Biggest monthly outgoing is being ignored!

We're fast becoming a cost-cutting nation with 92% of homeowners currently trying to reduce their monthly outgoings.

New research from Barclays / Woolwich shows that there are savings to be made on one of our biggest monthly outgoings - the mortgage.

People are failing to realise how much they can actually save by swapping their mortgage. A staggering 58% of homeowners say they have never remortgaged outside of moving home, but the majority (74%) said that if they could save £50 a month they would consider doing so.

Are you one of nearly half (44%) of those surveyed who are now spending more time on cost cutting than over the previous 12 months? If so, why not give us a call and see if you could make savings on your biggest monthly outgoing?

Book best fixed rates now!

Reported in Saturday's "Financial Times":
"Homeowners concerned about rising costs should consider reserving a competitive mortgage deal now - even if they're not moving or refinancing until 2012 - as some lenders will let borrowers reserve a rate six months in advance. More lenders increased their mortgage rates this week, as the eurozone debt crisis continued to drive up the cost of wholesale funding. Nationwide Building Society, Woolwich and ING Direct all raised rates, with Woolwich increasing some by as much as 50 basis points. But mortgage brokers are concerned that some homeowners still believe mortgage rates will remain low - or fall - because the Bank of England base rate remains at 0.5 per cent".

This report reflects the almost daily emails we received from lenders across the board detailing increases in some fixed rates. So if you want to review your position, give us a call on 020 8652 9944.

"The Critical Cost of Uninsurance" (a BBC Report)

A very interesting article from the BBC's Business reporter published at the end of last week:

http://www.bbc.co.uk/news/business-15700529

If you want to review your options and potential costs, then give us a call on

020 8652 9944

Another lender back in for 90% Loan to Value

Following the move by Woolwich / Barclays at the end of October, Nationwide has announced that it will now again lend up to 90% Loan to Value (LTV) for house purchase and first time buyers.

The maximum for re-mortgages remains at 85% LTV.

Rates are competively priced (3 and 5 year fixes) and it is more good news that competition continues to increase in this key part of the market.

First time buyers can continue to take advantage of the £500 product fee discount, to help with the upfront costs of moving into a home.

Please note that the maximum LTV for new build houses will remain at 85%, and new build flats at 75%.

Good News for the Self Employed

In a revision of policy guidelines announced today a major lender (that can potentially provide up to 90% mortgages), has informed us that:

"We will now accept applications for self-employed customers who have been trading for two years (this was previously three years). Our income verification requirements remain unchanged; customers must be able to evidence two full years of trading figures in the form of accounts, an accountant’s certificate or HM Revenue & Customs SA302 forms".

Barclays / Woolwich recommences 90% mortgages

We are pleased to announce that Barclays / Woolwich are again able to offer mortgages for both residential purchase and remortgage applications up to 90%. This now means that even more customers will be eligible to take out a mortgage with a 10% deposit or 10% equity in their property.

We are told that:
The maximum loan size will be £500,000.
The maximum LTV continues to be 85% for new build properties, shared ownership and shared equity schemes and right to buy.
For re-mortgages above 80% there must be no element of capital raising as per current policy.
For purchases, the products will be available to both home movers and first time buyers.

This has to be good news in that it adds to competition at this end of the market. Barclays / Woolwich currently has a policy that ensures no dual pricing; so the same deals are available via brokers or in branch, as indeed are their "loyalty" deals for existing Barclays current account holders.

Useful Guides for First Time Buyers and Re-mortgagors

Nationwide Building Society in recognising that over 50% of it's new customers have sought independent advice has  just published two guides.

They provide a lot of background information that we hope you might find useful.

http://www.nationwide-intermediary.co.uk/content/literatureanddownloads/buyer-guides.aspx?dm_i=5KB,JWRC,W6ZG8,1M9GN,1

If you want to download a copy or any pages, they are available in PDF format.

1.99% Fixed until 31st December 2013!

Yes, this is the lowest 2 year fixed rate I can remember and is subject to a Booking Fee of only £199. Available up to 70% Loan to Value with 10% overpayments.

Rate launches today, so if you don't want to miss out, then give us a call NOW on 020 8652 9944!

