 in 2011 to £260,304 in 2016.

Santander Customer Service

Zanet — Sun, 10 Jul 2011 08:21:37 +0000

Does Santander deserve a second chance? Simon Read from the Independent believes so, as his article this week reasons the Spanish-owned company has good reasons why it’s failed and will turn things around in the coming months. A response too late for many customers who have overwhelmingly rated the Spanish giant bottom in a customer service poll on Martin Lewis’ money saving site.

Santander announced this week it was moving from Bangalore to Glasgow creating 500 jobs. Is this a response to the negative press Santander has received, being voted the 3rd worst customer service last year? Some say this move is to avoid rising costs in India as the average wage there is experiencing a 12 per cent rise.

Santander Customer Service - Not Great

Personally, I bank with Santander, actually Abbey, or go back further Abbey National. I have found though, the last few years have been appalling. Just getting my account on-line took the customer service and local branch several months due to the age of my business account and lack of knowledge in the branch. Then the queues always seem longer than any other branch in my local high street, overall if they put a slice of the marketing budget towards service, things would improve.

In the past, I hadn’t take out an Abbey / Santander mortgage, even though it was most appealing . I admire the clever marketing from Santander, especially as a huge F1 fan, but I also understand a mortgage should be judged ons what payments come out my pocket over the term, not how big the cash-back is for taking a mortgage with them. No doubt about it you cant ignore the marketing power and influence Santander has on the high street.

Simon Read brings out all high street lenders need to improve there customer service due to the amount of negativity since the credit crunch. A main part of the reason is the problems arising from merging Abbey, Alliance & Leicester and Bradford & Bingley. So it was good to hear new UK boss Ana Botin say this week that “Improving the service we offer is my top priority.”

Will Santander get customer service right? It will need to, if it wants to survive on the high street. Peoples perception is changing, television programmes like Mary Portas Secret Shopper, her web site claims, “I have been challenged by the Prime Minister and Deputy Prime Minister to undertake an independent review on the Future of the High Street – to help ‘bring back the bustle’ to our town centres”. Customer service is always top on her agenda and it is becoming large on banks too, if they want customers support in the coming months.

Fixed Rate Mortgage Up

Zanet — Tue, 19 Apr 2011 10:21:15 +0000

After a period of falling mortgage approvals, mortgage applications are now on the rise.

Over 80% of borrowers chose to apply for fixed rate mortgage.

The Mortgage Advice Bureau revealed in a recent report that the number of mortgage applications was up by 11.6% in February2011 and 20% in March 2011 compared the previous year.

Fixed Rate Mortgages Are Up

Though its worth noting this is only applications and doesn’t always translate into approvals.

The most interesting statistic to come out of the report is the amount of fixed rate mortgages applied for. Customers are fully aware of the current financial climate and are prepared to fix at a considerably higher rate to provide a long term consistent package.

Other details reveal the average loan size increased by 3.3% from February 2011. The loan-to-value ratio decreased from 71.4% in February to 69.9% in March.

There is a little competition building between lenders that is helping to ease the cautious concerns we’ve seen in previous years.

Royal Bank of Santander

Zanet — Thu, 30 Dec 2010 12:15:50 +0000

Royal Bank of Santander – Santander look set to buy Royal Bank of Scotland

It seems Santander the Spanish bank that bought Abbey National are about to purchase 318 branches from Royal Bank of Scotland. Thus our cheeky headline “Royal Bank of Santander”
Santander put a £2bn offer in April and is set to acquire 318 high street branches from the Royal Bank of Scotland as the only bidder left in a sale process that ends this Tuesday.

Santander’s controls 14% of the country’s mortgage market and 10% of retail savings and overall branches. Santander has survived the global financial meltdown after it sold parts of its property portfolio just as the market started to crack in 2007.

The Royal Bank of Scotland is trying to shore up its books as the government prepares a scaled exit from its ownership. The bank recently made its debut in the covered bond market, where banks issue bonds backed up by their loan portfolio. The bank raised €1.25bn, after attracting €1.9bn of orders from investors.

Royal Bank of Santander part of the Santander growth

Santander have already acquired Abbey National, Bradford & Bingley and Alliance & Leicester.It certainly looks set to become a large bank with a large appetite for UK success as it posted annual profits of £1.5bn in 2009, up 30% from 2008.

According to the Chairman of Santander “We expect a double-digit growth in Britain this year, pushed by a recovering economy through opportunities that may arise”

Do you think Santander is gaining to much strength in the UK? Are you a customers of Royal Bank of Scotland and had your accounts moved to Santander as part of the deal? Do you think it’s a fair deal?

Update: This completion date is now thought to be more likely in the early part of 2012 as both banks work through the complicated process of transferring customers between the two operations. Santander is experienced in this area, having taken over Alliance & Leicester and Bradford & Bingley in addition to the Abbey National acquisition that announced the arrival of the Spanish bank on the UK high street.