‘Mortgages’ News
House prices ‘to fall 30%’
Posted 2008-04-3
The average value of a home in the UK looks set for fall by 30 per cent as a consequence of the credit crunch, the International Monetary Fund (IMF) has warned.An earlier report from the global financial body issued late last year warned of a similar outcome but was largely brushed aside by pundits who insisted the housing supply shortage would prop up demand.With Capital Economics now describing a comparable 25 per cent downward house price correction as "entirely plausible," however, many pundits are beginning to question earlier, more-optimistic forecasts.Further adding to the gloom is a recent report from the Bank of England which found that the mortgage market is experiencing an equally ominous downturn, with approvals down and lending criteria tightening."The credit crunch has really got a grip on the mainstream mortgage market and there is nothing you can look to that shows the situation is going to improve in the near future," David Hollingworth, a mortgage broker at London & Country, told ThisIsLondon.co.uk.Availability of mortgage products has fallen by 70 per cent since last summer and by 13 per cent since last Monday alone....
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60,000 homeowners face repossession
Posted 2008-04-3
A worrying new government report shows that up to 60,000 families are at risk of having their home repossessed this year, the Liberal Democrats have claimed.The party based its assessment on newly-released Department for Communities and Local Government (DCLG) figures, which paint a worrying picture of household incomes.Following analysis of the data, the Lib Dems established that there are presently 60,000 families who spend 75 per cent or more of their disposable incomes on mortgage payments alone.Liberal Democrat shadow CLG secretary, Julia Goldsworthy, explained that the sums meant tens of thousands of families were now at the mercy of fluctuations in interest rates and inflation."There are 60,000 families teetering on the edge of losing their homes, weighed down by massive debts," she warned. "As living costs rise and the credit crunch starts to bite, families are forced to cut back on essentials in order to keep a roof over their heads."According to the DCLG figures there were 27,100 repossessions last year - 0.23 per cent of the total 11,822,000 outstanding mortgages. ...
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Mortgage lenders ‘too keen to repossess’
Posted 2008-04-2
Mortgage lenders do not go "anywhere near far enough" to help customers avoid having their homes repossessed, it has been claimed.The Repossessions Advice Centre said that many customers are losing their homes due to issues that could be resolved with appropriate guidance from a professional mortgage provider.He cited reports of some homeowners having their property repossessed in cases where temporarily switching to an interest-only mortgage would have allowed them to retain their property.David Warnes, director of the Repossessions Advice Centre, said there appears to be a marked lack of concern within the industry about helping people weather the current economic downturn."They try and send someone out to re-budget but all that person does is say: If you cut down on your drinking, cut down on your smoking, then you can afford your mortgage. - they dont really go far enough."The Financial Services Authority recently issued a clarification of the rules governing home repossessions, noting that lenders are contractually obliged to pursue all reasonable avenues to avoid foreclosures....
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Mortgage market ‘tightening’
Posted 2008-04-1
The availability of mortgages has been dramatically curtailed in recent months and this reality will be reflected in the prices of the financial products, it has been suggested.MoneySupermarket.com said the situation facing the market could be summed up neatly in terms of simple economics: "less choice, more expensive prices".Louise Cuming, head of mortgage services at the financial website, cited recent research by MoneyFacts.co.uk which pointed to a 60 per cent year-on-year reduction in the number of mortgage deals on the market.That report also noted that of the 250 mortgages in the market today, just 68 are offered by the top ten mortgage lenders - another indication of tightened lending criteria among high street names."Its happened because all lenders are taking a much more pessimistic approach to their attitude to risk," Ms Cuming explained. "Theyre stepping away from the deals that they would consider riskier."She added: "Weve also seen - at the same time as the lack of availability of products - the products that are available are being priced at a premium rate, so costs are going up."...
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FTBs will benefit ‘hugely’ from mortgage crisis
Posted 2008-03-30
Ongoing difficulties in the mortgage market spell good news for first-time buyers (FTBs) who are looking to get on the property ladder, it has been claimed. Firstrung acknowledged that prospective homeowners would be the first to feel the pinch of a 60 per cent reduction in mortgage availability, but the firm insisted they also stood to gain the most. ...
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Mortgage brokers spy worsening market
Posted 2008-03-30
The vast majority of mortgage brokers expect the residential mortgage market to continue to deteriorate this year, new research has suggested. Some 85 per cent of brokers polled by independent risk consulting company Protiviti said that that credit crunch would spell bad news for the market and predicted increasing numbers of people being priced out. ...
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Building societies ‘primed’ for mortgage lending
Posted 2008-03-26
The UKs building societies are in an ideal position to maintain current mortgage lending patterns in spite of the credit crunch, it has been claimed. Banks and other financial institutions largely rely on global money markets and inter-bank lending to securitise their loans - both of which are still struggling with severe funding bottlenecks following the US sub-prime crash. ...
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Interest-only mortgages ‘make sense’
Posted 2008-03-25
Interest-only mortgage remains a viable option for getting a foot on the housing ladder and do not deserve to be vilified, a senior figure in the Council of Mortgage Lenders (CML) has claimed. Bernard Clarke, communications manager for the CML, said that interest-only mortgages are a "perfectly rational approach" to the housing market for many prospective homeowners. ...
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Mortgage lending declines in February
Posted 2008-03-24
Gross lending figures for home purchases fell by six per cent from £25.6 billion in January to £24 billion last month, new figures have revealed. Subdued levels of home purchase applications are believed to be responsible for the downtick, with re-mortgage approvals remaining strong and confounding expectations of a wider crash. ...
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Mortgage costs continue to rise
Posted 2008-03-19
The cost of borrowing for a home purchase has continued to rise in spite of recent interest rate cuts, John Charcol has claimed. Though the Bank of Englands benchmark rate of borrowing has fallen by 50 base points in the last four months, the mortgage broker said UK money markets continue to suffer. ...