Euro crises starts to hit UK mortgage rates!

According to yesterday's "Sunday Times": "Borrowers have been urged to snap up mortgage deals at record lows amid signs that the ongoing turmoil in the eurozone is starting to push up rates.

Private banks, which often lead the high street banks by several weeks, have started to increase rates for the first time in more than two years. Money market rates, which are used by lenders to fund deals, have also been creeping up despite last week's co-ordinated effort by central banks to ease pressure in the lending markets. The three-month inter-bank rate, or Libor, which is used to fund variable-rate deals, rose to its highest level since July 2009, while five-year swap rates, used to fund fixed-rate deals, rose from 1.61% to 1.71% last week after being on a downward trend since February".

So if you want to review your options, we stand ready to assist.

Mortgage Fees "rise 17% over the last 12 months"

The average mortgage arrangement fee has increased by 17% over the last 12 months, research by "Moneyfacts Group" has revealed.

It means that the average fee has increased by £151 over the last 12 months from £879 to £1,030. There are many fees that far outstrip the average; however, with the highest fee on the market is being £3,800, which is being charged by Accord Mortgages through selected intermediaries. The lender with the dubious honour of charging the highest percentage arrangement fee is Precise Mortgages at 2.00%. There are some mortgages that don't charge an arrangement fee but they are very much at a premium, with only 12% offering this luxury.

"Lenders appear to be offsetting the low mortgage rates on offer by increasing the arrangement fees," commented Michelle Slade, spokesperson for Moneyfacts Group. "The average arrangement fee has increased by 17% as lenders battle it out to offer the lowest headline rate. Percentage fees have become increasingly common, with one lender charging as much as 2%. Unfortunately too many borrowers still focus their initial attention on getting the best rate, without taking full consideration of the true cost of the deal. In many cases a low rate with a high fee can work out more expensive than opting for a slightly higher rate, but with a lower fee".

This is exactly where our mortgage sourcing here at MDS Sutton comes into it's own. We research the "best" deal for you based on what you are looking for and then the total cost of the deal over the period in question.

Mortgage Choices "improve for First Time Buyers"

Reported in Saturday's "Financial Times":

"The mortgage market for first-time buyers is slowly improving as more lenders launch innovative products and house prices become more affordable. But the criteria for granting loans are still tough, mortgage brokers have warned.

According to the Council of Mortgage Lenders, the number of first-time buyers taking out mortgages hit a ten-month high in June - up 24 per cent from May, to a total of 18,100 loans. Last week, Halifax also reported that the number of towns in which first-time buyers can afford property is at its highest since 2003. Research from the mortgage lender found the average house price in June was affordable for someone on average earnings in 48 per cent of all local authority districts, compared with 40 per cent in 2010, and just 6 per cent in 2007".

Fixed Rates Continue to Fall to Record Lows

According to "Moneyfacts" today: " Lenders continue to cut fixed mortgage rates in an attempt to get borrowers to switch away from their variable rate deals.

Their latest research has revealed the average five-year fixed mortgage rate has fallen below 5% for the first time since records began in 1988. While the average five-year fixed mortgage rate has stood as high as 6.24% (in September 2009) in the 29 months since bank base rate has been at 0.50%, rates have decreased to 4.99%. At the same time, the average two-year fixed mortgage rate has fallen from 5.18% in September 2009 to 4.24%, while the average three-year fixed rate has fallen from 5.61% to 4.74%.

With the cost of funding fixed rate mortgages through the swap rate market having fallen to an all time low, Michelle Slade, spokesperson for Moneyfacts, said this is being passed on to borrowers through some of the lowest mortgage rates ever seen. "Lenders are trying to tempt borrowers off variable rate deals and onto fixed rate deals as they are concerned about some borrowers' ability to repay their mortgages when rates finally start to rise," added Ms Slade. "A proportion of borrowers on variable rate deals will have absorbed the savings they have made from lower repayments into other monthly expenditure, meaning affordability will become a problem when rates go up."

Rate increase from Nat West / RBS

It's been a while since we have seen any increases.... but news this afternoon:

You may have read about world wide influences on "SWAP" rates as markets might be moving deposits from the Euro and US Dollar and sterling keeps it's AAA rating?

