HBOS Increases Mortgage Rates Despite Brown Appeal
April 16, 2008
Despite calls from Gordon Brown to lenders to follow the Bank of England’s rate cut, HBOS has increased mortgage interest rates on a range of its two year fixed rate deals.
The move by the country’s biggest mortgage lender came only hours after a meeting between UK’s top bankers and the Government.
Industry experts said this interest rate increase proves that mortgage lenders are being unable to handle the demand and demonstrate a lack of belief between banks and the Government.
Popularity: 10%
Fixed Rate Mortgages Decline
April 13, 2008
Tracker rate mortgages have been extremely popular in February, according to the Council of Mortgage Lenders borrowers selecting fixed rate mortgage deals decreased to 52 per cent, in fact the lowest since March 2005. In the other hand tracker rate mortgage acquisitions increased to 35 per cent, from 33 per cent in January. The CML reported that floating rate mortgages are becoming ever more appealing compared with fixed rate mortgages due to the current financial instability.
However the amount of deposit home buyers put down hasn’t changed significantly. In February first time buyers typically borrowed 88 per cent of the property’s value, unchanged from January, and 3.33 times their income, compared with 3.32 in January. Home movers typically borrowed 71 per cent of the property’s value, up from 70 per cent in January, and 2.97 times their income, unchanged from January.
Michael Coogan, the CML director general said:
The trend away from fixed rate mortgages continues as expectations of further Bank base rate reductions, probably starting this week, have increased.
The February figures relate to completions of transactions started several months ago. More recently, there has been consistent evidence of tightening in lending criteria which will lead to shrinking pipelines of new business as the recent Bank of England’s credit condition survey made clear. We expect this process of further tightening in lending criteria to continue in the second quarter as lenders respond to the challenging market conditions.
Individual lenders are having to balance consumer demand with service considerations, as many of those active in the market are seeing higher levels of applications than they can deal with in the wake of the overall tightening in supply of funding to the market.
While lower short-term interest rates help a little, we continue to urge the Bank of England to use more broad-based and flexible measures to increase liquidity levels in the UK market so that firms have sufficient funding available to match consumer borrowing demand in 2008.
Popularity: 11%
Overseas Property: Cyprus
April 12, 2008
Travel experts say that attracts a considerable number of British holidaymakers every year. According to the travel agent Thomas Cook Cyprus is proving to be as popular as ever.
Cyprus is continuing to attract a considerable number of people from the UK each year, Thomas Cook revealed.
The average property prices in Europe have risen around 20% per year. For anyone considering investing in overseas property, Cyprus would be a good option. By investing in buy to let oversea property in Cyprus you’ll almost certainly watch your investment grow.
The relatively low cost of living in Cyprus is without doubt a positive advantage which continues attracting British tourists every year, securing your potential rental income.
Recent statistics pointed to Cyprus as being one of the most inexpensive countries in Europe, fuelling a better quality of life and marking the Mediterranean hot spot as an all year round holiday favourite.
New property developments are being built in northern Cyprus with two bedroom properties the most advisable for the rental market.
Look out for well appointed apartments close to amenities and with pool and parking to maximise short and long term let potential.
Popularity: 19%
CML Says Mortgage Lending Will Half in 2008
April 11, 2008
The Council of Mortgage Lenders (CML) reported that mortgage lending could fall by half this year unless the Bank of England releases more money to the mortgage lenders.
Steven Crawshaw, the chairman of the CML, said the demand for property has decreased considerably nonetheless, “potential borrowing still significantly exceeds the industry’s collective capacity to supply funds”.
A large number of mortgage lenders were forced to withdraw mortgage deals and up the prices as result of the credit crunch, and according to Mr Crawshaw it will not get better unless lenders find a new source of funding.
Without attracting new funding sources we will see an ongoing process of attrition in mortgage choice - possibly over a protracted period - with lenders managing down demand by tightening lending criteria, increasing price, or withdrawing more products from the market altogether.
This is not lender specific but across the piece - large and small; specialist and mainstream; Plc and mutual.
Yesterday the Bank of England cut the base rate by 0.25 per cent, which was predictable, is spite of this many lenders have increased their mortgage interest rates.
Last week, First Direct became the biggest lender to withdraw entirely from offering new mortgages, and several small building societies have also been forced to close their doors to new business.
Many lenders have also tightened criteria, pulling 100% mortgages and making their best deals available to those with the largest deposits.
Popularity: 11%
More Lenders Dropping Out Buy to Let Mortgages
April 10, 2008
The Bank of Scotland has drop five of its buy to let mortgages and ten of its self-certifying mortgages, this decision was due to the pressure created from other mortgage lenders who have completely dropped out the buy to let mortgages market.
The HBOS and the Mortgage Business have also pulled out some of their buy to let mortgage range.
Heather Scott, HBOS mortgages head of press relations said:
There has been a very significant reduction in the number of lenders in the specialist sector. Our focus is on getting the right proportion of business.
We can’t handle the level of business from those lenders who have left the sector.
Popularity: 13%
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