However, at MDS in Sutton; we have heard this afternoon that the bank owned 83% by UK tax payers (RBS) is increasing it's 2 year fixed rate for purchases and re-mortgages (with a 25% deposit), tomorrow from 3.19% to 3.39%.

Maybe a sign of things to come?

Let's face it, every day we read something different about what might be happening today and what it may mean for the future!

Why not review your situation NOW and see if your finances could be future proofed?

"Lowest ever 5 year Fixed Rates"

Reported in today's "Financial Times":

"The lowest ever five-year fixed rate on a UK mortgage will be launched today as banks and building societies continue to slash the cost of fixed-rate home loans in response to the eurozone crisis which is holding down the cost of borrowing in the UK.

Over the past month, mortgage lenders have made significant cuts to fixed-rate loans following a sharp drop in swap rates - the rate at which banks lend to each other and price the cost of fixed mortgages.

Banks are currently able to negotiate five-year swap deals at about 2.2 per cent due to expectations that interest rates will remain depressed over the longer term".

This doesn't mean we can get rates priced at this level, because banks add their margins and these margins increase as the percentage you borrow against the value of the property increases (LTV).

It is not impossible to get a five year fixed rate lower than some lenders currently charge on their Standard Variable Rate!

Even at 85% LTV there is a lot more competition out there than at the beginning of 2011.

So why not see if you can pay for your summer holiday by making savings on your mortgage?

More lenders at 90% and now 95% Loan to Value

In a further indication of their willingness to lend, two more lenders have made themselves available for first time buyers with a 10% deposit over the last week.

Even better news, is that one lender has moved back into the 95% LTV bracket, so just a 5% deposit required!

We can help you see if you are eligible and for the right people this has to be good news!

Why not call to arrange a free no obligation chat to see if these options are open to you?

Mortgage Availablity at 30 month high!

Figures from Moneyfacts Group have revealed that the number of mortgage deals is increasing, and is currently at a more than two and a half year high.

 

There have been rises across the loan-to-value tiers, with the exception of 100% loan-to-value mortgages, which lenders appear loath to offer again. But buyers with a 10% deposit have seen their options increase considerably; there are currently 261 products at 90% loan-to-value, up from 176 at the same point last year.

 

The tier with the highest number of mortgage products at present is 75% loan-to-value, which is comprised of just over 800 residential home loan deals.

 

As a result of increasing numbers of mortgage products, rates have fallen. Figures from Moneyfacts Group last week showed that mortgage rates have fallen to their lowest point in 23 years. The average two year fixed rate product is at 4.32%, the three year at 4.92% and the five year fixed rate at 5.29%. In addition, the average two year tracker rate has fallen to 3.37%.

 

"Lenders appear to be applying the recent cuts equally across all loan-to-value tiers, which is good news for first-time buyers," commented Michelle Slade, spokesperson for Moneyfacts Group. "Previously, cuts were only being applied to lower loan-to-value bands," she added.

Why use a broker? Guide from "Your Mortgage" magazine

You may find the linke below useful, in answering some background questions.

http://viewer.zmags.com/publication/843eea7d#/843eea7d/1

"Moneyfacts" Survey shows mortgage rates lowest since 1988

Average fixed and tracker mortgage rates have fallen to their lowest level since "Moneyfacts" Group started recording rates in 1988, figures show. Lenders have steadily reduced mortgage rates in recent months, with a significant number of competitive tracker and fixed products becoming available as a result.

 

It marks a sea change from earlier in 2011 when an anticipated rise in the Bank of England base rate of interest saw mortgage rates begin to rise. However, recent economic data has suggested that any recovery is in its early stages, lessening the prospect of the measure being raised from its all time low of 0.5% this year. In the fixed rate market, the average two year product currently carries a rate of 4.32%, while the average three year fixed rate mortgage is 4.92%. In addition, the average rate of a five year fixed rate mortgage is 5.29%. Tracker mortgages have also seen a fall in rates, with the average two year product declining to 3.37%.

 

Figures show that cuts are being equally applied across all loan-to-value tiers, but Michele Slade, spokesperson for "Moneyfacts Group", says that trend could be short-lived. "While rates may still fall slightly further, it is likely that some lenders will instead opt to make existing competitive deals available to borrowers with smaller deposits," she commented. "If borrowers delay too long to secure a new mortgage deal, they could find that they miss out on some of the lowest rates ever seen."

5 Year Fixed Rates up from next week

At a time when we at MDS hear daily about reduced rates as lenders have what they are all calling a "Summer Sale", Northern Rock has just announced the following:

"On Monday 13 June we will increase our 70% LTV Everyday 5 Year Fixed rates, currently available at 4.25% with a £995 product fee (for purchase and remortgage customers)".

To be fair, Northern Rock has a range of deals available at present, most of which are amongst the best available. Maybe, this announcement is indicative of increased demand or future trends?

If you want to review your options, or don't want to miss out, then call now!

A further tightening of Interest Only policy from Lloyds / Halifax

The following communication was received by email yesterday:

"We would like to update you on a planned change affecting the way in which Halifax Intermediaries processes Interest Only mainstream mortgage applications.

With effect from Tuesday 31 May, all new Interest Only (including part and part) mortgage applications will require evidence of the repayment plan that the customer wishes to use in order to proceed to offer stage. Only if the evidence meets our criteria and covers the full amount requested on an Interest Only basis can a mortgage offer be produced.

Please note that existing customers are also now required to provide a copy of evidence of a suitable repayment plan if they want to convert all or part of their mortgage from Repayment to Interest Only. Once received, this evidence will be checked against our list of acceptable repayment vehicles and the mortgage account will then be transferred to Interest Only.

As a responsible lender, we believe that it is necessary to ensure our borrowers have an appropriate repayment strategy in place to pay off the mortgage balance at the end of their term".

To fix or not? Bank of England's Chief Economist interviewed

Families should plan for interest rates to rise gradually over the next two years, the Bank of England's chief economist signalled in an interview with the Financial Times.

Spencer Dale also made it clear that he personally foresaw a difficult outlook for the economy, saying he favoured an immediate interest rate rise even though the recovery is fragile. Mr Dale is a member of the Bank's monetary policy committee, which sets interest rates. "I'm not particularly happy about voting to raise interest rates and doing it for nasty reasons," he said, referring to his concerns that higher interest rates were needed to rein in inflation rather than growth, which remains weak. "I don't take lightly the impact this could have on some families," he added. "But I think the cost to our economy as a whole - were inflation to persist for longer and our credibility start to be eroded - would be even worse. "

His comments marked the first time that the Bank has provided guidance to households on interest rates, helping them decide whether to sign fixed interest rate mortgages or gamble on the Bank's monthly rate-setting meetings.

Source : Financial Times page 1 - 21.5.11.

Expected increases in interest rates to be delayed?

The Council of Mortgage Lenders (CML) has said that any base rate rise could be pushed back to late summer or into 2012.

The measure was frozen last week against a backdrop of weaker than expected economic data, suggesting a weak economic recovery. The body said that although inflationary pressures persist, it thinks that the Bank of England's Monetary Policy Committee will be swayed by the poor state of household finances and its impact on consumer spending.

"August now looks the earliest possible date for a rate rise, but weaker short-term prospects for economic growth suggest that the committee may hold off from any tightening for the rest of this year," predicted the CML.

Lenders start to compete with lower rates

Recent weeks and this week in particular has seen a rush of activity as lenders compete with one other offering lower fixed and tracker rates. Some are reducing fees and offering other incentives. This is very good news for the consumer (and our customers), as increased proper competition means that lenders are starting to reduce the vastly increased margins and fees they have charged since 2008.

One lender tells us that: "As you can see we have reduced the rates on our fixed and tracker rates across the board, with our new credit system now in place we are looking to massively increase business levels in May. Also we now offer an amazingly competitive 90% 2 year fixed deal (purchase products launched - with 2 Year Fixed rates starting from 5.65% with no additional product fee)".

This is a good time to be considering a purchase or reviewing your existing arrangements. So unless you are currently paying 2.5% or lower on your variable rate, it is highly likely that you could save money now! Indeed, you can be sure that if we suggest you move your mortgage, we will be certain it is the best thing for you! So why not give us a call on 020 8652 9944, 7 days a week?

0.75% difference on 5 year fixed rates!

In the same email received this afternoon from our regulatory partners Intrinsic we learn that:

Newcastle Building Society are launching a 5 year fixed rate of 5.74% (80% LTV) and

Nottingham Building Society are launching a 5 year fixed rate of 4.99% (again 80% LTV), but on a "semi exclusive basis" and "the product comes with a free valuation, for both purchases and re-mortgages, and free legals for standard re-mortgages".

This just shows the differences for rates launched today!

I've just agreed a rate of 4.39% fixed for 5 years for a client on a purchase with a higher deposit.

New rates from Friday purchase and re-mortgage

In a week where we have started to see lenders fighting to appear in the "Best Buy" tables, the following rates will come out on 8th April:

4.15% Fixed to 30.06.13 up to 80% LTV, Booking Fee: £199 Arrangement Fee: £800 Valuation up to £670 included Remortgage Transfer Service included

4.85% Fixed to 30.06.14 up to 80% LTV, Booking Fee: £199 Arrangement Fee: £800 Valuation up to £670 included Remortgage Transfer Service included

4.99% Fixed to 30.06.16 up to 80% LTV, Booking Fee: £199 Arrangement Fee: £800 Valuation up to £670 included Remortgage Transfer Service included

Variable rates available at 2.59% (Base plus 2.09%) for 50% LTV, 2.99% (Base plus 2.49%) for 75% both for the life of the mortgage and with no early repayment charges. Booking Fee: £199 Arrangement Fee: £800 Valuation up to £670 included Remortgage Transfer Service included.

If offset is your thing because you are a high rate tax payer, self employed or have large savings then 3.49% (Base plus 2.99%) for 75% LTV for the life of the mortgage and with no early repayment charges. Booking Fee: £199 Arrangement Fee: £800 Valuation up to £670 included Remortgage Transfer Service included.

All these deals are available for re-mortgage too, so why not get in touch and let us review your current arrangements? No Fees are payable unless we can find a mortgage deal that leaves you better off than you would be otherwise and the lender is prepared to offer you the mortgage!

Nationwide BS latest to tighten interest only policy

Following the news from Lloyds / Halifax last week, Nationwide has announced this morning that:

"With effect from tomorrow, we will be amending our criteria for all new lending as follows:

• Interest Only and Part Repayment applications will be limited to a maximum LTV of 75%
• Applications which exceed 75% LTV will only be considered on a Repayment basis".

Never mind the Meerkats; just insure your "Essentials"?

Are you paying for more than you need, or blinded by all the small print?

"Essentials" is designed for First Time Buyers, First Time Insurers and Tenants.

Cover includes:    Up to three bedrooms
                           Buildings insured up to £250000
                           Contents insured up to £25000
                           Loss / theft key cover to £250
                           Pedal cycles to £500 (£250 per cycle)
                           Credit card cover to £150
                           Digital information cover to £150
                           Special events (weddings and Christmas) up to 10% of Contents sum assured.

Nationwide BS House Prices Index Quarter 1 2011

Some interesting figures published this morning:

Nationally, house prices increased by 0.5% in March
On the three month on three month measure, prices rose by 0.6%
Prices 0.1% higher than one year ago

These are national averages and will vary vastly from region to region.

To illustrate this as regards average prices for Greater London:

House prices increased by 1.31% over the last 3 months.
House prices increased by 2.09% over the last 12 months.
and are 2.02% higher than in the first quarter of 2007.

Changes affecting interest only mortgage applications

Lloyds Banking Group has just made the following announcement:

"Further to the Group's strategic review of interest only lending, we would like to update you on a change affecting Halifax mortgage business.

With effect from Wednesday 6th April, the maximum loan to value for all new mortgages where all or some of the lending is on an interest only basis will be 75%. This will also be applicable to any existing customers that wish to port their mortgage.

This change will ensure that the interest only lending policy is aligned across all mortgage brands within Lloyds Banking Group"

This follows on from a policy change in October 2010 whereby only the following are acceptable sources of repayment and lists what documentation is required:

Endowments 

Copy of the latest projection statement dated within the last 12 months 

Stocks & Shares ISA

Copy of the latest investment statement dated within the last 12 months  

                                   

Unit Trusts/Open Ended Investment Companies (OEICs)

Copy of the latest investment statement dated within the last 12 months

Pensions

Copy of the latest projection statement dated within the last 12 months        

                                             

Investment Bonds                                     
Copy of the latest investment statement dated in the last 12 months

UK Stocks & Shares 

Copy of the share valuation on date of assessment        

                               

Savings (UK Sterling)

Copy of passbook/statement of balance
within the last 12 months                                                      

Sale of Second Home (UK)  
Property details, amount of any mortgage debt and mortgage provider. (Property valuation and land registry search carried out by us if needed e.g. if the property is unencumbered).

Halifax is alone at the moment in having different interest rates for interest only mortgages.

Remortgaging on the increase due to worries about rate rises

The number of people remortgaging rose to a 26-month high during February as homeowners braced themselves for higher interest rates, figures revealed today.

Around 35,725 loans were approved for people switching to a new deal during the month, the highest level since December 2008, according to the Bank of England.

The increase is likely to have been driven by expectations that the Bank of England will increase the base rate from its current record low of 0.5% sooner than previously thought due to high inflation. The speculation has prompted people who had been sitting on their lenders' standard variable rate to remortgage before rates start to rise.

Our computer programs allow us to quickly assess the costs of remortgaging when compared to your existing lender's standard variable rate or whatever deal they may be offering you.

It is still true to say that sometimes the best deals are "for new customers only", so give us a call and we'll help you make the right choice for you and not the bank!

Some advice for those thinking about The Mortgage Minefield

The first hurdle to overcome is the lender's credit score. This can be tightened and loosened at will as a lender decides exactly when to increase or decrease their lending levels.

A good three-year address history is a must and it helps dramatically to be registered on the voters roll at your current address.

The amount you can borrow is no longer simply linked to a multiple of your income, but on an affordability basis linked to the credit score. Monthly outgoings are taken into account, so a small credit card you could pay off, but choose just to pay the minimum, will affect your borrowing.

The number of dependents you have also has a bearing, as will any outgoings many take for granted such as childcare. This means that although they may be on the same incomes, a couple with no children or credit card debts may be able to borrow substantially more than a couple with two children and outstanding credit card balances.

In terms of documentation, lenders will want to see your last three months' payslips and last P60 as well as potentially your last three months' bank statements.  These must be sequential with no single statement missing. Be warned that many lenders do not like internet bank statements, even though they encourage their own customers to switch to online statements.

If purchasing, proof of the deposit monies will also be required. If this is a lump sum that has suddenly appeared in your account then they will want to know the origins of this.

For those who are self-employed or have more erratic income, lenders are generally asking for much more documentation. Apart from the last two years' accounts and possibly the last 12 months' bank statements, lenders have also been asking for form SA302, which shows the tax calculation made by the Revenue. This is something that many do not necessarily receive as a matter of course and it will need to be specially requested, slowing down an application.

The frustrating part is that there seems to be no uniformity to what lenders will ask for and when! Decent independent mortgage brokers will know which lenders are moving quicker than others and what they are likely to ask for at any given  time.

Fiixed rates at their highest for six months

The cost of fixed rate mortgages has hit a six month high as a result of lenders passing on the rising cost of funding to borrowers, the latest research from Moneyfacts has revealed.

 

Average two and five year fixed rates have increased to their highest level since August last year, at 4.49% and 5.45% respectively, while three year rates are at their highest since last September at 5.05%. However, the increases have come at the same time that the cost to lenders of raising funding on the swap rate market has soared. Having stood at 1.35% at the end of November, the two-year swap rate has increased by 47% in the subsequent months to currently stand at 1.98%.

 

Michelle Slade, spokesperson for Moneyfacts, said that with no signs of swap rates starting to fall, the likelihood is that mortgage rates will rise further. "The majority of lenders have increased rates since the start of the year, with some mortgage deals seeing rate rises of more than 0.50%," added Ms Slade. "Borrowers who have delayed the decision to commit to a new deal will now find themselves having to pay higher monthly payments."

 

According to Moneyfacts, a 0.50% increase in the rate of a £150,000 mortgage adds £42 per month to a borrower's repayments.

Houseprices up this year?

Homeowners were treated to a surprise rise in house prices last month as values bounced back after steep falls in some parts of the country. Mortgage giant Halifax said the average cost of a home in Britain rose to £164,173 in January, a climb of 0.8 per cent. Property experts say a shortage of good homes coming up for sale, low interest rates and higher rents could boost property prices by five per cent this year. Halifax said the rise came after steep falls amid December’s snow disruption, when prices suffered a 1.3 per cent plunge.

 

You may also have seen an article in last Thursday's "Standard" highlighting how prices in some Boroughs in London are already close to their previous peak. Merton averaged 5% below the peak, Sutton 9% below and Croydon 13% below. Indeed, all of the factors mentioned above are exaserbated in Greater London which is also less reliant on the public sector for employment.

Mortgage Numbers on the Rise

The number of mortgage products available from lenders has more than doubled in the last two years, but other factors continue to block buyers' routes to the housing market.

 

Research conducted by Moneyfacts shows that the number of residential mortgage products fell has increased from an all time low of 1,097 two years ago to 2,447, with borrowers holding a 20% deposit seeing the number of deals increase by threefold over the period. The number of mortgages in the 80% loan-to-value range has jumped from 97 to 390. The tier with the largest number of products is 75% LTV, however - a result of lenders making their best deals available at this tier. Two years ago, the number of residential mortgages available to a buyer with a 25% deposit was 422; today that number is 851.

 

Despite the rise in mortgage numbers, access to them remains restricted for many. Latest figures from the Bank of England show that the number of mortgage approvals has fallen recently, while the cost of fixed rate mortgages continues to rise. "Although lenders' windows may be full of best buy deals, it doesn't mean they want to lend. Borrower affordability remains the key factor in lending decisions and lenders remain strict over which borrowers they will accept," said Michelle Slade, spokesperson for Moneyfacts Group. "Borrowers who have benefited from record low interest rates for the last two years may be in for a shock when it comes to finding a new deal."

What is all this about SWAP rates and do I re-mortgage now?

You can't get away from speculation about interest rates at the moment with almost daily opinion and comment in the newspapers.

Yesterday's news about UK growth rates may now dampen some of the speculation but the thing with so called "experts", is that they change their opinion every time some new and unexpected news arises!

The only choice for the rest of us when deciding to fix or not (or when), and with our TARDIS and crystal balls out of action, is to consider the consequences of "what if" the worst did happen? Maybe, better to be "safe than sorry", if an increase in rates could prove unaffordable and result in the loss of your home? It really depends on an individual family's budget and how much "fat is on the bone" i.e. non essential expenditure that could be culled if rates did increase dramatically and quickly.

Just for the record SWAP rates which are rates that bank's base their fixed rate pricing on have changed as follows:

2 Year Fixed: 1.23% (12m ago) 1.4% (6m ago) 1.76% (last month) 1.77% today (1.81% last week).

5 Year Fixed 2.04% (12m ago) 2.42% (6m ago) 2.88% (last month) 2.91% today (2.94% last week).

You can work out for yourselves what margins banks are charging above these rates and it is very true that actual rates charged no longer closely relate to market SWAP rates.

To chat further and discuss your re-mortgage options, just get in touch.

Some better news for Landlords

Throughout 2010 the number of deals available for buy to let has shown a steady increase, albeit from a very low level.

2011 sees one lender launch two new 5 year fixed rates, which in themselves are very difficult to find at the moment.

The good news continues in that the interest rate and fees are very reasonable in a market place where fees can border on extortion!

The headlines:

Fixed until March 2016 4.99% (60% LTV) or 5.39% (65% LTV).

£250 Booking Fee and No Arrangement Fee!

Free basic Valuation and for re-mortgages they will include Free re-mortgage transfer service.